/raid1/www/Hosts/bankrupt/TCR

/raid1/www/Hosts/bankrupt/TCR_Public/210924.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, September 24, 2021, Vol. 25, No. 266 Headlines 160 ROYAL PALM: Taps Dechert LLP as Special Appellate Counsel 203-205 NORTH: Court Issues Amended Confirmation Order 7FOUR ON STONE: Balks at Bid to Dismiss or Appoint Trustee 96 WYTHE: Seeks Approval to Hire Leitner Berman as Appraiser 96 WYTHE: Unsecureds to be Paid in Full with Interest in Plan A.B.C. CARPET: Taps B. Riley Securities as Investment Banker A.B.C. CARPET: U.S. Trustee Appoints Creditors' Committee AEROCENTURY CORP: Announces Special Dividend for Chapter 11 Exit AHERN RENTALS: S&P Places 'CCC+' ICR on CreditWatch Positive ALCHEMY COPYRIGHTS: S&P Alters Outlook to Pos., Affirms 'B+' ICR ALLIANCE HEALTHCARE: S&P Ups ICR to 'B-' on Acquisition by Akumin ARCHDIOCESE OF AGANA: To Convey Chancery Assets to Trust ARCONIC CORP: Fitch Alters Outlook on 'BB+' IDR to Stable ATD NEW HOLDINGS: Fitch Affirms 'B-' IDRs, Outlook Stable BENSON PROPERTY: Seeks to Hire Joel M. Aresty as Legal Counsel BIZGISTICS INC: Seeks to Hire Underwood Murray as Legal Counsel BOUTIQUE NV: Court Sets Oct. 26 Confirmation Hearing BOY SCOUTS OF AMERICA: Readying Final Plan Voting Materials BOY SCOUTS OF AMERICA: Tort Claimants Tap Claro Group as Consultant BOY SCOUTS: Too Little Info on Plan, Insurers & Claimants Say BRAZOS ELECTRIC: Seeks to Hire McKool as Special Conflicts Counsel BRIGGS & STRATTON: Touts Progress A Year Under KPS CAJUN COMPANY: Files Supplement to Clarify on Insurance Coverage CHARLESTON ORTHODONTIC: Unsecured Creditors Will Get 5% of Claims CONSENSUS CLOUD: S&P Assigns 'B+' ICR, Outlook Stable COPPER MECHANICAL: Seeks to Hire Wisdom Professional as Accountant COPPER MECHANICAL: Seeks to Tap Alla Kachan as Bankruptcy Counsel D. INTERNATIONAL: Court Rejects UST's Bid to Convert or Dismiss DAVIDZON MEDIA: Hearing Today on Continued Cash Collateral Access DUNBAR PLAZA: Case Summary & 4 Unsecured Creditors ERIN ENERGY: Delaware Justices Urged to Save Suit FABMETALS INC: Seeks to Hire Coolidge Wall Co. as Legal Counsel FLIX BREWHOUSE: Seeks to Hire Ferguson as Co-Counsel FLIX BREWHOUSE: Seeks to Hire Sugar Felsenthal as Legal Counsel FLIX BREWHOUSE: Taps HMP Advisory Holdings as Financial Advisor FLUSHING LANDMARK: Taps Giambalvo, Stalzer & Co. as Accountant G & J TRANSPORTATION: Taps Victor W. Dahar as Legal Counsel GCI LLC: S&P Hikes ICR to 'B+' on Broadband Growth, Outlook Stable GENESIS ENERGY: S&P Downgrades ICR to 'B', Outlook Stable GORHAM PAPER: Taps Donlin Recano as Administrative Advisor GRACIE'S VENTURES: Unsecured Creditors to Recover 5% in 5 Years GROVE ENTERPRISES: Seeks Approval to Tap Christopher Quinn as CRO HARBOR VENTURES: Surplus Funds & Sale Proceeds to Fund Plan HILLTOP AT DIA: Seeks to Hire Hilco as Real Estate Agent HILMORE LLC: To File Amended Disclosures and Plan by Oct. 18 I MORALES TIRE: Seeks to Clarify Language in Confirmed Plan IGLESIA NUEVA: Plan Confirmation Hearing Set for Oct. 26 INNERLINE ENGINEERING: Taps Curd Galindo & Smith as Legal Counsel INTELSAT SA: SES Wants Jane Mago as Witness in Dispute ISLAND EMPLOYEE: Case Summary & 20 Largest Unsecured Creditors ISRAEL MARMOL: Taps De la Hoz & Associates as Accountant J.C. PENNEY: Closes More Stores After Bankruptcy Exit J.J.W. METAL: Taps Arroyo Cruz Law Office as Litigation Counsel JAR-BET LLC: Seeks to Hire Boyer Terry as Bankruptcy Counsel JOHNSON & JOHNSON: NJ Court Won't Preempt Plan for Texas Two-Step JUST ENERGY: Nov. 1, 2021 Claims Bar Date Set K&D MANAGEMENT: Seeks to Hire ResourcePartners as Accountant KDA PROPERTIES: Files Chapter 11 to Stop Foreclosure KISMET ROCK HILL: Taps Newpoint Advisors as Accountant KNB HOLDINGS: S&P Affirms 'CCC+' ICR, Outlook Stable LORNA JANE USA: Hits Chapter 11 for Shift to Online LUCKY STAR-DEER: Taps Giambalvo, Stalzer & Co. as Accountant MALLETT INC: Seeks to Hire Backenroth as Legal Counsel MATCH GROUP: S&P Assigns 'BB' Issuer Credit Rating, Outlook Stable MEDLEY LLC: Files Liquidating Trust Contract as Plan Supplement MERIT DENTAL: Files Emergency Bid to Use Cash Collateral MIDTOWN DEVELOPMENT: Chapter 11 Stops Sale of Black's Building MIRION TECHNOLOGIES: S&P Affirms 'B' ICR, Off Watch Positive MORROW GA INVESTORS: Trustee Taps Ogier Rothschild as Legal Counsel MORROW GA INVESTORS: Trustee Taps Stonebridge as Accountant NEW BETHEL: Unsecureds to Get 0.50% Recovery in Plan NEWELL BRANDS: Fitch Raises LT IDR to 'BB+', Outlook Stable NINETY-FIVE MADISON: Taps Glenn Agre Bergman & Fuentes as Counsel NTH SOLUTIONS: Approves Extra 25% to Class 2 in Cramdown PARK PLACE: Case Summary & 20 Largest Unsecured Creditors PLATINUM CORRAL: Nov. 10 Plan Confirmation Hearing Set PURDUE PHARMA: Court's Sept. 17 Modified Bench Ruling on Plan PURDUE PHARMA: UST Seeks Stay, Insists Plan Order Unconstitutional RBC BEARINGS: S&P Assigns 'BB' Issuer Credit Rating, Outlook Stable ROCHELLE HOLDINGS: Asset Sale Proceeds, or Borrowing, to Fund Plan RUNNER BUYER: S&P Assigns 'B' Issuer Credit Rating, Outlook Stable RUSSIAN MEDIA: Taps Law Offices of Alla Kachan as Counsel RUSSIAN MEDIA: Taps Wisdom Professional Services as Accountant SANG H. SHIN: Disclosure Statement Hearing Slated for Oct. 20 SANTA CLARITA LLC: Michael W. Carmel Named Chapter 11 Trustee SEARS HOLDINGS: Last Department Store in Illinois Closed SECURE ENERGY: Fitch Assigns B+ Rating on Sr. Unsecured Notes SERVICE KING: Skips Interest Payment Amid Cash Woes SOUND HOUSING: Court Directs Appointment of Chapter 11 Trustee SOUND HOUSING: Disclosures Denied as Trustee to Take Over SUPERMOOSE NEWCO: S&P Upgrades ICR to 'CCC+', Outlook Stable TEXXON PETROCHEMICALS: Nov. 2 Plan & Disclosure Hearing Set TEXXON PETROCHEMICALS: Unsecureds Will Get 100% of Claims in Plan THAI STK: Seeks Cash Collateral Access THE GALLEY: Case Summary & Unsecured Creditor TRAXIUM LLC: Plan Violates Absolute Priority Rule, Objectors Say TSM DEVELOPMENT: Voluntary Chapter 11 Case Summary U.S. TOBACCO: Appointment of Creditors' Committee Sought VICTORIA TOWERS: Taps Giambalvo, Stalzer & Co. as Accountant WABASH NATIONAL: S&P Rates New $400MM Senior Unsecured Notes 'B' WADSWORTH ESTATES: Unsecureds to Get Negligible Recovery in Plan WASATCH RAILROAD: Taps Markus Williams as Legal Counsel WASHBURN MARINE: Taps Weinstein & St. Germain as Bankruptcy Counsel Z REAL ESTATE: Taps Shane DiGiuseppe & Rodgers as Special Counsel ZELIS HOLDINGS: S&P Rates 1st Lien and Delayed Draw Term Loan 'B' [*] Corporate Bankruptcies Up in Miami in August 2021 [*] Key Hertz Case Advisors Join Special Virtual Program Oct. 14 [*] Petitions Seek Supreme Court Review of 3 Bankruptcy Rulings [^] BOOK REVIEW: Mentor X ********* 160 ROYAL PALM: Taps Dechert LLP as Special Appellate Counsel ------------------------------------------------------------- 160 Royal Palm, LLC and liquidating trustee Cary Glickstein seek approval from the U.S. Bankruptcy Court for the Southern District of Florida to employ Dechert, LLP as special appellate counsel. The liquidating trustee and the Debtor need the assistance of a special appellate counsel to prosecute the consolidated appeal related to an adversary proceeding, which seeks to avoid and recover certain transfers made by the Debtor to Glenn Straub and Palm Beach Polo, Inc. Dechert will receive 40 percent of contingency fee recovered by Shraiberg, Landau & Page, PA, the Debtor's special litigation counsel, in the adversary proceeding or the consolidated appeal. The firm will also receive a 10 percent success fee. G. Eric Brunstad, Jr., a partner at Dechert, disclosed in a court filing that his firm is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. The firm can be reached through: G. Eric Brunstad, Jr., Esq. Dechert LLP Cira Centre, 2929 Arch Street Philadelphia, PA 19104-2808 Telephone: (215) 994-4000 Facsimile: (215) 994-2222 Email: eric.brunstad@dechert.com About 160 Royal Palm 160 Royal Palm, LLC is a Florida limited liability company, which owns prime real property consisting of a partially constructed hotel and condominium located at 160 Royal Palm Way, Palm Beach, Fla. The property is under state court receivership. 160 Royal Palm filed a voluntary petition for relief under Chapter 11 of the United States Bankruptcy Code (Bankr. S.D. Fla. Case No. 18-19441) on Aug. 2, 2018. In the petition signed by Cary Glickstein, sole and exclusive manager, the Debtor disclosed $16,447,759 in total assets and $114,926,976 in total liabilities. The case is assigned to Judge Erik P. Kimball. The Debtor tapped Philip J. Landau, Esq., at Shraiberg, Landau & Page, P.A., as its bankruptcy counsel. Greenberg Traurig, P.A., Gregg H. Glickstein, P.A., and Dechert LLP serve as the Debtor's special counsel. On Feb. 11, 2020, the court confirmed the Debtor's Chapter 11 plan of liquidation. Cary Glickstein is the liquidating trustee appointed pursuant to the plan. 203-205 NORTH: Court Issues Amended Confirmation Order ------------------------------------------------------ Judge Nancy Hershey Lord of the U.S. Bankruptcy Court for the Eastern District of New York entered an amended order confirming the Second Amended Chapter 11 Plan of Liquidation of 203-205 North 8th Street Loft, LLC as filed by its Secured Creditors, 203-205 N 8th Street LLC; North 8th Investor LLC; and 3052 Brighton 1st Street LLC. The Amended Order: * provided that all executory contracts and unexpired leases of the Debtor, other than residential leases, shall be assumed and assigned or rejected by a notice filed and served by the Proponents and/or the Successful Bidder on 21 days' notice (from the previous 14 days' notice) to the affected parties; and * struck out the provision that the sale of the Debtor's Property and the Proponents shall have the full benefit of Section 1146(a) of the Bankruptcy Code if the successful purchaser sells the Property within two years after the effective date. Section 1146(a) provides that the transfer or sale of the Property under the Plan to the successful purchaser shall not be taxed under any law. A copy of the Amended Order is available for free at https://bit.ly/39uNClR from PacerMonitor.com. About 203-205 North 8th Street Loft On Feb. 6, 2020, 203-205 North 8th Street Loft, LLC, filed a petition for Chapter 11 bankruptcy relief (Bankr. E.D.N.Y. Case No. 20-40793), which was executed by Johnathan Rubin, as president of the Debtor. The Debtor was estimated to have less than $1 million in assets and liabilities. The Debtor is represented by Kriss & Feuerstein LLP. 7FOUR ON STONE: Balks at Bid to Dismiss or Appoint Trustee ---------------------------------------------------------- 7Four on Stone Apartments, LLC opposed the motion filed by its secured creditors, CRB Holdings, LLC and Capital Fund REIT, to convert or dismiss the Debtor's case, or alternatively, appoint a Chapter 11 Trustee for the Debtor. The Secured Creditors allege that the Debtor's principal, Albert Brown, paid thousands of dollars for non-operational purposes to "dodgy lenders" in violation of the Bankruptcy Rules and to the detriment of CRB and Capital Fund. The Secured Creditors also allege that Brown has squandered their cash collateral and used it for personal purposes. A copy of the motion is available for free at https://bit.ly/3u2NgMC from PacerMonitor.com. Although the Debtor admitted it did need permission to make the payments, adding it did not receive permission, the Debtor denied the allegation of having absconded estate funds arguing that it is simply incorrect. The Debtor disclosed having paid a hard money lender for $5,157 as a deposit for an appraisal and an environmental survey, which payment the Debtor said is required by said lender before making an offer of refinancing. The Debtor asserted that it made such payment to explore a potential refinancing -- which would occur only after Court approval, the Debtor added. The Debtor, however, admitted having made an unauthorized disbursement for $5,800 for loan repayment. A copy of the objection is available for free at https://bit.ly/3nWONCT from PacerMonitor.com. Attorney for CRB Holdings, LLC and Capital Fund REIT: Cynthia L. Johnson, Esq. Law Office of Cynthia L. Johnson 11640 East Caron Street Scottsdale, AZ 85259 Telephone: (480) 381-7929 Email: cynthia@jsk-law.com About 7Four on Stone Apartments 7Four on Stone Apartments, LLC, a Scottsdale, Ariz.-based company engaged in activities related to real estate, filed a petition for Chapter 11 protection (Bankr. D. Ariz. Case No. 21-05717) on July 26, 2021, listing as much as $10 million in both assets and liabilities. Albert Brown, the Debtor's managing member, signed the petition. Judge Scott H. Gan oversees the case. The Debtor tapped May, Potenza, Baran & Gillespie, PC as legal counsel and Craig Elggren, CPA, as accountant. 96 WYTHE: Seeks Approval to Hire Leitner Berman as Appraiser ------------------------------------------------------------ 96 Wythe Acquisition, LLC seeks approval from the U.S. Bankruptcy Court for the Southern District of New York to hire Leitner Berman to conduct a valuation of its property, the Williamsburg Hotel, located at 96 Wythe Ave., Brooklyn, N.Y. The firm will receive an appraisal fee in the amount of $35,000. Any additional work following payment of the appraisal fee will be billed at the rate of $750 per hour. As disclosed in court filings, Leitner Berman does not hold or represent any interest adverse to the Debtor's estate. The firm can be reached through: Joel Leitner, MAI Leitner Berman 1 Pierrepont Street, 8A Brooklyn, NY 11201 Phone: 917-922-4882 Email: jleitner@leitnerberman.com About 96 Wythe Acquisition 96 Wythe Acquisition, LLC, a privately held company in Brooklyn, N.Y., filed a petition for Chapter 11 protection (Bankr. S.D.N.Y. Case No. 21-22108) on Feb. 23, 2021, disclosing zero assets and $79,990,206 in liabilities. David Goldwasser, chief restructuring officer, signed the petition. Judge Robert D. Drain oversees the case. The Debtor tapped Backenroth Frankel & Krinsky, LLP and Mayer Brown, LLP as legal counsel. Getzler Henrich & Associates, LLC and Hilco Real Estate, LLC serve as the Debtor's financial advisors. 96 WYTHE: Unsecureds to be Paid in Full with Interest in Plan ------------------------------------------------------------- 96 Wythe Acquisition LLC, filed with the U.S. Bankruptcy Court for the Southern District of New York a Disclosure Statement and Chapter 11 Plan dated September 20, 2021. The Debtor is a New York limited liability company with its principal place of business in Brooklyn, New York. The Debtor owns and operates the Williamsburg Hotel, a successful 10-story, 147 room independent hotel, constructed in 2017, and located at 96 Wythe Avenue, Brooklyn, New York (the "Hotel"). The bankruptcy filing provided a breathing spell for the Debtor to stabilize its operations having filed at a low point in the market, in particular, as business and leisure travel restarted and event bookings recommenced. The filing also provided the Debtor time to raise additional funds and capital for a restructuring, develop a plan to restructure its obligations, and position itself for future success. The Debtor's proposed Plan includes the infusion of up to $8 million in new money (together with estimated, available cash projected on the Effective Date in the approximate amount of $10 million), which forms the predicate for a plan of reorganization and emergence from the Reorganization Case, while preserving the going-concern value of the Hotel for the benefit of not only the Debtor, but all constituents and creditors, including the mechanics and materialman, general unsecured creditors, and the Mezz Lender, who would otherwise receive significantly less in the context of a foreclosure or liquidation. Class 1 are Allowed Priority Claims excluding Priority Tax Claims. Class 1 Priority Claims are unimpaired under the Plan. Unless otherwise agreed by the Debtor and such Claimant, each holder of a Class 1 Allowed Priority Claims shall be paid in cash, in full on the applicable distribution date. Class 2 Secured Claim includes the Allowed Claim of BSP, which is impaired under the Plan. The BSP Undisputed Claim shall be allowed in the amount of $70.7 million. The BSP Undisputed Claim shall be paid in full, together with interest to be paid as follows: (i) the Reorganized Debtor shall pay BSP equal monthly payments of interest only at a rate of 4.5% per annum commencing on the Effective Date for 4 years; (ii) commencing on the 4th anniversary of the Effective Date, the Reorganized Debtor shall pay interest at a rate of 5% per annum for an additional 2 years; and (iii) on the 6th anniversary of the Effective Date, the Reorganized Debtor shall make a final payment consisting of the balance of the BSP Undisputed Claim. In addition, on the Effective Date, the Reorganized Debtor shall (a) contribute $3 million into an interest account to serve as the Interest Reserve for the Reorganized Debtor's payments on account of the BSP Undisputed Claim, which such account shall be established at a third-party bank selected by the Debtor in its sole discretion and drawn on by the Reorganized Debtor to pay BSP interest payments in full or partially in the event that the Reorganized Debtor has not paid the required monthly interest payment in full or partially by the 20th of the month when such payment becomes due; and (b) pre-pay BSP the first 2 monthly interest payments required to be paid under clause (i) such that on the Effective Date, the Reorganized Debtor shall pay BSP a total of the first two (2) monthly interest payments. Class 3 Secured Property Tax Claims includes the Allowed Secured Property Tax Claims, which Claims are impaired under the Plan. The Debtor has identified 1 Secured Property Tax Claim filed by 1 holder in the amount of $3,092,874.62. The Reorganized Debtor shall pay such amounts as provided for under the Property Payment Plan. Class 4 Secured M&M Claims include Allowed Claims held by M&Ms. Class 4 Priority Claims are impaired under the Plan. The Debtor has identified 3 Secured M&M Claims asserted by 3 holders in the aggregate amount of approximately $353,306.00. Unless otherwise agreed to by the Debtor and such holder of an Allowed Secured M&M Claim, the Reorganized Debtor shall pay Allowed Secured M&M Claims 100% of the value of such Claim. Class 5 includes all Allowed Unsecured Claims, which Claims are impaired under the Plan. The Debtor has identified approximately 41 Unsecured Claims, which it estimates aggregate between $1,970,936 to $2,570,936.00, subject to final reconciliation (the "Undisputed Unsecured Claim Amount"). The Debtor will fund a pot plan in an amount of the Undisputed Claim Amount, through deferred payments in 5 equal installments. Such funds will be paid by the Debtor or Reorganized Debtor, as the case may be, on or before the date upon which deferred distributions are due to holders of Allowed Unsecured Claims. Each holder of an Allowed Unsecured Claim will receive a pro rata distribution funded from the Undisputed Claim Amount in 5 equal annual pro rata installment payments with interest at a rate of 5% per annum, commencing with the first pro-rata payment 30 days after the Effective Date, and 4 remaining pro rata installment payments each being due on the first, second, third and fourth anniversaries of the Effective Date. To the extent Allowed Unsecured Claims aggregate the Undisputed Unsecured Claim Amount, such holder will be paid in full with interest as provided for in the Plan. If Allowed Unsecured Claims exceed the Undisputed Unsecured Claim Amount, such holders will receive a pro rata distribution against the Undisputed Unsecured Claim Amount. Class 6 includes all Allowed Subordinated Claims, which are impaired under the Plan. Unless otherwise agreed by the Debtor and such claimant, holders of Allowed Subordinated Claims will be subordinated to Allowed Unsecured Claims and will not receive any distribution under the Plan. All Equity Interests will be cancelled, and the Plan Sponsor will be issued new Interests in the Reorganized Debtor, constituting of 100% ownership of the Reorganized Debtor. The Plan Sponsor shall contribute $8,000,000.00 to the Reorganized Debtor upon the Effective Date, $6,562,000.00 of which shall be paid as a capital contribution. In addition, while the Debtor and the Management Company dispute any allegations made with respect to the PPP Loans and believe such claims are baseless, the Debtor and Management Company have agreed to settle any and all claims, if any, relating to the PPP Loans pursuant to the PPP Settlement. Pursuant to the PPP Settlement, which is approved, the Management Company has agreed to defer repayment of over $2,000,000.00 in claims for fees due to the Management Company through the Plan's Effective Date, until after all Allowed Claims have been paid, and the Plan Sponsor has agreed to infuse an additional $1,438,000.00 to the Reorganized Debtor (for a total payment of $8,000,000.00 including such infusion and capital contribution of $6,562,000.00) which shall be earmarked as a settlement payment (together with deferral of debt by the Management Company) pursuant to the PPP Settlement. The Plan Sponsor's cash infusion and the income generated by the Debtor's and the Reorganized Debtor's operations will be used to fund operating expenses and to pay the amounts necessary to fund the Plan payments. A full-text copy of the Disclosure Statement dated September 20, 2021, is available at https://bit.ly/39xAYT8 from PacerMonitor.com at no charge. Proposed Co-Counsel to the Debtor: Leah Eisenberg Jason I. Kirschner Dabin Chun Douglas Spelfogel, Esq. Mayer Brown, LLP 1221 Avenue of the Americas New York, NY 10020 Tel.: (212) 506-2500 Fax: (212) 506-1910 Email: dspelfogel@mayerbrown.com Co-Counsel to the Debtor: Mark A. Frankel, Esq. Backenroth Frankel & Krinsky, LLP 800 Third Avenue New York, NY 10022 Telephone: (212) 593-1100 Facsimile: (212) 644-0544 Email: mfrankel@bfklaw.com About 96 Wythe Acquisition LLC 96 Wythe Acquisition LLC is a privately held company whose principal property is located at 96 Wythe Ave, Brooklyn, NY 11249. 96 Wythe Acquisition sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. S.D.N.Y. Case No. 1-22108) on February 23, 2021. In the petition signed by David Goldwasser, chief restructuring officer, the Debtor disclosed $0 in assets and $79,990,206 in liabilities. Judge Robert D. Drain oversees the case. Backenroth Frankel & Krinsky, LLP, led by Mark Frankel, is the Debtor's counsel. A.B.C. CARPET: Taps B. Riley Securities as Investment Banker ------------------------------------------------------------ A.B.C. Carpet Co. Inc. and its affiliates seek approval from the U.S. Bankruptcy Court for the Southern District of New York to employ B. Riley Securities, Inc. as investment banker and financial advisor. B. Riley will render these services: (a) review and analyze, from a financial perspective, the general business, operations, financial condition and prospects of the Debtors; (b) assist the Debtors with securing Debtor-in-Possession (DIP) financing with the Debtors' existing lender or an alternative lender; (c) assist the Debtors with a restructuring transaction and/or sale transaction; (d) solicit interest for a restructuring transaction and/or sale transaction with potential strategic and financial buyers and conduct a sale process consistent with market business practices; (e) assist the Debtors, as requested, with other schedules, analyses and communications relating to a restructuring transaction and/or sale transaction and the Chapter 11 cases; (f) participate in negotiations regarding a restructuring transaction and/or sale transaction with prospective interested parties; and (g) provide testimony to support the Debtors' objectives during these Chapter 11 cases. B. Riley will be compensated as follows: (a) An initial retainer of $50,000; (b) A transaction fee equal to the greater of (1) 2.5 percent of the sale transaction or restructuring transaction and (2) $500,000; (c) A transaction fee at the closing of the transaction in an amount equal to the transaction fee that would otherwise have been paid to B. Riley with respect to such transaction, irrespective of whether B. Riley closes such Transaction; and (d) Reimbursement of out-of-pocket expenses. Perry Mandarino, a senior managing director at B. Riley Securities, disclosed in a court filing that the firm is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. The firm can be reached through: Perry M. Mandarino B. Riley Securities, Inc. 11100 Santa Monica Blvd., Suite 800 Los Angeles, CA 90025 Telephone: (310) 966-1444 Email: pmandarino@brileyfin.com About A.B.C. Carpet Co. Inc. New York-based A.B.C. Carpet Co., Inc. owns and operates ABC Carpet & Home, an iconic lifestyle brand and home furnishing retailer with stores in Manhattan and Brooklyn. A.B.C. Carpet Co. and its affiliates filed their voluntary petitions for Chapter 11 protection (Bankr. S.D.N.Y. Lead Case No.21-11591) on Sept. 8 2021. Aaron Rose, chief executive officer, signed the petitions. At the time of filing, the Debtors disclosed up to $50 million in assets and up to $100 million in liabilities. Judge David S. Jones oversees the cases. The Debtors tapped Greenberg Traurig, LLP as legal counsel and B. Riley Securities, Inc. as investment banker and financial advisor. Stretto is the claims and noticing agent. The U.S. Trustee for Region 2 appointed an official committee of unsecured creditors in the Debtors' bankruptcy cases on Sept. 22, 2021. A.B.C. CARPET: U.S. Trustee Appoints Creditors' Committee --------------------------------------------------------- The U.S. Trustee for Region 2 on Sept. 22 appointed an official committee to represent unsecured creditors in the Chapter 11 cases of A.B.C. Carpet Co., Inc. and its affiliates. The committee members are: 1. Anadol Rug Co. 1088 Huff Road Atlanta, GA 30318 Attn: Suat Izmirli, President Tel: (404) 350-8558 E-mail: suat@anadolrugs.com; 2. Frette Inc. 15 West 37th Street, 8th Floor New York, NY 10018 Attn: Paolo Fabiocchi, Chief Financial Officer Tel: (646) 701-1309 E-mail: pfabiocchi@frette.com 3. Fabric Inc. 113 Cherry St. PMB 66768 Seattle, WA 98104 Attn: Nevin Shetty, CFO Tel: (206) 853-7300 E-mail: nevin@fabric.inc 4. Step Halicilik ve Magazacilik Sanayi ve Ticaret Anonim Sirketi c/o Stepvi Cevdet Pasa Cad. Engin Konak Apt. No. 23/2 Bebek 34342 Istanbul Turkey Attn: Efe Konak, CEO Tel: + 90 (0212) 327 00 50/117 E-mail: ekonak@stepevi.com ydonmez@stepcarpet.com 5. Meathway Contracting 53-46 70th Street Maspeth, NY 11378 Attn: John Maher, President Tel: (917) 838-0936 E-mail: meathwaycontracting@yahoo.com Official creditors' committees serve as fiduciaries to the general population of creditors they represent. They may investigate the debtor's business and financial affairs. Committees have the right to employ legal counsel, accountants and financial advisors at a debtor's expense. About A.B.C. Carpet Co. Inc. New York-based A.B.C. Carpet Co., Inc. owns and operates ABC Carpet & Home, an iconic lifestyle brand and home furnishing retailer with stores in Manhattan and Brooklyn. A.B.C. Carpet Co. and its affiliates filed their voluntary petitions for Chapter 11 protection (Bankr. S.D.N.Y. Lead Case No.21-11591) on Sept. 8 2021. Aaron Rose, chief executive officer, signed the petitions. At the time of filing, the Debtors disclosed up to $50 million in assets and up to $100 million in liabilities. Judge David S. Jones oversees the cases. Oscar N. Pinkas, Esq., and Sara A. Hoffman, Esq., at Greenberg Traurig, LLP represent the Debtors as legal counsel. AEROCENTURY CORP: Announces Special Dividend for Chapter 11 Exit ---------------------------------------------------------------- In connection with AeroCentury Corp.'s impending exit from Chapter 11 reorganization, as set forth in the Combined Disclosure Statement and Joint Chapter 11 Plan of Reorganization of AeroCentury Corp, and Its Affiliated Debtors, the Company announced on Sept. 22, 2021, details regarding the special dividend (the "Dividend") to be paid to stockholders ("Legacy Shareholders") that hold shares of Common Stock of the Company as of the effective date of the Plan prior to the sale and issuance of Common Stock of the Company to the plan sponsor group led by YuCheng Hu ("Plan Sponsor:"). The record date for the Dividend will be September 30, 2021, which is the anticipated effective date of the Plan. The dividend rate will be $0.6468 per share. The payment date will be October 13, 2021. The Dividend payment is conditioned upon the closing of the Common Stock investment of the Plan Sponsor and the Plan being declared effective by the Company. About AeroCentury Corp. AeroCentury Corp. is engaged in the business of investing in used regional aircraft equipment and leasing the equipment to foreign and domestic regional air carriers. Its principal business objective is to acquire aircraft assets and manage those assets in order to provide a return on investment through lease revenue and, eventually, sale proceeds. It is headquartered in Burlingame, Calif. AeroCentury Corp. and affiliates, JetFleet Holdings Corp. and JetFleet Management Corp., sought Chapter 11 bankruptcy protection (Bankr. D. Del. Lead Case No. 21-10636) on March 29, 2021. The Debtors tapped Morrison & Foerster, LLP and Young Conaway Stargatt & Taylor, LLP as legal counsel; B Riley Securities, Inc. as financial advisor and investment banker; and BDO USA, LLP as auditor. Kurtzman Carson Consultants is the claims agent and administrative advisor. AHERN RENTALS: S&P Places 'CCC+' ICR on CreditWatch Positive ------------------------------------------------------------ S&P Global Ratings placed its 'CCC+' issuer credit rating on U.S. equipment rental provider Ahern Rentals Inc. on CreditWatch with positive implications. At the same time, S&P assigned its preliminary 'CCC+' issue-level and '5' recovery ratings to the company's proposed $550 million second-priority senior secured notes due 2026. The company plans to use the net proceeds to refinance its existing $550 million senior secured notes due 2023. The CreditWatch placement indicates the likelihood for an upgrade by one notch to 'B-' with a stable outlook, if the refinancing is successful and the company applies the proceeds from the $50 million affiliate loan repayment, net of refinancing transaction fees, to repay a commensurate portion of asset-based loan (ABL) borrowings. The proposed notes refinancing and affiliate loan repayment should alleviate liquidity pressure. If completed, the transaction would push all material maturities beyond the next three years because the ABL would expire in October 2024 in the absence of the springing maturity. The proposed $50 million ABL repayment, funded by affiliate loan repayment, would increase Ahern's liquidity cushion. S&P said, "We forecast the company will not be in compliance with all its springing financial covenants during 2021 if tested, though these only apply when it draws more than 90% of the ABL. As a result, we exclude the final 10% of the ABL amount from sources of liquidity in our liquidity analysis. However, we still expect sources of liquidity will be above 1.2x its uses, such that we view the company's liquidity position to be adequate." Ahern's shift toward a less-aggressive capital expenditure (capex) strategy and restrictive covenant package benefit the company's credit profile. Historically, the company has prioritized growth over reducing debt leverage, particularly during economic downturns. For example, the company opened 15 stores during 2020, a period when rental demand decreased significantly. S&P said, "Although the company opened 13 stores in 2021 as rental demand recovered, we believe in 2022 and in future years Ahern will reduce the pace of new store growth and focus on leveraging its existing branch network, as required by a covenant that restricts new store growth to 5% annually. In future economic downturns, we expect Ahern would maximize equipment utilization by reducing net capex, similar to its larger rental peers we rate. Furthermore, covenants restricting dividends and intercompany loans drive a less-aggressive financial strategy." Demonstrated ability and willingness to operate more conservatively and generate free operating cash flow (FOCF) to reduce debt leverage would further benefit the company's credit profile. S&P said, "Considering the highly cyclical nature and low barriers to entry of the equipment rental industry, we view Ahern's past emphasis on growth over FOCF generation and leverage above 5x as riskier than 'B'-rated peers. However, lower capex should allow the company to generate positive FOCF starting in 2022. We expect affiliate companies to repay remaining loans on their stated maturity dates in March 2022 and November 2023. We also expect free cash flow and proceeds from the repayment of affiliate loans to reduce S&P Global Ratings-adjusted debt to EBITDA to the 4.5x-5x area by the end of 2022 and drive further deleveraging thereafter." Benefit of new store openings will have more of an impact in 2022 than in 2021. S&P said, "We believe rental demand will remain strong through 2022. We expect nonresidential construction activity to increase by 5.9% in 2022 and for supply of equipment to remain tight, benefiting rental equipment providers. Although demand has improved steadily since mid-2020, Ahern has seen the strongest acceleration during the period since May 2021. As a result, we now expect the overall benefit of new store sales and earnings, particularly for the 13 opened during 2021, to be more significant next year than this year. As a result, we are now forecasting S&P Global Ratings-adjusted EBITDA to increase modestly in 2021 before ramping up in 2022." CreditWatch S&P said, "We aim to resolve the CreditWatch when the proposed refinancing is complete and we have reviewed the final terms of the transaction and the final debt documentation. We will also withdraw our ratings on the existing debt once the refinancing transaction is complete. "We will likely raise our long-term issuer credit rating on Ahern Rentals to 'B-', with a stable outlook, if it completes the refinancing in a timely manner, repays existing debt, and uses a $50 million affiliate loan repayment, net of refinancing transaction fees, to repay ABL borrowings. "Failure to complete, or delays in completing, the proposed refinancing would likely lead us to review our rating on Ahern Rentals. We could affirm our ratings or take a negative action on the company and withdraw our preliminary 'CCC+' rating on the proposed senior secured notes." ALCHEMY COPYRIGHTS: S&P Alters Outlook to Pos., Affirms 'B+' ICR ---------------------------------------------------------------- S&P Global Ratings affirmed its 'B+' issuer credit rating and revised the its outlook on Alchemy Copyrights LLC (d/b/a Concord) to positive from stable. S&P said, "The positive outlook reflects our expectation that Concord's adjusted leverage will decline to the low 4.0x threshold we set for the current ratings over the next 12 months primarily driven by the secular tailwinds in digital streaming. The outlook also reflects our expectations for free operating cash flow (FOCF) to debt to remain above 10% over the next 12 months. "The positive outlook reflects our expectation for solid revenue and EBITDA growth due to increasing global music consumption on music streaming platforms, social media, and games. EBITDA expansion in the recent quarters has driven adjusted leverage to 4.8x as of June 30, 2021, on a trailing-12-months basis and we expect further deleveraging to low-4x area by 2021 end." Tailwinds in the music industry will support Concord's strong revenue growth over the next two years. While the company's theatricals segment revenue declined significantly due to the cancellations of live events in 2020, its major segments--recorded music and music publishing segments--benefited from secular trends in the industry including the increasing penetration of streaming services. S&P forecasts the company's revenue growth in the low- to mid-teens percentage area over the next two years, primarily supported by strength in the recorded music and publishing businesses and rebound in theatricals business after significant declines in 2020. Digital streaming remains the primary driver of growth for the music industry, outpacing declines in physical and digital downloads. S&P expects Concord's growth trajectory to mirror that of the music industry as digital music streaming, which accounted for more than 60% of global recorded music revenues during 2020, continues to grow as the industry's dominant revenue source albeit at a slower rate each year. The proliferation of streaming services has increased global music consumption from legal sources, providing a legitimate access-based model. Furthermore, S&P sees that the music industry benefits from growth opportunities within social media and gaming as companies in these sectors continue to license music catalogues for their platforms and games. While ongoing legal and re-education efforts by the music industry has helped curb digital piracy over the past decade, the industry continues to contend with the value gap and new forms of piracy, including stream-ripping, which could threaten the current growth trajectory. A recovery in the theatricals business and strong growth in the higher-margin recorded music business will contribute to EBITDA margin expansion in 2021 and 2022. S&P expects the company's adjusted EBITDA margins to expand 200 to 300 basis points (bps) during 2021 and 2022 bolstered by strong growth in the higher margin recorded music business and rebound in theatrical business as live events return. Recorded music (with EBITDA margins in the high-40% area) and music publishing (EBITDA margin in the high-20% area) businesses continue to benefit from favorable industry trends. S&P said, "We expect the increasing mix of higher-margin revenue to contribute to company's overall margin expansion. Concord's theatrical segment was severely hit by the COVID-19-related closures, but with the easing of social gathering restrictions and return of live events and performances, the theatrical revenues are slowly recovering this year. The theatrical segment has some exposure to Broadway but skews a lot more to amateur productions in schools and colleges. As these facilities reopen in the fall and into 2022, we expect to see the theatricals segment rebound and recover to pre-pandemic levels within the next 18 months." S&P said, "We expect the company's adjusted leverage to improve to the low-4x area by year-end 2021 and expect continued use of free cash flows acquisitions and growth initiatives. Concord's adjusted leverage was 4.9x as of March 31, 2021, on a trailing-12-months basis. We expect its adjusted leverage to improve to the low-4.0x area in 2021, primarily driven by EBITDA growth from its recorded music and publishing businesses, which will be partially offset by operating losses at theatrical segment. Furthermore, we forecast FOCF to debt to be about 13%-15% in 2021 with expectations for healthy cash flow conversion from EBITDA. We expect the company to continue to undertake opportunistic acquisitions and prioritize the use of free cash flows for growth initiatives. While we expect the company's S&P Global Ratings-adjusted leverage will remain above 4x because of its acquisitive growth strategy, its future deleveraging will be supported by EBITDA growth due to favorable industry trends and inorganic EBITDA from acquisitions. "The positive outlook reflects our expectations that Concord's adjusted leverage will decline to the low-4.0x threshold we set for the current ratings over the next 12 months primarily driven by the secular tailwinds in digital streaming. The outlook also reflects our expectations for FOCF to debt to remain above 10% over the next 12 months." S&P could raise its ratings on Concord within the next 12 months under the following scenarios: -- S&P expects the company to maintain adjusted leverage in the low 4.0x area while FOCF to debt remains at least 10% on a sustained basis after factoring in acquisitions; or -- Secular tailwinds continue to drive revenue and EBITDA growth further supported by a recovery in the theatricals segment as more of the economy recovers post the COVID-19 shutdowns. S&P could revise the outlook back to stable if we expect adjusted leverage to remain above the low-4.0x area indicating a higher leverage tolerance and/or a more aggressive financial policy including potential large debt-financed acquisitions or shareholder distributions. ALLIANCE HEALTHCARE: S&P Ups ICR to 'B-' on Acquisition by Akumin ----------------------------------------------------------------- S&P Global Ratings raised its issuer credit rating on Alliance HealthCare Services to 'B-' from 'CCC+' and removed it from CreditWatch, where S&P placed it with positive implications on July 26, 2021. The rating outlook is stable, the same as S&P'S outlook on Akumin. The rating actions follow the closing of Akumin Inc.'s acquisition of Alliance HealthCare Services. S&P raised its issuer credit rating on Alliance HealthCare to 'B-' with a stable outlook to equalize it with that of Akumin because S&P now considers Alliance to be a core entity of the company. S&P subsequently withdrew its issuer credit rating on Alliance. S&P said, "At the same time we raised our issue-level rating on Alliance's senior secured debt to 'B-' from 'CCC+', and its unsecured debt to 'CCC' from 'CCC-'. We have subsequently withdrawn the issue-level ratings." ARCHDIOCESE OF AGANA: To Convey Chancery Assets to Trust -------------------------------------------------------- Haidee Eugenio Gilbert of The Guam Daily Post reports that the Archdiocese of Agana plans to convey the Chancery property and other real estate assets to a trust for the compensation of clergy sex abuse claimants, as part of ongoing mediation in its bankruptcy case, archdiocese attorney Ford Elsaesser said Tuesday, Sept. 21, 2021. This comes after the release of a financial report showing that just $2.4 million remains of the $7.03 million in net proceeds from the sale of two major archdiocese properties. The net proceeds are among sources of funding for nearly 300 abuse claims, but most, or $4 million-plus, has been used already to pay legal fees for both sides in the now 32-month-old archdiocese bankruptcy case. The Chancery property on San Ramon Hill, overlooking Guam's capital city of Hagatna, was estimated earlier to be worth $2.5 million. Mr. Elsaesser, who's based in Idaho, said other sources of funding for the claims are payments from insurers, as well as contributions from parishes and others. But at this point, details of the compensation plan remain under wraps because the archdiocese and the committee representing the abuse victims and other creditors are continuing their mediation, with U.S. Bankruptcy Judge Robert Farris as the mediator, Mr. Elsaesser said. Mr. Elsaesser said the archdiocese could not share how the current plan at this point compares to the initial $21 million compensation plan released in January 2020, but he said the church is working to improve the initial plan so that it will be agreeable to the creditors' committee. The archdiocese filed for Chapter 11 bankruptcy in January 2019 so it can settle the claims, reaching more than $1 billion, filed by those who said they were raped or molested by priests and other Guam clergy dating back to the 1950s. More than $10M owed to banks, SBA In addition to the abuse claims, the archdiocese has obligations to First Hawaiian Bank, Bank of Hawaii, the U.S. Small Business Administration and other financial institutions of "well over $10 million," Elsaesser said. The archdiocese's goal is to compensate the claimants to right the wrongs of the past, while keeping Catholic schools and parishes open. The grassroots Concerned Catholics of Guam organization agrees. "We do not want parishes or schools to be closed and sold as that will not benefit anyone, if our relationship with God is made secondary to wanting as much as possible without considering the consequences of such extreme possible actions," Concerned Catholics of Guam President David Sablan said. "I pray and hope the victims and their families direct these attorneys, instead of the other way around." While there is "no archdiocese property officially for sale right now," Mr. Elsaesser said, the archdiocese anticipates that the Chancery and other real property will be conveyed to a trust to be used to compensate abuse claimants. Tony Diaz, director of communications for the archdiocese, said the plan is to move the Chancery operations to the Dulce Nombre de Maria Cathedral-Basilica area. Mr. Elsaesser also said the archdiocese is working to meet the federal court's order to submit its reorganization plan to solve its bankruptcy, by Nov. 29., and currently he sees no reason to make an extension request. About Agana Archdiocese The Roman Catholic Archdiocese of Agana is an ecclesiastical territory or diocese of the Catholic Church in the United States that comprises the United States dependency of Guam. The Roman Catholic Archdiocese of Agana sought Chapter 11 protection (Bankr. D. Guam Case No. 19- 00001) on Jan. 9, 2019. In the petition signed by Most Rev. Michael Jude Byrnes, Coadjutor Archbishop of Agana, it listed $22.96 million in assets, with $45.66 million in liabilities. The case is handled by Honorable Judge Frances M Tydingco-Gatewood. Edwin H. Caldie, of Stinson Leonard Street LLP, is the Debtor's counsel. ARCONIC CORP: Fitch Alters Outlook on 'BB+' IDR to Stable --------------------------------------------------------- Fitch Ratings has affirmed Arconic Corporation's (ARNC) Issuer Default Rating (IDR) at 'BB+'. Fitch has also affirmed ARNC's senior first lien secured ABL facility at 'BBB-'/'RR1' and senior second lien secured notes at 'BB+'/'RR4'. ARNC's senior first lien secured notes are affirmed at 'BBB-' and the recovery rating is revised to 'RR2' from 'RR1'. The revision in the recovery rating was due to an update to Fitch's "Corporates Recovery Ratings and Instrument Ratings Criteria" in April 2021, which classifies the company's first lien notes as a category 2 instrument, structurally junior to the ABL facility. The Rating Outlook is revised to Stable from Negative. The Rating Outlook revision to Stable is predominantly driven by the company's improved financial position following the pension annuitization in early 2021, coupled with strong growth and tailwinds across multiple of ARNC's end-markets, which has offset much of the declines related to aviation market