/raid1/www/Hosts/bankrupt/TCR

/raid1/www/Hosts/bankrupt/TCR_Public/211006.mbx T R O U B L E D C O M P A N Y R E P O R T E R Wednesday, October 6, 2021, Vol. 25, No. 278 Headlines 1116 MAPLE STREET: Taps Benedon & Serlin as Appellate Counsel 2724 OCEAN BLVD: Taps The Agency as Real Estate Broker ACCO BRANDS: Fitch Affirms 'BB' LT IDR, Outlook Remains Stable ATHEROTECH INC: Supreme Court Turns Down Dispute vs. Trustee BARETTA INC: Seeks Court Approval to Hire GRS Appraisal BARTLEY INDUSTRIES: Lender Seeks to Prohibit Cash Collateral Use BLUE TREE: Fitch Affirms 'BB-' LT IDRs, Outlook Remains Stable BLUEBERRY COMMONS: Case Summary & Unsecured Creditor BROADSTREET PARTNERS: S&P Rates $332.5MM 1st-Lien Term Loan 'B' BRODIE HOLDINGS: Case Summary & 5 Unsecured Creditors BROOKS AUTOMATION: S&P Places 'BB-' ICR on CreditWatch Developing BUZZ FINCO: Fitch Affirms 'BB-' LT IDR & Alters Outlook to Stable BYRNA TECHNOLOGIES: Appoints Emily Rooney as Director CALPLANT I LLC: Case Summary & 5 Unsecured Creditors CARNIVAL CORP: Delays Debt Reckoning by Refinancing Bonds CARNIVAL CORP: S&P Assigns 'BB-' Rating on First-Lien Term Loan CASTLELAKE AVIATION: S&P Assigns 'B+' Rating on Sr. Unsec. Notes CHIMNEY PASTURES: Unsecureds Will Get 100% of Claims in 36 Months CLEVELAND-CLIFFS INC: Fitch Raises IDRs to 'BB-', Outlook Positive CMA LOGISTICS: Unsecureds to Get 100% of Profit from 20 Quarters CRC BROADCASTING: Gets Interim Cash Access Until Oct 31 DAISEY LLC: Voluntary Chapter 11 Case Summary DALTON CRANE: Seeks to Hire Martin & Drought as Legal Counsel DAVEY KENT: Unsecured Creditors to Recover 2% in Plan DELTA AIR: Supreme Court Declines Pilots' Benefits Case vs. PBGC DENARDO CAPITAL: Gets OK to Hire Rosewood as Real Estate Advisor DENARDO CAPITAL: Oct. 14 Plan & Disclosure Hearing Set DETOUR PLUMBING: Seeks to Hire Anand Law as Bankruptcy Counsel E.L. SERVICES INC: Seeks to Hire Vaught & Boutris as Accountant EG GLOBAL: Case Summary & 3 Unsecured Creditors EG VENTURES: Case Summary & 3 Unsecured Creditors ELITE AVIATION: Case Summary & 2 Unsecured Creditors ELITE ENGINEERING: Case Summary & 4 Unsecured Creditors ELITE METAL: Case Summary & 2 Unsecured Creditors ENSEMBLE RCM: S&P Places 'B' ICR on Watch Positive on Announced IPO ESSA PHARMA: Registers 7.3M Shares Under 2021 Incentive Plan EXPRESS GRAIN: Files Emergency Bid to Use Cash Collateral EXTRUSION GROUP: Case Summary & 14 Unsecured Creditors EYECARE PARTNERS: S&P Affirms 'B' ICR on Acquisition Agreement FORD STEEL: Nov. 2 Disclosure Statement Hearing Set FOREVER 21: Case Dismissed After Lawyers Agree to Waive Fees FORTEM RESOURCES: Case Summary & 20 Largest Unsecured Creditors FRIENDSHIP VILLAGE: Fitch Assigns 'BB+' IDR, Outlook Stable FRONTIER COMMUNICATIONS: S&P Rates New 2nd-Lien Sec. Notes 'CCC+' GREATER WORKS: Seeks to Hire KW Atlanta Partners as Broker GREENSILL CAPITAL: Credit Suisse’s Zurich Offices Raided in Probe GROW CAPITAL: Delays Form 10-K Filing to Complete Audit GRUPO AEROMEXICO: Presents Plan, Disclosures to U.S. Court HI CRUSH: Winternitz Completes Liquidation of Surplus Assets HOME4FAMILIES LLC: Unsecured Creditors Will Get 2.86% of Claims ILLINOIS CENTER: $255MM Loan Placed on Servicer Watchlist ILLINOIS STAR: 800 Bldg. Valued at $1.5MM, Mall at $1.65MM IMAGEWARE SYSTEMS: Discontinues Pillphone Messaging Platform INTERPACE BIOSCIENCES: Extends Notes Maturity to Oct. 31 INVO BIOSCIENCE: Signs $2M Stock Purchase Agreement With Paradigm IPC CORP: S&P Cuts ICR to 'SD' Following Restructuring Agreement J&J ROBINSON: Voluntary Chapter 11 Case Summary JHW ALPHIA: S&P Alters Outlook to Negative, Affirms 'B-' ICR JUAREZ BROTHERS: Voluntary Chapter 11 Case Summary KATERRA INC: Bankruptcy Judge Stops Greensill's Move for UK Lawsuit LEHMAN BROTHERS: Dispute Goes On as Deutsche Makes Legal Bid LEHMAN BROTHERS: Payouts to Unsecured Creditors Now at $128.9BB LUX AMBER: Incurs $1.98M Net Loss in Fiscal Year Ended April 30 MADDOX FOUNDRY: Nov. 10 Disclosure Statement Hearing Set MAINSTREET PIER: Wins Cash Collateral Access Thru Nov 20 MALLINCKRODT PLC: Lawyer Says Bondholders Concerned and Frustrated MARKEL CATCO: Chapter 15 Case Summary MARRIOTT HOUSTON WESTCHASE: Value of Collateral Continues to Drop MARTIN FINANCIAL: Seeks to Hire Kelley & Clements as Legal Counsel MATADOR RESOURCES: Fitch Gives FirstTime 'B+' IDR, Outlook Stable MCAFEE LLC: Fitch Hikes Rating on Secured Credit Facility to 'BB+' MCCLATCHY CO: Borello Test Should Be Used in Carriers' Class Suit MCK USA 1: Seeks to Hire Related ISG Realty as Broker MEADE INSTRUMENTS: Sheppard Mullin Agrees to Pay $4.45 Million MORGAN STANLEY 2013-C10: Fitch Lowers Class H Certs Rating to 'C' NEUBASE THERAPEUTICS: Signs Separation Agreement With CFO NEXTERA ENERGY: Fitch Affirms 'BB+' LT IDRs, Outlook Stable NSM TOP HOLDINGS: S&P Alters Outlook to Neg., Affirms 'B' ICR OZOP ENERGY: To Sell $30 Million Worth of Securities PARALLAX HEALTH: Appoints Sonia Choi as Interim CEO PARETEUM CORP: Incurs $6.6M Net Loss in Quarter Ended March 31 PARETEUM CORP: To Evaluate Strategic Alternatives PENNSYLVANIA ECONOMIC: Fitch Affirms BB- on $114MM Parking Bonds PHI GROUP: Changes Subsidiary Name to Empire Spirits, Inc. PHI GROUP: Forms Asia Diamond Exchange, Inc. Subsidiary POST OAK: Seeks to Hire KapilaMukamal as Financial Advisor POST OAK: Seeks to Hire Leon Cosgrove as Bankruptcy Counsel POST OAK: Seeks to Hire Morris Nichols as Bankruptcy Co-Counsel QDOS INC: Justices Pass on Involuntary Bankruptcy Dismissal Fight QUANTUM CORP: Registers 5.9 Million Shares Under 2012 LTIP QURATE RETAIL: Fitch Affirms 'BB' LongTerm IDRs, Outlook Stable REDWOOD EMPIRE: May Use Cash Collateral Thru Nov 18 ROARK & ASSOCIATES: Seeks Approval to Hire Bankruptcy Attorneys ROCHELLE HOLDINGS: Ordered to Revise Plan & Disclosures by Oct. 8 SAMURAI MARTIAL: Unsecured Creditors Will Get $45K in 60 Months SILGAN HOLDINGS: Fitch's 'BB+' IDR Removed From UCO Status SK FOODS: California Court Dismisses Four in One Suit SOUTH COAST BEHAVIORAL: Nov. 22 Plan Confirmation Hearing Set STATERA BIOPHARMA: Turner Stone Replaces Meaden & Moore as Auditor TALI CORP: Unsecured Creditors to Get Share of Income for 5 Years TENRGYS LLC: Nov. 9 Disclosure Statement Hearing Set TERRAFORM POWER: Fitch Affirms 'BB-' LongTerm IDR, Outlook Stable THOR INDUSTRIES: S&P Rates New $400MM Senior Unsecured Notes 'BB-' TIMESHARE TERMINATION: False Advertising Suit Halted by Filing USA GYMNASTICS: Defeats Bankruptcy Plan Vote Challenge of Insurer VENOCO LLC: Supreme Court Denies CA Appeal of Trustee Taking Suit WA INC: Seeks to Hire Goering & Goering as Bankruptcy Counsel WEST C BUILDERS: May Use Cadence Bank Cash Collateral WILLCO X DEVELOPMENT: Taps Mitchell Hoffman as Expert Witness WILLCO X: Gets OK to Hire John Smiley as Expert Witness WILSON GOMER: Claims Will be Paid From Continued Operations WINDSTREAM HOLDINGS: Supreme Court Refuses to Hear Vendor Appeal ZACH HALOPOFF: Case Summary & Unsecured Creditor ZNB LLP: Case Summary & 4 Unsecured Creditors [*] Carl Marks Advisors Bags Three M&A Advisor Turnaround Awards [*] Commercial Chapter 11 Filings Down 6% in September 2021 [*] Judge Guy Cole Jr. to Receive American Inns of Court Award [] B.Riley Adds Three Senior Executives to Restructuring Division [] Byron Moldo Named Geneva's Restructuring Group Chief [] John Chun Joins Herrick Feinstein's Restructuring Department ********* 1116 MAPLE STREET: Taps Benedon & Serlin as Appellate Counsel ------------------------------------------------------------- 1116 Maple Street, LLC seeks approval from the U.S. Bankruptcy Court for the Central District of California to hire Benedon & Serlin, LLP as its appellate counsel. The Debtor requires legal assistance in connection with a district court appeal of two separate orders issued by the bankruptcy court in the adversary proceeding bearing case number 2:20-ap-01622-BR. The firm's hourly rates for commercial litigation range from $650 to $205. Benedon & Serlin received a post-petition retainer from the Debtor in the aggregate amount of $25,000. Gerald Serlin, Esq., a partner at Benedon & Serlin, disclosed in a court filing that his firm neither holds nor represents an interest adverse to the Debtor. The firm can be reached through: Gerald Serlin, Esq. Benedon & Serlin, LLP 22708 Mariano Street Woodland Hills, CA 91367-6128 Phone: (818) 340-1950 About 1116 Maple Street 1116 Maple Street, LLC, is a single asset real estate debtor (as defined in 11 U.S.C. Section 101(51B)). It has 100 percent fee interest in a property located at 1116 East Maple St., Glendale, Calif., valued by the Debtor at $5 million. 1116 Maple Street filed a petition for Chapter 11 protection (Bankr. C.D. Calif. Case No. 20-16362) on July 14, 2020, listing $5,057,759 in assets and $4,871,355 in liabilities. Mihran Tcholakian, managing member, signed the petition. Judge Barry Russell oversees the case. Margulies Faith LLP is the Debtor's bankruptcy counsel. 2724 OCEAN BLVD: Taps The Agency as Real Estate Broker ------------------------------------------------------ 2724 Ocean Blvd, LLC seeks approval from the U.S. Bankruptcy Court for the Central District of California to employ The Agency as its broker. The Debtor requires the assistance of a broker to list and market its real property located at 2724 Ocean Blvd., Corona Del Mar, Calif. The initial listing price is $29.5 million. The Agency will be paid a commission of 5 percent of the gross sales price. Stephen Perkins and Michael Caruso, real estate brokers at The Agency, 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 Agency can be reached at: Stephen Perkins Michael Caruso The Agency 331 Foothill Rd., Suite 100 Beverly Hills, CA 90210 Tel: (424) 400-5915 Email: james@theagencyre.com About 2724 Ocean Blvd LLC 2724 Ocean Blvd, LLC is a California limited liability company formed on July 6, 2017. Formerly known as 505 N. Santa Fe, LLC, the Debtor was formed originally for the purpose of developing the real property located at 505 N. Santa Fe, Vista, Calif. Instead, the Debtor purchased the real property located at 2724 Ocean Boulevard, Corona Del Mar, Calif. On Jan. 11, 2018, the Debtor's name was changed to 2724 Ocean Blvd, LLC. 2724 Ocean Blvd filed a voluntary petition for Chapter 11 protection (Bankr. C.D. Calif. Case No. 20-12027) on July 20, 2020, listing as much as $50 million in both assets and liabilities. Judge Mark S. Wallace oversees the case. Jeffrey I. Golden, Esq., at Weiland Golden Goodrich LLP, serves as the Debtor's legal counsel. ACCO BRANDS: Fitch Affirms 'BB' LT IDR, Outlook Remains Stable -------------------------------------------------------------- Fitch Ratings has affirmed the Long-Term Issuer Default Rating (IDR) of ACCO Brands Corporation at 'BB'. The Rating Outlook remains Stable. Fitch has applied its updated recovery rating criteria and has upgraded ACCO's senior secured revolving credit facility and term loan, which is co-borrowed by ACCO Brands Australia Holding Pty Limited, to 'BBB-'/'RR1' from 'BB+'/'RR1', and has affirmed the senior unsecured notes at 'BB'/'RR4'. The ratings have been removed from Under Criteria Observation, where they were placed following the publication of the updated recovery ratings criteria on April 9, 2021. ACCO's ratings reflect the company's historically consistent FCF and reasonable gross leverage, which trended around 3.0x prior to operating challenges in 2020 related to the coronavirus pandemic. The ratings are constrained by secular challenges in the office products industry and channel shifts within the company's customer mix, as well as the risk of further debt-financed acquisitions into faster-growing geographies and product categories. KEY RATING DRIVERS Coronavirus Pandemic: ACCO has seen a significant decline in demand for its products since the start of the pandemic due to remote work and education arrangements. Revenue in 2020 declined approximately 15% to $1.66 billion from $1.96 billion in 2019 and 1H21 revenue excluding PowerA remains down 11% on a two-year basis. The company has demonstrated good cost control, with operating expenses down approximately 14% in 2020 yielding an EBITDA decline of 30% in 2020. Fitch expects ACCO's base business to rebound somewhat in 2H21 as remote work and education arrangements subside. However, acceptance of remote work arrangements longer term could limit ACCO's ability to fully rebound to pre-2020 revenue levels. Fitch projects ACCO's sales (prior to the impact of the PowerA acquisition) could improve around 7.5% to $1.8 billion with EBITDA rebounding toward $230 million, up from $205 million in 2020, while consolidated sales and EBITDA could reach $2.0 billion and $290 million respectively. Revenue and EBITDA growth could be modestly positive in 2022. FCF could remain around $125 million annually as EBITDA growth is mitigated by higher taxes and capex. Fitch expects FCF to be directed towards debt reduction though the company may also resume share repurchases in the near term. Limited Organic Industry Growth: The office products industry is experiencing a slow secular decline in mature markets due to a shift toward digital technologies, partially offset by growth in emerging markets. ACCO is also managing a continued shift in channel revenue away from traditional office product superstores such as Staples and Office Depot and traditional office supply wholesalers towards discounters, e-commerce retailers and the independent channel. These customers have also increased their direct sourcing efforts to grow private label penetration, creating more competition for ACCO's largely branded product portfolio. The potential for greater remote work arrangements longer term creates new headwinds for many of ACCO's business lines. While ACCO benefits from its market-leading position, the company has been affected by industry pressures. ACCO's U.S. revenue (43.0% of net revenue in 2019) declined 1.5% on a four-year CAGR basis in 2015-2019; operating income declines were modestly higher at 3.6%. Fitch expects flattish to modestly negative growth will continue over the medium term, after the near-term impacts of the coronavirus pandemic. Acquisitions Drive Growth and Diversification: Given secular challenges in some of ACCO's primary categories and markets, the company has acquired several businesses over the last few years to capitalize on growth in new markets and faster-growing adjacent categories. The acquisitions have contributed to ACCO's revenue growth, margin expansion due to greater scale and improved geographic and customer diversity. The December 2020 acquisition of PowerA is an example of ACCO adding a higher-growth category to its business portfolio. Strong Expense and Balance Sheet Management: ACCO maintains a tight focus on its cost structure, which has enabled the company to improve profitability in a difficult operating environment. In the U.S., the company continues to reallocate sales efforts to higher-margin independent retailers (who tend to sell higher-price-point, higher-margin products but have a higher cost to serve as well) and away from the declining, lower-margin office superstore channel. Meanwhile, the company's selling, general & administrative expense margin has remained relatively steady in the low-19% range in recent years despite sluggish organic growth and fixed cost inflation. The company's ongoing focus on cost reductions has protected EBITDA in the face of its top-line challenges. ACCO's good balance sheet management is a positive factor in its credit profile. While the company occasionally makes debt-financed acquisitions to optimize its portfolio, the company has demonstrated a willingness to manage its leverage through debt reduction following a transaction, in line with its public commitment to maintain net debt to EBITDA around 2.5x (similar on a gross leverage basis given minimal cash balances). Over the four years prior to 2020, gross leverage has trended at 3.0x, with approximately $100 million of debt reduction in 2018/2019 following the debt-financed Esselte acquisition in 2017. Supply Chain Pressures Manageable: ACCO has experienced supply chain pressures in 2021 plaguing much of the consumer products industry including material shortages, elongated lead times, commodity price inflation as well as elevated shipping costs given 60% of the company's revenues are derived from products manufactured outside the region where sales are generated. While 3Q21 margins are likely to be pressured by the sharp rise in prices and supply chain disruptions, Fitch expects price increases implemented towards the end of the quarter to support margins starting in 4Q21. DERIVATION SUMMARY ACCO'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. Including a full-year contribution from the PowerA acquisition, Fitch projects 2021 gross leverage could trend in the high-3x, below Fitch's downgrade sensitivity of 4.0x. ACCO is similarly rated to Spectrum Brands, Inc. (BB/Rating Watch Positive), Central Garden and Pet Company (BB/Stable) and a notch below Tempur Sealy (BB+/Stable) and Newell Brands (BB+/Stable). Spectrum Brands, Inc.'s current 'BB' rating reflects the company's diversified portfolio and historical track record of maintaining gross 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, proforma for recent acquisitions. Fitch expects modest organic revenue growth over the medium term supplemented by acquisitions, with pro forma EBITDA margins in the 10% area and annual FCF of $100 million to $150 million. Gross leverage is expected to trend in the mid-to-high 3.0x area. Tempur Sealy's 'BB+'/Stable rating reflects its leading market position as a vertically integrated global bedding company with well known, established brands across a wide variety of price points that are distributed across a number of wholesale and direct channels. The ratings are tempered by the single product focus in a highly competitive, fragmented market that can be exposed to potential pullbacks in discretionary consumer spending during periods of macroeconomic weakness. Fitch projects Tempur Sealy will maintain long-term gross leverage in the low-2x range. Newell's 'BB+'/Stable rating 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. KEY ASSUMPTIONS -- Following a decline of around 15% in 2020, organic revenue could expand around 7% to $1.78 billion in 2021 as remote work and education arrangements ease. Including the contribution from the PowerA acquisition, total 2021 revenue could be around $2 billion. Organic revenue growth could be in the low single digits in 2022 as ACCO is expected to continue to benefit from improving macroeconomic conditions; -- EBITDA margins, which declined from approximately 15% in 2019 to 12% in 2020, could rebound to the low-to-mid 14% range on the rebound in sales and the margin accretive impact of the PowerA acquisition. In 2021, legacy ACCO EBITDA could expand to around $240 million as sales rebound, with PowerA adding approximately $50 million in EBITDA. EBITDA in 2022 could grow modestly alongside top-line expansion; -- FCF after dividends, which was $147 million in 2019, declined to around $100 million in 2020 as the drop in EBITDA was only partially mitigated by lower cash taxes and capex. FCF is projected to be in the $125 million range beginning 2021, as EBITDA growth is mitigated by higher taxes and capex; -- The acquisition of PowerA is expected to have a modestly positive impact on ACCO's FCF in 2021 and 2022, in the range of $10 million to $15 million annually. Fitch expects ACCO will deploy FCF toward debt reduction but could resume its share buyback program at some point in 2021 or 2022. Dividends are projected at around $25 million, or approximately $0.26 per share, in line with ACCO's history; -- Gross debt/EBITDA, which averaged around 3.0x over the past four years, increased to the 4.0x area in 2020 excluding the revolver draw at year end to fund the PowerA acquisition. Pro forma for the acquisition, leverage at YE 2020 was approximately 4.6x, assuming a $50 million EBITDA contribution. Gross leverage could return to the high-3x by 2021 trending towards the mid-3x thereafter assuming an EBITDA rebound at the legacy business and some FCF deployment toward debt reduction. RATING SENSITIVITIES Factor that could, individually or collectively, lead to positive rating action/upgrade: -- An upgrade beyond 'BB' is possible if the company makes favorable acquisitions that change its business mix toward less cyclical or higher growth prospects while maintaining total debt/EBITDA below 3.0x. However, an upgrade is not anticipated in the near term given existing business model and industry issues. Factor that could, individually or collectively, lead to negative rating action/downgrade: -- Sustained gross leverage at or above 4.0x, generating annual FCF of less than $25 million, or a large debt-financed acquisition without a concrete plan to reduce gross leverage to 4.0x in a 24-month time frame could lead to a negative rating action. 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: Liquidity is ample and is supported by the company's consistent FCF generation, though seasonally skewed to the second half of the year. As of June 30, 2021, ACCO had $77.9 million of cash on hand and $330.9 million of revolver availability, net of $12.8 million outstanding letters of credit and $256.3 million of revolver borrowings. ACCO had $1,247 million of debt outstanding as of June 30, 2021, consisting primarily of a $275 million in euro senior secured term loan A, $91 million outstanding on the U.S. dollar senior secured term loan A, $42 million under the Australian dollar senior secured term loan A and $256 million of revolver borrowings (all of which mature in March 2026), and $575.0 million of unsecured notes due March 2029. Annual amortization across ACCO's capital structure is approximately $30 million through 2023. ACCO manages to 2.5x net debt to EBITDA and has historically applied a portion of FCF toward debt reduction, which Fitch expects will continue. Financial covenants include maintenance of funded indebtedness (net of cash) to EBITDA less than 4.0x (increasing to 4.5x for up to three quarters following an acquisition) and interest coverage (EBITDA divided by interest expense) greater than 3.0x. In conjunction with the PowerA acquisition, ACCO amended its credit facility to increase permitted acquisition pro forma leverage to 4.5x from 3.5x; the company also increased its maximum net leverage covenant by 0.5x through the second quarter of 2022. Consequently, maximum net leverage would be 4.75x at the end of the third quarter of 2021 and 4.25 at the end of 2021. The maximum net leverage would step down to 4.0x at the end of the third quarter of 2022. Recovery Considerations Fitch has assigned Recovery Ratings (RRs) to the various debt tranches in accordance with Fitch criteria, which allows for the assignment of RRs for issuers with IDRs in the 'BB' category. Given the distance to default, RRs in the 'BB' category are not computed by bespoke analysis. Instead, they serve as a label to reflect an estimate of the risk of these instruments relative to other instruments in the entity's capital structure. Fitch rates ACCO's first-lien secured debt one notch above the IDR, reflecting outstanding recovery prospects (91%-100%) given default (RR1). Unsecured debt will typically achieve average recovery, and thus was assigned an 'RR4', or 31%-50% recovery. ISSUER PROFILE ACCO Brands (ACCO) is one of the world's largest designers, marketers and manufacturers of branded academic, consumer and business products. The product portfolio includes a number of well-known brands, including Swingline, Five Star, Mead, AT-A-GLANCE, Kensington, GBC, Tilibra, Leitz and Rapid. 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. ATHEROTECH INC: Supreme Court Turns Down Dispute vs. Trustee ------------------------------------------------------------ Alex Wolf, writing for Bloomberg Law, reports that the U.S. Supreme Court turned down a case involving jurisdictional issues related to whether a failed blood-testing company's bankruptcy trustee can proceed with a suit accusing its majority shareholders of fraudulent transfer claims. The justices' order Monday means Atherotech Inc. trustee Thomas E. Reynolds can pursue his suit in the U.S. District Court for the Northern District of Alabama as long as the shareholders -- Behrman Capital IV LP and one of its funds, MidCap Financial Investment LP -- are properly served under Bankruptcy Rule 7004(d). That rule allows plaintiffs in bankruptcy-related lawsuits to serve defendants anywhere in the U.S. About Atherotech Inc. Atherotech's main asset is its VAP cholesterol test, which is licensed out of the University of Alabama at Birmingham. Atherotech Inc. filed for Chapter 7 bankruptcy protection (Bankr. N.D. Ala. Case No. 16-00909) on March 4, 2016. Atherotech Holdings, Inc., simultaneously filed a separate Chapter 7 petition (Bankr. N.D. Ala. Case No. 16-00910). Atherotech listed less than $50,000 in assets and between $50,000 and $100 million in liabilities in its petition, the report said. The Hon. Tamara O'Mitchell presides over the case. Lee Benton -- lbenton@bcattys.com -- of Benton & Centeno LLP, serves as its bankruptcy counsel. BARETTA INC: Seeks Court Approval to Hire GRS Appraisal ------------------------------------------------------- Baretta, Inc. seeks approval from the U.S. Bankruptcy Court for the Eastern District of Missouri to employ GRS Appraisal & Auction Services, LLC. The Debtor requires the assistance of a qualified appraiser, auctioneer and liquidator to evaluate and sell its equipment, inventory and memorabilia. GRS will be compensated as follows: (a) a commission of 22 percent of the gross proceeds from any sale of the property but no reimbursement for expenses; (b) a 15 percent buyer's premium on each item from the buyer; (c) a 3 percent fee for purchases by credit card; and (d) charge $125 per hour for "pick-up fees, labor and truck." Nancy Cripe, president of GRS, disclosed in a court filing that her firm is a "disinterested person" as defined in section 101(14) of the Bankruptcy Code. The firm can be reached through: Nancy Cripe GRS Appraisal & Auction Services 1727 Bluffview Drive Dupo, IL 62239 Phone: 618.286.4010 Fax: 618.286.4060 Email: info@grsauctions.com About Baretta Inc. Baretta, Inc. filed a petition for Chapter 11 protection (Bankr. E.D. Mo. Case No. 21-40914) on March 15, 2021, listing up to $1 million in assets and up to $500,000 in liabilities. Judge Bonnie L. Clair oversees the case. Ledbetter Law Firm, LLC and Herren Dare & Streett serve as the Debtor's legal counsel. BARTLEY INDUSTRIES: Lender Seeks to Prohibit Cash Collateral Use ---------------------------------------------------------------- First United Bank & Trust Company asks the U.S. Bankruptcy Court for the Western District of Oklahoma to prohibit Bartley Industries, Inc. from using cash collateral. First United is the Debtor's secured creditor. The Secured Creditor asserts the Debtor has not provided a budget and related documents demonstrating sufficient adequate protection to the Secured Creditor. The Secured Creditor has also not received any proposed budget from the Debtor, only profit and loss statements from March 2021 to August 2021. The Debtor is the owner of Accounts Receivable, secured by a Note, Security Agreement, UCC-1 Statements, and Guaranty Agreements in favor of First United. The Promissory Note for $201,020, dated July 8, 2019; secured by a Commercial Security Agreement covering all Accounts Receivable of Bartley Industries, Inc., and perfected in the attached UCC-1 Statements; Guaranty Agreement of even date executed by Donna Clark to guaranty payment of the indebtedness; and Guaranty Agreement of even date executed by Dera Clark to guaranty payment of the indebtedness. As of the Petition Date, the balance on the Note was principal in the amount of $181,331, plus accrued and unpaid interest in the amount of $1,631.59 and late fees in the amount of $150, including without limitation reasonable fees and expenses for First United's attorneys and related consultants in connection therewith pursuant to the loan documents. First United has not authorized the Debtor to use its Cash Collateral and the Debtor has not notified the Secured Creditor of any order from the Bankruptcy Court that allows the Debtor to use the Cash Collateral. The Debtor has not made any payments to the Secured Creditor in two months, and the loan is now due for September 2021. The Debtor has received the monthly Accounts Receivable payments related to its business operations, secured by Loan Documents #6003. The Secured Creditor asks the Court to enter an Order requiring the Debtor to account for Accounts Receivable received the Petition Date through the date of hearing on the Bank's Motion. A copy of the motion is available at https://bit.ly/3BhUS0E from PacerMonitor.com About Bartley Industries Inc. Bartley Industries Inc. offers electrical maintenance, repair and installation services. The company filed a Chapter 11 petition (Bankr. W.D. Okla. Case No. 21-12565) on September 25, 2021. In the petition signed by its president, Donna Bartley, the Debtor listed $1,733,842 in total assets and $2,003,791 in total liabilities. Law Offices of B David Sisson represents the Debtor, as counsel. First United Bank and Trust Company, as secured creditor, is represented by: William Riley Nix, Esq. 717 North Crockett Street Sherman TX 75090 Tel: 903/870-0212 Fax: 903/870-0109 Email: riley_nix@yahoo.com BLUE TREE: Fitch Affirms 'BB-' LT IDRs, Outlook Remains Stable -------------------------------------------------------------- Fitch Ratings has affirmed the Long-Term Issuer Default Ratings (IDRs) of Blue Tree Holdings, Inc. and its operating subsidiaries Bamberger Polymers Corp. and Ravago Holdings America, Inc. at 'BB-'. The Rating Outlooks remains Stable. Fitch has applied its updated Recovery Rating criteria, upgraded Blue Tree's senior secured term loan to 'BB+'/'RR2' from 'BB'/'RR2' and affirmed the ABL facility at 'BB+'/'RR1'. Fitch has also withdrawn its existing long-term issue ratings at the Bamberger and Ravago levels. The 'BB-' rating reflects the company's leading position in polymer distribution, its flexible and scalable operating model, solid FCF generation, strong relationship with suppliers, and commodity exposure. The Stable Outlooks reflect Fitch's expectations of continued volumetric stability and stable cash generation throughout the forecast horizon. To the extent that the company applies its consistently positive cash flow toward reducing its ABL balance, bolt-on M&A, and growth capex related to strengthening its value-add offerings, Fitch believes that Blue Tree's operating profile will remain strong and its credit risk manageable throughout the ratings horizon. The ratings have been removed from Under Criteria Observation (UCO), where they were placed following the publication of the updated Recovery Rating criteria on April 9, 2021. Fitch has withdrawn its existing long-term issue ratings at the Bamberger and Ravago levels as they are no longer considered by Fitch to be relevant to the agency's coverage. KEY RATING DRIVERS Recovery Ratings Criteria Update: The issue and Recovery Ratings for Blue Tree's debt are based on Fitch's rating grid for issuers with 'BB' category IDRs. This grid reflects average recovery characteristics of similar-ranking instruments. Blue Tree's term loan is viewed as Category 2 first lien, which translates into a two-notch uplift from the 'BB-' IDR to 'BB+' and a Recovery Rating of 'RR2'. Elevated Polymer Pricing to Stabilize: Pricing for polyethylene and polypropylene increased dramatically from 1H20 to 1H21 driven by market supply issues due to coronavirus-related plant disruptions in 2020 and weather-related plant-idling in 2021 (Winter Storm Uri, Hurricane Ida, Hurricane Nicholas), and healthy demand for domestic materials. Blue Tree realized relatively outsized EBITDA margins and FCF generation through this period, supported by the company's leading position on polymers distribution. Prices have begun to trend lower through 2H21, with supply levels loosening for most grades. Fitch expects polymer pricing to continue to gradually decline towards normal levels through 2H21 and 2022 as new capacity leans the market towards balance and demand steps back from current highs, leading to earnings performance more consistent with historical results for Blue Tree and its operating subsidiaries. Fragmented Market Provides Opportunity: The global chemical distribution market is highly fragmented, with an estimated market size of roughly $200 billion and where the top two distributors account for only about 10% of the market. Benefiting from size, scale and diversification within polymers, Blue Tree is better able to navigate logistical challenges and counterparty risk than smaller competitors. Fitch believes that the company is likely to continue to pursue value-add services like packaging and storing, as well as adjacent capabilities, in order to position itself as a clear low-cost option for major petrochemical suppliers. Sustainable Market Leadership: Blue Tree's strong relationship with suppliers allowed them to capture a relatively larger proportion of supply than many of its competitors, and as a result the company was able to grow share throughout 2020 and 1H21. During the global financial crisis, the company generated strong FCF despite adverse macroeconomic cycles and volatile raw material prices due in large part to its countercyclical working capital profile. Solid, Stable FCF: Blue Tree's strong relationships with customers and countercyclical working capital have resulted in strong, stable cash generation through the cycle. The company's manufacturing capabilities add value on both the supplier and consumer side, which alongside the company's disciplined approach to capital deployment are supportive of the company's credit profile. Fitch believes that Blue Tree will allocate cash flow toward a combination of capital projects and bolt-on acquisitions which expand the company's value-add services, and debt reduction (most likely through ABL paydown) such that they can comfortably operate with total debt with equity credit/operating EBITDA of around 3.5x. DERIVATION SUMMARY Blue Tree is the largest North American polymer distributor in a fragmented industry. Relative to Univar (BB+/Stable), Blue Tree is smaller, with a narrower product portfolio. Beyond chemicals, Fitch compares Blue Tree to IT distributor Arrow Electronics, Inc. (BBB-/Stable), and metals distributor Reliance Steel and Aluminium Co. (BBB+/Stable). Each of these distributors benefits from significant size, scale and diversification compared with peers within their markets. Fitch believes the fragmented nature of, and potential for, continued outsourcing within chemicals distribution provides distributors like Blue Tree and Univar a unique opportunity to increase market share and capture potential market expansion. Fitch views cash flow risk within the distribution industry as relatively low compared with chemicals producers, given the limited commodity price risk, diversification of customers and end-markets, low annual capex requirements of 1%-2% annually, and working capital benefits in the current down cycle. While technology and metals distribution market risks differ, the overall operating performances and cash flow resiliency are similar, with FCF margins for these distribution peers averaging in the low-to-mid-single digits over the past five years. Fitch expects a more normalized price environment coupled with management directing cash flows toward modest gross debt reduction and bolt-on M&A to lead to gross leverage of around 3.5x. Fitch views this leverage profile to be consistent with 'BB-' rating tolerances. KEY ASSUMPTIONS Fitch's key assumptions within its rating case for the issuer include: -- Gradually lower polymer pricing as market supply issues alleviate, while volume growth is modest due to normalized demand levels; -- Margins normalize towards historical levels; -- Solid FCF generation throughout forecast, supported early in the forecast by countercyclical working capital; -- FCF allocated primarily toward bolt-on M&A and gross debt reduction. RATING SENSITIVITIES Factors that could, individually or collectively, lead to positive rating action/upgrade: -- Gross debt reduction and steady EBITDA growth, leading to Total Debt with Equity Credit/Operating EBITDA durably below 3.25x or FFO Adjusted Leverage durably below 4.25x; -- Continued investment in additional product lines and ancillary services, further strengthening relationships with suppliers and customers; -- Demonstrated ability to generate solid free cash flow during periods of depressed earnings; -- Demonstrated track record of adherence to capital allocation priorities and financial policy targets. Factors that could, individually or collectively, lead to negative rating action/downgrade: -- Harsher than expected competition and/or poor cost control efforts, leading to Total Debt with Equity Credit/Operating EBITDA durably above 3.75x or FFO Adjusted Leverage durably above 4.75x; -- Deterioration in the company's relationships with suppliers, leading to eroding market share; -- Continually strained operating environment, leading to a strained earnings profile and reductions in the borrowing base, resulting in pressured liquidity; -- More aggressive than expected financial policy, representing a departure from historical norms. 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: Blue Tree faces limited maturities until the ABL matures in 2026 (followed by the term loan in 2028). While the $870 million ABL is over 50% utilized as of 2Q21, Fitch anticipates near-term working capital inflows to be applied toward ABL debt repayment which, in addition to solid forecasted FCF generation, should support a sufficient liquidity profile for the company. ISSUER PROFILE Blue Tree Holdings, Inc., a subsidiary of Ravago S.A. and the parent company of Ravago Holdings America, Inc. and Bamberger Polymers Corp., is a leading polymer and chemical distribution company and provider of value-added services, working with leading suppliers worldwide. Blue Tree is the largest company in the highly fragmented U.S. polymer market. Ravago provides value-add services such as blending, mixing, and formulating. 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. BLUEBERRY COMMONS: Case Summary & Unsecured Creditor ---------------------------------------------------- Debtor: Blueberry Commons Sunnyvalle LLC 1944 Kingsley St. Santa Cruz, CA 95062 Business Description: Blueberry Commons Sunnyvalle LLC is a Single Asset Real Estate debtor (as defined in 11 U.S.C. Section 101(51B)). The Debtor is the fee simple owner of a land subdivided into six parcels in Sunnyvale, California valued at $3.5 million. Chapter 11 Petition Date: October 5, 2021 Court: United States Bankruptcy Court Northern District of California Case No.: 21-51275 Debtor's Counsel: Kevin Tang, Esq. TANG & ASSOCIATES 17011 Beach Blvd Suite 900 Huntington Beach, CA 92647 Tel: (714) 594-7022 Fax: (714) 594-7024 Email: kevin@tang-associates.com Total Assets: $3,500,000 Total Liabilities: $3,095,426 The petition was signed by Hui Jiang as managing member. The Debtor listed the Franchise Tax Board as its sole unsecured creditor holding a claim of $4,000. A full-text copy of the petition is available for free at PacerMonitor.com at: https://www.pacermonitor.com/view/PTO7DUA/Blueberry_Commons_Sunnyvalle_LLC__canbke-21-51275__0001.0.pdf?mcid=tGE4TAMA BROADSTREET PARTNERS: S&P Rates $332.5MM 1st-Lien Term Loan 'B' --------------------------------------------------------------- S&P Global Ratings assigned its 'B' issue-level rating and '3' recovery rating (50%-70%; rounded estimate: 55%) to BroadStreet Partners Inc.'s (B/Stable/--) proposed $332.5 million first-lien term loan tranche B-2. While the proposed offering will be nonfungible with the company's existing $1.097 billion first-lien term loan outstanding as of June 30, 2021, it will have the same Jan. 20, 2027 maturity date. BroadStreet also intends to raise a $325 million add-on to the company's existing $400 million senior unsecured notes. The senior unsecured notes add-on and new nonfungible first-lien term loan will not affect our ratings on BroadStreet--including S&P's 'B' long-term issuer credit rating, 'B' first-lien credit facility debt rating, and 'CCC+' unsecured debt rating. S&P said, "We expect BroadStreet to use proceeds from the raises to repay revolver borrowings and incremental private financing that were used to fund the largest core partnership to date. Including the new debt issuances, additional earnout obligations, and annualized earnings contributions from closed acquisitions, BroadStreet's pro forma leverage for the 12 months ended June 30, 2021 is approximately 6.9x with EBITDA interest coverage of 3.0x. While the company's leverage is trending higher relative to our expectations, we believe metrics remain in line with the 'B' rating. "BroadStreet performed favorably in the 12 months ended June 30, 2021, in our view, with revenue growing 21.4% to $883 million and modest EBITDA margin expansion. Over the 12 months, BroadStreet's organic growth (including contingent commissions) was 3.1%, improving slightly compared to 2.3% in calendar 2020. Although the employee benefits business--which represents less than 25% of the overall business--continues to report negative organic growth, we expect the segment to turn around in the second half of 2021 as employment levels improve. Complementing the company's organic expansion is BroadStreet's continued execution on its robust acquisition pipeline. Since the end of the second quarter, BroadStreet has completed two core partnerships and 10 tuck-in acquisitions, totaling to 31 deals closed year-to-date. For the remainder of 2021, we expect BroadStreet to continue to pursue tuck-in deals funded through cash on hand and for the company to deleverage as it integrates accretive acquisitions." BRODIE HOLDINGS: Case Summary & 5 Unsecured Creditors ----------------------------------------------------- Debtor: Brodie Holdings LLC 830 High Street Chestertown, MD 21620 Chapter 11 Petition Date: October 5, 2021 Court: United States Bankruptcy Court District of Maryland Case No.: 21-16309 Debtor's Counsel: Tate M. Russack, Esq. RLC, PA LAWYERS & CONSULTANTS 7999 North Federal Highway Suite 102 Boca Raton, FL 33487 Tel: 561-571-9610 Fax: 800-883-5692 Email: Tate@russack.net Estimated Assets: $1 million to $10 million Estimated Liabilities: $1 million to $10 million The petition was signed by Harry Kaiser as managing member. A full-text copy of the petition containing, among other items, a list of the Debtor's five unsecured creditors is available for free at PacerMonitor.com at: https://www.pacermonitor.com/view/CWZKBQQ/Brodie_Holdings_LLC__mdbke-21-16309__0001.0.pdf?mcid=tGE4TAMA BROOKS AUTOMATION: S&P Places 'BB-' ICR on CreditWatch Developing ----------------------------------------------------------------- S&P Global Ratings placed all of its ratings on Brooks Automation Inc., including its 'BB-' issuer credit rating and 'BB-' issue-level rating on its senior secured debt, on CreditWatch with developing implications. S&P expects to resolve the CreditWatch placement when it has fully assessed the transaction's effects on the company's business and financial positions. The CreditWatch placement follows the company's announcement that it has entered into agreement to sell its semiconductor business for $3.0 billion in cash. S&P expects the deal to close in the first half of calendar year 2022. The semiconductor business reported around $600 million in revenue in the twelve-months-ended June 30, 2021, and the life sciences segment reported around $485 million in the same period. S&P adjusted leverage was 0.4x on June 30, 2021. As a result of the pending sale, the company will no longer pursue a separation into two independent and publicly traded companies as announced in May 2021. Following the sale, the remaining business will operate as a standalone, publicly-traded life sciences company. CreditWatch S&P said, "We will resolve the CreditWatch placement after reviewing the prospective company's capital structure, financial policy, business strategy, and outlook. We will reassess the ratings based on our view of the business profile, as well as capitalization, of the entity as a standalone life-sciences company." BUZZ FINCO: Fitch Affirms 'BB-' LT IDR & Alters Outlook to Stable ----------------------------------------------------------------- Fitch Ratings has affirmed the Long-Term Issuer Default Rating (IDR) of Buzz Finco L.L.C. at 'BB-' and upgraded the senior secured revolver and term loans to 'BB+'/'RR1' from 'BB/RR2'. The upgrade resolves the Under Criteria Observation (UCO) designation placed on Buzz Finco L.L.C. in April 2021 related to the modification of Fitch's Recovery Ratings and Instrument Ratings criteria. Fitch believes the senior secured revolver and term loans satisfy the conditions of category 1 first lien debt and accordingly receive an RR1 recovery rating and 2-notch uplift from the IDR. Fitch has also assigned a 'BB-' IDR to Bumble Inc. The Rating Outlook has been revised to Stable from Negative. KEY RATING DRIVERS IPO and Organic Growth Drive Deleveraging: Bumble's leverage has quickly declined from a peak of 5.6x in Oct-2020 to 3.4x in the LTM period ended June 2021. Deleveraging has been driven by both strong organic EBITDA growth and a $200 million term loan repayment paid with proceeds of Bumble's February 2021 IPO. Fitch expects continued EBITDA growth to drive further deleveraging, but expects leverage to likely remain above Fitch's 3.0x positive ratings sensitivity. Industry Growth Supported by Secular Tailwinds: Fitch expects the online dating industry, and freemium dating applications in particular, to experience strong user and revenue growth over the rating horizon. Fitch believes growth will be supported by increasing international smartphone penetration, declining marriage rates, lessening stigmas around online dating and an increasing proportion of Generation Z being eligible to use web-based dating services. Fitch believes Bumble is well positioned to benefit from this secular trend. Bumble's revenue growth trajectory was not significantly affected by coronavirus-related restrictions on social gatherings, and the business has exhibited strong sequential revenue growth in each month since April 2020. Fitch expects that loosening pandemic-related restrictions globally will also drive additional user growth, as in-person dating becomes more accessible. Limited Product Diversification: Bumble's portfolio consists of two main platforms, Bumble and Badoo, which represented 65% and 35% of revenue, respectively, in the LTM period ended June 2021. Fitch believes limited product diversification increases credit risk as any significant operational or reputational issues at either platform may have a significant impact on Bumble's consolidated financial profile. While the Bumble application has modes that extend beyond dating, including BFF and Bizz, Fitch does not believe these modes currently have a large enough user base to provide material product level diversification. Significant Level of Competition: Bumble competes in the crowded and competitive online dating industry. Bumble's main competitor is Match Group, Inc. which owns the largest and highest grossing dating app in the world, Tinder, as well as a number of other competitive platforms such as Hinge, PlentyofFish, Match.com, eHarmony, etc. Fitch believes that multiple large competitors can exist in the dating app space, as users will frequently use and pay for multiple dating applications at once. Fitch believes Match Group is better competitively positioned due to its large number of platforms with critical user mass, and relatively conservative capitalization and strong financial profile such. As a result, Match Group can deploy financial resources aggressively to acquire competitors and introduce features across its platforms aimed at competing with Bumble. Fitch believes Bumble's focus on female empowerment and safety provides important competitive differentiation, though Fitch questions the long-term sustainability of this advantage against competitors with significant financial resources and only modest barriers to entry for new dating applications. Robust Cash Flow Generation: Fitch expects Bumble to generate strong FCF margins over the rating horizon. Cash flow generation will be supported by a strong EBITDA margin profile, limited working capital requirements, and low levels of capital intensity. Fitch believes strong FCF generation provides management with significant financial flexibility to pursue strategic investments with internally generated resources. However, consistently allocating FCF toward shareholder distributions will limit financial flexibility. Concentrated Voting Power: Blackstone, Bumble's sponsor, and Whitney Wolfe Herd, Bumble's Founder and CEO, collectively hold 93% of Bumble Inc.'s voting power. Blackstone holds 72% of the voting power while Wolfe Herd holds 21%. Fitch believes the concentration of voting power between the sponsor and the founder increases the likelihood of shareholder friendly actions, which negatively affects the credit profile. DERIVATION SUMMARY Bumble's 'BB-' IDR is supported by Bumble's competitive positioning as a safe and female-friendly dating application, relatively conservative leverage profile, strong FCF generation and Fitch's expectation for the company to achieve sustained strong revenue growth supported by a number of secular tailwinds. The credit profile's strengths are offset by material discretionary consumer spending exposure, limited product diversification and significant sector competition. The 'RR1' Recovery Rating on the senior secured debt reflects Fitch's expectation for a superior recovery based on the company's strong underlying cash flow generation, profitability and brand value. Bumble builds and operates dating and social networking mobile applications, which most notably include Bumble and Badoo. Bumble does not have any direct peers within Fitch's corporates universe. Fitch believes Bumble's operational, financial and credit protection metrics position it well in the 'BB-' rating category compared with Fitch's rated TMT universe. KEY ASSUMPTIONS Fitch's key assumptions within the rating case for the issuer include: -- Consolidated revenue expected to grow at a double-digit CAGR over the rating horizon, driven by both paying user growth and ARPPU growth, reflecting the strong secular tailwinds in the online dating industry and the company's new user monetization initiatives; -- Fitch assumes a majority of revenue growth will be derived from Bumble subscription and transaction growth, as a majority of marketing spend is allocated toward Bumble user acquisition; -- Fitch does not assume any acquisitions over the forecast period; -- Gross profit margins assumed to be stable over the forecast horizon; -- Fitch assumes EBITDA margins range between 27%-29% -- Fitch assumes stable capital intensity over the rating horizon; -- Fitch assumes Bumble repurchases $1.1 billion of shares, funded primarily with free cash flow as well as some incremental debt. RATING SENSITIVITIES Factors that could, individually or collectively, lead to positive rating action/upgrade: -- Bumble's consolidated revenue growth materially exceeding industry growth; -- Total debt with equity credit/operating EBITDA sustained below 3.0x; -- Sustained double-digit FCF margins. Factors that could, individually or collectively, lead to negative rating action/downgrade: -- Debt funded acquisitions or shareholder returns causing total debt with equity credit/operating EBITDA to exceed 4.0x without a credible plan for deleveraging; -- Match Group, Facebook or other competitors taking material market share from Bumble, resulting in poor operating performance and depressed profitability. Fitch believes indicators would be flat to negative revenue growth and EBITDA margins sustained near or below 20%; -- Sustained low single-digit FCF margins. 