/raid1/www/Hosts/bankrupt/TCR

/raid1/www/Hosts/bankrupt/TCR_Public/211008.mbx T R O U B L E D C O M P A N Y R E P O R T E R Friday, October 8, 2021, Vol. 25, No. 280 Headlines 5 STAR PROPERTY: $97K Sale of Winter Haven Property to Smart Okayed 51 EAST 73RD: Unsecureds' Recovery "Unknown" in Trustee's Plan 572 E 26TH: Value of Brooklyn Apartment Cut by 42% 6525 BELCREST: Seeks to Tap Peckar & Abramson as Litigation Counsel 96 WYTHE: Gets Court Okay to Go Forward With Restructuring Plan A & G PIZZA: Wins Cash Collateral Access Thru Oct 31 A.B.C. CARPET: DIP Loan, Cash Collateral Access OK'd AB ROBINSON: Seeks to Hire Porter Law Network as Bankruptcy Counsel AEGIS TOXICOLOGY: Moody's Ups CFR & Secured First Lien Loan to B2 AGAPE' ASSEMBLY: $650K Sale of Orlando Property to Echols Approved ARBORETUM CROSSING: Unsecured Creditors to Recover 100% in Plan ASSUREDPARTNERS INC: Incremental Loan No Impact on Moody's B3 CFR ATI HOLDINGS: Moody's Cuts CFR to B3 & Alters Outlook to Negative AUTOMOTIVE PARTS: Seeks to Hire Howard LLP as Tax Services Provider AVALANCHE COMPANY: Unsecureds to be Paid in Full in 48 Months AZZIL GRANITE: Nov. 17 Auction Set for Quarry and Related Assets B N EMPIRE: May Pay Insurance, Utilities Through Oct. 19 BAIRN LLC: Case Summary & 20 Largest Unsecured Creditors BARFLY VENTURES: Pastaio Will Take Over HopCat Space in Royal Oak BASIC ENERGY: Berry Corp. Wins Auction for Its C&J Well Services BEAR COMMUNICATIONS: Oct. 7-14 Ritchie Auction of Personal Property BL SANTA FE: Wins Interim OK on Postpetition Financing BLUE DOLPHIN: Unit Signs $10M Loan Agreement With Greater Nevada BONANZA CREEK: Moody's Assigns Ba3 CFR & Rates New $400MM Notes B1 BOY SCOUTS OF AMERICA: Former HQ in Lancaster Listed for Sale BRAIN ENERGY: Unsecured Creditors Will Get 85% of Claims in Plan BROADSTREET PARTNERS: Moody's Lowers CFR to 'B3', Outlook Stable BROWNIE'S MARINE: BLU3 Inc. to Start Nomad Pre-Order Shipments BROWNIE'S MARINE: Completes Private Placement of $365K Units BUY MOORE: Unsecured Creditors to Get $17.5K in 60 Months BV GLENDORA: Creditor Glendora Plaza Reserves Rights as to Claims BV GLENDORA: Plan Filed in Bad Faith, Plesnik Creditors Say CARNIVAL CORP: Moody's Rates Planned $1.5BB Term Loan Add-on 'Ba2' CAROL C. FARLEY: Selling Pittsburgh Residential Property for $800K CF INDUSTRIES: Moody's Alters Outlook on Ba1 CFR to Positive CIVITAS RESOURCES: Fitch Assigns First Time 'BB-' LongTerm IDR CLEANSPARK INC: Inks Power Services Deal for Georgia Facilities CONDUENT INC: Moody's Assigns 'B1' CFR, Outlook Stable CORONADO CAPITAL: Rental Income to Fund Plan Payments CREATD INC: Closes Purchase of Majority Stake in Dune Glow CRED INC: Ex-Exec. Rips Move to Block His Bankruptcy Discharge D.W. TRIM: Unsecureds May Get 20% Dividend in Plan DALLAS COUNTY SCHOOLS: Moody's Withdraws B3 Issuer Rating DAVID ARRIGONI: Sale of Tallahassee Property to Corey Gray OK'd DCG ACQUISITION: Moody's Affirms B3 CFR & Alters Outlook to Stable DENNY'S CORP: Egan-Jones Keeps B Senior Unsecured Ratings EMPOWER CLINICS: Incurs $579,320 Net Loss in Second Quarter EXELA INTERMEDIATE: Debt Repurchase No Impact on Moody's Caa3 CFR EYECARE PARTNERS: Moody's Affirms 'B3' CFR, Outlook Stable FRONTIER COMMUNICATIONS: Fitch Affirms 'BB-' LT IDR, Outlook Stable FRONTIER COMMUNICATIONS: Moody's Rates New $1BB 2nd Lien Notes Caa2 FRONTIER COMMUNICATIONS: Taps Junk-Bond Market After Ch. 11 Exit GANNETT HOLDINGS: Moody's Rates New $400MM Secured Notes 'B1' GLATFELTER (P.H.) CO: S&P Lowers ICR to 'BB', Outlook Stable GROUP 1 AUTOMOTIVE: S&P Affirms 'BB+' ICR on Recent Acquisitions GRUPO AEROMEXICO: Seeks Exit Facility, Stock Participation in Plan GRUPO AEROMEXICO: Shares Rise More Than 3% After Exit Plan Filed GVS TEXAS: Unsec. Creditors Will Get 100% of Claims in Joint Plan HIGHLAND CAPITAL: Asks Court to End Shareholder Undervaluing Suit HOME DEALS: Case Summary & 5 Unsecured Creditors HUMANIGEN INC: 4 Execs Elect to Receive Stock Compensation in Q4 INFORMATICA INC: S&P Assigned Prelim 'BB-' ICR, Outlook Stable JAB ENERGY: Cash Collateral Access, $720,000 DIP Loan OK'd JONES SODA: Hires Armanino LLP as New Auditor KISMET ROCK HILL: U.S. Trustee Unable to Appoint Committee LAMBRIX CRANE: Seeks Cash Collateral Access on Final Basis LASERSHIP INC: S&P Assigns 'B-' ICR on Acquisition of OnTrac LEE HI ASSOCIATES: Sale of Melrose, Roanoke Property Approved LEE HI ASSOCIATES: Sale of Peters Creek, Roanoke Property Okayed LMMS INC: Wins Cash Collateral Access Thru Oct 20 LOGMEIN INC: S&P Upgrades ICR to 'B', Outlook Stable MALLINCKRODT PLC: Faces $93 Million Drug Royalty Claim In Ch. 11 MCAFEE LLC: Fitch Corrects Sept. 29 Ratings Release MEDALLION MIDLAND: Fitch Assigns 'BB-' Rating on Sec. Term Loan B MEDALLION MIDLAND: Moody's Rates New $735MM Secured Term Loan 'B2' MEDLEY LLC: Notes Trustee Reacts to UST's Plan Objection MEDLEY LLC: Supporters of Chapter 11 Plan Clarify Cash Flow METAL CLASSICS: $185K Sale of Evansville Asset to 7th Heaven OK'd METROPOLITAN COLLEGE: Fitch Affirms 'BB' IDR, Outlook Negative MKS INSTRUMENTS: Moody's Confirms Ba1 CFR & Rates Secured Debt Ba1 MORNINGSTAR SENIOR: Fitch Alters Outlook on 'BB+' IDR to Negative MORROW GA INVESTORS: Trustee Gets OK to Tap Special Counsel OCCIDENTAL PETROLEUM: Fitch Alters Outlook on 'BB' IDR to Positive OMNIQ CORP: QShield Selected in Georgia to Crack Down on Crime ONEWEB GLOBAL: Eutelsat Hikes Holding to More Than 20% P8H INC: Further Fine-Tunes Plan Documents PETROTEQ ENERGY: Provides Update on TSXV Reinstatement Application PRIMARY PRODUCTS: Fitch Assigns First Time 'BB(EXP)' LT IDRs PRIMARY PRODUCTS: Moody's Gives First Time 'B1' Corp Family Rating PRINCETON-WINDSOR PEDIATRICS: Wins Cash Collateral Access PURDUE PHARMA: Colluded With Walgreens to Sell Opioid, Jury Told PURDUE PHARMA: Lobby Groups Join Battle Over Sackler Immunity QUANTUM CORP: Extends Maturity of Revolving Credit Facility to 2026 QUOTIENT LIMITED: CEO to Get CHF600K Relocation Payment RAM DISTRIBUTION: Unsecureds May Get 1% Payout Over 10 Years RANDOLPH HOSPITAL: Bid to Use Cash Collateral Moot RECON MEDICAL: Seeks to Tap Perry Clark as Litigation Counsel REGINA PECK: Proposed Sale of Horse Withdrawn REGIONAL WEST HEALTH: Fitch Alters Outlook on 'BB+' IDR to Stable RICKENBAKER GIN INC: U.S. Trustee Unable to Appoint Committee RIVERSTREET VENTURES: Gen. Unsecured Claims to Recover 100% ROCKDALE MARCELLUS: Pachulski to Represent Committee ROYAL ALICE: Unsecureds to Get 100% in Hoffman & RSB's Sale Plan SARATOGA & NORTH CREEK: Nov. 9 Disclosure Statement Hearing Set SECURE ENERGY: Moody's Assigns First Time 'B1' Corp. Family Rating SHELTON BROTHERS: Trustee's $560K Sale of Progressive Interest OK'd SITEONE LANDSCAPE: Moody's Raises CFR to Ba2, Outlook Positive SLIDEBELTS INC: May Use Cash Collateral Thru Dec 1 SPORTTECHIE INC: Case Summary & 13 Unsecured Creditors SUMMIT FAMILY: Beautiful Buying Substantially All Assets for $3.1M SUNERGY CALIFORNIA: Trustee Taps Cushman & Wakefield as Broker SUNOCO LP: Fitch Rates Proposed Sr. Unsecured Notes 'BB' SUNOCO LP: Moody's Rates New $800MM Senior Unsecured Notes 'B1' TASEKO MINES: Fitch Rates $50MM Revolver Credit Facility 'BB-' TELKONET INC: Extends Maturity of Heritage Loan to Dec. 31 TENRGYS LLC: Gen. Unsecured Claims to Recover 100% in Plan THOR INDUSTRIES: Moody's Ups CFR to Ba2 & Alters Outlook to Stable TOUCH OF HEAVEN: Dec. 14 Plan Confirmation Hearing Set TOUCH OF HEAVEN: Unsecured Creditors to Get $0 in Plan TRAXIUM LLC: Court OKs Disclosures; Dec. 6 Confirmation Hearing Set TRI-WIRE ENGINEERING: $1.1MM DIP Loan, Cash Collateral Access OK'd TRI-WIRE ENGINEERING: Committee Taps Jeffrey Sternklar as Counsel U.S. SILICA: To Explore Strategic Alternatives for ISP Segment U.S. TOBACCO: Xcaliber Drops Support for Committee Formation UNIVERSAL ENTERPRISES: Chapter 15 Case Summary US STEEL: Fitch Raises IDR to 'BB-', Outlook Remains Positive USA COMPRESSION: Fitch Affirms 'BB-' LT IDR, Outlook Remains Neg. WALKER & DUNLOP: Moody's Affirms 'Ba1' CFR on Alliant Capital Deal WATER MARBLE: Confirmation Hearing Slated for Dec. 16 WC CULEBRA: Files Amendment to Disclosure Statement WC CULEBRA: Oct. 26 Plan Confirmation Hearing Set WEST PHILADELPHIA ACHIEVEMENT: S&P Lowers Rev Bond Rating to 'BB-' WESTERN MIDSTREAM: Fitch Alters Outlook on 'BB' LT IDR to Positive WILLIAMS TRANSPORTATION: $750K Sale of Laurel Property Approved WINNEBAGO INDUSTRIES: Moody's Hikes CFR to Ba3, Outlook Stable [^] BOOK REVIEW: The Titans of Takeover ********* 5 STAR PROPERTY: $97K Sale of Winter Haven Property to Smart Okayed ------------------------------------------------------------------- Judge Catherine Peek McEwen of the U.S. Bankruptcy Court for the Middle District of Florida authorized 5 Star Property