/raid1/www/Hosts/bankrupt/TCR

/raid1/www/Hosts/bankrupt/TCR_Public/210716.mbx T R O U B L E D C O M P A N Y R E P O R T E R Friday, July 16, 2021, Vol. 25, No. 196 Headlines 18 FREMONT ST ACQUISITION: Moody's Hikes CFR to B3, Outlook Stable 286 RIDER AVE: Voluntary Chapter 11 Case Summary 500 W 184: Taps Vision Realty Advisors as Real Estate Broker ACADEMY LTD: Moody's Hikes CFR to Ba3 & Alters Outlook to Stable AHERN ENERGY: Seeks to Hire Garman Turner Gordon as Legal Counsel AINSWORTH TRUCK: Seeks to Hire The Claro Group as Financial Advisor AJRANC INSURANCE: Obtains Interim Access to Cash Collateral ALAMO DRAFTHOUSE: Court Extends Plan Exclusivity Thru September 29 ALH PROPERTIES: Has Final OK on Cash Collateral Use ALLIANCE RESOURCE: S&P Alters Outlook to Stable, Affirms 'B+' ICR ALM LLC: Unsecured Creditors Will Get 2% Dividend in Plan AMWINS GROUP: Moody's Assigns B3 Rating to $890MM Unsecured Notes APEG MAXEY: $21.5M Postpetition Loan From Pender Wins Court OK APPLIED ENERGETICS: Raises $2.4M From Private Sale of Common Stock AUTOMOTIVE PARTS: July 23 Deadline Set for Panel Questionnaires AVID BIOSERVICES: Mark Bamforth Quits as Director BELDEN INC: S&P Rates New Senior Subordinated Notes Due 2031 'BB-' BGS WORKS: Aug. 26 Hearing on Disclosure Statement BGT INTERIOR: May Use Cash Collateral Thru August 3 BHATT CORP: Final Cash Collateral Hearing Moved to July 29 BIG ASS FANS: Madison Transaction No Impact on Moody's B2 Rating BOYCE HYDRO:Has $3 Mil. to $4 Mil. Bankruptcy Fund for 6,000 Claims BRICK HOUSE: Wins Cash Collateral Access Thru Aug. 31 C AND N TRANSPORT: Plan of Reorganization Confirmed by Judge CALLON PETROLEUM: S&P Ups ICR to 'B-' on Increased Liquidity CHICAGOAN LOGISTIC: Seeks Approval to Hire Bankruptcy Attorneys COBRA HOLDINGS: S&P Assigns 'B-' ICR on Acquisition by Clearlake COGECO COMMUNICATIONS: DBRS Confirms BB(high) Issuer Rating COHU INC: Moody's Upgrades CFR to B1 Following Debt Repayment COLLEGE PARENT: Fitch Assigns FirstTime 'BB-' LT IDR COLLEGE PARENT: Moody's Assigns First Time B2 Corp Family Rating CONNECTIONS COMMUNITY: PCO Taps Leech Tishman as Legal Counsel COSMOS HOLDINGS: To Swap $1 Million Debt for Equity CP HOLDINGS: U.S. Trustee Unable to Appoint Committee CREW ENERGY: DBRS Confirms B(low) Issuer Rating, Trend Positive CROSS COUNTRY HOLDINGS: Investor Lending Says Plan Not Feasible CRYPTO TRADERS: Owner Can't File for Chapter 11 Amid SEC Suit CURO GROUP: Moody's Affirms B3 CFR on Strong Profitability DIFFENDAL-WELLIVER: Case Summary & 5 Unsecured Creditors DIOCESE OF ROCHESTER: Parties Warned of Outcome Absent Consensus DIOCESE OF ROCKVILLE: Abuse Victims Can Access Parishes' Data ENOVA INT'L: Moody's Affirms B2 CFR & Alters Outlook to Stable EVOKE PHARMA: Launches Gimoti Patient-Physician Experience Program FIFTEEN TWENTY: Taps Rosewood Realty as Real Estate Consultant FILOS CATERING: Seeks to Hire Leonard K. Welsh as Legal Counsel FLORIDA TILT: Asks Court to Extend Plan Exclusivity Thru Oct. 26 FORD CITY CONDOMINIUM: Taps Mitchell Abrons Jr. as Accountant FOREVER 21: United States Trustee Says Disclosures Inaccurate FOREVER 21: Watchdog Says Liquidation Plan Unfair to Creditors FRESH ACQUISITIONS: Gets OK to Hire GlassRatner, Appoint CRO FRESH ACQUISITIONS: Gets OK to Hire Gray Reed as Legal Counsel GAINCO INC: Aug. 2 Hearing on Continued Cash Collateral Access GATEWAY FOUR: Gets Additional $11MM in Loans from Romspen GATEWAY FOUR: Has Final OK on Access to Romspen's Cash GAUCHO GROUP: Extends CEO's Employment Until October 2021 GEMINI HDPE: Moody's Affirms 'Ba3' Rating on Term Loan B Due 2027 GIRARDI & KEESE: Trustee Uncovers Fee Payments to Ex-Wife Erika GLOBAL DISCOVERY: Taps Grobstein Teeple as Financial Advisor GPSPRO LLC: Seeks to Hire Garman Turner Gordon as Legal Counsel HANDL NEW YORK: May Use Cash Collateral Thru Aug. 3 Final Hearing HARI 108: Seeks Cash Collateral Access HASTINGS ESTATE: Gets OK to Hire Candace Monroe as Accountant HASTINGS ESTATE: Taps Harris & Wakayama as Special Counsel HCRX INVESTMENTS: Moody's Assigns B2 Rating to Sr. Unsecured Notes IMPERIAL DADE: Moody's Rates New $280MM First Lien Term Loan 'B2' JACOBS TOWING: Seeks to Employ Misty Tindol as Accountant JANE STREET: S&P Assigns 'BB-' Rating on Sr. Sec. Term Loan Add-On KNOW LABS: Granted Patent for Bio-RFIDTM Technology LAKE CECILE: Court Conditionally Approves Disclosure Statement LAREDO PETROLEUM: Moody's Hikes CFR to B2 & Rates $400MM Notes B3 LIMETREE BAY: Akin Gump Represents Term Lender Group LIMETREE BAY: Retains B. Riley Advisory as Restructuring Advisor LOVES FURNITURE: To Postpone Ch. 11 Plan Confirmation to Aug. 31 LRGHEALTHCARE: Taps Verdolino & Lowey as Wind-down Consultant MADISON IAQ: Moody's Affirms B2 CFR on Big Ass Fans Acquisition MCGRAW-HILL EDUCATION: Moody's Assigns B3 CFR, Outlook Stable MOBBBT LLC: Seeks to Hire James L. Drake as Legal Counsel MOBITV INC: Plan Exclusivity Period Extended Until August 30 MONEYGRAM INT'L: Moody's Rates New First Lien Secured Notes 'B2' NAB HOLDINGS: Moody's Hikes CFR to B1 on Preferred Stock Redemption NAHAUL INC: Seeks Court Approval to Hire Bankruptcy Attorneys NEOVASC INC: Announces New Leadership Appointments NEW YORK CLASSIC: May Use Cash Thru July 20 Final Hearing NEX LEVEL TRANSPORT: Taps Hamilton Stephens as Legal Counsel OCTAVE MUSIC: S&P Alters Outlook to Stable, Affirms 'B-' ICR OMEGA SPORTS: Gets Cash Collateral Access Thru Aug 29 OWENS & MINOR: S&P Ups ICR to 'BB-' on Lower Leverage Target P8H INC: Court OKs Interim Use of $21,759 Cash Collateral PARALLAX HEALTH: CEO Paul Arena Resigns PARK RIVER: Moody's Confirms B2 CFR Amid Wolf Home Acquisition PERFORMANCE FOOD: Moody's Rates New $780MM Unsecured Notes 'B2' PIERCE CONTRACTORS: Seeks to Hire Fuller Law Firm as Counsel PIPELINE FOODS: In Dire Need of Buyer in Bankruptcy PLATINUM GROUP: Unit Granted Patent for PGMs on Li–S Batteries PROSPECT CAPITAL: Moody's Gives Ba2(hyb) Rating on New Pref. Stock PUBLIUS VALERIUS: Taps Coldwell Banker as Real Estate Broker PURDUE PHARMA: Madison Township Trustees Approve Bankruptcy Plan REGALIA BEACH: Wins Approval of Plan and Disclosure Statement REGIONAL AMBULANCE: Decreased IRS Adequate Protection Payment OK'd RESOLUTE INVESTMENT: Moody's Affirms B1 CFR on Dividend Recap RIDER UNIVERSITY: Moody's Downgrades Education Bonds to Ba2 ROCHELLE HOLDINGS: Voluntary Chapter 11 Case Summary SAMURAI MARTIAL: Wins Cash Collateral Access Thru Aug 3 SANTA MARIA: Unsecured Creditors to Recover 9.05% to 13.21% in Plan SC SJ : Says Fairmont San Jose Ex-Manager Acted in Bad Faith SNL BALDWIN: Primavera Enters Refinancing Agreement with Rizzo SPURLOWS ARCHERY: Wins Access to Cash Collateral STRATHCONA RESOURCES: Moody's Assigns First Time 'B2' CFR SUPERCONDUCTOR TECHNOLOGIES: New Voting Date for Clearday Merger TEEFOR2 INC: Seeks to Hire Stephen R. Wade as Bankruptcy Counsel TEX-GAS HOLDINGS: U.S. Trustee Unable to Appoint Committee THUNDER RAIN: Court Conditionally Approves Disclosure Statement TIANJIN JAHO: Seeks Approval to Hire Paul Taggart as Accountant TUG INC: Case Summary & 11 Unsecured Creditors TYNDALL PARKWAY: U.S. Trustee Unable to Appoint Committee UPSTREAM NEWCO: S&P Affirms 'B' Rating on First Lien Debt URS HOLDCO: Moody's Lowers CFR to Caa1, Outlook Negative VIAD CORP: Moody's Gives 'B3' CFR & Rates New $400MM Term Loan 'B3' VPR BRANDS: Issues $100K Promissory Note to CEO WHATABRANDS LLC: Moody's Cuts CFR to B2 & Rates New Term Loan B2 WIRTA HOTELS: Seeks Transfer of Funds from Affiliate's Account WITCHEY ENTERPRISES: TUS rustee Says Disclosure Inadequate YS HOMES: Taps Sotheby's International as Real Estate Broker ZAYAT STABLES: Bankruptcy Trustee Cites Possible Assets in Egypt ZOOMINFO LLC: Moody's Affirms B1 CFR Following Chorus Acquisition [*] Effects of Bankruptcy Code Amendments on Lessors Post COVID-19 [^] BOOK REVIEW: Macy's for Sale ********* 18 FREMONT ST ACQUISITION: Moody's Hikes CFR to B3, Outlook Stable ------------------------------------------------------------------ Moody's Investors Service upgraded 18 Fremont Street Acquisition, LLC's Corporate Family Rating to B3 from Caa1 and its Probability of Default Rating to B3-PD from Caa1-PD. The rating on the company $450 million original senior secured term loan due 2025 was also upgraded, to B3 from Caa1. The rating outlook is stable. Fremont developed and operates Circa Casino Resort, an $860 million resort casino development in downtown Las Vegas whose casino opened in October 2020 and the rest of the facility opened in December 2020. Fremont also owns two existing and operating casinos in downtown Las Vegas -- the D and Golden Gate Casino. The upgrade considers Moody's expectation that debt-to-EBITDA at the end of the first full year of operations will be in the 5x to 6x range. This is based on Moody's current estimate of Fremont's pro forma revenue and EBITDA based on a full year of Circa Casino Resorts' operations, with revenue to range between $280 million and $300 million and reported EBITDA between $80 million and $90 million. Fremont's debt/EBITDA for the 12-month period ended March 31, 2021, which was mostly a period of construction related to Circa Casino Resorts and included a period of temporary closure related to coronavirus for the company's two smaller casinos, was extremely high at about 16.2x. The stable outlook reflects Moody's expectation that there will continue to be a gradual easing of social distancing requirements that will result in increased visitation, and that company has good liquidity to manage in the uncertain operating environment that is likely to persist over the next year. The company's good liquidity is characterized by about $59 million of unrestricted cash as of March 31, 2021. Fremont does not have a revolver in place, although the term loan agreement allows for a $10 million revolver. The following ratings/assessments are affected by the action: Ratings Upgraded: Issuer: 18 Fremont Street Acquisition, LLC Corporate Family Rating, Upgraded to B3 from Caa1 Probability of Default Rating, Upgraded to B3-PD from Caa1-PD GTD Senior Secured 1st Lien Term Loan, Upgraded to B3 (LGD3) from Caa1 (LGD4) Outlook Actions: Issuer: 18 Fremont Street Acquisition, LLC Outlook, Changed To Stable From Negative RATINGS RATIONALE Fremont's B3 CFR reflects the positive credit consideration given to the company's good performance during the initial ramp-up period despite the ongoing, albeit lessening challenges, related to the coronavirus. Also considered favorable are the company's heavily populated and popular primary market, the downtown Las Vegas market, along with the competitive advantages the facility has given that it is the newest casino in that market. The facility includes innovative new attractions such as the sports-themed Stadium Swim deck with a large video board. Credit concerns consider Fremont's relatively small size in terms of expected revenue and EBITDA and lack of geographic diversification. Net revenue in the first full year Circa is open is expected to be less than $300 million and EBITDA less than $100 million. Additionally, all of Fremont's revenues and EBITDA will be derived from one gaming market. This relatively small size and limited geographic diversification exposes Fremont to local, regional, and nationwide economic swings. Credit concerns also consider that the coronavirus pandemic remains a credit concern for the company. Fremont's casinos, like other casinos across the U.S., are still vulnerable to future closings and capacity restrictions that create earnings uncertainty. In addition, competition for consumer discretionary spending from these alternate and popular entertainment choices, including movie theaters and restaurants, will eventually return once they increase volume and open. Now that Circa Casino Resort is open, Fremont is subject to several financial covenants that went into effect. These include a minimum run-rate based EBITDA covenant that increases from $15 million in the first full quarter the facility is open, $32 million in the second full quarter that facility is open, and finally, to $50 million in the third full quarter that the facility is open. There is also a total net debt-to-EBITDA leverage covenant that starts out at 5.75x the first full quarter that the facility is open and drops steadily over a period of four years to 4.5x. The coronavirus outbreak and the government measures put in place to contain it continue to disrupt economies and credit markets across sectors and regions. Although an economic recovery is underway, the recovery is tenuous, and continuation will be closely tied to containment of the virus. As a result, a degree of uncertainty around Moody's forecasts remains. Moody's regards the coronavirus outbreak as a social risk under Moody's ESG framework, given the substantial implications for public health and safety. The gaming sector has been one of the sectors most significantly affected by the shock given its sensitivity to consumer demand and sentiment. More specifically, Fremont remains vulnerable to a renewed spread of the outbreak. Fremont also remains exposed to discretionary consumer spending that leave it vulnerable to shifts in market sentiment in these unprecedented operating conditions. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS A higher rating can be achieved once Moody's has a higher degree of confidence that the risks related to the coronavirus have lessened further and the operating environment improves along with revenue and earnings visibility. A higher rating also requires that Fremont continues to generate comfortably positive free cash flow, sustain debt-to-EBITDA below 4.0x, and maintain good liquidity. Ratings could be downgraded if liquidity weakens including if it appears that Fremont will not be able to meet its financial covenant requirements or cover its fixed charges. While Moody's expects these financial covenants will be met, the continuing uncertainty related to the coronavirus could make it more difficult for Fremont to meet these covenants if the environment worsens and there are additional opening limitations and/or more stringent social distancing restrictions are put in place. The ratings could also be downgraded if Fremont's operating performance weakens or the company is unable to generate positive free cash flow. The principal methodology used in these ratings was Gaming published in June 2021. 18 Fremont Street Acquisition, LLC is a privately held company owned by Derek and Gregory Stevens that developed Circa Casino Resort, an $860 million resort casino development in downtown Las Vegas that opened in December 2020. Circa Casino Resorts operates a hotel and casino including a 60-story, 512-room hotel casino with 55 table games, 1,352 slots, multiple bars, and a sportsbook. Fremont also owns 2 existing and operating casinos in downtown Las Vegas -- the D and Golden Gate Casino. Consolidated revenue and EBITDA for the latest 12-month period ended March 31, 2021 was $150 million and $29 million, respectively. 286 RIDER AVE: Voluntary Chapter 11 Case Summary ------------------------------------------------ Debtor: 286 Rider Ave Acquisition LLC 123 5th Avenue 4th Floor Attn: 286 Rider Ave Lender LLC New York, NY 10003 Business Description: 286 Rider Ave Acquisition is part of the residential building construction industry. The Debtor is the owner of the real property located at 286 Rider Avenue, Bronx, New York. Chapter 11 Petition Date: July 15, 2021 Court: United States Bankruptcy Court Southern District of New York Case No.: 21-11298 Judge: Hon. Lisa G. Beckerman Debtor's Counsel: Fred B. Ringel, Esq. ROBINSON BROG LEINWAND GREENE GENOVESE & GLUCK P.C. 875 Third Avenue New York, NY 10022 Tel: (212) 603-6300 Email: fbr@robinsonbrog.com Estimated Assets: $1 million to $10 million Estimated Liabilities: $1 million to $10 million The petition was signed by Lee E. Buchwald, manager. The Debtor failed to include in the petition 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/YNJAYNI/286_Rider_Ave_Acquisition_LLC__nysbke-21-11298__0001.0.pdf?mcid=tGE4TAMA 500 W 184: Taps Vision Realty Advisors as Real Estate Broker ------------------------------------------------------------ 500 W 184, LLC seeks approval from the U.S. Bankruptcy Court for the Southern District of New York to hire New York-based real estate broker, Vision Realty Advisors. The Debtor needs a real estate broker to sell its real estate at 500 West 184th St., New York. The firm will be paid a 6 percent commission on the sale price. If the property is represented by a different broker, the 6 commission will be shared and the commission to Vision Realty Advisors will be reduced to 3 percent. David Warren, the firm's real estate agent, disclosed in a court filing that he is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. The firm can be reached at: David Warren Vision Realty Advisors 1385 Broadway, 16th Floor New York, NY 10018 Phone: 212-417-9234 Email: info@visionra.com About 500 W 184 LLC Bronx, N.Y.-based 500 W 184, LLC sought protection under Chapter 11 of the Bankruptcy Code (Bankr. S.D.N.Y. Case No. 21-10392) on March 2, 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 Michael E. Wiles oversees the case. The Law Office of Warren R. Graham serves as the Debtor's legal counsel. ACADEMY LTD: Moody's Hikes CFR to Ba3 & Alters Outlook to Stable ---------------------------------------------------------------- Moody's Investors Service upgraded Academy, Ltd.'s (Academy, a subsidiary of Academy Sports and Outdoors, Inc.) ratings, including the corporate family rating to Ba3 from B1, probability of default rating to Ba3-PD from B1-PD and the ratings on the senior secured term loan and notes to Ba3 from B2. The speculative-grade liquidity rating remains SGL-1. The outlook was changed to stable from positive. The CFR and PDR upgrades reflect Academy's continued outperformance in Q1 2021 relative to expectations and Moody's projections for solid credit metrics even in a scenario of normalized demand in the sporting goods category. The upgrades also reflects governance considerations, including the reduction in ownership by Academy's former private equity sponsor KKR to 31.7% of outstanding stock and Moody's expectation for balanced financial strategies. The two notch upgrade of the secured notes and term loan ratings to Ba3 from B2 reflects expectations for lower baseline revolver borrowings in Moody's loss given default model as a result of the CFR upgrade. Moody's expects operating performance to remain strong in 2021, reflecting the ongoing pandemic-driven pivot in consumer spending towards the sports and outdoors categories and economic recovery. However, demand in the sporting goods sector is likely to moderate from the spike in 2020-2021, as consumers resume spending on leisure and entertainment. Moody's expects a material decline in earnings in that scenario, however operating results should remain above 2019 levels as Academy's operational improvements mitigate demand weakness. The company has executed well on its omni-channel and digital initiatives, inventory management, private label credit card penetration, and new customer acquisition during the pandemic. Moody's took the following rating actions for Academy, Ltd.: Corporate family rating, upgraded to Ba3 from B1 Probability of default rating, upgraded to Ba3-PD from B1-PD Senior secured term loan, upgraded to Ba3 (LGD4) from B2 (LGD4) Senior secured regular bond/debenture, upgraded to Ba3 (LGD4) from B2 (LGD4) Outlook, changed to stable from positive RATINGS RATIONALE Academy's Ba3 CFR reflects the company's scale and solid market position in its regions. In addition, the company's value price points and diversified product assortment tend to result in resilient performance during economic downturns. The turnaround strategy put in place by the current management team in 2018, including initiatives in merchandising, private label credit card and omnichannel investment, has contributed to earnings growth since the second half of 2019. The company's operational turnaround and strong consumer demand for sporting goods beginning in early 2020 drove a 27% increase in revenue and a 143% increase in adjusted EBITDA for the LTM period ended Q1 2021 compared to 2019. This earnings improvement, together with Q2 debt reduction, resulted in Moody's adjusted pro forma debt/EBITDA falling to 2.1x for the LTM period ending May 1, 2021 and EBIT/interest expense increasing to 4.8x. The rating also considers governance factors, including the expectation for balanced financial strategies. Specifically, Moody's does not expect re-leveraging transactions, as the company has reduced debt levels at the time of the IPO and with the $99 million term loan paydown in May 2021, and KKR's ownership stake had declined to a minority position after the follow-on equity offerings. The rating also benefits from Academy's very good liquidity profile. At the same time, the rating is constrained by the competitive nature of sporting goods retail, including the increased focus of major apparel and footwear brands on direct-to-consumer distribution and the consumer shift to online shopping. In addition, sporting goods demand can fluctuate, in part driven by demand cycles in the firearms and ammunition category. As consumers return to more normalized spending habits and the very high demand for firearms and ammunition moderates, Moody's expects revenue and earnings to weaken from 2020-2021 levels. This could drive an increase in Moody's-adjusted debt/EBITDA to 3.3x from 2.1x and a decline in EBIT/interest expense to 2.5x from 4.8x (both pro-forma for the May 2021 term loan refinancing and assuming no other changes in debt). In addition, as a retailer, Academy needs to make ongoing investments in social and environmental factors, including responsible sourcing, product and supply sustainability, privacy and data protection, as well as compliance with regulations on the sales of firearms and ammunition. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS The ratings could be upgraded if the company demonstrates continued growth in revenue and operating profit beyond the current strong demand cycle, while maintaining very good liquidity and balanced financial policies. Quantitatively, the ratings could be upgraded with expectations for Moody's-adjusted debt/EBITDA to be maintained below 3.25x and EBIT/interest expense above 3.5x in a period of normalized demand. The ratings could be downgraded if earnings or liquidity significantly deteriorate or the company experiences material execution missteps. Aggressive financial strategy actions could also result in a downgrade. Quantitatively, the ratings could be downgraded if Moody's-adjusted debt/EBITDA is maintained above 4.0x or EBIT/interest expense declines below 2.5x. Headquartered in Katy, Texas, Academy, Ltd. is a US sports, outdoor and lifestyle retailer with a broad assortment of hunting, fishing and camping equipment, along with footwear, apparel, and sports and leisure products. The company operates 259 stores under the Academy Sports + Outdoors banner, which are primarily located in Texas and the southeastern United States, and its website. Academy generated approximately $6.1 billion of revenue for the twelve months ended May 1, 2021. The company is publicly traded following the October 2020 IPO. The principal methodology used in these ratings was Retail Industry published in May 2018. AHERN ENERGY: Seeks to Hire Garman Turner Gordon as Legal Counsel ----------------------------------------------------------------- Ahern Energy, LLC seeks approval from the U.S. Bankruptcy Court for the District of Nevada to employ Garman Turner Gordon, LLP to serve as legal counsel in its Chapter 11 case. The firm will provide these services: a. prepare all necessary or appropriate motions, applications, answers, orders, reports, and other papers in connection with the administration of the Debtor's estate; b. to take all necessary or appropriate actions in connection with a plan of reorganization and related disclosure statement) and all related documents, and such further actions as may be required in connection with the administration of the Debtor's estate; and c. perform all other necessary legal services in connection with the prosecution of the Debtor's Chapter 11 case. The firm's hourly rates are as follows: Shareholders $425 to $825 per hour Associates $200 to $400 per hour Paraprofessionals $55 to $215 per hour The Debtor paid Garman Turner Gordon a retainer of $46,000 and will reimburse the firm for out-of-pocket expenses incurred. Mark Weisenmiller, Esq., a partner at Garman Turner Gordon, disclosed in a court filing that his firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. The firm can be reached at: Mark M. Weisenmiller, Esq. William M. Noall, Esq. Garman Turner Gordon LLP 7251 Amigo Street, Suite 210 Las Vegas, NV 89119 Telephone: (725) 777-3000 Facsimile: (725) 777-3112 Email: mweisenmiller@gtg.legal wnoall@gtg.legal About Ahern Energy Ahern Energy LLC owns 201.5 membership interests of Wyo Tech Investment Group, LLC (valued at $2.15 million), 814,400 corporate shares of Inductance Energy Corporation (valued at $2.03 million), and interest in Quantum Energy Inc. (valued at $2.08 million). Ahern Energy sought protection under Chapter 11 of the Bankruptcy Code (Bankr. D. Nev. Case No. 21-13053) on June 16, 2021. Evan Ahern, manager and member, signed the petition. At the time of the filing, the Debtor disclosed total assets of $6,270,396 and total liabilities of $2,439,206. Garman Turner Gordon, LLP is the Debtor's legal counsel. AINSWORTH TRUCK: Seeks to Hire The Claro Group as Financial Advisor ------------------------------------------------------------------- Ainsworth Truck Leasing, LLC seeks approval from the U.S. Bankruptcy Court for the Southern District of Texas to hire The Claro Group, LLC as its financial advisor. The Debtor requires a financial advisor to: (a) provide business and debt restructuring advice, including business strategy and other key elements of the business; (b) review inventory to determine its salability and to provide monetization alternatives; (c) assist in cost containment procedures; (d) assist in the review of reports or filings as required by the court or the Office of the United States Trustee; (e) review the Debtor's financial information, including, but not limited to, analyses of cash receipts and disbursements, financial statement items, and proposed transactions for which court approval is sought; (f) review and analyze the Debtor's proposed business plans and the business and financial condition of the Debtor generally; (g) assist in evaluating reorganization strategy and alternatives available, including any asset sale transactions; (h) review and analyze the Debtor's financial projections and assumptions; (i) review and analyze the enterprise, asset, and liquidation valuations; (j) assist in preparing documents necessary for confirmation of any Chapter 11 plan, proposed asset sales, proposed use of cash and financing; (k) assist the Debtor in negotiations and meetings with creditors and other parties in interest; (l) assist with the claims resolution procedures including, but not limited to, analyses of creditors' claims by type and entity; (m) evaluate and make recommendations in connection with strategic alternatives to maximize the value of the Debtor; and (n) provide other such functions as requested by the Debtor to assist in its Chapter 11 case. The firm's hourly rates are as follows: Managing Directors $495 - $650 per hour Directors/Senior Advisors $450 - $495 per hour Managers/Sr. Managers $350 - $445 per hour Analysts/Senior Consultants $265 - $305 per hour Administrative Personnel $125 - $175 per hour The Debtor paid $10,000 to the firm as a retainer fee. Douglas Brickley, managing director at The Claro Group, disclosed in a court filing that his firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. The firm can be reached at: Douglas J. Brickley The Claro Group, LLC 711 Louisiana Street, Suite 2100 Houston, TX 77002 Tel.: (713) 454-7730/(713) 955-8406 Mobile: (713) 398-5088 Email: dbrickley@theclarogroup.com About Ainsworth Truck Leasing Robstown, Texas-based Ainsworth Truck Leasing, LLC sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. S.D. Texas Case No. 21-21142) on May 19, 2021. In the petition signed by David Ainsworth, Sr., sole member, the Debtor disclosed up to $10 million in both assets and liabilities. Judge David R. Jones oversees the case. Okin Adams, LLP and The Claro Group, LLC serve as the Debtor's bankruptcy counsel and financial advisor, respectively. Kleberg Bank, as lender, is represented by: Lisa C. Fancher, Esq. Fritz, Byrne, Head & Gilstrap, PLLC 221 West Sixth Street, Suite 960 Austin, TX 78701 Tel: 512-322-4708 Tax: 512-477-5267 E-mail: lfancher@fbhg.law AJRANC INSURANCE: Obtains Interim Access to Cash Collateral ----------------------------------------------------------- Judge Caryl E. Delano authorized AJRANC Insurance Agency, Inc. to use cash collateral, on an interim basis, pursuant to the budget, pending a further hearing on the motion. The Debtor, however, is not authorized to pay a car allowance to Anthony Borruso, the Debtor's president. As adequate protection for the interest of the Debtor's lenders, Judge Delano authorized the Debtor to provide the lenders a replacement lien on all types of collateral in which they held a security interest and lien as of the Petition Date to the same extent, validity and priority that they held as of the Petition Date, as adequate protection. The Debtor shall also make monthly interest only payment to Iberia, calculated at a per diem rate of $91.07, as further adequate protection. The payment shall be due on the tenth day of each month. A copy of the order is available for free at https://bit.ly/3k1Ph8Z from PacerMonitor.com. The further hearing will be held on July 19, 2021 at 2 p.m. About AJRANC Insurance Agency AJRANC Insurance Agency, Inc., based in Lutz, Fla., filed a Chapter 11 petition (Bankr. M.D. Fla. Case No. 20-06493) on August 27, 2020. In the petition signed by Anthony L. Borruso, president, the Debtor disclosed $1,869,283 in assets and $1,920,494 in liabilities. Stichter Riedel Blain & Postler, P.A., serves as bankruptcy counsel to the Debtor. Nine Family Circle Holdings, Inc. (Case No. 20-6494) and R.A. Borruso, Inc. (Case No. 20-6495) also sought Chapter 11 protection. The cases are jointly administered under AJRANC Insurance's case. ALAMO DRAFTHOUSE: Court Extends Plan Exclusivity Thru September 29 ------------------------------------------------------------------ At the behest of Alamo Drafthouse Cinemas Holdings, LLC and its affiliates, Judge Mary F. Walrath of the U.S. Bankruptcy Court for the District of Delaware extended the periods in which the Debtors may file a chapter 11 plan through and including September 29, 2021, and to solicit acceptances through and including November 29, 2021. The Debtors now have the additional time to negotiate, prepare and pursue confirmation of a chapter 11 plan. Given the complexity associated with simultaneously administering the Chapter 11 Cases, marketing their assets, and continuing to operate their business in the ordinary course, the extensions are helpful to analyze and negotiate a potential plan. A copy of the Court's Extension Order is available at https://bit.ly/2TbJR02 from Epiq11.com. About Alamo Drafthouse The Alamo Drafthouse Cinema -- https://drafthouse.com/ -- is an American cinema chain founded in 1997 in Austin, Texas, that is famous for its strict policy of requiring its audiences to maintain proper cinema-going etiquette. Known for offering full meal and alcohol service at its theaters, the company also operates a movie merchandise store and an annual genre film festival, Fantastic Fest. Alamo Drafthouse had 41 locations as of March 31, 2021, with 23 of those locations ran by franchisees. Alamo Drafthouse Cinemas Holdings, LLC and 33 affiliated companies filed Chapter 11 petitions (Bankr. D. Del. Lead Case No. 21-10474) on March 3, 2021. Alamo Drafthouse was estimated to have $100 million to $500 million in assets and liabilities as of the bankruptcy filing. The Honorable Mary F. Walrath is the case judge. The Company tapped Young Conaway Stargatt & Taylor LLP as bankruptcy counsel, Portage Point Partners as its financial adviser, and Houlihan Lokey Capital as its investment banker. Epiq Corporate Restructuring, LLC, is the claims agent. ALH PROPERTIES: Has Final OK on Cash Collateral Use --------------------------------------------------- Judge David R. Jones authorized ALH Properties No. Fourteen, LP to use the cash collateral in the operating account, on a final basis, pursuant to the budget, through the earlier of: (a) the date upon which a Chapter 11 or Chapter 7 trustee is appointed in any of the bankruptcy cases; or (b) the occurrence of an uncured Event of Default by the Debtor under the final order. The budget provided for $1,697,034 in total cash disbursements for the 13-week period, distributed on a weekly basis, as follows: $33,408 for the week ending June 5, 2021; $144,339 for the week ending June 12, 2021; $14,623 for the week ending June 19, 2021; $195,180 for the week ending June 26, 2021; $50,484 for the week ending July 3, 2021; $206,519 for the week ending July 10, 2021; $41,573 for the week ending July 17, 2021; $324,008 for the week ending July 24, 2021; $55,837 for the week ending July 31, 2021; $194,267 for the week ending August 7, 2021; $44,106 for the week ending August 14, 2021; $339,977 for the week ending August 21, 2021; and $52,712 for the week ending August 28, 2021. The Court ruled that any proceeds, distribution, or otherwise from any insurance claim made by or on behalf of the Debtor shall be deposited into a segregated account that shall not be used by the Debtor except in accordance with the budget or with written consent from the Lender, Massachusetts Mutual Life Insurance Company. The Debtor owed the Lender $44,750,000 in stated principal amount, under certain prepetition loan documents. The Lender asserts a valid security interest and perfected lien in all property designated as collateral under the pertinent loan documents. * Lender's Stipulation Effective for the duration of the consensual use of Cash Collateral through the Termination Date, according to the final order, the Lender stipulates that: a. The Lender does not have a security interest in or lien on any equity contributions in the Operating Account. The Lender, however, reserves all rights to verify and challenge the Debtor's assertion that certain funds are equity contributions that do not constitute proceeds of the Collateral; b. The Lender will defer any request for a determination that the Debtor's Chapter 11 case is subject to the single asset real estate provisions of the Bankruptcy Code; c. The Lender agrees to attend mediation on issues related to the Debtor's formulation of a plan of reorganization if reasonably requested by the Debtor subject to reasonable scheduling accommodations; and d. The Lender will defer pursuing its rights and remedies: -- under the Recourse Guaranty Agreement by Nicholas J. Massad, Jr. as personal guarantor of the Debtor's obligations under the Loan Documents dated as of March 7, 2013; and -- against the Debtor's general partner, CBD Hospitality, Inc. The Lender's deferral in exercising its rights under the Guaranty and against CBD Hospitality, Inc. shall not be a waiver of any of its rights with respect thereto. The Lender said it will defer pursuing its rights provided that Nicholas J. Massad, Jr. and CBD Hospitality, Inc. shall not make any transfers out of the ordinary course during the term of the deferral. * Adequate Protection The Court ruled that the Lender shall receive from the Debtor the following as adequate protection for the Debtor's use of the Cash Collateral: a. monthly payments of $170,000 from the Petition Date until the Termination Date, with the first Adequate Protection Payment to be paid on or before the later of (i) July 1, 2021 or (ii) two business days after the entry of the final order, and each subsequent Adequate Protection Payment shall be paid on the first business day of each month thereafter during the term of the final order; and b. until the Termination Date, the Debtor shall make cash payments to the Lender for all reasonable and documented out-of-pocket postpetition fees and expenses of legal counsel, financial advisors, appraisers, and other consultants. Payment of the Lender Fees and Expenses shall not be subject to allowance by the Court but shall be subject to the following process: -- The Lender shall provide copies of invoices for such fees and expenses to counsel for the Debtor, any Committee, and the U.S. Trustee. -- The invoices for such fees and expenses shall not be required to comply with any U.S. Trustee guidelines related to the payment of fees and expenses of retained estate professionals, may be in summary form only, and shall not be subject to application or allowance by the Court. -- Any objections raised by the Debtor, the U.S. Trustee, or any Committee with respect to such invoices within 10 days of receipt thereof will be resolved by the Court. -- Pending such resolution, the undisputed portion of any such invoice shall be paid by the Debtor within three days of the expiration of the Invoice Review Period. Except as otherwise ordered by the Court in the event an objection is timely filed, such fees and expenses shall not be subject to any setoff, defense, claim, counterclaim, or diminution of any type, kind, or nature whatsoever. c. the Lender is granted, to the extent of any diminution in value of the Lender's interest in the Cash Collateral, subject to the Carve Out: -- valid, binding, senior, enforceable and automatically perfected liens on (i) all property that is currently subject to any prepetition liens in favor of the Lender, to the same extent, priority and validity of such prepetition liens and (ii) all property that was unencumbered as of the Petition Date; and -- valid, binding, junior, enforceable and automatically perfected liens on all property of the Debtor's estate, subject to prepetition valid, binding, senior, enforceable and perfected lien provided, however, any claims and causes of action of the Debtor shall not be subject to the Replacement Liens. * Milestones The Debtor shall complete the following milestones: 1. On or before September 30, 2021, the Debtor shall file either (i) a disclosure statement which must be reasonably acceptable to the Lender, and a plan of reorganization which must be reasonably acceptable to the Lender, or (ii) a motion seeking approval of bidding procedures and a sale of substantially all assets pursuant to Section 363 of the Bankruptcy Code; 2. On or before October 22, 2021, the Debtor shall obtain an order approving (i) the Disclosure Statement for solicitation of the Plan, if proceeding under paragraph 14.a.(i), or (ii) the Sale, if proceeding under paragraph 14.a.(ii); 3. If proceeding under paragraph 14.a.(i) and 14.b(i), (i) the Debtor shall commence solicitation of the Plan on or before October 27, 2021; and (ii) obtain an order confirming the Plan by December 3, 2021; 4. On or before December 17, 2021 (i) if proceeding with the Disclosure Statement and the Plan under paragraph 14.a(i), 14.b(i), and 14.c, the Debtor shall substantially consummate the Plan through, among other things, the occurrence of the effective date of the Plan; or (ii) close the Sale, if proceeding with the Sale under paragraph 14.a.(ii) and 12.b (ii). A copy of the final order is available for free at https://bit.ly/36qmOl0 from PacerMonitor.com. About ALH Properties No. Fourteen ALH Properties No. Fourteen, LP, owner and operator of the Embassy Suites Discovery Green hotel in Houston, sought protection under Chapter 11 of the Bankruptcy Code (Bankr. S.D. Tex. Case. No. 21-31797) on May 31, 2021. In the petition signed by Nick Massad, Jr., president and general partner, the Debtor disclosed up to $50 million in both assets and liabilities. Judge David R. Jones oversees the case. Porter Hedges LLP and The Claro Group, LLC serve as the Debtor's legal counsel and financial advisor, respectively. Massachusetts Mutual Life Insurance Company, as lender, is represented by Charles A. Beckham, Jr., Esq., at Haynes and Boone, LLP. ALLIANCE RESOURCE: S&P Alters Outlook to Stable, Affirms 'B+' ICR ----------------------------------------------------------------- S&P Global Ratings affirmed its 'B+' issuer credit rating on U.S. thermal coal producer Alliance Resource Partners L.P. and revised the outlook to stable from negative. S&P said, "The stable outlook reflects our expectation for improved domestic thermal coal demand and lower absolute debt borrowings to lead to lower adjusted leverage and more headroom under the company's debt covenants. "We expect adjusted leverage to stabilize close to 2x because of increased volumes, cost control, as well as debt repayment in the next 12 months. We now assume Alliance's sales volumes will rebound to about 31 million in 2021 from about 28 million in 2020. High contracted domestic volumes for 2021 as well as the temporary surge in the domestic thermal coal demand because of accelerating economic growth should provide some opportunity for increased sales over the next 12 months. We assume the company will use its cash flow to either prepay debt or bolster cash balances in advance of future maturities. In the longer term, we still expect domestic and international thermal markets to weaken. We project EBITDA margins will continue to decline, ranging 25%-30% (down from 30%-37% historically). This is underpinned by the ongoing secular decline of the thermal coal industry and lower domestic prices, partially offset by cost management. "Discretionary cash flow (DCF) applied toward debt repayment should build a rating buffer over the next 12-24 months. We expect Alliance will generate $100 million-$115 million of DCF in 2021 and use part of it to reduce debt. We believe if favorable market conditions persist in the next 12-24 months, the company could build a cash balance to help fund the maturity of its 2025 notes. In addition, Alliance recently formed a royalties segment combining oil, gas, and coal reserves activities to seek alternative financing options ahead of its maturities. "Alliance could face limited access to the capital markets on environmental, social, and governance (ESG) considerations. We believe thermal coal companies will continue to lose access to traditional financing options as major financial and investment companies have decreased their coal investments or committed to divest. Even though we project over the next 12 months Alliance will have lower adjusted leverage and higher EBITDA margins than several U.S.-based coal peers such as Consol Energy Inc. and Arch Resources Inc., investor and government pressure to curb carbon emissions could make access to capital increasingly difficult and more expensive. Therefore, we continue to apply a negative adjustment that results in a rating one notch below the implied anchor score. "The stable outlook reflects our expectation of improved adjusted leverage because of better than expected domestic thermal coal demand in the next 12 months. We expect Alliance will operate at about 2x adjusted leverage for the full year 2021 and in 2022. In addition, we estimate covenant cushion will increase, supported by nearly $220 million of debt repayment since June 2020. We assume the company will continue reducing debt in the next 12 months." S&P could lower its rating on Alliance in the next 12 months if domestic thermal coal market conditions deteriorated, causing volumes to decline 5% and prices to fall 8%-10% (below $39.30 per ton). This would result in: -- Adjusted leverage above 4x; -- Funds from operations (FFO) to debt below 20%; or -- Free operating cash flow approaching break-even or S&P does not expect it to support the 2025 notes maturity. S&P is unlikely to raise the rating on Alliance in the next 12 months because of the risk ESG factors increase the cost of doing business and limit access to financing. However, S&P could consider an upgrade if: -- Company materially diversified its business into commodities with more stable cashflows, improving its competitive position; and -- Financial markets are potentially more receptive to the domestic thermal coal industry. ALM LLC: Unsecured Creditors Will Get 2% Dividend in Plan --------------------------------------------------------- ALM, LLC, d/b/a Agua La Montana, filed with the U.S. Bankruptcy Court for the District of Puerto Rico a Disclosure Statement in the Small Business Chapter 11 Case dated July 13, 2021. The Debtor began operations in September 2018, that is, 2 years prior to the filing. At the beginning of the year 2020, two disasters affected Puerto Rico: earthquakes and the Covid-19 pandemic. These events had severe consequences in Debtor's business finances. The Debtor was incapable to comply with its creditors as originally agreed and several creditors sued the company. The Debtor tried to reach an agreement with creditor Canyon but could not obtain a viable agreement. AThe Debtor had no other alternative but to file for bankruptcy on November 25, 2020, to protect the assets of the estate and be able to pay its creditors through a Plan of Reorganization in an orderly manner. Class 7 consists of Priority Unsecured Claims under sections 507(a)(1)-(7) in the amount of $3,220. The allowed claims under this class will be paid in cash in full with 3.25% interest over the course of 60 months from the effective date of the Plan or as otherwise agreed between the parties. Class 8 consists of General Unsecured Creditors. The total obligation to unsecured creditors under this Class is $7,282.00 which includes any amount due upon the rejection of an executory contract that fall under this class. Allowed claims in this class shall receive a dividend of 2% on the effective date of the Plan in full payment of their claims or as otherwise agreed between the parties. Class 9 consists of Unsecured Creditors with claims over $1,501.00. The total obligation to unsecured creditors under this Class is $232,639.00 which includes any amount due upon the rejection of an executor contract that falls under this class. Allowed claims in this class shall receive a dividend of 2% in 60 monthly installments in full payment of their claims or as otherwise agreed between the parties. Class 10 consists o the Collateral Deficiency Claim of Canyon Square Investments LLC. The allowed claim under this class will be paid a 2% dividend over the course of 60 months from the effective date in full payment of the claim or as otherwise agreed between the parties. Class 11 consists of Equity Security and other interest holders. This class shall not receive any distribution under the Plan. This class is ineligible to vote. Payments and distributions under the Plan will be funded by business income, collection of money, sale or rent of assets, investors and any other income to which debtor may be eligible. A full-text copy of the Disclosure Statement dated July 13, 2021, is available at https://bit.ly/3wBcfq8 from PacerMonitor.com at no charge. Counsel for the Debtor: Mary Ann Gandia-Fabian, Esq. Ganbia-Fabian Law Office P.O. Box 270251 San Juan, PR 00928 Tel: 1-787-390-7111 Fax: 1-787-729-2203 Email: gandialaw@gmail.com About ALM LLC ALM, LLC, a/k/a Agua La Montana, is the owner of a fee simple title to a property located in Trujillo Alto, Puerto Rico having a current value of $860,943. ALM, LLC filed a voluntary petition for relief under Chapter 11 of the Bankruptcy Code (Bankr. D.P.R. Case No. 20-04571) on Nov. 25, 2020. The petition was signed by Kristian E. Riefkohl Bravo, president. At the time of the filing, the Debtor disclosed total assets of $1,083,384 and total liabilities of $2,919,967. Judge Mildred Caban Flores is the case judge. The Debtor tapped Gandia Fabian Law Office as counsel and Jose Victor Jimenez, CPA, of Jimenez Vazquez & Associates, PSC as an accountant. AMWINS GROUP: Moody's Assigns B3 Rating to $890MM Unsecured Notes ----------------------------------------------------------------- Moody's Investors Service has assigned a B3 rating to $890 million of senior unsecured notes being issued by Amwins Group, Inc. (Amwins, corporate family rating B1). The company expects to use proceeds of the offering, together with proceeds of a previously announced incremental senior secured term loan and cash on hand, to repay its existing senior unsecured notes, make restricted payments to shareholders of up to $750 million, pay related transaction expenses, and for general corporate purposes. The rating outlook for Amwins is unchanged at stable. RATINGS RATIONALE Amwins' ratings reflect its market position as the largest US property & casualty (P&C) wholesale broker; its diversification across clients, retail producers, insurance carriers and product lines; and its healthy EBITDA margins. The company has achieved solid organic growth and consistent profitability supported by effective technology investments, high employee retention and an opportunistic acquisition strategy. Offsetting these strengths is Amwins' significant debt burden, integration risk associated with acquisitions including its recent acquisition of Worldwide Facilities, and potential liabilities arising from errors and omissions, a risk inherent in professional services. The acquisition of Worldwide Facilities, a top five P&C wholesale broker headquartered in California, was financed largely with equity, and broadens Amwins' specialty capabilities but carries integration risk. While the issuance of debt to fund a restricted payment is credit negative, Amwins has a good track record of reducing leverage through earnings and free cash flow. For the 12 months through March 2021, Amwins generated revenues of $1.5 billion with strong organic growth driven by significant rate increases in commercial and specialty lines and new business. The company's EBITDA margins have held relatively steady through the 12 months ended March 2021 as compared to fiscal year 2020, per Moody's calculations. Giving effect to the proposed borrowings, Amwins will have pro forma debt-to-EBITDA above 6x, (EBTIDA - capex) interest coverage in the range of 2.5x-3x, and free-cash-flow-to-debt in the mid-single digits, according to Moody's estimates. The rating agency expects Amwins to reduce leverage below 6x by year-end through healthy earnings and free cash flow. These pro forma metrics reflect Moody's adjustments for operating leases, certain non-recurring items and run-rate EBITDA from acquisitions. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATING Factors that could lead to an upgrade of Amwins' ratings include: (i) continued profitable growth, (ii) debt-to-EBITDA ratio below 4.5x, (iii) (EBITDA - capex) coverage of interest exceeding 3.5x, and (iv) free-cash flow-to-debt ratio above 8%. Factors that could lead to a rating downgrade include: (i) debt-to-EBITDA ratio above 6x, (ii) (EBITDA - capex) coverage of interest below 2.5x, or (iii) free-cash-flow-to-debt ratio below 5%. Moody's has assigned the following rating: $890 million backed senior unsecured notes due in 2029 at B3 (LGD5). Moody's will withdraw the rating from the existing $650 million of senior unsecured notes when those notes are redeemed. The rating outlook for Amwins is unchanged at stable. The principal methodology used in this rating was Insurance Brokers and Service Companies published in June 2018. APEG MAXEY: $21.5M Postpetition Loan From Pender Wins Court OK -------------------------------------------------------------- Judge Christopher Lopez authorized Apeg Maxey LP to incur up to $21,500,000 in aggregate principal amount, plus closing costs and expenses, of postpetition loans provided by Pender West Credit 1 REIT, L.L.C. under the parties' Postpetition Financing Facility. The Court ruled that the balance of the Postpetition Financing -- with a total commitment amount aggregating $22,000,000 -- shall be made available to the Debtor to incur and borrow as additional Postpetition Loans after entry of the final order. The Debtor shall use the available amount of Postpetition Loan proceeds authorized under the Interim Order to pay Specialty Credit Holdings, LLC, the Debtor's Existing Secured Lender $20,500,000 no later than the Discounted Payment Deadline. Upon timely payment of the amount, the Existing Secured Lender's claim will be satisfied and all liens of the Existing Secured Lender on the Debtor's assets will be automatically and immediately released. If the Debtor fails to timely make the payment or Specialty Credit contests that its secured claim has been fully and indefeasibly paid, then the authorization regarding the Postpetition Financing Facility will be automatically and immediately revoked, any commitment to lend by the Postpetition Lender automatically voided, and any funds advanced by the Postpetition Lender to Debtor will be deemed property of the Postpetition Lender and held in trust by Debtor for the Postpetition Lender's benefit. In light of the satisfaction of the secured claims of the prior senior lender, the Bidding Procedures will be amended consistent with the Postpetition Lender's bid serving as a stalking horse bid, such that the Debtor will control adjournment, modification, and primary responsibility for hosting and holding the auction and sending notices, with the Postpetition Lender being given consultation rights related to any material modifications or decisions related to the sale process and auction. Additionally, the minimum initial overbid to qualify as a Qualified Bidder will be $250,000 in excess of the value the Debtor places on Postpetition Lender's bid. The Postpetition Lender's willingness to make the Postpetition Loans is conditioned upon, among other things, the approval of the Postpetition Lender as a stalking horse bidder for substantially all assets of the Debtor. To secure performance and payment of the Debtor's Postpetition Obligations, the Postpetition Lender is granted: -- a first priority, priming security interest in and lien on all property of the Debtor and its estate, which liens shall be senior to any existing liens or claims, subject only to any liens on property of the Debtor that (1) are valid, perfected, and not avoidable and (2) have, as of the date of the entry of the Interim Order priority over the liens of Specialty Credit; and -- a junior security interest and lien on all property of the Debtor and their estates that is subject to a Permitted Prior Senior Lien, if any. The Postpetition Lender is also granted an allowed superpriority administrative expense claim pursuant to section 364(c)(1) of the Bankruptcy Code, which allowed superpriority administrative claim shall be payable from and have recourse to all prepetition and postpetition property of the Debtor and all proceeds thereof, but excluding the Excluded Avoidance Actions and Proceeds. Except as to Permitted Prior Senior Liens, the Postpetition Liens and the Postpetition Superpriority Claims (i) shall not be made subject to or pari passu with: (A) any lien, security interest, or claim, and shall be valid and enforceable against the Debtors, their estates, any trustee, or any other estate representative appointed or elected in these Cases or any Successor Cases and/or upon the dismissal of these Cases or any Successor Cases; (B) any lien that is avoided and preserved for the benefit of the Debtors and their estates; and (C) any intercompany or affiliate lien or claim, provided that such lien or claim is with an intercompany affiliate that is a Debtor. As a condition to the availability of the Postpetition Loans and the use of Collateral (including Cash Collateral), the Debtor shall comply with the milestones set forth in the Term Sheet of the Postpetition Financing, the non-compliance of which shall constitute an Event of Default under the Postpetition Financing Facility and the Interim Order. A copy of the Term Sheet is available for free at https://bit.ly/3huXEIj from PacerMonitor.com. Use of Postpetition Collateral The Court further authorized the Debtor to use the Postpetition Collateral, including Cash Collateral, as set forth in the Approved Budget, the Interim Order and the Postpetition Loan Documents, from the entry of the interim order through and including the Maturity Date. As adequate protection for the Debtor's use of Postpetition Collateral, no later than the third business day of each month, the Debtor will make an adequate protection payment to the Postpetition Lender in an amount equal to the amount of cash held by Debtor on the last day of the previous month minus $100,000, which payment will be credited towards the Postpetition Obligations in accordance with the Postpetition Loan Documents. The Postpetition Lender shall have the exclusive right to use the Postpetition Obligations, Postpetition Liens and Postpetition Superpriority Claim to credit bid, with respect to any bulk or piecemeal sale of all or any portion of the Postpetition Collateral. Managing Agent for Debtor's Property The Court ruled that Better World Properties, LLC shall continue to operate as the Debtor's Property's managing agent during until the Maturity Date pursuant to the terms of its existing management agreement with the Debtor. The Debtor may neither terminate, nor seek to terminate the Managing Agent without the prior written consent of the Postpetition Lender. As previously reported by the Troubled Company Reporter, the Debtor's Property consists of an apartment complex commonly known as the Verandas at North Shore Apartments located at 666 Maxey Road, in Houston, Texas. A copy of the interim DIP order is available for free at https://bit.ly/3e8QAz0 from PacerMonitor.com. The final hearing on the motion shall commence on July 27, 2021, at 1 p.m. (prevailing Central time). At the final hearing, in addition to seeking a final order approving the Postpetition Financing, the Debtor shall request approval of a break-up fee of $750,000 and additional expense reimbursement up to an additional $100,000 (for a total aggregate cap of reimbursable expenses equal to $150,000) in favor of the Postpetition Lender in the event the Postpetition Lender is not the successful bidder in the sale of the Debtor's asset. Objections to the relief sought must be received no later than July 26, 2021, at 3 p.m. (prevailing Central time). About Apeg Maxey LP Apeg Maxey LP is the owner of the real property and improvements located at 666 Maxey Road, Houston, Texas 77013, which is an apartment complex commonly known as the Verandas at North Shore Apartments. Apeg Maxey LP filed a voluntary petition for relief under Chapter 11 of the Bankruptcy Code (Bankr. S.D. Tex. Case No. 21-31246) on April 12, 2021. At the time of filing, the Debtor disclosed $10 million to $50 million in both assets and liabilities. Judge Christopher Lopez oversees the case. The Kraus Law Firm, PC serves as the Debtor's legal counsel. Specialty Credit Holdings, LLC, as Secured Lender, is represented by Thompson & Knight LLP. APPLIED ENERGETICS: Raises $2.4M From Private Sale of Common Stock ------------------------------------------------------------------ Applied Energetics, Inc. closed on the issuance of 3,153,333 shares of its common stock, par value, $0.001 per share, in a private sale to individual purchasers at a price of $0.75 per share, or $2,365,000 in the aggregate. All of the purchasers are accredited, sophisticated investors, and the issuance of the shares was not in connection with any public offering in accordance with Section 4(a)(2) of the Securities Act of 1933. About Applied Energetics Headquartered in Tucson, Arizona, Applied Energetics, Inc. -- www.aergs.com -- specializes in the development and manufacture of advanced high-performance lasers, high voltage electronics, advanced optical systems, and integrated guided energy systems for prospective defense, aerospace, industrial, and scientific customers worldwide. Applied Energetics reported a net loss of $3.23 million for the year ended Dec. 31, 2020, compared to a net loss of $5.56 million for the year ended Dec. 31, 2019. As of March 31, 2021, the Company had $5.75 million in total assets, $2.61 million in total liabilities, and $3.14 million in total stockholders' equity. Henderson, Nevada-based RBSM LLP, the Company's auditor since 2016, issued a "going concern" qualification in its report dated April 12, 2021, citing that the company has suffered recurring losses from operations, will require additional capital to fund its current operating plan, and has stated that substantial doubt exists about the company's ability to continue as a going concern. AUTOMOTIVE PARTS: July 23 Deadline Set for Panel Questionnaires --------------------------------------------------------------- The United States Trustee is soliciting members for an unsecured creditors committee in the bankruptcy case of Automotive Parts Distribution International, LLC If a party wishes to be considered for membership on any official committee that is appointed, it must complete a questionnaire available at https://bit.ly/3rdJwXb and return it to elizabeth.a.young@usdoj.gov and erin.schmidt2@usdoj.gov, ATTN: Elizabeth A. Young and Erin M. Schmidt, at the Office of the United States Trustee so that it is received no later than 4:00 p.m. Central Daylight Time, on July 23, 2021. If the U.S. Trustee receives sufficient creditor interest in the solicitation, it may schedule a meeting or telephone conference for the purpose of forming a committee. About Automotive Parts Automotive Parts Distribution International, LLC was established in January 2008 as a distribution and marketing company to cover the North American aftermarket. It offers radiators, condensers, fan assemblies, heater cores, intercoolers, heavy duty radiators, and fuel pump module assemblies. Automotive Parts Distribution sought Chapter 11 protection (Bankr. N. D. Case No. 21-41655) on July 12, 2021. In its petition, it listed assets and liabilities of $10 million to $50 million. The petition was signed by The petition was signed by Kevin O'Connor, CEO. Rakhee V. Patel, Esq. of Winstead PC is the Debtors' counsel. AVID BIOSERVICES: Mark Bamforth Quits as Director ------------------------------------------------- Mark Bamforth resigned from his position as a member of the Board of Directors of Avid Bioservices, Inc., effective immediately. Mr. Bamforth's resignation did not result from any disagreements with the Company's management or the Board on any matter relating to its operations, policies or practice. Mr. Bamforth was chairman of the Board's corporate governance committee and a member of its audit committee at the time of his resignation. In connection with Mr. Bamforth's resignation, the Board appointed Esther M. Alegria, Ph.D., as a member of the audit committee and corporate governance committee and appointed Joseph Carleone, Ph.D., as chairman of the corporate governance committee. Form of PSU Award Notice Effective July 9, 2021, the Compensation Committee of the Board approved a form of Notice of Grant of Performance Stock Unit Award to be used in connection with the grant of performance stock unit awards to the Company's named executive officers and certain other officers pursuant to the Company's 2018 Omnibus Incentive Plan. The Form of PSU Award Notice will govern PSU awards to the Company's officers that were approved by the Compensation Committee effective July 9, 2021. The Form of PSU Award Notice provides, among other things, that (i) each PSU that vests represents the right to receive one share of the Company's common stock, (ii) the PSUs vest annually as one-third of the total award based on the Company's achieving specified performance measurements for the applicable performance period defined in the Form of PSU Award Notice, (iii) the PSUs have target payout opportunities of between 0% and 200%, (iv) the performance measurements include Revenue and Adjusted Net Profits (as defined in the Form of PSU Award Notice) as described further in the Form of PSU Award Notice, and (v) no PSU shall become earned and vested following a grantee's Separation from Service (as defined in the Plan), except as expressly provided in the terms of the Form of PSU Award Notice, as applicable, or as otherwise provided pursuant to the terms of the Plan. About Avid Bioservices Avid Bioservices -- http://www.avidbio.com-- is a dedicated contract development and manufacturing organization (CDMO) focused on development and CGMP manufacturing of biopharmaceutical drug substances derived from mammalian cell culture. The company provides a comprehensive range of process development, CGMP clinical and commercial manufacturing services for the biotechnology and biopharmaceutical industries. With over 28 years of experience producing monoclonal antibodies and recombinant proteins, Avid's services include CGMP clinical and commercial drug substance manufacturing, bulk packaging, release and stability testing and regulatory submissions support. For early-stage programs, the company provides a variety of process development activities, including upstream and downstream development and optimization, analytical methods development, testing and characterization. The scope of its services ranges from standalone process development projects to full development and manufacturing programs through commercialization. Avid Bioservices reported net income of $11.21 million for the year ended April 30, 2021, a net loss of $10.47 million for the year ended April 30, 2020, a net loss of $4.21 million for the year ended April 30, 2019, and a net loss of $21.81 million for the year ended April 30, 2018. As of April 30, 2021, the Company had $265.51 million in total assets, $187.77 million in total liabilities, and $77.74 million in total stockholders' equity. BELDEN INC: S&P Rates New Senior Subordinated Notes Due 2031 'BB-' ------------------------------------------------------------------ S&P Global Ratings assigned its 'BB-' issue-level rating and '5' recovery rating to St. Louis-based cable, connector, and component manufacturer Belden Inc.'s proposed senior subordinated notes due 2031. The '5' recovery rating indicates S&P's expectation for modest (10%-30%; rounded estimate: 15%) recovery in the event of a payment default. S&P expects the company to use the net proceeds from these notes for general corporate purposes, including to repay its outstanding 2.875% senior subordinated notes due 2025. S&P said, "Our 'BB' issuer credit rating and stable outlook on Belden are unchanged. Our ratings reflect our fair assessment of the company's business risk profile, which is characterized by its participation in a highly competitive and cyclical industry. However, this risk is offset by its leading market positions in some of its product niches and continuing diversification into value-added specialty products. Our rating also reflects Belden's leverage in the high 3x area as of March 2021, which has been elevated due to the temporary demand shocks stemming from the COVID-19 pandemic. The company has a stated net leverage target of 2x-3x and we continue to expect it will take prudent actions focused on deleveraging. "Our stable outlook on Belden reflects our expectation that its leverage will gradually decline toward the low-3x area by the end of 2021 as it recovers from the softness in its industrial segment and its supply chain challenges." BGS WORKS: Aug. 26 Hearing on Disclosure Statement -------------------------------------------------- Judge Victoria S. Kaufman will convene hearing to consider the adequacy of the Disclosure Statement Describing BGS Works, Inc.'s Chapter 11 Plan of Reorganization will be held on Aug. 26, 2021 at 1:00 p.m. The deadline to file and serve any objections to approval of the proposed Disclosure Statement is August 12, 2021. The deadline to file and serve any reply to any objections to approval of the proposed Disclosure Statement is August 19, 2021. The Status Conference in this case is continued to August 26, 2021 at 1:00 p.m. About BGS Works BGS Works, Inc., based in Woodland Hills, CA, filed a Chapter 11 petition (Bankr. C.D. Cal. Case No. 20-11237) on July 15, 2020. The petition was signed by Joseph Sternlib, owner. In its petition, the Debtor was estimated to have $1 million to $10 million in both assets and liabilities. The Hon. Victoria S. Kaufman presides over the case. RESNIK HAYES MORADI, LLP, serves as bankruptcy counsel to the Debtor. BGT INTERIOR: May Use Cash Collateral Thru August 3 --------------------------------------------------- Judge Eduardo V. Rodriguez authorized BGT Interior Solutions, Inc. to use cash collateral through August 3, 2021 to pay the actual, necessary and ordinary expenses of its business, pursuant to the budget. The budget for the period from July 6 through August 3, 2021 provided for $902,307 for payroll; $1,400,000 for inventory; $8,230 for utilities; $57,920 for rent; $153,824 for payment to Veritex Bank for adequate protection and bank charges; and $125,000 for miscellaneous expenses. The Court further ruled that: a. Lender, Veritex Community Bank, as adequate protection against diminution in value of its interests in the Cash Collateral, is granted a continuing valid, binding, enforceable, and automatically perfected postpetition security interest in, and replacement liens on all assets of the Debtor and its estate to the extent of the diminution in value of the Lender's collateral; b. The US Small Business Administration, as Prepetition Junior Secured Lender, is granted a continuing valid, binding, enforceable, and automatically perfected postpetition security interest in, and replacement liens on all assets of the Debtor and its estate, together with the proceeds thereof, to the extent of the diminution in value of the SBA's collateral. The replacement liens shall be junior to Veritex Bank, N.A.'s replacement lien; c. The Debtor is permitted to make monthly adequate protection payments to Veritex, as follows: (i) Adequate Protection (LOC), which is estimated at $44,000; (ii) Adequate Protection (DB payoff) for $47,552; and Adequate Protection (equipment) for $11,272; d. Any State Tax Liens of the Texas Comptroller of Public Accounts shall not be primed by nor made subordinate to any liens granted to any party, to the extent such State Tax Liens are valid, senior, perfected and unavoidable, and rights of any party in interest to object to the priority, validity, amount and extent of the claims and State Tax Liens are fully preserved; e. All State Tax Lien(s) shall continue, and the Comptroller shall be granted a replacement lien on all of Debtor's property to the extent of the diminution in value of the Comptroller's collateral. All replacement liens shall attach in the same order of priority as existed on the Petition Date; and f. The Debtor shall not utilize Sales Tax Trust Funds, if any, for any purpose other than remittance to the Comptroller. Any party in interest other than the Debtor, may commence, no later than September 11, 2021, an adversary proceeding or other contested matter objecting to, contesting, or challenging the amount, validity, priority, or enforceability of the obligations or the liens in favor of Veritex. If no such adversary proceeding or contested matter is commenced within the Challenge Period, such obligations will be deemed and adjudicated finally and indefeasibly as valid and enforceable, and the liens in favor of Veritex securing the obligations will be deemed and adjudicated finally and indefeasibly as valid, enforceable and perfected liens in the Collateral. A copy of the second agreed order is available for free at https://bit.ly/3e5JbAq from PacerMonitor.com. A final hearing on the Debtor's cash collateral motion will be held on August 2, 2021 at 10 a.m. About BGT Interior Solutions, Inc. BGT Interior Solutions, Inc. owns and operates a business known as BGT Interior Services, Inc., which provides multi-family luxury interior finish packages to the construction industry in Texas and nationwide. The company specializes in custom turn-key flooring and countertop packages to fit a variety of multi-family, hospitality, or commercial settings. The company offers custom design services and interior finish packages, providing its customers a single point of contact from fabrication to installation. The Debtor sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. S.D. Tex. Case No. 21-32124) on June 23, 2021. In the petition signed by Robert Wagner, vice president and director, the Debtor disclosed up to $50,000 in both assets and liabilities. Judge Eduardo V. Rodriguez oversees the case. Kimberly A. Bartley, Esq. at Waldron & Schneider, L.L.P. is the Debtor's counsel. Veritex Community Bank, as creditor, is represented by Crady Jewett McCulley & Houren LLP. BHATT CORP: Final Cash Collateral Hearing Moved to July 29 ---------------------------------------------------------- The U.S. Bankruptcy Court for the Northern District of Alabama has authorized Bhatt Corp. to use cash collateral to pay operating expenses, adequate protection payments, and administrative payments on an interim basis through July 19, 2021. The Debtor requires immediate authority to use cash collateral to continue business operations without interruption toward the objective of formulating an effective plan of reorganization for the benefit of all its creditors. The Bank of the Ozarks asserts claims against the Debtor and the cash collateral in excess of $103,000. The Secured Creditor has filed a lien with the Secretary of State of Alabama and claims in excess of $491,000. The exact priority and amount of each of these alleged Secured Creditors' claims are subject to later determination upon the filing of a proper perfected Proof of Claim by each of the Secured Creditors or deemed filed under 11 U.S.C. Section 1111(a) or filing by the Debtor or a Trustee under Rule 3004 of the Federal Rules of Bankruptcy Procedure. The Debtor is authorized to use cash collateral up to the aggregate amount of $85,000 Dollars per month for operating expenses and in any amounts approved by the Court as adequate protection payments and administrative expenses in accordance with the budget of estimated future income and necessary operating expenses to pay: i. the maintenance and preservation of its assets; ii. the purchase of replacement inventory; iii. the continued operation of its business including, but not limited to, payroll, employee expenses and insurance; iv. all administrative expenses of the Bankruptcy Case, including Debtor's professional fees and expenses not to exceed $25,000 at any one time, provided the Court, upon proper notice, approves such fees and expenses and further provided that there are no unencumbered assets from which said administrative expenses can be paid; v. payment of the Adequate Protection Payments as approved by the Court; and vi. quarterly fees due to the Bankruptcy Clerk's Office. As adequate protection for the Debtor's use of the cash collateral, the Secured Creditor, to the extent its liens and interest appear, is granted replacement perfected security interests and liens under Bankruptcy Code section 361(2) and to the extent and with the same priority in Debtor's post-petition collateral and proceeds thereof, that such Secured Creditor held in Debtor's pre-petition collateral. The Debtor will maintain appropriate insurance coverage on the Secured Creditor's collateral with the same coverage amount that existed prior to the Petition Date and naming the Secured Creditor as an additional insured. As additional adequate protection, the Debtor will make payments of $550 to the Secured Creditor each month commencing August 6, 2021, pending further Court orders. * * * The final hearing on the Debtor's motion to use cash collateral set on July 15, 2021, at 1:30 p.m. was vacated. Parties have been directed to submit an amended agreed interim order that reschedules the final hearing on cash collateral to July 29 at 1:30 p.m. About Bhatt Corporation Bhatt Corporation sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. N.D. Ala. Case No. 21-40661) on July 2, 2021. In the petition signed by Kamalnayan Bhatt, president, the Debtor disclosed $1 million in both assets and liabilities. Judge James J. Robinson oversees the case. Harry P. Long, Esq., at The Law Offices of Harry P. Long, LLC is the Debtor's counsel. Bank of the Ozarks, as secured creditor, is represented by: Rita L. Hullett, Esq. Baker, Donelson, Bearman, Caldwell & Berkowitz, P.C. 420 20th N., Suite 1400 Birmingham AL 35203 Tel No: (205) 250-8310 E-mail: rhullett@bakerdonelson.com BIG ASS FANS: Madison Transaction No Impact on Moody's B2 Rating ---------------------------------------------------------------- Moody's Investors Service says the announced acquisition of Big Ass Fans, LLC. (B2 stable) by Madison IAQ LLC (B2 stable) has no immediate impact on the ratings of Big Ass Fans. On July 12, 2021, Madison IAQ made public that it had signed a definitive agreement to acquire Big Ass Fans for an undisclosed amount. Moody's believes that based on the proposed transaction, the acquisition will trigger the change of control provision in Big Ass Fans' senior secured first lien revolving credit facility and term loan, in which the existing owners cease to retain capital stock representing more than 50% of the total voting power of the company. The transaction is targeted to close by the end of July or early August 2021 and is subject to customary closing conditions and approvals. If Big Ass Fans' debt is retired, Moody's will withdraw its ratings upon repayment. If Big Ass Fans' debt is not retired following the closing of the acquisition, Moody's ability to maintain the company's ratings will consider where in the corporate structure Big Ass Fans' debt will reside, any guarantees of Big Ass Fans' debt by Madison IAQ LLC, and the financial and operational disclosures available with respect to Big Ass Fans. Big Ass Fans' B2 Corporate Family Rating considers the company's leading market position in commercial, industrial and residential fans, strong brand name, broad customer base and diverse end markets. The rating is further supported by the company's focus on innovative product launches and an effective distribution network, which helps drive solid profitability. In addition, the rating reflects the company's consistent positive free cash flow. These factors are offset by the cyclical nature of the company's end markets, particularly within the residential space, which represents about 20% of revenue. The rating is further constrained by the company's aggressive financial policy, which has resulted in spikes in debt leverage, and relatively small size within the universe of manufacturing companies. Big Ass Fans, headquartered in Lexington, Kentucky, is engaged in the manufacturing and direct selling of industrial, commercial and residential fans. The company operates facilities in the United States, Australia, Canada and Singapore. Revenue for the 12 months ended March 31, 2021 totaled approximately $245 million. Big Ass Fans is owned by Lindsay Goldberg (a private equity firm). BOYCE HYDRO:Has $3 Mil. to $4 Mil. Bankruptcy Fund for 6,000 Claims ------------------------------------------------------------------- Terry Camp of ABC 12 News reports that the man who will oversee the distribution of money from a bankruptcy fund in the wake of the Edenville Dam disaster provided new information about the money available to victims on Tuesday. Boyce Hydro, the company that operated the dams, filed for bankruptcy shortly after the historic flood last 2020. The money set aside for victims won't go very far if all of the claims currently on file are valid. "In the bankruptcy process, there have already been almost 6,000 claims filed," said Scott Wolfson, the attorney who has been appointed the liquidating trustee for the Boyce Hydro bankruptcy plan. Most of those 6,000 claims are from flood victims. Wolfson said once he was once he became involved with the Boyce Hydro bankruptcy plan, he wanted to tour the area that was impacted to get a better feel for what happened in Midland, Gladwin and Saginaw counties. "The idea I had about how much territory or land it covered was just dead wrong. I kept driving and driving and driving, I couldn’t believe the miles and miles of devastation," he said. The bankruptcy fund consists of insurance proceeds, Boyce Hydro's assets and the money obtained from the condemnation sale of the dams. It has netted a few million dollars. "Between $3 million and $4 million in cash, but there are going to be ongoing expenses as we go forward that will impact that amount," Wolfson said. He believes real estate surrounding the dams will eventually be sold, which will boost the fund total. But it most likely won't produce any big payouts to the thousands of flood victims. "When I was asked to get involved with this, I was hoping to see insurance proceeds and other numbers that had another zero or two on them, but this is the reality of the world we live in and we will do the best we can to distribute them fairly," Wolfson said. He still wants to hear from people who were affected by the floods. "If folks have not made a claim, they have damage, we will be putting together a claims process and they will have the opportunity to file a claim," Wolfson said. Its not clear at this point when these funds will begin to be distributed to the flood victims and other creditors. About Boyce Hydro LLC Boyce Hydro LLC is an Edenville dam that was privately owned and operated by Boyce Hydro Power, a company based in Edenville, which also owned three other hydroelectric facilities. On July 31, 2020, Boyce Hydro and affiliate, Boyce Hydro Power, LLC, sought Chapter 11 protection (Bankr. E.D. Mich. Lead Case No. 20-21214). The Debtors were each estimated to have $10 million to $50 million in assets and $1 million to $10 million in liabilities as of the bankruptcy filing. Judge Daniel S. Oppermanbaycity oversees the cases. Goldstein & McClintock LLP, led by Matthew E. McClintock, Esq., is the Debtors' legal counsel. On Feb. 25, 2021, the court entered a nonconsensual order, which confirmed the Debtors' joint consolidated Chapter 11 plan of liquidation, and approved the establishment of the Boyce Hydro liquidating trust and Scott A. Wolfson's appointment as liquidating trustee. The plan was declared effective on March 3, 2021. The liquidating trustee tapped Wolfson Bolton, PLLC as bankruptcy counsel and Honigman, LLP as special counsel. Stretto is the claims agent. BRICK HOUSE: Wins Cash Collateral Access Thru Aug. 31 ----------------------------------------------------- The U.S. Bankruptcy Court for the District of Utah, Central Division, has authorized Brick House Properties, LLC to use cash collateral on a final basis through August 31, 2021 and provide adequate protection payments. The Debtor requires funds to continue to manage and preserve the Property for the benefit of Zions Bank and other creditors and in order to continue to operate as a going concern. The Debtor has virtually no funds available other than the Cash Collateral, and the continued management and preservation of the Property is dependent upon the Debtor's ability to use the Cash Collateral. The Debtor's business consists primarily of holding and managing two separate parcels of real property, located at 1624 and 1646 West 13200 South, Riverton, Utah 84065. The Property is encumbered by a lien held by Zions Bank. Zions Bank also claims priority secured liens on all rents, income, and profits generated by the Property. Zions Bank has consented to the Debtor's use of Cash Collateral pursuant to the terms proposed in the Motion. Zions Bank will receive a replacement lien pursuant to Bankruptcy Code section 552 in post-petition rents and income generated by the Property. A copy of the order is available at https://bit.ly/3B2nHyy from PacerMonitor.com. About Brick House Properties, LLC Brick House Properties, LLC, filed a Chapter 11 bankruptcy petition (Bankr. D. Utah Case No. 20-26250) on Oct. 21, 2020, estimating under $1 million in both assets and liabilities. Brick House Properties owns two parcels of real property in Riverton, Utah. It leases portions of the property to four related persons and entities: (i) Our Journey School LLC (the "Pre-Elementary School"); (ii) Our Journey, Inc. (the "Elementary School"); (iii) Hidden Valais Ranch LLC (the "Farm"); and (iv) Emily and Josh Aune. Emily Aune is the sole member of the Debtor, and is also the sole member and owner of the Farm. She is a 90% owner in the Pre-Elementary School. The Elementary School is a 501(3)(c) non-profit and is managed by a board which Emily and Josh are members of. Judge Kevin Anderson oversees the case. The Debtor is represented by Cohne Kinghorn, P.C. as counsel. C AND N TRANSPORT: Plan of Reorganization Confirmed by Judge ------------------------------------------------------------ Judge Caryl E. Delano has entered an order confirming the Plan of Reorganization of C and N Transport LLC. The proposed treatment in the Plan for Class 4 shall be amended and replaced as follows: * Hitachi asserts a proof of claim (Claim No. 15) in the amount of $44,957.79, of which $22,950.00 is secured by 1 2019 Mac Dropdeck Trailer; VEHICLE ID NUMBER (Serial No.) 5MASA4824KA046312 and $22,007.79 is unsecured. Hitachi shall have an allowed secured claim under Bankruptcy Code Section 506 in the stated agreed amount of $22,950.00. The allowed secured claim will be reamortized over 5 years at 5.50% interest with payments commencing thirty days from the entry of the Confirmation Order. Any pre-confirmation payments will be applied to the principal balance of the allowed secured claim. There is no pre-payment penalty. Hitachi will retain its lien to the same extent, validity, and priority as existed pre-petition. In addition, Hitachi shall have an allowed unsecured claim in the stated amount of $22,007.79 which shall be treated as a Class 12 claim. The proposed treatment in the Plan for Class 11 shall be amended and replaced as follows: * Wells Fargo shall have a secured claim (Claim No. 13) in the amount of $115,169.79 secured by 3 Mac trailers, ending in VIN Nos. 6309, 6310, 6311. Wells Fargo shall have an allowed secured claim in the agreed amount of $115,169.79. The allowed secured claim will be amortized over 5 years at 6.0% interest with payments commencing on the first day of the month following the entry of a final non-appealable Confirmation Order. Any pre-confirmation payments will be applied first to post-petition interest at the contract rate, then to pre-petition interest on Claim No. 13. The loan documents which pertain to Claim No. 13 shall remain in full force and effect, except as expressly modified in the Confirmation Order. In the event of a post-confirmation default, Wells Fargo is not required to obtain relief from the Bankruptcy Court to enforce its rights under the Confirmation Order or its loan documents. By agreement of the parties, the Debtor shall reinstate its pre petition obligations for the remaining Freightliner tractor with a VIN ending in 2095 with the following amended terms: * MB Financial shall have an allowed Class 2 secured claim in the amount of $27,329.90 (which is the balance as of October 20, 2020 and subject to adjustment for any payments that may have been made by the Debtor); * The secured debt shall be reamortized for a period of 24 months as of the Effective Date of the Plan; * The Debtor shall make monthly payments of at least $1,100.00 on the secured claim; and, * The Debtor shall make a payment of $2,200.00 within Thirty days after the Effective Date for certain adequate protection payments that were not made during the post-petition periods of August, September, October, and November 2020. A copy of the Plan Confirmation Order dated July 13, 2021, is available at https://bit.ly/3wRqzLr from PacerMonitor.com at no charge. Counsel for the Debtor: Michael R. Dal Lago, Esq. Christian Garrett Haman, Esq. Dal Lago Law 999 Vanderbilt Beach Road, Suite 200 Naples, FL 34108 Telephone: (239) 571-6877 Email: mike@dallagolaw.com chaman@dallagolaw.com About C and N Transport Based in Cape Coral, Fla., C and N Transport LLC is a trucking company which provides general freight transportation services throughout the United States of America. C and N Transport sought bankruptcy protection under Chapter 11 of the Bankruptcy Code (Bankr. M.D. Fla. Case No. 20-00427) on Jan. 21, 2020. In the petition signed by Cynthia Trayner, member, the Debtor estimated up to $50,000 in assets and $1 million to $10 million in liabilities. Michael R. Dal Lago, Esq., at Dal Lago Law, serves as the Debtor's legal counsel. The U.S. Trustee, until further notice, will not appoint an official committee of unsecured creditors in the Chapter 11 case of C and N Transport, LLC, according to court dockets. CALLON PETROLEUM: S&P Ups ICR to 'B-' on Increased Liquidity ------------------------------------------------------------ S&P Global Ratings raised its issuer credit rating on Houston-based oil and gas exploration and production company Callon Petroleum Co. to 'B-' from 'CCC+' and removed all of its ratings on the company from CreditWatch, where S&P placed them with positive implications on June 21, 2021. S&P said, "At the same time, we raised our issue-level rating on Callon's unsecured notes to 'B-' from 'CCC+'. The '3' recovery rating remains unchanged, indicating our expectation for meaningful (50%-70%; rounded estimate: 65%) recovery in the event of a payment default. "The stable outlook reflects our expectation that Callon will maintain adequate liquidity and appropriate credit measures for the current rating, including funds from operations (FFO) to debt of at least 20%, over the next 12-24 months. We also expect free cash flow generation in 2021 and 2022 will be used to further reduce revolver borrowings, which remain elevated." The successful refinancing improves Callon's debt maturity schedule and liquidity. The upgrade reflects Callon's extended debt maturity runway and increased liquidity following the funding of its $650 million 8.0% unsecured notes due 2028. The proceeds have been earmarked for redemption of the company's $542.7 million 6.25% unsecured notes due 2023 and a partial paydown of its revolving credit facility. S&P said, "The company's next debt maturity will be in late 2024 (with a springing revolver maturity possibly coming into play earlier that year) and we expect management will proactively attempt to extend its longer-term debt over the course of the next 12-24 months. Callon's liquidity is also improving, with excess proceeds from the new notes being used to reduce the outstanding borrowings on its recently reaffirmed $1.6 billion revolving credit facility to about $850 million on a pro forma basis (about 53% drawn). We anticipate the company will use its substantial free operating cash flow (FOCF) and the proceeds from potential asset sales to help reduce its relatively high level of outstanding borrowings on the facility over the next one to two years." S&P said, "We now view the likelihood of a distressed debt transaction as remote. With Callon's improved credit risk profile and the lower yields on its debt following the refinancing, we believe it is now unlikely that the company will engage in a debt transaction that we would view as distressed." Although it has retained some up-tiering capacity, such transactions would be uneconomical at current trading levels and likely unnecessary given the accommodative market conditions supported by favorable crude oil prices. Higher commodity prices and the company's oil-weighted production mix will strengthen its financial ratios. Based on S&P's current oil and gas price forecast, it expects Callon's average FFO to debt will exceed 20% with debt to EBITDA in the 3.0x-3.5x range over the next two years as the company generates substantial FOCF, which is supported by its hedges on about 60% of its oil production in the second half of 2021 and 25% of its production in 2022. Callon has also hedged the majority of its anticipated natural gas production for the remainder of this year. S&P said, "We believe the company will likely benefit from its oil-centric production mix (more than 60%) as well as the flexibility provided by its asset base, which spans both the Permian and Eagle Ford basins. We expect the company will continue to run three drilling rigs in the second half of the year along with one completion crew. However, given that its capital spending targets are well below levels immediately following the Carrizo acquisition, we expect its production will continue to decline modestly year over year." Callon has allocated about 70% of its 2021 budget to the Permian Basin and the remainder to the Eagle Ford Basin. S&P said, "The stable outlook reflects our expectation that Callon will maintain adequate liquidity and appropriate credit measures for the current rating, including FFO to debt of at least 20%, over the next 12-24 months. We also expect free cash flow generation in 2021 and 2022 will be used to further reduce revolver borrowings, which remain elevated." S&P could lower its rating on Callon if: -- Its liquidity deteriorates; -- S&P believes its capital structure is unsustainable; or -- Contrary to S&P's expectations, it believes there is a significant likelihood the company will undertake a debt exchange that it would view as distressed. This would likely follow a prolonged period of low commodity prices, combined with a more aggressive financial policy than currently envisioned, that results in negative free cash flow and an inability to refinance its maturing debt. S&P could raise its rating on Callon if: -- The company substantially reduces its outstanding revolver borrowings while maintaining adequate headroom under its financial covenants such that it has a sufficient cushion to absorb potential negative commodity price volatility. S&P would also expect Callon to sustain FFO to debt of more than 20% before raising its rating; or -- Its FFO to debt exceeds 30% for a sustained period. S&P believes this could occur if commodity prices increase and the company generates substantial free cash flow that it uses for further debt reduction. CHICAGOAN LOGISTIC: Seeks Approval to Hire Bankruptcy Attorneys --------------------------------------------------------------- Chicagoan Logistic Company seeks approval from the U.S. Bankruptcy Court for the Northern District of Illinois to hire David Herzog, Esq., of Herzog & Schwartz, P.C. and Laxmi Sarathy, Esq., as bankruptcy attorneys. The Debtor requires both attorneys to: (a) render legal advice with respect to the powers and duties of the Debtor; (b) negotiate, draft and pursue all documentation necessary in the Debtor's Chapter 11 case; (c) prepare legal papers; (d) perform necessary legal work regarding approval of the Debtor's disclosure statement and Chapter 11 plan; (e) appear in court; (f) assist with any disposition of the Debtor's assets by sale or otherwise; (g) attend all meetings and negotiate with representatives of creditors, the Office of the U.S. Trustee, and other parties-in-interest; (h) provide legal advice regarding bankruptcy law, corporate law, corporate governance, transactional, tax, labor, litigation, and other issues to the Debtor in connection with its ongoing business operations; and, (i) perform other necessary legal work. Each bankruptcy attorney received the amount of $5,000 from the Debtor as attorney's fees. Mr. Sarathy and Mr. Herzog disclosed in a court filing that they are "disinterested persons" as the term is defined in Section 101(14) of the Bankruptcy Code. The attorneys can be reached at: Laxmi P. Sarathy, Esq. 3553 W. Peterson Avenue, Suite 102 Chicago, IL 60659 Tel.: 312-674-7965 Fax: 312-873-4774 Email: Lsarathylaw@gmail.com -- and -- David R. Herzog, Esq. Herzog & Schwartz, P.C. 77 West Washington Street, Suite 1400 Chicago, IL 60602 Tel.: (312) 977-1600 Fax: (312) 977-9936 Email: drhlaw@mindspring.com About Chicagoan Logistic Company Chicagoan Logistic Company, an affiliate of NAHAUL, Inc., is a Chicago-based company in the general freight trucking industry. Chicagoan Logistic Company and NAHAUL filed Chapter 11 petitions (Bankr. N.D. Ill. Case Nos. 21-07154 and 21-07152) on June 5, 2021. The two cases are not jointly administered. In the petition signed by Serkan B. Kaputluoglu, president, Chicagoan Logistic Company disclosed total assets of up to $1 million and total liabilities of up to $10 million. Judge Carol A. Doyle is assigned to Chicagoan Logistic Company's Chapter 11 case. David Herzog, Esq., of Herzog & Schwartz, P.C. and Laxmi P. Sarathy, Esq., serve as Chicagoan Logistic Company's legal counsel. Buchalter, A Professional Corporation represents creditor, Partners Funding. Vadim Serebro, Esq., serves as counsel to creditor, World Global Capital LLC, doing business as Funderslink. ATX MCA Fund I, LLC, also a creditor, is represented by The Magnozzi Law Firm, P.C. Creditor BMO Harris is represented by Howard & Howard. COBRA HOLDINGS: S&P Assigns 'B-' ICR on Acquisition by Clearlake ---------------------------------------------------------------- S&P Global Ratings assigned its 'B-' issuer credit rating to Pittsburgh-based Cobra Holdings Inc. (dba Confluence). S&P said, "We also assigned our 'B-' issue-level and '3' recovery ratings to the company's proposed first-lien credit facilities, and 'CCC' issue-level and '6' recovery ratings to its proposed second-lien term loan. "The stable outlook reflects our expectation for adjusted leverage to remain above 10x in the next year (8x excluding preferred shares). However, we expect improving credit measures, driven by high-single-digit percent organic revenue growth and expanding adjusted EBITDA margins, to improve cash flow and support adequate liquidity." Clearlake Capital Group, a private equity firm specializing in the technology, industrial, and consumer sectors, is acquiring Confluence, a provider of performance reporting, regulatory, risk, and data software solutions. The transaction will be partially financed by $405 million in first-lien credit facilities ($290 million term loan, $75 million delayed-draw term loan, and $40 million revolver) and a $105 million second-lien term loan. High starting leverage, a small EBITDA base, and high customer concentration limits room for operational missteps. Confluence is undergoing a multiyear product enhancement and migration following its acquisition of StatPro in 2019, which doubled its revenue and added portfolio analytics and data services to its offerings. Over the next 18 months we estimate approximately 25% of total annual recurring revenue (ARR) will transition to new IT environments. Despite no significant customer migration issues over the last year, S&P believes Confluence could be vulnerable to cash flow deficits if a top customer leaves and/or there are cost overruns. The top three customers generated about 15% of total ARR in 2020. Acquisitions funded with the delayed-draw term loan will likely result in S&P Global Ratings-adjusted leverage above the 10x area (8x excluding preferred shares) in the next two years. Valuations within the financial technology segment have spiked, and recent acquisition multiples for large market participants can be 20x-25x. Smaller, unprofitable companies can see revenue multiples well over 4x. This trend makes acquisition-based growth expensive, further delaying deleveraging. Nevertheless, S&P believes Confluence will pursue targets that enhance product breadth by contributing post-trade compliance and administration capabilities and facilitating expansion into new asset classes and geographies. Positive industry trends, subscription-based revenue, and high customer retention rates provide revenue predictability. S&P said, "We believe demand from asset managers and servicers to automate workflows, address regulatory requirements, and outsource noncore functions will support long-term industry growth. Despite Confluence operating in a highly competitive industry, the company does not participate much in requests for proposal, which limits the need to compete on price. Under our base case, over the next two years we expect revenues to increase in the high-single-digit percent area, primarily driven by upselling regulatory and compliance solutions while maintaining gross retention rates in the mid-90% area." The stable outlook reflects S&P's expectation for adjusted leverage to remain above 10x in the next year. However, it expects improving credit measures, driven by high-single-digit percent organic revenue growth and expanding adjusted EBITDA margins, to significantly improve cash flow and support adequate liquidity. S&P could lower its rating if it no longer considers Confluence's capital structure sustainable. Free operating cash flow (FOCF) deficits and borrowings under the revolving credit facility to fund operations could precipitate this, likely because of: -- Poor execution of customer migrations, leading to client losses or cost overruns; -- Debt-funded dividends or nonaccretive acquisitions; and -- Industry consolidation among asset managers and servicers and/or vendor consolidation resulting in client attrition. While unlikely over the next 12 months, S&P could raise the rating if S&P Global Ratings-adjusted leverage is below 6.5x and FOCF to debt above 7% on a sustained basis, likely because of: -- Evidence the company is committed to using cash flow for debt repayment over acquisitions; -- Faster customer migrations onto new platforms; and -- Lower one-time expenses and higher cost savings than expected. COGECO COMMUNICATIONS: DBRS Confirms BB(high) Issuer Rating ----------------------------------------------------------- DBRS Limited confirmed Cogeco Communications Inc.'s Issuer Rating at BB (high) and Senior Secured Notes & Debentures rating at BBB (low) with a Recovery Rating of RR1. All trends are Stable. The confirmations follow Cogeco's announcement that its U.S. subsidiary, Atlantic Broadband (ABB), has entered into a definitive agreement with WideOpenWest, Inc. (WOW) to purchase all of its broadband systems located in Ohio (the Acquisition). The transaction is valued at USD 1.125 billion and is expected to be financed through a combination of (1) USD 900 million committed secured debt at ABB, which is nonrecourse to Cogeco, and (2) approximately USD 225 million in cash. WOW's Ohio broadband system's revenue for the 12-month period ended March 31, 2021, was USD 244 million and pro forma adjusted EBITDA reflecting ABB's cost structure and USD 2 million in cost synergies was approximately USD 103 million. The transaction is expected to close in Cogeco's Q1 2022 (September to November 2021). In December 2020, DBRS Morningstar confirmed Cogeco's Issuer Rating at BB (high) with a Stable trend. The Issuer Rating is predicated on Cogeco's consolidated indebtedness and reflects the probability of default within the consolidated entity. At that time, DBRS Morningstar noted that Cogeco's EBITDA performance was in-line with expectations and that credit metrics were solid with F2020 gross leverage at 2.72 times (x) compared with DBRS Morningstar's initial estimate of approximately 3.00x, reflecting both a decline in lease-adjusted gross debt and an increase in EBITDA. Today's rating action is based on several factors, including (1) the attractiveness of the acquisition target, which enables ABB to expand its service footprint into an adjacent region; (2) material revenue growth potential given low fiber-to-the-home penetration rate by local competitors; (3) an acceptable transaction valuation, the attractiveness of which is enhanced by the present value of tax benefits created by the Acquisition; (4) management's intention to use free cash flow (FCF) to aggressively reduce leverage following the transaction close; and (5) the solid track record that ABB has established through multiple acquisitions in the U.S. including the USD 1.4 billion MetroCast acquisition that was completed in early 2018. In its analysis, DBRS Morningstar focused on (1) the business risk profile of the combined entity, including the benefits and risks associated with integration and realization of operating synergies; (2) the financial risk profile, including assessing the cash-generating capacity of the combined entity; and (3) the Company's longer-term business strategy and financial management intentions. DBRS MORNINGSTAR ANALYSIS (1) Business Risk DBRS Morningstar believes that the Acquisition's primary benefit to Cogeco's business risk profile is the continued growth of ABB's scale and geographic revenue diversification in the north-east region of the U.S. market and future growth potential. WOW's Ohio broadband system provides roughly 196,000, 61,000, and 35,000 Internet, video, and voice subscribers, respectively. With an estimated 688,000 homes passed in the Ohio broadband system's network, the ~29% subscriber penetration rate provides considerable long-term revenue growth opportunity despite being a three-player market. As a result of the Acquisition, ABB's overall Internet subscriber base is expected to increase ~38% to 707,000 subscribers. DBRS Morningstar believes ABB is well positioned to leverage WOW's DOCSIS 3.1 network platform in order to offer attractive consumer bundles that include Internet protocol television (IPTV) services to drive revenue and EBITDA growth and reduce churn. Further, a low enterprise penetration rate provides growth potential in Cleveland and Columbus as does the potential of urban edge-outs in the long term. That said, industry headwinds persist for Cogeco (and the cable industry) as the competitive environment intensifies in both Canada and the U.S. Cogeco competes with numerous (and, in some cases, much larger) players for telephony, broadband, and, more recently, video services in the form of IPTV services. Further, as ABB expands its service footprint, it is expected to compete more directly (even in rural regions) with considerably larger integrated U.S.-based communications companies that may be able to offer a greater breadth of services and/or bundles. As such, cable operators such as Cogeco/ABB may continue to lose market share to IPTV providers in the future and face continued cord shaving and cutting trends, although Cogeco's feature-rich digital video platform may partially mitigate this pressure. Overall, DBRS Morningstar believes the Acquisition is a net positive for Cogeco's business risk profile reflecting (1) the expansion of ABB's footprint to adjacent markets without operating overlap; (2) a demographic profile that should provide long-term growth potential through the introduction of bundled service plans and the launch of additional features such as IPTV, increased data packages, and an enhanced enterprise offering; and (3) ABB's solid track record of acquiring assets that it is able to successfully leverage to drive revenue and EBITDA growth. DBRS Morningstar believes these positives mitigate the anticipated 18–24 month integration period, including the introduction of a new billing system and an estimated $82 million in incremental integration capital expenditures (capex). (2) Financial Risk Profile In terms of financial profile, the Acquisition is expected to result in an increase in Cogeco's consolidated debt balance to approximately $4.5 billion (DBRS Morningstar estimate including spectrum funding) at close, up from $3.2 billion as at Q2 2021 (ended February 28, 2021). Pro forma gross debt-to-EBITDA is expected to peak at roughly 3.30x at the time of close compared with 2.67x for the 12-month period ended February 28, 2021. EBITDA coverage is forecast to decrease to between 7.0x and 7.5x at close compared with 8.38x for the 12-month period ended February 28, 2021. Post-close, DBRS Morningstar forecasts that FCF after capex and dividends and before changes in working capital as a percent of debt will be at a reasonably sound level at about 8.0% to 8.5%, despite the increase in debt. DBRS Morningstar expects the Company to deleverage to below 3.0x by the end of F2023 primarily by applying the majority of FCF (after dividend payments) to debt repayment. (3) Business Strategy and Financial Management Intentions The positive impact of the Acquisition on the business risk profile reflects the continued growth in the ABB service footprint and incremental revenue and EBITDA growth potential. Although the U.S. cable market is highly competitive, the nonmetropolitan markets in which ABB primarily operates feature a more fragmented competitive environment, typically less advanced communications networks, and/or a more attractive demographic profile. While the integration of WOW's Ohio broadband system entails execution risk related to the integration of the target's billing system, DBRS Morningstar believes that ABB's experience in integrating and subsequently driving revenue and EBITDA growth from numerous previously acquired assets (including various MetroCast assets) over the last several years should largely mitigate integration and operational risks. Further, DBRS Morningstar believes that Cogeco has the ability and willingness to deleverage after the close of the Acquisition. DBRS Morningstar estimates Cogeco will generate over $1,000 million of consolidated FCF from F2022 to F2024, with ABB generating roughly 40% to 45%. This magnitude of consolidated FCF (with a significant portion expected to be applied to debt reduction) combined with modest EBITDA growth should result in the Company deleveraging to below 3.0x by YE2023. DBRS Morningstar's confirmation of the Issuer Rating reflects its view that financial deleveraging to below 3.0x by YE2023 is reasonable in both magnitude and time frame for the BB (high) rating category. Should Cogeco's gross debt-to-EBITDA not trend toward 3.0x by YE2023 and the Company experience a deterioration in operating performance, a negative rating action could result. The Recovery Rating remains RR1 for Cogeco's Senior Secured Notes & Debentures. While DBRS Morningstar examines recovery scenarios through an enterprise-valuation approach, because ABB's debt is nonrecourse to Cogeco, the Recovery Rating on Cogeco's senior debt is based only on a valuation of its Canadian operations. Therefore, the increase in debt at ABB as a result of the Acquisition does not affect the Recovery Rating of Cogeco's debt. In accordance with "DBRS Morningstar Criteria: Recovery Ratings for Non-Investment-Grade Corporate Issuers," DBRS Morningstar has confirmed the security rating of BBB (low) with a Recovery Rating of RR1 for Cogeco's Senior Secured Notes & Debentures, which is one notch above the Company's Issuer Rating of BB (high). Cogeco's ratings continue to be supported by its established footprint in existing markets and the growth potential and diversification of the U.S. cable segment, which DBRS Morningstar believes is enhanced by the Acquisition. The rating actions taken by DBRS Morningstar also continue to consider intensifying competition, consumer cord cutting and/or shaving trends, the shifting wireless competitive landscape in Canada and the Company's lack of a wireless offering at this time, and risks associated with technological and regulatory changes. Notes: All figures are in Canadian dollars unless otherwise noted. COHU INC: Moody's Upgrades CFR to B1 Following Debt Repayment ------------------------------------------------------------- Moody's Investors Service upgraded Cohu, Inc.'s ratings, including the Corporate Family Rating to B1 from B2, the Probability of Default Rating to B1-PD from B2-PD, and the senior secured rating to Ba3 from B2. The stable outlook is maintained. The rating action follow's Cohu's repayment of approximately $100 million of the senior secured term loan B (Term Loan), announced on June 30, using the net proceeds of the divestiture of Cohu's Printed Circuit Board (PCB) Test business, which closed on June 24. The repayment reduced reported debt by about 45%. Though the PCB Test business has historically been more profitable than the remainder of Cohu's operations, Moody's estimates that the divestiture and debt repayment has improved leverage from 2.2x debt to EBITDA (twelve months ended March 27, 2021, Moody's adjusted) to just under 1.5x (twelve months ended March 27, 2021, proforma for the repayment and divestiture, Moody's adjusted). The upgrade also reflects the improved operating profile driven by the recovery in the automotive and industrial end markets and benefit of strong secular growth in the mobile end market driven by the rollout of 5G smartphones. Upgrades: Issuer: Cohu, Inc. Corporate Family Rating, Upgraded to B1 from B2 Probability of Default Rating, Upgraded to B1-PD from B2-PD Senior Secured Bank Credit Facility, Upgraded to Ba3 (LGD3) from B2 (LGD3) Outlook Actions: Issuer: Cohu, Inc. Outlook, Remains Stable RATINGS RATIONALE The B1 CFR reflects Cohu's conservative financial policy of maintaining low financial leverage, which Moody's expects will remain below 2x debt to EBITDA (Moody's adjusted), and a large cash balance, which Moody's expects will remain above $100 million. The rating also reflects the base of recurring revenues, accounting for about 42% of revenues ("non-systems revenues" twelve months ended March 27, 2021, adjusted for the PCB Test divestiture), comprised of maintenance revenues on the large installed base of semiconductor test systems and consumable products revenues driven by semiconductor production volume. Moody's expects that the conservative financial leverage, base of recurring revenues, and Cohu's low capital intensity will support consistent generation of free cash flow (FCF). This conservative financial philosophy is appropriate given the dependence on semiconductor manufacturing customers' capital spending plans, which contributes to volatile demand for Cohu's semiconductor test equipment and handler products, which account for about 58% of revenues ("systems revenues" for twelve months ended March 27, 2021, adjusted for the PCB Test divestiture). Also, Cohu's semiconductor customers are exposed to cyclical end markets, including the automotive and industrial markets, which contributes to volatility of semiconductor chip production. This introduces some volatility to demand for Cohu's consumable products used in chip testing, such as contactors and probe pins, and for spares and equipment maintenance services. Cohu's revenue scale is modest for the rating and Cohu's share of the semiconductor automated test equipment (ATE) market is modest relative to industry leaders Teradyne Inc and Advantest Corp, who together comprise about 90% of the industry. Cohu's liquidity is good. Moody's expect Cohu to maintain at least $100 million in cash on the balance sheet ($291 million of cash and short-term investments as of March 27, 2021) and generate at least $40 million of FCF over the next year. The Term Loan is covenant-lite. A constraint to a better profile is the lack of a larger revolving credit facility with more standard terms. Moody's instrument ratings reflect the probability of default of the company (as reflected in the B1-PD Probability of Default rating) and an average recovery of approximately 50% in Moody's assumed default scenario, in the aggregate, across all creditors. The 50% recovery rate reflects both the mixed capital structure with both senior and junior claim priorities and the reduced lender protections due to absence of financial maintenance covenants governing the Term Loan. The Ba3 rated Term Loan reflects the first priority lien on all assets, and benefit from loss absorption of (unrated) unsecured liabilities. The Term Loan also benefits from upstream guarantees