weakness. KEY RATING DRIVERS ARNC's ratings are supported by the company's strong financial structure, which is generally in line with that of companies rated at investment-grade levels. The company's end markets are also relatively diversified and composed of industries that are shifting toward lighter-weight materials, which ARNC specializes in. The company's commodity price volatility is limited as it is able to hedge or pass through the majority of metal exposure. Fitch believes the company requires a strong financial structure to offset its limited profitability and moderate exposure to broad economic cycles, which constrain its rating. The company will also still be required to make pension contributions going forward, which somewhat strains its financial flexibility. ARNC has not experienced meaningful operational disruptions as a result of the coronavirus pandemic, but the risk of future supply-chain disruption exists. ARNC also assumed the potential liability that could stem from the Grenfell Towers tragedy in 2017, which will remain an overhang for the foreseeable future, despite Fitch's expectation that insurance coverage may offset potential liabilities. Cyclical, But Diversified End Markets: ARNC's end markets are highly cyclical, as its customers operate in the commercial aerospace, ground transportation, packaging, diversified industrial, and building and construction industries. The exposure to economic cycles and demand fluctuations within these industries could result in significant top-line volatility, as seen in the current market environment, and prolonged market volatility and uncertainty could lead to negative rating momentum. However, some of this risk is partially mitigated by the company's diversified mix of end markets, long-term contracts and relationships, and innovative offerings. In particular, Fitch views market diversification as a positive factor for the company's credit profile in the current environment. Coronavirus Impact Update: The coronavirus pandemic has predominantly impacted ARNC through the company's aerospace end-market exposure. Fitch currently forecasts aerospace production to remain somewhat pressured over the next few years, as OEMs slowly begin to re-ramp production. Fitch expects many suppliers will remain in de-stocking mode through the end of 2021. There have not been any material long-term operational disruptions at the company, though Fitch views the supply chain vulnerability as a potential risk. Non-Aerospace Mostly Positive: Near-term stabilization and increased output in ground transportation, packaging and industrials are projected to offset the impact of the aviation downturn for ARNC. In particular, the trade cases in 2018 and 2020 has afforded ARNC a moderately more competitive position within the industrial products market. Recent commodity price increases also had a material positive effect on revenue, but negative effect on margins and net working capital, and neutral effect on EBITDA, as costs are generally passed through to customers or hedged. Meanwhile, packaging has several positive tailwinds that should support substantial growth beginning in 2022, including the ramp up of ARNC's U.S. facility following a non-compete agreement roll-off with Alcoa, as well as broader market pressures to shift to more environmentally friendly products such as aluminum. A quicker than expected rebound in aviation could result in upside to Fitch's forecasts for ARNC. Strong Financial Structure: ARNC's leverage is low and its financial structure is strong for the ratings, despite weakness from the coronavirus pandemic. Fitch forecasts 2021 gross debt/EBITDA to be in the low-to-mid-2.0x range, which is more commensurate with 'BBB' category issuers. FFO leverage is elevated in 2021 primarily due to pension contributions made, which Fitch includes pre-FFO, but Fitch forecasts the metric to decline to the mid-2x range in 2022 and beyond following the annuitization completed to reduce future pension costs and aluminum impact on net working capital. Fitch believes the company must maintain lower leverage than similarly rated peers due to the high degree of cyclicality, profitability consistent with mid-'BB' category rated issuers and required pension contributions. The recent transaction and regulatory changes have lowered future pension contribution requirements that should provide the company some flexibility when measuring against its sensitivities. Moderate Profitability, Weak but Improving Cash Flow: Fitch expects the company will generate EBITDA margins in the high-single digit or low-double-digit range over the next few years, in line with other similarly rated companies. However, FCF will be negative in 2021, primarily driven by pension contributions made during the period, including the annuitization. Fitch also forecasts cash outflows related to working capital could also weigh on the company's cash generation in 2021 but would likely flatten out and result in improved CF in the following few years. Fitch also believes the company could institute a dividend in late-2021 or 2022. DERIVATION SUMMARY In general, Arconic Corp. has weaker profitability than similarly rated peers such as Kaiser Aluminum Corp. (BB/Positive), but a stronger capital structure, which is more in line with investment-grade issuers. Fitch considers ARNC's end markets to be relatively diversified and expects the company's cash flow to gradually improve following several cost-cutting measures, reduced environmental costs and lower pension contributions expected following the announced annuitization. KEY ASSUMPTIONS Fitch's key assumptions within its rating case for the issuer include: -- Revenue growth in 2021 driven by commodity price increases coupled with end-market recovery in industrial products, ground transportation and packaging; offset by declines in aerospace; modest commodity price reduction in 2022 and 2023 balances out with organic revenue growth; -- EBITDA margins decline temporarily in 2021 due to pass through costs from commodity price increases, but increase to low double digit range thereafter; -- Temporary capex reduction in 2021 and increase to between 2% and 3% of revenue per year thereafter; -- Annual dividend instituted after normalization of operations; Fitch assumes up to $100 million per year; -- Pension contributions plus other post-employment benefit (OPEB) payments decline to around or less than $100 million per year in 2022; -- Working capital cash outflows in 2021 in conjunction with resumption of growth, particularly related to packaging; -- No voluntary debt repayment or M&A. RATING SENSITIVITIES Factors that may, individually or collectively, lead to positive rating action: -- FFO leverage sustained below 2.5x and/or gross leverage (total debt-to-EBITDA) sustained below 1.5x; -- EBIT margins sustained above 7%; -- Company publicly commits to obtaining and maintaining an investment grade credit profile. Factors that may, individually or collectively, lead to negative rating action: -- FFO leverage is sustained above 3.2x and/or gross leverage (total debt-to-EBITDA) sustained around or above 2.5x; -- Contingent legal liabilities, pension contributions or environmental liabilities result in significant cash flow impact. 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 Strong Liquidity Position: Fitch considers ARNC's liquidity position to be strong. Total liquidity was comprised of $540 million of cash and equivalents and $785 million of availability under its $800 million ABL facility at the end of June 2021. Fitch anticipates ARNC will maintain liquidity of between $1.0 billion and $1.5 billion on average over the next several years between cash and its ABL facility, which could be drawn upon during the year to cover short-term working capital fluctuations but would likely be subsequently paid down. ARNC's capital structure consists of an ABL credit facility, senior first lien secured notes and senior second lien secured notes. The first lien notes are the earliest maturity and are due in 2025. ISSUER PROFILE Arconic Corporation (ARNC) is a provider of rolled aluminum products, extrusions, and building products. The company's end markets consist of building and construction, industrial, packaging, automotive, and aerospace & defense. 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. ATD NEW HOLDINGS: Fitch Affirms 'B-' IDRs, Outlook Stable --------------------------------------------------------- Fitch Ratings has affirmed ATD New Holdings, Inc. (ATD), and its American Tire Distributors, Inc. (ATDI) subsidiary, 'B-' Issuer Default Ratings (IDRs). Fitch has affirmed ATDI's secured ABL revolving credit facility at 'BB-'/'RR1'. Fitch has assigned ratings of 'B-'/'RR4' to ATDI's secured first lien term loan. Fitch's ratings apply to a $1.2 billion secured ABL revolver and a $1,000 million secured first lien term loan. The Rating Outlooks for ATD and ATDI are stable. KEY RATING DRIVERS First Lien Ratings: Fitch's first lien recovery rating on ATDI's proposed instrument drops to 'RR4' from 'RR3' due to the higher levels of debt at the first lien level. This, in turn, reduces expected recoveries for first lien debtholders to between 31%-50% under Fitch's waterfall generated recovery analysis. As a result, Fitch's rating on ATDI's proposed first lien term loan is one-notch lower than on the existing first lien loan. In the near term, Fitch expects the proposed transaction could lead to a slight increase in leverage relative to prior expectations but Fitch expects leverage to be commensurate with a 'B-' rating. Fitch's recovery analysis, which was used to determine ATDI's existing instrument ratings, ranked the FILO term loan below the first lien term loan in the waterfall analysis. The lower ranking helped to support a higher recovery rating for the first lien debt, since the FILO term loan had a lower priority. Fitch's recovery analysis assumptions regarding total enterprise value that determines creditor recoveries has not changed, nor has the amount Fitch assumes is drawn on the ABL despite ATD's intention to increase the size of the ABL to $1.2 billion from $1.005 billion. Ratings and Outlook: ATD's ratings reflect the company's leading market position as a distributor of passenger vehicle and light truck replacement tires in North America. The ratings also reflect ATD's FCF generation and solid performance through the pandemic. However, the company's high leverage weighs on the ratings, as does its limited geographical and product category diversification as a tire distributor focused solely on the U.S. and Canadian markets. The Stable Outlook reflects Fitch's expectation that the most severe effects of the pandemic are behind the company and that leverage will decline over the next several years as the company targets excess cash toward debt reduction. Solid FCF Generation: Fitch expects ATD to generate solid FCF over the next several years on stronger end-market conditions. Fitch expects ATD's FCF margin (as calculated by Fitch) will be about 0.5% in 2021, before rising to 1.5% over the next several years. ATD's actual FCF margin was 1.5% in 2020, and was supported by working capital inflows resulting from enhanced vendor terms, lower cash interest expense, as well as reduced capex levels. ATD's capital intensity (capex/revenue) tends to be low, and Fitch expects capital intensity to remain below 1.0% over the next several years. High Leverage: Fitch expects ATD's lease-adjusted gross EBITDAR leverage (lease-adjusted debt/operating EBITDAR, as calculated by Fitch) to decline to 6.5x by YE 2021 as a result of strong end-market demand, partially offset by cost headwinds from higher labor, freight and logistics expenses. Beyond 2021, Fitch expects lease-adjusted EBITDAR leverage to decline to the mid-5x range over the next several years, driven by a combination of higher EBITDAR and debt reduction. ATD's actual lease-adjusted EBITDAR leverage at YE 2020 was 7.6x, which was down from 8.6x at YE 2019, due to a combination of operating performance improvement and debt repayment. Lease-adjusted leverage is higher than gross EBITDA leverage (total debt/operating EBITDA) due to the company's use of operating leases for its facilities. At YE 2020, gross EBITDA leverage was 7.3x. Fitch expects ATD's gross EBITDA leverage to decline towards 5.5x by YE 2021. Improving Coverage Metrics: Fitch expects ATD's funds from operation (FFO) fixed charge coverage to rise toward 1.5x by YE 2021, up from 1.2x at YE 2020. After 2021, Fitch expects FFO fixed charge coverage to stabilize around 1.5x over the next several years. Limited Diversification: Compared with other Fitch-rated distributors, ATD's ratings incorporate the company's limited diversification as a tire distributor in North America, as opposed to distributors of multiple product categories in more global regions. However, the stability of the replacement tire end-market, coupled with ATD's exposure to tires across the value chain, including of its own private label brands, helps to partially mitigate this risk. In addition, the growth of ATD's additional service offerings, such as its Flx Fwd third-party logistics business and its Torqata data intelligence unit, will further diversify ATD's product and service offerings. DERIVATION SUMMARY ATD's operating profile is relatively strong compared with its peers, with limited exposure to cyclical end-markets, such as automotive original equipment manufacturers. ATD is relatively less diversified when compared to LKQ Corporation (BBB-/Stable), which distributes a wide range of automotive products on a global basis. ATD's exposure to non-tire related products, or services, is still limited and its sales are concentrated in North America. Fitch expects leverage to remain relatively high compared with is peer group. Lease-adjusted debt/EBITDAR has historically run near the high-7x to mid-8x range over the past couple of years and is expected to decline towards the low-5x range over the next several years. ATD's FCF margins are not as robust as LKQ's or Wesco International, Inc.'s (BB-/Stable), but Fitch expects the company to produce FCF margins in the low-single digits. KEY ASSUMPTIONS Fitch's key assumptions within its rating case for the issuer include: -- Revenue rises by 18% in 2021 and 5% in 2022 before moderating to approximately 4% in both 2023 and 2024. Higher revenue is supported by solid replacement tire volume and pricing, as well as growth in ATD's logistics and service offerings; -- FCF margins run in the 0.5%-1.5% range over the next several years; -- Capital intensity is stable at about 0.7%; -- Fitch expects the company to direct excess cash toward debt reduction. Key Recovery Rating Assumptions The recovery analysis assumes ATD would be considered a going concern in bankruptcy and would be reorganized rather than liquidated. Fitch has assumed a 10% administrative claim in the recovery analysis. ATD's recovery analysis reflects a situation in which it loses a key customer and estimates the going-concern EBITDA at $250 million, which reflects Fitch's view of a sustainable, post-reorganization EBITDA level upon which the valuation of the company would be based following a hypothetical default. The sustainable, post-reorganization EBITDA is for analytical valuation purposes only and does not reflect a level of EBITDA at which Fitch believes the company would fall into distress. The going-concern EBITDA considers ATD's stable operations, exposure to the more-stable replacement tire market and the non-discretionary nature of its products. Weighed against these attributes are the company's low operating margins and the relatively powerful position of its vendors. The $250 million ongoing EBITDA assumption is higher than Fitch's calculated actual EBITDA in 2020, which included the effects of the pandemic. Fitch utilizes a 5.25x Enterprise Value (EV) multiple based on ATD's leading market position and relative stability of the automotive replacement tire end-market, which is consistent with Fitch's recovery rating criteria. ATD was previously re-organized at an EV around 9.0x in 2018. According to Fitch's "Automotive Bankruptcy Enterprise Values and Creditor Recoveries" report published in January 2021, about 48% of auto-related defaulters had exit multiples above 5.0x, with about 24% in the 5.0x to 7.0x range. However, the median multiple observed across 21 issuers was only 5.0x. Within the report, Fitch observed that 87% of the bankruptcy cases analyzed were resolved as a going concern. Automotive defaulters were typically weighed down by capital structures that became untenable during a period of severe demand weakness, due either to economic cyclicality or the loss of a significant customer, or they were subject to significant operational issues. Fitch's recovery analysis assumes a $754 million draw on ATD's proposed $1.2 billion ABL and ABL FILO Tranche, which is based on a 60% draw and considers Fitch's estimated value of the borrowing base as of April 3, 2021. Fitch's estimate of the amount drawn in its recovery analysis is unchanged from the prior review despite ATD's intention to increase the size of the ABL commitment by $195 million due to the borrowing base is not expected to be affected by the refinancing transaction. The ABL receives first priority in the distribution of value. Due to the ABL's first-lien claim on ring-fenced collateral, the facility receives a Recovery Rating of 'RR1' with a waterfall generated recovery computation (WGRC) in the 91%-100% range. The $1,000 million senior secured first lien debt has second priority in the distribution value and receives a lower priority than the ABL in the distribution of value hierarchy. This results in a Recovery Rating of 'RR4' with a WGRC in the 31%-50% range. RATING SENSITIVITIES Factors that could, individually or collectively, lead to positive rating action/upgrade: -- Sustained lease-adjusted EBITDAR leverage below 5.5x; -- Sustained FFO fixed charge coverage ratio above 2.0x; -- Sustained FCF margins above 1.5%. Factors that could, individually or collectively, lead to negative rating action/downgrade: -- Loss of a key customer; -- Sustained lease-adjusted EBITDAR leverage above 6.5x; -- Sustained FFO fixed charge coverage ratio below 1.7x; -- Sustained FCF margins below 0.5%; -- Liquidity concerns increase and/or heightened refinancing risk in the medium-term. BEST/WORST CASE RATING SCENARIO International scale credit ratings of Non-Financial Corporate issuers have a best-case rating upgrade scenario (defined as the 99th percentile of rating transitions, measured in a positive direction) of three notches over a three-year rating horizon; and a worst-case rating downgrade scenario (defined as the 99th percentile of rating transitions, measured in a negative direction) of four notches over three years. The complete span of best- and worst-case scenario credit ratings for all rating categories ranges from 'AAA' to 'D'. Best- and worst-case scenario credit ratings are based on historical performance. LIQUIDITY AND DEBT STRUCTURE Adequate Liquidity: As of July 3, 2021, ATD had $29 million of consolidated cash and cash equivalents. Based on its criteria, Fitch has treated all of ATD's cash as not readily available as of July 3, 2021 for purposes of calculating net metrics. Fitch's calculation is based on the amount of cash that Fitch believes the company would need to keep on hand to cover seasonality in its cash flows without the need for incremental borrowing or temporary revolver draws. Despite Fitch treating all of the company's cash as not readily available, Fitch believes ATD has sufficient financial flexibility to meet its near-term cash obligations. In addition to its cash on hand, ATD maintains additional liquidity through an ABL. As a result of the proposed transaction, the ABL commitment is expected to increase to $1.2 billion from $1.005 billion as well as extend the maturity date to 2026 from 2023. As of July 03, 2021, approximately $583 million was drawn on the $1.005 billion ABL due 2023. Debt Structure: As of Pro forma for the proposed transaction, Fitch expects ATD's debt to consist of $1.5 billion in total debt outstanding. Debt is expected to consist of $512 million in secured ABL borrowings due 2026, $1,000 million in first lien secured debt due 2027, and $0.4 million of other debt. ISSUER PROFILE ATD is a leading distributor of passenger vehicle and light truck replacement tires in the U.S. and Canada. The company supplies its customers with eight of the top 10 leading passenger vehicle and light truck tire brands. ATD also markets tires under its proprietary Hercules brand. ESG CONSIDERATIONS The highest level of ESG credit relevance, if present, is a score of '3'. This means ESG issues are credit-neutral or have only a minimal credit impact on the entity, either due to their nature or to the way in which they are being managed by the entity. BENSON PROPERTY: Seeks to Hire Joel M. Aresty as Legal Counsel -------------------------------------------------------------- Benson Property Investment Corp. seeks approval from the U.S. Bankruptcy Court for the Middle District of Florida to hire Joel M. Aresty, PA to serve as legal counsel in its Chapter 11 case. The firm's services include: (a) giving advice to the Debtor with respect to its powers and duties and the continued management of its business operations; (b) advising the Debtor of its responsibilities in complying with the U.S. trustee's operating guidelines and reporting requirements and with the rules of the court; (c) preparing legal documents; (d) protecting the interest of the Debtor in all matters pending before the court; (e) representing the Debtor in negotiation with its creditors in the preparation of a Chapter 11 plan. The firm received a retainer in the amount of $10,000. Joel Aresty, Esq., the firm's attorney who will be providing the services, will be billed at his hourly rate of $440 and reimbursed for expenses incurred. Mr. Aresty disclosed in a court filing that he is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. The firm can be reached through: Joel M. Aresty, Esq. Joel M. Aresty, P.A. 309 1st Ave. S. Tierra Verde, FL 33715 Telephone: (305) 904-1903 Facsimile: (800) 559-1870 Email: Aresty@Mac.com About Benson Property Investment Benson Property Investment Corp. sought protection for relief under Chapter 11 of the Bankruptcy Code (Bankr. M.D. Fla. Case No. 21-01081) on Aug. 19, 2021, listing as much as $500,000 in both assets and liabilities. Judge Caryl E. Delano oversees the case. Joel M. Aresty, P.A. serves as the Debtor's legal counsel. BIZGISTICS INC: Seeks to Hire Underwood Murray as Legal Counsel --------------------------------------------------------------- Bizgistics, Inc. seeks approval from the U.S. Bankruptcy Court for the Middle District of Florida to employ Underwood Murray, P.A. to serve as legal counsel in its Chapter 11 case. The firm's services include: a. advising the Debtor with respect to its responsibilities in complying with the U.S. trustee's guidelines and reporting requirements and with the rules of the court; b. preparing legal documents; c. protecting the interests of the Debtor in all matters pending before the court; and d. representing the Debtor in negotiations with its creditors and in the preparation and confirmation of a Chapter 11 plan. The firm's hourly rates are as follows: Megan W. Murray, Esq. $415 per hour Adam M. Gilbert, Esq. $300 per hour Paralegals $170 per hour Underwood Murray will be paid a retainer in the amount of $50,000 and will be reimbursed for out-of-pocket expenses incurred. Megan Murray, Esq., a partner at Underwood Murray, disclosed in a court filing that her firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. The firm can be reached at: Megan W. Murray, Esq. Adam M. Gilbert, Esq. Underwood Murray, P.A. 100 N. Tampa St., Suite 2325 Tampa, FL 33602 Tel: (813) 540-8401 Fax: (813) 553-5345 Email: mmurray@underwoodmurray.com agilbert@underwoodmurray.com About Bizgistics Inc. Bizgistics, Inc. is a Rydal, Pa.-based company that provides freight transportation arrangement services. Bizgistics filed a petition for Chapter 11 protection (Bankr. M.D. Fla. Case No. 21-02197) on Sept. 12, 2021, listing as much as $10 million in both assets and liabilities. Darrell Giles, chief executive officer and director, signed the petition. Underwood Murray, P.A. serves as the Debtor's legal counsel. BOUTIQUE NV: Court Sets Oct. 26 Confirmation Hearing ---------------------------------------------------- Judge Natalie M. Cox of the U.S. Bankruptcy Court for the District of Nevada, at the behest of Boutique NV, LLC, fixed the following dates related to the Debtor's Chapter 11 Plan: * Oct. 20, 2021, as the deadline for filing and serving objections to the Plan; * Oct. 20, 2021, as the deadline for submitting ballots voting on the Plan such that they are actually received by said date; and * Oct. 22, 2021, as the deadline for the Debtor to file a brief in support of Plan confirmation, a reply to any objections and declarations supporting confirmation. The Court will convene the hearing to consider confirmation of the Plan on October 26, 2021 at 9:30 a.m. A copy of the order is available for free at https://bit.ly/3u4ehPL from PacerMonitor.com. About Boutique NV Boutique NV, LLC owns and operates The Retreat on Charleston Peak, which is a 62-room hotel located at 2755 Kyle Canyon Road, Las Vegas. The hotel offers various amenities, including the Canyon Restaurant & Tavern Bar, a full-service restaurant and bar with restricted gaming, and a 5,100-square-foot event space and outdoor deck for wedding or commitment ceremonies, conferences, and other events. It also has a spa, however, that has been closed during the COVID-19 pandemic, but which will be reopened in August. Boutique NV filed a voluntary petition for relief under Chapter 11 of the Bankruptcy Code (Bankr. D. Nev. Case No. 21-13050) on June 16, 2021. In the petition signed by Deanna M. Crossman, manager, the Debtor listed as much as $10 million in both assets and liabilities. Judge Natalie M. Cox oversees the case. Larson & Zirzow, LLC represents the Debtor as legal counsel. BOY SCOUTS OF AMERICA: Readying Final Plan Voting Materials ----------------------------------------------------------- Jonathan Randles of The Wall Street Journal reports that the Boy Scouts of America is pushing forward with a plan to exit bankruptcy that includes nearly $1.9 billion in cash for sex-abuse survivors, overcoming advocates for some victims who sought to pause the youth group's efforts and who also want to propose their preferred compensation program. Judge Laurie Selber Silverstein of the U.S. Bankruptcy Court in Wilmington, Del. on Tuesday, Sept. 21, 2021, denied a bid by a committee representing abuse victims to delay her consideration of materials the Boy Scouts intend to send victims and other creditors ahead of a vote on a broader restructuring plan that the youth organization is advancing. A lawyer for the committee said it needs more time to review hundreds of pages of documents released by the Boy Scouts just a few days ago. The committee has a pending request to wrest control of the chapter 11 process from the Boy Scouts so a rival restructuring plan can potentially be sent to creditors. Judge Silverstein said during a hearing Tuesday she was mindful of the committee's concerns but that it was important to start the process of addressing legal challenges to the voting documents and make changes to solicitation materials to make it easier for abuse survivors to understand proposed settlements. Disputes over the chapter 11 voting materials follow important financial settlements with insurance carrier Hartford Financial Services Group Inc. and the Church of Jesus Christ of Latter-day Saints, a close partner of the Boy Scouts for decades. Hartford and the Church of Latter-day Saints agreed last week to settle claims by abuse victims for $787 million and $250 million, respectively. Despite opposition from the victims committee, the settlements are supported by law firms representing more than 65,000 of the roughly 82,000 men who have filed claims in the bankruptcy case over childhood sexual abuse. The Boy Scouts are among several nonprofits, including a number of Catholic dioceses and USA Gymnastics, that sought chapter 11 bankruptcy protection to resolve sexual-abuse liabilities. The Boy Scouts filed for chapter 11 protection in February 2020 and has been working to build support for deals to resolve thousands of sexual abuse claims and allow the youth group to emerge from bankruptcy. Tuesday's, September 21, 2021, hearing previewed a looming legal fight with the committee, which said in a court filing last week that the settlements "fail to capture the billions in value they promised would pay the sexual abuse claims of survivors." Committee lawyer Jim Stang said during the hearing that the Boy Scouts must provide abuse survivors with information about how the organization evaluated abuse claims and compare the value of the deals to assets held by the institution, its local councils and religious groups like the Mormon Church that sponsored troops. A lawyer for the Boy Scouts said the youth group will incorporate some suggestions raised by Mr. Stang and others in the final voting materials. Mr. Stang said Tuesday, Sept. 21, 2021, he anticipates the committee will seek discovery into the proposed settlements. The Boy Scouts and the affiliated local councils, which aren't in bankruptcy, have separately agreed to contribute up to $820 million in cash, property and other assets for survivors. Judge Silverstein is expected to continue evaluating the voting materials on Wednesday, September 22, 2021. About Boy Scouts of America The Boy Scouts of America -- https://www.scouting.org/ -- is a federally chartered non-profit corporation under title 36 of the United States Code. Founded in 1910 and chartered by an act of Congress in 1916, the BSA's mission is to train youth in responsible citizenship, character development, and self-reliance through participation in a wide range of outdoor activities, educational programs, and, at older age levels, career-oriented programs in partnership with community organizations. Its national headquarters is located in Irving, Texas. The Boy Scouts of America and affiliate Delaware BSA, LLC, sought Chapter 11 protection (Bankr. D. Del. Lead Case No. 20-10343) on Feb. 18, 2020, to deal with sexual abuse claims. Boy Scouts of America was estimated to have $1 billion to $10 billion in assets and at least $500 million in liabilities as of the bankruptcy filing. The Debtors have tapped Sidley Austin LLP as their bankruptcy counsel, Morris, Nichols, Arsht & Tunnell LLP as Delaware counsel, and Alvarez & Marsal North America, LLC as financial advisor. Omni Agent Solutions is the claims agent. The U.S. Trustee for Region 3 appointed a tort claimants' committee and an unsecured creditors' committee on March 5, 2020. The tort claimants' committee is represented by Pachulski Stang Ziehl & Jones, LLP, while the unsecured creditors' committee is represented by Kramer Levin Naftalis & Frankel, LLP. BOY SCOUTS OF AMERICA: Tort Claimants Tap Claro Group as Consultant ------------------------------------------------------------------- The official tort claimants' committee appointed in the Chapter 11 cases of The Boy Scouts of America and Delaware BSA, LLC seeks approval from the U.S. Bankruptcy Court for the District of Delaware to hire Claro Group, LLC to provide valuation services with respect to the claims filed by sexual abuse victims. The firm's services include: a. expert consulting services and expert testimony regarding valuation of sexual abuse claims filed in the Debtors' Chapter 11 cases; b. expert consulting services and expert testimony in connection with any plan or settlement filed by the Debtors regarding childhood sexual abuse claims; c. expert consulting services and expert testimony in the review and evaluation of reports prepared by the Debtors and their professionals and insurers; d. assisting in the preparation of affidavits or declarations, depositions and briefing concerning issues for which Claro Group is providing expert consulting services; e. assisting in the allocation of claims to potentially available insurance coverage if requested by the tort claimants' committee; f. preparing for and providing deposition and court testimony; and g. other services requested by the tort claimants' committee. The firm's standard hourly rates are as follows: Katie McNally $625 per hour John Cadarette $675 per hour Managing Director $605 to $675 per hour Director $495 per hour Managers/Senior Managers $350 to $395 per hour Analysts/Consultants/ Senior Consultants $265 to $305 per hour Katie McNally, managing director at Claro Group, disclosed in a court filing that her firm is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. The firm can be reached through: Katie McNally The Claro Group, LLC 123 North Wacker Drive, Suite 2100 Chicago, IL 60606 Phone: 312-546-3400/312-546-3426 Mobile: 937-726-3536 Fax: 312-554-8085 Email: kmcnally@theclarogroup.com About The Boy Scouts of America The Boy Scouts of America -- https://www.scouting.org/ -- is a federally chartered non-profit corporation under title 36 of the United States Code. Founded in 1910 and chartered by an act of Congress in 1916, the BSA's mission is to train youth in responsible citizenship, character development, and self-reliance through participation in a wide range of outdoor activities, educational programs, and, at older age levels, career-oriented programs in partnership with community organizations. Its national headquarters is located in Irving, Texas. The Boy Scouts of America and affiliate Delaware BSA, LLC, sought Chapter 11 protection (Bankr. D. Del. Lead Case No. 20-10343) on Feb. 18, 2020, to deal with sexual abuse claims. Judge Laurie Selber Silverstein oversees the cases. The Boy Scouts of America was estimated to have $1 billion to $10 billion in assets and at least $500 million in liabilities as of the bankruptcy filing. The Debtors tapped Sidley Austin LLP as bankruptcy counsel, Morris, Nichols, Arsht & Tunnell LLP as Delaware counsel, and Alvarez & Marsal North America, LLC as financial advisor. Omni Agent Solutions is the claims agent. The U.S. Trustee for Region 3 appointed a tort claimants' committee and an unsecured creditors' committee on March 5, 2020. The tort claimants' committee is represented by Pachulski Stang Ziehl & Jones, LLP, while the unsecured creditors' committee is represented by Kramer Levin Naftalis & Frankel, LLP. BOY SCOUTS: Too Little Info on Plan, Insurers & Claimants Say ------------------------------------------------------------- Rick Archer of Law360 reports that tort claimants and insurers told a Delaware bankruptcy judge Wednesday, September 22, 2021, that the Boy Scouts of America have failed to adequately explain multiple parts of its proposed Chapter 11 plan, including nearly $1.4 billion in recent settlements and how troop sponsors will be treated. The second all-day virtual hearing on the disclosure statement for the BSA's proposed bankruptcy plan also saw objections raised on subjects ranging from claims estimations to trustee appointments and insurance carriers accused of trying to stall the case for their own benefit. About Boy Scouts of America The Boy Scouts of America -- https://www.scouting.org/ -- is a federally chartered non-profit corporation under title 36 of the United States Code. Founded in 1910 and chartered by an act of Congress in 1916, the BSA's mission is to train youth in responsible citizenship, character development, and self-reliance through participation in a wide range of outdoor activities, educational programs, and, at older age levels, career-oriented programs in partnership with community organizations. Its national headquarters is located in Irving, Texas. The Boy Scouts of America and affiliate Delaware BSA, LLC, sought Chapter 11 protection (Bankr. D. Del. Lead Case No. 20-10343) on Feb. 18, 2020, to deal with sexual abuse claims. Boy Scouts of America was estimated to have $1 billion to $10 billion in assets and at least $500 million in liabilities as of the bankruptcy filing. The Debtors have tapped Sidley Austin LLP as their bankruptcy counsel, Morris, Nichols, Arsht & Tunnell LLP as Delaware counsel, and Alvarez & Marsal North America, LLC as financial advisor. Omni Agent Solutions is the claims agent. The U.S. Trustee for Region 3 appointed a tort claimants' committee and an unsecured creditors' committee on March 5, 2020. The tort claimants' committee is represented by Pachulski Stang Ziehl & Jones, LLP, while the unsecured creditors' committee is represented by Kramer Levin Naftalis & Frankel, LLP. BRAZOS ELECTRIC: Seeks to Hire McKool as Special Conflicts Counsel ------------------------------------------------------------------ Brazos Electric Power Cooperative, Inc. seeks approval from the U.S. Bankruptcy Court for the Southern District of Texas to employ McKool Smith PC as special conflicts counsel. The Debtor seeks to employ McKool Smith in connection with potential disputes arising from performance and administration of various pre-bankruptcy transactions and other litigation matters. McKool Smith will render these services: (a) investigate and advise the Debtor with the respect to the viability of the litigation matters, and if so requested, file objections, complaints, and any necessary pleadings; conduct discovery and prepare for trial, trial and prosecute and defend any appeals, as may applicable; (b) interact and coordinate with the Debtor's other professionals in furtherance of the litigation matters; and (c) perform any other necessary legal services. The hourly rates of McKool Smith's counsel are as follows: William D. Wood $1,155 Veronica Manning $750 Thomas Eisweirth $720 Other Attorneys $395 - $1,300 In addition, the firm will seek reimbursement for expenses incurred. McKool Smith provided also provided the following in response to the request for additional information set forth in Paragraph D.1. of the Fee Guidelines: Question: Did you agree to any variations from, or alternative to, your standard or customary billing arrangements for this engagement? Answer: No. Question: Do any of the firm's professionals in this engagement vary their rate based on the geographic location of the Debtor's Chapter 11 case? Answer: No. Question: If the firm has represented the Debtor in the 12 months prepetition, disclose McKool Smith billing rates and material financial terms for the prepetition engagement, including any adjustments during the 12 months prepetition. If the firm's billing rates and material financial terms have changed post-petition, explain the difference and the reasons for the difference. Answer: The firm did not represent the Debtor prepetition. Question: Has your client approved your prospective budget and staffing plan and if so, for what budget period? Answer: The firm has not prepared a budget. William Wood, Esq., a partner at McKool Smith, disclosed in a court filing that the firm is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. The firm can be reached through: William D. Wood, Esq. McKool Smith PC 600 Travis Street, Suite 7000 Houston, TX 77002 Telephone: (713) 485-7300 Facsimile: (713) 485-7344 Email: wwood@McKoolSmith.com About Brazos Electric Power Cooperative Brazos Electric Power Cooperative Inc. is a 3,994-megawatt transmission and generation cooperative which members' service territory covers 68 counties from the Texas Panhandle to Houston. It was organized in 1941 and the first cooperative formed in the Lone Star state with the primary intent of generating and supplying electrical power. At present, Brazos Electric is the largest generation and transmission cooperative in the state and is the wholesale power supplier for its 16 member-owner distribution cooperatives and one municipal system. Brazos Electric filed a voluntary petition for relief under Chapter 11 of the U.S. Bankruptcy Code (Bankr. S.D. Tex. Case No. 21-30725) on March 1, 2021. At the time of the filing, the Debtor disclosed assets of between $1 billion and $10 billion and liabilities of the same range. Judge David R. Jones oversees the case. The Debtor tapped Norton Rose Fulbright US, LLP and O'Melveny & Myers LLP as bankruptcy counsel; Foley & Lardner LLP and Eversheds Sutherland US LLP as special counsel; Collet & Associates LLC as investment banker; and Berkeley Research Group, LLC as financial advisor. Ted B. Lyon & Associates, The Gallagher Law Firm, West & Associates LLP, Butch Boyd Law Firm and Boyd Smith Law Firm, PLLC serve as special litigation counsel and McKool Smith PC serves as special conflicts counsel. Stretto is the claims and noticing agent. The U.S. Trustee for Region 7 appointed an official committee of unsecured creditors in the Debtor's case on March 15, 2021. The committee is represented by the law firms of Porter Hedges, LLP and Kramer, Levin, Naftalis & Frankel, LLP. FTI Consulting, Inc. and Lazard Freres & Co. LLC serve as the committee's financial advisor and investment banker, respectively. BRIGGS & STRATTON: Touts Progress A Year Under KPS -------------------------------------------------- Rich Kirchen, writing for Milwaukee Business Journal, reports that Briggs & Stratton' CEO Steve Andrews says that the company is different after a year of new ownership. On the one-year anniversary of KPS Capital Partners acquiring Briggs & Stratton, the manufacturer's president and CEO Steve Andrews emphasized that Briggs is not "just an engine company" and highlighted progress on electrification, battery power and energy storage. "To go from a company coming out of bankruptcy just one year ago to the company we are today is an impressive feat that couldn't have been done without the group of dedicated and talented employees we have supporting many accomplishments," Andrews said in a video message the Wauwatosa-based company delivered Wednesday morning to employees. KPS Capital is a New York City-based private-equity firm that emerged as the only bidder for Briggs & Stratton after Briggs filed for Chapter 11 reorganization in July 2020. Briggs & Stratton, which had been publicly traded, now is privately held and KPS on Sept. 22, 2020, named Andrews CEO, replacing Todd Teske. The Chapter 11 case allowed Briggs & Stratton to shed about $900 million of debt, which gives Andrews and his team the financial platform to grow the business through new-product development and acquisitions, he said in June 2021 during a Milwaukee Business Journal Power Breakfast. The company's improved balance sheet allowed KPS and Andrews' management team to drop a strategy of the previous management to sell Briggs & Stratton's turf-and-garden product lines. Andrews also in June said the company's new owners are committed to maintaining a strong headquarters and community presence in metropolitan Milwaukee while continuing to hire locally. In response to a Milwaukee Business Journal request for information and comment on the one-year anniversary of the KPS transaction, Briggs & Stratton shared a transcript of Andrews' remarks in the video to employees. He said Briggs & Stratton has redefined what it is beyond its history and reputation as a manufacturer of small internal-combustion engines. "We are NOT just an engine company," he said. "We are a power-agnostic products and technology company and we are building a foundation to ensure we are a sustainable and valuable company for the long term." Among the one-year accomplishments Andrews listed: * Aggressively leaning into electrification including acquiring an equity stake in Accelerated Systems, Inc. of Waterloo, Ontario, which provides Briggs with the capabilities necessary to significantly accelerate its electrification strategy; * Becoming a player in the rapidly growing energy-storage market by acquiring SimpliPhi Power, of Oxnard, California; * Launching new and differentiated products including the Vanguard 10kWh Battery Pack; * Investing millions of dollars in new equipment and technology to enhance operations; * Expanding manufacturing capacity for standby generators at a plant in Auburn, Alabama; * Assembling a new leadership team, including a new supply-chain leadership team; and * Increasing the company's focus on new product development, rolling out a robust new product development and project management process. "New products and technologies must be the lifeblood of the NEW Briggs & Stratton," Andrews said. About Briggs & Stratton Corp. Briggs & Stratton Corporation is a producer of gasoline engines for outdoor power equipment and a designer, manufacturer and marketer of power generation, pressure washer, lawn and garden, turf care, and job site products. The Company's products are marketed and serviced in more than 100 countries on six continents through 40,000 authorized dealers and service organizations. On the Web: https://www.basco.com/ Briggs & Stratton Corporation and four affiliates concurrently filed voluntary petitions for relief under Chapter 11 of the Bankruptcy Code (Bankr. E.D. Mo. Lead Case No. 20-43597) on July 20, 2020. The petitions were signed by Mark A. Schwertfeger, senior vice president and chief financial officer. At the time of the filing, Briggs & Stratton Corporation disclosed total assets of $1,589,398,000 and total liabilities of $1,350,058,000 as of March 29, 2020. Judge Barry S. Schermer oversees the cases. The Debtors tapped Weil, Gotshal & Manges LLP as bankruptcy counsel; Carmody MacDonald P.C. as local counsel; Foley & Lardner LLP as corporate counsel; Houlihan Lokey Inc. as investment banker; Ernst & Young, LLP as restructuring and tax advisor; Deloitte LLP as auditor and tax consultant; and Kurtzman Carson Consultants, LLC as claims and noticing agent. The Office of the U.S. Trustee appointed a committee to represent unsecured creditors in Debtors' Chapter 11 cases. CAJUN COMPANY: Files Supplement to Clarify on Insurance Coverage ---------------------------------------------------------------- The Cajun Company, Inc., filed with the U.S. Bankruptcy Court for the Western District of Louisiana a supplement to its First Amended Plan of Reorganization to clarify, among other things, that there is insurance coverage for non-asbestos personal injury claims, which is provided by The Travelers Indemnity Company or its affiliates. Inspite of Lamorak Insurance Company (one of the Debtor's primary insurers for non-automobile accident claims) being placed in receivership, the Debtor said it has adequate insurance coverage concerning asbestos claims