Group, Inc.'s sale of the real property located at 751 Ave. B SW, in Winter Haven, Florida, to Smart Trust Investment, LLC, for $97,000. A hearing on the Motion was held on Sept. 23, 2021. The property is more particularly described as follows: Lot 24, Block 5, Lake Addition to the Town of Winter Haven, Polk County, Florida, as per Deed Book "Q," Page 529, Public Records of Polk County, Florida, and being part of Map of Winter Haven, according to the map or plat thereof, as recorded in Plat Book 1, Page(s) 28, of the Public Records of Polk County, Florida. TAX ID #26-28-29-632000-005240. The sale is "as is" and free and clear of any liens, claims, interests, encumbrances, and security interests of any kind. The liens of any secured creditors, including DSRS, LLC, the Polk County Tax Collector, and Roger & Jeanie Fitzpatrick, will attach to the proceeds from the sale to the same extent, validity, and priority as existed against the property. The Debtor is authorized to pay all broker's fees, liens, and all ordinary and necessary closing expenses normally attributed to a seller of real estate at closing. The net sale proceeds after payment of the broker's fees, liens, and all ordinary and necessary closing costs, if any, will be held in trust by the Debtor's counsel until further order of the Court regarding the distribution of the net sale proceeds. The Debtor will provide a copy of the closing statement from the sale of the property to the office of the United States Trustee within five days of the closing date. The 14-day stay required under Bankruptcy Rule Section 6004(h) is waived. About 5 Star Property Group, Inc. 5 Star Property Group, Inc. sought protection for relief under Chapter 11 of the Bankruptcy Code (Bankr. M.D. Fla. Case No. 20-07801) on Oct. 20, 2020, listing under $1 million in both assets and liabilities. Buddy D. Ford, Esq. at BUDDY D. FORD, P.A. represents the Debtor as counsel. 51 EAST 73RD: Unsecureds' Recovery "Unknown" in Trustee's Plan -------------------------------------------------------------- Lori Jones, the Chapter 11 trustee for 51 East 73rd St LLC, filed with the U.S. Bankruptcy Court for the Southern District of New York a Disclosure Statement describing Plan of Liquidation dated October 4, 2021. The centerpiece of the Plan is the post-confirmation closing on the 363 Sale of the Debtor's real property and improvements located at 51-53 East 73rd Street, New York, New York 10021 ("Property"). The 363 Sale of the Property was conducted on July 29, 2021 pursuant to the Sale Stipulation approved by the Bankruptcy Court and the Terms and Conditions of Sale approved by the Bankruptcy Court. NYC NPL, having credit bid the sum of $25,000,000 for the Property, was the successful bidder at the 363 Sale. In accordance with the stipulation between the Trustee and NYC NPL, LLC that was previously approved by the Bankruptcy Court, NYC NPL shall pay an amount equal to the Carve Out to fund the Plan. The Plan shall also be funded from any and all recoveries made or obtained by the Trustee and/or Plan Administrator from the liquidation of all of the Debtor's other assets, including any litigation or avoidance claims held by the Debtor or the Estate. The 363 Sale was conducted on July 29, 2021. NYC NPL, having credit bid the sum of $25,000,000, made the highest and best bid for the Property at the 363 Sale. By the Sale Confirmation Order dated August 23, 2021, the Bankruptcy Court confirmed the results of the 363 Sale. The ultimate closing on the sale of the Property is subject to confirmation of the Plan by the Bankruptcy Court. The Plan shall be funded with the Carve-Out pursuant to the Sale Stipulation together with the proceeds from the prosecution of Causes of Action, if any, and any other source of recovery. Class 1 shall consist of the Allowed Secured Real Estate Liens and Water and Sewer Charges as of the Closing Date. Class 1 is unimpaired. Consistent with the Sale Stipulation and applicable law, the Allowed Secured Real Estate Liens and Water and Sewer Charges as of the Closing Date will be paid by the Trustee in full from the Carve-Out within 7 business days after the Effective Date. Class 2 shall consist of the Allowed NYC NPL Secured Claim. Class 2 is impaired. Consistent with the Sale Stipulation and the Sale Confirmation Order: (a) NYC NPL (or a designee of NYC NPL approved by the Trustee in writing) shall in exchange for the delivery of a Trustee 's Deed for the Property tender to the Trustee sums sufficient to pay the Carve-Out; and (b) NYC NPL shall not share in the General Unsecured Claims Reserve. Class 4 shall consist of the Allowed Priority Claims. Class 4 is unimpaired. Consistent with the Sale Stipulation, Allowed Priority Claims will be paid by the Trustee in full from the Carve-Out within 7 business days after the Effective Date. However, the Trustee does not believe there are any Priority Claims. Class 5 shall consist of all Allowed Unsecured Claims, which include any allowed Deficiency Claims. Class 5 is impaired. Consistent with the Sale Stipulation, Allowed General Unsecured Claims, which shall include all Allowed Deficiency Claims, except any Deficiency Claim of NYC NPL, will be paid their Pro Rata share of no less than the Allowed General Unsecured Claim Reserve. In addition, Allowed General Unsecured Claims, including Allowed Deficiency Claims, may be paid their Pro Rata share of any additional proceeds up to the amounts of the Allowed General Unsecured Claims from: (a) any recoveries from Causes of Action; and/or (b) any other source of recovery. Distributions will be made to Holders of Allowed General Unsecured Claims by the Trustee or the Plan Administrator after all Claims are resolved. The estimated recovery for General Unsecured Claims is "unknown at this time", according to the Disclosure Statement. Class 6 shall consist of all Allowed Equity Interests. Class 6 is impaired. Allowed Equity Interests are not anticipated to receive any Distribution from the Estate given that the Holders of Allowed Class 2, 3 and 5 Claims will not be made whole. The Plan shall be funded with the Carve-Out pursuant to the Sale Stipulation together with the proceeds, if any, from the prosecution of Causes of Action and any other source of recovery. The 363 Sale was conducted on July 15, 2021. NYC NPL, having credit bid the sum of $25,000,000 for the Property, was the highest and best bidder. By the Sale Confirmation Order, the Bankruptcy Court confirmed the results of the 363 Sale. Pursuant to the Sale Confirmation Order and Terms and Conditions of Sale, must close title to the Property on or before the later of 30 days from the entry of the Confirmation Order or an order confirming the results of the 363 Sale, time being of the essence as to NYC NPL, although such date may be extended solely by the Trustee. NYC NPL informed the Trustee that it intends to designate Chai 73 LLC, which is a wholly-owned subsidiary of NYC NPL, to close title to the Property. A full-text copy of the Disclosure Statement dated October 4, 2021, is available at https://bit.ly/3agyybN from PacerMonitor.com at no charge. Counsel to Lori Lapin Jones: Holly R. Holecek, Esq. LaMonica Herbst & Maniscalco, LLP 3305 Jerusalem Ave #201 Wantagh, NY 11793 Phone: (516) 826-6500 Fax: (516) 826-0222 Email: hrh@lhmlawfirm.com About 51 East 73rd St LLC 51 East 73rd St, LLC, owns and operates a real estate located at 51-53 East 73rd Street, N.Y. 51 East 73rd St sought protection under Chapter 11 of the Bankruptcy Code (Bankr. S.D.N.Y. Case No. 20-10683) on March 3, 2020. At the time of the filing, Debtor disclosed assets of between $10 million and $50 million and liabilities of the same range. The Debtor is represented by Leo Fox, Esq. Lori Lapin Jones, Esq., was appointed as the Debtor's Chapter 11 trustee. The trustee is represented by LaMonica Herbst & Maniscalco, LLP. 572 E 26TH: Value of Brooklyn Apartment Cut by 42% -------------------------------------------------- CRED iQ reports that the valuation of the property at 572 E 26th Street (Brooklyn, NY) was cut by 42%. The eight-unit, multi-family building was valued at $2.8 million ($350,000/unit) at origination in January 2017. This was cut to $1.6 million ($203,125/unit) in February 2021. The property secures a $1.9 million loan. 6525 BELCREST: Seeks to Tap Peckar & Abramson as Litigation Counsel ------------------------------------------------------------------- 6525 Belcrest Road, LLC seeks approval from the U.S. Bankruptcy Court for the Southern District of New York to employ Peckar & Abramson, PC as its special litigation counsel. The Debtor needs legal advice of a special counsel on issues related to the pending adversary proceeding styled 6525 Belcrest Road, LLC v. Dewey, L.C., et al., Adv. Pro. No. 21-1140. It also needs legal assistance in other pending litigations involving its commercial real property in Hyattsville, Md. The hourly rates of the firm's attorneys and staff are as follows: Michael S. Zicherman, Esq. $575 per hour Other Attorneys $235 - $495 per hour Paraprofessionals $125 - $290 per hour Michael Zicherman, Esq., a partner at Peckar & Abramson, disclosed in a court filing that his firm is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. The firm can be reached through: Michael S. Zicherman, Esq. Peckar & Abramson, PC 70 Grand Avenue River Edge, NJ 07661 Telephone: (201) 343-3434 Facsimile: (201) 343-6306 Email: mzicherman@peckarlaw.com About 6525 Belcrest Road New York-based 6525 Belcrest Road, LLC owns Metro Center III, a commercial real property in Hyattsville, Md. 6525 Belcrest Road filed its voluntary petition for Chapter 11 protection (Bankr. S.D.N.Y. Case No. 21-10968) on May 19, 2021, listing as much as $10 million in both assets and liabilities. Judge Michael E. Wiles oversees the case. The Debtor tapped Robinson Brog Leinwand Greene Genovese & Gluck PC as bankruptcy counsel and Peckar & Abramson, PC as special litigation counsel. 