/raid1/www/Hosts/bankrupt/TCR

/raid1/www/Hosts/bankrupt/TCR_Public/210519.mbx T R O U B L E D C O M P A N Y R E P O R T E R Wednesday, May 19, 2021, Vol. 25, No. 138 Headlines 2408 W KENNEDY: Voluntary Chapter 11 Case Summary ABRAXAS PETROLEUM: Angelo Gordon Delivers Restructuring Proposal AGF MACHINERY: Disclosure Statement Hearing Set for June 24 ALLIED INJURY: Court OKs Disclosures, July 20 Plan Hearing AMERICAN ROCK: Moody's Rates New $470MM First Lien Term Loan 'B2' ANGLO-DUTCH ENERGY: Seeks Approval to Hire Okin Adams as Counsel ANTERO MIDSTREAM: Moody's Upgrades CFR to Ba3, Outlook Stable ANTERO RESOURCES: Moody's Raises CFR to Ba3, Outlook Stable APPCITYLIFE: Files for Chapter 7 Bankruptcy Protection ASTRA ACQUISITION: Fitch Affirms 'B' LongTerm IDR, Outlook Stable ATKORE INC: Fitch Assigns BB Rating on New $400MM Unsec. Notes AVANTOR FUNDING: Moody's Rates New $1.1BB Incremental Loan 'Ba1' BCR PARTNERS: U.S. Trustee Unable to Appoint Committee BEP ULTERRA: Moody's Alters Outlook on 'B3' CFR to Stable BLINK CHARGING: Incurs $7.4 Million Net Loss in First Quarter BOY SCOUTS OF AMERICA: Considers Its Ch. 11 Plan as The Best Option BOY SCOUTS: Roman Catholic Archbishop Opposes Disclosure Statement BRECKENRIDGE HILLS: Gets Interim OK to Hire L.K. Wood as Broker BRECKENRIDGE HILLS: Gets Interim OK to Hire Legal Counsel CANTERA COURT: Taps Pulman Cappuccio & Pullen as Legal Counsel CASTEX ENERGY: Committee Taps Seaport Global as Financial Advisor CLEAN ENERGY: Posts $1.1 Million Net Profit in First Quarter CLEVELAND BIOLABS: Incurs $547,205 Net Loss in First Quarter COLORADO HEALTH: U.S. Govt.'s Bid to 'Leafrog' Creditors Fails COMMUNITY CARE: Moody's Affirms B2 CFR & Alters Outlook to Stable COMMUNITY INTERVENTION: Plan to Pay 10% to 20% for Unsecureds CYPRUS MINES: Tort Claimants Cannot Alter Ch.11 Committee Makeup DT MIDSTREAM: Fitch Assigns FirstTime 'BB+' LT IDR, Outlook Stable DT MIDSTREAM: Moody's Assigns First Time 'Ba1' Corp Family Rating EASTERDAYS FARMS: Sued for Loan Default on Potato,Onion Facilities ELECTROMEDICAL TECHNOLOGIES: Incurs $2.6M Net Loss in 1st Quarter ENCORE CAPITAL: Moody's Alters Outlook on 'Ba2' CFR to Positive ENERGY TRANSFER: Moody's Affirms Ba2 Preferred Stock Rating ESCALON MEDICAL: Incurs $137,465 Net Loss in Third Quarter FECK PROPERTIES: Martell Buying Englewood Property for $3.7-Mil. FLOAT HORIZEN: Wins Cash Collateral Access FLUOR CORP: Equity Proceeds Use No Impact on Moody's Ba1 CFR FOSSIL GROUP: Incurs $24.4 Million Net Loss in First Quarter G.A.F. SEELIG: Court OKs 2nd Amended Plan, Plan Administrator Named GDC TECHNICS: U.S. Trustee Appoints Creditors' Committee GEO GROUP: Lenders Prepare for Debt Talks With Prison Operator GNIRBES INC: Disclosure Statement Hearing Slated for June 2 GOODYEAR TIRE: Fitch Rates New $1.45-Bil. Unsecured Notes 'BB-' GOODYEAR TIRE: Moody's Rates New $1.45BB Unsecured Notes 'B2' GREEN DOT: Fitch Affirms BB+ Rating on $7MM 2011A Revenue Bonds GROWLIFE INC: Receives Second Default Notice From Lender GRUPO AEROMEXICO: Asks Court to Reject December 2020 Ch.11 Deal HEARTLAND DENTAL: Moody's Affirms B3 CFR on American Dental Deal HOYA MIDCO: Moody's Puts B3 CFR Under Review for Upgrade HUMANIGEN INC: Incurs $65.6 Million Net Loss in First Quarter HYSTER-YALE GROUP: Moody's Rates New $225MM First Lien Loan 'B1' IDEANOMICS INC: To Acquire US Hybrid for $50M IMERYS TALC AMERICA:Asks Court Okay to Carry Out Ch.11 Acquisitions INTEGRATED VENTURES: Incurs $16.6-Mil. Net Loss in Third Quarter JAGUAR HEALTH: Adjourns Annual Meeting to June 11 JAMES B. THOMAS: Public Access to Ex. A of Sale Motion Restricted JBS USA: Moody's Rates New $500MM Sr. Unsecured Notes 'Ba1' JET REAL ESTATE: $1.6M Sale of Del Mar Property to Zambon Approved JOSEPH M. THOMAS: Pehrssons Buying Erie City Properties for $1.05M KINTARA THERAPEUTICS: Incurs $6.6-Mil. Net Loss in Third Quarter LATAM BRASIL: Outsources Ground Agents as Restructuring Continues LEONARD R. COSTANTINI, III: Northwest Buying Rose Ridge for $1.35M MATCH GROUP: Moody's Rates New $400MM Incremental Term Loan 'Ba1' MAXIMUS INC: Moody's Assigns First Time 'Ba2' Corp Family Rating MCGEHEE PARK: Plan Confirmation Hearing Slated for June 24 MERION INC: Incurs $297,640 Net Loss in First Quarter MIAMI JEWISH: Fitch Affirms BB+ Rating on $44MM Series 2017 Bonds MICHAEL FELICE: Disclosure Statement Hearing Set for June 24 MOHEGAN TRIBAL: Incurs $16 Million Net Loss in Second Quarter NASHEF LLC: Wins Cash Collateral Access Thru July NEUBASE THERAPEUTICS: Incurs $5.5-Mil. Net Loss in Second Quarter NN INC: Signs Cooperation Agreement With Corre, Adds New Director NOVABAY PHARMACEUTICALS: Signs Deal to Sell $4-Mil. Common Shares OMNIQ CORP: Posts $3.3 Million Net Loss in First Quarter OUTLOOK THERAPEUTICS: Incurs $13.1 Million Net Loss in 2nd Quarter PHUNWARE INC: Incurs $12.4 Million Net Loss in First Quarter PIAGGIO AMERICA: U.S. Trustee Unable to Appoint Committee PRECIPIO INC: Incurs $1.5 Million Net Loss in First Quarter QUALITY REIMBURSEMENT: Plan Confirmed, Bid for Ch.11 Trustee Nixed RISING TIDE: Moody's Assigns First Time 'B3' Corp. Family Rating RITE AID: Moody's Alters Outlook on 'Caa1' CFR to Positive ROCKET SOFTWARE: Moody's Affirms B3 CFR Following ASG Acquisition ROLLING HILLS: Wins Cash Collateral Access ROYALE ENERGY: Incurs $572K Net Loss in First Quarter SAFE FLEET: Moody's Alters Outlook on B3 CFR to Stable SC SJ HOLDINGS: Fairmont San Jose's Bankruptcy Plan on Ice SEADRILL LTD: Forbearance Agreement Extended to May 28, 2021 SEADRILL PARNTERS: Court Approves Debt-for-Equity Plan SHRI NARAYAN: Seeks to Hire 'Ordinary Course' Professionals SQUARE INC: Fitch Assigns FirstTime 'BB' LT IDR, Outlook Stable STAR US BIDCO: Moody's Alters Outlook on B3 CFR to Positive STREAM TV: Court Dismisses Chapter 11 Case as Bad-Faith Filing SYNRGO INC: Case Summary & 20 Largest Unsecured Creditors TECT AEROSPACE: May 25 Hearing on Bid Procedures for Everett Assets TENTLOGIX INC: Proposed Private Sales of Goods and ACUs Approved TOPP'S MECHANICAL: D & K Agri Buying 2004 Grove Crane for $200K TRANQUILITY GROUP: U.S. Trustee Unable to Appoint Committee TRANS-LUX CORP: Incurs $621K Net Loss in First Quarter TRIUMPH HOUSING: Unsecureds to Share Funds After $25K Suit Reserve URBAN ONE: Posts $7K Net Income in First Quarter VICTORY CAPITAL: Moody's Upgrades CFR to Ba2, Outlook Stable VOYAGER AVIATION: Moody's Withdraws Caa1 CFR on Restructuring WEATHERFORD INT'L: Fends Off Investor Lawsuit Over Bankruptcy WEINSTEIN CO: Trustee Seeks to Toss Plan Appeal of Claimants WHITE STALLION ENERGY: Wins Cash Collateral Access Thru June 30 YOAKUM INDEPENDENT SCHOOL: Fitch Affirms 'BB' Issuer Default Rating YPF ENERGIA: Moody's Alters Outlook on 'Caa3' CFR to Stable ZEIGANGEL VENTURES: Voluntary Chapter 11 Case Summary [*] Hawaii Monthly Bankruptcies Increased for First Time in 2021 [*] Restaurants, Bars Face Possible Shutout From New Relief Fund ********* 2408 W KENNEDY: Voluntary Chapter 11 Case Summary ------------------------------------------------- Debtor: 2408 W Kennedy LLC DBA The Kennedy 2408 W Kennedy Blvd Tampa, Fl 33609 Business Description: 2408 W Kennedy owns and operates nightclubs in Tampa, Florida. Chapter 11 Petition Date: May 18, 2021 Court: United States Bankruptcy Court Middle District of Florida Case No.: 21-02578 Debtor's Counsel: W. Bart Meacham, Esq. W. BART MEACHAM, ESQUIRE 308 E. Plymouth St. Tampa, FL 33603 Tel: 813-223-6334 E-mail: wbartmeacham@yahoo.com Estimated Assets: $1 million to $10 million Estimated Liabilities: $500,000 to $1 million The petition was signed by Christopher Scott, managing member. The Debtor did not file a list of its 20 largest unsecured creditors. A full-text copy of the petition is available for free at PacerMonitor.com at: https://www.pacermonitor.com/view/S63ALCI/2408_W_Kennedy_LLC__flmbke-21-02578__0001.0.pdf?mcid=tGE4TAMA ABRAXAS PETROLEUM: Angelo Gordon Delivers Restructuring Proposal ---------------------------------------------------------------- Luzi Ann Javier of Bloomberg News reports that Angelo Gordon Energy Servicer, known as AGES, delivered a proposal for a pre-arranged reorganization of Abraxas Petroleum under Chapter 11 of the U.S. Bankruptcy Code. Angelo Gordon reported a 16.6% stake in Abraxas. The proposed restructuring would involve converting the total claims under the Second Lien Facility, including accrued and unpaid interest into 100% of the equity of the reorganized Issuer, subject to dilution by warrants. It also provides for restructuring and extending the maturity of the outstanding obligations under the First Lien Facility and hedge termination obligations. About Abraxas Petroleum Corp. San Antonio, TX-based Abraxas Petroleum Corporation -- http://www.abraxaspetroleum.com/-- is an independent energy company primarily engaged in the acquisition, exploration, development and production of oil and gas. AGF MACHINERY: Disclosure Statement Hearing Set for June 24 ----------------------------------------------------------- Judge William R. Sawyer has set for June 24, 2021, at 10 a.m., by telephone, the hearing to approve the Disclosure Statement explaining the Chapter 11 Plan of AGF Machinery, LLC. A copy of the order is available at https://bit.ly/3bzWgki from PacerMonitor.com at no charge. About AGF Machinery AGF Machinery, LLC -- https://agfmachinery.com/ -- is engaged in selling and renting construction equipment, aerial work platforms and heavy-duty equipment. The company offers a full line of construction equipment in its sales and rental inventories from Wacker Neuson, ASV, Skyjack, Toro, and Husqvarna. AGF Machinery filed a Chapter 11 petition (Bankr. M.D. Ala. Case No. 20-11029) on August 12, 2020. The petition was signed by Jeffrey Lee Washington, a member. Debtor disclosed $10 million to $50 million in both assets and liabilities at the time of the filing. Judge William R. Sawyer oversees the case. The Debtor has tapped Stichter, Riedel, Blain & Postler, P.A., as its bankruptcy counsel, and Saltmarsh, Cleaveland & Gund as its financial advisor. ALLIED INJURY: Court OKs Disclosures, July 20 Plan Hearing ---------------------------------------------------------- Judge Mark Houle approved the revised Disclosure Statement accompanying the Liquidation Plan of Allied Injury Management, Inc., filed by David M. Goodrich, the Debtor's Chapter 11 Trustee. Judge Houle fixed certain dates with respect to voting on the Plan and its confirmation: * June 4, 2021, as the deadline for creditors to return ballots; * June 18, 2021, as the deadline for filing the Trustee's ballot analysis and confirmation brief; * July 2, 2021, as the deadline for filing objections to Plan confirmation; * July 9, 2021, as the deadline for filing replies to Plan objections; and * July 20, 2021, at 1 p.m., as the confirmation hearing on the Plan. A copy of the order is available for free at https://bit.ly/3bxasLb from PacerMonitor.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. AMERICAN ROCK: Moody's Rates New $470MM First Lien Term Loan 'B2' ----------------------------------------------------------------- Moody's Investors Service assigned a B2 rating to American Rock Salt Company LLC's ("ARS") new $470 million first lien term loan and a Caa1 rating to the new $100 million second lien term loan. At the same time, Moody's affirmed the B2 Corporate Family Rating and the B2-PD probability of default rating. The rating for the existing first lien term loan will be withdrawn upon repayment. The ratings outlook is negative. "The change in the outlook to negative reflects the company's decision to pursue a debt- financed recapitalization, in part, to make a significant distribution to shareholders with the resulting increase in leverage materially constraining its ability to maintain a credit profile appropriate for the B2 rating during mild winters," said Botir Sharipov, Vice President and lead analyst for American Rock Salt. Assignments: Issuer: American Rock Salt Company LLC Senior Secured 1st Lien Term Loan, Assigned B2 (LGD3) Senior Secured 2nd Lien Term loan, Assigned Caa1 (LGD6) Affirmations: Issuer: American Rock Salt Company LLC Corporate Family Rating, Affirmed B2 Probability of Default Rating, Affirmed B2-PD Outlook Actions: Issuer: American Rock Salt Company LLC Outlook, Changed To Negative From Stable RATINGS RATIONALE The rating affirmation reflects the company's continued and successful efforts to improve operating performance, increase productivity and efficiency, which along with higher average selling prices, have led to margin expansion and improved profitability over the last few years notwithstanding a challenging calendar year 2020. The B2 CFR reflects ARS's limited scale with a single mine, lack of business diversity and weather-dependent business model that results in volatile credit metrics and cash flow generation. The rating is supported by the company's sector leading operating margins, highly variable cost structure, typically strong cash flow from operations and low capital expenditures partially offset by a dividend policy that has historically led to significant shareholder distributions. Factors that further support the rating are high barriers to entry in rock salt mining industry and cost advantages in the company's primary markets in western and central New York and Pennsylvania due to favorable access to truck and rail transportation, as well as operating one of the lowest cost and the newest salt mines in the United States. The rating also reflects ARS's adequate liquidity and expectations that the owners would support the company during periods of exceptionally weak snowfall (e.g. two or more consecutive warm winters). As a part of transaction, ARS will transfer and consolidate NOMI Holder LLC and other related entities, previously owned by the holding company, into the borrower group at the OpCo level, eliminating rent payments and royalties historically paid by ARS, increasing collateral and providing a small uplift to EBITDA. While ARS paid down a significant portion of debt since the last dividend recapitalization in 2011, the proposed $203 million distribution to the holding company funded by new debt and $40 million in balance sheet cash will increase its debt and materially reduce the financial flexibility required to withstand potentially high variability in winter conditions. A mild 2019-2020 winter not only led to a drop in deicing volumes in FY2020, but also left municipal customers with elevated inventories, reducing solicited volumes and prices during the last bidding season. Customers' elevated inventory levels and a light start to the 2020-2021 winter led to a 35% y-o-y decline in tonnage sold in the December quarter, causing leverage to rise to 6.9x for LTM December 2020 from 3.7x for LTM December 2019. While January weather was near average, February's substantial and frequent snowfall and consistently below freezing temperatures have likely reduced government and commercial customer inventories, and have resulted in a significant increase in tonnage sold and revenues during the March quarter. YTD for FY 2021, ARS tonnage sold has increased 6.6% y-o-y, resulting in EBITDA increasing in the March 2021 period and leverage declining as compared to the LTM December 2020 period. Moody's estimates that ARS's leverage in FY2021 (September year-end) will remain in the range of 6.5-7x. Assuming average 2021-2022 winter conditions and that ARS will use the majority of anticipated free cash flow for debt repayment, Moody's expects adjusted debt/EBITDA to decline to 6-6.5x by the end of FY2022. However, should the markets the company serves experience below-average winter conditions, leverage could be well in excess of 7.5x in FY2022, which is above the current downgrade trigger. The company is expected to remain modestly free cash flow positive during mild winters. The negative outlook reflects the company's decision to pursue a debt-financed recapitalization with the resulting increase in leverage elevating the risk that during mild winters, leverage could exceed 7.5x and that ARS might not be able to maintain a credit profile appropriate for the B2 rating. By the nature of its business, i.e. deriving nearly 100% of its revenues from underground mining of rock salt deposits, American Rock Salt faces a number of ESG risks typical for a company in the mining industry including compliance with stringent health, safety and environmental regulations. The company is subject to many and varied environmental laws and regulations in the areas where it operates. However, the ESG risks for ARS are generally lower than those of base and precious metals producers because salt mining is considered less hazardous and requires less processing (crushing and grinding). The company needs to maintain social relationships with the community surrounding its mine. The governance risk is above average given the company's private ownership has shown to support an aggressive dividend policy with a significant amount of cash flows that had historically been distributed to shareholders. American Rock Salt is expected to have adequate liquidity for at least the next 12 months. Moody's anticipate positive free cash flow on an annual basis but expect significant quarterly variation due to the seasonality of the salt business and need to build up inventories in advance of the selling season. The company builds cash on the balance sheet in the first and second fiscal quarters (fourth and first calendar quarters) as it collects accounts receivable from the snow season and uses most of its cash in the third and fourth fiscal quarters. Moody's expect the company will rely on the new $70 million asset-based revolving credit facility (unrated) to fund inventory build before collecting significant cash in the first calendar quarter of the year. On a pro forma transaction basis, ARS is expected to have $37 million in cash and cash equivalents. As of March 31, 2021, ARS had nothing drawn under the revolving credit facility. The new revolver is subject to borrowing base and will expire in 2026. The revolver commitment steps down to $35 million from March to August each year and contains a springing fixed charge coverage ratio test of 1.1x if revolver excess availability is less than 10% of the borrowing base. Moody's do not expect the covenant will be triggered over the next four quarters. The senior secured first lien term loan due 2028 is rated B2, on par with the B2 CFR, reflecting its large proportion of the overall debt. It has a first priority lien on all fixed domestic assets, salt reserves and minerals rights. The senior secured second lien term loan due 2029 is rated Caa1, reflecting its subordinate position in the capital structure relative to the $470 million first lien term loan and the $70 million asset-based revolver (unrated) due 2026 that has a first priority lien on current assets. The term loans is guaranteed by all material domestic subsidiaries of the borrower American Rock Salt Company LLC, including the new entities brought into the borrower group. As proposed, the new credit facilities are expected to provide the borrower with covenant flexibility that could adversely affect creditors. Notable terms include: 1) Incremental debt capacity up to the sum of the greater of $100 million and 100% of four-quarter, pro forma EBITDA, plus an unlimited amount not exceeding 5.0x First Lien Leverage Ratio (for pari passu basis secured debt). No portion of the incremental may be incurred with an earlier maturity than the initial term loans and the incremental debt is subject to MFN pricing protections; 2) The credit agreement will permit the transfer of assets to unrestricted subsidiaries, up to the carve-out capacity, and subject as well to "blocker" provisions which prohibit the transfer of any intellectual property that is material to the operation of the company or its restricted subsidiaries, taken as a whole, to unrestricted subsidiaries; 3) Dividends or transfers resulting in partial ownership of subsidiary guarantors could jeopardize guarantees subject to protective provisions which will only permit guarantee releases if they are in connection with a bona fide, legitimate business purpose of the company and not for the primary purpose of effecting a release from such guarantee to evade creditors; 4) The credit agreement will provide some limitations on up-tiering transactions, including the requirement that each lender consents to amendments to subordinate the liens securing the first lien credit facilities attaching to all or substantially all of the collateral to any other material indebtedness for borrowed money. The above are proposed terms and the final terms of the credit agreement may be materially different. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS Moody's see limited upside to the company's ratings due to its current business profile (operating a single mine), modest size and high leverage post the proposed dividend recapitalization transaction. However, quantitatively, Moody's would consider an upgrade if the company pays down debt so that in mild (trough) winter conditions leverage does not exceed 4x, the company maintains good liquidity and a conservative financial policy (i.e. does not continually dividend out excess cash or lever up to take advantage of improved earnings). Moody's could downgrade the ratings if leverage is expected to exceed 7.5x, interest coverage to fall below 2x and sustained liquidity (cash and revolver availability) to decline below $30 million. Moody's could also downgrade the ratings if the company undertakes a large debt-financed acquisition, does not reduce indebtedness or makes a significant distribution that will further constrain its ability to maintain a credit profile appropriate for the B2 rating through mild winters. American Rock Salt Company LLC produces highway deicing rock salt. The company operates a single mine in upstate New York and sells primarily to state and local government agencies in the northeastern United States. The firm is a wholly owned subsidiary of American Rock Salt Holdings LLC, which is closely held by private investors including some members of management. The company does not publicly disclose its financial statements. Headquartered in Retsof, NY, American Rock Salt generated approximately $220 million in revenue for the twelve months ended March 31, 2021. The principal methodology used in these ratings was Chemical Industry published in March 2019. ANGLO-DUTCH ENERGY: Seeks Approval to Hire Okin Adams as Counsel ---------------------------------------------------------------- Anglo-Dutch Energy, LLC seeks approval from the U.S. Bankruptcy Court for the Southern District of Texas to employ Okin Adams, LLP as legal counsel. Okin Adams will render these legal services: (a) advise the Debtor regarding its rights, duties and powers in its Chapter 11 case; (b) assist the Debtor in its consultations relative to the administration of the case; (c) assist the Debtor in analyzing the claims of creditors and in negotiating with such creditors; (d) assist the Debtor in the analysis of and negotiations with any third party concerning reorganization matters; (e) represent the Debtor at all hearings and other proceedings; (f) review and analyze all applications, orders, statements of operations and schedules filed with the court and advise the Debtor as to their propriety; (g) assist the Debtor in preparing pleadings and applications; and (h) perform such other legal services as may be required. The firm will be paid at these rates: Timothy L. Wentworth $450 per hour Christopher Adams $500 per hour Legal Assistants $135 per hour As of the petition date, Okin Adams was not owed any fees and expenses by the Debtor and $130,039 of the retainer remained in the client trust account. Timothy Wentworth, Esq., at Okin Adams, 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: Timothy L. Wentworth, Esq. Okin Adams LLP 1113 Vine St., Suite 240 Houston, TX 77002 Tel: (713) 228-4100 Email: twentworth@okinadams.com About Anglo-Dutch Energy Anglo-Dutch Energy, LLC -- http://www.anglo-dutch.com-- is an operator focused on exploration, acquisitions, and development in the United States. Its acquisitions team is experienced in acquiring low-risk production life oil and gas reserves throughout the Upper Gulf Coast, Permian Basin and Mid-Continent. Anglo-Dutch Energy filed its voluntary petition for relief under Chapter 11 of the Bankruptcy Code (Bankr. S.D. Texas Case No. 21-60036) on April 23, 2021. Scott V. Van Dyke, member and president, signed the petition. At the time of the filing, the Debtor disclosed assets of up to $50 million and liabilities of up to $10 million. Judge Christopher M. Lopez oversees the case. Timothy L. Wentworth, Esq., at Okin Adams LLP, serves as the Debtor's legal counsel. ANTERO MIDSTREAM: Moody's Upgrades CFR to Ba3, Outlook Stable ------------------------------------------------------------- Moody's Investors Service upgraded Antero Midstream Partners LP's (AM) Corporate Family Rating to Ba3 from B1, Probability of Default Rating to Ba3-PD from B1-PD, and senior unsecured notes to B1 from B2. The Speculative Grade Liquidity rating was unchanged at SGL-3. The rating outlook remains stable. "The upgrade reflects AM's recent decision to cut shareholder distributions and reduce debt, as well as the significant improvements in the credit profile of AM's principal customer Antero Resources Corporation, which improves visibility around AM's future throughput volumes and cash flow," said Sajjad Alam, Moody's Senior Analyst. Issuer: Antero Midstream Partners LP Ratings Upgraded: Corporate Family Rating, Upgraded to Ba3 from B1 Probability of Default Rating, Upgraded to Ba3-PD from B1-PD Senior Unsecured Notes, Upgraded to B1 (LGD5) from B2 (LGD5) Ratings Unchanged: Speculative Grade Liquidity Rating, Remains Unchanged at SGL-3 Outlook Actions: Outlook, Remains Stable RATINGS RATIONALE Antero Midstream's Ba3 CFR reflects its heavy reliance on Antero Resources, concentrated geographic focus in the Appalachian Basin, and indirect exposure to highly volatile natural gas and natural gas liquids (NGLs) prices. AM's primary counter-party Antero Resources is trying to operate with lower costs, generate free cash flow, reduce debt and push out significant debt maturities. Consequently, any material changes to Antero Resources' credit profile will likely have a direct impact on Antero Midstream's ratings. AM's CFR is supported by its substantial scale, moderate financial leverage, adequate distribution coverage and predominantly fee-based revenue stream from Antero Resources. AM will continue to distribute a significant portion of its operating cash flow leaving only a limited amount for reinvestment. Antero Midstream's unsecured notes are rated B1, one notch below the Ba3 CFR given the significant size of the company's secured credit facility in the capital structure that has a priority claim to AM's assets. The SGL-3 rating reflects Moody's view that AM will maintain adequate liquidity through 2022. AM had roughly $1.5 billion of availability under its $2.13 billion revolving credit facility as of March 31, 2021 and Moody's don't expect any meaningful increase in revolver borrowings through 2022. The revolver expires on October 26, 2022, and Moody's expects AM to remain in compliance with the revolver financial covenants. The partnership has limited alternate liquidity given its assets are encumbered. Antero Midstream's stable rating outlook is consistent with the rating outlook of Antero Resources. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS An upgrade of AM's ratings would depend on Antero Resources Corporation ratings being upgraded. Moody's would also expect debt/EBITDA to remain near 3x and distribution coverage to be sustained above 1.1x. The CFR could be downgraded if Antero Resources' CFR is downgraded, or if AM's leverage metric rises above 4x. The principal methodology used in these ratings was Midstream Energy published in December 2018. Antero Midstream Partners LP is a wholly owned subsidiary of Antero Midstream Corporation, a midstream energy company based in Denver, Colorado. Antero Midstream Corporation owns and operates an integrated system of natural gas gathering pipelines, compression stations, processing and fractionation plants, and water handling and treatment assets in northwest West Virginia and southern Ohio. ANTERO RESOURCES: Moody's Raises CFR to Ba3, Outlook Stable ----------------------------------------------------------- Moody's Investors Service upgraded Antero Resources Corporation's Corporate Family Rating to Ba3 from B1, Probability of Default Rating to Ba3-PD from B1-PD, and senior unsecured notes to B1 from B2. The SGL-2 Speculative Grade Liquidity Rating was unchanged. The rating outlook remains stable. "The upgrade reflects Antero's meaningful debt reduction in early-2021, and our expectation that the company will achieve additional debt reduction through 2022 by generating free cash flow more consistently," commented Sajjad Alam, Moody's Senior Analyst. "Higher natural gas and NGLs prices, management's heightened focus on maintaining capital discipline, as well as the company's significant hedge book provide good free cash flow visibility and a reasonable path towards further deleveraging." Ratings Upgraded: Issuer: Antero Resources Corporation Corporate Family Rating, Upgraded to Ba3 from B1 Probability of Default Rating, Upgraded to Ba3-PD from B1-PD Senior Unsecured Notes, Upgraded to B1 (LGD5) from B2 (LGD5) Ratings Unchanged: Issuer: Antero Resources Corporation Speculative Grade Liquidity Rating, Unchanged at SGL-2 Outlook Actions: Issuer: Antero Resources Corporation Outlook, Remains Stable RATINGS RATIONALE Antero's Ba3 CFR reflects its improving but high financial leverage on a consolidated basis (for Antero Midstream), exposure to volatile natural gas and natural gas liquids (NGLs) prices, geographic concentration in Appalachia, and significant undeveloped reserves and shale focused operations. While Antero's diversified firm-transportation (FT) pipeline contracts have historically helped realize higher prices, the company pays high tariff rates and has a higher overall midstream cost structure than its Appalachian peers. The credit profile is supported by Antero's large natural gas production and reserves in Appalachia, significant natural gas liquids (-30%) in the production mix, consistent long-term hedging philosophy that reduces risk and improves cash flow visibility, reduced operating and development costs, and significant ownership of Antero Midstream Corporation, which could be a source of alternate liquidity. Antero should have good liquidity through 2022, which is reflected in the SGL-2 rating. Moody's expects significant free cash flow generation through 2022 enabling Antero to reduce debt by an additional $200-$400 million and fully extinguish revolver drawings. Antero will not have any notes maturity until 2025 assuming a full redemption of the 2023 notes after the company's recent decision to call those bonds. Antero had $1.76 billion in available borrowing capacity as of March 31, 2021 after accounting for $742 million of LC outstanding. The borrowing base under the credit facility was $2.85 billion and lender commitments were $2.64 billion at March 31. The borrowing base was re-affirmed in the semi-annual redetermination in April 2021. Antero's revolver will mature the earlier of: (i) October 26, 2022, and (ii) the date that is 91 days to the earliest stated redemption of any series of Antero's senior notes, unless such series of notes is refinanced. Moody's expects Antero to extend the maturity in 2021 to maintain a good liquidity cushion. Antero's senior unsecured notes are rated B1, below the Ba3 CFR because of the significant size of the secured credit facility, which has a first-lien priority claim to substantially all of Antero's assets. The unsecured notes have upstream guarantees from substantially all of Antero's E&P subsidiaries that also guarantee the secured revolving credit facility. Antero's stable rating outlook reflects Moody's expectation of continued deleveraging and significant free cash flow generation through 2022. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS An upgrade would be contingent on Antero's ability to produce free cash flow on a consistent basis, maintain capital efficiency and achieve material debt reduction. More specifically, an upgrade could be considered if the company can sustain the leveraged full-cycle ratio (LFCR) above 1.5x and maintain a retained cash flow to debt ratio above 30% on a consolidated basis. Antero's ratings could be downgraded if retained cash flow to debt remains below 20%, the LFCR approaches 1x, or the company generates recurring or substantial negative free cash flow. The principal methodology used in these ratings was Independent Exploration and Production Industry published in May 2017. Antero Resources Corporation is a leading natural gas and natural gas liquids producer in the Marcellus and Utica Shales in West Virginia, Ohio and Pennsylvania. APPCITYLIFE: Files for Chapter 7 Bankruptcy Protection ------------------------------------------------------ Collin Krabbe of Albuquerque Business First reports that APPCityLife, an Albuquerque tech company that created tech tools for citizens of Albuquerque, plans to liquidate. The company, founded in 2009, filed for Chapter 7 bankruptcy protection in the second week of May 2021. It listed between $0 and $50,000 in estimated assets, according to the petition filed in New Mexico Bankruptcy Court. The company reported $588,028 in liabilities. The largest unsecured creditor listed in the filing is Bryan and Patricia Bingham with a claim amount of $271,000. Also included among the unsecured creditors are the IRS, owed $74,551, and the Bank of Oklahoma, owed $19,600. APPCityLife has been a longstanding member of the Albuquerque startup scene, and has made an impact on the community. It has developed mobile applications that could help citizens more easily use municipal services. In 2018, the city unveiled the company's One Albuquerque application, which sought to centralize access to city departments and their services, making them more accessible. It also developed the ABQRIDE for the municipal transit system, allowing users to calculate fares and track buses. The company also developed a permitting application for Bernalillo County, as well as an app for Roadrunner Food Bank and the Albuquerque International Balloon Museum. The company came up with an idea for an artificial intelligence-based chatbot designed to help immigrants access services, according to reporting from GovTech. Its founder and CEO, Lisa Abeyta, also worked to uplift women in tech, which is notorious for its low levels of female employment. She declined comment on the bankruptcy. APPCityLife raised more than $1.6 million over the course of two funding rounds, according to U.S. Securities and Exchange Commission filings. In 2013, it acquired its longtime partner, OnQueue Technologies, which worked with cloud-based computing technologies. At the time of the deal, Abeyta said in a statement that APPCityLife had about 50,000 "active users on our platform" in the Albuquerque market. In 2015, APPCityLife partnered with California software firm Accela Inc. to offer the tech company's CityLife platform, enabling city governments to design and deploy applications. The company, which was a 2017 Business First Innovation New Mexico winner, has faced financial difficulties. Between October 2018 and March of this 2021, the company was hit with four federal tax liens totaling more than $140,000, according to records from the Bernalillo County Clerk's Office. Abeyta previously said APPCityLife's financial situation stemmed in part from a capital commitment from a New Mexico-based investment group that fell through after she was told the funds had been wired, Business First reported. About APPCityLife APPCityLife is an Albuquegue-based tech company founded in 2009 that created tech tools. It sought Chapter 7 protection (Bankr. D.N.M. Case No. 21-10608) on May 13, 2021. In the petition, APPCityLife estimated assets of between $0 million and $50,000 and estimated liabilities of $588,028 ASTRA ACQUISITION: Fitch Affirms 'B' LongTerm IDR, Outlook Stable ----------------------------------------------------------------- Fitch Ratings has affirmed Astra Acquisition Corp.'s (Astra, d.b.a. Anthology) Long-Term Issuer Default Rating (IDR) at 'B'. Fitch has also affirmed the 'BB-'/'RR2' rating for Astra's secured revolving credit facility and first lien term loan and 'CCC+'/'RR6' rating for its second lien term loan. Fitch has assigned a 'B' IDR to Astra Intermediate Holding Corp. The Rating Outlook is Stable. The ratings reflect Astra's high customer retention rates, strong recurring revenues, significant market position in the student information system (SIS) market, comprehensive product offerings and strong cloud-based technology platform. Fitch believes these strengths position the company to benefit from the secular growth trends in EdTech spending. Astra's Fitch-calculated pro forma total leverage (total debt with equity credit/EBITDA) of roughly 7x at fiscal year-end 2021. The debt burden as well as the limited size and market share constrain the rating to the 'B' range. KEY RATING DRIVERS Pandemic Impact: The economic dislocation caused by the coronavirus may adversely affect the technology upgrade investment cycle. The pandemic caused wide-spread delays in university procurement processes in 2020, which resulted in a few new bookings pushed into 2021. While Fitch expected some colleges to face funding pressure due to the pandemic, Astra's subscription model provided revenue stability through 2020. The company's core business is very sticky as the SIS system is mission critical to most of the schools regardless of student enrollment. A small proportion of schools with exposure to international students faced more financial difficulties. However, the impact on Astra was manageable given their relatively smaller size and the company's diversified customer base. The pandemic actually raised awareness among schools the importance of information technology to support remote learning. Subscription Sales Drive Recurring Revenues: Around 77% of Astra's LTM revenues are recurring in nature (combination of maintenance and subscription). Astra's subscription-based offering is well established with subscription revenues (47% of total revenues) growth outpacing declines in maintenance (26% of revenues) and perpetual licenses (4% of revenues). For YTD December 2020, the gross renewal rate and net retention rate was 95% and 98%, respectively, which was in line with the prior year. Fitch expects continued growth in subscription revenues will drive margin expansion. Diversified Customer Base: The merger of CMC and EdCentric in 2020 resulted in approximately 2,100 customers, and together the top-five contribute 7% of total revenues. The limited customer overlap between the two companies with complementary product offerings provide significant cross-selling opportunities. The average customer only uses 1.7 Astra products. On a combined basis, Astra's annual customer retention rates are in excess of 90% with gross ACV retention in excess of 95%, highlighting the stable and attractive client base. Strong Margins and FCF Support Higher Leverage: Astra's around 30% EBITDA margins are in line with its SaaS peers in this scale category. Despite the sizeable interest burden, Fitch expects Astra will generate mid- to high-single digit FCF margins that will increase to the teens as operating leverage, synergies and cost savings are achieved. Attractive Industry Dynamics: Astra is benefiting from secular tailwinds for the higher ed software sector. Firstly, Astra is expected to benefit from the 12% growth expected in the sector globally. Secondly, Higher Ed institutions are showing a greater willingness to deploy a cloud-based platform as a means to build a more flexible technology platform and also to contain tech costs as the existing systems are 20+ years old. Astra is uniquely positioned to benefit from this shift. Demand for Higher Education is largely a-cyclical, with enrollments growing at a steady rate of 1.3% from 2000-2020. Ownership Could Limit Deleveraging: Anthology is majority-owned by private equity firm Veritas Capital. Fitch believes private equity ownership is likely to result in some level of ongoing leverage to optimize ROE. As the company is in the process of executing on its cost optimization plans, gross leverage remains at approximately 7x for fiscal year-end 2021. Fitch expects the company to gradually delever through EBITDA growth with periodic dividend recapitalization that could reset financial leverage at elevated levels. This could constrain upside in ratings. DERIVATION SUMMARY Fitch's ratings and Outlook for Astra are supported by the company's highly recurring revenues, strong product portfolio and technology platform and proven ability to gainshare relative to their larger peers. A sizable installed base of subscriptions and a strong professional services backlog provide near-term revenue stability, despite the near-term headwinds to the higher education sector. Astra's ratings are constrained by its smaller scale relative to the larger and more diversified education software peers, such as Ellucian (not rated), Oracle (BBB+/Negative) and Workday (not rated) and its high leverage. KEY ASSUMPTIONS Fitch's key assumptions within its rating case for the issuer include: -- Revenues are expected to grow at a mid- to high-single-digit rate as college enrollments stabilize. -- EBITDA margins are expected to improve to the 30% range driven by the combination of both companies and the resulting synergies, cost savings arising from greater usage of the India Delivery center and shifting toward higher margin recurring business. -- Working capital and Capex assumptions in line with historical trends. Recovery Considerations The recovery analysis assumes that Astra would be considered a going concern in bankruptcy and that the company would be reorganized rather than liquidated. Fitch has assumed a 10% administrative claim. Astra's recovery analysis assumes significant delays in new software sales and implementations and ongoing industry issues in the Higher Ed segment dragging down revenues. Longer-than-anticipated coronavirus-related shutdowns delay the company's ability to achieve the previously detailed cost cuts and synergies, further pressuring margins. The post-reorganization going concern EBITDA of roughly $48 million also takes into account Astra's operating performance relative to its competitors and its overall industry segments. Fitch assumes that Astra will receive a going concern recovery multiple of 7x. The estimate considers several factors including the company's highly recurring revenue streams, the strength of the product offering, stability of end market demand and the long-term secular growth trends for the sector. The estimate also considers the strong trading multiples for other software providers to the higher education system like Chegg and Blackbaud. Additionally, median M&A multiples for the sector are in the double-digit range. Fitch assumes a fully drawn revolver ($40 million) in its recovery analysis since credit revolvers are tapped as companies are under distress. Fitch estimates strong recovery prospects for the first lien credit facilities and rates them 'BB-'/'RR2', or two notches above Astra's 'B' IDR. Fitch estimates limited recovery prospects for the second lien term loan and rates it 'CCC+'/'RR6', two notches below Astra's IDR. RATING SENSITIVITIES Factors that could, individually or collectively, lead to positive rating action/upgrade: -- Management maintains total debt with equity credit / operating EBITDA below 5.5x; -- (CFO-Capex)/Total Debt with equity credit greater than 8%; -- Revenue growth in the high-single-digits, implying market share gains. Factors that could, individually or collectively, lead to negative rating action/downgrade: -- Fitch's expectation of forward total leverage sustaining above 7x; -- (CFO-Capex)/Total Debt with equity credit less than 3%; -- Sustained negative revenue growth; -- FFO Fixed Charge Coverage sustain below 1.5x. 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 Sufficient Liquidity: Astra had $44.6 million of cash on hand as of Dec. 31, 2020 as well as full availability of its $40 million revolver. Fitch forecasts the company will generate mid to high single digit FCF margins in 2021, the first full year of the combined entity and will increase to teen level as revenue growth, synergies and cost savings are achieved. There are no material near-term maturities and scheduled annual amortization only comprises 1% of the First Lien Term Loan outstanding. 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. ATKORE INC: Fitch Assigns BB Rating on New $400MM Unsec. Notes -------------------------------------------------------------- Fitch Ratings has assigned a rating of 'BB'/'RR4' to Atkore Inc.'s (ATKR) proposed issuance of $400 million of 10-year senior unsecured notes. Atkore intends to use the proceeds together with the proceeds of a planned $400 million seven-year term loan to refinance its existing $800 million term loan B that matures in Dec. 2023. Fitch currently rates Atkore Inc. and Atkore International, Inc.'s Long-Term Issuer Default Ratings (IDR) 'BB', the planned $400 million secured term loan 'BB+'/'RR2' and $325 million ABL revolver 'BBB-'/'RR1'. The Rating Outlook is Stable. KEY RATING DRIVERS Strengths and Concerns: The ratings take into account Atkore's leading market position in electrical raceway products in the U.S., moderate financial leverage and healthy cash flow generation. These factors are offset by Atkore's relatively narrow product line, the low technology and commoditized nature of its products, its significant exposure to the cyclical U.S. commercial construction market and commodity cost exposure. Leading Market Positions: Atkore's leading market position is supported by a broad offering within its categories, high product quality and timely deliveries. This helps Atkore compete in a market characterized by low technology and commoditized products, primarily conduit tubing and framing for electrical work. Competition is meaningful given the relatively substitutable nature of the company's products and a wide range of national and smaller regional competitors. Cyclical Non-Residential Construction Market: U.S. non-residential new construction accounts for a significant 30%-40% of Atkore's business. Volume declines in fiscal 2020 were focused in highly affected subsectors such as retail and hotel, and have been offset in part by construction in data centers, warehouses, renovation and single-family residential. Fitch expects these trends to continue through fiscal 2021, with a recovery in the most damaged subsectors not expected until 2022. Commodity Exposure: Atkore's profitability is exposed to the price fluctuations of commodities such as PVC resin, copper and steel; however, the company has shown the ability to quickly pass through higher input costs in its prices. In periods of high input material inflation, the company may experience a time lag to recoup pricing. Atkore's Electrical segment (75% of sales) generally sells its products on a spot basis, while its Safety & Infrastructure segment (25% of sales) maintains contracts with its OEM customers that typically experience a three-month lag for selling prices to catch up to commodity price changes. Moderate Financial Leverage: Atkore's leverage is moderate for the 'BB' category, with the company having focused on deleveraging the business over the past few years. Gross leverage (total debt/EBTIDA) improved to 1.6x at March 31, 2021 from 2.5x at September 2020, but it will likely trend toward the low-2.0x range as the company executes its M&A strategy and continues to repurchase its shares. Improving Profitability: Atkore's EBITDA and FCF margins can vary year-to-year, but have been on a generally improving trend over the past four years. Atkore's sales declined 7.9% to $1.8 billion in fiscal year 2020 (Sept. 30, 2020), primarily due to lower volumes and lower selling prices during the height of the pandemic. Revenues have recovered relatively quickly, returning to a growth in fiscal 2021. The company's recent results have further benefitted from recent supply shortages in PVC electrical conduit, leading to a surge in prices and EBITDA margins in fiscal 2021. Fitch assumes that market conditions will normalize in fiscal 2022, when EBITDA margins are expected to return to around the fiscal 2019 level of 18.7%. Solid FCF: Atkore generated FCF of $200 million in fiscal 2020, and Fitch projects the FCF will improve to around $300 million, or 12%-13% of revenues, in fiscal years 2021 and 2022, supported by higher EBITDA. Fitch expects cash flow will be deployed to bolt-on M&A and share repurchases with the potential for a larger, leveraging acquisition. The company has adequate liquidity consisting of healthy cash balances, ABL revolver availability and no significant maturities until 2026. DERIVATION SUMMARY Atkore is a diversified manufacturer of electrical and tubular products serving mainly the non-residential construction markets in the U.S. Atkore's competition ranges from small, regional manufacturers to large global industrial companies and electrical equipment manufacturers such as Eaton Corporation (BBB+/Negative), nVent Electric (BBB-/Stable) and Hubbell Inc. (A-/Stable), which maintain more diversified portfolios with products possessing a higher degree of technology. Atkore's rating is disadvantaged by its outsized exposure to the cyclical non-residential construction markets, although this is somewhat offset by its somewhat diverse exposure to various subsectors with the industry. Atkore's rating is supported by its moderate size with revenues near $2 billion. KEY ASSUMPTIONS -- Fitch assumes fiscal 2021 organic growth of 40% driven to a large degree by higher selling prices due to supply and demand imbalances in PVC. Revenues in 2022 decline by 20% due to assumed declines in prices of steel and PVC and competitive pressures; -- EBITDA margins increase by around 800bps in fiscal 2021 driven by increased demand and industry supply constraints. EBITDA margins decline in 2022 by a similar amount due to a normalization of industry supply and demand and competitive price pressures; -- Leverage drops to 1.2x (total debt with equity credit/operating EBITDA) in 2021 and trends back towards the company's target at 2.0x-2.5x by 2024 as the company executes its acquisition strategy; -- FCF margins are expected to be in the low double digits. RATING SENSITIVITIES Factors that could, individually or collectively, lead to positive rating action/upgrade: -- Debt/EBITDA below 2.0x through the cycle; -- A significant improvement in product and end market diversification that reduces cyclicality; -- A demonstrated improvement in margins through cycles. Factors that could, individually or collectively, lead to negative rating action/downgrade: -- Debt/EBITDA above 3.0x for a sustained period; -- A significant decline in sales and/or margins that signals intensifying competition or an inability to pass on increased commodity prices; -- Challenges in integrating a larger, debt-funded acquisition. 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 Liquidity: As of March 26, 2021, Atkore had adequate liquidity of $620 million, which consisted of $304 million in cash and cash equivalents ($53.2 million of which was held at non-U.S. subsidiaries) and $316 million in available funds under its $325 million ABL revolver. Fitch expects the company to have adequate liquidity to fund growth, including capital expenditures of around $55 million per year and growth in working capital. Capital Structure: As of March 26, 2021, the company's debt consisted of $772 million outstanding on its term loan B that matures in December 2023. AVANTOR FUNDING: Moody's Rates New $1.1BB Incremental Loan 'Ba1' ---------------------------------------------------------------- Moody's Investors Service assigned a Ba1 rating to Avantor Funding, Inc. proposed incremental term loan due 2028 for EUR930 million ($1.1 billion). There are no changes to Avantor's existing ratings including the Ba3 Corporate Family Rating, Ba3-PD Probability of Default Rating, Ba1 senior secured rating, and SGL-1 Speculative Grade Liquidity rating. The outlook remains stable. Proceeds of the offering will be primarily used to finance the acquisition of Ritter GmbH and its affiliates -- a German healthcare technology company that specializes in proprietary products for clinical diagnostics and drug discovery that Avantor has agreed to acquire for EUR890 million. Moody's views the transaction as a credit negative as it will increase Avantor's pro forma leverage to close to 5x up from 4.5x on the twelve months ending December 31, 2020. This incorporates earnings contribution from Ritter (annual revenue of approximately EUR225 million) and the incremental debt to fund the acquisition. While the acquisition will increase leverage, Moody's considers the acquisition to be strategically sensible as Ritter has strong organic growth opportunities and will benefit from Avantor's strong existing customer relationships. Ratings assigned: Issuer: Avantor Funding, Inc. Senior Secured EUR Term Loan expiring 2028, Assigned Ba1 (LGD2) RATINGS RATIONALE Avantor's Ba3 CFR is supported by the company's track record of delivering good revenue and earnings growth. It also reflects moderate financial leverage with adjusted debt/EBITDA of 5 times (pro-forma for the Ritter acquisition). The rating is supported by the steady and largely recurring nature of around 85% of revenue, as well as high customer switching costs associated with the ultra-high purity materials business. It also reflects good scale with revenues of approximately $6.4 billion and good customer, geographic, and product diversification. Moody's expects Avantor will generate strong free cash flow over the next 12-18 months. Near term, the COVID-19 pandemic has presented opportunities to Avantor; the company has been involved in the production of both COVID-19 therapies and vaccines but also benefitted from increased demand for PPE and Diagnostic testing. Moody's expects this tailwind to continue in 2021, but it is likely to be temporary. Meanwhile, Avantor has also invested to meet growing demand in its bioproduction capabilities. This is supported by a moderate increase in capex geared towards strengthening Avantor's position as a key supplier for the biopharma industry. Moody's expects Avantor to use some of its financial flexibility to fulfill its external growth strategy, such as its pending acquisition of Ritter. The Speculative Grade Liquidity rating of SGL-1 reflects Moody's expectation that Avantor's liquidity will remain very good over the next 12 to 18 months. Avantor's liquidity is supported by $173 million of cash as of March 31, 2021. Moody's estimates that Avantor will generate over $700 million of free cash flow over the next 12 months, aided by working capital management and lower interest expense. External liquidity is supported by a $515 million senior secured revolving credit facility expiring in July 2025. Furthermore, the company has an accounts receivable securitization facility (unrated) that provides for borrowings of up to $300 million, which expires in March 2023. The stable outlook reflects Moody's expectation that Avantor's debt/EBITDA will improve toward the 4.0-4.5 times within 12-18 months of closing of the Ritter acquisition, primarily through earnings growth and debt repayment. Avantor faces some degree of environmental risk due to the handling of, manufacturing, use or sale of substances that are or could be classified as toxic or hazardous materials. From a governance standpoint, Avantor has adopted more conservative financial policies since its 2019 IPO, including a publicly stated debt/EBITDA target range of 2.0 - 4.0 times. The company typically meets or exceeds its guidance. Regarding social risk, Avantor is exposed to both positive and negative social considerations. Moody's regards the coronavirus pandemic as a social risk under its ESG framework given the substantial implications for public health and safety. The pandemic has reduced demand for some of Avantor's products due to the temporary closure of some research facilities and lower demand from healthcare and industrial customers. However, the company has been involved in the production of COVID-19 therapies and vaccines and benefitted from increased demand for PPE and diagnostic testing, which has supported earnings growth in the latter half of 2020. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS The ratings could be upgraded if Avantor further improves its scale and business line diversity. Specifically, debt to EBITDA sustained below 3.5 times would support an upgrade. The ratings could be downgraded if Avantor's operating performance deteriorates, or if it engages in large debt-funded acquisitions. A downgrade could also occur if debt to EBITDA is sustained above 5.0 times. Following the proposed increase in secured debt to fund the Ritter acquisition, there is limited cushion in the Ba1 senior secured instrument rating. Avantor is a global provider of mission critical products and services to the life sciences and advanced technologies & applied materials industries. Headquartered in Pennsylvania, the company generates revenue of approximately $6.4 billion annually. The principal methodology used in these ratings was Distribution & Supply Chain Services Industry published in June 2018. BCR PARTNERS: U.S. Trustee Unable to Appoint Committee ------------------------------------------------------ The U.S. Trustee for Region X disclosed in a court filing that no official committee of unsecured creditors has been appointed in the Chapter 11 case of BCR Partners, LLC. About BCR Partners BCR Partners -- https://bransoncedarsresort.com -- is a vacation destination offering tree houses, log cabins and bungalows. BCR Partners filed its voluntary petition for relief under Chapter 11 of the Bankruptcy Code (Bankr. W.D. Case No. 21-60121) on Feb. 26, 2021. Michael Hyams, chief operating officer and partner, signed the petition. At the time of filing, the Debtor had between $1 million and $10 million in both assets and liabilities. Berman, DeLeve, Kuchan & Chapman, LLC represents the Debtor as legal counsel. BEP ULTERRA: Moody's Alters Outlook on 'B3' CFR to Stable --------------------------------------------------------- Moody's Investors Service affirmed BEP Ulterra Holdings, Inc.'s (Ulterra) ratings, including its B3 Corporate Family Rating, B3-PD Probability of Default Rating, and B3 senior secured term loan ratings. The rating outlook was changed to stable from negative. Affirmations: Issuer: BEP Ulterra Holdings, Inc. Corporate Family Rating, Affirmed B3 Probability of Default Rating, Affirmed B3-PD Senior Secured Bank Credit Facility, Affirmed B3 (LGD4) Outlook Actions: Issuer: BEP Ulterra Holdings, Inc. Outlook, Changed To Stable From Negative RATINGS RATIONALE The change of the outlook to stable reflects Moody's expectations that the company will maintain adequate liquidity and will see a gradual improvement in earnings and cash flow generation in 2021-22. Ulterra's B3 CFR incorporates Moody's expectation that the company will benefit modestly from stabilizing industry conditions in 2021-22. With the limited growth in demand, Ulterra's highly variable cost structure will allow the company to generate enough cash flow to cover its proportionally higher capital spending, debt payments, and working capital requirements. Ulterra remains a cyclical company with cash flows highly correlated to the volatility of upstream drilling. Moody's expects that Ulterra's leverage and interest coverage will start to improve, with Debt/EBITDA recovering to below 7x and EBITDA/interest to around 2x in 2021 and will continue to improve in 2022. The CFR is constrained by the company's small scale and single product line focus in a niche segment of Polycrystalline Diamond Compact (PDC) drill-bits. Moody's expects Ulterra to maintain adequate liquidity, supported by its cash balance of $27 million at the end of 2020 and substantial availability under its $50 million super priority revolving credit facility, maturing in November 2023. The revolving credit facility has a number of financial covenants, including maintaining a maximum net super priority debt/EBITDA ratio of 1.0x at all times and a springing net total debt/EBITDA covenant of 4.5x tested when utilization exceeds 60%. Ulterra should remain in compliance with its covenants through 2022 and Moody's does not expect the revolver utilization to reach the level that makes the total leverage covenant operational. The senior secured term loan maturing in 2025 has a first lien pledge of all the assets of the issuer and guarantors, including the operating subsidiaries, and is rated B3 (the same as the CFR). Although the $50 million super priority 2023 revolving credit facility will be paid out on a first out basis in the event of default, given the small size of the facility as compared to the size of the term loan, the term loan is rated the same as the CFR. The term loan facility and the revolving credit facility have liens on the assets of the company and its downstream guarantors and the subsidiaries. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS An upgrade of the B3 ratings may be achieved if Ulterra maintains leverage below 4.5x, with good liquidity amid a broader recovery in drilling activity in the US. Ratings could be downgraded if Ulterra's liquidity position weakens or its EBITDA/Interest does not recover to 2.5x. Ulterra Holdings, Inc. is a manufacturer of Polycrystalline Diamond Compact (PDC) drill bits and stick-slip reduction tools headquartered in Fort Worth, Texas. Ulterra is owned by the private equity firms Blackstone Group and American Securities. The principal methodology used in these ratings was Global Oilfield Services Industry Rating Methodology published in May 2017. BLINK CHARGING: Incurs $7.4 Million Net Loss in First Quarter ------------------------------------------------------------- Blink Charging Co. filed with the Securities and Exchange Commission its Quarterly Report on Form 10-Q disclosing a net loss of $7.36 million on $2.23 million of total revenues for the three months ended March 31, 2021, compared to a net loss of $2.96 million on $1.30 million of total revenues for the three months ended March 31, 2020. As of March 31, 2021, the Company had $251.94 million in total assets, $8.77 million in total liabilities, and $243.17 million in total stockholders' equity. For the three months ended March 31, 2021 and 2020, the Company used cash of $8,497,978 and $3,413,141, respectively, in operations. The Company's cash use for the three months ended March 31, 2021 was primarily attributable to its net loss of $7,364,475, adjusted for net non-cash expenses in the aggregate amount of $1,054,705, and $2,188,208 of net cash used in changes in the levels of operating assets and liabilities. The Company's cash used for the three months ended March 31, 2020 was primarily attributable to its net loss of $2,961,100, adjusted for net non-cash expenses in the aggregate amount of $220,023, and $672,064 of net cash used in changes in the levels of operating assets and liabilities. During the three months ended March 31, 2021, net cash used in investing activities was $40,582,908, of which, $36,562,212 was provided in connection with the purchase of marketable securities and $4,020,696 was used to purchase charging stations and other fixed assets. During the three months ended March 31, 2020, net cash provided by investing activities was $799,614, of which, $1,100,516 was provided in connection with the sale of marketable securities and $300,902 was used to purchase charging stations and other fixed assets. During the three months ended March. 31, 2021, cash provided in financing activities was $222,385,807, of which, $221,405,782 was provided by the sale of common stock in a public offering and $999,540 was provided upon the exercise of warrants, this was offset by $19,515 used to pay down the Company's liability in connection with internal use software. During the three months ended March 31, 2020, cash used in financing activities was $17,989 which was used to pay down its liability in connection with internal use software. As of March 31, 2021, the Company had cash, working capital and an accumulated deficit of $195,646,354, $230,972,150 and $194,715,923, respectively. During the three months ended March 31, 2021, the Company had a net loss of $7,364,475. Management Comments "Blink is off to a strong start and solidly positioned to drive growth as we move through the balance of 2021. We are excited by the opportunities we see in the marketplace, and as evidenced during the first quarter, we are perfectly situated to capitalize on these opportunities. It is an exciting and transformative time for the industry and Blink. We are optimistic about our future and our leadership role in the worldwide EV charging infrastructure industry," stated Michael D. Farkas, founder and chief executive officer of Blink. "As a key contributor to the expanding EV landscape, we are continuously looking for opportunities to strategically increase our global assets while also making EV charging more accessible. As such, we are very excited about this week's announced acquisition of Blue Corner and the opportunity it provides Blink to establish a significant presence in Europe immediately. International expansion is fundamental to our growth, and we believe this acquisition will accelerate the success we are already achieving in Europe," Mr. Farkas continued. "Blink's European expansion allows the Company to capitalize on the robust European EV industry where EVs comprise of a large and growing share of the automotive market. Sales of plug-in EVs in Europe rose 137% last year compared to 4% growth in the U.S." Brendan Jones, president of Blink, commented, "We started 2021 with strong revenue and sales growth and continued progress with our owner/operator business model, which we believe will further contribute to our upward growth for the year. We are energized by the momentum we see in our industry and the substantial interest we're seeing for Blink chargers. The establishment of EV infrastructure is becoming a priority in the U.S. and worldwide as government entities, businesses, and local communities increasingly encourage the adoption of electric vehicles to promote sustainability and a greener, cleaner environment. Blink is pursuing and is poised to capture the many current, and future charging opportunities as the world evolves to widespread EV use and seeks reliable, fast, and accessible EV infrastructure to support this transition." "As we move through 2021, we remain intently focused on expanding our leadership role in the EV charging industry and extending our charging footprint, both domestically and internationally. We made tremendous progress during the first quarter, both in terms of new deployments and new distribution opportunities and partnerships. With our owner/operator business model, we target high density, high volume locations such as hotels, multi-family residences, and healthcare centers. We are also working with a broad range of countries, states, and municipalities to strengthen EV infrastructure as more individual drivers and fleets transition to greener transportation. The structure of our owner/operator agreements is comprised of long-term, renewable contracts with a revenue sharing model in which we receive payment each time a vehicle is charged at a Blink-owned unit, creating the potential to generate a valuable recurring revenue stream for many years to come as EV utilization increases," stated Farkas. A full-text copy of the Form 10-Q is available for free at: https://www.sec.gov/Archives/edgar/data/1429764/000149315221011337/form10-q.htm About Blink Charging Based in Miami Beach, Florida, Blink Charging Co. (OTC: CCGID) f/k/a Car Charging Group Inc. -- http://www.CarCharging.com-- is an owner and operator of electric vehicle charging stations in the United States and a growing presence in Europe, Asia, Israel, the Caribbean, and South America. The Blink Network utilizes proprietary cloud-based software that operates, maintains, and tracks the EV charging stations connected to the network, along with the associated charging data. The Company has established key strategic partnerships to roll out adoption across numerous location types, including parking facilities, multifamily residences and condos, workplace locations, health care/medical facilities, schools and universities, airports, auto dealers, hotels, mixed-use municipal locations, parks and recreation areas, religious institutions, restaurants, retailers, stadiums, supermarkets, and transportation hubs. Blink Charging reported a net loss of $17.85 million for the year ended Dec. 31, 2020, compared to a net loss of $9.65 million for the year ended Dec. 31, 2019. As of Dec. 31, 2020, the Company had $33.98 million in total assets, $6.82 million in total liabilities, and $27.16 million in total stockholders' equity. BOY SCOUTS OF AMERICA: Considers Its Ch. 11 Plan as The Best Option ------------------------------------------------------------------- Law360 reports that the Boy Scouts of America have doubled down just ahead of a crucial Chapter 11 disclosure hearing on warnings that their preferred Delaware bankruptcy reorganization plan offers the only alternative to protracted sexual abuse claim litigation, local council bankruptcies and sinking memberships in some regions. According to amended plan and disclosure statements produced during a prehearing flurry of filings Sunday, May 16, 2021, the group's unrestricted cash and investments could fall by more than 50% in 2025 in the event the proposed global deal collapses, while memberships would decline by 5% overall as litigation over damages for sexual abuse survivors. About Boy Scouts of America The Boy Scouts of America -- https://www.scouting.org/ -- is a federally chartered non-profit corporation under title 36 of the United States Code. Founded in 1910 and chartered by an act of Congress in 1916, the BSA's mission is to train youth in responsible citizenship, character development, and self-reliance through participation in a wide range of outdoor activities, educational programs, and, at older age levels, career-oriented programs in partnership with community organizations. Its national headquarters is located in Irving, Texas. The Boy Scouts of America and affiliate Delaware BSA, LLC, sought Chapter 11 protection (Bankr. D. Del. Lead Case No. 20-10343) on Feb. 18, 2020, to deal with sexual abuse claims. Boy Scouts of America was estimated to have $1 billion to $10 billion in assets and at least $500 million in liabilities as of the bankruptcy filing. The Debtors have tapped Sidley Austin LLP as their bankruptcy counsel, Morris, Nichols, Arsht & Tunnell LLP as Delaware counsel, and Alvarez & Marsal North America, LLC as financial advisor. Omni Agent Solutions is the claims agent. The U.S. Trustee for Region 3 appointed a tort claimants' committee and an unsecured creditors' committee on March 5, 2020. The tort claimants' committee is represented by Pachulski Stang Ziehl & Jones, LLP, while the unsecured creditors' committee is represented by Kramer Levin Naftalis & Frankel, LLP. BOY SCOUTS: Roman Catholic Archbishop Opposes Disclosure Statement ------------------------------------------------------------------ The Roman Catholic Archbishop of Los Angeles (RCALA) and its related BSA-chartered organizations (ADLA Chartered Organizations) join in the objection filed by The Church of Jesus Christ of Latter-day Saints to the Disclosure Statement explaining the Second Amended Chapter 11 Plan of Reorganization for Boy Scouts of America and Delaware BSA, LLC. RCALA and the ADLA Chartered Organizations have filed claims against the Debtors for indemnity and contribution constituted as "Indirect Abuse Claims" under the Plan. The Objectors point out to the Court that their Claims are proposed to be channeled to the Settlement Trust, which is subjected to vague and indeterminate procedures for allowance and payment. RCALA and the ADLA Chartered Organizations understand that they have rights as insureds under certain of the BSA's and Local Councils' insurance policies that are proposed to be assigned to the Settlement Trust under the Plan. "These right rights would be effectively cut off by the proposed Insurance Entity Injunction under the Plan," Patrick A. Jackson, Esq., at FAEGRE DRINKER BIDDLE & REATH LLP, counsel for the objectors, told the Court. Accordingly, RCALA and the ADLA Chartered Organizations submit that the Plan is patently unconfirmable in its current form and the Disclosure Statement fails to provide "adequate information" required under Chapter 1125 of the Bankruptcy Code. The Objectors, by their joinder, ask the Court to deny approval of the Disclosure Statement, or in the alternative, rule that the Disclosure Statement provides for a patently unconfirmable Plan on which votes should not be solicited. A copy of the joinder is available for free at https://bit.ly/3eTH5Vo from Omni Agent Solutions, claims agent. The Roman Catholic Archbishop of Los Angeles and its related BSA-chartered organizations are represented by: Patrick A. Jackson, Esq. Ian J. Bambrick, Esq. Kaitlin W. MacKenzie, Esq. FAEGRE DRINKER BIDDLE & REATH LLP 222 Delaware Ave., Suite 1410 Wilmington, DE 19801-1621 Telephone: (302) 467-4200 Facsimile: (302) 467-4201 Email: Patrick.Jackson@faegredrinker.com Ian.Bambrick@faegredrinker.com Kaitlin.MacKenzie@faegredrinker.com - and - Michael P. Pompeo, Esq. FAEGRE DRINKER BIDDLE & REATH LLP 1177 Avenue of the Americas, 41st Floor New York, NY 10036-2714 Telephone: (212) 248-3140 Facsimile: (212) 248-3141 Email: Michael.Pompeo@faegredrinker.com About Boy Scouts of America The Boy Scouts of America -- https://www.scouting.org/ -- is a federally chartered non-profit corporation under title 36 of the United States Code. Founded in 1910 and chartered by an act of Congress in 1916, the BSA's mission is to train youth in responsible citizenship, character development, and self-reliance through participation in a wide range of outdoor activities, educational programs, and, at older age levels, career-oriented programs in partnership with community organizations. Its national headquarters is located in Irving, Texas. The Boy Scouts of America and affiliate Delaware BSA, LLC, sought Chapter 11 protection (Bankr. D. Del. Lead Case No. 20-10343) on Feb. 18, 2020, to deal with sexual abuse claims. Boy Scouts of America was estimated to have $1 billion to $10 billion in assets and at least $500 million in liabilities as of the bankruptcy filing. The Debtors have tapped Sidley Austin LLP as their bankruptcy counsel, Morris, Nichols, Arsht & Tunnell LLP as Delaware counsel, and Alvarez & Marsal North America, LLC as financial advisor. Omni Agent Solutions is the claims agent. The U.S. Trustee for Region 3 appointed a tort claimants' committee and an unsecured creditors' committee on March 5, 2020. The tort claimants' committee is represented by Pachulski Stang Ziehl & Jones, LLP, while the unsecured creditors' committee is represented by Kramer Levin Naftalis & Frankel, LLP. BRECKENRIDGE HILLS: Gets Interim OK to Hire L.K. Wood as Broker --------------------------------------------------------------- Breckenridge Hills Fuel, LLC and Shri Narayan, LLC received interim approval from the U.S. Bankruptcy Court for the Eastern District of Missouri to hire L.K. Wood Realty Services, Inc. as their exclusive real estate broker. The Debtors require a real estate broker to market their properties located at (i) 1999 Highway Z, Pevely, Mo.; 416 Benham St., Bonne Terre, Mo.; 1125 Sycamore Lane, St. Clair, Mo.; and 4390 Telegraph Road, St. Louis, Mo. L.K. Wood will be paid a 6 percent commission on the sales price. As disclosed in court filings, L.K. Wood is a "disinterested person" within the meaning of Section 101(14) of the Bankruptcy Code. The firm can be reached through: L.K. Wood, Jr. L.K. Wood Realty Services Inc. 8460 Watson Rd #112 St. Louis, MO 63119 Phone: +1 314-849-6300 About Breckenridge Hills Fuel and Shri Narayan Breckenridge Hills Fuel, LLC leases out two gas stations and convenience stores located at 1125 Sycamore Lane, St. Clair, Mo. and 4390 Telegraph Road, St. Louis, Mo. Shri Narayan, LLC owns and operates two gas stations and convenience stores located at 1999 Highway Z, Pevely, Mo., and 416 Benham St., Bonne Terre, Mo. Breckenridge Hills Fuel and Shri Narayan filed petitions for relief under Chapter 11 of the Bankruptcy Code (Bankr. E.D. Mo. Case Nos. 21-41572 and 21-41573) on April 25, 2021. Milapkumar P. Patel, member and manager of the Debtors, also sought Chapter 11 protection (Bankr. E.D. Mo. Case No. 21-41571) on April 25, 2021. The cases are jointly administered under Case No. 21-41571). Judge Bonnie L. Clair presides over the cases. Breckenridge Hills Fuel and Shri Narayan disclosed total assets of up to $50,000 and liabilities of up to $10 million at the time of the filing. The Debtors are represented by Angela Redden-Jansen, Esq. BRECKENRIDGE HILLS: Gets Interim OK to Hire Legal Counsel --------------------------------------------------------- Breckenridge Hills Fuel, LLC and Shri Narayan, LLC received interim approval from the U.S. Bankruptcy Court for the Eastern District of Missouri to hire Angela Redden-Jansen, Esq., an attorney practicing in Maplewood, Mo., to handle their Chapter 11 cases. Ms. Redden-Jansen will provide these services: (a) analyze the Debtors' financial condition; (b) prepare and file statement of financial affairs, Chapter 11 plan, disclosure statement and other papers which may be necessary or appropriate in the Debtors' bankruptcy proceedings; (c) represent the Debtors at the meeting of creditors and court hearings; (d) represent the Debtors in adversary proceedings and other contested bankruptcy matters; and (e) assist the Debtors in the federal and state court lawsuits and administrative proceedings related or ancillary to the bankruptcy proceedings. Ms. Redden-Jansen's standard rate is $325 per hour while the rates for paralegals range from $140 to $245 per hour. In addition to the standard hourly rates to be charged, the Debtors will pay all actual expenses incurred by the attorney. Ms. Redden-Jansen received a retainer of $5,107.50. As disclosed in court filings, Ms. Redden-Jansen does not represent interest adverse to the Debtors in the matters upon which she is to be engaged as attorney for the Debtors. Ms. Redden-Jansen can be reached at: Angela Redden-Jansen, Esq. 3350 Greenwood Blvd Saint Louis, MO 63143 Tel: 314-645-5900 Fax: 314-754-8104 Email: amredden@swbell.net About Breckenridge Hills Fuel and Shri Narayan Breckenridge Hills Fuel, LLC leases out two gas stations and convenience stores located at 1125 Sycamore Lane, St. Clair, Mo. and 4390 Telegraph Road, St. Louis, Mo. Shri Narayan, LLC owns and operates two gas stations and convenience stores located at 1999 Highway Z, Pevely, Mo., and 416 Benham St., Bonne Terre, Mo. Breckenridge Hills Fuel and Shri Narayan filed petitions for relief under Chapter 11 of the Bankruptcy Code (Bankr. E.D. Mo. Case Nos. 21-41572 and 21-41573) on April 25, 2021. Milapkumar P. Patel, member and manager of the Debtors, also sought Chapter 11 protection (Bankr. E.D. Mo. Case No. 21-41571) on April 25, 2021. The cases are jointly administered under Case No. 21-41571). Judge Bonnie L. Clair presides over the cases. Breckenridge Hills Fuel and Shri Narayan disclosed total assets of up to $50,000 and liabilities of up to $10 million at the time of the filing. The Debtors are represented by Angela Redden-Jansen, Esq. CANTERA COURT: Taps Pulman Cappuccio & Pullen as Legal Counsel -------------------------------------------------------------- Cantera Court Complex, Inc. received approval from the U.S. Bankruptcy Court for the Southern District of Texas to hire Pulman, Cappuccio & Pullen, LLP as its legal counsel. The firm will render these services: a. take all necessary actions to protect and preserve the Debtor's estate, including the prosecution of actions on the Debtor's behalf, the defense of any action commenced against Debtor, the negotiation of disputes in which the Debtor is involved, and the preparation of objections to claims filed against the estate; b. prepare legal papers; c. advise the Debtor concerning legal questions regarding all aspects of its Chapter 11 case, including issues regarding the administration of assets, sale or lease of assets, claims and objections to claims, and any appropriate litigation including avoidance actions or affirmative claims of the estate against third parties (in both bankruptcy court and other necessary judicial forums); d. assist the Debtor in the preparation of a plan of reorganization; and e. perform all other necessary legal services in connection with the case. The firm will be paid at these rates: Randall A. Pulman, Partner $500 per hour Thomas Rice, Counsel $450 per hour Catherine Stone Curtis, Partner $375 per hour Carissa Brewster, Associate $200 per hour Paralegal $160 per hour Pulman Cappuccio is a disinterested person under Section 101(14) of the Bankruptcy Code, according to court papers filed by the firm. The firm can be reached through: Randall A. Pulman, Esq. Thomas Rice, Esq. Catherine Stone Curtis, Esq. Pulman, Cappuccio & Pullen, LLP 2161 NW Military Highway, Suite 400 San Antonio, TX 78213 Tel: (210) 222-9494 Fax: (210) 892-1610 Email: rpulman@pulmanlaw.com trice@pulmanlaw.com ccurtis@pulmanlaw.com About Cantera Court Complex Cantera Court Complex, Inc. is the owner and operator of Cantera Court Complex, one of the premier multi-tenant retail centers in Laredo, Texas. It also owns six residential properties doing business as BMW Creative Homes that are under contracts for deed. Cantera Court Complex sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. S.D. Texas Case No. 21-50044) on April 30, 2021. In the petition signed by Eric Lee Benavides, director, the Debtor disclosed up to $10 million in both assets and liabilities. Catherine S. Curtis, Esq., at Pulman, Cappuccio & Pullen, LLP, is the Debtor's legal counsel. Falcon International Bank, as lender, is represented by Richard E. Haynes III at Trevino Haynes, PLLC. CASTEX ENERGY: Committee Taps Seaport Global as Financial Advisor ----------------------------------------------------------------- The official committee of unsecured creditors of Castex Energy 2005 Holdco, LLC and its affiliates seeks approval from the U.S. Bankruptcy Court for the Southern District of Texas to hire Seaport Global Securities, LLC as its financial advisor. The firm's services include: a. analyzing the Debtors' budgets, weekly cash flow, assets and liabilities, and overall financial condition; b. reviewing financial and operational information furnished by the Debtors to the committee; c. scrutinizing the economic terms of various agreements; d. analyzing the Debtors' proposed business plans, plugging and abandonment estimates, valuation of assets, plan of liquidation and developing alternative scenarios, if necessary; e. assessing the Debtors' various pleadings and proposed treatment of unsecured creditor claims; f. preparing or reviewing avoidance action and claim analyses; g. assisting the committee in reviewing the Debtors' financial reports; h. advising the committee on the current state of the Debtors' Chapter 11 cases; i. advising the committee in negotiations with the Debtors and third parties, as necessary; j. if necessary, participating as a witness in hearings before the court with respect to matters upon which Seaport has provided advice; and k. any other activities approved by the committee and its legal counsel and agreed to by Seaport. The firm will be paid at these rates: Managing Director $600 per hour Vice President $510 per hour Associate $360 per hour Analyst $240 per hour Paraprofessional $185 per hour Thomas Thompson, managing director at Seaport, disclosed in a court filing that his firm is a "disinterested person" within the meaning of Section 101(14) of the Bankruptcy Code. The firm can be reached through: Thomas Thompson Seaport Global Securities LLC 360 Madison Avenue, 22nd Floor New York, NY 10017 Tel: 212-616-7700 About Castex Energy 2005 Holdco Castex Energy 2005 Holdco, LLC and its affiliates, Castex Energy 2005, LLC, Castex Energy Partners, LLC, and Castex Offshore, Inc., sought protection under Chapter 11 of the Bankruptcy Code (Bankr. S.D. Texas Lead Case No. 21-30710) on Feb. 26, 2021. At the time of the filing, the Debtors disclosed assets of between $100 million and $500 million and liabilities of the same range. Judge David R. Jones oversees the cases. The Debtors tapped Okin Adams LLP as bankruptcy counsel, The Claro Group, LLC as financial advisor, and Thompson & Knight LLP as special counsel and conflicts counsel. Douglas Brickley, managing director at Claro Group, serves as the Debtors' chief restructuring officer. Donlin, Recano & Company, Inc. is the notice, claims and balloting agent. The U.S. Trustee for Region 7 appointed an official committee of unsecured creditors in the Debtors' Chapter 11 cases. Stewart Robbins Brown & Altazan, LLC and Howley Law, PLLC serve as the committee's bankruptcy counsel and local counsel, respectively. Seaport Global Securities, LLC is the committee's financial advisor. CLEAN ENERGY: Posts $1.1 Million Net Profit in First Quarter ------------------------------------------------------------ Clean Energy Technologies, Inc. filed with the Securities and Exchange Commission its Quarterly Report on Form 10-Q disclosing net profit of $1.07 million on $135,275 of sales for the three months ended March 31, 2021, compared to a net loss of $313,574 on $858,816 of sales for the three months ended March 31, 2020. As of March 31, 2021, the Company had $6.71 million in total assets, $8.95 million in total liabilities, and a total stockholders' deficit of $2.24 million. The Company had a working capital deficit of $3,165,663 as of March 31, 2021. The company also had an accumulated deficit of $16,582,898 as of March 31, 2021 and used $663,192 in net cash from operating activities for the three months ended March 31, 2021. Therefore, the Company said, there is doubt about its ability to continue as a going concern. There can be no assurance that the Company will achieve its goals and reach profitable operations and is still dependent upon its ability (1) to obtain sufficient debt and/or equity capital and/or (2) to generate positive cash flow from operations. A full-text copy of the Form 10-Q is available for free at: https://www.sec.gov/Archives/edgar/data/1329606/000149315221011419/form10q.htm About Clean Energy Headquartered in Costa Mesa, California, Clean Energy Technologies, Inc. -- http://www.cetyinc.com-- designs, produces and markets clean energy products and integrated solutions focused on energy efficiency and renewables. Clean Energy reported a net loss of $3.44 million for the year ended Dec. 31, 2020, compared to a net loss of $2.56 million for the year ended Dec. 31, 2019. As of Dec. 31, 2020, the Company had $4.12 million in total assets, $11.36 million in total liabilities, and a total stockholders' deficit of $7.24 million. Spokane, Washington-based Fruci & Associates II, PLLC, the Company's auditor since 2015, issued a "going concern" qualification in its report dated April 15, 2021, citing that the Company has an accumulated deficit, net losses, negative working capital, and has utilized significant net cash in operations. These factors raise substantial doubt about the Company's ability to continue as a going concern. CLEVELAND BIOLABS: Incurs $547,205 Net Loss in First Quarter ------------------------------------------------------------ Cleveland Biolabs, Inc. filed with the Securities and Exchange Commission its Quarterly Report on Form 10-Q disclosing a net loss of $547,205 on zero revenue for the three months ended March 31, 2021, compared to a net loss of $601,728 on $156,042 of total revenues from grants and contracts for the three months ended March 31, 2020. As of March 31, 2021, the Company had $14.70 million in total assets, $518,151 in total liabilities, and $14.18 million in total stockholders' equity. The Company has incurred net losses of approximately $170 million from its inception through March 31, 2021. Historically, the Company has not generated, and does not expect to generate in the immediate future, revenue from sales of product candidates. Cleveland Biolabs said, "We have incurred cumulative net losses and expect to incur additional losses related to our R&D activities. We do not have commercial products and have limited capital resources and our contracts and grants with the DoD were completed in 2020, meaning that we are currently not generating any revenues or cash from operations. At March 31, 2021, we had cash, cash equivalents and short-term investments of $14.6 million, which represents a increase of $12.4 million since the end of our last fiscal year. This increase was caused by our capital raise and warrant exercises, offset by our net cash used in operations of $0.36 million during the three months ended March 31, 2021. We expect our cash, cash equivalents, and short-term investments, to fund our projected operating requirements and allow us to fund our operating plan, in each case, into May 2022. However, until we are able to commercialize our product candidates at a level that covers our cash expenses, we will need to raise substantial additional capital, which we may be unable to raise in sufficient amounts, when needed and at acceptable terms. Our plans with regard to these matters may include seeking additional capital through debt or equity financing, the sale or license of drug candidates, the sale of certain of our tangible and/or intangible assets, the sale of interests in our subsidiaries or joint ventures, obtaining additional government research funding, or entering into other strategic transactions. There can be no assurance that we will be able to obtain future financing on acceptable terms, obtain additional government financing for our operations, or enter into other strategic transactions. In addition, the recent outbreak of the novel coronavirus known as COVID-19 has significantly disrupted world financial markets, negatively impacted U.S. market conditions and may reduce opportunities for us to seek out additional funding. If we are unable to raise adequate capital and/or achieve profitable operations, future operations might need to be scaled back or discontinued. The financial statements do not include any adjustments relating to the recoverability of the carrying amount of recorded assets and liabilities that might result from the outcome of these uncertainties." A full-text copy of the Form 10-Q is available for free at: https://www.sec.gov/Archives/edgar/data/1318641/000143774921012189/cbli20210331_10q.htm About Cleveland BioLabs Cleveland BioLabs, Inc. -- http://www.cbiolabs.com-- is a biopharmaceutical company developing novel approaches to activate the immune system and address serious medical needs. The Company's proprietary platform of Toll-like immune receptor activators has applications in radiation mitigation and oncology. The Company's most advanced product candidate is entolimod, which is being developed as a medical radiation countermeasure for the prevention of death from acute radiation syndrome and other indications in radiation oncology. The Company was incorporated in Delaware in June 2003 and is headquartered in Buffalo, New York. Cleveland Biolabs reported a net loss of $2.44 million for the year ended Dec. 31, 2020, compared to a net loss of $2.69 million for the year ended Dec. 31, 2019. As of Dec. 31, 2020, the Company had $2.32 million in total assets, $304,611 in total liabilities, and $2.01 million in total stockholders' equity. Cleveland, Ohio-based Meaden & Moore, Ltd. issued a "going concern" qualification in its report dated March 22, 2021, citing that the Company has incurred losses each year from inception through Dec. 31, 2020, and continues to have negative cash flow from operations. However, management believes, based on the current projections, including the impact of the February 2021 equity raise, that the Company will have enough funds to ensure continuing operations as a stand-alone entity for a period of at least one year from the issuance of these financial statements. COLORADO HEALTH: U.S. Govt.'s Bid to 'Leafrog' Creditors Fails -------------------------------------------------------------- Mary Anne Pazanowski of Bloomberg Law reports that the U.S. government improperly used Affordable Care Act payments it owed a defunct Colorado health insurer to satisfy part of a debt the insurer owed it, as the state's insolvency laws didn't allow the set off, the Federal Circuit said Monday, May 17, 2021. Nothing in state law, the ACA, or the regulations implementing it allowed the federal government to assert priority over Colorado Health Insurance Cooperative Inc.'s other creditors in state liquidation proceedings, the U.S. Court of Appeals for the Federal Circuit said. Colorado Health, a CO-OP program insurer, participated in the Colorado reinsurance and risk-adjustment programs for benefit year 2015. Because Colorado had declined to administer those programs, HHS operated both. For that year, HHS owed Colorado Health $38,664,335 under the reinsurance program, and Colorado Health owed HHS approximately $42,000,000 under the risk-adjustment program. In early 2016, before the final obligations for benefit year 2015 were tabulated, HHS made an early reinsurance payment. Accounting for that payment, HHS still owes Colorado Health $24,489,799. No other payments have been made. Soon after HHS' early payment, a Colorado court ordered Colorado Health into liquidation. Liquidation is a bankruptcy-like proceeding during which a liquidator, here Michael Conway, collects and distributes an insurer's assets. The government challenged a Claims Court decision, arguing that Colorado law, as properly interpreted, affords it a right to offset ACA debts during insolvency proceedings. "We hold that the government did not have a right to offset ACA obligations during Colorado Health's insolvency proceedings and that the Claims Court’s money judgment was proper," the Federal Circuit ruled. A copy of the Opinion is available at http://www.cafc.uscourts.gov/sites/default/files/opinions-orders/20-1292.OPINION.5-17-2021_1778434.pdf COMMUNITY CARE: Moody's Affirms B2 CFR & Alters Outlook to Stable ----------------------------------------------------------------- Moody's Investors Service affirmed Community Care Health Network, LLC's (dba "Matrix") B2 corporate family rating and the B2 instrument ratings on the health services provider's senior secured first-lien debt, which includes a $20 million revolving credit facility and a $330 million term loan. Moody's upgraded Matrix's probability of default rating to B2-PD, from B3-PD, to reflect the company's more secure positioning in the B2 CFR and the related improved default risk. Moody's has also changed the company's outlook to stable, from negative. Issuer: Community Care Health Network, LLC Upgrades: Probability of default rating, upgraded to B2-PD from B3-PD Affirmations: Corporate family rating, affirmed at B2 Senior secured 1st lien bank credit facility, affirmed at B2 (LGD3) Outlook Actions: Issuer: Community Care Health Network, LLC Outlook, changed to stable, from negative RATINGS RATIONALE Moody's bases Matrix's improved outlook on the company's 50% surge in revenue in 2020 and resultant improvements to leverage and liquidity. The company was able to quickly repurpose its staff of clinicians and its mobile clinics in response to the COVID-19 pandemic. While core comprehensive health assessment ("CHA") volumes shrank in 2020, particularly in the second quarter, Matrix deployed some 50 mobile clinics to major new corporate customers' sites, where its clinicians and nurse practitioners ("NPs") could perform COVID testing and clinical trials and provide employee health and wellness services. The pivot to COVID-related employee health and wellness and workplace-safety services led to the formation of a new reporting unit, Clinical Solutions, which provided more than half of Matrix's $415 million 2020 revenue. Before 2020 the Risk Adjustment segment, in which CHA services are booked, had represented more than 90% of Matrix's sales. Matrix's Moody's-adjusted EBITDA doubled in 2020, to $95 million, while leverage was cut by more than half, to 3.5 times at year end 2020, from 7.5 times at the end of 2019. While Moody's does not expect a similar degree of operating improvement this year, Matrix's core CHA unit will show sharp improvement as social distancing restrictions are eased and NPs are able to resume conducting face-to-face CHAs. Clinical Solutions' revenue will contract, given both the premium pricing that had been commanded in 2020 because of the emergency nature of the services and a reversal in the spread of the virus. However, Moody's believes that as hard-hit industries resume operations, there will be continued demand for Matrix's mobile, clinical capabilities, albeit at steadily declining levels. The stable outlook reflects Moody's view that even with only marginal improvements in revenue in 2021 -- driven by a shifting sales mix of sharply improving CHA revenue and contracting Clinical Solutions revenue -- resultant credit metrics and liquidity will be strong for the B2 CFR. While the Clinical Solutions segment provides welcome revenue diversification, its long-term prospects are uncertain. Moody's anticipates leverage to improve modestly this year from the 3.5 times level at year end 2020. As a percentage of debt, free cash flow will be in the high single digits. Having already built to healthy levels as a result of 2020's unexpected operating performance, cash in 2021 will grow to $90 million to $100 million, quite strong relative to about $315 million of funded debt. Moody's considers Matrix's liquidity as good. Year-end 2020 cash of $70 million was more than double the amount at the prior-year end period, even after using a moderate amount of cash on a late-2020 acquisition. Moody's also expects the company's small, $20 million revolving credit facility to remain undrawn this year. Uncertainty with regard to the direction of financial strategy, given private equity ownership and Matrix's markedly improved liquidity position, weighs on the credit ratings. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS Moody's could upgrade Matrix's ratings if revenue growth can be sustained in 2021, despite the sharply shifting mix; if leverage continues to improve; and if its liquidity profile remains good or better. Moody's could downgrade the ratings if CHA-segment revenue does not rebound as strongly as expected; if Moody's expects debt-to-EBITDA leverage to be sustained above 6.0 times; or if Moody's anticipate that annual free cash flow will approach breakeven. Through its Risk Adjustment segment, Community Care Health Network, LLC (dba Matrix Medical Network, "Matrix") provides primarily home-based care management services for Medicare Advantage health plans in the U.S., including comprehensive health assessments ("CHAs") and chronic and post-acute-care management. Its Clinical Solutions unit focuses on providing employee health and wellness services, COVID-19 symptom screening and testing, vaccine studies and lab processing services. Moody's expect the company to generate 2021 revenues of about $440 million. Matrix was spun out from The Providence Service Corporation in an October 2016 buyout by Frazier Healthcare Partners. The principal methodology used in these ratings was Business and Consumer Service Industry published in October 2016. COMMUNITY INTERVENTION: Plan to Pay 10% to 20% for Unsecureds ------------------------------------------------------------- Community Intervention Services, Inc., and its debtor-affiliates filed with the Bankruptcy Court a Joint Liquidating Plan and a Disclosure Statement on May 14, 2021. The Plan contemplates that $250,000 of funds (which are cash collateral of Debtors' Senior Secured Lenders -- Fifth Third Bank and Capital One, National Association, as agent for itself and Fifth Third Bank), along with all proceeds of any estate causes of action, for distribution to the Debtors' general unsecured creditors for their allowed claims. The Debtors' bankruptcy estates will be substantively consolidated and administered by the Plan Administrator, who will take control of the estate on the effective date of the Plan. The Plan proposes that Getzler Henrich & Associates, through David Campbell, would serve as the Plan Administrator. Mr. Campbell currently serves as the Debtors' financial advisor. The Plan provides for a single distribution of the $250,000 pool to general unsecured creditors for their Allowed Claims to be made promptly after the resolution of all claim objections. The unsecured creditors that will share in the $250,000 fund exclude MWE (with a claim of $6,068,193); H.I.G. (with a claim of $5,245,415); and the Severance Claimants (with claims totaling $750,640). The $250,000 pool is expected to generate distributions between 10% and 20% of unsecured creditors' claims entitled to share in the proceeds. The Debtors currently anticipate that this distribution is likely to be made by October 31, 2021. The Senior Secured Lenders and Capital One have agreed not to participate in the distributions from the $250,000 pool, or the proceeds from any avoidance action (if any), on account of their deficiency claims. The Plan also provides for payment in full of all allowed priority claims, including administrative claims (arising during the Chapter 11 cases and the wind down of the Debtors' business and financial affairs), and priority tax claims. By agreement with the Internal Revenue Service the unmatured priority tax claim of the IRS will be settled at a 25% discount. These administrative and priority tax claims will be paid on the Effective Date or such later date as they become allowed or due and payable in the ordinary course. After payment of all these claims and distributions to general unsecured creditors, all other bankruptcy estate funds will be paid to the Senior Secured Lenders for their first-priority security interest in all of the Debtors' assets. The Senior Secured Lenders have waived their right to receive a distribution for their deficiency claims on the Senior Secured Lenders' Claim and Subordinated Secured Lender Claim. The Senior Secured Lenders would have been entitled to receive (on account of their deficiency claims) more than 95% of the $250,000 pool for the allowed general unsecured claims under the Plan absent the waiver. The amount available to the Senior Secured Lenders consisting of proceeds from the liquidation of the Debtors' assets, after the payment of wind-down expenses, shall be subject to these carve-out amounts: * $250,000, to fund distributions to the Debtors' general unsecured creditors; and * $634,609, to be paid on the Effective Date of the Plan to the IRS in full satisfaction of the IRS's claim for employment-related taxes deferred under the CARES Act. Prior to the filing of the Plan, the Debtors have already effectuated the liquidation of a substantial portion of their assets through two asset sales: (i) the sale of substantially all of the assets of Futures to FBTC Transitional Sub, LLC, which closed on April 5, 2021; and (ii) the sale of substantially all of the assets of South Bay (and certain of the assets of CIS) to SB Transitional Sub, LLC. Each of the purchasers is a special purpose entity formed and controlled by The Mentor Network, a Boston-based provider of behavioral health services. Holders of the Debtors' equity interests will not receive any distributions on account of such equity interests, which will be extinguished under the terms of the Plan. A copy of the Disclosure Statement is available for free at https://bit.ly/3eQbiof from PacerMonitor.com. About Community Intervention Services, Inc. Community Intervention Services, Inc. sought Chapter 11 protection (Bankr. D. Mass. Case No. 21-40002-EDK). The case is being jointly administered with the bankruptcy cases of its affiliates Community Intervention Services Holdings, Inc., Futures Behavior Therapy Center, LLC, and South Bay Mental Health Center, Inc. CYPRUS MINES: Tort Claimants Cannot Alter Ch.11 Committee Makeup ---------------------------------------------------------------- Law360 reports that a Delaware bankruptcy judge Tuesday, May 19, 2021, denied a request by a group of talc personal injury claimants to change the makeup of the tort claimants committee in Cyprus Mines Corp.'s Chapter 11, saying she did not see any conflicts of interest involving its current members. While U.S. Bankruptcy Judge Laurie Selber Silverstein expressed concern that committee members may be delegating their responsibilities to their counsel, the fact that those attorneys also represent parties involved in the creation of a settlement with Cyprus parent Imerys Talc America does not in and of itself create a conflict of interest, she ruled. About Cyprus Mines Corporation Cyprus Mines Corporation is a Delaware corporation and a wholly-owned subsidiary of Cyprus Amax Minerals Co., which is an indirect subsidiary of Freeport-McMoRan Inc. It currently has relatively limited business operations, which include the ownership of various parcels of real property, certain royalty interests that generate de minimis revenue (e.g., less than $1,500 in each of the past two calendar years), and the ownership of an operating subsidiary that conducts marketing activities. Cyprus Mines is a predecessor in interest of Imerys Talc America, Inc. In June 1992, Cyprus Mines sold its talc-related assets to RTZ America Inc. (later known as Rio Tinto America, Inc.) through a two-step process. First, Cyprus Mines transferred its talc-related assets and liabilities (subject to minor exceptions) to Cyprus Talc Corporation, a newly formed subsidiary of Cyprus Mines, pursuant to an Agreement of Transfer and Assumption, dated June 5, 1992. Second, Cyprus Mines sold the stock of Cyprus Talc Corporation to RTZ pursuant to a Stock Purchase Agreement, also dated June 5, 1992 (as amended, the "1992 SPA"). The purchase price was approximately $79.5 million. Cyprus Talc Corporation was later renamed Imerys Talc America, Inc. By virtue of the 1992 ATA, the entity now named Imerys expressly and broadly assumed the talc liabilities of Cyprus Mines and its former subsidiaries that were in the talc business. Cyprus Mines filed for Chapter 11 bankruptcy protection (Bankr. D. Del. Case No. 21-10398) on Feb. 11, 2021, listing between $10 million and $50 million in assets, and between $1 million and $10 million in liabilities. The Hon. Laurie Selber Silverstein is the case judge. The Debtor tapped Reed Smith LLP, led by Kurt F. Gwynne, Esq., as bankruptcy counsel; Kasowitz Benson Torres, LLP as special conflicts counsel; and Prime Clerk LLC as claims agent. James L. Patton, Jr. was appointed as the future claimants' representative in the Debtor's Chapter 11 case. The FCR tapped Young Conaway Stargatt & Taylor, LLP as his bankruptcy counsel and Gilbert, LLP as his special insurance counsel. The U.S. Trustee for Regions 3 and 9 appointed an official committee of tort claimants on March 4, 2021. The tort committee is represented by Caplin & Drysdale, Chartered and Campbell & Levine, LLC. Province, LLC serves as the tort committee's financial advisor. DT MIDSTREAM: Fitch Assigns FirstTime 'BB+' LT IDR, Outlook Stable ------------------------------------------------------------------ Fitch Ratings has assigned DT Midstream, Inc. (DTM) a first time Long-Term Issuer Default Rating (IDR) of 'BB+'. In addition, Fitch has assigned 'BBB-'/'RR1' ratings (recovery of 91%-100%) to the senior secured term loan and 'BB+'/'RR4' ratings (recovery of 31%-50%) to the senior unsecured notes. The Outlook is Stable. The rating reflects DTM's low leverage, long term contracts assuring stable cash flows and credit protections for lower rated counterparties. Fitch expects revenues to be fairly stable over the next few years given minimum volume commitments (MVC) and demand charges, which were 90% of 2020 revenues. Importantly, the rating also reflects the step down of the cash flow assurances each year and risks associated with customer concentration. DTM's exposure to low rated counterparties is a limiting factor for the rating. KEY RATING DRIVERS Scale and Scope of Operations: DTM's ratings reflect the benefits of two business segments in two different producing basins, the Marcellus/Utica and the Haynesville and its size and scale. Fitch estimates that approximately 54% of 2020's adjusted EBITDA was from the gathering segment and 26% from the pipeline segment. The remaining 20% was from cash distributions from joint ventures from four different pipeline systems. DTM has fee-based contracts with a weighted average contract life of approximately nine years. Conservative Credit Profile: On a pro forma basis, Fitch expects YE 2021 leverage of 4.5x to 4.8x through the 2024 forecast period. With a fully operational system, capex is expected to be manageable and leverage remains within this band. Fitch forecasts DTM to be free cash flow positive, although the company may direct cash toward growth opportunities, for shareholder returns (e.g. dividend increases or share repurchases), or debt reduction. MVCs and Demand Charges: In 2020, 99% of revenues were fee based, and significantly about 90% came from MVCs/demand charges. While the agreements have a significant amount of cash flow assurances in the near term from the MVCs/demand charges, those will step down over time, increasing cash flow volatility. Diverse Assets and Customers: Fitch views DTM's diversity favorably. The company's assets are located in the Marcellus/Utica and Haynesville basins. In 2021, DTM expects approximately 61% of revenues (including proportional revenues from joint ventures) from the Marcellus/Utica and 34% from the Haynesville. The remaining 5% is located outside of these regions. DTM's focus is on dry gas and its transportation to the northeast and Gulf Coast, with smaller amounts delivered to the midwest and eastern Canada. Customers include producers (51% of revenues including proportional revenues from joint ventures), LDCs & utilities (25%), interstate pipelines (7%) and other (17%), largely gas marketers. Counterparty Exposure/Customer Concentration: Fitch views the significant concentration in high yield customers as credit concerns. In 2020, Indigo Natural Resources (Indigo, NR) generated 26% of revenues, followed by Southwestern Energy (SWN; BB/Stable) at 24% and Antero Resources with 8%. All three are high yield. Indigo's share of revenues will increase in 2021 as the Louisiana Energy Access Pipeline (LEAP) pipeline system grows revenues during its first full year of operations. To mitigate counterparty risk, customers have credit enhancements in place. In recent history, DTM has only had one customer declare bankruptcy and it did not have an impact on cash flows. Marcellus/Utica Assets: In the Appalachian basin, DTM's significant customer is Southwestern Energy which has substantial acreage dedications for the life of the reserves. DTM gathers approximately two-thirds of SWN's dry gas in the region. Dry gas moves on the Susquehanna Gathering System's 193 miles of pipeline and has capacity of 1.4 bcf/d. These assets are in SWN's Northeast Appalachia segment, which is not SWN's growth region for 2021 compared to its Southwest Appalachia segment. Haynesville Assets: DTM grew in size and scale with the December 2019 acquisition of the Haynesville assets for approximately $2.7 billion. It acquired a gathering system, Blue Union, and a 150 mile lateral pipeline that was under construction. The pipeline, the LEAP, went into service in August 2020. DTM also received long-term MVCs/demand charge agreements with its now largest counterparty, Indigo, a large private producer with the acquisition. DTM moves gas from the Haynesville on the LEAP lateral to the Gulf Coast to petrochemical customers, refining facilities, power plants and LNG facilities. Pipeline JVs add Stability: DTM received cash distributions from four pipelines, totalling approximately 20% of adjusted 2020 EBITDA. Fitch adds these distributions to its adjusted EBITDA. The company's most notable pipeline stakes include Millennium (26.25% ownership stake), Vector (40%), and NEXUS (50%). These JV stakes provide DTM with additional diversity and stable cash flows from long term contracts. Fitch views these pipelines favorably given the regulatory issues facing construction of new pipelines, particularly in the northeast. DERIVATION SUMMARY DTM is the midstream segment that is being spun out of DTE Energy Company (DTE; IDR BBB/Stable). It is a platform of about 1,000-mile system of gathering pipelines and 1,200 miles of pipeline assets that connect key markets in the midwest U.S., eastern Canada, northeast U.S. and Gulf Coast regions to production in the largest and most economic dry gas basins in the United States, the Marcellus/Utica and Haynesville Basins. DTM is rated two notches below The Williams Companies, Inc. (WMB; BBB). The two-notch rating differential is warranted given WMB's much larger size, scale and diversity. WMB generates six times more EBITDA than DTM. Both companies generate approximately half of their cash flows from gathering while the rest comes from pipelines. In the gathering segment, DTM benefits from having most of its revenues from MVCs while WMB has almost none. Fitch expects WMB to have YE 2021 leverage of approximately 4.7x whereas DTM is forecasted to be 4.5x to 4.8x. Lastly, WMB has operations throughout the U.S. and slightly over half are investment grade counterparties while DTM has assets in two producing basins largely with high yield customers. Enable Midstream (Enable; BBB-) is rated one notch higher, before it agreed to be acquired by Energy Transfer LP (ET; BBB-). The comparison of Enable to DTM is reasonable if Enable is considered on a standalone basis (before it agreed to be acquired). Historically, Enable operated with leverage below 4.0x which was a large driver for its historical rating. Leverage has increased in recent history due to its concentrated position in the SCOOP and STACK and has faced headwinds. While Enable has assets largely concentrated in one region, it has a diverse set of customers that are primarily investment grade. Enable generates approximately 67% of gross margins from gathering and processing and the remaining is from transportation and storage whereas DTM derives 51% of its EBITDA from gathering and the balance from pipelines. In terms of EBITDA, Enable is more than 50% larger. KEY ASSUMPTIONS Fitch's key assumptions within the rating case for the issuer include: -- A Fitch price deck of Henry Hub natural gas prices of $2.75 per thousand cubic feet (mcf) in 2021; 2.45 in 2022 and over the long-term and West Texas Intermediate oil prices of $55 per barrel (bbl) in 2021, $50/bbl in 2022 and $50/bbl in 2023; -- Revenues have low mid-single digit growth in the forecast period; -- After significant capital spending in 2020 on a pro forma basis, it drops significantly in 2021 to a range of $250 million to $300 million; -- The company generate positive free cash flow (which may be directed for additional capex, returns for shareholders, or debt reduction); -- The secured instruments are secured by a perfected first priority lien on substantially all assets of the borrowers and guarantors. RATING SENSITIVITIES Factors that could, individually or collectively, lead to positive rating action/upgrade: -- Leverage (total debt with equity credit to operating EBITDA) at or below 4.0x on a sustained basis; -- Improvement in the credit quality and concentration of the major counterparties. Factors that could, individually or collectively, lead to negative rating action/downgrade: -- Leverage (total debt with equity credit to operating EBITDA) be at or above 5.0x on a sustained basis; -- A significant decline in MVCs/demand charges beyond Fitch's forecast period may require lower leverage for ratings to remain unchanged. 