of wholly-owned material domestic subsidiaries. If the mix of secured debt rises meaningfully, the Term Loan rating could be downgraded. The rating is supported by governance considerations, specifically Cohu's conservative financial policy, which has prioritized debt repayment over the past year, making large repayments on the Term Loan using funds from an equity issuance in March and the proceeds of the recent PCB Test divestiture. Cohu maintains a large cash balance and is a public company with a broad investor base and an independent board of directors. Cohu has abstained from significant share repurchases and suspended the quarterly dividend ($10 million annually) in May 2020 in order to conserve cash during the Covid-19 pandemic during which some of Cohu's operations were negatively impacted by movement restrictions. Given the large share of revenues dependent on the capital spending plans of semiconductor manufacturers, and Cohu's small revenue scale and market share relative to industry leaders Teradyne and Advantest, Moody's expect that Cohu's financial policy will remain conservative. The stable outlook reflects Moody's expectation that revenues will be sustained at an annual rate exceeding $800 million over the next 12 to 18 months with the EBITDA margin (Moody's adjusted) maintained in the upper teens percent. Moody's expects that revenues could vary periodically due to changes in the mix of sales of test equipment relative to consumable products. Moody's expects that Cohu will maintain its conservative financial policy, maintaining debt to EBITDA (Moody's adjusted) below 2x over the period. FACTORS THAT COULD LEAD TO AN UPGRADE OR A DOWNGRADE OF THE RATINGS The ratings could be upgraded if: Scale, diversification of sales, or share of recurring revenues rises materially Profitability improves, evidenced by sustained EBITDA margins (Moody's adjusted) of at least low 20 percent The conservative financial policy is maintained, with FCF to debt (Moody's adjusted) sustained above 20% The ratings could be downgraded if: Revenue declines, or EBITDA margins (Moody's adjusted) trend down, toward the mid-teens percent level, suggestive of a weakening competitive position, or Financial policy turns less conservative, with FCF to debt (Moody's adjusted) falling below 10%. The principal methodology used in these ratings was Semiconductor Methodology published in December 2020. Cohu, based in Poway, California, makes test automation equipment used in the final stages of production of semiconductor devices. Products include semiconductor test and inspection handlers, micro-electro mechanical systems (MEMS) test modules, test contactors, thermal subsystems, and semiconductor automated test equipment. These products are sold to global semiconductor manufacturers and semiconductor test subcontractors. Cohu generated revenues of $670 million for the twelve months ended March 27, 2021 (proforma for the divestiture of the PCB Test business.) COLLEGE PARENT: Fitch Assigns FirstTime 'BB-' LT IDR ---------------------------------------------------- Fitch Ratings has assigned a first-time 'BB-' Long-Term Issuer Default Rating (IDR) to College Parent LP (d/b/a Verizon Media Group [VMG]) and AP Core Holdings II, LLC (AP Core) and a 'BB+/RR1' senior secured rating to AP Core's credit facilities. The Rating Outlook is Stable. Fitch views VMG's carve-out positively despite the heightened underlying challenges facing VMG's businesses. The rating is supported by the opportunity to improve the company's expense base and the resultant decline in Fitch-calculated leverage to below 2.0x over the rating horizon, due to expected margin improvement and debt repayment. On May 2, 2021, funds managed by affiliates of Apollo Global Management, Inc. agreed to acquire 90% of VMG from Verizon Communications, Inc. (Verizon), for approximately $5 billion, or 4.3x adjusted EBITDA including Fitch-estimated savings. Verizon will hold the remaining 10%. Funding will include $1.5 billion of secured debt, $500 million of unsecured HoldCo debt, and $2.6 billion and $750 million of equity from Apollo and Verizon, respectively. On July 5, 2021, SoftBank Group announced the acquisition of Yahoo Japan for $1.6 billion, which is expected to close shortly after VMG's sale. Net proceeds will be allocated between VMG, Apollo and Verizon, although neither the final net proceeds nor allocations have been determined. KEY RATING DRIVERS Secularly Challenged Businesses: VMG is the fourth most visited global website with approximately 900 million global unique monthly visitors. VMG has number one positions in the finance, news and information and lifestyle verticals and number two positions in E-mail services and sports news. However, better capitalized competitors, audience fragmentation, and continued erosion in certain segments are expected to continue to negatively affect VMG's operating performance. Complicated Organizational Structure: VMG's search and consumer businesses, including Yahoo! Mail and Yahoo's home page, news, sports, finance, and entertainment content verticals, excluding legacy AOL subscription assets, will be placed into AP Core. AP Core will continue generating the majority of VMG's EBITDA and FCF, and will support VMG's first-lien secured facilities comprised of a $150 million undrawn revolver, $750 Term Loan B-1, and $750 million high yield style Term Loan B. Management has committed to using AP Core's FCF to prepay its Term Loan B-1 and set a net leverage target at AP Core of 1.3x that begins in 2022. VMG's digital advertising platform (Ad Tech), content delivery platform and legacy AOL subscription assets will remain outside AP Core. Investment requirements will use a mix of FCF, cash from the Yahoo! Japan sale, and an $850 million delayed draw term loan (DDTL) with an intermediate HoldCo. In addition, $500 million of unsecured HoldCo notes will be issued by another intermediate HoldCo outside AP Core as part of the transactions' initial financing. Fitch notes that, in line with current market conditions, AP Core's Restricted Payments baskets allow for significant cash leakage that step up when net leverage has declined to no greater than 1x below closing leverage, or following an IPO. The baskets can also be used for investments and redemption of subordinated debt. Conservative Closing Leverage: A majority of VMG's acquisition will be funded with equity, driving the low closing leverage of 3.1x. The final equity investment amount will be reduced by a portion of net proceeds from Yahoo! Japan's $1.6 billion sale to Softbank, although neither the final net proceeds nor allocations have been determined. Regardless, any reductions in the final investment will have no effect on Fitch-calculated closing leverage. AP Core's leverage is expected to rapidly improve over the rating horizon due to debt prepayment and EBITDA improvement. VMG's total leverage, which includes AP Core debt, is expected to improve more slowly as borrowings under the DDTL offset a portion of AP Core's prepayments. Fitch believes closing leverage is appropriate given the model's ongoing secular challenges. However, Apollo Group will own 90% of VMG and exert full control over the company's operational and financing decisions. Fitch believes this increases the likelihood of future debt funded shareholder friendly actions, which could negatively impact the credit profile. Cost Efficiencies: VMG has identified cost synergies, which it expects to be realized by 2024, driven by operating efficiency improvements and technology and facility benefits, with matching upfront costs. Fitch's rating case estimates both VMG and AP Core will achieve 90% of expected efficiencies along with full upfront cost allocation. Fitch and VMG did not include revenue synergies in their estimates. Fitch's rating case assumes a blend of expense realization success based on varying expectations for synergy and upfront cost realizations. These are driven by the category and scope of expected efficiencies and upfront costs, typical industry realizations and the probability of realizing each category. Fitch's realization expectations range from 75% to 100% of management's expectations and full upfront cost expectations. Stand Alone Operating Profile: Following a recovery in 2021 due to ongoing advertising environment improvements, aggregate revenue growth is expected to range from low-single digit declines to roughly flat over the rating horizon. However, Fitch estimates VMG has significant margin expansion potential of approximately 900 basis points driven by the efficiency opportunities. Parent/Subsidiary Linkage: Fitch believes the parent-subsidiary linkage is moderate between VMG and AP Core, and that AP Core is stronger resulting in no notching benefits. While there will be management control and commonality and centralized treasury, AP Core will not provide upstream guarantees or cross defaults, and there will be dividend restrictions. AP Core does not currently provide audited financials, but is expected to do so over the rating horizon. DERIVATION SUMMARY VMG's primary competitors are larger and better capitalized and have dominant market positions. Facebook (A+/Stable) and Google (unrated) have meaningfully larger and faster growing revenue bases, significantly higher margins and are much better capitalized. In addition, Google has a dominant market position in both email and search. While DIRECTV Entertainment Holdings, LLC (BB+/Stable) has a similar growth trajectory in its base business, it will have lower closing leverage and a receives one notch uplift from AT&T's 70% retained economic ownership position following DIRECTV's spin-off. KEY ASSUMPTIONS Fitch's key assumptions within the rating case for the issuer include: -- VMG and Yahoo! Japan transactions close in 4Q21: -- AP Core revenues grow low single digits in 2021 due to easy comps to 2020, followed by low single digit annual declines as continued strength in the finance, sports and entertainment verticals is offset by softness in other segments; -- RemainCo revenues grow mid-single digits in 2021 due to easy comps. 2022 revenue falls low single digit due to Yahoo! Japan sale, which more than offsets positive momentum in Ad Tech and Verizon Media Platform. That positive momentum continues over the rating horizon and revenues grow mid-single digits annually; -- Realized Fitch-calculated expense synergies drive 900 bp of EBITDA margin improvement by 2024; -- Capital intensity remains in the high single digits driven in large part by the ongoing Ad Tech investment; -- Ad Tech's capital investment is funded with the delayed draw term loan; -- Full costs to achieve the expense synergies are incurred through 2024; -- No dividends or M&A activity over the rating horizon; -- AP Core uses annual FCF to pay down Term Loan B-1 by 2024; -- Total Debt with Equity Credit / Operating EBITDA plus annualized realized expense savings declines to 2.0x by 2023 from 3.1x at closing (based on LTM March 31, 2021 operating results). RATING SENSITIVITIES Factors that could, individually or collectively, lead to positive rating action/upgrade: -- Fitch does not anticipate an upgrade in the near term; -- VMG makes substantial progress towards realizing its total cost savings; -- Total debt with equity credit / operating EBITDA including realized cost savings declines below 2.0x. Factors that could, individually or collectively, lead to negative rating action/downgrade: -- VMG experiences delays in realizing its total cost savings; -- Inconsistent or insufficient revenue gains from anticipated investments in Ad Tech business; -- Total debt with equity credit / operating EBITDA including annualized realized cost savings remains above 3.0x through 2022; -- Debt funded recapitalization or acquisition that increases leverage beyond 4.0x without a creditable plan to reduce leverage below 3.0x within 18 to 24 months. 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 Comfortable Liquidity: Pro Forma for the carveout transaction, Fitch expects VMG's liquidity to be comfortable, supported by approximately $150 million in cash and a $150 million revolver, which is expected to be undrawn at close. Fitch expects further support of liquidity from stable free cash flow generation. Fitch expects approximately $700 million in FCF generation over the rating horizon. VMG will have no significant near-term maturities at transaction close. VMG's revolver is expected to mature five years after close, and VMG will not have a significant principal maturity until the term loan facilities and Holdco notes mature in six years. Annual amortization payments are expected to be modest at $37.5 million annually. 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. ISSUER PROFILE College Parent LP (d/b/a Verizon Media Group [VMG]) will be a diversified digital media and technology company. Businesses include Yahoo! (Yahoo! Mail, search, finance, sports, news) and other digital offerings. VMG is currently a subsidiary of Verizon Communications, Inc. (Verizon). Following the pending sale of a 90% interest to Apollo Global Management, VMG will have three reporting segments: Consumer, Search and RemainCo. Consumer (Yahoo! Mail and Yahoo's! home page, news, sports, finance, and entertainment) and Search will be part of AP Core Holdings II, LLC (AP Core), the borrower under the secured credit facilities. RemainCo will consist of Ad Tech, Verizon Media Platform, and Membership Services. COLLEGE PARENT: Moody's Assigns First Time B2 Corp Family Rating ---------------------------------------------------------------- Moody's Investors Service has assigned to College Parent, L.P. ("College Parent" or the "company", d/b/a "Yahoo") a B2 Corporate Family Rating and B2-PD Probability of Default Rating. In connection with this rating action, Moody's assigned a Caa1 rating to College Holdings II, LLC's ("College Holdings II") proposed $500 million 5-year senior unsecured notes (the "HoldCo Notes"). The rating outlook is stable. Proceeds from the HoldCo Notes will be used to help finance the carve out of Verizon Media Group ("VMG") from Verizon Communications Inc. via a $5 billion buyout by Apollo Global Management, Inc. ("Apollo" or the "PE sponsor") via an approximate $2.6 billion preferred equity cash contribution from Apollo and $750 million rollover preferred equity from Verizon. The common equity will be split 90% Apollo/10% Verizon. College Holdings II will be a newly-established wholly-owned indirect subsidiary of College Parent, a newly-formed entity that will be created from the reorganized VMG assets. College Parent will eventually be the financial reporting entity for the group's consolidated accounts. To help facilitate the additional financing required for the transaction, the PE sponsor intends to segregate the cash flow generative businesses, comprising the consumer owned and operated (excluding membership services) and search businesses, into a separate newly-formed subsidiary, AP Core Holdings I, LLC ("AP Core Holdings I"), which will not provide credit support to the non-core businesses. AP Core Holdings I plans to raise unrated senior secured bank debt issued from a newly-formed wholly-owned direct subsidiary, AP Core Holdings II, LLC ("AP Core Holdings II" or the "Core Credit Group"), consisting of a: (i) $150 million 5-year revolving credit facility (RCF); (ii) $750 million 6-year term loan B facility; and (iii) $750 million 6-year high-yield style term loan facility. Additional funding for the buyout will include an unrated $850 million 5-year senior unsecured delayed draw term loan (the "Ad Tech DDTL") issued by College Holdings I, LLC, a newly-formed wholly-owned indirect subsidiary of College Parent, which will provide liquidity and offset the cash drain produced by the Ad Tech business. The Ad Tech DDTL, which will not benefit from a parent guarantee, will be placed privately. Transaction closing is expected in Q3 2021, subject to customary regulatory approvals and other closing conditions. On July 5, 2021, SoftBank Group announced the acquisition of Yahoo Japan for $1.6 billion, which is expected to close soon after the VMG sale. Net proceeds will be allocated between VMG, Apollo and Verizon, although final allocations have not been disclosed. Following is a summary of the rating actions: Assignments: Issuer: College Parent, L.P. Corporate Family Rating, Assigned B2 Probability of Default Rating, Assigned B2-PD Issuer: College Holdings II, LLC $500 Million Senior Unsecured (HoldCo) Regular Bond/Debenture due 2026, Assigned Caa1 (LGD6) Outlook Actions: Issuer: College Holdings II, LLC Outlook, Assigned Stable Issuer: College Parent, L.P. Outlook, Assigned Stable As newly-formed holding companies with no material assets other than the equity interests of their subsidiaries, College Parent, L.P. through College Holdings III, LLC are expected to conduct substantially all of their operations through their operating subsidiaries. It is Moody's understanding that the assets that will be owned by College Parent, L.P. through College Holdings III, LLC on the closing date will be, in all material respects, the same assets that are/were owned by the audited entity, Verizon Media Group, and these newly-established holding companies do not have and will not have on the closing date any assets, liabilities, operations or cash flows other than these assets and the two new debt facilities referenced as the Ad Tech DDTL and HoldCo Notes. The assigned ratings are subject to review of final documentation and no material change to the size, terms and conditions of the: (i) planned transaction; (ii) pro forma organizational structure; and (iii) pro forma assets owned by and asset protections embedded within the newly-formed entities as advised to Moody's. RATINGS RATIONALE College Parent, L.P.'s (d/b/a "Yahoo") B2 CFR reflects the carve-out's: (i) moderately high pro forma financial leverage; (ii) negative free cash flow (FCF) generation expected in 2022 and potentially neutral-to-modestly positive FCF in 2023 when cost synergies are likely to be partially realized; (iii) ongoing operating losses and cash drain in the Ad Tech unit, which is a drag on operating performance; (iv) low EBITDA margins partly due to high traffic acquisition costs, expenses associated with restructuring initiatives and flattish organic revenue growth expectations; and (v) competitive challenges, chiefly in search advertising, that historically produced negative organic revenue growth. The rating also takes into account the absence of an operating history as a standalone entity and execution risk related to a three-year period to realize an outsized and ambitious cumulative cost synergies and operational improvement program, which Moody's estimates will be extensive, offset by equally substantial near-term costs to achieve efficiencies. The B2 rating also considers Yahoo's: (i) scale as a leading online content aggregator across a massive online user base; (ii) relatively loyal users with improving customer engagement and monetization since the pandemic; (iii) diversified and personalized content offerings; (iv) good global diversity; and (v) sizable external liquidity to offset projected negative FCF generation. Assuming the transaction closes by the end of Q3 2021, Moody's base case estimates pro forma financial leverage will remain in the 4.6x area through 2022 (as calculated by Moody's, incorporating Moody's standard and non-standard adjustments, which include Moody's estimate for cost synergies net of costs to achieve efficiencies in the first-year after closing and excluding certain non-recurring costs). Moody's adjusted debt calculation includes the proposed $2 billion opening debt capitalization (Moody's assumes the Ad Tech DDTL and Core Credit Group RCF will be undrawn at closing) plus Moody's adjustments for the present value of lease obligations and non-cancellable commitments associated with purchases of content, bandwidth and traffic acquisition costs, as well as the appropriate EBITDA add-back adjustments. As the rationalization program transitions Yahoo's IT infrastructure from an on-premise network to an optimized cloud platform, Moody's expects the debt adjustments for purchase commitments to decrease. Though opening pro forma leverage appears low for the rating category, the rating considers the possibility of volatile credit protection measures and higher-than-anticipated leverage due to periods of underperformance in view of the substantial rationalization program, which could experience delays, cost overages and timing differences. Moody's also takes into account possible changes to the Transitional Services and Shared Services Agreements that could lead to higher cash outlays. Additionally, the rating also assumes that the Ad Tech DDTL will be drawn in the early years of the transformation to offset operating losses and fund capex at Ad Tech before that division turns operating cash flow positive. Moody's also considers the potential for debt-financed acquisitions, albeit a low likelihood given Yahoo management's immediate attention will be focused on restructuring the business and achieving organic revenue growth. As a result of these factors, Moody's base case projection assumptions are very conservative and presume financial leverage could fluctuate in the 4.5x-6.5x range on a GAAP basis (as calculated by Moody's) over the rating horizon. Moody's understands that the PE sponsor has developed a robust cost reduction strategy. Moody's notes that the full impact of planned cost synergies is not instantaneous, requiring up to three years for full realization. One-time cumulative carve-out costs to achieve future cost efficiencies will be sizable and nearly offset realized synergies over the near-term, thus impacting EBITDA growth and Yahoo's ability to de-lever swiftly over the rating horizon. EBITDA margins are comparatively low, in the 8%-10% area, primarily due to high traffic acquisition costs (roughly 40% of revenue) paid to third parties to direct consumer and business traffic to Yahoo's online properties. During the first two years after closing, Moody's expects EBITDA margin expansion will originate mostly from the planned rightsizing program and operational improvements, and less from revenue growth due to competitive challenges, which weigh on the rating. Between 2018 and 2020, the predecessor's revenue declined at a -4% CAGR (or -2.3% excluding assets that were sold or currently held for sale). This was chiefly due to the predecessor's sub-par growth in the Ad Platform business (roughly 85% of predecessor revenue), which was also impacted by COVID-19 that led to the division's -4.5% CAGR during this period. The unit's display advertising revenue grew just under 1% CAGR, due to waning active users within certain parts of the business that have since been sold (e.g., Tumblr and HuffPost); while search advertising declined at a -10.5% CAGR due to share losses to Alphabet's Google, the world's largest and ubiquitous search engine, as well as a pullback in client ad spend in 2020 arising from the pandemic. Moody's projects organic revenue growth in the -1% to +1% area over the next 2-3 years. Yahoo's B2 CFR benefits from the company's scale as a leading online content aggregator that reaches roughly 85% of internet users in the US and ranks in the top five for the most visited websites globally with content verticals consistently ranked #1 or #2. As the world's 4th largest internet property, Yahoo's content is broad and personalized with good diversification across the consumer (i.e., comprising mail, home, finance, sports, news and entertainment/lifestyle verticals) and search verticals. The company registers a global audience of roughly 900 million monthly unique visitors across the Yahoo ecosystem and has a large logged in email user base of approximately 150 million (email accounts total 650 million), which is a key identifier to access first-party user data that becomes more valuable to advertisers as Google phases out third-party cookies from its Chrome browser. It also facilitates conversion to paid users for subscriptions, e-commerce and micro-transactions on Yahoo's web properties as well as partner sites. To the extent the management team executes on its operational improvement plan, maintains the upward momentum in monthly active users (MAUs) that was witnessed during the pandemic and expands into growth verticals, Moody's believes Yahoo can benefit from increased user engagement and monetization driven by the accelerated secular shift of marketing spend and consumer purchase activity from traditional offline channels to online platforms. The company is poised to exploit these pronounced trends as consumers continue to scale back in-store shopping, increase visits to online retail sites and rely on e-commerce after the COVID-19 outbreak, particularly as online ads transition to the more fragmented open web from large online publishers. The stable outlook reflects Moody's view that Yahoo will capitalize on good industry growth prospects, cost efficiencies and steps to improve its product offerings, go-to-market strategy and product time-to-market under new ownership. Over the next 12-15 months, Moody's expects adequate liquidity supported by minimum cash balances of $100 - $150 million (opening cash balance pro forma for the debt raise is expected to be around $150 million) and sufficient external liquidity. While the rating is constrained by Moody's expectation for negative FCF generation in 2022, arising from weak organic revenue growth and sizable one-time costs to restructure the business, Moody's also consider the sizable external liquidity consisting of the $850 million Ad Tech DDTL, which will be used to offset the cash burn in the non-core business, while the $150 million RCF at AP Core Holdings II will enhance liquidity at the Core Credit Group. As a portfolio company of Apollo, Moody's expects Yahoo's financial strategy to be relatively aggressive given that equity sponsors have a tendency to tolerate high leverage and favor high capital return strategies for limited partners. Governance risk related to cash distributions to shareholders and/or acquisitions could increase over the intermediate timeframe as EBITDA expands and debt is reduced. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS A ratings upgrade is unlikely over the near-term, however over time an upgrade could occur if the company demonstrates organic revenue growth in the low-to-mid-single digit range and EBITDA margin expansion leading to consistent and increasing positive free cash flow generation and sustained reduction in total debt to GAAP EBITDA leverage below 4.5x (as calculated by Moody's) and positive free cash flow to debt of at least 4% (as calculated by Moody's). Yahoo would also need to maintain at least a good liquidity profile and exhibit prudent financial policies. Ratings could be downgraded if financial leverage is sustained above 6.5x total debt to GAAP EBITDA (as calculated by Moody's) or EBITDA growth is insufficient to support positive free cash flow to debt of at least 1% (as calculated by Moody's) by year end 2022. Market share erosion, significant client losses, sub-par organic revenue growth, weakened liquidity or if the company engages in leveraging acquisitions or sizable shareholder distributions could also result in ratings pressure. With Headquarters in Sunnyvale, CA and New York, NY, College Parent, L.P. (d/b/a "Yahoo") is a leading global online content aggregator and web services provider. The online portal's web properties include: Search, Consumer (Yahoo Mail, Yahoo Finance, Yahoo News, Yahoo Sports, Yahoo Entertainment and Yahoo Lifestyle), Ad Tech, Media Platform and Membership Services. The company is being reorganized from the Verizon Media Group ("VMG") division of Verizon Communications Inc. via a $5 billion buyout by Apollo Global Management, Inc. VMG's revenue totaled approximately $7.1 billion for the fiscal year ended December 31, 2020. The principal methodology used in these ratings was Business and Consumer Service Industry published in October 2016. CONNECTIONS COMMUNITY: PCO Taps Leech Tishman as Legal Counsel -------------------------------------------------------------- Eric Huebscher, the patient care ombudsman appointed in Connections Community Support Programs Inc.'s Chapter 11 case, seeks approval from the U.S. Bankruptcy Court for the District of Delaware to hire Leech Tishman Fuscaldo & Lampl, LLC to serve as his legal counsel. The firm's services include: (a) representing the ombudsman in any proceeding or hearing in the bankruptcy court, and in any action or proceeding in other courts where the rights of the patients may be litigated or affected as a result of the Chapter 11 case; (b) advising the ombudsman concerning the requirements of the Bankruptcy Code and Bankruptcy Rules and the requirements of the Office of the United States Trustee relating to the discharge of his duties under Section 333 of the Bankruptcy Code; (c) advising and representing the ombudsman concerning any potential reorganization; and (d) performing other necessary legal services. The firm's hourly rates are as follows: Partner $315 - $655 per hour Associate $75 - $330 per hour Paralegals and Law Clerks $40 - $240 per hour Patrick Carothers, Esq., a partner at Leech Tishman, disclosed in a court filing that his firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. The firm can be reached at: Patrick W. Carothers, Esq. Leech Tishman Fuscaldo & Lampl LLC 1007 N. Orange Street, 4th Floor Wilmington DE, 19801 Phone: 412.606.3182 Fax: 412.227.5551 Email: pcarothers@leechtishman.com About Connections Community Support Programs Connections Community Support Programs Inc. is a multifaceted not-for-profit 501(c)(3) health and human services organization operating and founded in Delaware with over 100 locations throughout Delaware and more than 1,100 employees. Since its founding in 1985, CCSP has grown from providing assistance to older adults with lifelong histories of psychiatric hospitalization to one of Delaware's largest nonprofit organizations that touches the lives of approximately 10,000 of Delaware's most vulnerable citizens and their families, dealing with behavioral health and substance use disorders, housing challenges, and developmental and intellectual disabilities. The organization leases 408 properties (including 389 leased facilities associated with housing and veterans' services) and owns 48 properties. Connections Community Support Programs filed for Chapter 11 protection (Bankr. D. Del. Case No. 21-10723) on April 19, 2021. The Debtor had estimated assets and debt of $50 million to $100 million as of the bankruptcy filing. The Debtor tapped Chipman Brown Cicero & Cole, LLP, led by Mark L. Desgrosseilliers, Esq., as legal counsel and SSG Advisors, LLC as investment banker. Robert Katz, managing director at EisnerAmper LLP, serves as the Debtor's chief restructuring officer. Omni Agent Solutions is the claims and noticing agent and administrative agent. The U.S. Trustee for Region 3 appointed an official committee of unsecured creditors on May 3, 2021. The committee is represented by Polsinelli, PC. On April 26, 2021, the U.S. Trustee for Region 3 appointed Eric M. Huebscher as patient care ombudsman in this Chapter 11 case. The ombudsman tapped Leech Tishman Fuscaldo & Lampl, LLC as legal counsel and Huebscher & Company as consultant. COSMOS HOLDINGS: To Swap $1 Million Debt for Equity --------------------------------------------------- Cosmos Holdings Inc. entered into a debt exchange agreement with Grigorios Siokas, the Company's chief executive officer. The Agreement provided for the issuance by the Company of 166,667 shares of common stock, at the rate of $6.00 per share, or an aggregate of $1,000,000, in exchange for $1,000,000 of existing loans by Mr. Siokas to the Company. About Cosmos Holdings Cosmos Holdings Inc. is a multinational pharmaceutical wholesaler. The Company imports, exports and distributes pharmaceutical products of brand-name and generic pharmaceuticals, over-the-counter (OTC) medicines, and a variety of dietary and vitamin supplements. Currently, the Company distributes products mainly in the EU countries via its two wholly owned subsidiaries SkyPharm SA and Decahedron Ltd. Cosmos Holdings reported net income of $820,786 for the year ended Dec. 31, 2020, compared to a net loss of $3.30 million for the year ended Dec. 31, 2019. As of March 31, 2021, the Company had $41.69 million in total assets, $44.50 million in total liabilities, and a total stockholders' deficit of $2.80 million. San Francisco, California-based Armanino LLP, the Company's auditor since 2019, issued a "going concern" qualification in its report dated April 15, 2021, citing that the Company has suffered recurring losses from operations and has a net accumulated deficit that raises substantial doubt about its ability to continue as a going concern. CP HOLDINGS: U.S. Trustee Unable to Appoint Committee ----------------------------------------------------- The U.S. Trustee for Region 3 on July 13 disclosed in a court filing that no official committee of unsecured creditors has been appointed in the Chapter 11 cases of CP Holdings, LLC and Pacrim U.S. LLC. About CP Holdings and Pacrim U.S. CP Holdings, LLC is a Texas-based assisted living facility founded in 2007. CP Holdings and affiliate Pacrim U.S. LLC sought Chapter 11 protection (Bankr. D. Del. Lead Case No. 21-10950) on June 20, 2021. In their petitions, the Debtors disclosed total assets of up to $50 million and total liabilities of up to $100 million. The cases are handled by Judge Laurie Selber Silverstein. Patrick J. Reilley, Esq., at Cole Schotz P.C., is the Debtors' legal counsel. CREW ENERGY: DBRS Confirms B(low) Issuer Rating, Trend Positive --------------------------------------------------------------- DBRS Limited changed all trends on Crew Energy Inc.'s ratings to Positive from Negative and confirmed the Issuer Rating at B (low) and the Senior Unsecured Notes rating at B (low) with a Recovery Rating of RR4. The trend changes reflect DBRS Morningstar's assessment that the Company's key credit metrics are expected to improve materially through 2022 and 2023 because of a recovery in crude oil and natural gas prices and a projected notable increase in production volumes. Crew's ratings are underpinned by the Company's (1) current size (Q1 2021 production averaged 26,258 barrels of oil equivalent (boe) per day (boe/d)); (2) capital and operational flexibility, as the Company operates the majority of its production and owns interests in the related processing facilities; and (3) significant inventory of drilling locations that provides a source of future production growth. The ratings are constrained by the Company's heavy concentration of reserves and production in northeastern British Columbia in the Montney resource play and a higher weighting of lower-valued natural gas (72% on a boe basis for the year 2020) in the production mix. DBRS Morningstar notes that the Company has been able to realize better pricing for its natural gas relative to many of its peers as a result of its diversified exposure to multiple gas markets and a successful hedging program. The Company's key credit metrics weakened significantly in 2020 and were well below the B range due to the steep decline in crude oil prices, lower natural gas price realizations, and slightly weaker production volumes. The Company took steps to counter price pressures by cutting costs, reducing capital expenditures (capex), and suspending lower margin production for a brief period of time. The Company incurred a free cash flow (FCF; cash flow after capex and dividends) deficit before working capital changes of $46 million for the year. Crew used the net proceeds of $58 million from a strategic infrastructure transaction, whereby the Company reduced its interests in two natural gas processing facilities, to fund the FCF deficit as well as reduce the debt drawn on its credit facilities. With a recovery in crude oil prices and strengthening natural gas prices, the Company has sharply stepped up its capex program this year with a budget (based on the midpoint of Company guidance) of $132.5 million, a 54% increase relative to 2020. As a consequence of higher capex, the Company expects production volumes to rise by 23% to average 27,000 boe/d in 2021 (based on the midpoint of guidance) and it targets further growth of 19% (at the midpoint of guidance) to average 32,000 boe/d in 2022. The Company also expects, with rising production volumes, per-unit costs will decline and netbacks will strengthen accordingly. DBRS Morningstar's base-case assumes commodity prices of (1) USD 53/barrel (bbl) for West Texas Intermediate oil over the balance of 2021 and USD 52/bbl in 2022 and 2023, and (2) $2.75/thousand cubic feet (mcf) for the spot price of natural gas in Alberta for the rest of 2021 and $2.50/mcf in 2022 and 2023. Based on these assumptions and combined with rising production volumes and lower unit costs, DBRS Morningstar expects the Company's cash flow to increase considerably this year and through 2022 and 2023. However, because of higher capex planned this year, DBRS Morningstar expects a modest FCF deficit in 2021. With current commodity prices well exceeding DBRS Morningstar forecasts, FCF this year may be closer to breakeven. For 2022 and 2023, the Company plans to moderate the level of capex with the intent to generate FCF surpluses and direct surpluses to strengthening the balance sheet. The Company's key credit metrics are anticipated to recover to within the B range. DBRS Morningstar is of the view that the Company has sufficient liquidity to manage a modest FCF deficit. The Company's credit facility was recently reconfirmed at $150 million. At the end of Q1 2021, the Company had drawn $56.9 million on the facility and had letters of credit of $11.7 million outstanding that were supported by the facility. Furthermore, the Company (1) has an option between June 2021 and June 2023 to enter into a 20-year natural gas processing agreement and convert an additional 11.43% interest in its two gas processing facilities for consideration of up to $37.5 million; (2) has hedged approximately 55% of this year's projected natural gas production at $2.48/gigajoule (GJ; or $3.08/mcf calculated using Crew's heat content factor) and approximately 35% of next year's projected natural gas production at $2.46/GJ (or $3.05/mcf calculated using Crew's heat content factor), which underpins the Company's cash flow forecasts; and (3) does not have any financial maintenance covenants on the $300 million of Senior Unsecured Notes, which do not mature until March 2024. Should the Company's credit profile continue to strengthen in line with DBRS Morningstar projections, Crew's ratings are likely to be upgraded by one notch. On the other hand, should oil prices plunge again and the Company's key credit metrics drop significantly below DBRS Morningstar's base-case expectations for an extended period, DBRS Morningstar may consider a negative rating action. Notes: All figures are in Canadian dollars unless otherwise noted. CROSS COUNTRY HOLDINGS: Investor Lending Says Plan Not Feasible --------------------------------------------------------------- Secured creditor Investor Lending USA., objects to the Disclosure Statement and Plan of debtor Cross Country Holdings Partnership, AGP. Secured Creditor is entitled to receive payments pursuant to a Promissory Note which is secured by a Deed of Trust on the subject property commonly known as 1130 North Poinsettia Place, West Hollywood, California 90046 ("Property"). The Secured Creditor is the largest creditor in this case. Investor Lending claims that the Debtor fails to provide for adequate protection payments or provide a reasonable timeline for refinance or sale of the subject property. The disclosure statement and the plan are infeasible. Investor Lending states that although not all the Cardinal Congregate factors apply to all debtors, most well-crafted disclosure statements which contain the adequate information mandated by 11 U.S.C. Sec. 1125 will contain a description tracking each of these points, or a statement that the factor do not apply to the Debtors. The Disclosure Statement submitted is deficient in several respects for failing to provide adequate information with respect to several of the factors identified in the Cardinal Congregate. Investor Lending points out that the Debtor's schedules and operating reports fails to show how the Debtor has the financial means to actually rehabilitate the property in order to sell. It adds that the Debtor also fails to identify a reasonable time frame for a potential refinancing or sale. Investor Lending asserts that the Disclosure Statement and Plan need to contain a specific undertaking as to which party (Debtors, directly, or Secured Creditor via impound) will be responsible for post-confirmation real estate taxes and casualty insurance. Investor Lending further asserts that if Debtor intends to pay these obligations directly, the Plan should provide a breach provision providing that if Debtors do not make said payments, it shall be considered an event of default under the Plan with the Secured Creditor empowered to obtain relief without further order from the court. A full-text copy of Investor Lending's objection dated July 13, 2021, is available at https://bit.ly/3hIm2GN from PacerMonitor.com at no charge. Attorney for Secured Creditor: Erica Loftis, Esq. (SBN 259286) Merdaud Jafarnia, Esq. (SBN 217263) Adam P. Thursby, Esq. (SBN 318465) GHIDOTTI | BERGER LLP 1920 Old Tustin Ave. Santa Ana, CA 92705 Ph: (949) 427-2010 Fax: (949) 427-2732 bknotifications@ghidottiberger.com About Cross Country Holdings Partnership Cross Country Holdings Partnership, AGP, filed a voluntary petition for reorganization under chapter 11 of the Bankruptcy Code (Bankr. C.D. Cal. Case No. 20-11365) on August 3, 2020, disclosing $1,000,001 to $10 million in both assets and liabilities. The Debtor is represented by Raymond H. Aver, Esq. at Law Offices Of Raymond H. Aver. CRYPTO TRADERS: Owner Can't File for Chapter 11 Amid SEC Suit ------------------------------------------------------------- Law360 reports that an Idaho man accused of running a fraudulent cryptocurrency investment scheme can't file for Chapter 11 because the terms of a court-imposed restraining order and a preliminary injunction explicitly disallow bankruptcy filings, an Idaho federal court has found. Shawn Cutting and his investment entity, Crypto Traders Management LLC, didn't demonstrate any change in circumstances that would warrant adjusting the terms of a $13.8 million asset freeze, U.S. District Judge B. Lynn Winmill said Tuesday. The court had issued a temporary restraining order freezing the assets along with other restrictions after the U.S. Securities and Exchange Commission filed an enforcement suit. About Crypto Traders Management LLC Crypto Traders Management LLC is a cryptocurrency investment company in Idaho. CURO GROUP: Moody's Affirms B3 CFR on Strong Profitability ---------------------------------------------------------- Moody's Investors Service has affirmed Curo Group Holdings Corp.'s corporate family rating and senior secured rating at B3. Curo's outlook remains stable. The rating action follows Curo's announcement of its planned refinancing of its outstanding B3-rated $690 million senior secured notes with an issuance of $700 million in senior secured notes. RATINGS RATIONALE The affirmation reflects Moody's unchanged view of Curo's B3 CFR, which is supported by the company's strong profitability and few substantial debt maturities before 2028. At the same time, the ratings also reflect weaknesses stemming from very high regulatory risk inherent to the subprime unsecured consumer lending industry in which Curo operates, and the firm's weak capitalization. The ratings consider the benefits to creditors of the firm's planned issuance of $700 million in senior secured notes, the proceeds of which will be used to fully repay the firm's outstanding $690 million senior secured notes and for transaction-related costs. The transaction will result in an extension of the maturity of the firm's primary debt facility and decrease refinancing risk, though these benefits are somewhat offset by a modest increase in leverage. Moody's said the ratings also consider the evolution of Curo's geographic and product mix. As of March 31, 2021, the firm's Canadian businesses account for about 70% of its outstanding loan balances. This is a sizeable increase from 2016, when 70% of loan balances were US installment loans, and just 20% were Canadian direct loans. Notwithstanding the shift in loan balance mix, the company continues to derive the majority of its revenues from the US, accounting for 70% of revenue during the twelve months ending March 31, 2021, and this was little changed from the geographic split in 2016. In part, the mismatch in loan balances and revenues is driven by pandemic-related and inorganic factors -- Curo experienced a significant decline in its US loan portfolio over the past year, but grew its Canadian direct lending portfolio and acquired Flexiti's portfolio of Canadian point-of-sale (POS) loans in 2021. Given the current composition of the firm's loan portfolio, Moody's expects Curo's Canadian businesses to comprise a higher proportion of revenues going forward, but higher margins in the US will continue to drive outsized revenue contributions from there. Lower reliance on US revenues should benefit creditors due to lower regulatory risks and higher asset quality in Canada, somewhat offset by lower interest margins from those products. However, the pandemic-driven decline in the US consumer loan portfolio will pressure related interest and fee income in the next 12-18 months. The B3 rating on Curo's existing senior secured notes reflects the volume and priority of these notes within the firm's overall capital structure. Curo's outlook is stable, reflecting Moody's expectation that financial performance will continue to improve and the company will maintain solid profitability over the next 12-18 months. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS Curo's ratings could be upgraded if the company improves its capitalization through earnings retention while maintaining a conservative financial policy, consistently strong earnings and sufficient liquidity. The ratings could also be upgraded if the firm continues to reduce reliance on earnings derived from products highly exposed to regulatory risks, namely, its US high-cost subprime installment loans. Curo's ratings could be downgraded if the company experiences a meaningful deterioration in its earnings. The ratings could also be downgraded if the company incurs substantial amounts of additional debt to pursue organic growth or a potential acquisition. The ratings could also be downgraded in the event of an adverse regulatory development that would have a significant adverse impact on the company's operations. The principal methodology used in these ratings was Finance Companies Methodology published in November 2019. DIFFENDAL-WELLIVER: Case Summary & 5 Unsecured Creditors -------------------------------------------------------- Debtor: Diffendal-Welliver, Inc. d/b/a Meadowgate 305 Basehoar School Road Littlestown, PA 17340 Case No.: 21-01574 Chapter 11 Petition Date: July 15, 2021 Court: United States Bankruptcy Court Middle District of Pennsylvania Judge: Hon. Henry W. Van Eck Debtor's Counsel: Lawrence V. Young, Esq. CGA LAW FIRM 135 North George Street York, PA 17401 Tel: 717-848-4900 Fax: 717-843-9039 E-mail: lyoung@cgalaw.co Estimated Assets: $1 million to $10 million Estimated Liabilities: $500,000 to $1 million The petition was signed by Suzanne Radcliffe, president. A full-text copy of the petition containing, among other items, a list of the Debtor's five unsecured creditors is available for free at PacerMonitor.com at: https://www.pacermonitor.com/view/FVEH5FY/Diffendal-Welliver_Inc__pambke-21-01574__0001.0.pdf?mcid=tGE4TAMA DIOCESE OF ROCHESTER: Parties Warned of Outcome Absent Consensus ---------------------------------------------------------------- Sean Lahman of Rochester Democrat and Chronicle reports that a bankruptcy judge threatened a negative outcome if both sides don't agree in Roman Catholic Diocese of Rochester's case. On the day that the Roman Catholic Diocese of Rochester filed for bankruptcy protection in September 2019, Bishop Salvatore Matano renewed his apology to those who had suffered sexual abuse by priests or other church personnel. The volume of sexual abuse claims and the diocese's bankruptcy case are inextricably linked. Its Chapter 11 filing came just a month after New York state opened a one-year legal window to file civil lawsuits for past instances of sexual abuse. It quickly became clear that the volume of abuse cases and the potential payouts were going to create an existential crisis for the diocese. In his initial letter to parishioners, Matano acknowledged that "litigation cost and settlements or jury awards will exceed our resources." Nearly two years have now passed since the Rochester diocese filed its petition for Chapter 11 reorganization. The deadline to file claims against the Diocese of Rochester came and went last August 2020, but there have been few signs of any progress towards a resolution. Instead, the two main parties in the case have become deadlocked, filing a series of competing legal motions last month asking U.S. Bankruptcy Judge Paul Warren to intervene and complaining that the other side was being unreasonable in the court-ordered mediation process. Last week, Judge Warren made it clear that he'd had enough. At the outset of a hearing conducted by telephone July 9, 2021, Warren noted that he'd read every word of the more than 1,000 pages of legal filings, urging the parties to keep their oral arguments brief. "I don't need lengthy presentations," Warren said. "This has been papered to death." Parties deadlocked What followed was each side explaining in great detail why the other side was responsible for the lack of progress in mediation. A lawyer representing abuse survivors accused the diocese of trying to make "backroom deals" with insurance companies to limit the amount of money available to pay survivors. Another lawyer, representing the diocese, countered that the amount of money being sought was "out of the stratosphere" and "completely unrealistic." Eventually, Warren appeared to tire of the back and forth and interjected. "We've been at this for over an hour and we are going in circles," Warren said. Then he issued his ruling, denying the motions and ordering the sides to return to mediation, and this time with a sense of urgency. "This brinkmanship is an affront to this court and its order to participate in mediation," Warren said. "You are not to return to mediation with your former positions in hand and seek to rehash those positions. Wipe the slate clean, participate with fresh eyes and fresh views. You all need to be willing to compromise." Warren made clear that he expected to see some significant progress in the short term, and that if he were called upon again to resolve a stalemate, it was likely that everyone would walk away unhappy. "The court wishes to remind the parties that if the path to non-consensual resolution persists, all parties are at risk for an unfavorable outcome," Warren said. Attorneys for the diocese had asked the court to approve a $35 million settlement agreement they'd reached with Lloyd's of London and Interstate Fire and Casualty, a pair of companies who together represent about one-third of the Diocese’s total insurance coverage. Stephen Donato, representing the diocese, argued that the money represented a significant contribution to a "survivors fund," which would be supplemented by money provided by other insurance policies, by parishes and schools, and by the diocese itself. That fund would likely total over $100 million, Donato told the court, which, after accounting for low or no-value claims would result in an average settlement of $220,000 per survivor. Donato argued that the "risk of continuing litigation is eating up most of the available money." Richard Morrissey, the U.S. trustee appointed to the case, argued that the motion should not be approved because it "would lock in parts of a bankruptcy settlement before a plan has even been submitted." A claimants committee, representing the roughly 475 survivors who filed claims against the diocese, objected to the deal, arguing that the amount of the proposed settlement was too low. But more than that, attorneys argued that the attempt to set a fixed amount for the insurance payout was premature and ignored all of the central unresolved issues in the case, primarily the value of each abuse claim and who is liable for paying those amounts. Allegations of 'backroom deals' Ilan Scharf, an attorney for the claimants' committee, said that details of the proposed settlement left many questions unanswered and that approving it "would allow more backroom deals like this one with other insurance companies." In rejecting the diocese's request to approve the settlement, Judge Warren noted that it would release insurers from further liability, as well as some other entities like parishes. He also issued a word of caution, suggesting to some observers that he might have been inclined to agree with Scharf's characterization of a "backroom deal." "If this path is persisted on by the diocese and its insurers, at some point the issue of whether a settlement comprises a sub-rosa agreement will be addressed by the court," Warren said. A sub-rosa agreement is an arrangement between parties that was arrived at secretly or in confidence. A group of 20 abuse survivors had asked for their claims to be removed from the bankruptcy process so that their cases could move forward, allowing a state judge to make rulings on a number of the issues the parties found themselves deadlocked over. But Warren also rejected this idea, explaining that it would simply force each of those cases to start over from scratch after investing almost two years into the bankruptcy process. Warren discussed a similar stalemate in the bankruptcy case of the Archdiocese of St. Paul and Minneapolis. A judge there observed that some of the survivors who filed proofs of claim had died during the years that lawyers were engaging in a drawn-out, back-and-forth legal process. Warren urged the lawyers in this case to choose a different path and made clear he was willing to act if they did not. "I hope that all of the factions will set aside their desire to win and focus on a resolution that is fair and agreeable to all parties in this case," Warren said. Next steps Judge Warren ordered the parties to resume their work with the court-ordered mediator, U.S. Bankruptcy Judge Gregg Zive, as soon as possible. Zive is based in Reno, Nevada. Warren told the attorneys in the case to cancel any vacation plans and rearrange their court calendars so they could travel to Reno for face-to-face meetings as soon as Judge Zive was available. "There are no excuses for failing to participate," Warren told them. Warren also cleared the way for outside experts to help make some progress on evaluating the merits and value of individual abuse claims. The Claro Group, based in Chicago, will be employed as a valuation expert and help the creditor's committee evaluate each individual sexual abuse allegation based on court documents that have been filed under seal. The judge also issued an order that would allow experts retained by the insurance companies to access those files so they could analyze the merits of each one and determine the value of each claim. Role of parishes in settlement The issues of liability and claim valuation are complex and nuanced, but this bankruptcy case is not exploring virgin territory. There are currently 10 American dioceses involved in bankruptcy proceedings, including three others in New York state: Buffalo, Syracuse and Rockville Centre. Fifteen other dioceses have emerged from the bankruptcy process. Marie Reilly, a law professor at Pennsylvania State University, studied bankruptcy cases involving dioceses and religious orders, and published her findings in an extensive 2019 law journal article. The details in each case are different, but the broad issues are largely the same. Among them is the nature of the relationships among entities within a Catholic diocese. In other words, the extent to which a parish or school bears liability for abuse that occurred on its watch, and thus, how much money they would be expected to contribute toward settling those abuse claims. Reilly's analysis addresses one concern often expressed by parishioners: that bankruptcy proceedings could result in the forced sale of a church building or other property to raise money for a settlement fund. "No doubt all parties in the Catholic bankruptcy cases understood that a bankruptcy court order approving a trustee's sale of a Catholic parish church or school would likely set off an explosion of self-immolating litigation," Reilly wrote. But that doesn't mean parishes should not expect to contribute. Although a property liquidation seems unlikely for individual parishes, Reilly writes that it "should not obscure the importance of future contributions of Catholic faithful as a plan-funding source. Canon law obligates Catholics to support the Church. It gives the bishop authority to tax parishes for ordinary support of the diocese." About The Diocese of Rochester The Diocese of Rochester in upstate New York provides support to 86 Roman catholic parishes across 12 counties in upstate New York. It also operates a middle school, Siena Catholic Academy ("SCA"). The Diocese has 86 full-time employees and six part-time employees and provides medical and dental benefits to an additional 68 retired priests and 2 former priests. The Diocese generated $21.88 million of gross revenue for the fiscal year ending June 30, 2019, compared with a gross revenue of $24.25 million in fiscal year 2018. The Diocese of Rochester filed for Chapter 11 bankruptcy protection (Bankr. W.D.N.Y. Case No. 19-20905) on Sept. 12, 2019, amid a wave of lawsuits over alleged sexual abuse of children. In the petition, the Diocese was estimated to have $50 million to $100 million in assets and at least $100 million in liabilities. Bond, Schoenec & King, PLLC is the Diocese's counsel. Stretto is the claims and noticing agent. DIOCESE OF ROCKVILLE: Abuse Victims Can Access Parishes' Data ------------------------------------------------------------- Law360 reports that sexual abuse victims asserting claims against the Roman Catholic Diocese of Rockville Centre will have access to its parish financial information after a New York bankruptcy judge ruled Wednesday, July 14, 2021, that they and other unsecured creditors need to determine if parish funds are intermingled with the assets of the bankrupt diocese. During a hearing conducted remotely, U.S. Bankruptcy Judge Shelley C. Chapman said that account statements for the 136 parishes in the diocese will be made available to the official committee of unsecured creditors, but that the dollar amounts indicating account balances in the parishes' bank and investment accounts will remain confidential for now. About The Roman Catholic Diocese of Rockville Centre, New York The Roman Catholic Diocese of Rockville Centre, New York, is the seat of the Roman Catholic Church on Long Island. The Diocese has been under the leadership of Bishop John O. Barres since February 2017. The State of New York established the Diocese as a religious corporation in 1958. The Diocese is one of eight Catholic dioceses in New York, including the Archdiocese of New York. The Diocese's total Catholic population is approximately 1.4 million, roughly half of Long Island's total population of 3.0 million. The Diocese is the eighth largest diocese in the United States when measured by the number of baptized Catholics. The Roman Catholic Diocese of Rockville Centre, New York, filed a Chapter 11 petition (Bankr. S.D.N.Y. Case No. 20-12345) on Sept. 30, 2020. The Diocese was estimated to have $100 million to $500 million in assets and liabilities as of the filing. The Hon. Shelley C. Chapman is the case judge. The Diocese tapped Jones Day as legal counsel, Alvarez & Marsal North America, LLC, as restructuring advisor, and Sitrick and Company, Inc., as communications consultant. Epiq Corporate Restructuring, LLC, is the claims agent. The U.S. Trustee for Region 2 appointed a committee to represent unsecured creditors in the Chapter 11 case. The Committee retained Pachulski Stang Ziehl & Jones LLP as its legal counsel. ENOVA INT'L: Moody's Affirms B2 CFR & Alters Outlook to Stable -------------------------------------------------------------- Moody's Investors Service has affirmed Enova International, Inc.'s B2 long-term senior unsecured rating and its B2 corporate family rating. Moody's has also changed Enova's outlook to stable from negative. Affirmations: Issuer: Enova International, Inc. Corporate Family Rating, Affirmed B2 GTD Senior Unsecured Regular Bond/Debenture, Affirmed B2 Outlook Actions: Issuer: Enova International, Inc. Outlook, Changed To Stable From Negative RATINGS RATIONALE Moody's said the change in Enova's outlook to stable from negative reflects the solid progress the firm has made on integrating its October 2020 OnDeck Capital (OnDeck) acquisition. The stable outlook also reflects Moody's expectation that Enova will maintain strong profitability and capitalization over the next 12-18 months. Moody's said Enova's B2 CFR is supported by the firm's strong profitability and capitalization, along with its flexible online business model. The 2020 OnDeck acquisition transformed Enova to being a more diversified business, from a predominantly subprime consumer lender through its legacy CashNet and NetCredit brands. OnDeck's small business loans account for approximately 55% of Enova's receivables, and Enova's legacy business activities in subprime consumer loans account for the remaining 45%. Consumer loans still accounted for 70% of revenue during the first quarter of 2021, but this is partly driven both by seasonality and historically low charge-off rates due to pandemic-related stimulus and other measures. Over time, small business lending should become a higher proportion of Enova's revenue, notwithstanding the lower yields from these loans compared to subprime consumer loans. Overall, Enova's reduced reliance on subprime consumer loans is positive for creditors because it reduces the firm's exposure to regulatory risk, as subprime consumer loans have come under high scrutiny at both the federal and the state level. The affirmation and outlook revision also reflect the progress Enova has made on the integration of OnDeck, with most targeted synergies on track to be realized by the end of the year. In addition, Enova now expects that OnDeck's legacy portfolio of small business loans will yield over $200 million in residual cash flows, and it had assigned little value to these loans at the time of the acquisition. Enova's capitalization, as measured by tangible common equity to tangible managed assets (TCE/TMA), has improved significantly to over 40% as of March 31, 2021, from approximately 12% as of December 31, 2019. While Moody's does not expect Enova to maintain this level of capitalization over the long term, Moody's expects Enova to continue to maintain conservative levels of capitalization, consistent with historical levels. Moody's said Enova's B2 senior unsecured rating reflects the size and priority of unsecured debt within the firm's capital structure. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS The ratings could be upgraded if the firm is able to reduce exposure to regulatory risks while maintaining strong and stable earnings, with net income to average managed assets (NI/AMA) consistently at 5% or above and TCE /TMA consistently above 15%. The ratings could be downgraded if Moody's expects Enova's NI/AMA to be sustained below 4% for a protracted period, or if leverage and liquidity meaningfully deteriorate, or if the firm experiences a material operational failure. The principal methodology used in these ratings was Finance Companies Methodology published in November 2019. EVOKE PHARMA: Launches Gimoti Patient-Physician Experience Program ------------------------------------------------------------------ Evoke Pharma, Inc. announced the start of additional marketing initiatives focusing on the launch of a patient and physician experience program for GIMOTI, the Company's nasal spray product for the relief of symptoms in acute and recurrent diabetic gastroparesis. The program will provide samples of GIMOTI primarily to targeted gastroenterologists and advance practice practitioners. The program intends to expand awareness and trial of GIMOTI for both physicians and patients and help both groups gain experience with GIMOTI and its non-oral treatment benefits. About Evoke Pharma Headquartered in Solana Beach, California, Evoke -- http://www.evokepharma.com-- is a specialty pharmaceutical company focused primarily on the development of drugs to treat GI disorders and diseases. The Company is developing Gimoti, a nasal spray formulation of metoclopramide, for the relief of symptoms associated with acute and recurrent diabetic gastroparesis in adult women. Evoke Pharma reported a net loss of $13.15 million for the year ended Dec. 31, 2020, compared to a net loss of $7.12 million for the year ended Dec. 31, 2019. As of March 31, 2021, the Company had $19.29 million in total assets, $11.48 million in total liabilities, and $7.81 million in total stockholders' equity. BDO USA, LLP, in San Diego, California, the Company's auditor since 2014, issued a "going concern" qualification in its report dated March 11, 2021, citing that the Company has had recurring losses and negative cash flows from operations since inception and expects to continue to incur net losses for the foreseeable future. The determination as to whether the Company can continue as a going concern includes consideration of managements operating plan and anticipated timing of future cash flows. FIFTEEN TWENTY: Taps Rosewood Realty as Real Estate Consultant -------------------------------------------------------------- Fifteen Twenty Six Fifty Second, LLC seeks approval from the U.S. Bankruptcy Court for the Southern District of New York to hire Rosewood Realty Group as its real estate consultant and broker. The Debtor needs the services of the firm to market and sell its property at 1526 52nd St., Brooklyn, N.Y. The firm will be paid a 5 percent sales commission and a 4 percent refinance commission. Greg Corbin, the firm's president, disclosed in a court filing that his firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. The firm can be reached at: Greg Corbin Rosewood Realty Group 38 East 29th Street, 5th Floor New York, NY 10016 Phone: (212) 359-9904 Email: Greg@rosewoodrg.com About Fifteen Twenty Six Fifty Second Suffern, N.Y.-based Fifteen Twenty Six Fifty Second, LLC sought Chapter 11 protection (Bankr. S.D. NY. Case No. 21-22397) on July 7, 2021. In the petition signed by Isaac Lefkowitz, chief executive officer, the Debtor disclosed total assets of $4,700,000 and total liabilities of $1,138,820. Judge Robert D. Drain presides over the case. Robert L. Rattet, Esq., at Davidoff Hutcher & Citron, LLP, serves as the Debtor's bankruptcy counsel. FILOS CATERING: Seeks to Hire Leonard K. Welsh as Legal Counsel --------------------------------------------------------------- Filos Catering, Inc. seeks approval from the U.S. Bankruptcy Court for the Eastern District of California to employ the Law Offices of Leonard K. Welsh to serve as legal counsel in its Chapter 11 case. The firm's services include: a. consulting with the Debtor about its financial situation and goals and the efficacy of various forms of bankruptcy as a means to achieve its goals; b. preparing the documents necessary to administer the Debtor's bankruptcy case; c. advising the Debtor concerning its duties in a Chapter 11 case; d. helping the Debtor formulate a Chapter 11 plan of reorganization, drafting the plan, and prosecuting legal proceedings to obtain confirmation of the plan; and e. preparing and prosecuting pleadings such as complaints to avoid preferential transfers or transfers deemed fraudulent to creditors, objections to claims, and motions for authority to borrow money, sell property or compromise claims. The hourly rates charged by the firm are as follows: Attorneys $350 per hour Legal Assistants $125 per hour The firm will also be reimbursed for out-of-pocket expenses incurred and will be paid a retainer in the amount of $16,738. Leonard Welsh, Esq., disclosed in a court filing that his firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. The firm can be reached at: Leonard K. Welsh, Esq. Law Offices of Leonard K. Welsh 4550 California Avenue, Second Floor Bakersfield, CA 93309 Tel: (661) 328-5328 Fax: (661) 760-9900 Email: lwelsh@lkwelshlaw.com About Filos Catering Filos Catering, Inc. filed its voluntary petition for relief under Chapter 11 of the Bankruptcy Code (Bankr. E.D. Cal. Case No. 21-11704) on July 2, 2021. At the time of filing, the Debtor had between $500,001 and $1 million in both assets and liabilities. Judge Jennifer E. Niemann oversees the case. The Debtor is represented by the Law Offices of Leonard K. Welsh. FLORIDA TILT: Asks Court to Extend Plan Exclusivity Thru Oct. 26 ---------------------------------------------------------------- Debtor Florida Tilt, Inc., requests the U.S. Bankruptcy Court for the Southern District of Florida, Miami Division to extend the exclusive periods during which the Debtor may file a plan of reorganization and disclosure statement until October 26, 2021, and solicit acceptances to December 26, 2021. This is Debtor's third request for the exclusivity periods extension. Much progress has been made toward plan confirmation, but negotiations have not yet been concluded between the Debtor and secured creditor Wells Fargo and unsecured priority creditor IRS. The Debtor seeks to have Wells Fargo's and the IRS' prior approval of plan treatment before filing any plan to streamline the said matter. A copy of the Debtor's Motion to extend is available at https://bit.ly/2USgz7m from PacerMonitor.com. About Florida Tilt Inc. Florida Tilt, Inc. sought protection under Chapter 11 of the Bankruptcy Code (Bankr. S.D. Fla. Case No. 20-20779) on October 1, 2020, listing under $1 million in both assets and liabilities. Judge Robert A. Mark oversees the case. Ariel Sagre, Esq., at Sagre Law Firm, P.A., serves as the Debtor's legal counsel. Until further notice, the United States Trustee said it will not appoint a Committee of Creditors under 11 USC Section 1102. FORD CITY CONDOMINIUM: Taps Mitchell Abrons Jr. as Accountant ------------------------------------------------------------- Ford City Condominium Association seeks approval from the U.S. Bankruptcy Court for the Northern District of Illinois to hire Mitchell Abrons Jr., an Illinois-based certified public accountant. The Debtor needs an accountant to prepare accurate projections for its Chapter 11 reorganization plan as well as other financial functions, which may be required during the remainder of its Chapter 11 case. Mr. Abrons will be paid at an hourly rate of $50 for each of the following services to be performed: accounts payable, accounts receivable, bill payment, detailed general ledgers, bank reconciliation, financial statements, customized reports, and general bookkeeping. In a court filing, Mr. Abrons disclosed that he is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. Mr. Abrons can be reached at: Mitchell Abrons Jr. 2249 Erika Drive Broadview, IL 60155 About Ford City Condominium Association Chicago-based Ford City Condominium Association sought protection under Chapter 11 of the Bankruptcy Code (Bankr. N.D. Ill. Case No. 21-05193) on April 20, 2021. Wendy Watson, president, signed the petition. In the petition, the Debtor disclosed total assets of $511,636 and total liabilities of $1,266,643. Judge Carol A. Doyle oversees the case. Golden Law and Crane, Simon, Clar & Goodman serve as the Debtor's legal counsel. The Debtor also tapped the services of Mitchell Abrons Jr., an Illinois-based certified public accountant. FOREVER 21: United States Trustee Says Disclosures Inaccurate ------------------------------------------------------------- Andrew R. Vara, the United States Trustee for Region 3, objects to the motion of Forever 21, Inc. and its debtor-affiliates for entry of an order approving the Disclosure Statement. The United States Trustee claims that the Debtors' Plan does not propose to pay administrative creditors, priority tax and other priority creditors as required under § 1129(a)(9). Instead, the Plan proposes that those administrative creditors who already returned opt-in forms shall be paid in accordance with the terms of the Settlement. The United States Trustee points out that the Debtors should not be permitted to pre-pay Prime Clerk an estimated $200,000 to soliciting votes from such creditors because the two classes of general unsecured creditors must be deemed to reject the Plan under section 1126(g) of the Code. The United States Trustee asserts that the Disclosure Statement does not contain adequate information for the following reasons: * While the Debtors have included a Liquidation Analysis, it is factually inaccurate, most significantly with respect to the amount of professional fees that a chapter 7 trustee would incur if the case were to convert. * Debtors did not assert that all professionals have agreed not to seek payment for any services or out of pocket expenses relating to the plan and disclosure statement process, or subsequent services, such as filing and prosecuting additional administrative claims objections. Nor did the Debtors include in the "Plan Scenario" the $200,000 they are seeking Court authority to prepay to Prime Clerk to undertake solicitation of the Plan. * If the Disclosure Statement is to be approved, the inaccuracies in the Liquidation Analysis must be corrected, so as to allow administrative creditors to get a true picture of what difference, if any, there would be in the amount of distribution on their claims in chapter 7, as compared with a liquidation under the Plan. The United States Trustee further asserts that the Disclosure Statement includes numerous inaccurate or misleading statements, including the following: * The Disclosure Statement includes the representation that the Plan waives all avoidance actions against general unsecured creditors, and uses that as a carrot to induce such creditors to vote in favor of the Plan. * The Disclosure Statement wrongly asserts that parties in voting classes who "abstain" from voting on the Plan and do not opt-out of or object to third party releases will be deemed to consent to such releases. * There are a number of places in the Disclosure Statement that give the misleading impressing that the Debtors are continuing their business and are going to reorganize. About Forever 21 Founded in 1984 by South Korean husband and wife team Do Won Chang and Jin Sook Chang and headquartered in Los Angeles, Calif., Forever 21, Inc. -- http://www.forever21.com/-- is a fast-fashion retailer of women's, men's and kids' clothing and accessories and is known for offering the hottest, most current fashion trends at a great value to consumers. Forever 21 delivers a curated assortment of new merchandise brought in daily. Forever 21, Inc. and seven of its U.S. subsidiaries each filed a voluntary petition for relief under Chapter 11 of the United States Bankruptcy Code (Bankr. D. Del. Lead Case No. 19-12122) on Sept. 29, 2019. According to the petition, Forever 21 has estimated liabilities on a consolidated basis of between $1 billion and $10 billion against assets of the same range. As of the bankruptcy filing, the Debtors operated 534 stores under the Forever 21 brand in the U.S. and 15 stores under beauty and wellness brand, Riley Rose. The Debtors tapped Kirkland & Ellis LLP as legal advisor; Alvarez & Marsal as restructuring advisor; and Lazard as investment banker; and Pachulski Stang Ziehl & Jones LLP as local bankruptcy counsel. Prime Clerk is the claims agent. Andrew Vara, acting U.S. trustee for Region 3, appointed a committee of unsecured creditors on Oct. 11, 2019. The committee is represented by Kramer Levin Naftalis & Frankel LLP and Saul Ewing Arnstein & Lehr LLP. Counsel to the administrative agent under the Debtors' prepetition revolving credit facility and the Debtors' DIP ABL financing facility are Morgan, Lewis & Bockius LLP and Richards, Layton & Finger, PA. Counsel to the administrative agent under the Debtors' DIP term loan facility is Schulte Roth & Zabel LLP. FOREVER 21: Watchdog Says Liquidation Plan Unfair to Creditors -------------------------------------------------------------- Alex Wolf of Bloomberg Law reports that Forever 21 Inc.'s proposed liquidation plan received pushback from the Justice Department's bankruptcy watchdog, which accused the bankrupt retailer of baiting administrative creditors into accepting less than they're owed under the law. Forever 21, which sold its brand and operational assets out of bankruptcy for $81 million, is asking its administrative creditors, owed an estimated $229 million, to accept 11 cents on the dollar for their claims. Although suppliers and other creditors that contribute to an organization while it's in bankruptcy are entitled to full payment under the bankruptcy code, the law allows them to consent to receiving less. The U.S. Trustee asserts that the Debtors' request for approval to send opt-out forms to those administrative creditors who have not returned an opt-in form, and to all of their priority tax and other priority creditors, should be denied. "The Debtors' Plan does not propose to pay administrative creditors, priority tax and other priority creditors as required under Sec. 1129(a)(9). Instead, the Plan proposes that those administrative creditors who already returned opt-in forms shall be paid in accordance with the terms of the Settlement. The terms of that Settlement guarantee an 11% payout," the U.S. Trustee said. "In contrast, administrative creditors that did not return opt-in forms and also do not return opt-out forms, together with all priority tax and other priority creditors who do not return opt-out forms, shall receive their "Pro Rata share of the Administrative and Priority Claims Recovery," in an unspecified amount. The Plan is silent as to what distribution will be made to those administrative and priority creditors who do return an opt-out form." About Forever 21 Founded in 1984 by South Korean husband and wife team Do Won Chang and Jin Sook Chang and headquartered in Los Angeles, Calif., Forever 21, Inc. -- http://www.forever21.com/-- is a fast-fashion retailer of women's, men's and kids clothing and accessories and is known for offering the hottest, most current fashion trends at a great value to consumers. Forever 21 delivers a curated assortment of new merchandise brought in daily. Forever 21, Inc. and seven of its U.S. subsidiaries each filed a voluntary petition for relief under Chapter 11 of the United States Bankruptcy Code (Bankr. D. Del. Lead Case No. 19-12122) on Sept. 29, 2019. According to the petition, Forever 21 has estimated liabilities on a consolidated basis of between $1 billion and $10 billion against assets of the same range. As of the bankruptcy filing, the Debtors operated 534 stores under the Forever 21 brand in the U.S. and 15 stores under beauty and wellness brand, Riley Rose. The Debtors tapped Kirkland & Ellis LLP as legal advisor; Alvarez & Marsal as restructuring advisor; and Lazard as investment banker; and Pachulski Stang Ziehl & Jones LLP as local bankruptcy counsel. Prime Clerk is the claims agent. Andrew Vara, acting U.S. trustee for Region 3, appointed a committee of unsecured creditors on Oct. 11, 2019. The committee is represented by Kramer Levin Naftalis & Frankel LLP and Saul Ewing Arnstein & Lehr LLP. Counsel to the administrative agent under the Debtors' prepetition revolving credit facility and the Debtors' DIP ABL financing facility are Morgan, Lewis & Bockius LLP and Richards, Layton & Finger, PA. Counsel to the administrative agent under the Debtors' DIP term loan facility is Schulte Roth & Zabel LLP. * * * In February 2020, the company was purchased by a consortium that includes Authentic Brands Group, Simon Property Group and Brookfield Property Partners for $81.1 million. As part of the deal, ABG and Simon will each own 37.5% of the fast-fashion retailer, while Brookfield controls the remaining 25% of Forever 21's operating and intellectual property businesses. FRESH ACQUISITIONS: Gets OK to Hire GlassRatner, Appoint CRO ------------------------------------------------------------ Fresh Acquisitions, LLC and its affiliates received approval from the U.S. Bankruptcy Court for the Northern District of Texas to hire GlassRatner Capital & Advisory Group, LLC and appoint Mark Shapiro, the firm's senior managing director, as their chief restructuring officer. The firm's services include: a. Assisting in all aspects of the Debtors' business activities and operations, including budgeting, cash management and financial management; b. Assisting the Debtors in communications and negotiations with the Debtors' lenders, tax and other governmental authorities or agents, vendors, landlords, and other stakeholders; c. Reviewing daily operating activity, purchases and expenses; d. Causing the Debtors to exercise their rights under any agreements; e. Reviewing the Debtors' historical and projected financial information, including operating results, capital structure and funding mechanics; f. Assisting the Debtors in developing financial and liquidity projections; g. Identifying and assessing potential restructuring alternatives for the Debtors; h. Assisting and managing the sale of the Debtors' assets through a Section 363 sale process, an out-of-court sale process, or a plan of reorganization; i. Providing court testimony to support the plan or sale, as necessary; j. Assisting the Debtors with data collection and preparing ongoing financial reporting; k. With the Debtors' assistance, preparing the information required pursuant to statutory reporting requirements related to the Debtors' Chapter 11 proceedings; l. With the Debtors' assistance, preparing reports for, and communications with, the bankruptcy court, creditors, and any other constituents; m. Reviewing, evaluating and analyzing the financial ramifications of proposed transactions for which the Debtors may seek bankruptcy court approval; n. Providing financial advice and assistance to the Debtors in connection with a sale transaction; o. Assisting the Debtors in developing and supporting a proposed plan of reorganization; p. Rendering court testimony; q. Managing the process to secure debtor-in-possession financing; r. Working with the Debtors and their professionals to maximize the value of the estate; and s. Any other services, duties or tasks which fall within the responsibilities of a CRO. The Debtors have agreed to compensate the firm at a fixed rate of $20,000 per week, which will be billed to the Debtors on a monthly basis. In addition, GlassRatner will receive reimbursement of up to $2,500 per month for out-of-pocket expenses incurred. In the event the firm determines that monthly out-of-pocket expenses may exceed the $2,500 cap, the firm will seek the Debtors' authorization in advance of incurring such expenses. Mr. Shapiro disclosed in a court filing that his firm is a "disinterested person" within the meaning of Section 101(14) of the Bankruptcy Code. GlassRatner can be reached through: Mark Shapiro GlassRatner Capital & Advisory Group, LLC 3500 Maple Avenue, Suite 420 Dallas, TX 75219 Direct: (972) 794-1056 Mobile: (303) 482-7218 Email: mshapiro@brileyfin.com About Fresh Acquisitions LLC and Buffets LLC Fresh Acquisitions LLC and Buffets, LLC operate independent restaurant brands and are based in San Antonio, Texas. Prior to the COVID-19 pandemic, Fresh Acquisitions and its affiliates were a significant operator of buffet-style restaurants in the United States with approximately 90 stores operating in 27 states. Fresh Acquisitions' concepts include six buffet restaurant chains and a full-service steakhouse, operating under the names Furr's Fresh Buffet, Old Country Buffet, Country Buffet, HomeTown Buffet, Ryan's, Fire Mountain, and Tahoe Joe's Famous Steakhouse, respectively. Buffets Holdings, Inc. filed for Chapter 11 relief in January 2008 and won confirmation of a reorganization plan in April 2009. In January 2012, Buffets again sought Chapter 11 protection and emerged from bankruptcy in July 2012. On Aug. 19, 2015, Alamo Ovation, LLC acquired Buffets Restaurants Holdings, Inc., and as a result of the merger, Buffets operated over 300 restaurants in 35 states. Down to 150 restaurants in 25 states after closing unprofitable locations, Buffets LLC and its affiliated entities sought Chapter 11 protection (Bankr. W.D. Texas Case No. Lead Case No. 16-50557) in San Antonio, Texas, on March 7, 2016. On April 27, 2017, the court confirmed the Debtors' Second Amended Joint Plan of Reorganization. The effective date of the plan was May 18, 2017. Fresh Acquisitions and 14 affiliates, including Buffets LLC (also known as Ovation Brands) sought Chapter 11 protection (Bankr. N.D. Texas Lead Case No. 21-30721) on April 20, 2021. Fresh Acquisitions was estimated to have $1 million to $10 million in assets and $10 million to $50 million in liabilities. The Hon. Harlin Dewayne Hale is the case judge. In the 2021 cases, the Debtors tapped Gray Reed as bankruptcy counsel, Katten Muchin Rosenman LLP as special counsel, Hilco Real Estate, LLC as real estate consultant, and GlassRatner Capital & Advisory Group LLC, doing business as B. Riley Advisory Services, as restructuring advisor. Mark Shapiro, GlassRatner's senior managing director, serves as the Debtors' chief restructuring officer. BMC Group, Inc. is the claims and noticing agent. Arizona Bank & Trust, as creditor, is represented by Patrick A. Clisham, Esq., at Engelman Berger, PC while the Debtors' DIP lender is represented by J. Michael Sutherland, Esq., at Carrington Coleman. On April 30, 2021, the U.S. Trustee for Region 7 appointed an official committee of unsecured creditors in the Debtors' Chapter 11 cases. Dickinson Wright, PLLC and Caliber Advisors, LLC serve as the committee's legal counsel and financial advisor, respectively. FRESH ACQUISITIONS: Gets OK to Hire Gray Reed as Legal Counsel -------------------------------------------------------------- Fresh Acquisitions, LLC and its affiliates received approval from the U.S. Bankruptcy Court for the Northern District of Texas to hire Gray Reed to serve as legal counsel in their chapter 11 cases. The firm's services include: a) Advising the Debtors with respect to their powers and duties in the continued management and operation of their businesses and properties; b) Advising and consulting on the conduct of the cases, including all of the legal and administrative requirements of operating in Chapter 11; c) Attending meetings and negotiating with representatives of creditors and other parties in interest; d) Taking all necessary actions to protect and preserve the Debtors' estates, including prosecuting actions on the Debtors' behalf, defending any action commenced against the Debtors, and representing the Debtors in negotiations concerning litigation in which the Debtors are involved; e) Preparing legal papers; f) Appearing before the bankruptcy court and any appellate courts; g) Representing the Debtors in connection with obtaining authority to continue using cash collateral and securing post-petition financing; h) Advising the Debtors with respect to a sale process; and i) Performing all other necessary legal services for the Debtors in connection with the prosecution of the cases, including, but not limited to (i) analyzing the Debtors' leases and contracts and the assumption and assignment or rejection thereof, (ii) analyzing the validity of liens against the Debtors, and (iii) advising the Debtors on corporate and litigation matters. Gray Reed's customary rates generally range from $325 to $875 per hour for attorneys and $100 to $310 per hour for paraprofessionals. The attorneys primarily responsible for this engagement and their respective standard hourly rates are as follows: Jason S. Brookner Partner $735 per hour Aaron M. Kaufman Partner $620 per hour Amber M. Carson Associate $535 per hour Gray Reed received a retainer in the aggregate amount of $345,000. Jason Brookner, Esq., a partner at Gray Reed, disclosed in a court filing that his firm is a "disinterested person" within the meaning of Section 101(14) of the Bankruptcy Code. Mr. Brookner also disclosed the following in response to the request for additional information set forth in Paragraph D.1 of the Revised U.S. Trustee Guidelines: Question: Did the firm agree to any variations from, or alternatives to, the firm's standard billing arrangements for this engagement? Answer: No. The firm and the Debtors have not agreed to any variations from, or alternatives to, the firm's standard billing arrangements for this engagement. The rate structure provided by the firm is appropriate and is not significantly different from (a) the rates that the Debtors charge for other non-bankruptcy representatives or (b) the rates of other comparably skilled professionals. Question: Do any of the firm professionals included in this engagement vary their rate based on the geographical location of the Debtors' Chapter 11 cases? Answer: No. The hourly rates used by the firm in representing the Debtors are consistent with the rates that the firm charges other comparable Chapter 11 clients, regardless of the location of the Chapter 11 case. Question: If the firm has represented the Debtors in the 12 months prepetition, disclose the firm's billing rates and material financial terms for the prepetition engagement, including any adjustments during the 12 months prepetition. Answer: The firm has represented the Debtors since December 3, 2020. During 2020, Mr. Brookner's hourly rate was $720 and Ms. Carson's hourly rate was $495. The firm's hourly billing rate are reviewed annually and are subject to adjustment on a periodic basis. The attorneys' respective hourly rates increased on January 1, 2021. Other than the hourly rate increase, the material financial terms of the engagement have not changed. Question: Have the Debtors approved the firm's budget and staffing plan, and if so, for what budget period? Answer: The firm is subject to the budgets approved as a part of the debtor-in-possession financing. Gray Reed can be reached through: Jason S. Brookner, Esq. Aaron M. Kaufman, Esq. Amber M. Carson, Esq. Gray Reed 1601 Elm Street, Suite 4600 Dallas, TX 75201 Tel: (214) 954-4135 Fax: (214) 953-1332 Email: jbrookner@grayreed.com akaufman@grayreed.com acarson@grayreed.com About Fresh Acquisitions LLC and Buffets LLC Fresh Acquisitions LLC and Buffets, LLC operate independent restaurant brands and are based in San Antonio, Texas. Prior to the COVID-19 pandemic, Fresh Acquisitions and its affiliates were a significant operator of buffet-style restaurants in the United States with approximately 90 stores operating in 27 states. Fresh Acquisitions' concepts include six buffet restaurant chains and a full-service steakhouse, operating under the names Furr's Fresh Buffet, Old Country Buffet, Country Buffet, HomeTown Buffet, Ryan's, Fire Mountain, and Tahoe Joe's Famous Steakhouse, respectively. Buffets Holdings, Inc. filed for Chapter 11 relief in January 2008 and won confirmation of a reorganization plan in April 2009. In January 2012, Buffets again sought Chapter 11 protection and emerged from bankruptcy in July 2012. On Aug. 19, 2015, Alamo Ovation, LLC acquired Buffets Restaurants Holdings, Inc., and as a result of the merger, Buffets operated over 300 restaurants in 35 states. Down to 150 restaurants in 25 states after closing unprofitable locations, Buffets LLC and its affiliated entities sought Chapter 11 protection (Bankr. W.D. Texas Case No. Lead Case No. 16-50557) in San Antonio, Texas, on March 7, 2016. On April 27, 2017, the court confirmed the Debtors' Second Amended Joint Plan of Reorganization. The effective date of the plan was May 18, 2017. Fresh Acquisitions and 14 affiliates, including Buffets LLC (also known as Ovation Brands) sought Chapter 11 protection (Bankr. N.D. Texas Lead Case No. 21-30721) on April 20, 2021. Fresh Acquisitions was estimated to have $1 million to $10 million in assets and $10 million to $50 million in liabilities. The Hon. Harlin Dewayne Hale is the case judge. In the 2021 cases, the Debtors tapped Gray Reed as bankruptcy counsel, Katten Muchin Rosenman LLP as special counsel, Hilco Real Estate, LLC as real estate consultant, and GlassRatner Capital & Advisory Group LLC, doing business as B. Riley Advisory Services, as restructuring advisor. Mark Shapiro, GlassRatner's senior managing director, serves as the Debtors' chief restructuring officer. BMC Group, Inc. is the claims and noticing agent. Arizona Bank & Trust, as creditor, is represented by Patrick A. Clisham, Esq., at Engelman Berger, PC while the Debtors' DIP lender is represented by J. Michael Sutherland, Esq., at Carrington Coleman. On April 30, 2021, the U.S. Trustee for Region 7 appointed an official committee of unsecured creditors in the Debtors' Chapter 11 cases. Dickinson Wright, PLLC and Caliber Advisors, LLC serve as the committee's legal counsel and financial advisor, respectively. GAINCO INC: Aug. 2 Hearing on Continued Cash Collateral Access -------------------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of Texas, Corpus Christi Division, has authorized Gainco, Inc., to temporarily use cash collateral to avoid immediate and irreparable harm to the Debtor and its estate pending a final hearing. The Court directed the Debtor to expend the temporary cash collateral only pursuant to the terms of the current order and the interim budget. At the end of every week, commencing on Friday of the first full calendar week following the Petition Date, the Debtor will deliver to the Subchapter V Trustee and Traditions Commercial Finance, LLC, variance reports showing actual cash receipts and disbursements for the immediately preceding week, noting therein all variances from amounts set forth for such period(s) in the Interim Budget. As an adequate protection payment, the Debtor will pay to Traditions $15,000 in July 2021. The Debtor and Traditions each reserve their rights with respect to how such adequate protection payment will be allocated with regard to any claims asserted by Traditions. Pursuant to the setoff right of First Community Bank and also as an adequate protection payment -- to be applied against FCB's allowed claim -- the Debtor will pay to FCB $2,101.11 in July 2021. The Debtor is authorized to make a $5,000 post-petition retainer payment to the Law Offices of William B. Kingman, P.C. The Debtor will deliver the payment to the firm's IOLTA account to be held until fees are approved pursuant to a subsequent court order. As additional adequate protection for alleged cash collateral used, Traditions, Yellowstone Capital LLC, Payroll Funding Company LLC, CHTD Company, FCB and Affiliated Funding Corporation -- alleged secured creditors who asserted or assert a security interest in cash collateral -- are granted a valid, perfected, and non-avoidable replacement lien and security interest on all of the Debtor's accounts, receivables and proceeds thereof to the extent acquired after the Petition Date. The replacement liens will be in the same priority as existed on the Petition Date. However, notwithstanding any provisions of the Interim Order, the ad valorem tax liens currently held by San Patricio County incident to any real property or tangible personal property will neither be primed by nor subordinated to any liens granted. A continued hearing on the use of cash collateral will be held on August 2 at 11 a.m. It is anticipated that all persons will appear telephonically and also may appear via video at this hearing. Audio communication will be by use of the Court's regular dial-in number. Video participation is available via GoToMeeting. A copy of the Order and the Debtor's budget is available for free at https://bit.ly/3r5eYHd from PacerMonitor.com. The Debtor projects $475,000 in revenue and $208,661.18 in total operating expenses for July. About Gainco, Inc. Gainco, Inc. sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. S.D. Tex. Case No. 21-21122 on April 30, 2021. In the petition signed by Theresa Nix, president, the Debtor disclosed up to $1 million in assets and up to $10 million in liabilities. Judge David R. Jones oversees the case. The Law Offices of William B. Kingman, P.C. is the Debtor's counsel. GATEWAY FOUR: Gets Additional $11MM in Loans from Romspen --------------------------------------------------------- Judge Martin R. Barash authorized David K. Gottlieb, Chapter 11 Trustee for Gateway Four LP, to borrow from Romspen Mortgage Limited Partnership an additional $11,264,000 as part of the Gateway Four Loan to pay the expenses set forth in the budget. The provisions, protections, liens, and other terms with respect to the Gateway Four Loan shall apply with the same force and effect to the Additional Financing. All of the rights and protections afforded to Romspen, KPRS Construction Services, Inc., Largo Concrete, Inc. and all other parties who assert an interest in the assets of the Gateway Four estate shall continue in effect as set forth in the prior orders -- the Interim DIP Financing/Cash Collateral Order; the Final DIP Financing/Cash Collateral Order; and the April 2021 DIP Financing/Cash Collateral Order. The terms of the Postpetition Credit Agreement are modified (1) increase the amount of Postpetition Facility by $11,264,000; (2) amend the attached budget to conform with the revised budget; and (3) modify retroactively as of June 30, 2021, the Maturity Date of the Gateway Four Loan, to provide that the Maturity Date of the Gateway Four Loan shall be the first to occur of: * September 30, 2021; * the effective date of an Approved Plan of Reorganization; or * the date of acceleration of the Gateway Four Loan pursuant to the Postpetition Credit Agreement. Judge Barash also authorized the Trustee to use the available cash of the Gateway Four bankruptcy estate to pay the expenses as set forth in the budget. A copy of the order is available for free at https://bit.ly/3wFTulz from PacerMonitor.com. About Gateway Four LP Gateway Four LP and its affiliates Gateway Two LP and Gateway Five LLC sought protection under Chapter 11 of the Bankruptcy Code (Bankr. C.D. Cal. Lead Case No. 20-11581) on Aug. 31, 2020. In the petition signed by its president, James Acevedo, Gateway Four disclosed assets ranging between $50 million to $100 million and liabilities ranging between $10 million to $50 million. Judge Martin R. Barash oversees the case. Daniel M. Shapiro, Attorney at Law serves as the Debtors' counsel, and the Law Office of Sevan Gorginian as co-counsel. GATEWAY FOUR: Has Final OK on Access to Romspen's Cash ------------------------------------------------------ Judge Martin R. Barash, on a final basis, approved the stipulation entered into between Gateway Four LP's Chapter 11 Trustee, David K. Gottlieb, and Romspen Mortgage Limited Partnership to continue using the cash collateral of the Debtor's bankruptcy estate upon the same terms and conditions as previously approved by the Court. Accordingly, the Trustee is authorized to use the Gateway Four June Remaining Funds, on a final basis, to pay for the expenses set forth in the June 2021 budget, according to the terms of the Stipulation, and to the terms of the First Interim DIP Financing/Cash Collateral Order, First Final DIP Financing/Cash Collateral Order and the April 2021 DIP Financing/Cash Collateral Order. All of the rights and protections afforded to Romspen, KPRS Construction Services, Inc., Largo Concrete, Inc. and all other parties who assert an interest in the assets of the Gateway Four estate -- as set forth in the First Interim DIP Financing/Cash Collateral Order, the First Final DIP Financing/Cash Collateral Order and the April 2021 DIP Financing/Cash Collateral Order -- shall continue in effect. Moreover, the terms of the Postpetition Credit Agreement, as modified by the April 2021 Postpetition Financing Amendment, are modified solely to amend the attached budget to conform with the June 2021 Budget. A copy of the final order is available for free at https://bit.ly/2UA0pPF from PacerMonitor.com. About Gateway Four LP Gateway Four LP and its affiliates Gateway Two LP and Gateway Five LLC sought protection under Chapter 11 of the Bankruptcy Code (Bankr. C.D. Cal. Lead Case No. 20-11581) on Aug. 31, 2020. In the petition signed by its president, James Acevedo, Gateway Four disclosed assets ranging between $50 million to $100 million and liabilities ranging between $10 million to $50 million. Judge Martin R. Barash oversees the case. Daniel M. Shapiro, Attorney at Law serves as the Debtors' counsel, and the Law Office of Sevan Gorginian as co-counsel. GAUCHO GROUP: Extends CEO's Employment Until October 2021 --------------------------------------------------------- All of the independent members of the Board of Directors of Gaucho Group Holdings, Inc. approved the extension of Scott Mathis' employment agreement with the company, dated Sept. 28, 2015 until Oct. 31, 2021. Mr. Mathis serves as the company's CEO. All other terms of the Employment Agreement remain the same. Meanwhile, on July 5, 2021, the company moved its headquarters to 112 NE 41st Street, Suite 106, Miami, Florida 33137. The company's telephone and fax numbers remain the same, Tel: 212-739-7700; Fax: 212-655-3681. About Gaucho Group Headquartered in New York, NY, Gaucho Group Holdings, Inc. -- http://www.algodongroup.com-- was incorporated on April 5, 1999. Effective Oct. 1, 2018, the Company changed its name from Algodon Wines & Luxury Development, Inc. to Algodon Group, Inc., and effective March 11, 2019, the Company changed its name from Algodon Group, Inc. to Gaucho Group Holdings, Inc. Through its wholly-owned subsidiaries, GGH invests in, develops and operates real estate projects in Argentina. GGH operates a hotel, golf and tennis resort, vineyard and producing winery in addition to developing residential lots located near the resort. In 2016, GGH formed a new subsidiary and in 2018, established an e-commerce platform for the manufacture and sale of high-end fashion and accessories. The activities in Argentina are conducted through its operating entities: InvestProperty Group, LLC, Algodon Global Properties, LLC, The Algodon - Recoleta S.R.L, Algodon Properties II S.R.L., and Algodon Wine Estates S.R.L. Algodon distributes its wines in Europe through its United Kingdom entity, Algodon Europe, LTD. Gaucho Group reported a net loss of $5.78 million for the year ended Dec. 31, 2020, compared to a net loss of $6.95 million for the year ended Dec. 31, 2019. As of March 31, 2021, the Company had $11.46 million in total assets, $3.18 million in total liabilities, and $8.28 million in total stockholders' equity. GEMINI HDPE: Moody's Affirms 'Ba3' Rating on Term Loan B Due 2027 ----------------------------------------------------------------- Moody's Investors Service affirmed the Ba3 rating assigned to Gemini HDPE LLC's senior secured term loan B due 2027 which has approximately $588 million of debt outstanding. The outlook was changed to positive from negative. RATING RATIONALE The rating action reflects the improvement in the credit quality of Gemini's offtaker, INEOS Group Holdings S.A (INEOS: Ba3 positive), as Moody's revised its outlook on INEOS to positive from negative earlier this month. That rating action is due to continued economic recovery from the pandemic as INEOS has seen improvement in performance faster than previously. Since the trough in Q2'20 when EBITDA reached EUR260 million, Q4'20 and Q1'21 EBITDA well exceeded year-over-year comparisons with Q1'21 EBITDA of EUR706 million almost double Q1'20 EBITDA of EUR365 million. Offtaker credit quality is the primary driver of Gemini's credit assessment because INEOS wraps operational and market risk under its Tolling Agreement. Additionally, INEOS is deeply involved in the project as owner, operator, technology provider, and facility coordinator given Gemini's location within INEOS's manufacturing complex. INEOS provides guaranties under long-term Tolling Agreements that are structured to achieve a low but stable 1.0x debt service coverage ratio. The toll payment obligation is absolute, unconditional and not subject to abatement or set-off. Moody's expect the plant will maintain its strong cost position and will produce solid operational results through the remainder of 2021 and beyond with production output above nameplate capacity. Other key credit considerations include Gemini's highly competitive cost position; weak project finance protections particularly the lack of reserves such as a debt service reserve; as well as refinancing risk with 70% of the debt scheduled to be outstanding at maturity. This refinancing risk is mitigated by the terms of the Tolling Agreements that extend past the debt maturity and provide for sufficient cash flow to repay the expected refinancing amount by the maturity of the Toll Agreements in December 2035. There is minimal liquidity retained at the asset and Gemini had $6.1 million in cash and equivalents as of March 31, 2021. RATING OUTLOOK The positive outlook considers the potential for further upward pressure of Gemini's offtaker/owner credit quality owing in part to the positive outlook at INEOS. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS FACTORS THAT COULD LEAD TO AN UPGRADE Gemini HDPE's rating could be upgraded if there is further improvement in INEOS's credit quality as long as the project maintains solid operational performance. FACTORS THAT COULD LEAD TO A DOWNGRADE Gemini HDPE's rating could be downgraded if there is deterioration of INEOS's credit quality, if the key underlying contracts are challenged or violated or if the project encounters extensive operating problems. PROFILE Gemini HDPE LLC (Gemini) is a high-density polyethylene (HDPE) manufacturing plant within INEOS's Battleground Manufacturing Complex (BMC) located in La Porte, Texas. The project uses INEOS' licensed proprietary Innovene-S process and is operating above its nameplate capacity of 1 billion pounds of HDPE per year. RATING METHODOLOGY The principal methodology used in these ratings was Generic Project Finance Methodology published in June 2021. GIRARDI & KEESE: Trustee Uncovers Fee Payments to Ex-Wife Erika --------------------------------------------------------------- Law360 reports that Erika Girardi, the reality TV star ex-wife of disgraced attorney Thomas Girardi, has been collecting California lottery payments that her ex-husband's now-bankrupt firm accepted in lieu of fees in a 2012 settlement, the Girardi Keese's liquidation trustee claimed Wednesday, adding that the firm and the "Real Housewives of Beverly Hills" star had hidden those payments from the court and creditors. The alleged -- and unusual -- scheme was purportedly uncovered by Elissa Miller, the bankruptcy trustee liquidating the firm's assets. Miller said that she's intercepted $19,760 in lottery payments being dispersed to Girardi this 2021. About Girardi & Keese Girardi and Keese or Girardi & Keese was a Los Angeles-based law firm founded in 1965 by lawyers Thomas Girardi and Robert Keese. It served clients in California in a variety of legal areas. It was known for representing plaintiffs against major corporations. An involuntary Chapter 7 petition (Bankr. C.D. Cal. Case No. 20-21022) was filed in December 2020 against GIRARDI KEESE by alleged creditors Jill O'Callahan, Robert M. Keese, John Abassian, Erika Saldana, Virginia Antonio, and Kimberly Archie. The petitioners' attorneys: Andrew Goodman Goodman Law Offices, Apc Tel: 818-802-5044 E-mail: agoodman@andyglaw.com Elissa D. Miller, a member of the firm SulmeyerKupetz, has been appointed as Chapter 7 trustee. be reached at: The Chapter 7 trustee can be reached at: Elissa D. Miller 333 South Grand Ave., Suite 3400 Los Angeles, California 90071-1406 Telephone: (213) 626-2311 Facsimile: (213) 629-4520 E-mail: emiller@sulmeyerlaw.com GLOBAL DISCOVERY: Taps Grobstein Teeple as Financial Advisor ------------------------------------------------------------ Global Discovery Biosciences Corporation seeks approval from the U.S. Bankruptcy Court for the Central District of California to hire Grobstein Teeple, LLP as its financial advisor. The firm's services include evaluating books and records, gathering and analyzing available documents and electronic data, interviewing parties to the matter, performing financial and other analyses, and, if required, testifying at deposition and trial. The firm's hourly rates range from $85 to $525. Howard Grobstein, the firm's managing partner, disclosed in a court filing that his firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. The firm can be reached at: Howard B. Grobstein, CPA Grobstein Teeple LLP 6300 Canoga Avenue, Suite 1500W Woodland Hills, CA 91367 Tel: (818) 532-1020 About Global Discovery Biosciences Irvine, Calif.-based Global Discovery Biosciences Corporation -- https://www.gdbiosciences.com -- is a fully licensed diagnostic laboratory running specialized, highly specific and accurate testing for its clients, domestic and global. Global Discovery Biosciences filed a voluntary petition for relief under Chapter 11 of the Bankruptcy Code (Bankr. C.D. Calif. Case No. 21-10619) on March 11, 2021. Dan Angress, chief executive officer and secretary, signed the petition. At the time of the filing, the Debtor had between $1 million and $10 million in both assets and liabilities. Judge Mark S. Wallace oversees the case. The Debtor tapped Weiland Golden Goodrich, LLP as bankruptcy counsel, Robertson & Culver, LLP as special counsel and Grobstein Teeple, LLP as financial advisor. Mark M. Sharf is the Subchapter V trustee appointed in the Debtor's Chapter 11 case. The trustee is represented by Margulies Faith, LLP. GPSPRO LLC: Seeks to Hire Garman Turner Gordon as Legal Counsel --------------------------------------------------------------- GPSPRO, LLC seeks approval from the U.S. Bankruptcy Court for the District of Nevada to employ Garman Turner Gordon, LLP to serve as legal counsel in its Chapter 11 case. The firm will provide these services: a. prepare all necessary or appropriate motions, applications, answers, orders, reports, and other papers in connection with the administration of the Debtor's estate; b. to take all necessary or appropriate actions in connection with a plan of reorganization and related disclosure statement) and all related documents, and such further actions as may be required in connection with the administration of the Debtor's estate; and c. perform all other necessary legal services in connection with the prosecution of the Debtor's Chapter 11 case. The firm's hourly rates are as follows: Shareholders $425 to $825 per hour Associates $200 to $400 per hour Paraprofessionals $55 to $215 per hour The Debtor paid Garman Turner Gordon a retainer of $23,000 and will reimburse the firm for out-of-pocket expenses incurred. Mark Weisenmiller, Esq., a partner at Garman Turner Gordon, disclosed in a court filing that his firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. The firm can be reached at: Mark M. Weisenmiller, Esq. William M. Noall, Esq. Garman Turner Gordon LLP 7251 Amigo Street, Suite 210 Las Vegas, NV 89119 Telephone: (725) 777-3000 Facsimile: (725) 777-3112 Email: mweisenmiller@gtg.legal wnoall@gtg.legal About GPSPRO LLC GPSPRO, LLC filed a Chapter 11 bankruptcy petition (Bankr. D. Nev. Case No. 21-13055) on June 16, 2021, disclosing total assets of up to $50,000 and total liabilities of up to $1 million. The Debtor is represented by Garman Turner Gordon, LLP. HANDL NEW YORK: May Use Cash Collateral Thru Aug. 3 Final Hearing ----------------------------------------------------------------- Judge J. Kate Stickles authorized HANDL New York, LLC to use cash collateral, pursuant to the approved budget, through and including the date of the final hearing on the motion. The Court ruled that the secured parties in the cash collateral are granted fully perfected replacement liens on all of the Debtor's assets to repay the diminution of value arising from the Debtor's use of Cash Collateral, provided that the secured parties shall be entitled to attachment of replacement liens on assets of the Debtor only with the same validity, priority, amount, and extent as the Agent's prepetition liens. To the extent that unencumbered funds are not available to pay administrative expenses in full, the Replacement Liens shall be subject to payment of the Carve-Out. A copy of the interim order is available for free at https://bit.ly/3yHxXtW from PacerMonitor.com. The final hearing will be held on August 3, 2021 at 2 p.m. prevailing Eastern Time. Objections must be filed on or before July 27. About HANDL New York, LLC HANDL New York, LLC is a supplier of cell phone cases and attachable phone holders and stands. The Debtor sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. D. Del. Case No. 21-10984) on June 30, 2021. In the petition signed by Allen Hirsch, principal manager, the Debtor disclosed up to $1 million in assets and up to $10 million in liabilities. Judge John T. Dorsey oversees the case. Adam Hiller, Esq. at Hiller Law, LLC is the Debtor's counsel. HARI 108: Seeks Cash Collateral Access -------------------------------------- HARI 108, LLC asks the U.S. Bankruptcy Court for the Northern District of Illinois, Eastern Division, for authority to use cash collateral on an emergency basis and for related relief. The Debtor requires the use of cash collateral for payroll, purchase inventory and supplies, maintenance and repairs, advertising, and other miscellaneous items needed in the ordinary course of business. The Debtor requests that the Court authorize it to use cash and cash equivalents that allegedly serve as collateral for claims asserted against the Debtor and its property by these Secured Creditors: 1. Associated Wholesale Grocers, Inc. 2. MBH Investments, LLC 3. U.S. Small Business Administration 4. United Food and Commercial Workers Unions and Employers Midwest Pension Fund 5. United Food and Commercial Workers International Union Industry Pension Fund On May 15, 2017, Central Grocers filed for Chapter 11 bankruptcy. The Debtor was a member of the Central Grocers distribution and rebate program. As a result of the Central Grocers bankruptcy, the Debtor lost over $248,000 in rebates and membership interest in Central Grocers. Also on May 15, 2017, the Debtor entered into a membership agreement with Associated Wholesale Grocers, Inc., an association that supplies inventory and produce to grocery stores at preferred prices. Since the contract date, AWG has been supplying the Debtor with inventory and supplies according to the credit terms that requires the Debtor to pay for weekly purchase on the following Friday after the week of delivery. The Debtor filed the Chapter 11 case to preserve the estate property for its creditors. On November 25, 2020, United Food and Commercial Workers Unions and Employers Midwest Pension Fund, issued a citation to discover assets to the Debtor's bank account in for a judgment stemming from pension withdrawal liability Hometown National Bank. The Debtor initially negotiated a payment plan for the First Citation allowing it operate while the Debtor was dealing with the economic impact of the Covid19 Pandemic. On May 26, 2021, United Food and Commercial Workers International Union-Industry Pension Fund, issued a citation to discover assets to the Debtor's bank account in Hometown National Bank for a judgment stemming from pension withdrawal liability. On June 3, 2021, the Citation caused Hometown National Bank to freeze the Debtor's account. At the time, the account had approximately $68,673 of fund. These funds were earmarked for payment to AWG. Pursuant to the membership agreement, AWG has a security interest in the Debtor accounts. As a result, the Debtor could not meet its financial obligations. Associated Wholesale Grocers asserts a security lien and claim against the Debtor's inventory and accounts, with a current indebtedness of approximately $0.00 after Associated Wholesale Grocers applied a setoff. The MBH Investments asserts a security interest lien and claim against the Debtor's inventory and accounts, with a current indebtedness of approximately $750,000 and a cross-collateralized loan with the related entities. The U.S. Small Business Administration asserts a security interest lien and claim against the Debtor's inventory and accounts, with a current indebtedness of approximately $150,000. United Food and Commercial Workers Unions and Employers Midwest Pension Fund and United Food and Commercial Workers International Union Industry Pension Fund may have potential secured claims by virtue of Illinois Citation Lien issued pre-petition. The Debtor proposes to use cash collateral and provide adequate protection to the Lender on these terms and conditions: A. The Debtor will permit the Lender to inspect, upon reasonable notice, within reasonable hours, the Debtor's books and records; B. The Debtor will maintain and pay premiums for insurance to cover all of its assets from fire, theft and water damage; C. The Debtor will, upon reasonable request, make available to the Lender evidence of that which purportedly constitutes its collateral or proceeds; D. The Debtor will reserve sufficient funds for the payment of current real estate taxes relating to the Property; E. The Debtor will properly maintain the Property in good repair and properly manage such Property; and F. The Lender will be granted valid, perfected, enforceable security interests in and to the Debtor's post-petition assets, including all proceeds and products which are now or hereafter become property of the estate to the extent and priority of its alleged prepetition liens, if valid, but only to the extent of any diminution in the value of the assets during the period from the commencement of the Debtor's Chapter 11 case through the next hearing on the use of cash collateral. A copy of the motion is available at https://bit.ly/3hWf53L from PacerMonitor.com. About HARI 108, LLC HARI 108, LLC, doing business as Illinois Valley Food & Deli, is a grocery and delicatessen operating in LaSalle, Ill. Hari was formed in February 17, 2011. The Debtor acquired IVFD, a business that had been operating in LaSalle for over 60 years. The Debtor sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. N.D. Ill. Case No. 21-08044) on June 30, 2021. In the petition signed by Sanjay Amin, manager, the Debtor disclosed up to $500,000 in assets and up to $10 million in liabilities. O. Allan Fridman, Esq., at Law Office of Allan Fridman is the Debtor's counsel. HASTINGS ESTATE: Gets OK to Hire Candace Monroe as Accountant ------------------------------------------------------------- Hastings Estate Company, Inc. received approval from the U.S. Bankruptcy Court for the Western District of Washington to hire Candace Monroe, an accountant practicing in Washington. Ms. Monroe, former chief financial officer of Inn Properties, LLC, will provide bookkeeping and accounting services at an hourly rate of $70. Ms. Monroe disclosed in a court filing that she is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. About Hastings Estate Company Port Townsend, Wash.