96 WYTHE: Gets Court Okay to Go Forward With Restructuring Plan --------------------------------------------------------------- Jonathan Randles of The Wall Street Journal reports that a New York bankruptcy judge rejected a government bid to convert the hotel bankruptcy to a liquidation or dismiss the case outright The owners of the Williamsburg Hotel in Brooklyn, N.Y., defeated attempts by a federal bankruptcy watchdog to oust hotel management, allowing its operators to move ahead with a plan to restructure its finances and emerge from chapter 11. Judge Robert Drain of the U.S. Bankruptcy Court in White Plains, N.Y., on Wednesday denied a request by the U.S. Trustee to convert the chapter 11 case to a chapter 7 liquidation, which would have required installing an independent overseer to take over the property. "[T]he UST's contention that a chapter 7 trustee should be appointed to sell the Hotel -- a position not even adopted by Benefit Street -- is not in the best interest of creditors or the estate. Such outcome under any chapter would result in the loss tens of millions of dollars; i.e. the Debtor's financial advisors have determined that a fire sale of the Hotel would result in a loss in excess of $30 million against the Hotel market value and loss of the new investment into the Debtor of $8 million (the cash infusion provided for under the Plan). Such result is highly prejudicial and not supported under the fats and law," the Debtor said in its objection to the U.S. Trustee's conversion motion. About Williamsburg Hotel Williamsburg Hotel is an upmarket boutique hotel situated in Brooklyn, New York. 96 Wythe Acquisition LLC, which owns the Williamsburg Hotel, filed Chapter 11 bankruptcy protection (Bankr. S.D.N.Y. Case No. 21-22108) on Feb. 23, 2021. It listed assets and liabilities of $50 million to $100 million. BACKENROTH FRANKEL & KRINSKY, LLP, led by Mark Frankel, is the Debtor's counsel. A & G PIZZA: Wins Cash Collateral Access Thru Oct 31 ---------------------------------------------------- The U.S. Bankruptcy Court for the Eastern District of North Carolina, Raleigh Division, has authorized A & G Pizza, Inc. to use cash collateral on an interim basis in accordance with the budget through October 31, 2021, with a 10% variance. The Debtor requires the use of cash collateral to pay its expenses and maintain constant cash flow. US Foods, Inc. and the North Carolina Department of Revenue assert an interest in the Debtor's cash collateral. US Foods, Inc. is identified as the secured party in a UCC Financing Statement filed with the NC Secretary of State (file number 20180014280H). The Debtor does not believe that any outstanding accounts payable are owed to US Foods. The North Carolina Department of Revenue also has an interest in Cash Collateral by virtue of a tax lien filed in 2020 in the amount of $17,168. Adequate protection of the Secured Creditors' interest in the collateral exists in the form of replacement liens in after-acquired revenue to the same extent as they had prior to the bankruptcy. Following the period covered by the Order, the Debtor believes it will be in a position where it can responsibly determine what, if any, additional adequate protection can be offered. The Court ruled that the Debtor may use cash collateral provided that the secured creditors will be granted liens in after-acquired revenue to the same extent and priority as they had prior to the filing of the case. A further hearing on the matter is scheduled for October 26, at 10 AM. A copy of the order and the Debtor's budget for the period from September 29 to October 31, 2021 is available at https://bit.ly/3uLp3ek from PacerMonitor.com. The Debtor projects $$29,000 in total available cash and $25,289.41 in total expenses. About A & G Pizza, Inc. A & G Pizza, Inc. operates "Milano Pizza" in Zebulon, North Carolina. Milano Pizza has been in business for over thirty years. The debtor-entity, owned by Aiman Abdelhadi, has operated Milano Pizza since 2015. The Debtor sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. E.D.N.C. Case No. 21-02160) on September 29, 2021. In the petition filed by Aiman Abdelhadi, president, the Debtor disclosed up to $50,000 in assets and up to $500,000 in liabilities. Travis Sasser, Esq., at Sasser Law Firm is the Debtor's counsel. A.B.C. CARPET: DIP Loan, Cash Collateral Access OK'd ---------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of New York has authorized A.B.C. Carpet Co. Inc. and affiliates to use cash collateral and obtain postpetition financing on a final basis from 888 Capital Partners, LLC, up to the amount of $6,350,000. The Debtors have an immediate need to use cash collateral and obtain credit on an interim basis in order to, among other things, administer and preserve the value of their assets and to avoid harm to their Estates. On October 1, 2020, the Debtors executed a Promissory Note and Loan and Security Agreement in favor of Gerber Finance Inc., predecessor in interest to 888 Capital Partners, as lender and, together with an equity holder as participant, to provide Debtors with one or more loans in the principal amount of $5,000,000. The DIP Facility will mature on November 10, 2021. All obligations and liabilities of the Debtors to the DIP Lender that remain outstanding or are in existence on the last day of the term of the DIP Facility will be due and payable on the Maturity Date. On July 21, 2021, the Senior Prepetition Lender and one of the Debtors' equity holders Ms. Paulette Cole executed a Participation Agreement, pursuant to which Ms. Cole as the Participant acquired a $2,000,000 undivided junior participation interest under the Prepetition Loan Documents. On August 4, 2021, the Senior Prepetition Lender and the Participant executed a Partial Release of Collateral, pursuant to which the Participant acquired an additional $700,000 undivided junior participation interest under the Prepetition Loan Documents. The Prepetition Loan is secured by a first priority security interest in all assets of the Debtors in which the Prepetition Lender properly perfected a security interest. The Prepetition Loan matures on September 30, 2022, and bears interest at the rate of 3% per annum in excess of the prime rate plus 5% in the case of a default. As of the Petition Date, the outstanding balance due on the Prepetition Loan (including recent prepetition advances) was no less than $8,747,598.42, of which no less than $2.7 million constitutes the Participant's Participation Interest under the Participation Documents, including interest. As adequate protection for the Debtors' use of prepetition collateral, the Prepetition Lender is granted postpetition priority, valid, and perfected replacement liens on and security interests in all of the Debtors' now existing and hereafter acquired DIP Collateral, which Adequate Protection Liens will (i) be junior to the DIP Liens, the Carve-Out, and the Valid Prior Liens, and (ii) will be senior to all other security interests in, liens on, or claims against the Prepetition Collateral and DIP Collateral, whether now existing or hereafter arising or acquired. The Adequate Protection Liens granted to the Prepetition Lender pursuant to the Interim Order are automatically perfected by operation of law upon the Court's entry of the Interim Order nunc pro tunc from the Petition Date without further action by the Prepetition Lender. The DIP Liens, the DIP Superpriority Claims, the Prepetition Liens, the Adequate Protection Liens, and the Superpriority Adequate Protection