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 Expected: As of Dec. 31, 2020 DTM, had $42 million of cash on the balance sheet. Fitch believes the addition of a $750 million revolver provides DTM with sufficient liquidity through the forecast period. SUMMARY OF FINANCIAL ADJUSTMENTS Fitch typically adjusts midstream energy companies' EBITDA to exclude equity in earnings of unconsolidated affiliates and includes cash distributions from unconsolidated affiliates. Fitch removes distributions to non-controlling interests from DTM's EBITDA. 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. DT MIDSTREAM: Moody's Assigns First Time 'Ba1' Corp Family Rating ----------------------------------------------------------------- Moody's Investors Service assigned first-time ratings to DT Midstream, Inc., including a Ba1 Corporate Family Rating, Ba1-PD Probability of Default Rating, Baa2 rating to its proposed $750 million senior secured revolving credit facility maturing in 2026, Baa2 rating to its proposed $1 billion senior secured term loan maturing in 2028, Ba2 rating to its proposed $2.1 billion senior unsecured notes and SGL-2 Speculative Grade Liquidity Rating. The rating outlook is stable. Proceeds from the new term loan and notes issuance will be used to make a payment to DTE Energy Company (DTE, Baa2 stable) in connection with DT Midstream's spin-off. Moody's ratings are subject to review of all final documentation. DTE's Board of Directors had authorized its management to pursue a plan to spin-off DT Midstream, comprising its midstream business. The separation is expected to be completed around mid-year 2021, subject to final approval by DTE's Board of Directors, regulatory approvals, and satisfaction of other conditions. DTE shareholder approval is not required to effect the separation transaction. "DT Midstream's ratings reflect its diversified and integrated asset base, moderate leverage and sound expected distribution coverage," said Amol Joshi, Moody's Vice President and Senior Credit Officer. "However, DTM's ratings are constrained by its limited scale, with the majority of its revenue from non-investment grade counterparties." Assignments: Issuer: DT Midstream, Inc. Corporate Family Rating, Assigned Ba1 Probability of Default Rating, Assigned Ba1-PD Speculative Grade Liquidity Rating, Assigned SGL-2 Senior Secured First Lien Revolving Credit Facility, Assigned Baa2 (LGD2) Senior Secured First Lien Term Loan, Assigned Baa2 (LGD2) Senior Unsecured Regular Bond/Debenture, Assigned Ba2 (LGD5) Outlook Actions: Issuer: DT Midstream, Inc. Outlook, Stable RATINGS RATIONALE DTM's Ba1 CFR reflects the benefit from fee-based revenue with no direct commodity price exposure, and long-term contracts underpinned by pipeline demand charges, minimum volume commitments (MVCs) and acreage dedications providing volume and cash flow visibility over the next several years. The company has moderate leverage and targets long-term total leverage below 4x. DTM also targets a dividend distribution coverage above 2x, and its ability to generate significant excess cash should support growth spending or repaying its pre-payable term loan debt. The company has an integrated mix of pipeline, storage and gathering assets that connect the prolific Appalachian and Haynesville dry gas supply basins to key demand markets, with a diverse customer base comprising natural gas local distribution companies, power generators, industrials, producers and marketers. DTM's strengths are partially offset by its limited size and scale relative to some of its peers, with natural gas gathering assets comprising almost 50% of cash flow. While contractual features and credit enhancements mitigate DTM's counterparty risk, the majority of its revenue is from non-investment grade counterparties. The rating is also restrained by DTM's limited track record as an independent company. While the company operates many assets, non-operated pipeline assets exceed 20% of expected cash flow. DTM has so far operated as a sizeable utility company's segment, benefitting from DTE's strong credit profile. Spinning-off DTM into an independent company could result in dis-synergies and additional costs. DTM's new board of directors could also result in uncertainty regarding items such as corporate strategy, leverage policy, capital allocation, along with the inherent execution risks involved in a transaction of this size. DTM's secured revolver and term loan are both rated Baa2, two notches above the Ba1 CFR, reflecting their first priority lien and supported by $2.1 billion of junior debt cushion. DTM's $2.1 billion of senior unsecured notes are rated Ba2, one notch below the Ba1 CFR, given the significant amount of secured debt in DTM's pro forma capital structure. DTM should maintain good liquidity through 2022 as reflected in its SGL-2 rating. DTM should have a modest cash balance and an undrawn $750 million revolver at spin-off. The revolver will have financial covenants including a maximum consolidated net leverage ratio of 5x and a minimum interest coverage ratio of 2.5x. The term loan will be governed by a minimum debt service coverage ratio of 1.1x. Moody's expects the company to be in compliance with these covenants through 2022. The company should generate excess cash flow upon satisfying its capital spending and dividend distribution needs, which will likely be used to support growth projects or repay its pre-payable term loan debt. The stable rating outlook reflects DTM's moderate leverage underpinned by long-term contracts and cash flow visibility. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS DT Midstream's ratings could be upgraded if the company meaningfully increases its size and scale, achieves debt to EBITDA comfortably below 4x, maintains sound distribution coverage and simplifies its debt structure, while improving its counterparty risk profile and asset quality. DT Midstream's ratings could be downgraded if debt to EBITDA approaches 5x, distribution coverage significantly weakens, or there is meaningful deterioration in asset quality or counterparty risk profile. DT Midstream's ratings could also be downgraded if there is a significant increase in debt to fund a sizable acquisition, or shareholder friendly actions materially hurt the company's leverage. Headquartered in Detroit, Michigan, DT Midstream, Inc. is an owner, operator and developer of an integrated portfolio of natural gas interstate pipelines, intrastate pipelines, storage systems, gathering lateral pipelines, gathering systems, treatment plants and compression and surface facilities. The principal methodology used in these ratings was Midstream Energy published in December 2018. EASTERDAYS FARMS: Sued for Loan Default on Potato,Onion Facilities ------------------------------------------------------------------ Kristin M. Kraemer of Tri-City Herald reports that the day after the patriarch of one of Washington's largest agriculture operations died in a head-on crash in December 2020, four of his family's commercial properties went into default. Rabo AgriFinance wants its money back, and is asking a federal court to foreclose on the Franklin County properties and order Gale Easterday's widow, two of his children and a daughter-in-law to pay up. The properties are large onion and potato packing and storage facilities in Pasco and Basin City. Within two months, the nearly $1 million line-of-credit loan had racked up $58,000 in unpaid interest on the contract and the default. And in the three months since, it has continued to accrue interest of about $580 daily at a 21% rate. The international agricultural lender Rabo AgriFinance filed has filed a new lawsuit in U.S. District Court against 3E Properties, along with Karen Easterday, Debby and Cody Easterday and Jody Easterday. Karen, Debby and Cody Easterday all are general partners of Easterday Farms, and Jody Easterday and husband Andrew H. Wills have interest in the mortgaged properties, the suit says. "The loan is in default and has not been paid," the lender said in its April 21 filing for breach of the loan agreement. The complaint further states that Easterday Farms could not be included as a defendant in this civil action because of a stay in place since Easterday Farms filed a voluntary bankruptcy petition on Feb. 8, 2021. However, that bankruptcy filing by one-half of the Easterday conglomerate "was a separate and independent default" under the loan agreement. The first was Gale Easterday's Dec. 10, 2020 death. The Easterday family, and its farming and ranching operations, have been mired in legal troubles for nearly four months. In January 2021, Tyson Foods sued in Franklin County Superior Court accusing Easterday Ranches of bilking the meat processor out of more than $225 million by charging for buying and feeding of 200,000 cattle that never existed. That was followed by the first of two Chapter 11 bankruptcy filings by the Mesa-based family in federal court. The cattle ranch listed debts of just under $237 million to its top 20 creditors. Then, the farming side filed for its own bankruptcy protection, showing debts of nearly $18 million to its top 20 creditors. CRIMINAL CASE In March 2021, Cody Easterday — president and chief executive officer of the family's companies — admitting concocting the scheme to defraud Tyson and another company in what federal prosecutors have dubbed a "ghost-cattle scam." The total loss was more than $244 million. The money was used to offset about $200 million lost in commodity futures contracts trading. Easterday, 49, faces up to 20 years in prison for his guilty plea to one count of wire fraud, and must pay full restitution for the money he stole. Sentencing is set Aug. 4, 2021. He has been ordered not to leave the state of Washington in the interim, and had to surrender his passport to the U.S. Probation Office. But last week, Easterday got permission from a judge to travel to the Boise area from May 16-22. 2021 for the birth of a grandchild. FAMILY HISTORY The family's operations started in the late 1950s when Ervin Easterday moved from Idaho to farm in the new Columbia Basin Reclamation Irrigation project. Gale Easterday eventually took over for his dad, and worked with wife Karen and their five children on their different properties throughout Eastern Washington. Last December 2020, the 79-year-old died when he drove the wrong way on Interstate 182 in Pasco. His pickup hit head-on with an Easterday potato truck. Easterday Farms has an office in downtown Pasco. According to the recent lawsuit filing by Rabo, Gale Easterday's death "resulted in an Event of Default" under the terms of their credit and loan agreements. The mortgage on the first two properties — 5235 Industrial Way along Highway 395 in north Pasco and 1427 N. First Ave. in downtown — were included in a credit loan agreement with Rabo in 2009. The mortgage on the other two properties — 90 and 110 Pillsbury Road in Basin City — then was added into a master credit agreement in 2018. Cody Easterday and Easterday Farms then did a "QuickLine Credit Application and Account Agreement" with Rabo in March 2020. The complaint states that as of Feb. 8, 2021 — two months after Gale Easterday’s death — the loan amount had grown to $1,053,245 in principal and interest. The case has been assigned to Chief Judge Stanley A. Bastian, who also is presiding over Cody Easterday's criminal case. No trial date has been set in the civil case. 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. ELECTROMEDICAL TECHNOLOGIES: Incurs $2.6M Net Loss in 1st Quarter ----------------------------------------------------------------- Electromedical Technologies, Inc. filed with the Securities and Exchange Commission its Quarterly Report on Form 10-Q disclosing a net loss of $2.56 million on $166,440 of net sales for the three months ended March 31, 2021, compared to a net loss of $451,241 on $214,870 of net sales for the three months ended March 31, 2020. As of March 31, 2021, the Company had $1.69 million in total assets, $3.47 million in total liabilities, and a total stockholders' deficit of $1.78 million. During the three months ended March 31, 2021, the Company's cash and cash equivalents increased by $315,861 reflecting net proceeds from financing activities of $643,098 partially offset by cash used in operations of $327,237. At March 31, 2021 the Company had a working capital deficit of $1,826,511 and cash on hand of $580,774. Working capital deficit totaled $224,579 excluding derivative liabilities - convertible notes-payable of $1,601,932. During the three months ended March 31, 2020, its cash and cash equivalents increased by $38,881, reflecting cash provided by operations of $699 and cash provided by financing activities of $38,182. Cash flows used in operating activities totaled $327,237 for the three months ended March 31, 2021 as compared to cash flows provided of $699 for the three months ended March 31, 2020. The increase in cash flows used in operating activities is primarily the result of an increase in inventory purchases, a reduction in accounts payable and an increase in the loss from operations impacted by increased costs related to public Company operations and a decrease in gross profit. Cash flows provided by financing activities totaled $643,098 for the three months ended March 31, 2021 as compared to $38,182 for the three months ended March 31,2020. The cash flows provided in the 2021 period are primarily the result of $712,500 in net proceeds from convertible promissory notes partially offset by debt repayments totaling $62,846. A full-text copy of the Form 10-Q is available for free at: https://www.sec.gov/Archives/edgar/data/1715819/000110465921066713/tm2111751d1_10q.htm About Electromedical Technologies Scottsdale, AZ-based Electromedical Technologies, Inc. is a bioelectronics manufacturing and marketing company. The Company offers U.S. Food and Drug Administration (FDA) cleared medical devices for pain management. Bioelectronics is a developing field of "electronic" medicine, which uses electrical impulses over the body's neural circuitry to try to alleviate pain, without drugs. Electromedical reported a net loss of $3.87 million for the year ended Dec. 31, 2020, compared to a net loss of $1.74 million for the year ended Dec. 31, 2019. As of Dec. 31, 2020, the Company had $1.42 million in total assets, $2.73 million in total liabilities, and a total stockholders' deficit of $1.32 million. San Diego, California-based dbbmckennon, the Company's auditor since 2018, issued a "going concern" qualification in its report dated March 30, 2021, citing that the Company has suffered recurring losses from operations and has a negative working capital balance, which raises substantial doubt about its ability to continue as a going concern. ENCORE CAPITAL: Moody's Alters Outlook on 'Ba2' CFR to Positive --------------------------------------------------------------- Moody's Investors Service affirmed the Ba2 corporate family rating of Encore Capital Group, Inc. and the Ba3 guaranteed senior secured debt rating. Concurrently, the issuer outlook has been changed to positive from stable. RATINGS RATIONALE AFFIRMATION OF RATINGS REFLECTS RESILIENCE OF ENCORE'S FRANCHISE The affirmation of the Ba2 CFR reflects Encore's demonstrated resilience of its global franchise, as evidenced by the company's strong financial performance since the onset of the coronavirus pandemic. The strength of Encore's performance has been underpinned by higher than expected cash collections in the United States (US) where borrowers in distress benefitted from a number of direct stimulus measures taken by the US government in response to the coronavirus pandemic. Higher than expected collections in the US helped to offset lower than budgeted collections in Europe. Strong collections activity boosted the company's profitability, cash flows and capitalisation and resulted in moderate deleveraging, with Moody's calculated Debt to EBITDA ratio for the trailing twelve months ending March 31, 2021 declining to 2.3x from 2.5x at year-end 2020 and 2.8x at year-end 2019. During the same time, Encore strengthened its liquidity by extending maturities of its term debt by replacing its senior secured notes due in 2023 and 2024 with the new notes maturing in 2026 and 2028. The Ba2 CFR also reflects Encore's relatively long track record, with more than 20 years of operating performance; but at the same time, regulatory risk inherent to the debt collection business, particularly in the US. The affirmation of the Ba3 rating of Encore's and Cabot Financial (Luxembourg) S.A's guaranteed senior secured notes is based on Encore's Ba2 CFR and reflects the application of Moody's Loss Given Default for Speculative-Grade Companies methodology, published in December 2015, and the priorities of claims and asset coverage in Encore's liability structure. OUTLOOK CHANGED TO POSITIVE By changing the outlook on Encore to positive, Moody's acknowledged upward rating pressure due to the recent strengthening of Encore's credit profile, provided deleveraging, improved capitalisation and profitability prove sustainable over the next 12-18 months. At the same time, Moody's expects some moderation in Encore's profitability and cash flow metrics as government support measures in the US expire or are reduced. The lower supply of non-performing loan portfolios, which has been caused by reduced consumer delinquencies and charge-offs during the pandemic on the back of direct stimulus measures, will likely reduce the company's future profitability in the short to medium term. In addition, the progressive recovery of the economy and expected rebound in consumption and spending will likely lead to higher delinquencies and a drop in collections, but will also in due course increase a supply of non-performing loans. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS Encore's CFR could be upgraded if the company: 1) continues to demonstrate strong financial performance, with consistently solid profitability and cash flows; 2) maintains its Debt/EBITDA leverage, on a consistent basis, at less than 2.5x, as calculated by Moody's; 3) diversifies its geographical mix, which would reduce its exposure to the regulatory risk in a given region; and 4) if Moody's deems that the operating environment for debt purchasers has improved. The outlook could return to stable if: 1) Encore fails to secure the amount of portfolio purchases necessary to sustain its profitability at pre-pandemic levels; 2) its collections drop meaningfully relative to pre-pandemic levels; or 3) Encore's Debt/EBITDA leverage increases, on a sustained basis, to the upper end of the range of its leverage target of 2x- 3x, as calculated by the company on the basis of net debt to EBITDA. Encore's CFR could be downgraded in case of: 1) meaningful and sustained deterioration in the company's profitability and cash flows; 2) increase in leverage, on a sustained basis, to above 3.5x, measured as Debt/EBITDA, as calculated by Moody's; 3) failure to maintain adequate committed revolving borrowing availability, or if liquidity otherwise materially weakens; or 4) regulatory developments in a country to which the company has significant business exposure that would have significant negative impact on the company's franchise. A change in the CFR would lead to a similar upward or downward change of the senior secured debt rating. Further, the senior secured debt rating could be upgraded with changes to the liability structure that would decrease the amount of debt considered senior to the notes or increase the amount of debt considered junior to the notes. The debt rating could be downgraded if the amount of debt considered senior to the notes increases. LIST OF AFFECTED RATINGS Issuer: Encore Capital Group, Inc. Affirmations: Long-term Corporate Family Rating, affirmed Ba2 Backed Senior Secured Regular Bond/Debenture, affirmed Ba3 Outlook Action: Outlook changed to Positive from Stable Issuer: Cabot Financial (Luxembourg) S.A Affirmation: Backed Senior Secured Regular Bond/Debenture, affirmed Ba3 Outlook Action: Outlook changed to Positive from Stable PRINCIPAL METHODOLOGY The principal methodology used in these ratings was Finance Companies Methodology published in November 2019. ENERGY TRANSFER: Moody's Affirms Ba2 Preferred Stock Rating ----------------------------------------------------------- Moody's Investors Service has changed Energy Transfer LP's (ET) outlook to stable from negative. Moody's also affirmed ET's Baa3 senior unsecured notes, its Ba1 junior subordinated notes rating, its Ba2 Cumulative Redeemable Perpetual Preferred ratings and its P-3 short term rating. Moody's has also changed the outlook for Enable Midstream Partners, LP (ENBL) to stable from negative while affirming its Baa3 senior unsecured notes rating. ET's pending acquisition of ENBL is expected to close in the second half of 2021. The outlook actions reflect the prospects for an acceleration in debt reduction and improved leverage metrics following ET's posting of very strong first quarter 2021 financial results and using the free cash flow generated by this performance to repay $3.7 billion of debt during the quarter.. "While fully recognizing that 2021's first quarter results were inflated by outsized one-time gains associated with the response of ET's Texas intrastate transportation and storage asset base to the winter storm Uri disruption, Moody's was encouraged that ET deployed the quarter's excess liquidity into debt reduction," commented Andrew Brooks, Moody's Vice President. "Moody's remains concerned with the possible interruption or loss of cash distributions from ET's ownership stake in the Dakota Access Pipeline (DAPL), which remains mired in litigation; however, the magnitude of this potential loss is blunted to an extent by ET's improved profitability together with the pending closure of its acquisition of Enable Midstream Partners, LP and its contribution to future consolidated EBITDA." Affirmations: Issuer: Enable Midstream Partners, LP Senior Unsecured Shelf, Affirmed (P)Baa3 Commercial Paper, Affirmed P-3 Senior Unsecured Notes, Affirmed Baa3 Issuer: Energy Transfer LP Issuer Rating, Affirmed Baa3 Junior Subordinated Notes, Affirmed Ba1 Pref. Stock, Affirmed Ba2 Commercial Paper, Affirmed P-3 Senior Unsecured Notes, Affirmed Baa3 Outlook Actions: Issuer: Enable Midstream Partners, LP Outlook, Changed To Stable From Negative Issuer: Energy Transfer LP Outlook, Changed To Stable From Negative RATINGS RATIONALE ET's ratings are supported by its very large consolidated and geographically diversified asset base comprised of crude oil, natural gas and natural gas liquids pipeline services and storage, and largely fee-based natural gas midstream gathering and processing operations. ET, though its operating subsidiaries, ranks among the largest publicly traded midstream master limited partnerships (MLP) in terms of its size, geographic reach and the operational diversification of its businesses. ET also holds the general partnership interest and common units in Sunoco LP (SUN, Ba3 positive) and USA Compression Partners, LP (USAC, B1 stable), further adding to overall operational diversity. ET's $96 billion midstream asset base generates a largely fee-based cash flow stream. It produced first quarter 2021 EBITDA of $5.04 billion, of which approximately $2.4 billion was attributable to the optimization of its operations during winter storm Uri. Adjusting for the one-time impact of Uri, ET saw its once robust base EBITDA growth flatten in 2020 under the pressure of pandemic influenced upstream energy market weakness combined with fewer midstream growth opportunities. As a result, leverage on a proportionately consolidated basis increased to 5.6x at year-end. Following its first quarter results, ET has upped 2021's reported EBITDA guidance to a range of $12.9 to $13.3 billion (excluding the pending merger of ENBL). Reflecting as much as $5 billion of debt reduction in 2021 ($3.7 billion was repaid in the first quarter), Moody's expects debt/EBITDA to drop below 4.5x for the year. However, returning to a more normalized EBITDA performance in 2022 (which Moody's is conservatively projecting to evidence little growth from 2021's base level), it is likely that debt/EBITDA will still fall below 5x, helped by 2021's accelerated debt repayment. October 2020's 50% distribution cut, which internalized approximately $1.6 billion of cash flow, supplemented by significant reductions in projected capital spending, should enable ET to generate modestly positive free cash flow into 2022 and beyond, further supporting debt reduction and a trajectory towards ET's stated target of achieving a 4.5x minimum adjusted debt/EBITDA. Moody's recognizes, however, that in a still somewhat uncertain energy operating environment even generating flat EBITDA entails execution risk, notwithstanding the enhanced value that winter storm Uri has ascribed to ET's storage and transportation assets. Regulatory, permitting and political risk for major energy infrastructure projects has been on the rise. The cost of project delays is borne by project owners, ultimately detracting from project returns and delaying receipt of cash flow associated with these investments. Uncertainty continues to plague the operation of DAPL (Midwest Connector Capital Company LLC, Baa2 negative) as it continues to confront litigation on several fronts. ET operates DAPL and maintains a 38.3% ownership position in the pipeline. The MLP structure employed by ET vests considerable influence with the general partner of these entities, whose operations are subject to boards of directors appointed by their respective general partners. MLP limited partner unitholders have considerably fewer voting rights than shareholders in a conventional corporate structure, further restricting their influence over MLP governance. Moody's views ET to be in a good liquidity position into 2022, enhanced by strong earnings retention, which Moody's assumes will fund the repayment of debt. On March 5, ET redeemed 2021's $1.4 billion of maturing notes in cash. ET has $3.05 billion of scheduled debt maturities in 2022. ET has guided 2021's growth capital spending of $1.65 billion, down almost 50% from 2020's $3.05 billion, with further spending declines projected for 2022 and beyond. At March 31, $800 million was utilized under ET's $6.0 billion credit facilities, all of which was in commercial paper. Its $5.0 billion revolving credit facility has a December 1, 2024 scheduled maturity date, and is supplemented by a $1.0 billion 364-day credit facility, scheduled to mature in November. The 364-day facility had no borrowings outstanding. ET has a history of consistent support for its investment grade rating, which Moody's expects will continue to be the case. The outlook is stable reflecting an anticipated trajectory of debt reduction. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS Ratings could be upgraded if debt/EBITDA (proportionately consolidated) drops below 4.5x with strong distribution coverage remaining intact. ET's rating could be downgraded should debt/EBITDA return to and remain above 5x. Energy Transfer LP is headquartered in Dallas, Texas, and owns and operates a broad array of midstream energy assets. The principal methodology used in these ratings was Midstream Energy published in December 2018. ESCALON MEDICAL: Incurs $137,465 Net Loss in Third Quarter ---------------------------------------------------------- Escalon Medical Corp. filed with the Securities and Exchange Commission its Quarterly Report on Form 10-Q disclosing a net loss of $137,465 on $2.32 million of net revenues for the three months ended March 31, 2021, compared to a net loss of $127,883 on $2.36 million of net revenues for the three months ended March 31, 2020. For the nine months ended March 31, 2021, the Company reported a net loss of $235,542 on $7.64 million of net revenues compared to a net loss of $181,853 on $7.39 million of net revenues for the nine months ended March 31, 2020. As of March 31, 2021, the Company had $5.58 million in total assets, $4.30 million in total liabilities, and $1.28 million in total shareholders' equity. The Company's total cash on hand as of March 31, 2021 was approximately $1,653,000 excluding restricted cash of approximately $256,000 compared to approximately $826,000 of cash on hand and restricted cash of $255,000 as of June 30, 2020. Approximately $48,000 was available under the Company's line of credit as of March 31, 2021. Because its operations have not historically generated sufficient revenues to enable profitability, the Company said it will continue to monitor costs and expenses closely and may need to raise additional capital in order to fund operations. Escalon said, "We expect to continue to fund operations from cash on hand and through capital raising sources if possible and available, which may be dilutive to existing stockholders, through revenues from the licensing of our products, or through strategic alliances. Additionally, we may seek to sell additional equity or debt securities through one or more discrete transactions, or enter into a strategic alliance arrangement, but can provide no assurances that any such financing or strategic alliance arrangement will be available on acceptable terms, or at all. Moreover, the incurrence of indebtedness in connection with a debt financing would result in increased fixed obligations and could contain covenants that would restrict our operations." The Company further said, "As of March 31, 2021 we had an accumulated deficit of approximately $69.1 million, incurred recurring losses from operations and negative cash flows from operating activities in prior years. These factors raise substantial doubt regarding our ability to continue as a going concern, and our ability to generate cash to meet our cash requirements for the following twelve months as of the date of this form 10-Q." A full-text copy of the Form 10-Q is available for free at: https://www.sec.gov/ix?doc=/Archives/edgar/data/862668/000086266821000009/esmc-20210331.htm About Escalon Headquartered in Wayne, Pennsylvania, Escalon Medical Corp. operates in the healthcare market, specializing in the development, manufacture, marketing and distribution of medical devices for ophthalmic applications. Escalon Medical reported a net loss applicable to common shareholders of $702,021 for the year ended June 30, 2020, compared to a net loss applicable to common shareholders of $301,616 for the year ended June 30, 2019. As of June 30, 2020, the Company had $5.72 million in total assets, $4.21 million in total liabilities, and $1.51 million in total shareholders' equity. Friedman LLP, in Marlton, New Jersey, the Company's auditor since 2018, issued a "going concern" qualification in its report dated Sept. 28, 2020, citing that the Company's significant accumulated deficit and recurring losses from operations and negative cash flows from operating activities raise substantial doubt about the Company's ability to continue as a going concern. FECK PROPERTIES: Martell Buying Englewood Property for $3.7-Mil. ---------------------------------------------------------------- Feck Properties, LLC, asks the U.S. Bankruptcy Court for the Middle District of Florida to authorize the sale of the real property located at 2504 N Beach Rd., in Englewood, Charlotte County, Florida, together with incidental personalty located thereon, to Robert Martell for $3.7 million, subject to higher and better offers. Pursuant to the Plan, the Debtor may sell any of its property, with notice to all interested parties. The Debtor has received an offer for the purchase of its FL Property through the Contract. The Purchaser is not an insider. The sale will be free and clear of all liens, claims, and interests, with all such liens, claims, and interests to attach to the proceeds of sale. The sale price is $ 3.7 million, "as-is, where-is," with no warranties, except as to marketable title. Commissions are to be paid at closing, whereupon the participating brokers will split 6% in accordance with their respective agreements, which are not subject to approval of the Court. Closing will occur no later than the 15th calendar day following the date on which an Order Approving Sale is entered on the docket of the Bankruptcy Court. The Contract permits the Debtor to continue to accept reservations and provides for a mechanism for the Buyer and the Debtor to allocate income and expenses related to reservations after the closing date. During the notice period, competing offers may be considered. The Debtor is not transferring any personally identifiable information in connection with the sale, except to the extent of personally identifiable information of persons whose reservations arise after closing. The known lien holders are: a. Gina Hollis, first mortgagee, who will be paid the sum of $2,058,999.39 at closing, which sum will be applied to principal, with the remaining secured claim to attach to the proceeds of sale, which proceeds will be held in escrow as will be agreed by the parties or ordered by the Court. Immediately upon resolution of the objection to the claim of Ms. Hollis (either by agreement or Order of the Court), any additional amounts allowed by the Court will be disbursed from escrow. b. Outstanding real property taxes related to the FL Property, including holders of tax certificates, will be paid in full, at closing. Pursuant to the provisions of the Plan and the Order Confirming Plan, the deed transferring ownership of the FL Property, and the mortgage of the purchaser will be exempt from transfer taxes as provided by 11 U.S.C. Section 1146(a). The Court will establish the amount of funds held in escrow for the benefit of Ms. Hollis. Net funds over and above the escrowed amounts will be payable to the Debtor, deposited into the DIP account, and distributed to creditors in accordance with the provisions of the Plan. A copy of the Contract is available at https://tinyurl.com/cu9u38uz from PacerMonitor.com free of charge. About Feck Properties Feck Properties is primarily engaged in real estate rentals business in Florida and real estate development and sales business in Massachusetts. Feck Properties filed its voluntary petition for relief under Chapter 11 of the Bankruptcy Code (Bankr. M.D. Fla. Case No. 20-05209) on July 7, 2020. In the petition signed by Stanley B. Feck, manager, Debtor disclosed $4,750,000 in assets and $2,773,630 in liabilities. Kevin Christopher Gleason, Esq., at Florida Bankruptcy Group, LLC represents Debtor as legal counsel. The Debtor's Third Amended Plan of Reorganization was confirmed on Dec. 14, 2020. FLOAT HORIZEN: Wins Cash Collateral Access ------------------------------------------ The U.S. Bankruptcy Court for the Middle District of Tennessee, Nashville Division, has authorized Float Horizen, LLC to use cash collateral on an interim basis to pay expenses in the ordinary course of business. The Debtor requires the use of cash collateral to continue present business operations. Pursuant to a Promissory Note entered into on December 20, 2016, Pinnacle Bank loaned $441,200 to the Debtor. The Bank asserts that the Debtor is truly and justly indebted to Bank in the amount of $374,177 that includes principal of $371,544, accrued interest of $2,283.85 as of October 6, 2020, and attorney's fees of $350 with interest continuing to accrue at the per diem rate of $53. The Bank further asserts the Debtor's obligations to Bank, including the obligation to repay the Indebtedness, are secured by unavoidable, valid and perfected liens and/or security interests in certain assets of the Debtor. The Debtor currently does not have any facts or basis to object to the validity, perfection, or priority of the Bank's lien. To further secure the repayment of the Indebtedness, the Debtor executed an Assignment of Deposit Account and Security Agreement and a UCC Financing Statement was recorded with the Tennessee Secretary of State as document number 426118426. To secure the aggregate amount of all Cash Collateral used by the Debtor and to secure any diminution in the value of the Bank's interest in its Collateral, the Bank is granted, without need of further act or documentation, a first priority replacement lien and security interest under Sections 361(2) and 363(e) of the Bankruptcy Code, on all of its Collateral and all collateral of the same or similar type, and all proceeds, product, offspring, rents, or profits thereof. To the extent the liens and security interests granted the Order prove insufficient to secure any diminution in value of the Bank's interest in its Collateral the Bank is granted an administrative priority claim pursuant to Section 507(b) of the Bankruptcy Code to secure any such diminution in value. The security interests and liens of the Bank are created and perfected without the necessity of the execution, filing or recording of any documents otherwise required under bankruptcy or non-bankruptcy law for the creation or perfection of security interests and liens. To adequately protect the Bank's lien from this ongoing diminution in Collateral value, the Debtor has agreed to make an initial Adequate Protection Payment of $1,000 upon entry of the order, and then monthly payments in an amount to be determined at the Final Hearing on Motion for Relief currently scheduled for May 4, 2021, which will be made until such time as the Debtor either confirms a Plan of Reorganization in the case and/or there is any modification or termination of the provisions of the Agreed Order. The Debtor will continue to maintain insurance with respect to all Collateral for the purposes and in the amounts maintained by the Debtor in accordance with the requirements of the Debtor's agreements with the Bank. A copy of the order is available for free at https://bit.ly/3yiS2Hu from PacerMonitor.com. About Float Horizen, LLC Float Horizen, LLC, filed its voluntary petition for relief under Chapter 11 of the Bankruptcy Code (Bankr. M.D. Tenn. Case no. 20-04478) on Oct. 6, 2020. In the petition signed by Robin Ritter, chief manager. the Debtor estimated $50,000 in assets and $1 million to $10 million in liabilities. Judge Randal S. Mashburn oversees the case. Lefkovitz & Lefkovitz, PLLC is the Debtor's counsel. Pinnacle Bank, as Lender, is represented by: Matthew R. Murphy, Esq. David M. Smythe, Esq. Smythe Huff & Hayden, PC 1222 16th Avenue South, Suite 301 Nashville, TN 37212 E-mail: mmurphy@smythehuff.com FLUOR CORP: Equity Proceeds Use No Impact on Moody's Ba1 CFR ------------------------------------------------------------ Moody's Investors Service noted that Fluor Corporation's use of the majority of the proceeds from its preferred equity issuance to redeem debt is credit positive since it will likely result in a material pay down of debt and interest cost savings even though it will also lead to higher annual cash outflows. However, it will not impact the company's ratings including its Ba1 corporate family rating, Ba1-PD probability of default rating as well as the Ba1 rating on its senior unsecured debt. Its rating outlook remains negative. Fluor announced on May 12, 2021 that it intends to raise at least $450 million from the offering of convertible preferred stock and may raise about $67.5 million more since it has granted the underwriter a 30-day option to purchase additional preferred shares from the company. It plans to use the proceeds to redeem debt and to cover premiums and for general corporate purposes. This will result in a material debt paydown and annual interest savings, but will also result in higher cash outflows since the dividend yield on the preferred equity is likely to be higher than the interest on the company's debt and the amount of preferred equity outstanding will be higher than the amount of notes redeemed. Fluor currently has three note issues outstanding with interest rates ranging from 1.75% to 4.25% and will have to pay a premium to retire this debt since it is trading above par value. Fluor's operating performance stabilized in 2020 as the company focused on reducing costs and project risks and benefitted from more effective execution on problem projects. It returned to reporting consistently positive EBITDA, but its profit margins and the absolute level of EBITDA generation remained at a very low historical level. Therefore, the company generated only $350 million of adjusted EBITDA in 2020 and its credit metrics remained weak for its rating with an adjusted leverage ratio (debt/EBITDA) of 5.8x and interest coverage (EBITA/Interest) of only 2.1x. Fluor's operating performance and credit metrics could strengthen in 2021 if it continues to avoid unforeseen project issues, but its operating risk profile remains elevated since it is somewhat reliant on a few large projects. Also, Its recent project bidding opportunities have been limited due to historically low commodity prices and the economic uncertainty created by the coronavirus in 2020. Therefore, its credit metrics are likely to remain weak in the near term. Nevertheless, Fluor's bidding opportunities are likely to strengthen as the economic recovery gains momentum and surging commodity prices and potentially higher infrastructure spending lead to increased project activity. This could result in higher revenues and stronger operating earnings and credit metrics over the next 12 to 18 months as the company benefits from further cost reductions and incurs lower interest costs due to debt pay downs. If Fluor's operating performance and credit metrics fail to materially strengthen to a level that is commensurate with its Ba1 corporate family rating, including an adjusted leverage ratio sustained above 3.5x and interest coverage below 4.0x, or it fails to maintain a very strong liquidity profile then its rating could be downgraded. Headquartered in Irving, Texas, Fluor Corporation provides engineering, procurement, construction and maintenance (EPCM) services globally and is a large contractor to the US government. Fluor generated $14.9 billion in revenues during the LTM period ended March 31, 2021 and had a backlog of $23.8 billion. FOSSIL GROUP: Incurs $24.4 Million Net Loss in First Quarter ------------------------------------------------------------ Fossil Group, Inc. filed with the Securities and Exchange Commission its Quarterly Report on Form 10-Q disclosing a net loss attributable to the company of $24.44 million on $363.04 million of net sales for the 13 weeks ended April 3, 2021, compared to a net loss attributable to the company of $85.58 million on $390.72 million of net sales for the 14 weeks ended April 4, 2020. As of April 3, 2021, the Company had $1.35 billion in total assets, $507.23 million in total current liabilities, $433.06 million in total long-term liabilities, and $408.82 million in total stockholders' equity. "We are pleased to start the year with better than expected sales performance, which reflects improving consumer demand in the U.S., ongoing momentum in Mainland China and continued strength in our digital channels globally," said Kosta Kartsotis, Chairman and CEO. "We also delivered solid gross margins and cost control, which resulted in improved profitability versus a year ago. Notably, we captured further organizational efficiencies in the first quarter, allowing us to capture more than $50 million in cost savings and achieve the financial targets under our $250 million New World Fossil 2.0 program earlier than anticipated." "While the COVID pandemic continues to disrupt certain markets, we are encouraged by our outlook in large markets like the U.S. and Mainland China, which are benefiting from the execution of our digital strategy. More broadly, we are pleased with our success in transforming the business model, which has strengthened our digital mix, significantly improved our cost structure and positions us to drive increased growth and profitability over the long term." Gross profit totaled $182.6 million compared to $140.4 million in the first quarter of 2020, as the decrease in sales was more than offset by an improved gross margin rate, which increased 1,440 basis points to 50.3%. The year-over-year increase primarily reflects reduced levels of inventory valuation adjustments and minimum licensed product royalties, which were elevated due to the onset of the COVID-19 global pandemic. Also contributing to the improved margin rate were favorable changes in channel, product and region mix and favorable currency impacts of approximately 110 basis points, partially offset by higher freight costs. Operating expenses totaled $199.4 million compared to $274.7 million a year ago. Operating expenses in the first quarter of 2021 included $7.5 million of restructuring costs, primarily related to employee costs, while operating expenses in the first quarter of 2020 included $9.4 million of restructuring costs. First quarter 2021 selling, general and administrative expenses decreased on a year-over-year basis, reflecting lower compensation and marketing costs and 12% fewer Company stores compared to a year ago. The 2021 first quarter included other long-lived asset impairments of $4.5 million as compared to $17.1 million in the 2020 first quarter, reflecting a reduction in retail store impairment in the current year. First quarter 2021 operating loss was $16.8 million compared to an operating loss of $134.3 million in the first quarter of 2020. As of April 3, 2021, the Company had total liquidity of $250 million, comprised of $247 million of cash and cash equivalents and $3 million of availability under its revolving credit facility. Total debt was $195 million, including $138 million under its term credit agreement. Inventories at the end of the first quarter of 2021 totaled $322 million, a decrease of 27% versus a year ago, primarily reflecting proactive management of inbound receipts to align with consumer demand. A full-text copy of the Form 10-Q is available for free at: https://www.sec.gov/ix?doc=/Archives/edgar/data/883569/000088356921000021/fosl-20210403.htm About Fossil Group Headquartered in Richardson, Texas, Fossil Group, Inc. -- www.fossilgroup.com -- is a global design, marketing and distribution company that specializes in consumer fashion accessories. The Company's principal offerings include an extensive line of men's and women's fashion watches and jewelry, handbags, small leather goods, belts, and sunglasses. In the watch and jewelry product categories, the Company have a diverse portfolio of globally recognized owned and licensed brand names under which its products are marketed. Fossil Group reported a net loss of $95.94 million in 2020, a net loss of $50.01 million in 2019, and a net loss of $938,000 in 2018. G.A.F. SEELIG: Court OKs 2nd Amended Plan, Plan Administrator Named ------------------------------------------------------------------- Judge Elizabeth S. Stong confirmed the Second Amended Plan of Liquidation of G.A.F. Seelig, Inc., and approved the Disclosure Statement explaining that Plan, pursuant to separate rulings. Judge Stong ruled that the Disclosure Statement contain adequate information according to Section 1125 of the Bankruptcy Code. The Liquidation Plan, which shall have been substantially consummated upon occurrence of the Effective Date, provided for the appointment of Alan D. Halperin as Plan Administrator. The Plan Administrator shall make distributions for allowed administrative expense claims, priority tax claims, professional fee claims, priority WARN claim, priority non-tax claims, secured PACA claim and Class 1 general unsecured claims in the order of their priority in the plan. Class 1 has voted to accept the Plan. On or before the Effective Date, the Debtor shall establish and maintain the Disputed Claims Reserve, pursuant to the Plan, which shall be treated as a disputed ownership fund. The Debtor shall automatically be deemed dissolved for all purposes without the necessity for any further action upon entry of an order closing the Chapter 11 Case. A copy of the Disclosure Statement order is available for free at https://bit.ly/3yo2jlN from PacerMonitor.com. A copy of the confirmation order is available for free at https://bit.ly/3hBwwYz from PacerMonitor.com. About G.A.F. Seelig Headquartered in Woodside, New York, G.A.F. Seelig, Inc., is a family-owned company that distributes dairy products (skims, lo fats, whole milk), creams, yogurts, juices, water, imported and domestic cheeses, purees, raviolis and pastas, oils and vinegars, chocolate and an ever expanding array of food service items. G.A.F. Seelig, Inc., filed a Chapter 11 bankruptcy petition (Bankr. E.D.N.Y. Case Nos. 17-46968) on Dec. 30, 2017. In the petition signed by Rodney P. Seelig, president, the Debtor estimated assets of $1 million to $10 million and liabilities of the same range. The Debtors tapped Michael L Moskowitz, Esq., at Weltman & Moskwitz, LLP, as bankruptcy counsel; and MYC & Associates, Inc., as auctioneer. GDC TECHNICS: U.S. Trustee Appoints Creditors' Committee -------------------------------------------------------- The U.S. Trustee for Region 7 appointed an official committee to represent unsecured creditors in the Chapter 11 case of GDC Technics, LLC. The committee members are: 1. Kingslea Stringham 2. TranStar Aircraft Interiors, LLC 1184 Corporate Dr W. Arlington, TX 76006 Attn: Danny Wintz Phone: 940-453-3527 E-mail: Danny.wintz@dfwaircraft.com 3. Agente Technical, LLC 714 Centerpark Drive, Suite 140 Colleyville, TX 76034 Attn: Alexa Bui Phone: (817) 357-5555 E-mail: Abui@agentetech.com 4. PAC Seating Systems, Inc. 3370 SW 42nd Ave. Palm City, FL 34990 Attn: Chuck Tufano Phone: (678) 358-1036 E-mail: tufano@pac-fl.com Official creditors' committees serve as fiduciaries to the general population of creditors they represent. They may investigate the debtor's business and financial affairs. Committees have the right to employ legal counsel, accountants and financial advisors at a debtor's expense. About GDC Technics Headquartered in Fort Worth, Texas, GDC Technics LLC -- https://www.gdctechnics.com/ -- is a global aerospace company with expertise in engineering and technical services, modifications, electronic systems, R&D, and MRO services. GDC Technics sought Chapter 11 bankruptcy protection (Bankr. W.D. Texas Lead Case No. 21-50484) on April 26, 2021. CEO Brad Foreman signed the petition. At the time of the filing, the Debtor had between $10 million and $50 million in both assets and liabilities. The case is handled by Judge Craig A. Gargotta. Wick Phillips Gould & Martin, LLP, led by Jason M. Rudd, Esq., is the Debtor's legal counsel. Oliver Zeltner of Jones Day is representing Boeing Co. Gabe Morgan of Weil, Gotshal & Manges is representing the pre-bankruptcy lenders. GEO GROUP: Lenders Prepare for Debt Talks With Prison Operator -------------------------------------------------------------- Eliza Ronalds-Hannon of Bloomberg News reports that lenders to private prison operator Geo Group Inc. are gearing up for debt talks, according to people with knowledge of the matter, hiring lawyers and interviewing financial advisers to protect their interests in the discussions. A group of term loan holders tapped law firm Gibson Dunn & Crutcher while bondholders hired lawyers from Akin Gump Strauss Hauer & Feld, said the people, who asked not to be identified because the information is private. Both groups are interviewing financial advisory firms, they added. The creditors are expecting Geo Group to negotiate a maturity extension on its 2024 term loan About Geo Group Geo Group conducts substantial business and manages and/or owns correctional facilities (private prisons and/or mental health facilities) in Thornton, Delaware County, Pennsylvania (George W. Hill Correctional Facility) as well as elsewhere in Pennsylvania (Moshannon Valley Correctional Facility in Philipsburg, PA) and across the United States. Geo Group also conducts substantial business in this District and Division by providing "rehabilitation programs to individuals while in-custody and post-release into the community." GNIRBES INC: Disclosure Statement Hearing Slated for June 2 ----------------------------------------------------------- Judge Mindy Mora has set for June 2, 2021, at 3 p.m., via Zoom video conference, the hearing to consider approval of the Disclosure Statement explaining the Plan of Gnirbes Inc. Objections to the Disclosure Statement must be filed by May 26, 2021. A copy of the order is available for free at https://bit.ly/3wfb5k6 from PacerMonitor.com. About Gnirbes Inc. Gnirbes Inc. sought protection under Chapter 11 of the Bankruptcy Code (Bankr. S.D. Fla. Case No. 20-13992) on March 26, 2020. At the time of the filing, the Debtor was estimated to have assets of less than $50,000 and liabilities of between $100,001 and $500,000. Judge Mindy A. Mora oversees the Debtor's case. The Debtor is represented by Kelley, Fulton & Kaplan, P.L. GOODYEAR TIRE: Fitch Rates New $1.45-Bil. Unsecured Notes 'BB-' --------------------------------------------------------------- Fitch Ratings has assigned a rating of 'BB-'/'RR4' to The Goodyear Tire & Rubber Company's (GT) proposed issuance of $1.45 billion in senior unsecured notes. GT intends to use proceeds from the notes to fund a portion of the cash consideration for its acquisition of Cooper Tire & Rubber Company (CTB), along with associated fees and expenses. GT's Long-Term Issuer Default Rating (IDR) is 'BB-'; the Rating Outlook is Negative. GT was placed on Under Criteria Observation (UCO) on April 9, 2021, following the conversion of Fitch's "Exposure Draft: Corporates Recovery Ratings and Instrument Ratings Criteria" to final. The UCO assignment indicates that an existing instrument and/or Recovery Rating (RR) may change as a direct result of the final criteria. However, the 'BB-'/'RR4' rating assigned to the proposed notes is not affected by the criteria change. KEY RATING DRIVERS Credit Profile Post CTB Acquisition: GT's ratings reflect Fitch's expectation that the company's credit profile over the intermediate term will fall within Fitch's ratings sensitivities, despite some near-term pressure due to the CTB acquisition and continued external challenges related to the coronavirus pandemic. Supporting GT's ratings is its decision to fund the acquisition with a combination of cash on hand, stock and incremental borrowings. This, along with CTB's somewhat stronger standalone credit profile, results in only a relatively modest incremental weakening of GT's near-term credit profile compared with Fitch's standalone expectations for GT, with the potential for a stronger credit profile in a few years once synergies are achieved. Negative Rating Outlook: The Negative Rating Outlook reflects Fitch's concerns that incremental borrowing associated with the acquisition and integration complexities could complicate GT's ability to strengthen its credit profile while external market conditions remain challenging. GT's FCF is likely to be negative in 2021 as the company replenishes inventories and spends on the capex deferred from 2020. The Negative Rating Outlook also reflects continued uncertainty regarding the pace of recovery in the global tire market, following the significant demand decline seen in 2020 as a result of the pandemic. Fitch expects global tire demand to rebound significantly in 2021 but to remain below the 2019 level, due to lower vehicle miles traveled (VMT). Fitch could downgrade GT's ratings if it appears that the company's credit profile will remain outside of its negative rating sensitivities beyond 2023. However, Fitch could revise the Outlook to Stable if it appears the company is on track to improve margins, FCF and leverage. Elevated Leverage: Fitch expects GT's pro forma gross EBITDA leverage, measured as debt/Fitch-calculated EBITDA, will be elevated, likely in the mid-4.0x range, around the time of acquisition close, but Fitch expects it to decline over the intermediate term to below 4.0x as market conditions normalize and GT realizes synergies from the acquisition. FFO leverage is likely to be more elevated in the near term, partially due to lower FFO as a result of about $175 million-$225 million in rationalization payments in GT's standalone business and additional cash costs associated with the acquisition. Fitch expects FFO leverage to decline below the 4.5x negative rating sensitivity, but the timing will depend on the pace of improvement in GT's cash-generating capabilities. Negative Near-Term FCF: Fitch expects GT's FCF will likely be negative in 2021 as the company works to replenish its tire inventories, which were depleted in 2020. Also, capex is likely to be elevated as a result of spending deferred from 2020, and Fitch expects there will be some incremental cash costs associated with the CTB acquisition. Following 2021, Fitch expects GT's FCF to turn positive as working capital and capex normalize, and as the company begins to realize synergies from the acquisition. Fitch expects FCF margins to run in the 1%-3% range in 2022 and beyond. DERIVATION SUMMARY Following the CTB acquisition, GT will have a relatively strong competitive position as the third-largest global tire manufacturer, with a highly recognized brand name and a focus on the higher-margin high-value-added (HVA) tire category. However, the shift in focus has led to lower tire unit volumes and revenue, particularly in the mature North American and Western European markets. The company's diversification is increasing as rising incomes in emerging markets lead to higher demand for HVA tires, particularly in the Asia-Pacific region. GT's margins are roughly consistent with those of the other large Fitch-rated tire manufacturers, Compagnie Generale des Etablissements Michelin (A-/Stable) and Continental AG (BBB/Stable), but GT's leverage is considerably higher, as the other two companies generally maintain midcycle EBITDA leverage below 1.0x. GT's leverage is roughly consistent with that of auto suppliers in the 'BB' category, such as Meritor, Inc. (BB-/Stable). GT's margins are relatively strong compared with typical 'BB'-category issuers, but this is tempered by seasonal working capital swings that lead to more variability in FCF over the course of a year. FCF margins are also sensitive to raw material prices and capex spending. KEY ASSUMPTIONS Fitch's key assumptions within its rating case for the issuer include: -- GT closes on the CTB transaction 2H21. -- About one-half of the $165 million in synergies are realized in 2022, with the remainder in 2023. -- Global auto production rises by 6% in 2021, including an 8% increase in the U.S. -- Global replacement tire demand largely recovers in 2021 but still remains below the 2019 level. -- Beyond 2021, GT's sales grow in the low-single digits, excluding the effect of the CTB acquisition. -- Capex is elevated in 2021, then runs near 5.5% over the next several years. -- Debt, including off-balance sheet factoring, increases to about $8.7 billion in 2021, then declines toward $7.5 billion over the next several years. -- FCF is negative in 2021, then runs in the 1%-3% range over the following years. -- The company maintains a solid liquidity position, including cash and credit facility availability. RATING SENSITIVITIES Factors that could, individually or collectively, lead to positive rating action/upgrade: -- Demonstrating continued growth in tire unit volumes, market share and pricing. -- Sustained FCF margins of 1.5%. -- Sustained gross EBITDA leverage below 3.0x. -- Sustained FFO leverage below 3.5x. Factors that could, individually or collectively, lead to negative rating action/downgrade: -- Integration issues or unforeseen costs associated with the acquisition that inhibit the company's ability to bring its credit profile inside of its negative rating sensitivities within two years. -- A significant step-down in demand for the company's tires without a commensurate decrease in costs. -- An unexpected increase in costs, particularly related to raw materials, that cannot be offset with higher pricing. -- A decline in the company's consolidated cash below $700 million for several quarters. -- Sustained break-even FCF margin. -- Sustained gross EBITDA leverage above 4.0x. -- Sustained FFO leverage above 4.5x. 