going forward. Travelers and the United States Fidelity and Guaranty Company (USF&G) will supply coverage for some years, the Debtor added. The Debtor also clarified that the terms of the (i) Agreement of Settlement, Compromise and Release between itself and USF&G that was executed in November 2012, and the terms of (ii) the Confidential Settlement Agreement and Release executed in June 2021 between the parties, shall continue after the effective date in full force and effect. A copy of the Plan Supplement is available for free at https://bit.ly/3nW1Api from PacerMonitor.com. About The Cajun Company The Cajun Company -- http://cajunco.net/-- is a family-owned and operated business that provides industrial insulation services. The Cajun Company filed its voluntary petition for relief under Chapter 11 of the Bankruptcy Code (Bankr. W.D. La. 21-50174) on March 26, 2021. Julia E. Davis, corporate secretary and comptroller, signed the petition. At the time of the filing, the Debtor had estimated assets of less than $50,000 and liabilities of between $1 million and $10 million. Judge John W. Kolwe oversees the case. The Debtor tapped H. Kent Aguillard, Esq., as bankruptcy counsel; Darnall, Sikes & Frederick, Inc., as accountant; and Steve Gardes, an accountant practicing in Lafayette, La., as financial consultant. Neuner Pate, Mickey S. deLaup, Esq., and Stephen M. DuValle, Esq., of Maricle & Associates, serve as the Debtor's special counsel. CHARLESTON ORTHODONTIC: Unsecured Creditors Will Get 5% of Claims ----------------------------------------------------------------- Charleston Orthodontic Specialists, LLC, filed with the U.S. Bankruptcy Court for the District of South Carolina a Disclosure Statement in connection with the Plan of Reorganization dated September 20, 2021. On March 24, 2021, the Debtor filed a Voluntary Petition for relief under Chapter 11 of Title 11 of the United States Code. The Debtor continues to operate its business as a Debtor in Possession. Charleston Orthodontic Specialists, Inc., was formed in South Carolina in September, 2016. Its original stockholder was Nicholas Savastano, Jr., DMD ("Dr. Savastano"). Dr. Savastano formed or caused to be formed several other LLCs. Over time, all of the locations were doing business as Charleston Orthodontic Specialists. The source of the Debtor's funds are the patient accounts and patient insurance receivables which generate primarily from the four open locations. For purposes of this Disclosure Statement and the Plan, those parties who allege to have purchased portions of the Debtor's receivables in exchange for immediate cash outlays are referred to as Merchant Capital Account holders, or "MCAs." The Court's ruling on the MCAs' status in this case is crucial to the Debtor's reorganization opportunities. The Plan calls for a 60 month term, with many of the Classes of claims receiving monthly installments and balloon payments at the end of the 60th month. Cash flow statements from the Monthly Operating Reports filed in this case show the actual expenditures and income generated by the Debtor. The Plan Budget shows how the company will fare with the new payouts under the Plan itself. The Plan Budget is derived from anticipated future figures as well as averages from the cash flows for April July, 2021. The Debtor filed a motion to sell certain assets and equipment from the closed locations. The sale is treated specifically with regards to Stearns Equipment. In general, however, in the event that sale does not occur for any reason, then the Debtor abandons those particular assets and equipment from the bankruptcy estate without the need for further Court order. Class 7 relates to the Secured Claim of Pinnacle Bank. The lien serves as collateral for 7 loans with an approximate total balance of $7,123,082. At best, the estimated value of all of the Debtor's assets, subject to this lien, is $2,772,000. The secured portion of the Pinnacle Bank loans is $2,772,000, and the unsecured portion is the remaining balance. Payments will be made in the amount of $20,000.00 per month, applied only to Class 7. Payments will continue for 60 consecutive months after the Effective Date. Classes, 10, 11, 12 ,13 and 14, deal only with the various claims of the Merchant Capital Account parties ("MCAs"), who are in a dispute with the Debtor and Pinnacle as to ownership of portions of the Debtor's receivables. The Debtor offers to pay the claimants in Classes 10, 11, 12 ,13 and 14 the equivalent of 35% of their individual original claims, without interest, in installments over 60 months, with any unpaid balance due in a balloon payment at the end of the 60th month, in a manner similar to the treatment and valuation of Pinnacle's secured claim. Class 22 includes General Unsecured Claims. Participants in this Class include all claimants with unsecured claims not treated specifically within other above Classes. Total claims are $4,747,407. The Class is Impaired. This Class will be paid prorate from the operating funds of the Debtor. The amounts to be distributed are approximately 5% of their allowed claims, without interest, estimated at $3,956 per month to be prorated among the claimants based on their claim amounts. Payments will be made monthly by the Disbursing Agent. Class 23 is Equity Security Holders ("Members") of the Debtor. Participants in this Class include all claimants with membership interests in the Debtor. The only claimant in this Class is Dr. Savastano. This Class is Impaired. Claimants in this Class will not receive any distributions under the Plan. Dr. Savastano will continue to receive his normal salary as an employee of the Debtor. The Plan is to be implemented beginning with the Effective Date. The Debtor will use the funds it has on hand on the Effective Date, after consideration and, as appropriate, toward payment of administrative and priority claims, and to make distributions to holders of Class claims that are allowed. Thereafter, the Debtor will use its net operating funds to make the payments called for in the Plan to the various Classes for a period of 60 consecutive months. At that time, all payments are final and will result in the claims being satisfied in full with prejudice. In addition, the Debtor has or will either sell furniture, fixtures and equipment in the closed business locations, or at other locations if in the best interest of the estate, at best available prices, either by private sale or auction, using the Debtor's business discretion in consultation with Pinnacle Bank. The net proceeds applied to the secured principal portion of the Pinnacle Bank debt. Such payments will not reduce the regularly scheduled payments for Pinnacle Bank as set forth in the Plan. If for any reason another secured creditor makes a claim to some or all of the net proceeds, then the funds will be held in escrow by the Debtor earmarked for the successful recipient of the funds per further order of this Court. A full-text copy of the Disclosure Statement dated Sept. 20, 2021, is available at https://bit.ly/3EJldqA from PacerMonitor.com at no charge. Attorney for Debtor: Ivan N. Nossokoff ID # 2556 IVAN N. NOSSOKOFF, LLC Attorney at Law 4000 Faber Place Drive, Suite 300 North Charleston, SC 29405 Tel: (843) 571-5442 About Charleston Orthodontic Specialists Charleston Orthodontic Specialists, LLC, filed its voluntary petition for relief under Chapter 11 of the Bankruptcy Code (Bankr. D.S.C. Case No. 21-00827) on March 24, 2021. At the time of the filing, the Debtor disclosed up to $10 million in assets and up to $50 million in liabilities. Judge John E. Waites presides over the case. Ivan N. Nossokoff, Esq., at Ivan N. Nossokoff, LLC, represents the Debtor as legal counsel. Creditor, AKF Inc., d/b/a FundKite is represented by Johnson Law Firm, P.A. and Kaminski Law PLLC. Pinnacle Bank, also a creditor, is represented by Parker Poe Adams & Bernstein LLP. CONSENSUS CLOUD: S&P Assigns 'B+' ICR, Outlook Stable ----------------------------------------------------- S&P Global Ratings assigned its 'B+' issuer credit rating to Consensus Cloud Solutions Inc. and its 'B+' issue-level rating and '3' recovery rating to its proposed senior unsecured notes due 2026 and 2028. The '3' recovery rating indicates its expectation for meaningful (50%-70%; rounded estimate: 55%) recovery in the event of a payment default. J2 Global Inc. is planning to spin off its cloud services business into a stand-alone company named Consensus Cloud Solutions Inc. Consensus has proposed issuing $800 million of senior unsecured notes due 2026 and 2028 to complete the transaction. The stable outlook reflects S&P's expectation that upon its spinoff from J2, Consensus will maintain leverage of less than 5x and free operating cash flow (FOCF) to debt of more than 10%. S&P said, "The key constraints for our rating on Consensus include its small scale relative to other rated software companies, its exclusive focus on digital fax solutions, its need to develop new products, and its lack of a track record as a stand-alone company. Nevertheless, the company benefits from a high proportion of recurring revenue, maintains strong levels of probability and cash flow generation, and we believe its fax offerings are becoming increasingly critical for health care customers to transmit data and address challenges from interoperability in doing so. "We believe J2 Global will complete the spin-off transaction in October. In April, J2 Global Inc. announced its intention to turn its cloud fax business into a stand-alone, publicly-traded company through a tax-free spinoff to its shareholders. Under the transaction, J2 will distribute 80.1% of Consensus' shares to its shareholders and retain the remaining 19.9%. The transaction also calls for Consensus to issue a special dividend to the company. The transaction depends on the achievement of several criteria including a private letter ruling from the IRS addressing specific aspects of the spin-off, the receipt of a tax opinion, and a Form 10 registration statement with the SEC. We believe these conditions have been mostly satisfied. Given that Consensus is planning to issue $800 million of unsecured notes, we expect the transaction to close in October." Consensus derives substantially all of its revenue from one product stream. Currently, the company derives a substantial portion of revenue from its cloud fax offerings. S&P said, "In our view, this level of concentration is Consensus' most significant credit risk because its future success depends on both the continued use of cloud fax technologies for messaging and management's ability to retain its position in this market. If the company faced increased competitive pressures or the use of its cloud fax offerings fell out of favor following the emergence of new technologies, we think it would be difficult for it to offset the decline in its revenue. Moreover, given Consensus' small scale, we would also expect a drop in its operating leverage to amplify the adverse effects of increased competition on its profitability and cash flow, which would potentially constrain its ability to invest in new products." Notwithstanding these risks, the ongoing expansion of use cases for its cloud fax offerings among its small office/home office (SOHO), small and mid-size business (SMB), and Enterprise channel clients somewhat mitigates this concentration. For example, the company generated roughly $184 million of revenue from its SOHO channel in fiscal year 2020, which compares with roughly $147 million of total revenue from its corporate channel. The trends and growth prospects for the company's fax solutions in its SoHo and corporate channels are on opposing trajectories. Maia Research estimates that the total addressable market for online fax solutions is approximately $2 billion, which comprises about $500 million for the SoHo market and about $1.5 billion for the corporate cloud fax market. The SoHo market, which includes the company's legacy eFax product (introduced over 25 years ago), has historically contracted by the low-single digit percent area annually. In contrast, the corporate cloud fax market, which has benefited from the favorable secular trends in enterprise data communication, has expanded rapidly in recent years. These trends include digitization, interoperability, data security, green initiatives, and regulations, particularly in the legal, compliance, insurance, and health care industries. The opportunity to address health care interoperability is deeply embedded in the company's operating strategy. The digitization of health care records to streamline workflows and increase efficiency and patient transparency is fueling greater requirements for the creation and storage of data and secure communications, which presents interoperability challenges. S&P said, "Given this shift and the acceptance of fax messaging as one of the most secure methods to transmit health care data under the Health Insurance Portability and Accountability Act (HIPPA), we think this area could provide an attractive growth opportunity for Consensus' existing digital cloud fax technology, which is HITRUST certified. It will also likely provide the company with opportunities to develop new products to expand its total addressable market. We believe this will be a critical component of Consensus' future expansion. One recent example of such an opportunity is the company's Unite health care interoperability platform, which is a comprehensive workflow collaboration and data exchange solutions suite it launched in 2020." Consensus benefits a large proportion of recurring revenue, a highly variable cost structure, and low capital intensity. The company offers its online fax products to customers under contracts containing both fixed components and variable components based on actual usage. According to Consensus, it generates more than 80% of its revenue from fixed-fee subscriptions. While the average tenure of these contracts differs between its SoHo (generally up to a year) and Enterprise channels (typically 2-3 years), the company has historically maintained a stable level of customer churn in the 2% area. Due to the predictable nature of its revenue stream, as well as the company's highly variable cost structure and low capital intensity, it has historically generated strong levels of profitability based on its company-calculated EBITDA margin (in the 55% area) and cash flow generation. S&P said, "We expect Consensus to incur additional corporate costs as it adjusts to operating as a stand-alone public company. We also believe the company will need to increase its investment in its sales force and product development to support its organic growth strategy. Nonetheless, we expect Consensus to sustain S&P Global Ratings-adjusted EBITDA margins of about 50%." S&P said, "We project the company will generate healthy free cash flow and maintain S&P Global Ratings-adjusted leverage of less than 5x. Upon the completion of the spin-off, Consensus expects its company-calculated gross leverage to be about 4x (less than 5x on an S&P Global Rating-adjusted). In our base-case forecast, we assume pro forma S&P Global Ratings-adjusted leverage of around 4.5x as of year-end 2021, improving toward the low 4x area by year-end 2022. We also expect the company to generate at least $80 million of FOCF over the next two years, which will likely translate to free cash flow to debt of about 10% in 2021 and beyond based on its current level of funded debt. "We expect management's financial policies to be supportive of the rating. As a stand-alone company, Consensus has stated it will target maximum gross leverage of 4x over the near term and 3x over the longer term. Although the company lacks a track record of operating as a stand-alone company, we think that investing in its organic growth will be its primary focus because it has no intention of paying a dividend and its debt will not be callable for at least two years. While Consensus could undertake some mergers and acquisitions (M&A), we note that it has not been a heavy acquirer of assets over the past 10 years. Additionally, the restrictions placed on the company to preserve the tax-free nature of the spin-off preclude it from issuing additional equity and also limits the ability to repurchase stock. In addition, it would likely be unable to fund a sizeable transaction. "The qualifications of Consensus' management team and its corporate governance framework appear comparable with those of other publicly traded companies. We expect the company's board to adopt and adhere to corporate governance policies that allow it to effectively oversee management. We also expect Consensus' board to comprise up to six directors initially--consistent with NASDAQ's listing requirements--the majority of which will be independent. These directors will serve in staggered terms until 2026, under which one-third of the total number of directors will come up for reelection in either 2022, 2023 or 2024. The company also intends to establish an environmental, social, and corporate governance subcommittee and other typical subcommittees such as an audit compensation committee, which is required for public companies. Additionally, we believe Consensus' announced management team, including Scott Turicchi as CEO, John Nebergall as COO, and Jeffrey Sullivan as CTO (all of whom are coming from J2 Global), has the expertise and necessary qualifications to operate the company. "The stable outlook reflects our expectation that upon its spinoff from J2, Consensus will maintain leverage of less than 5x and free operating cash flow (FOCF) to debt of more than 10%.. "We could lower our rating on Consensus if its revenue or profitability are weaker than we expect such that its S&P Global Ratings-adjusted leverage rises above 5x or its FOCF to debt declines toward the mid-single-digit percent area absent prospects for improvement." An upgrade is unlikely over the next 24 months given Consensus' lack of prepayable debt and limited scale and product diversity. Before upgrading the company, we would require it to sustain leverage of less than 4x and demonstrate a strong expansion in its corporate business and a reduced dependence on its online fax product. COPPER MECHANICAL: Seeks to Hire Wisdom Professional as Accountant ------------------------------------------------------------------ Copper Mechanical, Inc. seeks approval from the U.S. Bankruptcy Court for the Eastern District of New York to employ Wisdom Professional Services Inc. as its accountant. Wisdom Professional will render these services: (a) gather and verify all pertinent information required to compile and prepare monthly operating reports; (b) prepare monthly operating reports for the Debtor in Bankruptcy Case No. 1-21-41797-nhl. Wisdom Professional will be compensated for its services at the rate of $275 per report. In addition, the firm will be reimbursed for expenses incurred. Michael Shtarkman, a certified public accountant at Wisdom Professional Services, disclosed in a court filing that the firm is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. The firm can be reached through: Michael Shtarkman, CPA Wisdom Professional Services Inc. 626 Sheepshead Bay Road, Suite 640 Brooklyn, NY 11224 Telephone: (718) 554-6672 Facsimile: (718) 954-8994 Email: mshtarkmancpa@gmail.com About Copper Mechanical Copper Mechanical, Inc. sought Chapter 11 protection (Bankr. E.D.N.Y. Case No. 21-41797) on July 12, 2021, listing under $1 million in both assets and liabilities. Judge Nancy H. Lord oversees the case. The Debtor tapped the Law Offices of Alla Kachan, PC as counsel and Wisdom Professional Services Inc. as accountant. COPPER MECHANICAL: Seeks to Tap Alla Kachan as Bankruptcy Counsel ----------------------------------------------------------------- Copper Mechanical, Inc. seeks approval from the U.S. Bankruptcy Court for the Eastern District of New York to employ the Law Offices of Alla Kachan, PC as its legal counsel. The firm will render these legal services: (a) assist the Debtor in administering this Chapter 11 case; (b) make such motions or take such action as may be appropriate or necessary under the Bankruptcy Code; (c) represent the Debtor in prosecuting adversary proceedings to collect assets of the estate and such other actions as the Debtor deem appropriate; (d) take such steps as may be necessary for the Debtor to marshal and protect the estate's assets; (e) negotiate with the Debtor's creditors in formulating a plan of reorganization for the Debtor in this case; (f) draft and prosecute the confirmation of the Debtor's plan of reorganization in this case; and (g) render such additional services as the Debtor may require in this case. The hourly rates of the firm's counsel and staff are as follows: Attorneys $475 Clerks/Paraprofessionals $250 In addition, the firm will be reimbursed for expenses incurred. The Debtor paid the firm an initial retainer of $15,000. Alla Kachan, Esq., a member of the Law Offices of Alla Kachan, disclosed in a court filing that the firm is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. The firm can be reached through: Alla Kachan, Esq. Law Offices of Alla Kachan, PC 2799 Coney Island Avenue, Suite 202 Brooklyn, NY 11235 Telephone: (718) 513-3145 Email: alla@kachanlaw.com About Copper Mechanical Copper Mechanical, Inc. sought Chapter 11 protection (Bankr. E.D.N.Y. Case No. 21-41797) on July 12, 2021, listing under $1 million in both assets and liabilities. Judge Nancy H. Lord oversees the case. The Debtor tapped the Law Offices of Alla Kachan, PC as counsel and Wisdom Professional Services Inc. as accountant. D. INTERNATIONAL: Court Rejects UST's Bid to Convert or Dismiss --------------------------------------------------------------- Judge Vincent P. Zurzolo of the U.S. Bankruptcy Court for the Central District of California denied as moot the motion of the United States Trustee to convert, dismiss or appoint a Chapter 11 Trustee for D. International Services LLC, the Court having dismissed the Debtor's case, with a 180-day prohibition against being a debtor, on September 14, 2021. A copy of the order is available for free at https://bit.ly/3zFuKLK from PacerMonitor.com. About D. International Services LLC D. International Services is engaged in activities related to real estate. The company sought Chapter 11 protection (Bankr. C.D. Cal. Case No. 21-15793) on July 19, 2021. In the petition signed by Greta Curtis, managing member, the Debtor estimated $1 million to $10 million in both assets and liabilities. Judge Vincent P. Zurzolo is assigned to the case. Law Offices of Eric O. Ibisi, A Professional Corporation is the Debtor's counsel. DAVIDZON MEDIA: Hearing Today on Continued Cash Collateral Access ----------------------------------------------------------------- The U.S. Bankruptcy Court for the Eastern District of New York has authorized Davidzon Media, Inc. and affiliates to use cash collateral on an interim basis and provide related relief through September 24, 2021. The Debtor is authorized to use cash collateral in accordance with the approved budget, with a 10% variance. The Permitted Variance will be tested at the end of each week beginning with the end of the first week of May 2021, both for the preceding week and cumulatively from the date of the Interim Order through the end of the most recently completed week. As adequate protection and security for the payment of the Adequate Protection Obligations, Great Elm Capital Corp., the prepetition secured lender, on account of the Loan Agreement and the Prepetition Liens, is granted a valid, perfected replacement security interest in and lien on all of the Prepetition Collateral, subject and subordinate only to the Carve Out. The Adequate Protection Obligations will constitute superpriority claims as provided in section 507(b) of the Bankruptcy Code. The Debtors will pay Great Elm $55,000 by wire transfer in immediately available funds on the first Tuesday of each month following entry of the Interim Order. As adequate protection, the Debtors will pay Great Elm $55,000 by wire transfer in immediately available funds on the first Tuesday of each month following entry of the Interim Order. The Court's order provides for a carve-out consisting of all fees required to be paid to the Clerk of the Court and to the United States Trustee under applicable law and in the event that one or more of the Cases converts to chapter 7, an additional amount of $3,000 for a Chapter 7 Trustee appointed in such case. These events constitute Events of Default: (a) Any Case will be dismissed or converted to a case under chapter 7 of the Bankruptcy Code, except to the extent Great Elm consents to such dismissal or conversion; (b) The Interim Order will be stayed, amended, modified, reversed, or vacated without the written consent of Great Elm, which stay is not vacated, or which amendment, modification, reversal, or vacatur is not stayed within three business days following the imposition of such stay or the effective date of such amendment, modification, reversal or vacatur; (c) Any Prepetition Collateral is sold without the prior written consent of Great Elm; (d) Any Debtor will file any application in support of any of (a) through (c) above; (e) Any Debtor's filing of a motion to appoint, any other party's filing of a motion to appoint if such motion is not resolved within 30 days, or the appointment of, a trustee or examiner with expanded powers in any Case; (f) Any Debtor's filing of a motion or other pleading seeking to grant a lien on the Prepetition Collateral that is equal or senior to the Prepetition Liens; (g) The Court's entry of an order granting relief from the automatic stay to allow for foreclosure on any Prepetition Collateral with an aggregate book value in excess of $25,000; (h) Any Debtor's failure to perform, in any respect, any of the terms, conditions, covenants, or obligations under the Interim Order. A further hearing on the Debtors' application to use Cash Collateral is scheduled for September 24 at 2 p.m. A copy of the order and the Debtor's budget is available for free at from https://bit.ly/3zERGudPacerMonitor.com. The Debtor projects $880,000 in total receipts and $859,925.16 in total disbursements for the period from May 7 to September 24, 2021. About Davidzon Media Davidzon Media, Inc. filed a voluntary petition for relief under Chapter 11 of the Bankruptcy Code (Bankr. E.D.N.Y. Case No. 21-40308) on Feb. 8, 2021. Grigory Davidzon, president, signed the petition. At the time of filing, the Debtor disclosed less than $50,000 in assets and between $1 million and $10 million in liabilities. Judge Elizabeth S. Stong oversees the case. The Law Offices of Alla Kachan, PC serves as the Debtor's counsel. DUNBAR PLAZA: Case Summary & 4 Unsecured Creditors -------------------------------------------------- Debtor: Dunbar Plaza, Inc. 1007 Dunbar Avenue Dunbar, WV 25064 Business Description: Dunbar Plaza, Inc. is a Single Asset Real Estate debtor (as defined in 11 U.S.C. Section 101(51B)). Chapter 11 Petition Date: September 23, 2021 Court: United States Bankruptcy Court Southern District of West Virginia Case No.: 21-20221 Debtor's Counsel: Joseph W. Caldwell, Esq. Matthew M. Johnson, Esq. CALDWELL & RIFFEE, PLLC 3818 MacCorkle Ave. S.E. Suite 101 Post Office Box 4427 Charleston, WV 25364-4427 Tel: (304) 925-2100 E-mail: joecaldwell@frontier.com mjohnson@caldwellandriffee.com Estimated Assets: $1 million to $10 million Estimated Liabilities: $1 million to $10 million The petition was signed by Carl Higginbotham as president. A copy of the Debtor's list of four unsecured creditors is available for free at PacerMonitor.com at: https://www.pacermonitor.com/view/GSOIM5A/Dunbar_Plaza_Inc__wvsbke-21-20221__0002.0.pdf?mcid=tGE4TAMA A full-text copy of the petition is available for free at PacerMonitor.com at: https://www.pacermonitor.com/view/M2ZYCLI/Dunbar_Plaza_Inc__wvsbke-21-20221__0001.0.pdf?mcid=tGE4TAMA ERIN ENERGY: Delaware Justices Urged to Save Suit ------------------------------------------------- Jeff Montgomery of Law360 reports that attorneys for stockholders in a company forced into bankruptcy while suing its controller over a disastrous deal urged Delaware's Supreme Court on Wednesday to undo a key dismissal ruling, warning that past decisions had trapped the business in a legal "black hole". David Tejtel of Friedman Oster & Tejtel PLLC, counsel to Erin Energy Corp.'s Chapter 7 trustee and stockholders, told a three-justice panel that the court should use a rarely exercised "relief from judgment" rule to rescue the Chancery Court case under appeal and put it back on a different procedural track. About Erin Energy Houston, Texas-based Erin Energy Corporation (NYSE American:ERN) (JSE:ERN) -- http://www.erinenergy.com/-- was an independent oil and gas exploration and production company focused on energy resources in sub-Saharan Africa. Its asset portfolio consisted of five licenses across three countries covering an area of 6,100 square kilometers, including current production and other exploration projects offshore Nigeria, as well as exploration licenses offshore Ghana and The Gambia. As of March 31, 2018, the Debtors disclosed $247.5 million in assets and $628.7 million. Erin Energy Corporation and its affiliates sought protection under Chapter 11 of the Bankruptcy Code (Bankr. S.D. Tex. Lead Case No. 18-32106) on April 25, 2018. Judge Marvin Isgur presided over the cases. The Debtors tapped Okin & Adams LLP as their legal counsel, and The Loev Law Firm, PC, as their securities law counsel. The case was converted to a Chapter 7 liquidation on July 13, 2018. Ronald J. Sommers was named the Chapter 7 trustee. The Trustee first hired Kyung S. Lee PLLC as general counsel, but later replaced the firm with Parkins Lee & Rubio LLP. FABMETALS INC: Seeks to Hire Coolidge Wall Co. as Legal Counsel --------------------------------------------------------------- FabMetals, Inc. seeks approval from the U.S. Bankruptcy Court for the Southern District of Ohio to hire Coolidge Wall Co., L.P.A. to serve as legal counsel in its Chapter 11 case. The firm's services include: a. advising the Debtor of its powers and duties in the continued management and operation of its business; b. attending meeting and negotiating with representatives of creditors and other parties of interest; c. taking all necessary action to protect and preserve the Debtor's estate, including the prosecution of actions on the Debtor's behalf, the defense of any action commenced against the Debtor, negotiations concerning all litigation in which the Debtor is involved, and objections to claims filed against the estate; d. preparing legal papers; e. preparing a plan of reorganization and all related documents and taking any necessary action to obtain confirmation of the plan; f. advising the Debtor in connection with any potential sale of its assets; g. appearing before the bankruptcy court, any appellate courts and the Office of the U.S. Trustee; h. consulting with the Debtor regarding tax matters; and i. performing all other necessary legal services. The firm holds a retainer in the amount of $30,266.50. As disclosed in court filings, Coolidge Wall is a disinterested person within the meaning of Section 101(14) of the Bankruptcy Code. The firm can be reached through: Patricia J. Friesinger, Esq. Coolidge Wall Co., L.P.A. 33 W. First Street, Ste. 200 Dayton, OH 45402 Tel: (937) 449-5776 Fax: (937) 223-6705 Email: friesinger@coollaw.com About FabMetals Inc. New Carlisle, Ohio-based FabMetals, Inc. filed a petition for Chapter 11 protection (Bankr. S.D. Ohio Case No. 21-31583) on Sept. 17, 2021, listing as much as $10 million in both assets and liabilities. FabMetals President Tommy Hensley signed the petition. Judge Guy R. Humphrey oversees the case. Patricia J. Friesinger, Esq., at Coolidge Wall Co., L.P.A. is the Debtor's legal counsel. FLIX BREWHOUSE: Seeks to Hire Ferguson as Co-Counsel ---------------------------------------------------- Flix Brewhouse NM, LLC seeks approval from the U.S. Bankruptcy Court for the Western District of Texas to employ Ferguson Braswell Fraser Kubasta, PC as co-counsel with Sugar Felsenthal Grais & Helsinger, LLP. The firm's services include: (a) advising the Debtor of its powers and duties in the continued management and operation of its business and property; (b) attending meetings and negotiating with creditor representatives and other parties in interest, and advising and consulting with the Debtor on the conduct of the case, including all of the legal and administrative requirements of operating in Chapter 11; (c) taking appropriate action to protect and preserve the Debtor's assets, including prosecuting actions on behalf of the estate, defending actions commenced against the estate, negotiating any litigation in which the Debtor may be involved, and objections to claims filed against the estate; (d) preparing legal papers; (e) advising the Debtor with respect to its executory contracts and unexpired leases, and seeking court approval to assume or reject each, as appropriate; (f) appearing before the court; and (g) performing other necessary legal services. Ferguson will be paid at the rate of $500 per hour and reimbursed for out-of-pocket expenses incurred. The firm received from the Debtor a retainer of $10,000. Rachael Smiley, Esq., a partner at Ferguson, disclosed in a court filing that the firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. The firm can be reached at: Rachael Smiley, Esq. Ferguson Braswell Fraser Kubasta PC 2500 Dallas Pkwy Plano, TX 75093 Tel: (972) 378-9111 Fax: (972) 378-9115 Email: rsmiley@fbfk.law About Flix Brewhouse NM LLC Flix Brewhouse NM LLC is a New Mexico limited liability company that operates a dine-in cinema under the name "Flix Brewhouse," located in the Village @ La Orilla commercial real estate development in Albuquerque, N.M. It is a wholly owned subsidiary of Flix Brewhouse Holdco LLC, which is a wholly owned subsidiary of Flix Entertainment LLC. Flix Entertainment in turn owns several other direct and indirect subsidiary entities that operate Flix Brewhouse locations across the Southwestern and Midwestern U.S. Flix Brewhouse NM's business is multifaceted, consisting of an eight-screen luxury dine-in movie theater showing first-run films to consumer audiences, a lounge and a craft microbrewery producing Flix Brewhouse-branded beer. On Sept. 10, 2021, Flix Brewhouse NM filed a petition for Chapter 11 protection (Bankr. W.D. Texas Case No. 21-30676), listing as much as $10 million in both assets and liabilities. Allan L. Reagan, president of Flix Brewhouse NM, signed the petition. The Debtor is represented by Ferguson Braswell Fraser Kubasta, PC and Sugar Felsenthal Grais and Helsinger, LLP as legal counsel. HMP Advisory Holdings, LLC, doing business as Harney Partners, is the financial advisor. On Sept. 13, 2021, the U.S. Trustee for Region 6 appointed Michael Colvard to serve as Subchapter V trustee. FLIX BREWHOUSE: Seeks to Hire Sugar Felsenthal as Legal Counsel --------------------------------------------------------------- Flix Brewhouse NM, LLC seeks approval from the U.S. Bankruptcy Court for the Western District of Texas to employ Sugar Felsenthal Grais & Helsinger, LLP to serve as legal counsel in its Chapter 11 case. The firm's services include: (a) advising the Debtor of its powers and duties in the continued management and operation of its business and property; (b) attending meetings and negotiating with creditor representatives and other parties in interest, and advising and consulting with the Debtor on the conduct of the case, including all of the legal and administrative requirements of operating in Chapter 11; (c) taking appropriate action to protect and preserve the Debtor's assets, including prosecuting actions on behalf of the estate, defending actions commenced against the estate, negotiating any litigation in which the Debtor may be involved, and objections to claims filed against the estate; (d) preparing legal papers; (e) advising the Debtor with respect to its executory contracts and unexpired leases, and seeking court approval to assume or reject each, as appropriate; (f) appearing before the court; and (g) performing other necessary legal services. The firm's hourly rates are as follows: Partners $500 to $600 per hour Associates $350 per hour Paralegals $50 to $300 per hour The Debtor received from the Debtor a retainer of $125,000. Jonathan Friedland, Esq., a partner at Sugar Felsenthal Grais & Helsinger, 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: Jonathan P. Friedland, Esq. Jack O'Connor, Esq. Mark Melickian, Esq. Sugar Felsenthal Grais & Helsinger LLP 30 N. LaSalle St., Ste. 3000 Chicago, IL 60602 Tel: 312.704.9400 Fax: 312.704.9400 Email: jfriedland@sfgh.com joconnor@sfgh.com mmelickian@sfgh.com About Flix Brewhouse NM LLC Flix Brewhouse NM LLC is a New Mexico limited liability company that operates a dine-in cinema under the name "Flix Brewhouse," located in the Village @ La Orilla commercial real estate development in Albuquerque, N.M. It is a wholly owned subsidiary of Flix Brewhouse Holdco LLC, which is a wholly owned subsidiary of Flix Entertainment LLC. Flix Entertainment in turn owns several other direct and indirect subsidiary entities that operate Flix Brewhouse locations across the Southwestern and Midwestern U.S. Flix Brewhouse NM's business is multifaceted, consisting of an eight-screen luxury dine-in movie theater showing first-run films to consumer audiences, a lounge and a craft microbrewery producing Flix Brewhouse-branded beer. On Sept. 10, 2021, Flix Brewhouse NM filed a petition for Chapter 11 protection (Bankr. W.D. Texas Case No. 21-30676), listing as much as $10 million in both assets and liabilities. Allan L. Reagan, president of Flix Brewhouse NM, signed the petition. The Debtor is represented by Ferguson Braswell Fraser Kubasta, PC and Sugar Felsenthal Grais and Helsinger, LLP as legal counsel. HMP Advisory Holdings, LLC, doing business as Harney Partners, is the financial advisor. On Sept. 13, 2021, the U.S. Trustee for Region 6 appointed Michael Colvard to serve as Subchapter V trustee. FLIX BREWHOUSE: Taps HMP Advisory Holdings as Financial Advisor --------------------------------------------------------------- Flix Brewhouse NM, LLC seeks approval from the U.S. Bankruptcy Court for the Western District of Texas to employ HMP Advisory Holdings, LLC as its financial advisor. The firm's services include: (a) assisting the Debtor in the preparation of monthly operating reports and other reports required to be filed in connection with its Chapter 11 case; (b) assisting the Debtor and its legal counsel in seeking court approval for debtor-in-possession financing; (c) assisting the Debtor in developing and maintaining 13-week cash forecasts, any budget-to actual reporting, or other reporting required by potential debtor-in-possession financing; (d) assisting in the formulation of a plan of reorganization, including the preparation of financial projections, liquidation analysis, claims analysis and reconciliation, and other analysis, as needed; (e) assisting the Debtor and its legal counsel, as requested, to prepare for the "Section 341" meeting of creditors and to complete the initial interview questionnaire, schedules of assets and liabilities, and statement of financial affairs; and (f) providing other financial advisory services. The firm's hourly rates are as follows: President/EVP $600 per hour Support Staffs $80 per hour HMP received from the Debtor a retainer of $15,000. The firm will also receive reimbursement for out-of-pocket expenses incurred. Erik White, a partner at HMP, 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: Erik White HMP Advisory Holdings, LLC dba Harney Partners 3800 N. Lamar Blvd. Suite 200 Austin, TX 78576-0003 Office: (512) 592-7740 Mobile: (734) 494-2160 Email: ewhite@harneypartners.com About Flix Brewhouse NM LLC Flix Brewhouse NM LLC is a New Mexico limited liability company that operates a dine-in cinema under the name "Flix Brewhouse," located in the Village @ La Orilla commercial real estate development in Albuquerque, N.M. It is a wholly owned subsidiary of Flix Brewhouse Holdco LLC, which is a wholly owned subsidiary of Flix Entertainment LLC. Flix Entertainment in turn owns several other direct and indirect subsidiary entities that operate Flix Brewhouse locations across the Southwestern and Midwestern U.S. Flix Brewhouse NM's business is multifaceted, consisting of an eight-screen luxury dine-in movie theater showing first-run films to consumer audiences, a lounge and a craft microbrewery producing Flix Brewhouse-branded beer. On Sept. 10, 2021, Flix Brewhouse NM filed a petition for Chapter 11 protection (Bankr. W.D. Texas Case No. 21-30676), listing as much as $10 million in both assets and liabilities. Allan L. Reagan, president of Flix Brewhouse NM, signed the petition. The Debtor is represented by Ferguson Braswell Fraser Kubasta, PC and Sugar Felsenthal Grais and Helsinger, LLP as legal counsel. HMP Advisory Holdings, LLC, doing business as Harney Partners, is the financial advisor. On Sept. 13, 2021, the U.S. Trustee for Region 6 appointed Michael Colvard to serve as Subchapter V trustee. FLUSHING LANDMARK: Taps Giambalvo, Stalzer & Co. as Accountant -------------------------------------------------------------- Flushing Landmark Realty Mezz, LLC seeks approval from the U.S. Bankruptcy Court for the Eastern District of New York to employ Giambalvo, Stalzer & Company, CPAs, PC as its accountant. The firm will render these services: (a) give the Debtor accounting advice with respect to the preparation of tax returns; (b) assist the Debtor and its counsel in preparing tax returns; and (c) assist the Debtor in minimizing taxes from the sale of assets. The hourly rates of the firm's professionals are as follows: Principals $350 Senior Manager $275 Manager $250 Senior Accountant $275 Staff Accountant $135 Administrative Staff $120 In addition, the firm will seek reimbursement for expenses incurred. As disclosed in court filings, Giambalvo is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. The firm can be reached at: Giambalvo, Stalzer & Company, CPAs, PC 3500 Sunrise Highway Suite 100, Building 200 Great River, NY, 11739 Telephone: (631) 321-8000 Facsimile: (631) 321-8075 Email: info@gsco-cpas.com About Flushing Landmark Realty Mezz Flushing Landmark Realty Mezz LLC, a Flushing, New York-based company engaged in the business of constructing and managing real properties, filed a petition under Chapter 11 of the Bankruptcy Code (Bankr. E.D.N.Y. Case No. 20-72404) on July 8, 2020, disclosing assets of up to $50,000 and liabilities of up to $50 million. Myint Kyaw, managing member, signed the petition. Judge Robert E. Grossman oversees the case. The Debtor tapped Weinberg, Gross & Pergament LLP, and Macco Law Group, LLP, as legal counsel and Giambalvo, Stalzer & Company, CPAs, PC as accountant. G & J TRANSPORTATION: Taps Victor W. Dahar as Legal Counsel ----------------------------------------------------------- G & J Transportation, LLC seeks approval from the U.S. Bankruptcy Court for the District of New Hampshire to hire Victor W. Dahar, P.A. to serve as legal counsel in its Chapter 11 case. The firm's services include: a. assisting the Debtor in the preparation and review of bankruptcy schedules and monthly operating reports; b. attending Section 341 meeting with the Debtor and satisfying the requirements of the U.S. Trustee in Chapter 11 reorganizations; c. preparing a Chapter 11 plan and disclosure statement; d. preparing objections to motions for relief from stay and advising the Debtor on pending issues as they arise; e. representing the Debtor in turnover, preference actions and other avoidance or subordination actions; f. representing the Debtor in the sale of its property and in litigation matters; g. negotiating with the creditors' committee, if any, and creditors, as necessary; and h. providing all other necessary legal services. Eleanor Wm. Dahar, Esq., at Victor W. Dahar, disclosed in court filings that her firm is "disinterested" within the meaning of Section 101(14) of the Bankruptcy Code. The firm can be reached through: Eleanor Wm. Dahar, Esq. Victor W. Dahar, P.A. 20 Merrimack Street Manchester, NH 03101 Phone: (603) 622-6595 Fax: (603) 647-8054 Email: vdaharpa@att.net About G & J Transportation G & J Transportation, LLC is a New Hampshire-based company that provides transportation services to Whiteman Family Wood Processing, LLC. G & J filed a petition for Chapter 11 protection (Bankr. D. N.H. Case No. 21-10544) on Sept. 10, 2021, listing $773,364 in total assets and $1,219,603 in total liabilities. George G. Whiteman, Jr., owner, signed the petition. Judge Bruce A. Harwood oversees the case. Victor W. Dahar, Professional Association is the Debtor's legal counsel. GCI LLC: S&P Hikes ICR to 'B+' on Broadband Growth, Outlook Stable ------------------------------------------------------------------ S&P Global Ratings raising all ratings on U.S.