Claim will be junior and subject to the payment, without duplication, of these fees and expenses: a. all unpaid fees payable to the U.S. Trustee and Clerk of the Bankruptcy Court pursuant to 28 U.S.C. section 1930(a); b. to the extent allowed by the Bankruptcy Court at any time (regardless of whether the order allowing such fees is entered before or after notice of the Carve-Out Trigger Date and subject to Paragraph 4(c), payment of fees and expenses and reimbursement of expenses payable to Greenberg Traurig, LLP, as counsel to the Debtors, and any other professionals retained by the Debtors or a creditors' committee, if appointed incurred prior to delivery of a Carve-Out Notice, inclusive of any holdbacks, but excluding any unused retainers established prior to the date hereof; c. all unpaid fees and expenses incurred by the Professionals after the delivery of a Carve-Out Notice, in an aggregate amount not to exceed $250,000, and an additional $500,000 further to the engagement letter between the Debtors and B. Riley to be held in trust for the benefit of B. Riley for the duration of the "Tail Period" to satisfy any "Transaction Fee" if payable, as each of those terms are defined in the Engagement Letter; provided, for the avoidance of doubt, that all amounts paid to Professionals under the Carve-Out must be allowed by order of the Bankruptcy Court; and d. in the event of a conversion of the Bankruptcy Cases to cases under chapter 7 of the Bankruptcy Code, allowed fees and expenses incurred by a trustee and any professional retained by such trustee, in an aggregate amount not to exceed $50,000. A copy of the order and the Debtor's DIP budget for the period beginning September 8 to the week ending November 6, 2021, is available at https://bit.ly/3iA4f4p from Stretto, the claims agent. The Debtor projects $776,000 in total collections and $1,539,000 in total operating disbursements for the week ending October 9. About A.B.C. Carpet Co., Inc. A.B.C. Carpet Co., Inc.own and operate ABC Carpet & Home, an iconic lifestyle brand and home furnishing retailer with stores in Manhattan and Brooklyn. The Debtor sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. S.D. N.Y. Case No 21-11591) on September 8, 2021. In the petition signed by Aaron Rose, chief executive officer, the Debtor disclosed up to $50 million in assets and up to $100 million in liabilities. Its affiliates that concurrently filed voluntary petitions for relief under Chapter 11 of the Bankruptcy Code are A.B.C. Home Furnishings, Inc. and A.B.C. Oriental Carpets, Inc. A.B.C. Carpet Co., Inc. is the lead case. Judge David S. Jones oversees the case. The Debtors tapped Greenberg Traurig, LLP as general bankruptcy counsel, B. Riley Securities, Inc. as investment banker and financial advisor, and Stretto as noticing and claims agent. AB ROBINSON: Seeks to Hire Porter Law Network as Bankruptcy Counsel ------------------------------------------------------------------- AB Robinson Trucking, Inc. seeks approval from the U.S. Bankruptcy Court for the Northern District of Illinois to employ the Porter Law Network to serve as legal counsel in its Chapter 11 case. The firm's services include: (a) advising the Debtor regarding its powers and duties in the continued management of its assets; (b) preparing legal papers; (c) preparing and seeking court approval of the Debtor's plan of reorganization and disclosure statement; (d) taking necessary actions with respect to claims that may be asserted against the Debtor; and (e) performing all other necessary legal services. The hourly rates of the firm's attorneys and staff are as follows: Karen J. Porter, Esq. $450 per hour Associated Attorneys $200 - $350 per hour Legal Assistants $175 per hour In addition, the firm will seek reimbursement for expenses incurred. Prior to the commencement of the case, the Debtor paid the firm a retainer of $3,000 and filing fee of $1717. Karen Porter, Esq., an attorney at the Porter Law Network, disclosed in a court filing that her firm is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. The firm can be reached through: Karen J. Porter, Esq. Porter Law Network 230 West Monroe, Suite 240 Chicago, IL 60606 Telephone: (312) 372-4400 Facsimile: (312) 372-4160 Email: porterlawnetwork@gmail.com About AB Robinson Trucking AB Robinson Trucking, Inc. filed its voluntary petition for Chapter 11 protection (Bankr. N.D. Ill. Case No. 21-11021) on Sept. 24, 2021, listing as much as $500,000 in both assets and liabilities. Judge Donald R. Cassling oversees the case. Karen J. Porter, Esq., at Porter Law Network serves as the Debtor's legal counsel. AEGIS TOXICOLOGY: Moody's Ups CFR & Secured First Lien Loan to B2 ----------------------------------------------------------------- Moody's Investors Service upgraded Aegis Toxicology Sciences Corporation's ratings, including its Corporate Family Rating to B2 from B3 and its Probability of Default Rating to B2-PD from B3-PD. Moody's also upgraded the senior secured first lien rating to B2 from B3. The outlook is stable. The upgrade of the CFR reflects a material debt reduction and improvement in Aegis's liquidity following strong operating performance due to demand for COVID-19 testing - a positive social consideration. Although this revenue tailwind will materially decrease once the pandemic wanes, the debt reduction leaves Aegis in a strong position to absorb risks in its core toxicology business, with debt/EBITDA that Moody's anticipates will be sustained below 5.0x. Moody's took the following rating actions: Aegis Toxicology Sciences Corporation Ratings upgraded: Corporate Family Rating to B2 from B3 Probability of Default Rating to B2-PD from B3-PD Senior secured first lien revolving credit facility due 2023 to B2 (LGD3) from B3 (LGD3) Senior secured first lien term loan due 2025 to B2 (LGD3) from B3 (LGD3) The outlook remains stable RATINGS RATIONALE Aegis's B2 CFR is constrained by the company's small size relative to much larger competitors, and its focus on toxicology testing, notwithstanding its recent expansion into COVID testing. The toxicology industry has faced challenges in the past and Moody's believes it will continue to face longer term pricing pressure and the potential for meaningful Medicare rate cuts after 2022. The strong demand for COVID-19 testing has resulted in unprecedented earnings growth in 2021, which significantly reduced Aegis's exposure to toxicology testing and led to a rapid reduction in leverage. Moody's expects that Aegis's earnings will contract substantially once the pandemic ebbs, and that financial leverage will increase, but that debt/EBITDA will be sustained below 5.0x. Moody's anticipates Aegis' renewed financial flexibility will be used for a combination of acquisitions and shareholder's distributions. Moody's expects Aegis to maintain very good liquidity and generate close to $100 million of free cash flow in 2021 and at least $25 million in 2022. The company has full availability on its $50 million revolving credit facility that expires in May 2023. Liquidity is further supported by roughly $93 million of cash as of June 30, 2021 and no meaningful debt maturities until 2023. The stable outlook reflects Moody's view that once the revenue from COVID-19 testing recedes, debt/EBITDA will be sustained in a range of 4.0x-5.0x and Aegis will generate modestly positive free cash flow. Social and governance considerations are material to Aegis's credit profile. Social risks include the potential for Medicare rate cuts as a result of changes to the laboratory payment fee schedule. Social risk also arises from reputational harm caused by fraud and abuse that has been an issue in the laboratory testing industry. With respect to governance, the company has a mixed track record due to material accounting issues that have depressed earnings and led to material customer losses and management changes in recent years. Further, Aegis' private equity ownership increases governance risk. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS The ratings could be downgraded if Aegis fails to grow its core toxicology testing business or expand into other types of testing as the pandemic ebbs. Other factors that could lead to a downgrade include a shareholder distribution, debt funded acquisition or escalation of internal control issues. Specifically, debt/EBITDA sustained above 6.0x could lead to a downgrade. An upgrade is unlikely in the near-term; however, the ratings could be upgraded if the company demonstrates a material expansion in scale, and sustains solid growth in earnings and cash flow. Specifically, debt/EBITDA sustained below 4.0x could support an upgrade. Aegis Toxicology Sciences Corporation, headquartered in Nashville, TN, is a specialty toxicology laboratory providing services to the healthcare, sports, workplace and biopharma industries. Aegis is privately-owned by affiliates of financial sponsor ABRY Partners II, LLC (ABRY). Aegis generated revenue of approximately $500 million in the last twelve months to June 30, 2021. The principal methodology used in these ratings was Business and Consumer Service Industry published in October 2016. AGAPE' ASSEMBLY: $650K Sale of Orlando Property to Echols Approved ------------------------------------------------------------------ Judge Karen S. Jennemann of the U.S. Bankruptcy Court for the Middle District of Florida authorized Agape' Assembly Baptist Church Inc.'s sale of the real property, located at 8203 Palazzo Court, in Orlando, Florida 32836, and more particularly described as Lot 14K Block K Vizcaya Phase II according to the Plat thereof recorded in Plat Book 26, Pages 78-81 of the Public Records of Orange County, Florida, to Shirley Echols for $650,000, plus costs of the sale as set forth in their purchase and sale agreement. The Sale Hearing was held on Sept. 21, 2021 at 1:30 p.m. On Oct. 1, 2021, the Debtor will execute and deliver the original Special Warranty Deed in Lieu of Foreclosure for the Real Property to Herring Bank, as Trustee c/o Ryan C. Reinert, Esq., Shutts & Bowen LLP, 4301 W. Boy Scout Blvd., Suite 300, Tampa, FL 33607 to be held in escrow pending the closing of the Sale approved herein, which will take place no later than Oct. 8, 2021 at 5:00 p.m. In the event that the Sale is not consummated before the Closing Deadline, Herring Bank, as Trustee will be entitled to record the Escrow Deed to take title to the Real Property with the Debtor and Buyer returned to their respective positions ex-ante the execution of the Sale Agreement with all claims of the Debtor and Buyer to the Real Property released. The Confirmation Order is expressly modified to reduce the floor price for the sale of the Real Property as set forth in Section 2(a)(III) of the Confirmed Plan from $650,000 in net proceeds to Herring Bank, as Trustee, to the amount of $605,000 in net proceeds to Herring Bank, as Trustee, as well as to permit the Bishops to be replaced as the Buyer by Shirley Echols and/or Heritage Investment Seeds LLC, provided further that, except as expressly modified herein or by separate order of the Court, all other terms of the Confirmation Order will remain in full force and effect. Pursuant to 11 U.S.C. Sections 105(a), 363(f) and 365 of the Bankruptcy Code, the Sale by the Debtor to the Buyer of the Real Property, as contemplated by the Sale Motion and to occur before the Closing Deadline, is authorized and approved on the terms set forth therein. Until the Closing Deadline, the Debtor is authorized and directed to close, consummate and comply with the Sale Agreement and all other agreements and documents related to and contemplated thereby and to execute such other documents, and take such other actions as are necessary or appropriate to effectuate the Sale pursuant to the terms of the Sale Agreement and this Sale Order. Such authorization will expire immediately upon the expiration of the Closing Deadline. The net proceeds of the Sale of the Real Property will be distributed pursuant to the Confirmation Order with Herring Bank, as Trustee to receive the net amount of $605,000 at the closing of the Sale without further order of the Court. Subject to the payment or delivery by the Buyer of the consideration provided for pursuant to the Sale Agreement before the Closing Deadline, pursuant to Section 363(f) of the Bankruptcy Code, the sale of the Real Property by the Debtor to the Buyer will constitute a legal, valid and effective transfer of the Real Property and will vest the Buyer with all right, title and interest of the Debtor in and to the Real Property free and clear of any and all security interests, mortgages, liens, judgments, encumbrances, interests and restrictions of any kind, including, without limitation, that certain: (a) First Mortgage Trust Indenture executed by Agape' Assembly Baptist Church, Inc., a Florida non-profit corporation, together with Agape Christian Academy and Preschool, Inc., Mortgagor, in favor of The Herring National Bank, Mortgagee, dated December 15, 2004, in the original principal amount of $7.2 million, recorded April 6, 2005 in Official Records Book 7906, Page 1708 and together with the Supplemental First Mortgage Trust Indenture recorded Jan. 20, 2006 in Official Records Book 8437, Page 1256 and affected by the Partial Release of Mortgage and Other Documents recorded Jan. 4, 2012 in Official Records Book 10314, Page 3050 and together with the Second Supplemental First Mortgage Trust Indenture recorded Jan. 11, 2013 in Official Records Book 10504, Page 5052, all of the Public Records of Orange County, Florida; (b) Second Mortgage Trust Indenture executed by Agape' Assembly Baptist Church, Inc., a Florida non-profit corporation, together with Agape Christian Academy and Preschool, Inc., Mortgagor, in favor of The Herring National Bank, Mortgagee, dated December 15, 2004, in the original principal amount of $715,000, recorded April 6, 2005 in Official Records Book 7906, Page 1764 and together with the Supplemental Second Mortgage Trust Indenture recorded Jan. 20, 2006 in Official Records Book 8437, Page 1263 and affected by the Partial Release of Mortgage and Other Documents recorded Jan. 4, 2012 in Official Records Book 10314, Page 3050 and together with the Supplemental Second Mortgage Trust Indenture recorded Jan. 11, 2013 in Official Records Book 10504, Page 5012, all of the Public Records of Orange County, Florida. (As to Parcels A and B); (c) Default Final Judgment as to Damages in favor of Summit Charter Schools, Inc. recorded Aug. 31, 2015 in Official Records Book 10975, Page 5736, Public Records of Orange County, Florida; (d) Clear Creek 837 Tax RE LLC may have a lien on the property by virtue of Orange County Tax Certificate Number 2017-6342, and a Notice of Application for Tax Deed recorded on Aug. 1, 2019 at Doc. No. 20190476123, Public Records of Orange County, Florida; (e) Orange County, Florida may have a lien on the property by virtue of an Order Imposing Administrative Fine/Lien recorded on Sept. 18, 2015 in Official Records Book 10984, Page 9360, Public Records of Orange County, Florida; (f) Orange County, Florida may have a lien on the property by virtue of a code enforcement lien recorded on Feb. 2, 2016 at Document No. 20160087980, in the Public Records of Orange County, Florida; (g) Orange County, Florida may have a lien on the property by virtue of unpaid property taxes; and (h) Vizcaya Master Homeowners Association, may have a lien on the property by virtue of unpaid homeowner's association assessments, including an Amended Claim of Lien recorded on Sept. 2, 2016 at Document No. 20160462475, in the Public Records of Orange County, Florida, effective as of the Closing of the Sale, with all such liens and interests to transfer to the proceeds of the Sale in the same extent, validity and priority. The Sale or other conveyance of the Real Property is being made under the Debtor's Confirmed Plan and thus pursuant to Section 1146(a) of the Bankruptcy Code, the transfer of the Real Property will not be subject to any document recording tax, stamp tax, conveyance fee, intangibles or similar tax, mortgage tax, stamp act, real estate transfer tax, mortgage recording tax, Uniform Commercial Code filing or recording fee, regulatory filing or recording fee, or other similar tax or governmental assessment. The Sale Order will be effective and enforceable immediately upon entry and its provisions will be self-executing, and the stay of (i) orders authorizing the sale, use or lease of property of the estate, as set forth in Bankruptcy Rule 6004(h); (ii) orders authorizing the assignment of an executory contract or unexpired lease, as set forth in Bankruptcy Rule 6006(d); and (iii) proceedings to enforce a judgment, as set forth in Bankruptcy Rule 7062, or otherwise will not apply to the Sale Order. The 14-day stay period pursuant to Fed. R. Bankr. P. 6004(h) is waived. On Oct. October 11, 2021, Herring Bank, as Trustee will file with the Court a notice providing all parties in interest with the status of the outcome of the Closing and/or recording of the Escrow Deed. About Agape' Assembly Baptist Church Agape' Assembly Baptist Church, Incorporated, is a religious organization in Orlando, Fla. Agape' Assembly Baptist Church filed a voluntary petition under Chapter 11 of the Bankruptcy Code (Bankr. M.D. Fla. Case No. 19-07981) on Dec. 5, 2019. In the petition signed by Richard Bishop, president and director, the Debtor was estimated to have $1 million to $10 million in both assets and liabilities. Justin M. Luna, Esq., at Latham Luna Eden & Beaudine, LLP, is the Debtor's legal counsel. ARBORETUM CROSSING: Unsecured Creditors to Recover 100% in Plan --------------------------------------------------------------- Arboretum Crossing, LLC, filed with the U.S. Bankruptcy Court for the Western District of Texas a Disclosure Statement for Plan of Reorganization dated Oct. 4, 2021. Natin Paul is a successful real estate entrepreneur very active in the Austin market - one of the hottest real estate markets in the country. World Class Holdings, LLC is the sole manager and Arboretum Crossing Equity, LLC is the sole member of the Debtor and each of the foregoing is an affiliate of Natin Paul. The Debtor owns an approximately 24-acre parcel of real property located at 9333 Research Boulevard, Austin, Texas, improved by a strip shopping center occupied by various commercial tenants (the "Property"). To preserve the value of the Property and its business operation for the benefit of all stakeholders—including to preserve what the Debtor believes to be substantial equity value in the Property—the Debtor commenced this Chapter 11 Case on July 6, 2021. The Property is the Debtor's principal asset. In the Debtor's opinion the fair market value of the Property is $45,000,000.00. The 2021 appraisal of the Property by the Travis County Appraisal District is $32,500,000.00. The Debtor has been and is currently seeking to obtain replacement financing in an amount sufficient to satisfy all Allowed Claims in this Bankruptcy Case. Based on the Debtor's opinion of the value of the Property at $45,000,000, the Property value exceeds the debt secured by liens on the Property by over $13,000,000. Accordingly, the Debtor believes that it should be able to secure replacement financing for its current secured debt and, therefore, has focused its efforts on doing so. If the Debtor has not identified replacement financing for its secured debt by December 31, 2021, the Debtor will then commence a simultaneous sales process. The Plan will treat claims as follows: * Class 1 consists of Allowed Secured Claims of 9333 Research Boulevard, LP ("Lender"). The Debtor scheduled the Lender with a Disputed Claim of $29,809,687.00 under the mortgage loan. In full and final satisfaction of Lender's Allowed Secured Claim, the Claim shall be paid in full on or prior to July 6, 2022. Until Lender's Allowed Secured Claim is paid in full, interest shall accrue and be payable on the unpaid balance of Lender's Allowed Secured Claim at the rate of 4.25% per annum or such other amount as is determined by the Bankruptcy Court. This Class will receive a distribution of 100% of their allowed claims. * Class 2 consists of Allowed Secured Claims of Travis County Tax Collector. Travis County filed a proof of secured claim in the amount of $788,796.08. Travis County's Class 2 Allowed Secured Claim shall be paid in full in equal monthly installments of principal and interest, commencing on the first day of the first month following the Effective Date and continuing on the first day of each succeeding month until the expiration of 60 months from the Petition Date. Interest shall begin to accrue as of the Petition Date and will paid at the rate of 12% per annum. This Class will receive a distribution of 100% of their allowed claims. * Class 3 consists of all Unsecured Claims that are not Insider Claims. The Debtor believes there are approximately $48,475.00 in non-insider Unsecured Claims. Each Allowed Unsecured Claim shall be paid in full, without interest, on the later of (i) 30 days after the Effective Date, (ii) 10 days after such Claim becomes an Allowed Claim, or (iii) if the Unsecured Claim is for a refund of a security deposit, in the ordinary course of business as provided under the applicable lease. This Class will receive a distribution of 100% of their allowed claims. * Class 4 consists of Allowed Insider Claims. Insider Claims shall be paid in full without interest, but only after all other Claimants in the Case have been paid in full. This Class will receive a distribution of 100% of their allowed claims. * Class 5 consists of Equity Interests. Each holder of an Equity Interest shall retain such interests but shall not receive any distribution on account of such interests until Classes 1, 2, 3 and 4 Allowed Claims are paid in full. All consideration necessary for the payment or tender of Distributions under the Plan will be derived from (i) Cash on hand on the Effective Date, (ii) income generated by the Reorganized Debtor from operations, and (iii) the proceeds from any sale or refinancing of the Property. The Debtor or Reorganized Debtor, as applicable, plans to sell all or part of the Property or refinance all or any part of the existing obligations that encumber the Property, including the obligations to Lender. In the event such a transaction is consummated by the Debtor or Reorganized Debtor, the net proceeds from such sale or refinancing (after payment of property taxes, customary closing costs, including broker's fees, title insurance fees, and other typical closing costs and taxes attributable to the Property) shall be paid to Lender until the Allowed Lender Secured Claim is satisfied. A full-text copy of the Disclosure Statement dated October 4, 2021, is available at https://bit.ly/3liOqAQ from PacerMonitor.com at no charge. Counsel for Debtor: Mark H. Ralston Fishman Jackson Ronquillo, PLLC Three Galleria Tower 13155 Noel Road, Suite 700 Dallas, TX 75240 Telephone: (972) 419-5544 Facsimile: (972) 4419-5501 Email: mralston@fjrpllc.com About Arboretum Crossing LLC Arboretum Crossing LLC, an Austin, Texas-based company primarily engaged in renting and leasing real estate properties, filed its voluntary petition for relief under Chapter 11 of the Bankruptcy Code (Bankr. W.D. Tex. Case No. 21-10546) on July 6, 2021. In the petition signed by Natin Paul, authorized agent, the Debtor listed $10 million to $50 million in both assets and liabilities. Judge Tony M. Davis oversees the case. Mark H. Ralston, Esq., at Fishman Jackson Ronquillo, PLLC, represents the Debtor as legal counsel. ASSUREDPARTNERS INC: Incremental Loan No Impact on Moody's B3 CFR ----------------------------------------------------------------- Moody's Investors Service is maintaining the B3 corporate family and B3-PD probability of default rating of AssuredPartners, Inc following the company's announcement that it plans to issue an incremental $350 million senior secured term loan due in February 2027 (rated B1). The company will use net proceeds from the incremental borrowing to fund acquisitions and pay related fees and expenses. The rating outlook for AssuredPartners is unchanged at stable. RATINGS RATIONALE According to Moody's, AssuredPartners' ratings reflect its growing presence in middle market insurance brokerage, its good mix of business across property & casualty insurance and employee benefits, and its healthy EBITDA margins. The company has generated mid-single digit organic growth through the first half of 2021 with steady EBITDA margins. AssuredPartners is an active acquirer and allows acquired brokers to operate fairly autonomously under local and regional brands, while the group centralizes accounting and control functions and certain carrier relationships. Credit challenges for the group include aggressive financial leverage, execution risk associated with acquisitions, and significant cash outflows to pay contingent earnout liabilities. Like its peers, AssuredPartners also faces potential liabilities from errors and omissions in the delivery of professional services. Moody's estimates that AssuredPartners' pro forma debt-to-EBITDA ratio will remain around 7x after giving effect to the proposed incremental borrowing. Pro forma (EBITDA - capex) interest coverage will be over 2x, and the free-cash-flow-to-debt ratio will be in the low-to-mid-single digits. These pro forma metrics include Moody's adjustments for operating leases, deferred earnout obligations, run-rate earnings from completed and assumed acquisitions and certain non-recurring costs. Giving effect to the incremental term loan, AssuredPartners' ratings include: Corporate family rating at B3; Probability of default rating at B3-PD; $847 million (including $350 million increase) senior secured 1st lien term loan maturing in February 2027 at B1 (LGD3); $414.5 million senior secured revolving credit facility maturing in February 2025 at B1 (LGD3); $2.122 billion ($2.090 billion outstanding) senior secured term loan maturing in February 2027 at B1 (LGD3); $250 million ($246.4 million outstanding) senior secured 1st lien delayed draw term loan maturing in October 