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 expects GT's liquidity to remain sufficient as the company navigates improving economic conditions following the pandemic. As of March 31, 2021, the company had $1.2 billion in cash and cash equivalents, excluding Fitch's adjustments for not readily available cash, and $3.4 billion in availability on its various global credit agreements, including $2.4 billion of availability on its primary U.S. and European revolvers. The most significant near-term debt maturity is EUR250 million in 3.75% senior unsecured notes issued by Goodyear Europe B.V. (GEBV) that matures in 2023. According to its criteria, Fitch treats $600 million of GT's cash as not readily available, based on Fitch's estimate of the amount of cash needed to cover seasonality in the company's business. Debt Structure: GT's consolidated debt structure primarily consists of a mix of secured bank credit facilities and senior unsecured notes. As of March 31, 2021, GT had $400 million in second-lien term loan borrowings and $3.55 billion in senior unsecured notes outstanding. There were no borrowings outstanding on GT's first-lien secured revolver. GEBV's debt structure consisted of $293 million in senior unsecured notes and $158 million of on-balance sheet accounts receivable securitization borrowings. GEBV's secured revolver was undrawn. GT also has various borrowings outstanding at certain non-U.S. operations, including credit facilities in Mexico and China. In addition to its on-balance sheet debt, Fitch treated $459 million of off-balance sheet factoring as debt at March 31, 2021. 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. GOODYEAR TIRE: Moody's Rates New $1.45BB Unsecured Notes 'B2' ------------------------------------------------------------- Moody's Investors Service assigned a B2 rating to The Goodyear Tire & Rubber Company's proposed $1.45 billion senior unsecured guaranteed notes. Goodyear's existing ratings are unaffected, including the B1 corporate family rating, the B1-PD Probability of Default rating, the Ba2 senior secured second-lien term loan rating, the B2 senior unsecured guaranteed notes rating and the B3 senior unsecured unguaranteed notes rating, as well as Goodyear Europe B.V.'s senior unsecured guaranteed notes rating of Ba3. The Speculative Grade Liquidity rating remains SGL-2. The outlook is stable. The proceeds from these notes will help fund the acquisition of Cooper Tire & Rubber Company (Cooper Tire), with the transaction expected to close in the second half of 2021. RATINGS RATIONALE Goodyear's ratings reflect its strong global position as a manufacturer of aftermarket and original equipment tires supported by a leading market share position in North America, good scale and growth in higher-margin 17-inch and larger tires. The acquisition of Cooper Tire strengthens Goodyear's US replacement tire position while also meaningfully boosting the original equipment tire business in China where demand is accelerating. The acquisition increases pro forma debt-to-EBITDA (including Moody's standard adjustments) towards 6x but should result in annual free cash flow beyond 2021 of over $200 million that could be applied to debt repayments. As a result, Moody's expects debt-to-EBITDA to fall towards 4x by year-end 2022. The EBITA margin is expected to rebound sharply in 2021 and resume expansion in 2022 as continued cost savings and distribution synergies gain traction. The stable outlook reflects Moody's expectations for industry tire volumes to continue rebounding through 2021, leading to improved cost absorption and margins. The combined entity should generate strong cash flow sufficient to fund growth investments and debt repayment while maintaining a sizable cash position and modest reliance on revolving credit facilities. Goodyear's SGL-2 Speculative Grade Liquidity Rating is supported by Moody's expectation for maintenance of a robust cash position ($1.2 billion at March 31, 2021) and significant availability under various revolving credit facilities. At March 31, 2021, the company had over $1.4 billion of availability under its $2 billion asset-based lending facility (ABL) expiring 2025 and full availability under the €800 million revolving credit facility set to expire 2024. Moody's expects free cash flow, inclusive of Cooper Tire's accretive free cash flow profile, to comfortably exceed $200 million beginning in 2022 even with higher growth investments in working capital and capital expenditures. Moody's took the following rating action on Goodyear Tire & Rubber Company (The): New Gtd. Senior Unsecured Regular Bond/Debenture, assigned at B2 (LGD4) FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS The ratings could be upgraded with improving margins, boosted by better than anticipated savings/synergies from the acquisition. The expectation that meaningful, positive free cash flow will be used for debt reduction such that debt-to-EBITDA falls to the mid-3x range or EBITA-to-interest eclipses 3x could also warrant positive rating action. Ratings could be downgraded if the EBITA margin declines to the mid-5x range, free cash flow falls well shy of Moody's expected level or debt-to-EBITDA approaches 6x. EBITA-to-interest below 2.5x could also result in a downgrade. Ratings pressure could also arise from a meaningful decline in liquidity, including increased reliance on revolving credit facilities. Goodyear's role within the automotive industry exposes the company to material environmental risks arising from increasing regulations on carbon emissions. As automotive manufacturers seek to introduce more electrified powertrains, traditional internal combustion engines will become a smaller portion of the car parc. Electric and battery electric vehicles are heavier, requiring tires to handle the increase in weight while tasking tire manufacturers to conserve raw materials with greater durability. The principal methodology used in these ratings was the Automotive Supplier Methodology published in January 2020. The Goodyear Tire & Rubber Company is one of the largest tire manufacturers in the world. Revenues for the latest twelve months ended March 31, 2021 were approximately $12.8 billion. Pro forma revenues including Cooper Tire are expected to be over $15 billion. GREEN DOT: Fitch Affirms BB+ Rating on $7MM 2011A Revenue Bonds --------------------------------------------------------------- Fitch Ratings has affirmed the rating on the following revenue bonds issued by the California Statewide Communities Development Authority (CA) on behalf of Green Dot Public Schools California (GDPSC), Animo Inglewood Charter High School (AICHS) Project at 'BB+': -- $7,095,000 charter school revenue bonds series 2011A. In addition, Fitch has affirmed AICHS's Issuer Default Rating (IDR) at 'BB+'. The Rating Outlook on the revenue bonds and IDR is Stable. SECURITY The bonds are payable from pledged revenues of AICHS, including local control funding formula (LCFF) funds from the state of California. There is a cash-funded debt service reserve funded to maximum annual debt service (MADS). ANALYTICAL CONCLUSION The 'BB+' IDR and bond rating reflect the school's elevated leverage metrics given its midrange revenue defensibility characteristics and operating risk assessment. KEY RATING DRIVERS Revenue Defensibility -- Midrange: AICHS's midrange revenue defensibility is supported by its solid academic performance, history of stable enrollment, and strong demand bolstered by a substantial waitlist. The school has some flexibility to enroll additional students, but like all charter schools, lacks control over tuition rate setting. Operating Risk -- Midrange: The school has midrange flexibility to vary costs with enrollment shifts. Fitch considers AICHS's carrying costs for debt service and pension contributions to be low. Financial Profile -- 'bb': The 'bb' financial profile assessment reflects the expectation that the school will take necessary measures to reduce expenditures if needed to maintain margin and leverage ratios consistent with a 'bb' assessment. Asymmetric Additional Risk Considerations: No asymmetric additional risk considerations apply to the ratings. RATING SENSITIVITIES Factor that could, individually or collectively, lead to positive rating action/upgrade: -- A sustained decline in Net Debt to CFADS below 6.0x while maintaining sustainable operating margins and cash flow available for debt service. Factors that could, individually or collectively, lead to negative rating action/downgrade: -- A decline in per-pupil funding that is more significant than what Fitch currently anticipates in its stress case scenario, without additional offsetting expenditure measures taken by the school; -- A sustained decline in enrollment that reduces revenues and weakens the financial condition of the school; -- An increase in net debt to CFADS above 12.0x in Fitch's stress case; -- The loss of the school's charter, a risk exhibited throughout the charter school sector. 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 Animo Inglewood is a charter high school located in Inglewood, CA. Certified in 2001 and initiating operations in 2002 with 140 freshman students, AICHS has received three charter renewals since creation, most recently in 2020 for a full five-year term. AICHS's history of renewals and strong academic track record partially offset the renewal risk inherent in any charter school. GDPSC is a non-profit charter school management organization serving over 10,000 students across a network of 20 schools in CA, in the greater Los Angeles area. In exchange for a shared services fee, AICHS has access to GDPSC's vendor contracts, academic and financial management support, and fundraising capabilities. CURRENT DEVELOPMENTS Coronavirus Effects on California School Funding State revenue performance has far exceeded expectations in fiscal 2021, creating a benign near-term outlook for state per-pupil funding. California's revenues are driven by personal income and capital gains taxes from high-income individuals, which have been less affected by the pandemic than the broader economy. California Governor Gavin Newsom's proposed fiscal 2022 budget includes significant additional funding for schools, including incentives for reopening quickly, additional summer school funding, more rapid repayment of deferrals and a 3.8% cost of living adjustment for Local Control Funding Formula for the 2021-2022 school year. The federal government also provided extraordinary aid to schools in the state, with $26.4 billion provided across three aid packages. The largest stimulus measure, the American Rescue Plan of March 2021, provides $15.3 billion for California schools. Animo Inglewood Charter High School Update During the current academic year, AICHS provided academic services through its distance learning and hybrid academic models. The school began the 2021 academic year fully remote and began bringing students back gradually for specific testing and to participate in student learning pods. As of late April, the school has begun in person instruction for the ninth grade class. AICHS ended fiscal 2020 (FYE June 30) favorably, with a surplus of approximately $630,000. The school benefited from cost savings associated with the school being closed, additional state funding, donations, and expenditure reduction measures that were implemented at the start of the pandemic. The school did incur additional expenses related to the purchase of technology to facilitate distance and hybrid learning models, but the cost savings and additional state and federal relief funds helped the school fund these costs. The school's fiscal 2021 budget projects a surplus of approximately $300,000 and includes the use of additional federal and state aid monies to offset expenditures related to the pandemic. As of the end of the 3Q2021, the school projects fiscal 2021 will be in line with or above the budgeted surplus. AICHS's charter was renewed in the of fall 2019 by the school's authorizer, Inglewood Unified School District, for another five-year term that began June 30, 2020. Revenue Defensibility AICHS's midrange revenue defensibility is driven by healthy demand flexibility evidenced by a large and regularly updated wait list, enrollment trends at close to capacity, and stronger historical academic performance compared to other Inglewood city high schools. Typical of the charter school sector, revenue defensibility is limited by the inability to control pricing as the school's main revenue source is derived from per pupil revenue from the state. AICHS has had solid academic results that drive sound demand and enrollment. The school's results on statewide assessment tests have generally exceeded those at comparable schools, as well as statewide averages. AICHS enrollment has been stable over the past several academic years at around 630 students, with capacity to increase to 650 under its charter. The school maintains an up-to-date waitlist that is consistently at or above 50% of the school's enrollment. Fitch views AICHS's strong demand as a source of financial flexibility. The school relies heavily on state revenues, which is somewhat more volatile than typical municipal revenue given California's tax structure. Over the long term, Fitch expects state school funding to grow at a rate above inflation, but below GDP growth, in line with other California schools with stable enrollment that are funded under the LCFF. Operating Risk Fitch considers the school's operating risk profile to be midrange, based on the school's fixed carrying costs and flexibility to control other expenditures. The school has well-identified cost drivers, largely teacher salaries and fringe benefits. The school has midrange control over expenditures and is somewhat limited in its practical ability to reduce the number of teachers due to the need to maintain student teacher ratios specified in the teacher contract and the need to provide a sufficient number of subject matter teachers in each grade. The school is currently in compensation negotiations with both their classified and certificated unions. School management maintains flexibility in the school's budget to reduce costs if needed. In addition, the management organization provides a central support function to the school, including educational support and finance, accounting, and human resource management, which reduces cost pressures from those areas. AICHS's fixed costs for maximum annual debt service (MADS) and pension contributions are low, at less than 15% of expenditures. The school participates in two state-funded pension systems, CalSTRS and CalPERS, both of which are mandating increasing employer contributions over the next few years to improve their funded ratios. Fitch expects carrying costs to increase modestly given expectations for increasing pension contributions. Management reports that it does not have any significant capital expenditures planned in the current or upcoming fiscal year, with minor projects being expensed through the school's normal operating budget. Financial Profile AICHS's leverage is consistent with a 'bb' assessment, given the midrange revenue defensibility and operating risk assessments. The 'bb' financial profile assessment incorporates Fitch's stress case scenario assumption and the expectation that the school will take necessary expenditure reduction measures to offset potential revenue declines. The school's 'bb' financial profile assessment reflects AICHS's solid operating margins and cash flow generation, however the school is limited by elevated leverage metrics that have been maintained over the past several years. Net debt (including Fitch-calculated net pension liabilities) to cash flow available for debt service (CFADS) has fluctuated over the last five years but has remained in the 'bb' assessment range. Fitch estimates the school's NPL for CalPERS and CalSTRS by allocating a portion of each plan's Fitch-adjusted net liability using a ratio of AICHS's annual contributions relative to the total contribution for each plan. The Fitch-adjusted NPL assumes a 6% discount rate, which is lower than both plans' reported discount rates. Fitch does not incorporate cash held by GDPSC in its analysis of net debt. Fitch's base case assumes growth in state and local education revenues at about 2.5% and growth in variable expenditures at a slightly lower rate. Fitch also assumes the school's Fitch-adjusted net pension liabilities remain constant. Over the three-year base case scenario, AICHS's coverage metrics remain in line with 2020 levels and leverage metrics continue to improve marginally and remain within the 'bb' financial profile assessment range. Fitch's stress case utilizes the FAST Econometric API - Fitch Analytical Stress Test Model (FAST) to determine the impact of a typical recession on revenues assuming constant enrollment. While the output derived from FAST is not a forecast, it does provide estimates of possible revenue behavior in a downturn, based on historical performance. As such, Fitch has incorporated FAST results, along with analytical judgement, to develop the stress case. The stress case incorporates a higher revenue decline in year one than the base case, reflecting a steeper decline in per-pupil funding, followed by marginal revenue growth in year two and higher growth in year three. Fitch assumes the school will take measures to control expenditures during year one in response to revenue declines, with expenditure growth at around inflation in years two and three. In this scenario, leverage metrics become more elevated in the initial years, but remain consistent with a 'bb' financial profile assessment. 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. GROWLIFE INC: Receives Second Default Notice From Lender -------------------------------------------------------- GrowLife, Inc. received on April 23, 2021, a notice of an event of default on the following notes held by Silverback Capital Corporation: (i) the Secured Convertible Promissory Note and Securities Purchase Agreement dated Aug. 7, 2018 (ii) the Secured Convertible Promissory Note and Securities Purchase Agreement dated July 22, 2019, and (iii) the Secured Convertible Promissory Note and Securities Purchase Agreement dated Jan. 30, 2020. The Default Notices were issued as result of the Company's inability to provide the reserve share requirement as specified in the Notes. Silverback has asserted its rights as penalty for the reserve share default to increase in the outstanding Note balances by 15%, an increase in the conversion discount by 5% to 60%, and a default interest rate on the outstanding note balances of 22%. As a result of the reserve share default, on May 7, 2021, Silverback demanded immediate payment in full of all amounts outstanding under the Notes. The Company was unable to meet the demand, and as a result on May 10, 2021, Silverback presented second default notice for lack of payment. Silverback has asserted its rights for the second default and as penalty therefore asserted an increase in the outstanding note balances by another 15%, an additional increase in the conversion discount by 5% to 55% and a default interest rate on the outstanding note balances of 22%. At this time the Company is unable to payoff its entire loan balance due to Silverback or meet its reserve share obligations required in the Notes. The Company is taking action to remedy these two events of default. About GrowLife GrowLife, Inc. (PHOT)-- http://www.shopgrowlife.com-- aims to become the nation's largest cultivation service provider for cultivating organics, herbs and greens and plant-based medicines. Through a network of local representatives covering the United States and Canada, regional centers and its e-Commerce team, GrowLife provides essential goods and services including media, industry-leading hydroponics and soil, plant nutrients, and thousands of more products to specialty grow operations. GrowLife is headquartered in Kirkland, Washington and was founded in 2012. GrowLife reported a net loss of $6.38 million in 2020, a net loss of $7.37 million in 2019, and a net loss of $11.47 million in 2018. As of Sept. 30, 2020, the Company had $4.29 million in total assets, $7.65 million in total current liabilities, $2.19 million in total long term liabilities, and a total stockholders' deficit of $5.54 million. Walnut Creek, California-based BPM LLP, the Company's auditor since 2019, issued a "going concern" qualification in its report dated April 15, 2021, citing that the Company has sustained recurring losses 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. BPM LLP, in Walnut Creek, California, the Company's auditor since 2019, issued a "going concern" qualification in its report dated April 1, 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. GRUPO AEROMEXICO: Asks Court to Reject December 2020 Ch.11 Deal --------------------------------------------------------------- Law360 reports that Mexican airline Grupo Aeromexico SAB de CV has asked a New York bankruptcy judge to reject a request by the manager of its customer loyalty program to approve a deal the companies struck in December 2020, saying only debtors can submit settlements to the court. In a motion filed Friday, May 14, 2021, Aeromexico claimed it alone has standing to ask for the approval of a proposed settlement it reached with PLM Premier and PLM minority owner Aimia Holdings, saying PLM and Aimia were engaged in an "ill-conceived" attempt to force Aeromexico to assume contracts on their schedule rather than according to its own business. About Grupo Aeromexico SAB de CV 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. HEARTLAND DENTAL: Moody's Affirms B3 CFR on American Dental Deal ---------------------------------------------------------------- Moody's Investors Service affirmed the ratings of HEARTLAND DENTAL, LLC, including the Corporate Family Rating at B3, the Probability of Default Rating at B3-PD, the first lien senior secured debt rating at B2, and the senior unsecured notes at Caa2. The outlook remains stable. The rating action follows the announced acquisition of American Dental Partners, Inc. ("American Dental"; B3) for $660 million. American Dental provides management services to affiliate dental centers, which are primarily focused on general dentistry and hygiene, with a growing focus on aesthetic segments (orthodontics, endodontics, periodontics). American Dental currently operates approximately 278 offices across 21 states. The company expects the acquisition to close in the second quarter 2021 and be fully debt funded. The affirmation of the B3 CFR reflects the added scale, potential for near-term cost synergies and longer-term operational synergies that the acquisition will bring to Heartland. For example, Heartland will look to add value to American Dental by expanding their scope of services including adding the Invisalign product offering. Other areas of savings include procurement, laboratory savings and rate renegotiations with payors given Heartland's expanded scale. While the acquisition will raise pro forma debt/EBITDA to the mid 7.0x-range (excluding synergies) Moody's expects that leverage will decline to the 7.0x range by the end of 2021 driven by the realization of synergies and continued recovery from the pandemic impact in 2020. Despite Heartland's expertise with small tuck-in acquisitions, there is integration risk as American Dental will be the largest acquisition for Heartland since it was acquired by KKR in 2018. Further, Moody's expects the company to continue to make other acquisitions and continue to spend heavily to fund new office openings concurrent with the integration of American Dental. This raises operational, financial and liquidity risk and demonstrates the highly aggressive nature of Heartland's growth strategy. The stable outlook is supported by a favorable industry outlook and Heartland's good operating and acquisition track record. The stable outlook also incorporates Moody's expectation that Heartland will continue to be aggressive with its growth strategy, but that it will maintain good liquidity and could reduce discretionary spending should it face an operating set-back. Ratings affirmed: Issuer: HEARTLAND DENTAL, LLC Corporate Family Rating, affirmed at B3 Probability of Default Rating, affirmed at B3-PD Senior Secured 1st Lien Revolving Bank Credit Facility, affirmed at B2 (LGD3) Senior Secured 1st Lien Term Loans, affirmed at B2 (LGD3) Senior Unsecured Regular Bond/Debenture, affirmed at Caa2 (LGD6) Outlook Actions: Issuer: HEARTLAND DENTAL, LLC Outlook, remains Stable RATINGS RATIONALE Heartland's B3 Corporate Family Rating reflects its high debt/EBITDA and negative free cash flow in light of its aggressive growth strategy. The rating is supported by the company's position as one of the largest dental support organization (DSO) in the US, favorable industry dynamics and good geographic diversity. Additionally, Heartland has some ability to improve cash flow and liquidity by reducing new office openings and new dentist affiliation investments. Moody's expects Heartland to maintain good liquidity over the next 12-18 months. The company has historically had negative free cash flow due to growth and acquisition spending. Moody's believes that free cash flow will be positive in 2021 due to improved operating performance and the addition of American Dental, which generates positive free cash flow. Liquidity is supported by the company's $245 million cash balance as of December 31, 2020, and an undrawn $135 million revolver. There are no financial maintenance covenants on the term loans. Moody's considers coronavirus to be a social risk given the risk to human health and safety. Aside from coronavirus, Heartland Dental faces other social risks such as the rising concerns around the access and affordability of healthcare services. However, Moody's does not consider the dental service companies to face the same level of social risk as many other healthcare providers. Heartland Dental, in particular, generates most of its revenues from commercial insurance which Moody's views favorably. From a governance perspective, Moody's views Heartland's growth strategy to be extremely aggressive given its history of debt-funded acquisitions and high leverage. Heartland has added over 200 offices since its acquisition by KKR in March 2018, either through acquisition or opening new dental offices. While there is execution risk to rapid growth, acquisitions and new store openings have generally been executed successfully. Owner dentists and the equity sponsor contributed about $122 million dollars in August 2020 through an equity raise, a credit positive. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS The ratings could be downgraded if the company's earnings weaken or financial leverage increases. Failure to integrate American Dental successfully, pursuit of an overly aggressive expansion strategy or deterioration in Heartland's cash flow or liquidity could also result in a ratings downgrade. The ratings could be upgraded if Heartland adopts less aggressive financial policies and reduces debt to EBITDA below 6.0 times. Additionally, the company would have to materially improve free cash flow. Heartland provides support staff and comprehensive business support functions under administrative service agreements to its affiliated dental offices, organized as professional corporations. Heartland currently operates more than 1,400 offices across 38 states. Heartland is majority-owned by KKR, and Ontario Teachers' Pension Plan Board maintains partial ownership. The company generated about $1.5 billion in net patient service revenue as of December 31, 2020. The principal methodology used in these ratings was Business and Consumer Service Industry published in October 2016. HOYA MIDCO: Moody's Puts B3 CFR Under Review for Upgrade -------------------------------------------------------- Moody's Investors Service placed Hoya Midco, LLC's ("Vivid Seats") ratings, including its B3 Corporate Family Rating, on review for upgrade. The rating outlook was changed to ratings under review from negative. This action follows the company's announcement[1] that it has entered into a definitive merger agreement with Horizon Acquisition Corporation, a publicly-traded special purpose acquisition company that will result in Vivid Seats Inc. becoming a public company and a significant portion of the existing debt will be repaid. Under the proposed merger agreement, the transaction will provide approximately $769 million of gross proceeds to Vivid Seats, including a $225 million fully committed common stock PIPE provided by institutional investors, including Fidelity Management & Research Company LLC, and Eldridge Industries, LLC ("Eldridge"). Eldridge has also committed to make an additional investment in common stock equal to Horizon's shareholder redemptions, if any. The company disclosed in its announcement [1] that all proceeds, net of transaction expenses, will be used for debt repayment and capital structure optimization. The transaction is expected to close in the second half of 2021, and its subject to shareholder approval and other customary closing conditions. On Review for Upgrade: Issuer: Hoya Midco, LLC Corporate Family Rating, Placed on Review for Upgrade, currently B3 Probability of Default Rating, Placed on Review for Upgrade, currently B3-PD Senior Secured Bank Credit Facility, Placed on Review for Upgrade, currently B3 (LGD3) Outlook Actions: Issuer: Hoya Midco, LLC Outlook, Changed To Rating Under Review From Negative RATINGS RATIONALE / FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS The review will focus on Vivid Seats' capital structure, financial and growth strategy as a public company, and resulting financial leverage following the completion of the SPAC merger. Moody's expects that Vivid Seats will materially reduce its leverage as all proceeds, net of transaction expenses, are earmarked for debt repayment and capital structure optimization. At the end of fiscal 2020, Vivid Seats had approximately $895 million debt and $200 million of preferred equity outstanding, with $285 million cash on hand. The review will also focus on the company's expected pace of earnings recovery from the coronavirus pandemic. The new capital structure would likely strengthen Vivid Seats' credit profile by significantly reducing debt levels, with the potential for a rating upgrade of one or two notches. Vivid Seats' credit profile continues to reflect its concentrated business profile in the ticket resale market and the stiff competition it faces from larger, diversified companies operating both primary and secondary ticket marketplaces. The rating remains supported by the company's entrenched position in the secondary ticket marketplace, the scalable nature of its platform which benefits from network effects, and strong double-digit EBITDA margins the company has been able to consistently achieve prior to the unprecedented event cancellations and venues/ theater/sports events closures due to coronavirus outbreak in the US. The company's leverage spiked in 2020 due to the pandemic, but Moody's expects a gradual earnings recovery as the pandemic abates which should return EBITDA close to the pre-pandemic levels by the end of 2022. The company's credit profile is challenged by intense competition from two larger peers and continued regulatory scrutiny surrounding the secondary ticket marketplace and fee transparency. The principal methodology used in these ratings was Business and Consumer Service Industry published in October 2016. Hoya Midco, LLC is the parent company of Vivid Seats LLC, headquartered in Chicago, Illinois, which provides an online marketplace serving the secondary ticketing industry. The company is majority-owned by affiliates of GTCR, LLC and co-investors, with ownership stakes also held by affiliates of Vista Equity Partners Management LLC and the management team. HUMANIGEN INC: Incurs $65.6 Million Net Loss in First Quarter ------------------------------------------------------------- Humanigen, Inc. filed with the Securities and Exchange Commission its Quarterly Report on Form 10-Q disclosing a net loss of $65.57 million on $486,000 of total revenue for the three months ended March 31, 2021, compared to a net loss of $2.47 million on zero revenue for the three months ended March 31, 2020. As of March 31, 2021, the Company had $98.85 million in total assets, $81.83 million in total liabilities, and $17.02 million in total stockholders' equity. The increase in net loss for the first quarter 2021 as compared to the first quarter 2020 was largely due to an increase in total expenses, mainly research and development expense of $59.2 million from $0.7 million for the three months ended March 31, 2020 to $59.9 million for the three months ended March 31, 2021. The increase in R&D is primarily due to an increase of $51.4 million of expense in lenzilumab manufacturing costs and $7.5 million for clinical trial expenses related to the LIVE-AIR study, both of which began after the first quarter of 2020. The costs incurred for the production of lenzilumab will continue to be included in R&D until lenzilumab is authorized or approved for commercial use, at which point the amounts expended for production will be classified as inventory. Net cash used in operating activities, net of balance sheet changes, was $35.8 million for the three months ended March 31, 2021. During the three months ended March 31, 2021, the company raised net proceeds of $36.1 million from the sale of shares of common stock under its At-the-Market offering program. The company drew the first tranche of $25.0 million under its credit facility with Hercules Capital, providing net proceeds of $24.4 million. As of March 31, 2021, the company had cash and cash equivalents of $92.9 million. The company also completed a public offering in the second quarter of 2021 with net proceeds of $94.1 million. The proforma balance of cash and cash equivalents at March 31, 2021 with the proceeds from the public offering is $187.0 million. The company expects to continue to use its funds on development and manufacturing of lenzilumab in anticipation of its potential commercialization under EUA or other conditional marketing authorizations. In the second quarter of 2021 the company anticipates the amount of spending on lenzilumab production will be at least the same level as the first quarter of 2021. If an EUA or CMA for lenzilumab is not received by mid-2021, the company will seek to decrease or eliminate spending on the production of lenzilumab for commercial use. A full-text copy of the Form 10-Q is available for free at: https://www.sec.gov/Archives/edgar/data/1293310/000121465921005311/h51021110q.htm About Humanigen Based in Brisbane, California, Humanigen, Inc. (OTCQB: HGEN), formerly known as KaloBios Pharmaceuticals, Inc. -- http://www.humanigen.com-- is a clinical stage biopharmaceutical company, developing its clinical stage immuno-oncology and immunology portfolio of monoclonal antibodies. The Company is focusing its efforts on the development of its lead product candidate, lenzilumab, its proprietary Humaneered anti-human GM-CSF immunotherapy, through a clinical research agreement with Kite Pharmaceuticals, Inc., a Gilead company to study the effect of lenzilumab on the safety of Yescarta, axicabtagene ciloleucel including cytokine release syndrome, which is sometimes also referred to as cytokine storm, and neurotoxicity, with a secondary endpoint of increased efficacy in a multicenter Phase Ib/II clinical trial in adults with relapsed or refractory large B-cell lymphoma. Humanigen reported a net loss of $89.53 million for the 12 months ended Dec. 31, 2020, compared to a net loss of $10.29 million for the 12 months ended Dec. 31, 2019. As of Dec. 31, 2020, the Company had $68.30 million in total assets, $22.76 million in total liabilities, and $45.54 million in total stockholders' equity. HYSTER-YALE GROUP: Moody's Rates New $225MM First Lien Loan 'B1' ---------------------------------------------------------------- Moody's Investors Service affirmed Hyster-Yale Group, Inc.'s B2 corporate family rating and B2-PD probability of default rating. Moody's also assigned a B1 rating to the proposed $225 million first lien term loan due 2028. Moody's also upgraded the company's Speculative Grade Liquidity rating to SGL-2 from SGL-3. The rating outlook has been changed to positive from stable. Proceeds from the new term loan will be used to repay all existing first lien term loan debt outstanding as well as to increase cash reserves. RATINGS RATIONALE Hyster-Yale's B2 CFR reflects the company's low EBITA margins, typically between 2% and 4%. This is due to the company's relatively high cost structure when compared to many of its competitors. Although Moody's expects margin improvement in 2021 as demand recovers, EBITA margins will remain below 4% through 2022. This along with a build in working capital and ongoing capital investment will lead to modest negative free cash flow through 2022, despite its revenue base of almost $3 billion. Hyster-Yale's rating also reflects its heavy reliance on the US lift truck market, which comprises almost 60% of revenues. However, the ratings also reflect the company's solid market position in the global lift truck market, enhanced by recent acquisitions. Hyster-Yale's strong market position and innovation investments make it well-placed to grow its share as demand from industrial customers rebounds in upcoming years. Bookings (dollar value) increased by 94% in the first quarter of 2021 versus the same period in 2020. At the same time, backlog increased by nearly 60%, and now stands at about $1.5 billion. The stronger backlog supports Moody's expectations that Hyster-Yale's revenues will grow to over $3 billion in 2021, recovering much of the sales lost during the downturn of 2020. With better scale and ongoing cost reduction initiatives underway, Moody's believes that Hyster-Yale will be able to steadily improve EBITA margins to over 4% over the next few years. Hyster-Yale maintains a relatively conservative capital structure and financial policy. On close of the term loan refinancing, the company will have balance sheet debt of about $350 million. Moody's projects Hyster-Yale's debt-to-EBITDA to be in the mid 3x range in 2021. While this is slightly higher than recent levels, Hyster-Yale's leverage will remain low for the rating. The company prioritizes its capital deployment toward investment, rather than shareholder returns. The company has not made any material share repurchases over the last several years but does pay a quarterly dividend, aggregating $21 million annually. It is important that Hyster-Yale maintain modest leverage and conservative financial policies to offset its thin margins and volatile industry demand inherent in its operations. The positive outlook reflects Moody's expectations of gradual margin improvement through 2022 on robust sales growth. This will allow debt-to-EBITDA to return to sub-3x levels by 2022. Moody's expects no change to financial policy over this period, but modestly-sized acquisitions may occur. The first lien term loan is rated B1, one notch higher than the CFR, reflecting the loss absorption provided by other unsecured liabilities in the event of default. Higher notching on the term loan using Moody's Loss Given Default for Speculative-Grade Companies methodology is constrained by the existence of a $300 million ABL revolver facility that is ranked senior to the term loan. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS Moody's could upgrade Hyster-Yale's ratings if it maintains EBITA margin above 4% while keeping debt-to-EBITDA below 3.5x. The sustainment of good liquidity, with prospects for positive free cash flow, could also support a ratings upgrade. Ratings could be downgraded if the company significantly increases debt, resulting in debt-to-EBITDA of over 5.5x. Also, sustained weakness in EBITA margins at close to breakeven levels or a deterioration in liquidity could result in lower ratings. Assignments: Issuer: Hyster-Yale Group, Inc. Senior Secured Bank Credit Facility, Assigned B1 (LGD3) Affirmations: Issuer: Hyster-Yale Group, Inc. Corporate Family Rating, Affirmed B2 Probability of Default Rating, Affirmed B2-PD Upgrades: Issuer: Hyster-Yale Group, Inc. Speculative Grade Liquidity Rating, Upgraded to SGL-2 from SGL-3 Outlook Actions: Outlook, Changed To Positive From Stable The principal methodology used in these ratings was Manufacturing Methodology published in March 2020. Headquartered in Cleveland, Ohio, Hyster-Yale Materials Handling, Inc., through its operating subsidiary Hyster-Yale Group, Inc. is an integrated full-line lift truck manufacturer. In addition, the company produces lift truck attachments, hydrogen fuel cell power products and provides telematics, automation and fleet management services, as well as an array of other power options for its lift trucks. Revenue was approximately $2.8 billion in 2020. IDEANOMICS INC: To Acquire US Hybrid for $50M --------------------------------------------- Ideanomics Inc. has signed a definitive agreement to acquire 100% of privately held US Hybrid in cash and stock consideration. The acquisition is subject to customary closing conditions. Ideanomics will acquire US Hybrid for an aggregate purchase price of $50,000,000 in a combination of $30,000,000 of cash and $20,000,000 worth of Ideanomics stock as consideration, subject to customary purchase price adjustments set forth in the Agreement. US Hybrid designs, manufactures, and markets integrated power conversion systems for battery electric, fuel cell, and hybrid vehicles, as well as systems for renewable energy generation and storage. The Agreement contains customary representations, warranties, covenants, termination rights and indemnities of the parties. Non-fundamental representations and warranties survive for 18 months following the closing date and fundamental representations and warranties survive either indefinitely or for the statute of limitations. The Agreement also contains mutual indemnification obligations of the parties thereto. The indemnification obligations of the parties are capped at $25,000,000 for non-fundamental representations and warranties. The indemnification obligations of the parties for breaches of non-fundamental representations and warranties are subject to a $100,000 deductible, except in the case of fraud. The Agreement contains customary covenants. "The acquisition of US Hybrid is a significant one for our EV efforts across the Ideanomics Mobility division and is the stepping-stone we were looking for to ensure we provide vehicles and technologies that can proudly allow us to state the meaningful components are Made in America. We are excited to bring Dr. Goodarzi and team into the Ideanomics family, they have been exceptional to work with throughout our discussions, and we look forward to helping them develop their business further. We will be bringing their technologies and capabilities into our own vehicles, as well as helping the broader industry leverage the outstanding technology the US Hybrid team has developed in Hybrid, EV, and Hydrogen fuel cells," said Alf Poor, Ideanomics CEO. "With decades of experience and credibility from deployments with reputable customers, US Hybrid will become an innovation engine for Ideanomics and provide strategic opportunities for clean technology applications across the zero emissions transportation value chain, both now and in the future." "We are excited to be joining the Ideanomics family, as a synergistic addition to the Ideanomics ecosystem of EV businesses. Ideanomics' global platform will provide us with the opportunity to unlock the commercialization and sales potential of our American-made zero-emission products within Ideanomics and our broad customer base. This combination of our businesses provides for a bright future in zero emission transportation, where we continue to innovate for the future, while scaling our commercial products to meet the immediate demands of the industry," said Dr. Gordon Abas Goodarzi, PhD, PE, CEO of US Hybrid. About Ideanomics Ideanomics is a global company focused on the convergence of financial services and industries experiencing technological disruption. Its Mobile Energy Global (MEG) division is a service provider which facilitates the adoption of electric vehicles by commercial fleet operators through offering vehicle procurement, finance and leasing, and energy management solutions under its innovative sales to financing to charging (S2F2C) business model. Ideanomics Capital is focused on disruptive fintech solutions and services across the financial services industry. Together, MEG and Ideanomics Capital provide their global customers and partners with leading technologies and services designed to improve transparency, efficiency, and accountability, and its shareholders with the opportunity to participate in high-potential, growth industries. The Company is headquartered in New York, NY, with operations in the U.S., China, Ukraine, and Malaysia. Ideanomics reported a net loss of $106.04 million for the year ended Dec. 31, 2020, compared to a net loss of $96.83 million for the year ended Dec. 31, 2019. As of Dec. 31, 2020, the Company had $234.41 million in total assets, $32.64 million in total liabilities, $1.26 million in series A convertible redeemable preferred stock, $7.48 million in redeemable non-controlling interest, and $193.02 million in total equity. IMERYS TALC AMERICA:Asks Court Okay to Carry Out Ch.11 Acquisitions ------------------------------------------------------------------- Law360 reports that talc supplier Imerys Talc America asked a Delaware bankruptcy judge for permission to enact its plans to buy up small operating businesses to help generate revenue for its claimants, including authorization to move quickly in putting down cash deposits without further court approval. In papers filed Friday, Imerys said it is looking to buy one or more operating companies that will become the property of the debtor and, post-bankruptcy, would be owned by a Chapter 11 trust that will disburse any revenues from the operating assets for the benefit of Imerys personal injury claimants. About Imerys Talc America Imerys Talc and its subsidiaries -- https://www.imerys-performance-additives.com/ -- are in the business of mining, processing, selling, and distributing talc. Talc is a hydrated magnesium silicate that is used in the manufacturing of dozens of products in a variety of sectors, including coatings, rubber, paper, polymers, cosmetics, food, and pharmaceuticals. Its talc operations include talc mines, plants, and distribution facilities located in: Montana (Yellowstone, Sappington, and Three Forks); Vermont (Argonaut and Ludlow); Texas (Houston); and Ontario, Canada (Timmins, Penhorwood, and Foleyet). It also utilizes offices located in San Jose, California and Roswell, Georgia. Imerys Talc America, Inc., and two subsidiaries, namely Imerys Talc Vermont, Inc., and Imerys Talc Canada Inc., sought Chapter 11 protection (Bankr. D. Del. Lead Case No. 19-10289) on Feb. 13, 2019. The Debtors were estimated to have $100 million to $500 million in assets and $50 million to $100 million in liabilities as of the bankruptcy filing. The Hon. Laurie Selber Silverstein is the case judge. The Debtors tapped Richards, Layton & Finger, P.A., and Latham & Watkins LLP as counsel; Alvarez & Marsal North America, LLC as financial advisor; and Prime Clerk LLC as claims agent. INTEGRATED VENTURES: Incurs $16.6-Mil. Net Loss in Third Quarter ---------------------------------------------------------------- Integrated Ventures, Inc. filed with the Securities and Exchange Commission its Quarterly Report on Form 10-Q disclosing a net loss of $16.59 million on $696,805 of total revenues for the three months ended March 31, 2021, compared to a net loss of $444,671 on $130,910 of total revenues for the three months ended March 31, 2020. For the nine months ended March 31, 2021, the Company reported a net loss of $17.18 million on $961,152 of total revenues compared to a net loss of $573,580 on $374,052 of total revenues for the nine months ended March 31, 2020. As of March 31, 2021, the Company had $5.15 million in total assets, $310,974 in total liabilities, $1.13 million in series C preferred stock, $3 million in series D preferred stock, and $709,964 in total stockholders' equity. As of March 31, 2021, the Company had total current assets of $2,635,866, including cash of $99,974 and equipment deposits of $2,528,392, and total current liabilities of $310,974. During the three months ended March 31, 2021, the Company's lenders converted in full their convertible notes payable and the related derivative liabilities were settled. Most recently, the Company has funded its operations primarily from convertible notes payable, the issuance of Series C and D preferred stock, and cash generated from its digital currency mining operations. The Series C and D preferred stock are recorded at total face value of $4,125,000 as mezzanine equity due to certain mandatory redemption features of the stock. During the nine months ended March 31, 2021, the Company received net proceeds from convertible notes payable of $563,000, which debt was converted in full into shares of its common stock. The Company also funded the purchase of cryptocurrency mining equipment through short-term installment debt totaling $57,822. A full-text copy of the Form 10-Q is available for free at: https://www.sec.gov/Archives/edgar/data/1520118/000147793221003165/intv_10q.htm About Integrated Ventures Inc. Integrated Ventures Inc. operates as technology holdings Company with focus on cryptocurrency sector. For more information, please visit company's website at www.integratedventuresinc.com Integrated Ventures reported a net loss of $1.08 million for the year ended June 30, 2020, compared to a net loss of $9.51 million for the year ended June 30, 2019. Houston, Texas-based M&K CPAS, PLLC, the Company's auditor since 2018, issued a "going concern" qualification in its report dated Sept. 23, 2020, citing that since inception, the Company has suffered net losses that have resulted in an accumulated deficit and stockholders' deficit, which raises substantial doubt about its ability to continue as a going concern. JAGUAR HEALTH: Adjourns Annual Meeting to June 11 ------------------------------------------------- Jaguar Health, Inc.'s Annual Meeting of Stockholders held on May 13, 2021 was adjourned due to a lack of quorum. The adjourned meeting will be held at 8:30 a.m. Pacific Standard Time (11:30 a.m. Eastern Standard Time) on Friday, June 11, 2021, at the offices of the Company at 200 Pine Str. Suite 400, San Francisco, Calif. The record date for determining stockholders eligible to vote at the Annual Meeting will remain the close of business on April 12, 2021. Stockholders have thus far strongly supported the proposals. No action is required by any stockholder who has previously delivered a proxy and who does not wish to revoke or change that proxy. "We currently have less than 0.1% of our total authorized shares of Common Stock available for future issuance, taking into account shares issued and outstanding and shares reserved for issuance upon exercise of outstanding warrants, existing equity incentive awards, and under our stock incentive plan and inducement award plans. The Board believes that approval of Proposal 3 - the proposed increase in the number of authorized shares of Common Stock - will benefit us by providing flexibility in responding to future business opportunities as the Board may deem in the best interest of shareholders, from time to time; and also, if deemed in the best interest of shareholders by the Board, to raise additional capital from time to time to execute our business plans," Conte said. "We encourage all eligible stockholders who have not yet voted their shares - or provided voting instructions to their broker or other record holder – to do so prior to the Annual Meeting, as your participation is important. See below under 'How to Vote' for instructions on how to vote if you have not already voted, or if you would like to change your votes," said Lisa Conte, Jaguar's president and CEO. "Jaguar's Board of Directors recommends a vote "FOR" the presented proposals. Based on a preliminary review of the votes cast, over 80% have voted in favor of Proposal 3 ("Approving an amendment to the Company's Third Amended and Restated Certificate of Incorporation, as amended (the "COI"), to increase the number of authorized shares of Common Stock from 150,000,000 shares to 290,000,000 shares."). Approximately an additional 11% of the Company's eligible common stock outstanding needs to be voted to reach quorum." How to Vote Stockholders of record as of the close of business on April 12, 2021 may vote by internet at http://www.voteproxy.com,or by telephone at 800-776-9437 (this voting phone number is operational 24x7), or by returning a properly executed proxy card. Stockholders who hold shares of Jaguar stock in street name may vote through their broker. Street name stockholders requiring assistance with voting their shares are encouraged to contact Jaguar's proxy solicitation firm, Georgeson, at 866-821-0284, Monday to Friday from 9:00 AM – 11:00 PM US Eastern Standard Time, and Saturday from 12:00 PM-6:00 PM US Eastern Standard Time. Georgeson's call center is not staffed on Sundays. No changes have been made to the proposals to be voted on by stockholders at the Annual Meeting. The Company's Proxy Statement and any other materials filed by the Company with the SEC can be obtained free of charge at the SEC's website at www.sec.gov. About Jaguar Health Jaguar Health, Inc. -- http://www.jaguar.health-- is a commercial stage pharmaceuticals company focused on developing novel, sustainably derived gastrointestinal products on a global basis. The Company's wholly owned subsidiary, Napo Pharmaceuticals, Inc., focuses on developing and commercializing proprietary human gastrointestinal pharmaceuticals for the global marketplace from plants used traditionally in rainforest areas. Its Mytesi (crofelemer) product is approved by the U.S. FDA for the symptomatic relief of noninfectious diarrhea in adults with HIV/AIDS on antiretroviral therapy. Jaguar Health reported a net loss and comprehensive loss of $33.81 million for the year ended Dec. 31, 2020, compared to a net loss and comprehensive loss of $38.54 million for the year ended Dec. 31, 2019. As of Dec. 31, 2020, the Company had $42.84 million in total assets, $25.64 million in total liabilities, and $17.20 million in total stockholders' equity. JAMES B. THOMAS: Public Access to Ex. A of Sale Motion Restricted ----------------------------------------------------------------- Judge Maria Ellena Chavez-Ruark of the U.S. Bankruptcy Court for the District of Maryland granted the request of Michael G. Wolff, the Subchapter V Trustee of James B. Thomas, to restrict public access to Exhibit A of his motion to sell, via private sale, the real property located at 625 Eldrid Drive, in Silver Spring, Maryland, to Rafael Espinal for $379,900. The Trustee sought to restrict public access to personal identification information contained in a document filed in the case. The document as specified in the Motion will be restricted from public access. The Clerk will docket the redacted document in accordance with Fed. R. Bankr. P. 9037(h)(2). The Movant will serve copies of the Order to the Debtor, the counsel for the Debtor, the case trustee, and the U.S. Trustee, and any individual whose personal identifying information has been restricted from public access within 14 days of the date of entry of the Order. About James B. Thomas James B. Thomas filed a Voluntary Petition for Relief pursuant to Chapter 13 of the Bankruptcy Code on Sept. 26, 2019. On Jan. 27, 2020, the Debtor converted his case to a Chapter 11 Bankruptcy (Bankr. D. Md. Case No. 19-22866-LSS). On April 16, 2020, the Debtor filed an Amended Voluntary Petition Election to Proceed under Subchapter V of Chapter 11. On Jan, 14, 2021, Michael G. Wolff was assigned as the Chapter 11 Subchapter V Trustee in the matter. JBS USA: Moody's Rates New $500MM Sr. Unsecured Notes 'Ba1' ----------------------------------------------------------- Moody's Investors Service has assigned a Ba1 rating to proposed $500 million senior unsecured 10-year notes to be co-issued by JBS USA Lux S.A. ("JBS USA"), along with wholly-owned subsidiaries JBS USA Finance, Inc. ("JBS USA Finance") and JBS USA Food Company ("JBS USA Food"). The co-issuers are indirect wholly-owned subsidiaries of Brazil based JBS S.A. (Ba1 stable, the "parent"). The new notes will be guaranteed by the parent and several restricted subsidiaries, excluding Pilgrim's Pride Corporation (Ba3 stable). The other ratings of JBS USA and the stable outlook are unaffected. Net proceeds from the proposed notes will be used to fund the pending acquisition of Dutch plant-based food company, Vivera, for EUR341 million ($412 million) and for general corporate purposes. New Assignments: Issuer: JBS USA Lux S.A. GTD Senior Unsecured Global Notes, Assigned Ba1 RATINGS RATIONALE JBS USA Lux S.A.'s ("JBS USA") instrument ratings are driven primarily by the credit profile of parent guarantor, JBS S.A. (Corporate Family Rating, Ba1 stable), which controls JBS USA in all material respects. Thus, Moody's expect that future changes to the JBS USA debt instrument ratings and outlook will reflect any changes to the JBS S.A. Corporate Family Rating and outlook, respectively. The ratings could also be affected by any changes in capital structure that result in material shifts in relative rights of payment, guarantees or collateral support with respect to debt instruments of JBS USA and JBS S.A. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS An upgrade to JBS USA debt instrument ratings would likely result from an upgrade to the JBS S.A. Corporate Family Rating. Conversely, a downgrade to JBS USA debt instrument ratings would likely result from a downgrade to the JBS S.A. Corporate Family Rating. The principal methodology used in these ratings was Protein and Agriculture published in May 2019. JBS USA Lux S.A. operates the North America beef and pork segments and the Australian beef and lamb operations of Brazil-based JBS S.A., the largest protein processor in the world. JBS USA Lux S.A. also owns a controlling 80.2% equity interest in US-based Pilgrim's Pride Corporation (NASDAQ: PPC), the second largest poultry processor in the world. Reported net sales for JBS S.A. consolidated and JBS USA Lux S.A. consolidated for the twelve months ended December 2020 were approximately $52.3 billion and $39.3 billion, respectively. JET REAL ESTATE: $1.6M Sale of Del Mar Property to Zambon Approved ------------------------------------------------------------------ Judge Margaret M. Mann of the U.S. Bankruptcy Court for the Southern District of California authorized Jet Real Estate Group, LLC's sale of the real property located at 12994 Via Esperia, in Del Mar, California, Parcel Number 3010922600, to Brent Zambon for $1.6 million. A hearing on the Motion was held on April 15, 2021, at 10:00 a.m. The Debtor is authorized to close the sale as contemplated in the Sale Agreement and the Order. The Debtor is authorized to pay through escrow all usual and customary costs of sale, including without limitation (a) escrow fees, (b) title insurance fees, (c) recording fees, (d) messenger fees, and (e) liens of record, in each case to the extent not disputed by the Debtor. The liens that may be forthwith paid by the Debtor from escrow include (i) the liens of any and all taxing authorities, (ii) the liens recorded in favor of secured creditor Mike Hall, Trustee of the Hall Family Trust, dated June 14, 1989, for $525,000, the amount undisputed by Debtor, and (ii) the lien recorded in favor of secured creditor Thomas Farley for the amount of $200,000. No further distribution of the sale proceeds will be made without the express approval of the Court. The sale of the Property is free and clear of all liens, encumbrances, and interests, as set forth in the Motion, with respect to noticed lienholders Trust, Farley, and the San Diego County Treasurer-Tax Collector. To the extent that any portion of a claim, lien, or interest in or to the Property is not paid through escrow, such claims, liens, and interests in and to the Property will attach to the net sale proceeds that are received by the Debtor through escrow. As the Debtor and the Trust, following a telephonic meet and confer between their respective counsel of record, are unable to agree on the amount of Trust's liens, the Motion is without prejudice as to the total amount of these liens. Any amount claimed by Trust exceeding $525,000 will be disposed according to further order of the Court. Upon the close of escrow, the Debtor is authorized to open an interest-bearing, DIP Savings Account, at a repository approved by the Office of the United States Trustee, for the express purpose of holding the Disputed Amount until such time that the Court can determine how to dispose of it. The Debtor will not distribute or otherwise transact the funds held in the Savings Account absent express instruction from the Court, and Debtor will provide Trust with monthly statements for the Savings Account. Any interest generated by the Savings Account will be disbursed at the sole discretion of the Court. The Order adequately protects the interest of Trust. The issuer of a title policy insuring the sale of the Property contemplated by the Sale Agreement, if any, and the Escrow Agent, will be entitled to rely upon the Order in connection with the Sale. The Tentative Ruling (Exhibit A) and all findings and conclusions of law contained in the Tentative Ruling will be fully incorporated into the Order by reference. The $525,000 payment to Trust is allowed as an interim distribution without prejudice to adjustment either higher or lower as the disputes about offsets, attorneys fee and default interest are resolved. The Debtor disputes the Trust's claim of $846,349.31, but has agreed to pay $525,000 to Trust leaving $321,349.31 unpaid. If the Trust's claim is paid in full, the net proceeds would be $542,058.99. Despite the exclusion of the various sale fees assumed by the Debtor and the approximation of the Farley Lien, the net proceeds with the Trust's claim paid in full would be enough to cover the sale fees and the variance in the Farley Lien. There would also be enough funds to pay JPMorgan's unsecured claim of $30,344.38, which would be reduced by the additional $15,000 payment from the Buyer. A copy of the Exhibit A is available at https://tinyurl.com/rfadsd6z from PacerMonitor.com free of charge. About Jet Real Estate Group Jet Real Estate Group, LLC sought protection for relief under Chapter 11 of the Bankruptcy Code (Bankr. S.D. Cal. Case No. 20-05584) on Nov. 11, 2020 listing under $1 million in both assets and liabilities. Benjamin Carson at Benjamin Carson Law Office serves as the Debtor's counsel. JOSEPH M. THOMAS: Pehrssons Buying Erie City Properties for $1.05M ------------------------------------------------------------------ Joseph Martin Thomas, M.D., asks the U.S. Bankruptcy Court for the Western District of Pennsylvania to authorize the sale to Dale E. Pehrsson and Robert S. Pehrsson of the following: (i) the real estate located at 2100 South Shore Drive, in Erie, Pennsylvania, Tax Index No. 17-041-034.0-102.00 situate in the City of Erie, County of Erie, and Commonwealth of Pennsylvania, acquired by virtue of a Deed from Denise Illig Robison and Russell Robison, her husband dated Nov. 29, 2000 and recorded on recorded on Nov. 29, 2000 in Erie County Record Book 740, Page 873, for $1.035 million, and (ii) the personal property owned by the Debtor for the total purchase price of $12,000. A hearing on the Motion is set for June 3, 2021, at 11:30 a.m. The Objection Deadline is May 24, 2021. The following named Respondents either appear to have liens on the real property and/or personal property which is the subject of this sale, or alternatively, are named as Respondents for the purpose of notifying them that a sale of the subject property, to which they may have some claim, is being proposed: (a) PNC Bank, National Association is a banking institution with a mailing address of PNC Bank, N.A., P.O. Box 94982, Cleveland, Ohio 44101. PNC is represented by Brian Nicholas, Esquire, KML Law Group PC, 701 Market Street, Suite 5000, Philadelphia, Pennsylvania 19106. PNC is being named as a Respondent as it is the holder of a first Mortgage on the property located at 2100 South Shore Drive, Erie, Pennsylvania in the face amount of $780,000 dated Sept. 9, 2009 and recorded on Sept. 18, 2009 in the Office of the Recorder of Deeds of Erie County, Pennsylvania at Record Book 1591, Page 1529 and re-recorded on Dec. 7, 2009 at Record Book 1607, Page 1982. It is believed that the approximate balance due on this mortgage is $647,171.24, plus interest and satisfaction costs. (b) Tax Collector, City of Erie, is a taxing authority with a mailing address of 626 State Street, Room 105, Erie, Pennsylvania 16501-1128. The Tax Collector, City of Erie is being named as a Respondent in regard to the real estate taxes that will be due on the subject property for the year 2021. (c) The Erie County Tax Claim Bureau has a mailing address of 140 West Sixth Street, Room 110, Erie, Pennsylvania 16501. The Erie County Tax Claim Bureau has a statutory lien for delinquent 2020 real estate taxes in the amount of $39,294.75, plus continuing interest at the rate of 9% per annum from March 1, 2021. (d) The United States of America, Internal Revenue Service is an agency of the United States Government. The United States of America, Internal Revenue Service is being named as a Respondent as the following Federal Tax Liens have been entered in the Court of Common Pleas of Erie County, Pennsylvania: (i) Federal Tax Lien entered on June 15, 2018 at Case No. 30954-2018 in the amount of $255,140.32; and (ii) Federal Tax Lien entered on July 9, 2018 at Case No. 31126-2018 in the amount of $187,570.67. (e) The Respondent, Commonwealth of Pennsylvania, Dept. of Revenue, is being named as a Respondent because the following liens have been entered in the Court of Common Pleas of Erie County, Pennsylvania: (i) Tax Lien entered on Dec. 10, 2018 at Case No. 32118-2018 in the amount of $38,193.59 and (ii) Tax Lien entered on Feb. 4, 2019 at Case No. 30321-2019 in the amount of $20,512.12. (f) The Respondents, Dale E. Pehrsson and Robert S. Pehrsson, have a mailing address of 1 Golden Eagle Lane, Clarion, Pennsylvania 16214 and are being named as a Respondents because they are the prospective purchasers of the subject property. They are represented by Eugene C. Sundberg, Jr., Esquire, and the Marsh Law Firm, 300 State Street, Suite 300, Erie, Pennsylvania 16507. The Debtor holds such title to the property the Bankruptcy Code confers upon him. Based upon market comparables, and consistent with the most recent listing price for the property, it is believed and therefore averred that the fair market value of the property is approximately $1.15 million. Multiple parties were interested in and viewed the property, and the initial offer accepted was for $1.065 million. However, home and pool inspections revealed certain deficiencies in the property that warranted a price reduction to $1.035 million. It is believed and therefore averred that the potential value of those deficiencies may be greater than the amount of the price reduction. As a result, the Debtor submits that the amount represents that highest and best offer currently available. The Debtor has secured an offer for the real estate from the Buyers in the amount of $1.035 million on the terms of their Agreement for the Sale of Real Estate, as well as an Addendum to Agreement of Sale executed after property inspection. Contingent upon approval of the sale of the real estate, the prospective purchasers have also submitted an offer to purchase various items of personal property owned by the Debtor for the total purchase price of $12,000 more fully described in Exhibit C. The Debtor consulted with a former broker of like personal property in determining the purchase price for the same, which the consultant agreed to do at no charge to the Debtor. Based on the consultant's knowledge of market comparables, in consultation with the Debtor and his Court-approved realtor, the Debtor submits that the purchase price for the personal property represents the fair market value of the same. The real and/or personal property proposed to be sold either appears to be validly encumbered by the liens identified at Exhibit D, or alternatively, the Respondents identified at Exhibit D, are being notified of the proposed sale in order to divest and transfer any potential lien or claim they may have to the subject property. The Debtor believes that the offer of $1.035 million for the real property and of $12,000 for the items of personal property are fair and should be accepted. He proposes that the encumbrances and other claims identified at Exhibit D, to the extent that they validly encumber the subject property, be divested and transferred to the proceeds of sale. He also proposes that the funds created by the sale be subject to the prior payment of all administrative costs and expenses allowed by the Court, including, but not limited to the filing fee for the Motion to Sell Real Property of the Estate Free and Clear of Liens in the amount of $188, as well as the actual out-of-pocket costs for advertising in both the Erie Times News and the Erie County Legal Journal. The Debtor also proposes payment of all usual and ordinary costs of sale, including, but not limited to, the following: a) Payment of no more than $1,500.00 in fees to be paid to the closing agent who represents the Debtor at the time of the real estate closing; b) Any and all municipal fees, as well as any and all water, sewer, and refuse charges, if applicable; c) Payment of any and all delinquent real estate taxes in the approximate amount of $39,294.75, plus continuing interest at the rate of 9% per annum from March 1, 2021; d) Current real estate taxes, pro-rated to the date of closing; e) The sale is being proposed pursuant to Dr. Thomas' Amended Plan of Reorganization dated April 1, 2021 and, as such, will be exempt from all realty transfer taxes pursuant to Section 1146(a). f) Payment of the Court approved realtor commission of 4.5% in the amount of $47,925; g) The sum of $10,470 (1% of the combined purchase price of the real estate and personal property) will be paid the Office of the United States Trustee on account of quarterly U.S. Trustee's fees due in regard to the disbursements made at the time of the real estate closing. h) Payment on the full amount of the first mortgage lien on the real estate located at 2100 South Shore Drive, Erie, Pennsylvania in favor of PNC Bank, National Association, in the approximate principal amount of $647,171.24, plus interest and satisfaction costs. i) Payment on the full amount of the secured tax lien on the real estate located at 2100 South Shore Drive, Erie, Pennsylvania in favor of the Internal Revenue Service in the approximate principal amount of $239,176.77, plus interest and satisfaction costs, which shall be placed in escrow pending any offset from the Debtor’s future tax filings. j.) Payment on the full amount of the secured tax lien on the real estate located at 2100 South Shore Drive, Erie, Pennsylvania in favor of the Pennsylvania Department of Revenue in the approximate principal amount of $22,185.11, plus interest and satisfaction costs. k) The net proceeds from the sale, after payment of the disbursements outlined, which are estimated to be approximately $21,000, will be paid to Debtor’s Counsel, Michael P. Kruszewski, Esquire and the Quinn Law Firm, to be held in its escrow account, on account of the administrative claims of the Debtor, Joseph Martin Thomas. The proceeds from the sale of the personal property in the amount of $12,000 will be paid to the Debtor's Counsel, Michael P. Kruszewski, Esq., and the Quinn Law Firm, to be held in its escrow account, on account of the administrative claims of the Debtor. A copy of the Agreement and Exhibits is available at https://tinyurl.com/m3f44zbh from PacerMonitor.com free of charge. Joseph Martin Thomas sought Chapter 11 protection (Bankr. W.D. Pa. Case No. 20-10334) on May 6, 2020. The Debtor tapped Michael P. Kruszewski, Esq., at The Quinn Law Firm as counsel. KINTARA THERAPEUTICS: Incurs $6.6-Mil. Net Loss in Third Quarter ---------------------------------------------------------------- Kintara Therapeutics, Inc. filed with the Securities and Exchange Commission its Quarterly Report on Form 10-Q disclosing a net loss of $6.64 million for the three months ended March 31, 2021, compared to a net loss of $1.96 million for the three months ended March 31, 2020. For the nine months ended March 31, 2021, the Company reported a net loss of $31.57 million compared to a net loss of $5.30 million for the nine months ended March 31, 2020. The increase in loss for the nine months ended March 31, 2021 compared to the nine months ended March 31, 2020 was largely due to the recognition of $16.1 million of non-cash expenses related to the acquisition of in-process research and development costs associated with the merger with Adgero Biopharmaceuticals Holdings, Inc. and an expanded rate of expenditures with the initiation of the GCAR study and REM-001 development. As of March 31, 2021, the Company had $18.85 million in total assets, $2.74 million in total liabilities, and $16.12 million in total stockholders' equity. At March 31, 2021, the Company had cash and cash equivalents of approximately $15.7 million. The cash and cash equivalents at March 31, 2021 are expected to be sufficient to fund the Company's planned operations into the second quarter of calendar year 2022. A full-text copy of the Form 10-Q is available for free at: https://www.sec.gov/ix?doc=/Archives/edgar/data/1498382/000156459021027558/ktra-10q_20210331.htm About Kintara Located in San Diego, California, Kintara (formerly DelMar Pharmaceuticals) is dedicated to the development of novel cancer therapies for patients with unmet medical needs. Kintara is developing two late-stage, Phase 3-ready therapeutics for clear unmet medical needs with reduced risk development programs. The two programs are VAL-083 for GBM and REM-001 for CMBC. Kintara reported a net loss of $9.13 million for the year ended June 30, 2020, compared to a net loss of $8.05 million for the year ended June 30, 2019. As of June 30, 2020, the Company had $2.94 million in total assets, $2.67 million in total liabilities, and $263,214 in total stockholders' equity. LATAM BRASIL: Outsources Ground Agents as Restructuring Continues ----------------------------------------------------------------- Joao Machado of Airline Geeks reports that as LATAM Airlines Group reshuffles its operations and cleans up its financial situation as a part of its Chapter 11 bankruptcy process, the group's branches continue their streamlining and cost-cutting measures. The latest agreement -- and one of the most relevant with respect to labour relations so far -- was announced this week at LATAM Brasil. In an internal announcement, the company announced it would be outsourcing its ground agent jobs at almost all Brazilian airports. According to Brazilian aviation outlet Aeroin, the change in the sourcing of the airline's ground handling will be effective from the second week of May, with the exception of three airports, some of the most important in LATAM Brasil's domestic network: Brasília, Rio de Janeiro and São Paulo. In Its internal communications, Aeroin reports, the company has told its employees that "the hiring of partners to undertake these operations at LATAM is in line with the market and follows a worldwide trend in the providing of services of this kind of specialized service," adding that "this is an important measure at the moment, contributing to the economic sustainability of the company." From the start of the pandemic, and especially after the entry of the group and subsequently, of the Brazilian branch in the Chapter 11 process, the airline is engaged in the revision of labor costs. While its major competitors -- Azul Brazilian Airlines and GOL Airlines -- signed temporary labour revision agreements, LATAM Brasil tried to permanently reduce the salary of its flight crews. Met by huge backlash, especially from the National Union of Aeronauts, all potential agreements were rejected by the affected employees, even after 2,700 of those workers were fired. LATAM Brasil said it had to pay as much as 30% more than its peers, which forced the revision as a matter of survival and maintaining competitiveness in the market. The message ends by saying, "We know this is a tough and hard decision to be made, but it's a necessary one. This way, we reinforce our respect to all affected employees and thank [them] immensely for the dedication, commitment and time of service to our airline. Parallelly, we continue working strongly to contribute to the professional relocation of these people." In Brazil, at many times the outsourcing might be a faster process than is thought, with the same employees shifted directly from the airlines to the outsourcing companies. Finally, LATAM Brasil confirmed the decision in a press release, saying that "aware of its economic and social responsibility, LATAM is already in touch with the unions representing the impacted category to discuss the conditions and create an additional viable leave package, in addition to making all efforts to contribute with the professional relocation of all people impacted by this change. The airline created a website for curriculum register and will recommend the professionals to other companies." About LATAM Airlines Group LATAM Airlines Group S.A. -- http://www.latam.com/-- is a pan-Latin American airline holding company involved in the transportation of passengers and cargo and operates as one unified business enterprise. It is the largest passenger airline in South America. Before the onset of the COVID-19 pandemic, LATAM offered passenger transport services to 145 different destinations in 26 countries, including domestic flights in Argentina, Brazil, Chile, Colombia, Ecuador and Peru, and international services within Latin America as well as to Europe, the United States, the Caribbean, Oceania, Asia and Africa. As reported in the Troubled Company Reporter - Latin America on May 6, 2021, S&P Global Ratings lowered the ratings on Latam Airlines Group S.A.'s EETC-2015 1 Class A certificates to 'CCC-'(sf) from 'CCC'(sf) and on Class B certificates to 'CC'(sf) from 'CCC-'(sf). Subsequently, S&P withdrew the ratings. LATAM and its 28 affiliates sought Chapter 11 protection (Bankr. S.D.N.Y. Lead Case No. 20-11254) on May 25, 2020. Affiliates in Chile, Peru, Colombia, Ecuador and the United States are part of the Chapter 11 filing. The Debtors disclosed $21,087,806,000 in total assets and $17,958,629,000 in total liabilities as of Dec. 31, 2019. The Hon. James L. Garrity, Jr., is the case judge. The Debtors tapped Cleary Gottlieb Steen & Hamilton LLP as bankruptcy counsel, FTI Consulting as restructuring advisor, Lee Brock Camargo Advogados as local Brazilian litigation counsel, and Togut, Segal & Segal LLP and Claro & Cia in Chile as special counsel. The Boston Consulting Group, Inc. and The Boston Consulting Group UK LLP serve as the Debtors' strategic advisors. Prime Clerk LLC is the claims agent. The official committee of unsecured creditors formed in the case tapped Dechert LLP as its bankruptcy counsel, Klestadt Winters Jureller Southard & Stevens, LLP as conflicts counsel, UBS Securities LLC as investment banker, and Conway MacKenzie, LLC as financial advisor. Ferro Castro Neves Daltro & Gomide Advogados, is the committee's Brazilian counsel. The Ad Hoc Group of LATAM Bondholders tapped White & Case LLP as counsel. LEONARD R. COSTANTINI, III: Northwest Buying Rose Ridge for $1.35M ------------------------------------------------------------------ Northwest Land 1014, LP, asks the U.S. Bankruptcy Court for the Western District of Pennsylvania to authorize it to buy Leonard R. Costantini, III's two parcels of real property located at 4769 Gibsonia Road, in Allison Park, Pennsylvania 15101, Parcel ID 1216-E-00281-0000-00, which was recorded in the Allegheny County Recorder of Deeds Book Volume 15153, Page 70 and 1215-R-00121-0000-00, which was recorded in the Allegheny County Recorder of Deeds Book Volume 12407, Page 442, respectively, referred to as Rose Ridge, for $1.35 million. A hearing on the Motion is set for May 26, 2021, at 1:30 p.m. The Debtor owns Rose Ridge. Since the filing of the case, the Movant has made an offer to purchase the property for cash immediately upon a sale order. The purchase price for the Real Property is $1.35 million. The Respondents which may hold liens, claims, and encumbrances against Rose Ridge are as follows: (i) H&M Holdings Group LLC, (ii) Township of West Deer, (iii) County of Allegheny, (iv) Deer Lakes School District, and (v) Midland Funding LLC. The liens, claims, and encumbrances, if any, are hereby transferred to the proceeds of the sale, if and to the extent that they may be determined to be valid liens against the Real Property sold in accordance with their validity or priority. The Movant avers that the within offer is in the best interests of the estate and its creditors, and that the proposed sale is fair and reasonable. The Movant respectfully asks that the Court enters an Order approving the sale of the Real Property free and clear of all liens, claims, and encumbrances. A copy of the Letter of Intent is available at https://tinyurl.com/5m499wwm from PacerMonitor.com free of charge. The Purchaser: NORTHWEST LAND 1014, LP 375 Golfside Drive Wexford, PA 15090 Leonard R. Costantini, III sought Chapter 11 protection (Bankr. W.D. Pa. Case No. 20-23376) on Dec. 4, 2020. The Debtor tapped Robert Lampl, Esq., as counsel. MATCH GROUP: Moody's Rates New $400MM Incremental Term Loan 'Ba1' ----------------------------------------------------------------- Moody's Investors Service has affirmed Match Group, Inc.'s ("Match" or the "company") Ba2 Corporate Family Rating and Ba2-PD Probability of Default Rating. Concurrently, Moody's affirmed the Ba1 ratings on the senior secured bank credit facilities and Ba3 ratings on the senior unsecured notes residing at Match Group Holdings II, LLC ("Holdings II"), a wholly-owned second tier holding company. Moody's also assigned a Ba1 rating to the $400 million incremental delayed draw term loan A facility that was recently issued by Holdings II. The Speculative Grade Liquidity is unchanged at SGL-1. The outlook was revised to stable from negative. On March 26, 2021, Match amended its bank credit agreement to issue an optional $400 million incremental delayed draw term loan A facility (DDTLA)[1]. Net proceeds from the DDTLA, if drawn, may be used to finance the cash portion of the $1.725 billion purchase price for the acquisition of Hyperconnect, an online social discovery platform, which is expected to close in Q2 2021. While Match intends to finance the purchase with a 50/50 mix of cash and newly issued Match common shares, the DDTLA provides Match with an additional potential source of funding in the event the company were to revise down the equity portion of the funding mix and/or use less cash-on-hand. At March 31, 2021, cash and cash equivalents totaled approximately $846 million. The DDTLA is secured to the same collateral package as Match's existing bank credit facilities. No amounts were outstanding on the DDTLA at March 31, 2021 or as of the date of the Q1 2021 earnings call on May 5, 2021. Following is a summary of the rating actions: Assignment: Issuer: Match Group Holdings II, LLC $400 Million Incremental Delayed Draw Term Loan A due March 2022, Assigned Ba1 (LGD2) Affirmations: Issuer: Match Group, Inc. Corporate Family Rating, Affirmed at Ba2 Probability of Default Rating, Affirmed at Ba2-PD Issuer: Match Group Holdings II, LLC $750 Million Senior Secured Revolving Credit Facility due 2025, Affirmed at Ba1 (LGD2) $425 Million Senior Secured Term Loan B due 2027, Affirmed at Ba1 (LGD2) $450 Million 5.000% Senior Unsecured Notes due 2027, Affirmed at Ba3 (LGD5) $500 Million 4.625% Senior Unsecured Notes due 2028, Affirmed at Ba3 (LGD5) $350 Million 5.625% Senior Unsecured Notes due 2029, Affirmed at Ba3 (LGD5) $500 Million 4.125% Senior Unsecured Notes due 2030, Affirmed at Ba3 (LGD5) Speculative Grade Liquidity Actions: Issuer: Match Group, Inc. Speculative Grade Liquidity, Unchanged at SGL-1 Outlook Actions: Issuer: Match Group Holdings II, LLC Outlook, Assigned Stable Issuer: Match Group, Inc. Outlook, Changed to Stable from Negative RATINGS RATIONALE The revision of the outlook to stable reflects Match's strong reacceleration of top-line revenue growth in Q1 2021 (+23% year-over-year, +2.5% quarter-over-quarter) coupled with EBITDA margin expansion, and Moody's expectation that operating performance will remain robust over the coming year as the global economy recovers. Strong performance in Q1 2021 was driven by a recovery in à la carte revenue at Tinder (accounts for about 60% of Match's revenue), optimized pricing and rapid growth at Hinge, one-to-many live streaming video at PlentyOfFish and growth in the company's average subscribers (+12% yoy) and ARPU (+9% yoy) in North America and overseas markets. Despite an uneven recovery across the world, with the US and certain Western European countries reopening at a faster pace than other countries, offset by weakness across India, Brazil, Japan and some European markets, Moody's expects Match to repeat 20%+ yoy revenue growth in Q2 2021. The company has guided to yoy revenue and EBITDA growth at the high end of the mid-to high teens percentage range in 2021. Given that roughly 66% of Match's operating expenses are variable, as revenue accelerates, Moody's forecasts operating expenses to rise over the course of the year, particularly marketing and selling expenses, which will help stimulate demand and offset increasing competition. However, this will likely cap operating margin expansion. Notwithstanding the demand recovery in the services sector expected in 2021-22 boosted by the economic rebound, the rating considers the lingering economic scarring from the recession that could affect consumers' purchasing behavior given the income weakness within some demographic segments and risks associated with the timing of the abatement of the pandemic. Offsetting these risks is Moody's view that improving business conditions coupled with greater reopening of bars, restaurants and other social gathering venues globally will lead to increased out-of-home mobility and support growth in user activity and engagement on Match's online dating applications ("apps"). This will facilitate vigorous expansion of EBITDA and de-leveraging at a faster-than-expected pace approaching the 4x downgrade threshold by year end 2021 with further decreases thereafter (barring sizable debt-financed M&A) and strong free cash flow (FCF) generation. At March 31, 2021, Match's total debt to EBITDA was 4.6x, retained cash flow to net debt was 26% and FCF was $781 million, equivalent to roughly 20% FCF to debt (all metrics are Moody's adjusted). The company has publicly committed to returning net leverage to under its as-reported leverage target of 3x net debt to EBITDA (equivalent to around 4x total debt to EBITDA as calculated by Moody's) by year end 2021. The affirmation of the Ba2 CFR reflects Match's market position as the leading global provider in the online dating category; (ii) high growth profile evidenced by share gains and strong secular adoption of its online dating apps to find romantic partners; and (iii) Tinder brand, which is the number one grossing global dating app positioned in the faster growth "freemium app" segment of the market. The rating is supported by robust debt protection measures and a track record of deleveraging under its as-reported leverage target of 3x net debt to EBITDA via strong EBITDA growth, which Moody's expects to transpire over the rating horizon. Following last year's spin-off from former parent IAC/InterActiveCorp, free cash flow conversion has improved compared to prior years due to the absence of dividends since the separation, which Moody's projects to continue as the company allocates excess cash to growth investments. There is good revenue diversification across geographies and products with a broad portfolio of non-Tinder dating brands comprising around 40% of revenue. Moody's expects that Match will effectively manage potential customer acquisition volatility that could arise as a result of Google's phase-out of third-party cookie data and Apple's recent implementation of privacy-focused changes that require all app developers to ask users' permissions to collect tracking data. Moody's forecasts adjusted EBITDA margins (as calculated by Moody's) in the 33%-35% area, buttressed by 15%-20% yoy revenue growth and Moody's projection that G-20 economies will collectively expand by 5.3% in 2021. The Ba2 rating is constrained by Match's moderately high financial leverage and narrow business focus in a highly competitive industry with revenue concentration in the Tinder brand. Given minimal entry barriers, Match faces significant competition from a multitude of smaller players, such as Meet Group and Bumble, as well as larger players like Facebook. Despite Match's strong historical and future growth trends, there may be periods of weaker-than-expected revenue growth due to economic shocks, heightened competition, lower ARPU, reduced user traffic or higher customer churn, which weighs on the rating. Additionally, margins could experience pressure as Match invests in new geographies, product development, customer acquisition, marketing and data analytics to retain and attract subscribers to its dating apps. The online dating market is susceptible to sudden changes in consumer engagement and rapidly evolving technology that could lead to declines in user activity and impact payer conversion and monetization. Moody's expects Match to continue to invest in technology, including machine learning and data science, as well as new product features to sustain high user engagement. Over the next 12-15 months, Moody's expects Match to maintain very good liquidity (SGL-1 Speculative Grade Liquidity rating) supported by the company's "asset-lite" operating model that facilitates meaningful free cash flow conversion in the 80%-85% range and high cash balances (cash and cash equivalents totaled roughly $846 million at March 31, 2021). Moody's projects free cash flow over the next twelve months in the $800-$900 million range. External liquidity is supported by a $750 million revolving credit facility (RCF) and the new $400 million DDTLA, which provide ample alternate liquidity for M&A and growth opportunities. Moody's Loss Given Default model excludes the exchangeable notes given their equity-like feature and potential redemption via stock in the future. Moody's assumes borrowings under the revolver and DDTLA and applied a -1 notch override on the credit facilities' ratings given the potential for a higher mix of secured debt in the future to support acquisitions or refinancing activity. 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 corporate assets arising from the current weakness in US and overseas economic activity and gradual recovery over 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 Moody's 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. A social impact that Moody's considers in Match's credit profile is the increasing usage of online dating and social networking platforms that help users find potential matches for friendship, dating, discovery and networking, which will continue to benefit Match and support solid revenue and EBITDA growth fundamentals over the next several years. Given that Match is entrusted with sensitive user data, Moody's notes that potential data privacy breaches could prompt some consumers to avoid using the company's dating apps thereby increasing social risk. Offsetting this risk is the company's continuing focus and increasing investment and training in its information security, privacy and user safety programs across all of its dating apps. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS An upgrade could occur if Match exhibits revenue growth and EBITDA margin expansion leading to consistent retained cash flow to net debt of at least 23% and leverage sustained near 3x total debt to EBITDA (all metrics are Moody's adjusted). Ratings could be downgraded if a decline in revenue or higher operating expenses led to EBITDA margin contraction or total debt to EBITDA sustained above 4x. There would be downward pressure on ratings if EBITDA were to weaken resulting in retained cash flow to net debt sustained below 15% (all metrics are Moody's adjusted). Headquartered in Dallas, Texas, Match Group, Inc. is a leading online dating provider via its major brands in 40 languages globally. Revenue totaled approximately $2.5 billion for the twelve months ended March 31, 2021. The principal methodology used in these ratings was Business and Consumer Service Industry published in October 2016. MAXIMUS INC: Moody's Assigns First Time 'Ba2' Corp Family Rating ---------------------------------------------------------------- Moody's Investors Service assigned first time ratings to Maximus, Inc., including a Ba2 corporate family rating, Ba2-PD probability of default rating and Ba2 ratings to the proposed senior secured revolving credit facility expiring 2026, term loan A due 2026 and term loan B due 2028. The speculative grade liquidity rating is SGL-1. The outlook is stable. On April 20, Maximus agreed to acquire Veterans Evaluation Services ("VES") for $1.4 billion in cash. On March 1, Maximus acquired the federal division of Attain, LLC for $430 million in cash. The net proceeds of the proposed facilities will be used to acquire VES and refinance existing debt. RATINGS RATIONALE The Ba2 CFR reflects Maximus's large contract base, with an over $7 billion contract backlog today, and long operating history as an on-shore, outsourced business process service provider to large, mostly healthcare-focused government entities. Moody's expects debt to EBITDA will decline towards 2.5 times from over 3.0 times as of March 31, 2021, pro forma for the proposed financing and VES acquisition, over the next 12 to 18 months. Moody's anticipates organic revenue contraction in a low single digit percent range in FY2022 (ends September 30) due to the wind-down of the company's COVID-19 response work and of its 2020 US Census contract. However, a resumption of revenue growth in the mid single digit range is expected thereafter. Further rating support is provided by anticipated EBITDA margins around 16%, EBITDA less capital expenditures to interest expense well above 7 times and annual free cash flow of at least $200 million. Modest annual capital expenditures of about 1% to 2% of revenues are expected. Costs from the two large 2021 acquisitions will weigh on near term profitability rates. All financial metrics cited reflect Moody's standard adjustments. Maximus has high customer concentration, with 20 contracts accounting for around 64% of revenue in the LTM period ended March 31, 2021. However, demand for outsourced services is expected to grow with government healthcare payments over the near to medium term. Maximus's roster of clients includes the US Centers for Medicare & Medicaid Services ("CMS"), the New York State Department of Health and the UK Department of Work & Pensions, with whom Maximus has maintained many years of contract renewals and high satisfaction ratings. The purchase of VES will make its Compensation and Pension ("C&P") Medical Disability Examinations ("MDEs") work for the U.S. Department of Veterans Affairs ("VA") its second largest customer behind CMS. Expected growth in MDEs delivered by its over 5,000 credentialed medical providers is a key driver of Moody's anticipation of renewed revenue growth after 2022. Moody's considers the business process outsourcing services market highly competitive, with limited barriers to competitive entry. Government preferences for on-shore service providers is a key differentiator provided by Maximus's over 30,000 employees, many located in the markets that they serve. Price competition among providers is keen, but high service quality and positive references from customers are also key determinants of new contract wins and "no bid" contract renewals. Technology acquired with Attain could help further differentiate Maximus's service offerings by adding its predictive analytics and other service enhancements. Demographic trends including an aging US population and demands for data security and a high quality of service from government healthcare and other programs provide support for Maximus's revenue growth. These underlying societal trends are considered positive social input factors to the ratings. Maintaining a positive track record and reputation for effectiveness by its government customers and the underlying program beneficiaries is a critical consideration for Maximus to remain competitive. As a business services provider, Maximus does not exhibit material environmental risks. Before VES and Attain in 2021, Maximus had not made large, debt-funded acquisitions and had operated without much financial leverage, other than from a revolving credit facility, for many years. The twin debt funded acquisitions in rapid succession lead Moody's to consider Maximus's financial strategies as opportunistic and evolving. As a public company, Maximus provides transparency into its governance and financial results and goals. The majority of its board of directors are independent. Near-term capital allocation priorities include financial leverage reduction. Moody's views Maximus's liquidity as very good, reflected in the SGL-1 rating. The company is expected to have around $100 million of cash when the VES purchase closes and over $400 million of the $600 million revolver available. Moody's expects Maximus will generate at least $200 million of free cash flow, well in excess of around $65 million of required term loan amortization. The revolving credit facility and term loan A are subject to maintenance of a maximum Consolidated Total Leverage Ratio (net of up to $75 million of cash) of not greater than 4.0 times, or 4.5 times following a permitted acquisition (as defined), and a minimum Interest Coverage Ratio (to be defined in the loan agreement) of not less than 3.0 times. Moody's anticipates Maximus will remain well within compliance of both financial covenants over the next 12 to 15 months. The Ba2 ratings on Maximus's senior secured credit facilities reflect both the Ba2-PD PDR and a loss given default assessment of LGD3. The senior secured credit facilities benefit from secured guarantees from all existing and subsequently acquired wholly-owned domestic subsidiaries. As there is no other material debt in the capital structure, the facilities are rated in line with the Ba2 CFR. The senior secured credit facility agreement will include provisions permitting incremental debt capacity up to the sum of: 1) the greater of: a) $630 million; and b) consolidated EBITDA for the most recent trailing 12 month period; 2) in the case of debt secured pari passu with the existing secured debt, the maximum amount that can be incurred without causing the Consolidated Net Senior Secured Leverage Ratio to exceed its level as of the facility closing date. No portion of the incremental capacity may be incurred with an earlier maturity than the initial term loans. Subject to certain limitations, Maximus will be permitted to designate any existing or subsequently acquired or organized non-borrower subsidiary as an "unrestricted subsidiary", subject to carve-out capacity and other conditions. There are no express "blocker" provisions which prohibit the transfer of material or specified assets to unrestricted subsidiaries. Non-wholly-owned subsidiaries are not required to provide guarantees; dividends or transfers resulting in partial ownership of subsidiary guarantors could jeopardize guarantees, with a protective provision requiring majority lender consent for any guarantee releases, if required under the credit agreement. There are no express protective provisions prohibiting an up-tiering transaction. The stable outlook reflects Moody's expectations for steady financial leverage declines and at least $200 million of free cash flow. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS The ratings could be upgraded if 1) Maximus diversifies and grows its contract and customer base, 2) EBITDA margins remain around 18%; 3) Moody's expects debt to EBITDA below 2.5 times; and 4) Maximus gains greater financial flexibility through less reliance on secured debt financing sources. The ratings could be downgraded if: 1) there are material customer losses; 2) revenue does not grow; 3) EBITDA margins remain below 15%; 4) Moody's expects debt to EBITDA will remain above 3.5 times; 5) free cash flow to debt remains below 10%; or 6) Maximus adopts more aggressive financial strategies, including large debt funded acquisitions or share repurchases. The principal methodology used in these ratings was Business and Consumer Service Industry published in October 2016. Issuer: Maximus, Inc. Corporate Family Rating, Assigned Ba2 Probability of Default Rating, Assigned Ba2-PD Speculative Grade Liquidity Rating, Assigned SGL-1 Senior Secured Revolving Credit Facility, Assigned Ba2 (LGD3) Senior Secured Term Loan A, Assigned Ba2 (LGD3) Senior Secured Term Loan B, Assigned Ba2 (LGD3) Outlook, Assigned Stable Maximus (NYSE:MMS), headquartered in Reston, Virginia, is a business process services contractor focused on health and human services programs for the US federal, state and non-US governments. Moody's expects revenue of over $4 billion in FY2022 (ends September 30). VES provides outsourced C&P MDE contracting for the VA. Attain is a US federal government contractor providing digital transformation and artificial intelligence solutions. MCGEHEE PARK: Plan Confirmation Hearing Slated for June 24 ---------------------------------------------------------- Judge William R. Sawyer approved the Disclosure Statement explaining the Chapter 11 Plan of McGehee Park Apartments, subject to certain amendments on the record. Judge Sawyer set the confirmation hearing on the Plan on June 24, 2021 at 10 a.m., by telephone. About McGehee Park Apartments McGehee Park Apartments is a single asset real estate (as defined in 11 U.S.C. Section 101(51B)). McGehee Park Apartments filed its voluntary petition for relief under Chapter 11 of the Bankruptcy Code (Bankr. M.D. Ala. Case No. 20-32590) on Dec. 29, 2020. Michael King, sole member, signed the petition. In the petition, the Debtor disclosed assets of between $1 million and $10 million and liabilities of the same range. Judge William R. Sawyer oversees the case. Memory Memory & Causby, LLP is the Debtor's legal counsel. Fannie Mae is represented by: Matthew M. Cahill, Esq. Rita L. Hullett, Esq. BAKER, DONELSON, BEARMAN, CALDWELL & BERKOWITZ, PC 420 20th Street North, Suite 1400 Birmingham, AL 35203 Tel: (205) 328-0480 Fax: (205) 322-8007 E-mail: mcahill@bakerdonelson.com @bakerdonelson.com MERION INC: Incurs $297,640 Net Loss in First Quarter ----------------------------------------------------- Merion, Inc. filed with the Securities and Exchange Commission its Quarterly Report on Form 10-Q disclosing a net loss of $297,640 on $435,362 of total sales for the three months ended March 31, 2021, compared to a net loss of $592,770 on $65,988 of total sales for the three months ended March 31, 2020. As of March 31, 2021, the Company had $1.22 million in total assets, $1.61 million in total liabilities, and a total shareholders' deficit of $382,473. As of March 31, 2021, the Company had a cash balance of approximately $6,000, compared to a cash balance of approximately $10,000 at Dec. 31, 2020. Merion said, "In assessing our liquidity, we monitor and analyze our cash on-hand and our operating and capital expenditure commitments. Our liquidity needs are to meet our working capital requirements, operating expenses and capital expenditure obligations. Other than operating expenses and current liabilities of approximately $1.0 million, the Company does not have significant cash commitments. Cash requirements include cash needed for purchase of inventory, payroll, payroll taxes, rent, and other operating expenses. However, in response to the liquidity factors described above, the Company has continued to find ways to reduce its operating expenses. In addition, should our Company need funds, our principal shareholder and Chief Executive and Financial Officer Mr. Dinghua Wang may lend additional money to the Company from time to time to the extent he is in a position and willing to do so. No assurance can be provided that he will continue to lend funds to the Company in the future." "Management has concluded under U.S. GAAP that there is substantial doubt about our ability to continue as a going concern as a result of our lack of significant revenue and sufficient working capital. If we are unable to generate significant revenue or secure financing, we may be required to cease or limit our operations. Our financial statements do not include adjustments that might result from the outcome of this uncertainty." A full-text copy of the Form 10-Q is available for free at: https://www.sec.gov/Archives/edgar/data/1517498/000147793221003160/ewlu_10q.htm About Merion Merion, Inc. is a provider of health and nutritional supplements and personal care products based in West Covina, California. Currently, the Company is mainly selling its products over the Internet directly to end-user customers through its websites, www.dailynu.com and www.merionus.com, and to wholesale distributors through phone and electronic communication. Merion reported a net loss of $1.82 million for the year ended Dec. 31, 2020, compared to a net loss of $722,404 for the year ended Dec. 31, 2019. As of Dec. 31, 2020, the Company had $1.38 million in total assets, $1.55 million in total liabilities, and a total shareholders' deficit of $168,767. Flushing, New York-based Wei, Wei & Co., LLP, the Company's auditor since 2017, issued a "going concern" qualification in its report dated March 30, 2021, citing that the Company has incurred significant losses, has negative working capital and lacks significant revenues. The ability of the Company to continue as a going concern is dependent on raising capital and ultimately to attain profitable operations. Accordingly, the Company has determined that these factors raise substantial doubt as to the Company's ability to continue as a going concern for a period of one year from the issuance of these financial statements. MIAMI JEWISH: Fitch Affirms BB+ Rating on $44MM Series 2017 Bonds ----------------------------------------------------------------- Fitch Ratings has assigned a 'BB+' Issuer Default Rating (IDR) to the Miami Jewish Health Systems and Subsidiaries (MJHS or the system) and affirmed the following bonds issued by the city of Miami Health Facilities Authority on behalf of MJHS at 'BB+': -- $44,035,000 revenue and refunding bonds series 2017. The Rating Outlook is Stable. SECURITY The bonds are secured by a pledge of gross revenues and a mortgage on certain property of the obligated group (OG), which includes MJHS, the Florida PACE Centers and the Miami Jewish Health Foundation, Inc. ANALYTICAL CONCLUSION The 'BB+' rating for MJHS reflects the system's mixed demand characteristics, with softer independent living (IL) occupancy balanced by good demand across other continuum of care services, an operating risk profile that incorporates the operating challenges over the past two years and an expected improvement in performance, and adequate levels of unrestricted liquidity that had been weakened by the operating losses and one-time expenses, including a payout to terminate MJHS' defined benefit plan but has been buoyed in FY21 by an influx of proceeds from the sale of a non-obligated asset. The rating also incorporates the application of an asymmetric risk factor related to MJHS' exposure to government payors in two of its main service lines -- skilled nursing and the Program of All-Inclusive Care for the Elderly (PACE). Together these service lines represent over 75% of the OG's revenues, and government payors are the largest payor source for each of the service lines. Performance in FY21 has shown improvement, with the operating losses narrowing, especially in the past few months. Fitch's forward look shows operations reaching levels more consistent with the rating level over the next two years. Capital spending is expected to remain lower than depreciation and then gradually increase closer to historical levels. KEY RATING DRIVERS Revenue Defensibility: 'bb' Mixed Demand Characteristics The weaker revenue defensibility assessment reflects softer occupancy in IL that is offset by good historical demand for skilled nursing and PACE services. The census in all service lines, except for PACE, have been affected by the coronavirus pandemic; however, Fitch expects the overall census to improve in the next year. The assessment also reflects Fitch's view that the lower IL occupancy limits MJHS's rate flexibility. Operating Risk: 'bb' Turnaround Efforts Slowed by Pandemic The weak operating risk assessment reflects the sizable operating losses at MJHS over the past few years, with the operating ratio climbing to above 110% and the net operating margin negative in FY19 and FY20. Despite improvement in FY21, Fitch expects MJHS's operating performance to remain largely consistent with the weak operating profile assessment. Capital spending is expected to remain below depreciation over the next two years. Fitch expects MJHS will meet its debt service covenant in FY21. Financial Profile: 'bb' Steady Path to Recovery Through the Cycle At YE 2020 (unaudited), MJHS had unrestricted cash-to-adjusted debt of about 41.8% and MADS coverage of -0.7x (as calculated by Fitch). Given MJHS's weak revenue defensibility and weak operating risk assessments and Fitch's forward-looking scenario analysis, Fitch expects MJHS's key leverage metrics to remain consistent with a non-investment grade financial profile even as operations steadily improve. RATING SENSITIVITIES Factors that could, individually or collectively, lead to positive rating action/upgrade: -- Growth in unrestricted liquidity such that cash to adjusted debt is expected to stabilize above 120%. -- Improvement to cash flow such that debt service coverage is consistently around 3x. Factor that could, individually or collectively, lead to negative rating action/downgrade: -- A deterioration in unrestricted liquidity such that cash to adjusted debt falls below 45%. 