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: As of June 2021, Bumble's liquidity is supported by $252 million of readily available cash and an undrawn $50 million revolver. Fitch expects liquidity will be further supported by consistent FCF generation, due to strong profitability and limited capital requirements. Bumble's debt structure is comprised of a $50 million senior secured revolver and $641.4 million of outstanding senior secured term loans. The revolver matures in January 2025, and the term loan matures January 2027. Bumble has no significant debt maturities over the rating horizon, and will only be required to make $1.4 million quarterly amortization payments over the life of the term loan. Fitch believes Bumble's liquidity is sufficient to support its debt service over the ratings horizon. ISSUER PROFILE Bumble Inc. builds and operates dating and social networking mobile applications, which most notably include Bumble and Badoo. On a consolidated basis, Bumble has more than 40 million monthly active users across more than 150 countries. ESG CONSIDERATIONS Bumble has an ESG Relevance Score of '4' for social impacts due to Bumble's position as a female-friendly dating application seeking to mitigate harassment or abusive language frequently experienced by women on dating applications, which has a positive impact on the credit profile, and is relevant to the ratings in conjunction with other factors. Fitch believes that Bumble's female friendly policies give Bumble a competitive advantage in the online dating industry, which bolsters the company's strong market position and supports user retention rates. Bumble has an ESG Relevance Score of '4' for governance structure due to the sponsor and founder's collective control of all operational and financing decisions, which has a negative impact on the credit profile, and is relevant to the ratings in conjunction with other factors. Unless otherwise disclosed in this section, the highest level of ESG credit relevance is a score of 3 - 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. BYRNA TECHNOLOGIES: Appoints Emily Rooney as Director ----------------------------------------------------- The board of directors of Byrna Technologies Inc. filled a newly created vacancy by appointing Emily Rooney as a director. The Company anticipates that Rooney will serve on the Board's Audit Committee. The Board has determined that Rooney is independent for purposes of serving on the Board under the applicable rules of the Securities and Exchange Commission and the Nasdaq Marketplace. There are no arrangements or understandings between Rooney and any other persons, pursuant to which she was selected as a director. Rooney was host and executive editor of WGBH's weekly Beat The Press program for 24 years, a media criticism program which has earned awards including two local Emmy's, five National Press Club awards, and the University of Pennsylvania's Bart Richards Award for media criticism. Simultaneously, Rooney was host and executive editor of Greater Boston, WGBH's local issues and public affairs program for 18 years. During that time, Greater Boston was honored with several New England Emmys, Associated Press and Edward R. Murrow Awards for Best Public Affairs Program, and excellence in writing and commentary. Rooney has also received the Dennis Kauff Award for Excellence in Reporting, the Yankee Quill Award from the American Newspaper Society, Reporter of the Year Award from the Massachusetts Bar Association, and has been inducted into the Massachusetts Broadcasters Hall of Fame. Rooney came to WGBH from the Fox Network in New York, where she oversaw political coverage, including the 1996 presidential primaries, national conventions, and presidential election. When she joined Fox in 1994, she was senior producer of Fox news productions, developing news programming for Fox and producing specials. Prior to Fox, Rooney was executive producer of ABC's World News Tonight with Peter Jennings. Rooney is a graduate of American University in Washington, D.C. and has honorary doctorates from UMass Boston and Westfield State. Rooney will receive compensation as an outside director of the Company under the director compensation policies adopted by the Board from time to time. About Byrna Technologies Headquartered in Byrna Technologies Inc. -- www.byrna.com -- develops, manufactures, and sells non-lethal ammunition and security devices. These products are used by the military, correctional services, police agencies, private security and consumers. Byrna Technologies reported a net loss of $12.55 million for the year ended Nov. 30, 2020, a net loss of $4.41 million for the fiscal year ended Nov. 30, 2019, a net loss of $2.15 million for the fiscal year ended Nov. 30, 2018, and a net loss of $2.8 million for the fiscal year ended Nov. 30, 2017. As of May 31, 2021, the Company had $22.03 million in total assets, $8.88 million in total liabilities, and $13.15 million in total stockholders' equity. CALPLANT I LLC: Case Summary & 5 Unsecured Creditors ---------------------------------------------------- Two affiliates that concurrently filed voluntary petitions for relief under Chapter 11 of the Bankruptcy Code: Debtor Case No. ------ -------- CalPlant I Holdco, LLC (Lead Case) 21-11302 6101 State Highway 162 Willows, CA 95988 CalPlant I, LLC 21-11303 6101 State Highway 162 Willows, CA 95988 Business Description: The Debtors have constructed the world's first plant capable of manufacturing medium density fiberboard ("MDF") from rice straw. Located in northern California approximately 85 miles north of Sacramento, the Plant converts rice straw -- a waste product of rice farming -- into MDF. While the Plant has been in development for nearly three decades and has been selling MDF for six months, it is not yet fully operational. Chapter 11 Petition Date: October 5, 2021 Court: United States Bankruptcy Court District of Delaware Judge: Hon. John T. Dorsey Debtors' Local Bankruptcy Counsel: Eric J. Monzo, Esq. Brya M. Keilson, Esq. MORRIS JAMES LLP 500 Delaware Avenue Suite 1500 Wilmington, DE 19801 Tel: 302-888-6800 Fax: 302-888-6800 Email: emonzo@morrisjames.com bkeilson@morrisjames.com Debtors' Bankruptcy Counsel: Jennifer L. Marines, Esq. Benjamin Butterfield, Esq. Miranda K. Russell, Esq. MORRISON & FOERSTER LLP 250 West 55th Street New York, New York 10019 Tel: (212) 468-8000 Fax: (212) 468-7900 Email: jmarines@mofo.com bbutterfield@mofo.com mrussell@mofo.com Debtors' Restructuring & Financial Advisor: PALADIN MANAGEMENT GROUP Debtors' Claims & Noticing Agent: PRIME CLERK LLC CalPlant I Holdco's Estimated Assets: $50 million to $100 million CalPlant I Holdco's Estimated Liabilities: $0 to $50,000 CalPlant I, LLC's Estimated Assets: $100 million to $500 million CalPlant I, LLC's Estimated Liabilities: $100 million to $500 million The petitions were signed by Jeffrey N. Wagner, executive chairman. CalPlant I Holdco stated it has no creditors holding unsecured claims. Full-text copies of the petitions are available for free at PacerMonitor.com at: https://www.pacermonitor.com/view/BOFEDLI/CalPlant_I_Holdco_LLC__debke-21-11302__0001.0.pdf?mcid=tGE4TAMA https://www.pacermonitor.com/view/BIM7XHI/CalPlant_I_LLC__debke-21-11303__0001.0.pdf?mcid=tGE4TAMA List of CalPlant I, LLC's Five Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ 1. Con-Vey LLC Equipment $7,050 PO Box 1399 Supplier Roseburg, OR 97470 Mark Halliday Tel: (541) 672-5506 Email: mark.halliday@con-vey.com 2. Direct Energy Business Utility $237,700 P.O. Box 32179 Service New York, NY 10087-2179 Diane Holman Tel: 949-294-0709 Email: diane.holman@directenergy.com 3. Pacific Gas and Electric Utility $988,941 Box 997300 Services Sacramento, CA 95899-7300 Tino Nava Tel: 530-519-1303 Email: tan4@pge.com 4. Siempelkamp Maschinen Equipment $2,664,099 Siempelkampstr 75 Supplier Krefeld D-47803 Germany Roland Peltzer Tel: (49)151-14736693 Email: roland.peltzer@siempelkamp.com 5. Western States Fire Trade Vendor $407,183 Protection Co 188 Cirby Way Roseville, CA 95678 Madison Lee Tel: (916) 924-1631 Email: MADISON.LEE@WSFP.US CARNIVAL CORP: Delays Debt Reckoning by Refinancing Bonds --------------------------------------------------------- Davide Scigliuzzo of Bloomberg News reports that Carnival Corp.'s path to recovery from the pandemic is still fraught with uncertainties. But the cruise-line operator is on track to sell debt yielding around 4% to refinance bonds, issued during the worst of the Covid-19 lockdowns last year, that pay almost three times as much. Carnival's ability to refinance cheaply shows both investors' optimism for the cruise industry and the dearth of opportunities in a market still buoyed by liquidity. The Miami-based company said it expects to return its full fleet to the seas by the spring of 2022. About Carnival Corp. Carnival plc operates as a leisure travel company in North America, Australia, Europe, and Asia. It operates in four segments: North America and Australia Cruise Operations, Europe and Asia Cruise Operations, Cruise Support, and Tour and Other. The company operates cruises under the Carnival Cruise Line, Princess Cruises, Holland America Line, P&O Cruises (Australia), Seabourn, Costa, AIDA, P&O Cruises (UK), and Cunard brand names. Carnival plc was founded in 1850 and is based in Southampton, the United Kingdom. CARNIVAL CORP: S&P Assigns 'BB-' Rating on First-Lien Term Loan --------------------------------------------------------------- S&P Global Ratings assigned its 'BB-' issue-level rating to U.S.-based cruise operator Carnival Corp.'s proposed $1.5 billion term loan B. The recovery rating is '1', indicating our expectation for very high (90%-100%; rounded estimate 95%) recovery for lenders in the event of a default. Carnival plans to use proceeds from the loan to redeem amounts under its existing 11.5% first-priority senior secured notes due 2023 ($2 billion outstanding), and to pay premiums, accrued interest, and fees and expenses. S&P said, "Since the transaction is largely debt for debt, it does not affect our 'B' issuer credit rating or negative outlook on Carnival. We expect the transaction will reduce Carnival's interest burden because we expect the margin on the term loan B will be about the same as the margin on Carnival's existing term loan B, which is 3.75%- significantly lower than the 11.5% rate on the secured notes the company is redeeming." The transaction will also result in a modest improvement in the company's maturity profile. Recovery analysis Key analytical factors: -- S&P assigned its 'BB-' issue-level rating to Carnival's proposed $1.5 billion new term loan B. The recovery rating is '1', indicating its expectation for very high (90%-100%; rounded estimate 95%) recovery for lenders in the event of a default. All other issue-level ratings are unchanged. Simulated default assumptions: -- S&P simulated default scenario contemplates a default occurring by 2024 due to a significant decline in cash flow from permanently impaired demand for cruises following the negative publicity and travel advisories during the COVID-19 pandemic, a prolonged economic downturn, and/or increased competitive pressures. -- S&P includes in its assumption of unsecured claims that benefit from subsidiary guarantees new ship debt that we expect Carnival to incur before the year of default. -- S&P estimates gross enterprise value at emergence of around $23 billion by applying a 7x multiple to our estimate of EBITDA at emergence. It uses a multiple that is at the high end of its range for leisure companies to reflect Carnival's good position in the cruise industry, which is a small but underpenetrated segment of the overall travel and vacation industry. -- S&P allocate its estimate of gross enterprise value at emergence among secured and unsecured claims based on its understanding of the contribution, by asset value, of the parent and subsidiary guarantors. -- S&P assumes that of its estimated gross enterprise value at emergence, about 71% is available to cover first- and second-priority secured claims, around 16% is available to cover unsecured claims that benefit from subsidiary guarantees, and around 13% is available to cover unsecured claims that only benefit from parent guarantees. -- S&P said, "Under our analysis, and after subtracting administrative expenses from our estimate of gross enterprise value, around $15.5 billion of enterprise value would be available to cover secured claims. After satisfying first- and second-priority secured claims, any remaining value, which we estimate to be $5.7 billion, is then allocated among claims that benefit from subsidiary guarantees, and those that only benefit from parent guarantees. This is because it is our understanding that a material portion of the collateral sits at the subsidiary guarantors." -- S&P said, "Under our analysis, we attribute $3.5 billion of the residual value, after satisfying first- and second-priority claims, to unsecured debt that benefits from subsidiary guarantees. This debt also benefits from the enterprise value, around $3.5 billion, that is not pledged as collateral and that we attribute to the unsecured debt that has subsidiary guarantees. The total value, around $7 billion, only partially covers our estimate of unsecured debt with subsidiary guarantees at default. We assume these deficiency claims are pari passu with the unsecured debt that has only parent guarantees." -- S&P said, "Under our analysis, we attribute around $2.2 billion of the residual value, after satisfying first- and second-priority secured claims, and around $2.8 billion in enterprise value that we attribute to the unsecured debt that has only parent guarantees. The total value, around $5 billion, only partially covers our estimate of those unsecured claims and pari passu deficiency claims at default." -- S&P assumes Carnival's revolvers are 100% drawn at default. Simplified waterfall: -- Emergence EBITDA: $3.3 billion -- EBITDA multiple: 7x -- Gross enterprise value: $23.4 billion -- Net enterprise value available after administrative expenses (7%): $21.8 billion -- Value attributable to secured/unsecured claims: $15.5 billion/$6.3 billion -- Value available to first-lien secured claims: $15.5 billion -- Estimated first-lien secured claims at default: $7.6 billion --Recovery range: 90%-100%; rounded estimate: 95% -- Value available to second-lien secured claims: $8 billion -- Estimated second lien secured claims at default: $2.3 billion --Recovery range: 90%-100%; rounded estimate: 95% -- Value available (including some residual value after satisfying secured first and second lien claims) to unsecured claims that benefit from subsidiary guarantees (the export credit facilities, the 2026 and 2027 notes, the 2023 convertible notes, the revolver, and bi-lateral bank facilities): $7 billion -- Pro rata share of parent value: $4.5 billion -- Total value available to unsecured claims that benefit from subsidiary guarantees: $11.5 billion -- Estimated unsecured claims that benefit from subsidiary guarantees at default: $24.2 billion --Recovery range: 30%-50%; rounded estimate: 45% -- Value available to unsecured debt with only parent guarantees: $0.5 billion -- Unsecured claims with only parent guarantees at default: $1.7 billion --Recovery range: 10%-30%; rounded estimate: 25% Note: All debt amounts include six months of prepetition interest. CASTLELAKE AVIATION: S&P Assigns 'B+' Rating on Sr. Unsec. Notes ---------------------------------------------------------------- S&P Global Ratings assigned its 'B+' issue-level rating and '5' recovery rating to the senior unsecured notes issued by aircraft operating lessor Castlelake Aviation Ltd.'s subsidiary Castlelake Aviation Finance DAC. Newly-formed Castlelake will use the proceeds from these notes, along with the proceeds from its term loan B, to acquire its initial aircraft portfolio, as well as for general corporate purposes. The '5' recovery rating indicates its expectation for modest (10%-30%; rounded estimate: 25%) recovery in the event of a payment default. ISSUE RATINGS--RECOVERY ANALYSIS Key analytical factors -- S&P's analysis suggests that the collateral for the proposed term loan, which comprises 52 aircraft, will cover about 73% of the facility at default, while its share of the unpledged value pushes the total recovery above 75%. The unpledged value relating to the unencumbered aircraft would be sufficient to provide about 25% coverage of the unsecured claims, including the proposed senior unsecured notes and the secured deficiency claim. -- S&P's simulated default scenario assumes a significant disruption in the air travel industry in 2025, which causes airlines to renegotiate their leases and turn back aircraft on lease. This causes aircraft values to decline, requiring the company to use cash flow to pay down certain secured aircraft financing to meet its collateralization covenants. -- S&P values the company on a going concern basis following a discrete asset valuation approach. The initial fleet comprises 71 aircraft. S&P depreciates the appraised value of the aircraft to the year of default (2025), at which point it applies realization rates to reflect the contraction of their value in distressed circumstances. Simplified waterfall -- Gross enterprise value (discrete asset valuation approach): $1,395 million -- Valuation split between unencumbered assets/term loan B collateral/AirAsia collateral: 19%/64%/17% -- Net enterprise value after 5% administrative expenses: $1,325 million -- Estimated collateral value available to the proposed term loan: $850 million -- Additional recovery through unencumbered assets: $86 million -- Total value available to the proposed term loan: $936 million -- Estimated term loan balance at default: $1,172 million --Recovery expectations: 70%-90% (rounded estimate: 75%) -- Total value available to unsecured claims: $251 million -- Senior unsecured notes/pari passu claims (term loan and revolver deficits): $431 million/$508 million --Recovery expectations: 10%-30% (rounded estimate: 25%) Notes: All debt amounts include six months of prepetition interest. Ratings List CASTLELAKE AVIATION LIMITED Issuer Credit Rating BB-/Stable/-- NEW RATING CASTLELAKE AVIATION FINANCE DAC Senior Unsecured USD notes B+ Recovery Rating 5(25%) CHIMNEY PASTURES: Unsecureds Will Get 100% of Claims in 36 Months ----------------------------------------------------------------- Chimney Pasture Ranch, LLC, filed with the U.S. Bankruptcy Court for the Southern District of Texas a Disclosure Statement and Plan of Reorganization for Small Business dated September 30, 2021. Chimney Pasture is a Texas limited liability company that was established in 2004 and is wholly owned by Charles L. Newcomb. It owns approximately 1,254 acres of ranch land in Starr County, Texas (the "Property") with improvements including a 10,000 square foot barndominium. The Property secures a loan from Texas First Bank. Chimney Pasture inadvertently failed to refinance the loan before it came due. Chimney Pasture filed this bankruptcy case in order to secure a longer period of time in which to pay the loan on the Property. The Plan of Reorganization proposes to pay Chimney Pasture's creditors primarily from future rental income generated by the Chimney Pasture's lease of the Property. Although the Property is not yet leased, Chimney Pasture believes that it will be able to find a suitable tenant and that rent from the lease will be sufficient to fund the Plan. Non-priority unsecured creditors holding allowed claims will receive distributions valued at the full amount of their allowed claim. This Plan also provides for the payment of administrative and priority claims. The Plan will treat claims as follows: * Class 1 consists of the claim of Texas First Bank. Texas First Bank filed a proof of claim for $438,396.06. Chimney Pasture will pay post-petition interest on Texas First Bank's claim of $438,396.06 at a rate of 4.75% per year from the petition date until the claim amount is paid in full. Chimney Pasture will make 36 monthly payments to Texas First Bank on the fifth day of each month, with the first payment to be made on the fifth day of the first full calendar month after the effective date of the Plan. * Class 2 consists of the claim of Starr County Tax Office. Chimney Pasture will pay the claim of Starr County Tax Office, plus post-petition interest accruing on this amount at a rate of 12% per year from the petition date until the amount is paid in full in 36 equal monthly payments, beginning on the fifth day of the first full. * Class 3 consists of NonPriority Unsecured Creditors. Chimney Pasture will pay 100% of the claims in Class 3 in 36 equal monthly payments, beginning on the fifth day of the first full calendar month after the effective date of the Plan. * Class 4 consists of Equity Security Holders. The class 4 creditor will retain his stock interests subject to the terms of this plan. Chimney Pasture expects to lease the Property and fund the Plan with rental income from the lease. Except for any items of property specifically surrendered according to the terms of the Plan, Chimney Pasture will retain the property of the bankruptcy estate. Charles Newcomb will remain president of the reorganized Debtor. A full-text copy of the Disclosure Statement dated September 30, 2021, is available at https://bit.ly/3A9tkJp from PacerMonitor.com at no charge. Attorney for the Debtor: Reese Baker, Esq. Baker & Associates 950 Echo Lane, Ste 300 Houston, TX 77024 Tel: (713) 979-2279 About Chimney Pastures Ranch Houston-based Chimney Pastures Ranch, LLC filed its voluntary petition for relief under Chapter 11 of the Bankruptcy Code (Bankr. S.D. Texas Case No. 21-32253) on July 2, 2021. Charles Newcomb, president, signed the petition. In the petition, the Debtor disclosed $1 million to $10 million in assets and $100,000 to $500,000 in liabilities. Judge Christopher M. Lopez presides over the case. Reese Baker, Esq., at Baker & Associates, represents the Debtor as legal counsel. CLEVELAND-CLIFFS INC: Fitch Raises IDRs to 'BB-', Outlook Positive ------------------------------------------------------------------ Fitch Ratings has upgraded the Issuer Default Ratings (IDRs) for Cleveland-Cliffs, Inc. (CLF) and its subsidiary, AK Steel Corporation to 'BB-' from 'B'. Fitch has also upgraded both companies' debt ratings. The upgrades reflect solid steel fundamentals, including historically high steel prices, which has resulted in materially higher EBITDA generation, significantly improved leverage metrics and should also lead to strong free cash flow generation. Strong cash flow generation will result in the ability to significantly reduce debt. The Rating Outlook is Positive, which reflects the possibility that total debt/EBITDA could be sustained below 2.5x over the rating horizon. The IDR could be upgraded if mid-cycle total debt/EBITDA is expected to be sustained below 2.5x, pension funding is improved and FCF is expected to be positive and is allocated toward gross debt repayment resulting in gross debt in the $4.0-$4.5 billion range. KEY RATING DRIVERS Improved Steel Market Conditions: The timing and magnitude of recovery in automotive demand has been faster than Fitch initially anticipated, leading to improved steel market fundamentals. HRC prices have recovered dramatically to historical highs and are supported by solid supply/demand dynamics, consolidation in the industry which has resulted in supply discipline, raw material prices and relatively low imports. The improved domestic steel environment leads to significantly stronger than expected EBITDA generation and improved leverage metrics. Fitch expects strong steel fundamentals to result in significant cash flow generation and deleveraging capacity. Total debt/EBITDA was 3.2x as of 2Q 2021 and Fitch expects it to be maintained in the 2.5x-3.5x range over the ratings horizon. Fitch expects cash to be used for debt repayment, particularly toward outstanding borrowings on the ABL in the near-term. AM USA Acquisition: Fitch viewed the acquisition of ArcelorMittal USA as a credit positive, as it was deleveraging, creates the opportunity for debt reduction and results in increased size, scale and end-market diversification. CLF is now the largest flat-rolled steel producer and largest iron ore pellet producer in North America. Approximately 66% of AK Steel's 2019 sales were to the automotive market, whereas roughly 27% of AM USA's 2019 sales were to the automotive market. Fitch views the increased end-market diversification and reduced concentration in the auto market positively. However, Cliffs will still have relatively high auto market exposure. High-Value Add Focus: AK Steel is one of a few North American steel producers capable of producing some of the most sophisticated grades of advanced high-strength steels and value-added stainless steel products, and the only producer of non-oriented electrical steel, a critical component of hybrid/electric vehicles' motors. AK Steel also produces steel grades critical to automotive light-weighting steel trends, and it is well positioned longer-term to benefit from an auto recovery and the transition to electric cars. AK Steel's benefits from a higher proportion of fixed price contracts leading to less price volatility compared with other players in the industry. AK Steel Merger: Cliffs consummated a merger with AK Steel, its second-largest iron ore pellet customer, on March 13, 2020, at which point AK Steel became Cliffs' wholly owned subsidiary. Cliffs' debt outstanding increased by approximately $2.24 billion in 1Q20, and Cliffs assumed significant pension obligations of AK Steel as part of the merger. However, Fitch viewed the transaction as relatively leverage-neutral on a normalized basis, with additional earnings offsetting the increase in debt. Vertically Integrated Business Model: Cliffs' merger with AK Steel created a vertically integrated steel producer that is self-sufficient in iron ore, which Fitch expects to improve steel margins and provide the opportunity for synergies. Following its AM USA acquisition, Cliffs has roughly 17 million tons of additional steel capacity. HBI Strategy: EAF steel producers have been taking market share from blast furnace producers in the U.S. As EAF steel producers expand into higher value-added steel products, they will require a higher quality, iron ore-based metallic, such as HBI, to produce higher quality steel. Cliffs' strategy is to become a critical supplier of HBI to EAFs, and it began construction on its Toledo HBI plant as part of that strategy. Cliffs spent approximately $1 billion to construct the HBI plant and production of HBI began in December 2020. Cliffs expects annual capacity to be approximately 1.9 million tonnes once the plant is fully operational. HBI can also be used internally by AK Steel's and ArcelorMittal USA's blast furnaces to improve productivity. Pension Obligations: Through the AM USA acquisition, CLF's acquired a significant amount of pension obligations. Pension obligations were underfunded by approximately $1.2 billion at YE21. While manageable currently, the fixed costs wear on cash flow and can be particularly detrimental during low points in the cycle. Strong Operational Ties: Fitch has equalized the IDRs of Cliffs and AK Steel given the vertical integration between the entities, which results in strong operational and strategic ties. Fitch believes AK Steel will continue to account for a meaningful portion of Cliffs' iron ore production. Fitch views Cliffs' financial performance as linked to AK Steel's, as the steel and manufacturing segment will account for the majority of the combined company's sales. Additionally, certain Cliffs notes benefit from guarantees from AK Steel and some subsidiaries, providing legal ties between the entities. Fitch believes additional borrowing will be at the Cliffs level and expects the remaining AK Steel debt to be redeemed. DERIVATION SUMMARY Cliffs is comparable in size but less diversified compared with integrated steel producer United States Steel Corporation (B/Positive). Cliffs is larger compared with EAF long steel producer Commercial Metals Company (BB+/Stable) in terms of steel capacity, although Cliffs has historically had less favorable credit metrics. Cliffs is also larger in terms of annual capacity, although has historically less favorable credit metrics compared with EAF producer Steel Dynamics, Inc. (BBB/Stable). KEY ASSUMPTIONS Fitch's key assumptions within its rating case for the issuer include: -- Annual steel shipments of approximately 17 million tons; -- Capex of approximately $650 million per year over the rating horizon; -- No dividends in 2021, dividend reinstated in 2022; -- No additional acquisitions or share repurchases through the rating horizon. RATING SENSITIVITIES Factors that could, individually or collectively, lead to positive rating action/upgrade: -- Mid-cycle total debt to EBITDA expected to be sustained below 2.5x; -- EBITDA margins sustained above 10%; -- Improved pension funding status; -- Debt repayment leading to gross debt of around $4.0-$4.5 billion. Factors that could, individually or collectively, lead to negative rating action/downgrade: -- Total debt to EBITDA sustained above 3.5x; -- EBITDA margins sustained below 8.5%; -- Significantly weaker steel fundamentals resulting in materially lower than expected FCF generation. BEST/WORST CASE RATING SCENARIO International scale credit ratings of Non-Financial Corporate issuers have a best-case rating upgrade scenario (defined as the 99th percentile of rating transitions, measured in a positive direction) of three notches over a three-year rating horizon; and a worst-case rating downgrade scenario (defined as the 99th percentile of rating transitions, measured in a negative direction) of four notches over three years. The complete span of best- and worst-case scenario credit ratings for all rating categories ranges from 'AAA' to 'D'. Best- and worst-case scenario credit ratings are based on historical performance. LIQUIDITY AND DEBT STRUCTURE Solid Liquidity: As of June 30, 2021, CLF had $73 million in cash and cash equivalents, and $1.595 billion available under its $3.5 billion ABL credit facility due 2025. The ABL credit facility matures in 2025, or 91 days prior to the stated maturity date of any portion of existing debt if the aggregate amount of existing debt that matures on the 91st day is greater than $100 million. The ABL credit facility is subject to a springing 1.0x minimum fixed-charge coverage covenant when availability is less than the greater of (i) 10% of the lesser of (a) the maximum ABL amount (currently $3.5 billion) and (b) the borrowing base; and (ii) $100 million. CLF has no material maturities until 2024, but it has pension expense obligations. ISSUER PROFILE Cleveland-Cliffs is an integrated producer of steel, the largest flat-rolled producer of steel and largest producer of iron ore pellets in North America. 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. CMA LOGISTICS: Unsecureds to Get 100% of Profit from 20 Quarters ---------------------------------------------------------------- CMA Logistics, LLC, filed with the U.S. Bankruptcy Court for the Southern District of Indiana a Combined Small Business Chapter 11 Plan of Reorganization and Disclosure Statement dated September 30, 2021. The Debtor was formed and began operating in 2015 under its then owner, Curt Baumgartner, as part of a dual-purpose operation that was broken down between freight brokerage (CMA Freight Services, LLC) and trucking services (CMA Logistics, LLC). For purposes of the financial resources and obligations identified and addressed by this Plan, both companies' interests are referred to and treated as the Debtor's. Unfortunately, the legal separation between the two entities was never clear and the Schedules properly listed freight services as a d/b/for this Debtor. Despite that, the only operation conducted by the Debtor now is over the road long haul service business utilizing its owned and leased rolling stock. Cash generated by ongoing operations shall first be used to fund administrative expenses, including professional and case Trustee fees and expenses. The Plan pays priority claims in accordance with the treatment allowed under the Code. Given their size such payment will consume much of the cash available to creditors. After satisfaction of these claims, general unsecured creditors shall be paid pro rata out of all remaining Plan payments. The Plan shall last for 59 months following the first payment made under it, which is due within 30 days of the date the Confirmation Order becomes a Final Order. Given the liquidation value of the company, the Plan could be as short as 36 months, but the Debtor has elected to offer creditors a full five-year term. The Plan will treat claims as follows: * Class 2.1 consists of the claim of BMO Harris Bank, NA. On August 6, 2021, the Debtor and BMO Harris Bank, NA entered that certain Agreed Entry Resolving BMO's Motion for Relief from Stay, which Agreed Entry was approved by the Court by it Order Approving Agreed Entry, on August 9, 2021. All of the terms and conditions of the Agreed Entry are deemed to be incorporated in this Plan as if set forth verbatim and the Debtor adopts such terms as the treatment of BMO's secured claim. * Class 2.2 consists of the claim of Midland States Bank. The Debtor has 2 tractors financed by Midland States Bank ("MSB") that the Debtor believes are slightly undersecured. MSB shall be deemed to have an Allowed Secured Claim, (the "Allowed Secured Claim of MSB") equal to amount of such creditor's claim as shown in its proof of claim or $120,000 per tractor. The Debtor shall pay the Allowed Secured Claim of MSB by re-amortizing the entire balance due such creditor as of the Effective Date and paying that amount over the remaining useful life of the collateral using prime plus 2 or a 5.25% annual interest rate. Payments continue until the Allowed Secured Claim of MSB is paid in full. * Class 3 consists of Allowed General Unsecured Claims which claims shall receive a pro rata payment after satisfaction of the superior class claims treated under the Plan up to the full amount of the allowed claim of such creditor. Such claims shall be allowed, settled, compromised, satisfied and paid by a quarterly distribution of 100% of the net profits of the Debtor for the preceding quarter calculated in accordance with generally accepted accounting principles, less such priority payments, for 20 quarters following confirmation of the Plan. Payment of such claims is expressly subordinate to the payment of priority claims under this Plan. Class 3 is impaired and is entitled to vote on the Plan. * Class 4 consists of the Equity Interests, which interests shall be retained by existing interest owners. Debtor shall continue to operate its business in accordance with the projection of income, expense and cash flow, and shall pay its net after tax cash profit to satisfy creditor claims. A full-text copy of the Combined Plan and Disclosure Statement dated September 30, 2021, is available at https://bit.ly/3l8WggA from PacerMonitor.com at no charge. Attorney for the Debtors: KC Cohen KC Cohen, Lawyer, PC 151 N. Delaware St., Ste. 1106 Indianapolis, IN 46204 Phone: 317-715-1845 kc@esoft-legal.com CMA Logistics, LLC, an Indiana limited liability company, was formed and began operating in 2015 under its then owner, Curt Baumgartner, as part of a dual-purpose operation that was broken down between freight brokerage (CMA Freight Services, LLC) and trucking services (CMA Logistics, LLC). CRC BROADCASTING: Gets Interim Cash Access Until Oct 31 ------------------------------------------------------- Judge Paul Sala of the U.S. Bankruptcy Court for the District of Arizona approved the stipulation between CRC Broadcasting Company, Inc. and Desert Financial Federal Credit Union, allowing the Debtor to use cash collateral on an interim basis until October 31, 2021, pursuant to the budget for relocation expenses of AM station KQFN 1580 in accordance with the contracts with Kintronic Labs, Inc, Max-Gain Systems, Inc., and La Rue Communications. The budget, which covers the period from October 1 to 30, provided for $96,000 in total expenses. In consideration for the use of cash collateral, Desert Financial is granted replacement liens on all of the Debtor's property after the Petition Date, to the extent of diminution in value of Desert Financial's interest in the estate property. Desert Financial also is granted a superpriority administrative expense claim to the extent the replacement liens are not adequate to protect for any diminution of collateral. Moreover, Desert Financial is granted a superpriority administrative expense claim under Bankruptcy Code section 507(b) (without the need to file or request any such claim with the Bankruptcy Court or otherwise), to the extent Replacement Liens above do not adequately protect Desert Financial for any diminution of collateral, including Cash Collateral. The Debtor owes Desert Financial under certain loan documents no less than $1,477,964 resulting from its own debts and the debts of affiliated debtor, CRC Media West, LLC that it guaranteed and secured. Crestmark Vendor Finance, a division of MetaBank has asserted that it has a perfected, first priority purchase money security interest in certain specified collateral pursuant to Equipment Finance Agreement # 153522 entered into between Regents Capital Corporation and CRC Media West, LLC, which Equipment Finance Agreement was subsequently assigned by Regents Capital to Crestmark. The Debtor asserts that in April 2020 it received a $10,000 advance under the Economic Injury Disaster Loan Emergency Advance program (however, its loan application was ultimately denied). Desert Financial asserts that such Advance now constitutes Cash Collateral, which is disputed by the Debtor. The Debtor proposes to use $5,000 of the Advance to purchase an air conditioner unit discussed between the Parties. Desert Financial approves the purchase of the Unit, which constitutes collateral of Desert Financial under the Loan Documents. The Debtor may use the remaining $5,000 of the Advance solely for the expenses set forth in the Budget. A copy of the stipulated order is available for free at https://bit.ly/2YjDmKG from PacerMonitor.com. About CRC Broadcasting Co. CRC Broadcasting Company, Inc., a broadcast media company based in Scottsdale, Ariz., filed a voluntary petition under Chapter 11 of the Bankruptcy Code (Bankr. D. Ariz. Case No. 20-02349) on March 6, 2020, listing under $1 million in both assets and liabilities. Affiliate CRC Media West, LLC also filed for Chapter 11 petition (Bankr. D. Ariz. Case No. 20-02352) on March 6, 2020, listing under $1 million in both assets and liabilities. The cases are jointly administered. Judge Paul Sala oversees both cases. Allan D. NewDelman, Esq., at Allan D. NewDelman, P.C., is the Debtors' legal counsel. Squire Patton Boggs (US)LLP represents Desert Financial Federal Credit Union, secured creditor. Desert Financial Federal Credit Union, as secured creditor, is represented by Squire Patton Boggs (US) LLP. DAISEY LLC: Voluntary Chapter 11 Case Summary --------------------------------------------- Debtor: Daisey, LLC 15972 N. 115 Way Scottsdale, AZ 85255 Business Description: Daisey, LLC is a Single Asset Real Estate debtor (as defined in 11 U.S.C. Section 101(51B)). Chapter 11 Petition Date: October 5, 2021 Court: United States Bankruptcy Court District of Arizona Case No.: 21-07517 Debtor's Counsel: Lawrence D. Hirsch, Esq. PARKER SCHWARTZ, PLLC 7310 N. 16th Street Suite 330 Phoenix, AZ 85020 Tel: 602-282-0477 Fax: 602-282-0478 Email: lhirsch@psazlaw.com Estimated Assets: $1 million to $10 million Estimated Liabilities: $500,000 to $1 million The petition was signed by Hugh Anderson as managing member. The Debtor stated it has no creditors holding unsecured claims. A full-text copy of the petition is available for free at PacerMonitor.com at: https://www.pacermonitor.com/view/ANQSFLQ/DAISEY_LLC__azbke-21-07517__0001.0.pdf?mcid=tGE4TAMA DALTON CRANE: Seeks to Hire Martin & Drought as Legal Counsel ------------------------------------------------------------- Dalton Crane, L.C. seeks approval from the U.S. Bankruptcy Court for the Southern District of Texas to employ Martin & Drought, P.C. to serve as legal counsel in its Chapter 11 case. The hourly rates charged by Martin & Drought range from $200 to $500 for attorneys' services and from $100 to $125 for paralegal services. The hourly rate for lead attorney, Michael Colvard, Esq., is $450. Mr. Colvard disclosed in a court filing that his firm does not represent any interest adverse to the Debtor's estate. The firm can be reached through: Michael G. Colvard, Esq. Martin & Drought, P.C. Weston Centre 112 East Pecan Street, Suite 1616 San Antonio, TX 78205 Tel: (210) 220-1334 Fax: (210) 227-7924 Email: mcolvard@mdtlaw.com About Dalton Crane L.C. Edna, Texas-based Dalton Crane, L.C. filed its voluntary petition for Chapter 11 protection (Bankr. S.D. Texas Case No. 21-33218) on Oct. 1, 2021, listing as much as $50 million in both assets and liabilities. Joshua Dalton, chief executive officer, signed the petition. Michael G. Colvard, Esq., at Martin & Drought, P.C. represents the Debtor as legal counsel. DAVEY KENT: Unsecured Creditors to Recover 2% in Plan ----------------------------------------------------- Davey Kent, Inc. filed with the U.S. Bankruptcy Court for the Northern District of Ohio a Plan of Reorganization under Subchapter V dated September 30, 2021. Debtor Davey Kent, Inc. is a corporation organized under Ohio law and headquartered in Kent, Ohio. Davey Kent does business as Davey Drill and operates a business focused on the design, manufacturing, repair and sale of parts and equipment related to commercial drill rigs used for civil and geotechnical drilling. This Plan proposes to pay creditors of the Debtor from the future cash flow of its business operations. Non-priority unsecured Creditors holding Allowed Claims will receive distributions, which the Debtor has valued at approximately 2 cents on the dollar. This Plan provides for full payment of administrative expenses and priority claims. The Plan will treat claims as follows: * Class 1 consists of all Allowed Priority Claims. Unless it agrees to a different treatment, any claimant holding an Allowed Claim in this Class shall be entitled to be paid in full, in deferred pro-rata payments, on the allowed amount of the claim over the length of this Plan. * Class 2 consists of the Claims of Hometown Bank. Debtor Davey Kent has been making certain adequate protection payments on Hometown Bank's Claim pursuant to terms set forth in the Agreed Order Approving Continued Use of Cash Collateral and Providing Adequate Protection dated July 23, 2021. To the extent the collateral securing the Allowed Claim of HTB has a value in excess of the amount of the Allowed Claim, the Reorganized Debtor will pay HTB in full in monthly principal and interest installments either as set forth in its agreement or over 5 years with an interest rate of 3% per annum, whichever is later. * Class 3 consists of General Unsecured Claims. Allowed Claims in Class 3 will be paid annually pro-rata from the Reorganized Debtor's projected Disposable Income after and subject to the payment of Administrative Expenses and Priority Tax Claims, and payments to all other Classes, but pro-rata with the Unsecured portions of those Allowed Claims as provided in the Class treatments disclosed. No interest shall accrue on any Claims in this Class. * Class 4 consists of the unsecured Allowed Claim of Medical Mutual. Pursuant to the authority granted the Debtor by prior order of the Court, Medical Mutual will be paid in full on payments terms agreed upon between Medical Mutual and Debtor. * Class 5 consists of the outstanding stock issued by the Debtor, owned by J. Thomas Myers, II. Confirmation of this Plan shall cause all prepetition stock issued by Debtor Davey Kent to be revested in and retained by those holding an interest in the outstanding stock of Debtor Davey Kent as of the Petition Date and shall be subject to and based upon the terms and conditions as they existed on the Petition Date including under any Articles of Incorporation, ByLaws, and other duly executed corporate documents. The Plan will be implemented and funded through the future business operations of the Reorganized Debtor. As a part of its reorganization, the Reorganized Debtor does not contemplate the sale of any assets except that assets may be sold to the extent that it is later determined they are no longer of value to the Reorganized Debtor's business operation or their useful life for the Reorganized Debtor has expired. A full-text copy of the Disclosure Statement dated Sept. 30, 2021, is available at https://bit.ly/3BaggVD from PacerMonitor.com at no charge. About Davey Kent Inc. Davey Kent, Inc., a manufacturer of industrial machinery in Kent, Ohio, filed a petition for Chapter 11 protection (Bankr. N.D. Ohio Case No. 21-51022) on July 2, 2021, listing as much as $10 million in both assets and liabilities. Davey Kent President J. Thomas Myers, II signed the petition. Judge Alan M. Koschik oversees the case. Brouse McDowell, LPA and Escott & Company, LLC serve as the Debtor's bankruptcy counsel and accountant, respectively. DELTA AIR: Supreme Court Declines Pilots' Benefits Case vs. PBGC ---------------------------------------------------------------- Amanda Ottaway of Law360 reports that the U.S. Supreme Court declined Monday, Oct. 4, 2021, to hear a group of former Delta pilots' argument that lower courts afforded the Pension Benefit Guaranty Corp. too much leeway when they nixed a lawsuit claiming the agency's handling of their retirement plan cost them millions. The justices declined the pilots' June petition for writ of certiorari without explanation except to note that Justice Brett Kavanaugh didn't take part. Justice Kavanaugh previously sat on the D.C. Circuit Court of Appeals, which the suit passed through. As reported in the TCR, the D.C. Circuit in February 2021 rejected a group of Delta Air Lines pilots' push to rethink a panel decision that upheld the dismissal of a suit seeking $544 million in pension benefits. The appeals judges denied an en banc rehearing request from the pilots, who want to revive their class action saying the PBGC overstepped its authority once it took over their pension plan in 2006, following Delta's bankruptcy. The pilots were hoping the full circuit would overturn precedent that grants the PBGC power to interpret benefits laws but that they claim is misguided and increasingly out of date. About Delta Air Lines Atlanta, Georgia-based Delta Air Lines provides scheduled air transportation for passengers and cargo throughout the United States, and around the world. Northwest and 12 affiliates filed for Chapter 11 protection on Sept. 14, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-17930). On May 21, 2007, the Court confirmed the Northwest Debtors' amended plan. That amended plan took effect May 31, 2007. Delta and 18 affiliates filed for Chapter 11 protection on Sept. 14, 2005 (Bankr. S.D.N.Y. Lead Case No. 05-17923). Marshall S. Huebner, Esq., at Davis Polk & Wardwell, represented the Delta Debtors in their restructuring efforts. On April 25, 2007, the Court confirmed the Delta Debtors' plan. That plan became effective on April 30, 2007. On Dec. 31, 2009, Northwest Airlines, Inc., merged with and into Delta. DENARDO CAPITAL: Gets OK to Hire Rosewood as Real Estate Advisor ---------------------------------------------------------------- DeNardo Capital Management, LLC and DeNardo Capital II, LLC received approval from the U.S. Bankruptcy Court for the Southern District of New York to hire Rosewood Realty Group as their real estate advisor. The firm will pursue both the bankruptcy sale or refinancing of DeNardo Capital II's real property in Irvington, N.Y. Rosewood will be compensated as follows: 2 percent of the aggregate amount of financing or 1 percent if the counterparty was not introduced to the Debtors by the firm in the event that the refinancing is successful; and 4 percent of the gross purchase price in the event that the bankruptcy sale is successful. In the event that the Debtors' secured creditor is the winning bidder at the bankruptcy auction, Rosewood will receive a flat fee of $50,000. The firm is also entitled to up to $5,000 in reimbursement of marketing expenses in the event of a sale to either the secured creditor or a third-party. As disclosed in court filings, Rosewood is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. The firm can be reached through: Greg Corbin Rosewood Realty Group 38 E 29th St 5th floor New York, NY 10016 Phone: (212) 359-9900/(212) 359-9904 Email: Greg@rosewoodrg.com About DeNardo Capital DeNardo Capital Management, LLC is the sole member of DeNardo Capital II, LLC, which owns a residential development project in Irvington, N.Y. DeNardo Capital Management and DeNardo Capital II filed petitions for Chapter 11 protection (Bankr. S.D.N.Y. Lead Case No. 21-22098) on Feb. 16, 2021. At the time of the filing, DCM listed as much as $10 million in both assets and liabilities while DCII listed as much as $50 million in both assets and liabilities. Judge Sean H. Lane oversees both cases. Kirby Aisner & Curley, LLP, led by Dawn Kirby, Esq., and Rosewood Realty Group serve as the Debtors' legal counsel and real estate advisor, respectively. DENARDO CAPITAL: Oct. 14 Plan & Disclosure Hearing Set ------------------------------------------------------ On Sept. 30, 2021, DeNardo Capital Management LLC ("DCM") and DeNardo Capital II LLC, ("DCII," together with DCM, the "Debtors") filed with the U.S. Bankruptcy Court for the Southern District of New York an Amended Disclosure Statement and Plan of Reorganization. On Oct. 4, 2021, Judge Sean H. Lane ordered that: * Oct. 14, 2021, at 2:00 p.m. is the telephonic hearing to consider entry of an order approving the Disclosure Statement and confirming Plan. * Oct. 11, 2021, at 5:00 p.m. is fixed as the last day to submit Ballots for accepting or rejecting the Plan to be counted as votes. * Oct. 11, 2021, at 5:00 p.m. is fixed as the last date for filing and serving any written objections to approval of the Disclosure Statement, as amended, and confirmation of the Plan. A copy of the order dated October 4, 2021, is available at https://bit.ly/3mooNy1 from PacerMonitor.com at no charge. Counsel for the Debtors: Dawn Kirb KIRBY AISNER & CURLEY LLP 700 Post Road, Suite 237 Scarsdale, New York 10583 Tel. No.: (914) 401-9500 E-mail: dkirby@kacllp.com About DeNardo Capital DeNardo Capital II LLC owns a residential development project located in Irvington, N.Y. DeNardo Capital Management LLC is its sole member. DeNardo Capital Management LLC and affiliate DeNardo Capital II LLC sought Chapter 11 protection (Bankr. S.D.N.Y. Lead Case Nos. 21-22098) on Feb. 16, 2021. DCM estimated at least $10 million in assets and liabilities as of the bankruptcy filing. Kirby Aisner & Curley LLP, led by Dawn Kirby, Esq., serves as counsel to the Debtors. DETOUR PLUMBING: Seeks to Hire Anand Law as Bankruptcy Counsel -------------------------------------------------------------- Detour Plumbing Services Inc. seeks approval from the U.S. Bankruptcy Court for the Central District of California to employ Anand Law, PC to serve as legal counsel in its Chapter 11 case. The firm's services include: a. advising the Debtor generally regarding matters of bankruptcy law and the U.S. Trustee Guidelines relating to the operation of the Debtor's business during the pendency of its bankruptcy case; b. representing the Debtor in the bankruptcy case, adversary proceedings, contested matters and in any action in other California court where the right of the estate may be litigated or otherwise affected; c. advising the Debtor concerning its rights and remedies in connection with the estate's assets and claims of creditors; d. assisting the Debtor in the preparation of bankruptcy schedules, statements of financial affairs, lists and other disclosure documents; e. examining witnesses, claimants or adverse parties as the case may require; f. assisting in the preparation of legal papers; g. representing the Debtor in negotiations with creditors, lessors, lessees, potential lending sources, governmental entities and other parties in interest; h. assisting the Debtor in the formulation, preparation and execution of a program to maximize the value of the assets of the estate; and i. advising the Debtor regarding other legal questions and problems that may arise in or in connection with the case. The firm received a retainer in the amount of $16,470. As disclosed in court filings, Anand Law is a disinterested person within the meaning of Section 101(14) of the Bankruptcy Code. The firm can be reached through: Brandon J. Anand, Esq. Anand Law PC 5455 Wilshire Boulevard, Suite 1609 Los Angeles, CA 90036 Tel: 323-325-3389 Email: brandon@anandlaw.com admin@anandlaw.com About Detour Plumbing Services Inc. Detour Plumbing Services, Inc. filed a petition for Chapter 11 protection (Bankr. C.D. Calif. Case No. 21-17066) on Sept. 8, 2021, listing up to $50,000 in assets and up to $500,000 in liabilities. Judge Sandra R. Klein oversees the case. Brandon J. Anand, Esq., at Anand Law, PC represents the Debtor as legal counsel. E.L. SERVICES INC: Seeks to Hire Vaught & Boutris as Accountant --------------------------------------------------------------- E.L. Services, Inc. seeks approval from the U.S. Bankruptcy Court for the Northern District of California to employ Vaught & Boutris, LLP as its accountant and tax advisor. The firm's services include: a. preparing the Debtor's federal and state tax returns; b. advising the Debtor on the tax consequences of any transactions occurring in its bankruptcy case and on the preparation of budgets, cash flow projections and monthly operating reports; and c. providing tax advice and addressing EDD payroll account issues. Vaught & Boutris' hourly rates range from $350 to $500. The firm received a post-petition retainer of $10,000. As disclosed in court filings, Vaught & Boutris does not hold any interest adverse to the Debtor and its creditors or estate. The firm can be reached at: Basil J. Boutris, Esq. Jon R. Vaught, Esq. Vaught & Boutris LLP 80 Swan Way, Suite 320 Oakland, CA 94621 Tel: (510) 430-1518 Fax: (510) 382-1166 Email: basil@vaughtboutris.com jon@vaughtboutris.com About E.L. Services Inc. E.L. Services, Inc., a landscape and maintenance company in Dublin, Calif., filed a petition for Chapter 11 protection (Bankr. N.D. Calif. Case No. 21-41087) on Aug. 