-based wireless and cable provider GCI LLC one notch, including the issuer credit rating to 'B+' from 'B'. The stable outlook reflects downside cushion in the rating provided by an ability to continue to reduce leverage through solid free operating cash flow (FOCF) generation, offset by the company operating with leverage between 3x-4x that limits ratings upside. The upgrade primarily reflects improved credit metrics enabled by strong growth in GCI's broadband business combined with debt reduction. S&P said, "We expect leverage to decrease to about 3.0x by fiscal year-end 2021 from 3.4x as of June 30, 2021, on low-double-digit percent earnings growth and continued debt repayment. GCI expects to collect about $96 million of account receivable associated with its Rural Health Care (RHC) customers for the funding year that ended on June 30, 2021, which we expect it will use to pay down its revolving credit facility." S&P said, "Our base-case forecast assumes adjusted debt to EBITDA will remain in the 3.0x area in 2022 on flat to low-single-digit-percent EBITDA declines driven by a modest reduction in revenue following outsized growth in 2021, partially offset by moderate debt amortization. "We believe the company is comfortable operating at adjusted leverage of 3x to 4x. Although we expect leverage to be at the lower end of this range over the next 12 months, we believe the company could increase leverage to the upper end for tuck-in acquisitions. Modest distributions to the parent, Liberty Broadband, are also possible but we view this as unlikely over the next year because we forecast that Charter Communications Inc. will continue to engage in robust share repurchase activity. Given that Liberty Broadband is not permitted to hold more than a 26% stake in Charter, we expect the parent to monetize a portion of its Charter stock over the next year. "GCI's residential broadband moat provides a hedge against video cord-cutting. We believe the abundance of available online streaming alternatives will contribute to video subscriber losses in the mid- to high-teen percent area. Furthermore, we expect consumer voice access lines will decline about 8%-10% annually due to wireless substitution. Still, GCI should be able to offset the earnings and cash flow volatility from residential video cord-cutting and voice disconnects with its high-margin broadband offering, which is necessary to stream video. We expect the company's consumer broadband revenue to increase at a healthy pace for at least the next couple of years due to rate increases and subscriber growth as it takes share from its telecom competitors that use copper-based infrastructure with inferior data speeds. "We believe Liberty Broadband would support GCI in periods of temporary stress. We believe the parent could provide temporary support, given GCI is the only cash-generating asset of Liberty Broadband. That said, the $34 billion in unencumbered assets at Liberty Broadband are not pledged to GCI creditors. GCI only accounts for a small portion of Liberty's enterprise value, and there are no contractual requirements between GCI and Liberty to provide support. Therefore, we believe the equity stakes will not be used for the benefit of GCI creditors unless GCI's operating and financial performance deteriorates significantly, with prospects for recovery. "The stable outlook on GCI is based on our expectation that the company's leverage will decline modestly to the low-3x area over the next year as limited earnings growth is partially offset by solid FOCF generation, a portion of which we expect will go to debt repayment. However, financial policy constraints, including the longer-term potential for cash to be upstreamed to the parent, limit ratings upside. "We could raise our rating on GCI on improved geographic diversification and reduced exposure to government subsidy revenue, which would reflect an improved business risk profile. "Although unlikely in the near-term, we could lower the rating if deteriorating top-line trends and lower earnings limit FOCF and push leverage to 4.5x. This would likely be due to significant subsidy losses combined with higher customer churn on video and voice. We could also lower the rating if the company completes a debt-financed dividend that pushes leverage above 4.5x." GENESIS ENERGY: S&P Downgrades ICR to 'B', Outlook Stable --------------------------------------------------------- S&P Global Ratings lowered its issuer credit rating on Houston-based Genesis Energy L.P. and its rating on the senior unsecured notes to 'B' from 'B+'. The '3' recovery rating on the notes is unchanged. The stable outlook reflects S&P's expectation that Genesis' adjusted leverage will continue to be above 6x through 2022. Genesis Energy L.P.'s covenant stepdowns could be pressured by slower recoveries in its offshore and soda ash segments. As a result of its refinancing transactions earlier this year, Genesis has pushed its next upcoming maturity to 2024 and increased its cushion relative to its covenant requirements. However, after June 30, 2021, Genesis' consolidated leverage ratio steps down to 5.75x through March 31, 2022, and then 5.5x thereafter. Genesis' covenant calculations exclude the preferred units from its debt calculation. However, if segment margins in the offshore and sodium minerals and sulfur services segments remain challenged, Genesis may have less cushion to meet its covenant requirements. Genesis' pipeline volumes depend on exploration and production (E&P) companies' drilling and production rates. S&P said, "We expect growth of 10%-20% in Genesis' offshore segment in 2021 despite the outages on the Cameron Highway pipeline system (CHOPS) pipeline from damages due to the 2020 hurricane season. Furthermore, we expect further growth in this segment once King's Quay and Argos, two large contracted upstream developments, begin service in 2022. However, any delays in the start date of these contracts could pressure Genesis' cash flow generation. Most of Genesis' offshore pipeline contracts are with investment-grade E&P companies that operate in the Gulf Coast, where those contracts are mostly throughput-based and naturally more risky than take-or-pay contracts, which are independent of volumes transported. We believe the decisions E&P companies make based on drilling economics in various cycles could partially affect Genesis' volumes and profitability." S&P said, "We expect soda ash demand and pricing to return to pre-pandemic levels by 2023. Genesis is one of the market leaders in the soda ash production business. We view Genesis' diversification in the soda ash business as a credit positive compared to its midstream peers. The sodium mineral segment (in which the soda ash production is the largest contributor) represents around 21% of Genesis' total margin. The company, which exports around 50% of its total production, benefits from being a low-cost producer. Natural soda ash is cheaper to produce than synthetic soda ash produced in China. However, this segment was hit the hardest by the COVID-19 pandemic and as a result, the company took its Granger facility in Wyoming offline. We expect the Granger facility to resume operations after the completion of its expansion project in the second half of 2023 and will increase Genesis' soda ash production by 1.2 million tons per year. "The stable outlook reflects our view that Genesis' adjusted leverage will continue to be above 6x through 2022. Our calculations consider Genesis' preferred units as 100% debt given its ownership of two investors or less." S&P could lower the ratings if: -- S&P expects leverage to be above 7x through 2022. This may stem from lower-than-expected volumes flowing through Genesis midstream assets or a less robust recovery in soda ash prices and demand; or -- Genesis faces liquidity issues. S&P could raise the rating if: -- Adjusted debt to EBITDA is consistently below 6x. This may stem from the combined effect of additional debt paydown, improved cash flows, and faster recovery to soda ash prices. GORHAM PAPER: Taps Donlin Recano as Administrative Advisor ---------------------------------------------------------- Gorham Paper and Tissue, LLC and White Mountain Tissue, LLC seek approval from the U.S. Bankruptcy Court for the District of Delaware to hire Donlin, Recano & Company, Inc. as their administrative advisor. The firm's services include: a. assisting in the solicitation, balloting, tabulation and calculation of votes, as well as preparing any appropriate reports in support of confirmation of a Chapter 11 plan; b. preparing an official ballot certification and, if necessary, testifying in support of the ballot tabulation results; c. handling requests for documents from parties in interest in connection with the balloting services; and d. providing other bankruptcy administrative services. Donlin Recano will be paid based upon its normal and usual hourly billing rates and will be reimbursed for out-of-pocket expenses incurred. The retainer fee is $10,000. Nellwyn Voorhies, president of Donlin Recano, disclosed in a court filing that the firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. The firm can be reached at: Nellwyn Voorhies Donlin Recano & Company, Inc. 6201 15th Avenue Brooklyn, NY 11219 Tel: (800) 591-8236 About Gorham Paper and Tissue Founded in 2011, Gorham Paper and Tissue LLC -- http://www.gorhampt.com/-- operates a paper mill and manufactures customized tissues, towels and specialty packagings. It is headquartered in Gorham, N.H. Gorham Paper and Tissue and affiliate White Mountain Tissue, LLC, sought Chapter 11 protection (Bankr. D.N.H. Lead Case No. 20 12814 and 20-12815) on Nov. 4, 2020. Gorham Paper was estimated to have assets of $1 million to $10 million and liabilities of $50 million to $100 million. Judge Karen B. Owens oversees the cases. The Debtors tapped Bernstein, Shur, Sawyer & Nelson, P.A. as bankruptcy counsel, Polsinelli PC as local counsel, and B. Riley Securities as investment banker. Donlin Recano & Company, Inc. is the claims and noticing agent and administrative advisor. On Nov. 10, 2020, the U.S. Trustee for Region 3 appointed an official committee of unsecured creditors. Reed Smith serves as the committee's legal counsel. GRACIE'S VENTURES: Unsecured Creditors to Recover 5% in 5 Years --------------------------------------------------------------- Gracie's Ventures, Inc., filed with the U.S. Bankruptcy Court for the District of Rhode Island a Disclosure Statement regarding the Chapter 11 Plan of Reorganization dated September 20, 2021. Gracie's Ventures currently owns and operates two restaurants in downtown Providence, RI. Gracie's Ventures filed a Chapter 11 bankruptcy petition seeking to reorganize and continue its operations. The Chapter 11 filing was needed to allow Gracie's and Ellie's to renew their liquor licenses despite being behind on payment of state and local taxes. Ellen and her team were committed to continuing operations despite the challenges it faced post-pandemic. Class 1A consists of the Secured Claim of Independence Bank. The secured claim of Independence Bank shall be allowed in the amount of $50,000 which amount shall be paid in full in installments with fixed interest at 3.75% per annum over 8 years. The estimated monthly payment on account of the Secured claim will be $604.00 per month. Independence Bank shall retain its first priority security interest in the Collateral until the secured portion of its claim is paid in full pursuant to the plan. The balance of the Independence Bank claim in the amount of $53,954.57 shall be deemed unsecured and treated as a Class 4 General Unsecured Claim. Class 1B consists of the Secured Claim of TD Auto Finance. TD Auto Finance holds a secured claim in the current amount of $2,427.12 for a purchase money loan to the Debtor to finance the purchase of a 2015 Ford Transit. The Debtor shall retain the vehicle and the secured claim of TD Auto Finance shall be paid in full in accordance with the terms of the retail installment contract dated November 29, 2015. Current monthly payments of $420.26 per month for principal and interest will continue at the contract rate until the TD Auto Finance secured claim is paid in full. TD Auto Finance shall retain its security interest in the vehicle until the loan is paid in full. Class 1C consists of the Secured Claim of Financial Pacific Leasing. The secured claim of Financial Pacific Leasing shall be allowed in the amount of $6,000 which amount shall be paid in full in installments with fixed interest at 3.75% per annum over 3 years. The estimated monthly payment on account of the Class 1C claim will be $176.00 per month. The balance of the Financial Pacific Leasing claim in the amount of $55,319.45 shall be deemed unsecured and treated as a Class 4 General Unsecured Claim. Class 2 consists of the Lease Claim of Pawnee Leasing. The Class 2 claim of Pawnee Leasing Corporation shall be allowed in the amount of $4,000 which amount shall be paid in full in installments with fixed interest at 3.75% per annum over 3 years. The estimated monthly payment on account of the Class 2 claim will be $118.00 per month. The balance of the Pawnee Leasing claim in the amount of $40,907.72 shall be deemed unsecured and treated as a Class 4 General Unsecured Claim. Class 3 consists of Priority Tax Claims of Internal Revenue Service and State of Rhode Island. Priority Tax Claims and interest on Priority Tax Claims shall be paid in full in monthly installments over 60 months from Confirmation of the plan with interest at the rate determined under applicable nonbankruptcy law. Payments of allowed Priority Tax Claims will commence 30 days after the entry of the Confirmation Order and continue for 60 months. Class 4 is comprised of the allowed, general, unsecured non priority claims against the Debtor, which total approximately $2,000,000. The approximate dividend to be paid to the undisputed Class 4 creditors is currently estimated to be 5% percent of the allowed claim. The undisputed Class 4 creditors will be paid semi-annual dividends without interest in June and December for a period of 5 years beginning June 15, 2022 and ending December 15, 2026. To the extent the Debtor's financial performance exceeds its projections, an additional dividend may be paid to Class 4 creditors. If Debtors annual cash flow from operations after taxes and after all payments are made pursuant to the plan is $50,000 or more than projected for the 5 year term of the plan as determined as of December 31st ("Annual Positive Cash Flow"), Class 4 claims shall receive a pro rata share of one-half of the amount of the Annual Positive Cash Flow as an additional dividend payment. Class 5 consists of the interest of the Debtor's sole equity shareholder, Ellen Slattery. The value of the Class 5 equity interest is $0.00. The holder of the equity interest in Class 5 will not receive any distributions on account of her interests in the Debtor unless or until all payments contemplated under the plan have been made. The Debtor will be making the payments required under the Plan from income derived from the Debtor's business. All creditors will be paid from the net proceeds of the Debtor's operations. The Debtor's management believes that the projections realistically reflect the revenues that can be expected to be received from Debtor's operations during the pendency of the Plan. Debtor's management believes these projections are realistic, and that future net revenues will be sufficient to fund the payments to creditors provided under the Plan. A full-text copy of the Disclosure Statement dated September 20, 2021, is available at https://bit.ly/3zB3nCa from PacerMonitor.com at no charge. Attorney for the Debtor: Thomas P. Quinn, Esq. McLaughlinQuinn LLC 148 West River Street, Suite 1E Providence, RI 02904 Tel: 401-421-5115 Email: tquinn@mclaughlinquinn.com About Gracie's Ventures Gracie's Ventures Inc. owns restaurant Gracie's on Washington Street in Providence, R.I., as well as the nearby cafe Ellie's. Gracie's Ventures is a Rhode Island corporation solely owned by its founder, Ellen Slattery. Gracie's Ventures filed for Chapter 11 protection (Bankr. D.R.I. Case No. 20-11269) on Nov. 30, 2020. The Debtor was estimated to have assets of up to $50,000 and liabilities of $1 million to $10 million as of the bankruptcy filing. The Hon. Diane Finkle is the case judge. McLaughlinQuinn LLC, led by Thomas P. Quinn, Esq., is the Debtor's legal counsel. Independence Bank, as creditor, is represented by: Daniel E. Burgoyne, Esq. Partridge Snow & Hahn LLP 40 Westminster Street, Suite 1100 Providence, RI 02903 Tel: (401) 861-8200 Fax: (401) 861-8210 E-Mail: dburgoyne@psh.com GROVE ENTERPRISES: Seeks Approval to Tap Christopher Quinn as CRO ----------------------------------------------------------------- Grove Enterprises, LLC seeks approval from the U.S. Bankruptcy Court for the Southern District of Texas to employ Christopher Quinn, a professional based in Cypress, Texas, as its chief restructuring officer. Mr. Quinn will render the following services: (a) execute and/or file all necessary documents in connection with the bankruptcy case; (b) prepare and execute a plan of reorganization for the Debtor; and (c) execute, deliver, and perform for and on behalf of the Debtor any documents, agreements, settlements, guaranties, instruments, or undertakings as he may deem necessary or appropriate to confirm a plan of reorganization and conduct the bankruptcy case. Mr. Quinn will be compensated at his hourly rate of $350, plus reimbursement for expenses incurred. Mr. Quinn disclosed in a court filing that he is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. The professional can be reached at: Christopher L. Quinn 26414 Cottage Cypress Lane Cypress, TX 77433 Email: Chris.Quinn2021@outlook.com About Grove Enterprises Grove Enterprises, LLC filed its voluntary petition for relief under Chapter 11 of the U.S. Bankruptcy Code (Bankr. S.D. Tex. Case No. 21-60082) on Sept. 7, 2021, listing under $1 million in both assets and liabilities. Judge Christopher M. Lopez oversees the case. Tran Singh, LLP is the Debtor's legal counsel while Christopher Quinn, a professional based in Cypress, Texas, serves as the Debtor's chief restructuring officer. HARBOR VENTURES: Surplus Funds & Sale Proceeds to Fund Plan ----------------------------------------------------------- Harbor Ventures, LLC, filed with the U.S. Bankruptcy Court for the District of New Jersey a Disclosure Statement describing Chapter 11 Plan of Liquidation dated September 20, 201. This is a Liquidation Plan. In other words, the Proponent seeks to satisfy its debts through the sale the real property that it holds title to, together with recovery of surplus funds resulting from a Sheriff's Sale of real property located at 1122 Cook Avenue, Old Bridge, NJ 08857(the "Cook Avenue Property") formerly owned by Harbor Ventures that took place on April 7, 2021. The Effective Date of the proposed Plan is the date on which the Order of Confirmation becomes final. In an effort to remedy the problems that led to the bankruptcy filing, the principal of the Debtor has taken no compensation for the post-petition management of the Debtor; successfully negotiated a DIP loan that was the subject of a Motion to Approve Post-Petition Financing and is in the process of negotiating the sale of the Brainard Avenue Property that will be the subject of a Motion to Sell Real Property Free and Clear of Liens and a Motion to Appoint Broker. Class 1 consists of the Secured Claim of Township of Middletown lien covering the real property of the Debtor located at 54 Brainard Ave.,Port Monmouth, N.J. The secured claim of the Township of Middletown in the amount of $1,888.99 will be paid in full from the proceeds of the sale of the Brainard Avenue property and/or from the surplus funds recovery. Class 2 consists of the Secured Claim of: Township of Old Bridge lien formerly covering the real property of the Debtor located at 1122 Cook Avenue, Old Bridge, N.J. The secured claim of the Township of Old Bridge in the amount of $3,577.16 has been paid from the proceeds of the Sheriff's Sale conducted on 4/7/21 with respect to the property. Class 3 consists of the Secured Claim of TVC Funding IV, LLC formerly secured by a first mortgage lien covering the real property of the Debtor located at 1122 Cook Avenue, Old Bridge, N.J. The secured claim of TVC Funding IV, LLC in the amount of $317,568.06 has been paid from the proceeds of the Sheriff's Sale conducted on 4/7/21 with respect to the property. Class 4 consists of the Secured Claim of TVC Funding IV, LLC formerly secured by a first mortgage lien covering the real property of the Debtor located at 54 Brainard Ave., Port Monmouth, N.J. The secured claim of TVC Funding IV, LLC in the amount of $293,098.83 will be paid in full from the proceeds of the sale of the Brainard Avenue property and/or from the surplus funds recovery. Class 5 consists of the General Unsecured Claims total amount of claims $1,873.02. Payment to the General Unsecured Creditors will in the form of a pro rata distribution from the proceeds of the sale of the Debtor's real property located at 54 Brainard Ave., Port Monmouth, N.J. after payment of secured claims against such property, allowed priority claims and allowed administrative claims and/or from the surplus funds recovery. Class 6 consists of Interest holders. Paid to the extent available after payment of all other creditor claims. The Plan will be funded by the sale of the real property of the Debtor and from the surplus funds recovery. A full-text copy of the Disclosure Statement dated September 20, 2021, is available at https://bit.ly/3AD6UkP from PacerMonitor.com at no charge. Attorney for the Debtor: EUGENE D. ROTH, ESQUIRE – 4239 VALLEY PARK EAST 2520 HIGHWAY 35, SUITE 307 MANASQUAN, NEW JERSEY 08736 (732) 292-9288 About Harbor Ventures Harbor Ventures was formed on December 14, 2017 for the purpose of acquisition, renovation and resale of distressed properties in Central New Jersey. Harbor Ventures filed Chapter 11 Petition (Bankr. D.N.J. Case No. 21-13091) on April 15, 2021. The Debtor is represented by Eugene D. Roth, Esq. of LAW OFFICE OF EUGENE D. ROTH. HILLTOP AT DIA: Seeks to Hire Hilco as Real Estate Agent -------------------------------------------------------- Hilltop at DIA, LLC seeks approval from the U.S. Bankruptcy Court for the District of Colorado to employ Hilco Real Estate, LLC to market and sell 134 acres of development land in Aurora, Colo. The firm will receive a commission of 4 percent of the gross sale proceeds. As disclosed in court filings, Hilco is a disinterested person within the meaning of Section 101(14) of the Bankruptcy Code. The firm can be reached through: Sarah Baker Hilco Real Estate, LLC 5 Revere Drive, Suite 320 Northbrook, IL 60062 Tel: (847) 418-2703 Fax: (847) 897-0826 About Hilltop at DIA Englewood, Colo.-based Hilltop at DIA, LLC sought protection under Chapter 11 of the Bankruptcy Code (Bankr. D. Colo. Case No. 21-13309) on June 23, 2021, listing as much as $50 million in both assets and liabilities. Judge Thomas B. Mcnamara oversees the case. Onsager Fletcher Johnson, LLC is the Debtor's legal counsel. HILMORE LLC: To File Amended Disclosures and Plan by Oct. 18 ------------------------------------------------------------ The U.S. Bankruptcy Court for the Central District of California ruled that an Amended Disclosure Statement and Plan for Hilmore LLC be filed and served by October 18, 2021. The Court will continue to Nov. 3, 2021 at 11 a.m. the hearing on the Debtor's Disclosure Statement. Objections must be filed and served no later than Oct. 27. About Hilmore LLC Hilmore LLC, a single asset real estate debtor (as defined in 11 U.S.C. Section 101(51B)), filed its voluntary petition for relief under Chapter 11 of the Bankruptcy Code (Bankr. C.D. Cal. Case No. 21-12755) on April 5, 2021. Shahrokh Javidzad, manager, signed the petition. At the time of the filing, the Debtor had between $1 million and $10 million in both assets and liabilities. Judge Sheri Bluebond presides over the case. Weintraub & Selth APC represents the Debtor as legal counsel. I MORALES TIRE: Seeks to Clarify Language in Confirmed Plan ----------------------------------------------------------- I. Morales Tire Corp., together with Israel Morales Nieves, filed with the U.S. Bankruptcy Court for the District of Puerto Rico, on September 17, 2021, a Post Confirmation Modification of the Subchapter V Plan confirmed on August 5, 2021. The Debtors disclosed that in the confirmed Plan, Class 2 and 3 included treatment for PR Asset Portfolio 2013-1 International, LLC (PRAPI) regarding liens held by PRAPI over the Debtor's properties, which required the filing before the Court of a motion pursuant to Sections 363 and 1141(c) of the Bankruptcy Code. The Debtors realized, however, about the existence of ambiguous language in the treatment of Class 2 and Class 3, which ambiguity, the Debtors said, needs to be clarified since the Plan is a complimentary document required to achieve the wiping of the liens in the Property Registry. The Debtors are seeking to clarify the treatment provided in the Plan to Classes 2 and 3, and to postpone the effective date. The amendments, they said, will not materially affect any rights of any party, or the distributions included in the Plan. A copy of the Post Confirmation Modification is available for free at https://bit.ly/3Cy0DaG from PacerMonitor.com. About I. Morales Tire Corp. Aguas Buenas, P.R.-based I. Morales Tire Corp. filed its voluntary petition for relief under Chapter 11 of the Bankruptcy Code (Bankr. D.P.R. Case No. 21-00311) on Feb. 3, 2021, listing $100,001 to $500,000 in both assets and liabilities. Israel Morales Nieves also sought bankruptcy protection (Case No. 21-00305). Judge Mildred Caban Flores oversees the cases. Vilarino & Associates, LLC, serves as the Debtor's legal counsel. IGLESIA NUEVA: Plan Confirmation Hearing Set for Oct. 26 -------------------------------------------------------- The U.S. Bankruptcy Court for the Middle District of Florida conditionally approved the Disclosure Statement of Iglesia Nueva Vision, Inc. The Court will consider confirmation of the Debtor's Plan on October 26, 2021 at 1:30 p.m. As reported in the TCR, Iglesia Nueva Vision, Inc., filed a Plan of Reorganization and a Disclosure Statement on Sept. 16, 2021. General unsecured claims will be paid a pro rata distribution of $2,000 per year for five years. The Debtor's plan will be funded by offerings from parishioners, plus rents received from the rental home until that property is sold. When the property is sold, the net proceeds will be used to fund the Plan. When the balloon payment comes due to the Mortgagee, the funds to pay the balloon will be obtained by refinancing or selling the Church property. About Iglesia Nueva Vision Iglesia Nueva Vision owns a church in Lakeland, Florida. Abner Alicea, the current president, has been President and Pastor for the church since its inception in January 2003. The church building together with the Rental Home was purchased in July 2019. The following year, the church was faced with a pandemic situation. Iglesia Nueva Vision, Inc., filed its voluntary petition for Chapter 11 protection (Bankr. M.D. Fla. Case No. 21-03366) on June 28, 2021, disclosing up to $10 million in assets and up to $500,000 in liabilities. Abner Alicea, president, signed the petition. Judge Caryl E. Delano oversees the case. David W. Steen, PA is the Debtor's legal counsel. INNERLINE ENGINEERING: Taps Curd Galindo & Smith as Legal Counsel ----------------------------------------------------------------- Innerline Engineering, Inc. seeks approval from the U.S. Bankruptcy Court for the Central District of California to employ Curd Galindo & Smith, LLP to serve as legal counsel in its Chapter 11 case. The firm's services include: a. giving the Debtor legal advice with respect to its powers and duties and the continued operation of its business and management of its property; b. preparing legal papers; c. preparing and timely submitting a Subchapter V plan of reorganization to creditors and the court; d. assisting the Debtor as necessary in complying with the guidelines set by the Office of the U.S. Trustee; e. assisting in the prosecution of adverse actions, claims objections or contested matters, which may be necessary or ancillary proceedings to the bankruptcy; and f. performing other necessary legal services. Curd Galindo & Smith's hourly rates are as follows: Partners $600 per hour Associates $275 per hour Paralegals $125 per hour The firm will also receive reimbursement for out-of-pocket expenses incurred. The Debtor paid the firm a retainer of $31,178. Jeffrey Smith, Esq., a partner at Curd Galindo & Smith, 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: Jeffrey B. Smith, Esq. Curd Galindo & Smith, LLP 301 East Ocean Boulevard, Suite 1700 Long Beach, CA 90802 Tel: (562) 624-1177 Fax: (562) 624-1178 Email: jsmith@cgsattys.com About Innerline Engineering Inc. Corona, Calif.-based Innerline Engineering, Inc. -- http://www.innerlineengineering.com-- offers a variety of services to municipalities, utility owners, industrial facilities and commercial property owners for the maintenance of their underground utilities. Innerline Engineering filed a petition for Chapter 11 protection (Bankr. C.D. Calif. Case No. 21-14305) on Aug. 9, 2021, listing as much as $10 million in both assets and liabilities. Thomas J.C. Yeh, chief financial officer, signed the petition. Judge Wayne E. Johnson oversees the case. Curd Galindo & Smith, LLP is the Debtor's legal counsel. INTELSAT SA: SES Wants Jane Mago as Witness in Dispute ------------------------------------------------------ Advanced Television reports that SES, in a filing with Intelsat SA's Chapter 11 bankruptcy court, says it wants Jane Mago as an expert witness in its dispute with Intelsat. Ms. Mago will speak as a witness on the general subject matter of her recent report which covers arguments regarding which Intelsat entity is entitled to any potential FCC accelerated relocation payments and relevant case law, and Intelsat's own representations on the subject. Ms. Mago was the FCC's attorney and chief counsel and had a 26-year career at the FCC, retiring in 2004. She worked as the FCC's litigator in many actions covering the broadcasting industry. Ms. Mago then joined the National Association of Broadcasters (NAB) until retiring in 2014. She served NAB as EVP/General Counsel. She is a member of the New York Bar. Ms. Mago has an extensive background in appellate litigation and expertise in Constitutional issues (particularly First Amendment matters), FCC ownership rules, political broadcasting, administrative law, enforcement and licensing matters. She is now a consultant in media policy and law and a member of The Federalist Society. Her expert input will be -- no doubt -- contested by other experts with a number of the other parties involved in the Intelsat bankruptcy also saying they have engaged industry specialists to prepare reports. At the moment, none of the reports have been made public, although some -- or perhaps all -- will be released with the usual heavy redactions. About Intelsat S.A. Intelsat S.A. -- http://www.intelsat.com/-- is a publicly held operator of satellite services businesses, which provides a diverse array of communications services to a wide variety of clients, including media companies, telecommunication operators, internet service providers, and data networking service providers. It is also a provider of commercial satellite communication services to the U.S. government and other select military organizations and their contractors. The company's administrative headquarters are in McLean, Virginia, and the Company has extensive operations spanning across the United States, Europe, South America, Africa, the Middle East, and Asia. Intelsat S.A. and its debtor-affiliates concurrently filed voluntary petitions for relief under Chapter 11 of the Bankruptcy Code (Bankr. E.D. Va. Lead Case No. 20-32299) on May 13, 2020. The petitions were signed by David Tolley, executive vice president, chief financial officer, and co-chief restructuring officer. At the time of the filing, the Debtors disclosed total assets of $11,651,558,000 and total liabilities of $16,805,844,000 as of April 1, 2020. Judge Keith L. Phillips oversees the cases. The Debtors tapped Kirkland & Ellis LLP and Kutak Rock LLP as legal counsel; Alvarez & Marsal North America, LLC as restructuring advisor; PJT Partners LP as financial advisor & investment banker; Deloitte LLP as tax advisor; and Deloitte Financial Advisory Services LLP as fresh start accounting services provider. Stretto is the claims and noticing agent. The U.S. Trustee for Region 4 appointed an official committee of unsecured creditors on May 27, 2020. The committee tapped Milbank LLP and Hunton Andrews Kurth LLP as legal counsel; FTI Consulting, Inc. as financial advisor; Moelis & Company LLC as investment banker; Bonn Steichen & Partners as special counsel; and Prime Clerk LLC as information agent. ISLAND EMPLOYEE: Case Summary & 20 Largest Unsecured Creditors -------------------------------------------------------------- Debtor: The Island Employee Cooperative, Inc. DBA Burnt Cove Market DBA V&S Variety DBA The Galley Grocery DBA The Galley Supermarket 1 Burnt Cove Rd Stonington, ME 04681 Business Description: The Island Employee Cooperative is a Maine cooperative corporation created by the employees of Burnt Cove Market, The Galley, and V&S Variety for the purpose of purchasing the stores from Vern and Sandra Seile. Chapter 11 Petition Date: September 23, 2021 Court: United States Bankruptcy Court District of Maine Case No.: 21-10253 Judge: Hon. Michael A. Fagone Debtor's Counsel: Adam Prescott, Esq. BERNSTEIN SHUR SAWYER & NELSON, P.A. 100 Middle Street P.O. Box 9729 Portland, ME 04101 Tel: 207-774-1200 Email: aprescott@bernsteinshur.com Debtor's Financial Advisor: SPINGLASS MANAGEMENT GROUP Total Assets as of Aug. 28, 2021: $5,112,136 Total Liabilities as of Aug. 28, 2021: $5,877,439 The petition was signed by Kristy Wiberg as president. A full-text copy of the petition containing, among other items, a list of the Debtor's 20 largest unsecured creditors is available for free at PacerMonitor.com at: https://www.pacermonitor.com/view/L5G5IGQ/The_Island_Employee_Cooperative__mebke-21-10253__0001.0.pdf?mcid=tGE4TAMA ISRAEL MARMOL: Taps De la Hoz & Associates as Accountant -------------------------------------------------------- Israel Marmol & Associates, Inc. seeks approval from the U.S. Bankruptcy Court for the Southern District of Florida to employ De la Hoz & Associates, P.A. to prepare its tax returns and provide other accounting services. De la Hoz & Associates invoices the Debtor $500 per month for its services. The firm will also seek reimbursement for out-of-pocket expenses incurred. Ernesto de la Hoz, a partner at De la Hoz & Associates, 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: Ernesto de la Hoz De la Hoz & Associates, P.A. 999 Ponce de Leon Blvd., Suite 1035 Coral Gables, FL 33134 Tel: +1-305-860-8340 Email: edelahoz@cpadelahoz.com About Israel Marmol & Associates Israel Marmol & Associates, Inc. sought protection for relief under Chapter 11 of the Bankruptcy Code (Bankr. S.D. Fla. Case No. 21-17899) on Aug. 13, 2021, listing as much as $100,000 in both assets and liabilities. Judge Robert A. Mark oversees the case. Aleida Martinez Molina, Esq., at Weiss Serota Helfman Cole & Bierman, P.L. and De la Hoz & Associates, P.A. serve as the Debtor's legal counsel and accountant, respectively. J.C. PENNEY: Closes More Stores After Bankruptcy Exit ----------------------------------------------------- Kelly Tyko of USA TODAY reports that J.C. Penney is closing more stores barely a year after the business and its profitable locations were bought out of bankruptcy. The retailer confirmed to USA TODAY that the Greenwood, Mississippi and Baytown, Texas stores will soon close and are holding liquidation sales. The Mississippi store is scheduled to close Oct. 24, 2021 and the Texas location on Dec. 5. 2021. The department store chain was one of the largest retailers to file for Chapter 11 bankruptcy protection during the coronavirus pandemic. Officials said in May 2020 that they planned to close about 29% of its 846 stores or 242 locations in bankruptcy and hoped to use the process to shed debt and remain in business. Since then 174 stores have permanently closed and last December emerged from bankruptcy after being acquired by mall owners Simon Property Group and Brookfield Asset Management Inc. Eighteen stores shuttered in May 2021. About J.C. Penney Co. Inc. J.C. Penney Company, Inc. -- http://www.jcpenney.com/-- is an apparel and home retailer, offering merchandise from an extensive portfolio of private, exclusive, and national brands at over 850 stores and online. It sells clothing for women, men, juniors, kids, and babies. On May 15, 2020, J.C. Penney entered into a restructuring support agreement with lenders holding 70% of its first lien debt. The RSA contemplates agreed-upon terms for a pre-arranged financial restructuring plan that is expected to reduce several billion dollars of indebtedness. To implement the plan, J.C. Penney and its affiliates on May 15, 2020, filed voluntary petitions for reorganization under Chapter 11 of the U.S. Bankruptcy Code (Bankr. S.D. Tex. Lead Case No. 20-20182). At the time of the filing, J.C. Penney disclosed assets of between $1 billion and $10 billion and liabilities of the same range. Judge David R. Jones oversaw the cases. The Debtors tapped Kirkland & Ellis and Jackson Walker, LLP as legal counsel; Katten Muchin Rosenman, LLP as special counsel; Lazard Freres & Co. LLC as investment banker; AlixPartners, LLP as restructuring advisor; and KPMG, LLP as tax consultant. Prime Clerk is the claims agent, maintaining the page http://cases.primeclerk.com/JCPenney The committee of unsecured creditors retained Cole Schotz, P.C., and Cooley, LLP. * * * J.C. Penney in November 2020 won approval to sell substantially all of its retail and operating assets ("OpCo") to a group formed by landlords Brookfield Asset Management, Inc. and Simon Property Group and senior lenders through a combination of cash and new term loan debt. Paul, Weiss, Rifkind, Wharton & Garrison LLP was the legal counsel, and BRG Capital Advisors, LLC, served as financial adviser to Simon and Brookfield. J.J.W. METAL: Taps Arroyo Cruz Law Office as Litigation Counsel --------------------------------------------------------------- J.J.W. Metal Corp. seeks approval from the U.S. Bankruptcy Court for the District of Puerto Rico to employ Arroyo Cruz Law Office PSC as special litigation counsel. The firm will assist the Debtor in the following cases: (a) Autonomous Municipal Government of Carolina et al. vs. JJW Metal Corp., Civil No: CA2018CV03362; (b) JJW Metal Corp., vs. Autonomous Municipal Government of Carolina, Case No: COP-1060; (c) In re JJW Metal Corp., Case No. 11-0585-UU-01, before the Department of Urbanistic Permits, Municipal Government of Carolina stated environmental law and regulations matters. (d) JJW Metal Corp., vs. Municipal Government of Río Grande, Case No.: RG2019CV00369 (S-301). The firm will be billed at its hourly rate of $170, plus reimbursement of expenses incurred. Alberto Arroyo Cruz, Esq., the sole owner of Arroyo Cruz Law Office, disclosed in a court filing that the firm is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. The firm can be reached through: Alberto Arroyo Cruz, Esq. Arroyo Cruz Law Office PSC 410 Avenue General Valero, Suite 303 Fajardo, PR 00738 Telephone: (787) 863-5555 Facsimile: (787) 860-0412 Email: aclopsc@gmail.com About J.J.W. Metal Corp. Palmer, P.R.-based J.J.W. Metal Corp. sought protection under Chapter 11 of the Bankruptcy Code (Bankr. D.P.R. Case No. 20-04536) on Nov. 23, 2020. Jorge Rodriguez Quinones, president, signed the petition. At the time of the filing, the Debtor disclosed total assets of $1,649,341 and total liabilities of $1,750,865. Judge Edward A. Godoy oversees the case. The Debtor tapped Charles A. Cuprill, P.S.C., Law Offices as bankruptcy counsel; Luis R. Carrasquillo & Co. P.S.C. as financial consultant; and Gino Negretti Lavergne, Esq., Frank Inserni Milam, Esq., and Arroyo Cruz Law Office PSC as special counsel. Risk Assessment & Management (RAM) Group, Inc., Arturo Vazquez Cancel, and ISFPE, LLC serve as the Debtor's environmental consultants. JAR-BET LLC: Seeks to Hire Boyer Terry as Bankruptcy Counsel ------------------------------------------------------------ Jar-Bet, LLC seeks approval from the U.S. Bankruptcy Court for the Middle District of Georgia to employ Boyer Terry, LLC to serve as legal counsel in its Chapter 11 case. The firm's services include: a. providing legal advice with respect to the powers and obligations of the Debtor in the continued operation of its business and management of its property; b. preparing legal papers; c. continuing existing litigation, if any, to which the Debtor may be a party and conducting examinations incidental to the administration of its estate; d. taking necessary actions for the proper preservation and administration of the Debtor's estate; e. assisting in the preparation and filing of the Debtor's statement of financial affairs and bankruptcy schedules; f. taking necessary actions related to the use by the Debtor of its property pledged as collateral; g. prosecuting claims asserted by the Debtor; h. working with the Sub-Chapter V trustee to comply with all provisions of the Bankruptcy Code and proposing a consensual plan of reorganization; and i. performing all other legal services. The firm's attorneys will be paid at hourly rates ranging from $300 to $370 while paralegals will be paid at the rate of $100 per hour. The firm will also receive reimbursement for out-of-pocket expenses incurred. Boyer Terry received from the Debtor a retainer of $10,000. Wesley Boyer, Esq., a partner at Boyer Terry, 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: Wesley J. Boyer, Esq. Boyer Terry, LLC 348 Cotton Avenue, Suite 200 Macon, GA 31201 Tel: (478) 742-6481 Fax: (770) 200-9320 Email: Wes@BoyerTerry.com About Jar-Bet LLC Americus, Ga.-based Jar-Bet, LLC filed a petition for Chapter 11 protection (Bankr. M.D. Ga. Case No. 21-10519) on Sept. 3, 2021, listing up to $10 million in assets and up to $1 million in liabilities. Russ F. Barnes, managing member, signed the petition. Wesley J. Boyer, Esq., at Boyer Terry, LLC serves as the Debtor's legal counsel. JOHNSON & JOHNSON: NJ Court Won't Preempt Plan for Texas Two-Step ----------------------------------------------------------------- New Jersey Superior Court Judge John C. Porto on Sept. 20, 2021, refused to preemptively stop Johnson & Johnson from engaging in a bankruptcy maneuver, described as the "Texas Two-Step", that cancer patients say would unlawfully shield company assets from claims its talcum powder products caused their illness. In the lawsuit, Brandi Carl vs. Johnson & Johnson, et al. (N.J. Super. Ct., Atlantic City, Docket No. ATL-L-6546-14) and Diana Balderrama vs. Johnson & Johnson, et al. (N.J. Super. Ct., Docket No. ATL-L-6546-14), the claimants sought a temporary restraining order and preliminary injunction against the pharmaceutical giant, arguing that the Texas Two-Step plan violates numerous provisions of New Jersey's Uniform Voidable Transactions Act. The Texas Two-Step relies on a unique provision of Texas corporate law that would allow economically viable companies to incorporate in Texas and then transfer liabilities to another entity with limited assets. Based on news reports and creditor committee comments in the bankruptcy case of Imerys Talc America Inc. (Bankr. D. Del. Lead Case No. 19-10289), the plaintiffs claim that J&J is purportedly planning a divisive merger that would separate their talc-related liabilities from their productive assets. Plaintiffs contend they do not seek to bar any J&J entity from filing for bankruptcy or executing a merger or undertaking any other generic corporate transaction. Instead, they seek to enjoin J&J from making fraudulent transfers before seeking the protection of the bankruptcy laws "and depriving talc claimants of the compensation they justly deserve." Following oral argument via ZOOM on Sept. 17, 2021, Judge Porto rejected plaintiffs' application for a TRO and preliminary injunction. Judge Porto noted the claimants wanted him "to assume the defendants intend to conduct a fraudulent transaction" but that he "cannot make that leap." The defendants' counsel acknowledged that J&J is "exploring" bankruptcy and is considering a "restructuring plan." However, the defendants cannot be enjoined from exploring any responsible legal actions or exercising their fiduciary responsibility or from making lawful decisions and judgments. Counsel further argues a company cannot be sued for "considering" or "exploring" potential future transactions. "The Court finds while Plaintiffs speculate on a potential divisive merger that would separate Defendants' talc-related liabilities from their productive assets, no such situation actually exists. The Defendants' attorney concedes her clients are exploring lawful transactions. Although there is ongoing litigation and plaintiffs have achieved some jury verdicts in other forums, it clearly appears the Defendants remain solvent with an ability to pay. 