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. Founded in the 1940s as a 23-bed nursing home for Jewish widows and widowers, MJHS has grown into a provider of a wide array of senior services in South Florida. The OG consists of a 438-bed skilled nursing facility, one of the largest in the Southeast, a 95-unit rental ILU, 81-unit ALU, 19-unit memory care facility, and a small 32-bed acute care hospital, mostly catering to the needs of the MJHS residents, all located on the system's main campus in Miami, and a foundation. The OG operates a large PACE program with four centers providing care to over 900 participants. Fitch's financial analysis is based on the OG. The OG had approximately $134.3 million in operating revenue in FY20. The main entities outside of the OG include the Wolf/Cypen Foundation which operates exclusively for the benefit of MJHS, and has approximately $7.5 million in unrestricted cash and investments, as well as three HUD Section 202 apartment buildings providing subsidized housing for the elderly, and a nurse registry program. REVENUE DEFENSIBILITY Historically IL occupancy has averaged in the 70% to 80% range, which is consistent with a weak revenue defensibility assessment. The pandemic has led to IL occupancy dropping further to below 60% in the most recent quarter. MLHS has historically had seasonal rentals from Canadian snow birds and thus, the current border closure with Canada has also affected IL occupancy. MJHS has had much stronger demand for skilled nursing, with occupancy prior to the pandemic generally above 90%, and for assisted living (AL), which while lower than skilled nursing occupancy, had hovered in the mid-to-high 80% range. Demand in the PACE program has been strong, with MJHS able to fill its allocation of members for the program. The census in MJHS' 32-bed acute care hospital continues to be challenged, with a daily census generally under 10, and MJHS continues to seek ways to utilize the available beds, such as for the coordination of care for its PACE participants. MJHS faces steady competition from a number of AL and skilled nursing providers in the immediate service area. MJHS' primary service area is a 10-mile radius surrounding the main campus in downtown Miami, with the secondary service area a 20-mile radius beyond that. While IL competition is limited in downtown Miami, there are number of entrance fee IL providers in the broader east coast Florida market, especially north of Miami, and Fitch views MJHS' lower IL occupancy, albeit for a rental product, to reflect both the demand for the product in the immediate service area and the competition that exists from entrance fee IL campuses in the greater region. Service area demographics are mixed, with very good growth characteristics offset by income levels lower than county and state levels, a further indication of MJHS's limited ability to raise its rates for the private pay services it provides. However, more than 80% of the OG's revenues is derived from government payors, which sets the rates that MJHS receives and that limited rate flexibility is reflected in the weaker revenue defensibility assessment. OPERATING RISK MJHS is a rental facility and has no contractual healthcare liability for its independent living residents, which reduces a certain amount of risk in MJHS' operating profile. Nevertheless, the overall weak operating risk assessment reflects the sizable operating losses at MJHS over the past few years, with the operating ratio climbing to above 110% and the net operating margin negative in FY19 and FY20. MJHS has implemented a turnaround plan, which follows the recommendations in a report produced by a consultant brought in after a debt service coverage violation in FY19. While most of the recommendations have been implemented, the coronavirus pandemic has slowed the progress of MJHS's financial improvement, and the weak operating risk assessment reflects Fitch's belief that while the operating performance will continue to improve over the next two to three years, metrics will remain more in line with the current performance. Eight-month FY 21 results (June 30 year end), show an operating ratio of 100.5% a marked improvement over FY20 year end operating ratio, which was 110.6%. The improvement has been driven by good utilization and reimbursement rates in the PACE program, but all the major service lines have shown operational improvement in recent months. Fitch expects MJHS to rebuild its IL, assisted living, and skilled nursing occupancies over the next year. This combined with 200 more PACE participants tentatively granted to MJHS in Florida's FY22 budget, should continue to allow for an improved operating performance. After missing its debt service covenant each of the last two fiscal years, Fitch expects MJHS to cover its debt above the covenant in FY21. Fitch's expectation reflects the improved performance as well as approximately $16 million in proceeds related to the sale of a hospice company in which MJHS had a minority stake. The proceeds are expected to be treated as investment income given that MJHS's interest was a minority investment and the company was not operated by MJHS. The proceeds have also helped materially improve MJHS' unrestricted liquidity position. MJHS was given the opportunity to invest in the company that acquired the hospice company and MJHS has taken a small stake in that company. MJHS management reports that in the near term the hospice company has been investing in growth but that over the longer term the equity interest in the company should begin to produce a return. MJHS's capex has averaged a robust 172.5% of depreciation over the last four years. With the completion in FY19 of its largest project in process, a parking garage, capex spending lowered to 90.9% of depreciation in FY20. Near-term capital expenditures are expected to be limited to routine maintenance and smaller projects. An average age of plant of 20 years as of 2020 is very elevated for the rating level but reflects, in part, the sizable base of skilled nursing beds, which generally carry a higher age of plant. The EmpathiCare Village, a memory care project, which was expected to start within the next two years, is currently on hold as MJHS engages in a broader capital and strategic analysis. MJHS has hired a consultant to do a capital and strategic review of MJHS, given, among other items, the changes in healthcare and in senior living that has occurred in recent years. The review is expected to be completed in FY21, and potential capital projects will likely come out of that process. Fitch has not factored any large projects into the rating, including the EmpathiCare Village. With the improved unrestricted liquidity position, MJHS has a measure of debt capacity at the 'BB+' rating level, should operations continue to improve as anticipated. Currently MJHS has a manageable debt burden as indicated by maximum annual debt service as a percentage of revenue of 2.4%, which is very manageable. Revenue only coverage for MJHS is not a credit factor given that MJHS is a rental model. FINANCIAL PROFILE Given MJHS's weak revenue defensibility and operating risk assessments and Fitch's forward-looking scenario analysis, Fitch expects key leverage metrics to remain consistent with a 'BB+' rating, throughout the current economic and business cycle. As of YE 2020, MJHS had unrestricted cash and investments of approximately $17.9 million. This equates to about 41.8% of total adjusted debt. MJHS has no debt equivalents as it fully funded its defined pension plan and terminated in FY20. Days Cash on Hand (DCOH) was at 44 days at year end 2020. The approximately $16 million in proceeds from MJHS's stake in the sale of the hospice company has materially improved MJHS's unrestricted liquidity position through interim FY21. As Feb. 28, 2021, MJHS had $32.4 million in unrestricted cash and investments, which equated to 76.5% cash to adjusted debt and 91 DCOH, which was slightly above the covenant of 90 days. Fitch's baseline scenario, which is a reasonable forward look of financial performance over the next five years given current economic expectations, shows MJHS maintaining operating and financial metrics that are largely consistent with the current rating. Capital spending is expected to be below depreciation over this time, with no major projections currently factored into the rating. Fitch's stress scenario assumes an economic stress (to reflect equity volatility), which is specific to MJHS's asset allocation. The forward look shows MJHS maintains cash-to-adjusted debt levels that are consistent the BB+' rating throughout Fitch's baseline scenario and cash to adjusted debt remains resilient even under a potential stress case scenario. MADS coverage remains above the covenant as well. 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. MICHAEL FELICE: Disclosure Statement Hearing Set for June 24 ------------------------------------------------------------ Judge Vincent F. Papalia will consider the adequacy of the Disclosure Statement explaining the First Modified Chapter 11 Plan of Michael Felice Interiors LLC at a hearing on June 24, 2021, at 11 a.m., by phone via Court Solutions. A copy of the order is available at https://bit.ly/3bzXnjY from PacerMonitor.com at no charge. About Michael Felice Interiors Michael Felice Interiors LLC -- https://www.michaelfeliceinteriors.com/ -- is a full-service design firm located in Wyckoff, NJ. It offers a large selection of furniture, window coverings, carpet, lighting, and a gallery of Hunter Douglas shades and blinds. Michael Felice Interiors sought Chapter 11 protection (Bankr. D.N.J. Case No. 20-11531) on Jan. 30, 2020. The Debtor disclosed total assets of $97,524 and total liabilities of $2,300,540. SCURA, WIGFIELD, HEYER, STEVENS & CAMMAROTA, LLP, led by David L. Stevens, is the Debtor's counsel. MOHEGAN TRIBAL: Incurs $16 Million Net Loss in Second Quarter ------------------------------------------------------------- Mohegan Tribal Gaming Authority filed with the Securities and Exchange Commission its Quarterly Report on Form 10-Q disclosing a net loss of $15.97 million on $278.63 million of net revenues for the three months ended March 31, 2021, compared to a net loss of $140.03 million on $314.70 million of net revenues for the three months ended March 31, 2020. For the six months ended March 31, 2021, the Company reported a net loss of $42.73 million on $509.41 million of net revenues compared to a net loss of $130.61 million on $713.75 million of net revenues for the six months ended March 31, 2020. As of March 31, 2021, the Company had $2.85 billion in total assets, $2.99 billion in total liabilities, and a total capital of ($132.11 million). "The March quarter was important in the evolution of MGE, as we opened the Mohegan Sun Casino at Virgin Hotels Las Vegas - representing MGE's latest expansion and entry in the significant Las Vegas market," said Raymond Pineault, interim chief executive officer. "Continuing the trend of firsts, MGE, in partnership with the Governor of the State of Connecticut and the Mashantucket Pequot Tribe, reached an agreement to allow online gaming and retail and mobile sports betting, which when approved by the Connecticut Legislature, would expand MGE's online footprint while providing further diversification to our business. Additionally, late in the quarter, MGE's INSPIRE project in Incheon, South Korea received an important approval from South Korea's Ministry of Culture, Sports and Tourism, clearing the path to obtain financing for the project." Additionally, Carol Anderson, chief financial officer of the Company noted, "In the United States, our properties have continued to recover, as the rate of vaccinations increases and states continue to ease some COVID-related restrictions. At our flagship property Mohegan Sun, while revenues were below second quarter 2019 levels, which is the closest comparable due to property closures in the second quarter of 2020, Adjusted EBITDA was $70.0 million, 17.9% favorable to the second quarter of 2019, while EBITDA margin was up 1,212 bps over the same period. Outside of Connecticut, performance at ilani in Washington State continues to surpass expectations, while Mohegan Sun Pocono and Resorts are seeing positive sequential momentum. Finally, we look forward to reopening the MGE Niagara Resorts as soon as we are given approval from the government." A full-text copy of the Form 10-Q is available for free at: https://www.sec.gov/ix?doc=/Archives/edgar/data/1005276/000100527621000010/mtga-20210331.htm About Mohegan Tribal The Mohegan Tribal Gaming Authority d/b/a Mohegan Gaming & Entertainment -- http://www.mohegangaming.com-- is primarily engaged in the ownership, operation and development of integrated entertainment facilities, both domestically and internationally, including: (i) Mohegan Sun in Uncasville, Connecticut, (ii) Mohegan Sun Pocono in Plains Township, Pennsylvania, (iii) Niagara Fallsview Casino Resort, Casino Niagara and the 5,000-seat Niagara Falls Entertainment Centre, all in Niagara Falls, Canada, (iv) Resorts Casino Hotel in Atlantic City, New Jersey, (v) ilani Casino Resort in Clark County, Washington, (vi) Paragon Casino Resort in Marksville, Louisiana and (vii) INSPIRE Entertainment Resort, a first-of-its-kind, multi-billion dollar integrated resort and casino under construction at Incheon International Airport in South Korea. Mohegan Tribal reported a net loss of $162.02 million for the fiscal year ended Sept. 30, 2020, compared to a net loss of $2.38 million for the fiscal year ended Sept. 30, 2019. As of Dec. 31, 2020, the Company had $2.77 billion in total assets, $2.87 billion in total liabilities, and a total capital of $93.60 million. Deloitte & Touche LLP, in Hartford, Connecticut, the Company's auditor since 2018, issued a "going concern" qualification in its report dated Dec. 29, 2020, citing that certain tranches of the Company's senior secured credit facilities mature on Oct. 13, 2021, and the Company has determined that it will need to refinance these near-term maturities in order to meet the debt obligations at maturity, and the Company expects that without such a refinancing it is probable that it will not have sufficient liquidity to meet those debt obligations, and it may not be able to satisfy its financial covenants under the senior secured credit facilities. These conditions and events, when considered in the aggregate raise substantial doubt about the Company's ability to continue as a going concern. * * * As reported by the TCR on Feb. 4, 2021, Moody's Investors Service upgraded Mohegan Tribal Gaming Authority's ("MTGA") Corporate Family Rating to Caa1 from Caa2. The upgrade considers that on January 26, MTGA closed on a refinancing that had a meaningful positive impact on the company's liquidity. NASHEF LLC: Wins Cash Collateral Access Thru July ------------------------------------------------- The U.S. Bankruptcy Court for the District of Massachusetts has authorized Nashef LLC to use cash collateral on an interim basis, the terms and conditions of which, will be set forth in a separate order. A telephonic hearing on the matter is scheduled for July 22, 2021 at 10:30 a.m. A copy of the Court's initial order is available for free at https://bit.ly/2RX33O7 from PacerMonitor.com. About Nashef LLC Nashef LLC, a privately held company in Fitchburg, Mass. Nashef LLC sought protection under Chapter 11 of the Bankruptcy Code (Bankr. D. Mass. Case No. 20-40199) on Feb. 6, 2020. In the petition signed by Eyad Nashef, manager, the Debtor disclosed $170 in assets and $1,559,000 in liabilities. Judge Christopher J. Panos oversees the case. The Debtor is represented by James P. Ehrhard, Esq. at Ehrhard & Associates, P.C. NEUBASE THERAPEUTICS: Incurs $5.5-Mil. Net Loss in Second Quarter ----------------------------------------------------------------- Neubase Therapeutics, Inc. filed with the Securities and Exchange Commission its Quarterly Report on Form 10-Q disclosing a net loss of $5.52 million for the three months ended March 31, 2021, compared to a net loss of $4.38 million for the three months ended March 31, 2020. For the six months ended March 31, 2021, the Company reported a net loss of $9.59 million compared to a net loss of $8.88 million for the six months ended March 31, 2020. As of March 31, 2021, the Company had $27.47 million in total assets, $3.53 million in total liabilities, and $23.94 million in total stockholders' equity. The Company expects to continue to incur significant operating losses for the foreseeable future and may never become profitable. As a result, the Company will likely need to raise additional capital through one or more of the following: issuance of additional debt or equity, or complete a licensing transaction for one or more of the Company's pipeline assets. Management believes that it has sufficient working capital on hand to fund operations through at least the next twelve months from the date these unaudited condensed consolidated financial statements were available to be issued. There can be no assurance that the Company will be successful in acquiring additional funding, that the Company's projections of its future working capital needs will prove accurate, or that any additional funding would be sufficient to continue operations in future years. "We continue to expand and scale our unique precision genetic medicine platform that we believe can turn genes on, off, or edit them in vivo, and thus address most mechanisms that cause diseases in a single industry-unifying solution," said Dietrich A. Stephan, Ph.D., founder, CEO and Chairman of NeuBase. "Our recent financing led by top-tier healthcare investors enables us to advance our lead program into the clinic next year and expand our pipeline to address historically undruggable oncogenic driver mutations. We look forward to hosting our R&D day on June 8th, during which we will present an update on our current pipeline programs, as well as introduce an oncology program targeting a genetic driver mutation in a high value indication." A full-text copy of the Form 10-Q is available for free at: https://www.sec.gov/Archives/edgar/data/1173281/000110465921066181/tm2114120d1_10q.htm About NeuBase Therapeutics NeuBase Therapeutics, Inc. -- http://www.neubasetherapeutics.com-- is a biotechnology company focused on developing next generation therapies to treat rare genetic diseases and cancers caused by mutant genes. Given that perhaps every human disease has a genetic component, the Company believes that its differentiated platform technology has the potential for broad impact. Neubase Therapeutics reported a net loss of $17.38 million for the year ended Sept. 30, 2020, compared to a net loss of $26.13 million for the year ended Sept. 30, 2019. As of Sept. 30, 2020, the Company had $34.44 million in total assets, $3.15 million in total liabilities, and $31.29 million in total stockholders' equity. NN INC: Signs Cooperation Agreement With Corre, Adds New Director ----------------------------------------------------------------- NN, Inc. entered into an agreement with Corre Partners Management, LLC and certain related investors. Pursuant to the Cooperation Agreement, the Company increased the size of the Company's Board of Directors from nine to 10 directors and appointed Dr. Rajeev Gautam to fill the newly created directorship. Dr. Gautam will serve as a director with an initial term expiring at the Company's 2021 annual meeting and will be included in the Company's slate of director nominees for election at the 2021 and 2022 annual meeting. As previously announced in December 2020, Steven T. Warshaw is not standing for reelection and will resign as a member of the Board effective as of immediately prior to the commencement of the 2021 annual meeting of stockholders of the Company. Upon his retirement, the size of the Board will be automatically reduced from 10 members to 9 members. The Cooperation Agreement requires Corre Partners to, at the Company's 2021 annual meeting and at any meeting of the Company's stockholders held prior to the date of termination of the Standstill Period, vote all of its shares of the Company's common stock in favor of the election of directors nominated by the Board and otherwise in accordance with the Board's recommendation with respect to all other matters, subject to certain exceptions for extraordinary transactions, adoption of corporate defenses, and matters with a contrary recommendation from either or both Institutional Shareholder Services Inc. and Glass Lewis & Co., LLC. The Cooperation Agreement, among other things, contains certain customary standstill restrictions that apply to Corre during the period from May 13, 2021 until the date that is 20 calendar days prior to the last day of the advance notice period for the submission by shareholders of director nominations for the Company's 2023 annual meeting, as set forth in the advance notice provisions of the Company's Amended and Restated Bylaws. During the Standstill Period, Corre Partners is, among other things, restricted from engaging in any solicitation of proxies or written consents relating to the Company, acquiring any assets of the Company, or acquiring any voting stock that would result in Corre Partners having beneficial ownership of more than 15.0% of the Company's outstanding common stock. "Dr. Gautam's broad managerial and leadership experience within a large public company will bring valuable guidance to NN, and we welcome him to our Board," commented Jeri Harman, Chairman of NN's Board of Directors. "The knowledge he brings, including commercialization of products across multiple applications, will help shape NN's future direction. Warren Veltman, NN president and chief executive officer, said, "The extensive career of Dr. Gautam will offer unique insights for our Mobile and Power Solutions businesses, as his technical expertise in manufacturing, process technologies and performance materials is sure to add operational and long-term strategic value." "The addition of Dr. Gautam as an independent director will add experienced business leadership and valuable strategic expertise to the Board as NN accelerates its commercial efforts to capitalize on the significant secular growth opportunities in its end markets today," said John Barrett, managing partner of Corre Partners. "We appreciate Jeri's leadership and NN's commitment to strengthening its Board at this pivotal moment in its operating life cycle. This is a positive addition for all NN shareholders." Dr. Gautam said, "I look forward to working with the Board and management team to provide insights based on my experience that will support continued shareholder value creation." The NN Board is now comprised of 10 members, nine of whom are independent. About Dr. Rajeev Gautam Dr. Gautam brings substantive experience as a senior executive to manufacturing companies, and his current service as a senior executive for a publicly traded company, enables him to bring valuable insight, knowledge and experience to the Board. Dr. Rajeev Gautam, 68, is the president and chief executive officer, Performance Materials and Technologies of Honeywell International, Inc. (NASDAQ: HON), a global provider in developing and manufacturing high-quality performance chemicals and materials, process technologies and automation solutions. From 2009 to 2016, Dr. Gautam served as president of Honeywell UOP. He previously served as vice president of Research and Development, Honeywell UOP, and vice president and chief technology officer, Performance Materials and Technologies. Dr. Gautam began his career with Union Carbide in 1978, which became part of a joint venture with Honeywell UOP in 1988. Throughout his career, Dr. Gautam has championed innovative solutions for industry needs and has been responsible for the development and commercialization of a broad range of catalytic and separations applications for the refining, petrochemical and gas processing industries. About NN Inc. NN, Inc. -- www.nninc.com -- is a global diversified industrial company that combines advanced engineering and production capabilities with in-depth materials science expertise to design and manufacture high-precision components and assemblies primarily for the electrical, automotive, general industrial, aerospace and defense, and medical markets. The Company has 32 facilities in North America, Europe, South America, and China. NN, Inc. reported a net loss of $100.59 million for the year ended Dec. 31, 2020, compared to a net loss of $46.74 million for the year ended Dec. 31, 2019. As of March 31, 2021, the Company had $622.32 million in total assets, $340.70 million in total liabilities, $46.86 million in Series D perpetual preferred stock, and $234.75 million in total stockholders' equity. NOVABAY PHARMACEUTICALS: Signs Deal to Sell $4-Mil. Common Shares ----------------------------------------------------------------- NovaBay Pharmaceuticals, Inc. entered into an At the Market Offering Agreement with Ladenburg Thalmann & Co. Inc. to sell shares of the Company's common stock, par value $0.01 per share, having a current aggregate offering amount of up to $4,000,000, which offering amount may change as described in the Agreement, from time to time during the term of the Agreement, through an "at the market" equity offering program under which Ladenburg will act as the Company's sales agent. Under the Agreement, the Company will set the parameters for the sale of the Shares, including the maximum number of Shares to be sold daily and any minimum price per Share at which such Shares may be sold. Subject to the terms and conditions of the Agreement, Ladenburg may sell the Shares by methods deemed to be an "at the market offering" as defined in Rule 415 promulgated under the Securities Act of 1933, as amended, including, without limitation, sales made through NYSE American LLC, on any other existing trading market for the Common Stock or to or through a market maker. In addition, Ladenburg may also sell Shares in privately negotiated transactions, provided Ladenburg receives prior written approval from the Company. In conducting such sales activities, Ladenburg will use its commercially reasonable efforts consistent with its normal trading and sales practices and applicable state and federal laws, rules and regulations and the rules of NYSE American. The Company has no obligation to make any sales of Common Stock under the Agreement. The offering of Shares pursuant to the Agreement will terminate on April 7, 2024 unless suspended or terminated earlier by the Company upon prior notice to Ladenburg, by Ladenburg upon prior notice to the Company, or otherwise by mutual agreement of the parties. The Company will pay Ladenburg a commission equal to three percent of the gross sales proceeds of any Shares sold through Ladenburg under the Agreement. The Company has also provided Ladenburg with customary indemnification rights. Any sales of Shares under the Agreement will be made pursuant to the Company's shelf registration statement on Form S-3 (File No. 333-254744) filed with the Securities and Exchange Commission and declared effective on April 7, 2021. The Company filed a prospectus supplement with the Commission on May 14, 2021 in connection with the offer and sale of the Shares pursuant to the Agreement. In connection with the execution of the Agreement, the Company and Ladenburg agreed to terminate their prior At the Market Offering Agreement, dated April 27, 2020, pursuant to Section 8(c) of the Prior Agreement, which termination became effective upon entering into the Agreement on May 14, 2021. Under this prior "at-the-market" program, the Company sold 5,836,792 shares of Common Stock, representing total net proceeds of approximately $5.6 million to the Company prior to termination. As a result of entering into the Agreement, the Prior ATM Program is no longer available for use. About Novabay Headquartered in Emeryville, California, NovaBay Pharmaceuticals, Inc. -- http://www.novabay.com-- is a biopharmaceutical company focusing on commercializing and developing its non-antibiotic anti-infective products to address the unmet therapeutic needs of the global, topical anti-infective market with its two distinct product categories: the NEUTROX family of products and the AGANOCIDE compounds. The Neutrox family of products includes AVENOVA for the eye care market, CELLERX for the aesthetic dermatology market, and NEUTROPHASE for wound care market. Novabay reported a net loss attributable to common stockholders of $11.04 million for the year ended Dec. 31, 2020, compared to a net loss attributable to common stockholders of $10.48 million for the year ended Dec. 31, 2019. As of Dec. 31, 2020, the Company had $15.24 million in total assets, $2.92 million in total liabilities, and $12.32 million in total stockholders' equity. OMNIQ CORP: Posts $3.3 Million Net Loss in First Quarter -------------------------------------------------------- OMNIQ Corp. filed with the Securities and Exchange Commission its Quarterly Report on Form 10-Q disclosing a net loss attributable to the company of $3.34 million on $19.75 million of total revenues for the three months ended March 31, 2021, compared to a net loss attributable to the company of $2.87 million on $13.80 million of total revenues for the three months ended March 31, 2020. As of March 31, 2021, the Company had $38.21 million in total assets, $45.55 million in total liabilities, and a total stockholders' deficit of $7.34 million. Shai Lustgarten, CEO of OMNIQ, "2021 is off to a great start. Last week we announced a definitive agreement to acquire Dangot, forming a combined $91 Million revenue automation and object identification solutions powerhouse, well placed to drive increased sales of our AI based offerings." "We also recorded a strong first quarter on an organic basis," said Shai Lustgarten, CEO of OMNIQ. "Revenue increased 43% to nearly $20 million and AI based technology contracts grew 100% year over year. As we add new AI based projects, book repeat supply chain sales, in higher volumes, from our Fortune 500 customers, and cross-sell AI-based solutions to our supply chain customers, and now to Dangot customers, we expect rapid growth to continue." Adjusted EBITDA (adjusted Earnings Before Interest, Taxes, Depreciation and Amortization) for the first quarter of 2020 amounted to a loss of $1.2 million compared with an adjusted EBITDA loss of $834 thousand in the first quarter of 2020. After fully paying off its $5.0 million credit line, cash was $2.7 million for the period ended March 31, 2021. A full-text copy of the Form 10-Q is available for free at: https://www.sec.gov/Archives/edgar/data/278165/000149315221011334/form10-q.htm About omniQ Corp. Headquartered in Salt Lake City, Utah, omniQ Corp. (OTCQB: OMQS) -- http://www.omniq.com-- provides computerized and machine vision image processing solutions that use patented and proprietary AI technology to deliver data collection, real time surveillance and monitoring for supply chain management, homeland security, public safety, traffic & parking management and access control applications. The technology and services provided by the Company help clients move people, assets and data safely and securely through airports, warehouses, schools, national borders, and many other applications and environments. Omniq Corp. reported a net loss attributable to common stockholders of $11.31 million for the year ended Dec. 31, 2020, compared to a net loss attributable to common stockholders of $5.31 million for the year ended Dec. 31, 2019. As of Dec. 31, 2020, the Company had $38.66 million in total assets, $43.70 million in total liabilities, and a total stockholders' deficit of $5.04 million. Salt Lake City, Utah-based Haynie & Company, the Company's auditor since 2019, issued a "going concern" qualification in its report dated March 31, 2021, citing that the Company has a deficit in stockholders' equity, and has sustained recurring losses from operations. This raises substantial doubt about the Company's ability to continue as a going concern. OUTLOOK THERAPEUTICS: Incurs $13.1 Million Net Loss in 2nd Quarter ------------------------------------------------------------------ Outlook Therapeutics, Inc. filed with the Securities and Exchange Commission its Quarterly Report on Form 10-Q disclosing a net loss of $13.11 million for the three months ended March 31, 2021, compared to a net loss of $5.70 million for the three months ended March 31, 2020. For the six months ended March 31, 2021, the Company reported a net loss of $27.56 million compared to a net loss of $22.30 million for the six months ended March 31, 2020. As of March 31, 2021, the Company had $45.11 million in total assets, $24.46 million in total liabilities, and $20.65 million in total stockholders' equity. At March 31, 2021, Outlook Therapeutics had cash and cash equivalents of $37.2 million, compared to $5.6 million at Dec. 31, 2020. With the $42.6 million in gross proceeds received from the public offerings and private placements of common stock in February 2021, plus an additional $3.6 million received from warrant exercises also in February 2021, Outlook Therapeutics' cash and cash equivalents on hand are sufficient to fund operations through November 2021. The Company has incurred substantial losses and negative cash flows from operations since its inception. As of March 31, 2021, the Company had $10.5 million of principal and accrued interest due under an unsecured promissory note maturing on Jan. 1, 2022, and a $0.9 million loan granted pursuant to the Paycheck Protection Program of the Coronavirus Aid, Relief, and Economic Security Act, which matures on May 2, 2022. The Company said these factors raise substantial doubt about its ability to continue as a going concern. A full-text copy of the Form 10-Q is available for free at: https://www.sec.gov/Archives/edgar/data/1649989/000155837021007283/otlk-20210331x10q.htm About Outlook Therapeutics Outlook Therapeutics, Inc., formerly known as Oncobiologics, Inc. -- http://www.outlooktherapeutics.com-- is a late clinical-stage biopharmaceutical company working to develop the first FDA-approved ophthalmic formulation of bevacizumab for use in retinal indications, including wet AMD, DME and BRVO. If ONS-5010, its investigational ophthalmic formulation of bevacizumab, is approved, Outlook Therapeutics expects to commercialize it as the first and only on-label approved ophthalmic formulation of bevacizumab for use in treating retinal diseases in the United States, Europe, Japan and other markets. Outlook Therapeutics reported a net loss attributable to common stockholders of $48.87 million for the year ended Sept. 30, 2020, compared to a net loss attributable to common stockholders of $36.04 million for the year ended Sept. 30, 2019. As of Sept. 30, 2020, the Company had $19.73 million in total assets, $16.91 million in total liabilities, and $2.82 million in total stockholders' equity. KPMG LLP, in Philadelphia, Pennsylvania, the Company's auditor since 2015, issued a "going concern" qualification dated Dec. 23, 2020, citing that the Company has incurred recurring losses and negative cash flows from operations since its inception and has an accumulated deficit of $289.7 million as of Sept. 30, 2020 that raise substantial doubt about its ability to continue as a going concern. PHUNWARE INC: Incurs $12.4 Million Net Loss in First Quarter ------------------------------------------------------------ Phunware, Inc. filed with the Securities and Exchange Commission its Quarterly Report on Form 10-Q disclosing a net loss of $12.36 million on $1.65 million of net revenues for the three months ended March 31, 2021, compared to a net loss of $3.96 million on $2.64 million of net revenues for the three months ended March 31, 2020. As of March 31, 2021, the Company had $54.93 million in total assets, $38.37 million in total liabilities, and $16.56 million in total stockholders' equity. "The completion of Q1 constitutes a positive operational inflection point for our business as we have quickly made our Multiscreen-as-a-Service (MaaS) platform vision become reality across a number of key fronts," said Alan S. Knitowski, president, CEO and co-founder of Phunware. "Not only have we commenced the full roll out of our blockchain-enabled Mobile Loyalty Ecosystem specific to PhunToken, PhunCoin and PhunWallet as promised, but we have also executed a global distribution agreement with an anchor distribution partner that will be formally announced in the next several weeks. While we continue to work through what appears to be the final stages of the Covid pandemic operationally, we are both excited and comforted by the dramatic increase in business activity across all aspects of our software product and solution offerings for mobile, big data and the cloud. Importantly, these encompass all three of our core growth engines rolling forward, including our MaaS cloud, our data-driven loyalty marketplace and our secure, blockchain-enabled token, coin and wallet capabilities." "We completed Q1 with $23.5 million of cash on hand, constituting a record high for the Company since its inception," said Matt Aune, CFO of Phunware. "Subsequent to the completion of the quarter, Phunware eliminated all of its previously outstanding 2020 convertible notes in full. This action, combined with the initiation of a $25 million At-The-Market offering against a $100 million shelf registration statement, have dramatically improved the Company's balance sheet, operational flexibility and future business needs for both organic and inorganic growth opportunities." A full-text copy of the Form 10-Q is available for free at: https://www.sec.gov/ix?doc=/Archives/edgar/data/1665300/000162828021010391/phun-20210331.htm 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 reported a net loss of $22.20 million for the year ended Dec. 31, 2020, compared to a net loss of $12.87 million for the year ended Dec. 31, 2019. As of Dec. 31, 2020, the Company had $31.84 million in total assets, $33.81 million in total liabilities, and a total stockholders' deficit of $1.98 million. PIAGGIO AMERICA: U.S. Trustee Unable to Appoint Committee --------------------------------------------------------- The U.S. Trustee for Region 21, until further notice, will not appoint an official committee of unsecured creditors in the Chapter 11 case of Piaggio America, Inc., according to court dockets. About Piaggio America Piaggio America Inc. -- http://www.piaggioaerospace.it/-- is in the business of aerospace product and parts manufacturing. It designs, develops and supports unmanned aerial systems, business, special missions and ISR aircraft and aero engines. Piaggio America filed its voluntary petition for relief under Chapter 11 of the Bankruptcy Code (Bankr. S.D. Calif. Case No. 21-13491) on April 13, 2021. Paolo Ferreri, chief executive officer, signed the petition. In the petition, the Debtor disclosed $1 million to $10 million in assets and $10 million to $50 million in liabilities. Judge Erik P. Kimball presides over the case. Holland & Knight, LLP and Sonoran Capital Advisors, LLC serve as the Debtor's legal counsel and financial advisor, respectively. PRECIPIO INC: Incurs $1.5 Million Net Loss in First Quarter ----------------------------------------------------------- Precipio, Inc. filed with the Securities and Exchange Commission its Quarterly Report on Form 10-Q disclosing a net loss of $1.45 million on $1.82 million of net sales for the three months ended March 31, 2021, compared to a net loss of $3.21 million on $1.22 million of net sales for the three months ended March 31, 2020. As of March 31, 2021, the Company had $20.42 million in total assets, $5.86 million in total liabilities, and $14.56 million in total stockholders' equity. Cash decreased by $0.4 million during the three months ended March 31, 2021 and 2020, respectively. The cash flows used in operating activities of approximately $1.3 million during the three months ended March 31, 2021 included a net loss of $1.4 million, an increase in inventories and other assets of $0.3 million, an increase in finance lease right of use assets of less than $0.1 million, a decrease in accrued expenses and other liabilities of $0.2 million and a decrease in operating lease liabilities of $0.1 million. Cash flows used in investing activities were $0.2 million and less than $0.1 million for the three months ended March 31, 2021 and 2020, respectively, resulting from purchases of property and equipment. Cash flows provided by financing activities totaled $1.1 million for the three months ended March 31, 2021, which included proceeds of $1.3 million from the issuance of common stock. The Company has incurred substantial operating losses and has used cash in its operating activities for the past several years. As of March 31, 2021, the Company had negative working capital of $0.3 million and net cash used in operating activities of $1.3 million. The Company's ability to continue as a going concern over the next twelve months from the date of issuance of these condensed consolidated financial statements in this Quarterly Report on Form 10-Q is dependent upon a combination of achieving its business plan, including generating additional revenue and avoiding potential business disruption due to the novel coronavirus pandemic, and raising additional financing to meet its debt obligations and paying liabilities arising from normal business operations when they come due. A full-text copy of the Form 10-Q is available for free at: https://www.sec.gov/Archives/edgar/data/1043961/000155837021007252/prpo-20210331x10q.htm About Precipio Omaha, Nebraska-based Precipio, formerly known as Transgenomic, Inc. -- http://www.precipiodx.com-- is a cancer diagnostics company providing diagnostic products and services to the oncology market. The Company has developed a platform designed to eradicate misdiagnoses by harnessing the intellect, expertise and technology developed within academic institutions and delivering quality diagnostic information to physicians and their patients worldwide. Precipio operates a cancer diagnostic laboratory located in New Haven, Connecticut and has partnered with the Yale School of Medicine. Precipio reported a net loss of $10.6 million for the year ended Dec. 31, 2020, compared to a net loss of $13.24 million for the year ended Dec. 31, 2019. As of Dec. 31, 2020, the Company had $20.71 million in total assets, $6.55 million in total liabilities, and $14.16 million in total stockholders' equity. Hartford, CT-based Marcum LLP issued a "going concern" qualification in its report dated March 29, 2021, 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. QUALITY REIMBURSEMENT: Plan Confirmed, Bid for Ch.11 Trustee Nixed ------------------------------------------------------------------ Judge Julia W. Brand denied the motion of Alvaro Gancman and Eastpoint Corporation to appoint a Chapter 11 Trustee or, alternatively, to appoint an Examiner in the Chapter 11 case of Quality Reimbursement Services, Inc. The Court denied the request after having been advised by the Debtor that a settlement has been reached to resolve the issues raised by the motion, and after having considered the oppositions raised by the Debtor, the Committee, a group of consultants represented by Lesnick Prince and Pappas, LLP, and Consultant Brian Peterson. In a separate order on May 18, 2021, the Court entered an order confirming the Debtor's Third Amended Chapter 11 Plan of Reorganization, as Further Modified. About Quality Reimbursement Services Quality Reimbursement Services, Inc. -- http://www.qualityreimbursement.com/-- has been reviewing Medicare and Medicaid cost reports for more than 12 years. Its corporate office is located in Arcadia (CA). The company also has offices located in Birmingham, Ala.; Scottsdale, Ariz.; Los Angeles, Calif.; Colorado Springs, Colo.; Jacksonville, Fla.; Chicago, Ill.; Detroit and Shelby Township, Mich.; Guttenberg, N.J.; Dallas/Fort Worth, Texas; and Spokane, Wash. Quality Reimbursement Services filed a voluntary petition for relief under Chapter 11 of the Bankruptcy Code (Bankr. C.D. Cal. Case No. 19-20918) on Sept. 13, 2019. In the petition signed by James C. Ravindran, president, and CEO, the Debtor was estimated to have $1 million to $10 million in assets and $10 million to $50 million in liabilities. Judge Julia W. Brand oversees the case. Garrick A. Hollander, Esq., at Winthrop Couchot Golubow Hollander, LLP, represents the Debtor. The Office of the U.S. Trustee appointed a committee of unsecured creditors in the Debtor's case on Oct. 22, 2019. The committee retained Buchalter, a Professional Corporation, as its legal counsel. On August 18, 2020, the Court approved the Debtor's disclosure statement and scheduled the hearing on plan confirmation for November 20, 2020. The Debtor's plan of reorganization pays creditors in full. RISING TIDE: Moody's Assigns First Time 'B3' Corp. Family Rating ---------------------------------------------------------------- Moody's Investors Service assigned first time ratings to Rising Tide Holdings, Inc. (initially Marine One Merger Sub, Inc. "Rising Tide") including a B3 corporate family rating and a B3-PD probability of default rating. In addition, Moody's assigned a B2 rating to Rising Tide's proposed $385 million first lien term loan and a Caa2 rating to the proposed $120 million second lien term loan. The outlook is stable. The proceeds will be used to complete the acquisition of Rising Tide by L Catterton. Moody's ratings and outlook are subject to receipt and review of final documentation. The B3 CFR assignment reflects Rising Tide's high pro forma leverage post-transaction with funded debt/EBITDA of approximately 8.2x and Moody's lease adjusted debt/EBITDA of 6.7x for the LTM period April 3, 2021. However, leverage is expected to improve in 2021 from EBITDA growth. Record boat sales in 2020 should continue to provide tailwinds for Rising Tide over the near term as boat purchases are usually followed by an increased spend on boating aftermarket products. The rating incorporates governance considerations given the company's private equity ownership. Private equity owners tend to have more aggressive financial strategies. Assignments: Issuer: Rising Tide Holdings, Inc. 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 Caa2 (LGD5) Outlook Actions: Issuer: Rising Tide Holdings, Inc. Outlook, Assigned Stable RATINGS RATIONALE Rising Tide's B3 CFR reflects its high leverage and small scale compared to other rated retailers. The company operates in the marine aftermarket industry which is highly fragmented and very competitive. Rising Tide's business shows some cyclicality with the discretionary nature of boating and marine aftermarket products. However, performance through downturns has proven to be much more resilient than actual boat sales as these products have shorter replacement lives. The B3 CFR is supported by Rising Tide's brand awareness as well as its strong position in the marine aftermarket industry. The rating is also supported by Rising Tide's solid interest coverage with no near term debt maturities. The B3 CFR reflects that Rising Tide's funded leverage is expected to improve over the near term from favorable industry tailwinds. An increased interest in boating, which accelerated during the COVID-19 pandemic as it is conducive to social distancing, is expected to drive EBITDA growth over the next twelve to eighteen months. EBITDA is also expected to benefit from recent management initiatives. Over the past few years management has implemented initiatives to expand margins including optimized promotional activity and product assortment initiatives which focused on the core customer. The company has also been able to better leverage its selling, general and administrative costs with labor optimization and growth in online sales which has also been a main point of focus. The business has low capital investment requirements which benefit free cash flow generation. The stable outlook reflects the expectation that the recent margin enhancement will be sustained and deleveraging will occur through earnings growth while maintaining adequate liquidity. The stable outlook also reflects Moody's expectations of no material dividend distributions. Rising Tide has adequate liquidity reflecting Moody's expectation of low cash balances and positive free cash flow generation. The company will have access to an undrawn $125 million asset-based lending revolving credit facility. Moody's expects the revolver to be used for seasonal working capital needs as the company builds working capital and the fourth and first quarters in preparation of the spring and summer seasons. As proposed, the new first and second lien credit facilities are expected to provide covenant flexibility that if utilized could negatively impact creditors. Notable terms include the following: Incremental debt capacity up to the greater of $75 million and 100% of Consolidated EBITDA plus unlimited amounts subject to a net first lien leverage ratio of 4.1x (for pari passu first lien debt) and a secured net leverage ratio that does not exceed 0.25x outside the closing date secured leverage ratio (for debt pari passu with the 2nd lien). Amounts up to the greater of $75 million and 100% of Consolidated EBITDA may be incurred with a shorter weighted average life to maturity date than the initial term loans. The credit facilities contain provisions allowing the transfer of assets to unrestricted subsidiaries subject to a blocker provision which prohibits the transfer of material intellectual property to any unrestricted subsidiary. Non-wholly-owned subsidiaries are not required to provide guarantees; dividends or transfers resulting in partial ownership of subsidiary guarantors could jeopardize guarantees subject to protective provisions which only permit guarantee releases if such transfer is done for bona-fide business purposes and not for the primary purpose of effecting a release from such guarantee to evade creditors. The credit agreement provides some limitations on up-tiering transactions, including the requirement that each lender consents to amendments to subordinate the indebtedness or lien securing the first lien credit facilities. The proposed terms and the final terms of the credit agreement may be materially different. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS The ratings could be upgraded if the company displays a commitment to maintaining conservative financial policies and credit metrics. Specifically, a higher rating would require good liquidity, debt/EBITDA sustained below 5.25x and EBIT/interest expense sustained above 1.75x. The ratings could be downgraded if there is a deterioration of the company's overall operating performance, liquidity profile or sustained free cash flow deficits. Quantitatively, the ratings could be downgraded if EBIT/interest expense drops below 1.25x. Rising Tide Holdings, Inc. is a specialty marine aftermarket retailer that operates 237 hub and service center locations across 38 states and Puerto Rico as well as an ecommerce website as of April 2021. Rising Tide is controlled by investment funds affiliated with L Catterton following a leveraged buyout in May 2021. Net revenues for the LTM period ending April 3, 2021 were approximately $740 million. The principal methodology used in these ratings was Retail Industry published in May 2018. RITE AID: Moody's Alters Outlook on 'Caa1' CFR to Positive ---------------------------------------------------------- Moody's Investors Service changed the outlook for Rite Aid Corporation to positive from stable. All other ratings including the company's Caa1 corporate family rating and its Caa1-PD probability of default rating are affirmed. Additionally, Moody's upgraded the company's speculative grade liquidity rating to SGL-2 from SGL-3. "Rite Aid's liquidity has improved and near term maturities have been addressed but operational and competitive challenges remain," Moody's Vice President Mickey Chadha stated. "The change in outlook to positive reflects our expectations for further improvement in credit metrics and free cash flow over the next 12 months. New management initiatives are showing traction but will take time to fully demonstrate upside," Chadha further stated. Upgrades: Issuer: Rite Aid Corporation Speculative Grade Liquidity Rating, Upgraded to SGL-2 from SGL-3 Affirmations: Issuer: Rite Aid Corporation Probability of Default Rating, Affirmed Caa1-PD Corporate Family Rating, Affirmed Caa1 Senior Secured ABL Revolving Credit Facility, Affirmed B2 (LGD3) Senior Secured Bank Credit Facility, Affirmed Caa1 (LGD4) Senior Secured Regular Bond/Debenture, Affirmed Caa1 (LGD4) Senior Unsecured Regular Bond/Debenture, Affirmed Caa3 (LGD6) GTD Senior Unsecured Regular Bond/Debenture, Affirmed Caa2 (LGD5) Outlook Actions: Issuer: Rite Aid Corporation Outlook, Changed To Positive From Stable RATINGS RATIONALE Rite Aid's Caa1 rating incorporates it's weak credit metrics and smaller scale compared to much larger and well capitalized competitors like CVS Health and Walgreens Boots Alliance, Inc. Scale has become increasingly more important in today's competitive pharmacy sector. The company's recent fourth quarter results were weaker than expected primarily due to the very weak flu and cold season. However, Moody's anticipates that as restrictions and lockdowns are eased in 2021 the flu and cold season will somewhat normalize supporting an improvement in Rite Aid's earnings. Moody's also expects the COVID-19 vaccine roll out will be a tail wind for Rite Aid due to the increased traffic it generates and there is a high probability that the vaccine will be needed on an ongoing basis quite like the flu vaccine is today. Moody's expects Rite Aid's lease adjusted debt/EBITDA to be below 6.0x for the fiscal year ended March 2022 but interest coverage will remain weak at around 1.0x. Positive ratings consideration is given to Moody's expectation that management will continue focus on cost reduction, inventory rationalization, store remodels, growth in the Elixir PBM business, increase the level of script growth through increased traffic and file buys and strategically target participation in limited and preferred networks to boost revenue, earnings and free cash flow. Rite Aid's good liquidity, and the relative stability and positive longer term trends of the prescription drug industry are other positive rating considerations. Rite-Aid's rating also takes into consideration the litigation risk associated with prescription drug usage especially opioids. Rite Aid's financial strategies have remained balanced with the company using cash received from asset sales to repay debt. The positive outlook reflects Moody's expectation that management initiatives including expense rationalization will improve operating performance and credit metrics in the next 12 months. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS Ratings could be upgraded if the company demonstrates a sustained improvement in operating performance. An upgrade would require continued script volume growth and positive comparable front end sales. Ratings could be upgraded if the company demonstrates that it can maintain debt/EBITDA below 6.5 times and EBIT to interest expense above 1.0 times. In addition, a higher rating would require Rite Aid to continue to maintain at least an adequate liquidity profile, including positive free cash flow. Ratings could be downgraded should the likelihood of a default increase for any reason or if Rite Aid experiences a decline in revenues or earnings or increases debt such that debt/EBITDA is likely to remain above 7.0 times and EBIT to interest expense is likely to remain below 1.0 times. Ratings could also be downgraded should liquidity weaken including free cash flow remaining negative or the company does not get any traction on new PBM contracts or if prescription volumes decline. Rite Aid Corporation operates 2,464 drug stores in 18 states. It also operates a full-service pharmacy benefit management company (Elixir). Revenues are about $22 billion. The principal methodology used in these ratings was Retail Industry published in May 2018. ROCKET SOFTWARE: Moody's Affirms B3 CFR Following ASG Acquisition ----------------------------------------------------------------- Moody's Investors Service affirmed Rocket Software, Inc.'s B3 Corporate Family Rating and B3-PD Probability of Default Rating. Concurrently, Moody's affirmed the B2 rating on Rocket's first lien bank credit facilities and Caa2 rating on its senior unsecured bonds. The affirmations follow Rocket's announcement that it has entered an agreement to acquire ASG Technologies Group, Inc. The acquisition will be funded with an $825 million incremental first lien term loan as well as some balance sheet cash. The outlook remains stable. ASG is a provider of enterprise content management, systems management and data intelligence enterprise software products and services. ASG's solutions, like Rocket's, are oriented toward users of IBM mainframe and hybrid mainframe-distributed IT environments. The acquisition of ASG by Rocket is expected to provide Rocket with a suite of complementary mainframe focused products as well as significant cost cutting opportunities within both G&A and development functions. Affirmations: Issuer: Rocket Software, Inc. Corporate Family Rating, Affirmed B3 Probability of Default Rating, Affirmed B3-PD Senior Secured Bank Credit Facility, Affirmed B2 (LGD3) Senior Unsecured Regular Bond/Debenture, Affirmed Caa2 (LGD6) from (LGD5) Outlook Actions: Issuer: Rocket Software, Inc. Outlook, Remains Stable RATINGS RATIONALE Rocket's B3 CFR reflects the company's smaller scale relative to its infrastructure software peers, and its highly acquisitive growth strategy which can lead to periodic increases in debt. Rocket has somewhat limited organic growth prospects and looks to strategic acquisitions to augment growth and improve its market positioning. Rocket has historically used a combination of internally generated cash flow and debt to fund its acquisitions. The use of additional debt to fund further large acquisition activity could result in leverage levels remaining elevated over time. As evidenced by the high level of leverage used to finance the 2018 LBO of the company by private equity sponsors Bain Capital and additional debt incurred for acquisitions since the LBO, Moody's expects rocket to maintain an aggressive financial strategy. Rockets ratings are supported by the company's strong profitability with historical EBITDA margins of around 50%, strong free cash flow generation, long-standing supply relationship with IBM and relatively high proportion of recurring revenues. Rocket is expected to generate low single digit organic revenue growth over the next 12-18 months but Moody's expects that acquisition activity will continue to be a key driver of revenue and EBITDA growth. Moody's adjusted leverage is very high at over 8x as of December 2021 however when adjusting for certain one-time expenses and expected cost savings, leverage could be viewed at around 7.5x. Rocket's organic growth is expected to improve in 2021 compared to recent years and the realization of cost reductions throughout 2021 will help to bolster free cash flow generation which Moody's expects will approximate 4-5% of gross debt over the next 12-18 months. The stable outlook reflects Moody's expectations for continued low single digit organic revenue growth, consistent free cash flow generation in the mid-single digit percent of gross debt and expectations that the company will realize anticipated cost synergies, driving adjusted leverage toward 7x over the next 12-18 months. Liquidity is good based on an expected cash balance of $51 million at the close of the transaction and Moody's expectation for free cash flow to debt in the 4-5% range over the next 12-18 months. Liquidity is also supported by an undrawn $150 million revolving credit facility. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS Ratings could be upgraded if operating performance were to improve such that Moody's adjusted leverage were sustained below 6.5x and free cash flow to gross debt were maintained at 5% or above. Ratings could be downgraded if leverage is expected to be sustained above 7.5x or free cash flow generation was negative on other than a temporary basis. Moreover, the ratings could be downgraded if Rocket were to lose a critical business partner or face a material deterioration in recurring revenues or liquidity. Rocket Software, Inc. is a provider of IT management software tools to the distributed and IBM mainframe markets. Pro forma for the acquisition of ASG, the company is expected to generate approximately $711 million of revenues for the year ended December 31, 2020. Rocket, which is headquartered in Waltham, MA, is owned by management and funds affiliated with private equity sponsor Bain Capital. The principal methodology used in these ratings was Software Industry published in August 2018. ROLLING HILLS: Wins Cash Collateral Access ------------------------------------------ The U.S. Bankruptcy Court for the Eastern District of Missouri, Eastern Division, has authorized Rolling Hills Apartments, LLC to use cash collateral on an interim basis to pay the operating expenses of its business in accordance with the budget. The Debtor is directed to pay LBCI REO, LLC $5,000 by the first of each month beginning June 1, 2021 as adequate protection for the use of LBCI's cash collateral. As of the Petition Date, the Debtor owes LBCI $2,582,173, plus attorney's fees and costs. The debt is secured by valid, perfected, enforceable, first priority liens and security interests in the Debtor's real property in Maya Lane, St. Louis, Missouri. The liens and security interest extends to the rent income generated by the property. A final hearing on the Motion is scheduled for July 12 at 11 a.m. A copy of the order and the Debtor's budget is available free of charge at https://bit.ly/3olch2K from PacerMonitor.com. The Debtor projects $5,000 in monthly cost of debt service. About Rolling Hills Apartments, LLC Rolling Hills Apartments is a Single Asset Real Estate debtor (as defined in 11 U.S.C. Section 101(51B)). Rolling Hills sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. E.D. Mo. Case No. 21-41314) on April 9, 2021. In the petition signed by Robert Keith Bennett, manager, the Debtor disclosed $3,486,865 in assets and $3,752,509 in liabilities. Judge Kathy A. Surratt-States oversees the case. Carmody MacDonald, P.C. is the Debtor's counsel. ROYALE ENERGY: Incurs $572K Net Loss in First Quarter ----------------------------------------------------- Royale Energy, Inc. filed with the Securities and Exchange Commission its Quarterly Report on Form 10-Q disclosing a net loss of $572,167 on $401,263 of total revenues for the three months ended March 31, 2021, compared to net income of $384,362 on $383,814 of total revenues for the three months ended March 31, 2020. As of March 31, 2021, the Company had $8.02 million in total assets, $14.62 million in total liabilities, $22.41 million in convertible preferred stock, and a total stockholders' deficit of $29.01 million. The Company said the primary sources of liquidity have historically been issuances of common stock, oil and gas sales through ongoing operations and the sale of oil and gas properties. There are factors that give rise to substantial doubt about the Company's ability to meet liquidity demands, and it anticipates that its primary sources of liquidity will be from the issuance of debt and/or equity, the sale of oil and natural gas property participation interests through its normal course of business and the sale of non-strategic assets. At March 31, 2021, the Company has $1.529 million in Long Lived Assets Held for Sale. At March 31, 2021, the Company's consolidated financial statements reflect a working capital deficiency of $4,337,733 and a net loss from operations of $581,393. These factors raise substantial doubt about our ability to continue as a going concern. The accompanying consolidated financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern. The Company said, "Management's plans to alleviate the going concern by cost control measures that include the reduction of overhead costs and the sale of non-strategic assets. There is no assurance that additional financing will be available when needed or that management will be able to obtain financing on terms acceptable to the Company and whether the Company will become profitable and generate positive operating cash flow. If the Company is unable to raise sufficient additional funds, it will have to develop and implement a plan to further extend payables, attempt to extend note repayments, and reduce overhead until sufficient additional capital is raised to support further operations. There can be no assurance that such a plan will be successful." A full-text copy of the Form 10-Q is available for free at: https://www.sec.gov/Archives/edgar/data/1694617/000118518521000654/royaleinc20210331_10q.htm About Royale El Cajon, CA-based Royale Energy, Inc. -- http://www.royl.com-- is an independent oil and natural gas producer incorporated under the laws of Delaware. Royale's principal lines of business are the production and sale of oil and natural gas, acquisition of oil and gas lease interests and proved reserves, drilling of both exploratory and development wells, and sales of fractional working interests in wells to be drilled by Royale. Royale was incorporated in Delaware in 2017 and is the successor by merger to Royale Energy Funds, Inc., a California corporation formed in 1983. Royale Energy reported a net loss of $8.15 million for the year ended Dec. 31, 2020, compared to a net loss of $348,383 for the year ended Dec. 31, 2019. As of Dec. 31, 2020, the Company had $8.42 million in total assets, $14.57 million in total liabilities, $22.22 million in convertible preferred stock, and a total stockholders' deficit of $28.36 million. SAFE FLEET: Moody's Alters Outlook on B3 CFR to Stable ------------------------------------------------------ Moody's Investors Service changed the ratings outlook for Safe Fleet Holdings LLC to stable from negative. At the same time, Moody's affirmed the company's B3 corporate family rating and B3-PD probability of default rating, along with the B2 rating on the first lien senior secured credit facilities rating and the Caa2 rating on the senior secured second lien term loan. "Safe Fleet's demand prospects are stronger in 2021 with returning spending levels in many of the company's markets", says Shirley Singh, Moody's lead analyst for the company. "In addition, the ramp up of the California Highway Patrol contract and integration of the Durite acquisition will further strengthen earnings and improve credit metrics", adds Singh. Moody's estimates that leverage will fall below 7.4x and the company will maintain good liquidity supported by strong free cash flow in 2021. The following rating actions were taken: Affirmations: Issuer: Safe Fleet Holdings LLC Corporate Family Rating, Affirmed B3 Probability of Default Rating, Affirmed B3-PD Senior Secured 1st Lien Bank Credit Facility, Affirmed B2 (LGD3) Senior Secured 2nd lien Bank Credit Facility, Affirmed Caa2 (LGD6) Outlook Actions: Issuer: Safe Fleet Holdings LLC Outlook, Changed To Stable From Negative RATINGS RATIONALE Safe Fleet's B3 CFR reflects the company's high leverage with adjusted debt-to-EBITDA in excess of 7.5x (as of December 2020). With revenues of less than $500 million, the company's scale is relatively modest. Further, the company has a history of debt-financed acquisitions. The rating is supported by Safe Fleet's consistently positive cash flow driven by solid EBITA margins and low capital requirements. Safe Fleet maintains a competitive position within its niche markets with a broad set of customizable products for fleet vehicles in both aftermarket and OEM channels. The stable rating outlook reflects Moody's expectation for good liquidity and EBITDA growth over the course of 2021, resulting in modest deleveraging. Safe Fleet's liquidity is good. Liquidity sources include $31 million of cash and full availability under its $50 million revolving credit facility. Moody's expects the company to generate above $30 million of free cash flow in 2021. Environmental and social risks are not material to the credit profile. Governance risk is high given the company's private equity ownership and history of debt-financed acquisitions. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS Ratings could be downgraded if deterioration in market conditions, loss of a customer or competitive pressure weakens earnings or cash flow. Quantitatively, adjusted debt-to-EBITDA sustained above 7.5x or weakened liquidity could prompt a rating downgrade. Ratings could be upgraded if the company's scale increases and profit margins are maintained such that adjusted debt-to-EBITDA is sustained below 6.5x and free cash flow to debt increases to the high single-digit percent range. Headquartered in Belton, Missouri, Safe Fleet Holdings LLC manufactures safety and productivity products for fleet vehicles including school and transit buses, fire EMS and law enforcement vehicles, work trucks, truck & trailers used in various industries and military vehicles. Among Safe Fleet's products are cameras and surveillance systems, ladder racks, ramps and platforms, nozzles and valves, and stop signs and crossing arms for school buses. The company is majority-owned by Oak Hill Capital Partners. Sales in the last twelve months to March 31, 2021 were $435 million. The principal methodology used in these ratings was Manufacturing Methodology published in March 2020. SC SJ HOLDINGS: Fairmont San Jose's Bankruptcy Plan on Ice ---------------------------------------------------------- Daniel Gill of Bloomberg Law reports that the bankrupt Fairmont San Jose must wait to send its reorganization plan to creditors for a vote after a judge said the company's disclosures lack information about who would take over management of the luxury hotel. Identification of the new hotel managers is a "central issue" to the plan "for obvious reasons," Judge John T. Dorsey of the U.S. Bankruptcy Court for the District of Delaware said at a virtual hearing Monday, May 17, 2021. The plan disclosures also need the basic terms of proposed post-bankruptcy financing, Robert J. Gayda of Seward & Kissel LLP, an attorney for the unsecured creditors committee. About SC SJ Holdings and FMT SJ San Ramon, Caliofrnia-based Eagle Canyon Management's SC SJ Holdings LLC owns The Fairmont San Jose, an 805-room luxury hotel located at 170 South Market St., San Jose, Calif. The hotel is near many of the largest Fortune 1000 corporations and is a popular location for conferences and conventions, particularly in the technology industry. On March 5, 2021, SC SJ Holdings' affiliate, FMT SJ LLC, filed a voluntary petition for relief under Chapter 11 of the Bankruptcy Code (Bankr. D. Del. Case No. 21-10521). On March 10, 2021, SC SJ Holdings sought Chapter 11 protection (Bankr. D. Del. Case No. 21-10549). The cases are jointly administered under Case No. 21-10549. At the time of the filing, SC SJ Holdings disclosed assets of between $100 million and $500 million and liabilities of the same range. FMT SJ disclosed that it had estimated assets of between $500,000 and $1 million and liabilities of between $100 million and $500 million. The Debtors tapped Pillsbury Winthrop Shaw Pittman, LLP, as their bankruptcy counsel, Cole Schotz P.C. as local counsel, and Verity LLC as financial advisor. Stretto is the claims agent and administrative advisor. SEADRILL LTD: Forbearance Agreement Extended to May 28, 2021 ------------------------------------------------------------ On May 17, 2021, Seadrill Limited (OSE:SDRL, OTCQX:SDRLF) announces that Seadrill New Finance Limited (the "Issuer"), a subsidiary of the Company, has agreed to extend the existing forbearance agreement announced on 19 April 2021, with respect to the 12.0% senior secured notes due 2025 (the "Notes") with certain holders of the Notes (the "Note Holders"). Pursuant to the forbearance agreement, as extended, the consenting Note Holders have agreed not to exercise any enforcement rights with respect to the Issuer and any subsidiary of the Issuer which is an obligor under the Notes to, or otherwise take actions in respect of, certain events of default that may arise under the Notes as a result of, amongst other things, the Issuer not making the semi-annual 4% cash interest payment due to the senior secured noteholders on 15 January 2021 in respect of their Notes and the filing of Chapter 11 cases in the Southern District of Texas by the Company and certain of its consolidated subsidiaries (excluding the Issuer and its consolidated subsidiaries) until and including the earlier of 28 May 2021 and any termination of the forbearance agreement. The purpose of the forbearance agreement is to allow the Issuer and its stakeholders more time to negotiate on the heads of terms of a comprehensive restructuring of its balance sheet. Such a restructuring may involve the use of a court-supervised process. About Seadrill Ltd. Seadrill Limited (OSE:SDRL, OTCQX:SDRLF) -- http://www.seapdrill.com/-- is a deepwater drilling contractor providing drilling services to the oil and gas industry. As of March 31, 2018, it had a fleet of over 35 offshore drilling units that include 12 semi-submersible rigs, 7 drillships, and 16 jack-up rigs. On Sept. 12, 2017, Seadrill Limited sought Chapter 11 protection after reaching terms of a reorganization plan that would restructure $8 billion of funded debt. It emerged from bankruptcy in July 2018. Demand for exploration and drilling has fallen further during the COVID-19 pandemic as oil firms seek to preserve cash, idling more rigs and leading to additional overcapacity among companies serving the industry. In June 2020, Seadrill wrote down the value of its rigs by $1.2 billion and said it planned to scrap 10 rigs. Seadrill said it is in talks with lenders on a restructuring of its $5.7 billion bank debt. Seadrill Partners LLC, a limited liability company formed by deep-water drilling contractor Seadrill Ltd. to own, operate and acquire offshore drilling rigs, along with its affiliates, sought Chapter 11 protection (Bankr. S.D. Tex. Lead Case No. 20-35740) on Dec. 1, 2020, after its parent company swept one of its bank accounts to pay disputed management fees. Mohsin Y. Meghji, authorized signatory, signed the petitions. On Feb. 7, 2021, Seadrill GCC Operations Ltd., Asia Offshore Drilling Limited, Asia Offshore Rig 1 Limited, Asia Offshore Rig 2 Limited, and Asia Offshore Rig 3 Limited sought Chapter 11 protection. Seadrill GCC estimated $100 million to $500 million in assets and liabilities as of the bankruptcy filing. Additionally, on Feb. 10, 2021, Seadrill Limited and 114 affiliated debtors each filed a voluntary petition for relief under Chapter 11 of the United States Bankruptcy Code with the Court. The lead case is In re Seadrill Limited (Bankr. S.D. Tex. Case No. 21-30427). Seadrill Limited disclosed $7.291 billion in assets against $7.193 billion in liabilities as of the bankruptcy filing. In the new Chapter 11 cases, Kirkland & Ellis LLP is counsel for the Debtors. Houlihan Lokey, Inc., is the financial advisor. Alvarez & Marsal North America, LLC, is the restructuring advisor. The law firm of Jackson Walker L.L.P. is co-bankruptcy counsel. The law firm of Slaughter and May is co-corporate counsel. Advokatfirmaet Thommessen AS is serving as Norwegian counsel. Conyers Dill & Pearman is serving as Bermuda counsel. Prime Clerk LLC is the claims agent. Scott Greissman, Jason Zakia and Phil Abelson of White & Case; and Jason Brookner of Gray Reed represent the coordinating committee of secured lenders. Eric Winston, Benjamin Finestone and Devin van der Hahn of Quinn Emanuel represent Strategic Value Partners Bybrook Capital. Alfredo Perez, Matt Barr, Sunny Singh, David Cohen and Paul Genender of Weil Gotshal & Manges represent the RigCo lenders. SEADRILL PARNTERS: Court Approves Debt-for-Equity Plan ------------------------------------------------------ Judge David R. Jones, on May 14, 2021, confirmed the Fourth Amended Joint Chapter 11 Plan and approved the accompanying Disclosure Statement filed in the Chapter 11 cases of Seadrill Partners LLC and its debtor-affiliates. The Plan, which is the product of good faith, arm's-length negotiations by and among the Debtors, the Debtors' directors and officers, the Consenting TLB Lenders, the Agent, the Committee, and each member of the Committee, provides, among others, that: * the Reorganized Debtors will continue to pay all retiree benefits on and after the Effective Date pursuant to applicable law. * on the Effective Date, all property in each Estate, all of the Debtors' causes of action, and any property acquired by any of the Debtors pursuant to the Plan shall vest in each respective Reorganized Debtor, free and clear of all liens, claims, charges, or other encumbrances. * on and after the Effective Date, each Reorganized Debtor may operate its businesses and may use, acquire, or dispose of property and compromise or settle any Claims, interests, or causes of action without supervision or approval by the Court and free of any restrictions of the Bankruptcy Code or Bankruptcy Rules. * Transocean Offshore Deepwater Drilling, Inc. and Transocean Inc. shall be deemed to have opted out of the releases contained in Article VIII.C of the Plan. Nothing in the Plan releases or otherwise restricts any rights, causes of action, remedies and interests of any of the Transocean Entities against any of the Seadrill Parties in respect of (i) the Settlement and Cross-License Agreement dated December 21, 2018 among, Transocean, Seadrill Partners LLC and Seadrill Limited or any breach thereof, (ii) any of Transocean's patents or any infringement thereof, or (iii) applicable law; and/or (b) any Reorganized Debtor for any post-Effective Date infringement of Transocean's patents. * Transocean is allowed an Administrative Claim for the unpaid December 31, 2020 SDLP payment under the Patent Settlement for $2,000,000, and an Allowed General Unsecured Claim (as a result of SDLP's rejection under the Plan of the Patent Settlement) for $6,000,000. * the rights of the Debtors and Sodexo and/or its affiliates with respect to (i) Sodexo's cure claims and requests for administrative expense claims for post-petition goods and services provided by Sodexo to the Debtors, and (ii) Sodexo's right of setoff, as set forth in Sodexo's proofs of claim, are preserved and shall not be prejudiced by the entry of the Confirmation Order or the Plan confirmation. * the Debtors and Gulf Copper & Manufacturing Corporation shall reconcile any amounts due and owing under the Berthing Agreement in the ordinary course pursuant to the terms of the Berthing Agreement, with each party's rights being fully preserved. * each of the Debtors will, as a Reorganized Debtor, continue to exist after the Effective Date as a separate legal entity, with all of the powers of such legal entity under applicable law and without prejudice to any right to alter or terminate such existence whether by merger, conversion, dissolution or otherwise. * as of the Effective Date, the officers and directors of each of New HoldCo and the other Reorganized Debtors shall be appointed and/or shall continue in such role. * on or as soon as reasonably practicable after the Effective Date, the Debtors shall adopt the Employee Incentive Plan. The Employee Incentive Plan shall reserve a portion of the New Common Stock, in an amount to be determined by the New HoldCo Board, for grants made from time to time to employees, directors, officers, and consultants of the Reorganized Debtors, solely as determined by the New HoldCo Board. * on the Effective Date, the Debtors and the Reorganized Debtors are authorized to issue the New Common Stock to the Holders of Claims in Classes 3 or 4 pursuant to Article III of the Plan. The offering, issuance, and distribution of the New Common Stock according to the Plan shall be exempt from the registration requirements of Section 5 of the Securities Act and any other applicable United States state or local laws. A copy of the Plan Confirmation Order is available for free at https://bit.ly/3fDmjZp from Prime Clerk, claims agent. The Court authorized the Debtors and the Reorganized Debtors to make all distributions pursuant to the Plan. The Plan provides for the treatment of the Classes of Claims, as follows: * Class 1 - All Other Secured Claims against the Debtors Each Holder of an Allowed Other Secured Claim shall receive (as determined by the Debtors or the Reorganized Debtors, with the consent of the Required Consenting Lenders) (i) payment in full in Cash of its Allowed Other Secured Claim; (ii) the collateral securing its Allowed Other Secured Claim; (iii) Reinstatement of its Allowed Other Secured Claim; or (iv) other treatment rendering its Allowed Other Secured Claim Unimpaired pursuant to Section 1124 of the Bankruptcy Code. * Class 2 - Other Priority Claims Each Holder of an Allowed Other Priority Claim shall receive Cash in an amount equal to such Allowed Other Priority Claim, or such other treatment as may be agreed among the Holder of such Other Priority Claim, the Debtors, and the Required Consenting Lenders. * Class 3 - Super Senior Term Loan Claims On the Effective Date, each Holder of an Allowed Class 3 Claim shall receive its Pro Rata share of 31.8% of the New Common Stock, subject to dilution by any future issuances of New Common Stock. * Class 4 - TLB Secured Claims On the Effective Date, each Holder of an Allowed Class 4 Claim shall receive its Pro Rata share of 68.2% of the New Common Stock (subject to dilution by any future issuances of New Common Stock), unless such Holder elects to receive the Cash Out Amount per $1,000 of Allowed Class 4 Claims in Cash, subject to the Cash Cap. If the total Class 4 Cash Elections would result in distributions of Cash to Holders of Allowed Class 4 Claims in excess of the Cash Cap, then each Holder of an Allowed Class 4 Claim that elected to receive Cash shall receive its Pro Rata share of: (i) the Cash Cap amount in Cash and (ii) New Common Stock of the value equal to the balance of the recovery such Holder would have received in the absence of the Cash Cap. Any TLB Deficiency Claim shall be classified as a Class 5 General Unsecured Claim; provided, however, that if (i) Class 4 votes to accept the Plan and (ii) Class 5 votes to accept the Plan, the TLB Deficiency Claims shall not be entitled to any distribution under the Plan and shall be deemed canceled. * Class 5 - General Unsecured Claims. Holders of Allowed Claims in Class 5 will share pro-rata of $2,250,000. No Seadrill Party, however, is entitled to any distribution for any Seadrill Parties Unsecured Claim. A copy of the 4th Amended Joint Chapter 11 Plan is available for free at https://bit.ly/3w9mOkm from Prime Clerk, claims agent. About Seadrill Partners Seadrill Partners LLC (NYSE: SDLP) is a limited liability company formed by deep-water drilling contractor Seadrill Ltd.(OTCMKTS:SDRLF) to own, operate and acquire offshore drilling rigs. It was founded in 2012 and is headquartered in London, the United Kingdom. Seadrill Partners, set up as an asset-holding unit, owns four drillships, four semi-submersible rigs and three so-called tender rigs which are all operated by Seadrill Ltd. Seadrill Partners and its affiliates sought Chapter 11 protection (Bankr. S.D. Tex. Lead Case No. 20-35740) on Dec. 1, 2020. Mohsin Y. Meghji, managing partner at M3 Partners, acting as the Company's Chief Restructuring Officer, signed the petitions. Judge Marvin Isgur oversees the cases. Seadrill Partners disclosed $4,579,300,000 in assets and $3,122,300,000 in total debts as of June 30, 2020. Kirkland & Ellis LLP and Kirkland & Ellis International LLP, and Jackson Walker LLP are the Debtors' bankruptcy counsel. The Debtors also tapped Sheppard Mullin Richter & Hampton, LLP to serve as conflicts counsel and KPMG LLP to provide tax provision and consulting services. SHRI NARAYAN: Seeks to Hire 'Ordinary Course' Professionals ----------------------------------------------------------- Breckenridge Hills Fuel, LLC and Shri Narayan, LLC seek approval from the U.S. Bankruptcy Court for the Eastern District of Missouri to hire professionals used in the ordinary course of their business. The "ordinary course" professionals are: Butsch Roberts & Associates LLC 231 S Bemiston Ave #260 Clayton, MO 63105 Phone: +1 314-863-5700 -- Litigation Cunningham Rayfield & Bouchard PC P.O. Box 229 Crystal City, MO 63019-1037 -- Litigation Mid-City Accounting Services, LLC 5701 Southwest Ave St. Louis, MO 63139 -- Tax Preparation The Debtors will pay 100 percent of the post-petition fees and disbursements incurred up to $5,000 per month per OCP or $25,000 per OCP over the life of the Debtors' Chapter 11 cases. About Breckenridge Hills Fuel and Shri Narayan Breckenridge Hills Fuel, LLC leases out two gas stations and convenience stores located at 1125 Sycamore Lane, St. Clair, Mo. and 4390 Telegraph Road, St. Louis, Mo. Shri Narayan, LLC owns and operates two gas stations and convenience stores located at 1999 Highway Z, Pevely, Mo., and 416 Benham St., Bonne Terre, Mo. Breckenridge Hills Fuel and Shri Narayan filed petitions for relief under Chapter 11 of the Bankruptcy Code (Bankr. E.D. Mo. Case Nos. 21-41572 and 21-41573) on April 25, 2021. Milapkumar P. Patel, member and manager of the Debtors, also sought Chapter 11 protection (Bankr. E.D. Mo. Case No. 21-41571) on April 25, 2021. The cases are jointly administered under Case No. 21-41571). Judge Bonnie L. Clair presides over the cases. Breckenridge Hills Fuel and Shri Narayan disclosed total assets of up to $50,000 and liabilities of up to $10 million at the time of the filing. The Debtors are represented by Angela Redden-Jansen, Esq. SQUARE INC: Fitch Assigns FirstTime 'BB' LT IDR, Outlook Stable --------------------------------------------------------------- Fitch Ratings has assigned a first-time Long-Term Issuer Default Rating (IDR) of 'BB' to Square Inc.. The Rating Outlook is Stable. The ratings impact approximately $3.5 billion of debt outstanding at December 2020, not including undrawn capacity on the company's revolver and Paycheck Protection Program (PPP) facility, and a projected $2.0 billion issuance of new senior unsecured notes. The announced debt issuance will be used for general corporate purposes, including organic growth investments and potential acquisitions over time. Fitch also assigned first-time, issue-level ratings of 'BB'/'RR4' to the company's $500 million senior unsecured revolver, senior unsecured convertible notes and the announced senior unsecured notes. KEY RATING DRIVERS High Growth Fintech Leader: Fitch believes Square is positioned well to capitalize on secular growth areas in payments and consumer financial services. It is among the market leaders in small business point of sale (POS) hardware-software solutions and also quickly became one of the U.S. leaders in peer-to-peer payments and crypto trading. The company witnessed tremendous growth over the past decade, with 2020 gross profit of $2.7 billion versus $65 million in 2012. Gross profit is a key metric to focus on given the bitcoin trading business grew significantly since 2018 and has skewed reported revenue, as bitcoin transactions are reported on a gross basis. Beneficiary of Secular Payments Shift: Square operates at the intersection of an industry shift away from cash to electronic forms of payment, which Fitch believes will provide a continued revenue tailwind in the coming years. According to Mastercard, card usage is approximately 56% of global personal consumption expenditures (PCE) and will continue to grow as a portion of overall spending in the years ahead. Square serves the physical and omni-channel retail POS market as well as digital app-based payments that continue to benefit from a broader adoption of digital and mobile-based payments. Increased reliance by consumers on electronic payment forms will continue to support revenue growth in the coming years. Profitability Below Peers: Fitch views Square's profitability as a limiting factor for the IDR, as the company continues to invest heavily to grow its Seller business and Cash App. Fitch does not believe Cash App is materially profitable at the EBITDA level but will scale over time. Square publicly guided for material opex growth in 2021, which will further limit profit growth in the near term. However, Fitch believes high incremental margins typical for payments businesses could improve profit generation materially over time. Fitch estimates Square could generate EBITDA in excess of $1 billion by 2023-2024 (potentially sooner depending on growth investments), or materially above near break-even levels in 2015-2016. However, margins will likely remain below those of its payment industry peers due to growth investments and GAAP reporting. High but Evolving Leverage: Gross leverage is high following pandemic-driven EBITDA pressures and incremental debt taken on in the past 12-18 months. Fitch expects leverage to improve materially over the next few years and could trend toward the 3x-4x range via a combination of EBITDA growth and potentially lower debt with convertible debt conversions. However, leverage could remain high if there were a material share price pullback given a lower likelihood of convertibles being converted. Importantly, Square operates with net cash currently although M&A could change this over time. Significant Financial Flexibility: Fitch views Square as having high financial flexibility given: (i) positive FCF generation since 2017 (average 78% annual EBITDA conversion), (ii) $6.3 billion of cash and investments PF for the pending senior notes issuance, (iii) a $500 million senior unsecured revolver, and (iv) a market cap of more than $90 billion that further affords it various avenues to external financing. The company also has meaningful investments in bitcoin and equity investments (largely in DoorDash tied to its 2019 Caviar divestiture) totaling nearly $900 million. Coronavirus Impact Muted: Fitch believes Square executed well throughout the pandemic to date, despite significant exposure to in-store retail that comprised the majority of sales historically. Seller revenue was down 17% in 2Q20, but sales rapidly returned to double digit growth in 2H20 despite stay-at-home initiatives. This performance was driven by growth in e-commerce and contactless, new merchants and improved U.S. consumer spending. Cash App performed extremely well through the pandemic as consumers, with FY20 segment gross profit up 2.7x to $1.2 billion and monthly active users up 50% to 36 million. Competitive, Fragmented End Markets: Fitch views Square's end markets as huge and fragmented, but also highly competitive. The Seller payments business continues to evolve as more U.S. merchants, particularly smaller ones that were Square's core customers historically, adopt card and electronic forms of payment. Square's Seller business faces competition not only from newer, software-centric POS providers such as Toast, Clover and others, but also from legacy merchant acquirers & hardware POS providers, and e-commerce providers such as PayPal and Stripe. Its Cash App segment is also very competitive, with Square vying for share from banks, large tech providers, and stock brokerage firms, among others. Ownership Concentration: Fitch views founder and Chairman/CEO Jack Dorsey's ownership and control position, with 51% of voting power, as meaningful to the rating. The company has a very successful track record of execution, but the voting control is an important credit consideration for investors given the potential for shareholder interests to become misaligned with those of lenders over time. It also presents key-person risk if Mr. Dorsey were to leave or be removed from the company. The CEO is also CEO of another public company he co-founded, Twitter, Inc. Fitch views the ownership concentration as a factor in ESG considerations, with a '4' rating that could have a negative impact over time to the overall IDR. DERIVATION SUMMARY Square's ratings reflect its strong market position in each of its segments, historic growth profile, positive FCF generation in recent years, significant cash on the balance sheet (net cash) and secular growth in each of its main businesses. Offsetting attributes include a lower margin profile versus fintech industry peers and gross leverage that is higher versus industry leaders. The scale of Square's business (EBITDA) and more limited diversification versus certain higher rated peers are also limited factors to the rating. PayPal Holdings, Inc. (A-/Stable) and Fidelity National Information Services, Inc. (BBB/Positive) are among the leading U.S. and global fintech issuers and each operates with lower leverage, materially higher EBITDA and margins, and a track record of strong, growing FCFs. PayPal also has a stronger market position in its core e-commerce payment solutions business. NCR Corporation (BB-/Stable) has a relatively similar revenue and FCF scale to Square and is expected to operate at similar gross leverage levels in the coming years, although Square has a materially stronger growth profile and has net cash. Relative to these issuers and other fintech, payments, and software-oriented peers rated by Fitch, Fitch believes the IDR is well positioned at the 'BB' category. KEY ASSUMPTIONS -- Revenue grows by high-20% CAGR through 2024, driven by improved consumer spending patterns post pandemic, organic growth in Cash App, and incremental M&A; -- EBITDA margin expansion is limited due to significant projected opex investments. Reported margins are also skewed lower due to the material scale of bitcoin revenue, which is reported on a gross transaction value basis; -- Fitch assumes Square will build cash in the absence of material acquisitions. Fitch forecasts modest M&A spend, although the company has significantly more flexibility currently to do deals; -- Fitch assumes debt and leverage both decline through 2023-2024 as the company realizes significant EBITDA growth and gross debt declines with the PPP facility rolling off and portions of the in-the-money convertible notes outstanding are assumed converted. RATING SENSITIVITIES Factors that could, individually or collectively, lead to positive rating action/upgrade: -- EBITDA scales to $750 million or higher, while gross leverage remains within Fitch's bands outlined below; -- Gross leverage, Fitch-defined as total debt with equity credit/operating EBITDA, sustained below 4.25x; -- FCF margins expected to be sustained at 6.5% or above. Factors that could, individually or collectively, lead to negative rating action/downgrade: -- Gross leverage sustained above 5.25x; -- FCF margins expected to be sustained near 3% or below; -- Significant fundamental shifts in the business that negatively affect revenue, EBITDA and/or FCF; -- A significantly lower level of financial flexibility could also lead Fitch to reassess the rating. 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 Expected: Square has strong and stable access to liquidity in various forms, particularly given its net cash position. Fitch expects its liquidity will improve in the coming years as the business further scales and margins and FCF improve over time. As of December 2020, the company had the following key sources of liquidity: (i) $4.3 billion of cash and investments; (ii) an undrawn $500 million senior unsecured revolver facility; and (iii) strong FCF generation that ranged from $230 million-$400 million from 2018-2020. The company also has significant access to the capital markets, given its high market cap and multiple convertible debt issuances in recent years. It also has investments that could be monetized if needed but that Fitch has not included in Fitch's readily available cash nor net leverage calculations including: (i) approximately $473 million of bitcoin investments ($220 million cost basis) as of March 2021; and (ii) $376 million of equity ownership in DoorDash, Inc. (shares received as part of Caviar divestiture). Debt Structure: Since its IPO, Square historically relied upon the convertible debt market for most of its external capital needs. The company had $3.0 billion of convertible note issuances outstanding at December 2020, but approximately $1.9 billion of these notes are materially "in-the-money" and Fitch projects could convert into equity in the next few years. Fitch expects the conversion could be settled via new Class A shares. The company also has an undrawn $500 million senior unsecured revolver and announced $2 billion of senior notes issuance. In addition to its revolver and convertibles notes, Square has $464 million outstanding on a facility related to the Paycheck Protection Program (PPP) that Fitch considers as debt for leverage calculations. Square Capital has acted as a facilitator of loans to small businesses since April 2020, whereby it borrows from the Federal Reserve via its PPP facility (capacity up to $1 billion) and provides loans to merchants that meet certain requirements. The PPP was created to provide funding for businesses affected by the coronavirus pandemic. Merchant borrowers may qualify for debt forgiveness in certain instances. Via the PPP facility, subsidiary Square Capital provides two- or five-year loans at a 1% fixed interest rate, while Square pays 0.35% on the facility. Since inception, Square has retained some of these loans while selling others to institutional third-party investors. These loans are non-recourse to Square, secured by a pledge of PPP loans held by Square Capital, and the Small Business Administration (SBA) has guaranteed the loans. Square still bears some risk if it fails to meet certain requirements. ESG CONSIDERATIONS Square has an ESG Relevance Score of '4' for Governance Structure due to its significant control and ownership by CEO and Chairman Jack Dorsey. Mr. Dorsey has been a key force behind the company's success historically and will likely remain so in the years ahead, which presents both key-person risk as well as risks of misaligned incentives between shareholder and debt holder interests. This factor was a consideration, in conjunction with other factors, used in Fitch's rating analysis that could have a negative impact over time to the overall IDR. Unless otherwise disclosed in this section, the highest level of ESG credit relevance is a score of '3'. ESG issues are credit neutral or have only a minimal credit impact on the entity, either due to their nature or the way in which they are being managed by the entity. STAR US BIDCO: Moody's Alters Outlook on B3 CFR to Positive ----------------------------------------------------------- Moody's Investors Service affirmed the ratings of Star US Bidco, LLC (aka Sundyne) including its B3 Corporate Family Rating and B3-PD Probability of Default Ratings. Concurrently, Moody's affirmed the company's B3 first lien senior secured revolver, letters of credit facility and term loan ratings. The rating outlook was changed to positive from negative. The change in outlook to positive from negative reflects Moody's expectation that the company will maintain robust EBITDA margins and generate positive free cash flow while maintaining good liquidity. The positive outlook also reflects the company's better than expected operating performance amid the pandemic, supported by recurring aftermarket business and improving fundamentals in its end markets including petrochemical, LNG and refining. Moody's took the following rating actions: Affirmations: Issuer: Star US Bidco, LLC Corporate Family Rating, Affirmed B3 Probability of Default Rating, Affirmed B3-PD Senior Secured Bank Credit Facility, Affirmed B3 (LGD3) Outlook Actions: Issuer: Star US Bidco, LLC Outlook, Changed To Positive From Negative RATINGS RATIONALE Sundyne's B3 CFR reflects the company's high leverage and relatively modest size. The ratings also reflect the company's considerable exposure to the cyclical energy sector. However, with a large installed base of its equipment currently serving customers across multiple industries, Sundyne generates a significant portion of its revenue and gross profit from the higher-margin aftermarket business. This provides stability to a large portion of Sundyne's business, offsetting much of the risk of its OE energy exposure. As well, the company benefits from the mission-critical nature of its products, robust EBITDA margins, and well-established relationships with a blue-chip customer base supported by strong brands in niche markets. Sundyne has very good liquidity. Moody's expects that the company will continue to generate strong free cash flow over the next few years while maintaining cash reserves in excess of $25 million. Sundyne has an undrawn $100 million revolver and separate letters of credit facilities, with ample headroom under its springing financial maintenance covenant. From a corporate governance perspective, Moody's notes that the company's high leverage profile reflects in part its private equity ownership. Potential debt-funded acquisitions or dividends paid to the sponsor present ongoing event risk. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS Sundyne's ratings could be downgraded if there is an erosion in liquidity and leverage (Moody's-adjusted debt/EBITDA) exceeds 8x, annual free cash flow turns negative, or EBITA/interest trends towards 1.0x. The loss of a major customer, with volumes not replaced, could also drive negative ratings pressure. A more aggressive financial policy, including a sizable debt-financed dividend, would also exert downward ratings pressure. Ratings could be upgraded if the company demonstrates steady revenue and earnings growth such that debt/EBITDA is sustained below 6x and EBITA/interest remains above 2.0x. The continued strong free cash flow would also be required to support a prospective ratings upgrade. The principal methodology used in these ratings was Manufacturing Methodology published in March 2020. Headquartered in Arvada, Colorado, Sundyne is a manufacturer of pumps and compressors sold primarily to the mid and downstream oil & gas end-market in addition to chemicals and industrial sectors. The company was carved-out from Accudyne Industries in February 2020 and is owned by private equity sponsor Warburg Pincus. STREAM TV: Court Dismisses Chapter 11 Case as Bad-Faith Filing -------------------------------------------------------------- Law360 reports that a Delaware bankruptcy judge on Monday, May 17, 2021, dismissed television technology company Stream TV's Chapter 11 case, saying it was a bad-faith attempt to interfere with a court judgment handing the company's assets over to its creditors. In a virtual bench ruling following two days of testimony and argument last week, U.S. Bankruptcy Judge Karen Owens said Stream TV's Chapter 11 was not an honest attempt to reorganize but a "last ditch" effort to delay the handover of the company's assets under an agreement with SeeCubic Inc. "It was designed to stop SeeCubic and the secured creditors from fully implementing the omnibus agreement." About Stream TV Networks Philadelphia, Pa.-based Stream TV Networks, Inc. develops technology intended to display three-dimensional content without the use of 3D glasses. On Feb. 24, 2021, Stream TV Networks filed a Chapter 11 petition (Bankr. D. Del. Case No. 21-10433). Stream TV Networks CEO Mathu Rajan signed the petition. In the petition, the Debtor listed assets of about $100 million to $500 million and liabilities of $100 million to $500 million. Judge Karen B. Owens oversees the case. Dilworth Paxson, LLP, led by Martin J. Weis, Esq., is the Debtor's counsel. SYNRGO INC: Case Summary & 20 Largest Unsecured Creditors --------------------------------------------------------- Debtor: Synrgo, Inc. 590 W. Lambert Road Brea, CA 92821 Business Description: Synrgo, Inc. -- https://synrgo.com -- is a provider of real estate document recording and post-closing services. Chapter 11 Petition Date: May 18, 2021 Court: United States Bankruptcy Court Central District of California Case No.: 21-11264 Judge: Hon. Erithe A. Smith Debtor's Counsel: Sean A. OKeefe, Esq. OKEEFE & ASSOCIATES LAW CORPORATION, PC 26 Executive Park Suite 250 Irvine, CA 92614 Tel: (949) 334-4135 Email: sokeefe@okeefelawcorporation.com Estimated Assets: $0 to $50,000 Estimated Liabilities: $100 million to $500 million The petition was signed by Karl Klessig, chairman and sole Board member. A full-text 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/W5STOFQ/Synrgo_Inc__cacbke-21-11264__0001.0.pdf?mcid=tGE4TAMA TECT AEROSPACE: May 25 Hearing on Bid Procedures for Everett Assets ------------------------------------------------------------------- Judge Karen B. Owens of the U.S. Bankruptcy Court for the District of Delaware granted the request of TECT Aerospace Group Holdings Inc. and affiliates to shorten the notice and objection periods for their proposed bidding procedures in connection with the auction sale of their Everett, Washington assets. The hearing to consider the relief with respect to the Bidding Procedures and related relief requested in the Bidding Procedures Motion, and the Motion to Seal, will be held on May 25, 2021, at 10:00 a.m. (ET). Objections, if any, to the relief with respect to the Bidding Procedures and related relief, and the Motion to Seal, must be filed by May 20, 2021, at 4:00 p.m. (ET). The Order will be immediately effective and enforceable upon its entry. The Debtors are authorized to take all action necessary to implement the relief granted in the Order. About TECT Aerospace TECT Aerospace Group Holdings, Inc., and its affiliates manufacture high precision components and assemblies for the aerospace industry, specializing in complex structural and mechanical assemblies, and, machined components for a variety of aerospace applications. TECT produces assemblies and parts used in flight controls, fuselage/interior structures, doors, wings, landing gear, and cockpits. TECT operates manufacturing facilities in Everett, Washington, and Park City and Wellington, Kansas and their corporate headquarters is located in Wichita, Kansas. TECT currently employs approximately 400 individuals nationwide. TECT and its affiliates are privately held companies owned by Glass Holdings, LLC and related Glass-owned or Glass controlled entities. TECT Aerospace Group Holdings, Inc., and six affiliates sought Chapter 11 protection (Bankr. D. Del. Case No. 21-10670) on April 6, 2021. TECT Aerospace estimated assets of $50 million to $100 million and liabilities of $100 million to $500 million as of the bankruptcy filing. The Debtors tapped RICHARDS, LAYTON & FINGER, P.A., as counsel; WINTER HARBOR, LLC, as restructuring advisor; and IMPERIAL CAPITAL, LLC, as investment banker. KURTZMAN CARSON CONSULTANTS LLC is the claims agent. The Boeing Company, as DIP Agent, is represented by: Alan D. Smith, Esq. Perkins Coie LLP E-mail: ADSmith@perkinscoie.com - and - Kenneth J. Enos, Esq. Young Conaway Stargatt & Taylor, LLP E-mail: kenos@ycst.com TENTLOGIX INC: Proposed Private Sales of Goods and ACUs Approved ---------------------------------------------------------------- Judge Mindy A. Mora of the U.S. Bankruptcy Court for the Southern District of Florida authorized Tentlogix Inc.'s private sales of the soft goods, generators, and air conditioning units listed in Exhibit A for the Liquidation Value listed therein, free and clear of any liens. So long as the Debtor sells the asset for at least the amount listed on Exhibit A, no further action needs to be taken by the Debtor. In the event it seeks to sell an asset for less than the value referenced in Exhibit A, the Debtor must obtain further approval of the Court to sell the asset. A copy of the Exhibit A is available at https://tinyurl.com/9j59bwc from PacerMonitor.com free of charge. About Tentlogix Inc. Tentlogix Inc. filed for Chapter 11 bankruptcy protection (Bankr. S.D. Fla. Case No. 20-22971) on Nov. 27, 2020. Gary Hendry, chief executive officer, signed the petition. At the time of the filing, the Debtor disclosed $3,135,866 in assets and $10,689,420 in liabilities. Judge Mindy A. Mora oversees the case. The Debtor tapped Kelley, Fulton & Kaplan, P.L. as its legal counsel and Carr Riggs & Ingram as its accountant. TOPP'S MECHANICAL: D & K Agri Buying 2004 Grove Crane for $200K --------------------------------------------------------------- Topp's Mechanical, Inc., asks the U.S. Bankruptcy Court for the District of Nebraska to authorize the sale of the 2004 Grove TMS900E 90 Ton Rough Terrain Crane, S/N 223700, with a Nelson 3-Axle Dolly, VIN 1N9G62A3541012808, including all attachments and accessories thereto, to D & K Agri Sales, Inc., for $200,000. The Debtor is the owner of the Grove Crane. It no longer operates the Grove Crane as a part of its business and desires to sell same. The Debtor has contracted to sell the Grove Crane to the Buyer, a Nebraska corporation, subject to the Court's approval, for a purchase price of $200,000. The Buyer required the Debtor to have the Grove Crane inspected before Buyer would make an offer to purchase the Grove Crane. The inspection revealed that the Grove Crane requires repairs that will cost approximately $25,000, which the Buyer will assume following the sale of the Grove Crane. The Debtor paid the inspection fee in the amount of $1,288.71. The Debtor is not aware of any direct or indirect relationship between the proceedings in the above-captioned matter, including any case related thereto, and the Buyer or the Buyer's firm, partnership, corporation or any other form of business association or relationship, including all members, associates and professional employees thereof. Upon information and belief, the Buyer is ready, willing and able to close on its purchase of the Grove Crane. First Midwest Equipment Finance Co. has a first position security interest in the Grove Crane as a result of a purchase money security interest therein, and the amount remaining due by Debtor to First Midwest is approximately $172,299.50, as set forth in First Midwest's Proof of Claim filed in the bankruptcy proceeding on March 16, 2021. American Exchange Bank ("AEB") has a second position security interest in the Grove Crane as a part of its blanket security interest in the personal property of the Debtor, and the amount remaining due by Debtor to AEB is greater than any expected proceeds from the sale of the Grove Crane. James M. Rush and Lisa F. Rush claim a security interest in the Grove Crane pursuant to a UCC Financing Statement filed on Dec. 14, 2020, Filing Document #2012000647-4. The Debtor disputes that the Rushes have a valid security interest in the Grove Crane because the alleged debt claimed by the Rushes is personal to Luke Topp and Ria Topp, Debtor’s shareholders, the debt was not guaranteed by the Debtor, and there is no security agreement between Debtor and the Rushes wherein Debtor granted the Rushes a security interest in the Grove Crane. The proceeds from the sale of the Grove Crane will first be used to reimburse the Debtor for the cost of the inspection that was required to be performed before Buyer would make an offer to purchase, then to pay off the balance owed to First Midwest, and then the remainder will be applied against the outstanding balance owed to AEB. Except for the reimbursement of the inspection fee, none of the proceeds from the sale of the Grove Crane will be paid to the Debtor. Uupon distribution of sale proceeds to First Midwest, First Midwest will release its lien noted on the title to the Grove Crane, terminate any financing statement on file with the Nebraska Secretary of State related to the Grove Crane, and deliver the title to the Grove Crane to Debtor so that it can be endorsed and transferred to the Buyer. Upon distribution of sale proceeds to AEB, AEB will release its lien, if any, noted on the title to the Grove Crane, and amend any financing statement on file with the Nebraska Secretary of State to remove the Grove Crane from the description of collateral that AEB is claiming a security interest in. It is in the best interests of Debtor, the bankruptcy estate and creditors that the sale of the Grove Crane be free and clear of any lien asserted by the Rushes since the Rushes do not have a valid security interest in the Grove Crane. The Debtor's tax basis in the Property is $91,480. There is no anticipated capital gain or loss, or anticipated net taxable income from the sale because there will not be any net proceeds received by Debtor from the sale of the Grove Crane. 