25, 2021, disclosing up to $100,000 in assets and up to $10 million in liabilities. Steven P. Baca, general manager, signed the petition. Judge William J. Lafferty oversees the case. The Debtor tapped Kornfield, Nyberg, Bendes, Kuhner & Little P.C. as its legal counsel and Vaught & Boutris, LLP as its accountant and tax advisor. EG GLOBAL: Case Summary & 3 Unsecured Creditors ----------------------------------------------- Debtor: EG Global, LLC 5665 Atlanta, Hwy Suite 102B-204 Alpharetta, GA 30004 Chapter 11 Petition Date: October 5, 2021 Court: United States Bankruptcy Court Northern District of Georgia Case No.: 21-21054 Debtor's Counsel: William A. Rountree, Esq. ROUNTREE, LEITMAN & KLEIN, LLC Century Plaza I 2987 Clairmont Road, Ste 350 Atlanta, GA 30329 Tel: 404-584-1238 Fax: 404 704-0246 E-mail: swenger@rlklawfirm.com Estimated Assets: $0 to $50,000 Estimated Liabilities: $1 million to $10 million The petition was signed by Micheal T. Houston as CEO. A full-text copy of the petition containing, among other items, a list of the Debtor's three unsecured creditors is available for free at PacerMonitor.com at: https://www.pacermonitor.com/view/PHTHYOY/EG_Global_LLC__ganbke-21-21054__0001.0.pdf?mcid=tGE4TAMA EG VENTURES: Case Summary & 3 Unsecured Creditors ------------------------------------------------- Debtor: EG Ventures, LLC 5665 Atlanta Hwy Suite 102B-204 Alpharetta, GA 30004 Chapter 11 Petition Date: October 5, 2021 Court: United States Bankruptcy Court Northern District of Georgia Case No.: 21-21057 Debtor's Counsel: William A. Rountree, Esq. ROUNTREE, LEITMAN & KLEIN, LLC Century Plaza I 2987 Clairmont Road, Ste 350 Atlanta, GA 30329 Tel: 404-584-1238 Fax: 404 704-0246 E-mail: swenger@rlklawfirm.com Estimated Assets: $0 to $50,000 Estimated Liabilities: $1 million to $10 million The petition was signed by Michael T. Houston as CEO. A full-text copy of the petition containing, among other items, a list of the Debtor's three unsecured creditors is available for free at PacerMonitor.com at: https://www.pacermonitor.com/view/YUH7CYA/EG_Ventures_LLC__ganbke-21-21057__0001.0.pdf?mcid=tGE4TAMA ELITE AVIATION: Case Summary & 2 Unsecured Creditors ---------------------------------------------------- Debtor: Elite Aviation Products, Inc. d/b/a EAP Inc. 9 Studebaker Drive Irvine, CA 92618 Business Description: Elite Aviation Products, Inc. is a design, engineering, manufacturing and technology company within the aerospace industry. Chapter 11 Petition Date: October 5, 2021 Court: United States Bankruptcy Court Central District of California Case No.: 21-12417 Judge: Hon. Theodor Albert Debtor's Counsel: David L. Neale, Esq. LEVENE, NEALE, BENDER, YOO & BRILL L.L.P. 2818 La Cienega Avenue Los Angeles, CA 90034 Tel: (310) 229-1234 E-mail: dln@lnbyb.com Estimated Assets: $1 million to $10 million Estimated Liabilities: $1 million to $10 million The petition was signed by Zeeshawn Zia as president. A full-text copy of the petition containing, among other items, a list of the Debtor's two unsecured creditors is available for free at PacerMonitor.com at: https://www.pacermonitor.com/view/DGYM3BA/Elite_Aviation_Products_Inc__cacbke-21-12417__0001.0.pdf?mcid=tGE4TAMA ELITE ENGINEERING: Case Summary & 4 Unsecured Creditors ------------------------------------------------------- Debtor: Elite Engineering Services Inc. 9 Studebaker Drive Irvine, CA 92618 Business Description: Elite Engineering Services Inc. is part of Elite Aerospace Group, an advanced design, engineering, manufacturing and technology company within the aerospace industry. Chapter 11 Petition Date: October 5, 2021 Court: United States Bankruptcy Court Central District of California Case No.: 21-12418 Judge: Hon. Erithe A. Smith Debtor's Counsel: David L. Neale, Esq. LEVENE, NEALE, BENDER, YOO & BRILL L.L.P. 2818 La Cienega Avenue Los Angeles, CA 90034 Tel: (310) 229-1234 E-mail: dln@lnbyb.com Estimated Assets: $1 million to $10 million Estimated Liabilities: $1 million to $10 million The petition was signed by Zeeshawn Zia as president. A full-text copy of the petition containing, among other items, a list of the Debtor's four largest unsecured creditors is available for free at PacerMonitor.com at: https://www.pacermonitor.com/view/RZ47D4A/Elite_Engineering_Services_Inc__cacbke-21-12418__0001.0.pdf?mcid=tGE4TAMA ELITE METAL: Case Summary & 2 Unsecured Creditors ------------------------------------------------- Debtor: Elite Metal Manufacturing Inc. 9 Studebaker Drive Irvine, CA 92618 Business Description: Elite Metal Manufacturing Inc. is part of Elite Aerospace Group, an advanced design, engineering, manufacturing and technology company within the aerospace industry. Chapter 11 Petition Date: October 5, 2021 Court: United States Banrkuptcy Court Central District of California Case No.: 21-12419 Judge: Hon. Erithe A. Smith Debtor's Counsel: David L. Neale, Esq. LEVENE, NEALE, BENDER, YOO & BRILL L.L.P. 2818 La Cienega Avenue Los Angeles, CA 90034 Tel: (310) 229-1234 E-mail: dln@lnbyb.com Estimated Assets: $1 million to $10 million Estimated Liabilities: $1 million to $10 million The petition was signed by Zeeshawn Zia as president. A full-text copy of the petition containing, among other items, a list of the Debtor's two unsecured creditors is available for free at PacerMonitor.com at: https://www.pacermonitor.com/view/WEGAKLI/Elite_Metal_Manufacturing_Inc__cacbke-21-12419__0001.0.pdf?mcid=tGE4TAMA ENSEMBLE RCM: S&P Places 'B' ICR on Watch Positive on Announced IPO ------------------------------------------------------------------- S&P Global Ratings placing all of its ratings on Ensemble RCM LLC, including its 'B' issuer credit rating and its 'B' issue-level rating on the company's secured debt, on CreditWatch with positive implications. The CreditWatch placement reflects the potential for an upgrade if the company successfully completes its IPO and uses the proceeds to repay debt. Under this scenario, S&P would also need to be more certain that the company plans to maintain leverage below 5x. A successful IPO will likely provide the company with sufficient proceeds to substantially reduce its debt, including potentially improving its leverage below 5x. The CreditWatch placement follows the announcement that Ensemble has filed a preliminary prospectus for an IPO. S&P expects the transaction to close in 2021. It expects Ensemble to use the proceeds from the IPO to repay a portion of the $1,441.3 million outstanding under the company's term loan as of June 30, 2021. S&P said, "Clarity around its sponsor control and financial policies as a public company remain important considerations as we assess the likelihood that it will be able to sustain leverage of less than 5x.An upgrade is also dependent on our assessment of the company's financial policies following the IPO. Additionally, the level of ownership and influence that its financial sponsor will retain following the transaction will be an important consideration. "We plan to resolve the CreditWatch placement when the transaction closes, which we expect will happen by the end of the year or in 2022. The CreditWatch listing reflects the potential for an upgrade if Ensemble uses the IPO proceeds to repay debt and we are more certain the company plans to maintain leverage below 5x." ESSA PHARMA: Registers 7.3M Shares Under 2021 Incentive Plan ------------------------------------------------------------ Essa Pharma Inc. filed a Form S-8 registration statement with the Securities and Exchange Commission for the purpose of registering 7,342,788 common shares, no par value, of the company issuable to eligible employees, officers and directors of the company and certain other individuals pursuant to the Essa Pharma Inc. 2021 Omnibus Incentive Plan. A full-text copy of the prospectus is available for free at: https://www.sec.gov/Archives/edgar/data/1633932/000110465921121976/tm2128744d1_s8.htm About Essa Vancouver, BC-based Essa Pharma, Inc. -- www.essapharma.com -- is a clinical stage pharmaceutical company, focused on developing novel and proprietary therapies for the treatment of prostate cancer in patients whose disease is progressing despite treatment with current standard of care therapies, including second-generation anti-androgen drugs such as abiraterone, enzalutamide, apalutamide, and darolutamide. Essa reported a loss and comprehensive loss of $23.44 million for the year ended Sept. 30, 2020, a loss and comprehensive loss of $12.75 million for the year ended Sept. 30, 2019, a loss and comprehensive loss of $11.63 million for the year ended Sept. 30, 2018, and a loss and comprehensive loss of $4.50 million for the year ended Sept. 30, 2017. As of June 30, 2021, the Company had $203.52 million in total assets, $3.83 million in total liabilities, and $199.70 million in total shareholders' equity. EXPRESS GRAIN: Files Emergency Bid to Use Cash Collateral --------------------------------------------------------- Express Grain Terminals, LLC and affiliates ask the U.S. Bankruptcy Court for the Northern District of Mississippi for authority to use cash collateral, continue using existing bank accounts and cash management system, and provide adequate protection. The Debtors assert that an immediate need exists for the Business Debtors to use Cash Collateral in order to continue essential operations, acquire goods and services, and pay other necessary and essential business expenses. UMB Bank, N.A., the Debtors' principal secured lender, asserts various interests in substantially all of the Business Debtors' personal and real property including, without limitation, inventory, farm products, and accounts receivable. Further, the Bank asserts interests in Cash Collateral including, without limitation, the cash constitutes proceeds of the Collateral and, therefore, constitutes cash collateral within the meaning of Bankruptcy Code section 363(a). The Bank has not agreed to the Debtor's request but negotiations with the Bank are continuing. The Business Debtors propose to continue their Cash Management System with the Bank. The Business Debtors will take steps to close all existing banking accounts at other financial institutions and centralize their depository accounts with the Bank, including, but not limited to, any debtor-in-possession accounts that the Business Debtors may open and will not open any additional accounts at any other financial institutions without (i) giving adequate notice to the United States Trustee, the Bank and such other parties as the Court may direct, and (ii) receiving the express written consent from the Bank, or Court approval. However, until such time as accounts are established at the Bank, the Debtors may continue to use the existing Cash Management System simply as a matter of convenience and of necessity. In addition, the Debtors have agreed to an order freezing the Business Debtors' accounts at BankPlus and directing BankPlus to transfer all account balances with respect to the Business Debtors to the DIP Accounts at the Bank, subject to funding the immediate payroll due October 6, 2021. The obligation to transfer balances to the DIP Accounts should be ongoing until the accounts at BankPlus are closed or as otherwise directed by the Court. The Business Debtors will provide a list of all outstanding payments related to their accounts at BankPlus to BankPlus and the Bank within two business days of the entry of an order granting the Motion. As adequate protection for the Debtors' use of cash collateral, the Debtors have agreed to provide the Bank replacement security interests in, and liens on, all post-Petition Date acquired property of the Business Debtors and the Business Debtors' bankruptcy estates to the extent of the validity and priority of such interests, liens, or security interests, if any. To the extent that the Replacement Liens prove inadequate to protect the Bank from a demonstrated diminution in the value of the Bank's collateral position from the Petition Date, the Bank will be granted an administrative expense claim under section 503(b) with priority in payment under section 507(b). A copy of the motion and the Debtors' 10-day budget is available at https://bit.ly/3BbUXmp from PacerMonitor.com. The Debtor projects $12,575,726 in total cash collections for the period. About Express Grains Terminals Greenwood, Mississippi-based Express Grain Terminals, LLC, produces soy products such as oil and biodiesel. Express Grains Terminals sought Chapter 11 protection (Bankr. N.D. Miss. Case No. 21- 11832) on Sept. 29, 2021. In the petition signed by John Coleman as member, Express Grains Terminals estimated assets of between $10 million and $50 million and estimated liabilities of between $50 million and $100 million. The Law Offices of Craig M. Geno, PLLC, is the Debtor's counsel. EXTRUSION GROUP: Case Summary & 14 Unsecured Creditors ------------------------------------------------------ Debtor: Extrusion Group, LLC 5665 Atlanta Hwy Suite 102B- 204 Alpharetta, GA 30004 Chapter 11 Petition Date: October 5, 2021 Court: United States Bankruptcy Court Northern District of Georgia Case No.: 21-21053 Debtor's Counsel: William A. Rountree, Esq. ROUNTREE, LEITMAN & KLEIN, LLC Century Plaza I 2987 Clairmont Road, Ste 350 Atlanta, GA 30329 Tel: 404-584-1238 Fax: 404 704-0246 E-mail: swenger@rlklawfirm.com Estimated Assets: $50,000 to $100,000 Estimated Liabilities: $1 million to $10 million The petition was signed by Micheal T. Houston as CEO. A full-text copy of the petition containing, among other items, a list of the Debtor's 14 unsecured creditors is available for free at PacerMonitor.com at: https://www.pacermonitor.com/view/BGSPIVA/Extrusion_Group_LLC__ganbke-21-21053__0001.0.pdf?mcid=tGE4TAMA EYECARE PARTNERS: S&P Affirms 'B' ICR on Acquisition Agreement -------------------------------------------------------------- S&P Global Ratings affirmed all ratings on EyeCare Partners LLC, including the 'B' issuer credit rating, 'B' issue level rating on first-lien debt, and 'CCC+' issue-level rating on second lien debt. S&P also assigned 'B' and 'CCC+' ratings to the incremental first- and second-lien debt, respectively. The recovery ratings on first- and second-lien debt are '3' and '6', respectively. The negative outlook reflects the company's continued cash flow deficits and the risk that positive cash flow generation takes longer than expected to materialize, while leverage remains high. S&P said, "We view recent news as credit neutral, with the modestly leveraging acquisitions somewhat offset by strong operating performance in the first half of 2021.We expect pro forma leverage of about 8.9x on close of the acquisitions, which is roughly one turn of leverage higher than prior to the transaction. Despite the higher leverage, we recognize that EyeCare has emerged from the peak of the COVID-19 pandemic with most operational metrics such as office visits and surgical procedure volumes recovered to above pre-pandemic levels. The company also has adequate liquidity, which will be further increased by the proposed revolver upsize. "We expect the company's sales and EBITDA to continue to grow meaningfully in 2021, benefitting from acquisitions and rebounding from the pandemic. Through the first half of 2021 the company has delivered revenue growth of about 80% on a year-to-date basis, inclusive of acquisitions. Going forward we expect mid-single-digit organic sales growth. We expect acquisitions to remain a key contributor to growth, with the acquisitions closing in late 2021, and approximately $100 million in annual acquisition spend thereafter. We expect EBITDA margins in the 14%-15% range in 2021 and thereafter, supported by cost-savings benefits from recent investments in operational initiatives and from lower spending on such initiatives. These initiatives include revenue cycle management investments to improve collections capabilities, and an ERP implementation project. "We expect a free cash flow deficit in 2021, improving to positive free cash flow generation in 2022 as non-recurring expenses and cash outflows roll off. EyeCare has historically generated little to no free cash flow after one-time items such as acquisition related expenses, restructuring, and operational initiatives. We expect the company to generate a cash flow deficit in 2021, before improving to positive free cash flow in 2022. This year the company's cash flows are burdened with a variety of nonrecurring cash outflows, including Medicare advance repayments, a restructuring, and the ERP implementation and revenue cycle management initiatives, which we expect to deliver profitability benefits over time. We expect that lower spending on such items and continued expansion of revenue and EBITDA will enable the company to generate over $20 million of free cash flow in 2022." The negative outlook on EyeCare Partners reflects the risk that positive cash flow generation takes longer than expected to materialize, resulting in sustained free cash flow deficits and elevated leverage. S&P could lower its rating on EyeCare Partners if its adjusted free operating cash flow (FOCF) to debt is below 2.5% and adjusted debt to EBITDA is above 8x with limited prospects for improvement. This could occur if the company continues to incur expenses related to acquisitions, operational initiatives, and pandemic response, leading to EBITDA margin contraction or because of integration or execution issues related to recent acquisitions. This could also occur if the company pursues aggressive acquisitions that substantially increase its leverage while higher interest expense and integration/transaction costs constrain its cash flow generation. S&P could revise its outlook on EyeCare Partners to stable if it thinks the company will be able generate adjusted free operating cash flow to debt above 2.5% on a sustained basis while maintaining adjusted debt to EBITDA below 8x, even after any spending on operational initiatives and acquisition-related expenses. FORD STEEL: Nov. 2 Disclosure Statement Hearing Set --------------------------------------------------- On Sept. 29, 2021, debtor Ford Steel, LLC, filed with the U.S. Bankruptcy Court for the Southern District of Texas a second amended disclosure statement and a third amended plan. On October 4, 2021, Judge Eduardo Rodriguez ordered that: * Nov. 2, 2021, at 1:30 p.m. is the electronic hearing to consider the approval of the disclosure statement. * Oct. 28, 2021, is fixed as the last day for filing and serving written objections to the disclosure statement. A copy of the order dated Oct. 4, 2021, is available at https://bit.ly/3FnlWhg from PacerMonitor.com at no charge. Attorneys for the Debtor: Julie Mitchell Koenig, Esq. Cooper & Scully, PC. 815 Walker, Suite 1040 Houston, TX 77002 Tel: 713-236-6800 Fax: 713-236-6880 Email: julie.koenig@cooperscully.com About Ford Steel LLC Porter, Texas-based Ford Steel, LLC -- http://www.fordsteelllc.com/--is in the business of steel product manufacturing. It fabricates for a wide variety of industries including the petrochemical industry, waste water treatment, transmission communication and broadcast towers, mining, and oil and gas industries. Ford Steel filed a voluntary petition under Chapter 11 of the Bankruptcy Code (Bankr. S.D. Texas Case No. 20-34405) on Sept. 1, 2020. Herbert C. Jeffries, managing member, signed the petition. The Debtor had between $1 million and $10 million in both assets and liabilities. Judge Eduardo V. Rodriguez oversees the case. The Debtor tapped Cooper & Scully, PC as bankruptcy counsel. Muskat Mahony & Devine, LLP, Currin Wuest Mielke Paul & Knapp, PLLC, and Cantrell & Cantrell, PLLC serve as the Debtor's special counsel. First Financial Bank, Inc., as lender, is represented by West, Webb, Allbritton & Gentry, PC. FOREVER 21: Case Dismissed After Lawyers Agree to Waive Fees ------------------------------------------------------------ Daniel Gill of Bloomberg Law reports Forever 21's Chapter 11 case is coming to a close after the clothing retailer and its attorneys struck a deal with the Justice Department to forgo paying case advisers for some of their services in order to avoid converting it to Chapter 7. The U.S. Trustee's Office, the DOJ's bankruptcy watchdog that pushed for the conversion largely to expedite creditor payout, agreed over the weekend to drop its motion to convert. In exchange, Forever 21's bankruptcy professionals agreed to waive their fees from July 2020 through the closing of the case. About Forever 21 Inc. Founded in 1984 by South Korean husband and wife team Do Won Chang and Jin Sook Chang and headquartered in Los Angeles, Calif., Forever 21, Inc. -- http://www.forever21.com/-- is a fast-fashion retailer of women's, men's and kids clothing and accessories and is known for offering the hottest, most current fashion trends at a great value to consumers. Forever 21 delivers a curated assortment of new merchandise brought in daily. Forever 21, Inc. and seven of its U.S. subsidiaries each filed a voluntary petition for relief under Chapter 11 of the United States Bankruptcy Code (Bankr. D. Del. Lead Case No. 19-12122) on Sept. 29, 2019. According to the petition, Forever 21 has estimated liabilities on a consolidated basis of between $1 billion and $10 billion against assets of the same range. As of the bankruptcy filing, the Debtors operated 534 stores under the Forever 21 brand in the U.S. and 15 stores under beauty and wellness brand, Riley Rose. The Debtors tapped Kirkland & Ellis LLP as legal advisor; Alvarez & Marsal as restructuring advisor; and Lazard as investment banker; and Pachulski Stang Ziehl & Jones LLP as local bankruptcy counsel. Prime Clerk is the claims agent. Andrew Vara, acting U.S. trustee for Region 3, appointed a committee of unsecured creditors on Oct. 11, 2019. The committee is represented by Kramer Levin Naftalis & Frankel LLP and Saul Ewing Arnstein & Lehr LLP. Counsel to the administrative agent under the Debtors' prepetition revolving credit facility and the Debtors' DIP ABL financing facility are Morgan, Lewis & Bockius LLP and Richards, Layton & Finger, PA. Counsel to the administrative agent under the Debtors' DIP term loan facility is Schulte Roth & Zabel LLP. * * * In February 2020, the company was purchased by a consortium that includes Authentic Brands Group, Simon Property Group and Brookfield Property Partners for $81.1 million. As part of the deal, ABG and Simon will each own 37.5% of the fast-fashion retailer, while Brookfield controls the remaining 25% of Forever 21's operating and intellectual property businesses. FORTEM RESOURCES: Case Summary & 20 Largest Unsecured Creditors --------------------------------------------------------------- Debtor: Fortem Resources, Inc. f/k/a Strongbow Resources, Inc. Big Lake Energy Ltd. 777 N. Rainbow, Suite 250 Las Vegas, NV 89107 Business Description: The Company is engaged in the acquisition, exploration, and development of oil and gas properties. Chapter 11 Petition Date: October 5, 2021 Court: United States Bankruptcy Court District of Nevada Case No.: 21-14823 Judge: Hon. Natalie M. Cox Debtor's Counsel: Brett A. Axelrod, Esq. FOX ROTHSCHILD LLP 1980 Festival Plaza Drive, Suite 700 Las Vegas, NV 89135 Tel: (702) 262-6899 Email: baxelrod@foxrothschild.com Estimated Assets: $1 million to $10 million Estimated Liabilities: $1 million to $10 million The petition was signed by Marc A. Bruner as chief executive officer. A copy of the Debtor's list of 20 largest unsecured creditors is available for free at PacerMonitor.com at: https://www.pacermonitor.com/view/AIE5IQA/FORTEM_RESOURCES_INC__nvbke-21-14823__0003.0.pdf?mcid=tGE4TAMA A full-text copy of the petition is available for free at PacerMonitor.com at: https://www.pacermonitor.com/view/ACJYJDY/FORTEM_RESOURCES_INC__nvbke-21-14823__0001.0.pdf?mcid=tGE4TAMA FRIENDSHIP VILLAGE: Fitch Assigns 'BB+' IDR, Outlook Stable ----------------------------------------------------------- Fitch Ratings has affirmed the 'BB+' ratings on the series 2012, series 2013A, series 2017, and series 2018A revenue bonds issued by The Industrial Development Authority of the County of St. Louis Missouri on behalf of Friendship Village of St. Louis (FVSTL). Fitch has also assigned a 'BB+' Issuer Default Rating (IDR) to FVSTL. The Rating Outlook is Stable. SECURITY The bonds are secured by a pledge of gross revenues of the obligated group (OG), a mortgage on certain properties and equipment, and a debt service reserve fund. ANALYTICAL CONCLUSION FVSTL operates in two Missouri markets, Friendship Village of Sunset Hills (FVSH) and Friendship Village of Chesterfield (FVC). The rating primarily reflects its high debt burden and stressed leverage metrics, as a result of the borrowing to finance its expansion project, coupled with a weak operating risk profile compounded by the effects of the coronavirus pandemic. However, a rating in the higher end of the 'BB' category is supported by FVSTL's robust demand and pricing characteristics as the only life care community in the market. FVSTL also has historically strong occupancy rates for independent living units (ILUs), assisted living units (ALUs) and skilled nursing facility (SNF) beds. While census levels are likely to soften over the short term due to disruptions from the coronavirus pandemic, Fitch believes FVSTL's strong demand indicators should continue to translate into strong census levels over the longer term. While sales and fill of the new ILUs was slower than forecast due to the pandemic, management reports the new ILUs are now fully sold and indicates stabilization into 2023, which supports Fitch's expectations for operating performance to improve over time. KEY RATING DRIVERS Revenue Defensibility: 'bbb' Good Demand Across Two Campuses FVSTL's 'midrange' revenue defensibility is supported by its historically stable demand and pricing characteristics. Despite being in a competitive market, FVSTL's demand for its services remains strong across both of its campuses and all levels of care, which is partially driven by its communities being the only life care (Type-A) life plan community (LPC) in its primary market area. The recently completed expansion project entailed repositioning its campuses so that facilities, amenities and services strategically meets the needs of its residents reinforcing its appeal towards its targeted demographic. Operating Risk: 'bb' Weak Operating Risk Profile Compounded by Coronavirus Pressures FVSTL's operating risk profile remains weak compounded by ongoing pandemic pressures. Its large capital repositioning and expansion projects at both of its campuses was completed in January 2021 ahead of schedule and underbudget. FVSTL's debt burden remains as originally forecasted. The series 2018 financing increased its debt burden as evidenced by an average maximum annual debt service (MADS). This equates to a high 30% in revenues, which is substantially weaker than Fitch's 'BIG' medians of 16.4%. Debt to net available measured an elevated 48x during the same period. Fitch expects both metrics to improve following project stabilization, which should meaningfully boost FVSTL's total revenues and annual cash flow levels. Financial Profile: 'bb' Elevated Debt Profile Compounded by Pandemic Challenges Despite high capital spending that has stressed FVSTL's leverage profile, Fitch expects FVSTL's liquidity position to remain stable during Fitch's stress case scenario, and it is consistent with the rating level in light of its midrange revenue defensibility and weaker operating profile. Unaudited FYE 2021 results (as of June 30, 2021) reported $127.4 million in unrestricted cash and investments which translates into 672 days cash on hand (DCOH) and 39.8% cash to adjusted debt. FVSTL's MADS coverage has averaged about 1.0x over the last five fiscal years, which is consistent with the rating level. Asymmetric Additional Risk Considerations There are no asymmetric risk factors affecting this rating determination. RATING SENSITIVITIES Factors that could, individually or collectively, lead to positive rating action/upgrade: -- Demonstrated improved capital base measured by cash flow levels or unrestricted reserves that result in cash to stabilized MADS coverage levels in line with Fitch's 'BBB' medians; -- With the recent project completion, improvement in occupancy rates and IL sales will improve FVSTL's operating risk profile and lead towards key financial metrics closer to Fitch's 'BBB' medians. Factors that could, individually or collectively, lead to negative rating action/downgrade: -- Unexpected continued deterioration in cash flow levels or unrestricted reserves that result in cash to debt falling below 30% or stabilized MADS coverage levels below 1x; -- While FVSTL does not intend to issue more debt in the near term, any additional borrowing would put pressure on the 'BB+' rating. BEST/WORST CASE RATING SCENARIO International scale credit ratings of Sovereigns, Public Finance and Infrastructure issuers have a best-case rating upgrade scenario (defined as the 99th percentile of rating transitions, measured in a positive direction) of three notches over a three-year rating horizon; and a worst-case rating downgrade scenario (defined as the 99th percentile of rating transitions, measured in a negative direction) of three notches over three years. The complete span of best- and worst-case scenario credit ratings for all rating categories ranges from 'AAA' to 'D'. Best- and worst-case scenario credit ratings are based on historical performance. FVSTL operates in two Missouri markets, Friendship Village of Sunset Hills (FVSH) and Friendship Village of Chesterfield (FVC). FVSH and FVC historically operated as distinct entities. However, in 2017, FVC joined FVSH's existing OG, which is now called FVSTL. The FVSTL OG also includes FV Operations, LLC (FVO), which was established to employ personnel working at FVC, FVSH, and other affiliated entities. All three OG entities are solely owned by FV Services, Inc., which also wholly owns FV Management, a management service line of the system, and FV at Home. FV at Home wholly owns two subsidiaries: FV at Home - Supportive Service, which provides private duty services to residents, and FV at Home - Home Health, which provides Medicare-certified post-acute care services. The non-OG management service line employs senior management of the system and allocates costs commensurate with the level of services provided to each OG member FVSH owns and operates a life care (Type-A) LPC on 52 acres in Sunset Hills, MO. As of January 2021, FVSH is comprised of 462 IL apartments, 44 IL villas, 76 ALUs and SNF building with 144 beds FVC owns and operates a life care LPC on 37 acres in Chesterfield, MO. FVC is comprised of 349 IL apartments, 39 IL villas, 60 ALUs, and 90 SNF beds. The updated unit mix for both campuses reflect newly added and/or replaced IL/AL/SNF units which increased from 976 to 1,181 combined from FVSTL's expansion project. FVC and FVSH are located approximately 16 miles apart. Total operating revenues of FVSTL in FY21 (FYE June 30 2021, unaudited) were $66.9 million. Revenue Defensibility FVSTL has historically had strong occupancy rates for its ILUs, ALUs and SNF beds. However, census levels have softened over the short term due to the increase in units from FSVTL's expansion project along with disruptions from the coronavirus pandemic. Over the last four fiscal years, FVSTL averaged 91% occupancy in its independent living units (ILUs), but it declined to 86% as of June 2021. Management reported an improvement in occupancy rates at both campuses as recently as September 2021, due to pent up demand as well as FSTVL's maximizing sales velocity during periods when COVID-19 restrictions were lifted. Fitch believes FVSTL's occupancy will rebound as strong demand indicators should continue to translate into strong census levels over the longer term. FVC and FVSH are located approximately 16 miles apart and have adjacent primary market areas (PMAs), with only a small area of overlap, and together cover a large portion of the West/Southwest St. Louis area. FVSTL is the only Type-A (lifecare) product in its service area. Overall, the Type-A product and attractive pricing should continue to support strong ILU demand at both FVSTL campuses. There are five communities within proximity to FVSTL campuses: Mason Pointe (part of Lutheran Senior Services, 'BBB'/Stable), Aberdeen Heights, Laclede Groves, Meramec Bluffs and The Willows. However, these communities only offer modified fee-for-service (Type-B) residency agreements and have not demonstrated a material impact on FVSTL's demand. Given the ILU resident needs and low saturation needs of the market, ALU/SNF demand should strengthen moving forward. Moreover, Missouri's certificate of need requirement for ALUs and SNF beds has prevented widespread development of the product. As a result, fewer providers have entered the St. Louis market, and most long-term care providers are either continuum-based providers or nursing homes. FVSTL's average entrance fees are highly affordable relative to prevailing housing prices in its broad market area and the community has a demonstrated track record of regular increases to its monthly service fees. Operating Risk FVSTL offers type-A (lifecare)contracts which include unlimited health services for a consistent monthly fee. Due to the healthcare liability risk, Fitch views type A facilities as having a higher operating risk profile relative to facilities that offer type B, type C or rental contracts. Over the last three fiscal years, FVSTL has averaged a 108% operating ratio, 2.1% net operating margin (NOM), and 8.9% NOM-adjusted (NOMA), which is consistent with Fitch's weaker assessment of its operating risk. However, Fitch expects FVSTL's core operations and total cash flows levels to improve following stabilization of its capital projects. FVSTL's expansion project was completed ahead of schedule in January 2021 (and well ahead of expected contingency costs). Management paid off temporary debt in September 2021 and reported selling and filling its new 128 ILUs across both campuses. The first year of project stabilization to occur in FY 2023. This is slightly behind schedule as management originally planned for full stabilization by late 2022, but the new ILUs have been sold. FVSTL's capex has averaged about 400% of depreciation over the last three years (2018-2021), mostly reflecting the spending on the expansion projects. Fitch expects near-term capital expenditures to be limited to proactive infrastructure improvements of the campuses and demolishing the previous skilled nursing building no longer in service. Management maintains a capital budget of $3 to 5 million per year at both of its OG campuses combined. The average age of plant was a very low 5.5 years as of 2021 (a three-year average of 6.7 years). FVSTL's MADS is approximately $19.6 million, which equates to a high 27% of 2021 revenues. Additionally, FVSTL's debt to net available measured a weak 48x in fiscal 2021, reflecting both its high leverage position as well as its weaker annual cash flow levels in fiscal 2020 and 2021 due to disruptions from the coronavirus pandemic. Fitch expects FVSTL's debt burden to moderate in the coming years as new revenues from project stabilization. Original third-party forecasts from its 2018 bond issuance forecasted MADS equating to a high, but more manageable, 22.6% of fiscal 2023 revenues, the estimated first full year of project stabilization. Financial Profile Given FSTVL's midrange revenue defensibility, weak operating risk assessments and Fitch's forward-looking scenario analysis, Fitch expects key leverage metrics to remain consistent with the 'BB+' rating, throughout the economic and business cycle. As of 2021 YTDs, FVSTL had unrestricted cash and investments of approximately $127 million. This represents about 41% of total adjusted debt and 672 DCOH at year end 2021. MADS coverage is still estimated at approximately 1.1x in fiscal 2023 (the first year of project stabilization), which is adequate for FVSTL's current rating level. Should cash flow levels underperform for an extended time following project stabilization that results in coverage lower than 1x could result in negative pressure. FVSTL had approximately $320 million in outstanding long-term permanent debt, which includes: $204 million in series 2018A bonds, $48 million in series 2017 bonds, $40 million in series 2013A bonds, and $24 million in series 2012 bonds. Additionally, FVSTL drew down its $25 million in temporary short-term bank notes in fiscal 2021 to finance the remaining costs of its capital expansion and repositioning project. FVSTL fully paid off its short-term notes with initial entrance fees from its new ILUs in September 2021. FVSTL has no exposure to derivative instruments or a defined benefit pension plan. Fitch's baseline scenario, which is a reasonable forward look of financial performance over the next five years given current economic expectations, shows FVSTL maintaining operating and financial metrics that are, albeit thin, consistent with the current rating and with historical levels of performance (operating ratios tip over the 100% range and NOMAs in the mid 4% range). Capital spending should remain level with no additional borrowings expected now that the 2018 project is completed. Fitch's baseline scenario assumes an economic stress, which is specific to FVSTL's revenue growth and asset allocation. Despite the stress, FVSTL maintains cash-to-adjusted debt levels that are consistent the 'BB+' rating throughout Fitch's baseline forward looking scenario and remains adequate at the current rating level under a potential stress case scenario. MADS coverage remains thin through 2023, then rebounds as expected. DCOH remains consistently above 594 days through the base case which is neutral to the rating outcome. ESG CONSIDERATIONS Unless otherwise disclosed in this section, the highest level of ESG credit relevance is a score of '3'. This means ESG issues are credit-neutral or have only a minimal credit impact on the entity, either due to their nature or the way in which they are being managed by the entity. FRONTIER COMMUNICATIONS: S&P Rates New 2nd-Lien Sec. Notes 'CCC+' ----------------------------------------------------------------- S&P Global Ratings assigned its 'CCC+' issue-level rating and '5' recovery rating to Frontier Communications Holdings LLC's proposed $1 billion second-lien secured notes due 2030. The '5' recovery rating indicates its expectation for modest (10%-30%; rounded estimate: 15%) recovery in the event of a payment default. The company plans to use the net proceeds from these notes to fund the capital investments (capex) and operating costs associated with the upgrade of its network to fiber-to-the-home (FTTH) and for other general corporate purposes. S&P said, "The 'B+' issue-level rating and '1' recovery rating on Frontier's existing first-lien debt are unchanged. However, we now expect modestly higher recovery prospects for first-lien creditors because we raised our gross default valuation of the company by about $500 million to reflect its new FTTH investments, which we believe will be accretive to EBITDA by our 2023 hypothetical default year. Therefore, we revised our rounded recovery estimate for the first-lien debt to 95% from 90%. "The 'B-' issuer credit rating and stable outlook on Frontier are also unchanged. We expect the additional debt will increase the company's S&P Global Ratings-adjusted leverage to about 4x in 2021 from the mid-3x area under our previous base-case forecast. We believe Frontier's leverage will increase to the mid- to-high-4x area in 2022 as the incremental EBITDA from its FTTH investments is offset by ongoing declines in its voice, video, and copper-based broadband services and lower revenue from government subsidies. Furthermore, we do not expect any leverage improvement during at least the first two waves of its build plan, which it expects to complete by year-end 2025. "At the same time, we expect Frontier's free operating cash flow deficits to widen under its aggressive capital spending plan and significantly increase its external funding needs. Our base-case forecast assumes that the company funds its capital spending program with new debt, although it may seek equity from private investors to help maintain net leverage in line with its mid 3x-area target. Despite our expectation for weaker credit metrics over the next few years, we believe Frontier's fiber deployment--if well executed--will help expand its broadband market share and improve its earnings trends over the longer term." The company announced plans to speed up the upgrade of its network to FTTH at its analyst day in August 2021. Under wave 1 of its accelerated build plan, Frontier is targeting 600,000 fiber builds to reach 4 million fiber passings by the end of 2021. In wave 2, the company is aiming for 6 million new fiber locations to reach 10 million fiber passings by year-end 2025. This compares with 3.3 million new locations passed to reach about 6.7 million fiber passings by year-end 2028 under its previous plan. The accelerated build-out assumes Frontier will cover about two-thirds of its footprint with fiber, up from 24% currently. Still, the company is in the early innings of its multi-year network modernization effort and will need to prove it can adjust to changes in competitive dynamics and operating conditions--including, but not limited to, the supply chain issues currently affecting the wireline sector--to achieve its long-term goals. GREATER WORKS: Seeks to Hire KW Atlanta Partners as Broker ---------------------------------------------------------- Greater Works Childcare and Community Development Inc. seeks approval from the U.S. Bankruptcy Court for the Northern District of Georgia to employ KW Atlanta Partners as its exclusive listing broker in connection with the marketing and sale of its real property in Gwinnett County, Ga. The firm will receive a commission of 8 percent of the purchase price. Bruno Taillefer of Taillefer Commercial Group, an affiliated licensee of KW Atlanta Partners, disclosed in court filings that the firm is a "disinterested person" within the meaning of Section 101(14) of the Bankruptcy Code. Mr. Taillefer can be reached at: Bruno Taillefer Taillefer Commercial Group 1960 Satellite Boulevard, Suite 1100 Duluth, GA 30097 Direct: 770-789-7705 Office: 678-775-2600 About Greater Works Childcare and Community Development Greater Works Childcare and Community Development Inc., owner of a day-care facility in Lilburn, Ga., filed a voluntary petition for Chapter 11 protection (Bankr. N.D. Ga. Case No. 20-72185) on Nov. 30, 2020, listing as much as $1 million in both assets and liabilities. Judge James R. Sacca oversees the case. Paul Reece Marr, P.C. and Brooks, McGinnis & Company, LLC serve as the Debtor's legal counsel and accountant, respectively. GREENSILL CAPITAL: Credit Suisse’s Zurich Offices Raided in Probe ------------------------------------------------------------------- Corinne Gretler and Marion Halftermeyer of Bloomberg News report police raided Credit Suisse Group AG offices in Zurich and confiscated documents as part of an investigation into whether investors in funds it ran with Greensill Capital were misled, complicating efforts by the Swiss bank to move past the damaging scandal. In the last week of September 2021's search comes after a criminal complaint in April 2021 by Switzerland's State Secretariat for Economic Affairs, or Seco, for violations of a law against unfair competition, which deals with issues such as false or misleading advertising. A spokesman for the public prosecutor in Zurich confirmed that proceedings had been opened against an "exponent" of Greensill. About Greensill Capital Greensill is an independent financial services firm and principal investor group based in the United Kingdom and Australia. It offers structures trade finance, working capital optimization, specialty financing and contract monetization. Greensill Capital Pty is the parent company for the Greensill Group. Greensill began to unravel in March 2021 when its main insurer stopped providing credit insurance on US$4.1 billion of debt in portfolios it had created for clients including Swiss bank Credit Suisse. Greensill Capital (UK) Limited and Greensill Capital Management Company (UK) Limited filed for insolvency in Britain on March 8, 2021. Matthew James Byrnes, Philip Campbell-Wilson and Michael McCann of Grant Thornton were appointed as administrators. Greensill Capital Pty Ltd. filed insolvency proceedings in Australia. Matt Byrnes, Phil Campbell-Wilson, and Michael McCann of Grant Thornton Australia Ltd, were appointed as voluntary administrators in Australia. Greensill Capital Inc. filed for Chapter 11 bankruptcy (Bankr. S.D.N.Y. Case No. 21-10561) on March 25, 2021. Jill M. Frizzley, director, signed the petition. In the petition, the Debtor listed assets of between $10 million and $50 million and liabilities of between $50 million and $100 million. The case is handled by Judge Michael E. Wiles. In the Chapter 11 case, the Debtor tapped Segal & Segal LLP as bankruptcy counsel, Mayer Brown LLP as special counsel, and GLC Advisors & Co., LLC and GLCA Securities, LLC as investment bankers and financial advisors. Matthew Tocks is the chief restructuring officer of the Debtor. The official committee of unsecured creditors is represented by Arent Fox LLP. Greensill Capital (UK) Limited filed a Chapter 15 petition (Bankr. S.D.N.Y. Case No. 21-11473) to seek U.S. recognition of its UK proceedings on Aug. 18, 2021. ALLEN & OVERY LLP, led by Laura R. Hall, is the Debtor's counsel in the Chapter 15 case. GROW CAPITAL: Delays Form 10-K Filing to Complete Audit ------------------------------------------------------- Grow Capital, Inc. filed a Form 12b-25 with the Securities and Exchange Commission notifying the delay in the filing of its Annual Report on Form 10-K for the year ended June 30, 2021. "We are filing this extension in order to provide more time for our independent registered public accounting firm to complete the audit testing and review of our consolidated financial statements and the notes to those statements. Results of certain common control entities which are consolidated into the company's financial reports require complex analysis of adoption of ASC 606 in order to comply with the requirements, the data for which is still being compiled and analyzed," Grow Capital said. Grow Capital is expecting to report significant increases to both revenues and expenses during the most current fiscal year ended June 30, 2021, as compared to June 30, 2020. This change is predominantly due to the acquisition of operating subsidiary PERA LLC in August 2020, and the resulting change in presentation to include the operations of certain entities under common control. Upon the acquisition of PERA LLC, the company's reports reflect combined entities that meet the criteria of having common control with Grow Capital and its controlled subsidiaries, the operations of which are included in its consolidated and combined financial statements. Further, one of these entities has been required for the purposes of its financial reporting to adopt ASC 606, the impact of which requires substantial review and analysis by the company and our independent registered public accounting firm At the date of this report, the company's auditors have not yet finished their testing and review of the consolidated financial data and therefore the company has not provided quantified operational results. About Grow Capital Grow Capital (f/k/a Grown Condos, Inc.) -- http://www.growcapitalinc.com-- was a call center that contracted out as a customer contact center for a variety of business clients throughout the United States. Over time its main business became a third-party verification service. While continuing to operate as a call center, in 2008 the Company expanded its business plan to include the development of a social networking site called JabberMonkey (Jabbermonkey.com) and the development of a location based social networking application for smart phones called Fanatic Fans. Grow Capital reported a net loss of $2.35 million for the year ended June 30, 2020, compared to a net loss of $2.33 million for the year ended June 30, 2019. As of March 31, 2021, the Company had $3.50 million in total assets, $13.12 million in total liabilities, and a total stockholders' and members' deficit of $9.62 million. L J Soldinger Associates, LLC, in Deer Park, Illinois, the Company's auditor since 2017, issued a "going concern" qualification in its report dated Oct. 13, 2020, citing that the Company's significant operating losses raise substantial doubt about its ability to continue as a going concern. GRUPO AEROMEXICO: Presents Plan, Disclosures to U.S. Court ---------------------------------------------------------- Grupo Aeroméxico, S.A.B. de C.V. (BMV: AEROMEX) announced Oct. 1, 2021, that it filed, together with its subsidiaries that are debtors in the Company's Chapter 11 voluntary financial restructuring process, the Joint Plan of Reorganization, a disclosure statement related to the Plan and a motion to approve solicitation procedures with respect to the Plan. The Company intends to file one or more supplements to the Plan on the schedule set forth in the Plan or as otherwise ordered by the Court. A hearing to approve the Disclosure Statement is expected to be held on or about Oct. 21, 2021. Upon entry of an order approving the Disclosure Statement, the Company intends to begin the process to solicit votes on the Plan. The filing of the Plan is a key milestone on the Company's path to emergence from its Chapter 11 process, and the Company looks forward to continue to engage with its stakeholders to finalize the Plan on a consensual basis. About Grupo Aeromexico Grupo Aeromexico, S.A.B. de C.V. (BMV: AEROMEX) -- https://www.aeromexico.com/ -- is a holding company whose subsidiaries are engaged in commercial aviation in Mexico and the promotion of passenger loyalty programs. Aeromexico, Mexico's global airline, has its main hub at Terminal 2 at the Mexico City International Airport. Its destinations network features the United States, Canada, Central America, South America, Asia and Europe. Grupo Aeromexico and three of its subsidiaries sought Chapter 11 protection (Bankr. S.D.N.Y. Lead Case No. 20-11563) on June 30, 2020. In the petitions signed by CFO Ricardo Javier Sanchez Baker, the Debtors reported consolidated assets and liabilities of $1 billion to $10 billion. The Debtors tapped Davis Polk and Wardell LLP as their bankruptcy counsel, KPMG Cardenas Dosal S.C. as auditor, and Rothschild & Co US Inc. and Rothschild & Co Mexico S.A. de C.V. as financial advisor and investment banker. White & Case LLP, Cervantes Sainz S.C. and De la Vega & Martinez Rojas, S.C., serve as the Debtors' special counsel. Epiq Corporate Restructuring, LLC is the claims and administrative agent. The U.S. Trustee for Region 2 appointed a committee to represent unsecured creditors on July 13, 2020. The committee is represented by Willkie Farr & Gallagher, LLP and Morrison & Foerster, LLP. HI CRUSH: Winternitz Completes Liquidation of Surplus Assets ------------------------------------------------------------ Winternitz Industrial Auctioneers & Appraisers on Oct. 4 disclosed that they have completed the liquidation of surplus assets from Hi Crush's Sand Mining operations in Whitehall Wisconsin, and are transitioning to an Auction of remaining assets. This facility was constructed in 2014, and was capable of producing nearly 3 million tons of 20/100 frac sand per year. The liquidation has been ongoing over the past 4-Months, generating substantial recovery value for large and complicated production equipment. The process has now shifted to the final sales phase of Auctioning the balance of the assets. The Auction is to be conducted on Thursday October 14, 2021. Winternitz has been known for over 125 years as one of the nation's most successful industrial liquidation firms. This sale is being conducted in conjunction with Heritage Global Partners, a leading global asset and auction advisory firm. The "like new" assets in this sale includes equipment from both of Whitehall's Wet Plant and Dry Plant operations: -- Impact Crushers -- Filter Presses -- Radial Stackers -- Elevated Overland Conveyors -- Trough Conveyors -- Vibratory Scalping Screens -- Durability Attrition Cell Mills -- Gravimetric Weighfeeders -- Separators & Slurry Pumps -- Bucket Elevators -- Plant Support Equipment -- Vehicles & Office F, F & E "Our sales process really shined throughout the liquidation. We have been fortunate to generate above market value for our client. The operations were only active for a few years, and the excellent condition of the equipment increased the growing demand within the mining, aggregate and material handling industries." said Charles Winternitz, President of Winternitz Industrial Auctioneers. "This sale represents a great opportunity to serve our customers in the sand mining industry, and also presents a great option for those who are considering a startup sand mining business," he added. Inspection of all items included in the auction will be on Wednesday October 13th. Please contact Charles Winternitz at 847.729.3380 or via email 320270@email4pr.com. For more information and a complete listing of all lots, please visit us online at: http://www.winternitz.com/ About Winternitz Ever since 1894 when Samuel