'It is thus not sufficient that a monetary remedy be theoretically calculable; there must actually be a solvent defendant at the close of litigation from whom to recover such damages.' Marblegate Asset Mgt., Educ. Mgmt. Corp., 75 F. Supp. 3d 592, 607 (S.D.N.Y. 2014). The Plaintiffs seek money damages and they have adequate remedy at law at this time [as] the Defendants have a combined $77 billion dollars as stated by Defendants' attorney at oral argument. The Court finds Plaintiffs have an adequate remedy at law," Judge Porto said in his Sept. 20 decision. While unable to get a restraining order, the claimants' attorneys believe that judges, including bankruptcy judges, are on notice about J&J's possible plans and they hope it will be scrutinized more thoroughly than some recent previous bankruptcies that were clearly filed in order to evade legal liability. "I believe what we're seeing is that J&J is under the microscope and will no longer be able to do something underhanded without the courts or Congress stepping in. While the judge ruled against our motion to stop them now, he also seemed to be saying to J&J, 'I'll be watching,'" Plaintiffs' attorney Andy Birchfield from the Beasley Allen law firm said in response to the ruling. Attorneys for Johnson & Johnson: Jessica C. Lauria, Esq. WHITE & CASE LLP 1221 Avenue of the Americas New York, NY 10020 - and - Susan Sharko, Esq. FAEGRE DRINKER BIDDLE & REATH LLP 600 Campus Drive Florham Park, NJ 07932 Attorneys for Plaintiffs: Richard M. Golomb, Esq. GOLOMB SPIRT GRUNFELD 1835 Market Street, Suite 2900 Philadelphia, PA 19103 New Jersey Lawsuits Plaintiffs Brandi Carl and Diana Balderrama brought suit against defendants Johnson & Johnson, Johnson & Johnson Consumer Companies, Inc., Imerys Talc America, and Personal Care Products Council. The complaints sought damages for personal injury from Carl and Balderrama's development of ovarian cancer, allegedly from their use of Johnson & Johnson's Baby Powder. Plaintiffs' lawsuits were selected to be the first two to be tried in the "talc-based body powder products" multi-county litigation in Atlantic County Court. In September 2016, Atlantic County Judge Nelson C. Johnson granted defendants' motion to exclude plaintiffs' experts, paving the way for the cases to be thrown out. The plaintiffs appealed, and on Aug. 5, 2020, the appellate court in New Jersey reversed that decision. Golomb Spirt Grunfeld P.C. (formerly Golomb & Honik, P.C.), Beasley Allen Law Firm, and D'Amato Law Firm serve as counsel to the plaintiffs in the New Jersey cases. The New Jersey lawsuits are among thousands filed across the United States that contend Johnson & Johnson and talc supplier Imerys Talc America failed to warn women about known ovarian cancer risks associated with use of talc products like Johnson & Johnson's Baby Powder and Shower to Shower baby powder for feminine hygiene. About Johnson & Johnson Based in Skillman, New Jersey, Johnson & Johnson engages in the research and development of products. The Company provides products for newborns, babies, toddlers, and mothers, including cleansers, skin care, moisturizers, hair care, diaper care, sun protection, and nursing products. J&J is a blue-chip company that boasts roughly $430 billion in market value as of Sept. 22, 2021. Talc Liabilities Johnson & Johnson, the world's largest producer of talc powders, is facing more than 34,000 lawsuits that link its talc-based products to cancer, the majority of which are ovarian cancer. A 2018 Reuters investigation found J&J knew for decades that asbestos, a known carcinogen, lurked in its Baby Powder and other cosmetic talc products. In July 2019, the U.S. Justice Department launched a criminal investigation to find if the Company purposefully misled the public about asbestos fibers in its talcum powder. In November 2019, J&J recalled 33,000 bottles of its baby powder after the Food and Drug Administration discovered evidence of asbestos, in one of the bottles. After losing several cases in court, J&J announced in May 2020 it would end talc-based baby powder sales in the U.S. and Canada, but still insisted it was safe to use. J&J decided to reformulate its baby powder in the U.S., replacing the talc with safer cornstarch. * * * Johnson & Johnson has chosen law firm Jones Day to advise it as it explores placing a subsidiary in bankruptcy to settle thousands of personal injury claims linking talcum-based baby powder to cancer, Dow Jones reported. Facing more than 34,000 ovarian cancer claims, J&J has told attorneys for the victims that the company is actively exploring options to transfer its potential talc-related liabilities -- valued at approximately $24 billion -- to a stand-alone subsidiary and seek bankruptcy protection for that business entity. Under a scheme known in legal circles as the "Texas Two-Step," economically viable companies can incorporate in Texas and then transfer liabilities to another entity with limited assets. JUST ENERGY: Nov. 1, 2021 Claims Bar Date Set --------------------------------------------- The Ontario Superior Court of Justice (the "Canadian Court") set Nov. 1, 2021, at 5:00 p.m. (Toronto Time), as the last date and time for all persons and entities to file proofs of claim against Just Energy Group Inc. and its affiliates. On Sept. 15, 2021, Canadian Court issued an order (the "Claims Procedure Order"), commencing a claims procedure (the "Claims Process") for the purpose of identifying and determining all claims against the Just Energy Entities and their respective Directors and Officers. Pursuant to the Claims Procedure Order, Omni Agent Solutions was appointed Claims Agent (the "Claims Agent") for the Claims Process. Claimants must complete and submit their proofs of claim on the Claims Agent's online claims submission portal at https://omniagentsolutions.com/justenergyclaims. If not submitted at the online portal, proofs of claim must be delivered to the Monitor or the Claims Agent by prepaid ordinary mail, registered mail, courier, personal delivery, facsimile transmission or email at one of the applicable addresses: a) If located in Canada: FTI Consulting Canada Inc., Just Energy Monitor P.O. Box 104, TD South Tower 79 Wellington Street West Toronto Dominion Centre, Suite 2010 Toronto, ON, M5K 1G8 Attention: Just Energy Claims Process Email: claims.justenergy@fticonsulting.com Fax: 416-649-8101 b) If located in the United States or elsewhere: Just Energy Claims Processing c/o Omni Agent Solutions 5955 De Soto Ave., Suite 100 Woodland Hills, CA 91367 Claimants may also obtain the Claims Procedure Order, a general claims package, notice of dispute of claim form or any further information regarding the claims process from the Monitor's Web site at http://cfcanada.fticonsulting.com/justenergy/,the claim's agent website at https://omniagentsolutions.com/justenergyclaims or by contacting the Monitor at 1-844-669-6340 or claims.justenergy@fticonsulting.com or the claims agent at 1-866-680-8161 (US & Canada) or 1-818-574-3196 (international). About Just Energy Group Just Energy Group Inc. (TSX:JE; NYSE:JE) -- https//www.justenergy.com/ -- is a retail energy provider specializing in electricity and natural gas commodities and bringing energy-efficient solutions and renewable energy options to customers. Currently operating in the United States and Canada, Just Energy serves residential and commercial customers. Just Energy is the parent company of Amigo Energy, Filter Group Inc., Hudson Energy, Interactive Energy Group, Tara Energy, and terrapass. On March 9, 2021, Just Energy Group Inc., Just Energy Corp., Ontario Energy Commodities Inc., Universal Energy Corporation, Just Energy Finance Canada ULC, Hudson Energy Canada Corp., Just Management Corp., Just Energy Finance Holding Inc., 11929747 Canada Inc., 12175592 Canada Inc., JE Services Holdco I Inc., JE Services Holdco II Inc., 8704104 Canada Inc., Just Energy Advanced Solutions Corp., Just Energy (U.S.) Corp., Just Energy Illinois Corp, Just Energy Indiana Corp., Just Energy Massachusetts Corp., Just Energy New York Corp., Just Energy Texas I Corp., Just Energy, LLC, Just Energy Pennsylvania Corp., Just Energy Michigan Corp., Just Energy Solutions Inc., Hudson Energy Services LLC, Hudson Energy Corp., Interactive Energy Group LLC, Hudson Parent Holdings LLC, Drag Marketing LLC, Just Energy Advanced Solutions LLC, Fulcrum Retail Energy LLC, Fulcrum Retail Holdings LLC, Tara Energy, LLC, Just Energy Marketing Corp., Just Energy Connecticut Corp., Just Energy Limited, Just Solar Holdings Corp., and Just Energy (Finance) Hungary ZRT filed for protection under the Companies' Creditors Arrangement Act ("CCAA") before the Ontario Superior Court of Justice (Commercial List). Just Energy Group Inc. and its affiliates filed petitions under Chapter 15 of the Bankruptcy Code in the United States (Bankr. S.D. Tex. Lead Case No. 21-30823) on March 9, 2021, to seek recognition of the Canadian proceedings. FTI Consulting Canada Inc. has consented to act as monitor in the CCAA proceeding. BMO Capital Markets has been engaged as financial advisor, Osler, Hoskin & Harcourt LLP and Fasken Martineau DuMoulin LLP are legal advisors in Canada, Kirkland & Ellis LLP and Jackson Walker LLP are legal advisors in the United States. K&D MANAGEMENT: Seeks to Hire ResourcePartners as Accountant ------------------------------------------------------------ K&D Management, LLC seeks approval from the U.S. Bankruptcy Court for the Northern District of Georgia to employ ResourcePartners to prepare its federal and state tax returns. ResourcePartners will be compensated at the rate of $195 per hour for its accounting services and $125 per hour for administrative services. Kathy Reising, a certified public accountant and a member of ResourcePartners, disclosed in a court filing that her firm is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. The firm can be reached through: Kathy E. Reising, CPA ResourcePartners 1551 Jennings Mill Road Unit 900A Watkinsville, GA 30677 Telephone: (706) 353-2016 Email: kathy@resourcepartnerscpa.com About K&D Management Athens, Ga.-based K&D Management, LLC filed a Chapter 11 petition (Bankr. N.D. Ga. Case No. 21-54486) on June 11, 2021. In the petition signed by Dhansukh Patel, managing member, the Debtor disclosed total assets of up to $50,000 and total liabilities of up to $10 million. Judge Sage M. Sigler oversees the case. The Debtor tapped Danowitz Legal, P.C. as legal counsel and ResourcePartners as accountant. Utrecht Assets, LLC is represented by G. Frank Nason, IV, Esq. at Lamberth, Cifelli, Ellis and Nason, PA. KDA PROPERTIES: Files Chapter 11 to Stop Foreclosure ---------------------------------------------------- EMNETRA reports that KDA Property LLC, the owner of the Nativ Hotel building in downtown Denver, has filed for Chapter 11 bankruptcy Protection to delay the foreclosure process. KDA Property LLC said in a filing Wednesday that the four creditors had $9.61 million in debt. Most of the money ($8.07 million) goes to Chicago-based Pangea Mortgage Capital. This claim is backed by Nativ's four-storey building at 1612 Wazee St. and other assets. Nightclub operators, who are currently facing the heat from the city, want to move in. "We were going to leave the property lately, but we're going to leave our way," said Amin Suliaman, co-owner of Nativ Hotel. "I'm not going to make them bully us from property." Mr. Suliaman told Business Den that bankruptcy filings only relate to corporate real estate. He said the 14-room hotel and attached nightclub were run by another group that did not file for bankruptcy. According to Denver's public trustee office, Pangea Mortgage Capital began the foreclosure process for hotel buildings in December 2020. Mr. Suliaman said the project was "blind" because it was about to receive PPP funding in January. The property auction was originally set for May, but has been repeatedly postponed. Mr. Suliaman said the lender has not set a formal date as the company pays $ 56,000 in mortgages each month. "This gives us the opportunity to reset with a neutral third party in bankruptcy court and forces our lenders to work on the plans we have to go out," Mr. Suliaman said. "It brings us back to an equal arena." Jeffrey Weinman, a lawyer at Weinman & Associates, represents Nativ in bankruptcy proceedings. KDA Properties stated in its filings that it had a total of $11.61 million in assets. Of that amount, $10.8 million is the company's estimate of the value of the Wazee Street building. However, Sri Aman also said the building is currently on the market at an asking price of $7 million. Marcus & Millichap's Skyler Cooper is on the list. Since the beginning of the pandemic, the hotel has been suspended except for large bookings for nightclub visitors. According to Sri Aman, hotel operating costs are rising due to higher cleaning costs and a shortage of employees. The nightclub continues to operate. Mr. Suliaman owns 49% of KDA properties. Kennethware, which lists centennial addresses, owns the remaining 51 percent. Ware is also the company's second-largest creditor, owing $ 1.2 million in "fixed investment." KDA Properties said it had no revenue this 2021. In 2020, he earned $75,000 in "rental income from Nativ Hotel" and $118,613 in 2019. "As you know, we made a better investment," Mr. Suliaman said. "This wasn't the best, but we'll continue to plug it in." The Native Hotel opened in the spring of 2015. Shortly before Nativ opened in 2015, the cannabis section of the Denver Post dubbing "The first outwardly 420 friendly hotel in central Denver." It lists balconies where guests can smoke weeds, cafes that serve coffee infused with CBD, and owners of other marijuana-related businesses. However, by July 2015, the hotel had informed guests that marijuana was not available at the property. About KDA Properties KDA Properties LLC is in the nonresidential building operators business. KDA Properties LLC sought Chapter 11 protection (Bankr. D. Colo. Case No. 21-14821) on Sept. 16, 2021. In the petition signed by Jeffrey Weinman, on behalf of the company, KDA Properties estimated assets of between $10,000,001 and $50 million and estimated liabilities of between $1 million and $10 million. The cases are handled by Honorable Judge Elizabeth E. Brown. Jeffrey Weinman is the Debtors' counsel. KISMET ROCK HILL: Taps Newpoint Advisors as Accountant ------------------------------------------------------ Kismet Rock Hill, LLC seeks approval from the U.S. Bankruptcy Court for the District of South Carolina to employ Newpoint Advisors Corporation as its accountant. The firm's services include: a. preparing the Debtor's monthly operating reports and ensure Quickbooks entries are complete; b. attending hearings; and c. consulting with the Debtor and its legal counsel throughout its Chapter 11 case. The firm will be paid at hourly rates ranging from $225 to $275 and will be reimbursed for out-of-pocket expenses incurred. The retainer fee is $5,000. Carin Sorvik, a director at Newpoint Advisors, disclosed in a court filing that the firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. The firm can be reached at: Carin Sorvik Newpoint Advisors Corporation 843 Fieldstone Way West Palm Beach, FL 33413 Tel: (800) 306-1250 Fax: (702) 543-3881 About Kismet Rock Hill Kismet Rock Hill, LLC operates Holiday Inn, a hotel located at 503 Galleria Boulevard, in Rock Hill, S.C. Kismet Rock Hill filed its voluntary petition for Chapter 11 protection (Bankr. D.S.C. Case No. 21-01926) on July 23, 2021, listing as much as $50 million in assets and as much as $10 million in liabilities. Judge Helen E. Burris presides over the case. Christine E. Brimm, Esq., at Barton Brimm, PA and Newpoint Advisors Corporation serve as the Debtor's legal counsel and accountant, respectively. KNB HOLDINGS: S&P Affirms 'CCC+' ICR, Outlook Stable ---------------------------------------------------- S&P Global Ratings affirmed its 'CCC+' issuer credit rating on U.S.-based KNB Holdings Corp. and the outlook remains stable as demand for household goods remains robust. S&P said, "At the same time, we affirmed our 'CCC+' rating on the senior secured debt and maintained the '4' recovery rating, indicating our expectation for average recovery (30%-50%; rounded estimate: 40%) in the event of a default. "The stable outlook reflects our expectation that demand will remain solid and the company will offset rising costs, though leverage will remain elevated over the next 12 months. "The rating affirmation reflects the company's revolver maturity extension and improvement in our liquidity assessment. The company extended its revolver to 2024 from 2022. The revolver extension increased the company's liquidity sources overuses, improving it to over 1x from under 0.5x, and as such we revised our liquidity assessment on the company to less than adequate from weak. This indicates that we no longer anticipate an immediate liquidity risk as the company will have additional liquidity cushion to fund working capital and operating needs in the event of any shortfalls in funds from operations (FFO). While demand remains solid, operating conditions have been volatile due to rising costs and supply chain difficulties. Although the company's performance has improved as consumers have been purchasing home goods throughout the pandemic, resulting in leverage declining to 10x for the 12 months ended June 30, 2021, compared to 10.7x for the same prior-year period, S&P believes supply chain constraints and cost inflation pose potential significant risks. The company experienced supply chain shortages and cost inflation in the second quarter, resulting in adjusted second-quarter fiscal 2021 gross margins declining by roughly 80 basis points from the previous quarter, despite a 25% increase in revenues for the quarter. The company increased pricing to address inflationary pressures, which we expect to take hold in the second half of fiscal 2021. Housing trends currently remain strong, benefiting the company; however, if these trends slow, coupled with the increased pricing on products, consumers may slow their purchases, which could impair liquidity. S&P believes given supportive demand and increased pricing, margins will remain steady in the adjusted high-single-digits-percent area and leverage will improve to the 9x-9.5x range for fiscal 2021. The stable outlook reflects S&P's expectation that leverage will remain elevated over the next 12 months though demand will remain supportive. S&P could lower the ratings or revise the outlook to negative if it believes the risk of the company defaulting within 12 months has risen. This could happen if S&P believes: -- KNB's liquidity position deteriorates due to declining demand for home goods; -- Cash flows drop due to weaker orders or higher costs that could result in a near-term required debt payment miss; or -- Weakened operating profitability increases the risk of a covenant breach in the event it is triggered. S&P could raise the ratings if it believes: -- The company can generate stronger earnings and free cash flow such that we believe the capital structure will be sustainable, resulting in leverage sustained below the double-digit-percent area and improved liquidity; and -- EBITDA interest coverage remains above 1.5x through sustained improved operating performance. LORNA JANE USA: Hits Chapter 11 for Shift to Online --------------------------------------------------- Fibre2Fashion reports that Lorna Jane USA Inc., the US retail arm of Australian women's activewear retail brand Lorna Jane, filed for Chapter 11 protection recently in California, seeking to restructure by rejecting the leases for its retail boutiques to adapt to the shift in online purchasing. The Debtor previously operated 21 retail stores, all of which were closed prepetition. The Garden City, California-based company believes that pandemic-driven changes in consumer shopping habits that spurred the store closures "will endure even after the pandemic subsides, continuing to impact brick-and-mortar retail into the future." Through Chapter 11, the Debtor intends to restructure, stating that the primary goal of the bankruptcy proceeding is "to right-size its United States presence in part by rejecting all retail boutique store leases to enable the Debtor to better adapt and cultivate sustained profitability in light of the increasing shift to online purchasing and the impact of the Covid-19 pandemic on brick-and-mortar retail sales." The first day hearing has been scheduled for today, the company said in a press release. The company disclosed $6.8 million in assets and $48.7 million in liabilities. The Debtor is the wholly-owned subsidiary of LJ USA General Partnership, which is in turn owned equally by LG GP No. 1 Pty and LG GP No. 2 Pty, both organized under the laws of Australia, which are in turn wholly owned by Lorna Jane PTY Ltd, which is also organized under the laws of Australia, and headquartered in Brisbane. The company said that the pandemic has suppressed consumer willingness to shop in person, particularly in indoor malls where most of the debtor's retail boutiques are located and social distancing is difficult. "Consequently, consumer habits have changed and there has been a decided accelerating shift away from in-person retail shopping in favor of online purchasing that is predicted to endure even after the pandemic subsides," the company added. About Lorna Jane USA Lorna Jane USA Inc. is the US retail arm of Australian women's activewear retail brand Lorna Jane. Lorna Jane USA Inc. sought Chapter 11 protection (Bankr. C.D. Cal. Case No. 21-17267) on Sept. 16, 2021. In the petition signed by CRO Richard Munro, the Debtor disclosed total assets of $6,784,662 and total liabilities of $48,645,663. The case is handled by Honorable Judge Neil W. Bason. Richard H. Golubow, Esq., of WINTHROP GOLUBOW HOLLANDER, LLP, is the Debtor's counsel. LUCKY STAR-DEER: Taps Giambalvo, Stalzer & Co. as Accountant ------------------------------------------------------------ Lucky Star-Deer Park Mezz, LLC seeks approval from the U.S. Bankruptcy Court for the Eastern District of New York to employ Giambalvo, Stalzer & Company, CPAs, PC as its accountant. The firm will render these services: (a) give the Debtor accounting advice with respect to the preparation of tax returns; (b) assist the Debtor and its counsel in preparing tax returns; and (c) assist the Debtor in minimizing taxes from the sale of assets. The hourly rates of the firm's professionals are as follows: Principals $350 Senior Manager $275 Manager $250 Senior Accountant $275 Staff Accountant $135 Administrative Staff $120 In addition, the firm will seek reimbursement for expenses incurred. As disclosed in court filings, Giambalvo is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. The firm can be reached at: Giambalvo, Stalzer & Company, CPAs, PC 3500 Sunrise Highway Suite 100, Building 200 Great River, NY, 11739 Telephone: (631) 321-8000 Facsimile: (631) 321-8075 Email: info@gsco-cpas.com About Lucky Star-Deer Park Mezz Lucky Star-Deer Park Mezz LLC, a Deer Park, N.Y.-based company engaged in constructing and managing real properties, filed a voluntary petition for Chapter 11 protection (Bankr. E.D.N.Y. Case No. 20-72403) on July 8, 2020, disclosing assets of up to $50,000 and liabilities of $10 million to $50 million. Myint Kyaw, managing member, signed the petition. Judge Robert E. Grossman oversees the case. The Debtor tapped Weinberg, Gross & Pergament LLP, and Macco Law Group, LLP, as legal counsel and Giambalvo, Stalzer & Company, CPAs, PC as accountant. MALLETT INC: Seeks to Hire Backenroth as Legal Counsel ------------------------------------------------------ Mallett Inc. seeks approval from the U.S. Bankruptcy Court for the Southern District of New York to employ Backenroth Frankel & Krinsky, LLP to serve as legal counsel in its Chapter 11 case. The firm's services include: a. providing the Debtor with legal advice regarding its powers and duties in the continued operation of its business and management of its property; b. preparing reports and legal documents; c. assisting in the formulation and negotiation of a plan of reorganization with creditors; and d. performing other legal services, including but not limited to, the institution of actions against third parties, objections to claims, and the defense of actions, which may be brought by third parties against the Debtor. The firm's hourly rates are as follows: Attorneys $575 to $695 per hour Paralegals $125 per hour Backenroth will also receive reimbursement for out-of-pocket expenses incurred. The retainer fee is $35,000. Mark Frankel, Esq., a partner at Backenroth, 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 A. Frankel, Esq. Backenroth Frankel & Krinsky, LLP 800 Third Avenue New York, NY 10022 Tel: (212) 593-1100 Fax: (212) 644-0544 Email: mfrankel@bfklaw.com About Mallett Inc. New York-based Mallett Inc. sought protection under Chapter 11 of the Bankruptcy Code (Bankr. S.D.N.Y. Case No. 21-11619) on Sept. 15, 2021, listing $3,665,011 in assets and $13,181,708 in liabilities. The petition was signed by Graham Shircore as director. Judge James L. Garrity Jr. oversees the case. Backenroth Frankel & Krinsky, LLP is the Debtor's legal counsel. MATCH GROUP: S&P Assigns 'BB' Issuer Credit Rating, Outlook Stable ------------------------------------------------------------------ S&P Global Ratings assigned its 'BB' issuer credit rating to Dallas-based Match Group Holdings II, the subsidiary of Match Group Inc. S&P also assigned its 'BB' issue-level rating, and '3' recovery ratings on the company's proposed senior unsecured notes. S&P said, "The stable outlook reflects our expectation the company will exhibit steady revenue and EBITDA growth with leverage within the 3x to 4x area over the next 12 months. "Our ratings on Match Group reflect our assessment of its leading global position in online dating services, ownership of several well-known dating and social discovery brands, and well-established track record of operations." Match Group will use the net proceeds from the proposed notes issuance and proceeds from its planned concurrent direct equity offering to repay a portion of its 0.875% exchangeable senior notes due Oct. 1, 2022. The transaction is neutral for leverage. The company's leverage was 3.7x for the 12 months ended June 30, 2021. S&P said, "We expect Match Group will continue to benefit from payer growth at Tinder and its other brands both domestically and internationally and maintain leverage under 4x. "The stable outlook reflects our expectation that Match will maintain its net leverage below 4x over the next 12 months because of steady payer growth at Tinder and non-Tinder brands, both domestically and internationally. "We could lower the rating if leverage exceeds 4x over the next 12 months because of lower demand from a change in consumer preferences or weak post-pandemic economy and intensifying competition. In addition, we could also downgrade Match if, contrary to our expectations, the company prioritizes a more aggressive financial policy and pursues significant debt-funded acquisitions or share repurchases rather than debt reduction. "We could raise the rating if Match reduces its net leverage and commits to maintaining it below 3x. Additionally, an upgrade would require ongoing strong performance of Tinder, revenue and EBITDA growth at non-Tinder brands, and integration of its announced social discovery acquisition." MEDLEY LLC: Files Liquidating Trust Contract as Plan Supplement --------------------------------------------------------------- Medley LLC filed with the U.S. Bankruptcy Court for the District of Delaware a copy of the Liquidating Trust Agreement and Declaration of Trust as supplement to the Debtor's Third Amended Combined Disclosure Statement and Chapter 11 Plan. Pursuant to the Liquidating Trust Agreement entered into among the Debtor; Medley Capital LLC; the Official Committee of Unsecured Creditors; and Saccullo Business Consulting, LLC, through Anthony M. Saccullo, as Liquidating Trustee, all of the Debtor's and Medley Capital's respective rights and interest in the Liquidating Trust Assets are automatically vested in the Liquidating Trust on the effective date. A copy of the Liquidating Trust Agreement, filed with the notice, is available for free at https://bit.ly/2XzPSpc from Kurtzman Carson Consultants, claims agent. Counsel for the Debtor: Jeffrey R. Waxman, Esq. Eric J. Monzo, Esq. Brya M. Keilson, Esq. Morris James LLP 500 Delaware Avenue, Suite 1500 Wilmington, DE 19801 Telephone: (302) 888-6800 Facsimile: (302) 571-1750 E-mail: jwaxman@morrisjames.com emonzo@morrisjames.com bkeilson@morrisjames.com About Medley LLC Medley LLC, through its direct and indirect subsidiaries, including Medley Capital LLC, is an alternative asset management firm offering yield solutions to retail and institutional investors. It provides investment management services to a permanent capital vehicle, long-dated private funds, and separately managed accounts, and serves as the general partner to the private funds. Medley is headquartered in New York City and incorporated in Delaware. As of Sept. 30, 2020, Medley had $3.4 billion of assets under management in two business development companies, Medley Capital Corporation (NYSE: MCC) and Sierra Income Corporation, and several private investment vehicles. Over the past 18 years, Medley has provided capital to over 400 companies across 35 industries in North America. Medley filed a Chapter 11 bankruptcy petition (Bankr. D. Del. Case No. 21-10526) on March 7, 2021. The Debtor disclosed $5,422,369 in assets and $140,752,116 in liabilities as of March 2, 2021. The Debtor tapped Lowenstein Sandler LLP and Morris James LLP as bankruptcy counsel, Eversheds Sutherland (US) LLP as special counsel, B. Riley Securities Inc. as investment banker, and Andersen Tax LLC as tax accountant. Corporation Service Company serves as the Debtor's independent manager. Kurtzman Carson Consultants, LLC is the claims agent. The U.S. Trustee for Region 3 appointed an official committee of unsecured creditors on April 22, 2021. The committee is represented by Potter Anderson & Corroon, LLP and Kelley Drye & Warren, LLP. MERIT DENTAL: Files Emergency Bid to Use Cash Collateral -------------------------------------------------------- David W Hughes DMD & Associates PC, d/b/a Merit Dental Care asks the U.S. Bankruptcy Court for the Northern District of Texas, Dallas Division, for authority to use cash collateral. The Debtor has an immediate need to use the cash collateral of the Department of the Treasury - Internal Revenue Service, which may claim a lien on the Debtor's personal property including cash and accounts. The Debtor can adequately protect the interests of the Secured Lender as set forth in the proposed Interim Order for Use of Cash Collateral by providing the Secured Lender with postpetition liens, a priority claim in the Chapter 11 bankruptcy case, and cash flow payments. The Debtor intends to reorganize its affairs and needs to continue to operate in order to pay its ongoing expenses, generate additional income and to propose a plan in the Chapter 11 case. A copy of the motion is available at https://bit.ly/2W3ekyK from PacerMonitor.com. About Merit Dental Care Merit Dental Care is a provider of dental care to patients in the Dallas, Texas area. The Debtor sought protection under Chapter 11 of the U.S. Bankruptcy Court (Bankr. N.D. Tex. Case No. 21-31675) on September 17, 2021. In the petition signed by David W. Hughes, president, the Debtor disclosed up to $500,000 in assets and up to $10 million in liabilities. Judge Stacey G. Jernigan oversees the case. Joyce Lindauer, Esq. at Joyce W. Lindauer Attorney, PLLC is the Debtor's counsel. MIDTOWN DEVELOPMENT: Chapter 11 Stops Sale of Black's Building -------------------------------------------------------------- Jeff Reinitz of WCF Courier reports that the owners of the Black's Building have filed for bankruptcy to shield the historic downtown property from a sheriff's sale to collect on millions of dollars in outstanding debt. Midtown Development, which operates the Black's at 501 Sycamore St., filed for Chapter 11 reorganization protection in July 2021 after creditor MidWestOne Bank won a foreclosure action in Black Hawk County District Court. Then owners Verner and Donna Nelson filed for bankruptcy in August 2021, cancelling a sheriff's sale that would have liquidated a condo on West Commercial Street and a downtown commercial building at 626-632 Sycamore St. "It's going to work out good ... There's a plan. It will work out," Verner Nelson said when reached for comment last week. "There's going to be some good things happening." He declined to discuss the plan further. In court filings, Midtown Development said the company's problems began in 2011 when Black's 501 Steakhouse, located in the Black's Building, closed down and Midtown was unable to re-lease the space. A protracted legal spat with the former tenant followed. Coronavirus pandemic restrictions shut down the building's once lucrative events business, according to Midtown's filings. Commercial occupancy in the building began to decline, and Midtown began converting the space to residential apartments, but COVID-19 cut that demand. The operators were hoping for a resurgence once the pandemic waned and restrictions were lifted. The building's website notes that the Sky Events Centre and Tea Room have reopened. In the meantime, the Nelsons received permission from the court to sell three of their antique cars -- a 1959 Morgan 4/4 Roadster, a 1979 Rolls-Royce Silver Shadow and a 1969 Lincoln Continental Mark II -- at auction to put money toward debts. The sale, conducted by Rich Penn Auctions of Waterloo, was scheduled for Sept. 18 in conjunction with the sale of the collection at the Hemken Auto Museum in Williams. The auto sale would likely be a drop in the bucket compared to the amount of debt outlined in bankruptcy records. About $4.9 million is owed to MidwestOne Bank, according to foreclosure documents. Records for the Midtown Development bankruptcy filing indicate $458,000 in unpaid property taxes to Black Hawk County; $603,000 in loans to members of the Molinaro family; more than $100,000 for credit cards; and $31,000 for contractors. There is also a Small Business Administration loan of around $700,000 tied to the property, according to court records. In their personal filing, the Nelsons indicate their debt is business related. Assessed at $3.9 million, the Black's Building was constructed in 1913 and housed the former Black's Department Store. The Nelson family bought the structure in the 1980s. The Nelson family has a long history of renovating historic structures in the city, including the Black Hawk Fruit Company building on Water Street, the Chicago Great Western Depot on West Fifth Street and Winterbottom Supply on West Commercial Street. About Midtown Development Midtown Development, LLC, a real estate developer in Iowa, sought protection under Chapter 11 of the Bankruptcy Code (Bankr. N.D. Iowa Case No. 21-00478) on May 25, 2021. In the petition signed by Donna L. Nelson, managing member, the Debtor disclosed $1 million to $10 million in both assets and liabilities. Judge Thad J. Collins oversees the case. The Debtor tapped Day Rettig Martin, PC, as legal counsel, BerganKDV as accountant, and Moglia Advisors as financial advisor. Clark, Butler, Walsh & Hamann and Greenstein Sellers PLLC represent MidWestOne Bank, secured creditor. MIRION TECHNOLOGIES: S&P Affirms 'B' ICR, Off Watch Positive ------------------------------------------------------------ S&P Global Ratings affirmed its 'B' issuer credit rating on Mirion Technologies Inc. and removed all of its ratings on the company from CreditWatch, where S&P placed them with positive implications on June 24, 2021. At the same time, S&P assigned its 'B' issue-level rating and '3' recovery rating to the proposed term loan. The positive outlook reflects the potential S&P will raise its rating on Mirion if it uses its excess cash to pursue acquisitions and repay a portion of its debt such that its S&P Global Ratings-adjusted debt to EBITDA improves below 5x in the next 12 months. Mirion Technologies Inc. is being acquired by GS Acquisition Holdings Corp. II (GSAH II)--a special-purpose acquisition company (SPAC)--in a cash- and equity-funded transaction valued at $2.6 billion per the previously announced terms. As part of the transaction, the company is issuing a new $830 million term loan to refinance its existing debt due 2026. The equity capital Mirion is raising to fund the transaction could reduce its debt leverage. GSAH II expects to deploy a significant amount of cash to fund the acquisition, including the $750 million it raised via its June 2020 IPO (subject to redemptions) and an additional $900 million it expects to receive through a series of private placement in public equity (PIPE) offerings. Specifically, we expect GSAH II to use these funds, along with shares of its common stock and the proceeds from the proposed $830 million term loan, to purchase Mirion from its sponsor and other existing stockholders and refinance its existing debt. Following the transaction, which we expect to close in the fourth quarter of 2021 (likely October), S&P's project Mirion's total debt will decline by about $80 million. Mirion's credit measures will likely improve following the transaction, though the degree of improvement will depend on management's effective use of the excess cash on its balance sheet. For the 12 months ended June 30, 2021, the company's balance sheet was highly leveraged with S&P Global Ratings-adjusted debt to EBITDA of 7.5x (including six months of contributions from its recently acquired Sun Nuclear operations). Following the completion of the transaction and assumed debt repayment, S&P anticipates Mirion's debt leverage will drop to between 5x and 6x in fiscal year 2022 and eventually trend below 5x on a run-rate basis. The reduction in the company's debt leverage in 2022 reflects our assumption of run-rate S&P Global Ratings-adjusted EBITDA of $173 million as the demand for radiation detection and analysis tools remains solid, its integration of Sun Nuclear continues as planned, it strengthens its medical platform, progresses on its operational initiatives, and restructuring and other one-time costs subside. The company will issue the full amount of the committed $830 million first-lien term loan and retain the excess cash on its balance sheet to fund acquisitions and other strategic initiatives and repay debt, assuming no redemptions. The company will no longer be controlled by a financial sponsor. Upon the close of the transaction, publicly listed GSAH II will change its name to Mirion Technologies and will be listed on the New York Stock Exchange under the new ticker, MIR. GSAH II's existing public shareholders will own about 37% of the company and the PIPE investors will own about 44%, assuming no redemptions or outstanding warrants are exercised. Mirion's current financial sponsor, Charterhouse Capital, along with all of its other existing shareholders will own about 19% of the company as of the close of the transaction. S&P said, "We believe management will establish and abide by financial policies that support further deleveraging. We believe it is unlikely that Mirion will take on additional debt in the next year because management has issued a long-term net leverage ratio target of about 3x. Assuming minimal share redemptions, we expect the company to use about $200 million of cash from the debt issuance over the next year to pursue acquisitions and repay debt. While management has said that deleveraging the balance sheet will free the company to make bolt-on acquisitions and partake in other growth opportunities, we do not contemplate any large acquisitions that would lead to a material re-leveraging of its balance sheet in our base-case scenario. Therefore, we believe Mirion's pro forma capital structure will provide it with the flexibility to carry out its growth strategy while reducing its leverage." The positive outlook on Mirion reflects the potential for a higher rating if its ownership and management use its excess cash to pursue acquisitions and repay a portion of its debt such that its S&P Global Ratings-adjusted debt to EBITDA improves below 5x in the next 12 months. S&P could raise its ratings on Mirion if: -- Its operating performance and productivity initiatives continue to improve its operating results and free operating cash flow (FOCF) such that it maintains debt leverage of consistently below 5x; and -- The company maintains financial policies, particularly related to its future shareholder returns and acquisitions, that support this level of leverage. S&P could revise its outlook on Mirion to stable if: -- Its S&P Global Ratings-adjusted leverage remains above 5x due to unforeseen weakness in its operating performance; or -- The company adopts financial policies, particularly related to its future shareholder returns and acquisitions, that cause S&P to believe its debt leverage will not remain below 5x on a sustained basis. MORROW GA INVESTORS: Trustee Taps Ogier Rothschild as Legal Counsel ------------------------------------------------------------------- Tamara Miles Ogier, the trustee appointed in the Chapter 11 case of Morrow GA Investors, LLC, seeks approval from the U.S. Bankruptcy Court for the Northern District of Georgia to employ Ogier, Rothschild & Rosenfeld, PC as her legal counsel. The firm will render these legal services: (a) examine related review of petitions and schedules; (b) investigate and analyze improper disposal of assets, reclamation requests and petitions, and pending litigation involving the Chapter 11 case. (c) investigate possible assets of the bankrupt and services incidental to the sale of any assets. (d) prepare legal papers; and (e) take any and all other necessary actions incidental to the preservation and administration of the Debtor's estate. The hourly rates of the firm's attorneys and staff are as follows: William L. Rothschild $450 - $525 Tamara Miles Ogier $425 - $470 Allen Rosenfeld $395 - $470 Kathleen Steil $325 - $390 Paralegal $155 - $200 In addition, the firm will seek reimbursement for expenses incurred. Tamara Miles Ogier, Esq., an attorney at Ogier, Rothschild & Rosenfeld, disclosed in a court filing that the firm is a "disinterested person" as defined in Section 101(14) of the Bankruptcy Code. The firm can be reached through: Tamara Miles Ogier, Esq. Ogier, Rothschild & Rosenfeld, PC P.O. Box 1547 Decatur, GA 30031 Telephone: (404) 525-4000 Email: tmo@orratl.com About Morrow GA Investors Morrow GA Investors, LLC is a single asset real estate debtor (as defined in 11 U.S.C. Section 101(51B)). Morrow GA Investors owns a real property located at 1590 Adamson Parkway, Morrow, Ga., having an appraised value of $5.5 million. Morrow GA Investors filed a Chapter 11 petition (Bankr. N.D. Ga. Case No. 21-55706) on July 31, 2021, listing $5,502,000 in total assets and $2,698,079 in total liabilities. Judge James A. Sacca oversees the case. Limbocker Law Firm serves as the Debtor's legal counsel. The U.S. Trustee for Region 21 appointed Tamara Miles Ogier as trustee in this Chapter 11 case. The bankruptcy trustee tapped Ogier, Rothschild & Rosenfeld, PC as legal counsel and Stonebridge Accounting & Forensics, LLC as accountant. MORROW GA INVESTORS: Trustee Taps Stonebridge as Accountant ----------------------------------------------------------- Tamara Miles Ogier, the trustee appointed in the Chapter 11 case of Morrow GA Investors, LLC, seeks approval from the U.S. Bankruptcy Court for the Northern District of Georgia to employ Stonebridge Accounting & Forensics, LLC as her accountant. The trustee needs the assistance of an accountant to review the Debtor's financial records and prepare the tax returns as necessary. Stonebridge will be compensated at an hourly rate of $255 for its services. In addition, the firm will seek reimbursement for expenses incurred. Spence Shumway, a member of Stonebridge Accounting & Forensics, disclosed in a court filing that the firm is a "disinterested person" as defined in Section 101(14) of the Bankruptcy Code. The firm can be reached through: Spence A. Shumway, CPA Stonebridge Accounting & Forensics, LLC P.O. Box 1290 Grayson, GA 30017 Telephone: (770) 995-8102 Facsimile: (770) 995-8103 About Morrow GA Investors Morrow GA Investors, LLC is a single asset real estate debtor (as defined in 11 U.S.C. Section 101(51B)). Morrow GA Investors owns a real property located at 1590 Adamson Parkway, Morrow, Ga., having an appraised value of $5.5 million. Morrow GA Investors filed a Chapter 11 petition (Bankr. N.D. Ga. Case No. 21-55706) on July 31, 2021, listing $5,502,000 in total assets and $2,698,079 in total liabilities. Judge James A. Sacca oversees the case. Limbocker Law Firm serves as the Debtor's legal counsel. The U.S. Trustee for Region 21 appointed Tamara Miles Ogier as trustee in this Chapter 11 case. The bankruptcy trustee tapped Ogier, Rothschild & Rosenfeld, PC as legal counsel and Stonebridge Accounting & Forensics, LLC as accountant. NEW BETHEL: Unsecureds to Get 0.50% Recovery in Plan ---------------------------------------------------- New Bethel Baptist Church filed with the U.S. Bankruptcy Court for the Eastern District of Virginia an Amended Chapter 11 Plan and Amended Disclosure Statement dated September 17, 2021. Under the Plan, the Church proposes to pay in full the Priority Unsecured Claims of the City of Portsmouth, and pay the Class Three General Unsecured Claims approximately $15,000 over the life of the Plan (60 months at $250/mo.) reflecting a distribution of 0.50% of their claims. Class Three includes the claims of (i) TowneBank for $180,000; (ii) James M. Whitaker for $100,000; and (iii) the undersecured portion of Southern Bank's claim, scheduled for $2,550,000. The percentage payout is a direct result of the size of Southern Bank's deficiency claim. Allowed Unsecured Class Four Claims will be paid in equal aggregate monthly payments of $100, to be distributed pro rata, commencing after satisfaction of the priority claims of the City of Portsmouth. The Secured Claim of Southern Bank (Class One) shall be repaid based on the market value of its collateral. The remaining undersecured portion of Southern Bank's claim shall be paid as a general unsecured claim. The Secured Claim of the Small Business Administration (Class Two) shall be paid in equal monthly payments of principal and interest, based upon a 30-year amortization with 2.75% fixed interest, pursuant to the terms of the SBA's COVID-relief Economic Injury Disaster Loan terms. A copy of the Amended Disclosure Statement is available for free at https://bit.ly/3nXb2J9 from PacerMonitor.com. Counsel for the Debtor: Joseph T. Liberatore, Esq. Nathaniel Y. Scott, Es. Liberatore DeBoer P.C. Town Point Center, Suite 604 150 Boush Street Norfolk, VA 23510 Telephone: (757) 333-4500 Facsimile: (757) 333-4501 About New Bethel Baptist Church New Bethel Baptist Church is an unincorporated religious association pursuant to the Constitution of the Commonwealth of Virginia. New Bethel Baptist Church, based in Portsmouth, VA, filed a Chapter 11 petition (Bankr. E.D. Va. Case No. 19-73531) on Sept. 24, 2019. In the petition signed by Melinda L. Starkley, chairman of the trustees, the Debtor disclosed $1,449,207 in assets and $4,034,673 in liabilities. The Hon. Frank J. Santoro oversees the case. Joseph T. Liberatore, Esq., at Crowley Liberatore P.C., serves as bankruptcy counsel. NEWELL BRANDS: Fitch Raises LT IDR to 'BB+', Outlook Stable ----------------------------------------------------------- Fitch Ratings has upgraded Newell Brands Inc.'s Long-Term Issuer Default Rating (IDR) to 'BB+' from 'BB', and unsecured debt ratings to 'BB+/RR4' from 'BB/RR4'. The Rating Outlook is Stable. The upgrade reflects Fitch's expectation that EBITDA will stabilize in the $1.3 billion-$1.4 billion range beginning 2021, similar to 2019/2020 levels, with gross debt/EBITDA trending toward mid-3x in 2021 from 4.4x in 2019 on continued debt reduction. Increased confidence in Newell's ability to sustain low single digit organic sales growth and EBITDA growth of at least low single digits to $1.5 billion, along with continued debt reduction, given the company's reduced net debt/EBITDA target of 2.5x, could lead to a ratings upgrade. Risks to ratings include sustained weakness in core sales growth and EBITDA margin pressure given the ongoing gross margin challenges in a number of categories, investments required to support its brands and potential disruption and costs related to its new supply chain initiatives. KEY RATING DRIVERS Mixed Impact from the Pandemic: Consumer product companies showed disparate results in 2020. Some segments, including cleaning supplies, home-related products and personal grooming benefitted from shelter-in-place activity and attendant changes to consumer behavior, while other segments, such as cosmetics and office products, saw declines. Pandemic-related work stoppages throughout the supply chain affected the ability to meet orders in certain categories, somewhat mitigating the benefits of good consumer demand. Fitch expects Newell's 2021 total core sales growth to be up around 9%, with total revenue of $10.3 billion, as categories that were adversely impacted such as writing (15.4% of 2020 revenue), home fragrance (9.8%), outdoor & recreation (13.8%), and connected home and security business (3.8%) recover through 2021. Growth in categories such food, home appliances and commercial business (collectively 45.44% of 2020 revenue) which were beneficiaries in 2020 is expected to moderate in the second half of 2021 into 2022. Fitch expects revenue in 2022 to decline 4% to $9.9 billion but still be modestly above the $9.7 billion reported in 2019, and be flat to modestly positive thereafter. Newell expects to sustain low single digit organic sales growth over the medium term by strengthening brands through increased innovation, focusing on omnichannel initiatives (with ecommerce at 22% of sales), and accelerating international growth (which accounts for one-third of its sales). Newell reported core sales declines of mid-single digits in 2018 and low single declines in 2019, with market share losses in some of its categories. The company recently discussed its strategy of aligning its eight business units into three categories to direct investments and business focus and maximize portfolio value. The "growth and value accelerators" comprised of food, writing and home fragrance (together 38% of 2020 net sales) have strong growth potential and gross margin of over 40%. Newell views the "solid value generators' comprised of commercial, baby and parenting and connected home and security (32% of 2020 net sales) as steady businesses with decent growth potential and good gross margin. Finally, the "continuous improvement" group includes home appliances and outdoor and recreation in the midst of a turnaround, with the main challenge being gross margin that is significantly below the company average of 33%-34%. EBITDA Expected to Remain Around $1.3 billion-$1.4 Billion: Newell's 2020 EBITDA was $1.3 billion, essentially flat to 2019 levels on a sales decline of 3.4% due to good expense control which led to a 30bp improvement in operating margin. Fitch expects EBITDA to be in the $1.3 billion range-$1.4 billion range in 2021 and 2022, with recovery in some of its weaker performing categories offset by moderating growth in categories that benefited from stay-at-home activities. 