-based Hastings Estate Company, Inc. sought protection under Chapter 11 of the Bankruptcy Code (Bankr. W.D. Wash. Case No. 21-10995) on May 20, 2021. At the time of the filing, the Debtor had between $1 million and $10 million in both assets and liabilities. Judge Marc Barreca oversees the case. Wenokur Riordan, PLLC and Harris & Wakayama, PLLC serve as the Debtor's bankruptcy counsel and special counsel, respectively. The Debtor also tapped the services of Candace Monroe, an accountant practicing in Washington. HASTINGS ESTATE: Taps Harris & Wakayama as Special Counsel ---------------------------------------------------------- Hastings Estate Company, Inc. received approval from the U.S. Bankruptcy Court for the Western District of Washington to hire Harris & Wakayama, PLLC as special counsel. The Debtor requires a special counsel to: (a) provide general legal services in connection with the development of the historic waterfront building in Port Townsend, Wash., which is the subject of the Debtor's bankruptcy proceeding; (b) defend the foreclosure action against the Debtor's building, lands, and related permits and entitlements pursued by the secured creditor, Pender West Credit 1 REIT, LLC, including the litigation in Jefferson County Superior Court entitled Hastings Estate Company, Inc., et al. v. LPSL Corporate Services, Inc., No. 20-2-00104-16; and (c) defend the property line dispute entitled Metis Group, LLC v. Hastings Estate Company, Inc., et al., Jefferson County Superior Court No. 19-2-02074-18. Malcolm Harris, Esq., and his paralegals will be paid at an hourly rate of $350 and $80, respectively. The retainer fee is $20,000. In a court filing, Mr. Harris disclosed that he is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. Harris & Wakayama can be reached at: Malcolm Harris, Esq. Harris & Wakayama PLLC 999 3rd Avenue, Suite 3210 Seattle, WA 98104 Tel.: (206) 621-1818 Fax: (206) 624-8560 Email: mharris@hmwlaw.com About Hastings Estate Company Port Townsend, Wash.-based Hastings Estate Company, Inc. sought protection under Chapter 11 of the Bankruptcy Code (Bankr. W.D. Wash. Case No. 21-10995) on May 20, 2021. At the time of the filing, the Debtor had between $1 million and $10 million in both assets and liabilities. Judge Marc Barreca oversees the case. Wenokur Riordan, PLLC and Harris & Wakayama, PLLC serve as the Debtor's bankruptcy counsel and special counsel, respectively. The Debtor also tapped the services of Candace Monroe, an accountant practicing in Washington. HCRX INVESTMENTS: Moody's Assigns B2 Rating to Sr. Unsecured Notes ------------------------------------------------------------------ Moody's Investors Service assigned a B2 (LGD5) rating to the senior unsecured notes of HCRX Investments HoldCo, L.P., a subsidiary of HealthCare Royalty, Inc. (collectively "HealthCare Royalty"). There are no changes to the company's existing ratings including the Ba3 Corporate Family Rating, the Ba3-PD Probability of Default Rating, the Ba2 (LGD2) senior secured ratings, and the SGL-1 Speculative Grade Liquidity Rating. The outlook is stable. Proceeds of the bond offering, together with IPO proceeds and proceeds from a secured credit agreement, are to be used to recapitalize the company by combining a series of limited partnerships and offering public equity. At the close of the transaction, Moody's anticipates pro forma gross debt/EBITDA of approximately 2.9x. The assigned ratings prospectively assume successful execution of the IPO offering with approximately $500 million of proceeds; otherwise Moody's will reevaluate the ratings being assigned. The following ratings/assessments are affected by the action: New Assignments: Issuer: HCRX Investments Holdco, L.P. GTD Senior Unsecured Global Notes, Assigned B2 (LGD5) RATINGS RATIONALE HealthCare Royalty's Ba3 Corporate Family Rating reflects its niche focus as an acquirer of royalty interests in pharmaceutical products. The company specializes in mid-sized royalty acquisitions with values generally between $20 million to $250 million. Many of the products are for critical health conditions, and the underlying sales outlook for the royalty-generating products is favorable. HealthCare Royalty's cash flow will remain solid, reflecting limited operating expenses and an efficient operating structure. Offsetting these strengths, the existing portfolio is moderately concentrated in three drugs that accounted for approximately 48% of revenue in 1Q 2021 and which Moody's believes will generate about half of 2021 royalty receipts, i.e. Vimpat, Shingrix and Zolgensma. Many products in the portfolio are marketed by small biopharmaceutical companies, exposing HealthCare Royalty to credit risk, especially when it holds notes receivable from such entities. With a portfolio duration of about 10 years from the time of acquisition of a royalty, the company will be reliant on new acquisitions for royalty replenishment, creating execution risk. As the company grows, Moody's anticipates that it will contemplate larger royalty transactions and face more competition. The issuer of the unsecured notes is HCRX Investments HoldCo, LP. The B2 rating on the unsecured notes reflects their junior position in the capital structure relative to a senior secured term loan and senior secured revolving credit facility. There is a downstream guarantee on the unsecured notes from an intermediate holding company, but not from HealthCare Royalty, Inc., i.e. the ultimate parent and filer of the financial statements. Moody's anticipates receiving adequate financial information to ascertain that the there are no material operations, cash flow, assets or liabilities at the parent entity and intermediate entities other than equity interest in their subsidiaries. Moody's anticipates very good liquidity, reflected in the SGL-1 Speculative Grade Liquidity Rating. Cash on hand following the transactions will total over $400 million, and the $540 million revolving credit facility will be undrawn at close. Moody's anticipates that only the revolver will have financial maintenance covenants and that cushion will be good. The outlook is stable, incorporating Moody's expectations for good operating performance and ongoing acquisitions that adhere to a long term debt/EBITDA target of 3.5x. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS Factors that could lead to an upgrade include: solid performance of products comprising the royalty streams; successfully establishing a longer track record as a public company; and debt/EBITDA sustained below 3.5x. Factors that could lead to a downgrade include: adverse performance of core royalties due to competition or early generics, unexpected challenges in collecting royalties from marketers, or material debt-financed acquisitions. Specifically, debt/EBITDA sustained over 4.5x could result in a downgrade. The principal methodology used in this rating was Pharmaceutical Industry published in June 2017. Headquartered in Stamford, Connecticut, HealthCare Royalty, Inc. purchases royalties and uses debt-like structures to acquire interests in commercial or near-commercial stage biopharmaceutical assets. Total royalty receipts in 2020 totaled $405 million. IMPERIAL DADE: Moody's Rates New $280MM First Lien Term Loan 'B2' ----------------------------------------------------------------- Moody's Investors Service assigned a B2 rating to BCPE Empire Holdings, Inc.'s (also known as Imperial Dade) proposed $280 million incremental senior secured first lien term loan due 2026 and $145 million delay draw senior secured first lien term loan due 2026. All other ratings for the company remain unchanged including Imperial Dade's B3 Corporate Family Rating. The outlook is unchanged at stable. The proceeds from the proposed $280 million incremental first lien term loan will be used to fund seven acquisitions currently under letter of intent (LOI) for $299 million. The proposed $145 million delayed draw first lien term loan will be available for 12 months after closing, subject to a maximum pro forma first lien net leverage of 5.0x. Moody's expects the proposed delayed draw term loan will be used to fund future acquisitions and to pay related fees and expenses. The proposed transaction is leverage neutral based on management's estimates of the purchase prices and earnings contribution. However, Moody's does not have full visibility into the earnings of the target companies and the purchase prices are not finalized. Even if leverage neutral, Moody's views the transactions as credit negative because debt continues to increase and could delay deleveraging. Moody's estimates the company's debt/EBITDA financial leverage at around 9.2x as of the last twelve months period ending March 31, 2021, and pro forma for acquisitions based on management's estimates. Moody's expects the company's revenue and earnings will sequentially improve over the next 12-18 months, benefiting from continued good demand for its Jan-San products along with a recovery in some of its end markets throughout 2021, particularly the foodservice, hospitality and education end markets. As a result, Moody's projects Imperial Dade's debt/EBITDA leverage to improve to around 8.1x by the end of fiscal 2021. Assignments: Issuer: BCPE Empire Holdings, Inc. Senior Secured First Lien Term Loan , Assigned B2 (LGD3) Senior Secured First Lien Delayed Draw Term Loan , Assigned B2 (LGD3) RATINGS RATIONALE Imperial Dade's B3 CFR broadly reflects its high financial leverage with debt/EBITDA at 9.2x as of the last twelve months period ending March 31, 2021, and pro forma for the proposed transaction and acquisitions. Some of the company's end markets continue to experience closure or materially reduced operations due to coronavirus related restrictions, negatively impacting demand for the company's products. However, these restrictions are moderating as the pandemic eases and Moody's expects Imperial Dade's organic revenue and earnings will sequentially improve over the next 12-18 months, supported by a recovering US economy and the gradual reopening in some of the currently challenged end markets throughout 2021. Moody's also anticipates certain additional expenses related to the coronavirus and restructuring costs will decline over the next year, and will support cash flows. As a result, Moody's projects debt/EBITDA will improve but remain high at about 8.1x by the end of fiscal 2021, as the company will continue to focus on making growth investments. Imperial Dade is relatively modest in scale with annual revenue of about $2.4 billion pro forma for acquisitions, and has limited experience operating at its current scale. The company's lack of national reach is partially offset by its expanding presence near major metropolitan areas. The company sells some low priced and commodity-oriented products for which switching costs are low and there is potential for pricing pressure. The rating also reflects Imperial Dade's well established and growing market position as a specialty distributor of foodservice packaging (FSP) and janitorial sanitation (Jan-San) products, driven in part by its broad product breadth. The company benefits from a relatively stable revenue stream owing to the disposable nature of products sold, and has well diversified customer and supplier bases. Imperial Dade has relatively high margins for the industry, buoyed by its standing as a larger player in a fragmented market and its growing private label business. The company's good liquidity reflects Moody's expectation for positive free cash flow over the next 12-18 months, access to an undrawn $245 million ABL pro forma for the transaction, and lack of near-term maturities until the ABL is due in 2024, which provides financial flexibility over the next 12 months. Governance factors include the company's aggressive financial policies under private equity ownership, including its high financial leverage, aggressive acquisition strategy, and debt funded shareholder dividend distributions. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS The stable outlook reflects Moody's expectations that Imperial Dade's revenue and earnings will improve as the US economy emerges from the coronavirus downturn, resulting in debt/EBITDA leverage improving to around 8.1x by the end of fiscal 2021 and improved positive free cash flow generation over the next year. The ratings could be upgraded if the company continues to grow its revenue scale while maintaining a stable EBITDA margin, and generates consistent healthy free cash flows on an annual basis. The company would also need to sustain debt/EBITDA below 6.0x and EBITA/interest approaching 2.0x. A ratings upgrade will also require at least good liquidity and financial policies that support credit metrics at the above levels. The ratings could be downgraded if operating performance deteriorates, debt/EBITDA is sustained above 8.0x, EBITA/interest approaches 1.0x of if liquidity weakens for any reason, including the company generating weak or negative free cash flow on an annual basis. Ratings could also be downgraded if the company completes a large debt-financed acquisition or distribution to shareholders that materially increases financial leverage. The principal methodology used in these ratings was Distribution & Supply Chain Services Industry published in June 2018. Headquartered in Jersey City, New Jersey, BCPE Empire Holdings, Inc. (dba Imperial Dade), is a wholesale specialty distributor of Foodservice Disposables (FSD) and Janitorial Sanitation (Jan-San) products. Bain Capital acquired a majority stake in the company in June 2019, with Imperial Dade's management and prior private equity sponsor Audax continuing to hold minority stakes. Imperial Dade is private and does not publicly disclose its financials. Pro forma for recent acquisitions, Imperial Dade generated revenue of about $2.4 billion for the twelve-month period ended March 31, 2021. JACOBS TOWING: Seeks to Employ Misty Tindol as Accountant --------------------------------------------------------- Jacobs Towing, LLC seeks approval from the U.S. Bankruptcy Court for the Middle District of Alabama to hire Misty Tindol of Wilkerson, Bowden & Associates, P.C. as its accountant. The services to be provided by the accountant include the preparation and filing of tax returns and monthly operating reports and such other accounting services as deemed necessary. Ms. Tindol will be paid at an hourly rate of $175 for such services. The Debtor shall likewise pay an hourly rate of $58 for the in-office bookkeeping fees and $57 for the in-office support staff fees. Ms. Tindol disclosed in a court filing that she is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. Ms. Tindol can be reached at: Misty K. Tindol, CPA Wilkerson, Bowden & Associates, P.C. 529 Boll Weevil Circle Enterprise, AL 36330 Phone: (334) 347-9509 ext. 235 Fax: (334) 393-2194 Email: mtindol@bwb.cpa About Jacobs Towing Jacobs Towing, LLC, doing business as B&R Wrecker & Recovery in Troy, Ala., filed a Chapter 11 petition (Bankr. M.D. Ala. Case No. 21-31004) on June 10, 2021. At the time of the filing, the Debtor had between $1 million and $10 million in both assets and liabilities. Donnie L. Jacobs, member, signed the petition. Judge William R. Sawyer oversees the case. Espy Metcalf & Espy, PC and Misty Tindol of Wilkerson, Bowden & Associates, P.C. serve as the Debtor's legal counsel and accountant, respectively. JANE STREET: S&P Assigns 'BB-' Rating on Sr. Sec. Term Loan Add-On ------------------------------------------------------------------ S&P Global Ratings assigned its 'BB-' issue rating to Jane Street Group LLC's add-on to its senior secured term loan B due 2028. S&P expects the company to use the proceeds to further expand trading capital and support liquidity as it continues expanding its trading operations. Despite its expectation that utilization of the additional trading capital will increase market risk and credit risk exposures, this does not impact its ratings on Jane Street. S&P believes capital is sufficient to maintain an S&P Global Ratings risk-adjusted capital ratio above 8%, in line with its current ratings expectations. KNOW LABS: Granted Patent for Bio-RFIDTM Technology --------------------------------------------------- Know Labs, Inc. has been granted another foundational patent for its Bio-RFIDTM technology. This new patent brings Know Labs portfolio to 23 issued and 34 pending patents, enhances the company's technological leadership position and brings Know Labs one step closer to FDA submission and commercial launch. "Our technology platform has the potential to disrupt the medical diagnostic industry because of its unique ability to detect and measure analytes such as glucose using radio frequency spectroscopy. Our innovative approach and the technology behind it have tremendous long-term value, which we are protecting through a disciplined intellectual property strategy," said Ron Erickson, Know Labs founder and chairman. "We expect to receive other critical patents soon, which, combined with our current portfolio, support our path to commercial launch." U.S. Patent No. 11,058,331 was issued by the United States Patent and Trademark Office and is titled "Analyte Sensor and System with Multiple Detector Elements that can Transmit or Receive." The patent relates to the technology that allows the implementation of radio frequency scans using different combinations of antennas to improve the detection capabilities of the Bio-RFID sensors in non-invasively measuring and identifying analytes, including glucose. "This patent covers how the antennas used by the Bio-RFID technology platform could be arranged, which will be critical for building a variety of medical devices focused on other analytes," said Phil Bosua, Bio-RFID inventor and Know Labs CEO. "Our current focus is on launching what we believe will be the world's first non-invasive glucose monitoring device. This foundational patent protects the broad application of Bio-RFID and is another important milestone toward a revolution in medical diagnostic technology." Know Labs will continue to provide updates on its intellectual property portfolio as patents are issued, along with progress toward FDA clinical trials of its non-invasive glucose monitor. About Know Labs Know Labs, Inc., was incorporated under the laws of the State of Nevada in 1998. Since 2007, the Company has been focused primarily on research and development of proprietary technologies which can be used to authenticate and diagnose a wide variety of organic and non-organic substances and materials. The Company's Common Stock trades on the OTCQB Exchange under the symbol "KNWN." Know Labs reported a net loss of $13.56 million for the year ended Sept. 30, 2020, compared to a net loss of $7.61 million for the year ended Sept. 30, 2019. As of March 31, 2021, the Company had $15.91 million in total assets, $8.06 million in total current liabilities, $432,059 in total non-current liabilities, and $7.41 million in total stockholders' equity. BPM LLP, in Walnut Creek, California, the Company's auditor since 2019, issued a "going concern" qualification in its report dated Dec. 29, 2020, citing that the Company has sustained a net loss from operations and has an accumulated deficit since inception. These factors raise substantial doubt about the Company's ability to continue as a going concern. LAKE CECILE: Court Conditionally Approves Disclosure Statement -------------------------------------------------------------- Judge Karen S. Jennemann has entered an order conditionally approving the Disclosure Statement explaining the Plan of Lake Cecile Resort Inc. A Plan confirmation hearing by video via ZOOM will be held on Sept. 13, 2021, at 1 p.m. in Courtroom A, Sixth Floor, of the United States Bankruptcy Court, 400 West Washington Street, Orlando, Florida. Creditors and other parties in interest shall file with the clerk their written acceptances or rejections of the Plan (ballots) no later than 7 days before the date of the Confirmation Hearing. Any party objecting to the disclosure statement or confirmation of the Plan shall file its objection no later than 7 days before the date of the Confirmation Hearing. The Debtor's counsel shall file a ballot tabulation no later than 2 days before the date of the Confirmation Hearing. About Lake Cecile Resort Lake Cecile Resort Inc. is an Orlando, Fla.-based company primarily engaged in renting and leasing real estate properties. Lake Cecile Resort sought protection under Chapter 11 of the Bankruptcy Code (Bankr. M.D. Fla. Case No. 21-01060) on March 12, 2021. In the petition signed by Mary T. Nguyen, president, the Debtor disclosed between $10 million and $50 million in both assets and liabilities. Judge Karen S. Jennemann oversees the case. David R. McFarlin, Esq., at Fisher Rushner, P.A., is the Debtor's legal counsel. LAREDO PETROLEUM: Moody's Hikes CFR to B2 & Rates $400MM Notes B3 ----------------------------------------------------------------- Moody's Investors Service upgraded Laredo Petroleum, Inc.'s Corporate Family Rating to B2 from B3, Probability of Default Rating to B2-PD from B3-PD, senior unsecured notes rating to B3 from Caa1 and Speculative Grade Liquidity Rating to SGL-2 from SGL-3. Concurrently, Moody's assigned a B3 rating to Laredo's proposed $400 million senior unsecured notes due 2029. The rating outlook is stable. Laredo plans to use proceeds from the new unsecured notes offering to repay a significant portion of outstanding revolver borrowings. This should boost the company's revolver availability and liquidity. Laredo had borrowed under the revolver to partially fund the acquisition of certain Howard County assets. Moody's ratings are subject to review of all final documentation. "Laredo's strategy is transitioning its portfolio to focus on increasing oil production over time," commented Amol Joshi, Moody's Vice President and Senior Credit Officer. "While Laredo faces increased execution risk during this transition, the company's margins and capital efficiency should improve." Upgrades: Issuer: Laredo Petroleum, Inc. Probability of Default Rating, Upgraded to B2-PD from B3-PD Speculative Grade Liquidity Rating, Upgraded to SGL-2 from SGL-3 Corporate Family Rating, Upgraded to B2 from B3 Senior Unsecured Notes, Upgraded to B3 (LGD4) from Caa1 (LGD5) Assignments: Issuer: Laredo Petroleum, Inc. Senior Unsecured Notes, Assigned B3 (LGD4) Outlook Actions: Issuer: Laredo Petroleum, Inc. Outlook, Remains Stable RATINGS RATIONALE The upgrade of Laredo's CFR to B2 reflects the company's growing oil production while improving margins and capital efficiency pro forma for the acquisition of Sabalo Energy, LLC's oily assets and the sale of certain working interests in its legacy proved developed producing operated properties. These transactions support the company's strategic focus on growing its more profitable oil-weighted production, and Moody's expects Laredo's oil cut of total production to exceed 45% from about 30% in first quarter of 2021. Laredo's B2 CFR is supported by its production and reserve base in the Permian's prolific Midland Basin, high degree of operational control, relatively low operating costs along with retained gathering assets within its legacy production corridors and management's track record of mitigating cash flow volatility by consistently hedging a significant proportion of its oil and gas production. Laredo's credit profile is constrained by its moderate scale and geographically concentrated upstream operations, as well as limited oil-weighted drilling inventory compared to some of its peers. Laredo's strategy is to focus drilling on its more oily acreage to raise the proportion of profitable production and to significantly reduce new drilling activity on its legacy acreage. This should gradually increase oil content in the company's production mix and support margins and returns, if capital and operating costs remain under control. The strategy entails significant capital expenditures required to develop undeveloped acreage and grow production of oil, but the company's cash flow at current commodity prices should be supportive. Laredo's senior unsecured notes are rated B3, one notch below the B2 CFR, reflecting the priority claim of its borrowing base senior secured credit facility that has a first lien on most of Laredo's assets. Laredo's SGL-2 Speculative Grade Liquidity Rating reflects its good liquidity. At March 31, the company had $44 million of cash and $220 million of borrowings with $44 million of letters of credit outstanding under its credit facility. Pro forma for the notes offering and repayment of a significant portion of outstanding revolver borrowings, Laredo should have less than $100 million of borrowings under its credit facility. Laredo is amending its existing revolving credit facility and extending its maturity. The amended facility is expected to have a $725 million borrowing base, with financial covenants including maximum Consolidated Total Leverage Ratio of 3.5x for any fiscal quarter ending on or after September 30, 2021 and current ratio of at least 1x. The revolver matures in 2025, but has a springing maturity of 180 days inside the maturity of its nearest notes maturity in January 2025. Moody's expects the company to have sufficient headroom under its covenants through 2022 based on projected spending and debt levels. The company should generate free cash flow at higher oil prices, and availability under its revolver should cover funding shortfalls, if any, through 2022. Laredo's stable rating outlook is based on Moody's expectation that Laredo should maintain a competitive cost structure and manage its capital program and liquidity prudently. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS The ratings could be upgraded if Laredo successfully executes its strategy of focusing on oil production while keeping capital and operating costs under control and growing oil production in a supportive commodity price environment, its leveraged full cycle ratio (LFCR) approaches 1.5x and retained cash flow (RCF) to debt exceeds 30% while balancing leverage and any shareholder returns. Moody's could consider a downgrade if Laredo's RCF/debt ratio falls below 15%, if the company's capital productivity materially declines or its liquidity significantly deteriorates. Laredo Petroleum, Inc. is a Tulsa, Oklahoma based independent exploration and production company with primary assets in West Texas' Midland Basin. The principal methodology used in these ratings was Independent Exploration and Production Industry published in May 2017. LIMETREE BAY: Akin Gump Represents Term Lender Group ---------------------------------------------------- Pursuant to Rule 2019 of the Federal Rules of Bankruptcy Procedure, the law firm of Akin Gump Strauss Hauer & Feld LLP submitted a verified statement to disclose that it is representing the Ad Hoc Term Lender Group in the Chapter 11 cases of Limetree Bay Services, LLC, et al. Akin Gump does not represent or purport to represent any other entities in connection with the Debtors' chapter 11 cases. Akin Gump does not represent the Ad Hoc Term Lender Group as a "committee" and does not undertake to represent the interests of, and is not a fiduciary for, any creditor, party in interest, or entity other than the Ad Hoc Term Lender Group. In addition, the Ad Hoc Term Lender Group does not represent or purport to represent any other entities in connection with the Debtors' chapter 11 cases. As of July 13, 2021, members of the Ad Hoc Term Lender Group and their disclosable economic interests are: Platinum Compass B 2018 RSC Limited Level 26, Al Khatem Tower Abu Dhabi Global Market Square Al Maryah Island Abu Dhabi PO BOX 25642 United Arab Emirates * Prepetition Term Loans: $203,967,717 * Prepetition Holdco Term Loans: $99,834,590 Westbourne Credit Management Limited Level 12, 101 Collins Street Melbourne VIC 3000 Australia * Prepetition Term Loans: $529,672,312 * Prepetition Holdco Term Loans: $259,185,487 Nothing contained in this Verified Statement should be construed as a limitation upon, or waiver of, the rights of any member of the Ad Hoc Term Lender Group to assert, file, and/or amend any claim in accordance with applicable law and any orders entered in these chapter 11 cases. Additional holders of claims against the Debtors' estates may become members of the Ad Hoc Term Lender Group, and certain members of the Ad Hoc Term Lender Group may cease to be members in the future. Akin Gump reserves the right to amend or supplement this Verified Statement in accordance with the requirements set forth in Bankruptcy Rule 2019. Counsel to the Ad Hoc Term Lender Group can be reached at: AKIN GUMP STRAUSS HAUER & FELD LLP Marty L. Brimmage, Jr., Esq. Lacy M. Lawrence, Esq. 2300 N. Field St., Suite 1800 Dallas, TX 75201 Tel: (214) 969-2800 Fax: (214) 969-4343 E-mail: mbrimmage@akingump.com llawrence@akingump.com Ira S. Dizengoff, Esq. One Bryant Park New York, NY 10036 Tel: (212) 872-1000 Fax: (212) 872-1002 Email: idizengoff@akingump.com - and - Scott L. Alberino, Esq. Kevin M. Eide, Esq. Benjamin L. Taylor, Esq. Robert S. Strauss Tower 2001 K Street, N.W. Washington, DC 20006-1037 Tel: (202) 887-4000 Fax: (202) 887-4288 E-mail: salberino@akingump.com keide@akingump.com taylorb@akingump.com A copy of the Rule 2019 filing, downloaded from PacerMonitor.com, is available at https://bit.ly/3ibwHZA About Limetree Bay Refining Limetree Bay Energy is a large-scale energy complex strategically located in St. Croix, U.S. Virgin Islands. The complex consists of Limetree Bay Refining, a refinery with peak processing capacity of 650 thousand barrels of petroleum feedstock per day, and Limetree Bay Terminal, a 34-million-barrel crude and petroleum products storage and marine terminal facility serving the refinery and third-party customers. Limetree Bay Refining, LLC, restarted operations in February 2021, and is capable of processing around 200,000 barrels per day. Key restart work at the site began in 2018, including the 62,000 barrels per day modern, delayed Coker unit, extensive desulfurization capacity, and a reformer unit to produce clean, low-sulfur transportation fuels. The restart project provided much needed economic development in the U.S.V.I. and created more than 4,000 construction jobs at its peak. Limetree Bay Refining, LLC and its affiliates sought Chapter 11 protection on July 12, 2021. The lead case is In re Limetree Bay Services, LLC (Bankr. S.D. Tex. Case No. 21-32351). Limetree Bay refining listed at least $1 billion in assets and at least $500 million in liabilities as of the bankruptcy filing. Baker Hostetler is acting as legal counsel for the Company and B. Riley Financial Inc. has been retained as restructuring advisor. LIMETREE BAY: Retains B. Riley Advisory as Restructuring Advisor ---------------------------------------------------------------- B. Riley Advisory Services, a subsidiary of B. Riley Financial Inc, has been retained as restructuring advisor for Limetree Bay Refining, LLC. Limetree Bay Refining, LLC and several of its affiliates (collectively, "Limetree Bay" or the "Company") has filed voluntary petitions under Chapter 11 of the U.S. Bankruptcy Code in the United States Bankruptcy Court for the Southern District of Texas. Limetree Bay intends to use the Chapter 11 process to engage in discussions with its lenders, creditors, equity owners and others to evaluate options to maximize the value of the estate and recoveries for stakeholders, including exploring a potential sale of its assets. Limetree Bay has received commitments for up to $25 million in new debtor-in-possession financing that, upon court approval, is expected to provide sufficient liquidity to meet ongoing business obligations related to the maintenance of the refinery during the Chapter 11 process. The Chapter 11 filing was necessitated in part by the recent temporary suspension of Limetree Bay’s petroleum refining and processing operations on May 12, 2021 and the indefinite suspension of its plans to restart the refinery due to severe regulatory and financial constraints. Given the uncertainty related to the restart of production and commercial sales of refined products, the Company believes filing voluntary petitions under Chapter 11 is the most prudent course of action. It is expected that management will continue to be responsible for handling the care and maintenance of the refinery and all other necessary day-to-day operations throughout this process. "We are extremely grateful to our investors, employees and business partners for standing by us through the restart process and these uncertain times," said Jeff Rinker, Limetree Bay's CEO. "Severe financial and regulatory constraints have left us no choice but to pursue this path, after careful consideration of all alternatives. The Chapter 11 process provides Limetree with the clearest path to maximize the value of our estate for our stakeholders while safely preparing the refinery for an extended shutdown." The parent of the Company expects to continue operations at its oil storage terminal business. Baker Hostetler is acting as legal counsel for the Company. B. Riley’s Mark Shapiro is serving as Chief Restructuring Officer. The Company intends to provide further updates on the Chapter 11 proceedings when there are significant developments. About Limetree Bay Refining Limetree Bay Energy is a large-scale energy complex strategically located in St. Croix, U.S. Virgin Islands. The complex consists of Limetree Bay Refining, a refinery with peak processing capacity of 650 thousand barrels of petroleum feedstock per day, and Limetree Bay Terminal, a 34-million-barrel crude and petroleum products storage and marine terminal facility serving the refinery and third-party customers. Limetree Bay Refining, LLC, restarted operations in February 2021, and is capable of processing around 200,000 barrels per day. Key restart work at the site began in 2018, including the 62,000 barrels per day modern, delayed Coker unit, extensive desulfurization capacity, and a reformer unit to produce clean, low-sulfur transportation fuels. The restart project provided much needed economic development in the U.S.V.I. and created more than 4,000 construction jobs at its peak. Limetree Bay Refining, LLC and its affiliates sought Chapter 11 protection on July 12, 2021. The lead case is In re Limetree Bay Services, LLC (Bankr. S.D. Tex. Case No. 21-32351). Limetree Bay refining listed at least $1 billion in assets and at least $500 million in liabilities as of the bankruptcy filing. Baker Hostetler is acting as legal counsel for the Company and B. Riley Financial Inc. has been retained as restructuring advisor. LOVES FURNITURE: To Postpone Ch. 11 Plan Confirmation to Aug. 31 ---------------------------------------------------------------- Leslie A. Pappas of Bloomberg Law reports that Loves Furniture Inc. will postpone confirmation of its Chapter 11 plan until Aug. 31, 2021, in an attempt to resolve numerous creditor objections. Criticisms of the plan vary widely and came from a number of creditors, including the company's merchant credit card processor Shift4 Payments LLC, lender Store Master Funding XII LLC, trucking company Penske Truck Leasing Co., and furniture manufacturers Fusion Furniture Inc. and Southern Motion Inc. Loves' attorney, Max J. Newman of Butzel Long, expressed hope at a hearing Wednesday that Loves could resolve most of the objections within 30 days. About Loves Furniture Loves Furniture Inc. -- http://www.lovesfurniture.com/-- is a furniture retailer that sells furniture, mattresses, home dÃ©cor and appliances. It conducts business under the name Loves Furniture and Mattresses. Loves Furniture sought Chapter 11 protection (Bankr. E.D. Mich. Case No. 21-40083) on Jan. 6, 2021. The Debtor was estimated to have $10 million to $50 million in assets and liabilities at the time of the filing. Judge Thomas J. Tucker oversees the case. The Debtor tapped Butzel Long, A Professional Corporation, led by Max J. Newman, Esq., as legal counsel; B. Riley Advisory Services as financial advisor; and Stretto as claims and noticing agent. On Jan. 14, 2021, the U.S. Trustee for Region 9 appointed an official committee of unsecured creditors. The committee tapped Foley & Lardner LLP as its legal counsel and Conway Mackenzie, LLC as its financial advisor. LRGHEALTHCARE: Taps Verdolino & Lowey as Wind-down Consultant ------------------------------------------------------------- LRGHealthcare, now known as HGRL, seeks approval from the U.S. Bankruptcy Court for the District of New Hampshire to hire Verdolino & Lowey, P.C. as wind-down consultant. The firm's services include: (a) coordinating financial reporting and related services; (b) winding down reporting and related services, including but not limited to, drafting periodic updates and liquidation analyses, preparing monthly operating reports, creating and seeking approval of a wind-down timeline and budget with logically sequence events and action items, preparing final audit, and collecting, distributing and liquidating the Debtor's assets and making distributions; (c) human resources reporting and services, including but not limited to, benefits, pension plan, health and dental insurance, workers' compensation, accounts receivable and other matters; (d) administrative and governance reporting and services, including but not limited to, assisting in prosecuting, settling, assigning, or otherwise compromising or abandoning the pursuit of any possible avoidance actions, estate claims and other causes of action; (e) overseeing and coordinating compliance and regulatory reporting and services; and (f) performing other actions that may be reasonably requested by the Debtor from time to time related to winding down the business. The firm's hourly rates are as follows: Craig Jalbert, CIRA $495 per hour Other Senior Professionals $385 per hour Bookkeeper/General Staff $285 per hour Craig Jalbert, the firm's consultant who will be providing the services, disclosed in a court filing that he is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. Verdolino & Lowey can be reached at: Craig R. Jalbert, CIRA Verdolino & Lowey, P.C. 124 Washington Street Foxboro, MA 02035 Phone: (508) 543-1720 Email: cjalbert@vlpc.com About LRGHealthcare LRGHealthcare -- www.lrgh.org -- is a not-for-profit healthcare charitable trust operating Lakes Region General Hospital (LRGH), Franklin Regional Hospital, and numerous other affiliated medical practices and service programs. LRGH is a community-based acute care facility with a licensed bed capacity of 137 beds, and FRH is a 25-bed critical access hospital with an additional 10-bed inpatient psychiatric unit. In 2002, Lakes Region Hospital Association and Franklin Regional Hospital Association merged, with the merged entity renamed LRGHealthcare. LRGHealthcare offers a wide range of medical, surgical, specialty, diagnostic, and therapeutic services, wellness education, support groups, and other community outreach services. LRGHealthcare filed a Chapter 11 petition (Bankr. D.N.H. Case No. 20-10892) on Oct. 19, 2020. The petition was signed by Kevin W. Donovan, president and chief executive officer. At the time of the filing, the Debtor estimated to have $100 million to $500 million in both assets and liabilities. Judge Bruce A. Harwood oversees the case. The Debtor tapped Nixon Peabody LLP as legal counsel; Baker Newman Noyes as accountant; and Deloitte Transactions and Business Analytics, LLP and Kaufman, Hall & Associates, LLC as financial advisors. Epiq Corporate Restructuring, LLC is the claims, noticing, solicitation, and administrative agent. The U.S. Trustee for Region 1 appointed a committee of unsecured creditors on Oct. 23, 2020. The committee is represented by the law firms of Sills Cummis & Gross P.C. and Drummond Woodsum. CBIZ Accounting, Tax and Advisory of New York, LLC serves as the committee's financial advisor. In December 2020, the U.S. Bankruptcy Court, District of New Hampshire issued a final order approving Concord Hospital's acquisition of Lakes Region General Hospital, Franklin Hospital and their ambulatory sites from LRGHealthcare. The healthcare system and its two hospitals were sold to Concord Hospital for $30 million. On May 5, 2021, the Debtor filed its change of name from LRGHealthcare to HGRL with the Secretary of State for the State of New Hampshire and the Laconia Town Clerk. MADISON IAQ: Moody's Affirms B2 CFR on Big Ass Fans Acquisition --------------------------------------------------------------- Moody's Investors Service affirmed ratings for Madison IAQ, LLC including the company's B2 corporate family rating and B2-PD probability of default rating. Moody's also affirmed the company's B1 rating on the senior secured debt and the Caa1 rating on the senior unsecured notes. The outlook is stable. The rating action follows the company's announced acquisition of Big Ass Fans, LLC (BAF; B2 stable) for $1.1 billion. The acquisition will be funded with an incremental term loan of $715 million, as well as $320 million of new equity and $75 million of cash. The rating affirmation reflects continued strong demand for Madison IAQ's products and services which will result in double-digit earnings growth over the next 12-18 months. Despite very high leverage, with pro forma debt/EBITDA around 8.0x for the twelve months ended June 2021, Moody's expects debt/EBITDA to decline to around 7.0x over the next 12-18 months. The affirmation is also supported by Moody's expectation that, despite being largely debt funded, Madison IAQ's free cash flow will be modestly enhanced by the acquisition of BAF. Importantly, Moody's expects strong free cash flow of at least $200 million annually. In addition, the company has good liquidity with over $300 million in cash and revolving credit facility availability. Nonetheless, the acquisition of BAF is credit negative. Execution risk, which was already high given the recent acquisition of Nortek Air, will be heightened with the concurrent integration of BAF. The carve out nature of Nortek Air, which is significantly larger than Madison IAQ amplifies the execution risk of these transactions. Further, the sizeable acquisition of BAF so soon after the Nortek Air acquisition demonstrates a highly aggressive appetite for leverage and acquisitions. Outlook Actions: Issuer: Madison IAQ LLC Outlook, Remains Stable Affirmations: Issuer: Madison IAQ LLC Probability of Default Rating, Affirmed B2-PD Corporate Family Rating, Affirmed B2 Senior Secured Bank Credit Facility (Local Currency), Affirmed B1 (LGD3) Senior Secured Regular Bond/Debenture (Local Currency), Affirmed B1 (LGD3) Senior Unsecured Regular Bond/Debenture (Local Currency), Affirmed Caa1 (LGD5) RATINGS RATIONALE Madison IAQ's B2 CFR reflects the company's high adjusted debt-to-EBITDA as a result of the recent acquisition of Nortek Air and the pending acquisition of BAF. Madison has a niche market focus on indoor air quality products, which will have some exposure to cyclical markets, such as residential construction. The company competes against significantly larger companies in certain of its markets. The ratings are supported by the significant scale of the company with pro forma revenue of nearly $2.5 billion. Further, the company generates a meaningful percentage of revenue from replacement, or retrofit sales (over 60% in sales), which has strong margins and also provides a degree of earnings stability through economic cycles. The stable outlook reflects Moody's expectation that the integration of both businesses will go smoothly, and without significant disruption to cash flows and customers. The stable outlook is predicated on the expectation that higher earnings will reduce leverage to 7.0x over the next 12-18 months. Environmental and social risks are not material to the credit quality. Governance risk is high given the high financial leverage as a result of sizeable debt financed acquisitions. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS Ratings could be downgraded if Madison IAQ experiences integration challenges that limits the company's ability to reduce leverage. Quantitatively, leverage sustained above 7.5x and free cash flow to debt of below 3% could prompt a downgrade. A ratings upgrade could be prompted by sustained improvement in earnings while maintaining good liquidity and financial policies which would support an improvement in credit metrics. Specifically, an upgrade would require adjusted debt-to-EBITDA to be sustained below 5.5x and free cash to debt in the high single digits. Headquartered in Chicago, Illinois, Madison IAQ manufactures indoor air quality solutions for commercial and residential establishments including hospitals, education, hospitality, distribution, retail, residential, service, office and manufacturing facilities. Revenue, on combined basis, will exceed $2.5 billion in 2021. The principal methodology used in these ratings was Manufacturing Methodology published in March 2020. MCGRAW-HILL EDUCATION: Moody's Assigns B3 CFR, Outlook Stable ------------------------------------------------------------- Moody's Investors Service assigned a B3 corporate family rating and B3-PD probability of default rating to McGraw-Hill Education, Inc. Moody's also rated the company's proposed senior secured term loan and revolving credit facility at B2 and senior unsecured notes at Caa2. The rating outlook is stable. Platinum Equity Advisors, LLC ("Platinum') intends to use the net proceeds from the offerings to fund the acquisition of McGraw from Apollo Global Management LLC. The proposed debt raise represents the main component of Platinum's $4.5 billion purchase price (subject to closing adjustments and excluding transaction fees and expenses) for the acquisition of McGraw. Platinum is contributing $1.4 billion of cash common equity to help fund the acquisition. The assigned ratings reflect Moody's view of the end state capital structure of McGraw assuming the transactions (acquisition, refinancing and structural changes) will occur as proposed. This includes an expectation that following the consummation of the acquisition by Platinum, Mav Acquisition Corporation will merge with and into McGraw as planned, with McGraw as the surviving entity. McGraw will become a direct, wholly owned subsidiary of Holdings and the issuer of rated debt. McGraw's B3 CFR reflects the company's high financial leverage with exposure to a cyclical K-12 market and intense competition among leading players especially as the market transitions to digital products and services from traditional learning materials. Moody's estimates that proforma for approximately $1 billion incremental debt being raised in connection with the acquisition, Debt/Cash EBITDA (Moody's adjusted) will increase to 7.3x from 5.1x as of FYE 3/2021, which Moody's views as high given the company's inherent seasonality in the Higher Education business and cyclicality due to exposure to adoption cycles in its K-12 business. Assignments: Issuer: McGraw-Hill Education, Inc. Corporate Family Rating, Assigned B3 Probability of Default Rating, Assigned B3-PD Senior Secured Bank Term Loan, Assigned B2 (LGD3) Senior Secured Bank Revolving Credit Facility, Assigned B2 (LGD3) Senior Secured Regular Bond/Debenture, Assigned B2 (LGD3) Senior Unsecured Regular Bond/Debenture, Assigned Caa2 (LGD5) Outlook Actions: Issuer: McGraw-Hill Education, Inc. Outlook, Assigned Stable RATINGS RATIONALE The high initial leverage weakly positions McGraw within the B3 CFR and there is minimal capacity for the absorption of potential earnings volatility, debt-funded acquisitions and shareholder distributions. Moody's estimates that McGraw can reduce its leverage toward mid-6x range over the next 12-18 months if the company uses a portion of its free cash flows to pay down debt beyond mandatory amortization, in addition to EBITDA growth in mid-single digit percentage range. Earnings improvements will largely be driven by continued cost cutting, with only modest low-single digit revenue growth. Nevertheless, McGraw's credit profile continues to garner support from its strong brand, good market position, long-standing relationships with education institutions, proprietary content developed through long-term exclusive relationships with leading authors and broad range of product offerings. The accelerated digital transformation supports revenue growth for McGraw and lays a pathway for a more efficient cost structure in the longer term, with lower inventory levels and lower earnings volatility associated with estimation of future period print returns. Furthermore, a portion of the cost actions taken is expected to be permanent, which will further support the positive trajectory of McGraw's earnings over the next 12-18 months. STRUCTURAL CONSIDERATIONS The B2 ratings on the proposed first lien senior secured credit facilities (revolver and term loan) and the senior secured notes benefit from their senior position in the capital structure, resulting in a one-notch uplift from the CFR. Both credit facilities and the secured notes benefit from subordination of the proposed $875 million unsecured notes. The proposed unsecured notes are rated Caa2 and subordinated to the first lien senior secured credit facilities and $200 million ABL facility. The ABL revolver has first priority lien on all current asset collateral and second priority lien on fixed asset collateral. As such, it is ranked ahead of all rated secured and unsecured debt instruments in Moody's priority of claim waterfall. As proposed, the new 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 100% of consolidated EBITDA and $550 million, plus unlimited amounts up to either closing date first lien net leverage or if the fixed charge coverage ratio is no worse than at closing (if pari passu secured). Amounts up to $250 million may be incurred with an earlier maturity date than the initial term loans. There are no express "blocker" provisions which prohibit the transfer of specified assets to unrestricted subsidiaries; such transfers are permitted subject to carve-out capacity and other conditions. Non-wholly-owned subsidiaries are not required to provide guarantees; dividends or transfers resulting in partial ownership of subsidiary guarantors could jeopardize guarantees, with no explicit protective provisions limiting such guarantee releases though there will be no unrestricted subsidiaries at closing. There are no express protective provisions prohibiting an up-tiering transaction. The above are proposed terms and the final terms of the credit agreement may be materially different. LIQUIDITY Moody's expects that McGraw will have good liquidity supported by a $75 million cash balance (proforma for the transactions), free cash flow in excess of $200 million over the next 12 months supported by earnings improvement, a $200 million five-year ABL facility (unrated), and a proposed $150 million five-year revolver. The company estimates the ABL's available borrowing base will be $125 million from June 2021 -- October 2021 or $90 million from November 1, 2021 through the closing borrowing base termination date. Moody's project that the company's cash on hand, funds from operations (FFO) and seasonal borrowings against the ABL facility will be sufficient to fund the company's highly seasonal cash flow and the 1% required annual term loan amortization of $11.5 million, $50 million in capex, $80 million in plate spending, and $100 million in deferred purchase payment due one year from close. The proposed term loan does not have financial covenants and the revolver will have a springing net leverage covenant of 6.7x tested at 40% or greater draw with substantial expected headroom over the next year. ESG CONSIDERATIONS The key social risks in the education publishing sector lie in evolving demographic and societal trends and particularly in the way students choose to study and consume learning materials. As affordability of textbooks and learning materials are important to students and higher education institutions, less expensive alternatives to print textbooks emerged. The rapid move to a virtual classroom during the coronavirus pandemic has accelerated advances in online courseware delivery that might have taken much longer before the pandemic. Higher Education institutions and K-12 schools are adapting to digital learning products and integrating them into courseware. This transformation supports digital revenue growth for McGraw and lays a pathway for a more efficient cost structure in the longer term. Governance risks Moody's consider in McGraw's credit profile include an aggressive financial strategy employed by its new financial sponsor, as reflected in a highly levered capital structure immediately following the acquisition. Platinum is planning to raise substantial amount of incremental debt in connection with the proposed transactions, increasing leverage in a highly cyclical industry. The new sponsor's controlling shareholder position provides it with the ability to make unilateral decisions regarding financial policy, and there is the risk that McGraw will issue incremental debt to fund large acquisitions to enhance equity returns. The stable outlook reflects Moody's expectation that McGraw will maintain a good liquidity position for the next 12-18 months and generate in excess of $200 million of annual free cash flow. Moody's assumes McGraw will use approximately half of its free cash flow to reduce debt through required amortization, the excess cash flow sweep, and possible discretionary payments to bring Moody's-adjusted Debt/Cash EBITDA to 6.5x over the next 12-18 months. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS The ratings could be upgraded if McGraw is able to consistently grow revenue and demonstrate earnings growth resulting in debt-to-cash EBITDA (Moody's adjusted) being sustained comfortably below 5x and is committed to operating at that leverage level. Good liquidity with cash balances being more than sufficient to cover outflows including seasonal working capital swings and with free-cash flow-to-debt being sustained in the mid- single-digit percentage range or better, would also be needed for an upgrade. Moody's defines cash EBITDA as EBITDA with cash prepublication costs expensed, adjusting for changes in deferred revenue and including Moody's standard accounting adjustments. The ratings could be downgraded if the company sustains debt-to-cash EBITDA materially above 6.5x (Moody's adjusted) over the next 12-18 months or free cash flow deteriorates. An aggressive financial policy, weakening of liquidity including through such factors as significant revolver usage or diminishing cash balance would also pressure the ratings. The principal methodology used in these ratings was Media published in June 2021. McGraw-Hill Education, Inc. is a global provider of educational materials and learning services targeting the higher education, K-12, professional learning and information markets with content, tools and services delivered via digital, print and hybrid offerings. McGraw reported fiscal year 2021 billings of $1.6 billion. MOBBBT LLC: Seeks to Hire James L. Drake as Legal Counsel --------------------------------------------------------- MOBBBT, LLC seeks approval from the U.S. Bankruptcy Court for the Southern District of Georgia to employ James L. Drake, Jr. P.C. to serve as legal counsel in its Chapter 11 case. The firm's services include: (a) advising the Debtor of its powers and duties under the Bankruptcy Code; (b) preparing a plan of rehabilitation, disclosure statement and other legal papers; and (c) representing the Debtor in all proceedings before the bankruptcy court. James Drake, Jr., Esq., the firm's attorney who will be handling the case, will charge an hourly fee of $350 and will receive reimbursement for work-related expenses. The firm's paralegal will charge $150 per hour. Mr. Drake declared in a court filing that he is a disinterested person within the meaning of Section 101(14) of the Bankruptcy Code. The firm can be reached through: James L. Drake, Jr. James L. Drake, Jr. PC P.O. Box 9945 Savannah, GA 31412 Phone: (912) 790-1533 Email: jdrake@drakefirmpc.com About MOBBBT LLC MOBBBT, LLC filed its voluntary petition for relief under Chapter 11 of the Bankruptcy Code (Bankr. S.D. Ga. Case No. 21-40379) on June 11, 2021. John D. Northrup, Jr., sole member, signed the petition. At the time of filing, the Debtor disclosed total assets of up to $10 million and total liabilities of up to $1 million. Judge Edward J. Coleman III oversees the case. James L. Drake, Jr., P.C. serves as the Debtor's legal counsel. MOBITV INC: Plan Exclusivity Period Extended Until August 30 ------------------------------------------------------------ At the behest of MobiTV, Inc. and its affiliates, Judge Laurie Selber Silverstein of the U.S. Bankruptcy Court for the District of Delaware extended the periods in which the Debtors may file a plan of reorganization through and including August 30, 2021, and to solicit acceptances through and including October 29, 2021. This is the first extension of the Debtor's exclusivity periods. The Debtors have faced a variety of complex issues, including the loss of their primary customer, T-Mobile USA, early in the proceedings. The Debtors expended significant time in negotiating a settlement with T-Mobile and the Committee, one which provided a runway for ultimate confirmation of a plan of liquidation. Since the Petition Date, in addition to stabilizing operations and obtaining typical "first-day relief," the Debtors have completed a marketing and sale process, which resulted in the Sale Order and closing of the Sale. And since the Closing Date, the Debtors have been negotiating with the Committee and Ally Bank regarding a global settlement, in addition to the settlement with T-Mobile. Moreover, the Debtors have already satisfied key milestones necessary for the successful resolution of these Chapter 11 Cases. It includes the completion and filing of their schedules and statements, establishing claim bar dates, and the closing of the Sale. The Debtors have been making steady and material progress in these Chapter 11 Cases and are on pace to efficiently complete the administration of these cases. The continued exclusivity will permit the Debtors the ability to maintain flexibility in crafting an appropriate plan. All of the Debtors' stakeholders will benefit from the Debtors' focused efforts to maximize the value of the Debtors' estates at this time. The extension will give the Debtors the focus their time and energy on post-Closing transition issues and working towards confirming a plan ultimately. A copy of the Debtor's Motion to extend is available at https://bit.ly/3B5FKnf from Stretto.com. A copy of the Court's Extension Order is available at https://bit.ly/3hGekg2 from Stretto.com. About MobiTV Inc. Founded in 2000, MobiTV is the first company to bring live and on-demand television to mobile devices and is a leader in application-based television and video delivery solutions. MobiTV provides end-to-end internet protocol streaming television services via a proprietary cloud-based, white-label application. On March 1, 2021, MobiTV Inc. and MobiTV Service Corporation filed for Chapter 11 protection (Bankr. D. Del. Lead Case No. 21-10457). MobiTV Inc. estimated at least $10 million in assets and $50 million to $100 million in liabilities as of the filing. Judge Laurie Selber Silverstein oversees the case. FTI Consulting, Inc. and FTI Capital Advisors LLC have been retained as the Debtors' financial advisor and investment banker to assist in the negotiation of strategic options. Pachulski Stang Ziehl & Jones LLP and Fenwick & West LLP serve as the Debtors' legal counsel. Stretto is the claims agent, maintaining the page https://cases.stretto.com/MobiTV. The U.S. Trustee for Regions 3 and 9 appointed an official committee of unsecured creditors on March 15, 2021. The committee tapped Fox Rothschild, LLP, and PricewaterhouseCoopers, LLP as its legal counsel and financial advisor, respectively. MONEYGRAM INT'L: Moody's Rates New First Lien Secured Notes 'B2' ---------------------------------------------------------------- Moody's Investors Service assigned a rating of B2 to MoneyGram International, Inc. proposed issuance of first lien secured notes. The action completes the rating of the company's proposed refinancing of its debt capital structure. "MoneyGram's strategic actions have improved business positioning over the last eighteen months, but competition is further intensifying and business portfolio dynamics remain highly complex" said Peter Krukovsky, Moody's Senior Analyst. "From this perspective, the recent equity capital raise, debt reduction and the pending refinance at lower interest rates provide the needed flexibility." The following ratings/assessments are affected by the action: New Assignments: Issuer: MoneyGram International, Inc. GTD Senior Secured 1st Lien Global Notes, Assigned B2 (LGD3) RATINGS RATIONALE MoneyGram's credit profile reflects its recently improved competitive positioning in the growing cross-border money transfer industry, potential for consistent albeit modest revenue growth and stable profitability. The resolution of DOJ monitoring in May 2021, followed by a $100 million equity offering and the pending debt capital structure refinancing at lower interest rates combine for a substantial credit profile and FCF improvement. Pro forma for the refinance and excluding monitor costs and Ripple contra-expense as non-recurring items, Moody's estimates adjusted total leverage as of LTM ending June 2021 at 4.1x. Pro forma FCF/debt in 2021 is 5%, excluding the forfeiture payment and the estimated $24.1 million one-time tax payment in Q4 2021. While Moody's expects remittances to grow solidly in 2021 following the modest decline in 2020 and to remain a growth market over the intermediate term, competition in the cross-border money transfer industry is increasingly intense, and the channel shift from cash to digital continues to have a deflationary effect on pricing. The strong performance of MoneyGram's digital business is an important credit positive, supporting the company's long-term strategic positioning. Industry leaders with strong digital services may continue to gain share from the informal channel, banks and regional operators, but face pressure from digital wallets and digital-led competitors that benefit from breadth of customer engagement and are not burdened by leverage or need to support a cash channel EBITDA stream. Following DOJ monitoring resolution and capital structure refinancing, continued debt reduction remains a strategic priority for MoneyGram. With FCF improved, the company will be able to prepay debt over time, and the first prepayment may occur in the first half of 2022. MoneyGram maintains ample liquidity with estimated pro forma cash balance of $125 million as of June 2021, and Moody's projects the company to be able to make debt prepayments while maintaining solid operating cash balances. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATING The stable outlook reflects Moody's expectation of modest revenue and EBITDA growth combined with debt reduction driving adjusted total debt/EBITDA to about 4x by the end of 2022. The ratings could be upgraded if MoneyGram demonstrates consistent revenue and EBITDA growth, and if leverage is reduced below 4x. The ratings could be downgraded if MoneyGram experiences a sustained EBITDA decline, if free cash flow weakens, or if total leverage is sustained above 5x. The principal methodology used in this rating was Business and Consumer Service Industry published in October 2016. With estimated revenues of $1.275 billion for the last twelve months ended June 2021, MoneyGram is a global provider of cross-border money transfer services. NAB HOLDINGS: Moody's Hikes CFR to B1 on Preferred Stock Redemption ------------------------------------------------------------------- Moody's Investors Service upgraded NAB Holdings, LLC's (North American Bancard, or NAB) Corporate Family Rating to B1 from B2, Probability of Default Rating to B1-PD from B2-PD, and senior secured credit facilities to B1 from B2. The rating outlook remains stable. The action follows the redemption of the remaining preferred stock by NAB at the end of June 2021. "NAB's strong cash flow enabled it to reduce redeemable preferred stock by $150 million during the pandemic despite the difficult operating environment, resulting in a meaningfully improved credit profile" said Peter Krukovsky, Moody's Senior Analyst. "While the long-term growth potential of the current business portfolio may be below the industry average, strong cash flow will continue to build the company's financial flexibility over time." The following rating actions were taken: Upgrades: Issuer: NAB Holdings, LLC Corporate Family Rating, Upgraded to B1 from B2 Probability of Default Rating, Upgraded to B1-PD from B2-PD Senior Secured Bank Credit Facility, Upgraded to B1 (LGD3) from B2 (LGD3) Outlook Actions: Issuer: NAB Holdings, LLC Outlook, Remains Stable RATINGS RATIONALE NAB's credit profile is supported by good business stability, profitability and cash flow generation, offset in part by a muted medium-term growth trajectory. Credit ratios have materially improved despite the pandemic, with total leverage estimated at 3.4x as of LTM June 2021. NAB used strong FCF over the past 18 months to redeem $150 million of preferred stock that accrued cash dividends at a high rate, with the last redemption completed in June 2021. Moody's views NAB's FCF generation as a differentiated credit strength, as FCF/debt stands at 15% for LTM June 2021. Liquidity remains strong with an estimated cash balance of $92 million in June 2021 following the preferred redemption. NAB's revenue decline of 7% in 2020 was driven by an SMB merchant focus and a decline in Humboldt, with support from a high proportion of card-not-present revenues and SG&A controls which sustained margins. A broad rebound is developing in 2021 with revenues in Q4 2020 and Q1 2021 already above comparable quarters in 2019, driven by strength across a broad variety of SMB merchant categories. Moody's projects NAB to grow revenues nearly 20% in 2021 as both core and Humboldt businesses recover from the 2020 trough, and project margins to expand meaningfully driven by vertical integration, mix shift to direct distribution, operating leverage over controlled SG&A, and growth in high-margin Humboldt revenues. However, NAB's high exposure to ISO distribution and modest integrated payments presence may limit its longer-term growth trajectory. NAB has successfully created value through acquisitions over time, and Moody's expect the company to continue to evaluate M&A opportunities. However, Moody's does not expect acquisitions to be large in size relative to NAB's financial flexibility. If the company uses its cash liquidity and free cash flow generation to finance the acquisitions, they would be deleveraging compared to the base case forecast. Larger acquisitions could require incremental debt issuance, but Moody's does not expect such acquisitions (if they occur) to result in a material change to the credit profile. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS The stable outlook reflects Moody's expectation of a revenue rebound in 2021 followed by more modest growth in 2022, resulting in total leverage approaching 3x. The ratings could be upgraded if NAB demonstrates consistent revenue and EBITDA growth, and if leverage is sustained below 3x. The ratings could be downgraded if NAB experiences a sustained revenue or margin decline, or if total leverage is sustained above 4.5x. The principal methodology used in these ratings was Business and Consumer Service Industry published in October 2016. With estimated revenues of $506 million for the last twelve months ended June 2021, NAB is a merchant acquirer serving primarily small and medium size merchant customers across the US. NAHAUL INC: Seeks Court Approval to Hire Bankruptcy Attorneys ------------------------------------------------------------- NAHAUL, Inc. seeks approval from the U.S. Bankruptcy Court for the Northern District of Illinois to hire David Herzog, Esq., of Herzog & Schwartz, P.C. and Laxmi Sarathy, Esq., as bankruptcy attorneys. The Debtor requires both attorneys to: (a) render legal advice with respect to the powers and duties of the Debtor; (b) negotiate, draft and pursue all documentation necessary in the Debtor's Chapter 11 case; (c) prepare legal papers; (d) perform necessary legal work regarding approval of the Debtor's disclosure statement and Chapter 11 plan; (e) appear in court; (f) assist with any disposition of the Debtor's assets by sale or otherwise; (g) attend all meetings and negotiate with representatives of creditors, the Office of the U.S. Trustee, and other parties-in-interest; (h) provide legal advice regarding bankruptcy law, corporate law, corporate governance, transactional, tax, labor, litigation, and other issues to the Debtor in connection with its ongoing business operations; and (i) perform other necessary legal work. Each bankruptcy attorney received the amount of $5,000 from the Debtor as attorney's fees. Mr. Sarathy and Mr. Herzog disclosed in a court filing that they are "disinterested persons" as the term is defined in Section 101(14) of the Bankruptcy Code. The attorneys can be reached at: Laxmi P. Sarathy, Esq. 3553 W. Peterson Avenue, Suite 102 Chicago, IL 60659 Tel: 312-674-7965 Fax: 312-873-4774 Email: lsarathylaw@gmail.com -- and -- David R. Herzog, Esq. Herzog & Schwartz, P.C. 77 West Washington Street, Suite 1400 Chicago, IL 60602 Tel.: (312) 977-1600 Fax: (312) 977-9936 Email: drhlaw@mindspring.com About NAHAUL Inc. NAHAUL, Inc., an affiliate of Chicagoan Logistic Company, is a privately held company in the general freight trucking industry. The company is based in Columbus, Ohio. NAHAUL and Chicagoan Logistic Company filed Chapter 11 petitions (Bankr. N.D. Ill. Case Nos. 21-07152 and 21-07154) on June 5, 2021. The two cases are not jointly administered. In the petition signed by Serkan B. Kaputluoglu, president, NAHAUL disclosed between $100,000 and $500,000 in assets and between $1 million and $10 million in liabilities. Judge Carol A. Doyle is assigned to NAHAUL's Chapter 11 case. David Herzog, Esq., of Herzog & Schwartz, P.C. and Laxmi P. Sarathy, Esq., serve as NAHAUL's legal counsel. NEOVASC INC: Announces New Leadership Appointments -------------------------------------------------- Neovasc Inc. has appointed Lisa Becker as vice president, Regulatory Affairs, Global Angina Therapies and Sarah Gallagher as vice president, Clinical Affairs. "Neovasc's Regulatory and Clinical teams will be well strengthened with the additions of Lisa and Sarah, who bring tremendous experience in regulatory and clinical affairs to the overall Neovasc team," said Fred Colen, president and chief executive officer of Neovasc. "We look forward to leveraging their industry expertise as we pursue our own development goals in North America and Europe." Ms. Becker has more than 20 years of experience in medical device regulatory affairs. Her product and therapy experience has spanned medical devices from cardiac rhythm management, to vascular support, pulmonary artery pressure monitoring, cardiac occluders, heart valves and most recently, structural heart products, previously working at Abbott, St. Jude Medical, Boston Scientific and Guidant. She possesses regulatory experience on a global scale, with responsibility for multiple geographies, including US and EU Class III approvals. Ms. Becker earned a Bachelor of Science in Organizational Behavior with a General Engineering minor from the United States Air Force Academy and a Masters of Science from Chapman University. She served nearly ten years on active duty as an officer in the US Air Force. A highlight of Ms. Becker's career includes the approval of the world's smallest mechanical heart valve and a duct occluder for premature infants, which was approved in four major geographies within a six-month period. "I view my regulatory work as a continuation of my service toward improving lives. As a member of the Neovasc team, I will bring my professional passion for driving medical device development through creative and collaborative regulatory approval strategies to the Company's efforts to expand approval and acceptance of the Reducer device," said Ms. Becker. Ms. Gallagher brings 20 years of medical device clinical research experience to the Neovasc team. Prior to joining Neovasc, she held leadership roles at Medtronic in Interventional Pain, Neuromodulation, and Cardiac Rhythm Management, as well as St. Jude Medical in Structural Heart. During her tenure she held roles with increasing responsibility in clinical research and clinical operations, and she has developed and executed both pre- and post-market clinical trials and supported regulatory approvals globally. Ms. Gallagher holds a Bachelor of Applied Arts in Exercise Science and a Bachelor of Arts in Psychology from the University of Minnesota, and Master of Science in Technology Management from the University of St. Thomas. "I am excited to be joining the Neovasc Clinical Affairs team at this critical point in the Company's corporate and clinical journey," said Ms. Gallagher. "I am eager to engage in the ongoing and new studies and data supporting the Reducer and Tiara programs, as we seek to bring these important treatment options to more patients." Neovasc also announced the departure of Vicki Bebeau, former vice president of Clinical and Regulatory affairs who is assisting with transitioning activities to Sarah and Lisa until Aug. 30, 2021. About Neovasc Inc. Neovasc is a specialty medical device company that develops, manufactures and markets products for the rapidly growing cardiovascular marketplace. The Company is a leader in the development of minimally invasive transcatheter mitral valve replacement technologies, and minimally invasive devices for the treatment of refractory angina. Its products include the Neovasc Reducer, for the treatment of refractory angina, which is not currently commercially available in the United States (2 U.S. patients have been treated under Compassionate Use) and has been commercially available in Europe since 2015, and Tiara, for the transcatheter treatment of mitral valve disease, which is currently under clinical investigation in the United States, Canada, Israel and Europe. For more information, visit: www.neovasc.com. Neovasc reported a net loss of $28.69 million for the year ended Dec. 31, 2020, compared to a net loss of $35.13 million for the year ended Dec. 31, 2019. As of Dec. 31, 2020, the Company had $17.88 million in total assets, $15.90 million in total liabilities, and $1.98 million in total equity. Grant Thornton, LLP, in Vancouver, Canada, the Company's auditor since 2002, issued a "going concern" qualification in its report dated March 10, 2021, citing that the Company incurred a comprehensive loss of $30.2 million during the year ended Dec. 31, 2020. These conditions, along with other matters, raise substantial doubt about the Company's ability to continue as a going concern as at Dec. 31, 2020. NEW YORK CLASSIC: May Use Cash Thru July 20 Final Hearing --------------------------------------------------------- Judge Martin Glenn authorized New York Classic Motors LLC to use $264,757 of additional cash collateral through the final hearing on the motion, according to the terms of the Third Interim Order. The final hearing is set for July 20, 2021, at 2 p.m. The additional cash collateral shall be used by the Debtor pursuant to the budget. HIL Holdings I LLC and the United States of America, on behalf of the U.S. Small Business Administration, are parties in interest to the cash collateral. A copy of the bridge order is available for free at https://bit.ly/2Vxm2kl from PacerMonitor.com. About New York Classic Motors New York Classic Motors LLC, a classic car dealer in New York, filed for Chapter 11 bankruptcy protection (Bankr. S.D. N.Y. Case No. 21-10670) on April 9, 2021. At the time of the filing, the Debtor had between $10 million and $50 million in both assets and liabilities. The Debtor is represented by Kirby Aisner & Curley, LLP. Judge Martin Glenn oversees the case. The U.S. Trustee for Region 2 appointed an official committee of unsecured creditors on April 29, 2021. Arent Fox, LLP and CBIZ Accounting, Tax and Advisory of New York, LLC serve as the committee's legal counsel and financial advisor, respectively. NEX LEVEL TRANSPORT: Taps Hamilton Stephens as Legal Counsel ------------------------------------------------------------ Nex Level Transport, Inc. seeks approval from the U.S. Bankruptcy Court form the Western District of North Carolina to hire Hamilton Stephens Steele + Martin, PLLC to serve as legal counsel in its Chapter 11 case. The firm will render these services: (a) provide legal advice with respect to the powers and duties of the Debtor in the continued operation of its business and management of its properties; (b) negotiate, prepare, and pursue confirmation of a Chapter 11 plan and approval of a disclosure statement, and all related reorganization agreements and documents; (c) prepare legal papers and appear in court; and (e) perform all other legal services for the Debtor which may be necessary and proper in its Chapter 11 proceedings. The firm's hourly rates are as follows: Melanie Johnson Raubach Attorney $400 per hour Glenn Thompson Attorney $450 per hour Kenneth Dantinne Attorney $300 per hour Robin Kelley Paralegal $175 per hour Melanie Johnson Raubach, Esq., a partner at Hamilton, disclosed in a court filing that her firm is a "disinterested person" as defined in section 101(14) of the Bankruptcy Code. Hamilton can be reached through: Melanie Johnson Raubach, Esq. Hamilton Stephens Steele + Martin, PLLC 525 North Tryon Street, Suite 1400 Charlotte, NC 28202 Tel: 704.227.1059 / 704.344.1117 Fax: 704.344.1483 Email: mraubach@lawhssm.com info@lawhssm.com About Nex Level Transport Nex Level Transport, Inc. filed its voluntary petition for relief under Chapter 11 of the Bankruptcy Code (Bankr. W.D.N.C. Case no.21-30400) on July 9, 2021. At the time of filing, the Debtor had between $50,001 to $100,000 in assets and 100,001 to $500,000 in liabilities. Judge J. Craig Whitley oversees the case. Matthew A. Winer, Esq., at Hamilton Stephens Steele & Martin, PLLC, serves as the Debtor's legal counsel. OCTAVE MUSIC: S&P Alters Outlook to Stable, Affirms 'B-' ICR ------------------------------------------------------------ S&P Global Ratings affirmed its 'B-' issuer credit rating and revised the outlook to stable from negative on The Octave Music Group Inc. S&P's stable outlook reflects its expectation that Octave will continue to benefit from the return of foot traffic to its service locations and that its revenues and EBITDA generation will recover leading to leverage in the mid-6x area and free operating cash flow (FOCF) to debt above 5% in 2021. Usage of Octave's products and services has improved due to recovering foot traffic at retail locations, bars, and restaurants across the U.S. Since the beginning of 2021, U.S. cities and states have gradually eased their pandemic-related restrictions on public gatherings due to increasing vaccination numbers and steadily declining COVID-19 infection rates. These easing restrictions, combined with strong consumer demand for social gatherings, have boosted patronage at bars and restaurants that utilize Touchtunes and increased foot traffic at retail locations that use the company's Playnetwork services. For the Touchtunes segment, usage of its digital jukeboxes has improved substantially since the depths of the pandemic in 2020. In the first quarter of 2021, while the total number of active jukeboxes were still well below pre-pandemic levels, the coinage per jukebox (a measure of usage per machine) was steadily above that of comparable 2019 periods. In S&P's view, this period of strong usage speaks to pent-up demand for social gatherings and entertainment as patrons returned to bars and restaurants after social distancing during 2020. In S&P's view, this favorable coinage trend may continue into the summer months as consumer demand for social engagements remains high and as the average consumer is still relatively limited by their social gathering options (i.e. local entertainment versus international travel). After the summer of 2021, S&P expects coinage per jukebox metrics may gradually decline closer to more normalized levels of usage. However, this decline is likely to be offset by an increasing number of Touchtunes locations opening back up, thereby still increasing gross coinage. For Octave's PlayNetwork segment, its in-store music solutions offering, we expect a less robust recovery in revenues over the next two years. Importantly, this revenue base was less exposed to volatile declines in demand during 2020 because of its subscription-based service revenue model. However, this segment's overall revenue recovery may be partially moderated by retail clients that have permanently closed their businesses or downsized certain retail locations, thereby reducing PlayNetwork's footprint. Nevertheless, S&P expects long-term revenue growth opportunities for this segment will be supported by domestic net new retail clients, international expansion opportunities, and the company's favorable partnership with Apple music. As a result of these favorable revenue trends, S&P expects revenues to grow in the high-20% area in 2021 and improve further by around 10% in 2022. EBITDA and cash flow generation have improved with recovering revenues since the start of 2021. Year-to-date positive revenue trends for Octave's products and services, combined with the company's cost actions over the past 12 months, have resulted in substantially improved EBITDA and cash flow generation for the first quarter of 2021 relative to the past few quarters. S&P expects this trend will continue through 2021 and into 2022 as the company's revenue base steadily recovers toward pre-pandemic levels. S&P said, "As a result, we expect the company's credit metrics will improve accordingly, with leverage declining to the mid-6x area in 2021 and the 6x area in 2022 from 13.7x in 2020. FOCF to debt should also improve to the 5%-8% range in 2021 and 2022 from 3.1% in 2020. We believe the company's expected stronger operating performance, specifically its ability to generate sufficiently positive free operating cash flow, will allow it to comfortably service its $10 million, or 3.45%, annual mandatory debt amortization on its $290 million senior secured term loan." Environmental, social, and governance (ESG) credit factors for this credit rating change: -- Health and safety S&P said, "Our stable outlook reflects our expectation that Octave will continue to benefit from the return of foot traffic to its service locations and that its revenues and EBITDA generation will recover leading to leverage in the mid-6x area and FOCF to debt above 5% in 2021. "We could lower our rating on Octave if we believe business disruptions from the pandemic will create additional operating challenges and liquidity pressures such that we view the capital structure as unsustainable. This would most likely occur if COVID-19 cases resurge, state and local governments return to more stringent social-distancing measures, and consumer preferences change such that foot traffic in bar and restaurants that utilize Octave's services substantially falls. "We could raise our rating on Octave if the company is able to lower and keep leverage below 6x and sustain FOCF to debt well above 5%. This scenario would likely include a combination of a strong return to pre-pandemic revenues, improved EBITDA margins through prudent cost management, better cash flow generation through working capital management, and voluntary debt repayment." OMEGA SPORTS: Gets Cash Collateral Access Thru Aug 29 ----------------------------------------------------- The U.S. Bankruptcy Court for the Western District of North Carolina, Charlotte Division, has authorized Omega Sports, Inc. to use cash collateral on an interim basis in the ordinary course of business through August 29, 2021 in accordance with the budget, with a 10% variance. Because Fidelity and American Express may have an interest in inventory and other assets of the Debtor and the proceeds therefrom within the meaning of 11 U.S.C. section 363, which may be used by the Debtor in accordance with the Interim Order, Fidelity and American Express will be granted adequate protection. As adequate protection for Fidelity's interest in Cash Collateral, to the extent the Debtor uses such Cash Collateral, Fidelity is granted valid, attached, choate, enforceable, perfected and continuing security interests in, and liens upon post-petition assets of the Debtor of the same character and type actually used, to the same validity, priority and extent as the liens and encumbrances of Fidelity attached to the Debtor's assets pre-petition. Fidelity's security interests in, and liens upon, the Post-Petition Collateral will have the same validity, priority and extent as existed between Fidelity, the Debtor, and all other creditors or claimants against the Debtor's estate on the Petition Date. In addition, and as additional adequate protection, the Debtor will make the July and August 2021 monthly payments to Fidelity due on Loan 1226 and Loan 1228 at the non-default rate set forth in the applicable Loan Documents. As adequate protection for American Express's interest in Cash Collateral, to the extent the Debtor uses such Cash Collateral, American Express is granted valid, attached, choate, enforceable, perfected and continuing security interests in, and liens upon postpetition assets of the Debtor of the same character and type actually used, to the same validity, priority and extent as the liens and encumbrances of American Express attached to the Debtor's assets pre-petition. American Express's security interests in, and liens upon, the Post-Petition Collateral will have the same validity, priority and extent as existed between American Express, the Debtor, and all other creditors or claimants against the Debtor's estate on the Petition Date. A final hearing on the use of Cash Collateral will be held on August 25, 2021 at 9:30 a.m. A copy of the order and the Debtor's budget is available at https://bit.ly/3yHWq28 from PacerMonitor.com. The Debtor projects $1,031,705 in cash collections and $1,053,959 in total outflows for July. About Omega Sports Greensboro, North Carolina-based Omega Sports, Inc. -- https://www.omegasports.com/ -- manufactures and sells sporting goods, including apparel, footwear, and gear and accessories. Omega Sports sought Chapter 11 protection (Bankr. W.D.N.C. Case No. 21-30160) on March 25, 2021, disclosing between $1 million and $10 million in both assets and liabilities. Ronald Craig Carlock, Jr., owner and chief executive officer, signed the petition. The case is handled by Honorable Judge Laura T. Beyer. The Debtor tapped Moon Wright & Houston, PLLC as legal counsel and The Finley Group as financial advisor. OWENS & MINOR: S&P Ups ICR to 'BB-' on Lower Leverage Target ------------------------------------------------------------ S&P Global Ratings upgraded the issuer credit rating to 'BB-' of Owens & Minor Inc. (OMI) in light of an improved competitive position, strong 2022 EBITDA guidance, improving long-term visibility, and a clearer capital allocation policy. Meanwhile, S&P is upgrading its revolver and 2024 senior secured notes to 'BB-', and the 2029 senior unsecured notes to 'B'. S&P's positive view is tempered somewhat by improving, but still relatively low earnings visibility particularly on the sustainability of PPE demand, a renewed appetite for acquisitions, and execution risks related to various growth initiatives. The positive outlook reflects the possibility for an upgrade if the company's long-term outlook becomes clearer and the company continues to build a track record of maintaining leverage below 3.5x. OMI's competitive position has improved from a few years ago. A stabilized medical distribution business coupled with a differentiated manufacturing capability underpins S&P's higher opinion of OMI's competitive advantage. Under the new management team, OMI has stabilized its legacy medical distribution business through better customer service quality. While the company has yet to recover the lost revenue from some large customer losses a few years ago, customer satisfaction and retention have improved. Further solidifying OMI's competitive position is its differentiated Americas-based personal protective equipment (PPE) manufacturing business, which was brought front and center during the COVID-19 pandemic. S&P said, "We believe that OMI will generally maintain S&P Global Ratings-adjusted leverage in the 3x-4x range over the long term. Since the beginning of 2020, the management team has reduced its total debt to under $1 billion from nearly $1.6 billion, leading to company-defined leverage of 2x as of the first quarter of 2021. More recently, at Investor Day, management provided more color on the leverage target of 2x-3x. A major caveat is that management has expressed a strong willingness to make acquisitions and, for a "right" acquisition, it's willing to bring leverage to 3x-4x. And for a "perfect" acquisition, it's ready to bring leverage to "a little bit above" 4x but reduce it back to 2x-3x through cash flow generation. "Our 'BB-' issuer credit rating assumes OMI's S&P Global Ratings-adjusted net leverage (0.3x-0.5x higher than company-defined leverage) to be in the 3x-4x range, with some M&A spending. However, OMI's acquisition (and post-acquisition deleveraging) track record is mixed. Transaction multiples are high in the current market. We therefore will closely track management's acquisition appetite and commentary about the capital allocation policy. "We see execution risks related to various growth initiatives and uncertainty on the true long-term earnings power. The drastic improvement in OMI's EBITDA since the onset of the COVID-19 pandemic was driven primarily by the higher-margin PPE manufacturing business. We believe that PPE demand will stay above the pre-pandemic level but well below peak level during the pandemic. It remains to be seen whether the company can achieve the long-term (through 2026) revenue and EBITDA guidance as it could be impacted by many moving parts such as PPE volume rationalization, proprietary portfolio expansion, and new adjacent market entry." Lastly, the core medical distribution business still faces two larger peers. Compared with Cardinal Health Inc. and Medline Industries Inc., OMI was late entering the fast-expanding post-acute distribution and private-label manufacturing businesses. The company spent over $1 billion in 2017 and 2018 acquiring Byram Healthcare (a key player in home health medical/surgical distribution) and Halyard Health's (a medical product manufacturer) surgical and infection prevention business. The Halyard acquisition turned out to be a highly attractive addition to the company as it is the source of the attractive Americas-based PPE manufacturing, which has emerged as the most significant credit driver since the onset of the pandemic. Although the company has reduced leverage steadily through EBITDA growth and debt repayment, S&P remains concerned that increasing competition or a desire to improve its competitive position could cause the company to become more acquisitive. The positive outlook reflects the possibility for an upgrade if the company's long-term outlook becomes clearer and the company continues to build a track record of maintaining leverage below 3.5x. S&P said, "We could revise the outlook back to stable if we believed OMI's leverage would likely remain in the 4x-5x range on a sustained basis. This could occur through leveraging acquisitions. "We could consider a higher rating if OMI can establish a longer track record executing on its growth strategy (both organic and inorganic) and manage any potential headwinds from lower PPE demand. We would also need to be convinced that OMI's leverage would stay well below 3.5x on a sustained basis (with acquisitions)." P8H INC: Court OKs Interim Use of $21,759 Cash Collateral --------------------------------------------------------- Judge David S. Jones authorized Megan E. Noh, Chapter 11 Trustee for P8H, Inc., d/b/a Paddle8, to use cash collateral on an interim basis up to an aggregate amount of $21,759. The authorized amount shall be used for the budgeted expenses to be incurred during the period from and including July 12, 2021 to and including August 22, 2021, pending a further interim hearing on the motion to be held on August 26, 2021. FBNK Finance S.a.r.l., as assignee of Stockaccess Holdings SAS, has asserted that it holds a prepetition lien on the cash collateral. Judge Jones ruled that, for the purpose of adequately protecting the Lender from Collateral Diminution, the Lender is granted: a. Replacement liens in all of the Debtor's post-petition assets to the extent that Lender's alleged lien in the Cash Collateral was valid, perfected and enforceable as of the Petition Date in the continuing order of priority of its pre-petition liens to the extent Collateral Diminution occurs during the Chapter 11 case, subject to the carve out; and b. A first priority post-petition lien in the proceeds of any litigation that may be commenced including (i) avoidance claims that may be asserted by or on behalf of the Debtor's estate, and (ii) any other litigated matters, but only to the extent that Lender's alleged lien in the Cash Collateral was valid, perfected and enforceable as of the Petition Date in the continuing order of priority of its pre-petition liens to the extent Collateral Diminution occurs during the Chapter 11 case; and c. A super priority administrative expense claim pursuant to Section 507(b) of the Bankruptcy Code, subject to the Carve-Out, to the extent that the adequate protection granted is inadequate. The Carve-out consists of (i) the claims of Chapter 11 professionals duly retained in the Chapter 11 case and to the extent awarded; (ii) United States Trustee fees and any Clerk's filing fees; (iii) fees and expenses incurred in connection with any investigation of the nature, extent and validity of Lender's liens and security interests in an amount up to $10,000; and (iv) the fees and commissions of a hypothetical Chapter 7 trustee for up to $10,000. Moreover, the Trustee shall segregate and continue to hold from the Debtor's estate's cash on hand the amount of $213,261 related to claims alleged by Rema Hort Mann Foundation, Penumbra Foundation, The New American Cinema Group, Inc., The Shawn Carter Foundation, the UN Women National Committee UK, and Counseling In Schools, Inc. that certain funds held by the Debtor belong to such entities pursuant to New York's Art and Cultural Affairs Law. A copy of the 15th interim order is available for free at https://bit.ly/2UG7Ogw from PacerMonitor.com. At the next Interim Hearing, which will be held on August 26 at 10 a.m. (prevailing Eastern Time), the Bankruptcy Court will consider any request by the Trustee to use Cash Collateral after the Further Interim Period. Objections to any further interim cash collateral use authorization must be filed no later than 4 p.m. (prevailing Eastern Time) on August 20. About P8H, Inc. d/b/a Paddle8 Paddle8 was founded in 2011 by Alexander Gilkes, Aditya Julka, and Osman Khan. It is one of the first online auction house that specialized in the art world's "middle market." It announced a high-profile merger with the Berlin-based online auction house Auctionata in 2016, but the partnership was dissolved in 2017 when Auctionata filed for insolvency. P8H, Inc., doing business as Paddle 8, sought protection under Chapter 11 of the Bankruptcy Code (Bankr. S.D.N.Y. Case No. 20-10809) on March 16, 2020. At the time of filing, the Debtor was estimated to have assets of less than $50,000 and liabilities of between $50,001 and $100,000. Judge Stuart M. Bernstein oversees the case. The Debtor is represented by Kirby Aisner & Curley, LLP. Megan E. Noh is the Debtor's Chapter 11 trustee. The Trustee is represented by Pryor Cashman, LLP. FBNK Finance S.a.r.l., as lender, is represented by Jonathan I. Rabinowitz, Esq., at Rabinowitz, Lubetkin & Tully, LLC. PARALLAX HEALTH: CEO Paul Arena Resigns --------------------------------------- Paul R. Arena resigned as chief executive officer, as chairman of the Board of Directors, and as a director of Parallax Health Sciences, Inc., effective July 7, 2021. His resignation did not involve any disagreement with the Company. Effective July 8, 2021, Dr. Jorn Gorlach was unanimously elected as a member of the Board. Dr. Gorlach formerly served as a member of the Company's Board between Nov. 1, 2012, until his resignation on July 26, 2017. Dr. Gorlach has over 20 years of experience in the bio-medical field. In 2001, Dr. Gorlach co-founded AAvantgarde, a management consulting firm focused on the development and support of start-up companies. Since the inception of AAvantgarde in 2001, Dr. Gorlach has also served as one of its directors. As a co-founder and director of AAvantgarde, Dr. Gorlach is responsible for management consulting, licensing, and general operations. Since 2006, Dr. Gorlach has also served as a co-founder and director of Montecito BioSciences, Ltd., a diagnostics and testing company with proprietary technology for point-of-care diagnostics, testing, and data communication. In 2002, Dr. Gorlach co-founded AAvantgarde Laboratories AG and has served as its CEO since that time. AAvantgarde Laboratories AG is a research, development, and licensing company of biotechnology products, particularly in the field of diagnostics, biological prognostics, and diseases. As CEO, Dr. Gorlach was responsible for developing the company's business plan, developing outlines for product concept, research, and development, and leading financing activities and investor relations. In 2001, Dr. Gorlach co-founded Arcanum Discovery, Inc., a proteomics and drug discovery company focusing on novel drug target identifiers and validation. Additionally, from 2001 to 2002, Dr. Gorlach served as head of business development and finances for Arcanum Discovery, Inc. where he developed the company's product concept, research and development, and business plan as well as managed financing activities and investor relations. In 2001, Dr. Gorlach co-founded Ercole Biotech, Inc., a research stage biopharmaceutical company involved in the creation of oligonucleotide drugs. In 1997, Dr. Gorlach co-founded Paradigm Genetics, Inc., a bio-technology research company. From 1997 to 1999, Dr. Gorlach served as the company's Director of Research where he was responsible for developing concepts regarding novel functional genomics platform, focusing on high throughput, industrialization, systematization, and biology/IT integration. From 1999 to 2000, Dr. Gorlach served as the Director of Project Management for Paradigm Genetics, Inc. As Director of Project Management, Dr. Gorlach managed customer projects and research progress. From 2000 to 2001, Dr. Gorlach served as the company's vice president of business development. As a member of the company's executive team, Dr. Gorlach was responsible for new projects and the development of plans in future key business fields. Beginning in 2001 and continuing through 2002, Dr. Gorlach served as a consultant for Paradigm Genetics, Inc., where he supported the company's agricultural project initiatives and customer negotiations. From 1996 to 1997, Dr. Gorlach served as the Group Leader of Combinatorial Biochemistry for Novartis, Inc., a healthcare and scientific research company. As Group Leader of Combinatorial Biochemistry, Dr. Gorlach led team efforts in developing pharmaceutically active macrolide and cloning multiple polyketides genes. From 1994 to 1996, Dr. Gorlach was a research scientist for Ciba-Geigy, Inc., a chemical company. As a research scientist, Dr. Gorlach focused on acquired immunity and chemical regulation in wheat. From 1991 to 1994, Dr. Gorlach was a research fellow for the Swiss Federal Institute in Zurich, Switzerland. As a research fellow, Dr. Gorlach focused his attention on gene regulation of amino acid biosynthetic pathways. Dr. Gorlach has received a Bachelor of Science Degree in Biochemistry from the University of Hannover. In 1991, Dr. Gorlach obtained a Master in Science from the University of Hannover in Biochemistry. In 1994, Dr. Gorlach received a Ph.D. in Molecular Biology from ETH Zurich, and in 2000, received an MBA from the Kenan-Flagler Business School at the University of North Carolina-Chapel Hill. About Parallax Headquartered in West Palm Beach, Florida, Parallax Health Sciences, Inc. -- www.parallaxcare.com -- focuses on personalized patient care through remote healthcare services, behavioral health systems, and Point-of-Care diagnostic testing. Parallax reported a net loss of $12.87 million for the year ended Dec. 31, 2019. As of Dec. 31, 2019, the Company had $1.36 million in total assets, $11.61 million in total liabilities, and a total stockholders' deficit of $10.25 million. Farmington Hills, Michigan-based Freedman & Goldberg CPAs, the Company's auditor since 2016, issued a "going concern" qualification in its report dated May 15, 2020, citing that the Company has suffered recurring losses from operations, has a net capital deficiency and has significant contingencies that raise substantial doubt about its ability to continue as a going concern. PARK RIVER: Moody's Confirms B2 CFR Amid Wolf Home Acquisition -------------------------------------------------------------- Moody's Investors Service confirmed Park River Holdings, Inc.'s, operating as PrimeSource Building Products, Inc. B2 Corporate Family Rating and B2-PD Probability of Default Rating. Moody's also confirmed the B1 rating on PrimeSource's senior secured term loan, which is being increased by $415 million, and the Caa1 rating on the company's senior unsecured notes due 2029. The outlook is stable. This completes the review initiated on June 29, 2021. Proceeds from the $415 million term loan add-on, new equity contribution from affiliates of Clearlake Capital Group, L.P. (Clearlake), the owner of PrimeSource, and rollover equity from management will be used to acquire Wolf Home Products (Wolf) from affiliates of Tenex Capital Management for approximately $530 million, excluding fees and expenses, in a leveraging transaction in which debt is the preponderance source of funding. Wolf is mainly a provider of branded kitchen and bath cabinets, from which it earns about 60% of its revenue. Outdoor living and specialty exterior building products account for the balance of revenue. Wolf expands PrimeSource's product offerings. The acquisition of Wolf follows comes shortly after PrimeSource's acquisition of Nationwide Enterprises, Inc. (Nationwide) in an all-debt transaction. Despite Clearlake's track record of aggressive use of debt for acquisitions, the confirmation of PrimeSource's B2 CFR considers Moody's expectation that profitability will benefit from higher volumes due to growth in the domestic construction end market, the driver of PrimeSource's revenue, and resulting operating leverage from that growth. Repair and remodeling activity represents approximately 65% of pro forma revenue and is exhibiting strong growth. New home construction accounts for the balance of pro forma revenue, a benefit but also vulnerable to cyclicality. As a national distributor with an expanded product offerings from recent acquisitions, PrimeSource should benefit from high levels of spending in these end markets. Another offset to PrimeSource's highly leveraged capital structure is good liquidity due to ample revolver availability. The revolver is more than sufficient to meet any potential shortfalls in operating cash flow due to seasonal demands. Governance characteristics Moody's consider in PrimeSource's credit profile include an aggressive financial strategy, evidenced by high leverage resulting from Clearlake's leveraged buyout of PrimeSource and follow-on debt financed acquisitions. Since acquiring PrimeSource in December 2020 Clearlake will have increased total adjusted debt to about $2.4 billion from $800 million at Q3 2020. Additional debt for acquisitions and future dividends to shareholders are an ongoing possibility. The stable outlook reflects Moody's expectation that PrimeSource will maintain substantial revolver availability. End market dynamics that will continue to support growth and successful integration of acquisitions without impacting operations further support the stable outlook. The following ratings are affected by the action: Confirmations: Issuer: Park River Holdings, Inc. Corporate Family Rating, Confirmed at B2 Probability of Default Rating, Confirmed at B2-PD Senior Secured Bank Credit Facility, Confirmed at B1 (LGD3) Senior Unsecured Regular Bond/Debenture, Confirmed at Caa1 (LGD5) Outlook Actions: Issuer: Park River Holdings, Inc. Outlook, Changed To Stable From Rating Under Review RATINGS RATIONALE PrimeSource's B2 CFR reflects Moody's expectation that the company will remain highly leveraged over the next eighteen months at over 6.0x. Fixed charges including cash interest, term loan amortization and operating and finance lease payments will approach $180 million per year, significantly reducing financial flexibility. PrimeSource may encounter challenges integrating Wolf and Nationwide at the same time. Also, PrimeSource faces strong competition especially as the company embarks on selling Wolf-branded cabinets into new markets west of the Mississippi River, which is one investment thesis for the acquisition of Wolf. Providing an offset to PrimeSource's leveraged capital structure is good profitability. Moody's forecasts adjusted EBITDA margin in the range 12.5% - 15% through 2022, which is a credit strength of the company. Moody's projects revenue will approach $2.5 billion by year end 2022 from $1.5 billion for LTM Q1 2021 due to organic growth and full-year earnings from acquired companies. Moody's also calculates interest coverage, measured as EBITA-to-interest expense, will be 2.5x by late 2022, which is reasonable given the company's considerable interest expense. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS Factors that could lead to an upgrade: Debt-to-LTM EBITDA approaching 4.5x EBITA-to-interest expense is maintained near 2.5x Preservation of good liquidity Follow more conservative financial policies Factors that could lead to a downgrade: EBITA-to-interest expense is sustained near 1.5x Debt-to- LTM EBITDA does not improve from about 6.0x pro forma at FYE21 and fails to trend towards 5.0x by FYE22, which is management's financial plan for each year Liquidity deteriorates Excessive usage of the revolving credit facility Aggressive acquisition with additional debt or shareholder return activity PrimeSource Building Products, Inc., headquartered in Irving, Texas, is a specialty branded building products distributor. Clearlake Capital Group, L.P., through its affiliates, is the owner of PrimeSource. The principal methodology used in these ratings was Distribution & Supply Chain Services Industry published in June 2018. PERFORMANCE FOOD: Moody's Rates New $780MM Unsecured Notes 'B2' --------------------------------------------------------------- Moody's Investors Service assigned a B2 rating to Performance Food Group, Inc.'s (PFG) new $780 million senior unsecured notes due 2029. All other ratings and the stable outlook remain unchanged. The new notes, together with $1.067 billion in equity, an $870 million draw on the asset-based revolving credit facility and cash on hand will be used to finance the $2.5 billion purchase of Core-Mark, refinance PFG's $350 million senior notes due 2024 and pay for fees and expenses. Moody's took the following rating actions for Performance Food Group, Inc.: Senior unsecured regular bond/debenture due 2029, assigned B2 (LGD5) RATINGS RATIONALE PFG's Ba3 corporate family rating is supported by the company's scale and market position as the third-largest food service provider in the US food service industry and second-largest distributor in the convenience store industry pro-forma for the Core-Mark acquisition. PFG's diversified operations and a customer base that was less affected by coronavirus restrictions, including in the quick service restaurant, independent pizza, and convenience-store channels, supported its relatively resilient performance during the pandemic. The recovery is now more firmly in place, with a reported early Q4 FY 2021 increase in sales over pre-pandemic levels in the Food Service segment and flat results in Vistar. The credit profile also benefits from governance considerations, specifically PFG's balanced financial strategy, which includes a 2.5-3.5x leverage target (based on the company's definition) outside of major acquisitions, and the use of a mix of equity and debt to finance deals. The rating is constrained by PFG's modest operating margins relative to its larger peers and its acquisitive business strategy. The company's relatively high leverage of 5.1x pro-forma for the Core-Mark acquisition also constrains the rating. Nevertheless, reflecting expectations for continued earnings recovery and debt repayment, Moody's projects debt/EBITDA to decline below 4x in FY 2022 from 5.1x estimated pro-forma (Moody's-adjusted leverage based on PFG's guidance for fiscal year ending June 2021, Core-Mark's LTM March 31, 2021 results, and expected financing) and EBITA/interest expense to increase to 3.2x from 2.4x. The stable outlook reflects Moody's expectations for a continued recovery in the food service sector, which when combined with debt repayment will support significant deleveraging despite the incremental acquisition debt. The stable outlook also reflects Moody's expectation that integration risk will be limited due to the company's track record with previous acquisitions, including Reinhart. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS Factors that could lead to an upgrade include a sustained improvement in earnings while maintaining a balanced financial strategy that results in debt/EBITDA of under 3.75x and EBITA/interest expense above 3.25x on a sustained basis. Factors that could lead to a downgrade include the adoption of a more aggressive financial strategy that does not prioritize near term debt reduction that results in debt/EBITDA sustained above 4.25x or EBITA/interest expense not recovering to 2.75x or higher. A sustained deterioration in liquidity for any reason could also lead to a downgrade. Headquartered in Richmond, Virginia, Performance Food Group, Inc. (PFG), is a food distributor with revenues of approximately $27 billion (about $44 billion pro forma for the acquisition of Core-Mark) as of March 31, 2021. PFG is a wholly owned subsidiary of publicly traded Performance Food Group Company (PFGC). The principal methodology used in this rating was Distribution & Supply Chain Services Industry published in June 2018. PIERCE CONTRACTORS: Seeks to Hire Fuller Law Firm as Counsel ------------------------------------------------------------ Pierce Contractors, Inc. seeks approval from the U.S. Bankruptcy Court for the Northern District of California to employ The Fuller Law Firm, P.C. to serve as legal counsel in its Chapter 11 case. The firm's services include: (a) advising the Debtor with respect to its powers and duties; (b) attending meetings and negotiating with representatives of creditors and other parties in interest; (c) taking all necessary actions to protect and preserve the Debtor's estate; (d) preparing legal papers necessary to the administration of the estate and reviewing monthly operating reports required to be filed in the case; (e) negotiating and preparing a plan for reorganization and all related agreements or documents; (f) advising the Debtor in connection with the possible sale or any possible refinance of its assets; (g) appearing before the court; and (h) performing all other necessary legal services. Fuller Law Firm will be compensated at the following hourly rates: Lars T. Fuller $505 per hour Saman Taherian $485 per hour Joyce Lau $395 per hour The firm received a retainer of $25,000. Lars Fuller, Esq., founding partner at Fuller Law, disclosed in court filings that the firm and its attorneys are "disinterested persons" as that term is defined by Section 101(14) of the Bankruptcy Code. The firm can be reached through: Lars T. Fuller, Esq. Sam Taherian, Esq. Joyce K. Lau, Esq. The Fuller Law Firm, P.C. 60 No. Keeble Ave. San Jose, CA 95126 Telephone: (408) 295-5595 Facsimile: (408) 295-9852 Email: admin@fullerlawfirm.net About Pierce Contractors Pierce Contractors, Inc., a Morgan Hill, Calif.-based company in the building equipment contractor industry, filed its voluntary petition for relief under Chapter 11 of the Bankruptcy Code (Bankr. N.D. Calif. Case No. 21-50915) on July 9, 2021. The petition was signed by Richard Pierce, chief executive officer. At the time of the filing, the Debtor had between $1 million and $10 million in both assets and liabilities. Judge Stephen L. Johnson oversees the case. Lars Fuller, Esq., at The Fuller Law Firm, P.C., represents the Debtor as legal counsel. PIPELINE FOODS: In Dire Need of Buyer in Bankruptcy --------------------------------------------------- Jeremy Hill of Bloomberg News reports that Pipeline Foods LLC, a Minnesota-based food ingredient supplier, is teetering on the brink of liquidation while it searches for a rescuer in bankruptcy. Pipeline sells specialty ingredients like organic corn and wheat to manufacturers, international trading groups and consumer packaged goods companies, court papers show. But the Covid-19 pandemic squeezed Pipeline's customers, hampering demand for its products and resulting in a Chapter 11 bankruptcy filing last week. The company has enlisted the help of boutique investment bank Ocean Park to sound out buyers, Mark Minuti of Saul Ewing Arnstein & Lehr said on behalf of Pipeline. About Pipeline Foods Pipeline Foods is the first U.S.-based supply chain solutions company focused exclusively on non-GMO, organic, and regenerative food and feed. Its dedicated team brings transparent, sustainable supply chain solutions to connect the dots for its farming partners and end users of organic grains and ingredients. On the Web: https://www.pipelinefoods.com/ Pipeline Foods LLC sought Chapter 11 protection (Bankr. D. Del. Lead Case No. 21-11002) on July 8, 2021. In the petition signed by CRO Winston Mar, Pipeline Foods estimated assets between $100 million and $500 million and estimated liabilities of between $100 million and $500 million. The cases are handled by Honorable Judge Karen B. Owens. Pipeline Foods is represented by Saul Ewing Arnstein & Lehr, LLP with Michael Gesas as lead counsel. Pipeline Foods, LLC's Financial Advisor is SierraConstellation Partners. The Chief Restructuring Officer for Pipeline is Winston Mar of SierraConstellation Partners. The Claims Agent for Pipeline Foods is Stretto. Bryan Cave Leighton Paisner LLP is the Board of Directors' counsel. PLATINUM GROUP: Unit Granted Patent for PGMs on Li–S Batteries ---------------------------------------------------------------- Platinum Group Metals Ltd. and subsidiary Lion Battery Technologies Inc. report that the U.S. Patent and Trademark Office has issued a third patent to Florida International University related to platinum group metals being used in lithium batteries. Specifically, this third patent is related to PGMs in the "Next Generation" Lithium Sulphur Batteries. Under a sponsored research agreement, Lion has exclusive rights to all technology being developed by FIU with Lion funding, including granted patents. The new patent was issued on June 15, 2021, entitled "Battery Cathodes for Improved Stability" with patent number US 11,038,160 B2. The patent covers a preparation method using PGM catalysts in carbon materials for use as cathodes with increased emphasis on Lithium Sulphur Batteries. The new patent broadens protection for US patent 10,734,636 B2 issued to FIU on Aug. 4, 2020, covering the composition of carbon cathodes containing PGMs. Lithium Sulphur Batteries are well known to have the potential for a significant increase in power to weight ratios over traditional lithium-ion batteries popular in EV applications, such as those utilizing nickel, manganese and cobalt or "NMC" cathodes. One of the challenges in Lithium Sulphur Batteries is getting them to charge and discharge hundreds of times as required in commercial settings. Dr. Bilal El-Zahab, the project leader of the Lion Battery work at FIU commented, "We are pleased to receive this important patent for the use of PGMs in Lithium Sulphur Batteries. As outlined in our patent application, we are seeing 2 times capacity retention after 100 cycles using PGMs versus the control group without PGMs. We have observed Lithium Sulphur Batteries with cycling performance at nearly 300 cycles with greater than 70% capacity retention relative to the first cycle. We are still working on optimizing performance and we are working towards 500+ cycles. The initial results are encouraging and indicate that PGMs can bring significant performance improvements to high power to weight Lithium Sulphur Batteries." In addition to the above new patent, a further final patent application has also been filed for specific application of PGMs in most lithium batteries, including current lithium-ion chemistries. A PGM bearing separator is showing good promise to extend the life of a lithium metal anode, which for example, may allow for weight savings by the elimination of graphite at the anode. Michael R. Jones, CEO of Platinum Group said, "Lion's patents and research work continue to show the potential of PGMs to improve the performance of lithium batteries. PGMs are well known to be good catalysts, encouraging reactions, and a little bit can go a long way. Using PGMs to thrift out other costly and heavy battery components while improving battery performance is the focus of our exciting research." Lion is a private company formed jointly in 2019 by Anglo American Platinum Limited, one of the world's leading primary producers of platinum group metals, and the Company to accelerate the development of next-generation battery technology using platinum and palladium. The Company currently owns 53.7% in Lion. Dr. El-Zahab, with prior battery research and development experience and post-doctoral work completed at the Massachusetts Institute of Technology, is the head of the Lion battery research team and was recently appointed to the Board of Lion Battery Technologies Inc. About Platinum Group Metals Headquartered in British Columbia, Canada, Platinum Group Metals Ltd. -- http://www.platinumgroupmetals.net-- is a platinum and palladium focused exploration, development and operating company conducting work primarily on mineral properties it has staked or acquired by way of option agreements or applications in the Republic of South Africa and in Canada. The Company's sole material mineral property is the Waterberg Project. The Company continues to evaluate exploration opportunities both on currently owned properties and on new prospects. Platinum Group reported a net loss of US$7.13 million for the year ended Aug. 31, 2020, compared to a net loss of US$16.77 million for the year ended Aug. 31, 2019. As of Feb. 28, 2021, the Company had US$50.77 million in total assets, US$31.93 million in total liabilities, and US$18.85 million in total shareholders' equity. PricewaterhouseCoopers LLP, in Vancouver, Canada, the Company's auditor since 2007, issued a "going concern" qualification in its report dated Nov. 25, 2020, citing that the Company has suffered recurring losses from operations and has a net capital deficiency, negative working capital and has significant amounts of debt payable without any current source of operating income which raise substantial doubt about its ability to continue as a going concern. PROSPECT CAPITAL: Moody's Gives Ba2(hyb) Rating on New Pref. Stock ------------------------------------------------------------------ Moody's Investors Service has assigned a Ba2 (hyb) rating to the new cumulative perpetual preferred stock to be issued by Prospect Capital Corporation (PSEC, Baa3 stable), a New York-based business development company (BDC). PSEC's Baa3 senior unsecured rating is not affected by the new issuance; the company's outlook is stable. RATINGS RATIONALE The Ba2 (hyb) rating assigned to PSEC's planned new cumulative preferred stock reflects the securities' junior priority in PSEC's capital structure. The preferred stock will be subordinated to all PSEC indebtedness, will rank pari passu with PSEC's existing preferred stock, and will rank senior only to common equity. Preferred stock dividends that PSEC elects to not pay will be cumulative. PSEC will not be permitted to pay dividends to common stockholders or repurchase common stock until cumulative preferred stock dividends are paid in full. PSEC intends to use the net proceeds for general corporate purposes, including repayment of debt. PSEC's Baa3 long-term senior unsecured rating is based on the company's low leverage, strong liquidity management, and longer history of profitable operations compared to most rated BDC peers. PSEC maintains a strong capital cushion with an ample asset coverage ratio cushion of 74% at March 31, 2021. Moody's expects that the new preferred stock will have an immaterial effect on PSEC's statutory asset coverage ratio and asset coverage ratio cushion. Moody's expects that PSEC's leverage will over time moderately increase to be within the company's 0.7x - 0.85x target range, which is below most rated peers. PSEC's strong liquidity management is aided by ample availability under its multi-year committed revolving credit facility, very low unfunded credit extensions to portfolio companies, and well-distributed debt maturities. PSEC's funding sources are also more diverse than most rated BDC peers. PSEC also has diverse revenue sources, based on its investments in US middle market lending, subordinated structured notes and real estate, which benefits its long-term earnings stability. PSEC has effectively managed asset quality challenges during the pandemic-related downturn, with non-accrual loans declining to 0.7% of gross loans (at fair value) at March 31, 2021, lower than the rated BDC peer median. PSEC's credit challenges include a lower proportion of senior secured loans compared to certain other rated BDCs and the liquidity and capital risks inherent to the BDC business model. PSEC's stable outlook is based on Moody's expectation of stable-to-improving operating conditions for BDCs that will contribute to improved strength and stability of asset quality, profitability and leverage metrics over the next 12-18 months. The stable outlook also incorporates Moody's expectation that PSEC will maintain strong underwriting discipline amid growing pricing competition for middle market loans and that liquidity coverage will remain strong. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS Moody's could upgrade PSEC's ratings if the company: 1) sustainably maintains debt-to-tangible equity of not more than 1x; 2) reduces structured credit, real estate exposures and junior investments as a proportion of total investments; and 3) generates profitability that consistently compares well with rated BDC peers. Moody's could downgrade PSEC's ratings if the company: 1) increases the ratio of net debt to tangible equity to more than 1.3x; 2) increases investments that Moody's expect would increase the company's asset and earnings volatility; 3) generates profitability that is weaker than expected compared to rated peers; 4) pays dividends that exceed net investment income on a regular basis; or 5) materially increases its funding reliance on secured debt. The principal methodology used in these ratings was Finance Companies Methodology published in November 2019. PUBLIUS VALERIUS: Taps Coldwell Banker as Real Estate Broker ------------------------------------------------------------ Publius Valerius Publicola, LLC seeks approval from the U.S. Bankruptcy Court for the Southern District of Texas to hire Houston-based real estate broker, Coldwell Banker Commercial. The firm's services include: (a) marketing the Debtor's property to potential buyers through real estate listings or advertisements; (b) negotiating with potential buyers, advising the Debtor of sales negotiations and preparing the documentation necessary for any potential sales contracts; (c) communicating with all parties to obtain the particulars of the sales transactions; (d) preparing all of the documents necessary to assure timely closing on the property; and, (e) negotiating and resolving any issues with regard to the sale of the property. Coldwell Banker will be paid a commission of 3 percent of the total sales price for the services rendered if it is the only firm involved in the sale. Should there be any cooperating broker, the commission shall be 4 percent and will be split between the two brokers. Llyod Lee, the firm's broker who will be providing the services, disclosed in a court filing that he is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. The firm can be reached at: Lloyd Lee Coldwell Banker Commercial 2 Greenway Plaza, Suite 150 Houston, TX 77046 Phone: 832-335-9534 Email: lloyd.lee@cbunited.com About Publius Valerius Publicola Publius Valerius Publicola, LLC sought protection under Chapter 11 of the Bankruptcy Code (Bankr. S.D. Texas Case No. 21-32258) on July 3, 2021. At the time of the filing, the Debtor disclosed total assets of up to $1 million and total liabilities of up to $500,000. Judge Christopher M. Lopez oversees the case. Margaret M. McClure, Esq., serves as the Debtor's bankruptcy attorney. PURDUE PHARMA: Madison Township Trustees Approve Bankruptcy Plan ---------------------------------------------------------------- Peng Chen of Richland Source reports that the reorganization plan from Purdue Pharma was approved by Madison Township trustees on Monday, July 12, 2021, afternoon, paving the way for the township to potentially receive future opioid settlement funds. According to an FAQ regarding the reorganization plan from Purdue, before filing for a Chapter 11 bankruptcy in 2019, the company faced more than 2,900 lawsuits in the U.S. for developing and marketing OxyContin. The medication has allegedly exacerbated the opioid crisis. In March, Purdue filed the plan worth more than $10 billion at a U.S. Bankruptcy Court in New York, according to multiple national news outlets. A federal bankruptcy judge has permitted the OxyContin maker to get the required votes for the reorganization plan from 600,000 creditors. According to Purdue's FAQ, Madison Township and other 6,000 local governments, have filed claims against Purdue last July and are eligible to vote on the proposed bankruptcy plan. Leanna Rhodes, fiscal officer for Madison Township, said the Richland County Prosecutor's Office recommended the township to take Monday's action. After the vote on Monday, July 12, 2021, Trustee Catherine Swank said the amount of money the township will receive remains unknown at the moment. The township did not plan to file a claim against Purdue last 2020 after then Fire Chief Ron Luttrell said the department had no major issue getting Narcan, the medication used to treat overdose, according to Rhodes. However, the township changed its mind after the county prosecutor's office provided an estimated claim from economists. According to the economists’ opinion, Madison Township's estimated damage and abatement cost from 2003 through 2040 resulting from the opioid crisis will be more than $540,000. The estimates were based on various categories such as drug treatment programs expense and tax revenue loss, according to the estimate. Andrew Keller, chief civil assistant prosecutor for Richland County, said in an email on Tuesday that Madison Township was eligible to file a proof of claim in Purdue's bankruptcy because trustees are members of the nationwide class action opioid litigation against several opioid drug manufacturers. Keller said the township did not make a specific monetary claim when participating as a member of the class. Richland County commissioners recently also voted to support Purdue's reorganization plan, according to Keller. Purdue has divided the claims against the company into 18 classes, according to the FAQ. Two-thirds of the members in each class must vote for the plan to get it approved. The bankruptcy court has scheduled a confirmation hearing on August 9, which Purdue will officially announce the voting results. While the money local governments will receive is unclear now, Purdue estimated that Ohio will get more than 4.3 percent of the settlement funds, ranked sixth among the country. California will likely get the most funds at almost 10 percent. Florida is expected to receive 7 percent of the money. According to Purdue's FAQ, the money will flow through the National Opioid Abatement Trust, which was established to allocate the funds, and support approved abatement uses. About Purdue Pharma LP Purdue Pharma L.P. and its subsidiaries -- http://www.purduepharma.com/-- develop and provide prescription medicines and consumer products that meet the evolving needs of healthcare professionals, patients, consumers and caregivers. Purdue's subsidiaries include Adlon Therapeutics L.P., focused on treatment for Attention-Deficit/Hyperactivity Disorder (ADHD) and related disorders; Avrio Health L.P., a consumer health products company that champions an improved quality of life for people in the United States through the reimagining of innovative product solutions; Imbrium Therapeutics L.P., established to further advance the emerging portfolio and develop the pipeline in the areas of CNS, non-opioid pain medicines, and select oncology through internal research, strategic collaborations and partnerships; and Greenfield Bioventures L.P., an investment vehicle focused on value-inflection in early stages of clinical development. Opioid makers in the U.S. are facing pressure from a crackdown on the addictive drug in the wake of the opioid crisis and as state attorneys general file lawsuits against manufacturers. More than 2,000 states, counties, municipalities and Native American governments have sued Purdue Pharma and other pharmaceutical companies for their role in the opioid crisis in the U.S., which has contributed to the more than 700,000 drug overdose deaths in the U.S. since 1999. OxyContin, Purdue Pharma's most prominent pain medication, has been the target of over 2,600 civil actions pending in various state and federal courts and other fora across the United States and its territories. On Sept. 15 and 16, 2019, Purdue Pharma L.P. and 23 affiliated debtors each filed a voluntary petition for relief under Chapter 11 of the U.S. Bankruptcy Code (Bankr. S.D.N.Y. Lead Case No. 19-23649), after reaching terms of a preliminary agreement for settling the massive opioid litigation facing the Company. The Company's consolidated balance sheet at Aug. 31, 2019, showed $1.972 billion in assets and $562 million in liabilities. U.S. Bankruptcy Judge Robert Drain, in White Plains, New York, has been assigned to oversee Purdue's Chapter 11 case. Davis Polk & Wardwell LLP and Dechert LLP are serving as legal counsel to Purdue. PJT Partners is serving as investment banker, and AlixPartners is serving as financial advisor. Prime Clerk LLC is the claims agent. REGALIA BEACH: Wins Approval of Plan and Disclosure Statement ------------------------------------------------------------- Judge Laurel M. Isicoff has entered an order approving on final basis the Disclosure Statement of Regalia Beach Developers LLC. The Plan, as amended is confirmed and approved in all respects. The SWM Objection is overruled. Any other Objections to Confirmation not withdrawn or otherwise addressed in this Order are expressly overruled. As set forth in the analysis contained in the Disclosure Statement, a Chapter 7 liquidation of the Debtor would result in a lower distribution to the Debtor's unsecured creditors. As a result of the Plan, the creditors of the Debtor will be likely be paid in full and will make a distribution to equity. The Debtor announced on the record at the Hearing certain modifications to the Plan and Amended Disclosure Statement as follows: -- Amended Disclosure Statement * The following shall be added to Section V: "; and, e. Potential claims against Bank OZK and Madison Realty Capital, LLC for fraudulent conveyances and other claims asserted as counterclaims in the case styled Atalaya Administrative LLC v. Regalia Units Owner LLC, et al., Case No. 2019-035138-CA-01." * The following sentence shall be deleted from Section V: "Moreover, the Debtor believes the cost of litigation will outweigh any benefit, and the Settlement with Atalaya will prevent the prosecution of certain claims." * Section VII shall be amended to add the word "Class 3" to the first sentence of the third paragraph. -- Plan: * Section 5.1 shall be amended to change the definition of "Equity Distribution" to "Equity Payout". * Section 5.3 shall be amended to change the term "Allowed Claims" to "Allowed Class 3 Claims," and to add a sentence that provides as follows: "In the event that the Debtor fails to satisfy its obligations under this Section 5.3, then any Creditor with an Allowed Class 3 Claim may seek the appointment of an independent fiduciary or liquidating trustee for the sole purpose of analyzing and litigating the Litigation Claims. * Section 11.1 shall include at the end of the Section the following: "and (k) to consider any motion by a creditor with an Allowed Class 3 Claim, on an expedited basis, for appointment of an independent fiduciary or liquidating trustee for the sole purpose of analyzing and litigating the Litigation Claims in the event that the Debtor fails to satisfy its obligations under Section 5.3. Counsel for the Debtor: Linda Worton Jackson, Esq. Linsey M. Lovell, Esq. Pardo Jackson Gainsburg, PL 200 SE First Street, Suite 700 Miami, Florida 33131 Tel: 305-358-1001 Fax: 305-358-2001 E-mail: LJackson@pardojackson.com E-mail: LLovell@pardojackson.com About Regalia Units Owner Regalia Units Owner LLC, and Regalia Beach Developers LLC, which are engaged in activities related to real estate, sought Chapter 11 protection (Bankr. S.D. Fla. Lead Case No. 20-15747) on May 27, 2020. At the time of the filing, both Debtors disclosed assets of between $10 million and $50 million and liabilities of the same range. Chief Judge Laurel M. Isicoff oversees the cases. Pardo Jackson Gainsburg, PL is the Debtors' legal counsel, and Mark Pordes of Pordes Residential Sales and Marketing is the Debtors' real estate agent. REGIONAL AMBULANCE: Decreased IRS Adequate Protection Payment OK'd ------------------------------------------------------------------ The Bankruptcy Court, with the consent of Regional Ambulance Service, Inc. and the Internal Revenue Service, amended the Cash Collateral Order previously entered on May 11, 2021, to provide for a reduced monthly adequate protection amount of $5,000 to be paid to the IRS beginning July 20, 2021. The Court entered the amended order after the parties have informed the Court that they have agreed to such amendment. Previously, the Cash Collateral Order provided, among other things, that the Debtor shall make periodic payments to the IRS for $5,000 on May 20, 2021; $5,000 on June 20, 2021; and $7,500 on July 20, 2021 and shall continue making monthly adequate protection payments for $7,500 by the 20th day of each month thereafter until the earlier of: (a) confirmation of a plan of reorganization for the Debtor; (b) conversion of the Debtor's Chapter 11 case; or (c) entry of a contrary order by the Court regarding the use of such cash collateral. The amended Cash Collateral Order now provided that the Debtor shall make periodic payments to the IRS for $5,000 on July 20, 2021, and shall continue making the same amount of monthly adequate protection payments by the 20th day of each month thereafter until the earlier of: (a) confirmation of a plan of reorganization for the Debtor; (b) conversion of the Debtor's Chapter 11 case; or (c) entry of a contrary order by the Court regarding the use of the cash collateral. All other terms and provisions of the Cash Collateral Order remain in full force and effect. A copy of the amended consent order is available for free at https://bit.ly/3r1v6cF from PacerMonitor.com. About Regional Ambulance Service Regional Ambulance Service, Inc. filed a voluntary petition for relief under Chapter 11 of the Bankruptcy Code (Bankr. D.S.C. Case No. 21-01021) on April 12, 2021, listing under $1 million in both assets and liabilities. Darrin Moyer, president, signed the petition. Judge Helen E. Burris oversees the case. Barton Brimm, PA and Fuller Frost & Associates CPA's serve as the Debtor's legal counsel and accountant, respectively. RESOLUTE INVESTMENT: Moody's Affirms B1 CFR on Dividend Recap ------------------------------------------------------------- Moody's Investors Service has affirmed the B1 corporate family, B1-PD probability of default and Ba3 first lien term loan ratings on Resolute Investment Managers, Inc.'s (RIM) following its announcement to add-on to its first lien term loan. The rating agency also affirmed the company's B3 second lien term loan rating and maintained the stable outlook on RIM's ratings. RIM plans to add-on $275 million to its first lien term loan and use the proceeds along with cash on its balance sheet to fund a dividend to existing shareholders. The proposed dividend recapitalization is credit negative because RIM's debt-to-EBITDA (Moody's adjusted) will increase significantly to 5.3x proforma from 3.3x for last twelve months ended March 31, 2021. The transaction demonstrates RIM's aggressive financial strategy because it represents the second dividend recap in the last six months. However, the rating affirmation reflects Moody's expectation of deleveraging through EBITDA growth, supported by growth in the company's AUM base and improving AUM resilience metrics. Moody's expects RIM will continue to generate healthy levels of free cash flow, providing capacity to bring leverage back below 5x over the next 12-18 months. A summary of the rating actions are as follows: Issuer: Resolute Investment Managers, Inc. Corporate Family Rating, affirmed at B1 Probability of Default Rating, affirmed at B1-PD Senior Secured First Lien Term Loan Facility, affirmed at Ba3 Senior Secured Revolving Credit Facility, Affirmed at Ba3 Senior Secured Second Lien Term Loan Facility, affirmed at B3 Outlook Actions Issuer: Resolute Investment Managers, Inc. Outlook, Remains Stable RATINGS RATIONALE RIM's B1 corporate family rating reflects its solid cash flow generation, diverse suite of investment funds and strong distribution platform. These strengths are partially offset by the company's modest scale, equity focused asset mix and high financial leverage. The incremental debt will raise debt-to-EBITDA, as calculated by Moody's, to 5.3x from 3.3x as of March 31, 2021. RIM's recent operating performance, if sustained, should support deleveraging over the next 12 to 18 months. Additionally, the continued outperformance of the company's largest minority-owned affiliate, ARK Investment Management LLC, continues to contribute meaningfully to RIM's bottom line. The dividend recapitalization will increase the company's financial leverage above 5x but this elevated leverage ratio remains within Moody's expectations for B1-rated asset managers. The add-on to the first lien senior secured term loan will reduce the proportion of second lien debt relative to first lien debt in the company's capital structure which is credit negative for the holders of the first lien debt because it reduces their cushion of loss absorbing capital. However, the rating affirmation of the first lien secured loan rating reflects Moody's expectation that the proportion of RIM's first lien secured loan relative to its total liabilities will decline through paydowns. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS RIM's ratings could be upgraded if: 1) financial leverage is sustained below 4x; or 2) outflows are stemmed such that there is an improvement in asset resiliency scores; or 3) the financial contribution of new affiliates are able to stabilize revenue and profit margins. Conversely, RIM's ratings could be downgraded if: 1) leverage is sustained above 7x debt-to-EBITDA; or 2) AUM levels continue to decay, or 3) there is a key person turnover within the senior management ranks. RIM is a multi-affiliate asset manager that provides investment strategies and services to institutions, retirement plans and retail investors. At June 30, 2021, the company had $178 billion of consolidated assets under management. The principal methodology used in these ratings was Asset Managers Methodology published in November 2019. RIDER UNIVERSITY: Moody's Downgrades Education Bonds to Ba2 ----------------------------------------------------------- Moody's Investors Service has downgraded Rider University's (NJ) revenue bonds to Ba2 from Ba1. The bonds were issued through the New Jersey Educational Facilities Authority. Rider University recorded approximately $89 million of debt outstanding in fiscal 2020. Rider's debt rose to approximately $110 million with its issuance of Series 2021 bonds in May 2021. The rating outlook is negative. RATINGS RATIONALE The rating downgrade to Ba2 from Ba1 reflects Rider University's continued very weak operating performance, reliance on a line of credit and recent increase in leverage, largely for working capital needs. The university's student demand and pricing power remain challenged, reflected in enrollment declines, lagging growth in net tuition per student and an 8% decrease in net tuition revenue over the fiscal 2016-20 period. A significant decline in room and board revenue will result in fiscal 2021 deficits in line with fiscal 2020 despite federal relief aid funding and some expense reductions measures. While the university has articulated strategies to improve operations, a turnaround, if achievable, will take multiple years. In the interim, the university will fund deficits from proceeds of its recent Series 2021 bonds (not rated) and may also need to access reserves and lines of credit depending on the duration and magnitude of deficits. Deficit operations and strategic investments have already led to a 16% decline in monthly liquidity over the past five years. Rider's recent issuance of Series 2021B bonds (not rated) elevates leverage risk with a bullet due in fiscal 2031. The Ba2 rating remains supported by the university's moderate scale, with $131 million of revenue in fiscal 2020, as well as a mortgage on its main campus in Lawrenceville with an appraised value of over $230 million, well in excess of outstanding debt. Management's commitment to improve financial performance in the face of softened revenue growth prospects is a credit strength, although the university faces multiple constraints to doing so, including a less flexible labor environment and litigation surrounding the sale of its Westminster property in Princeton, New Jersey. The university has also articulated plans to strengthen its brand and pricing power, although success is uncertain in a highly competitive and evolving market environment. RATING OUTLOOK The negative outlook reflects potential for additional negative rating action if Rider is unable to stem enrollment declines and adjust its budget to be more financially sustainable. FACTORS THAT COULD LEAD TO AN UPGRADE OF THE RATINGS Sustained improvement in strategic position, reflected in increased enrollment with corresponding material growth in net tuition and auxiliary revenue Significant improvement in operating margins with debt service coverage consistently over 1.5x Material growth in unrestricted cash and investments relative to debt and expenses FACTORS THAT COULD LEAD TO A DOWNGRADE OF THE RATINGS Operating deficits that are either deeper or longer than those currently projected through 2024 Significant reduction in liquidity, currently a key element providing Rider time to strengthen its challenged competitive fundamentals Material increase in debt without compensating increase in flexible reserves LEGAL SECURITY The bonds are a general obligation of the university and are secured by a Mortgage and Security Agreement under which certain real and personal property are pledged along with a pledge of tuition and fees. There is no debt service reserve fund. The recently issued Series 2021A and 2021B bonds (not rated) are on parity with outstanding bonds and do have debt service reserve funds. The Series 2021A refunded the Series 2012A bonds. PROFILE Rider University is a moderately sized private, not-for-profit university located in Lawrence Township (Mercer County), NJ. In fall 2020, Rider enrolled 4,205 full-time equivalent (FTE) students and in fiscal 2020 recorded operating revenue of $131 million. METHODOLOGY The principal methodology used in these ratings was Higher Education published in May 2019. ROCHELLE HOLDINGS: Voluntary Chapter 11 Case Summary ---------------------------------------------------- Debtor: Rochelle Holdings XIII, LLC 260 Wekiva Springs Road, Ste. 2030 Longwood, FL 32779 Business Description: Rochelle Holdings is a Single Asset Real Estate debtor (as defined in 11 U.S.C. Section 101(51B)). Chapter 11 Petition Date: July 15, 2021 Court: United States Bankruptcy Court Middle District of Florida Case No.: 21-03216 Debtor's Counsel: Lawrence M. Kosto, Esq. LAWRENCE M. KOSTO 619 E. Washington St. Orlando, FL 32801 Tel: 407-425-3456 Fax: 407-423-9002 E-mail: lkosto@kostoandrotella.com Total Assets: $85,000,0000 Estimated Liabilities: $29,055,000 The petition was signed by Matthew R. Hill, managing member. The Debtor stated it has no unsecured creditors. A full-text copy of the petition is available for free at PacerMonitor.com at: https://www.pacermonitor.com/view/G3JOGWY/ROCHELLE_HOLDINGS_XIII_LLC__flmbke-21-03216__0001.0.pdf?mcid=tGE4TAMA SAMURAI MARTIAL: Wins Cash Collateral Access Thru Aug 3 ------------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of Texas, Houston Division, has authorized Samurai Martial Sports, Inc. to use cash collateral on an interim basis in accordance with the budget. The Debtor is permitted to use cash collateral for necessary business expenses incurred in the ordinary course in the categories and amounts listed in the budget until the final hearing. The Court says Bank United and Texas Citizens Bank will continue to have the same liens, encumbrances and security interests in the cash collateral generated or created post filing, as existed prior to the filing date. A final hearing on the Debtor's Motion for Use of Cash Collateral is set for August 3, 2021, at 2:30 p.m. by audio and video electronic means. A copy of the order is available at https://bit.ly/3e8ny2w from PacerMonitor.com. About Samurai Martial Sports, Inc. Samurai Martial Sports, Inc. sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. S.D. Tex. Case No. 21-32250) on July 2, 2021. In the petition signed by Ihab Ahmed, president, the Debtor disclosed up to $10 million in both assets and liabilities. Judge Eduardo V. Rodriguez oversees the case. Reese Baker, Esq. at Baker and Associates is the Debtor's counsel. SANTA MARIA: Unsecured Creditors to Recover 9.05% to 13.21% in Plan ------------------------------------------------------------------- Santa Maria Brewing Co Inc. filed with the U.S. Bankruptcy Court for the Central District of California a Disclosure Statement describing its Chapter 11 Plan dated July 13, 2021. The Plan is an operating chapter 11 plan of reorganization. In other words, the Debtor has proposed the Plan to continue operations, utilize plan financings and to timely pay Debtor's creditors as overseen by the Court. The Debtor will fund the Plan from the following sources: (1) ongoing income generated from operations; (2) $1.5 million in plan financing being obtained from third parties; (3) $500,000 contribution from President and equity holder Byron Moles; and (4) any other cash available on the Effective Date of the Plan (collectively, the "Assets"). The sources shall also be referred as the "Plan Funds." Class 7 consists of the Priority Unsecured Claim of Bertao Vaz Living Trust (sole asserted non-tax priority claimant). The Debtor has objected to Claim No. 42, including the amount included as priority. The Debtor's records indicate there is no basis for claimant's priority wage claim and believes it will be disallowed in full. However, even if allowed, priority wage claims are capped at $13,650. Accordingly, to the extent any priority wage claim for claimant is deemed allowed by the Court, the Debtor will pay it in cash in full on the Effective Date. Class 8 consists of the timely-filed and scheduled hybrid unsecured claims in the total amount of $3,419,101.86. Each of the hybrid unsecured claimants entered into a pre-petition Investor Financing Agreement with the Debtor, under which claimants invested an amount with the Debtor in return for common stock in the Debtor, as well as rights to receive quarterly returns, royalties, late charges, and default interest on their investment. Each allowed hybrid unsecured creditor will receive the option to elect one of the following treatments: * to retain their Stock and equity position in the Debtor, and waive any and all rights to receive payment of Fees and Charges which have been incurred or will be incurred, as their "new value" contribution under the Plan and will receive $0 on their unsecured claim; or * to relinquish their Stock, and have their full claim included in and paid in accordance with the treatment of Class 9 General Unsecured Claims. Class 9 consists of timely-filed and scheduled general unsecured claims. The total amount of allowed unsecured claims range $7,572,127.02 to $11,046,228.87 (depending on elections made by Class 8). Each allowed general unsecured creditor will receive their pro rata share of $1,000,000 on the Effective Date, resulting in an estimated payout of between 9.05% to 13.21%, depending on elections made by Class 8 claimants. Additionally, there are multiple objections to Class 9 claims pending, which may result in a reduced amount of unsecured claims and an even higher percentage payout to Class 9 creditors. Class 10 consists of all common stock holders. Each member of this class will retain his or her interest in the Reorganized Debtor but will not be allowed to take any distributions until all secured and unsecured claims are paid all payments due under the Plan. Byron Moles is making a new value contribution of $500,000 on the Effective Date on behalf of all stockholders. In addition, any Class 8 hybrid claim holder who elects to retain their Stock and equity position in the Debtor, will be waiving their rights to receive Fees and Charges due under their agreements with the Debtor as their additional new value contribution. The Debtor will fund the Plan from the following sources: (1) ongoing income generated from operations; (2) $1.5 million in plan financing being obtained from third parties; (3) $500,000 contribution from President and equity holder Byron Moles and (4) any other cash available on the Effective Date of the Plan. The $1.5 million Plan financing is being provided as an unsecured loan by Michael McCormick. Mr. McCormick is a secured creditor of the estate. A full-text copy of the Disclosure Statement dated July 13, 2021, is available at https://bit.ly/3hIhIr3 from PacerMonitor.com at no charge. Attorneys for the Debtor: Leslie A. Cohen, Esq. J'aime K. Williams, Esq. Leslie Cohen Law, PC 506 Santa Monica Blvd., Suite 200 Santa Monica, CA 90401 Telephone: (310) 394-5900 Facsimile: (310) 394-9280 Email: leslie@lesliecohenlaw.com jaime@lesliecohenlaw.com About Santa Maria Brewing Santa Maria Brewing Co. Inc. filed its voluntary petition for relief under Chapter 11 of the Bankruptcy Code (Bankr. C.D. Cal. Case No. 20-11486) on Dec. 15, 2020. Byron Moles, chief executive officer, signed the petition. At the time of the filing, the Debtor disclosed $1 million to $10 million in assets and $10 million to $50 million in liabilities. Judge Deborah J. Saltzman oversees the case. Leslie Cohen Law, PC serves as the Debtor's bankruptcy counsel. SC SJ : Says Fairmont San Jose Ex-Manager Acted in Bad Faith ------------------------------------------------------------ Becky Yerak of The Wall Street Journal reports that the bankrupt Fairmont San Jose hotel asked for a court ruling determining that former operator Accor SA is acting in bad faith by obstructing efforts to change the property's branding to Hilton Worldwide Holdings Inc.'s Signia nameplate. The owner of the 805-room Silicon Valley luxury hotel said Accor wants to send a message to other property owners that it won't tolerate efforts to dump it as a hotel manager. "Simply put, the Debtors' proposed plan protects Accor's legitimate interests as a creditor in these chapter 11 cases by providing for payment in full of any ultimate claim in favor of Accor that is fully allowed against the Debtors. Before the confirmation hearing, the plan will provide assets and mechanisms that will ensure payment of Accor's allowed claim, if any, including the $22.24 million damages claim estimated solely for feasibility by the Court on June 29, 2021. Nevertheless, Accor's actions demonstrate that it will continue to seek to prevent confirmation of the plan through litigation and/or by requesting modifications that are off-market or unreasonable under the circumstances, even if these demands jeopardize Accor's chances of getting paid in full on its claims, because it is seeking to further its agenda, by among other things, ensuring that the Hotel does not reopen under a new flag," the Debtors said in court filings. The Debtors request that the Court enter an order finding that Accor's rejection of the plan is not in good faith and designating Accor pursuant to Section 1126(e) of the Bankruptcy Code. About SC SJ Holdings and FMT SJ San Ramon, California-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. SNL BALDWIN: Primavera Enters Refinancing Agreement with Rizzo -------------------------------------------------------------- SNL Baldwin Realty, LLC, submitted a First Amended Disclosure Statement for the First Amended Chapter 11 Plan dated July 13, 2021. Louis Primavera (the Debtor's sole owner and operator) worked tirelessly to develop a plan that would allow the Debtor to retain the Subject Property, as the loss of the Subject Property would leave White Glove with no ability to operate and Primavera with no ability to make a living. Cognizant of his fiduciary obligations towards the Debtor's creditors, Primavera only explored options that would be beneficial to the Debtor's creditors. Ultimately, Primavera was successful. The Debtor, in conjunction with its counsel, prepared and filed a Plan of Reorganization and corresponding Disclosure Statement providing for the sale of the 821 Atlantic Avenue, Baldwin, NY 11510 (the "Subject Property") and the payment of the Debtor's creditors in full. However, the Debtor continued to work diligently to develop a plan that would allow it to retain the Subject Property while fulfilling its fiduciary obligation to its creditors. Ultimately, the Debtor was successful, and filed an amended Plan and Disclosure Statement providing for the retention of the Subject Property, and the payment of all past-due obligations and leaving it only with current mortgage and tax payments. The Debtor believes that its chapter 11 case will be successful. All monies which shall be used to make the payments to all holders of Administrative claims, Priority Tax claims, Class 1 Claims, Class 2 Claims and Class 3 Claims shall be derived from the Debtor's available cash and capital infusions made by Primavera. Primavera's capital contribution will be derived from: (i) $325,000.00 from the refinance of the Rizzo Property; (ii) funds on hand from White Glove in the approximate sum of $65,000.00; (iii) funding of $200,000.00 in an increased EIDL loan to White Glove; and (iv) a NYS Grant in the sum of $50,000.00 to White Glove. Primavera has amassed funds for his capital infusion into the Debtor from several sources. Primavera has entered into an agreement with his girlfriend Rosa Rizzo pursuant to which Rizzo agreed to refinance the Rizzo Property and provide Primavera with the proceeds of said refinance to fund the Debtor's Plan and to build the spray booth at the Subject Property. Upon determining that a refinance of the Rizzo Property was necessary, Rizzo moved quickly and engaged Advisor's Mortgage Group, LLC ("AMG") as a broker to assist her in obtaining the necessary loan. AMG is currently assisting Rizzo with a refinance from Quontic Bank, and it is anticipated that a loan commitment for $325,000.00 will issue on or before July 20, 2021. Primavera is also drawing funds from his wholly owned corporation White Glove (the Debtor's tenant). White Glove has three separate sources of funds. First, White Glove has more than $65,000.00 on deposit in its financial accounts. Second, White Glove has a pending grant application in the sum of $50,000.00 from the New York State COVID-19 Pandemic Small Business Recovery Grant Program. Finally, White Glove is awaiting funding on a SBA Economic Injury Disaster Loan ("EIDL") loan increase in the sum of $200,000.00. White Glove had an initial EIDL loan in 2020 in the sum of $104,000.00 and in April 2021, White Glove received an email advising that additional proceeds on the EIDL loan were being offered. White Glove requested an additional $200,000.00, and is waiting for the loan to be funded. Primavera intends to make White Glove's cash and the proceeds from the NYS Grant and the EIDL loan available to the Debtor to satisfy its obligations under the Plan and to build the spray booth, which ultimately benefits White Glove by providing it with the wherewithal it requires to operate profitably. While Primavera is hopeful that White Glove will receive the funds from the NYS Grant and the EIDL loan expeditiously, such sums are not necessary for the funding of the Debtor's Plan, which can be fully funded by Primavera's cash infusion from the refinance of the Rizzo Property. It is estimated that the total amount to be paid on the Effective Date of the Plan will be $235,754.61. Thus, the $325,000.00 from the refinance of the Rizzo Property, which is expected to fund on or around August 31, 2021, is more than sufficient to satisfy same plus pay for the installation of the spray booth, which is estimated to cost $80,000.00. Like in the prior iteration of the Plan, the Debtor shall pay each holder of an Allowed Unsecured Claim 100% of their Allowed General Unsecured Claims plus 9% interest in one lump-sum payment. On the Effective Date, the Reorganized Debtor's issued and outstanding Stock shall continue to be held and owned 100% by Primavera. New stock certificates may be issued, in the form and manner desired, at the discretion of the Board of Directors of the Reorganized Debtor. A full-text copy of the First Amended Disclosure Statement dated July 13, 2021, is available at https://bit.ly/3z0zETr from PacerMonitor.com at no charge. Counsel for the Debtor: Michael G. Mc Auliffe, Esq. THE LAW OFFICE OF MICHAEL G. MC AULIFFE 68 South Service Road, Suite 100 Melville, NY 11747 Tel: (631) 465-0044 About SNL Baldwin Realty SNL Baldwin Realty, LLC, filed a Chapter 11 bankruptcy petition (Bankr. E.D.N.Y. Case No. 20-73348) on Nov. 7, 2020, disclosing under $1 million in both assets and liabilities. The Debtor is represented by the LAW OFFICE OF MICHAEL G. MCAULIFFE. SPURLOWS ARCHERY: Wins Access to Cash Collateral ------------------------------------------------ Judge Roberta A. Colton authorized Spurlows Archery Pro Shop, LLC to use cash collateral until further Court order. The Debtor is authorized to pay: (a) amounts expressly authorized by this Court, including payments to the United States Trustee for quarterly fees; (b) the current and necessary expenses set forth in the approved budget, plus an amount not to exceed 10% for each line item; and (c) additional amounts as may be expressly approved in writing by the Secured Creditors. The Court held that (i) Corporation Service Company, as Representative (Global Factors LLC); (ii) Corporation Service Company, as Representative (Vader Mountain Funding); (iii) NanoFlex Capital; (iv) Last Chance Funding Inc.; and (v) the U.S. Small Business Administration will have perfected post-petition liens against the cash collateral to the same extent and with the same validity and priority as their prepetition liens. The Court directed the Debtor to maintain insurance coverage for its property in accordance with the obligations under the loan and security documents with the Secured Creditors. A copy of the final order is available for free at https://bit.ly/3r9UGfO from PacerMonitor.com. About Spurlows Archery Pro Shop Spurlows Archery Pro Shop, LLC sought protection under Chapter 11 of the Bankruptcy Code (Bankr. M.D. Fla. Case No. 20-05340) on July 13, 2020, listing under $1 million in both assets and liabilities. The Debtor has tapped Buddy D. Ford, P.A. as its legal counsel and A+ Accounting & Tax as its accountant. STRATHCONA RESOURCES: Moody's Assigns First Time 'B2' CFR --------------------------------------------------------- Moody's Investors Service has assigned first-time ratings to Strathcona Resources Ltd., including a B2 corporate family rating, a B2-PD probability of default rating, and a B3 rating to the proposed US$500 million unsecured notes. The rating outlook is stable. Strathcona will use the majority of net proceeds from its proposed US$500 million notes offering (equivalent to around C$625 million) to repay the balance of around C$510 million outstanding under its revolving credit facility as well as repaying around C$100 million of the C$200 million remaining on its term loan B. Strathcona as an entity is the result of an amalgamation between Strath Resources Ltd. and Cona Resources Ltd. in August 2020, along with its acquisition of Osum Oil Sands Corp. which was amalgamated with Strathcona in June 2021. "Strathcona's ratings reflect its low leverage and good credit metrics, with the key challenge to its rating being the lack of operating history and potential execution risks associated with its planned growth," stated Jonathan Reid, Moody's analyst. Assignments: Issuer: Strathcona Resources Ltd. Corporate Family Rating, Assigned B2 Probability of Default Rating, Assigned B2-PD Senior Unsecured Notes, Assigned B3 (LGD5) Outlook Actions: Issuer: Strathcona Resources Ltd. Outlook, Assigned Stable RATINGS RATIONALE Strathcona's rating is constrained by: 1) its limited operating history and track record as a consolidated entity, which leads to greater financial and operating uncertainty as well as execution risks associated with the company's plan to grow production organically; and 2) exposure to Western Canadian heavy oil differentials that Moody's expect will widen in 2022, caused predominantly by increasing global heavy production and Canadian pipeline constraints. The company benefits from: 1) good credit metrics supported by its low absolute debt levels when measured against both production and cash flow; 2) majority of production from heavy oil and oil sands assets that have low decline rates (less than 10%) that requires a low level of capital to sustain production; and 3) good liquidity expected over the next 12-18 months. Governance considerations include Strathcona's private equity ownership. Strathcona has lower debt and leverage than the levels typically associated with private equity ownership; however, Moody's believe that Strathcona will be the growth platform for its private equity owners in the Western Canadian Basin. This increases the potential that the company could continue to pursue debt funded acquisitions to grow the company's scale. The stable outlook is supported by Moody's expectation that Strathcona will maintain good credit metrics while growing production over the next 12-18 months. Strathcona's liquidity is good, with sources of around C$784 million through mid-2022 (starting in Q3 2021) compared to uses of around C$70 million. Sources of liquidity are comprised of C$784 million availability under the company's revolving credit facility (C$800m available less C$16 million in letters of credit as of March 31, 2021) that matures in June 2025, with uses comprised of around negative C$50 million of free cash flow through mid-2022 (using Moody's price assumptions of $52 WTI for the remainder of 2021 with a WCS differential of $14 and $50 WTI with a WCS differential of $18 in 2022 in conjunction with Strathcona's current capex projections) and mandatory quarterly debt amortization payments of around $5 million on the company's term loan B. Moody's expect Strathcona will be in compliance with the three financial covenants of its credit facility over the next four quarters. Alternate liquidity is limited, as all assets are pledged to the first lien credit facilities. Strathcona's unsecured notes are rated B3, one notch below the company's B2 CFR. The one notch differential is the result of the C$800 million first lien revolving credit facility and C$100 first lien term loan (both due in June 2025) which rank ahead of Strathcona's unsecured notes in its capital structure. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS The ratings could be upgraded if Strathcona is able to grow production while maintaining positive free cash flow, if retained cash flow (RCF)-to-debt is sustained above 30% (around 40% expected in 2021), and the LFCR is sustained above 1.5x (around 2x expected in 2021). The ratings could be downgraded if RCF-to-debt is below 10% (around 40% expected in 2021), if the LFCR is below 1x (around 2x expected in 2021), or Strathcona's liquidity profile deteriorates either as a result of sustained negative free cash flow or from cash distributions to the company's PE owners. Strathcona Resources Ltd. is an oil and gas producer headquartered in Calgary Alberta, with producing assets located across Western Canada. Strathcona is majority owned by private equity firm Waterous Energy Fund. The principal methodology used in these ratings was Independent Exploration and Production Industry published in May 2017. SUPERCONDUCTOR TECHNOLOGIES: New Voting Date for Clearday Merger ---------------------------------------------------------------- Superconductor Technologies Inc. reported updated record and meeting dates related to its previously announced definitive merger agreement with Allied Integral United, Inc. (Clearday). To permit the stockholders that purchased STI stock after the original stockholder record date of June 4, 2021, to vote at this important meeting, the date of the special meeting of STI stockholders to vote upon the merger has been moved to Aug. 10, 2021, and the record date for determining the stockholders entitled to notice of, and to vote at the Special Meeting or any adjournment or postponement thereof has been moved to July 13, 2021. STI also clarified the aggregate effect of the previously disclosed Reverse Stock Split Proposal offset by the issuance of "true-up shares" to the stockholders of Superconductor as of the closing of the merger. Upon the closing of the merger, each STI stockholder (other than dissenting shares) will hold, immediately after the merger, not less than approximately 46% of the number of common stock shares that stockholder owned immediately before the merger. For example, if a STI stockholder currently has 500 shares as of the closing of the merger, that stockholder will own no less than 232 shares immediately after the merger is closed. In the aggregate, the stockholders of STI will own approximately 3.6% of the total shares of the combined company, on a fully diluted basis as determined by the merger agreement, as of immediately after the merger is closed. After the initial June 4 record date, trading volume of STI stock increased. To enable a proxy vote that more accurately reflects desires of the overall stockholder base, including the stockholders that acquired STI stock after June 4, Superconductor's Board of Directors determined that it was appropriate to change the dates for the New Proxy Vote and the New Record Date. STI stockholders who have already cast their ballot regarding the merger will be required to recast their ballot by the date of the New Proxy Vote. "We are pleased to see the influx of new Superconductor stockholders over the past several weeks and want to accurately account for the will of our overall stockholder base," said Jeff Quiram, STI's president and chief executive officer. "We believe that these changes to the schedule accomplish that goal, and we look forward to proceeding with the Clearday merger in alignment with the updated process." Upon closing of the merger, Superconductor will be led by new management and new members of the board of directors that are designated by Clearday. About Superconductor Technologies Headquartered in Austin Texas, Superconductor Technologies Inc. -- www.suptech.com -- develops and commercializes high temperature superconductor (HTS) materials and related technologies. Since 1987, STI has led innovation in HTS materials, cryogenic cryocoolers developing more than 100 patents as well as proprietary trade secrets and manufacturing expertise. Superconductor Technologies reported a net loss of $2.96 million for the year ended Dec. 31, 2020, compared to a net loss of $9.23 million for the year ended Dec. 31, 2019. As of April 3, 2021, the Company had $2.98 million in total assets, $722,000 in total liabilities, and $2.56 million in total stockholders' equity. Los Angeles, CA-based Marcum LLP, the Company's auditor since 2009, issued a "going concern" qualification in its report dated March 31, 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. TEEFOR2 INC: Seeks to Hire Stephen R. Wade as Bankruptcy Counsel ---------------------------------------------------------------- Teefor2, Inc., a California Corporation seeks approval from the U.S Bankruptcy Court for the Central District of California to employ the Law Offices of Stephen R. Wade P.C. to serve as legal counsel in its Chapter 11 case. The firm will render these services: a. advise the Debtor concerning the requirements of the bankruptcy court, the Federal Rules of Bankruptcy Procedure, the Local Rules, and with respect to compliance with the requirements of the Office of the U.S. Trustee; c. advise the Debtor regarding matters of bankruptcy law, including the rights and remedies of the Debtor in regard to its assets and the claims of its creditors; d. conduct examinations of witnesses, claimants, or adverse parties with respect to any necessary or pending litigation arising in the bankruptcy case; e. prepare legal papers; f. represent the Debtor in any proceedings or hearings in the bankruptcy court and any proceedings in other courts where the Debtor's rights under the Bankruptcy Code may be litigated or affected; g. file any motions, applications or other pleadings appropriate to effectuate the reorganization of the Debtor; h. review claims and file objections to disputed claims; i. assist the Debtor in working with the Subchapter V trustee, Carolyn Djang, in the negotiation, formulation, confirmation and implementation of a Chapter 11 plan of reorganization; j. assist the Debtor in negotiation with secured creditors; k. serve as the Debtor's general insolvency counsel in cooperation with any special counsel or other professionals retained by the Debtor in the case; and l. perform other necessary legal services. The hourly rates charged by the firm are as follows: Stephen R. Wade $415 per hour Orlando Arango $75 per hour The firm will also be reimbursed for out-of-pocket expenses incurred. Stephen Wade, Esq., a partner at the firm, disclosed in a court filing that the firm is a "disinterested person" within the meaning of Section 101(14) of the Bankruptcy Code. Stephen R. Wade can be reached at: Stephen R. Wade, Esq. Law Offices of Stephen R. Wade P.C. 405 N. Indian Hill, Blvd. Claremont, CA 91711 Tel: (909) 985-6500 Fax: (909) 912-8887 Email: srw@srwadelaw.com About Teefor2 Inc. Teefor2, Inc. owns and operates a graphic design and screen printing business in the City of Chino, Calif. It sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. C.D. Calif. Case No. 21-12580) on May 10, 2021. In the petition signed by Larry Lazalde, president, the Debtor disclosed up to $500,000 in assets and up to $10 million in liabilities. Judge Scott H. Yun oversees the case. The Law Offices of Stephen R. Wade, P.C. is the Debtor's counsel. TEX-GAS HOLDINGS: U.S. Trustee Unable to Appoint Committee ---------------------------------------------------------- The U.S. Trustee for Region 6 on July 13 disclosed in a court filing that no official committee of unsecured creditors has been appointed in the Chapter 11 case of Tex-Gas Holdings, LLC. About Tex-Gas Holdings Tex-Gas Holdings, LLC sought protection under Chapter 11 of the Bankruptcy Code (Bankr. S.D. Texas Case No. 21-80092) on June 1, 2021. Elroy D. Fimrite, president of Tex-Gas Holdings, signed the petition. In the petition, the Debtor disclosed assets of between $1 million and $10 million and liabilities of the same range. Judge Jeffrey P. Norman oversees the case. Andrews Myers, P.C. is the Debtor's legal counsel. THUNDER RAIN: Court Conditionally Approves Disclosure Statement --------------------------------------------------------------- Judge Brenda T. Rhoades has entered an order conditionally approving the Disclosure Statement of Thunder Rain Holdings, LLC. The telephonic hearing to consider final approval of the Debtors' Disclosure Statement and to consider the confirmation of the Debtors' proposed Chapter 11 Plan is fixed and shall be held on August 23, 2021 at 10:00am. August 16, 2021 is fixed as the last day for filing and serving written objections to: (1) final approval of the Debtors' Disclosure Statement; or (2) confirmation of the Debtors' proposed Chapter 11 plan. August 18, 2021 is fixed as the last day for filing written acceptances or rejections of the Debtors' proposed Chapter 11 plan which must be received by 5:00 p.m. (CDT). About Thunder Rain Holdings Thunder Rain Holdings, LLC filed its voluntary petition for relief under Chapter 11 of the Bankruptcy Code (Bankr. E.D. Tex. Case No. 21-40163) on Feb. 1, 2021. At the time of filing, the Debtor disclosed $2,281,753 in assets and $2,543,976 in liabilities. Gary G. Lyon, Esq., at Bailey Johnson & Lyon, PLLC, is the Debtor's legal counsel. TIANJIN JAHO: Seeks Approval to Hire Paul Taggart as Accountant --------------------------------------------------------------- Tianjin Jaho Investment, Inc. received approval from the U.S. Bankruptcy Court for the Western District of Washington to employ Paul Taggart, an accountant practicing in Everett, Wash. The Debtor requires the assistance of a certified public accountant for all tax matters relating to its Chapter 11 case and has selected Mr. Taggart because he is an experienced CPA. Mr. Taggart's rate for tax services is $200 per hour. In court filings, Mr. Taggart disclosed that he does not have an interest materially adverse to the interest of the Debtor's estate, creditors or equity security holders. Mr. Taggart can be reached at: Paul Taggart, CPA 3209 Colby Ave Suite 105 Everett, WA 98201 Phone: (425) 374-8649 About Tianjin Jaho Investment Houston-based Tianjin Jaho Investment, Inc. is a single asset real estate debtor (as defined in 11 U.S.C. Section 101(51B)). Tianjin Jaho Investment filed its voluntary petition for relief under Chapter 11 of the Bankruptcy Code (Bankr. W.D. Wash. Case No. 21-11047) on May 26, 2021. Charles Xi, president, signed the petition. At the time of filing, the Debtor had between $10 million and $50 million in both assets and liabilities. Judge Christopher M. Alston presides over the case. The Law Office of Marc S. Stern represents the Debtor as legal counsel. TUG INC: Case Summary & 11 Unsecured Creditors ---------------------------------------------- Debtor: Tug, Inc. d/b/a Proscape Landscape Mgmt 12506 W. Kellogg Street Wichita, KS 67235 Chapter 11 Petition Date: July 15, 2021 Court: United States Bankruptcy Court District of Kansas ase No.: 21-10665 Judge: Hon. Dale L. Somers Debtor's Counsel: Nicholas R. Grillot, Esq. HINKLE LAW FIRM LLC 1617 N. Waterfront Parkway, Suite 400 Wichita, KS 67206 Tel: 316-267-2000 Fax: 316-264-1518 Email: ngrillot@hinklaw.com Total Assets: $339,621 Total Liabilities: $1,089,820 The petition was signed by Connor Fosse, president. A full-text copy of the petition containing, among other items, a list of the Debtor's 11 unsecured creditors is available for free at PacerMonitor.com at: https://www.pacermonitor.com/view/ZIEY3AQ/Tug_Inc__ksbke-21-10665__0001.0.pdf?mcid=tGE4TAMA TYNDALL PARKWAY: 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 Tyndall Parkway Apartments, LLC, according to court dockets. About Tyndall Parkway Apartments Tyndall Parkway Apartments, LLC, a Panama City, Fla.-based company engaged in renting and leasing real estate properties, sought protection under Chapter 11 of the Bankruptcy Code (Bankr. N.D. Fla. Case No. 21-50044) on May 25, 2021. In the petition signed by Edward E. Wilczewski, president, the Debtor disclosed $10 million to $50 million in both assets and liabilities. The Debtor tapped Stichter, Riedel, Blain & Postler, PA as bankruptcy counsel and Beggs & Lane, RLLP as special counsel. UPSTREAM NEWCO: S&P Affirms 'B' Rating on First Lien Debt --------------------------------------------------------- S&P Global Ratings affirmed its 'B' issue-level and '3' recovery ratings to Upstream Newco's first lien debt in wake of the proposed incremental first-lien term loan. The '3' recovery rating indicates its expectation for meaningful (50%-70%; rounded estimate: 55%) recovery in the event of a payment default. The company will use the proceeds from the term loan along with $100 million of rollover equity to fund the acquisition of Results Physiotherapy, a Tennessee-based provider of outpatient rehabilitation services. S&P said, "Our 'B' issuer credit rating on Upstream reflects our expectation that the company will maintain adjusted leverage below 7x. We expect adjusted EBITDA margins of 23%-25% and steady cash flow generation. Therefore, our other ratings on the company and its debt are unchanged." ISSUE RATINGS--RECOVERY ANALYSIS Key analytical factors -- Upstream's capital structure comprises a $50 million revolving credit facility, a $580 million first-lien senior secured term loan ($574 million outstanding), the new incremental $310 million first-lien senior secured term loan, and a $140 million senior secured second-lien term loan. -- S&P assumes the revolver will be 85% drawn based on the assumed available amount of $50 million and LIBOR of 250 basis points at default. -- S&P's simulated default scenario contemplates a default occurring in 2024 stemming from the company's inability to control costs of its growth strategy or material reimbursement cuts. -- S&P values the company on a going-concern basis using a 5.5x multiple of its projected emergence EBITDA, which is consistent with the multiples it uses for similar companies. Simulated default assumptions -- Simulated year of default: 2024 -- EBITDA at emergence: $106 million -- EBITDA multiple: 5.5x Simplified waterfall -- Net emergence value (after 5% administrative costs): $552 million -- Valuation split (obligors/nonobligors): 100%/0% -- Collateral value available to first-lien lenders: $552 million -- First-lien senior secured debt at default: $930 million --Recovery expectations: 50%-70% (rounded estimate: 55%) -- Collateral value available to second-lien lenders: $0 -- Second-lien senior secured debt at default: $148 million --Recovery expectations: 0%-10% (rounded estimate: 0%) Note: All debt amounts include six months of prepetition interest. URS HOLDCO: Moody's Lowers CFR to Caa1, Outlook Negative -------------------------------------------------------- Moody's Investors Service downgraded the ratings of URS Holdco, Inc. ("United Road or URS"), including the corporate family rating and senior secured rating to Caa1 from B3, and the probability of default rating to Caa1-PD from B3-PD. The outlook is negative. The downgrade reflects Moody's expectation of weak credit metrics impacted by the semiconductor shortage in the automotive sector, which has constrained volumes and revenue, especially in the transportation of new vehicles for URS. The downgrade also reflects cost headwinds stemming from higher third-party driver costs, rising fuel costs, as well as additional lease expenses after the company did a number of sale leaseback transactions to shore up liquidity in 2020. The negative outlook reflects URS's weak liquidity and profitability remaining below expectations due to ongoing depressed transportation volumes from the OEMs. Further limiting liquidity is the upcoming expiration of the ABL revolver in September 2022. However, it's Moody's expectation that the revolver will be refinanced by the end of 2021. RATINGS RATIONALE The Caa1 CFR reflects United Road's automotive exposure with a high concentration of revenue from original equipment manufacturers that are facing production delays as a result of the shortage of semiconductors used to produce new vehicles. Additionally, financial leverage is very high with debt-to-EBITDA at 13.4x as of March 31, 2021, potentially making its capital structure unsustainable if transportation volumes remain depressed into 2022. The company's customer concentration on OEMs, which represent about 66% of revenue, exposes the company to further supply chain delays which will directly impact URS' transportation volumes. Providing some support is URS' exposure to the transportation of used car vehicles, which has been less affected by supply chain disruptions. The credit profile is also affected by a shortage of drivers, which has led to higher costs for URS, especially in what it pays to its third-party carriers to deliver loads. Third-party carriers represent about 25% of all loads. Net fuel costs have also been on the rise. The company has the capacity to pass on fuel costs to the customer, but there is a time lag to realize higher pricing. Positively, the company maintains a leading position in the markets for the transportation of new and used cars, which positions it well to capitalize on rising volumes once production normalizes and the associated demand for transporting new vehicles to retail locations recovers. Liquidity is weak, given expectations of negative free cash flow as the company contends with thin margins and rising costs. The company has a cash balance of about $29 million, as well as availability of about $28 million in the company's $60 million asset-based lending (ABL) facility, excluding availability collateralized by the company's cash balance. Moody's also note that revolver availability is diminished by a springing fixed charge coverage ratio that the company would not pass if it were to be tested in the near term. This financial covenant is triggered if availability (currently represented by cash of $29 million and $28 million of ABL available for total liquidity of $57 million) under the ABL is less than the greater of $6 million and 10% of the loan cap. The Caa1 rating on the company's approximately $350 million senior secured bank credit facility (term loan) outstanding's due in 2024, at the same level as the CFR, reflects the preponderance of this class of debt in the liability structure. The term loan ranks behind the $60 million ABL revolving credit facility, which has a first lien on the more liquid assets, such as accounts receivable. The term loan has a second lien on the revolver collateral and a first lien on the remainder of the company's domestic assets. The obligations of borrowers URS Holdco, Inc. and United Road Services, Inc. under the term loan are guaranteed by the ultimate parent company, URS Parent Corporation, and each borrower's wholly owned restricted subsidiaries. Moody's took the following actions: Ratings Downgraded: Issuer: URS Holdco, Inc. Corporate Family Rating, Downgraded to Caa1 from B3 Probability of Default Rating, Downgraded to Caa1-PD from B3-PD Senior Secured Bank Credit Facility, Downgraded to Caa1 (LGD4) from B3 (LGD4) Outlook: Outlook, remains Negative Factors that could lead to an upgrade or downgrade of the ratings: The ratings could be downgraded if Moody's expects liquidity to deteriorate, including a material decline in the cash balance, decreasing revolver availability or the company fails to refinance in a timely manner. The ratings could also be downgraded with expectations of weakening operating performance, including if Moody's expects interest coverage to materially worsen or debt-to-EBITDA will be sustained above 7x. Downward ratings momentum would also be driven by aggressive financial policies. The ratings could be upgraded with sustained earnings growth that results in stronger credit metrics, including Moody's expectation of debt-to-EBITDA below 6.0x, EBITDA less capex-to-interest exceeding 1.0x, and a material improvement in operating margin, as well as consistently positive free cash flow and greater revolver availability. The principal methodology used in these ratings was Surface Transportation and Logistics published in May 2019. URS Holdco, Inc., based in Romulus, Michigan, is a leading provider of over-the-road transportation of automobiles and vehicle logistics in the United States and Canada through its principal operating subsidiary, United Road Services, Inc. Revenues were $529 million for the last twelve months ended March 31, 2021. URS Holdco, Inc. is a portfolio company of The Carlyle Group, a private equity firm. VIAD CORP: Moody's Gives 'B3' CFR & Rates New $400MM Term Loan 'B3' ------------------------------------------------------------------- Moody's Investors Service assigned a B3 corporate family rating and a B3-PD probability of default rating to Viad Corp. Concurrently, Moody's assigned a B3 rating to the proposed senior secured first lien credit facilities consisting of a $400 million term loan B due 2028 and a $100 million revolving credit facility expiring 2026. Moody's also assigned a SGL-3 speculative grade liquidity rating, indicating adequate liquidity. The outlook is stable. Proceeds from Viad's proposed term loan B will be used to fully repay its outstanding balance under its existing revolving credit facility, add approximately $48 million of cash to the balance sheet, and pay related fees and expenses. The new $100 million revolver is expected to remain undrawn at closing. Viad faces substantial challenges due to coronavirus pandemic-related travel restrictions in the near term. Changes to consumers behavior may develop as a result of the pandemic, highlighting social risk to the business. Broadly, Moody's regards the coronavirus outbreak as a social risk under its ESG framework, given the substantial implications for public health and safety. Governance considerations include management's historically conservative financial policy with company-calculated debt/EBITDA maintained at 2.5x or below. The company prioritizes maintaining the asset base first, after which looking to execute on growth opportunities using their "Refresh, Build, Buy" framework. Management also took necessary actions in securing additional capital at the beginning of the pandemic. These actions included aggressive costs reductions, eliminations of discretionary spend, $56 million in cash proceeds raised from the disposition of certain assets, and a $180 million investment secured from private equity firm Crestview Partners. The Crestview investment included an initial $135 million in newly-issued perpetual convertible preferred stock that carries a 5.5% dividend, which is payable in cash or in-kind at the company's option, and a delayed draw commitment of up to $45 million that can be accessed until August 2021. Management is committed to de-levering back to historical levels through EBITDA recovery and to free cash flow generation. Assignments: Issuer: Viad Corp Corporate Family Rating, Assigned B3 Probability of Default Rating, Assigned B3-PD Speculative Grade Liquidity Rating, Assigned SGL-3 Senior Secured First Lien Term Loan B, Assigned B3 (LGD3) Senior Secured First Lien Revolving Credit Facility, Assigned B3 (LGD3) Outlook Actions: Outlook, Assigned Stable The assigned ratings are subject to review of final documentation and no material change to the size, terms and conditions of the transaction as advised to Moody's. RATINGS RATIONALE Viad's B3 CFR reflects its high leverage driven by the material decline in earnings due to travel restrictions related to the spread of COVID-19 (all metrics include Moody's standard adjustments). Viad's scale is small in terms of revenue and earnings relative to other single B rated Business and Consumer Services companies and the Pursuit business is highly seasonal with approximately 60% of revenue generated in the company's third quarter. The rating is supported by Viad's exposure to leisure travel which is expected to see material year-over-year growth this summer as well as the company's leading and defensible market position in the global live events industry. While the GES, Viad's global live events business, recovery will be slower, it historically has provided stable free cash flow generation with 3-5 year contracts and high renewal rates. Moody's expects that the company's operations, specifically Pursuit, will benefit from the strong growth in leisure travel this summer and will be able to reduce leverage to below 6.0x by the end of 2022. The stable outlook reflects Viad's adequate liquidity to support its operations over the next twelve to eighteen months as its earnings recover from the impact of travel restrictions related to the pandemic. Viad's earnings suffered in 2020 due to both the cancellation of exhibitions and conferences as well as revenue per available room ("RevPAR") and occupancy declines in the hospitality and attractions segment as a result of the pandemic. Pursuit lodging bookings are pacing well ahead of 2019 levels in destinations without border restrictions such as Glacier Park and the Alaska collections while the Banff Jasper booking pace is expected to accelerate once travel restrictions to Canada are lifted. Moody's expects the recovery in Viad's earnings will be driven by a stronger rebound in leisure travel and the higher margin Pursuit segment, while the business travel recovery will lag leading to a slower recovery in the GES segment. The SGL-3 rating reflects Viad's adequate liquidity profile. The company had approximately $35 million of cash as of March 31, 2021, and after transaction close, Moody's expects Viad to add an additional $48 million of cash to the balance sheet and have a fully undrawn $100 million revolver. The company also has access to an additional $45 million delayed draw commitment of convertible preferred stock from Crestview Partners until it expires on August 5, 2021. Moody's expects Viad will not need to access the additional liquidity. Moody's expects negative free cash flow this year due to significant investments into new Pursuit attractions. The new revolver is subject to a minimum liquidity requirement of $75 million from transaction close to the earlier of June 30, 2022 or the first business day after Viad elects to terminate the Minimum Liquidity Period. Upon expiration of the Minimum Liquidity Period, Viad will be subject to a minimum consolidated interest coverage ratio of 2x on or before 9/30/22 and 2.5x on or after 12/31/22, and a maximum total net leverage ratio of 4.5x on or before 9/30/22 and 4x on or after 12/31/22. Moody's expects Viad to be in and maintain compliance with its covenants. As proposed, the new credit facilities are expected to provide covenant flexibility that if utilized could negatively impact creditors. Notable terms include incremental debt capacity up to the greater of $50 million and 33% of Consolidated EBITDA, plus unlimited amounts subject to 4.0x Total Net Leverage Ratio (if pari passu secured). No portion of the incremental may be incurred with an earlier maturity than the initial term loans. The credit agreement permits the transfer of assets to unrestricted subsidiaries, up to the carve-out capacities, subject to "blocker" provisions which prohibit the transfer of any material intellectual property to an 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 with an unaffiliated third party and is consummated for a bona fide business purpose . The credit agreement will include anti-Serta blocker provisions to be agreed upon by the parties. The proposed terms and the final terms of the credit agreement may be materially different. The B3 rating of the senior secured first lien credit facility, consisting of a $100 million revolving credit facility expiring 2026 and a $400 million term loan B due 2028, reflects a PDR of B3-PD and a loss given default ("LGD") of LGD3. The senior secured first lien rating is in line with the B3 CFR and reflects its position as the vast majority of debt in the capital structure. The facilities are secured by a first priority lien on substantially all assets of Viad and its subsidiaries. The stable outlook reflects that Viad has sufficient liquidity to support its operations over the next twelve to eighteen months as its earnings recover from the impact of travel restrictions related to the pandemic. It also reflects Moody's expectation that the company's operations will benefit from the strong growth in leisure travel this summer and that Viad will reduce leverage below 6.0x by the end of 2022. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS The ratings could be upgraded if progress continues against the coronavirus pandemic leading to a resumption of unrestricted international travel and EBITA margins return to pre-pandemic levels. The ratings could also be upgraded if Moody's expects Viad will sustain: 1) free cash flow to debt above 5%, 2) very good liquidity to withstand further economic shocks, and 3) balanced financial strategies. The ratings could be downgraded if Moody's anticipates: 1) revenue and EBITA margins will recover more slowly than currently expected, 2) macroeconomic events disrupt travel markets, 3) free cash flow will remain minimal or negative, leading to a diminished liquidity profile or 4) more aggressive financial strategies featuring debt-financed acquisitions or shareholder returns. Viad is a global leader serving the attractions and hospitality market, as well as the live event industry. The Company has two distinct operating divisions: Pursuit and GES. Pursuit is a high growth, high margin attractions and hospitality company comprised of ten attractions that offer unique experiences to over 2.4 million visitors annually, and 25 lodging properties with 380,000 room nights sold annually. GES is a global live events company (exhibitions/conferences, brand experiences and venue services), working with 70% of Fortune 1,000 brands across 4,000 global events in over 75 countries. The principal methodology used in these ratings was Business and Consumer Service Industry published in October 2016. VPR BRANDS: Issues $100K Promissory Note to CEO ----------------------------------------------- VPR Brands, LP issued a promissory note in the principal amount of $100,001 to Kevin Frija, who is the Company's chief executive officer, president, principal financial officer, principal accounting officer and chairman of the Board, and a significant stockholder of the Company. The principal amount due under the July 2021 Note bears interest at the rate of 24% per annum, and the July 2021 Note permits Mr. Frija to deduct one ACH payment from the Company's bank account in the amount of $500 per business day until the principal amount due and accrued interest is repaid. The July 2021 Note is unsecured. About VPR Brands Headquartered in Ft. Lauderdale, FL, VPR Brands -- http://www.VPRBrands.com-- is a technology company whose assets include issued U.S. and Chinese patents for atomization-related products, including technology for medical marijuana vaporizers and electronic cigarette products and components. The Company is also engaged in product development for the vapor or vaping market, including e-liquids, vaporizers and electronic cigarettes (also known as e-cigarettes) which are devices which deliver nicotine or cannabis and cannabidiol (CBD) through atomization or vaping, and without smoke and other chemical constituents typically found in traditional products. Hackensack, New Jersey-based Prager Metis CPA's LLC, the Company's auditor since 2018, issued a "going concern" qualification in its report dated April 15, 2021, citing that the Company incurred a net loss of $563,779 for the year ended Dec. 31, 2020, has an accumulated deficit of $10,342,173 and a working capital deficit of $1,892,210 at Dec. 31, 2020. These factors, among others, raise substantial doubt regarding the Company's ability to continue as a going concern. As of March 31, 2021, the Company had $1.02 million in total assets, $3.36 million in total liabilities, and a total partners' deficit of $2.34 million. WHATABRANDS LLC: Moody's Cuts CFR to B2 & Rates New Term Loan B2 ---------------------------------------------------------------- Moody's Investors Service downgraded Whatabrands LLC's corporate family rating to B2 from B1, probability of default rating to B2-PD from B1-PD and senior secured rating to B2 from B1. In addition, Moody's assigned a B2 rating to the company's proposed $2.3 billion senior secured term loan B and $200 million revolving credit facility, which will replace its existing capital structure. The outlook is stable. Proceeds from the proposed $2.3 billion term loan will be used to repay Whatabrands existing $1.22 billion term loan, repurchase $1.0 billion of preferred stock, place about $50 million of cash on the balance sheet and pay fees and expenses. "The downgrade was prompted by governance considerations particularly Whatabrands decision to significantly increase debt to support a material return to shareholders of about $1.0 billion" stated Bill Fahy, Moody's Senior Credit Officer. The $1.0 billion of incremental debt will result in debt to EBITDA increasing to over 6.5 times from about 4.7 times for the LTM period ending March 31, 2021. "Overall, we view the debt financed share repurchase as the adoption of a more aggressive financial strategy". Downgrades: Issuer: Whatabrands LLC Corporate Family Rating, Downgraded to B2 from B1 Probability of Default Rating, Downgraded to B2-PD from B1-PD Gtd Senior Secured Term Loan, Downgraded to B2 (LGD3) from B1 (LGD3) Gtd Senior Secured Revolving Credit Facility, Downgraded to B2 (LGD3) from B1 (LGD3) Assignments: Issuer: Whatabrands LLC Senior Secured First Lien Term Loan, Assigned B2 (LGD3) Senior Secured Revolving Credit Facility, Assigned B2 (LGD3) Outlook Actions: Issuer: Whatabrands LLC Outlook, Remains Stable RATINGS RATIONALE Whatabrands B2 CFR benefits from above average unit volumes that indicate strong brand awareness in its core market of Texas, a diversified day-part and customer mix and its good liquidity. Whatabrands is constrained by its high leverage, modest scale and geographic concentration in Texas. Governance risk is also a credit constraint given Whatabrands financial sponsor ownership as financial sponsors typically support more aggressive financial strategies including higher leverage, extractions of cash flow via dividends, and more aggressive growth strategies. The stable outlook reflects Moody's view that same store sales will remain positive and help drive a steady improvement in earnings, credit metrics and liquidity as government restrictions are scaled or eliminated. The outlook also reflects that Moody's expects leverage will migrate towards 6.0 times over the next 12 to 18 months so long as Whatabrands does not pursue any further increases in debt to support other repurchases of its common or preferred stock. The restaurant sector has been one of the sectors most significantly affected by the coronavirus outbreak given its exposure to widespread location restrictions and closures as well as its sensitivity to consumer demand and sentiment. Moody's regard the coronavirus outbreak as a social risk under its ESG framework, given the substantial implications for public health and safety. Whatabrands private ownership is a rating factor given the potential implications from both a capital structure and operating perspective. Financial policies are always a key concern of privately-owned companies with regards to the potential for higher leverage, extractions of cash flow via dividends, or more aggressive growth strategies. Restaurants by their nature and relationship with sourcing food and packaging, as well as an extensive labor force and constant consumer interaction are deeply entwined with sustainability, social and environmental concerns. While these factors may not directly impact the credit, they could impact brand image and result in a change in the view of the brand overall. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS A ratings upgrade would require steady growth in earnings while maintaining good liquidity and a more moderate financial policy, with a demonstrated willingness and ability to achieve and maintain improved credit metrics. Quantitative metrics include debt to EBITDA sustained below 5.75 times and EBITDA less capex coverage of gross interest sustained over 1.75 times. A downgrade could occur if on a sustained basis debt to EBITDA was over 6.5 times or EBITDA less capex to interest coverage was below 1.25 times. A deterioration in liquidity could also result in a downgrade. Whatabrands LLC, a wholly-owned subsidiary of Sunrise Group Holdings, LLC (Sunrise), owns the Whataburger fast food brand which operates and franchises a total of 856 units (734 owned and 122 franchised) in 10 states with the substantial majority in Texas. Sunrise is majority owned by funds affiliated with BDT Capital Partners and its founding owners. Annual revenues are about $2.6 billion while system sales are approximately $2.9 billion. The principal methodology used in these ratings was Restaurant Industry published in January 2018. WIRTA HOTELS: Seeks Transfer of Funds from Affiliate's Account -------------------------------------------------------------- Wirta Hotels 3, LLC and Wirta 3, LLC asked the Bankruptcy Court to authorize Debtor Wirta Hotels to transfer funds from its accounts to accounts maintained by Debtor Wirta 3 for the purpose of complying with the terms of the Cash Management Order. Wirta 3 has an open account with United Business Bank, which is one of the three banks that Wirta Hotels uses -- with approval of the United States Trustee -- to deposit its cash. Tara J. Schleicher, Esq., at Foster Garvey P.C., counsel for the Debtors, averred that permitting the Debtors to shift funds among their various accounts will prejudice no party, as Wilmington Trust, National Association maintains its security interest in such cash regardless of which Debtor holds it, and the quantum of general unsecured claims at either Debtor is not significant relative to the Debtors' cash balances and cash flows. Absent the requested relief, Wirta Hotels would be forced to open new bank accounts and make other changes to its cash management system, she said. Wilmington acts as Trustee, on Behalf of the Registered Holders of Citigroup Commercial Mortgage Trust 2017-C4, Commercial Mortgage Pass-Through Certificates, Series 2017-C4, and asserts an interest in the Debtors' cash collateral in that capacity. A copy of the motion is available for free at https://bit.ly/3hwSgoc from PacerMonitor.com. The Court was slated to consider the request in a telephonic hearing on July 15, 2021. On July 14, the Court entered an order confirming the Debtors' Third Amended and Restated Joint Chapter 11 Plan of Reorganization. Counsel for the Debtors: Tara J. Schleicher, Esq., Dan Youngblut, Esq. Foster Garvey P.C. 1111 Third Avenue Seattle, WA 98101 Telephone: (206) 447-4400 Email: tara.schleicher@foster.com dan.youngblut@foster.com About Wirta Hotels 3 and Wirta 3 Wirta Hotels 3, LLC and Wirta 3, LLC are privately held companies that own and operate the Holiday Inn Express & Suites in Sequim, Wash. On Sept. 18, 2020, Wirta Hotels and Wirta 3 filed Chapter 11 petitions (Bankr. W.D. Wash. Lead Case No. 20-12398). At the time of the filing, Wirta Hotels disclosed $2,365,830 in assets and $2,805,775 in total liabilities while Wirta 3 disclosed $13,214,141 in assets and $7,017,530 in liabilities. Judge Marc Barreca oversees the cases. The Debtors tapped Foster Garvey, PC as legal counsel and Premier Capital Associates, LLC as financial consultant. Saddle Peak Hotel Advisors, LLC provides general consulting and expert witness services to the Debtors. WITCHEY ENTERPRISES: TUS rustee Says Disclosure Inadequate ---------------------------------------------------------- United States Trustee, and respectfully objects to the Corrected Second Amended Small Business Disclosure Statement For The Debtor's Small Business Plan Of Reorganization filed by Witchey Enterprises, Inc. The United States Trustee points out that the Disclosure Statement does not contain adequate information which would enable a creditor or interest holder to make an informed judgment about the Plan for the following reasons: * The Disclosure Statement fails to fully comply with Local Rule of Bankruptcy Procedure 3016-2. * The Disclosure Statement and Plan should contain the following provision: The reorganized Debtor shall be responsible for timely payment of fees incurred pursuant to 28 U.S.C. Sec. 1930(a)(6). After confirmation and within thirty (30) days after the end of each calendar quarter, the reorganized Debtor shall file with the court and serve on the United States Trustee a quarterly financial report for each calendar quarter (or portion thereof) during which the case remains open, in a format prescribed by the United States Trustee and provided to the Debtor by the United States Trustee. * Section III B of the Disclosure Statement describes the Plan as having administrative claims identified as "Class 1" and the priority tax claim of the Internal Revenue Service identified as "Class 3." Administrative claims and priority tax claims are not subject to classification as claims subject to voting in Chapter 11 reorganization, but are instead each entitled to specific treatment set forth in the Bankruptcy Code. As such, the language in the Disclosure Statement purporting to classify these claims into voting classes in the Plan is erroneous and should be amended. * Section III B of the Disclosure Statement states that the Debtor proposes to pay the holders of Class 4 allowed general unsecured claims up to a total of $150,000 in the sixty months following the effective date of the Plan, but further provides that payments to those claimants will be made only in those months in which the Debtor makes a cash profit of at least $10,000. Given this condition and no assurance of the Debtor's future profitability, the Debtor's proposed treatment of Class 4 claims is illusory and makes it impossible for the holders of those claims to determine whether voting in favor of the Plan is in their best interests vis a vis liquidation of the estate. * The Disclosure Statement is virtually silent as to the sources and implementation of funding to implement the Plan other than a scant assertion in Section IV which states that "The Debtor believes that the plan is feasible and urges that it be approved. The Debtor after clearing out the excess leased equipment, getting rid of the Linehaul routes and focusing on the local operation, believes it can operate profitably going forward." This barebones representation does not constitute "adequate information" within the meaning of Section 1125(a) of the Bankruptcy Code and raises serious concerns with respect to the feasibility of the Debtor's Plan. About Witchey Enterprises Witchey Enterprises, Inc., a Wilkes-Barre, Pa.-based provider of courier and express delivery services, filed a Chapter 11 petition (Bankr. M.D. Pa. Case No. 19-00645) on Feb. 14, 2019. Louis Witchey, president, signed the petition. At the time of filing, the Debtor had between $1 million and $10 million in both assets and liabilities. Judge Patricia M. Mayer oversees the case. The Debtor tapped Andrew Joseph Katsock, III, Esq., as legal counsel and David L. Haldeman as accountant. YS HOMES: Taps Sotheby's International as Real Estate Broker ------------------------------------------------------------ YS Homes, LLC seeks approval from the U.S. Bankruptcy Court for the District of Maryland to hire TTR Sotheby's International Realty to assist in selling its single-family dwelling located at 5807 Sonny Drive, Lothian, Md. The firm will be paid a 5 percent commission on the property's sale price. Jennifer Chino and Ashley Earle, the firm's real estate agents who will be assisting the Debtor, disclosed in a court filing that they are "disinterested persons" as the term is defined in Section 101(14) of the Bankruptcy Code. The firm can be reached at: Jennifer Chino Ashley Earle TTR Sotheby's International Realty 209 Main St. Annapolis, MD 21401 Tel.: (410) 941-7009/(410) 280-5600 About YS Homes YS Homes, LLC filed a voluntary petition for relief under Chapter 11 of the Bankruptcy Code (Bankr. D. Md. Case No. 21-10874) on Feb. 11, 2021, disclosing total assets of up to $1 million and total liabilities of up to $50,000. Judge Michelle M. Harner oversees the case. Richard M. Goldberg, Esq., at Shapiro Sher Guinot & Sandler, serves as the Debtor's legal counsel. ZAYAT STABLES: Bankruptcy Trustee Cites Possible Assets in Egypt ---------------------------------------------------------------- According to Paulick Report, the bankruptcy trustee entrusted with sorting through the assets and liabilities of Ahmed Zayat, the Eclipse Award-winning owner of 2015 Triple Crown champion American Pharoah, charged in court documents filed on Tuesday, July 13, 2021, that Zayat and members of his immediate family are engaged in "an exercise in gamesmanship, obstruction and delay" to prevent the trustee from having access to financial documents. Trustee Donald V. Biase made those accusations in a memorandum in opposition to a motion by Zayat family members to block subpoenas for records from a number of financial institutions, credit card companies and even wagering accounts with TVG. The motions to quash were filed by Justin Zayat, Joanne Zayat, Emma Zayat, Benjamin Zayat and JPZ Holdings LLC. Zayat filed for Chapter 7 Bankruptcy last September 2020 after Zayat and Zayat Stables were sued by a lender, MGG Capital Group, for defaulting on a loan. The company won a $24.5 million summary judgment against Zayat in June 2020. Even without many of the documents requested, Biase was able to trace a number of financial transactions he found questionable between Zayat Stables and Ahmed Zayat's wife, Joanne, son Justin and other family members. "The trustee's investigation reveals that the debtor (Zayat) and his family members have engaged in a pattern of intermingling of assets and ongoing financial transactions among themselves, Zayat Stables, LLC, and the creditors of the debtor,” the memorandum from Biase states. About Zayat Stables Headquartered in Hackensack, New Jersey, Zayat Stables owned 203 thoroughbred horses. The horses, which are collateral for the bank loan, are worth $37 million, according to an appraisal mentioned in a court paper. Ahmed Zayat said in a court filing that he personally invested $40 million in the business. The Company filed for Chapter 11 bankruptcy protection (Bankr. D.N.J. Case No. 10-13130) on Feb. 3, 2010. The Company estimated $10 million to $50 million in assets and the same range of liabilities as of the bankruptcy filing. The Debtor tapped Cole, Schotz, Meisel, Forman & Leonard, P.A., as bankruptcy counsel. ZOOMINFO LLC: Moody's Affirms B1 CFR Following Chorus Acquisition ----------------------------------------------------------------- Moody's Investors Service affirmed ZoomInfo, LLC's B1 Corporate Family Rating and B1-PD Probability of Default Rating following the company's announcement that it will acquire Chorus, a market leading conversation intelligence platform. Concurrently, Moody's upgraded ZoomInfo's senior secured credit facility rating to Ba2 from Ba3, consisting of a $250 million revolver and upsized $600 million term loan B (including $200 million incremental), and affirmed a $650 million senior unsecured notes rating (upsized by $300 million) issued at ZoomInfo Technologies LLC, at B3. The Speculative Grade Liquidity rating remains SGL-1. The outlook is stable. Net proceeds from the new incremental term loan and unsecured notes, together with cash on hand, will be used to fund the acquisition of Chorus and pay related fees and expenses. The acquisition is expected to close in July 2021. RATINGS RATIONALE The material increase in debt and financial leverage, as well as the significant multiple paid for a very small and currently unprofitable company makes this transaction a negative credit development. Further, it signals that ZoomInfo will continue to use debt and re-leverage its balance sheet to fund its future growth. Proposed incremental debt will increase ZoomInfo's debt-to-EBITDA leverage (Moody's adjusted) to around 5.4x from 3.3x as of March 31, 2021, which weakly positions the company in the B1 rating. Adjusted leverage is calculated on a cash EBITDA basis (including the change in deferred revenue plus amortization of deferred commission costs less the change in deferred costs; expensing stock-based compensation and capitalized software costs). However, Moody's expects that with continued strong EBITDA growth and ZoomInfo's good track record of integrating and extracting synergies from acquisitions, leverage will decline to the low 4.0x ranges by the end of fiscal 2021. With the Chorus acquisition, ZoomInfo is expanding its engagement sales tech stack by adding a highly complementary and fastest growing conversation intelligence tool. Chorus' main solutions include real-time call recording and transcription, sales coaching, onboarding and skill development and data analytics. Moody's believes that product synergies will compliment both platforms, allowing ZoomInfo to sell Chorus product into the company's large and growing customer base, driving more comprehensive go-to-market solution for its customers. Through rationalization of expenses and increasing sales rep productivity, Chorus' EBITDA is expected to become accretive in the second half of 2022. The upgrade of the senior secured credit facility rating to Ba2 from Ba3 reflects the increase in the proportion of junior-ranking unsecured notes relative to the secured debt in ZoomInfo's pro forma capital structure, which provide additional loss-absorption to the credit facility under Moody's Loss Given Default (LGD) framework. ZoomInfo's B1 CFR reflects Moody's expectations for revenue and earnings growth of approximately 30-40%, respectively, and solid free cash flow to total debt in the mid-20% range over the next 12-18 months. Absent subsequent debt-funded acquisitions, Moody's projects ZoomInfo's pro forma debt-to-EBITDA leverage (Moody's adjusted and excluding stock based compensation) to decline towards mid-3.0x range over the next 12-18 months, from approximately 5.4x as of March 31, 2021. The company has a publicly stated commitment to a more conservative financial policy with a long-term leverage target of less than 3.0x (based on management's calculation), which equates to about 3.5x-4.0x on a Moody's basis. ZoomInfo has a defensible market position, including its contributory data model that guarantees 95% data accuracy and fully integrates into several leading customer relationship management (CRM) and market systems, a source of a competitive advantage over other large and small data providers. The company's highly predictable and recurring annual subscription-based revenues, historically strong retention rates and very good profitability also provide credit support. Conversely, ZoomInfo's rating is constrained by its high debt-to-EBITDA and moderate revenue base that is exposed to cyclical client spending. The company lacks product and geographic diversification and operates within the highly competitive sales intelligence data market given the presence of large and small providers with relatively low barriers to entry. ZoomInfo is slowly building a track record on its stated conservative financial policies as a publicly-controlled company. The stable outlook reflects Moody's expectations that ZoomInfo will continue to defend its niche market position in the B2B sales and marketing intelligence sector, maintain discipline approach to capital allocation and strong balance sheet. Moody's also projects the company's organic revenue and EBITDA growth of around 30-40% over the next 12-18 months, debt-to-EBITDA (Moody's adjusted) to decline towards mid-3.0x range, and annual free cash flow in excess of $250 million in 2022. The SGL-1 Speculative Grade Liquidity Rating reflects Moody's expectation that ZoomInfo will maintain very good liquidity over the next 12-15 months. Sources of liquidity consist of robust cash balances in excess of $200 million at the close of the transaction, expectation for strong free cash flow generation to debt around 20%, and full access to new $250 million revolving credit facility due November 2025. The required term loan amortization has been prepaid through the term of the loan. The revolver has a springing consolidated first lien leverage covenant of 7.65x that will be triggered should borrowings exceed 35% of availability. There is no financial maintenance covenant applicable to the term loan. Moody's does not expect the covenant to be triggered over the near term and believe there is ample cushion within the covenant based on Moody's projected earnings levels for the next 12-15 month. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS The ratings could be upgraded if ZoomInfo substantially increases and diversifies its revenue base while debt-to-EBITDA (Moody's adjusted) improves towards 3.5x, with the company continuing to maintain very good liquidity. The upgrade would also be likely as the private equity ownership declines below 50% and the company establishes and maintains balanced financial policies. A ratings downgrade could result if Moody's expects low revenue growth, free cash flow as a percentage of debt will remain below 10%, or debt-to-EBITDA (Moody's adjusted) will exceed 5.0x for a sustained period. Affirmations: Issuer: ZoomInfo, LLC Corporate Family Rating, Affirmed B1 Probability of Default Rating, Affirmed B1-PD Issuer: ZoomInfo Technologies LLC Gtd Senior Unsecured Regular Bond/Debenture, Affirmed B3 (LGD5) Upgrades: Issuer: ZoomInfo, LLC Gtd Senior Secured Revolving Credit Facility, Upgraded to Ba2 (LGD2) from Ba3 (LGD3) Gtd Senior Secured 1st Lien Term Loan, Upgraded to Ba2 (LGD2) from Ba3 (LGD3) Outlook Actions: Issuer: ZoomInfo Technologies LLC Outlook, Remains Stable Issuer: ZoomInfo, LLC Outlook, Remains Stable Headquartered in Vancouver, WA, ZoomInfo is a subscription-based B2B company that allows sales and marketing professionals to gain access to accurate information on firmographic data, company contacts, organizational charts, technology and real time projects on their target accounts. Following the June 2020 IPO, ZoomInfo is a publicly traded company on NASDAQ: ZI. Moody's projects the company's annual revenue to exceed $700 million in 2021. ZoomInfo is majority owned by TA Associates, the Carlyle Group, 22C Capital and the founder Henry Schuck. The principal methodology used in these ratings was Business and Consumer Service Industry published in October 2016. [*] Effects of Bankruptcy Code Amendments on Lessors Post COVID-19 ------------------------------------------------------------------ Erika Barnes, Brian R. Pollock, Jackson B. Sanders, and Summer Associate of Stites & Harbison PLLC wrote an article on Mondaq titled "United States: Amendments To The Bankruptcy Code Impact Lessors Post COVID-19." With available vaccines and lifted restrictions, restaurant capacities have increased, moratoriums are ending, and handshakes abound. This return to normalcy comes along with the need to address the ongoing impact of COVID-19 and legislation enacted in response. For example, the Coronavirus Aid, Relief, and Economic Security (CARES) Act's amendments to the Bankruptcy Code will have an impact through at least December 2022. In addition to increasing the debt limitation to $7.5 million for Subchapter V small businesses, three particular amendments will impact lessors in dealing with lessees facing bankruptcy: * Debtors' Extension to Meet Obligations Under a Commercial Property Lease (Section 365(d)(3)) Section 365(d)(3) of the Bankruptcy Code requires a debtor to timely perform all of their obligations under any unexpired lease of nonresidential property. Under the CARES Act, a Subchapter V small business debtor can be given more time in order to comply with lease obligations post-petition. While any debtor or trustee can have a 60-day grace period for cause, a Subchapter V debtor that can demonstrate a material financial hardship stemming, directly or indirectly, from the COVID-19 pandemic may be granted an additional 60 days (up to 120 days total) by the bankruptcy court. * Increased Amount of Time for Debtor/Lessee to Assume or Reject a Non-Residential Lease (Section 365(d)(4)) The CARES Act also amended Section 365(d)(4). Previously, a debtor had to assume or reject a commercial property lease within 120 days of the bankruptcy filing. Congress has increased this period by 90 days, meaning a debtor now has 210 days to decide on assumption or rejection. Courts can still grant an additional 90-day extension for cause, giving the debtor up to 300 days to make the decision (without needing the consent of the lessor for additional time). * Landlord Protection From Preferential Payment Recoveries (Section 547) Section 547 of the Bankruptcy Code enables a bankruptcy trustee or debtor to recover certain payments made to creditors in the 90 days preceding the bankruptcy filing. Under current law, this provision is subject to certain defenses, such as contemporaneous exchanges of value or payments made in the ordinary course of business. To incentivize rent deferral, the CARES Act amendment now protects a commercial landlord from having to return payments as preferential if they were made "in connection with" an agreement or arrangement to defer rent subsequent to March 13, 2020. This amendment only applies to rent payments and excludes payment of fees, penalties, or interest a debtor may otherwise have owed without the deferral. [^] BOOK REVIEW: Macy's for Sale -------------------------------- Author: Isadore Barmash Publisher: Beard Books Paperback: 180 pages List price: $34.95 Isadore Barmash writes in his Prologue, "This book tells the story of Macy's managers and their leveraged buyout, the newest and most controversial device in the modern financial armament" when it took place in the 1980s. At the center of Barmash's story is Edward S. Finkelstein, Macy's chairman of the board and chief executive office. Sixty years old at the time, Finkelstein had worked for Macy's for thirty-five years. Looking back over his long career dedicated to the department store as he neared retirement, Finkelstein was dismayed when he realized that even with his generous stock options, he owned less than one percent of Macy's stock. In the years leading up to his unexpected, bold takeover, Finkelstein had made over Macy's from a run-of-the-mill clothing retailer into a highly profitable business in the lead of the lucrative and growing fashion and "lifestyle" field. To aid him in accomplishing the takeover and share the rewards with him, Finkelstein had brought together more than three hundred of Macy's top executives. To gain his support for his planned takeover, Finkelstein told them, "The ones who have done the job at Macy's are the ones who ought to own Macy's." Opposing Finkelstein and his group were the Straus family who owned the lion's share of Macy's and employees and shareholders who had an emotional attachment to Macy's as it had been for generations, "Mother Macy's" as it was known. But the opponents were no match for Finkelstein's carefully laid plans and carefully cultivated alliances with the executives. At the 1985 meeting, the shareholders voted in favor of the takeover by roughly eighty percent, with less than two percent opposing it. The takeover is dealt with largely in the opening chapter. For the most part, Barmash follows the decision making by Finkelstein, the reorganization of the national company with a number of branches, the activities of key individuals besides Finkelstein, Macy's moves in the competitive field of clothing retailing, and attempts by the new Macy's owners led by Finkelstein to build on their successful takeover by making other acquisitions. Barmash allows at the beginning that it is an "unauthorized book, written without the cooperation of the buying group." But as he quickly adds, his coverage of Macy's as a business journalist and his independent research for over a year gave him enough knowledge to write a relevant and substantive book. The reader will have no doubt of this. Barmash's narrative, profiles of individuals, and analysis of events, intentions, and consequences ring true, and have not been contradicted by individuals he writes about, subsequent events, or exposure of material not public at the time the book was written. First published in 1989, the author places the Macy's buyout in the context of the business environment at the time: the aggressive, largely laissez-faire, Reagan era. Without being judgmental, the author describes how numerous corporations were awakened from their longtime inertia, while many individuals were feeling betrayed, losing jobs, and facing uncertain futures. Isadore Barmash, a veteran business journalist and author, was associated with the New York Times for more than a quarter-century as business-financial writer and editor. He also contributed many articles for national media, Reuters America, and the Nihon Kenzai Shimbun of Japan. He has published 13 books, including a novel and is listed in the 57th edition of Who's Who in America. He was born November 16, 1921, in Philadelphia, Pennsylvania. He died November 9, 2006, in New York City. ********* 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 ***