L. Winternitz auctioned items from the World's Columbian Exhibition in Chicago, Winternitz has been helping clients obtain the highest recovery value in the disposition of their assets. Our innovative thinking, dedicated values and depth of experience in in the auction business have made Winternitz a leader in Industrial Auctions and Appraisals. About Heritage Global Partners As industry pioneers with 150 years of collective industry experience, HGP has conducted over 5000 auctions in 30 different countries. HOME4FAMILIES LLC: Unsecured Creditors Will Get 2.86% of Claims --------------------------------------------------------------- Homes4FamiIies, LLC, filed with the U.S. Bankruptcy Court for the District of Maryland a Chapter 11 Plan under Subchapter V dated September 30, 2021. The Debtor is a limited liability company organized for the purpose of holding and managing real property. The Debtor was organized May 3, 2018 for the purpose of a refinancing transaction that consolidated ownership of 7 real properties owned by First Chesapeake Investment Properties, LLC and 2 real properties owned by MVR Investments, LLC. On or about June 27, 2019, Wilmington Trust, NA filed suit against the Debtor in the United State District Court for Maryland seeking appointment of a receiver and for judgment and possession of Debtor's 9 properties. On or about September 14, 2020, Wilmington Trust, NA assigned the note and deed of trust to K & S Eastern, LLC. K & S Eastern, LLC was substituted as Plaintiff in the US District Court action against Debtor on October 20, 2020. Thereafter, K & S Eastern, LLC escalated collection against Debtor and escalated prosecution of the case against Debtor-leading to Debtor's Chapter 11 filing. The value of the property to be distributed under the Plan during the term of the Plan is not less than the Debtor's projected disposable income for that same period. Unsecured creditors holding allowed claims will receive distributions, which the Debtor has valued at approximately 2.86 cents on the dollar, with adjustments in this Plan for K&S Eastern, LLC in consideration of a section 1111(b) election, as this Plan is superseding that election, with K&S Eastern, LLC, in part waiving that election according to the terms of this Plan. The Plan will govern the new contractual relationship between K&S Eastern, LLC and the Debtor. The Plan also provides for the payment of secured, administrative, and priority claims in accordance with the Bankruptcy Code. Debtor plans to surrender three of its rental properties to secured creditor K & S Eastern, LLC; namely, 1702 Lombard Street, Baltimore, MD and 2507 Francis Street, Baltimore, MD and 429 N. Washington Street, Baltimore, MD. Surrendering these three properties to K & S Eastern, LLC will reduce the debt obligation to this creditor. As part of this Plan, K&S has agreed to forbear from collecting any charges other than Principal, Interest, Late Charge and the Protective Advances referenced as Protective Advance-Tax, Protective Advance-Insurance, and Protective Advancelegal, and to waive any further legal fees and expenses incurred through an Order of Confirmation of this Plan. The sum of Principal, Interest, Late Charge and the Protective Advances is $954,309.15. If the sum of the values of the three Properties being deeded to K&S is subtracted from that sum, the parties agree that the unsecured claim of K&S will be $673,342.15 ($954,309.15 less $280,967.00. Debtor's projected disposable income is derived from the rents it will collect from its 6 units. Debtor's secured payment to K &S will be used to pay the secured claims of Mayor and City Council of Baltimore. In month 4, Debtor projects disposable income of $636.00 per month. Debtor projects from month 13 through month through 24, debtor will have a disposable monthly net income of $818.00. Debtor projects that from month 25 to 36, it will have a monthly disposable income of $1,008.00. Debtor projects that from months 37 to 48, it will have a disposable income of $1,197.00 per month. Finally, from months 49 through 60, Debtor projects a monthly disposable income of $1,396.00. Debtor's conservative increase in monthly net income results from a 3% increase in annual rent for each property. The estate has no equity to disburse to creditors other than the proposed disposable income that will fund the debtor's plan. After payment of the administrative class, Debtor anticipates an unsecured creditor dividend of approximately 2.86% ($19,293.33) to class 6 claimant (s) with K&S to also receive the treatment. The initial source of funding Debtor's plan is through the surrender of approximately $385,933.00 of real estate to secured creditor K & S Eastern, LLC. The remaining source of funds shall come from rental collections from Debtor's units as seen in Appendix E-2 with the added potential revenue from 3% annual rent increases. During the term of this Plan, the Debtor shall submit the disposable income (or value of such disposable income) necessary for the performance of this plan to the Subchapter V Trustee/or Creditors directly and shall pay the Trustee or Creditors. The term of this Plan begins on the date of confirmation of this Plan and ends on the 60th month subsequent to that date. A full-text copy of the First Amended Plan dated September 30, 2021, is available at https://bit.ly/3A9p7Fu from PacerMonitor.com at no charge. Attorney for Debtor: Damani K. Ingram, Esq. Bar No. 26320 The Ingram Firm, LLC 5457 Twin Knolls Road Suite 301 Columbia, MD 21045 P: (410) 992-6603 F: (410) 992-6671 E: ingramlawfirm@gmail.com About Homes4FamiIies Homes4FamiIies, LLC, sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. D. Md. Case No. 20-20771) on Feb. 14, 2020. In the petition signed by Mark Jones, president and chief executive officer, the Debtor disclosed up to $1 million in both assets and liabilities. Judge Nancy V. Alquist oversees the case. Damani K. Ingram, Esq. at the Ingram Firm, LLC is the Debtor's counsel. K&S Eastern, LLC, as lender, is represented by: Martin H. Schreiber II, Esq. Law Office of Martin H. Schreiber II, LLC 3600 Clipper Mill Road, Suite 201 Baltimore, MD 21211 ILLINOIS CENTER: $255MM Loan Placed on Servicer Watchlist --------------------------------------------------------- Julianne Cavaliere, writing for Trepp, reports that the $255.6 million Illinois Center loan was placed on servicer watchlist, according to the September remittance cycle. Trepp notes the first-time comments accompanying the move indicate occupancy was 55.8% in Q2 2021. The loan is backed by 2.1 million square feet at 111 East Wacker Drive and 233 North Michigan Avenue in Chicago. The collateral is mostly office space, alt-hough watchlist comments indicate that the retail properties at the complex were severely impacted by COVID-19. The comments also note that some tenants vacated ahead of their lease expiration dates. The Illinois Center loan is split across three deals. A $98.3 million slice represents 12.70% of the GSMS 2015-GC34 deal while another $98.3 million piece comprises 10.97% of CGCMT 2015-GC33. An additional $59 million piece makes up 6.08% of CGCMT 2015-GC35. All three deals are part of CMBX 9. The properties behind the Illinois Center loan were collectively appraised for $390 million, giving it an LTV of 67. DSCR (NCF) for the loan was 1.44x in 2020 when occupancy was 67%. Those numbers were 1.02x and 66%, respectively, for Q1 2021. According to the Troubled Company Reporter in May, Fitch Ratings has affirmed 12 classes of Citigroup Commercial Mortgage Trust (CGCMT) 2015-GC33 commercial mortgage pass-through certificates and revised two Outlooks to Negative from Stable. While the majority of the pool continues to exhibit generally stable performance, overall loss expectations on the pool have risen primarily due to the increasing number of Fitch Loans of Concern (FLOCs) as well as ongoing concerns related to the coronavirus pandemic. Fitch's current ratings incorpo-rate a base case loss of 6.4%. The Negative Outlooks on classes D through F, and X-D, reflect losses that could reach 8.1% when factoring in additional stresses related to the coronavirus pandemic. Fitch has designated 14 loans (19.9% of pool) as FLOCs, including three specially serviced loans (12.3%). The Illinois Center loan (11% of the pool) was among the largest contributors to the loss. The loan is secured by two adjoining 32-story office towers lo-cated in the East Loop submarket of the Chicago CBD. 111 East Wacker, which totals 1.02 million sf, was built in 1969 and last renovated in 2014; and 233 North Michigan Avenue, which totals 1.07 million sf, was built in 1972 and last renovated in 2014. Per the servicer, the YE 2020 NOI DSCR was down to 1.61x from 2.19x at YE 2019; amortization began in September 2020. YE 2020 NOI was down approximately 10% yoy. Per the YE 2020 rent roll, the property was 67% leased compared to 72.2%, as of September 2019, and 72.3% at issuance; the occupancy decline is primarily attributable to the loss of Young & Rubicam Inc. (3.3% of NRA), which vacated near its lease expiry in 2020. Approximately 7.2% of the NRA is scheduled to roll over next 12 months. Fitch applied a 7.5% haircut to the YE 2020 cash flow in its analysis primarily to account for this upcoming tenant roll. ILLINOIS STAR: 800 Bldg. Valued at $1.5MM, Mall at $1.65MM ---------------------------------------------------------- Illinois Star Centre, LLC, operates a retail shopping center located at 3000 DeYoung Street, Marion, Illinois 62959. The Debtor determined that it would no longer be economically feasible to continue its business, so it filed a Motion to Reject Unexpired Leases, which was granted on December 18, 2018. On January 14, 2020, the Debtor filed a Motion to Sell the Mall. The Motion to Sell indicates that the ownership group of the Debtor, who constitutes the entity Illinois Star 800, LLC, was also seeking to sell the adjacent real property, the "800 Building", which was not owned by the Debtor. The buyer proposed to purchase the Mall and 800 Building for a total price of $3,200,000. However, the purchase price did not provide an allocation of the proceeds between the Mall and the 800 Building. In the Motion to Sell, the Debtor requested that the Bankruptcy Court approve an allocation of the proceeds from the sale of the Mall and 800 Building based upon evidence at an evidentiary hearing regarding the values of the Mall and 800 Building. After no objections were filed to the Motion to Sell, an order was entered on March 3, 2020 granting the Motion. Subsequently an Amended Sale Order was entered on June 29, 2020. The sale closed on July 30, 2020. The Sale Order requires the Court to determine the value of both the Mall and the 800 Building. The Court conducted a valuation hearing on July 28, 2021. Appraisers for the City of Marion and Illinois Star 800 provided testimony as to the value of both the Mall and 800 Building. Both appraisers testified that the valuation of real estate is derived from three approaches to value. They are the Cost, Income Capitalization, and Sales Comparison Approaches. Both appraisers also agreed that the Cost Approach was not applicable for either property, so their analyses focused on the Income Capitalization and the Sales Comparison Approaches. Income Capitalization is based on an estimate of the property's possible net income. The Sales Comparison Approach compares the sales of similar properties to the subject property, with certain adjustments to determine a value. Both appraisers used the sale price per square foot as a unit of comparison for the properties. Based upon the appraisals and testimony provided at the July 28 hearing, the Court determined that the value of the 800 Building is $1,550,000, and the value of the Illinois Star Centre Mall is $1,650,000. A full-text copy of the Opinion dated Sept. 30, 2021, signed by Judge Laura K. Grandy of the United States Bankruptcy Court for the Southern District of Illinois, is available at https://is.gd/N6q4R8 from Leagle.com. About Illinois Star Centre Illinois Star Centre LLC owns the Illinois Star Centre Mall located at 3000 W. Deyoung Street, Marion. The mall, which is valued at $5.5 million, offers more than 50 stores and restaurants and serves the Southern Illinois Community with events that showcase local talent. Illinois Star Centre sought protection under Chapter 11 of the Bankruptcy Code (Bankr. S.D. Ill. Case No. 17-30691) on May 4, 2017. At the time of the filing, Debtor disclosed $5.6 million in assets and zero liabilities. Judge Laura K. Grandy oversees the case. Carmody MacDonald, P.C. and Hoffman Slocomb LLC are the Debtor's bankruptcy counsel and special counsel, respectively. The Debtor tapped Dinan Real Estate Advisors, Inc. to appraise its real estate located at 3000 DeYoung, Marion, Ill.; and Vista Properties and Investments to assist in the marketing and sale of the property. No official committee of unsecured creditors has been appointed in the Debtor's case. IMAGEWARE SYSTEMS: Discontinues Pillphone Messaging Platform ------------------------------------------------------------ ImageWare Systems, Inc. announced that, in connection with a review of its assets, it is discontinuing its pillphone messaging platform to focus on its Cloud-based, multimodal biometric cybersecurity solutions and the markets requiring faster, accurate identification to better secure communities, data and assets against costly ransomware attacks. Pillphone has been cleared by the Federal Drug Administration and is HIPAA compliant and was originally developed utilizing certain intellectual property acquired from Vocel, Inc. ("Vocel") in 2012. The intellectual property acquired from Vocel will be placed in a separate non-operating entity. About ImageWare Systems Headquartered in San Diego, CA, ImageWare Systems, Inc. -- http://www.iwsinc.com-- provides defense-grade biometric identification and authentication for access to your data, products, services or facilities. The Company delivers next-generation biometrics as an interactive and scalable cloud-based solution. ImageWare brings together cloud and mobile technology to offer two-factor, biometric, and multi-factor authentication for smartphone users, for the enterprise, and across industries. Imageware Systems reported a net loss of $7.25 million for the year ended Dec. 31, 2020, compared to a net loss of $11.58 million for the year ended Dec. 31, 2019. As of June 30, 2021, the Company had $8.77 million in total assets, $16.70 million in total liabilities, $5.20 million in mezzanine equity, and a total shareholders' deficit of $13.14 million. San Diego, California- based Mayer Hoffman McCann P.C., the Company's auditor since 2011, issued a "going concern" qualification in its report dated April 2, 2021, citing that the Company does not generate sufficient cash flows from operations to maintain operations and, therefore, is dependent on additional financing to fund operations. These conditions raise substantial doubt about the Company's ability to continue as a going concern. INTERPACE BIOSCIENCES: Extends Notes Maturity to Oct. 31 -------------------------------------------------------- Interpace Biosciences, Inc. and Ampersand 2018 Limited Partnership amended the Ampersand Note on Sept. 29, 2021, to change its maturity date to the earlier of (a) Oct. 31, 2021 and (b) the date on which all amounts become due upon the occurrence of any event of default as defined in the Ampersand Note. On Sept. 29, 2021, the Company and 1315 Capital II, L.P. amended the 1315 Capital Note to change its maturity date in a similar manner. Except with respect to their respective maturity dates, the terms of the Notes are otherwise unchanged. The Security Agreement remains in full force and effect, and was not amended in connection with the amendments to the Notes. Interpace Biosciences entered into promissory notes with Ampersand dated Jan. 7, 2021, in the amount of $3 million, and 1315 Capital II, L.P., in the amount of $2 million, respectively, and a related security agreement. On May 10, 2021, the Company amended the Ampersand Note to increase the principal amount to $4.5 million, and amended the 1315 Capital Note to increase the principal amount to $3.0 million. The maturity dates of the Notes were the earlier of (a) June 30, 2021 and (b) the date on which all amounts become due upon the occurrence of any event of default as defined in the Notes. On June 24, 2021, the Company and Ampersand amended the Ampersand Note to change its maturity date to the earlier of (a) Aug. 31, 2021 and (b) the date on which all amounts become due upon the occurrence of any event of default as defined in the Ampersand Note. On June 25, 2021, the Company and 1315 Capital amended the 1315 Capital Note to change its maturity date in a similar manner. On Aug. 31, 2021, the Company and Ampersand amended the Ampersand Note to change its maturity date to the earlier of (a) Sept. 30, 2021 and (b) the date on which all amounts become due upon the occurrence of any event of default as defined in the Ampersand Note. On Aug. 31, 2021, the Company and 1315 Capital amended the 1315 Capital Note to change its maturity date in a similar manner. Ampersand holds 28,000 shares of the Company's Series B Convertible Preferred Stock, which are convertible from time to time into an aggregate of 4,666,666 shares of the Company's Common Stock, and 1315 Capital holds 19,000 shares of the Company's Series B, which are convertible from time to time into an aggregate of 3,166,668 shares of the Company's Common Stock. On an as-converted basis, such shares would represent approximately 39% and 26% of the Company's fully-diluted shares of Common Stock, respectively. As a result, the Company considers the Sept. 29, 2021 amendments to the Notes to be related party transactions. About Interpace Headquartered in Parsippany, NJ, Interpace Biosciences f/k/a Interpace Diagnostics Group, Inc. -- http://www.interpace.com-- offers specialized services along the therapeutic value chain from early diagnosis and prognostic planning to targeted therapeutic applications. Clinical services, through Interpace Diagnostics, provides clinically useful molecular diagnostic tests, bioinformatics and pathology services for evaluating risk of cancer by leveraging the latest technology in personalized medicine for improved patient diagnosis and management. Pharma services, through Interpace Pharma Solutions, provides pharmacogenomics testing, genotyping, biorepository and other customized services to the pharmaceutical and biotech industries. Interpace Biosciences reported a net loss of $26.45 million for the year ended Dec. 31, 2020, compared to a net loss of $26.74 million for the year ended Dec. 31, 2019. As of March 31, 2021, the Company had $43.86 million in total assets, $30.22 million in total liabilities, and $46.54 million in preferred stock, and a total stockholders' deficit of $32.9 million. Woodbridge, New Jersey-based BDO USA, LLP, the Company's auditor since 2012, issued a "going concern" qualification in its report dated April 1, 2021, citing that the Company has suffered operating losses, has negative operating cash flows and is dependent upon its ability to generate profitable operations in the future or obtain additional financing to meet its obligations and repay its liabilities arising from normal business operations when they come due. In addition, the Company has been materially impacted by the outbreak of a novel coronavirus (COVID-19), which was declared a global pandemic by the World Health Organization in March 2020. These conditions raise substantial doubt about its ability to continue as a going concern. INVO BIOSCIENCE: Signs $2M Stock Purchase Agreement With Paradigm ----------------------------------------------------------------- Invo Bioscience, Inc. entered into a stock purchase agreement with Paradigm Opportunities Fund, LP, an accredited institutional investor, pursuant to which the company will issue to such investor 600,703 shares of its common stock, par value $0.0001 per share for a purchase price of $3.329 per share for an aggregate purchase price of $1,999,740.29. This transaction is set to close on Nov. 30, 2021. The shares will be issued under the exemption from registration under Section 4(a)(2) and/or Rule 506 of the Securities Act of 1933, as amended. The purchase agreement contains a $250,000 break-up fee whereby if either party fails to close, it will be required to pay the non-breaching party a fee of $250,000. The investor under the purchase agreement also agreed to a one-year lock up period with respect to the shares. About INVO Bioscience Sarasota, Florida-based INVO Bioscience, Inc. -- http://invobioscience.com-- is a medical device company focused on creating simplified, lower-cost treatments for patients diagnosed with infertility. The Company's solution, the INVO Procedure, is a revolutionary in vivo method of vaginal incubation that offers patients a more natural and intimate experience. Its lead product, the INVOcell, is a patented medical device used in infertility treatment and is considered an Assisted Reproductive Technology (ART). Invo Bioscience reported a net loss of $8.35 million in 2020, a net loss of $2.16 million on $1.48 million in 2019, a net loss of $3.07 million in 2018, and a net loss of $702,163 in 2017. As of June 30, 2021, the Company had $9.93 million in total assets, $5.57 million in total liabilities, and $4.36 million in total stockholders' equity. IPC CORP: S&P Cuts ICR to 'SD' Following Restructuring Agreement ---------------------------------------------------------------- S&P Global Ratings lowered its issuer credit rating on global trading communication systems, compliance solutions, and networking services provider IPC Corp. to 'SD' (selective default) from 'CCC-'. S&P also lowered its ratings on the company's second-lien debt to 'D' because lenders are receiving less than the original promise. The downgrade of the company and its second-lien debt follows IPC's announcement that it has recapitalized its business by granting 2nd lien debt holders equity in the company in exchange for eliminating previous claims. This distressed exchange agreement results in a reduction of more than $400 million of the company's debt. While this will improve the company's credit metrics going forward, S&P believes holders of 2nd lien debt have received less than the original promise. As part of the transaction, the company has also repaid in full of the first-lien term loan using proceeds from 3rd party financing. Therefore, the rating on the first-lien loan is unaffected. S&P has immediately withdrawn existing ratings following the downgrade, as the company's new debt does not require a rating. J&J ROBINSON: Voluntary Chapter 11 Case Summary ----------------------------------------------- Debtor: J&J Robinson Ventures LLC 6520 W. County Road 0030 Corsicana, TX 75110 Business Description: The Debtor is primarily engaged in renting and leasing real estate properties. Chapter 11 Petition Date: October 5, 2021 Court: United States Bankruptcy Court Northern District of Texas Case No.: 21-31826 Judge: Hon. Stacey G. Jernigan Debtor's Counsel: Melissa S. Hayward, Esq. HAYWARD PLLC 10501 N. Central Expressway Suite 106 Dallas, TX 75231 Tel: 972-755-7100 Email: mhayward@haywardfirm.com Estimated Assets: $1 million to $10 million Estimated Liabilities: $1 million to $10 million The petition was signed by Joe Robinson as 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/JUKYDMA/JJ_Robinson_Ventures_LLC__txnbke-21-31826__0001.0.pdf?mcid=tGE4TAMA JHW ALPHIA: S&P Alters Outlook to Negative, Affirms 'B-' ICR ------------------------------------------------------------ S&P Global Ratings affirmed its 'B-' issuer credit rating on U.S.-based JHW Alphia Holdings Inc. reflecting its expectation that operating performance will gradually improve in the second half of fiscal 2021. However, execution risks remain and an inability to improve operating performance could result in a downgrade. As a result, S&P revised the outlook to negative from stable. S&P said, "At the same time, we affirmed our 'B-' issue-level rating on the senior secured debt credit facilities. The recovery rating remains '3', indicating our expectation for meaningful recovery (50%-70%; rounded estimate: 50%) in the event of a default. "The negative outlook reflects the risk that we could lower the rating over the next 12 months if profitability continues to deteriorate." The negative outlook reflects the deterioration in credit metrics and further risks due to rising costs and operating inefficiencies. The company's second-quarter fiscal 2021 S&P Global Ratings-adjusted EBITDA margins declined to 4%-4.5% from 6.5%-7% a quarter ago. This was due to commodity shortages and inflation, ERP implementation difficulties, and shortage of freight. Leverage for the 12 months ended June 30, 2021, rose to 9.1x from 8.2x a quarter ago, highlighting the consequence of the deterioration in profitability. During second-quarter fiscal 2021, the company's ERP onboarding caused a lack of visibility on supply, demand, and inventory, which resulted in an estimated loss of about $6 million in EBITDA. Furthermore, supply chain problems due to shortages of freight and increased costs resulted in EBITDA deterioration of $2 million. Despite strong demand the company was unable to fulfill all orders due to a lack of ingredients, which resulted in extraneous downtime, and trucking, which resulted in an inability to both receive ingredients and deliver finished products. S&P said, "We expect the company to offset material and labor cost inflation with pricing, though some of it will take hold in fiscal 2022. As such, we could see some more margin pressures in the third and fourth fiscal quarter 2021. At this time we do not believe the company's capital structure is unsustainable nor do we believe liquidity is constrained; however, further deterioration of profitability is a risk to the ratings. In our base case, we expect fiscal 2021 leverage of 9.5x-10x improving to 8x-8.5x inclusive of our treatment of the preferred shares as debt and 6.5x-7x strengthening to 5.5x-6x without, as ERP issues largely abate and supply chain difficulties ease, though we recognize that if supply chain pressures and operating execution persist, profitability could further deteriorate." Supply chain constraints could pressure liquidity and cash flow generation. S&P continues to assess the company's liquidity as adequate with sources over uses coverage of over 1.6x, although it believes liquidity could decline rapidly if the company is unable to resolve its operational and supply chain issues to improve cash flows and successfully unwind working capital. The company's inventory levels at quarter end were elevated due to supply chain and freight difficulties, increasing to about $96 million at the end of second-quarter fiscal 2021 from $73 million at the end of first-quarter fiscal 2021. This reflected ERP implementation problems which resulted in data quality issues, leading to some service disruption. Additionally, freight shortages meant that there were insufficient key raw materials at the plants, which led to excess employee downtime as workers waited for shipments to complete production and insufficient trucking to ship finished product out to customers. The increase in inventories resulted from higher than normal levels of raw materials as key ingredients are still missing to finish products, and elevated finished goods levels due to a lack of trucking to move products. Potential further shortages in certain materials remains a significant problem as service levels could decline and fixed-cost absorption deteriorates. This could erode profitability and ultimately constrain liquidity, which is captured in S&P's negative outlook. S&P said, "We acknowledge that the company's underperformance is cost and operational driven, not due to lower demand. We believe strengthening production and service levels to customers is essential for restoring the company's profitability. Strong pet ownership continues to provide demand tailwinds, supporting our expectation for continued revenue growth. Pet ownership in the U.S. expanded considerably in 2020 to 70% of households from 67% according to the American Pet Products Association, which we expect to result in increased demand for pet food, benefitting Alphia. Additionally, as new pets grow into adults, their pet food consumption will increase. According to Euromonitor the dollar value of the pet food industry grew to $41 billion in 2021 from $38.2 billion in 2020 and $35.3 billion in 2019. We expect these tailwinds will help drive high-single-digit top-line growth for Alphia in 2021 and mid-single-digit growth in 2022, though we recognize this growth could be constrained by ongoing supply chain and freight shortages. "The negative outlook reflects the risk that we could lower the ratings over the next 12 months if the company is unable to improve profitability and generate positive free cash flow, resulting in either constrained liquidity or an unsustainable capital structure." S&P believes this could happen if: -- Profitability continues to deteriorate due to supply chain or ERP problems; -- A material loss of customers due to switching production in house or a significant decline in service levels; or -- More aggressive financial policy that results in debt-financed acquisitions or dividends. S&P could revise the outlook back to stable if: -- The company is able to return to historical margins through resolving its supply chain issues and generates positive cash flow. JUAREZ BROTHERS: Voluntary Chapter 11 Case Summary -------------------------------------------------- Debtor: Juarez Brothers Investments, LLC 1400 S. Union Avenue Suite 120 Bakersfield, CA 93307 Business Description: Juarez Brothers Investments, LLC is part of the specialized freight trucking industry. Chapter 11 Petition Date: October 5, 2021 Court: United States Bankruptcy Court Eastern District of California Case No.: 21-12348 Judge: Hon. Jennifer E. Niemann Debtor's Counsel: Ignacio J. Lazo, Esq. CADDEN & FULLER LLP 2050 Main Street, Suite 260 Irvine, CA 92614 Tel: (949) 788-0827 E-mail: ilazo@caddenfuller.com Estimated Assets: $1 million to $10 million Estimated Liabilities: $1 million to $10 million The petition was signed by Walter Juarez as 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/7LH5QZY/Juarez_Brothers_Investments_LLC__caebke-21-12348__0001.0.pdf?mcid=tGE4TAMA KATERRA INC: Bankruptcy Judge Stops Greensill's Move for UK Lawsuit ------------------------------------------------------------------- Jeremy Hill, writing for Bloomberg News, reports that U.S. Bankruptcy Judge David Jones denied a request from Greensill Ltd. to sue Katerra Inc. in England instead of Texas. Greensill, the receivables financing firm that collapsed this year, alleges Katerra owes it about $440 million as a result of shoddy deals that pre-date Katerra's bankruptcy. Lawyers for Greensill, which is being liquidated in the U.K., asked Judge Jones to let the fight play out overseas then return to Texas to collect payment. Its lawyers argued that an English court would be better suited to resolve its claims because they deal with English law and the company is already undergoing insolvency. About Greensill Capital Greensill is an independent financial services firm and principal investor group based in the United Kingdom and Australia. It offers structures trade finance, working capital optimization, specialty financing and contract monetization. Greensill Capital Pty is the parent company for the Greensill Group. Greensill began to unravel in March 2021 when its main insurer stopped providing credit insurance on US$4.1 billion of debt in portfolios it had created for clients including Swiss bank Credit Suisse. Greensill Capital (UK) Limited and Greensill Capital Management Company (UK) Limited filed for insolvency in Britain on March 8, 2021. Matthew James Byrnes, Philip Campbell-Wilson and Michael McCann of Grant Thornton were appointed as administrators. Greensill Capital Pty Ltd. filed insolvency proceedings in Australia. Matt Byrnes, Phil Campbell-Wilson, and Michael McCann of Grant Thornton Australia Ltd, were appointed as voluntary administrators in Australia. Greensill Capital Inc. filed for Chapter 11 bankruptcy (Bankr. S.D.N.Y. Case No. 21-10561) on March 25, 2021. Jill M. Frizzley, director, signed the petition. In the petition, the Debtor listed assets of between $10 million and $50 million and liabilities of between $50 million and $100 million. The case is handled by Judge Michael E. Wiles. In the Chapter 11 case, the Debtor tapped Segal & Segal LLP as bankruptcy counsel, Mayer Brown LLP as special counsel, and GLC Advisors & Co., LLC and GLCA Securities, LLC as investment bankers and financial advisors. Matthew Tocks is the chief restructuring officer of the Debtor. The official committee of unsecured creditors is represented by Arent Fox LLP. Greensill Capital (UK) Limited filed a Chapter 15 petition (Bankr. S.D.N.Y. Case No. 21-11473) to seek U.S. recognition of its UK proceedings on Aug. 18, 2021. ALLEN & OVERY LLP, led by Laura R. Hall, is the Debtor's counsel in the Chapter 15 case. About Katerra Inc. Based in Menlo Park, Calif., Katerra Inc. is a Japanese-funded, American technology-driven offsite construction company. Katerra was founded in 2015 by Michael Marks, former chief executive officer of Flextronics and former Tesla interim CEO, along with Fritz Wolff, the executive chairman of The Wolff Co. It offers technology-driven design, manufacturing, and assembly solution for bathroom pods, door and window, furniture, and modular utility systems. Katerra and its affiliates sought Chapter 11 protection (Bankr. S.D. Tex. Lead Case No. 21-31861) on June 6, 2021. In its petition, Katerra disclosed assets of between $500 million and $1 billion and liabilities of between $1 billion and $10 billion. Judge David R. Jones oversees the cases. The Debtors tapped Kirkland & Ellis, LLP and Jackson Walker, LLP as bankruptcy counsel; Houlihan Lokey Capital, Inc. as investment banker; Alvarez & Marsal North America, LLC as financial and restructuring advisor; and KPMG, LLP as a tax consultant. Prime Clerk LLC is the claims and noticing agent. The official committee of unsecured creditors tapped Fox Rothschild, LLP, as counsel; and FTI Consulting, Inc., as financial advisor. Weil, Gotshal & Manges LLP is counsel for SB Investment Advisers (UK) Limited, DIP lender. * * * Katerra in early August 2021 won court approval to sell factories in Washington State and California for a total of $71 million. Blue Varsity LLC, a wholly-owned subsidiary of Mercer International Inc., purchased Katerra's cross-laminated timber factory in Spokane, Wash. Volumetric Building Companies, a Philadelphia-based construction company, agreed to buy Katerra's two-year-old factory in Tracy, Calif. LEHMAN BROTHERS: Dispute Goes On as Deutsche Makes Legal Bid ------------------------------------------------------------ Lucca de Paoli of Bloomberg Law reports that more than 13 years after Lehman Brothers filed for bankruptcy, the fight for the last scraps of its carcass is still going on. Deutsche Bank AG is leading a last-ditch legal bid to squeeze more from a bet it made on obscure notes issued by Lehman in the years before the U.S. bank's collapse. The German lender is appealing a decision made by a British court last year, hoping to gain more from its holding of "enhanced capital advantaged preferred securities" or ECAPS, a series of subordinated notes Lehman issued via one of its U.K. subsidiaries. About Lehman Brothers Lehman Brothers Holdings Inc. -- http://www.lehman.com/-- was the fourth largest investment bank in the United States. For more than 150 years, Lehman Brothers has been a leader in the global financial markets by serving the financial needs of corporations, governmental units, institutional clients and individuals worldwide. Lehman Brothers Holdings filed for Chapter 11 bankruptcy (Bankr. S.D.N.Y. Case No. 08-13555) on Sept. 15, 2008. Lehman's bankruptcy petition disclosed US$639 billion in assets and US$613 billion in debts, effectively making the firm's bankruptcy filing the largest in U.S. history. Several other affiliates followed thereafter. Affiliates Merit LLC, LB Somerset LLC and LB Preferred Somerset LLC sought bankruptcy protection in December 2009. The Debtors' bankruptcy cases were assigned to Judge James M. Peck. Judge Shelley Chapman took over the case after Judge Peck retired from the bench to join Morrison & Foerster. A team of Weil, Gotshal & Manges, LLP, lawyers led by the late Harvey R. Miller, Esq., serve as counsel to Lehman. Epiq Bankruptcy Solutions serves as claims and noticing agent. Dennis F. Dunne, Esq., Evan Fleck, Esq., and Dennis O'Donnell, Esq., at Milbank, Tweed, Hadley & McCloy LLP, in New York, served as counsel to the Official Committee of Unsecured Creditors. Houlihan Lokey Howard & Zukin Capital, Inc., served as the Committee's investment banker. On Sept. 19, 2008, the Honorable Gerard E. Lynch of the U.S. District Court for the Southern District of New York, entered an order commencing liquidation of Lehman Brothers, Inc., pursuant to the provisions of the Securities Investor Protection Act (Case No. 08-CIV-8119 (GEL)). James W. Giddens was appointed as trustee for the SIPA liquidation of the business of LBI. He is represented by Hughes Hubbard & Reed LLP. The Bankruptcy Court approved Barclays Bank Plc's purchase of Lehman Brothers' North American investment banking and capital markets operations and supporting infrastructure for US$1.75 billion. Nomura Holdings Inc., the largest brokerage house in Japan, purchased LBHI's operations in Europe for US$2 plus the retention of most of employees. Nomura also bought Lehman's operations in the Asia Pacific for US$225 million. The Debtors' chapter 11 plan was confirmed by the Bankruptcy Court on December 6, 2011 and became effective on March 6, 2012. The Debtors have commenced making distributions to holders of allowed claims and will continue to make distributions in accordance with the Plan until the liquidation of their assets is complete. * * * James W. Giddens, the trustee for the liquidation of LBI, announced in April 2021 that having already achieved a 100 percent distribution of customer property, the Trustee has now distributed approximately $9.096 billion to LBI's general unsecured creditors with allowed claims -- representing a distribution of 40.0605 percent -- and approximately $261 million to LBI's allowed secured, administrative, and priority creditors -- substantially completing all seventh interim distributions to these claimants. The LBI Trustee has distributed more than $115 billion to over 110,000 of LBI's former customers and creditors. This includes: (i) $92.301 billion distributed to LBI's former customers through the account transfer process; (ii) $13.472 billion distributed through the customer claim process in full satisfaction of all allowed customer claims; (iii) $9.096 billion distributed to LBI's general unsecured creditors with allowed claims -- representing a distribution of 40.0605 percent; and (iv) $261 million distributed to LBI’s allowed secured, administrative, and priority creditors -- representing a 100 percent distribution on these claims. In October 2021, the team winding down LBHI said it will pay $122.5 million to creditors, the 23rd distribution since Lehman's collapse in 2008. This will bring the total payout to unsecured creditors to $128.9 billion. Bondholders were projected to receive about 21 cents on the dollar when Lehman's bankruptcy plan went into effect in early 2012. The 23rd distribution raised the bondholders' recovery to more than 46.5 cents on the dollar and recoveries for general unsecured creditors of Lehman's commodities to 82.5 cents on the dollar. LEHMAN BROTHERS: Payouts to Unsecured Creditors Now at $128.9BB --------------------------------------------------------------- Lehman Brothers Holdings Inc., as Plan Administrator, announced Sept. 30, 2021, in a court filing the percentage recovery that will be distributed on October 7, 2021, to holders of allowed claims against LBHI, excluding certain creditors that will receive final distributions as authorized by the Bankruptcy Court on July 1, 2021. LBHI's aggregate 23rd distribution to unsecured creditors pursuant to its confirmed chapter 11 plan will total approximately $122.5 million, including $8.4 million in final distributions to certain creditors. This distribution consists of (1) $113.5 million of payments on account of third-party claims, which includes non-controlled affiliate claims, and (2) $9.0 million of payments between LBHI and its controlled affiliates. Cumulatively through the 23rd distribution, LBHI and its debtor affiliates' total distributions to unsecured creditors will amount to approximately $128.9 billion, including (1) $95.9 billion of payments on account of third-party claims, which includes non-controlled affiliate claims, and (2) $33.0 billion of payments among the Lehman Debtors and their controlled affiliates. In accordance with the Chapter 11 plan, which was confirmed on December 6, 2011, and subject to available funds, LBHI's 24th distribution to creditors is anticipated to be made within 5 business days of March 30, 2022. The cumulative distribution to LBHI unsecured claims as a result of the 23rd distribution is as follows: * LBHI Class 3 Senior Unsecured Claims: 46.472993% * LBHI Class 7 General Unsecured Claims: 43.506061% A copy of the notice of the 23rd distribution is available at Epiq at https://bit.ly/3iyVp6U About Lehman Brothers Lehman Brothers Holdings Inc. -- http://www.lehman.com/-- was the fourth largest investment bank in the United States. For more than 150 years, Lehman Brothers has been a leader in the global financial markets by serving the financial needs of corporations, governmental units, institutional clients and individuals worldwide. Lehman Brothers Holdings filed for Chapter 11 bankruptcy (Bankr. S.D.N.Y. Case No. 08-13555) on Sept. 15, 2008. Lehman's bankruptcy petition disclosed US$639 billion in assets and US$613 billion in debts, effectively making the firm's bankruptcy filing the largest in U.S. history. Several other affiliates followed thereafter. Affiliates Merit LLC, LB Somerset LLC and LB Preferred Somerset LLC sought for bankruptcy protection in December 2009. The Debtors' bankruptcy cases were assigned to Judge James M. Peck. Judge Shelley Chapman took over the case after Judge Peck retired from the bench to join Morrison & Foerster. A team of Weil, Gotshal & Manges, LLP, lawyers led by the late Harvey R. Miller, Esq., serve as counsel to Lehman. Epiq Bankruptcy Solutions serves as claims and noticing agent. Dennis F. Dunne, Esq., Evan Fleck, Esq., and Dennis O'Donnell, Esq., at Milbank, Tweed, Hadley & McCloy LLP, in New York, served as counsel to the Official Committee of Unsecured Creditors. Houlihan Lokey Howard & Zukin Capital, Inc., served as the Committee's investment banker. On Sept. 19, 2008, the Honorable Gerard E. Lynch of the U.S. District Court for the Southern District of New York, entered an order commencing liquidation of Lehman Brothers, Inc., pursuant to the provisions of the Securities Investor Protection Act (Case No. 08-CIV-8119 (GEL)). James W. Giddens was appointed as trustee for the SIPA liquidation of the business of LBI. He is represented by Hughes Hubbard & Reed LLP. The Bankruptcy Court approved Barclays Bank Plc's purchase of Lehman Brothers' North American investment banking and capital markets operations and supporting infrastructure for US$1.75 billion. Nomura Holdings Inc., the largest brokerage house in Japan, purchased LBHI's operations in Europe for US$2 plus the retention of most of employees. Nomura also bought Lehman's operations in the Asia Pacific for US$225 million. The Debtors' chapter 11 plan was confirmed by the Bankruptcy Court on December 6, 2011 and became effective on March 6, 2012. The Debtors have commenced making distributions to holders of allowed claims and will continue to make distributions in accordance with the Plan until the liquidation of their assets is complete. * * * James W. Giddens, the trustee for the liquidation of LBI, announced in April 2021 that having already achieved a 100 percent distribution of customer property, the Trustee has now distributed approximately $9.096 billion to LBI's general unsecured creditors with allowed claims -- representing a distribution of 40.0605 percent—and approximately $261 million to LBI's allowed secured, administrative, and priority creditors -- substantially completing all seventh interim distributions to these claimants. The LBI Trustee has distributed more than $115 billion to over 110,000 of LBI's former customers and creditors. This includes: (i) $92.301 billion distributed to LBI’s former customers through the account transfer process; (ii) $13.472 billion distributed through the customer claim process in full satisfaction of all allowed customer claims; (iii) $9.096 billion distributed to LBI's general unsecured creditors with allowed claims -- representing a distribution of 40.0605 percent; and (iv) $261 million distributed to LBI’s allowed secured, administrative, and priority creditors -- representing a 100 percent distribution on these claims. In October 2021, the team winding down LBHI said it will pay $122.5 million to creditors, the 23rd distribution since Lehman's collapse in 2008. This will bring the total payout to unsecured creditors to $128.9 billion. Bondholders were projected to receive about 21 cents on the dollar when Lehman's bankruptcy plan went into effect in early 2012. The 23rd distribution raised the bondholders' recovery to more than 46.5 cents on the dollar. LUX AMBER: Incurs $1.98M Net Loss in Fiscal Year Ended April 30 --------------------------------------------------------------- Lux Amber, Corp. filed with the Securities and Exchange Commission its Annual Report on Form 10-K disclosing a net loss of $1.98 million on $998,947 of revenue for the year ended April 30, 2021, compared to a net loss of $3.59 million on $976,671 of revenue for the year ended Dec. 31, 2019. As of April 30, 2021, the Company had $3.35 million in total assets, $2.47 million in total liabilities, and $884,913 in ttoal equity. During the year ended April 30, 2021, the primary sources of liquidity were cash flows from financing activities, and in particular, proceeds from issuance of convertible notes payable and the receipt of PPP loans. Plano, Texas-based Whitley Penn LLP, the Company's auditor since 2020, issued a "going concern" qualification in its report dated Sept. 29, 2021, citing that the Company has suffered recurring losses from operations and has a net capital deficiency that raises substantial doubt about its ability to continue as a going concern. A full-text copy of the Form 10-K is available for free at: https://www.sec.gov/Archives/edgar/data/1740695/000168316821004611/luxamber_10k-043021.htm About Lux Amber, Corp. Headquartered in Frisco, TX, Lux Amber, Corp., formed on Jan. 19, 2018, is an international specialty chemical company. LAC has three wholly owned subsidiaries: Worldwide Specialty Chemicals, Inc., Industrial Chem Solutions, Inc., and Safeway Pest Elimination, LLC. MADDOX FOUNDRY: Nov. 10 Disclosure Statement Hearing Set -------------------------------------------------------- On April 5, 2021, debtor Maddox Foundry & Machine Works, LLC filed with the U.S. Bankruptcy Court for the Northern District of Florida a Disclosure Statement and Plan. On September 30, 2021, Judge Karen K. Specie ordered that: * Nov. 10, 2021, at 10:45 a.m., via CourtCall is the hearing to consider the approval of the disclosure statement. * Nov. 3, 2021, is fixed as the last day for filing and serving written objections to the disclosure statement. A copy of the order dated September 30, 2021, is available at https://bit.ly/3FrjVku from PacerMonitor.com at no charge. About Maddox Foundry & Machine Works Maddox Foundry & Machine Works, LLC, is a company that operates a foundry machine shop. It emerged from a prior bankruptcy in 2017. In February of 2019, Chase Hope took over control of the Debtor from his parents, Fletcher and Mary Hope through the Debtor's parent company, Green Health Science, LLC. By April 2019, the Debtor started to experience financial issues. The Debtor experienced cash-flow issues and was unable to service its seven-figure obligations to the McGurn Entities. Maddox Foundry & Machine Works, LLC, a company that operates a foundry machine shop, sought protection under Chapter 11 of the Bankruptcy Code (Bankr. N.D. Fla. Case No. 20-10211) on Oct. 7, 2020. At the time of the filing, the Debtor disclosed assets of $500,000 and liabilities of $4.495 million. Judge Karen K. Specie oversees the case. Seldon J. Childers, Esq., at ChildersLaw, LLC, serves as the Debtor's legal counsel and Dawn Moesser, ASA, of ICS Asset Management Services, Inc., as the Debtor's appraiser. MAINSTREET PIER: Wins Cash Collateral Access Thru Nov 20 -------------------------------------------------------- The U.S. Bankruptcy Court for the District of Colorado authorized Mainstreet Pier, LLC to use cash collateral on a final basis in accordance with the budget, with a 5% variance. The Debtor has an immediate need to use Cash Collateral in order to permit, among other things: -- the orderly continuation of the operation of its businesses, -- maintain business relationships with vendors, suppliers and customers, -- make payroll, and -- satisfy other working capital needs. As adequate protection for the Debtor's use of cash collateral, Independent Bank, FirstBank, and any other party asserting an interest in the Debtor's cash, cash equivalents, accounts, and accounts receivable, are granted a post-petition lien on all of the Debtor's postpetition assets. All replacement liens will hold the same relative priority to assets as did the pre-petition liens. As additional adequate protection, the Debtor will pay Independent Bank the sum of $2,000 on or before October 30 and on the 30th day of each month thereafter. To the extent of the Cash Collateral Use Amount that is not offset by the value of the Replacement Lien in Adequate Protection Collateral, the Secured Lender is granted an allowed super-priority administrative claim pursuant to Section 507(b) of the Bankruptcy Code to the extent and priority provided for in the Bankruptcy Code and by operation of the Bankruptcy Code. The Secured Lender's consent to the use of Cash Collateral and the Debtor's authority to use Cash Collateral under the Order will terminate upon the earlier of (i) the occurrence of any Event of Default, or (ii) November 20, 2021. The Debtor will be deemed in default under the Order upon the occurrence of: (i) any future Event of Default under the Secured Loan Documents other than an Event of Default under the Secured Loan Documents which conflicts with the terms of the Order or (ii) any of the following conditions unless such Event(s) of Default is specifically waived in writing by Secured Lender: (a) the Debtor's failure to perform in any material respect any of its obligations pursuant to the Order; (b) Debtor's failure to comply with the Budget; (c) the appointment of a trustee pursuant to either sections 1104(a)( 1) or, 1104(a)(2) of the Bankruptcy Code; (d) the appointment of an examiner with expanded powers; (e) the conversion or dismissal of the case; (f) the entry of an order providing for relief from the automatic stay on any item valued at $25,000 or more; (g) the entry of any order amending, modifying, violating, contradicting, reversing, revoking, staying, rescinding or vacating this Order without the express prior written consent of Secured Lender (which may be withheld in Secured Lender's sole discretion and shall not be implied from any other action, inaction or acquiescence by Secured Lender); (h) conversion of the Debtor's chapter 11 case to a case under chapter 7 of the Bankruptcy Code. A copy of the order and the Debtor's budget is available at https://bit.ly/3D7F554 from PacerMonitor.com. The budget provided for these total expenses, on a weekly basis: $74,283 for the week ending October 9, 2021; $75,114 for the week ending October 16, 2021; $74,283 for the week ending October 23, 2021; $80,283 for the week ending October 30, 2021; $70,316for the week ending November 6, 2021; $70,316 for the week ending November 13, 2021; and $70,316 for the week ending November 20, 2021 About Mainstreet Pier, LLC Mainstreet Pier, LLC is a Colorado limited liability company which owns and operates a boutique hotel, commonly known at The Ascent on Main Street. The Ascent has 51 hotel rooms, operates two restaurants and an event center, and leases out another two restaurants and a jewelry store. The Debtor sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. D. Colo. Case No. 21-14682) on September 10, 2021. In the petition signed by Rick Hill, manager, the Debtor disclosed up to $50,000 in assets and up to $50 million in liabilities. Judge Elizabeth E. Brown oversees the case. Jonathan M. Dickey, Esq., at Kutner Brinen Dickey Riley, P.C. is the Debtor's counsel. Independent Bank, as Secured Lender, is represented by: John F. Young, Esq. Matthew T. Faga, Esq. Markus Williams Young & Hunsicker LLC 1775 Sherman Street, Suite 1950 Denver, CO 80203 Tel: (303) 830-0800 Fax: (303) 830-0809 E-mail: jvoungfrJmarkuswilliams.com E-mail: mfagafajmarkuswilliams.com MALLINCKRODT PLC: Lawyer Says Bondholders Concerned and Frustrated ------------------------------------------------------------------ Jeremy Hill, writing for Bloomberg News, reports that the bondholders of Mallinckrdot PLC are 'frustrated and concerned,' lawyer says. A group of Mallinckrodt Plc bondholders has grown "frustrated and concerned" with the drugmaker's ongoing bankruptcy, Alice Eaton of law firm Paul Weiss said on behalf of the holders in a hearing Monday, October 4, 2021. The reorganization is not moving fast enough, Eaton said, and the company is "suffering sluggishness by being under the microscope of bankruptcy." The noteholder group, which as of July 2021 counted Aurelius Capital Management and Oaktree Capital Management among its members, have been supportive of Mallinckrodt’s reorganization since it began almost a year ago. The bondholders are "paying for those costs in the form of diminished recoveries," Eaton said. About Mallinckrodt PLC Mallinckrodt is a global business consisting of multiple wholly-owned subsidiaries that develop, manufacture, market and distribute specialty pharmaceutical products and therapies. The company's Specialty Brands reportable segment's areas of focus include autoimmune and rare diseases in specialty areas like neurology, rheumatology, nephrology, pulmonology and ophthalmology; immunotherapy and neonatal respiratory critical care therapies; analgesics; and gastrointestinal products. Its Specialty Generics reportable segment includes specialty generic drugs and active pharmaceutical ingredients. Visit http://www.mallinckrodt.com/ On Oct. 12, 2020, Mallinckrodt plc and certain of its affiliates sought Chapter 11 protection in Delaware in the U.S. (Bankr. D. Del. Lead Case No. 20-12522) to seek approval of a restructuring that would reduce total debt by $1.3 billion and resolve opioid-related claims against them. Mallinckrodt plc disclosed $9,584,626,122 in assets and $8,647,811,427 in liabilities as of Sept. 25, 2020. Judge John T. Dorsey oversees the cases. The Debtors tapped Latham & Watkins LLP and Richards, Layton & Finger P.A. as their bankruptcy counsel; Arthur Cox and Wachtell, Lipton, Rosen & Katz as corporate and finance counsel; Ropes & Gray LLP as litigation counsel; Torys LLP as CCAA counsel; Guggenheim Securities LLC as investment banker; and AlixPartners LLP as restructuring advisor. Prime Clerk, LLC, is the claims agent. The official committee of unsecured creditors retained Cooley LLP as its legal counsel, Robinson & Cole LLP as co-counsel, and Dundon Advisers LLC as its financial advisor. On Oct. 27, 2020, the U.S. Trustee for Region 3 appointed an official committee of opioid related claimants. The OCC tapped Akin Gump Strauss Hauer & Feld LLP as its lead counsel, Cole Schotz as Delaware co-counsel, Province Inc. as financial advisor, and Jefferies LLC as investment banker. The Debtors filed their plan of reorganization and disclosure statement on April 20, 2021. MARKEL CATCO: Chapter 15 Case Summary ------------------------------------- Four affiliates that concurrently filed voluntary petitions for relief under Chapter 15 of the Bankruptcy Code: Debtor Case No. ------ -------- Markel CATCo Reinsurance Fund Ltd. 21-11733 Crawford House, 50 Cedar Avenue Hamilton, HM 11 Bermuda CATCo Reinsurance Opportunities Fund Ltd. 21-11734 Markel CATCo Investment Management Ltd. 21-11735 Markel CATCo Re Ltd. 21-11736 Business Description: Markel CATCo creates and manages a series of innovative insurance-linked investment funds which provide its investors the opportunity to participate in a selected mix of catastrophe reinsurance risks accessed through its reinsurance company, Markel CATCo Re Ltd. Foreign Proceeding: Liquidation Proceedings under Part XIII of the Companies Act 1981 (as amended), currently pending before the Supreme Court of Bermuda Chapter 15 Petition Date: October 5, 2021 Court: United States Bankruptcy Court Southern District of New York Judge: Hon. Lisa G. Beckerman Foreign Representatives: Simon Appell and John C. McKenna 26 Bermudiana Road, Suite 502 P.O. Box HM 321 Hamilton, HM 11 Bermuda Foreign Representatives' Counsel: Lisa Laukitis, Esq. SKADDEN, ARPS, SLATE, MEAGHER & FLOM LLP One Manhattan West New York, New York 10001 Tel: (212) 735-3000 Fax: (212) 735-2000 Email: lisa.laukitis@skadden.com - and – Justin M. Winerman, Esq. Anthony R. Joseph, Esq. 155 North Wacker Drive Chicago, Illinois 60606-1720 Tel: (312) 407-0700 Fax: (312) 407-0411 Email: justin.winerman@skadden.com - and - Peter Newman, Esq. SKADDEN, ARPS, SLATE, MEAGHER & FLOM (UK) LLP 40 Bank Street Canary Wharf London E14 5DS Tel: +44 20 7519 7000 Fax: +44 20 7519 7070 Email: peter.newman@skadden.com Estimated Assets: Unknown Estimated Debt: Unknown A full-text copy of Markel CATCo Reinsurance Fund Ltd.'s Chapter 15 petition is available for free at PacerMonitor.com at: https://www.pacermonitor.com/view/IO7GPKY/Markel_CATCo_Reinsurance_Fund__nysbke-21-11733__0001.0.pdf?mcid=tGE4TAMA MARRIOTT HOUSTON WESTCHASE: Value of Collateral Continues to Drop ----------------------------------------------------------------- Julianne Cavaliere, writing for Trepp, reports that the value of the collateral for the $69.9 million Marriott Houston Westchase loan was lowered for the third time based on September remittance data. The subject collateral is a 600-room full-service hotel located at 2900 Bri-arpark Drive in Houston, TX. According to Trepp, the collateral was valued at $135 million in 2007, but that value was reduced to $72 million in January 2018 and to $47.5 million in 2020. In September 2021, servicer data showed a new value of $39.8 million. As reported by the Troubled Company Reporter on Sept. 19, Fitch Ratings has downgraded one and affirmed 14 distressed classes of Bear Stearns Commercial Mortgage Securities Trust 2007-PWR18 commercial mortgage passthrough certifi-cates (BSCMSI 2007-PWR18). DEBT RATING PRIOR ---- ------ ----- Bear Stearns Commercial Mortgage Securities Trust 2007-PWR18 B 07401DAL5 LT CCCsf Downgrade Bsf C 07401DAM3 LT Csf Affirmed Csf D 07401DAN1 LT Csf Affirmed Csf E 07401DAP6 LT Dsf Affirmed Dsf F 07401DAQ4 LT Dsf Affirmed Dsf G 07401DAR2 LT Dsf Affirmed Dsf H 07401DAS0 LT Dsf Affirmed Dsf J 07401DAT8 LT Dsf Affirmed Dsf K 07401DAU5 LT Dsf Affirmed Dsf L 07401DAV3 LT Dsf Affirmed Dsf M 07401DAW1 LT Dsf Affirmed Dsf N 07401DAX9 LT Dsf Affirmed Dsf O 07401DAY7 LT Dsf Affirmed Dsf P 07401DAZ4 LT Dsf Affirmed Dsf Q 07401DBA8 LT Dsf Affirmed Dsf The downgrade reflects losses to class B are considered possible. Loss expec-tations on the remaining loan, the specially serviced Marriott Houston Westchase, have increased due to continued property performance declines, growing loan exposure and limited progress on workout. Fitch's loss expecta-tion of 67% considers a discount to the recent appraisal and reflects a stressed value of approximately $46,000 per key. The loan is secured by a 604-key, Marriott-flagged, full service hotel located in Houston, TX, approximately 10 miles west of the CBD. The coronavirus pan-demic has exacerbated already existing pre-pandemic property performance dete-rioration caused by the weakening economic conditions in Houston, reliance on the energy/oil sector and new hotel supply in the market. The hotel reported a negative NOI at YE 2020, and the servicer-reported NOI debt service coverage ratio (DSCR) has remained below 1.0x since 2018. The loan transferred to special servicing for a second time in March 2019 due to the borrower's request for a second modification, which closed in December 2019, with terms that included a maturity extension through June 2023 and the establishment of a new property improvement plan reserve. The loan had per-formed in accordance with terms of the modification until the borrower re-defaulted again in May 2020 due to the coronavirus pandemic. The loan was reported in foreclosure as of the September 2021 remittance. The borrower has not made a viable workout proposal or contributed additional eq-uity. The special servicer is monitoring property-level payables and evaluat-ing the exercise of remedies. The loan had first transferred to special servicing in July 2017 for imminent maturity default, ahead of its November 2017 maturity, and briefly transferred back to the master servicer in December 2018. In June 2018, the property was sold and the loan was assumed by a new borrower, which paid down the outstand-ing loan balance by 2.5% and repaid past-due franchising fees and trade paya-bles. The first modification converted debt service payments to interest-only and extended the loan maturity through June 2021. The new borrower was also required to pay down the loan by an additional 2.5% by Dec. 31, 2019, but the payment was not made. The property remains open for business as of September 2021. As of the TTM June 2021 STR report, the hotel reported an occupancy, ADR and RevPAR of 22.6%, $89.92, and $20.29, respectively, compared with 23.8%, $108.26, and $25.72 as of YE 2020 and 69.7%, $118.66, and $82.71 as of TTM August 2019. The hotel's TTM June 2021 penetration ratios for occupancy, ADR, and RevPAR were 56%, 119.5%, and 66.9%, respectively. The property's franchise agreement with Marriott expires in December 2023, with one 10-year renewal option. The hotel underwent a $21 million renovation in 2016 that was completed in January 2017 and included the addition of a Mar-riott Rewards Club Lounge, four new guest rooms, new bedding and furnishings, guest room refrigerators, and modernized elevators. The borrower also spent more than $2 million between June 2018 and June 2020 to renovate and upgrade rooms, common areas, mechanics, and amenities. The transaction has not received any principal paydown since the July 2018 re-mittance. As of the September 2021 distribution date, the pool's aggregate principal balance has been reduced by 97.2% to $69.9 million from $2.5 billion at issuance. Realized losses to date totaled 8.5% of the original pool bal-ance. Interest shortfalls totaling $13.5 million are currently affecting clas-ses B through S. MARTIN FINANCIAL: Seeks to Hire Kelley & Clements as Legal Counsel ------------------------------------------------------------------ Martin Financial, LLC seeks approval from the U.S. Bankruptcy Court for the Middle District of Georgia to employ Kelley & Clements, LLP to serve as legal counsel in its Chapter 11 case. The firm's services include: a. providing substantive and strategic advice on how to accomplish the Debtor's goals in connection with the prosecution of its bankruptcy case; b. advising the Debtor of its obligations, duties and rights under the Bankruptcy Code; c. preparing legal documents, including the Debtor's Chapter 11 plan and disclosure statement; d. appearing in court and at any meeting with the U.S. trustee and creditors; e. performing various services to administer the case, including, without limitation, (i) preparing motions, certifications of counsel, notices of fee applications, motions and hearings, and hearing binders of documents and pleadings, (ii) monitoring the docket for filings, (iii) monitoring pending applications, motions, hearing dates, and other matters and the deadlines associated therewith, (iv) handling inquiries regarding pending matters and the general status of the case; and (v) providing notice to parties in interest in compliance with the court's direction; f. interacting and communicating with the court's chambers and clerk's office; and g. performing all other necessary services. The firm's hourly rates are as follows: Charles N. Kelley, Jr., Partner $415 per hour Jonathan D. Clements, Partner $250 per hour Tammy A. Winkler, Paralegal $135 per hour As disclosed in court filings, Kelley & Clements is a "disinterested person" as that phrase is defined in Section 101(14) of the Bankruptcy Code. The firm can be reached through: Charles N. Kelley, Jr., Esq. Kelley & Clements LLP PO Box 2758 Gainesville, GA 30503 Phone: (770) 531-0007 Email: ckelley@kelleyclements.com About Martin Financial LLC Martin Financial, LLC filed a petition for Chapter 11 protection (Bankr. M.D. Ga. Case No. 21-30495) on Oct. 1, 2021, listing up to $50,000 in assets and up to $100,000 in liabilities. Charles N. Kelley, Jr., Esq., at Kelley & Clements, LLP represents the Debtor as legal counsel. MATADOR RESOURCES: Fitch Gives FirstTime 'B+' IDR, Outlook Stable ----------------------------------------------------------------- Fitch Ratings has assigned first-time Long-Term Issuer Default Ratings (IDRs) of 'B+' with Stable Rating Outlooks to Matador Resources Company (MTDR) and MRC Energy Company. Fitch has also assigned issue-level ratings of 'BB+'/'RR1' to MRC's senior secured reserve-based lending (RBL) credit facility and a 'BB-'/'RR3' rating to MTDR's senior unsecured notes. Matador's ratings reflect its high margin, oil-weighted Delaware acreage, supportive midstream assets at San Mateo that reduce transportation and marketing costs, improving unit economics via drilling efficiencies and strong netbacks. Fitch expects management's four-rig drilling program to generate meaningful FCF in the near term, which supports further repayment of the RBL and deleveraging toward 1.5x in 2022. These factors are partially offset by uncertainty around long-term economic inventory life extension, maintenance of currently strong unit economics outside of the company's 'A+' locations, its more prospective acreage position in the northern part of the Delaware basin and exposure to federal lands. KEY RATING DRIVERS Delaware-Focused Asset Base: Matador's asset profile consists of approximately 121,000 net acres in the Delaware basin split between Eddy and Lea counties in New Mexico and Loving County, Texas in addition to smaller non-core acreage positions in the Eagle Ford (25,700 net acres) and Haynesville (17,700 net acres). The company's Delaware acreage has relatively high oil exposure (approximately 57% as of 2Q21), is largely held by production (HBP) and supports two-mile laterals across a majority of drilling locations. Approximately 29% of the acreage is on federal lands; however, approximately 75% of this acreage is HBP, and almost all of the remaining acreage is not subject to expiration before 2028. The asset profile supports Matador's FCF-focused strategy in the medium term, but its northern acreage in Twin Lakes and Ranger remains more prospective and requires further de-risking. Supportive Midstream Assets: Matador's midstream joint venture assets at San Mateo provide both operational benefits through overall reduced transportation costs and lower marketing fees in addition to performance incentives from partner Five Point Energy LLC. The San Mateo assets offer 460 MMcf/d of gas processing capacity, 335 Mbbl/d of water disposal capacity and oil gathering and transportation systems which covers much of Matador's Delaware acreage. Matador has received approximately $76 million in performance incentives to date ($31.9 million in 1H21) from Five Point and continues to meet threshold requirements to earn up to an additional $150 million of incentives through 2024, which supports the FCF and liquidity profiles. Four-Rig Drilling Program: Fitch believes Matador's four-rig drilling program will generate modest production growth momentum and positive FCF through the rating horizon. Total production averaged 93.2 thousand barrels of oil equivalent per day (mboepd) in 2Q21 following increased drilling activity and 13 Voni wells turned to sales on the company's Stateline acreage. Management has primarily targeted Wolfcamp A and the lower Bone Spring intervals with 160-acre spacing and continues to see strong results. Fitch expects continued operational momentum as an additional 26 wells will turn to sales in Stateline and the Greater Stebbins Area in 2H21 and believes management will drill several more wells in the Rodney Robinson part of its Antelope Ridge acreage starting in 3Q21. Drilling Efficiency and Cost Improvements: Matador expects nearly all of its operated wells turned to sales will be two miles or longer, which, combined with management's use of multi-well pads, is driving significant improvements in drilling and completion (D&C) capex per foot. Matador's D&C capex/ft averaged approximately $615 in 2Q21 and has significantly improved since 2020 when it averaged $850/foot with an average lateral length of 8,800 feet. Management has indicated that drilling and completion costs are likely to increase in 2H21 given higher diesel, steel and proppant prices, but costs still remain competitive at about $695/ft in 2021E based on guidance from management. Positive FCF; Debt Repayment Focus: Fitch forecasts meaningful FCF in the near term at Fitch's price deck with expected capital spending of approximately $600 million in 2021 as Matador reestablishes operational momentum, which will then decline to $550 million in 2022 as growth capex moderates. Management remains focused on reducing debt and has repaid approximately $200 million on its RBL credit facility since the start of the year. Fitch believes management will continue to allocate a majority of FCF toward reducing the outstanding RBL balance ($240 million outstanding as of 2Q21) and that borrowings will be meaningfully reduced by early 2022. Fitch-calculated gross debt/EBITDA is forecast to approach 1.5x in 2022 with growth-linked improvements thereafter. Proactive Hedging Strategy: Fitch believes Matador will remain opportunistic and maintain adequate hedge coverage throughout the rating horizon consistent with historical averages. Matador is currently hedging approximately 65% of its oil and gas production for the remainder of 2021 primarily through collars that provide price upside. Oil hedge coverage in 2022 does drop to approximately 10%, but Fitch believes management may improve coverage to approximately 30% by the start of the year with potential for further increases thereafter. Long-Term Inventory Uncertainty: Fitch believes Matador has sufficient acreage to maintain operational momentum in the medium term, but there is uncertainty around maintenance of unit economics outside of the company's approximately 10 years of 'A+' locations. Management defines its 'A+' locations as those with an average well-level IRR of at least 15% at $30-$40/bbl oil and $2.00/mcf gas prices. Fitch believes well results outside of these locations and its proven Wolfcamp A and lower Bone Spring intervals could vary, and the company may need to redirect or deploy additional capital to further de-risk more prospective intervals or execute M&A to extend economic inventory life over the long term. However, at current commodity prices the number of economic locations expands considerably. DERIVATION SUMMARY Matador's 2Q21 production averaged 93.2 mboepd (57% oil), which is slightly larger than CrownRock L.P (B+/Positive; 82.3 mboepd in 2020) but smaller than SM Energy Company (B/Stable; 136.5 mboepd, 54% oil) and higher-rated Midland operators Endeavor Energy Resources (BB+/Positive; approximately 170 mboepd in 2020) and Diamondback Energy, Inc. (BBB/Stable; 401.4 mboepd, 60% liquids). The company's continued cost reduction efforts and high oil mix have led to strong Fitch-calculated unhedged netbacks of $35.2/boe in 2Q21. This compares favorably to SM Energy ($29.9/boe), primarily driven by SM's higher natural gas cut, is slightly higher than Diamondback ($34.5/boe) but similar to CrownRock and Endeavor. Fitch expects Matador to generate meaningful FCF through 2022. This should support debt repayment and leverage metrics approaching 1.5x by 2022, which is generally consistent with leverage profiles across the Permian peer group. KEY ASSUMPTIONS Fitch's key assumptions within its rating case for the issuer include: -- WTI oil price of $60/bbl in 2021, $52/bbl in 2022 and $50/bbl thereafter; -- Henry Hub natural gas price of $3.40/mcf in 2021, $2.75/mcf in 2022 and $2.45/mcf thereafter; -- Single-digit production growth in 2021 followed by mid-teen growth in 2022; -- Capex of approximately $600 million in 2021 and $550 million in 2022 followed by production-linked spending thereafter; -- Prioritization of forecast FCF toward RBL repayment; -- No material M&A activity. KEY RECOVERY RATING ASSUMPTIONS The recovery analysis assumes Matador would be reorganized as a going-concern in bankruptcy rather than liquidated. Fitch has assumed a 10% administrative claim and a 100% draw on its secured revolving facility. Going-Concern (GC) Approach Matador's going-concern EBITDA assumption reflects Fitch's projections under a stressed case price deck, which assumes WTI oil prices of $32/bbl in 2022, $42/bbl in 2023, and $45/bbl in the long term. The GC EBITDA estimate reflects Fitch's view of a sustainable, post-reorganization EBITDA level upon which it bases the enterprise valuation, which reflects the decline from current pricing levels to stressed levels, and then a partial recovery coming out of a troughed pricing environment. An EV multiple of 3.5x EBITDA is applied to the GC EBITDA to calculate a post-reorganization enterprise value. The choice of this multiple considers the following factors: -- Uncertainty around the medium and long-term sustainability of economic inventory and unit economics given the differentiation among Matador's acreage position within the Delaware basin. Fitch believes the company's northern acreage in the Twin Lakes and Ranger plays remain more prospective than the acreage the company is currently drilling and will potentially require further de-risking. -- The potential for heightened event risk around the company's federal acreage which represents approximately 29% of total acreage. -- The historical bankruptcy case study exit multiples for peer companies ranged from 2.8x to 7.0x, with an average E&P median of 4.4x. Liquidation Approach The liquidation estimate reflects Fitch's view of the value of balance sheet assets that can be realized in sale or liquidation processes conducted during a bankruptcy or insolvency proceeding and distributed to creditors. Fitch considers valuations such as SEC PV-10 and recent M&A transaction valuations for each basin including multiples for production per flowing barrel, proved reserves valuation, value per acre, and value per drilling location. The RBL is assumed to be fully drawn upon default, given the company's borrowing base at $900 million as well as Fitch's expectation that near-term production growth would likely offset some of the risk of price-linked borrowing base reduction. The RBL is senior to the unsecured notes in the waterfall. The allocation of value in the liability waterfall and its priority position results in recovery corresponding to 'RR1' for the senior secured RBL credit facility and 'RR3' for the senior unsecured notes. RATING SENSITIVITIES Factors that could, individually or collectively, lead to positive rating action/upgrade: -- Expansion of economic inventory life and further de-risking of longer-term unit economics; -- Production growth resulting in average daily production above 125 Mboepd; -- Allocation of FCF toward repayment of the RBL; -- Mid-cycle Debt/EBITDA sustained below 2.0x. Factors that could, individually or collectively, lead to negative rating action/downgrade: -- Loss of operational momentum resulting in average production sustained below 85 Mboepd; -- Inability to extend economic inventory life that leads to expectations for weakened unit economics; -- Inability to reduce RBL borrowings that materially erodes the liquidity profile and increases refinance risk; -- Mid-cycle Debt/EBITDA sustained above 2.5x. BEST/WORST CASE RATING SCENARIO International scale credit ratings of Non-Financial Corporate issuers have a best-case rating upgrade scenario (defined as the 99th percentile of rating transitions, measured in a positive direction) of three notches over a three-year rating horizon; and a worst-case rating downgrade scenario (defined as the 99th percentile of rating transitions, measured in a negative direction) of four notches over three years. The complete span of best- and worst-case scenario credit ratings for all rating categories ranges from 'AAA' to 'D'. Best- and worst-case scenario credit ratings are based on historical performance. LIQUIDITY AND DEBT STRUCTURE Improving Liquidity Profile: As of 2Q21, Matador had $45 million cash on hand and $414 million of borrowing capacity under its $700 million RBL ($900 million borrowing base) including $46 million of letters of credit outstanding. The company has repaid approximately $200 million of RBL borrowings since the start of the year and expects further reduction in 2H21. The RBL is subject to a semi-annual borrowing base redetermination and was affirmed at $900 million in April. Clear Maturity Schedule: Matador's maturity schedule remains relatively clear with the RBL and senior notes maturing in 2023 and 2026, respectively. Fitch believes further RBL repayment will reduce refinance risk and should allow for an extension of the facility. ISSUER PROFILE Matador Resources Company is an independent exploration and production company primarily focused in the Delaware Basin in Southwest New Mexico and West Texas. The company also has non-core operations in the Eagle Ford shale play in South Texas, the Haynesville/Cotton Valley in Louisiana and conducts Midstream operations through a midstream joint venture, San Mateo, in support of E&P transportation and water gathering 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. MCAFEE LLC: Fitch Hikes Rating on Secured Credit Facility to 'BB+' ------------------------------------------------------------------ Fitch Ratings has upgraded McAfee, LLC's senior secured credit facility to 'BB+'/'RR1' from 'BB'/'RR2'. The upgrade resulted from Fitch's application of its updated "Corporates Recovery Ratings and Instrument Ratings Criteria." The ratings have been removed from Under Criteria Observation (UCO), where they were placed following the publication of the updated Recovery Rating criteria on April 9, 2021. McAfee completed the divestiture of its enterprise cyber security segment to a Consortium led by Symphony Technology Group and became a pure play consumer cybersecurity company on July 27, 2021. Proceeds from the $4 billion all cash deal will be used to cover transaction fees, pay a special dividend, and pay down $1.0 billion in term loan debt. Fitch believes the loss of scale and revenue diversity from the sale of the Enterprise segment are offset by the deleveraging nature of the transaction and by higher margins and growth rates in the Consumer segment. KEY RATING DRIVERS Recovery Ratings Criteria Update: Instrument ratings and Recovery Ratings (RRs) for McAfee's senior secured ratings are based on Fitch's newly introduced notching grid for issuers with 'BB' category Long-Term IDRs. This grid reflects the outstanding recovery characteristics for similarly ranked instruments. Fitch views McAfee's senior secured revolver and term loans as Category 1 first lien debt, which translates into a two-notch uplift from the IDR of 'BB-' with a Recovery Rating of 'RR1'. Moderate Leverage Profile: Although the sale of the Enterprise segment resulted in the loss of roughly half of revenue and a third of EBITDA, debt prepayments of $1 billion resulted in the transaction being slightly deleveraging. Pro forma for the debt prepayments and using June 30, 2021 earnings, Fitch calculates leverage at 3.49x. Fitch is projecting leverage to trend further downward to 2.9x over the rating horizon, consistent with other 'BB' companies. Narrower Product Focus: Fitch expects the loss of the Enterprise segment to result in a leaner, more focused and higher margin company. Following the divestiture McAfee will lose about half of its revenue base along with a third of EBITDA, but the remaining company will have increased EBITDA margins in the high 40% to low 50% range as well as a higher growth rate. In recent years high growth and margins at the Consumer segment have been held back by underperformance in the Enterprise segment. Although scale and revenue diversity will decrease substantially following transaction Fitch believes this is offset by the stronger operating profile of the new company, which will be better able to focus on its core growth areas. IT Security Threats Increasingly Complex: IT security threats have evolved from PC-centric to mobile devices, networks, and user identities. The evolving threats enable a continuous stream of niche solutions to develop, addressing threats beyond the traditional PC-centric security to protect users, data and networks at various levels of the internet. While some of these solutions were developed by legacy cybersecurity providers, many were created by suppliers with narrow expertise. McAfee recently has placed an increased emphasis on providing security to mobile devices in order to align its product offerings to modern computing habits. Reliance on Channel Partners: McAfee relies on channel partnerships as a key part of their go-to-market strategy, notably signing a five-year global agreement to provide consumer security on ASUS PC product as well as renewing a deal to sell security products on Costco. The loss of, or failure to sign new channel partners, could result in growth headwinds for McAfee. Fragmented Industry: The cyber security market is highly fragmented with a high number of smaller providers continuing to remain relevant by providing niche solutions to emerging threats. McAfee benefits from a positive brand reputation as well as key channel partnerships to maintain share in fragmented market. Additionally, Fitch believes that the high number of smaller providers offers a wealth of acquisition targets for a competitor of McAfee's size. DERIVATION SUMMARY McAfee's 'BB-' rating is supported by consistently positive FCF, adequate liquidity and pro forma gross leverage of 3.49x. Fitch expects the company to maintain EBITDA margins in the high-40% range following the divestiture of the Enterprise segment. Fitch believes the remaining company will have a similar operational profile to pure play consumer cybersecurity peer NortonLifeLock, Inc. (BB+/Stable) following the divestiture although the leverage profile is expected to remain elevated over the rating horizon. Although McAfee is expected to significantly increase margins and revenue growth following the transaction, potential execution risks, decreased scale, and decreased revenue diversity are offsetting factors. KEY ASSUMPTIONS -- Transaction results in double digit revenue declines in 2021 and 2022 as the company experiences a half year and full year without Enterprise segment revenues, respectively; -- EBITDA margins increase to high-40% range following the divestiture; -- FCF margins increase to low-30% range following the divestiture; -- $1 billion in debt prepayments in 2021; -- $2.5 billion special dividend in 2021 along with $500 million in transaction expenses in 2021; -- No substantial acquisitions over the rating horizon. RATING SENSITIVITIES Factors that could, individually or collectively, lead to positive rating action/upgrade: -- Fitch's expectation of Gross Leverage as estimated by Total debt with Equity Credit/Operating EBITDA below 3.5x; -- Fitch's expectation of sustained market share growth resulting in material accretive ARPC gains. Factors that could, individually or collectively, lead to negative rating action/downgrade: -- Fitch's expectation of Gross Leverage as estimated by Total Debt with Equity Credit/Operating EBITDA above 4.5x; -- Fitch's expectation of sustained market share loss resulting in ARPC erosion. 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 Current liquidity at McAfee consists of $660 million in revolver availability as well as $416 million in available cash. As of June 26, 2021, debt at the company consists of a $164 million revolver due 2022 with no current borrowings, a $500 million revolver maturing 2024 with no current borrowings, a $3,179 million first-lien term loan due September 2024, with $2,690 million outstanding, a EUR 1,073 term loan due September 2024 with $1,269 equivalent in Euros outstanding using June 26, 2021 exchange rates. The company's USD denominated first lien debt accrues interest at L + 375 and the company's first lien EUR debt accrues interest at E + 350. The first lien term loans amortize at a rate of 1% of principal annually, payable quarterly. McAfee is in the process of applying proceeds from the sale of its Enterprise segment to $1 billion in debt prepayments. ISSUER PROFILE McAfee is a provider of cybersecurity software that derives revenue from the sale of security products, subscriptions, software as a service, support and maintenance, professional services, primarily through indirect relationships with original equipment manufacturers or direct sales to customers. The company remains one of the world's largest pure-play cyber-security providers. 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. MCCLATCHY CO: Borello Test Should Be Used in Carriers' Class Suit ----------------------------------------------------------------- An appeal arose from a class action brought by and on behalf of newspaper home delivery carriers for The Fresno Bee newspaper. In the trial court, the matter proceeded to a bifurcated bench trial on the issue of whether the owner of The Fresno Bee and its holding company, respectively, The McClatchy Company and McClatchy Newspapers, Inc., violated the unfair competition law by failing to pay the carriers' mileage expenses as required by Labor Code section 2802. The primary issue at trial was whether the carriers were employees or independent contractors. The trial court determined the carriers were independent contractors and, as a result, entered judgment in favor of The Bee. On appeal, the carriers contend (1) the trial court misallocated the burden of proof; (2) the trial court erred in relying on a regulation promulgated by the Employment Development Department (EDD), which the carriers contend is irrelevant; (3) the trial court erred in its application of the relevant test, as set out in S. G. Borello & Sons, Inc. v. Department of Industrial Relations (1989) 48 Cal.3d 341, (4) under Borello, the carriers are employees; (5) the trial court erred in relying on equitable considerations to determine The Bee's liability; and (6) the trial court improperly relied on testimony from unrepresentative class members. In supplemental briefing, the carriers additionally argue the test for employment set out in Dynamex Operations West, Inc. v. Superior Court (2018) 4 Cal.5th 903 applies, and the carriers are employees under that test. The Court of Appeals of California, Fifth District, agreed that the question of whether the carriers are employees or independent contractors must be determined under the Borello test. As such, the trial court erred in deferring to the EDD regulations, which the appeals court concluded are inapplicable. The appeals court also held that, ultimately, the trial court also failed to properly analyze the factors required by Borello, and therefore the lower court's decision must be reversed. The appeals court, however, declined to resolve whether the carriers are employees or independent contractors, and instead remanded for the trial court to address this question. The appeals case is VERONICA BECERRA et al., Plaintiffs and Appellants, v. THE McCLATCHY COMPANY et al., Defendants and Respondents, No. F074680 (Cal. App.). A full-text copy of the Opinion dated Sept. 30, 2021, is available at https://is.gd/tBUdiP from Leagle.com. Callahan & Blaine, Daniel J. Callahan, Esq. -- dcallahan@callahan-law.com -- Michael J. Sachs, Esq. -- msachs@callahan-law.com -- and Scott D. Nelson, Esq. -- snelson@callahan-law.com -- for Plaintiffs and Appellants. Lewis Brisbois Bisgaard & Smith, Allison Arabian and John S. Poulos, Esq. -- John.Poulos@lewisbrisbois.com -- Law Offices of William C. Hahesy and William C. Hahesy; Perkins Coie, Eric D. Miller and Jill L. Ripke, Esq. -- JRipke@perkinscoie.com -- Pillsbury Winthrop Shaw Pittman and Derek M. Mayor for Defendants and Respondents. About McClatchy Co. The McClatchy Co. -- https://www.mcclatchy.com/ -- is an American publishing company. On Feb. 13, 2020, The McClatchy Company and 53 affiliates sought Chapter 11 protection (Bankr. S.D.N.Y. Lead Case No. 20-10418) with a Plan of Reorganization that will cut $700 million of funded debt in half. McClatchy was estimated to have $500 million to $1 billion in assets and debt of at least $1 billion as of the bankruptcy filing. The Honorable Michael E. Wiles presided over the cases. The Debtors tapped Skadden, Arps, Slate, Meagher & Flom LLP as general bankruptcy counsel; Togut, Segal & Segal LLP as co-bankruptcy counsel with Skadden; Groom Law Group as special counsel; FTI Consulting, Inc. as financial advisor; and Evercore Inc. as investment banker. Kurtzman Carson Consultants LLC is the claims agent. The Debtors won confirmation of their bankruptcy-exit plan on September 25, 2020. The case has been renamed In re JCK Legacy Company et al. MCK USA 1: Seeks to Hire Related ISG Realty as Broker ----------------------------------------------------- MCK USA 1, LLC seeks approval from the U.S. Bankruptcy Court for the Southern District of Florida to hire Related ISG Realty to sell or secure a lease for its real property in Miami. Related ISG Realty will be compensated as follows: a. The broker's fee is contingent upon procurement of an appropriate tenant, and upon such, Related ISG Realty is entitled to a fee of (i) 10 percent of the gross value of the lease if the tenant does not have its own broker; or (ii) 10 percent of the gross value of the lease if the tenant does have its own broker, to be split as 5 percent to each broker. b. The broker's fee is contingent upon sale of the property, which would not be made until the closing specified in the sales contract: (i) 6 percent of the total purchase price if the buyer does not have its own broker; or (ii) 6 percent of the purchase price if the buyer has its own broker, to be split as 3 percent to each broker. As disclosed in court filings, Related ISG Realty does not hold interests adverse to the Debtor's bankruptcy estate. The firm can be reached through: Bruno Baiao Related ISG Realty 2875 NE 191st Street, Suite 200 Aventura, FL 33180 Mobile: 786-201-6117 Office: 305-932-6365 Email: aguabruno@gmail.com About MCK USA 1 LLC MCK USA 1, LLC, a Miami, Fla.-based company engaged in renting and leasing real estate properties, filed its voluntary petition for Chapter 11 protection (Bankr. S.D. Fla. Case No. 21-18197) on Aug. 24, 2021, listing $2 million in assets and $2.29 million in liabilities. Mario Peixoto, company owner, signed the petition. Judge Robert A. Mark presides over the case. Adina Pollan, Esq., at Pollan Legal serves as the Debtor's legal counsel. MEADE INSTRUMENTS: Sheppard Mullin Agrees to Pay $4.45 Million -------------------------------------------------------------- Daniel Gill of Bloomberg Law reports that telescope manufacturer Meade Instruments Corp. and Sheppard, Mullin, Richter & Hampton LLP reached a $4.45 million settlement over claims stemming from an antitrust lawsuit that ultimately led to Meade's bankruptcy. Meade's competitor, Orion Telescopes and Binoculars, won a $16 million jury verdict against Meade and its affiliates in 2019. Meade faced total liability in excess of $50 million once treble damages were applied. But the company, which received court approval of its bankruptcy plan in April 2021, filed Chapter 11 before a federal district court in California could enter final judgment. Sheppard Mullin Richter & Hampton, LLP ("SMRH"), Michael Scarborough, Leo D. Caseria, Dylan Ballard, and Will Chuchawat previously represented Meade Instruments Corp. beginning in or about November 2016, including providing advice to Meade and on Meade's behalf in a litigation entitled Optronic Technologies, Inc. v. Ningbo Sunny Electronic Co., et al., Case No. 5:16-cv-06370-EJD ("Antitrust Litigation"), in the United States District Court for the Northern District of California (San Jose Division) (the “District Court”) and in matters related thereto. They also represented Debtor’s co-defendants in the Antitrust Litigation, Ningbo Sunny Electronic Co., Ltd. ("Ningbo Sunny") and Sunny Optics, Inc. ("Sunny Optics"). Sunny Optics is the 100% shareholder of Meade. Peter (Wenjun) Ni is the CEO of Sunny Optics, and is the CEO of Ningbo Sunny. Ningbo Sunny is the parent of Sunny Optics. Sunny Optics is a holding company with its sole asset being the 100% ownership of Meade. In November 2019, a jury in the Antitrust Litigation issued a verdict against the Debtor and its co-defendants. Meade's competitor, Orion Telescopes and Binoculars, won a $16 million jury verdict against Meade and its affiliates. In December 2019, Meade and Sunny Optics filed a voluntary petition for relief under Chapter 11 of title 11 of the United States Code. The Debtor paid some, but not all, of the fees and costs of SMRH in connection with the Representation. On April 16, 2020, SMRH filed a proof of claim -- Claim No. 30 -- in the Meade Bankruptcy Proceeding in which it asserted a claim of $2,686,410 for unpaid fees and costs. In its amended bankruptcy schedules filed on April 16, 2020 and in a further amended schedule A/B filed on Dec. 4 2020, the Debtor identified potential claims against SMRH as an asset of Meade's bankruptcy estate. Meade believed that it had claims against SMRH, et al., for, including but not limited to, legal malpractice, breach of fiduciary duty, fraudulent transfers and preference payments. As a result of Mediation, Broadway Advisors, LLC (the plan agent for the Debtors) and SMRH agreed to settle and resolve all disputes. In consideration of the mutual general releases and covenants not to sue, SMRH shall (1) file a notice of withdrawal of the SMRH Proof of Claim; and (2) pay Meade Instruments Corp. $4,450,000 by wire transfer, which wiring instructions shall be provided separately to SMRH's counsel. The Plan Agent has carefully performed a cost-benefit analysis in weighing the benefit of the settlement against the prospects of proceeding with the litigation, and has concluded that the settlement presents a fair and reasonable resolution to the litigation. The settlement results in funds flowing into the estate that will be available for distribution under the Plan, and will likewise put the Plan Agent in a position to seek the entry of a final decree closing the case. About Meade Instruments Corp. Meade Instruments Corp. designs and manufactures optical products, including telescopes, cameras, binoculars, and sports optics products. Meade Instruments Corp. filed a voluntary petition for relief under Chapter 11 of the Bankruptcy Code (Bankr. C.D. Cal. Case No. 19-14714) on Dec. 4, 2019. In the petition signed by Victor Aniceto, president, the Debtor was estimated to have $10 million to $50 million in both assets and liabilities. Marc C. Forsythe, Esq., at Goe Forsythe & Hodges LLP, is the Debtor's legal counsel. Sall Spencer Callas & Krueger, a Law Corporation, and Parker Mills LLP, each serves as co-special litigation counsel. On Dec. 4, 2020, the Bankruptcy Court entered an order approving the Debtor’s employment of Sall Spencer Callas & Krueger, a Law Corporation and Parker Mills, LLP * * * In or around February 2021, a First Amended Plan of Reorganization for Meade was proposed by the Official Committee of Unsecured Creditors in the Meade Bankruptcy Proceeding, which Plan was confirmed by the Bankruptcy Court by order entered on or about May 4, 2021 and which became effective on June 1, 2021. The Plan became effective on June 1, 2021. MORGAN STANLEY 2013-C10: Fitch Lowers Class H Certs Rating to 'C' ----------------------------------------------------------------- Fitch Ratings has downgraded five and affirmed 11 classes of Morgan Stanley Bank of America Merrill Lynch Trust, commercial mortgage pass-through certificates, series 2013-C10 (MSBAM 2013-C10). DEBT RATING PRIOR ---- ------ ----- MSBAM 2013-C10 A-3 61762MBV2 LT AAAsf Affirmed AAAsf A-3FL 61762MAW1 LT AAAsf Affirmed AAAsf A-3FX 61762MAY7 LT AAAsf Affirmed AAAsf A-4 61762MBW0 LT AAAsf Affirmed AAAsf A-5 61762MCC3 LT AAAsf Affirmed AAAsf A-S 61762MBY6 LT AAAsf Affirmed AAAsf A-SB 61762MBU4 LT AAAsf Affirmed AAAsf B 61762MBZ3 LT Asf Downgrade AA-sf C 61762MCB5 LT BBBsf Affirmed BBBsf D 61762MBC4 LT B-sf Downgrade BBsf E 61762MBE0 LT CCCsf Downgrade Bsf F 61762MBG5 LT CCCsf Affirmed CCCsf G 61762MBJ9 LT CCsf Downgrade CCCsf H 61762MBL4 LT Csf Downgrade CCsf PST 61762MCA7 LT BBBsf Affirmed BBBsf X-A 61762MBX8 LT AAAsf Affirmed AAAsf Classes X-A is IO. The exchangeable class PST can be exchanged for classes A-S, B, and C. KEY RATING DRIVERS Increased Certainty of Loss: The downgrades are based on the increasing certainty of loss on the specially serviced loans, particularly Westfield Citrus Park and the Mall at Tuttle Crossing. There is a substantial concentration of Fitch Loans of Concern (48% of the pool), including five specially serviced loans (23.7%). Fitch's current ratings reflect a base case loss of 10.6%. The Negative Rating Outlooks reflect losses that could reach 12.3% after factoring in potential outsized losses on the specially serviced malls as well as the overall impact of the pandemic on the pool. The largest contributor to loss is the specially serviced Westfield Citrus Park loan (10% of the pool). The loan transferred to special servicing in July 2020 due to imminent default after missing its May 2020 debt service payment. The sponsor, Westfield Group, has been cooperating with a friendly foreclosure. A consensual foreclosure and receiver motion was filed in December 2020 with a receivership order entered in January 2021. All rents are being captured through a cash trap. The loan is secured by a 494,189-sf portion of a 1.0 million-sf regional mall located in Tampa, FL. The mall is anchored by non-collateral Dillard's, Macy's and JCPenney. A dark non-collateral former Sears is reportedly being redeveloped as a multipurpose entertainment center. The largest collateral tenants include Regal Cinemas and Dick's Sporting Goods. TTM June 2021 comparable in-line sales were approximately $120psf compared to $379psf at YE 2019, and $378psf at issuance (TTM April 2013). The 20-screen Regal Cinemas, which reopened in May 2021 after closing in October 2020 due to COVID, had reported sales of $292,100/screen in 2019, compared to $365,400/screen in 2017 and $407,050/screen in 2016. Three other regional mall properties are located in the same trade area and within 13 miles of the subject property. The main competition is Westfield Countryside, which is also undergoing a friendly foreclosure, a 1.3 million-sf mall located 13 miles southwest from the subject property in Clearwater, FL, and managed by Westfield. Three of the anchors, Dillard's, Macy's and JCPenney, overlap with the subject property. The mall also has a Whole Foods. International Plaza and Westshore Plaza are both located approximately 11 miles southeast of the subject. International Plaza, which is managed by Taubman and targets shoppers in a higher price segment, is a 1.2 million-sf mall anchored by Nordstrom, Dillard's and Neiman Marcus. Westshore Plaza, which is managed by Washington Prime Group, is a 1.1 million-sf mall with overlapping anchors, Macy's, JCPenney, Dick's Sporting Goods and a dark former Sears. Fitch modeled a 46% loss in its base case which implies an approximate 15% cap rate to YE 2019 NOI. Due to potential further volatility, an additional sensitivity was performed, which assumed a potential outsized loss of 60% on the loan's maturity balance, which implies an approximate 20% cap rate on 2019 NOI. The next largest contributor to loss is the Southdale Center loan (7.1%), which is secured by 634,880-sf portion of a 1.2 million-sf mall located in Edina, MN. Former collateral anchor Herberger's closed in August 2018, as part of Bon-Ton's bankruptcy proceedings. JCPenney, a non-collateral anchor, closed in June 2017, leaving only one anchor, Macy's, open at the mall. Per the March 2021 rent roll, collateral occupancy was 48% with total mall occupancy at 65%. The servicer reported YE 2020 NOI DSCR was 1.51x. Despite the dark anchor spaces, the sponsor, Simon Property Group, has undertaken an extensive redevelopment plan at the property. The former JCPenney was demolished and replaced by a 120,000-sf Life Time Fitness and approximately 35,000sf of office space, completed in late 2019. Additional development on outparcels includes a 146-key Homewood Suites that opened in September 2018; a four-story Restoration Hardware showroom; a 3,800 sf Shake Shack; and a 232-unit multifamily property that opened in July 2015. Fitch's modeled loss of 23% reflects an implied cap rate of 13.5% on YE 2019 NOI. The third largest contributor to loss is the specially serviced Mall at Tuttle Crossing loan (2.2%), which is secured by a 385,057-sf portion of a 1.1 million sf regional mall located in Dublin, OH. The loan transferred to special servicing in July 2020; in August 2020 the sponsor, Simon Property Group, disclosed that they plan to return the collateral to the lender. The non-collateral anchors include Macy's, JCPenney, Scene 75, and a dark former Sears. Comparable in-line tenant sales were $299 psf in 2019, compared to $324 in 2018, $337 psf in 2017 and $365 psf in 2016. Fitch's modeled loss of 53% in the base case implies an approximate 20% cap rate on YE 2019 NOI. An additional sensitivity was performed, assuming an outsized loss of 65% on the loan's maturity balance. This additional sensitivity implies an approximate 30% cap rate on YE 2019 NOI. Minimal Change to Credit Enhancement (CE), Significant Defeasance: As of the August 2021 distribution date, the pool's aggregate principal balance has paid down by 16.5% to $1.24 billion from $1.5 billion at issuance. Eight loans (14.8%) have been defeased. Six loans (21.7% of the pool) are full-term interest only while all other performing loans are amortizing. All loans are scheduled to mature or have an ARD by July 2023 (96.2%) or 2028 (3.8%). Alternative Loss Considerations: Fitch's analysis included an additional sensitivity scenario that assumed potential outsized losses of 60% and 65%, respectively, on the current balances of the Westfield Citrus Park and Mall at Tuttle Crossing loans. This additional sensitivity scenario contributed to maintaining the Negative Outlooks on classes A-S through D. RATING SENSITIVITIES Factor that could, individually or collectively, lead to negative rating action/downgrade: -- The senior AAA classes are unlikely to be downgraded given the substantial CE and significant defeasance, but could be downgraded should they suffer interest shortfalls. Class A-S through D are subject to downgrade should overall loss expectations increase, in particular, on the loans secured by regional malls. The distressed classes E and below are subject to further downgrade should additional loans transfer to special servicing or should losses be realized or become more certain on specially serviced loans. Factor that could, individually or collectively, lead to positive rating action/upgrade: -- Upgrades to classes B through C would only occur with significant improvement in CE and/or increased defeasance, but would be limited while Westfield Citrus Park and the Mall at Tuttle Crossing remain in special servicing. Classes would not be upgraded above 'Asf' if there is a likelihood of interest shortfalls. Upgrades to classes D and below are considered unlikely unless the specially serviced loans liquidate with recoveries well above expectations. BEST/WORST CASE RATING SCENARIO International scale credit ratings of Structured Finance transactions have a best-case rating upgrade scenario (defined as the 99th percentile of rating transitions, measured in a positive direction) of seven 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 seven notches over three years. The complete span of best- and worst-case scenario credit ratings for all rating categories ranges from 'AAAsf' to 'Dsf'. Best- and worst-case scenario credit ratings are based on historical performance. USE OF THIRD PARTY DUE DILIGENCE PURSUANT TO SEC RULE 17G -10 Form ABS Due Diligence-15E was not provided to, or reviewed by, Fitch in relation to this rating action. ESG CONSIDERATIONS MSBAM 2013-C10 has an ESG Relevance Score of '4' for Exposure to Social Impacts due to the exposure to the sustained structural shift in secular preferences affecting consumer trends, occupancy trends, etc., which has a negative impact on the credit profile, and is relevant to the rating[s] in conjunction with other factors. Unless otherwise disclosed in this section, the highest level of ESG credit relevance is a score of '3'. This means ESG issues are credit-neutral or have only a minimal credit impact on the entity, either due to their nature or the way in which they are being managed by the entity. NEUBASE THERAPEUTICS: Signs Separation Agreement With CFO --------------------------------------------------------- NeuBase Therapeutics, Inc. and Sam Backenroth, the company's chief financial officer, entered into a separation agreement and general release dated Sept. 30, 2021, pursuant to which the CFO is entitled to (i) the continuation of his current monthly base salary of $31,750 for a period of six months, (ii) immediate vesting of Mr. Backenroth's stock option grant dated July 12, 