2021 margin forecasts reflect management's projected $560 million inflation headwind; there could be some near-term downside risk if inflation picks up or persists into 2022. Newell has discussed a several-hundred basis point improvement opportunity in operating margin based on industry benchmarking, with a long-term target of driving operating margin improvement of 50bp annually. In 2020, the company drove a $160 million reduction in overhead costs and benefited from working capital management, improving cash conversion to the low 70s in 2020 from 115 days in 2018 due to actions such as extended payable terms and SKU reduction by over 50%. In September 2021, Newell discussed a new multi-year supply chain initiative (Project OVID) to transform its go-to market strategy, particularly in the U.S., moving from 23 business specific supply chains to a single integrated supply chain. This is expected to generate savings from fuller trucks, closer proximity to retailers and distribution center optimization. Given the ongoing gross margin challenges in a number of categories, investments required to support its brands and potential disruption and costs related to its supply chain initiatives, Fitch projects EBITDA margin to remain relatively flat at around 14% over the next couple of years. Leverage Expected to Trend Toward Mid-3x: Newell recently revised its long-term net leverage (net debt/EBITDA) ratio target to 2.5x from 3x. Newell reduced debt by roughly $6.5 billion between 2017-2020, funded with $7.6 billion in asset sale proceeds during that period. Total outstanding debt was $5.6 billion at the end of 2020 and Newell intends to pay down debt maturities of approximately $360 million in September 2021 and $250 million in 2022. Fitch expects gross debt/EBITDA to decline to 3.6x in 2021/2022, from 4.2x in in 2020 and 4.4x in 2019, based on its EBITDA projections. Newell has $1.1 billion of debt due in April 2023, which the company could choose to partially pay down with cash on hand given its stated leverage target. DERIVATION SUMMARY Newell's ratings reflect its diverse portfolio of strong brands across the learning and development, home solutions, commercial solutions, outdoor and recreation and home appliances categories; good geographical presence with a third of its business coming from international markets; and a strong digital presence, with digital representing 22% of sales. Fitch's expects EBITDA will stabilize in the $1.3 billion-$1.4 billion range beginning 2021, similar to 2019/2020 levels, with gross debt/EBITDA trending toward mid-3x in 2021 from 4.4x in 2019 on continued debt reduction. Increased confidence in Newell's ability to sustain low single digit organic sales growth and EBITDA growth of at least low single digits to $1.5 billion, along with continued debt reduction given the company's reduced net debt/EBITDA target of 2.5x could lead to a ratings upgrade. Risks to ratings include sustained weakness in core sales growth and EBITDA margin pressures given the ongoing gross margin challenges in a number of categories, investments required to support its brands and potential disruption and costs related to its new supply chain initiatives. ACCO Brands Corporation's 'BB'/Stable rating reflects the company's good position in the global office and business products industry. The ratings are constrained by secular challenges in the office products industry in North America, Europe and Australia. The company has taken steps over the last few years to manage costs given pressures on U.S. organic growth and has executed well on diversifying its customer base toward higher-growth, higher-margin channels in North America as well as acquisitions in better-performing categories and international markets. The rating also reflects ACCO's good balance sheet management, which has led to gross leverage trending around 3.0x over time. Spectrum Brands, Inc.'s current 'BB' rating reflects the company's diversified portfolio and historical track record of maintaining gross leverage leverage around 4.0x. The rating also reflects expectations for modest long-term organic revenue growth, reasonable profitability and positive FCF. The Positive Watch follows the proposed sale of the company's Hardware and Home Improvement business, which represents around 40% of EBITDA, and Fitch's expectations that gross leverage could trend in the mid-2x range following the sale, based on the company's updated financial policy. Fitch would expect to resolve its Watch upon the conclusion of the sale process and Spectrum's IDR could see a potential one-notch upgrade to 'BB+'. Central Garden & Pet Company's 'BB'/Stable rating reflects the company's strong market positions within the pet and lawn and garden segments, ample liquidity supported by robust FCF and moderate leverage offset by limited scale with EBITDA below $400 million, pro forma for the recent acquisitions. Fitch expects modest organic revenue growth over the medium term supplemented by acquisitions, with pro forma EBITDA margins in the 11% area and annual FCF of $100 million to $150 million. Gross leverage is expected to trend between 3.3x and 3.8x. KEY ASSUMPTIONS Fitch's key assumptions within the rating Ccse for the issuer include: -- Revenue increases to $10.3 billion in 2021 from $9.4 billion in 2020, or 9% on a core sales basis, as categories that were adversely impacted in 2020 such as writing, home fragrance, outdoor & recreation, and connected home and security business recover through 2021 while categories which benefitted from pandemic-related behavior remain at above-run rate revenue levels. Revenue is expected to decrease 4% in 2022 as pandemic related demand moderates and be flat to modestly positive thereafter; -- Operating EBITDA is expected to be around $1.4 billion with EBITDA margins of around 14%; -- Capex around $250 million and dividends at around $400 million annually; -- FCF (after dividends) expected to be in the $250 million – $350 million range annually; -- Total debt/EBITDA declines to 3.6x in 2021 from 4.2x in 2020. Newell is paying down upcoming debt maturities of approximately $360 million in September 2021 and expects to pay down $250 million due in 2022. Gross leverage is expected to remain in the mid 3x thereafter. RATING SENSITIVITIES Factor that could, individually or collectively, lead to positive rating action/upgrade: -- A positive rating action could result from increased confidence in the company's ability to grow core sales in the low single digits, sustaining EBITDA growth of at least low single digits leading to EBITDA of over $1.5 billion, with EBITDA margins in the mid-teens and gross debt/EBITDA sustained under 3.5x. Factor that could, individually or collectively, lead to negative rating action/downgrade: -- A negative rating action could result from worse than expected operating performance leading to reduced confidence in Newell's ability to stabilize its business and/or lower than expected debt reduction such that gross debt/EBITDA is sustained above 4.0x. BEST/WORST CASE RATING SCENARIO International scale credit ratings of Non-Financial Corporate issuers have a best-case rating upgrade scenario (defined as the 99th percentile of rating transitions, measured in a positive direction) of three notches over a three-year rating horizon; and a worst-case rating downgrade scenario (defined as the 99th percentile of rating transitions, measured in a negative direction) of four notches over three years. The complete span of best- and worst-case scenario credit ratings for all rating categories ranges from 'AAA' to 'D'. Best- and worst-case scenario credit ratings are based on historical performance. LIQUIDITY AND DEBT STRUCTURE Adequate Liquidity: As of June 30, 2021, Newell maintained $637 million cash on hand and almost full availability under its $1.25 billion unsecured revolving credit facility (RCF) that expires in December 2023, after netting out $21 million outstanding letters of credit. In addition, Newell has a $600 million accounts receivable securitization facility that matures in October 2022; as of June 30, 2021, there were no borrowings under this facility. The company's upcoming debt maturities include approximately $360 million in 2021 and $250 million in 2022, which the company expects to repay with cash on hand, given its revised leverage target. Post this, the company has approximately $1.1 billion of debt maturing in 2023, which the company could choose to refinance or pay down a portion with cash on hand. RECOVERY CONSIDERATIONS Fitch does not employ a waterfall recovery analysis for issuers assigned ratings in the 'BB' category. The further up the speculative grade continuum a rating moves, the more compressed the notching between the specific classes of issuances becomes. Newell's capital structure is unsecured, including its revolver and notes. Fitch has upgraded Newell's ratings across its capital structure to 'BB+'/'RR4' from 'BB'/'RR4', indicating average recovery prospects. ISSUER PROFILE Newell Brands (Newell) is a global marketer of consumer and commercial products, marketed under well-known brands such as Paper Mate, Sharpie, Dymo, EXPO, Parker, Elmer's, Coleman, Marmot, Oster, Sunbeam, FoodSaver, Mr. Coffee, Rubbermaid Commercial Products, Graco, Baby Jogger, NUK, Calphalon, Rubbermaid, Contigo, First Alert, Mapa, Spontex, Quickie and Yankee Candle. The company generates 33% of its sales in international markets and 22% of its sales via ecommerce. SUMMARY OF FINANCIAL ADJUSTMENTS Historical EBITDA has been adjusted for stock-based compensation, restructuring and restructuring related costs, acquisition amortization & impairment, transaction and related costs, other items. ESG CONSIDERATIONS Newell has an Environmental, Social and Governance (ESG) Relevance Score of '4' for Financial Transparency. This reflects a number of factors including material weaknesses in internal control over financial reporting in its 2019 and 2020 10K filings related to its tax accounting, an SEC subpoena in January 2020 related to the impairment of goodwill and other intangibles in 2018, and a subpoena in June 2021 related to disclosures of potential impact of revised U.S Treasury regulations. As of June 30, 2021, management has indicated it has remediated its material weaknesses in financial reporting. Operating comparability over the last few years has also been challenging given a number of reclassifications of continuing versus discontinued operations as well as business segments over 2018-2020. This has a negative impact on the credit profile and is relevant to the ratings in conjunction with the other factors. Unless otherwise disclosed in this section, the highest level of ESG credit relevance is a score of '3'. This means ESG issues are credit-neutral or have only a minimal credit impact on the entity, either due to their nature or the way in which they are being managed by the entity. NINETY-FIVE MADISON: Taps Glenn Agre Bergman & Fuentes as Counsel ----------------------------------------------------------------- Ninety-Five Madison Company, LP seeks approval from the U.S. Bankruptcy Court for the Southern District of New York to employ Glenn Agre Bergman & Fuentes LLP as its substitute legal counsel. The firm will render these legal services: (a) advise the Debtor regarding its rights, powers and duties in the continued management and operation of its business and properties; (b) negotiate and prepare all necessary documents in connection with debtor-in-possession financing and use of cash collateral; (c) attend meetings and negotiate with representatives of creditors and other parties-in-interest; (d) take necessary action to protect and preserve the Debtor's estate; (e) prepare legal papers; (f) negotiate and prepare a plan of reorganization and all related documents; (g) advise the Debtor in connection with any sale of assets; (h) appear before the bankruptcy court and any appellate courts; and (f) perform other necessary legal services for the Debtor in connection with this Chapter 11 case. The hourly rates of the firm's attorneys and staff are as follows: Partners $950 - $1,250 Associates $475 - $825 Paralegals $325 Senior Analysts $375 The firm has agreed with the Debtor that (i) Andrew K. Glenn, Esq., shall be billed at $1,100 per hour and (ii) other partners, all associates and all non-legal personnel shall be billed at 10 percent lower than their respective hourly rates. Andrew Glenn, Esq., a partner at Glenn Agre Bergman & Fuentes, disclosed in a court filing that the firm is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. The firm can be reached through: Andrew K. Glenn, Esq. Shai Schmidt, Esq. Rich Ramirez, Esq. Naznen Rahman, Esq. Glenn Agre Bergman & Fuentes LLP 55 Hudson Yards, 20th Floor New York, NY 10001 Telephone: (212) 358-5600 Email: aglenn@glennagre.com sschmidt@glennagre.com rramirez@glennagre.com nrahman@glennagre.com About Ninety-Five Madison Company Ninety-Five Madison Company, L.P. filed its voluntary petition for relief under Chapter 11 of the Bankruptcy Code (Bankr. S.D.N.Y. Case No. 21-10529) on May 22, 2021, listing up to $100 million in assets and up to $10 million in liabilities. Michael Sklar, general partner, signed the petition. Judge Sean H. Lane oversees the case. The Debtor tapped Glenn Agre Bergman & Fuentes LLP as legal counsel, replacing Windels, Marx, Lane & Mittendorf, LLP. NTH SOLUTIONS: Approves Extra 25% to Class 2 in Cramdown -------------------------------------------------------- Nth Solutions, LLC, notified the U.S. Bankruptcy Court for the Eastern District of Pennsylvania that it consents to a provision in any confirmation order of the Court that will modify the Debtor's Amended Plan of Reorganization to provide that the Class 2 Non-Priority Unsecured Creditors may still receive under a "cramdown" the potential 25% additional distribution contemplated for all Class 2 creditors under a "consensual" plan, in the event the Amended Plan were to be confirmed under the cramdown alternative of Section 1191(b) of the Bankruptcy Code rather than the consensual mechanism of Section 1191 (a) of the Code. A copy of the notice of consent is available for free at https://bit.ly/3i1rLXI from PacerMonitor.com. About Nth Solutions Nth Solutions, LLC -- https://nth-solutions.com/ -- operates a facility located at 15 East Uwchlan Avenue in Exton, Pa., where it manufactures electronic and mechanical precision devices. In addition to its own product line, Nth Solutions also works with its clients using a proprietary market-driven methodology in order to produce additional "state-of-the-art" products. Nth Solutions sought protection under Chapter 11 of the Bankruptcy Code (Bankr. E.D. Pa. Case No. 21-10782) on March 26, 2021. In the petition signed by Susan Springsteen, managing partner and member, the Debtor estimated less than $50,000 in assets and liabilities of $1 million to $10 million. Judge Eric L. Frank oversees the case. Maschmeyer Karalis P.C. represents the Debtor as counsel. PARK PLACE: Case Summary & 20 Largest Unsecured Creditors --------------------------------------------------------- Debtor: Park Place Master Tenant, LLC 25 E, Foothill Blvd. Arcadia, CA 91006 Business Description: Park Place Master Tenant, LLC is primarily engaged in renting and leasing real estate properties. Chapter 11 Petition Date: September 23, 2021 Court: United States Bankruptcy Court Central District of California Case No.: 21-17445 Debtor's Counsel: Jeffrey B. Smith, Esq. CURD, GALINDO & SMITH, LLP 301 E. Ocean Blvd., Suite 1700 Long Beach, CA 90802 Tel: 562-624-1177 Fax: 562-624-1178 Email: jsmith@cgsattys.com Estimated Assets: $1 million to $10 million Estimated Liabilities: $10 million to $50 million The petition was signed by Kin Hui, manager of managing member. A full-text copy of the petition containing, among other items, a list of the Debtor's 20 largest unsecured creditors is available for free at PacerMonitor.com at: https://www.pacermonitor.com/view/GPEJ5TY/Park_Place_Master_Tenant_LLC__cacbke-21-17445__0001.0.pdf?mcid=tGE4TAMA PLATINUM CORRAL: Nov. 10 Plan Confirmation Hearing Set ------------------------------------------------------ Judge Joseph N. Callaway of the U.S. Bankruptcy Court for the Eastern District of North Carolina conditionally approved the Disclosure Statement of Platinum Corral, LLC. Judge Callaway fixed Nov. 1, 2021 as the last day for filing written acceptances or rejections of the Plan. Nov. 1 is also fixed as the last day for filing written objections to Plan confirmation. The hearing to consider confirmation of the Plan is scheduled on Nov. 10, 2021 at 10 a.m. A copy of the order is available for free at https://bit.ly/3CycZ2H from PacerMonitor.com. About Platinum Corral Platinum Corral, LLC, is a multi-unit franchise operator of Golden Corral Buffet-Grill restaurants in North Carolina and Virginia. It is based in Jacksonville, N.C. Platinum Corral filed for Chapter 11 bankruptcy protection (Bankr. E.D.N.C. Case No. 21-00833) on April 9, 2021. In the petition signed by Louis William Sewell, III, president and chief executive officer, the Debtor disclosed $11,254,441 in assets and $49,389,647 in liabilities. Judge Joseph N. Callaway oversees the case. The Debtor tapped Smith Anderson as legal counsel, Williams Scarborough Gray LLP as accountant, and Capital Insight LLC as financial, real estate and restructuring advisor. On May 3, 2021, the official committee of unsecured creditors was appointed in the Debtor's Chapter 11 case. Brinkman Law Group, PC, Waldrep Wall Babcock & Bailey, PLLC and Dundon Advisers, LLC serve as the committee's lead bankruptcy counsel, local counsel and financial advisor, respectively. PURDUE PHARMA: Court's Sept. 17 Modified Bench Ruling on Plan ------------------------------------------------------------- Judge Robert D. Drain of the U.S. Bankruptcy Court for the Southern District of New York, issued a modified bench ruling on the request for confirmation of the Eleventh Amended Joint Chapter 11 Plan of Purdue Pharma L.P. and its debtor-subsidiaries. Judge Drain said that, although Debtors' noticing program reached roughly 98% of the adult population of the United States and approximately 86% of Canadian adults, he has caveat pertaining to notice to those in prison. He said prisoners may not have received the same high level of notice of these cases, the bar date, and the Debtors' request to confirm the plan, including of the proposed third-party claim releases in the Plan. Judge Drain, nevertheless, concluded that the Debtors' notice of the confirmation hearing and the proposed releases in the plan was sufficient. With respect to voting on the Plan, Judge Drain noted that based on the ballot declaration, over 120,000 votes were cast on the Plan, and of the votes cast, the Plan was accepted by every voting class. In the aggregate, the vote was over 95% in favor of confirmation. For the personal-injury claims classes, the vote was 95.7% (Class 10(b)) to over 98% (Class 10(a)), he related. Addressing the objections, which allege that the overwhelming acceptance of the Plan should be looked at differently, Judge Drain recounted that the United States Trustee has argued that the Court should not look at the votes cast but at the votes that were not cast in determining whether the plan was overwhelmingly accepted. The judge said, however, that it is the actual vote that counts, not a statement by a bureaucrat or his or her sense of where the wind is blowing. "That's why we have elections," he said. In addition, the judge wished that the Plan had provided for more but said will not jeopardize what the Plan does provide by denying its confirmation. Judge Drain said he will enter an order confirming the Plan if changes are made to Sections 5.8, Section 10.07(b), and Section 11.1(e) of the Plan, as pointed out in the bench ruling. Section 5.8 of the Plan sets forth the treatment of fee claims by other counsel -- not counsel whose compensation is separately subject to approval by prior order of the Court -- in particular, those of counsel to the personal injury ad hoc committee and of counsel to the school districts' ad hoc committee. These fees, he said, are based on counsels' hourly rates and perhaps in one instance a contingency fee that was not negotiated. Judge Drain believes that the Court will need to make a reasonableness finding as to those counsel fees and expenses in the future under Section 1129(a)(4), on notice to parties in interest, including to the U.S. Trustee. Judge Drain said he will require Section 10.7(b) of the Plan -- which provides for the release of third-party claims against the shareholder released parties -- to be further modified to state that a Debtor's conduct, or a claim asserted against the Debtor, must be a legal cause of the released claim, or a legally relevant factor to the third-party cause of action against the shareholder released party, for the third-party claim to be subject to the release. Section 11.1(e) of the Plan provides that those who would prosecute a cause of action against released parties based on its being a "non-opioid excluded claim," nevertheless must obtain leave from the bankruptcy court to do so. He said that provision should be clarified to apply only to a cause of action that colorably are derivative and therefore would belong to the Debtors' estates. A copy of the Modified Bench Ruling dated Sept. 17, 2021, is available for free at https://bit.ly/2XFYQB7 from Prime Clerk, claims agent. About Purdue Pharma Purdue Pharma L.P. and its subsidiaries -- http://www.purduepharma.com/-- develop and provide prescription medicines and consumer products that meet the evolving needs of healthcare professionals, patients, consumers and caregivers. Purdue's subsidiaries include Adlon Therapeutics L.P., focused on treatment for Attention-Deficit/Hyperactivity Disorder (ADHD) and related disorders; Avrio Health L.P., a consumer health products company that champions an improved quality of life for people in the United States through the reimagining of innovative product solutions; Imbrium Therapeutics L.P., established to further advance the emerging portfolio and develop the pipeline in the areas of CNS, non-opioid pain medicines, and select oncology through internal research, strategic collaborations and partnerships; and Greenfield Bioventures L.P., an investment vehicle focused on value-inflection in early stages of clinical development. Opioid makers in the U.S. are facing pressure from a crackdown on the addictive drug in the wake of the opioid crisis and as state attorneys general file lawsuits against manufacturers. More than 2,000 states, counties, municipalities and Native American governments have sued Purdue Pharma and other pharmaceutical companies for their role in the opioid crisis in the U.S., which has contributed to the more than 700,000 drug overdose deaths in the U.S. since 1999. OxyContin, Purdue Pharma's most prominent pain medication, has been the target of over 2,600 civil actions pending in various state and federal courts and other fora across the United States and its territories. On Sept. 15 and 16, 2019, Purdue Pharma L.P. and 23 affiliated debtors each filed a voluntary petition for relief under Chapter 11 of the U.S. Bankruptcy Code (Bankr. S.D.N.Y. Lead Case No. 19-23649), after reaching terms of a preliminary agreement for settling the massive opioid litigation. The Debtors' consolidated balance sheet as of Aug. 31, 2019, showed $1.972 billion in assets and $562 million in liabilities. U.S. Bankruptcy Judge Robert Drain oversees the cases. The Debtors tapped Davis Polk & Wardwell, LLP and Dechert, LLP as legal counsel; PJT Partners as investment banker; AlixPartners as financial advisor; and Grant Thornton, LLP as tax structuring consultant. Prime Clerk LLC is the claims agent. Akin Gump Strauss Hauer & Feld LLP and Bayard, P.A., represent the official committee of unsecured creditors appointed in the Debtors' bankruptcy cases. David M. Klauder, Esq., is the fee examiner appointed in the Debtors' cases. The fee examiner is represented by Bielli & Klauder, LLC. PURDUE PHARMA: UST Seeks Stay, Insists Plan Order Unconstitutional ------------------------------------------------------------------ William K. Harrington, the United States Trustee for Region 2, has filed an expedited motion to stay the implementation of Purdue Pharma L.P.'s reorganization plan that clears the Sackler Family from claims of opioid victims. The U.S. Trustee seeks a stay pending the United States Trustee's appeals of (1) the Court's September 17, 2021 Findings of Fact, Conclusions of Law, and Order Confirming the Twelfth Amended Joint Chapter 11 Plan, and (2) the related September 15, 2021 Order Authorizing the Debtors to Fund Establishment of the Creditor Trusts, the Master Disbursement Trust and Topco ("Advance Order"). The U.S. Trustee avers the Bankruptcy Court should grant the stay because it has a substantial possibility of success on appeal and because the harm that would result from denying a stay outweighs any potential harm from granting one. "The United States Trustee has a likelihood of success on appeal because the Confirmation Order violates the Bankruptcy Code (the "Code") and the Constitution. Particularly in light of recent Supreme Court precedent, there is a substantial chance that the appellate court will reverse the Confirmation Order's extinguishment of the rights of so many non-debtors against so many other non-debtors without their knowing and informed consent, adequate notice, or an opportunity to be heard." the U.S. Trustee contends. "As argued in the United States Trustee's objection to confirmation of the Debtors' Sixth Amended Plan, the Bankruptcy Code prohibits what amounts to a world-wide opioid-related discharge of hundreds, possibly thousands, of non-debtors who have not themselves filed for bankruptcy. And the Supreme Court has made clear that bankruptcy courts cannot legislate by creating rights not specified in the Code by Congress, even in "rare" cases. Czyzewski v. Jevic Holdings Corp., 137 S. Ct. 973, 987 (2017); Law v. Siegel, 571 U.S. 415, 424, 427 (2014). "Moreover, while the United States Trustee does not agree that such non-debtor releases are ever appropriate under the Code, the non-debtor releases here do not pass muster even under the dicta of Deutsche Bank AG v. Metromedia Fiber Network, Inc. (In re Metromedia Fiber Network, Inc.), 416 F.3d 136 (2d Cir. 2005)("Metromedia"). Indeed, the Second Circuit has never addressed the constitutional implications of non-consensual non-debtor releases like those here. Depriving countless victims of the opioid crisis of their direct causes of action against the myriad Sackler Family members and other non-debtors -- many of whom are unidentified -- cannot be reconciled with either the Due Process Clause or the Bankruptcy Clause of the Constitution. Nor does a non-Article III court have constitutional authority to render a final judgment that would extinguish state-law causes of action between non-debtors." The U.S. Trustee further argues it is not aware of any appellate court that has held the Due Process Clause permits a bankruptcy court to non-consensually extinguish non-debtors' direct causes of action against other non-debtors. "In obtaining plan confirmation, the Debtors conflated the due process notice afforded Purdue's creditors for their claims against Purdue with the due process notice for those with causes of action against the non-debtor Sackler Family members or other non-debtors. For example, Debtors misfocused on notice given of the bar date in these bankruptcy cases. But that had no bearing on the question whether there was adequate notice to the victims about the Plan's extinguishment of their direct causes of action against the Sackler Family members and other non-debtors." Timeline On July 14, 2021, the Debtors filed the Sixth Amended Joint Chapter 11 Plan of Reorganization of Purdue Pharma L.P. and its Affiliated Debtors. Section 10.7(b) of the Sixth Plan included a broad release of causes of action against all "Shareholder Released Parties," which it defined to include, among others, the Sackler Family. On July 19, the U.S. Trustee objected to confirmation of the Sixth Plan, arguing the Non-Debtor releases were unconstitutional, unauthorized by the Bankruptcy Code, and inconsistent with Second Circuit law. The United States Attorney for the Southern District of New York also filed a statement echoing the concerns regarding the Non-Debtor releases. Other parties in interest, including victims, state and local governments, insurers, and industry participants, also objected or expressed similar concerns. From the eve of the confirmation hearing until after the end of closing arguments, Debtors filed an additional five amendments to their chapter 11 plan. The United States Trustee filed supplemental objections to the amended plans. On Sept. 1, the Court rendered an oral ruling stating that it would confirm the proposed plan provided that two changes were made relating to claims against the Sackler Family and other non-debtors. On Sept. 2, the Debtors filed a Twelfth Amended Joint Chapter 11 Plan of Reorganization of Purdue Pharma L.P. and Its Affiliated Debtors. The Plan remains objectionable for the reasons explained in the United States Trustee's objections to the prior versions of the plan. At an Omnibus Hearing on Sept. 13, the Court heard arguments on the Debtors' Motion Pursuant to 11 U.S.C. Sec.105(a) and 363(b) for Entry of an Order Authorizing the Debtors to Fund Establishment of the Creditor Trusts, the Master Disbursement Trust and TopCo ("Advance Motion"). At the time of the hearing, the Court had not yet entered the Confirmation Order. In the Advance Motion, Debtors sought authorization to advance $6,855,468 to various trusts prior to consummation of the Plan "to enable such entities to undertake advance set-up work prior to the Effective Date, thereby allowing distributions to be made to creditors as soon as possible after the Effective Date." At the Sept. 13 hearing, the Court stated: "Every appellant should be moving for expedited review, and I assume they'll get it." On Sept. 15, prior to its entry of the Confirmation Order, the Court granted the Advance Motion over the objections of the states of Maryland, Connecticut, Oregon, and Washington, and of the U.S. Trustee. The Advance Order states the "the limited objections to the Motion are overruled, in part because of the Debtors' waiver at the Hearing of their right to argue that the grant of this Order and the implementation of the relief granted herein would render any appeal of the Court's confirmation of the Debtors' amended chapter 11 plan equitably moot." On Sept. 15, the U.S. Trustee filed notices of appeal of the Court's Sept. 1 oral ruling confirming the Plan, and the Sept. 15 Advance Order. On the same day, the U.S. Trustee filed the Motion for Stay as well as an Ex Parte Motion for an Order Shortening Notice and Scheduling Hearing with Respect to the United States Trustee's Expedited Motion for a Stay of Confirmation Order and Related Orders Pending Appeal Pursuant to Federal Rule of Bankruptcy Procedure 8007. In the Motion to Expedite, the U.S. Trustee explained his need to maintain the status quo pending resolution of his appeal and requested that the Court schedule a hearing on the Motion for Stay within 14 days of its filing. On Sept. 17 at 12:31 p.m., counsel for the Debtors emailed the Court, copying counsel for the U.S. Trustee and certain other parties. Counsel for the Debtors disagreed with the U.S. Trustee's position in the Motion to Expedite that there was a need to have an expedited hearing on the Motion for Stay on or before Sept. 29. Counsel for the Debtors asked instead that the hearing be held during the case's next Omnibus Hearing of Oct. 14. On the same day at 4:03 p.m., the U.S. Trustee sent a response email to the Court's chambers, the Debtors' counsel, and the other counsel addressed in the 12:31 p.m. email of the Debtors' counsel. In his email, the U.S. Trustee disagreed with certain characterizations made by the Debtors' counsel regarding prior conferrals as to the Motion to Expedite. He then restated the need to preserve the status quo while his appeal was pending and again asked the Court to schedule a hearing on the Motion for Stay on an expedited basis or, in the alternative, to convene a scheduling conference on the record to set a schedule. On Sept. 17, the Court entered the Confirmation Order, and Modified Bench Ruling. On the same day, the Court notified the parties that the Court will hold an on-the-record status/scheduling conference on Sept. 30. The Court directed counsel for Debtors to file a notice of such conference. The Debtors filed a notice of the Sept. 30 status conference as directed. The scheduled date for the status conference is one day after the period in which the U.S. Trustee requested his Motion to Stay be set for an expedited hearing. It is also next to the last day of the 14-day automatic stay period of the Confirmation Order under Bankruptcy Rule 3020(e). Separately, notices of appeal of the Confirmation Order were also filed by additional parties as follows: the state of Washington; the District of Columbia; a class of Canadian municipalities; the Peter Ballantyne Cree Nation on behalf of All Canadian First Nations and Metis People, the Peter Ballantyne Cree Nation on behalf itself, and the Lac La Ronge Indian Band; the state of Maryland; and the state of Connecticut. On Sept. 19, the states of Washington and Connecticut filed their own motion for stay of the Confirmation Order pending their appeal. On Sept. 21, the U.S. Trustee filed an amended notice and amended the Motion for Stay in light of the entry of the Confirmation Order. About Purdue Pharma Purdue Pharma L.P. and its subsidiaries -- http://www.purduepharma.com/-- develop and provide prescription medicines and consumer products that meet the evolving needs of healthcare professionals, patients, consumers and caregivers. Purdue's subsidiaries include Adlon Therapeutics L.P., focused on treatment for Attention-Deficit/Hyperactivity Disorder (ADHD) and related disorders; Avrio Health L.P., a consumer health products company that champions an improved quality of life for people in the United States through the reimagining of innovative product solutions; Imbrium Therapeutics L.P., established to further advance the emerging portfolio and develop the pipeline in the areas of CNS, non-opioid pain medicines, and select oncology through internal research, strategic collaborations and partnerships; and Greenfield Bioventures L.P., an investment vehicle focused on value-inflection in early stages of clinical development. Opioid makers in the U.S. are facing pressure from a crackdown on the addictive drug in the wake of the opioid crisis and as state attorneys general file lawsuits against manufacturers. More than 2,000 states, counties, municipalities and Native American governments have sued Purdue Pharma and other pharmaceutical companies for their role in the opioid crisis in the U.S., which has contributed to the more than 700,000 drug overdose deaths in the U.S. since 1999. OxyContin, Purdue Pharma's most prominent pain medication, has been the target of over 2,600 civil actions pending in various state and federal courts and other fora across the United States and its territories. On Sept. 15 and 16, 2019, Purdue Pharma L.P. and 23 affiliated debtors each filed a voluntary petition for relief under Chapter 11 of the U.S. Bankruptcy Code (Bankr. S.D.N.Y. Lead Case No. 19-23649), after reaching terms of a preliminary agreement for settling the massive opioid litigation. The Debtors' consolidated balance sheet as of Aug. 31, 2019, showed $1.972 billion in assets and $562 million in liabilities. U.S. Bankruptcy Judge Robert Drain oversees the cases. The Debtors tapped Davis Polk & Wardwell, LLP and Dechert, LLP as legal counsel; PJT Partners as investment banker; AlixPartners as financial advisor; and Grant Thornton, LLP as tax structuring consultant. Prime Clerk LLC is the claims agent. Akin Gump Strauss Hauer & Feld LLP and Bayard, P.A., represent the official committee of unsecured creditors appointed in the Debtors' bankruptcy cases. David M. Klauder, Esq., is the fee examiner appointed in the Debtors' cases. The fee examiner is represented by Bielli & Klauder, LLC. RBC BEARINGS: S&P Assigns 'BB' Issuer Credit Rating, Outlook Stable ------------------------------------------------------------------- S&P Global Ratings assigned its 'BB' issuer credit rating to RBC Bearings Inc. with a stable outlook. At the same time, S&P assigned its 'BB+' issue-level and '2' recovery ratings to the company's senior secured debt and its 'B+' issue-level and '6' recovery ratings to the company's senior unsecured debt. The issuer of the debt is Roller Bearing Company of America, Inc. The stable outlook on RBC reflects S&P's expectation for continued end market recovery and solid free cash flow generation. This should allow the company to reduce S&P Global Ratings-adjusted debt leverage to about 4x or lower over the next 12-18 months. RBC Bearings Inc. has announced its intention to acquire the Dodge mechanical power transmission division of Asea Brown Boveri Ltd. (ABB) for $2.9 billion. Despite its moderate size compared to that of its peers after the acquisition, RBC maintains a strong market position in the bearings industry. RBC has established leading share of the domestic bearings market, diverse global customer base across various end markets, and expanding portfolio of mechanical power transmission solutions, including the contemplated acquisition of Dodge. These factors are somewhat offset by the mature, cyclical nature of the end markets it serves. The multipurpose, highly engineered nature of RBC's bearing products and strong after-market demand contribute to its relatively higher margins compared to those of peers. In addition, there are moderate barriers to entry for smaller, generic-bearing producers. These factors also contribute to RBC's diverse customer base (no single customer greater than 7% of sales) although limited geographic diversity exposes the company to cyclical demand fluctuations. With service and engineering expertise, RBC targets certain high-growth markets that have long-term aftermarket potential, which can support more stable recurring revenue. The company is split almost equally on a revenue basis into two end markets, with 60% of revenues coming from aerospace and 40% from industrial. With the addition of Dodge, the company will be closer to 70% in industrial end markets and about 30% aerospace. S&P said, "The acquisition of Dodge will strengthen our view of the business. The Dodge addition would, in our view, result in incremental synergies, diversify RBC's product portfolio, increase aftermarket sales as percent of revenues, and improve sales force and distributor base. In addition, the similarities between the two companies should provide for a strong likelihood of success with revenue and cost synergies. We expect the combined company to benefit most from a significantly increased salesforce, supply chain integration, and producing Dodge products in RBC's manufacturing plants located in lower-cost countries. "RBC is poised for growth over the long term. Over the long term, we expect RBC to see favorable trends within global industrial manufacturing. RBC has been expanding its products on existing commercial aircraft platforms and should benefit from the tailwinds of 737 MAX production in the foreseeable future. Dodge has meaningful exposure to the food and beverage industry whose strong anticipated growth is driven by expanded capital expenditure spending in the protein-processing market. Still, RBC continues to be exposed to cyclical end markets and is prone to weakness during broader industrial recessions. We believe the company's conservative financial policy is a key underpinning of maintaining manageable debt leverage through the cycle." RBC maintains a conservative financial policy and will prioritize deleveraging the business after the acquisition. Though the use of substantial debt is within RBC's financial framework of temporarily increasing debt leverage for acquisitions, like the Sargent Aerospace & Defense acquisition in 2015, S&P Global Ratings expects management to maintain its public commitment to reduce leverage over shareholder-friendly initiatives such as share repurchases or the pursuit of additional debt-financed acquisitions until the company reduces consolidated leverage to below 4x. The company has committed to a long-term target of net leverage under 2x, although S&P does not expect the company to achieve that target until 2025 or thereafter. S&P Global Ratings views the mandatory convertible stock as debt in year one and equity within two years of conversion. RBC will issue $400 million in mandatory convertible preferred stock as part of the equity infusion for this transaction. Each share of the convertible preferred stock will convert to common shares three years from issuance. For issuers rated 'BB', S&P considers mandatory convertible preferred stock to be equity within two years of conversion. In fiscal 2022, we will consider the full amount of the preferred stock to be debt and leverage at issuance will be about 6x. In 2023, the company will reduce debt leverage to under 4x inclusive of assigning full equity credit to the preferred stock. The stable outlook on RBC reflects S&P's expectation for continued end-market recovery and solid free cash flow generation. This should allow the company to reduce S&P Global Ratings-adjusted debt leverage to about 4x or lower over the next 12-18 months. S&P could lower its rating on RBC if: -- The company's adjusted debt leverage remains above 4x with no prospects for improvement due to slower recovery in the aerospace end markets that delays deleveraging; or -- The company purses significant debt-funded acquisitions or share repurchases that similarly stretch credit metrics. S&P could raise its rating on RBC if the company reduces its debt leverage such that it expects the company's adjusted debt to EBITDA will remain below 3x through a downturn in the industrial cycle. ROCHELLE HOLDINGS: Asset Sale Proceeds, or Borrowing, to Fund Plan ------------------------------------------------------------------ Rochelle Holdings XIII, LLC, filed with the U.S. Bankruptcy Court for the Middle District of Florida an Amended Plan of Reorganization. The Plan includes (i) Class 1 Secured Claim of Richard J. Risser Family Trust dated September 13, 2007, and Shirley R. Risser, Trustee of the Shirley R. Risser Family Trust dated September 13, 2007 (the Rissers); (ii) Class 2 Secured Claim of Nicholson Investments, LLC; and Class 4 Equity Interests. There are no unsecured claims in the Debtor's case. Class 1 consists of the first mortgage of the Rissers for approximately $27,500,000. The Debtor will pay the loan on or before April 4, 2022. If the Claim is not paid in full by said date, the Rissers, on April 5, 2022, shall receive title to the Property held as collateral, less the Freeport Property, free and clear of liens, with the Rissers purchasing the Property for a credit bid of $24,000,000. Class 2 consists of the mortgage of Nicholson Investments, LLC for approximately $4,331,955. The Debtor said it shall attempt to pay the claim on or before April 4, 2022, otherwise, on April 5, 2022, Nicholson shall receive a promissory note for the amount then remaining unpaid. If the Nicholson debt is not paid in full by April 4, 2022 but the Risser debt has been paid in full, the Debtor shall execute a deed of the Property, less the Freeport property, free and clear of liens, in a form acceptable to Nicholson, and which shall be held in trust. The members of the Debtor will retain their interest post-confirmation. The Debtor shall fund the Plan through Letters of Intent and Contracts for the sale of portions of its real property that is expected to generate sufficient money to pay all claims in full. The Debtor will also obtain postpetition financing and interim funding if it is unable to close [on the sale] simultaneously. A copy of the Amended Plan is available for free at https://bit.ly/39wj0Aw from PacerMonitor.com. Counsel for the Debtor: Lawrence M. Kosto, Esq. Kosto & Rotella, P.A. 619 East Washington Street Orlando, FL 32801 Telephone: (407) 425-3456 Facsimile: (407) 423-9002 About Rochelle Holdings XIII Longwood, Fla.