2024 at B1 (LGD3); $500 million senior unsecured notes maturing in August 2025 at Caa2 (LGD5); $475 million senior unsecured notes maturing in June 2027 at Caa2 (LGD5); $550 million senior unsecured notes maturing in January 2029 at Caa2 (LGD5). The rating outlook for AssuredPartners, Inc is unchanged at stable. The first-lien credit facility rating could be downgraded if the proportion of first-lien debt relative to senior unsecured debt in the capital structure is increased. The principal methodology used in these ratings was Insurance Brokers and Service Companies published in June 2018. Based in Lake Mary, Florida, AssuredPartners ranks among the 15 largest US insurance brokers. The company generated revenue of $928 million during the first six months of 2021. ATI HOLDINGS: Moody's Cuts CFR to B3 & Alters Outlook to Negative ----------------------------------------------------------------- Moody's Investors Service downgraded ATI Holdings Acquisition, Inc.'s Corporate Family Rating to B3 from B2, the Probability of Default Rating to B3-PD from B2-PD, and the first lien senior secured bank credit facility to B3 from B2. At the same time, the Speculative Grade Liquidity rating was downgraded to SGL-3 from SGL-2. The outlook was changed to negative from ratings under review. The rating action concludes the review for downgrade initiated on July 26, 2021. The ratings downgrade reflects an increase in financial leverage and Moody's expectations that leverage to increase to around 6.5x following ATI's material downward revision of earnings guidance for year-end 2021. The revision was due to the acceleration of attrition among ATI's physical therapists in the second quarter and third quarters of 2021. Moody's believes that ATI's staffing pressures will challenge the ability to reduce leverage in the next 12-18 months. Governance risk considerations are material to the rating. Moody's believes that the material change in earnings forecast only weeks after closing the company's acquisition by a Special Purpose Acquisition Company (SPAC) calls into question management's credibility and their ability to reasonably forecast future results. In its negative outlook, Moody's expects ATI to incur additional costs as the company tries to remedy its staffing challenges, which could further pressure margins and strain cash. Further, any potential litigation costs related to defending against shareholder lawsuits that have now been brought against the company could further add to Moody's anticipated cash burn. The Speculative Grade Liquidity rating was downgraded to SGL-3 from SGL-2, as there will be additional staffing costs that will increase expenses for the year. While ATI has solid cash balance of approximately $90 million as of June 30, 2021 to offset the additional costs, Moody's expects that ATI will consume cash in 2021. Lastly, the revolver and term loan become current in roughly 6 months, and the uncertainty surrounding the business further increases the refinancing risk. Downgrades: Issuer: ATI Holdings Acquisition, Inc. Corporate Family Rating, Downgraded to B3 from B2 Probability of Default Rating, Downgraded to B3-PD from B2-PD Speculative Grade Liquidity Rating, Downgraded to SGL-3 from SGL-2 Senior Secured 1st Lien Term Loan, Downgraded to B3 (LGD3) from B2 (LGD3) Senior Secured 1st Lien Revolving Credit Facility, Downgraded to B3 (LGD3) from B2 (LGD3) Outlook Actions: Issuer: ATI Holdings Acquisition, Inc. Outlook, Changed To Negative From Rating Under Review RATINGS RATIONALE ATI's B3 Corporate Family Rating reflects its high financial leverage, moderate scale, and geographic concentration in the mid-western and East-Coast regions of the US. Moody's expects that debt/EBITDA will increase through the end of 2021 to around 6.5x, but then will improve to closer to 6.0x over the next 18 months. ATI has exposure to the workers compensation business, which can make the company vulnerable to economic cycles and workers' compensation reimbursement changes. The rating also reflects the relatively low barriers to entry in the industry, which could increase competitive challenges in the longer-term. The rating is supported by ATI's strong market presence as the second largest owner/operator of physical therapy clinics in the US as well its solid market share within the regions where it operates. In its negative outlook, Moody's expects ATI to incur additional costs that will delay deleveraging as the company tries to remedy its staffing challenges. Further, any potential litigation costs related to defending against shareholder lawsuits that have now been brought against the company could further add to Moody's anticipated cash burn. In its SGL-3 Speculative Grade Liquidity Rating, Moody's expects that ATI will consume cash in 2021. That said, ATI has a solid cash balance of approximately $90 million as of June 30, 2021. ATI will also have access to the $70 million revolving credit facility, but may not be fully available given its covenant terms and forecasted EBITDA decline. ESG considerations are a factor in ATI's ratings. Like most healthcare service providers ATI faces social risks around the rising concerns around access and affordability of healthcare services. Moody's does not consider physical therapy service providers to have the same level of social risk because it is typically a lower-cost treatment than more invasive procedures and a safer option to treatments that rely on opioids. From a governance perspective, Moody's believes that management's credibility and their ability to reasonably forecast future results is in question, following the material change in earnings forecast only weeks after closing the company's acquisition by a Special Purpose Acquisition Company (SPAC). Additionally, as most shares remain owned by affiliates of PE firm Advent International, who was the previous owner of ATI, Moody's anticipates that ATI's financial policies will remain aggressive given its growth strategy. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS ATI could be upgraded if it can successfully demonstrate stable organic growth, sustained positive free cash flow. ATI would also need to improve its employee attrition and maintain debt/EBITDA below 6.0 times could support an upgrade. The ratings could be downgraded if ATI has a more severe impact from employee attrition or larger costs associated with litigation and impairments. Additionally, the ratings could be downgraded if the company's liquidity weakens, fails to effectively manage its rapid growth, pursues more aggressive financial policies or if debt/EBITDA is sustained above 7.0x. ATI Holdings Acquisition, Inc., a wholly-owned subsidiary of ATI Physical Therapy, Inc. headquartered in Bolingbrook, IL, is an outpatient physical therapy and rehabilitation provider. The company operates about 900 clinics in 24 states concentrated around the U.S. Midwest and East coast. ATI Holdings' LTM June 30, 2021 revenue was $615 million. ATI Physical Therapy is publicly traded with funds affiliated with Advent International having a majority stake. The principal methodology used in these ratings was Business and Consumer Service Industry published in October 2016. AUTOMOTIVE PARTS: Seeks to Hire Howard LLP as Tax Services Provider ------------------------------------------------------------------- APDI Liquidation LLC, formerly known as Automotive Parts Distribution International, LLC, seeks approval from the U.S. Bankruptcy Court for the Northern District of Texas to employ Howard, LLP to prepare its 2020 federal and state tax returns. Howard estimates that its fees for the tax services are expected to be $10,000. The firm's hourly rates for out-of-scope work are as follows: Sarah Hancock, Tax Partner $310 per hour Julia Koonsman, Tax Manager $255 per hour Other Professionals, Tax Associate $75 - $130 per hour In addition, Howard will seek reimbursement for expenses incurred. Sarah Hancock, a tax partner at Howard, disclosed in a court filing that his firm is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. The firm can be reached through: Sarah Hancock Howard, LLP 7557 Rambler Road, Suite 600 Dallas, TX 75231 Telephone: (214) 346-0750 About Automotive Parts Automotive Parts Distribution International, LLC, now known as APDI Liquidation LLC, was established in January 2008 as a distribution and marketing company to cover the North American aftermarket. It offers radiators, condensers, fan assemblies, heater cores, intercoolers, heavy duty radiators, and fuel pump module assemblies. Automotive Parts filed a voluntary petition for Chapter 11 protection (Bankr. N.D. Texas Case No. 21-41655) on July 12, 2021, listing up to $10 million in assets and up to $50 million in