2019 covering 772,923 shares of the company's common stock, and (iii) an extension of Mr. Backenroth's post-termination exercise period of his outstanding stock options that are vested as of his last date of employment to March 31, 2024. The separation agreement includes a customary release of claims by Mr. Backenroth in favor of the company and its affiliates as well as a provision limiting the number of shares of the company's common stock that may be sold by Mr. Backenroth on a daily basis through June 30, 2024, unless authorized by the company. On Aug. 10, 2021, Mr. Backenroth notified NeuBase of his intent to resign from the company, effective Sept. 30, 2021. Mr. Backenroth's resignation is not a result of any disagreement with NeuBase or any matter relating to its accounting or financial policies or procedures, according to the company. About NeuBase Therapeutics NeuBase Therapeutics, Inc. -- http://www.neubasetherapeutics.com-- is a biotechnology company focused on developing next generation therapies to treat rare genetic diseases and cancers caused by mutant genes. The Company's modular peptide-nucleic acid antisense oligo platform which outputs "anti-gene" candidate therapies is designed to combine the specificity of genetic sequence-based target recognition with a modularity that enables use of various in vivo delivery technologies to enable broad and also selective tissue distribution capabilities. Neubase Therapeutics reported a net loss of $17.38 million for the year ended Sept. 30, 2020, compared to a net loss of $26.13 million for the year ended Sept. 30, 2019. As of June 30, 2021, the Company had $69.32 million in total assets, $9.04 million in total liabilities, and $60.28 million in total stockholders' equity. NEXTERA ENERGY: Fitch Affirms 'BB+' LT IDRs, Outlook Stable ----------------------------------------------------------- Fitch Ratings has affirmed the Long-Term Issuer Default Ratings (IDRs) of NextEra Energy Partners, LP (NEP) and its subsidiary, NextEra Energy Operating Partners, LP (NEP Opco) at 'BB+' with a Stable Rating Outlook. Due to strong legal ties, the IDRs of the two entities are the same. Fitch has also affirmed the 'BB+'/'RR4' rating for the senior unsecured notes at NEP Opco. The 'RR4' denotes average recoveries in an event of default. The senior unsecured notes are absolutely and unconditionally guaranteed by NEP. The notes also have an upstream guarantee from NextEra Energy US Partners Holdings, LLC (US Holdings), which is a subsidiary of NEP Opco. US Holdings is the borrower on the revolving credit facility, which is guaranteed by NEP Opco. NEP's ratings are driven by relatively stable cash flows generated by its portfolio of long-term contracted wind, solar and natural gas pipeline assets and sponsor affiliation with NextEra Energy, Inc. (NextEra; A-/Stable). Fitch expects NEP's Holdco FFO leverage ratio to range between 3.7x-4.3x over 2021-2023. NEP's ratings also reflect an above-peer 12%-15% distribution growth target and the structural subordination of Holdco debt to limited recourse project debt financings, tax equity and convertible equity portfolio financings (CEPFs). KEY RATING DRIVERS Contractual Cash Flows and Asset Diversity: Fitch favorably views NEP's portfolio of wind, solar and natural gas pipeline assets, which have long-term offtake arrangements with creditworthy counterparties and minimal exposure to either volumetric or commodity risks. As of Dec. 31, 2020, the renewable energy and pipeline projects had a total weighted average remaining contract term of approximately 15 years. The distributions that NEP receives from its project subsidiaries are well diversified by fuel and geography. As of September 2021 and including the portfolio recently acquired from Brookfield Renewable, the distributions are split as approximately 57% from wind assets, 21% from solar and 22% from natural gas pipeline assets based upon 2021 run rate project level cash available for distribution (CAFD). The high proportion of wind in NEP's portfolio is of modest concern given intermittency of the wind resource. As an example, poor wind resource in the second quarter of 2021 led to modestly weaker financial results. However, a wide geographic footprint of its wind portfolio mitigates NEP's exposure somewhat. Overall, the portfolio derives 38% of its CAFD from Western U.S., 15% from Midwest, 16% from South, 22% from Texas and 9% from Northeastern U.S. The concentration risk of the portfolio has materially decreased as NEP's size and scale has increased. NEP currently operates 59 projects, of which the top five projects (i.e. NET Mexico Pipeline, Meade Pipeline, Genesis solar, Silver State South and Desert Sunlight solar projects) contribute approximately 36% of CAFD. No Impact from Coronavirus and Uri: The pandemic has not had any material impact on NEP's operations and access to capital. NEP's portfolio is under long-term power purchase agreements (PPAs) with minimal volumetric risk. NEP's PPAs counterparties are typically highly creditworthy and have continued to perform as per the offtake agreements during the pandemic. NEP's wind portfolio performed well during winter storm Uri and did not suffer adverse financial outcomes unlike some of its peers. The Texas pipelines also did not experience any major disruption in their operations during the winter storm. Robust Outlook for Wind and Solar Generation: In Fitch's view, the accelerating decarbonization trend in power generation and customer demand for cleaner generation should continue to drive wind and solar generation in the U.S. Renewable generation continues to attract bipartisan support and the recent extension of Production Tax Credits for wind projects that begin construction in 2021 at a rate of 60% is expected to support continued wind development until 2025. If Federal Clean Energy Standard becomes a reality, it could provide a further boost to solar and wind development in the U.S. As a result, NEP should find no scarcity of renewable assets to acquire from third parties or its sponsor, NextEra, which currently has more than 16.7GW of renewables backlog. At the same time, the renewable industry has increasingly become very competitive and equipment costs have increased due to inflation and supply chain issues. Fitch has assumed that future acquisitions by NEP are toward the lower end of 8%-10% implied CAFD yield. However, NEP continues to have a competitive cost of capital, which alleviates Fitch's concern around spread compression. Increased Complexity with CEPF financings: NEP is increasingly reliant upon CEPF to finance its growth and has, since 2018, entered into five such transactions with large institutional investors to raise approximately $3.8 billion in total proceeds. Fitch views CEPFs as an efficient way for NEP to issue equity, layer in equity issuances over time and limit its exposure to any underperformance of the asset portfolio. A competitive cost of capital is critical to fund acquisitions to meet NEP's 12%-15% distribution growth rate target, which is fairly aggressive compared with the growth rate targeted by its peers. However, the increased use of CEPFs has added financial complexity to the organizational structure and makes NEP reliant on the stability of capital markets and strength of its unit price to execute the buyouts in a timely and cost-effective manner. While NEP has the ability to issue non-recourse project debt to fund the investor buyout in cash as a significant amount of assets in the CEPFs are unencumbered, doing so will negatively affect Parent FFO. Fitch believes it will be prudent for management to maintain sufficient headroom in its Holdco leverage metrics to absorb the resulting leverage creep. Slippage in Counterparty Credit Quality: NEP's portfolio of assets consists of long-term contracted projects with credit worthy counterparties. The weighted average counterparty credit is 'BBB-', based upon Fitch and other rating agencies' ratings. However, the average counterparty rating has declined from 'A-' since 2017, which is a concern. The decline has been driven in large part due to the downgrade in ratings for the California investor owned utilities. PG&E and Southern California Edison Company comprise 24% of expected 2021 run rate CAFD. The ratings for Pemex, which comprises 9% of expected 2021 run rate CAFD, have also declined to 'BB-' from 'BBB+' in 2016. Excluding PG&E and Pemex, average counterparty credit quality is 'BBB+'. Metrics in Line: The ratings of NEP and NEP Opco reflect the structural subordination of their debt to the limited recourse debt or tax equity at the project level. The project debt for renewable projects is typically sized to yield a debt service coverage ratio (DSCR) greater than 1.2x and generate a low 'BBB-'/'BBB' rating. The debt typically matures within the expiration date of the long-term contracts on any project. Most recent DSCRs provided to Fitch by NEP indicate that all projects with limited recourse project debt financings are performing well in excess of their DSCR thresholds. Fitch expects Holdco Debt/Parent Only FFO ratio to be in the 3.7x-4.3x range from 2021-2023, which compares favorably with management's target of 4.0x-5.0x. Fitch defines Parent Only FFO as run rate project distributions less Holdco G&A expenses, fee for management service agreement, credit fees and Holdco debt service costs. In its calculation of Holdco debt, Fitch includes all debt held at intermediate holding companies. At present, this adjustment includes $205 million of Holdco financing at STX Holdings as well as a $270 million revolver upon draw, which is expected to fund the cash portion of the buyout for CEPF-4. Fitch assumes NEP will issue non-recourse project debt at the asset level to fund the cash buyout portions of other CEPFs, which is not included in Fitch's Holdco debt calculation. Strong Sponsor Support: NEP benefits from its affiliation with NextEra, which is the largest renewable developer in the U.S. Aside from the drop down of 990MWs at IPO, NEP has purchased approximately 4.0GWs of additional wind and solar assets from NextEra. NextEra has demonstrated other forms of sponsor support such as the structural modification to the Incentive Distribution Rights fee structure executed in the fourth quarter of 2017, which lowered NEP's cost of equity and made future acquisitions more accretive to LP unitholders. NextEra provides to NEP its management, operational and administrative services via various service agreements and also financial management services through a cash sweep and credit support agreement. These agreements will continue to exist subject to the determination by NEP Board. The management service agreement (MSA) between NextEra and NEP has a 20-year contract life and cannot be terminated, except for cause. However, NEP's board will have the ability to oversee the MSA. NEP's Structural tax Advantages: Even though NEP is a C corporation for U.S. federal income tax purposes, it is not expected to pay meaningful federal income taxes for at least 15 years because of NOLs generated through MACRS depreciation benefits. NEP distributions up to an investor's outside basis are expected to be characterized as non-dividend distributions or return of capital for at least the next eight years. This makes NEP competitive to Master Limited Partnerships as a yield plus growth vehicle. DERIVATION SUMMARY Fitch views NEP's ratings to be positively positioned compared to those of Atlantica Sustainable Infrastructure Plc (Atlantica; BB+/Stable) and Terraform Power (TERPO; BB-/Stable) due to favorable geographic exposure, long-term contractual cash flows with minimal regulatory risk, and association with a strong sponsor. These factors more than offset NEP's relative higher leverage, aggressive distribution growth strategy and weaker asset composition owing to a larger concentration of wind assets. All three have strong parent support. Fitch considers NEP best positioned owing to NEP's association with NextEra, which is the largest renewable developer in the U.S. This provides visibility to NEP's LP distribution per unit growth targets, which at 12%-15% are more aggressive than those of Atlantica's (5%-8%). TERPO has been taken private and is no longer subject to public growth targets. TERPO benefits from having Brookfield Asset Management (BAM; A-/Stable) as a sponsor. Algonquin Power & Utilities Corp. (BBB/Stable) has 44.2% ownership interest in Atlantica. Atlantica's portfolio benefits from a large proportion of solar generation assets that exhibit less resource variability. In comparison NEP's portfolio consists of a larger exposure to wind MWs. TERPO's utility scale portfolio consists of 41% solar and 59% wind. NEP's concentration in wind is mitigated to certain extent by its diverse geographic footprint. Fitch views NEP's geographic exposure in the U.S. (100%) favorably as compared to TERPO's (68%) and Atlantica's (30%). Atlantica's long-term contracted fleet has a remaining contracted life of 17 years, higher than NEP's 15 years and TERPO's 12 years. NEP's forecasted credit metrics are stronger than TERPO's but weaker than Atlantica's. Fitch forecasts NEP's Holdco debt to Parent Only FFO ratio to be between 3.7x-4.3x over 2021-2023 compared with 6.0x for TERPO and mid-3x for Atlantica. Fitch rates NEP, Atlantica and TERPO based on a deconsolidated approach since their portfolio comprises assets financed using non-recourse project debt or with tax equity. KEY ASSUMPTIONS Fitch's key assumptions within the rating case for the issuer include: -- Fitch has used P50 to determine its rating case production assumption and P90 to determine its stress case production assumption; -- Buyout right exercised with CEPF and NEP to pay 70% of the buyout for CEPF 1, 2 and 4 in common units with the balance paid in cash; -- Acquisition of operational and contracted assets over 2021- 2023 to meet 12% to 15% distribution per unit growth; -- Acquisition CAFD toward the lower end of 8% - 10% range; -- Acquisitions funded with CEPFs and Holdco debt such that target capital structure is maintained; -- Intermediate holding company debt treated as on credit, which includes $205 million at STX Holdings and $270 million non recourse revolving credit facility; -- None of the project debt treated on-credit, which includes Fitch's assumption of future project debt issuances to fund the cash portion of CEPFs buyout. RATING SENSITIVITIES Factor that could, individually or collectively, lead to positive rating action/upgrade: -- The structural subordination of the Holdco debt to the non recourse project debt, tax equity and CEPF CEPFs as well as management's 4.0x-5.0x target Holdco leverage ratio caps the IDR at 'BB+'. Factors that could, individually or collectively, lead to negative rating action/downgrade: -- Growth strategy underpinned by aggressive acquisitions, addition of assets in the portfolio that bear material volumetric, commodity or interest rate risks; -- Material underperformance in the underlying assets that lends variability or shortfall to expected cash flow for debt service; -- Lack of access to equity markets to fund growth that may cast uncertainty regarding NEP's financial strategy; -- Higher than expected use of cash to fund the buyout of investors in CEPFs; -- Distribution payout ratio approaching or exceeding 100%; -- Holdco leverage ratio exceeding 5.0x on a sustainable basis. 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: NEP has a $1.25 billion revolving credit facility that matures in February 2026. The credit facility provides for up to $400 million of LC borrowing capacity. NEP has an accordion in its revolving facility up to a total commitment size of $2.0 billion. The facility provides flexibility for NEP to finance acquisitions partly through revolver borrowings, which can be subsequently termed out through equity and debt capital market issuances. As of June 30, 2021, NEP did not have any amount outstanding under its revolving credit facility. ISSUER PROFILE NEP is a growth-oriented limited partnership that acquires, manages and owns contracted clean energy projects with stable long-term cash flows. As of June 30, 2021, NEP owned a controlling, non-economic general partner interest and a 43% limited partner interest in NEP OpCo and NextEra owned a noncontrolling 57.0% limited partner interest in NEP Opco. Through NEP OpCo, NEP owns a portfolio of contracted renewable generation assets consisting of wind and solar projects, as well as seven contracted natural gas pipeline assets. NEP intends to grow primarily through acquisition of projects either from NextEra or via third-party acquisitions. SUMMARY OF FINANCIAL ADJUSTMENTS Fitch includes debt held at intermediate holding companies in its Holdco debt calculations. 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. NSM TOP HOLDINGS: S&P Alters Outlook to Neg., Affirms 'B' ICR ------------------------------------------------------------- S&P Global Ratings revised its outlook to negative from stable and affirmed its 'B' issuer credit and senior secured debt ratings on NSM Top Holdings Corp. S&P said, "Our negative outlook reflects our belief that near-term challenges, such as higher labor costs and supply chain disruption, could pressure EBITDA margins and cash flows, resulting in elevated adjusted leverage (above 8x) and negative FOCF over an extended period. "Adjusted leverage of about mid-8x as of the 12 months ended June 30, 2021, and negative FOCF of about $7 million in the first half of 2021 suggest a higher risk that the company may not meet our base case forecast, especially with the uncertainty regarding COVID-19. "While we expect order volume and backlog to continue to increase for the remainder of 2021 as patient demand returns for mobility products, the uncertainty about COVID-19 cases due to the delta variant could reduce order volume and impair the company's ability to fulfill the backlog. Resources such as NSM's assistive technology professionals (ATPs) and the supply chain can also potentially be hurt by the pandemic. Acquisitions, such as the company's recent acquisition of the second-largest complex rehabilitation technology (CRT) player in Canada, may partially offset revenue shortfalls due to the slightly extended transaction cycle. We project that the company's S&P Global Ratings' adjusted leverage will be below 8x and FOCF will be negative $10 million for 2021. We believe the negative FOCF is temporary because it includes the pay down of Medicare Advances and deferred taxes." For the 12 months ended June 30, 2021, the company reported revenue of about $510 million (net of bad debt expenses), representing growth of about 6% year over year. Acquisitions account for the bulk of revenue growth because the company has experienced slight same-store decline. Adjusted EBITDA margin has shown improvement every quarter since the fourth quarter of 2020, but remained below pre-pandemic levels. High exposure to government reimbursement, narrow business focus on the CRT market, and supplier concentration remain key risks. NSM generates 57% of revenue from Medicare and Medicaid, which gives limited flexibility to negotiate reimbursement rates. It operates in a relatively small and fragmented CRT market in the U.S. with a limited revenue base of about $510 million (net of bad debt expenses) in the 12-month period ended June 30, 2021. In the CRT segment, NSM assembles and customizes the chairs for patients, but the company does not manufacture wheelchairs and has to rely on third-party suppliers for components, which makes supplier concentration, with NSM's top three suppliers accounting for 55% of its costs, an important factor in our business risk assessment. Industry dynamics are generally favorable, with growth supported by the aging population and nondiscretionary nature of the company's products; its leading market position also provides some competitive advantage. NSM is one of the leading national providers of complex wheelchairs, related products, services, and home access services to end users with permanent ambulatory disabilities. The company benefits from favorable secular growth trends, including the aging population and increasing awareness about wheelchair replacements. In addition, S&P views these products as nondiscretionary for patients with permanent mobility disabilities because they are critical for long-term health and mobility. NSM generates a portion of the revenue from pediatric patients, which provides opportunities for ongoing services. It also generates some revenue from wheelchair replacement, providing good revenue and cash flow predictability. In S&P's view, NSM's large base of skilled ATPs provides some degree of competitive advantage against smaller regional players. These ATPs develop and maintain client relationships and ensure patients are evaluated and fitted appropriately. Its business also depends on the referral relationship an ATP creates, which generates additional revenue for NSM. Environmental, social, and governance (ESG) credit factors for this credit rating change: -- Health and safety The negative outlook reflects prospects that the company's financial metrics, most notably leverage and free operating cash flow, may remain weaker than our base case forecast, especially given the uncertainty caused by COVID-19. S&P could lower the rating if the company sustained leverage above 8x and reported FOCF below $10 million. S&P said, "We could revise the outlook back to stable if we believed the order volume would continue to increase and that the company had sufficient ATP counts and supplies to support those order intakes. In that case, we would expect NSM to continue increasing its EBITDA margin and sustaining S&P Global Ratings' adjusted leverage below 8x. We also expect reported FOCF of at least $10 million-$15 million in 2022, with our belief that it will continue to increase and achieve a sustainable level closer to about $20 million thereafter." OZOP ENERGY: To Sell $30 Million Worth of Securities ---------------------------------------------------- Ozop Energy Solutions, Inc. filed a Form S-3 registration statement with the Securities and Exchange Commission relating to the sale from time to time of common stock, warrants and units in one or more offerings of up to $30 million in aggregate price. The company will provide the specific terms of these securities in supplements to this prospectus. The prospectus supplements will also describe the specific manner in which these securities will be offered and may also supplement, update or amend information contained or incorporated by reference in this prospectus. Ozop may offer these securities in amounts, at prices and on terms determined at the time of offering. The securities may be sold directly, through agents, or through underwriters and dealers. If agents, underwriters or dealers are used to sell the securities, the company will name them and describe their compensation in a prospectus supplement. The company's common stock is currently quoted on the OTC Markets Pink under the symbol "OZSC." On Sept. 30, 2021, the closing price of the common stock as reported was $0.0445 per share. A full-text copy of the prospectus is available for free at: https://www.sec.gov/Archives/edgar/data/1679817/000149315221024363/forms-3.htm About Ozop Energy Solutions Ozop Energy Solutions (http://ozopenergy.com)invents, designs, develops, manufactures, and distributes ultra-high-power chargers, inverters, and power supplies for a wide variety of applications in the defense, heavy industrial, aircraft ground support, maritime and other sectors. The Company's strategy focuses on capturing a significant share of the rapidly growing renewable energy market as a provider of assets and infrastructure needed to store energy. OZOP Energy reported a net loss of $20.48 million for the year ended Dec. 31, 2020, compared to a net loss of $571,595 for the year ended Dec. 31, 2019. As of June 30, 2021, the Company had $9.42 million in total assets, $54.07 million in total liabilities, and a total stockholders' deficit of $44.65 million. Hackensack, New Jersey-based Prager Metis CPA's LLC, the Company's auditor since 2018, issued a "going concern" qualification in its report dated April 15, 2021, citing that as of Dec. 31, 2020, the Company had an accumulated deficit of $21,793,375 and a working capital deficit of $4,604,189. In addition, the Company has generated losses since inception. These factors, among others, raise substantial doubt regarding the Company's ability to continue as a going concern. PARALLAX HEALTH: Appoints Sonia Choi as Interim CEO --------------------------------------------------- Parallax Health Sciences, Inc. executed an executive agreement for the appointment of Sonia Choi as the company's interim chief executive officer effective Sept. 14, 2021, pursuant to a resolution of the board of directors dated Sept. 15, 2021. The executive agreement replaces any other agreement between Ms. Choi and the company or any of its subsidiaries, is for an initial term of one year, and provides a base compensation of $185,000 per annum. It also provides for various performance bonuses, and customary employee benefits, as well as performance-based stock options to purchase shares of the company's common stock at an exercise price of $0.052 for a period of five years from the date of grant, to be granted upon satisfactory completion of performance events. Ms. Choi is a highly experienced executive who combines analytical business strategies with results-driven creativity to identify new opportunities to drive growth. She has played key roles in innovative startup companies, and has launched new initiatives for small e-commerce companies. She has also led successful business development and marketing campaigns for NASDAQ traded companies. In addition, Ms. Choi has assisted several startup companies in securing Series A & Series B funding, and has commanded D&I initiatives in the field of technology. Ms. Choi is a patented inventor within the technology sector, and is experienced in patent monetization and patent portfolio management. She also has a background in the medical field as a licensed PCA caregiver, having provided health care services at Village Care Hospice in New York, as well as in the private sector. Ms. Choi attended Boston University, majoring in Environmental Studies. Parallax believes Ms. Choi is qualified to be the company's interim chief executive officer because of her extensive background and experience in corporate leadership and development. About Parallax Headquartered in West Palm Beach, Florida, Parallax Health Sciences, Inc. -- http://www.parallaxcare.com-- is a healthcare company focused on developing products and services that can provide remote communication, diagnosis, treatment, and monitoring of patients on a proprietary platform. Through its innovative technologies, both patented and patent-pending, the Company's principal mission is to deliver solutions that empower patients, reduce costs, and improve the quality of care. Parallax reported a net loss of $12.87 million for the year ended Dec. 31, 2019. As of Dec. 31, 2019, the Company had $1.36 million in total assets, $11.61 million in total liabilities, and a total stockholders' deficit of $10.25 million. Farmington Hills, Michigan-based Freedman & Goldberg CPAs, the Company's auditor since 2016, issued a "going concern" qualification in its report dated May 15, 2020, citing that the Company has suffered recurring losses from operations, has a net capital deficiency and has significant contingencies that raise substantial doubt about its ability to continue as a going concern. PARETEUM CORP: Incurs $6.6M Net Loss in Quarter Ended March 31 -------------------------------------------------------------- Pareteum Corporation filed with the Securities and Exchange Commission its Quarterly Report on Form 10-Q disclosing a net loss of $6.55 million on $15.47 million of revenue for the three months ended March 31, 2021, compared to a net loss of $9.42 million on $20.06 million of revenue for the three months ended March 31, 2020. As of March 31, 2021, the Company had $52.04 million in total assets, $71.47 million in total liabilities, $25.54 million in redeemable preferred stock, and a total stockholders' deficit of $44.97 million. Since March 31, 2021, the Company received net proceeds of $6.5 million as a result of the issuance of Junior Convertible Notes. Additionally, the Company was notified that the $0.8 million iPass PPP Loan was entirely forgiven. The Company also may sell up to an additional $2.5 million in aggregate principal Junior Convertible Notes under the Junior Convertible Notes Securities Purchase Agreement. The Company reported cash used in operating and investing activities of $7.8 million in the three months ended March 31, 2021 and $14.1 million in the year ended Dec. 31, 2020, after considering the receipt of proceeds from the sale of assets of $12.2 million. As of March 31, 2021, the Company had cash balances available for operations of $2.1 million. Additionally, as of March 31, 2021, the Company's total indebtedness, including the redemption value of the Redeemable Preferred Stock, but excluding lease liabilities, deferred financing costs and debt discounts, was $45.0 million, which was comprised of the principal balances of the Senior Convertible Note of $17.5 million, Junior Convertible Note of $2.4 million, a term loan of $0.2 million, promissory notes of $0.7 million, a related party loan of $0.3 million, the iPass PPP Loan of $0.8 million, and the redemption value of the Redeemable Preferred Stock of $23.1 million. Pareteum said, "In light of our cash position and indebtedness, we believe that we will not have sufficient resources to fund our operations and meet our obligations under our debt instruments for the twelve months following the filing of this Report. Our software platforms require ongoing funding to continue the current development and operational plans and we will continue to expend substantial resources for the foreseeable future in connection with the continued development of our software platforms. These expenditures will include costs associated with research and development activity, corporate administration, business development, and marketing and selling of our services. In addition, other unanticipated costs may arise. As a result, we believe that additional capital will be required to fund our operations and provide growth capital to meet our obligations under the Senior Convertible Note, the Junior Convertible Notes, and the Redeemable Preferred Stock. Accordingly, we will have to raise additional capital in one or more debt and/or equity offerings and continue to work with our lenders to cure the defaults, or otherwise seek other alternatives to addressing our liquidity and capital resources issues. There can be no assurance, however, that we will be successful in raising the necessary capital or that any such offering will be available to us on terms acceptable to us, or at all. If we are unable to raise additional capital that may be needed, this would have a material adverse effect on the Company. Furthermore, the recent decline in the market price of our common stock, coupled with the stock's delisting from the Nasdaq Stock Market, could make it more difficult to sell equity or equity-related securities in the future at a time and price that we deem appropriate. The factors discussed above raise substantial doubt as to our ability to continue as a going concern within one year after the date that this Report is issued." A full-text copy of the Form 10-Q is available for free at: https://www.sec.gov/ix?doc=/Archives/edgar/data/1084384/000162828021017682/teum-20210331.htm About Pareteum Corporation Pareteum -- www.pareteum.com -- is a cloud software communications platform company with a mission -- to Connect Every Person and Every(Thing). As a global provider of Communications Platform-as-a-Service (CPaaS) solutions with operations in North America, Latin America, Europe, Middle East and Africa, and Asia-Pacific regions, Pareteum empowers enterprises, communications service providers, early-stage innovators, developers, Internet-of-Things (IoT), and telecommunications infrastructure providers with the freedom and control to create, deliver and scale innovative communications experiences. The Pareteum platform connects people and devices around the world using the secure, ubiquitous, and highly scalable solution to deliver data, voice, video, SMS/text messaging, media, and content enablement. Pareteum reported a net loss of $44.66 million for the year ended Dec. 31, 2020, compared to a net loss of $222.35 million for the year ended Dec. 31, 2019. Los Angeles, California-based Baker Tilly US, LLP, the Company's auditor since 2014, issued a "going concern" qualification in its report dated June 17, 2021, citing that the Company has suffered recurring losses from operations, negative cash flows from operations, and had a negative working capital of $37.2 million and an accumulated deficit of $584.6 million as of Dec. 31, 2020. This raises substantial doubt about the Company's ability to continue as a going concern. In addition, with respect to the ongoing and evolving coronavirus outbreak, which was designated as a pandemic by the World Health Organization on March 12, 2020, the outbreak has cause substantial disruption in international and U.S. economies and markets and if repercussions of the outbreak are prolonged, could have a significant adverse impact on the Company's business. PARETEUM CORP: To Evaluate Strategic Alternatives ------------------------------------------------- Pareteum Corporation announced that due to ongoing liquidity requirements, it intends to evaluate a range of strategic alternatives. These strategic alternatives include, but are not limited to, a sale or other business combinations, financing, and/or restructuring transactions. Pareteum has engaged FTI Capital Advisors, LLC to assist with the evaluation process. Mary Beth Vitale, Chair of the Board of Directors of the Company, stated: "Our Board has determined that it is prudent at this time to undertake this strategic review to ensure all available alternatives for the Company are being evaluated. Pareteum will remain focused on our customers, vendors, employees, and other constituents, as well as continue to run the day-to-day operations as usual as it evaluates such alternatives." The Company has not set a timetable for the conclusion of its consideration of strategic alternatives, and it does not intend to comment further unless and until a specific course of action has been approved or the Company has otherwise determined that further disclosure is appropriate or required and in accordance with the requirements of applicable securities laws. About Pareteum Corporation Pareteum -- www.pareteum.com -- is a cloud software communications platform company with a mission - to Connect Every Person and Every(Thing). As a global provider of Communications Platform-as-a-Service (CPaaS) solutions with operations in North America, Latin America, Europe, Middle East and Africa, and Asia-Pacific regions, Pareteum empowers enterprises, communications service providers, early-stage innovators, developers, Internet-of-Things (IoT), and telecommunications infrastructure providers with the freedom and control to create, deliver and scale innovative communications experiences. The Pareteum platform connects people and devices around the world using the secure, ubiquitous, and highly scalable solution to deliver data, voice, video, SMS/text messaging, media, and content enablement. Pareteum reported a net loss of $44.66 million for the year ended Dec. 31, 2020, compared to a net loss of $222.35 million for the year ended Dec. 31, 2019. As of March 31, 2021, the Company had $52.04 million in total assets, $71.47 million in total liabilities, $25.54 million in redeemable preferred stock, and a total stockholders' deficit of $44.97 million. Los Angeles, California-based Baker Tilly US, LLP, the Company's auditor since 2014, issued a "going concern" qualification in its report dated June 17, 2021, citing that the Company has suffered recurring losses from operations, negative cash flows from operations, and had a negative working capital of $37.2 million and an accumulated deficit of $584.6 million as of Dec. 31, 2020. This raises substantial doubt about the Company's ability to continue as a going concern. In addition, with respect to the ongoing and evolving coronavirus outbreak, which was designated as a pandemic by the World Health Organization on March 12, 2020, the outbreak has cause substantial disruption in international and U.S. economies and markets and if repercussions of the outbreak are prolonged, could have a significant adverse impact on the Company's business. PENNSYLVANIA ECONOMIC: Fitch Affirms BB- on $114MM Parking Bonds ---------------------------------------------------------------- Fitch Ratings has affirmed the 'BB-' rating on the Pennsylvania Economic Development Financing Authority's (PEDFA) $114 million of outstanding senior parking revenue bonds. The Rating Outlook is Negative. RATING RATIONALE The Negative Rating Outlook reflects the narrow liquidity position of the parking system, which has been further challenged by reimbursements to Dauphin County and Assured Guaranty for debt service reserve draws. Although the parking system maintains healthy coverage on a senior basis, coverage is significantly lower for subordinate obligations. Resolution of the Negative Outlook will depend on full repayment of reserve reimbursements to Dauphin County and Assured Guaranty; recovery of parking demand to levels generating debt service coverage metrics in excess of covenant requirements; and an ability to address long-term capital needs. The rating reflects the system's continued revenue underperformance and more constrained financial profile, which has led to increased risk related to asset preservation. In the short term, PEDFA's financial commitments are currently being met. However, the system's financial capacity to meet all future obligations, including reimbursements to Dauphin County and Assured Guaranty for draws on the debt service reserve fund and the funding of necessary maintenance capex, is vulnerable to further deterioration in the current economic environment. The rating case reflects all-in coverage levels well below sum sufficiency in 2021, and below covenanted levels through the entirety of the forecast. The rating is further constrained by high leverage and total cost obligations, minimal liquidity, limited capital funding and uncertain rate-making flexibility to raise rates due to the political climate. Parking system cash flows and current fund balances remain narrow, providing limited internal resources for maintenance capex due to the low priority in the payment waterfall of capital reserve account replenishment. KEY RATING DRIVERS Dominant Position, Lagging Performance: Revenue Risk (Volume) - Weaker The system includes 11 parking facilities with a total of 7,694 spaces and 1,260 spaces of on-street metered parking covering around 70% of public parking in Harrisburg. Strong non-compete covenants are expected to provide adequate market share protection. However, while the high degree of governmental jobs in the area provide some degree of demand stability by way of commonwealth parking contracts, the system still depends on university enrollment and economic growth in the Harrisburg area, and parking revenues are likely to mirror the tepid historical performance. Rate-Making Authority: Revenue Risk (Price) - Midrange Contracted rate schedules provide for large increases in the initial years, followed by annual escalators thereafter. Rates currently remain competitive versus the national average, but could become uncompetitive to the extent greater than inflationary rate increases were to be needed to support revenue underperformance or increased lifecycle cost investments. Further, political risk may serve to limit rate-making flexibility. Capital Plan Exhibits Risk: Infrastructure Development and Renewal - Weaker The weaker assessment reflects the system's foreseen inability to generate excess cash flows to replenish the capital reserve account until the end of 2023. Repayments to the debt service reserves, which is expected to be complete by 2023, are prioritized higher than capital reserves in the system's flow of funds. Funded with bond proceeds, a $9.0 million capital reserve has been spent down to a current level of $2.5 million and remains at risk of full depletion. Future funding of capex may rely on additional leveraging as internal funding is structurally dependent on excess cash flow following all other required deposits as the reserve is tapped. In the medium term, management expects to spend $600,000 annually until 2023, at which point cash flows are expected to be available to replenish the capital reserve. Structural Features Have Weaknesses: Debt Structure - Weaker While the 2013A bonds are senior ranking in the project's debt profile, structural features are lacking as shown through limited requirements for liquidity and leverage protections, no established operating reserves and debt service reserves funded through surety policies. In addition, reserves for capital maintenance fall at the bottom of the cash flow waterfall, which present funding risks for ongoing capital investments. The system drew $1.7 million on debt service reserves in January 2021 and expects to draw on reserves for the next debt service principal payment in January 2022. Repayment of the advances is priority below current debt service in the cash flow waterfall. Senior tenor is long with a 30-year final maturity and subject to some capital appreciation. The parking system debt is fixed rate and fully amortizing. Financial Profile The system has an escalating debt service profile, including capital appreciation, which requires aggressive revenue growth to cover increasing debt service obligations as well as ongoing capital needs. All-in coverage (inclusive of subordinate debt) at YE 2020 (1x) fell below covenanted levels for the fourth time since 2013. Fitch's rating case forecasts senior-lien coverage to average 2.3x, based on a net revenue calculation. The average coverage of total project costs, including subordinated obligations and capital needs as well as debt service reserve draw reimbursements, is less than sum sufficient at 0.8x. Liquidity also remains a concern with minimal unrestricted cash and no operating reserves. PEER GROUP The closest publicly Fitch-rated peer is Miami Parking, rated 'A'/Stable. This parking credit represents a larger city system in a very strong metropolitan statistical area and is financially protected with significantly lower leverage, stronger liquidity and stronger debt service coverage ratio (DSCR). RATING SENSITIVITIES Factors that could, individually or collectively, lead to negative rating action/downgrade: -- Material degradation of out-year parking and revenue expectations should the pandemic result in anticipated long term economic impairment; -- Continued trend of narrow or insufficient cash flow generation; -- Foreseen depletion of the capital reserve; -- Delays in reserve draw repayment beyond the period outlined in bond indenture, or inability to reach reserve reimbursement agreements with Dauphin County and Assured Guaranty; -- System condition report indicating deteriorating assets and/or greater annual capital needs than those currently forecast. Factor that could, individually or collectively, lead to positive rating action/upgrade: -- The Rating Outlook may return to Stable if the system re establishes healthy debt service coverage in excess of the 1.25x covenanted levels over successive fiscal years in conjunction with healthier system liquidity. BEST/WORST CASE RATING SCENARIO International scale credit ratings of Sovereigns, Public Finance and Infrastructure issuers have a best-case rating upgrade scenario (defined as the 99th percentile of rating transitions, measured in a positive direction) of three notches over a three-year rating horizon; and a worst-case rating downgrade scenario (defined as the 99th percentile of rating transitions, measured in a negative direction) of three notches over three years. The complete span of best- and worst-case scenario credit ratings for all rating categories ranges from 'AAA' to 'D'. Best- and worst-case scenario credit ratings are based on historical performance. CREDIT UPDATE The pandemic has had a sizable effect on PEDFA's 2021 revenues to date. Revenues through August 2021 are down 17% from pre-pandemic levels in 2019, and are 10% below budgeted expectations. Operating expenses are on budget, with cash flow being $1.7 million under budget. Management attributes the rise in Delta variant cases for having a negative impact on current and future revenues as well as forecasted recovery. Monthly garage contract rates increased in March and management expects an additional increase to occur in 2022. The lease rate with the Commonwealth also increased in January. While ticket rate increases are subject to ordinance amendments with the City of Harrisburg, management is planning for one to occur in 1Q2022. Management forecasts that fiscal 2021 (ending Dec. 31) senior DSCR on the Series A bonds will reach 2x and all-in DSCR net of senior opex for the Series A, B and C bonds will reach 0.8x. In 2021, management noted that PEDFA was able to make the July interest payment; however, they expect to draw approximately $1.7 million on the Series B and C debt service reserves for the Jan. 1, 2022 P&I payment. PEDFA is responsible for reimbursing the Dauphin County and Assured Guaranty for the reserve repayment within one year per the bond indenture. PEDFA is engaging in discussions with Credit Enhancers over potentially obtaining an extension. PEDFA expects to fully repay Dauphin County and Assured Guaranty for this debt service reserve draw by 2023. Parking system cash flows and current fund balances remain very narrow and provide limited internal resources for maintenance capex as replenishment of the capital reserve account is low in priority in the payment waterfall. Given the anticipated nearly $2 million draw on reserves for the January principal payment on the subordinate liens, the system does not expect to generate excess cash flows to replenish the capital reserve account until after the reserve advances are repaid to Dauphin County in 2023. FINANCIAL ANALYSIS Fitch's rating case incorporates a 17% revenue decline in 2021 relative to 2019 based on YTD performance, with progressive recovery to 2019 revenue levels by 2023. In both of the cases, 2021 and 2022 Series B and C debt service includes reimbursements towards 2020 and 2021 shortfalls. Under this scenario, Fitch-calculated senior DSCR averages 2.3x throughout the forecast period, while all-in DSCR averages 1x, well below the rate covenant of 1.25x. Fitch's all-in DSCR calculation includes senior expenses pursuant to the trust indenture's flow of funds, but does not include subordinate expenses or capex needed to maintain the system. With the additional subordinate expenses and capex, DSCR is below sum sufficient, averaging 0.8x through 2025. PEDFA's all-in leverage is projected to reach 17.7x in 2021 and is expected to steadily drop down to 12x by 2025. Fitch's downside case assumes 19% revenue decline in 2021 relative to 2019, followed by recovery to 2019 levels by 2024. Fitch-calculated senior DSCR averages 2.2x throughout the forecast period, while all-in DSCR (net of senior opex only) averages 0.9x, which is below the rate covenant. The all-in average DSCR (net of sub opex and capex) of 0.7x is less than sum sufficient. PEDFA's total leverage is projected to reach 18x in 2021 and is expected to steadily drop down to 12.4x by 2025. 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. PHI GROUP: Changes Subsidiary Name to Empire Spirits, Inc. ---------------------------------------------------------- PHI Group, Inc. has reinstated and changed the name of its subsidiary Provimex, Inc., a Nevada company incorporated in September 2004, to Empire Spirits, Inc. and has obtained a new Tax Identification Number for this entity. Empire Spirits, Inc. will serve as the holding company for the acquisition of Five Grain Treasure Spirits Co., Ltd., a baijiu distiller in Jilin Province, China. In addition, the Company has incorporated CO2-1-0 (CARBON) CORP., a Wyoming corporation, as the holding company for a Carbon Mitigation Initiative through Environmentally Sustainable projects using Blockchain and Crypto Technologies in conjunction with Indonesia-based CYFS Group. About PHI Group Headquartered in Irvine, California, PHI Group, Inc. (www.phiglobal.com) primarily focuses on advancing PHILUX Global Funds, a group of Luxembourg bank funds organized as "Reserved Alternative Investment Fund", and building the Asia Diamond Exchange in Vietnam. The Company also engages in mergers and acquisitions and invests in select industries and special situations that may substantially enhance shareholder value. PHI reported a net loss of $2.18 million for the year ended June 30, 2020, compared to a net loss of $2.93 million for the year ended June 30, 2019. Eastvale, California-based MS Madhava Rao, issued a "going concern" qualification in its report dated June 22, 2021, citing that the Company has an accumulated deficit of $44,010,352 and stockholders' deficit of $7,059,790 as of June 30, 2020. These factors raise substantial doubt about the Company's ability to continue as a going concern. PHI GROUP: Forms Asia Diamond Exchange, Inc. Subsidiary ------------------------------------------------------- PHI Group, Inc. has formed Asia Diamond Exchange, Inc., a Wyoming corporation, Registration Number 2021-001010234, Employer Identification Number 87-2893358 as a subsidiary of the company, to develop and establish the Asia Diamond Exchange within the envisaged Chulai Multi Commodities Center in the Free-Trade Zone of the Chu Lai Open Economic Zone, Tam Quang Village, Nui Thanh District, Quang Nam Province, Vietnam. The ADE and CMCC projects will be carried out by Asia Diamond Exchange, Inc. in conjunction with other international partners and participants, including PHILUX Global Funds SCA, SICAV-RAIF, a Luxembourg bank fund, 1c rue Gabriel Lippmann, Munsbach 5365, Luxembourg and Gold Block Mining Co., Ltd., 4F, 143 Teheran-ro, Gangnam-gu, Seoul, Republic of Korea. About PHI Group Headquartered in Irvine, California, PHI Group, Inc. (www.phiglobal.com) primarily focuses on advancing PHILUX Global Funds, a group of Luxembourg bank funds organized as "Reserved Alternative Investment Fund", and building the Asia Diamond Exchange in Vietnam. The Company also engages in mergers and acquisitions and invests in select industries and special situations that may substantially enhance shareholder value. PHI reported a net loss of $2.18 million for the year ended June 30, 2020, compared to a net loss of $2.93 million for the year ended June 30, 2019. Eastvale, California-based MS Madhava Rao, issued a "going concern" qualification in its report dated June 22, 2021, citing that the Company has an accumulated deficit of $44,010,352 and stockholders' deficit of $7,059,790 as of June 30, 2020. These factors raise substantial doubt about the Company's ability to continue as a going concern. POST OAK: Seeks to Hire KapilaMukamal as Financial Advisor ---------------------------------------------------------- Post Oak TX, LLC seeks approval from the U.S. Bankruptcy Court for the Southern District of Florida to employ KapilaMukamal, LLP to serve as its financial advisor. The firm's services include: a. reviewing financial information about the Debtor, including assets, liabilities and cash flow; b. providing litigation support to the Debtor; c. assisting the Debtor in preparing monthly operating reports and in complying with the U.S. Trustee Guidelines; d. assisting the Debtor in the formulation, preparation and confirmation of a plan of reorganization, and providing related analyses including feasibility analysis for the Hilton Post Oak Hotel and consideration of discount rates. KapilaMukamal received a retainer in the amount of $25,000. Soneet Kapila, a partner at KapilaMukamal, 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: Soneet R. Kapila KapilaMukamal, LLP 1000 South Federal Highway, Suite 200 Fort Lauderdale, FL 33316 Telephone: (954) 761-1011 Facsimile: (954) 761-1033 Email: bmukamal@kapilamukamal.com About Post Oak TX, LLC West Palm Beach, Fla.