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. TRANQUILITY GROUP: U.S. Trustee Unable to Appoint Committee ----------------------------------------------------------- The U.S. Trustee for Region 13 disclosed in a court filing that no official committee of unsecured creditors has been appointed in the Chapter 11 case of Tranquility Group, LLC. About Tranquility Group Tranquility Group owns a vacation destination offering tree houses, log cabins, and bungalows. Tranquility Group filed a voluntary petition for relief under Chapter 11 of the Bankruptcy Code (Bankr. W.D. Mo. Case No. 21-60120) on Feb. 26, 2021. Michael R. Hyams, chief operating officer and partner, signed the petition. At the time of the filing, the Debtor had between $1 million and $10 million in both assets and liabilities. Berman, DeLeve, Kuchan & Chapman, LLC represents the Debtor as legal counsel. TRANS-LUX CORP: Incurs $621K Net Loss in First Quarter ------------------------------------------------------ Trans-Lux Corporation filed with the Securities and Exchange Commission its Quarterly Report on Form 10-Q disclosing a net loss of $621,000 on $2.59 million of total revenues for the three months ended March 31, 2021, compared to a net loss of $1.04 million on $1.91 million of total revenues for the three months ended March 31, 2020. As of March 31, 2021, the Company had $7.37 million in total assets, $15 million in total liabilities, and a total stockholders' deficit of $7.64 million. "Due to the onset of the COVID-19 pandemic in 2020, the Company experienced a reduction in sales orders from customers. As a result, the Company incurred a net loss of $621,000 in the three months ended March 31, 2021 and had a working capital deficiency of $6.3 million as of March 31, 2021," Trans-Lux said. "The Company is dependent on future operating performance in order to generate sufficient cash flows in order to continue to run its businesses. Future operating performance is dependent on general economic conditions, as well as financial, competitive and other factors beyond our control, including the impact of the current economic environment, the spread of major epidemics (including coronavirus) and other related uncertainties such as government-imposed travel restrictions, interruptions to supply chains and extended shut down of businesses. In order to more effectively manage its cash resources, the Company had, from time to time, increased the timetable of its payment of some of its payables, which delayed certain product deliveries from our vendors, which in turn delayed certain deliveries to our customers," Trans-Lux further said. A full-text copy of the Form 10-Q is available for free at: https://www.sec.gov/Archives/edgar/data/99106/000151316221000070/form10q.htm About Trans-Lux Headquartered in New York, New York, Trans-Lux Corporation -- http://www.trans-lux.com-- designs and manufactures TL Vision digital video displays for the financial, sports and entertainment, gaming, education, government, and commercial markets. With a comprehensive offering of LED Large Screen Systems, LCD Flat Panel Displays, Data Walls and scoreboards (marketed under Fair-Play by Trans-Lux), Trans-Lux delivers comprehensive video display solutions for any size venue's indoor and outdoor display needs. Trans-Lux reported a net loss of $4.84 million for the 12 months ended Dec. 31, 2020, a net loss of $1.40 million for the year ended Dec. 31, 2019, and a net loss of $4.69 million for the year ended Dec. 31, 2018. As of Dec. 31, 2020, the Company had $7.05 million in total assets, $14.10 million in total liabilities, and a total stockholders' deficit of $7.05 million. New Haven, CT-based Marcum LLP, the Company's auditor since 2015, issued a "going concern" qualification in its report dated April 15, 2021, 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. TRIUMPH HOUSING: Unsecureds to Share Funds After $25K Suit Reserve ------------------------------------------------------------------ Triumph Housing Management, LLC, filed with the Bankruptcy Court a Second Plan of Reorganization and a corresponding Disclosure Statement. The Plan proposes to satisfy unclassified claims in full. The Debtor said it has sufficient unencumbered funds on hand to pay all anticipated administrative expenses, without use of funds to which parties who paid insurance premiums might assert a claim. Classes of Claims and Their Treatment Under the Plan: * Class 1 - priority unsecured tax claims of the Internal Revenue Service for $400. The Debtor has sufficient cash on hand to pay the claim if that claim is allowed. * Class 2 - unsecured claims of insurance premium contributors. Unsecured claims related to creditors who provided insurance premium payments that were the subject of pre-petition litigation and a pre-petition settlement between Debtor and General Star Indemnity Company. The Debtor contends that no priority treatment is appropriate for claims of the Premium Contributors. The Premium Contributors are impaired and therefore entitled to vote on the Plan. * Class 3 - non-priority, general unsecured claims. General unsecured claims will be paid, on a pro-rata basis, any remaining funds after distribution of funds described for Classes 1 and 2 and any administrative expenses. General unsecured claimants are impaired and therefore entitled to vote on the Plan. The Debtor remains involved in litigation seeking to recover funds from insurance agents, with its suit against The Cone Company, Inc. and AmWINS Brokerage of Alabama, LLC resuming in the District Court for the Northern District of Georgia now that Debtor prevailed on appeal in the Eleventh Circuit. The Plan provides that the Debtor may reserve up to $25,000 to fund the litigation costs against AmWINS and Cone from funds that would otherwise be distributed after confirmation of the Plan. The litigation arose before the Petition Date when Cone, which was contracted by the Debtor to obtain liability insurance, contacted AmWINS, a wholesale insurance broker, to assist Cone in placing coverage for the Debtor's properties. Cone and AmWINS contacted General Star Indemnity Co. to underwrite the associated risks on a scheduled coverage basis, contrary to Debtor's request for blanket coverage. GenStar thereafter refused to pay losses that occurred on the Debtor's properties, leading to the Debtor's current litigation involvement. Pursuant to the Plan, the Debtor will make an initial distribution shortly after the time of confirmation, from cash on hand, plus annual distributions on the annual payment received from Weller Workforce, LLC (if any). The Debtor receives a 10% profit distribution from Weller for settlement payments and future profits from its ownership rights in Weller. If Debtor prevails in the District Court litigation, or settles the disputes with AmWINS and/or Cone, then any proceeds from that litigation or those settlements will be distributed in the same manner as provided in the Plan for other funds, after deducting costs of litigation. The Debtor anticipates that it will be managed post-confirmation by its existing management, who will continue to serve in their existing capacities. The current management consists of Mr. Alex Hertz and the Debtor's "back office" fulfillment personnel, including Mr. Merrik Metcalf. Certain developments on to the Debtor's litigations and disputes, follow: * Debtor filed a motion to participate in mediation with Cone and AmWINS, as well as TriMark Northside, LLC and Coppertree Apartments, LLC, two creditors in this case, and participated in that mediation. * Debtor, in conjunction with its appeal to the Eleventh Circuit Court of Appeals, participated in a second mediation with Cone and AmWINS. * Debtor reached a settlement with AmWINS for $50,000 and a release of claims related to the Eleventh Circuit Court of Appeals case. Debtor sought approval of this settlement from the Court, although the proposed settlement was not approved due to objections from certain creditors to the sufficiency of the amount to be received by the bankruptcy estate. * Debtor prevailed in its Eleventh Circuit Court of Appeals arguments involving Cone and AmWINS such that litigation is resuming against those parties in the District Court. * Debtor reached a settlement of a claim dispute with Trimark, which is being submitted for Court approval. A copy of the Disclosure Statement is available for free at https://bit.ly/3uXx3Ij from PacerMonitor.com. About Triumph Housing Management Triumph Housing Management, LLC, a real estate service provider based in Atlanta, filed a voluntary petition under Chapter 11 of the Bankruptcy Code (Bankr. N.D. Ga. Case No. 20-65578) on April 15, 2020. The petition was signed by Alex Hertz, its manager. At the time of the filing, the Debtor disclosed total assets of $877,090 and total liabilities of $8,074,355. Judge Jeffery W. Cavender oversees the case. The Debtor tapped Robl Law Group LLC as its counsel. URBAN ONE: Posts $7K Net Income in First Quarter ------------------------------------------------ Urban One, Inc. filed with the Securities and Exchange Commission its Quarterly Report on Form 10-Q disclosing consolidated net income attributable to common stockholders of $7,000 on $91.44 million of net revenue for the three months ended March 31, 2021, compared to a consolidated net loss attributable to common stockholders of $23.19 million on $94.88 million of net revenue for the three months ended March 31, 2020. As of March 31, 2021, the Company had $1.17 billion in total assets, $957.19 million in total liabilities, $12.74 million in redeemable noncontrolling interests, and $198.83 million in total stockholders' equity. Alfred C. Liggins, III, Urban One's CEO and president stated, "Normalizing for approximately $1.4 million of Richmond gaming chase costs, which were one-time in nature, our Adjusted EBITDA was down approximately 6.3% year over year, which was encouraging in the context of pre-COVID radio comparatives for January and February and a lack of political revenues. It is worth noting that compared to Q1 2019, which was a pre-pandemic and off-cycle political quarter, our Adjusted EBITDA was up by approximately 4.1% (and by 9.1% after normalizing for the Richmond gaming project). Our core radio advertising was down approximately 13.7% for the quarter, with January -28.4%, February -19.9% and March +8.8%. Currently for second quarter, core radio is pacing up over 70%, with April finishing at +89%. Our digital business had another strong quarter, with revenues up 64.6% and Adjusted EBITDA up by approximately $3.2 million. Cable TV revenues were down 2.6%, but Adjusted EBITDA of approximately $24.8 million was 14.5% higher than Q1 2019 (approximately $21.7 million), which is a more realistic comparison than the COVID-impacted Q1 2020, during which content production and marketing were effectively shut-off. Under the circumstances, we delivered a solid first quarter, and I anticipate further sequential improvements in Q2." During the quarter ended March 31, 2021, the Company saved approximately $1.0 million in employee compensation expenses and $654,000 in reduced travel and office expenses due to its cost savings initiatives. The Company also saved approximately $1.1 million in lower program content amortization expense at its cable television segment. These savings were offset by an increase of approximately $1.3 million in marketing spend. Finally, the increase in corporate selling, general and administrative expenses for the three months ended March 31, 2021, compared to the same period in 2020 is primarily due to an increase in expenses of approximately $1.4 million related to corporate development activities related to potential gaming and other similar business activities. Depreciation and amortization expense decreased to approximately $2.3 million for the quarter ended March 31, 2021, compared to approximately $2.5 million for the quarter ended March 31, 2020. Interest expense decreased to approximately $18.0 million for the quarter ended March 31, 2021, compared to approximately $19.1 million for the quarter ended March 31, 2020. The Company made cash interest payments of approximately $13.9 million on its outstanding debt for the quarter ended March 31, 2021, compared to cash interest payments of approximately $13.9 million on its outstanding debt for the quarter ended March 31, 2020. As of March 31, 2020, the Company had approximately $27.5 million in borrowings outstanding on its ABL Facility. There was no balance outstanding on March 31, 2021. As previously announced, on Jan. 25, 2021, the Company closed on a new senior secured notes. The proceeds from the 2028 Notes were used to prepay in full (1) the 2017 Credit Facility, (2) the 2018 Credit Facility, (3) the MGM National Harbor Loan; (4) the remaining amounts of the Company's 7.375% Notes, and (5) its 8.75% Notes that were issued in the November 2020 Exchange Offer. There was a net loss on retirement of debt of approximately $6.9 million for the quarter ended March 31, 2021 associated with these transactions. The impairment of long-lived assets for the three months ended March 31, 2020, was related to a non-cash impairment charge of approximately $5.9 million recorded to reduce the carrying value of the Company's Atlanta and Indianapolis market goodwill balances and a charge of approximately $47.7 million associated with our Atlanta, Cincinnati, Dallas, Houston, Indianapolis, Philadelphia, Raleigh, Richmond and St. Louis radio market broadcasting licenses. During the three months ended March 31, 2021, the benefit from income taxes decreased to $10,000 compared to approximately $21.9 million for the three months ended March 31, 2020. The decrease in the benefit from income taxes was primarily due to the application of the estimated annual effective tax rate for the year to date and pre-tax income of $451,000 during the quarter, and discrete tax provision adjustments for excess tax benefits related to restricted stock units. For the three months ended March 31, 2020, the benefit from income taxes was approximately $21.9 million. The increase in the benefit from income taxes was primarily due to the application of the actual effective tax rate for the year to date and pre-tax loss of approximately $44.9 million during the quarter, and discrete tax provision adjustments to previously unrecognized deferred tax assets that the Company believes it can now benefit from in future periods. The Company received a refund of taxes of $32,000 for the quarter ended March 31, 2021 and did not pay taxes for the quarter ended March 31, 2020. Other income, net, was approximately $1.7 million and $1.5 million for the three months ended March 31, 2021 and 2020, respectively. The Company recognized other income in the amount of approximately $1.7 million and $1.5 million for the three months ended March 31, 2021 and 2020, respectively, related to its MGM investment. The increase in noncontrolling interests in income of subsidiaries was due primarily to higher net income recognized by Reach Media during the three months ended March 31, 2021 compared to the three months ended March 31, 2020. Other pertinent financial information includes capital expenditures of $804,000 and approximately $1.4 million for the quarters ended March 31, 2021 and 2020, respectively. During the three months ended March 31, 2021 and 2020, the Company did not repurchase any shares of Class A or Class D common stock. A full-text copy of the Form 10-Q is available for free at: https://www.sec.gov/Archives/edgar/data/1041657/000110465921066535/tm2111736d1_10q.htm About Urban One Headquartered in Silver Spring, Maryland, Urban One, Inc. (together with its subsidiaries) -- www.urban1.com -- is an urban-oriented, multi-media company that primarily targets African-American and urban consumers. The Company's core business is its radio broadcasting franchise which is the largest radio broadcasting operation that primarily targets African-American and urban listeners. As of Dec. 31, 2020, the Company owned or operated 63 independently formatted, revenue producing broadcast stations (including 54 FM or AM stations, 7 HD stations, and the 2 low power television stations it operates) located in 13 of the most populous African-American markets in the United States. While a core source of the Company's revenue has historically been and remains the sale of local and national advertising for broadcast on its radio stations, its strategy is to operate the premier multi-media entertainment and information content provider targeting African-American and urban consumers. Urban One received notice from The Nasdaq Stock Market, Inc. that as a result of the resignation of Geoffrey Armstrong as a director of the Company effective Nov. 23, 2020 the Company was no longer in compliance with Nasdaq's audit committee requirements as set forth in Nasdaq Marketplace Rule 5605 since Mr. Armstrong had been a member of the audit committee. Urban One reported a consolidated net loss attributable to common stockholders of $8.11 million for the year ended Dec. 31, 2020. As of Dec. 31, 2020, the Company had $1.19 billion in total assets, $995.89 million in total liabilities, $12.70 million in redeemable noncontrolling interests, and $186.90 million in total stockholders' equity. VICTORY CAPITAL: Moody's Upgrades CFR to Ba2, Outlook Stable ------------------------------------------------------------ Moody's Investors Service has upgraded Victory Capital Holdings, Inc.'s corporate family rating and senior secured debt rating to Ba2 from Ba3. The rating agency also upgraded the company's probability of default rating to Ba2-PD from Ba3-PD. The outlook on the ratings remain stable. A summary of the rating action follows: Upgrades: Issuer: Victory Capital Holdings, Inc. Corporate Family Rating, upgraded to Ba2 from Ba3 Probability of Default Rating, upgraded to Ba2-PD from Ba3-PD Senior Secured Bank Credit Facility, upgraded to Ba2 from Ba3 Outlook Actions: Issuer: Victory Capital Holdings, Inc. Outlook, remains stable RATINGS RATIONALE The upgrade reflects the improvement to the company's revenue scale, leverage, AUM mix diversification and profitability metrics since its acquisition of USAA Asset Management Company (USAA AMCO) in 2019. Victory's larger scale and increased profitability has contributed to stronger cash flow generation which has allowed for meaningful debt paydown over the last two years. While the company recently indicated an appetite for more transformational M&A publicly, Moody's believe it has room within its current rating level to execute a large debt-financed acquisition. The acquisition and successful integration of USAA AMCO has significantly enhanced Victory's business profile. Assets under management totaled $154 billion at March 31, 2021 compared to about $60 billion just prior to the closing of the transaction. The new business has almost doubled revenues, improved GAAP profit margins and provided Victory with investment capabilities, particularly in fixed income and solutions offerings that Moody's believe will drive industry growth in coming years. Equally important, Victory now has a direct line to a large affinity group with high retention rates. Victory has prioritized deleveraging by paying down over 35% of the original principal on the debt used to fund the USAA AMCO acquisition; and engaged in several transactions to reduce its interest expense burden. At March 31 leverage stood at about 2.4 times debt-to-EBITDA, as adjusted by Moody's, down from about 5 times following the close of the transaction. The company repriced its credit facility to reduce the margin payable on LIBOR by an aggregate 100 basis points and executed a floating-to-fixed interest rate swap to further reduce its interest expense burden. Victory's Ba2 CFR reflects its strong profitability, exclusive ties to the USAA membership channel, and diverse product offerings provided by franchises operating under its integrated multi-boutique structure. Constraining the company's rating is its concentrated exposure to US equities, weak asset resiliency, and modest size relative to the broader financial services sector. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS Moody's could upgrade Victory's ratings if: 1) sustained asset inflows drive organic growth and improve asset resiliency rates to or above industry averages; 2) financial leverage (debt/EBITDA as calculated by Moody's) is maintained at current levels; or 3) profitability as measured by pre-tax income margins are sustained above 20%. Alternatively, the following factors could lead to a downgrade of Victory's ratings if: 1) asset decay is sustained such that net client redemptions exceed 3% of firm AUM per year; 2) leverage (debt/EBITDA as defined by Moody's) is maintained above 3.5x; or 3) five-year pre-tax income margin decline to below 15%. Victory is an integrated multi-boutique asset manager headquartered in San Antonio, Texas. At March 31, the company had assets under management of $154 billion and earned total revenues of approximately $780 million over the last twelve months. The principal methodology used in these ratings was Asset Managers Methodology published in Novemeber 2019. VOYAGER AVIATION: Moody's Withdraws Caa1 CFR on Restructuring ------------------------------------------------------------- Moody's Investors Service has withdrawn its ratings of Voyager Aviation Holdings, LLC because the company as of May 10, 2021 completed the out-of-court restructuring of its $415 million senior unsecured notes due August 2021 in a transaction that Moody's regards as a distressed exchange. Approximately 98.5% of noteholders supported Voyager's consent solicitation for the restructuring. Ratings withdrawn include: Voyager Aviation Holdings, LLC: Long-term corporate family rating (Caa1, previously on review for downgrade) Senior unsecured (Caa3, previously on review for downgrade) Outlook, Rating Withdrawn from Rating Under Review RATINGS RATIONALE Governance was a consideration in this rating action, given the change of control of Voyager associated with the debt restructuring. WEATHERFORD INT'L: Fends Off Investor Lawsuit Over Bankruptcy ------------------------------------------------------------- Jennifer Bennett of Bloomberg Law reports that Weatherford International PLC is free of a would-be class suit alleging it misled investors about its financial condition and plans ahead of a bankruptcy declaration, a federal judge in Texas said. Investors accused the oilfield services firm of giving several false assurances about its finances despite considering bankruptcy the whole time. But the Weatherford statements they challenged aren't actionable, and they didn't suggest the company intentionally misled them, the U.S. District Court for the Southern District of Texas said May 14, 2021. Most of the company statements are forward-looking and protected under the Private Securities Litigation Reform Act's safe harbor provision. About Weatherford International PLC Weatherford (NYSE: WFT), an Irish public limited company and Swiss tax resident -- http://www.weatherford.com/-- is a multinational oilfield service company providing innovative solutions, technology and services to the oil and gas industry. The Company operates in over 80 countries and has a network of approximately 650 locations, including manufacturing, service, research and development and training facilities and employs approximately 26,000 people. Weatherford reported a net loss attributable to the company of $2.81 billion for the year ended Dec. 31, 2018, compared to a net loss attributable to the company of $2.81 billion for the year ended Dec. 31, 2017. As of March 31, 2019, Weatherford had $6.51 billion in total assets, $10.62 billion in total liabilities, and a total shareholders' deficiency of $4.10 billion. On July 1, 2019, Weatherford International plc, Weatherford International, LLC, and Weatherford International Ltd. sought Chapter 11 protection (Bankr. S.D. Tex. Lead Case No. 19-33694). The Hon. David R. Jones is the case judge. The Debtors tapped Hunton Andrews Kurth LLP and Latham & Watkins LLP as counsel; Alvarez & Marsal North America LLC as financial advisor; Lazard Freres & Co. LLC as investment banker; and Prime Clerk LLC as claims agent. Henry Hobbs Jr., acting U.S. trustee for Region 7, on July 17, 2019, appointed three creditors to serve on the official committee of unsecured creditors in the Chapter 11 cases. WEINSTEIN CO: Trustee Seeks to Toss Plan Appeal of Claimants ------------------------------------------------------------ Law360 reports that the liquidating trustee administering the Chapter 11 plan of defunct movie studio The Weinstein Co. has told a Delaware federal judge that the plan has largely been executed and an appeal of its approval filed by a group of sexual misconduct claimants is a moot point. Dean A. Ziehl, the trustee selected to oversee the liquidation trust of the former debtor, said in a motion to dismiss the appeal Friday, May 14, 2021, that because the Chapter 11 plan has been substantially consummated, the appeal is equitably moot as funds set aside for sexual misconduct claimants have been distributed to the fund set up for claimants. About The Weinstein Company The Weinstein Company (TWC) -- http://www.WeinsteinCo.com/-- is a multimedia production and distribution company launched in 2005 in New York by Bob and Harvey Weinstein, the brothers who founded Miramax Films in 1979. TWC also encompasses Dimension Films, the genre label founded in 1993 by Bob Weinstein. During Harvey and Bob's tenure at Miramax and TWC, they have received 341 Oscar nominations and won 81 Academy Awards. TWC dismissed Harvey Weinstein in October 2017, after dozens of women came forward to accuse him of sexual harassment, assault or rape. The Weinstein Company Holdings LLC and 54 affiliates sought Chapter 11 protection (Bankr. D. Del. Lead Case No. 18-10601) on March 19, 2018, after reaching a deal to sell all assets to Lantern Asset Management for $310 million. The Weinstein Company Holdings estimated $500 million to $1 billion in assets and $500 million to $1 billion in liabilities. The Hon. Mary F. Walrath is the case judge. Cravath, Swaine & Moore LLP is the Debtors' bankruptcy counsel, with the engagement led by Paul H. Zumbro, George E. Zobitz, and Karin A. DeMasi, in New York. Richards, Layton & Finger, P.A., is the local counsel, with the engagement headed by Mark D. Collins, Paul N. Heath, Zachary I. Shapiro, Brett M. Haywood, and David T. Queroli, in Wilmington, Delaware. The Debtors also tapped FTI Consulting, Inc., as restructuring advisor; Moelis & Company LLC as investment banker; and Epiq Bankruptcy Solutions, LLC as claims and noticing agent. The official committee of unsecured creditors retained Pachulski Stang Ziehl & Jones, LLP as its legal counsel, and Berkeley Research Group, LLC, as its financial advisor. WHITE STALLION ENERGY: Wins Cash Collateral Access Thru June 30 --------------------------------------------------------------- The U.S. Bankruptcy Court for the District of Delaware has entered an order extending the termination date of the Final Cash Collateral order authorizing White Stallion Energy, LLC and affiliates to use cash collateral. The termination date is extended from May 14, 2021 to June 30, 2021. The Debtors are authorized, subject to the terms and conditions of the Final Order, to use Cash Collateral solely to the extent permitted by, and as set forth in, the Budget. The Debtors' right to use Cash Collateral will be subject in all respects to their compliance with the Budget, and such right will terminate automatically upon the earlier of (a) the occurrence of an Event of Default, unless waived in writing by the Agent on behalf of the Secured Parties in their sole discretion and (b) June 30, 2021, unless extended in writing by the Agent on behalf of the Secured Parties, in their sole discretion. Except for the amended, the Final Cash Collateral Order remains in full force and effect. A copy of the order is available at https://bit.ly/33QnH5o from Prime Clerk, the claims agent. About White Stallion Energy White Stallion Energy, LLC, was founded in February 2010 for the purpose of developing and operating surface mining complexes in Indiana and Illinois and subsequently grew through a series of strategic acquisitions. It operates six high-quality, low-cost thermal surface mines in Indiana and Illinois with approximately 200 million tons of demonstrated reserves. On Dec. 2, 2020, White Stallion Energy and 18 affiliated debtors each filed a voluntary petition for relief under Chapter 11 of the Bankruptcy Code (Bankr. D. Del. Lead Case No. 20-13037) on Dec. 2, 2020. White Stallion and its affiliates reported between $100 million and $500 million in assets and liabilities. On Jan. 26, 2021, Eagle River Coal, LLC filed a voluntary Chapter 11 petition. Eagle River is seeking for its case to be jointly administered with the Initial Debtors' cases. The Hon. Laurie Selber Silverstein is the case judge. The Debtors tapped Paul Hastings LLP as bankruptcy counsel, Young Conaway Stargatt & Taylor, LLP as local counsel, and FTI Consulting, Inc., as financial advisor. Prime Clerk LLC is the claims agent and administrative advisor. The U.S. Trustee for Region 3 appointed an official committee to represent unsecured creditors in the Debtors' cases. The committee tapped Cooley LLP as its bankruptcy counsel, Robinson & Cole LLP as Delaware counsel, and Province LLC as financial advisor. Riverstone Credit Management, LLC serves as DIP Agent. Its advisors are Bailey & Glasser LLP and Simpson Thacher & Bartlett LLP. YOAKUM INDEPENDENT SCHOOL: Fitch Affirms 'BB' Issuer Default Rating ------------------------------------------------------------------- Fitch Ratings has affirmed the following Yoakum Independent School District (ISD), TX ratings at 'BB': -- Long-Term Issuer Default Rating (IDR); -- Approximately $36.4 million outstanding unlimited tax (ULT) bonds. The Rating Watch Negative is removed. The Rating Outlook is Negative. SECURITY The ULT bonds are payable from an unlimited annual property tax levy. ANALYTICAL CONCLUSION The 'BB' IDR reflects continued weakness in operating performance which has resulted in a negative fund balance and cash position and a 'going concern' audit opinion in the last three fiscal years. The Negative Outlook reflects concern about the district's ability to sustain its recently improved liquidity. Resolution of the Negative Outlook is predicated on the district's cash-flow trends and the status of its financial resilience. Further deterioration in these areas would lead to a downgrade. The district's recent allocation of American Rescue Plan (ARP) funds could materially improve its financial position but is dependent on how the funds are utilized and the impact of ongoing enrollment declines. The rating also incorporates the district's slow revenue growth prospects and moderate long-term liabilities and fixed costs. The rating also reflects an asymmetric economic risk consideration based on the high taxpayer and energy sector concentration within the district. ECONOMIC RESOURCE BASE Yoakum ISD is located about 100 miles east of San Antonio, TX in the counties of Dewitt, Lavaca, and Gonzales. With an economy historically based on agriculture, the district lies within the Eagle Ford shale, one of the most actively drilled targets for unconventional oil and gas in the U.S. Assessed valuation (AV) tripled over fiscal years 2013-2015 due to the construction of a large natural gas liquids (NGLs) processing plant. However, due to an abatement agreement, nearly the entire value of the processing plant is exempt for purposes of calculating the maintenance and operation (M&O) levy. The abatement expires in fiscal 2023. Also, Eagle Ford's output has dropped sharply since fiscal 2016 due to the volatility in oil prices, leading gross AV to decline by nearly one-third. KEY RATING DRIVERS Revenue Framework: 'bbb' Post-pandemic long-term revenue growth is expected to be in line with inflation based on Fitch's expectation of periodic increases in state per-pupil funding, tempered by negative enrollment trends. The district's independent legal ability to raise revenues is limited by state law. Expenditure Framework: 'bbb' Pressured by a declining enrollment environment, natural spending growth is expected to be well above revenue growth. The fixed-cost burden for debt service and retiree benefits is moderate. The district's expenditure flexibility is adequate as it can still implement manageable cuts to core services. Long-Term Liability Burden: 'aa' Fitch expects the liability burden to remain moderate as the district has no future debt issuance plans and pension liabilities are modest. Operating Performance: 'bb' The district's operating performance has deteriorated in recent years, leaving it with limited gap-closing capacity given its inherent limited budgetary flexibility, negative general fund reserves and minimal cash levels. Yoakum ISD has an Environmental, Social, and Governance (ESG) Relevance Score of '5' for Rule of Law, Institutional & Regulatory Quality, Control of Corruption (GRL) due to poor financial operating and capital management, culminating in operational deficits and depletion of reserves resulting in negative balances and a 'going concern' audit opinion. This position has a negative impact on the credit profile and is highly relevant to the rating and the Negative Outlook. Yoakum ISD has an ESG Relevance Score of '5' for Government Effectiveness due to poor operating and capital management. This issue has a negative effect on the credit profile and is highly relevant to the rating and the Negative Outlook. RATING SENSITIVITIES Factors that could, individually or collectively, lead to positive rating action/upgrade: -- Sustained reversal of negative enrollment trends, a principal driver for state funding, which would enhance revenue growth prospects; -- Sustained balanced operations that stabilize operating performance and lead to a reversal of the accumulated deficit and negative cash position; -- The Negative Outlook could be removed upon improvement of the district's cash-flow trends and financial resilience. Factors that could, individually or collectively, lead to negative rating action/downgrade: -- Continued minimal cash position, operational deficits and negative reserves; -- Delayed management information or audits, or continuation of auditor opinions noting a 'going concern' risk; -- A material, sustained decline in district enrollment post pandemic, leading Fitch to reassess the medium-term revenue growth prospects to below the rate of inflation. 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. CURRENT DEVELOPMENTS Sector-wide Coronavirus Stimulus The recently-enacted ARP will provide $350 billion in direct aid to state and local governments and provide additional funding for transit systems and school districts (through the states) as well as a significant amount of economic stimulus that should have a positive near-term impact on state and local government revenues. Fitch does not expect the stimulus aid to alter the long-term credit fundamentals of state and local governments but should bridge near-term fiscal gaps. District Budget Update Yoakum ISD's financial position remains exceptionally weak, having deteriorated with recent large operating deficits and a precipitous decrease in its fund balance leading to negative balances since fiscal 2018. The district attributes the dramatic drop in reserves from a peak of 34% of spending in fiscal 2014 to poor management of costs related to major capital improvement projects. The audits for fiscal years 2018-2020 retained an unqualified opinion, although they also stated there was "substantial doubt about the district's ability to continue as a going concern" in all three years. Despite its weak financial health, the district has not declared financial exigency which would allow it to impose a mid-year reduction in force. Also, the Texas Education Agency (TEA) has not intervened to date. Modest improvement to the district's financial reserves did not materialize as budgeted in fiscal 2020. Audited results were essentially balanced, leaving the negative fund balance at $1.9 million or 11% of spending. In fiscal 2020, average daily attendance (ADA) declined by 8% due to the pandemic although state funding was based on a smaller loss of 2.3% due to TEA's provision of hold-harmless funding to mitigate the impact of the pandemic on school district funding levels. In general, this measure allows a district's projected ADA to be calculated using a three-year average trend from final ADA from the 2017 to 2020 academic years. The hold-harmless provision will remain in place for fiscal 2021. The adopted fiscal 2021 budget cuts spending by $700,000 or 4%, including $300,000 from a reduction of positions, and is projected to reduce the negative fund balance by a modest $200,000. Aided by the receipt of property taxes in January and February, the district reports a cash position of $4.4 million for all governmental funds as of May 13, 2021, equal to approximately 54 days of operations. Liquidity will likely trend downward through the fiscal year end as reliance shifts mostly to monthly state aid revenues although the imminent conclusion of the academic year will mitigate the scale of the decline in liquidity. Also, a significant boost in liquidity is expected in fiscal 2022 due to the district's $3.69 million allocation of Elementary and Secondary School Emergency Relief (ESSER) III funds, two-thirds of which (approximately $2.5 million) is expected in September. The planned uses of the ESSER funds include summer school classes and HVAC improvements. ESG CONSIDERATIONS Yoakum ISD has an Environmental, Social, and Governance (ESG) Relevance Score of '5' for Rule of Law, Institutional & Regulatory Quality, Control of Corruption (GRL) due to poor financial operating and capital management, culminating in operational deficits and depletion of reserves resulting in negative balances and a 'going concern' audit opinion. This position has a negative impact on the credit profile and is highly relevant to the rating and the Negative Outlook. Yoakum ISD has an ESG Relevance Score of '5' for Government Effectiveness due to poor operating and capital management. This issue has a negative effect on the credit profile and is highly relevant to the rating and the Negative Outlook. 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. YPF ENERGIA: Moody's Alters Outlook on 'Caa3' CFR to Stable ----------------------------------------------------------- Moody's Investors Service has affirmed YPF Energia Electrica S.A.'s (YPFEE) Caa3 corporate family and senior unsecured ratings. The outlook for all ratings was changed to stable from negative. Approximately $400 million of debt instruments affected. RATINGS RATIONALE YPFEE ratings affirmation and outlook stabilization acknowledge the successful exchange of the company's Class 1 Notes ($100 million) that was completed by the issuance of Class VI Notes for an amount of $60 million, payable in full at maturity in April 2023, 2 years from the issuance date and in compliance with Argentina's Central Bank FX regulations. The un-exchanged amount under Class 1 notes was paid in full at original maturity on May 10. Following the transaction, which did not entail material losses to investors, YPFEE emerged with a more comfortable debt profile, with manageable debt maturities until 2026 when its $400 international bond comes due. The ratings also take into consideration YPFEE's asset base and strong positioning in the power market in Argentina, with a 5% share of the country's installed capacity, the successful development of new assets in the renewable space in Argentina, with a solid operating track record and production levels. The expected strong cash generation underpinned by its long-term contractual base (average remaining life of contracts of 14 years) also support the ratings. The ratings and stable outlook further factor in the strengthening of cash flows following the completion early this year of most of its investment plan, with projected CFO to debt well above 20% in coming years due to the combination of improved cash flows and debt reduction, coupled with a prudent dividend policy. The ratings continue to be constrained by the exposure of the company to Cammesa, the agency controlled by the Argentine government (Government of Argentina, Ca, Stable) that manages the wholesale electricity market and YPFEE's main off-taker. Given the recent history of government intervention in the electricity market and Cammesa's increased reliance on government transfers Moody's believe other downside risks persist, including the potential risk of unilateral change to the PPA contract's terms and conditions and delays in cash settlements. In addition, YPFEE's debt is mostly dollar denominated and while contractual revenues are also dollar-denominated providing a natural hedge, Cammesa payments are made in pesos at the official exchange rate, which exposes bondholders to convertibility risks. RATING OUTLOOK The stable outlook reflects Moody's expectation that YPFEE will continue producing stable cash flows from its PPAs while maintaining sound operations. The rating and outlook incorporate Moody's view of leverage declining to the range of 2-3 times after the company completes most of its expansion during the current year. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS Given the current constraining factors and the exposure to Cammesa, an upgrade of the ratings will require an upgrade of the sovereign. In light of the outlook stabilization and Moody's expectation of improved credit metrics, Moody's do not anticipate negative pressure on the ratings unless there is an unexpected change to the regulatory framework for the company's operations that results in lower than expected revenues and cash flows. Quantitatively, a ratio of cash from operations to debt (before working capital changes) to debt below 15% could prompt a negative rating action. PROFILE The company was formed in August 2013 as a result of a spin-off from YPF Sociedad Anonima (Caa3/sta), Argentina's fully integrated oil & gas and largest energy company, majority owned by the government. YPF decided to spin-off its generation assets with the goal of converting YPFE in one of the main participants in the power market. YPFEE is among the top 5 largest market players, with a 5% share of the country's total installed capacity. As part of the its growth strategy, in March 2018 YPFEE entered into an agreement with GE by which one of GE's affiliates subscribed a 24.9% of YPF E's stock, while the remaining 75.1% belongs to YPF S.A. The principal methodology used in these ratings was Unregulated Utilities and Unregulated Power Companies published in May 2017. ZEIGANGEL VENTURES: Voluntary Chapter 11 Case Summary ----------------------------------------------------- Debtor: Zeigangel Ventures LLC 7175 West Post Road Las Vegas, NV 89113 Chapter 11 Petition Date: May 17, 2021 Court: United States Bankruptcy Court District of Nevada Case No.: 21-12539 Debtor's Counsel: Samuel A. Schwartz, Esq. SCHWRATZ LAW, PLLC 601 East Bridger Avenue Las Vegas, NV 89101 Tel: 702-385-5544 Fax: 702-385-2741 E-mail: saschwartz@nvfirm.com Estimated Assets: $1 million to $10 million Estimated Liabilities: $1 million to $10 million The petition was signed by Woodrow Lin, the managing member. The Debtor stated it has no creditors holding unsecured claims. A full-text copy of the petition is available for free at PacerMonitor.com at: https://www.pacermonitor.com/view/BA5THFI/ZEIGANGEL_VENTURES_LLC__nvbke-21-12539__0001.0.pdf?mcid=tGE4TAMA [*] Hawaii Monthly Bankruptcies Increased for First Time in 2021 ---------------------------------------------------------------- Dave Segal of Star Advertiser reports that Hawaii bankruptcies rose for the first time this year as filings in April 2021 jumped 19.3% even as the state continued to show encouraging signs of an economic recovery. The 136 cases were the most for any month since there were 140 in July 2021, according to new data released by the U.S. Bankruptcy Court, District of Hawaii. There were only 114 cases in April 2020. Through the first four months of 2021, bankruptcies are down 11.3% to 454 from 512 in the year-ago period as they stay on pace to decline for the second year in a row. However, Honolulu bankruptcy attorney Greg Dunn expects cases to increase in 2021 as people return to work with debt still hanging over their heads. "The rise in bankruptcies does not surprise me," said Dunn, who said cases for his office alone are up 54% from a year ago. "The number of people hiring me are motivated to do bankruptcies because many of them are now being sued, and the creditors are more aggressive in collecting on their delinquent claims as people are beginning to go back to work. I don't foresee creditors slowing down from their collection activities. So this could be a sign that bankruptcies may be on the rise regardless of Hawaii's recovery." State economist Eugene Tian pointed out, though, that the 136 bankruptcy cases are still relatively low compared with the 156 filed in April 2019. Last April 2021’s cases are also below the more than 200 filings each April for the years 2009 to 2013 at the end of the last recession and its aftermath, Tian said. "With the COVID-19 pandemic lasting so long, it is expected that bankruptcy filings will increase slowly," said Tian, chief economist with the state Department of Business, Economic Development and Tourism. "Economic recovery is a slow process and may take a few years to recover to the pre-COVID level. We may see more bankruptcy filings in the near future, but it will be far below the level of the 2009 recession. This is because the economy is getting better and about $7 billion in federal funds has been allocated, or is in the process of being allocated, to Hawaii this 2021." Still, Tian said the damage from the pandemic may be too much to overcome for some people. "People have been waiting for too long, and some businesses and individuals have reached their limit and need to cease operation," he said. Tian said Hawaii's economy, especially tourism, is performing better than economists expected at the beginning of 2021. "Visitor arrivals in April reached 62% of the April 2019 level, and during the first 10 days of May, arrivals were at 66% of the May 2019 level," he said. “At the beginning of 2021, we expected that visitor arrivals would reach 50% of the 2019 level by the end of June 2021." Tian noted that the Hawaii Commercial Rent Survey conducted in March found that 92% of Hawaii businesses were open, with 6.3% temporarily closed and 1.8% permanently closed. "The 1.8% permanently closed businesses can be translated into about 600 businesses that might be filing for bankruptcy, still a low number compared with the last recession," he said. In April 2021, Chapter 7 liquidation filings -- the most common type of bankruptcy -- increased 22.1% to 94 from 77 in the year-earlier period. Chapter 13 filings, which allow individuals with regular sources of income to set up plans to make installment payments to creditors over three to five years, rose 13.5% to 42 from 37. There were no Chapter 11 filings last month or in the year-earlier period. Chapter 11 filings are primarily for business reorganization. Around the state, bankruptcies rose in the four major counties last month. Honolulu County filings ticked up to 100 from 98, Hawaii County filings more than doubled to 10 from four, Maui County filings doubled to 20 from 10 and Kauai County filings tripled to six from two. [*] Restaurants, Bars Face Possible Shutout From New Relief Fund ---------------------------------------------------------------- Daniel Gill of Bloomberg Law reports that restaurants and bars that filed bankruptcy in the wake of pandemic losses are facing a possible shutout from a new $28.6 billion federal fund meant as a lifeline for the industry. The Small Business Administration, which administers the Restaurant Revitalization Fund, says bankrupt companies can't apply unless they have a court-approved bankruptcy plan. That restriction is a major concern, as struggling restaurants may not be able to get their bankruptcy plans approved before the money runs out, insolvency professionals say. "All companies that file an application are saying that they're having financial difficulty; I don't see why it's different if you're in or out of Chapter 11," said attorney Andrew Helman of Dentons Bingham Greenebaum. Fast casual restaurants Cosi and Even Stevens Sandwiches already have tried to ditch their bankruptcy cases so they can apply quickly. "There are lots of restaurants of all shapes and sizes that will take advantage of the fund because they were able to hold off from filing bankruptcy," said Monique Almy, a partner at Crowell & Moring LLP. "The bulk of filed RRF applications so far are from companies that have been holding on" and not filing, she said. The fledgling program likely won't have enough funds to buoy the industry, said Jennifer Feldsher, a partner with Morgan, Lewis & Bockius LLP's restructuring division. As of May 12, 2021 the SBA received more than 266,000 applications seeking a total of $65 billion, well over the total amount available, the agency said in a statement. The SBA already has disbursed $2.7 billion to more than 21,000 restaurants, it said. Bankruptcy Exclusion The RRF, part of the $1.9 trillion Covid relief package passed by Congress in March 2021, focuses "first on those who were left behind by the other relief programs" like the Paycheck Protection Program, President Joe Biden said in a May 6. 2021 speech touting the program. Tailored to small, family-run businesses, the fund doesn't require them to "compete above their weight class" against larger companies in order to access grant money, he said. Unlike the PPP, restaurants can use the funds for non-payroll expenses. The first 21 days of the fund's availability also are reserved for "priority" companies owned by women, veterans, or "those who have been subjected to racial or ethnic prejudice or cultural bias" and whose capital and credit opportunities have consequently been impaired, according to the SBA. It's unclear whether the $28.6 billion fund will even cover these priority businesses, Feldsher said. Priority applicants alone have filed more than 147,000 applications seeking $29 billion in grants, according to the SBA. Attorneys question the policy behind denying access to bankrupt companies. "I don't see any reason why a company reorganizing in Chapter 11 shouldn't be authorized to get the funds," Helman said. "The SBA has a clear bias against bankrupt companies—who knows why?" Almy asked. The agency didn't respond to a request for comment. The SBA's similar stance toward PPP eligibility spurred several lawsuits to force the agency to accept bankrupt borrowers, with the courts split on the issue. About a month ago, April 2021, the agency quietly updated its guidance to indicate that companies with confirmed plans could apply, even if they hadn't yet emerged from bankruptcy. The SBA has adopted the same policy with respect to the RRF. In a 2020 court filing, the agency said bankrupt companies should be excluded from the PPP because they carry an "'unacceptably high risk' of both ‘unauthorized use of funds' and 'non-repayment of unforgiven loans.'" Changing Tactics Some restaurants already in bankruptcy are trying to dismiss their cases to qualify for the new funding source. It's an unusual move after the time and money investment, which "proves the benefit of the RRF program," Almy said. Fast casual restaurant chain Cosi Inc. originally asked a Delaware bankruptcy court to consider its reorganization plan on an expedited basis so that it could seek up to $10 million from the RRF. But after the SBA said Cosi’s proposed interim plan approval wouldn't cut it, Cosi changed course and asked the court to dismiss its case. The court granted the request, with the SBA taking no position on the move. Covid has led to debtors "doing backflips" and behaving in ways that otherwise wouldn't be considered rational or normal behavior, Judge Brendan L. Shannon said. "But these are not rational or normal times," he said. In a separate case, an Arizona bankruptcy judge wouldn't allow Even Stevens Sandwiches LLC to dismiss its Chapter 11 case so that it can apply for PPP or RRF funding. Instead, the judge converted the case to Chapter 7. Better Alternative Several features of the new fund make it an especially attractive option for survival, when compared with discharging debt in bankruptcy. The fund "is really good for restaurants, which are incredibly difficult to restructure, primarily because they lack hard assets—just leases and good will," Helman said. Concrete assets, like real estate, inventory, accounts receivable, and equipment, are much easier to value than something like good will. The program also has more far-reaching benefits, Helman said. For example, restaurants will be able to pay their landlords, which must make their own debt payments, he said. The RRF also is a better option for restaurants than the PPP, which has been difficult for them to access, Feldsher said. "A key tenet of the PPP is you only get loan forgiveness if you use the funds to pay employees, but most restaurants were forced to furlough or fire their employees," she said. So even if they received the money, they'd lose the opportunity to have the loans forgiven, she said. "The RRF addresses these problems because the funds can be used for mortgage payments, rent, debt service, utilities, supplies, and retooling for outdoor dining or other adjustments," Feldsher said. The SBA also directly handles the RRF distribution process, in contrast to the PPP, which relies on banking institutions to facilitate funding, Almy said. The agency is "making great progress on approving loans and getting money out the door quickly," she said. That efficiency is a double-edged sword, narrowing the window for bankrupt restaurants to confirm their plans and become eligible. ********* Monday's edition of the TCR delivers a list of indicative prices for bond issues that reportedly trade well below par. Prices are obtained by TCR editors from a variety of outside sources during the prior week we think are reliable. Those sources may not, however, be complete or accurate. The Monday Bond Pricing table is compiled on the Friday prior to publication. Prices reported are not intended to reflect actual trades. Prices for actual trades are probably different. Our objective is to share information, not make markets in publicly traded securities. Nothing in the TCR constitutes an offer or solicitation to buy or sell any security of any kind. It is likely that some entity affiliated with a TCR editor holds some position in the issuers public debt and equity securities about which we report. Each Tuesday edition of the TCR contains a list of companies with insolvent balance sheets whose shares trade higher than $3 per share in public markets. At first glance, this list may look like the definitive compilation of stocks that are ideal to sell short. Don't be fooled. Assets, for example, reported at historical cost net of depreciation may understate the true value of a firm's assets. A company may establish reserves on its balance sheet for liabilities that may never materialize. The prices at which equity securities trade in public market are determined by more than a balance sheet solvency test. On Thursdays, the TCR delivers a list of recently filed Chapter 11 cases involving less than $1,000,000 in assets and liabilities delivered to nation's bankruptcy courts. The list includes links to freely downloadable images of these small-dollar petitions in Acrobat PDF format. Each Friday's edition of the TCR includes a review about a book of interest to troubled company professionals. All titles are available at your local bookstore or through Amazon.com. Go to http://www.bankrupt.com/books/to order any title today. Monthly Operating Reports are summarized in every Saturday edition of the TCR. The Sunday TCR delivers securitization rating news from the week then-ending. TCR subscribers have free access to our on-line news archive. Point your Web browser to http://TCRresources.bankrupt.com/and use the e-mail address to which your TCR is delivered to login. ********* S U B S C R I P T I O N I N F O R M A T I O N Troubled Company Reporter is a daily newsletter co-published by Bankruptcy Creditors Service, Inc., Fairless Hills, Pennsylvania, USA, and Beard Group, Inc., Washington, D.C., USA. Jhonas Dampog, Marites Claro, Joy Agravante, Rousel Elaine Tumanda, Valerie Udtuhan, Howard C. Tolentino, Carmel Paderog, Meriam Fernandez, Joel Anthony G. Lopez, Cecil R. Villacampa, Sheryl Joy P. Olano, Psyche A. Castillon, Ivy B. Magdadaro, Carlo Fernandez, Christopher G. Patalinghug, and Peter A. Chapman, Editors. Copyright 2021. All rights reserved. ISSN: 1520-9474. This material is copyrighted and any commercial use, resale or publication in any form (including e-mail forwarding, electronic re-mailing and photocopying) is strictly prohibited without prior written permission of the publishers. Information contained herein is obtained from sources believed to be reliable, but is not guaranteed. The TCR subscription rate is $975 for 6 months delivered via e-mail. Additional e-mail subscriptions for members of the same firm for the term of the initial subscription or balance thereof are $25 each. For subscription information, contact Peter A. Chapman at 215-945-7000. *** End of Transmission ***