-based Rochelle Holdings XIII, LLC sought protection under Chapter 11 of the Bankruptcy Code (Bankr. M.D. Fla. Case No. 21-03216) on July 15, 2021, disclosing total assets of $85 million and total liabilities of $29.06 million. Matthew R. Hill, managing member of Rochelle Holdings, signed the petition. Judge Lori V. Vaughan oversees the case. Kosto & Rotella, PA serves as the Debtor's legal counsel. RUNNER BUYER: S&P Assigns 'B' Issuer Credit Rating, Outlook Stable ------------------------------------------------------------------ S&P Global Ratings assigned its 'B' issuer credit rating to U.S.-based e-commerce rugs retailer Runner Buyer Inc., doing business as RugsUSA, At the same time, S&P assigned its 'B' issue-level rating and a '3' recovery rating to the company's proposed first-lien facilities. The stable outlook reflects S&P's expectation for steady operating performance over the next 12 months. S&P said, "Our rating is constrained by high leverage and financial sponsor ownership. Following the acquisition, we project RugsUSA's S&P Global Ratings-adjusted leverage of about 6x declining to the mid-5x area in 2022. We forecast improved operating performance driven by strong demand in the industry and project 18%-20% revenue growth in 2021. Although we forecast credit measures will improve over the next two years because of earnings improvement, controlling ownership by financial sponsor Francisco Partners limits our assessment of financial risk. However, we believe RugsUSA's asset-lite business model should support good levels of free cash flow generation to service debt obligations. RugsUSA has no physical retail presence and benefits from low capital expenditure requirements as well as minimal working capital needs, and as a result, we forecast good free operating cash flow (FOCF) of about $50 million in 2021." Potential deleveraging will be subject to how sponsors choose to use cash flow and how they balance growth and their own monetization goals. The rating reflects the company's narrow product focus and relatively small scale. RugsUSA was founded in 1998 as an e-commerce provider of rugs evolving into a multi-channel business model as a direct-to-consumer (DTC) retailer as well as a supplier to marketplaces such as Amazon and Wayfair. Since then, the company has grown rapidly, with a compound annual growth rate of over 30% over the past five years. S&P said, "We believe RugsUSA is well-positioned in the online rugs market with a focus in the value segment, which has seen increased demand in recent years. However, we view the industry as highly fragmented. Although RugsUSA has about a 5% market share, it competes against other DTC rug retailers as well as online marketplaces and big box retailers, some of which are larger and more well-capitalized, posing a risk to the company. In addition, the company's geographic presence is limited, with sales primarily generated in the U.S. We believe the company is a relatively small player in the approximately $6.5 billion area rug market, and we view RugsUSA's narrow product focus and small scale as key business risks. As the company focuses on expansion we believe there could be additional execution risk." S&P said, "Somewhat offsetting these factors is RugsUSA's good S&P Global Ratings-adjusted EBITDA margins, which we forecast in the 26% area for 2021. The company's competitive edge is centered on its data analytics capabilities, which allow the company to price, merchandise, and market products efficiently, contributing to good margins. It also helps the company build customer relationships, leading to increased retention among its roughly 2 million customer base. The company also benefits from strong supplier relationships and economies of scale, resulting in low product and shipping costs. The company's margins have improved in recent years because of improved sourcing and procurement, and we forecast a 100-basis-point margin improvement in 2021. As a result, we note that the companies top market share and good margins are offset by a small overall position in the area rug market. Favorable industry dynamics should support top-line growth over the next few years, but not at the pace seen in the unique 2020 pandemic year. The rating also reflects our expectation that RugsUSA will likely benefit from good home decor industry trends. Increased consumer focus on home decor and improvement has led to increased demand in the rug market. This was accelerated by the pandemic as consumers spent more time at home and reallocated their budgets. In addition, e-commerce penetration in the area rug market has been growing, and we expect it to continue growing. Specifically in the area rug market, the shift to online is driven by broader assortments at online retailers, which have the ability to carry more stock-keeping units (SKU) than brick and mortar retailers. Investments in warehouse capacity have enabled RugsUSA to carry 19,000 SKUs offering a wide selection to customers. In addition, a permanent shift in consumer preference for hard flooring rather than carpeted floors further boosts demand for area rugs. The stable outlook reflects S&P's expectation for steady operating performance over the next 12 months, with adjusted leverage sustained below 6x and good free operating cash flow generation. S&P could lower its rating on RugsUSA if: -- Lower-than-expected earnings caused its adjusted leverage to deteriorate to 6.5x or above. Such a scenario could occur if there were heightened competition in the industry; or -- The company pursued a more aggressive financial policy, including paying dividends to its financial sponsors. S&P would consider upgrading RugsUSA if: -- It meaningfully expanded its market presence, leading S&P to favorably reassess its competitive position; or -- S&P believed it would improve its leverage below 5x and sustain it at this level. An upgrade would be contingent on a commitment by the company's sponsor owners to pursue a more prudent financial policy, including deleveraging. RUSSIAN MEDIA: Taps Law Offices of Alla Kachan as Counsel --------------------------------------------------------- Russian Media Group, LLC seeks approval from the U.S. Bankruptcy Court for the Eastern District of New York to employ the Law Offices of Alla Kachan, P.C. to serve as legal counsel in its Chapter 11 case. The firm's services include: a) assisting the Debtor in administering the case; b) filing the necessary motions or taking appropriate actions under the Bankruptcy Code; c) representing the Debtor in prosecuting adversary proceedings to collect assets of the estate and such other actions as the Debtor deems appropriate; d) taking the necessary steps to marshal and protect the estate's assets; e) negotiating with creditors in formulating a plan of reorganization for the Debtor; f) preparing and seeking confirmation of the plan; and g) rendering such additional services as the Debtor may require in its bankruptcy case. The firm's hourly rates are as follows: Attorneys $475 per hour Paraprofessionals $250 per hour The Law Offices of Alla Kachan will be paid a retainer in the amount of $15,000 and will receive reimbursement for out-of-pocket expenses incurred. In a court filing, Alla Kachan, Esq., a partner at the Law Offices of Alla Kachan, disclosed 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: Alla Kachan, Esq. Law Offices of Alla Kachan, P.C. 2799 Coney Island Avenue, Suite 202 Brooklyn, NY 11235 Tel: (718) 513-3145 Fax: (347) 342-3156 Email: alla@kachanlaw.com About Russian Media Group Russian Media Group, LLC, a Brooklyn, N.Y.-based company doing business as TRN-WMNB, filed a petition for Chapter 11 protection (Bankr. E.D.N.Y. Case No. 21-41741) on July 1, 2021, listing $625,956 in assets and $1,532,402 in liabilities. Sam Katsman, vice-president of Russian Media Group, signed the petition. Judge Elizabeth S. Stong oversees the case. The Law Offices of Alla Kachan, P.C. and Wisdom Professional Services Inc. serve as the Debtor's legal counsel and accountant, respectively. RUSSIAN MEDIA: Taps Wisdom Professional Services as Accountant -------------------------------------------------------------- Russian Media Group, LLC seeks approval from the U.S. Bankruptcy Court for the Eastern District of New York to employ Wisdom Professional Services Inc. as its accountant. The firm's services include preparing the Debtor's monthly operating reports and gathering all pertinent information required to compile and prepare the reports. The firm will be paid $1,000 per report. The retainer fee is $6,000. Michael Shtarkman, a partner at Wisdom Professional Services, 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: Michael Shtarkman Wisdom Professional Services Inc. 626 Sheepshead Bay Rd. Suite 640 Brooklyn, NY 11224 Tel: (718) 554-6672 Email: michael@shtarkmancpa.com mshtarkmancpa@gmail.com About Russian Media Group Russian Media Group, LLC, a Brooklyn, N.Y.-based company doing business as TRN-WMNB, filed a petition for Chapter 11 protection (Bankr. E.D.N.Y. Case No. 21-41741) on July 1, 2021, listing $625,956 in assets and $1,532,402 in liabilities. Sam Katsman, vice-president of Russian Media Group, signed the petition. Judge Elizabeth S. Stong oversees the case. The Law Offices of Alla Kachan, P.C. and Wisdom Professional Services Inc. serve as the Debtor's legal counsel and accountant, respectively. SANG H. SHIN: Disclosure Statement Hearing Slated for Oct. 20 ------------------------------------------------------------- Judge Eduardo Rodriguez of the U.S. Bankruptcy Court for the Southern District of Texas has set for Oct. 20, 2021 at 11 a.m. the hearing to consider approval of the Disclosure Statement of Sang H. Shin DMD, PC. Objections to the Disclosure Statement must be filed and served by Oct. 15. Parties shall participate in the hearing electronically. A copy of the order is available for free at https://bit.ly/3EJpuKw from PacerMonitor.com. About Sang H. Shin DMD PC Sang H. Shin DMD PC, which conducts business under the name Shiny Dental, sought protection under Chapter 11 of the Bankruptcy Code (Bankr. S.D. Tex. Case No. 21-30554) on Feb. 11, 2021. Sang H. Shin, president, signed the petition. In the petition, the Debtor disclosed up to $500,000 in assets and up to $1 million in liabilities. At the time of the filing, the Debtor had estimated assets of between $100,001 and $500,000 and liabilities of between $500,001 and $1 million. The Milledge Law Firm, PLLC is the Debtor's legal counsel. SANTA CLARITA LLC: Michael W. Carmel Named Chapter 11 Trustee ------------------------------------------------------------- Judge Madeleine C. Wanslee of the U.S. Bankruptcy Court for the District of Arizona approved the appointment of Michael W. Carmel as Chapter 11 Trustee for Santa Clarita, LLC. A copy of the order is available for free at https://bit.ly/2W5DoW3 from PacerMonitor.com. About Santa Clarita LLC Santa Clarita, LLC was formed in 1998 by Remediation Financial, Inc. for the sole purpose of acquiring a real property consisting of approximately 972 acres of undeveloped land generally located at 22116 Soledad Canyon Road, Santa Clarita, Calif. The Debtor purchased the property from Whittaker Corporation, which used the property to manufacture munitions and related items for the U.S. Department of Defense. The soil and groundwater on the property suffered environmental contamination thus the property required remediation before it could be developed. In January 2019, the controlling interest in RFI was acquired by Glask Development, LLC. Glask Development has two members, K&D Real Estate Consulting, LLC and Gracie Gold Development, LLC. The Debtor's sole member and manager is RFI. Santa Clarita filed a voluntary petition for relief under Chapter 11 of the Bankruptcy Code (Bankr. D. Ariz. Case No. 20-12402) on Nov. 12, 2020. At the time of filing, the Debtor disclosed $100 million to $500 million in assets and $500 million to $1 billion in liabilities. Judge Madeleine C. Wanslee oversees the case. Thomas H. Allen, Esq., at Allen Barnes & Jones, PLC, is the Debtor's legal counsel. The Debtor also tapped the services of financial and accounting expert, J.S. Held LLC. SEARS HOLDINGS: Last Department Store in Illinois Closed -------------------------------------------------------- CNN reports that Sears will shut the doors on its last department store in Illinois come fall, the state in which its first retail store opened in 1925. The Sears department store in the Woodfield Mall in Schaumburg, a Chicago suburb, will close on Nov. 14, 2021. Transformco, which acquired Sears Holdings after the company filed for bankruptcy in 2018, confirmed its plans to redevelop the property. "We intend to reinvigorate and maximize the value of the real estate while enhancing the consumer experience with popular retailers that fit the regional draw of Woodfield Mall," said Scott Carr, president of Real Estate for Transformco. Transformco said the company is focused on growing sears.com and the Sears Home Services business. "This is part of the company's strategy to unlock the value of the real estate and pursue the highest and best use for the benefit of the local community," Larry Costello, Transformco's public relations director said in a statement. Sears will still have a presence in Illinois. There are 11 Sears Hometown Stores in the state, operating primarily in small towns by independent dealers or franchisees of Transformco affiliates. The stores are typically between 6,000 to 8,000 square feet — far smaller than Sears department stores which were each more than 100,000 square feet — and sell mainly hard goods and appliances. Transformco's strategy is to operate more stores like the Hometown Sears. There currently are 300 Sears and Kmart stores still open in the US, down from nearly 700 in October 2018, when Sears declared bankruptcy. At its peak, the company operated more than 3,000 stores. Once the nation's predominant retailer and its largest employer, Sears opened its first retail store in 1925 in Chicago and closed its last location there in 2018. Covid has further decimated the entire department store industry, forcing high end retailers like Neiman Marcus and budget department stores like JCPenney into bankruptcy. Sears Holdings emerged from bankruptcy in February 2019. A second Chapter 11 filing for the company could be the end for Sears and Kmart. "I was surprised it wasn't liquidated already," said Reshmi Basu, analyst with Debtwire and an expert in retail bankruptcies. "History shows a [second bankruptcy] for a retailer almost always ends up in liquidation." Critics of former CEO of Sears Holdings Eddie Lampert argued he was more interested in the company's real estate than its retail operations. Lampert, a hedge fund operator with an expertise in real estate, has redeveloped many former Sears locations. After he stepped down as CEO, Lampert was eventually sued by Sears Holdings for allegedly stripping away the company's assets as it was sliding into bankruptcy. About Sears Holdings Corp. Sears Holdings Corporation (OTCMKTS: SHLDQ) -- http://www.searsholdings.com/-- began as a mail ordering catalog company in 1887 and became the world's largest retailer in the 1960s. At its peak, Sears was present in almost every big mall across the U.S., and sold everything from toys and auto parts to mail-order homes. Sears claims to be is a market leader in the appliance, tool, lawn and garden, fitness equipment, and automotive repair and maintenance retail sectors. Sears and Kmart merged to form Sears Holdings in 2005 when they had 3,500 US stores between them. Kmart emerged in 2005 from its own bankruptcy. Unable to keep up with online stores and other brick-and-mortar retailers, a long series of store closings has left it with 687 retail stores in 49 states, Guam, Puerto Rico, and the U.S. Virgin Islands as of mid-October 2018. At that time, the Company employed 68,000 individuals, of whom 32,000 were full-time employees. As of Aug. 4, 2018, Sears Holdings had $6.93 billion in total assets, $11.33 billion in total liabilities and a total deficit of $4.40 billion. Unable to cover a $134 million debt payment due Oct. 15, 2018, Sears Holdings Corporation and 49 subsidiaries sought Chapter 11 protection (Bankr. S.D.N.Y. Lead Case No. 18-23538) on Oct. 15, 2018. The Hon. Robert D. Drain is the case judge. The Debtors tapped Weil, Gotshal & Manges LLP as legal counsel; M-III Partners as restructuring advisor; Lazard Freres & Co. LLC as investment banker; DLA Piper LLP as real estate advisor; and Prime Clerk as claims and noticing agent. The U.S. Trustee for Region 2 appointed nine creditors, including the Pension Benefit Guaranty Corp., and landlord Simon Property Group, L.P., to serve on the official committee of unsecured creditors. The committee tapped Akin Gump Strauss Hauer & Feld LLP as legal counsel; FTI Consulting as financial advisor; and Houlihan Lokey Capital, Inc. as investment banker. The U.S. Trustee for Region 2 on July 9, 2019, appointed five retirees to serve on the committee representing retirees with life insurance benefits in the Chapter 11 cases. * * * In February 2019, Bankruptcy Judge Robert Drain authorized Sears Holdings approval to sell the business to majority shareholder and CEO Eddie Lampert for approximately $5.2 billion. Lampert's ESL Investments, Inc., won an auction to acquire substantially all of Sears' assets, including the "Go Forward Stores" on a going-concern basis. The proposal would allow 425 stores to remain open and provide ongoing employment to 45,000 employees. SECURE ENERGY: Fitch Assigns B+ Rating on Sr. Unsecured Notes ------------------------------------------------------------- Fitch Ratings has assigned a 'B+'/'RR4' rating to Secure Energy Services Inc. (SES) offering of senior unsecured notes. Proceeds from the offering will be used for the prepayment of outstanding second lien secured debt and for general corporate purposes. The ratings and Stable Outlook reflect the strength demonstrated by both SES and Tervita Corporation (TEV) through the last downturn, when the companies maintained a steady level of profitability across a wide range of offered services, among others. SES is expected to leverage deep customer relationships and expanded asset footprint covering the major oil plays in the Western Canadian Sedimentary Basin (WCSB) to drive costs down and ultimately improve producer economics. Fitch views SES' improved competitive position driven by enhanced scale, higher utilization and combined cost efficiencies as supportive of credit quality. Additionally, low relative leverage, combined with expectations for near-term FCF-driven deleveraging, is indicative of a stronger credit profile. KEY RATING DRIVERS WCSB Activity Exposed: SES provides cost-effective and essential services primarily to E&P customers in Western Canada and North Dakota. Fitch expects demand for those services to remain healthy so long as oil is produced in those regions. However, activity levels in Western Canada and North Dakota drive the degree to which SES' services are required. SES expects the majority of its EBITDA post-merger to come from fixed-fee contracts without minimum volume commitments, and with terms of less than one year, which will continue its exposure to production levels and to the pace of drilling and completion in the WCSB (and North Dakota). Risks remain from a prolonged period of low commodity prices leading to reduced oil and gas activity. Contracts Provide Some Stability: The company will have some long-term contract cover through its Kerrobert and East Kaybob crude pipeline systems, as well as the water disposal facilities in the Pipestone and Montney regions. These longer-term take-or-pay-type and area dedication contracts provide stability and visibility into future revenue and cash flow for SES. Fitch would consider the further contracting of these assets and/or the addition of other long-term contracted assets as positive for credit quality. Size/Scale Benefits: SES' go-forward EBITDA will more than double with the addition of TEV. With synergy realization, Fitch anticipates the combined entity could reach $400 million within 18 months. The increased size and scale should yield material operational efficiencies, leading to a stronger cost structure and better customer offering. Additionally, Fitch sees an increased business robustness, better equipping the combined entity with tools to weather a future downturn in commodity prices/activity. The delivery of targeted synergies and continued expansion of EBITDA towards $500 million annually would indicate improvement in the credit profile. Strong Leverage for the Rating: The post-merger capital structure contains leverage that is strong for the rating category. Fitch's estimates, on a pro forma basis, including a full year of EBITDA from TEV, that 2021 leverage will be around 3.5x. Additionally, Fitch forecasts a decline in leverage over the forecast period to below 2.0x, as free cash flow generated is allocated towards debt reduction, consistent with current management guidance calling for leverage below 2.5x within two years of transaction close. A steady quarterly decrease in outstanding revolver balance, supported by prudent capital spending and flat dividend payments leading to positive FCF (before debt repayment) would be viewed as tangible indicators of credit strength. Customer Can Become Competitor: For a portion of SES' businesses, a large number of E&P companies handle the services SES provides in-house. Fitch believes the trend of producers outsourcing more non-E&P activities to better focus on core strengths and achieve improved capital efficiencies will continue. However, should service costs become too high, or there is a larger industry shift toward doing more in-house, the SES businesses not operating under long-term contracts may see financial results deteriorate. The recent trend of upstream consolidation has both positive and potential negative implications for SES. Larger producers may be more willing to sign long-term contracts for service as their businesses are more robust. Conversely, a larger producer may find it more economical to handle produced water itself. Fitch views consolidation as positive for the industry in the long run as it typically lowers costs, which improves resiliency. DERIVATION SUMMARY SES is somewhat unique relative to Fitch's midstream coverage given its diversification along the midstream value chain, including the operation of Class I & II landfills in Western Canada, combined with its structure as a standalone corporate entity. SES operates crude oil gathering, processing and transportation systems, among others, concentrated in a single basin, effectively, similar to Oryx Midstream Holdings LLC (Oryx; B/Positive) and Medallion Midland Acquisition, LLC (MEDMID; B+/Stable). Similar to WaterBridge Midstream Operating LLC (WBR; B-/Negative), SES operates produced and waste water treatment and disposal assets. While there is little direct business line overlap, Precision Drilling Corporation (PD; B+/Stable) is a peer as it is exposed to Canadian oil & gas activity and features a standalone corporate structure. As a standalone corporate entity, SES is dissimilar to sponsor-owned Oryx, MEDMID and WBR. SES, similar to its peers, has limited direct commodity price exposure. Roughly 95% of EBITDA is generated from fixed-fee contracts and/or (non-commodity) fee-based service agreements. However, most of the fixed-fee contracts and/or fee-based service agreements do not contain significant minimum volume commitments and as such SES, similar to peers, is exposed to producer volume changes. While SES provides services in multiple plays in the WCSB, Fitch views its exposure to specific basin economics as similar to a single-basin G&P issuer, given the overarching exposure to Canadian crude differentials. SES benefits from a mix of take-or-pay-type and area dedication contracts with durations of greater than one year remaining; however, these contracts make up a smaller relative proportion of overall EBITDA compared with Oryx, MEDMID and WBR. Outside of two crude systems and one water system, the majority of SES revenue comes from fixed-fee contracts and/or fee-based service agreements of three months or less. This results in a weaker credit profile for SES, compared to Oryx, MEDMID and WBR. Combined, SES and TEV have a broader relative customer base including customers outside of the oil & gas industry (specifically rail operators, metals & mining and large industrial companies). Additionally, approximately 75% of expected revenue from the pro forma top 10 customers will be from investment-grade counterparties; however, without a portfolio of long-term take-or-pay contracts, the relative importance of customer credit quality is reduced and is not at, this time, a differentiating credit factor. Fitch expects SES to have annual run-rate EBITDA in excess of $300 million. This compares favorably with Oryx, MEDMID and WBR. Pre-2020, PD reported EBITDA well in excess of $300 million. Fitch views the financial robustness afforded to larger relative scale, as measured by an EBITDA run-rate of $300 million per annum or greater, supportive of higher credit quality. Fitch expects post-merger leverage to be around 3.5x, on a pro forma trailing-twelve-month basis. Fitch forecasts leverage to decrease to below 2.5x by the end of 2023. This compares favorably with year-end 2021 leverage of 5.6x-5.9x at Oryx, 5.3x at MEDMID, 9.5x-10.0x at WBR and 5.1x at PD. Fitch views SES' lower expected leverage as a differentiating credit factor. Outsized event risk is shared by each of SES, Oryx, MEDMID and WBR, given the single-basin exposure. However, the combinations of SES' larger relative size, as measure by EBITDA, and meaningfully lower expected leverage reflects a comparably stronger credit profile. Compared with MEDMID, SES' size and leverage advantage is offset by MEDMID's much larger portion of EBITDA from long-term contracts as well as stronger producer expectations supporting targeted deleveraging. Size/scale and leverage differences more than offset contract portfolio duration and cause a one-notch separation between the IDRs of Oryx and SES. Compared with WBR, the significant leverage divergence, as well as larger relative size and scale, lead to a two-notch separation from the SES IDR. KEY ASSUMPTIONS Fitch's key assumptions within the rating case for the issuer include: -- Oil and gas production and development activity in Western Canada and North Dakota consistent with a Fitch base case West Texas Intermediate (WTI) assumption of US$52/bbl in 2022 before moving to a US$50/bbl long-term price assumption; -- A small number of assets are assumed to be divested/decommissioned as part of the merger-related asset review process, leading to an immaterial reduction in expected combined EBITDA; -- Meaningful overhead and operating cost synergies are realized over the forecast period; -- Dividends remain at current level through 2023. FCF generated is used to reduce outstanding credit facility borrowings; -- CAD/USD rate of $1.25 over the forecast period; -- The recovery analysis assumes that SES would be considered a going-concern in bankruptcy. Fitch has assumed a 10% administrative claim (standard). The going-concern EBITDA estimate of $255 million reflects Fitch's view of a sustainable, post-reorganization EBITDA level upon which Fitch bases the valuation of the company. As per Fitch's criteria, the going concern EBITDA reflects some residual portion of the distress that caused the default; -- Fitch used a 6x EBITDA multiple to arrive at SES' going concern enterprise value. The multiple is in line with recent reorganization multiples in the energy sector. There have been a limited number of bankruptcies and reorganizations within the midstream space, but bankruptcies at Azure Midstream and Southcross Holdco had multiples between 5x and 7x by Fitch's best estimates. In Fitch's bankruptcy case study report "Energy, Power and Commodities Bankruptcies Enterprise Value and Creditor Recoveries," published in April 2019, the median enterprise valuation exit multiplies for 35 energy cases for which this was available was 6.1x, with a wide range of multiples observed. RATING SENSITIVITIES Factor that could, individually or collectively, lead to positive rating action/upgrade: -- A positive rating action is not anticipated in the near term but Fitch may take positive rating action should minimum volume commitment contracts with a weighted average duration remaining of three years or greater make up 25% or more of total EBITDA and if leverage, defined as total debt with equity credit to operating EBITDA, was expected to be below 4.0x on a sustained basis. Factors that could, individually or collectively, lead to negative rating action/downgrade: -- Leverage, defined previously, above 5.0x for a sustained period; -- A negative rating action may be considered if annual run rate EBITDA were expected to remain below $300 million for a sustained period of time; -- Impairments to liquidity including expectations for Adjusted EBITDA Interest coverage to be sustained below 3.0x. BEST/WORST CASE RATING SCENARIO International scale credit ratings of Non-Financial Corporate issuers have a best-case rating upgrade scenario (defined as the 99th percentile of rating transitions, measured in a positive direction) of three notches over a three-year rating horizon; and a worst-case rating downgrade scenario (defined as the 99th percentile of rating transitions, measured in a negative direction) of four notches over three years. The complete span of best- and worst-case scenario credit ratings for all rating categories ranges from 'AAA' to 'D'. Best- and worst-case scenario credit ratings are based on historical performance. LIQUIDITY AND DEBT STRUCTURE Sufficient Liquidity: SES had cash on the balance sheet of $7 million as of June 30, 2021. The post-merger capital structure includes an $800 million first lien secured revolver, of which just over $400 million was expected to be drawn at transaction close. Additionally, an unsecured bilateral LC credit facility was put in place for $30 million. Given the relatively low working capital and sustaining capital requirements of the business, Fitch views the nearly $400 million in available revolver capacity, in addition to cash on hand, as sufficient. The company's debt maturities include the first lien revolver maturing in 2024, the second lien secured notes due in 2025 and the senior unsecured notes due in 2026. ISSUER PROFILE Secure Energy Services Inc. is a service provider to upstream oil and natural gas companies in Western Canada and the Northern U.S. SES owns and operates a network of midstream processing and storage facilities, crude oil and water pipelines, and crude by rail terminals. SES also provides environmental and fluid management services. 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. SERVICE KING: Skips Interest Payment Amid Cash Woes --------------------------------------------------- Service King Collision Repair Centers Inc., has begun to skip cash interest payments and tapped a line of credit as the Covid-19 pandemic has pushed down automobile traffic and raised costs for the business, according to people familiar with the company, The Wall Street Journal's Alexander Saeedy reports. Service King is conserving cash amid an ongoing liquidity crunch, electing to defer cash payments to term lenders and instead tack on additional debt to the loan balance, the sources told WSJ. The company also has drawn down on a revolving line of bank credit, the sources said. Service King Collision Repair -- https://www.serviceking.com/ -- is a national automotive collision repair company operating in 24 states and the District of Columbia across the U.S. It was founded in 1976 by Eddie Lennox in Dallas. The Carlyle Group purchased majority ownership of Service King in 2012. After growing the chain from 49 Texas locations to more than 175 locations in 20 states, it sold a majority stake to Blackstone in July 2014. Carlyle has maintained a minority stake. In 2017, Bloomberg reported that Blackstone and Carlyle explored a sale of the chain for as much as $2 billion. SOUND HOUSING: Court Directs Appointment of Chapter 11 Trustee -------------------------------------------------------------- Judge Marc Barreca of the U.S. Bankruptcy Court for the Western District of Washington directed the U.S. Trustee to appoint a Chapter 11 Trustee for Sound Housing LLC. The appointed Chapter 11 Trustee shall file a report addressing whether the continued real property development and sales of real property in the Debtor's Chapter 11 case, or conversion of the case to one under Chapter 7, is in the best interests of the estate and creditors. Judge Barreca previously denied the Debtor's request for approval of the adequacy of the Disclosure Statement explaining its Chapter 11 Plan of Liquidation. Creditors Julia Schwarz, Edmund Tee and Ezra Investments, LLC, objected to the request. A copy of the order is available for free at https://bit.ly/3kwuwlN from PacerMonitor.com. About Sound Housing LLC Sound Housing LLC filed its Chapter 11 petition (Bankr. W.D. Wash. Case No. 21-10341) on Feb. 19, 2021. At the time of filing, the Debtor had $1 million to $10 million in assets and $1 million to $10 million in liabilities. Judge Marc Barreca presides over the case. Jacob D DeGraaff, Esq., at Henry & DeGraaff, P.S., is the Debtor's legal counsel. SOUND HOUSING: Disclosures Denied as Trustee to Take Over --------------------------------------------------------- Judge Marc Barreca of the U.S. Bankruptcy Court for the Western District of Washington denied approval of the Disclosure Statement of Sound Housing LLC for reasons stated on the record, including the Court's appointment of a Chapter 11 Trustee for the Debtor. The U.S. Trustee has earlier filed a motion to convert Sound Housing case's to Chapter 7 or to dismiss the case or appoint a Chapter 11 trustee. According to the U.S. Trustee, the filing of a Chapter 7 case by principal Tatiana Gershanovich has clouded the issue of who is in charge of the Debtor's management and, ultimately, the Ch. 11 case. This uncertainty has created a management vacuum or gap that must be addressed to insure the protection of the interests of creditors, the estate, and other parties in interest. The Court on Sept. 20, 2021, entered an order directing the appointment of a Chapter 11 trustee for the Debtor. A copy of the order is available for free at https://bit.ly/3tZNyUy from PacerMonitor.com. About Sound Housing LLC Sound Housing LLC filed its Chapter 11 petition (Bankr. W.D. Wash. Case No. 21-10341) on Feb. 19, 2021. At the time of filing, the Debtor had $1 million to $10 million in assets and $1 million to $10 million in liabilities. The petition was signed by Tatiana Gershanovich, managing member. Judge Marc Barreca presides over the case. Jacob D DeGraaff, Esq., at Henry & DeGraaff, P.S., is the Debtor's legal counsel. On Aug. 2, 2021, the Debtor's principal, Tatiana Gershanovich, filed for chapter 7 relief (Case No. 21-11482). Ms. Gershanovich appears to be the sole member of the Debtor. Ed Wood is the chapter 7 trustee in the Chapter 7 case. SUPERMOOSE NEWCO: S&P Upgrades ICR to 'CCC+', Outlook Stable ------------------------------------------------------------ S&P Global Ratings raised its issuer credit rating on public safety and administration software provider SuperMoose Newco Inc. (doing business as CentralSquare Technologies) to 'CCC+' from 'CCC', its issue-level rating on its revolving credit facility and first-lien term loan to 'B-' from 'CCC+', and its issue-level rating on its second-lien term loan to 'CCC-' from 'CC'. S&P's '2 recovery rating on the first-lien term loan and '6' recovery rating on the second-lien term loan are unchanged. The stable outlook reflects S&P's expectation that CentralSquare's improved EBITDA margin will help it reduce its leverage below the 12x area and generate modestly positive free operating cash flow (FOCF) after debt service in 2022. While leverage remains high, CentralSquare's improving operational performance over the past year has helped stabilize its total liquidity. The company has faced significant headwinds over the past few years. CentralSquare was part of a three-company rollup in 2018, which experienced tremendous integration issues immediately after closing due to management's aggressive cost-savings plan. The company also dealt with issues related to COVID-19 because many of its government and agency customers had to put their public safety and administration deals on hold to address the fallout from the pandemic. However, even with these severe headwinds, CentralSquare was able to achieve a stable performance over the past year. S&P said, "The stable outlook reflects our expectation that CentralSquare's improved EBITDA margin will help it reduce its leverage below the 12x area and generate modestly positive free operating cash flow (FOCF) after debt service in 2022. "We could downgrade CentralSquare if we believe the risk of of a default or distressed exchange has increased or we foresee dim prospects for it to address its maturing revolver. This could occur due to operational missteps that lead to a drop in its recurring revenue, increased operating expenses--which reduce its EBITDA margins--or a market-related downturn that weakens the demand for CentralSquare's products. "We could upgrade our rating on CentralSquare if it addresses its fully drawn revolver due 2023, sustains leverage below the 10x area, and generates modest positive unadjusted FOCF after debt service. This could occur if the company maintains its stable business operations such that it modestly increases its revenue while sustaining stable EBITDA margins." TEXXON PETROCHEMICALS: Nov. 2 Plan & Disclosure Hearing Set ----------------------------------------------------------- On Sept. 20, 2021, debtor Texxon Petrochemicals, LLC filed with the U.S. Bankruptcy Court for the Eastern District of Texas a Disclosure Statement describing Plan of Reorganization. Judge Brenda T. Rhoades conditionally approved the Disclosure Statement and ordered that: * Oct. 29, 2021, is fixed as the last day for filing written acceptances or rejections of the Debtors' proposed Chapter 11 plan. * Oct. 27, 2021, is fixed as the last day for filing and serving written objections to final approval of the Debtors' Disclosure Statement; or confirmation of the Debtors' proposed Chapter 11 plan. * Nov. 2, 2021, at 9:30 a.m. is the telephonic hearing to consider final approval of the Debtors' Disclosure Statement (if a written objection has been timely filed) and to consider the confirmation of the Debtors' proposed Chapter 11 Plan. A full-text copy of the order dated Sept. 20, 2021, is available at https://bit.ly/3ky0duM from PacerMonitor.com at no charge. Proposed Attorneys for the Debtor: Eric A. Liepins, Esq. Eric A. Liepins, P.C. 12770 Coit Road, Suite 1100 Dallas, TX 75251 Telephone: (972) 991-5591 Facsimile: (972) 991-5788 Email: eric@ealpc.com About Texxon Petrochemicals Texxon Petrochemicals, LLC, filed its voluntary petition for relief under Chapter 11 of the Bankruptcy Code (Bankr. E.D. Tex. Case No. 20-42453) on Dec. 14, 2020. At the time of the filing, the Debtor had estimated assets of less than $50,000 and liabilities of between $100,001 and $500,000. Eric A. Liepins, Esq., serves as the Debtor's legal counsel. TEXXON PETROCHEMICALS: Unsecureds Will Get 100% of Claims in Plan ----------------------------------------------------------------- Texxon Petrochemicals, LLC, filed with the U.S. Bankruptcy Court for the Eastern District of Texas a Disclosure Statement describing Plan of Reorganization dated September 20, 2021. The Debtor was formed in 2011. The Debtor operates a gas station/convenience store located at 5301 N Lamer, Austin, Texas ("Property") under a lease agreement with Getty Leasing, Inc. During the pandemic the Debtor fell behind on lease payments and Getty sought to evict the Debtor. The Debtor filed this bankruptcy to avoid eviction and to continue operations to repay its creditors. After the filing of the bankruptcy, the Debtor continued operations, and has filed two motions with the Court. The first motion allowed the Debtor to maintain operations and assume the lease on the Property with Getty. The Debtor was required to provide certain insurance and make payments to Getty. The Debtor is current with its obligations under that Court Order. The second motion which was filed by the Debtor sought to hold Getty to an agreement to sell the Property to the Debtor. That motion has not been heard by the Court as of the filing of the Plan. The Debtor believes it has a solid business core and can continue operations while repaying its current debts to the creditors. Under the Debtor's Plan in the event the Court approves the Debtor's current motion to purchase the Property, the Debtor shall purchase the Property in cash on or before the Effective Date. The Debtor shall use the new funds to pay all creditors in full on the Effective Date. In the event the Court does not approve the Debtor's motion to purchase the Property, the Debtor will maintain operations and pay the creditors in full in monthly payments. The Plan will treat claims as follows: * Class 1 Claimants are the Allowed Administrative Claims of Professionals and US Trustee and will be paid in cash and in full on the Effective Date of this Plan. Professional fees are subject to approval by the Court as reasonable. Debtors' attorney's fees approved by the Court and payable to the law firm of Eric Liepins, P.C. will be paid immediately following the later of Confirmation or approval by the Court out of the available cash. The Debtor's case will not be closed until all allowed Administrative Claims are paid in full. * Class 2 Claimants are Allowed Ad Valorem Tax Claims. The Allowed Ad Valorem Tax Creditor Claims shall be paid out of the revenue from the continued operations of the business. Travis County has filed a Proof of Claim in the amount of $9,012.58 ("Ad Valorem Taxes") for business property taxes. The Ad Valorem Taxes due and owing will receive post-petition pre-confirmation interest at the state statutory rate of 12% per annum and post-confirmation interest at the rate of 12% per annum. The Debtor will pay any Allowed Class 2 claimant either on the Effective Date in the event of a purchase of the Property or over a 24 month period commencing on the Effective Date. * Class 3 is the Allowed Claim of the Getty Leasing, Inc. On May 14, 2021 the Court entered an Order Conditionally Granting Debtor's Motion to Assume Lease ("Order"). Under the terms of the Order the Debtor is required to make certain payments to Getty Leasing, Inc. in conjunction with assuming the lease on the Property. The Debtor has filed a motion with the Court to allow it to purchase the Property from Getty. In the event the motion is granted, the Debtor shall pay the purchase price to Getty on or before the Effective Date. Upon payment of the purchase price Debtor will have no further obligation to Getty. In the event the Court does not approve the motion to purchase the Property the Debtor shall continue to make the payments required under the Lease and the Order until the end of the term of the Lease. * Class 4 Claimants are Allowed Unsecured Creditors. All allowed unsecured creditors shall be paid in full upon the purchase of the store, on or before the Effective Date. In the event the Court does not approve the sale of the Property to the Debtor, the Debtor will continue to operate the store and the unsecured creditors shall share pro rata in the unsecured creditors pool. The Debtor shall make monthly payments commencing on the Effective Date of $2,000 into the unsecured creditors' pool. The Debtor shall make a total of 24 payments into the unsecured creditors pool with the first payment being made on the Effective Date. Based upon the Debtor schedules the Class 4 creditor will receive approximately 100% of their Allowed Claims. The Class 4 creditors are impaired. * Class 5 consists of Current Owners. The current owners will receive no payments under the Plan on account of their ownership interest, however, they will be allowed to retain their ownership in the Debtor. Class 5 Claimants are not impaired under the Plan. Debtor anticipates the purchase of the Property or the continue operations of the business to fund the Plan. A full-text copy of the Disclosure Statement dated September 20, 2021, is available at https://bit.ly/2XKSHnZ from PacerMonitor.com at no charge. Proposed Attorneys for the Debtor: Eric A. Liepins, Esq. Eric A. Liepins, P.C. 12770 Coit Road, Suite 1100 Dallas, TX 75251 Telephone: (972) 991-5591 Facsimile: (972) 991-5788 Email: eric@ealpc.com About Texxon Petrochemicals Texxon Petrochemicals, LLC filed its voluntary petition for relief under Chapter 11 of the Bankruptcy Code (Bankr. E.D. Texas Case No. 20-42453) on Dec. 14, 2020. At the time of the filing, the Debtor had estimated assets of less than $50,000 and liabilities of between $100,001 and $500,000. Eric A. Liepins, Esq., serves as the Debtor's legal counsel. THAI STK: Seeks Cash Collateral Access -------------------------------------- Thai Stk, Inc. asks the U.S. Bankruptcy Court for the Northern District of California, San Francisco Division, for authority to use cash collateral. The Debtor requires the use of cash collateral to provide for ordinary and necessary expenses as indicated in the budget. Thai Stk, Inc. operates a restaurant at the leasehold address 301 El Camino Real, Millbrae, California, 94030. The lease where Thai Stk, Inc. operates is under the name of Mr. Punsak Polemahasuppapole, the individual, as tenant. Thai Stk, Inc. operates as subtenant of Mr. Polemahasuppapole, with the consent of the landlord. The Debtor ran into two problems which are the Covid-19 pandemic and a wage-and-hour lawsuit filed by former employees. Pre-petition although the Debtor reached a confidential compromise of controversy with the "wage and hour" former employees, a decreased in revenue brought on by the Covid-19 pandemic caused Thai Stk, Inc. to fall behind in settlement payments. As a result, Thai Stk, Inc. elected to seek bankruptcy protection and reorganize under chapter 11 Subchapter V and filed the chapter 11 case on August 31, 2021. The cash collateral lienholders are the California