-based Post Oak TX, LLC is part of the traveler accommodation industry. Post Oak TX filed a petition for Chapter 11 protection (Bankr. S.D. Fla. Case No. 21-18563) on Aug. 31, 2021, listing as much as $100 million in both assets and liabilities. Judge Erik P. Kimball oversees the case. Andrew Zaron, Esq., at Leon Cosgrove, LLP and Morris, Nichols, Arsht & Tunnell, LLP serve as the Debtor's legal counsel. KapilaMukamal, LLP is the financial advisor. POST OAK: Seeks to Hire Leon Cosgrove as Bankruptcy Counsel ----------------------------------------------------------- Post Oak TX, LLC seeks approval from the U.S. Bankruptcy Court for the Southern District of Florida to employ Leon Cosgrove, LLC to serve as legal counsel in its Chapter 11 case. The firm's services include: (a) advising the Debtor with respect to its powers and duties under the Bankruptcy Code and the continued management of its business operations; (b) advising the Debtor with respect to compliance 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 interests of the Debtor in all matters pending before the court; and (e) representing the Debtor in the formulation, preparation and confirmation of a plan of reorganization. The firm will be paid as follows: Senior Partners $695 per hour Other Partners $500 to $650 per hour Associates $375 to $425 per hour Andrew Zaron, Esq., a partner at Leon Cosgrove, 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. In accordance with Appendix B-Guidelines for reviewing fee applications filed by attorneys in larger Chapter 11 cases, Mr. Zaron disclosed that: -- Leon Cosgrove agreed to a discount off of its standard hourly rates for senior partners; -- No Leon Cosgrove professional included in the engagement varied his rate based on the geographic location of the bankruptcy case; -- The billing rates for the firm's lawyers who will work on this matter are as follows: Senior Partners $695 per hour Other Partners $500 to $650 per hour Associates $375 to $425 per hour -- The Debtor approved a prospective budget and staffing plan for a three-month period. Leon Cosgrove can be reached at: Andrew D. Zaron, Esq. Leon Cosgrove, LLC 255 Alhambra Circle, Suite 800 Coral Gables, FL 33134 Tel: (305) 740-1992 Email: azaron@leoncosgrove.com About Post Oak TX, LLC West Palm Beach, Fla.-based Post Oak TX, LLC is part of the traveler accommodation industry. Post Oak TX filed a petition for Chapter 11 protection (Bankr. S.D. Fla. Case No. 21-18563) on Aug. 31, 2021, listing as much as $100 million in both assets and liabilities. Judge Erik P. Kimball oversees the case. Andrew Zaron, Esq., at Leon Cosgrove, LLP and Morris, Nichols, Arsht & Tunnell, LLP serve as the Debtor's legal counsel. KapilaMukamal, LLP is the financial advisor. POST OAK: Seeks to Hire Morris Nichols as Bankruptcy Co-Counsel --------------------------------------------------------------- Post Oak TX, LLC seeks approval from the U.S. Bankruptcy Court for the Southern District of Florida to employ Morris, Nichols, Arsht & Tunnell, LLP as co-counsel with Leon Cosgrove, LLC. The firm's services include: a. performing all necessary services as the Debtor's bankruptcy counsel, including, without limitation, legal advice in the areas of restructuring and bankruptcy; b. taking all necessary actions to protect and preserve the Debtor's estate, including the prosecution of actions by the Debtor, the defense of any actions commenced against the Debtor, negotiations concerning litigation in which the Debtor is involved and the filing of objections to claims filed against the estate; c. preparing legal papers; d. advising the Debtor regarding its rights and obligations; e. coordinating with other professionals in representing the Debtor in connection with its case; and f. performing all other necessary legal services. The firm's hourly rates are as follows: Partners $75 - $1,275 per hour Associates and Special Counsel $455 - $795 per hour Paraprofessionals $325 - $345 per hour Morris Nichols received an advance payment retainer of $25,000. Robert Dehney, Esq., a partner at Morris Nichols, disclosed in court filings that his firm is "disinterested" as defined in Section 101(14) of the Bankruptcy Code. In accordance with Appendix B-Guidelines for reviewing fee applications filed by attorneys in larger Chapter 11 cases, Mr. Dehney disclosed that: -- Morris Nichols agreed to a discount off of its standard hourly rates for senior partners; -- No Morris Nichols professional included in the engagement varied his rate based on the geographic location of the bankruptcy case; -- The billing rates for the firm's lawyers who will work on this matter are as follows: Partners $75 - $1,275 per hour Associates and Special Counsel $455 - $795 per hour Paraprofessionals $325 - $345 per hour -- The Debtor approved a prospective budget and staffing plan for a three-month period. The firm can be reached through: Robert J. Dehney, Esq. Morris, Nichols, Arsht & Tunnell, LLP 1201 North Market Street, 16th Floor Wilmington, DE 19899-1347 Telephone: (302) 658-9200 Facsimile: (302) 658-3989 Email: mharvey@mnat.com About Post Oak TX, LLC West Palm Beach, Fla.-based Post Oak TX, LLC is part of the traveler accommodation industry. Post Oak TX filed a petition for Chapter 11 protection (Bankr. S.D. Fla. Case No. 21-18563) on Aug. 31, 2021, listing as much as $100 million in both assets and liabilities. Judge Erik P. Kimball oversees the case. Andrew Zaron, Esq., at Leon Cosgrove, LLP and Morris, Nichols, Arsht & Tunnell, LLP serve as the Debtor's legal counsel. KapilaMukamal, LLP is the financial advisor. QDOS INC: Justices Pass on Involuntary Bankruptcy Dismissal Fight ----------------------------------------------------------------- Daniel Gill of Bloomberg Law reports that the U.S. Supreme Court declined to wade into a dispute over whether a media company could appeal a bankruptcy appellate panel's decision that restored its involuntary bankruptcy case. The decision Monday, October 4, 2021, lets stand a ruling by the Ninth Circuit that QDOS Inc. couldn't appeal the panel's decision. The bankruptcy appellate panel wasn't final, the U.S. Court of Appeals for the Ninth Circuit said. Only certain BAP orders -- such as a final ruling that sets the parties' rights and obligations -- are appealable, the Ninth Circuit said. The case stems from an involuntary bankruptcy petition that alleged creditors of QDOS Inc. filed in 2018. About QDOS, Inc. Based in Irvine, California, QDOS, Inc., d/b/a DeskSite, d/b/a DSN, designs and provides video entertainment software applications. DSN offers audiences complete video libraries from dozens of America's most popular professional sports teams & leagues. Content is accessible through team-branded apps on Smart TVs, computers, tablets, streaming media players, Blu-ray players, and game consoles. Each team's unique individual brand identity is firmly maintained via team-branded portals, while aggregating all viewers under a single network for advertising purposes. Petitioning creditors Carl Wiese, Matthew Hayden, and Felice Terrigno filed an involuntary chapter 11 petition (Bankr. C.D. Cal. Case No. 18-11997) on May 31, 2018. QUANTUM CORP: Registers 5.9 Million Shares Under 2012 LTIP ---------------------------------------------------------- Quantum Corporation filed a Form S-8 registration statement with the Securities and Exchange Commission to register 5,900,000 shares of common stock that are issuable under the company's 2012 Long-Term Incentive Plan. The additional shares have become available for issuance under an amendment and restatement of the Incentive Plan, approved by the company's stockholders on Sept. 21, 2021. A full-text copy of the prospectus is available for free at: https://www.sec.gov/Archives/edgar/data/709283/000070928321000062/quantum-sx82012planamendme.htm About Quantum Corp. Based in San Jose, California, Quantum Corp. (NYSE:QTM) -- http://www.quantum.com-- provides technology and services that stores and manages video and video-like data delivering the industry's top streaming performance for video and rich media applications, along with low cost, high density massive-scale data protection and archive systems. The Company helps customers capture, create and share digital data and preserve and protect it for decades. Quantum reported a net loss of $35.46 million for the year ended March 31, 2021, compared to a net loss of $5.21 million for the year ended March 31, 2020. As of June 30, 2021, the Company had $178.18 million in total assets, $291.11 million in total liabilities, and a total stockholders' deficit of $112.93 million. QURATE RETAIL: Fitch Affirms 'BB' LongTerm IDRs, Outlook Stable --------------------------------------------------------------- Fitch Ratings has affirmed Qurate Retail, Inc.'s (Qurate), Liberty Interactive LLC's and QVC Inc.'s Long-Term Issuer Default Ratings (IDRs) at 'BB' and all related issue ratings. Fitch has also revised the Recovery Rating on Qurate's cumulative redeemable preferred shares to 'RR5' from 'RR6', consistent with Fitch's revised "Corporates Recovery Ratings and Instrument Ratings Criteria," dated April 9, 2021. Fitch has removed Qurate from Under Criteria Observation (UCO). The Rating Outlook is Stable. KEY RATING DRIVERS Operating Performance: During the pandemic, Qurate outperformed Fitch's expectations, growing LTM ended June 30, 2021 total revenues 8% and 6% over 2020 and 2019, respectively. The average existing customer at QxH, Qurate's US video commerce business and its largest segment, spent approximately $1,400 on 28 items, in line with overall historical performance. In addition, QxH's total customer count increased 3% over LTM ended June 30, 2020 and 7% over 2019, while new customers increased by 5% and 17%, respectively, over the same periods. 2019 results are included to show the resiliency of the company's model excluding the pandemic's effects. Business Model: Qurate's unique business model bore fruit during the pandemic as consumers were unable or unwilling to shop at physical retail locations. The company focuses on creating and maintaining customer interest through direct-to-consumer engagement on its leading video platforms and Internet and mobile platforms, differentiating the company from brick-and-mortar or transactional ecommerce platforms. However, while the economy's full recovery timeline remains fluid given continued uncertainties around the pandemic, the model's strength may be tested in the face of growing competitive pressures as people increasingly return to in-person activities. Secular Evolution and Challenges: U.S. retailers remain pressured by growing ecommerce competition and the shift to lower priced alternatives. As one of the top 10 North American ecommerce retailers, Qurate is relatively well positioned. In FY2020, ecommerce revenues grew 11% and represented approximately 63% of Qurate's total revenues, up from 59% in FY2019. In addition, while its customer base remains stable despite price competition, the company has instituted price matching on some of its platforms. Management has demonstrated an aggressive focus on addressing its challenges, and Fitch believes the 'BB' rating remains appropriate. HSN Consolidation Synergies: Following HSN's integration, Qurate identified $370 million to $400 million in cost savings to be realized by 2022 (approximately 70% realized through Dec. 31, 2020, roughly in line with Fitch estimates). Fitch's rating case estimates Qurate will achieve approximately 93% ($360 million) of the range's midpoint. Fitch's estimates are based on varying expectations for synergy realizations based on the category and scope of the expected expense cuts, the probability of realizing reductions within each category, and typical industry expense cut realizations. Although Qurate stated they expect to realize revenue synergies, they have not disclosed an expected range, nor has Fitch included any benefits in its rating case. Shareholder Returns: In FY2020, Qurate distributed a special dividend funded with a mix of cash on hand and the issuance of cumulative redeemable preferred shares. Fitch assigned 0% equity credit to the preferred shares which drove pro forma total leverage to 4.0x, outside Fitch's negative rating sensitivity. However, Qurate's total leverage has declined to 3.7x at June 30, 2021 and QVC is well within its 2.5x negative rating leverage sensitivity (2.1x at June 30, 2021). Fitch's rating case also assumes Qurate will fund shareholder returns with a mix of FCF and debt issuance at QVC, which maintains a stated target net leverage of 2.5x. Fitch assumes the returns will be comprised of a mix of share buybacks and another special dividend and that both Qurate and QVC will remain within their rating sensitivities over the rating horizon. Fitch expects QVC will issue debt under the additional capacity created by EBITDA growth, resulting primarily from consolidation synergies. Rating Linkage: Fitch links Qurate, Liberty and QVC's Long-Term IDRs in accordance with its criteria. Qurate's IDR, its wholly owned subsidiary Liberty, and its indirect, wholly owned subsidiary QVC, reflect the consolidated legal entity/obligor credit profile and parent subsidiary relationships. Although Fitch does not believe Qurate would spin out QVC, Fitch would review the rating in that event. QVC Debt Ratings: Fitch rates QVC's senior secured credit facility and senior secured notes 'BBB-', two notches higher than the IDR. In addition, all of QVC's existing and future secured debt is secured by QVC's stock and guaranteed by QVC's material domestic subsidiaries, none of which have any material debt. Finally, QVC's secured debt is structurally senior to Liberty's unsecured debt. DERIVATION SUMMARY Qurate, the largest global provider of television retailing and a leading multimedia retailer, is well positioned within the retail sector given its loyal customer base, with nearly 90% of sales generated by repeat and reactivated customers and an increasing global ecommerce presence, which generated $8.9 billion of net revenues for fiscal 2020. It offers a wide variety of consumer products, marketed and sold primarily by merchandise-focused televised shopping programs distributed to more than 218 million households daily, and internet and mobile applications. Kohl's Corporation's ratings (BBB-/Stable) reflect its position as the second largest department store in the U.S. and its well-developed omnichannel strategies, with digital sales expected to contribute to approximately 35% of revenues going forward. Nordstrom's ratings (BBB-/Negative) reflect its historically good market position in the apparel, footwear, and accessories space, with its differentiated merchandise and high level of customer service enabling the company to enjoy strong customer loyalty. However, the Negative Outlook reflects concerns that recent pre-pandemic operating challenges could suggest some combination of execution shortfalls and increased susceptibility to secular headwinds in the department store space, which could limit the company's ability to return revenue and profitability close to pre-pandemic levels. Dillard's ratings (BB+/Positive) reflect its improving topline trajectory and strong cost reduction along with lower operating profitability, geographical concentration and low ecommerce penetration relative to its larger department store peers. The ratings also consider Dillard's strong liquidity, FCF and minimal debt maturities. Macy's ratings (BB+/Stable) reflect its improving topline trajectory and strong cost reduction and its position as the largest department store chain in the U.S. Results in recent years have been pressured given long-term weak mall traffic trends and heightened competition from alternate channels. KEY ASSUMPTIONS Fitch's key assumptions within its rating case for the issuer include: -- Mid-single single digit revenue growth in 2021 due to difficult 2H21 comps as the pandemic's effects cycle off and supply chain issues continue to weigh on growth; -- Low single digit revenue growth thereafter; -- Approximately 130 bp of margin improvement by 2023 due primarily to the full realization of Fitch-adjusted run rate synergies, net of the cost to achieve them; -- Capital intensity slowly declines to 2.1% by 2024 as Qurate completes the necessary capital investments to consolidate HSN and grow the business; -- FCF generation grows from $810 million in 2020 to $1.3 billion in 2024 due primarily to the realization of cost synergies; -- Shareholder returns return to historical levels funded with a mix of FCF and debt issuance at QVC, with another special dividend occurring in 2022; -- Over the rating horizon, Qurate's pro forma lease adjusted debt to operating EBITDAR remains around 3.5x while QVC's total debt with equity credit to operating EBITDA remains in the low-2.0s. RATING SENSITIVITIES Factors that could, individually or collectively, lead to positive rating action/upgrade: -- Qurate sustaining operating improvement, including positive revenue and EBITDA margin improvement, while QVC's total debt with equity credit to EBITDA remains below 2.0x and Liberty's total adjusted debt to EBITDAR remains below 3.25x; -- If Liberty were to manage to more conservative leverage targets. Factors that could, individually or collectively, lead to negative rating action/downgrade: -- If financial policy changes, including more aggressive leverage targets or weakened bondholder protection; -- If there are unexpected revenue declines in excess of 10% that materially drive declines in EBITDA and FCF, and result in Liberty's total adjusted debt to EBITDAR exceeding 3.75x and/or QVC's leverage exceeding 2.5x in the absence of a credible plan to reduce leverage. BEST/WORST CASE RATING SCENARIO International scale credit ratings of Non-Financial Corporate issuers have a best-case rating upgrade scenario (defined as the 99th percentile of rating transitions, measured in a positive direction) of three notches over a three-year rating horizon; and a worst-case rating downgrade scenario (defined as the 99th percentile of rating transitions, measured in a negative direction) of four notches over three years. The complete span of best- and worst-case scenario credit ratings for all rating categories ranges from 'AAA' to 'D'. Best- and worst-case scenario credit ratings are based on historical performance. LIQUIDITY AND DEBT STRUCTURE Adequate Liquidity: Fitch believes QVC's liquidity will be sufficient to support operations and its expansion into other markets. Fitch expects near-term debt repayment, acquisitions and share buybacks to be a primary use of FCF. Fitch expects Qurate to generate FCF of approximately $1 billion annually over the rating horizon. Fitch recognizes that in the event of a liquidity strain at Liberty, QVC could provide funding to support debt service via intercompany loans. Qurate's consolidated liquidity as of June 30, 2021 included $950 million in readily available cash and $2.85 billion available under QVC's $2.95 billion revolving credit facility due in December 2023. QVC's maturities are manageable, with the next maturities occurring in 2023 ($750 million) and 2024 ($600 million) of QVC secured notes mature. Qurate also lists near-term maturities that are only classified as near term because Liberty does not own the underlying shares needed to redeem the debentures. However, Liberty has no intention or requirement to redeem them in the near term, and maturities range from 2029 to 2046. ISSUER PROFILE Qurate Retail, Inc. is a global leader in video and e-commerce across multiple linear, streaming and online platforms including QVC, HSN, Zulily, and its Cornerstone titles. It reaches approximately 218 million homes worldwide and has approximately 18 million customers. ESG CONSIDERATIONS Qurate Retail, Inc. has an ESG Relevance Score of '4' for Group Structure due to complexity and related-party transactions, which has a negative impact on the credit profile, and is relevant to the rating in conjunction with other factors. Unless otherwise disclosed in this section, the highest level of ESG credit relevance is a score of '3'. This means ESG issues are credit-neutral or have only a minimal credit impact on the entity, either due to their nature or the way in which they are being managed by the entity. REDWOOD EMPIRE: May Use Cash Collateral Thru Nov 18 --------------------------------------------------- Judge Eddward P. Ballinger Jr. of the U.S. Bankruptcy Court for the District of Arizona has authorized Redwood Empire Lodging, LP to use cash collateral to pay postpetition expenses, pursuant to the budget during the second interim period from September 22 through and including November 18, 2021. The Court ruled that the Debtor will not make any payment to any professional employed under Bankruptcy Code section 327 before interim or final (as applicable) approval of such professional’s application for payment of such fees and costs. The Debtor, however, may pay for ordinary course accounting fees to Wyatt Whitchurch & Anderson as set forth in the operating budgets. In addition to the replacement liens granted to the Debtor's Lenders under the First Interim Order, the Lenders are granted as adequate protection, valid and perfected security interests in the Debtor's postpetition assets of the same type and to the same extent and priority (if any) as existed prior to the Petition Date. During the pendency of the third interim order, the Debtor will maintain insurance on the Lenders' physical collateral and will provide proof of insurance to its secured creditors in addition to what the Debtor provided on June 25, 2021 promptly following a written request. These events constitute an "Event of Default:" a. The Debtor will be in breach of its agreements or undertakings, provided that with respect to any report that any Lender claims has not been provided, the Lender will provide written notice to the Debtor relating to such report and the Debtor will have 2 business days to cure; b. The Debtor will furnish or knowingly make any false, inaccurate, or incomplete representation, warranty, certificate, report or summary in connection with or under the Order; c. the appointment of a trustee in the Debtor's Bankruptcy Case; d. the dismissal of Debtor's Bankruptcy Case; e. except as permitted, the use of Cash Collateral under Bankruptcy Code section 363(c) without Lenders' prior written consent; f. Best Western International, Inc. or any of its affiliates obtains a final order granting relief from the automatic stay applicable under Bankruptcy Code section 362 in the Debtor's Bankruptcy Case to exercise any of their rights under or terminate the membership agreements between Best Western and Debtor (and then cash collateral will cease as to the affected Hotel); g. any person or entity obtains a final order granting relief from the automatic stay with respect to the Lenders’ collateral (and then cash collateral will cease as to the affected Hotel); h. a further interim order approving the Debtor's use of Cash Collateral is not entered by the Court on or the expiration of the Second Interim Period; i. the Debtor's Bankruptcy Case is converted to a case under Chapter 7 of the Bankruptcy Code; j. the Debtor will sell either of its Hotels without either (i) the applicable secured creditor’s written consent (and in its sole and absolute discretion), or (ii) order of the Court after notice and a hearing; k. the Debtor's filing of a motion to abandon its interest in either of the Hotels; l. the Debtor's failure to maintain insurance in amounts and types as may be required under applicable loan and security documents, subject to 10 business days written notice and opportunity to cure; or m. the Debtor's failure to cause all applicable sales and bed taxes to be paid on or before their due dates, or the Debtor's failure to provide Lenders with evidence thereof subject to five business days written notice from Lender and opportunity to cure. The Court has not determined if or to what extent the Lenders hold valid security interests in the Cash Collateral or any other collateral. In this regard, the Debtor fully reserves all of its rights to challenge any of the security interests that may be asserted by the Lenders, and the Lenders fully reserve all of their rights to assert alleged claims and liens in the Cash Collateral (and any other property). Debtor has confirmed the authenticity of Pacific Premier's, Poppy's, and S&K's loan documents, which confirmation will be binding on the Debtor. The next hearing on the matter is scheduled for November 18 at 10 a.m. A copy of the order is available at https://bit.ly/3a12852 from PacerMonitor.com. About Redwood Empire Lodging, LP Redwood Empire Lodging, LP owns and operates two hotels: the Best Western Plus located at 208 N Lake Powell Boulevard, Page, Arizona 86040, and the Best Western Sonoma Winegrower's Inn, located at 6500 Redwood Drive, Rohnert Park, California 94928. The Debtor sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. D. Ariz. Case No. 21-04678) on June 16, 2021. In the petition signed by Debra Heckert, member, the Debtor disclosed up to $50 million in both assets and liabilities. Judge Eddward P. Ballinger Jr. is assigned to the case. Isaac M. Gabriel, Esq., at Quarles & Brady LLP is the Debtor's counsel. ROARK & ASSOCIATES: Seeks Approval to Hire Bankruptcy Attorneys --------------------------------------------------------------- Roark & Associates, LLC seeks approval from the U.S. Bankruptcy Court for the Northern District of California to employ Eric Gravel, Esq., and William McLaughlin, Esq., to serve as attorneys in its Chapter 11 case. The attorneys will render these services: (a) prepare and file all documents necessary for the prosecution of the Debtor's reorganization; (b) appear at the initial debtor interview with the Office of the U.S. Trustee and the first meeting of creditors; (c) prepare a disclosure statement and plan of reorganization and appear at proceedings related to the confirmation of the plan; and (e) assist the Debtor in the preparation and filing of monthly operating reports prior to confirmation and quarterly reports post-confirmation as required. Both attorneys will charge $400 per hour for their services. They received a retainer in the amount of $17,000. As disclosed in court filings, Mr. Gavel and Mr. McLaughlin are "disinterested persons" as that phrase is defined in Section 101(14) of the Bankruptcy Code. The attorneys can be reached at: Eric J. Gravel, Esq. 1390 Market Street, Suite 200 San Francisco, CA 94102 Telephone: (415) 767-3880 Email: ctnotices@gmail.com -- and -- William F. McLaughlin, Esq. 1305 Franklin Street, Suite 311 Oakland, CA 94612 Telephone: (510) 839-4456 Email: MCL551@AOL.COM About Roark & Associates Roark & Associates, LLC filed a petition for Chapter 11 protection (Bankr. N.D. Calif. Case No. 21-30614) on Sept. 1, 2021, listing as much as $50,000 in both assets and liabilities. Judge Dennis Montali oversees the case. Eric J. Gravel, Esq., and William F. McLaughlin, Esq., serve as the Debtor's bankruptcy attorneys. ROCHELLE HOLDINGS: Ordered to Revise Plan & Disclosures by Oct. 8 ----------------------------------------------------------------- Debtor Rochelle Holdings XIII, LLC filed with the U.S. Bankruptcy Court for the Middle District of Florida a Disclosure Statement and Plan of Reorganization. On October 4, 2021, Judge Lori V. Vaughan ordered that: * The Debtor is directed to file an amended disclosure statement and plan by October 8, 2021. * The hearing is continued to Nov. 17, 2021 at 10:00 a.m. in Courtroom C, Sixth Floor, of the United States Bankruptcy Court, 400 West Washington Street, Orlando, Florida 32801. * HMG Venture Partner, LLC and PM S-1 REO, LLC ("HMG/PMS"), J & R Hewitt Investments Limited Partnership ("Hewitt Investments"), and Debtor are directed to file briefs addressing HMG/PMS and Hewitt Investments' respective standing in this case on or before November 10, 2021. A copy of the order dated Oct. 4, 2021, is available at https://bit.ly/2YkFsdi from PacerMonitor.com at no charge. 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. SAMURAI MARTIAL: Unsecured Creditors Will Get $45K in 60 Months --------------------------------------------------------------- Samurai Martial Sports, Inc., filed with the U.S. Bankruptcy Court for the Southern District of Texas a Disclosure Statement and Plan of Reorganization for Small Business dated September 30, 2021. Samurai is a Texas corporation that was established in 2006 and is wholly owned 50% each by Ihab Ahmed and Wafa Abuleel. Ahmed is the president of the company. Samurai owns and operates a sports complex and physical fitness facility located at 12500 Oxford Park Drive, Houston, Texas 77082 (the "Property"). Samurai has a long history as a profitable business, but all of its operations ceased with the economic shut-down for COVID-19. Samurai was unable to keep its debts current throughout the shut down. Now that COVID-19 has subsided in part and the economic shut-down has been lifted, Samurai's business has returned, but it filed this bankruptcy case in order to obtain time to cure its defaults. This Plan of Reorganization proposes to pay Samurai's creditors primarily from future income generated by the business. Now that the economic shut-down has been lifted, Samurai believes that it will be able to operate its business sufficiently profitably to fund the Plan. Non-priority unsecured creditors holding allowed claims will receive distributions valued at the full amount of their allowed claim. This Plan also provides for the payment of administrative and priority claims. The Plan will treat claims as follows: * Class 1 consists of the claim of Harris County et al. Harris County filed a proof of claim for $25,657.32. Of this amount, $12,098.37 is for estimated ad valorem property taxes for the real property for 2021 tax year. Amounts owed for personal property ad valorem taxes for 2021 and remaining real estate ad valorem taxes will be paid over 48 months from the effective date of the plan to the Class 2 creditor except to the extent that Samurai successfully disputes any such amount under non-bankruptcy law. Amounts will also be paid interest at an interest rate of 12% per annum. The claim of Harris County shall be fully paid on or before July 2, 2026. * Class 2 consists of the claim of the City of Houston. The City of Houston filed a proof of claim for $10,614. The claim is for estimated ad valorem property taxes for the real property for 2021 tax year. On or before January 31, 2022, BankUnited will pay from the escrow amounts approximately one-half of the amounts due for the real estate ad valorem taxes for 2021 for Class 2; provided that BankUnited shall only be required to pay in total for all ad valorem taxes for 2021 the escrow amounts for ad valorem taxes for the Debtor. The claim of the City of Houston shall be fully paid on or before July 2, 2026. * Class 3 consists of the claim of Alief Independent School District. Alief Independent School District filed a proof of claim for $22,760.44. On or before January 31, 2022, BankUnited will pay from the escrow amounts approximately one-half of the amounts due for the real estate ad valorem taxes for 2021 for Class 3; provided that BankUnited shall only be required to pay in total for all ad valorem taxes for 2021 the escrow amounts for ad valorem taxes for the Debtor. The claim of Alief Independent School District shall be fully paid on or before July 2, 2026. * Class 4 consists of the claim of Texas Workforce Commission. Samurai will pay $1,475.93 to Class 4, plus postpetition interest accruing on this amount at a rate of 3.75% per year from the petition date until the amount is paid in full. Samurai will pay this amount in 36 equal monthly payments, beginning on the fifth day of the first full calendar month after the effective date of the Plan. * Class 5 consists of the claim of LiftFund. Samurai will pay $20,000.00 to Class 5, plus postpetition interest accruing on this amount at a rate of 5.5% per year from the petition date until the amount is paid in full. Samurai will pay this amount in 60 equal monthly payments beginning on the fifth day of the first full calendar month after the effective date of the Plan. * Class 6 consists of the claim of BankUnited. Samurai will pay the ongoing principal and interest payments to BankUnited of $13,375. Samurai will pay the arrearage amounts to BankUnited over 60 months in addition to the ongoing principal and interest payments. Further, Samurai will pay an ad valorem tax escrow to BankUnited of $3,250 per month, subject to adjustments for ad valorem tax increases. * Class 7 consists of the claim of Texas Citizens Bank. The claim of Texas Citizens Bank is classified for purposes of this plan as an unsecured claim and shall be paid in Class 9. The lien and deed of trust of Texas Citizens Bank shall be deemed released, terminated and discharged upon confirmation of this plan. Samurai may file a release and discharge of the deed of trust lien, and other encumbrances of Texas Citizens Bank upon the effective date of plan confirmation. * Class 8 consists of Priority Claim of the Internal Revenue Service. The priority claim of the Internal Revenue Service estimated at $40,338.24 over approximately 55 months at 3% interest such that the total priority claim of the Internal Revenue Service shall be fully paid on or before July 2, 2026. * Class 9 consists of NonPriority Unsecured Creditors. Samurai will pay $45,000 to the creditors with claims in Class 9 in 60 monthly payments, beginning on the fifth day of the first full calendar month after the effective date of the Plan. Such amount will be in full satisfaction of the claims in Class 9. * Class 10 consists of Equity Security Holders. The class 10 creditor will retain his stock interests in the Debtor subject to the terms of this plan. Samurai expects to fund the Plan with future income generated by its sports and fitness programs, which were profitable before the economic shut-down for COVID-19 and which Samurai expects to be profitable once again now that the economic shut-down has ended. Except for any items of property specifically surrendered according to the terms of the Plan, Samurai will retain the property of the bankruptcy estate. Ihab Ahmed will remain president of the reorganized Debtor. A full-text copy of the Disclosure Statement dated September 30, 2021, is available at https://bit.ly/3FjEbEk from PacerMonitor.com at no charge. Attorney for the Debtor: Reese Baker, Esq. Baker & Associates 950 Echo Lane, Ste 300 Houston, TX 77024 Tel: (713) 979-2279 About Samurai Martial Sports Inc. Samurai Martial Sports, Inc., is a Houston-based company that operates a sports complex, camps, after school care and related matters. Samurai Martial Sports filed a petition for Chapter 11 protection (Bankr. S.D. Tex. Case No. 21-32250) on July 2, 2021, listing as much as $10 million in both assets and liabilities. Ihab Ahmed, president of Samurai Martial Sports, signed the petition. Judge Eduardo V. Rodriguez oversees the case. Reese Baker, Esq., at Baker & Associates and Norris & Associates serve as the Debtor's legal counsel and accountant, respectively. SILGAN HOLDINGS: Fitch's 'BB+' IDR Removed From UCO Status ---------------------------------------------------------- Fitch Removes Silgan Holdings Inc.'s 'BB+' Long-Term Issuer Default Rating (IDR) from Under Criteria Observation (UCO). Fitch also removes from UCO Silgan's Senior 1st Lien Secured U.S. and Canadian Revolving and Term Loan Facilities at 'BBB-'/'RR1', senior unsecured USD and euro-denominated notes at' BB+'/'RR4', and the 'BBB-'/'RR1' ratings of the senior secured notes. The Rating Outlook is Stable. The removal from UCO of the senior secured and unsecured instruments reflects Fitch's application of the agency's updated Corporates Recovery Ratings and Instrument Ratings Criteria. The ratings were placed on UCO following the publication of the updated criteria on April 9, 2021. KEY RATING DRIVERS Recovery Ratings Criteria Update: The RR and instrument rating for Silgan's revolving credit are based on Fitch's rating grid for issuers with 'BB' category IDRs. Silgan's senior secured ratings are viewed as a category 1 first-lien, which translates into a one-notch uplift from the IDR of 'BB+' with a 'RR1'. Silgan's USD and Euro unsecured bonds are viewed as 'RR4', with a notching equivalent to the 'BB+' IDR. RATING SENSITIVITIES Factors that could, individually or collectively, lead to positive rating action/upgrade: -- Demonstrated commitment toward maintaining a Total Debt with Equity Credit/Operating EBITDA below 3.5x on a sustained basis, supported by a clear and credible financial policy; -- Credit conscious implementation of the company's M&A strategy while maintaining or enhancing cash flow consistency; -- Transition to a less encumbered balance sheet. Factors that could, individually or collectively, lead to negative rating action/downgrade: -- Total Debt with Equity Credit/Operating EBITDA above 4.0x on a sustained basis, or a weakening of existing leverage targeting; -- A debt funded acquisition which is not accommodated within existing financial policies, does not have a clear deleveraging path within 24 months, or which materially changes the predictability of cash flows. -- A change in capital allocation policies which prioritizes shareholder returns over deleveraging. 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. ISSUER PROFILE Silgan Holdings Inc. (Silgan) is a leading supplier of rigid packaging for a range of food and consumer products with EBITDA of approximately $800 million on revenue of over $5 billion. The company generates about 70% of revenues in North America and the remaining 20% in Europe, with the balance predominately in Latin America. SUMMARY OF FINANCIAL ADJUSTMENTS Fitch has made no material adjustments that are not disclosed within the company's public filings. ESG Considerations Unless otherwise disclosed in this section, the highest level of ESG credit relevance is a score of '3'. This means ESG issues are credit neutral or have only a minimal credit impact on the entity, either due to their nature or the way in which they are being managed by the entity. SK FOODS: California Court Dismisses Four in One Suit ----------------------------------------------------- Four in One Company, Inc., Bruce Foods Corporation, Cliffstar Corporation and Diversified Foods & Seasonings, Inc. are food product manufacturers that purchased processed tomato products from SK Foods L.P., Ingomar Packing Company, Los Gatos Tomato Products, Scott Salyer, Stuart Woolf and Greg Pruett. The Plaintiffs moved for cy pres distribution of the remaining class funds, $8,766.85, to the Institute for Consumer Antitrust Studies at Loyola University Chicago School of Law (ICAS/Loyola) and dismissal of the action. The Defendants did not file an opposition, and the Court submitted the matter without a hearing. Chief District Judge Kimberly J. Mueller of the United States District Court for the Eastern District of California, issued an order dated Sept. 30, 2021, granting the motions as follows: (1) The Court grants the disbursement of the remaining class funds in the amount of $8,766.85 to the appropriate cy pres designee, the ICAS/Loyola. (2) The Court dismisses on the merits and with prejudice the remaining causes of action against SK Foods, L.P. and Scott Salyer. The Court found that ICAS/Loyola's advocacy efforts align with the nature of the plaintiffs' lawsuit and the consumer protection objectives of the Sherman Act. The Plaintiffs propose ICAS/Loyola as cy pres designee "because of its work on behalf of consumers in the area of antitrust law to protect the rights of individuals from the types of predatory behavior underlying the lawsuit." ICAS/Loyola is a "non-sectarian charitable organization" and "non-partisan, independent academic center that advocates for a more just, competitive, and consumer-friendly economy." Silent class members' interests will reasonably be benefitted by the distribution to ICAS/Loyola, the Court said. The Plaintiffs argue that ICAS/Loyola reflects the interests of the silent class members because "it has a nationwide reach sufficient to justify receipt of the cy pres award." The Court agreed. ICAS/Loyola works on behalf of people such as the "[c]lass members in this case, who were consumers of commodities that were the subject of price-fixing agreements subject to antitrust liability." University programs may be appropriate designees when the focus of the program aligns with the interests of a nationwide class. Likewise, ICAS/Loyola's research on creating a more just economy will benefit the silent, nationwide class impacted by alleged price fixing. Therefore, the Court held, the organization is an appropriate cy pres designee due to the nexus between the class interests and the designee's interest. A full-text copy of the Order is available at https://is.gd/sD5Hxs from Leagle.com. The cases are Four In One Company, Inc., et al., Plaintiffs, v. SK Foods, L.P., et al. Defendants. Diversified Foods and Seasoning, Inc., et al., Plaintiffs, v. SK Foods, L.P., et al. Defendants. Bruce Foods Corporation., et al., Plaintiffs, v. SK Foods, L.P., et al. Defendants Cliffstar Corporation., et al., Plaintiffs, v. SK Foods, L.P., et al. Defendants, Nos. 2:08-cv-3017 KJM JDP, 2:08-cv-03074-KJM-JDP, 2:09-cv-00027-KJM-JDP, 2:09-cv-00442 KJM JDP (E.D. Cal.). About SK Foods SK Foods LP ran a tomato processing facility. It filed for Chapter 11 bankruptcy protection after being dropped by its lending group. Creditors filed an involuntary Chapter 11 petition against SK Foods LP and affiliate RHM Supply/ Specialty Foods Inc. (Bankr. E.D. Cal. Case No. 09-29161) on May 8, 2009. SK Foods had said it was preparing to file a voluntary Chapter 11 petition when the creditors initiated the involuntary case. The Company later put itself into Chapter 11 and Bradley D. Sharp was appointed as Chapter 11 trustee. The Debtors were authorized on June 26, 2009, to sell the business for $39 million cash to a U.S. arm of Singapore food processor Olam International Ltd. The replacement cost for the assets is $139 million, according to Olam. In February 2010, a federal grand jury returned a seven-count indictment charging Frederick Scott Salyer, former owner and CEO of SK Foods, with violations of the Racketeer Influenced and Corrupt Organizations Act, in connection with his direction of various schemes to defraud SK Foods' corporate customers through bribery and food misbranding and adulteration, and with wire fraud and obstruction of justice. Salyer supporters launched a Web site which can be accessed from two addresses: http://www.operationrottentomato.com/and http://www.scott-salyer.com/ SOUTH COAST BEHAVIORAL: Nov. 22 Plan Confirmation Hearing Set ------------------------------------------------------------- On Sept. 29, 2021, the U.S. Bankruptcy Court for the Central District of California held a disclosure statement hearing for Debtor South Coast Behavioral Health, Inc. On October 4, 2021, Judge Mark S. Wallace approved the Disclosure Statement and ordered that: * Nov. 5, 2021, is fixed as the last day to submit Ballots and objections to plan confirmation. * Nov. 12, 2021, is fixed as the last day for Debtor to file replies to objections. * Nov. 22, 2021, at 2:00 p.m. is the plan confirmation hearing. A copy of the order dated October 4, 2021, is available at https://bit.ly/3FkNuUv from PacerMonitor.com at no charge. About South Coast Behavioral Health South Coast Behavioral Health, Inc., is a healthcare company that specializes in the in-patient and outpatient treatment of addicts, alcoholics, and persons dealing with mental health issues. It offers a clinically supervised residential sub-acute detox services, therapeutic and residential treatment centers, intensive outpatient treatment services, and partial hospitalization programs. On the Web https://www.scbh.com/ South Coast Behavioral Health sought protection under Chapter 11 of the Bankruptcy Code (Bankr. C.D. Cal. Case No. 19-12375) on June 20, 2019. At the time of the filing, Debtor disclosed assets of between $1 million and $10 million and liabilities of the same range. Judge Mark S. Wallace oversees the case. The Debtor has tapped Nicastro & Associates, P.C., as its bankruptcy counsel. The Office of the U.S. Trustee appointed a committee of unsecured creditors in Debtor's case. The committee tapped Weiland Golden Goodrich LLP as its legal counsel, and Bryars Tolleson Spires + Whitton LLP as its financial advisor. On Feb. 27, 2020, the U.S. Trustee appointed Thomas Casey as the Debtor's Chapter 11 trustee. Mr. Casey has tapped Ringstad & Sanders LLP as his bankruptcy counsel; Nicastro & Associates, PC as special counsel; and Joseph S. Yung & Co. as tax accountant. STATERA BIOPHARMA: Turner Stone Replaces Meaden & Moore as Auditor ------------------------------------------------------------------ The audit committee of Statera BioPharma, Inc.'s board of directors approved the engagement of Turner, Stone & Company, LLP as the company's independent registered public accounting firm for the fiscal year ending Dec. 31, 2021, subject to completion of the firm's standard client acceptance process and execution of an engagement letter, and dismissed Meaden & Moore as the company's independent registered public accounting firm. The reports of M&M on the company's consolidated financial statements for the fiscal years ended Dec. 31, 2020 did not contain an adverse opinion or a disclaimer of opinion and was not qualified or modified as to uncertainty, audit scope or accounting principles. M&M's report on the company's consolidated financial statements for the fiscal year ended Dec. 31, 2019 did not contain an adverse opinion or a disclaimer of opinion but contained a modified opinion, as it included an explanatory paragraph describing the net capital deficiency that raised substantial doubt about its ability to continue as a going concern. Statera BioPharma stated that during the years ended Dec. 31, 2020 and 2019 and the subsequent interim period through Sept. 28, 2021: (i) the company had no disagreements (as defined in Item 304(a)(1)(iv) of Regulation S-K and the related instructions) with M&M on any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedure, which disagreements, if not resolved to M&M's satisfaction, would have caused M&M to make reference thereto in its reports on the company's financial statements for such years, and (ii) there were no "reportable events," as that term is defined in Item 304(a)(1)(v) of Regulation S-K, other than with respect to the company's previously reported determination that as of Dec. 31, 2019, the company's internal control over financial reporting was not effective. During the years ended Dec. 31, 2020 and 2019 and the subsequent interim period through Sept. 28, 2021, neither Statera BioPharma nor anyone acting on the company's behalf, consulted Turner Stone regarding: (i) the application of accounting principles to a specified transaction, either completed or proposed, or the type of audit opinion that might be rendered on the company's financial statements, and neither a written report nor oral advice was provided to the company that Turner Stone concluded was an important factor considered by the company in reaching a decision as to any accounting, auditing, or financial reporting issue, or (ii) any matter that was either the subject of a disagreement as defined in Item 304(a)(1)(iv) of Regulation S-K and the related instructions or a "reportable event" described in Item 304(a)(1)(v) of Regulation S-K. About Statera Statera Biopharma, Inc. (formerly known as Cytocom, Inc. and Cleveland Biolabs) is a clinical-stage biopharmaceutical company developing novel immunotherapies targeting autoimmune, neutropenia/anemia, emerging viruses and cancers based on a proprietary platform designed to rebalance the body's immune system and restore homeostasis. Cleveland Biolabs reported a net loss of $2.44 million for the year ended Dec. 31, 2020, compared to a net loss of $2.69 million for the year ended Dec. 31, 2019. As of June 30, 2021, the Company had $13.83 million in total assets, $300,623 in total liabilities, and $13.53 million in total stockholders' equity. TALI CORP: Unsecured Creditors to Get Share of Income for 5 Years ----------------------------------------------------------------- Tali Corp. d/b/a/ bkr, filed with the U.S. Bankruptcy Court for the Northern District of California a Plan of Reorganization. The Debtor's bankruptcy filing was precipitated by the COVID-19 pandemic. Despite the COVID pandemic, the Debtor saw an increase in internet sales in 2020, though not enough to offset the losses through other channels. The unexpected decline in revenue ultimately led to cash flow difficulties, and the Debtor's decision to file for bankruptcy. As of Oct. 1, 2021, the Debtor estimates that it will have approximately $42,000 of cash on hand. As of Oct. 1, 2021, Debtor estimates that it will have accounts receivable of approximately $122,000, 85% of which is estimated to be collectable, for a total recovery on accounts receivable of $103,700. Payments due under the Plan will be made from cash on hand as of the Effective Date of the Plan and future revenues generated by the reorganized Debtor. General unsecured creditors with allowed claims will receive a pro rata portion of the greater of (i) a fund totaling 5% of actual Net Revenue that Debtor earns above $4,500,000 per year in each of the 5 years after the Effective Date of the Plan, and (ii) a fund totaling 35% of Debtor s actual Net Income that exceeds $175,000.00/year in each of the 5 years after the Effective Date of the Plan. Taxes will be paid in full in monthly payments over 3 years. Administrative claims will be paid in full in monthly payments over 18 months or 3 years depending on the claim. Priority wage claimants, to the extent that the employee remains an employee of Debtor and that the claim is based on unused vacation days, will retain the right to use that vacation pay in the ordinary course of reorganized Debtor's business. Priority wage claimants, to the extent that they are no longer employed by Debtor or that their claims are based on unpaid wages, will be paid in full in monthly payments over 3 years. Class 1A consists of the claim of City National Bank. Debtor will pay the secured claim in full with interest from the Effective Date of the Plan through 77 monthly payments. Payments will be due on the 1st day of the month, starting on the Effective Date. The cure provisions in the Plan apply to this class. Creditors in these classes shall retain their interest in the collateral until Debtor makes all payments on the allowed secured claim specified in the Plan. Allowed claims of general unsecured creditors shall be paid as follows: The balance of the Debtor's projected disposable income for 3 years after payment of secured, administrative, and priority claims, is $0. Creditors will receive a pro rata portion of the greater of (i) a fund totaling 5% of actual Net Revenue that Debtor earns above $4,500,000 per year in each of the 5 years after the Effective Date of the Plan, and (ii) a fund totaling 35% of Debtor s actual Net Income that exceeds $175,000 per year in each of the 5 years after the Effective Date of the Plan. Both scenarios will be evaluated using the year end income tax return for each year as filed. Payments will be distributed one month after the annual tax return for each year is filed. In addition, should the reorganized Debtor (i) choose to prosecute the lawsuits or (ii) settle the lawsuits prior to the commencement of litigation, general unsecured creditors would receive a prorata portion of 50% of any net recovery. If at the end of 5 years after the Effective Date of the Plan general unsecured creditors with allowed claims have not received any payments, they shall be entitled to a pro rata portion of $10,000. All current interest holders will retain their percentage equity membership in the Debtor that they held as of the Petition Date. Post-confirmation, the Debtor will continue to be managed by Adam Winter and Tal Winter. A full-text copy of the Plan of Reorganization dated Sept. 30, 2021, is available at https://bit.ly/3D5CTLe from PacerMonitor.com at no charge. Attorney for the Debtor: Jeffrey I. Golden, Esq. Reem J. Bello, Esq. Sonja M. Hourany, Esq. Weiland Golden Goodrich LLP 650 Town Center Drive, Suite 600 Costa Mesa, CA 92626 Telephone: (714) 966-1000 Facsimile: (714) 966-1002 Email: jgolden@wgllp.com rbello@wgllp.com shourany@wgllp.com About Tali Corp. Tali Corp. d/b/a bkr manufactures glass and glass products. Tali sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. N.D. Cal. Case No. 21-30254) on April 1, 2021. In the petition signed by Adam Winter, chief operating officer, the Debtor disclosed up to $50,000 in assets and up to $10 million in liabilities. Judge Dennis Montali oversees the case. Jeffrey I. Golden, Esq., is the Debtor's counsel. TENRGYS LLC: Nov. 9 Disclosure Statement Hearing Set ---------------------------------------------------- On Oct. 1, 2021, Tenrgys, LLC and its Debtor Affiliates filed with the U.S. Bankruptcy Court for the Southern District of Mississippi a Disclosure Statement and Joint Plan. On October 4, 2021, Judge Jamie A. Wilson ordered that: * Nov. 9, 2021, at 10:00 a.m. at the U.S. Bankruptcy Court for the Southern District of Mississippi, Bankruptcy Courtroom 4C, 501 East Court Street, Jackson, Mississippi, is the hearing to consider the approval of the disclosure statement. * Nov. 1, 2021, is fixed as the last day for filing and serving written objections to the disclosure statement. A copy of the order dated October 4, 2021, is available at https://bit.ly/3moDYHv from PacerMonitor.com at no charge. About Tenrgys LLC Tenrgys, LLC operates as an oil and gas exploration and production company. It is headquartered in Ridgeland, Miss. Tenrgys and its affiliates filed their voluntary petitions for Chapter 11 protection (Bankr. S.D. Miss. Lead Case No. 21-01515) on Sept. 17, 2021, listing as much as $500 million in both assets and liabilities. Richard H. Mills, Jr., manager, signed the petitions. Judge Jamie A. Wilson oversees the cases. Copeland, Cook, Taylor & Bush, P.A. and FTI Consulting, Inc. serve as the Debtors' legal counsel and financial advisor, respectively. TERRAFORM POWER: Fitch Affirms 'BB-' LongTerm IDR, Outlook Stable ----------------------------------------------------------------- Fitch Ratings has affirmed TerraForm Power Operating LLC's (TERPO) 'BB-' Long-Term Issuer Default Rating (IDR). The Rating Outlook is Stable. Fitch has downgraded TERPO's senior unsecured rating to 'BB-'/'RR4' from 'BB'/'RR2' to reflect the application of the updated Corporates Recovery Ratings and Instrument Ratings Criteria. TERPO's IDR is supported by long-term contracted or regulated cash flows from a diversified renewables portfolio. Resource variability is a key risk offset by cost discipline. TERPO's IDR incorporates Fitch's expectation that it will fund cash distributions in a credit-supportive manner. Holdco-only FFO leverage is expected to range from mid-to high-5x. Private ownership is beneficial but impairs transparency. KEY RATING DRIVERS Contracted and Regulated Portfolio: TERPO owns and operates 4.2GW of diversified wind and solar assets located primarily in the U.S. and Spain. Approximately 59% of cash flows are long-term contracted with over 90% investment-grade off-takers, and 35% is regulated under a fixed return-on-investment regime in Spain. TERPO's power purchase contracts have a 12-year average remaining life, shorter than peers. Performance to Improve: Despite lower wind resources and outages, financial performance in 2021 overall is expected to improve, primarily due to strong power prices in Spain, cost savings and project completion. Spain wholesale power prices have more than doubled compared to a year ago. Mt. Signal solar project will be transitioned to a fully-wrapped OM agreement with SMA solar which should improve margin. The repowering of 160MW wind facilities in New York will add 100GWh generation per year and incremental cash flow of $5 million year. Texas Storm Impact Manageable: In February 2021, Texas' extreme cold weather resulted in record high wholesale power prices. TERPO operates about 400MW gross capacity in Texas (216MW net of minority partner interest). The Rattlesnake and South Plains facilities are the only two facilities that have fixed-volume energy hedges. They are required to purchase power at market price when generation was below a certain level. Rattlesnake was offline for 10 days. South Plains was operational but generation was impaired. Cost of operations from the event was $113 million including power purchase cost offset by $52 million of higher average market price realized at partially operational wind farm in Texas. TERPO restructured the terms of each partnership agreement that gives TERPO priority in distribution during the term of a new preferred equity investment. TERPO expects to have a net benefit for the forecast period as a result. Organic and Low Growth: Fitch expects TERPO to shift toward an organic and low growth model. Future growth will come from redevelopments (including repowering), distributed generation expansions, battery storage, behind-the-meter efficiency products. The repowering of the 160MW Cohocton and Steel Winds facilities in New York are expected to reach commercial operations by the end of the year. Increasing Distribution: Distributions have increased since the end of 2020. In affirming TERPO's ratings, Fitch assumes that it will fund the distributions in a credit supportive manner. In 2020, distribution totaled $315 million compared with $179 million in 2019. It was partly funded by proceeds from selling a 49.9% minority stake in an 836MW North American wind portfolio in October 2020. For the first half of 2021, TERPO distributed $411 million including $286 million to Terraform Power LLC. It was funded by a revolver draw of $290 million, which is expected to be repaid by project upfinancing. Upfinancing will result in lower growth in distributable cash flow, offset by maintaining or reducing holdco debt to reach a target leverage ratio. Service Contracts Improve Margin: TERPO expects wind O&M to achieve approximately $20 million run-rate savings following the implementation of Full-Service Agreement (FSA) with GE on the 1.6 GW North American wind fleet. TERPO received $6 million FSA guarantee payment in 2020. TERPO also extended the South Plains wind contract with existing O&M provider adding $2 million savings. TERPO executed Long-term Service Agreements (LTSA) for European wind which could achieve $4 million savings. TERPO signed LTSA for its 988 MW North America solar fleet with SMA solar (excluding Arcadia) which could save $5 million. Arcadia has been signed LTSA with QE Solar in July which could save $1 million. Private Ownership Largely Positive: Private ownership by Brookfield Renewable Partners (BEP, BBB+/Stable) and Brookfield affiliates removed $4 million administrative costs associated with a publicly listed company and the need to pay management fees which was $27 million in 2019. The 5%-8% growth target and 80%-85% dividend payout ratio are eliminated. However, a private ownership is usually less transparent. Credit Metrics: Fitch calculates TERPO's credit metrics on a deconsolidated basis as its operating assets are largely financed with nonrecourse debt. TERPO's 2020 holdco-only FFO leverage ratio was approximately 5.9x. In the next three years, Fitch projects that holdco-only FFO leverage will be in the mid to high 5.0x. Parent Sub Linkage: Fitch rates TERPO on a standalone basis. Fitch views TERPO as an affiliate of BEP and BEP's support is typical of a financial sponsor or investment manager, instead of a 'parent'. DERIVATION SUMMARY TERPO's ratings are assigned based on a deconsolidated approach. TERPO's subsidiaries are project subsidiaries that have been largely funded by nonrecourse debt. Fitch applies similar approach to NextEra Energy Partners (NEP; BB+/Stable) and Atlantica Sustainable Infrastructure plc (AY; BB+/Stable), both of which own and operate portfolios of nonrecourse projects. TERPO is similar in terms of generation capacity to NEP but is larger than AY. TERPO's long-term contracted fleet has a remaining contract life of 12 years, lower than NEP's 15 years and AY's 17 years. NEP and AY are publicly traded yieldcos and are targeting 12%-15% and 8%-10% distribution growth, respectively. TERPO has been taken private and is no longer subject to public growth targets and will execute a low-growth strategy. AY's renewable portfolio benefits from a large proportion of solar generation assets (63%) that exhibit less resource variability, versus NEP's 14% and TERPO's 43%. Fitch considers NEP better positioned than TERPO owing to NEP's primary presence in the U.S., stronger credit metrics and its association with NextEra Energy Inc. (A-/Stable). Similar to AY, TERPO is exposed to Spanish regulatory uncertainties. TERPO's credit metrics are weaker than those of AY, but TERPO's ownership by BEP is stronger than AY, providing stability and expertise in executing its business strategies. KEY ASSUMPTIONS -- Wind O&M to achieve about $20 million in run-rate savings following the implementation of the FSA with GE that wraps O&M and major maintenance and guarantees production on a MWh basis; -- Repowering of 160MW of wind facilities in NY to reach COD at the end of 2021; -- Certain amount of debt reduction and refinancing are assumed; -- $500 million project-level Upfinancing in 2021. RATING SENSITIVITIES Factors that could, individually or collectively, lead to positive rating action/upgrade: -- Holdco-only FFO leverage below 5.0x on a sustainable basis; -- A track record of a conservative and consistent approach in executing the business plan from a credit perspective. Factors that could, individually or collectively, lead to negative rating action/downgrade: -- Holdco-only FFO leverage above 6.5x on a sustainable basis; -- Underperformance in project assets that lends material variability or shortfall to expected project distributions on a sustained basis and without a clear path to recovery; -- Aggressive cash distribution resulting in holdco-only FFO leverage to exceed 6.5x; -- Lack of access to funding that causes TERPO to deviate from its target capital structure. 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. ISSUER PROFILE TERPO owns and operates 4.2GW of diversified wind and solar assets predominantly in the U.S., Europe and Canada. In 2020, 57% and 43% of the generation capacity are from wind and solar; 41% and 59% of projected revenue are from wind and solar respectively. 94% of the cash flows are under long term contracts or regulatory framework. Average remaining term of long-term contracts is 12 years. THOR INDUSTRIES: S&P Rates New $400MM Senior Unsecured Notes 'BB-' ------------------------------------------------------------------ S&P Global Ratings assigned its 'BB-' issue-level rating and '5' recovery rating to Thor Industries Inc.'s proposed $400 million senior unsecured notes due 2029, and affirmed the 'BB+' issue-level rating on the company's existing term loan and the '2' recovery rating remains unchanged. Thor plans to use the proceeds of the issuance to partially repay the outstanding balance under its asset-based lending (ABL) facility, which was temporarily drawn to partially finance the acquisition of Airxcel's recreational vehicle (RV) supplier business. On Sept. 1, 2021, Thor acquired Airxcel's RV segment for a total purchase price of $750 million, which was financed at closing by $125 million of cash on hand and a $625 million draw under the company's ABL. At the same time, Thor upsized the ABL capacity to $1 billion from $750 million to fund the acquisition and working capital needs. The 'BB' issuer credit rating and stable outlook are unchanged. S&P said, "We expect Thor will continue to experience good demand for its products, and we assume total revenue (including acquired Airxcel revenue) grows about 12%-17% in fiscal 2022 (ending July) compared with fiscal 2021 reported results. North American dealership inventories remain low, and Thor's backlog is at a record high level of about $16.9 billion as of July 2021; these factors contribute to our belief that the company's revenue generation could remain robust through fiscal 2022 and a portion of fiscal 2023. We preliminarily assume that retail demand growth could begin to slow starting in late fiscal 2022, leading to dealership inventory replenishment and low-single-digit percent total revenue growth at Thor in fiscal 2023. Our adjusted EBITDA margin assumption is in the 9.25%-9.75% range in fiscals 2022 and 2023. Based on these assumptions and no additional acquisitions or other leveraging transactions, we forecast adjusted debt to EBITDA in the 1x area in fiscal 2022 and in the 0.5x-0.75x range in fiscal 2023, which would represent a very good cushion compared with the 3.25x downgrade threshold at the current 'BB' issuer credit rating." ISSUE RATINGS--RECOVERY ANALYSIS Key analytical factors -- S&P's issue-level rating on the proposed $400 million senior unsecured notes is 'BB-'. The recovery rating is '5' and indicates its expectation of modest (10%-30%; rounded estimate: 15%) recovery for senior unsecured lenders in the event of a payment default. The proposed issuance is guaranteed by all existing and future domestic subsidiaries of Thor that guarantee the term loan. -- S&P views the proposed senior unsecured notes and secured term loan deficiency claims to be pari passu and share ratably in the value from non-obligor assets (primarily European subsidiary Erwin Hymer Group (EHG)), after EHG subsidiary-level debt claims are satisfied. The non-obligor foreign subsidiaries provide a 65% stock pledge to the ABL, term loan, and senior unsecured notes. -- S&P said, "Our issue-level rating on the company's senior secured term loan due 2026 is 'BB+'. The term loan comprises a U.S. dollar tranche and a euro tranche. Both tranches of the term loan have claims to the same collateral package. The '2' recovery rating indicates our expectation for substantial (70%-90%; rounded estimate: 85%) recovery for lenders in the event of a payment default." -- The term loan is secured by substantially all assets of the loan parties, which are defined as Thor Industries Inc. and its direct and indirect wholly owned domestic subsidiaries. The liens securing the term loan are first-priority for all collateral, other than the ABL priority collateral, and second-priority for the ABL priority collateral. -- S&P's analysis incorporates Thor's upsized ABL commitment of $1 billion. -- S&P's simulated default scenario contemplates a default occurring in 2026 because of a substantial decline in cash flow due to a prolonged economic downturn and a decline in the availability of consumer credit, the combination of which significantly reduces demand for the company's RVs. -- S&P assumes a reorganization following the default and use a 6x emergence EBITDA multiple to value the company. -- Because there is a euro-denominated tranche in the term loan, S&P might periodically adjust its assumed EBITDA at emergence and debt exposure at default for any material changes in currency exchange rates. Simulated default assumptions -- Simulated year of default: 2026 -- Emergence EBITDA: $380 million -- EBITDA multiple: 6x -- ABL facility: 60% drawn at default Simplified waterfall -- Net enterprise value (after 5% administrative costs): $2.17 billion -- Obligor/nonobligor valuation split: 81%/19% -- Estimated priority ABL claims on the obligor: $612 million -- Estimated European subsidiary-level secured real estate and unsecured debt claims on the non-obligor (primarily European Erwin Hymer Group assets): $102 million -- Value available to secured term loan claims: $1.38 billion -- Estimated secured term loan claims: $1.59 billion --Recovery expectations: 70%-90% (rounded estimate: 85%) -- Value available to senior unsecured lenders (for senior unsecured notes and deficiency term loan claims): $108 million -- Estimated senior unsecured claims (senior unsecured notes and deficiency term loan claims): $652 million --Recovery expectations: 10%-30% (rounded estimate: 15%) All debt amounts include six months of prepetition interest. TIMESHARE TERMINATION: False Advertising Suit Halted by Filing -------------------------------------------------------------- Nathan Hale of Law360 reports that the bankruptcy filings by a timeshare exit firm and its owners brought a halt Monday, October 4, 2021, to a false advertising suit against them in Florida federal court, where timeshare company Bluegreen Vacations Unlimited Inc. had recently argued that any shortfall of the timeshare exit firm's funds was the result of fraudulent transactions. Miami-based U.S. District Judge Beth Bloom issued a last-minute cancellation of a hearing scheduled for Monday afternoon on Bluegreen's motion for a preliminary injunction after Timeshare Termination Team LLC and its owners, Brian and Holly Wilbur, submitted notice in the morning that they had filed for bankruptcy protection. About Timeshare Terminational Team Timeshare Terminational Team LLC is a timeshare exit company in Greenwood Village, Colorado. Timeshare Termination Team sought Chapter 7 protection (Bankr. D. Colo. Case No. 21-15008) on Sept. 30, 2021. The case is handled by Honorable Judge Kimberley H Tyson. Jonathan Dickey, of Kutner Brinen Dickey Riley, P.C., is the Debtor's counsel. USA GYMNASTICS: Defeats Bankruptcy Plan Vote Challenge of Insurer ----------------------------------------------------------------- Alex Wolf of Bloomberg Law reports that TIG Insurance Co. lost its bid to block USA Gymnastics from soliciting votes for a Chapter 11 plan centered around a $425 million sex abuse settlement. TIG, the only USA Gymnastics insurer that hasn't agreed to settle claims stemming from former team doctor Larry Nassar's years-long sexual abuse, has taken issue with proposed plan provisions that hand over proceeds and collection rights under the organization's insurance policies to a victims' settlement trust. But TIG's objections don't "have legs," and aren't enough to block voting on the plan, Judge Robyn L. Moberly of the U.S. Bankruptcy Court for the Southern District of Indiana. About USA Gymnastics USA Gymnastics -- https://www.usagym.org/ -- is a not-for-profit organization incorporated in Texas. Based in Indianapolis, Indiana, USAG's organization encompasses six disciplines: women's gymnastics, men's gymnastics, trampoline and tumbling, rhythmic gymnastics, acrobatic gymnastics, and group gymnastics. USAG provides educational opportunities for coaches and judges, as well as gymnastics club owners and administrators, and sanctions approximately 4,000 competitions and events throughout the United States annually. More than 200,000 athletes, professionals, and clubs are members of USAG. USAG sets the rules and policies that govern the sport of gymnastics in the United States, including selecting and training the United States gymnastics teams for the Olympics and World Championships. As of the Petition Date, USAG employs 53 individuals, nearly all of whom work for USAG full-time. USA Gymnastics sought Chapter 11 protection (Bankr. S.D. Ind. Case No. 18-09108) on Dec. 5, 2018. USAG estimated $50 million to $100 million in assets and the same range of liabilities as of the bankruptcy filing. The Hon. Robyn L. Moberly is the case judge. USAG tapped JENNER & BLOCK LLP as counsel; ALFERS GC CONSULTING, LLC and SCRAMBLE SYSTEMS, LLC, as business consulting services providers; and OMNI Management Group, Inc., as claims agent. VENOCO LLC: Supreme Court Denies CA Appeal of Trustee Taking Suit ----------------------------------------------------------------- Jeff Montgomery of Law360 reports that the U.S. Supreme Court on Monday, Oct. 4, 2021, refused to hear a California agency's appeal challenging lower court findings that a bankruptcy trustee's inverse condemnation claim trumped state sovereign immunity defenses in the regulatory takeover of oil company land and assets during an offshore spill cleanup. In a certiorari denial listed in a string of October session-opening decisions, the justices rejected an appeal by the California State Lands Commission without comment. The commission sought reversal of the Third Circuit's May 24 finding that a 2006 high court ruling made bankruptcy's "in rem" jurisdiction over the Chapter 11 estate of oil driller Venoco LLC. About Venoco LLC Venoco, LLC, is a California-based and privately owned independent energy company primarily focused on the acquisition, exploration, production and development of oil and gas properties. As of April 2017, Venoco held interests in approximately 57,859 net acres, of which approximately 40,945 are developed. In the midst of a historic collapse in the oil and gas industry, Venoco, Inc. -- the predecessor in interest to Venoco, LLC -- and six of Venoco, Inc.'s affiliates commenced voluntary Chapter 11 cases (Bankr. D. Del. Lead Case No. 16-10655) on March 18, 2016, in Delaware to address their overleveraged capital structure. In under four months, the 2016 Debtors confirmed a plan eliminating more than $1 billion in funded debt and other liabilities. On April 17, 2017, each of Venoco, LLC, and six of its subsidiaries filed Chapter 11 bankruptcy petitions (Bankr. D. Del. Lead Case No. 17-10828). As of the bankruptcy filing, the Debtors estimated assets in the range of $10 million to $50 million and liabilities of up to $100 million. Judge Kevin Gross presides over the 2017 cases. The Debtors have hired Morris, Nichols, Arsht & Tunnell LLP and Bracewell LLP as counsel; Zolfo Cooper LLC as restructuring and turnaround advisor; Seaport Global Securities LLC as financial advisor; and Prime Clerk LLC as claims, noticing and balloting agent. WA INC: Seeks to Hire Goering & Goering as Bankruptcy Counsel ------------------------------------------------------------- WA, Inc. seeks approval from the U.S. Bankruptcy Court for the Southern District of Ohio to employ Goering & Goering, LLC to serve as legal counsel in its Chapter 11 case. The firm's services include: (a) taking all necessary actions to protect and preserve the estate, including the prosecution of actions on the Debtor's behalf, the defense of any actions commenced against the Debtor or the estate, negotiations concerning all litigation in which the Debtor may currently be involved, and objections to claims filed against the estate; (b) preparing legal papers; (c) negotiating and preparing a Chapter 11 plan of reorganization and all related documents; and (d) performing all other necessary legal services. The hourly rates for the firm's attorneys who will be primarily responsible for representing the Debtor are as follows: Eric Goering $400 per hour Robert Alfred Goering $500 per hour Alexis M. Mize $300 per hour The firm received $17,610 for pre-bankruptcy work, $1,738 for the filing fee and $20,652 as retainer. Eric Goering, Esq., at Goering, disclosed in court filings that his firm does not have any connection with the Debtor, creditors or any "party-in-interest." The firm can be reached through: Eric W. Goering, Esq. Robert A. Goering, Esq. Alexis Mize, Esq. Goering & Goering, LLC 220 West Third Street Cincinnati, OH 45202 Telephone: (513) 621-0912 About WA Inc. Cincinnati, Ohio-based WA, Inc. filed its voluntary petition for Chapter 11 protection (Bankr. S.D. Ohio Case No. 21-12122) on Oct. 1, 2021, listing up to $500,000 in assets and up to $10 million in liabilities. Judge Jeffery P. Hopkins oversees the case. Robert A. Goering, Esq., at Goering & Goering represents the Debtor as legal counsel. WEST C BUILDERS: May Use Cadence Bank Cash Collateral ----------------------------------------------------- The U.S. Bankruptcy Court for the Northern District of California, Santa Rosa Division, has authorized West C Builders, Inc. to use cash collateral in accordance with the Stipulation filed October 1, 2021. The parties agree the Debtor is authorized to use the cash collateral of Cadence Bank in accordance with the budget, with a 20% variance. The Debtor must remit monthly adequate-protection payments to Cadence Bank, in the amount of at least the payment pursuant to the loan documents regarding the Debtor's loan from Cadence Bank and on the due date set forth in the loan documents. If the Debtor fails to remit any such payment, Cadence Bank may immediately terminate the Debtor's authority to use cash collateral by filing a notice of such termination. Cadence Bank has a first-priority replacement lien on all the Debtor's post-petition assets, to the extent of the Debtor's use of the petition date bank account balances and the petition date accounts receivable from the petition date forward. The Debtor must account, at least twice per month, showing by budget category the amounts expended during the time period and showing, by project, the receipts during the time period. The accounting must include printouts of all deposits and withdrawals from the Debtor's bank accounts, downloaded from the Debtor's online access to the accounts, tying the accounting to the bank records. The reports must be received by Cadence Bank's counsel no later than 3 business days after the 15th of each month and the end of each month. If the Debtor fails timely to deliver any accounting, Cadence Bank may immediately terminate the Debtor's authority to use cash collateral by filing a notice of such termination. A copy of the stipulation and the Debtor's October 2021 budget is available at https://bit.ly/3uF5rIJ from PacerMonitor.com. The Debtor projects $110,000 in total income and $99,441.56 in total expenses. A copy of the order is available at https://bit.ly/3oxsfsG from PacerMonitor.com. About West C Builders, Inc. West C Builders, Inc. sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. N.D. Cal. Case No. 21-10263) on May 26, 2021. In the petition signed by Anton D. Council, president, the Debtor disclosed up to $10 million in both assets and liabilities. Judge Roger L. Efremsky oversees the case. Gina R. Klump, Esq. at Law Office of Gina R. Klump is the Debtor's counsel. WILLCO X DEVELOPMENT: Taps Mitchell Hoffman as Expert Witness ------------------------------------------------------------- Willco X Development, LLLP received approval from the U.S. Bankruptcy Court for the District of Colorado to hire Mitchell Hoffman, a certified public accountant at Harper Hofer & Associates, LLC, to serve as an expert witness. Mr. Hoffman will provide an expert assessment of, and testimony concerning, the Debtor's assessment and projections with respect to its operations, the probable value of its business, and the probabilities attending the refinancing and alternative sale outcomes reflected in its Chapter 11 plan of reorganization. Mr. Hoffman's hourly rate is $345. In court papers, Mr. Hoffman disclosed that he is a "disinterested person" within the meaning of Section 101(14) of the Bankruptcy Code. Mr. Hoffman holds office at: Mitchell Hoffman, CPA/ABV Harper Hofer & Associates, LLC 216 16th Street, Suite 850 Denver, CO 80202 Phone: +1 303-486-0000 Email: hoffman@harperhofer.com About Willco X Development LLP Willco X Development, LLLP, operator of the Hilton Garden Inn of Thornton in Colo., filed a Chapter 11 petition (Bankr. D. Colo. Case No. 20-16438) on Sept. 29, 2020, listing as much as $50 million in both assets and liabilities. Judge Thomas B. McNamara oversees the case. Weinman & Associates, P.C., led by Jeffrey A. Weinman, Esq., is the Debtor's bankruptcy counsel while EasonLaw, LLC serves as its litigation counsel. Independent Bank, as lender, is represented by John F. Young, Esq., at Markus Williams Young & Hunsicker, LLC. The U.S. Trustee for Region 19 appointed an official committee of unsecured creditors in the Debtor's case on Nov. 17, 2020. The committee is represented by Brinkman Law Group, PC. WILLCO X: Gets OK to Hire John Smiley as Expert Witness ------------------------------------------------------- Willco X Development, LLLP seeks authority from the United States Bankruptcy Court for the District of Colorado to employ John Smiley, Esq., an attorney at Sender & Smiley, LLC, to serve as an expert witness. Mr. Smiley has agreed to review, assess and testify concerning the methodology and assumptions underlying the Debtor's liquidation analysis for an hourly fee of $500. In court papers, Mr. Smiley disclosed that he is a "disinterested person" qualified to be employed under Section 327(a) of the Bankruptcy Code. Mr. Smiley holds office at: John C. Smiley Sender & Smiley, LLC 600 17th Street, Suite 2800 South Denver, CO 80202 Email: Jsmiley@SenderSmiley.com About Willco X Development LLP Willco X Development, LLLP, operator of the Hilton Garden Inn of Thornton in Colo., filed a Chapter 11 petition (Bankr. D. Colo. Case No. 20-16438) on Sept. 29, 2020, listing as much as $50 million in both assets and liabilities. Judge Thomas B. McNamara oversees the case. Weinman & Associates, P.C., led by Jeffrey A. Weinman, Esq., is the Debtor's bankruptcy counsel while EasonLaw, LLC serves as its litigation counsel. Independent Bank, as lender, is represented by John F. Young, Esq., at Markus Williams Young & Hunsicker, LLC. The U.S. Trustee for Region 19 appointed an official committee of unsecured creditors in the Debtor's case on Nov. 17, 2020. The committee is represented by Brinkman Law Group, PC. WILSON GOMER: Claims Will be Paid From Continued Operations ----------------------------------------------------------- Wilson Gomer MD Professional Medical Corporation filed with the U.S. Bankruptcy Court for the Central District of California a Plan of Reorganization for Small Business dated September 30, 2021. Since 2017, the Debtor has been in the business of operating a family medical practice in the Loma Linda-San Bernardino, CA area. The Debtor maintains two offices where patients are seen and provided medical care. Historically, the Debtor's family medical practice was financially solvent, that is, the medical practice generated enough income to pay all its operating expenses, taxes, and other obligations. The Debtor's financial issues relate to the esthetics/body sculpting practice that Dr. Gomer tried to build up in 2019 and 2020. Unfortunately, this practice area was never successful or profitable; the Covid-19 pandemic forced Debtor to close its offices for several months last year, and Debtor was never able to attract many patients for the laser body sculpting services. Nearly all the Debtor's debt consists of the expired leases for the 5 laser machines. Debtor has returned 2 of the 5 machines, and is seeking to return the remaining machines prior to confirmation of Debtor's Plan. The total amount of debt for the filed claims is about $660,000. The Debtor has only a few assets of low value that it could liquidate to pay off these debts. This Plan of Reorganization proposes to pay creditors from cash flow from operations: * Class 1 consists of Priority Claims. Any allowed priority claims will be unimpaired, and each holder of a Class 1 Priority Claim will be paid in full, in cash, upon the later of the effective date of this Plan, or the date on which such claim is allowed by a final non-appealable order. * Class 3 consists of Non-priority unsecured creditors. Class 3 claims will be impaired and will receive plan payments based on Debtor's projected disposable income. The Debtor shall continue in business and Dr. Wilson Gomer will continue to manage the Debtor. Dr. Gomer took a cut in his salary as of May 2021, with his compensation reduced from about $185,000 per year to $140,000 per year, in order to increase the Debtor's ability to propose and successfully complete a Subchapter V Plan. Dr. Gomer's salary, as well as the salary of his wife, Dory Gomer, will remain consistent during the life of Debtor's Plan. A full-text copy of the Plan of Reorganization dated September 30, 2021, is available at https://bit.ly/2YmMezL from PacerMonitor.com at no charge. About Wilson Gomer MD Prof Medical Corporation Wilson Gomer MD Prof Medical Corporation sought protection for relief under Chapter 11 of the Bankruptcy Code (Bankr. C.D. Cal. Case No. 21-13502) on June 25, 2021, listing under $1 million in both assets and liabilities. Judge Wayne E. Johnson oversees the case. Jason E. Turner, Esq., at J. Turner Law Group, APC, is the Debtor's legal counsel. WINDSTREAM HOLDINGS: Supreme Court Refuses to Hear Vendor Appeal ---------------------------------------------------------------- Rick Archer of Law360 reports that the Supreme Court on Monday, October 4, 2021, declined to hear arguments from a Windstream Holdings creditor that the Second Circuit wrongly applied the equitable mootness doctrine when it found it was too late to challenge vendor payments in the cable provider's bankruptcy case. The high court denied certiorari to waste management contractor GLM DFW Inc.'s petition arguing the high court needs to resolve circuit splits on the application of equitable mootness and prevent risks of a too-broad interpretation of the doctrine that it said could spring from the Second Circuit's denial of its appeal. About Windstream Holdings Windstream Holdings, Inc., and its subsidiaries provide advanced network communications and technology solutions for businesses across the United States. They also offer broadband, entertainment and security solutions to consumers and small businesses primarily in rural areas in 18 states. Windstream Holding Inc. and its subsidiaries filed for bankruptcy protection (Bankr. S.D.N.Y. Lead Case No. 19-22312) on Feb. 25, 2019. The Debtors had total assets of $13,126,435,000 and total debt of $11,199,070,000 as of Jan. 31, 2019. The Debtors tapped Kirkland & Ellis LLP and Kirkland & Ellis International LLP as counsel; PJT Partners LP as financial advisor and investment banker; Alvarez & Marsal North America LLC as restructuring advisor; and Kurtzman Carson Consultants as notice and claims agent. The U.S. Trustee for Region 2 appointed an official committee of unsecured creditors on March 12, 2019. The committee tapped Morrison & Foerster LLP as its legal counsel, AlixPartners, LLP, as its financial advisor, and Perella Weinberg Partners LP as investment banker. ZACH HALOPOFF: Case Summary & Unsecured Creditor ------------------------------------------------ Debtor: Zach Halopoff Inc. d/b/a Halo Industries Inc. 9 Studebaker Drive Irvine, CA 92618 Chapter 11 Petition Date: October 5, 2021 Court: United States Bankruptcy Court Central District of California Case No.: 21-12420 Judge: Hon. Scott C. Clarkson Debtor's Counsel: David L. Neale, Esq. LEVENE, NEALE, BENDER, YOO & BRILL L.L.P. 2818 La Cienega Avenue Los Angeles, CA 90034 Tel: (310) 229-1234 E-mail: dln@lnbyb.com Estimated Assets: $1 million to $10 million Estimated Liabilities: $1 million to $10 million The petition was signed by Zeeshawn Zia as president. The Debtor listed Last Chance Funding Inc. as its sole unsecured creditor holding a claim of $3,333,196. A full-text copy of the petition is available for free at PacerMonitor.com at: https://www.pacermonitor.com/view/WCPQPHQ/Zach_Halopoff_Inc__cacbke-21-12420__0001.0.pdf?mcid=tGE4TAMA ZNB LLP: Case Summary & 4 Unsecured Creditors --------------------------------------------- Debtor: ZNB LLP 830 High Street Chestertown, MD 21620 Chapter 11 Petition Date: October 5, 2021 Court: United States Bankruptcy Court District of Maryland Case No.: 21-16310 Debtor's Counsel: Tate M. Russack, Esq. RLC, PA LAWYERS & CONSULTANTS 7999 North Federal Highway Suite 102 Boca Raton, FL 33487 Tel: 561-571-9610 Fax: 800-883-5692 E-mail: Tate@russack.net Estimated Assets: $0 to $50,000 Estimated Liabilities: $1 million to $10 million The petition was signed by Harry Kaiser as managing partner. A full-text copy of the petition containing, among other items, a list of the Debtor's four unsecured creditors is available for free at PacerMonitor.com at: https://www.pacermonitor.com/view/CQFT5QY/ZNB_LLP__mdbke-21-16310__0001.0.pdf?mcid=tGE4TAMA [*] Carl Marks Advisors Bags Three M&A Advisor Turnaround Awards ---------------------------------------------------------------- Carl Marks Advisors, a leading investment bank providing financial and operational advisory services to middle market companies, on Sept. 30 disclosed that it has been recognized with three awards at The M&A Advisor's 15th Annual Turnaround Awards, one of the restructuring and distressed investing industry's benchmarks for excellence. Carl Marks Advisors was honored in the following categories: * Out-of-Court Restructuring of the Year ($50M to $100M) * Restructuring of the Year ($50MM to $100MM) * Restructuring of the Year ($500MM to $1B) Carl Marks Advisors won in the "Out-of-Court Restructuring of the Year" category for its work as Chief Restructuring Officer ("CRO") for Lenox Corporation, the well-known manufacturer, distributor, and retailer of tableware. Originally brought on to conduct a business assessment of the company, Carl Marks Advisors was reengaged as CRO, helping implement a business turnaround in that role. CMA's efforts included retaining necessary levels of lender and vendor support and liquidity, navigating the Company through the COVID-19 pandemic, and supporting the close of an out-of-court sale. A bankruptcy filing was thus avoided, an event that had seemed likely at the start of the engagement and could have led to the liquidation of the business. In addition, Carl Marks Advisors was honored with the "Restructuring of the Year ($50MM to $100MM)" award for its work with Bar Louie, the locally themed, national gastro-bar operator and franchisor. The chain, which operated more than 100 venues at its peak, retained Carl Marks Advisors to serve as CRO, leading the company through a Chapter 11 filing and successful emergence via a 363 sale during the height of the COVID-19 pandemic. Finally, the "Restructuring of the Year ($500MM to $1B)" award recognized the firm's work with American Addiction Centers (AAC), a nationwide inpatient and outpatient addiction care and recovery center. Under Carl Marks Advisors' guidance, AAC successfully exited Chapter 11 with a recapitalized balance sheet and was able to continue to treat patients throughout the bankruptcy process, despite the added stress of the pandemic. "We are very proud of our teams' hard work and dedication throughout the past year, which presented so many unique challenges, and we are gratified to see it recognized by The M&A Advisor," said Duff Meyercord, Managing Partner, Carl Marks Advisors. "These three transactions are great examples of the positive impact we can have in helping companies navigate even the most perilous circumstances." About Carl Marks Advisors Carl Marks Advisory Group LLC (Carl Marks Advisors) is a New York-based investment bank that provides financial and operational advisory services. Its integrated client service teams unite industry, operations, and transaction expertise to create effective solutions in complex situations. Securities are offered through Carl Marks Securities LLC, member FINRA and SIPC. Additional information about Carl Marks Advisory Group LLC and Carl Marks Securities LLC is available at http://www.carlmarksadvisors.com/ and http://www.carlmarkssecurities.com/ [*] Commercial Chapter 11 Filings Down 6% in September 2021 ----------------------------------------------------------- Epiq, a global technology-enabled services leader to the legal services industry and corporations, released its September 2021 bankruptcy filing statistics from its AACER bankruptcy information services business. Overall, September new filings for all chapters were down 4% or 30,907 month-over-month, down from 32,263 in August 2021. Total individual chapter 13 filings are up 6% over August, with 9,930 new cases. Total individual chapter 7 filings are down 9% over August, with 19,230 cases. Total commercial chapter 11 new filings are also down 6% over August, with 247 new cases. Individual Chapter 7 new filings have decreased each month since March 2021 while individual Chapter 13 filings have increased each month starting in May. A chart accompanying this announcement is available at https://www.globenewswire.com/NewsRoom/AttachmentNg/7c778d7a-d6b4-4a2e-8d72-b38ed0a0a947 The 2021 total open bankruptcy cases which include cases closed plus new cases filed this year continue to slide. September ended at 773,652 open cases, down 11% or 98,556 cases from the start of 2021. A chart accompanying this announcement is available at https://www.globenewswire.com/NewsRoom/AttachmentNg/6e51dcd8-4e1c-4bc8-a941-b62af61853ad "The bankruptcy new filings volume and chapter mix trends will likely change over the coming months with the Federal and State programs like the eviction moratorium expiring on September 30, 2021," said Todd Madsen, senior director of Epiq Bankruptcy Analytics. "However, numerous states like California have rent reimbursement programs, with funds in place that will continue to ward off new bankruptcy filings as moratoriums expire." About Epiq AACER Epiq AACER is your partner for bankruptcy information and compliance. Its AACER bankruptcy information services platform is built with superior data, technology, and expertise to create insight and mitigate risk for businesses impacted by bankruptcies. It offers free bankruptcy statistics and monthly email updates for both commercial and non-commercial consumer bankruptcy filings for Chapter 7, Chapter 11, and Chapter 13 cases. About Epiq Epiq, a global technology-enabled services leader to the legal services industry and corporations, takes on large-scale, increasingly complex tasks for corporate counsel, law firms, and business professionals with efficiency, clarity, and confidence. Clients rely on Epiq to streamline the administration of business operations, class action and mass tort, court reporting, eDiscovery, regulatory, compliance, restructuring, and bankruptcy matters. Epiq subject-matter experts and technologies create efficiency through expertise and deliver confidence to high-performing clients around the world. Learn more at https://www.epiqglobal.com/ [*] Judge Guy Cole Jr. to Receive American Inns of Court Award -------------------------------------------------------------- Judge R. Guy Cole Jr. has been selected to receive the prestigious 2021 American Inns of Court Professionalism Award for the Sixth Circuit. A judge on the U.S. Court of Appeals for the Sixth Circuit, he served as the court's chief judge -- and the court's first-ever African American chief judge -- from 2014 until April this year. Nominated by President Bill Clinton, Cole joined the court of appeals in 1995. "As the chief judge of our circuit, Judge Cole has conducted himself with the highest degree of character and integrity," write Judge Richard Allen Griffin and his fellow judges on the sixth circuit, who nominated Cole for the award. "In this regard, Guy Cole has led by example, to the betterment of our court and circuit." According to Griffin and his colleagues, Cole's accomplishments as chief judge include leading the circuit through the COVID-19 crisis, creating an employee appreciation program, improving the court's efficiency and professionalism, eliminating the court's backlog, and reviving the court's collegiality. Before joining the U.S. Court of Appeals for the Sixth Circuit, Judge Cole had experience in both public service and the private sector. On the public service side, he served as a U.S. bankruptcy judge for the Southern District of Ohio from 1987 to 1993 and was a trial attorney for the commercial litigation branch of the U.S. Department of Justice, Civil Division, earlier in his career. In the private sector, he was in practice at the Columbus, Ohio, law firm Vorys, Sater, Seymour and Pease LLP, eventually becoming the firm's first African American partner. Since 2010, Cole has also been an adjunct professor of law at The Ohio State University's Moritz College of Law. Judge Cole received the Distinguished Achievement Award from the Tufts Alumni Association in 2016. He has also helped lead several community organizations focused on health, education, and young people. In addition to serving as vice chair of The Ohio State University's James Cancer Hospital Board, he has held leadership positions at the Columbus Children's Hospital, March of Dimes, YMCA, Columbus Area International Program, and I Know I Can, an initiative that helps public school students in Columbus attain college educations. Judge Cole received his undergraduate degree from Tufts University in 1972 and his law degree from Yale Law School in 1975. The American Inns of Court, headquartered in Alexandria, Virginia, inspires the legal community to advance the rule of law by achieving the highest level of professionalism through example, education, and mentoring. The organization's membership includes nearly 30,000 federal, state, and local judges; lawyers; law professors; and law students in nearly 370 chapters nationwide. More information is available at http://www.innsofcourt.org/ [] B.Riley Adds Three Senior Executives to Restructuring Division ----------------------------------------------------------------- B. Riley Financial announced continued growth in its restructuring division with the addition of three new senior executives. John Sordillo, Jeffrey Truitt and Tim Hannon have joined B. Riley Advisory Services and bring several decades of experience and proven expertise in complex financial management and restructuring advisory. "We continue to enhance our business restructuring services with some of the best talent available in the market as demand for our middle-market advisory services continues to grow," said Ian Ratner, Co-CEO of B. Riley Advisory Services, the firm's specialty financial consulting business. "Corporates, private equity firms, portfolio companies, and lenders each have their own unique challenges, and we believe B. Riley has assembled a best-in-class team to help guide our clients through their most mission critical initiatives in the year ahead and beyond. We are thrilled to welcome John, Jeffrey and Tim to our growing team." Based in New York, John Sordillo joins as a Senior Managing Director and has over 30 years of accounting, finance, turnaround and restructuring experience, including as interim officer and chief restructuring officer in distressed situations, and as a principal investor in turnaround situations. He serves as a trusted advisor to companies, lenders, PE funds and other institutional investors in restructuring, corporate finance and litigation situations across a variety of industries including real estate, oil and gas, energy, manufacturing, telecommunications, gaming, healthcare and retail. Prior to B. Riley, he served in several senior restructuring advisory roles with firms including Broadview Business Advisors, CBIZ, Loughlin Management Partners, Deloitte, Ernst & Young (EY), and AlixPartners. In addition, he has served as a principal in the U.S. merchant banking business of TD Bank Financial Group. Mr. Sordillo earned a BBA in Public Accounting from Pace University and JD from Brooklyn Law School. Jeffrey Truitt joins as a Senior Managing Director and leads the firm's restructuring practice in Los Angeles. He has over 30 years of experience as a restructuring and turnaround professional serving as a trusted advisor to myriad companies, secured creditors, ad hoc bondholder groups, official committees and other interested parties in connection with out-of-court financial restructurings, operational turnarounds and/or chapter 11 reorganizations. Mr. Truitt has held various interim C-level management positions, including as CEO, CFO and CRO, and has served as court-appointed examiner in large Chapter 11 cases. Prior to joining the firm, Truitt was a Senior Managing Director at FTI Consulting and previously held various senior positions in the corporate restructuring practices of XRoads Solutions Group, Mesirow Financial Consulting, KPMG and Arthur Andersen. He holds several professional designations including CTP, CIRA and CDBV. Truitt earned a BA in Economics from the University of California, Los Angeles and an MBA from the UCLA Anderson Graduate School of Management. Tim Hannon joins as a Managing Director in Atlanta and brings over 30 years of experience in executive financial management and financial advisory services. He has served as CFO and Corporate Controller for companies ranging in size from $50 million to $1 billion. Most recently, Mr. Hannon was CFO for a $900 million fresh food CPG company. He began his career with Arthur Andersen in New York and has worked in the turnaround and transaction advisory practices at Zolfo Cooper and KPMG. He is a CPA (NY) and has CMA and CIRA designations. Mr. Hannon earned a BS in Accounting from the State University of New York at Albany. For more information about B. Riley Advisory Services, visit: www.brileyadvisoryservices.com. About B. Riley Advisory Services B. Riley Advisory Services (NASDAQ: RILY) is a financial consulting and valuation firm that works with law firms, lenders, private equity sponsors, and companies of all types on business challenges such as planning and executing a major acquisition or divestiture, pursuing a fraud investigation or corporate litigation, or managing through a business crisis or bankruptcy. The firm offers a unique mix of appraisal services including asset-based lending (ABL) valuations, restructuring and turnaround management, forensic accounting and litigation support, and transaction support services including due diligence and quality of earnings reviews. The firm is a subsidiary of B. Riley Financial. B. Riley Financial provides collaborative solutions tailored to fit the capital raising and business advisory needs of its clients and partners. B. Riley operates through several subsidiaries that offer a diverse range of complementary end-to-end capabilities spanning investment banking and institutional brokerage, private wealth and investment management, financial consulting, corporate restructuring, operations management, risk and compliance, due diligence, forensic accounting, litigation support, appraisal and valuation, auction and liquidation services. On the Web: http://www.brileyfin.com/ [] Byron Moldo Named Geneva's Restructuring Group Chief ------------------------------------------------------- Ervin Cohen & Jessup (ECJ) on Sept. 30 disclosed that Byron Z. Moldo, chair of the Firm's Bankruptcy, Receivership and Creditors' Rights Department, has been elected to Global Chairperson of the Debt Collection, Restructuring & Insolvency practice group at Geneva Group International (GGI), a worldwide alliance of well-established and experienced law, accounting and consulting firms committed to providing clients with specialist solutions for their international business requirements. "GGI is one of the largest international alliances of law, accounting and consulting firms, and our participation in this respected network provides our clients tremendous resources throughout the world," said Randall S. Leff, Ervin Cohen & Jessup's co-managing partner and a member of GGI's Executive Committee. "We are proud to see Byron take on this leadership role." Mr. Moldo's practice focus has always been bankruptcy, receivership, assignments for the benefit of creditors and all aspects of insolvency. He regularly serves as a Receiver in state and federal court cases, as assignee for the benefit of creditors, and as a fiduciary in other court-supervised matters. In addition, a substantial portion of his work consists of serving as general or special counsel to receivers, bankruptcy trustees, and other fiduciaries. Mr. Moldo also represents creditors' committees and secured creditors, and has been appointed as a Disbursing Agent, Chapter 11 Plan Confirmation Agent, and to serve in other fiduciary capacities. Ervin Cohen & Jessup LLP -- http://www.ecjlaw.com/-- is a full-service firm that provides a broad range of business-related legal services including corporate law; litigation; intellectual property & technology law; real estate transactions, land use and finance; construction & environmental law; tax planning and controversies; employment law; health care law; bankruptcy, receivership and reorganization; and estate planning. [] John Chun Joins Herrick Feinstein's Restructuring Department --------------------------------------------------------------- Herrick, Feinstein LLP on Sept. 27 disclosed that litigator John H. Chun has joined its growing Restructuring & Finance Litigation Department in New York. He comes to Herrick from Quinn Emanuel. Mr. Chun joins Herrick as a firm partner. He is the latest attorney to join Herrick's rapidly growing Restructuring and Finance Litigation Department. Since 2019, the practice group has added 14 new lawyers, including four partners, two counsel and eight associates, many coming from premier, global law firms. At Herrick, Mr. Chun will focus on a full range of complex litigation matters. His experience includes prosecuting and defending common law and securities fraud claims arising from complex structured finance and M&A transactions. Mr. Chun also has developed top-level expertise in litigation involving trade secrets, restrictive covenants, corporate raiding and clawback claims. Chun is licensed to practice in New York and has appeared in federal courts in New York and Maryland, in both district and appellate courts. "We are delighted to welcome John to the firm," said Irwin Kishner, Herrick's Executive Chairman. "John has built a reputation as an accomplished litigator, and he brings even more depth to Herrick's Restructuring & Finance Litigation group." "John is a deeply skilled litigator," added Sean O'Donnell, co-chair of Herrick's Restructuring & Finance Litigation Department. "He is a tremendous addition to our bench as we solidify Herrick's position among the go-to firms for restructuring and complex litigation." Herrick's Restructuring & Finance Litigation team has decades of experience advising clients in all phases of complex chapter 11 cases, out-of-court restructurings and related litigations. Herrick's clients include official and ad hoc creditor committees, distressed debt investors, private equity funds, hedge funds, bondholders, secured and unsecured lenders, real estate project owners, financial and insurance institutions, corporate debtors, trustees, boards of directors, independent directors, special investigation committees, foreign representatives, and other parties-in-interest in bankruptcy cases. In 2021 U.S. News - Best Lawyers(R) "Best Law Firms" ranked Herrick nationally and regionally in five practice areas, including bankruptcy and creditor debtor rights; insolvency/reorganization. "The breadth and synergy among Herrick's premier litigation practices is an ideal combination for what I am able to provide clients," Chun said. "Herrick has assembled an extremely experienced and highly collaborative team of lawyers that I am excited to join." About Herrick Founded in 1928, Herrick, Feinstein LLP is a prominent, full-service law firm, providing comprehensive legal services to businesses and individuals around the world. From its offices in New York City; Newark, New Jersey; and Istanbul, Turkey, Herrick maintains robust corporate, litigation, financial restructuring and commercial real estate capabilities, complemented by significant depth in art, employment, government relations, intellectual property, sports, tax, and trusts and estates. ********* 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 ***