Department of Tax and Fee Administration Account Information Group and the Employment Development Department. As of September 22, 2021, there are no proofs of claim filed asserting a secured claim interest. The Debtor's budget provides for $52,500 in total income and $50,503.51 in total expenses. The Debtor requests that interim and final approval of cash collateral access remain effective through plan confirmation and/or a date set by the Court for a final hearing. A copy of the motion is available at https://bit.ly/3u3lmjN from PacerMonitor.com. About Thai STK Inc. Thai Stk, Inc. operates a restaurant at the leasehold address 301 El Camino Real, Millbrae, California, 94030. The Debtor filed a Chapter 11 bankruptcy petition (Bankr. N.D. Calif. Case No. 21-30613) on Aug. 31, 2021, disclosing up to $50,000 in assets and up to $500,000 in liabilities. Judge William J. Lafferty oversees the case. The Debtor is represented by Belvedere Legal, PC. THE GALLEY: Case Summary & Unsecured Creditor --------------------------------------------- Debtor: The Galley 1 Burnt Cove Road Stonington, ME 04681 Chapter 11 Petition Date: September 23, 2021 Court: United States Bankruptcy Court District of Maine Case No.: 21-10254 Judge: Hon. Michael A. Fagone Debtor's Counsel: Adam Prescott, Esq. BERNSTEIN SHUR SAWYER & NELSON, P.A. 100 Middle Street P.O. Box 9729 Portland, ME 04101 Tel: 207-774-1200 Email: aprescott@bernsteinshur.com Debtor's Financial Advisor: SPINGLASS MANAGEMENT GROUP Estimated Assets: $1 million to $10 million Estimated Liabilities: $1 million to $10 million The petition was signed by Kristy Wiberg as president. The Debtor listed Verne C. Seile as its sole unsecured creditor holding a claim of $1,941,361. A full-text copy of the petition is available for free at PacerMonitor.com at: https://www.pacermonitor.com/view/OEYEFVY/The_Galley__mebke-21-10254__0001.0.pdf?mcid=tGE4TAMA TRAXIUM LLC: Plan Violates Absolute Priority Rule, Objectors Say ---------------------------------------------------------------- Gergel-Kellem Company, Inc., a/k/a/ Watt Printers (Watt), and G-K Ltd. (G-K), in an objection filed with the U.S. Bankruptcy Court for the Northern District of Ohio to the Amended Joint Plan of Reorganization and Disclosure Statement of Traxium, LLC and affiliated debtors, asserted that Traxium's current owners -- George and Tina Schmutz -- do not have authority to file the Plan and Disclosure Statement. Based on certain pledge agreements, according to CENPRAA, all of Traxium's membership units are owned by CENPRAA, not by Schmutz. A judicial determination needs to be made as to whether Schmutz or CENPRAA owns Traxium before the Court can rule on the Plan and Disclosure Statement, Watt and G-K asserted. Mark M. Mikhaiel, Esq. at Schneider Smeltz Spieth Bell, counsel for the objectors, pointed out that the Amended Plan, as the original Plan, contains an obvious absolute priority rule violation, which automatically precludes confirmation. The absolute priority rule contained in Section 1129(b)(2)(B)(ii) of the Bankruptcy Code provides that Debtors' equity holders cannot receive or retain under the plan any property on account of their old equity interests because the rejecting class of unsecured creditors will not be paid in full under the Plan. The exception or corollary to the absolute priority rule known as "new value" provides that for the "new value" exception to apply -- for old equity to retain the equity of the Reorganized Debtor -- the new value must be "(1) in money or money's worth, (2) reasonably equivalent to the value of the new equity interests in the reorganized debtor, and (3) necessary for implementation of a feasible reorganization plan. Mr. Mikhaiel noted that the current equity owners seek to retain their ownership interest post-bankruptcy despite failing to put any new capital into Traxium, in violation of the absolute priority rule. George Schmutz's reduction in salary and the assignment of claims against CENPRAA do not provide any value to Traxium, the counsel said. Bankruptcy courts have consistently held that a reduction in salary, or a release of claim is not a capital contribution to the debtor because a reduction in salary is not an infusion of new funds, he added. As to the Schmutz's assignment of the claim against CENPRAA, Mr. Mikhaiel argued that it is really a disguise for Traxium to pay for the costs of defense out of the corpus of the estate. Since CENPRAA's claims pending in Summit County relate to the Schmutz's personally, there is no reason for Traxium to pay for the costs and expenses of defense, he said. Mr. Mikhaiel further complained that while Traxium proposed that $3,300,000 to be paid to general unsecured claims over a 10-year period under the Plan, Traxium did not provide for default mechanisms. Traxium's statement that it will, somehow, pay all creditors in full over a decade, is a farce as the creditors may receive 100% of the allowed claims only if Traxium prevails in litigation and recover the entire alleged damages. Traxium must present proof that it will, in fact, recover 100% of its claimed damages against CENPRAA, Watt, and others before confirmation of the Plan, he averred. The $2.4 million Traxium estimated for professional fees to be incurred over a 10-year period would be better used to pay the creditors rather than pay attorneys to pursue a tenuous action, the counsel told the Court. A copy of the objection is available for free at https://bit.ly/2XEBKuG from PacerMonitor.com. Counsel for Gergel-Kellem Company, Inc. and G-K Ltd.: Mark M. Mikhaiel, Esq. Schneider Smeltz Spieth Bell 1375 E. Ninth Street, Suite 900 Cleveland, OH 44114 Telephone: (216) 696-4200 Facsimile: (216) 696-7303 E-mail: mmikhaiel@sssb-law.com About Traxium LLC Traxium, LLC is a holding company comprised of commercial printing and marketing businesses. It provides a complete platform of graphic design, marketing, and printing solutions and services consisting of print, bindery, and finishing services, mailing services, and other products and services to customers throughout the region and across the country. Traxium filed its voluntary petition for relief under Chapter 11 of the Bankruptcy Code (Bankr. N.D. Ohio Case No. 20-51888) on October 16, 2020. Affiliate Serendipity Holdings, LLC, also filed a Chapter 11 petition (Bankr. N.D. Ohio Case No. 20-51889) on Oct. 16. On Oct. 20, another affiliate, Cadence Holdings, LLC, filed a Chapter 11 petition (Bankr. N.D. Ohio Case No. 20-51908). The cases are jointly administered under Traxium LLC. The petitions were signed by George Schmutz, chief executive officer. On the Petition Date, debtor Traxium reported $4,420,019 in total assets and $5,665,021 in total liabilities. Debtor Serendipity Holdings disclosed $2,435,809 in total assets and $9,870,438 in total liabilities. Debtor Cadence Holdings estimated between $500,001 and $1,000,000 in total assets and between $1,000,001 and $10,000,000 in total liabilities at the time of filing. The Honorable Alan M. Koschik oversees the cases. Gertz & Rosen, Ltd. and Rysenia Capital Solutions, LLC serve as the Debtors' legal counsel and restructuring advisor, respectively. Dennis Durco of Rysenia Capital is the Debtors' operations consultant and chief restructuring officer. TSM DEVELOPMENT: Voluntary Chapter 11 Case Summary -------------------------------------------------- Debtor: TSM Development, LLC 1830 E. Main Street Grand Prairie, TX 75050 Chapter 11 Petition Date: September 23, 2021 Court: United States Bankruptcy Court Northern District of Texas Case No.: 21-31699 Debtor's Counsel: Gerrit M. Pronske, Esq. SPENCER FANE 5700 Granite Parkway Suite 650 Plano, TX 75024 Tel: 972-324-0300 Email: gronske@spencerfane.com Estimated Assets: $50,000 to $100,000 Estimated Liabilities: $1 million to $10 million The petition was signed by Kun W. Yu, member. 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/GYPBASY/TSM_Development_LLC__txnbke-21-31699__0001.0.pdf?mcid=tGE4TAMA U.S. TOBACCO: Appointment of Creditors' Committee Sought -------------------------------------------------------- A group of unsecured creditors asked the U.S. Bankruptcy Court for the Eastern District of North Carolina to appoint an official committee that will represent unsecured creditors of U.S. Tobacco Cooperative Inc. in its Chapter 11 case. The group, which consists of the largest unsecured trade creditors that include Xcaliber International Ltd. LLC, Tobacco Rag Processors and Schweitzer-Mauduit International, Inc., said unsecured creditors are not "adequately represented" in U.S. Tobacco Cooperative's bankruptcy case. "The [group] believes that unsecured creditors are owed many millions of dollars in the aggregate and that their interests are not adequately represented by other constituencies," said the group's attorney, Glenn Thompson, Esq., at Hamilton Stephens Steele + Martin, PLLC. U.S. Tobacco Cooperative owed as much as $2.5 million in unsecured trade debt as disclosed in the declaration filed by Keith Merrick, the cooperative's chief financial officer. "[U.S. Tobacco Cooperative] has an inherent conflict because its interests are served by minimizing debt repayment while general unsecured creditors seek to maximize repayment," Mr. Thompson said in court papers. "Similarly, neither the secured lenders nor the plaintiffs in the class actions are required to advocate for general unsecured creditors or have shown that they will do so in these cases," the attorney said, referring to the two separate class action suits pending in the North Carolina superior court and district court. The unsecured creditors' group can be reached through: Glenn C. Thompson, Esq. Robert A. Cox, Jr., Esq. Hamilton Stephens Steele + Martin, PLLC 525 North Tryon Street, Suite 1400 Charlotte, NC 28202 Telephone: (704) 344-1117 Facsimile: (704) 344-1483 E-mail: gthompson@lawhssm.com rcox@lawhssm.com - and - James R. Irving, Esq. April A. Wimberg, Esq. Dentons Bingham Greenebaum LLP 3500 PNC Tower, 101 S. Fifth Street Louisville, KY 40202 Telephone: (502) 587-3606 E-mail: james.irving@dentons.com april.wimberg@dentons.com Andrew C. Helman, Esq. Dentons Bingham Greenebaum LLP 254 Commercial Street, Suite 245 Merrill's Wharf Portland, ME 04101 Telephone: (207) 619-0919 E-mail: andrew.helman@dentons.com About U.S. Tobacco Cooperative U.S. Tobacco Cooperative produces U.S. flue-cured tobacco grown by more than 500 member growers in Florida, Georgia, South Carolina, North Carolina, and Virginia. Member-grown tobacco is processed and sold as raw materials to cigarette manufacturers worldwide. U.S. Tobacco Cooperative and affiliates sought Chapter 11 protection (Bankr. E.D.N.C. Lead Case No. 21-01511) on July 7, 2021. In the petition signed by Keith H. Merrick, chief financial officer, U.S. Tobacco Cooperative estimated assets of between $100 million and $500 million and estimated liabilities of between $100 million and $500 million. Judge Joseph N. Callaway oversees the cases. The Debtors tapped Hendren, Redwine & Malone, PLLC as bankruptcy counsel, and McGuireWoods, LLP and Robinson, Bradshaw & Hinson, P.A. as special counsel. BDO Consulting Group, LLC, SSG Advisors, LLC and CliftonLarsonAllen serve as the Debtors' financial advisor, investment banker and accountant, respectively. VICTORIA TOWERS: Taps Giambalvo, Stalzer & Co. as Accountant ------------------------------------------------------------ Victoria Towers Development Mezz Corp. seeks approval from the U.S. Bankruptcy Court for the Eastern District of New York to employ Giambalvo, Stalzer & Company, CPAs, PC as its accountant. The firm will render these services: (a) give the Debtor accounting advice with respect to the preparation of tax returns; (b) assist the Debtor and its counsel in preparing tax returns; and (c) assist the Debtor in minimizing taxes from the sale of assets. The hourly rates of the firm's professionals are as follows: Principals $350 Senior Manager $275 Manager $250 Senior Accountant $275 Staff Accountant $135 Administrative Staff $120 In addition, the firm will seek reimbursement for expenses incurred. As disclosed in court filings, Giambalvo is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. The firm can be reached at: Giambalvo, Stalzer & Company, CPAs, PC 3500 Sunrise Highway Suite 100, Building 200 Great River, NY, 11739 Telephone: (631) 321-8000 Facsimile: (631) 321-8075 Email: info@gsco-cpas.com About Victoria Towers Development Mezz Victoria Towers Development Mezz Corp., a Flushing, N.Y.-based company engaged in constructing and managing real properties, filed a voluntary petition for Chapter 11 protection (Bankr. E.D.N.Y. Case No. 20-72405) on July 8, 2020, disclosing assets of up to $50,000 and liabilities of up to $50 million. Myint Kyaw, managing member, signed the petition. Judge Robert E. Grossman oversees the case. The Debtor tapped Weinberg, Gross & Pergament LLP, and Macco Law Group, LLP, as legal counsel and Giambalvo, Stalzer & Company, CPAs, PC as accountant. WABASH NATIONAL: S&P Rates New $400MM Senior Unsecured Notes 'B' ---------------------------------------------------------------- S&P Global Ratings assigned its 'B' issue-level rating and '5' recovery rating to Wabash National Corp.'s proposed $400 million unsecured senior notes. The '5' recovery rating reflects its expectation of modest (10%-30%; rounded estimate: 20%) recovery in the event of a payment default. Wabash plans to use the proceeds to retire its existing $315 million senior notes due in 2025, and to pay off its existing $109 term loan. The company is increasing its asset-based lending facility (ABL) to $225 million from $175 million. Recovery prospects for the new senior notes improve based on the net reduction in secured claims ahead of the notes. ISSUE RATINGS – RECOVERY ANALYSIS Key analytical factors: -- Wabash National Corp. plans to issue $400 million in new senior notes. -- S&P assigned a '5' recovery rating (rounded estimate: 20%) and 'B' issue-level rating to the company's proposed $400 million senior notes. -- S&P's simulated default scenario contemplates a payment default in 2025 amid a sustained economic downturn that reduces customer demand for new commercial trailers, intense pricing pressures from competitive actions by other suppliers, and execution challenges related to the ramp-up of new technologies and product offerings. -- S&P values the company based on a 5x EBITDA multiple, in line with multiples we use for auto and commercial vehicle supplier peers. -- S&P assumes the asset-based revolver is 60% drawn. -- S&P assumes LIBOR of 250 basis points at default. Simulated default and valuation assumptions: -- Year of default: 2025 -- EBITDA multiple: 5x -- EBITDA at emergence: $47.3 million Simplified waterfall: -- Net enterprise value (after 5% administrative costs): $225 million -- Priority claims: $131 million -- Collateral value: $94 million -- Secured first-lien debt: Not available -- Collateral value: $94 million -- Senior unsecured claims: $411 million --Recovery expectations: 10%-30%; rounded estimate: 20% All debt amounts include six months of accrued prepetition interest. WADSWORTH ESTATES: Unsecureds to Get Negligible Recovery in Plan ---------------------------------------------------------------- Wadsworth Estates, LLC, filed with the U.S. Bankruptcy Court for the Eastern District of Louisiana a proposed First Supplemental and Amended Disclosure Statement to its Chapter 11 Plan of Reorganization dated August 11, 2021, containing the proposed immaterial modifications to its Disclosure Statement. The Debtor's Plan, which is a plan of liquidation, provides for the orderly distribution of the remaining proceeds of the sale of the Debtor's only significant asset consisting of 92.5034 acre tract of land that was valued between $20 million to $26 million but sold for $9 million. The sale proceeds were used to pay in full the Debtor's obligation to First American Bank and Trust and to Beverly Construction Company, LLC, including the attorney's fees incurred by the creditors. The Allowed Claims of both First American Bank and Beverly Construction Company LLC on account of attorney's fees will be paid in full. The Debtor and First American Bank have agreed to settle the bank's contested claim against the Debtor for default and penalty interest through a cash payment by Joseph Young for $200,000, to be paid by a carve out from Mr. Young's secured lien. Mr. Young has also consented to the carve out of $150,000 from the amount of his secured claim to be used exclusively for Administrative Expenses and Professional Fees, first, and for payment of general unsecured non-priority claims on a pro rata basis should there be any funds remaining. General unsecured creditors will likely receive a negligible distribution. The Allowed Secured Claim of Joseph Young Jr. aggregating $4,443,040 on account of a third lien mortgage on the Property will be paid in full up to the amount of the remaining proceeds of the Property sale. The amount of the Disputed Secured Claim of the Azby Fund will be ultimately be determined by the Bankruptcy Court. The amendment provided that the Equity Interests of the members of the Debtor shall remain unchanged. The Plan previously provided for the cancellation of the Equity Interest. A copy of the First Supplemental and Amended Disclosure Statement is available for free at https://bit.ly/3o1CWUb from PacerMonitor.com. Counsel for the Debtor: William G. Cherbonnier, Jr., Esq. The Caluda Group, LLC 2550 Belle Chasse Highway, Ste. 215 Gretna, LA 70053 Telephone 504-309-3304 Facsimile: 504-309-3306 Email: wgc@billcherbonnier.com - and - Christopher A. Sisk, Esq. The Caluda Group, LLC Sisk Law Firm 830 Union St, Ste. 301 New Orleans, LA 70112 Tel: 504-799-9987 Fax: 504-500-3376 E-mail: chris@sisklawfirm.com About Wadsworth Estates Wadsworth Estates is a Single Asset Real Estate debtor (as defined in 11 U.S.C. Section 101(51B)). Its only significant asset was a 92.5034-acre tract of land located in St. Tammany Parish that was marketed under the name of Wadsworth Estates. Wadsworth Estates sought protection under Chapter 11 of the Bankruptcy Code (Bankr. E.D. La. 20-10540) on March 10, 2020. In the petition signed Ashton J. Ryan, Jr., managing member, the Debtor was estimated to have between $10 million to $50 million in both assets and liabilities. William G. Cherbonnier, Jr., Esq. at the CALUDA GROUP, LLC, represents the Debtor. WASATCH RAILROAD: Taps Markus Williams as Legal Counsel ------------------------------------------------------- Wasatch Railroad Contractors seeks approval from the U.S. Bankruptcy Court for the District of Wyoming to employ Markus Williams Young & Hunsicker, LLC to serve as legal counsel in its Chapter 11 case. The firm's services include: a. assisting in the production of the Debtor's bankruptcy schedules and statement of financial affairs and other pleadings; b. assisting in the preparation of the Debtor's plan of reorganization and seeking confirmation of the plan; c. preparing legal papers; d. representing the Debtor in adversary proceedings and contested matters related to its bankruptcy case; e. advising the Debtor of its rights, powers, obligations and duties in the continuing operation of its business and the administration of its estate; and f. providing other necessary legal services. The firm's hourly rates are as follows: Attorneys $450 per hour Paralegals $125 per hour Markus Williams will also be reimbursed for out-of-pocket expenses incurred. The Debtor paid the firm a retainer of $34,217. Bradley Hunsicker, Esq., a partner at Markus Williams, 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: Bradley T. Hunsicker, Esq. William G. Cross, Esq. Markus Williams Young & Hunsicker, LLC 2120 Carey Avenue, Suite 101 Cheyenne, WY 82001 Tel: (307) 778-8178 Fax: (307) 638-1975 Email: bhunsicker@MarkusWilliams.com wcross@MarkusWilliams.com About Wasatch Railroad Contractors Wasatch Railroad Contractors, a Cheyenne, Wyo.-based company doing business as Wasatch Railcar Repair Contractors, sought Chapter 11 protection (Bankr. D. Wyo. Case No. 21-20392) on Sept. 14, 2021, listing $1,511,372 in assets and $3,337,129 in liabilities. John E. Rimmasch, chief executive officer, signed the petition. Markus Williams Young & Hunsicker, LLC is the Debtor's legal counsel. WASHBURN MARINE: Taps Weinstein & St. Germain as Bankruptcy Counsel ------------------------------------------------------------------- Washburn Marine Shipyard, LLC and its affiliates seek approval from the U.S. Bankruptcy Court for the Western District of Louisiana to employ Weinstein & St. Germain, LLC to handle its Chapter 11 case. Weinstein will be paid at the rate of $350 per hour for the services of its attorneys and $125 per hour for paralegal services. The firm will also receive reimbursement for out-of-pocket expenses incurred. Tom St. Germain, Esq., a partner at Weinstein, 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: Tom St. Germain, Esq. Weinstein & St. Germain, LLC 1103 West University Ave Lafayette, LA 70506 Tel: (337) 235-4001 Fax: (337) 235-4020 About Washburn Marine Shipyard Morgan City, La.-based Washburn Marine Shipyard, LLC filed a petition for Chapter 11 protection (Bankr. W.D. La. Case No. 21-50567) on Sept. 13, 2021, listing $362,943 in assets and $2,708,457 in liabilities. Alexander Joseph Washburn, manager, signed the petition. Judge John W. Kolwe oversees the case. Weinstein & St. Germain, LLC is the Debtor's legal counsel. Z REAL ESTATE: Taps Shane DiGiuseppe & Rodgers as Special Counsel ----------------------------------------------------------------- Z Real Estate Holdings, LLC seeks approval from the U.S. Bankruptcy Court for the Central District of California to employ Shane DiGiuseppe & Rodgers, LLP as special counsel. The firm will represent the Debtor as plaintiff in an adversary proceeding for mortgage fraud against the principals and brokers who originated the mortgage loan held by Iridium, LLC. The firm will be paid $400 per hour and reimbursed for out-of-pocket expenses incurred. Richard Rodgers, Esq., a partner at Shane DiGiuseppe & Rodgers, 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: Richard A. Rodgers, Esq. Shane DiGiuseppe & Rodgers LLP 3125 Old Conejo Road Thousand Oaks, CA 91320 Tel: (805) 230-2525 Email: rar@lawsdr.com About Z Real Estate Holdings Huntington, Calif.-based Z Real Estate Holdings, LLC filed its voluntary petition for Chapter 11 protection (Bankr. C.D. Calif. 21-12171) on March 9, 2021, listing as much as $10 million in both assets and liabilities. Judge Barry Russell oversees the case. Totaro & Shanahan and Shane DiGiuseppe & Rodgers, LLP represent the Debtor as bankruptcy counsel and special counsel, respectively. ZELIS HOLDINGS: S&P Rates 1st Lien and Delayed Draw Term Loan 'B' ----------------------------------------------------------------- S&P Global Ratings assigned its 'B' debt rating and '3' recovery rating to Zelis Holdings L.P. and subsidiaries' $550 million term loan B and $300 million delayed draw term loan (DDTL) due 2026. The '3' recovery rating indicates its expectation of meaningful recovery (50%) in the event of payment default. The company is also upsizing its undrawn revolver by $50 million to $200 million. The ratings on Zelis Holdings L.P. and its core subsidiaries--including S&P's 'B' long-term issuer credit rating as well as its 'B' ratings on its revolving credit facility due 2024 and $1.485 billion first-lien term loan due 2026--are unaffected by these issuances. Zelis intends to use the proceeds from the $550 million issuance to fund the acquisition of Sapphire Digital, a provider of provider directory, transparency, and navigation solutions to health plan members. Sapphire serves approximately 87 million members and 60 health plans and has a high degree of recurring revenue. The acquisition will enable Zelis to enter the consumer-facing health care market while offering solutions to clients as they prepare to come into compliance with the No Surprises Act (NSA). Additionally, the combination with Sapphire presents cross-selling opportunities in both directions, resulting in an expansion of Zelis' addressable market and further top-line and earnings growth opportunities. Zelis has put significant attention on understanding the NSA, the federal "surprise billing" reform law. The regulations have yet to be finalized but will change the manner in which payors and providers determine their initial payment amount and negotiate payments through arbitration. The Sapphire transaction is strategic to Zelis as the company continues to assess how it plans to adapt its products and services under the new regulatory framework, given the Sapphire platform supports a portion of the legislation that is focused on price transparency requirements. So, while the NSA remains a developing risk, S&P believes Zelis has the opportunity and capability to convert pressure that may result from lower claim volumes into some upside potential, through an offering of new solutions embedded within its suite of services. In the 12 months ended June 30, 2021, Zelis' performance was strong. The company grew revenue by almost 30%, with S&P Global Ratings-adjusted EBITDA margins exceeding 37% (net margins exceeding 42%). Material client wins, as well as a quick rebound in health care claim volumes, have supported this growth. This growth also allowed Zelis to reduce leverage to 4.7x (from 5.8x at year-end 2020) with EBITDA interest coverage exceeding 4.0x. While the $550 million term loan was issued to fund Sapphire, the DDTL will be used as an additional source of liquidity and dry powder for future mergers and acquisitions (M&A). S&P said, "We expect Zelis will utilize and fully draw on the DDTL by year-end 2021 or in early 2022. Inclusive of $850 million in new debt, we expect S&P Global Ratings-adjusted pro forma leverage to be elevated at 7.3x for the 12 months ended June 30, 2021. While this is above our downside trigger of 7.0x, once an M&A target is established, we expect the associated acquired EBITDA will offset this debt escalation and result in leverage returning to below 7.0x." S&P said, "Incorporating the Sapphire acquisition into our projections for the next 12 months, we forecast sustained top-line growth of approximately 30% with EBITDA margins of 35%-37% (net margins of 41%-42%). Margins are expected to slightly decline, since Sapphire is a lower-margin business with headroom to build scale and generate efficiencies through integration and synergies. Furthermore, we expect S&P Global Ratings-adjusted financial leverage to be 6.5x-7.0x at year-end 2021 and then fall to 5.5x-6.0x by year-end 2022 with EBITDA interest coverage exceeding 2.5x during this time, supported by continued strong revenue and EBITDA expansion." [*] Corporate Bankruptcies Up in Miami in August 2021 ----------------------------------------------------- Gabriela Henriquez Stoikow of Miami Today reports that business bankruptcies increased in Miami, Florida in August 2021 while individual cases decreased. as Miami-Dade opens up its economy. Just in August 2021, 360 cases of Chapter 7 were filed at the Bankruptcy Court of the Southern District of Florida, seven of Chapter 11 and 151 of Chapter 13. [*] Key Hertz Case Advisors Join Special Virtual Program Oct. 14 ---------------------------------------------------------------- A special virtual program at noon EDT on October 14 will bring together industry leaders to discuss how they directed the Hertz chapter 11 filing during the pandemic to result in a successful exit from bankruptcy in June 2021. The "Anatomy of the Hertz Chapter 11" program, moderated by Bloomberg Law and sponsored by Kramer Levin Naftalis & Frankel LLP, Moelis & Company and White & Case LLP, features practitioners who were involved with the case presenting their strategies, how they employed aggressive, nontraditional steps to maximize the company's value, and how negotiation was of utmost importance. Speakers on the webinar include: * Katherine Bologna, managing director, ABS, at Deutsche Bank AG, who served as the asset-backed securitization lender in the Hertz case. * Amy Caton, partner with Kramer Levin Naftalis & Frankel LLP, who served as counsel to Hertz's Official Committee of Unsecured Creditors. * William Derrough, co-head of Restructuring and Recapitalization and member of the Senior Leadership Team of Moelis & Company, who served as the lead investment banker in the Hertz case. * Thomas Lauria, a partner and global head of the Financial Restructuring and Insolvency Practice of White & Case LLP, who served as counsel to Hertz. The moderator for the program will be Jeff Fuller, a legal analyst with Bloomberg Law. If you are a member of the press and would like to attend the virtual program, please click https://www.abi.org/events/anatomy-of-the-hertz-chapter-11 About the American Bankruptcy Institute ABI is the largest multi-disciplinary, nonpartisan organization dedicated to research and education on matters related to insolvency. ABI was founded in 1982 to provide Congress and the public with unbiased analysis of bankruptcy issues. The ABI membership includes nearly 10,000 attorneys, accountants, bankers, judges, professors, lenders, turnaround specialists and other bankruptcy professionals, providing a forum for the exchange of ideas and information. For additional information on ABI, visit http://www.abiworld.org/ For additional conference information, visit http://www.abi.org/calendar-of-events [*] Petitions Seek Supreme Court Review of 3 Bankruptcy Rulings --------------------------------------------------------------- Mark Douglas of Jones Day wrote an article on JDSupra titled "U.S. Supreme Court Update: Petitions Seek Review of Notable Bankruptcy Law Rulings." At a conference to be held at the end of the summer recess on September 27, 2021, the U.S. Supreme Court will consider whether to grant petitions seeking review during the new Term that begins on October 4 of three notable appeals involving issues of bankruptcy law. Two of those appeals address the doctrine of "equitable mootness." The third concerns federal preemption of a non-debtor third party's tortious interference claims against other non-debtor third parties. The court-fashioned remedy of equitable mootness bars adjudication of an appeal when a comprehensive change of circumstances has occurred such that it would be inequitable for a reviewing court to address the merits of the appeal. In bankruptcy cases, appellees often invoke equitable mootness as a basis for precluding appellate review of an order confirming a chapter 11 plan. The equitable mootness doctrine has been criticized as an abrogation of federal courts' "virtually unflagging obligation" to hear appeals within their jurisdiction. In re One2One Commc'ns, LLC, 805 F.3d 428, 433 (3d Cir. 2015); In re Charter Commc'ns, Inc., 691 F.3d 476, 481 (2d Cir. 2012). According to this view, dismissing an appeal on equitable mootness grounds "should be the rare exception." In re Tribune Media Co., 799 F.3d 272, 288 (3d Cir. 2015); accord In re VeroBlue Farms USA, Inc., 2021 WL 3411834, *1 (8th Cir. Aug. 5, 2021) (as in decisions by the Third, Tenth, and numerous other Circuits, "we conclude that the district court did not apply a sufficiently rigorous test to determine when bankruptcy equities and pragmatics justify foregoing Article III judicial review of a bankruptcy court order confirming a Chapter 11 plan"); In re Pac. Lumber Co., 584 F.3d 229, 240 (5th Cir. 2009) (equitable mootness should be applied "with a scalpel rather than an axe"). In VeroBlue, the Eighth Circuit even went so far as "banish 'equitable mootness' from the (local) lexicon" because it is "misleading," holding that, in accordance with the Supreme Court's decision in Mission Prod. Holdings Inc. v. Tempnology LLC, 139 S. Ct. 1652 (2019), an appeal is "moot, that is, beyond a federal court's Article III jurisdiction, only if 'it is impossible for a court to grant any effectual relief whatsoever.'" VeroBlue, 2021 WL 3411834, at *5 (quoting Mission Prod., 139 S. Ct. at 1660). Substantially similar tests have been applied by most circuit courts of appeals in assessing whether an appeal of a chapter 11 confirmation order should be dismissed under the doctrine. Those tests, a common element of which is whether a chapter 11 plan has been substantially consummated, generally focus on whether the appellate court can fashion effective and equitable relief. Some courts, including the Third and Fifth Circuits, have taken the position that equitable mootness does not apply outside the context of appeals of chapter 11 plan confirmation orders. See, e.g., In re LCI Holding Company, Inc., 802 F.3d 547, 554 (3d Cir. 2015); In re Sneed Shipbuilding, Inc., 916 F.3d 405, 409 (5th Cir. 2019). Other courts, including the Fourth, Ninth, Tenth, and Eleventh Circuits, have been less constrained in relying on the doctrine to dismiss appeals. See Myers v. Offit Kurman, P.A., 773 F. App'x 161, 162 (4th Cir. 2019) (finding that an appeal from a bankruptcy court order granting a chapter 7 trustee's motion for approval of a settlement agreement was equitably moot given that the agreement had been fully consummated and funds had been distributed accordingly); Stokes v. Gardner, 483 F. App'x 345, 346 (9th Cir. 2012) (finding that an appeal of an order approving a settlement agreement in a chapter 7 case was equitably moot); Ordonez v. ABM Aviation, Inc., 787 F. App'x 533 (10th Cir. 2019) (appeals from a bankruptcy court order relating to a chapter 7 trustee's settlement of the debtor's employment discrimination claims were equitably moot, since the debtor did not diligently seek a stay, the settlement agreement had been fully consummated, the funds had been distributed, the estate had been fully administered, and the debtor's challenges were neither legally meritorious nor equitably compelling); In re JMC Memphis, LLC, 655 F. App'x 802 (11th Cir. 2016) (dismissing as equitably moot an appeal from an unstayed order approving a settlement between the chapter 7 trustee and the debtor's property insurer). The Second Circuit recently joined this group in In re Windstream Holdings, Inc., 838 Fed. App'x. 634 (2d Cir. 2021), ruling in a nonprecedential summary order that an appeal of a "critical vendor" order directing the payment of the prebankruptcy claims of vendors deemed essential to the success of a chapter 11 debtor's reorganization before the claims of other unsecured creditors was equitably moot after confirmation of the debtor's chapter 11 plan. In so ruling, the Second Circuit noted that: "Our precedent is clear that equitable mootness can be applied 'in a range of contexts,' including appeals involving all manner of bankruptcy court orders…. [A]n appeal does not need to directly challenge a reorganization plan to impact that plan." Id. at 637. One of the Windstream debtor's general unsecured creditors filed a petition seeking Supreme Court review of the ruling on July 21, 2021. See GLM DFW, Inc. v. Windstream Holdings, Inc., No. 21-78 (U.S.) (petition for cert. filed July 21, 2021). In In re Nuverra Environmental Solutions, Inc., 834 Fed. App'x 729 (3d Cir. 2021), a divided panel of the Third Circuit handed down a long-awaited ruling that could have addressed, but ultimately did not address, the validity of "gifting" chapter 11 plans under which a senior creditor class gives a portion of its statutorily entitled recovery to one or more junior classes as a means of achieving consensual confirmation. By avoiding the merits and holding that an appeal of an order confirming a "horizontal gifting" plan was equitably moot, the Third Circuit skirted a question that continues to linger in the aftermath of Czyzewski v. Jevic Holding Corp., 137 S. Ct. 973 (2017), which invalidated final distributions to creditors departing from the Bankruptcy Code's priority scheme as part of a nonconsensual "structured dismissal" of a chapter 11 case. A creditor who objected to the Nuverra debtor's chapter 11 plan filed a petition seeking review of the decision on July 6, 2021. See Hargreaves v. Nuverra Environmental Solutions Inc., No. 21-17 (U.S.) (petition for cert. filed July 6, 2021). In Sutton 58 Associates LLC v. Pilevsky, 164 N.E.3d 984 (N.Y. 2020), New York's highest court decided by a 4–3 margin that the doctrine of federal preemption does not bar a non-debtor third party's tortious interference claims against other non-debtor third parties for actions taken in anticipation of a debtor's chapter 11 filing. In Pilevsky, a lender provided $150 million in financing for a housing project that was structured as a bankruptcy-remote single-asset real estate entity. However, at the behest of the project's advisors and in violation of the loan agreement, the project owner engaged in conduct, including selling an ownership interest in the project to another entity, that disqualified it as a "single-asset real estate debtor" in a subsequent chapter 11 case. After the bankruptcy court confirmed the owner's chapter 11 plan, the lender sued the advisors in New York state court, arguing that their actions amounted to tortious interference with contract by causing the project owner to breach its agreements with the lender. A trial court decided that the claims were not preempted by federal bankruptcy law and an intermediate state appellate court reversed, concluding that the claims were preempted. The New York Court of Appeals reversed the intermediate appellate court, holding that "[p]laintiff's tortious interference claims—asserted against defendants who were not debtors in the bankruptcy proceedings and which are premised upon conduct that occurred prior to those proceedings—are peripheral to, and do not impugn, the bankruptcy process." Id. at 994. In a dissenting opinion, three of the court's judges expressed "fear [that] state litigation may disincentivize lawyers and potential secondary lenders from assisting debtors who wish to file for bankruptcy but need legal counsel and financial assistance to do so." Id. at 1014. The defendants asked the Supreme Court to review the decision on April 20, 2021. See Pilevsky v. Sutton 58 Associates LLC, 20-1483 (U.S.) (petition for cert. filed Apr. 20, 2021). In a conference later in the upcoming Term, the Court will consider whether to grant a petition seeking review of a ruling by the U.S. Court of Appeals for the Third Circuit in In re Venoco LLC, 998 F.3d 94 (3d Cir. 2021). In that case, before filing for chapter 11 protection, the debtors leased an offshore oil and gas drilling rig from the State of California and its Lands Commission (collectively, the "State"). After the debtors abandoned the leased rig, the State took over decommissioning the rig and plugged the abandoned wells. The liquidating trustee appointed under the debtors' confirmed chapter 11 plan filed an adversary proceeding in the bankruptcy court seeking to recover, on an inverse condemnation theory, compensation from the State for the alleged taking of the debtors' refinery without any compensation. The State moved to dismiss on the basis of, among other things, state sovereign immunity conferred by the Eleventh Amendment to the U.S. Constitution. The bankruptcy court denied the motion to dismiss, and a district court affirmed on appeal. A three-judge panel of the Third Circuit also affirmed. Among other things, the Third Circuit panel ruled that the liquidating trustee's claims were brought to effectuate the bankruptcy court's in rem jurisdiction and, in accordance with the Supreme Court's decision in Central Virginia Community College v. Katz, 546 U.S. 356 (2006), were therefore claims as to which the State had waived its sovereign immunity from suit by ratifying the Bankruptcy Clause of the U.S. Constitution (Art. I § 8 cl. 4). The State asked the Supreme Court to review the decision on July 23, 2021. See Cal. State Lands Comm'n v. Davis, No. 21-109 (petition for cert. filed July 23, 2021). It its petition, the State argues, among other things, that the "limited consent" to a waiver of state sovereign immunity found in Katz should not apply in a case involving claims that do not arise under federal bankruptcy law. [^] BOOK REVIEW: Mentor X ------------------------- The Life-Changing Power of Extraordinary Mentors Author: Stephanie Wickouski Publisher: Beard Books Hard cover: 156 pages ISBN: 978-1-58798-700-7 List Price: $24.75 Order this Book: https://is.gd/EIPwnq Long-time bankruptcy lawyer Stephanie Wickouski at Bryan Cave impressively tackles a soft problem of modern professionals in an era of hard data and scientific intervention in her third published book entitled Mentor X. In an age where employee productivity is measured by artificial intelligence and resumes are prescreened by computers, Stephanie Wickouski adds spirit and humanity to the professional journey. The title is disarmingly deceptive and book browsers could be excused for assuming this work is just another in a long line of homogeneous efforts on mentorship. Don't be fooled; Mentor X is practical, articulate and lively. Most refreshingly, the book acknowledges the most important element of human development: our intuition. Mrs. Wickouski starts by describing what a mentor is and distinguishes that role from a teacher, coach, role model, buddy or boss. Younger professionals may be skeptical of the need for a mentor, but Mrs. Wickouski deftly disabuses that notion by relating how a mentor may do nothing less than change the course of a protege's life. Newbies to this genre need little convincing afterwards. One of the book's worthiest contributions is a definition of mentor that will surprise most readers. Mentors are not teachers, the latter of which impart practical knowledge. Instead, according to Mrs. Wickouski, her mentors "showed me secrets that I could learn nowhere else. They showed me how doors are opened. They showed me how to be an agent of change and advance innovative and controversial ideas." What ambitious professional doesn't want more of that in their life? The practicality of the book continues as Mrs. Wickouski outlines the qualities to look for in a mentor and classifies the various types of mentors, including bold mentors, charismatic mentors, cold and distant mentors, dissolute mentors, personally bonded mentors, younger mentors, and unexpected mentors. Mentor X includes charts and workbooks which aid the reader in getting the most out of a mentor relationship. In a later chapter, Mrs. Wickouski provides an enormously helpful suggestion about adopting a mentor: keep an open mind. Often, mentors will come in packages that differ from our expectations. They may be outside of our profession, younger, less educated, etc . . . but the world works in mysterious ways and Mrs. Wickouski encourages readers to think about mentors broadly. In this modern era of heightened workplace ethics, Mrs. Wickouski articulates the dark side of mentors. She warns about "dementors" and "tormentors" -- false mentors providing dubious and sometimes self-destructive advice, and those who abuse a mentor relationship to further self-interested, malign ends, respectively. She describes other mentor dysfunctions, namely boundary-crossing, rivalry, corruption, and a few others. When a mentor manifests such behaviors, Mrs. Wickouski counsels it's time to end the relationship. Mrs. Wickouski tells readers how to discern when the mentor relationship is changing and when it is effectively over. Those changes can be precipitated by romantic boundaries crossed, emergence of rivalrous sentiment, or encouragement of unethical behavior or corruption. Mrs. Wickouski aptly notes that once insidious energies emerge, the mentorship is effectively over. At this point, certain readers may say to themselves, "Okay, I've got it. Now I can move on." Or, "My workplace has a formal mentorship program. I don't need this book anymore." Or even, "Can't modern technology handle my mentor needs, a Tinder of mentorship, so to speak?" Mrs. Wickouski refutes that notion. She analyzes how many mentoring programs miss the mark. In one of the best passages in the book, Mrs. Wickouski writes, "Assigning or brokering mentors negates the most critical components of a true mentor–protege relationship: the individual process of self-awareness which leads a person to recognize another individual who will give the advice singularly needed. That very process is undermined by having a mentor assigned or by going to a mentoring party." She does not just criticize; she offers a solution with three valuable tips for choosing the right mentor and five qualities to ascertain a true mentor in the unlimited sea of possibilities. Next, Mrs. Wickouski distinguishes between good advice and bad advice. She punctuates that discussion with many relevant and relatable examples that are easy to read and colorfully enjoyable. This section includes interviews with proteges who have had successful mentorships. The punchline: in the best mentorships, the parties harmoniously share personal beliefs and values. Also important, the protege draws inspiration and motivation from the mentor. The book winds down as usefully as it started: Mrs. Wickouski interviews proteges, asking them what they would have done differently with their mentors if they could turn back the clock. A common thread seems to be that the proteges would have gone deeper with their mentors -- they would have asked more questions, spent more time, delved into their mentors' thinking in greater depth. The book wraps up lightly by sharing useful and practical suggestions for maintenance of the mentor relationship. She answers questions such as, "Do I invite my mentor to my wedding?" and "Who pays for lunch?" Mentor X is an enjoyable read and a useful book for any professional in any industry at, frankly, any point in time. Advanced individuals will learn much from the other side, i.e., how to be more effective mentors. Mrs. Wickouski does a wonderful job of encouraging use of that all knowing aspect of human existence which never fails us: proper use of our intuition. About The Author Stephanie Wickouski is widely regarded as an innovator and strategic advisor. A nationally recognized lawyer, she has been named as one of the 12 Outstanding Restructuring Lawyers in the US by Turnarounds & Workouts and as one of US News' Best Lawyers in America. She is the author of two other books: Indenture Trustee Bankruptcy Powers & Duties, an essential guide to the legal role of the bond trustee, and Bankruptcy Crimes, an authoritative resource on bankruptcy fraud. She also writes the Corporate Restructuring blog. ********* 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 ***