liabilities. Kevin O'Connor, chief executive officer, signed the petition. Judge Edward L. Morris oversees the case. The Debtor tapped Winstead PC, and Ice Miller, LLP as legal counsel and Howard, LLP as tax services provider. The U.S. Trustee for Region 6 appointed an official committee of unsecured creditors in the Debtor's Chapter 11 case on Aug. 6, 2021. Kelley Drye & Warren, LLP and Province, LLC serve as the committee's legal counsel and financial advisor, respectively. AVALANCHE COMPANY: Unsecureds to be Paid in Full in 48 Months ------------------------------------------------------------- Avalanche Company, LLC, filed a Second Amended Chapter 11 Plan of Reorganization and Disclosure Statement dated Oct. 1, 2021. The Plan is jointly proposed by the Debtor and Secured Creditors, Nicholas Mechling and Christopher Mechling. The Debtor was formed in 2006 by the Mechlings, who each hold a 50% ownership of the Debtor. The Plan provides that before each Plan Payment becomes due, the Mechlings shall deposit to the account of the Reorganized Debtor funds sufficient to make each Plan Payment. The Mechlings anticipate that the source of these deposits shall be Intellectual Property Proceeds. To the extent that the Intellectual Property Proceeds is insufficient to fund the Plan Payments, the Mechlings may, but are not required to, deposit to the account of the Reorganized Debtor funds sufficient to make the balance of each Plan Payment. Each advance of funds by the Mechlings shall constitute a loan to the Reorganized Debtor. Class 1 Mechling Secured Claim will not be paid until all other creditors are paid in full. Class 2 Pouliot Judgment Claim aggregating $227,292, bearing 3% interest, will be paid in full in 48 monthly installments. The Debtor objected to the attorney's fees component of the claim amounting to $81,626, and contended, as well, that the entire amount under the Pouliot Judgment had been tendered and should be deemed to have been paid. A court ruling allowed the claim for $141,588. Allowed Class 3 General Unsecured Claims will bear interest at 3% and will be paid in full on pro rata basis in 48 monthly installments beginning no later than April 1, 2022. Class 4 Equity Interests are retained. The Mechlings anticipate that funds from the first container sized order will be available prior to the Effective Date. These funds (about $45,000 margin on the first order), plus the balance in the DIP accounts of about $27,522 as of August 31, 2021, will exceed the administrative expenses that are payable on the Effective Date of the Plan, the Debtor said. A copy of the Disclosure Statement is available for free at https://bit.ly/2ZVFdWZ from PacerMonitor.com. Counsel for Nicholas Mechling and Christopher Mechling, creditors and equity holders of the Debtor: Dean T. Kirby, Jr., Esq. Roberta S. Robinson, Esq. Kirby & McGuinn, A P.C. 707 Broadway, Suite 1750 San Diego, CA 92101-5393 Telephone: (619) 685-4000 Facsimile: (619) 685-4004 About Avalanche Company Avalanche Company, LLC, a San Diego, Calif.-based owner of sporting goods, hobby and musical instrument stores, sought protection under Chapter 11 of the Bankruptcy Code (Bankr. S.D. Cal. Case No. 20-01229) on March 3, 2020. At the time of the filing, the Debtor disclosed assets of between $1 million and $10 million and liabilities of the same range. Judge Christopher B. Latham oversees the case. The Debtor is represented by the Law Office of Bruce R. Babcock, Esq. AZZIL GRANITE: Nov. 17 Auction Set for Quarry and Related Assets ---------------------------------------------------------------- Judge Michael B. Kaplan of the U.S. Bankruptcy Court for the District of New Jersey authorized the bidding procedures proposed by Azzil Granite, Materials, LLC, and Magnolia Associates, LLC, in connection with the auction sale of quarry and related assets. The salient terms of the Bidding Procedures are: a. Bid Deadline: Nov. 10, 2021, at 3:00 p.m. (ET) b. Auction: If more than one Qualified Bid is submitted by the Bid Deadline, the Debtors will conduct an auction on Nov. 17, 2021, at 11:00 a.m. (ET) either by Zoom or at the offices of Genova Burns, LLC, 110 Allen Road, Suite 304, Basking Ridge, New Jersey 07920. c. Sale Hearing: Nov. 30, 2021, 10:00 a.m. (ET) d. Sale Objection Deadline: Nov. 26, 2021, 4:00 p.m. (ET) Within three days after the entry of the Order, the Debtor will serve the Motion along with the Order and the Bidding Procedures, via first class mail, upon the Notice Parties. Notwithstanding the possible applicability of the provisions of Bankruptcy Rule 6004 or any applicable provision of the Local Rules, the Order will not be stayed for 14 days after the entry hereof, but will be effective and enforceable immediately upon entry. A copy of the Bidding Procedures is available at https://tinyurl.com/wx4btb93 from PacerMonitor.com free of charge. About Azzil Granite Materials Azzil Granite Materials LLC -- an affiliate of Hackettstown, N.J.-based Lizza Equipment Leasing, LLC -- is a supplier of high friction granite aggregates for the New York City and Long Island market. Magnolia Associates LLC, another affiliate of Lizza Equipment Leasing, owns a 134-acre property with quarry located in White Hall, N.Y., which is valued by the company at $15 million. On June 12, 2019, Lizza Equipment Leasing sought Chapter 11 protection, together with Azzil Granite Materials (Bankr. D.N.J 19-21764) and Magnolia Associates LLC (Bankr. D.N.J. 19-21766) in the U.S. Bankruptcy Court for the District of New Jersey. Their cases are jointly administered under Lizza Equipment Leasing (Bankr. D.N.J. Lead Case No. 19-21763). In the petitions signed by Carl J. Lizza, co-managing member, Lizza Equipment Leasing disclosed $90 in assets and liabilities of $987,830; Azzil Granite Materials disclosed total assets of $813,825 and total liabilities of $23,859,263; and Magnolia Associates disclosed total assets of$15,317,480, and total liabilities of $13,137,533. Judge Michael B. Kaplan oversees the cases. Daniel M. Stolz, Esq., at Wasserman Jurista & Stolz, P.C., is the Debtors' bankruptcy counsel. Lizza Equipment won confirmation of its Liquidating Plan on Nov. 6, 2020. B N EMPIRE: May Pay Insurance, Utilities Through Oct. 19 -------------------------------------------------------- Judge Roberta Colton of the U.S. Bankruptcy Court for the Middle District of Florida granted B N Empire, LLC's motion to use cash collateral, with respect to insurance and utilities, on an interim basis through October 19, 2021, according to a proceeding memo filed in the bankruptcy court dockets. A copy of the budget, which provided $3,535 for insurance and $3,089 for electricity, is available at https://bit.ly/3DclpNv from PacerMonitor.com at no charge. The Court will continue to October 19, 2021 the motion to prohibit use of the cash collateral filed by Elizon DB Transfer Agent, LLC, the memo further disclosed. A copy of the proceeding memo is available for free at https://bit.ly/2YkBYrd from PacerMonitor.com. About B N Empire, LLC B N Empire, LLC, which owns a shopping center in Temple Terrace, Florida, filed a Chapter 11 petition (Bankr. M.D. Fla. Case No. 21-04509) on August 30, 2021. In the petition signed by Rajesh Bahl, manager, the Debtor estimated up to $50,000 in assets and $1 million to $10 million in liabilities. The Law Firm of M. Vincent Pazienza, P.A. represents the Debtor as counsel. Hoffman, Larin & Agnetti, P.A. represents Elizon DB Transfer Agent, LLC, secured creditor. BAIRN LLC: Case Summary & 20 Largest Unsecured Creditors -------------------------------------------------------- Debtor: Bairn, LLC 320 Brown Street, #409 West Lafayette, IN 47906 Business Description: Bairn, LLC is the fee simple owner of 69 real properties located in Lafayette, Indiana having an aggregate current value of $6.06 million. Chapter 11 Petition Date: October 7, 2021 Court: United States Bankruptcy Court Northern District of Indiana Case No.: 21-40249 Debtor's Counsel: Sarah L. Fowler, Esq. OVERTURF FOWLER LLP 9102 N. Meridian Street, Suite 555 Indianapolis, IN 46260 Tel: 317-559-3647 Fax: 317-854-9216 Email: sfowler@ofattorneys.com Total Assets: $6,479,598 Total Liabilities: $2,626,905 The petition was signed by Deborah Lane as president. A full-text copy of the petition containing, among other items, a list of the Debtor's 20 largest unsecured creditors is available for free at PacerMonitor.com at: https://www.pacermonitor.com/view/S4NS7JI/Bairn_LLC__innbke-21-40249__0001.0.pdf?mcid=tGE4TAMA BARFLY VENTURES: Pastaio Will Take Over HopCat Space in Royal Oak ----------------------------------------------------------------- Mike McConnell of the Royal Oak Tribune reports that an Italian restaurant with handmade pasta and pizza is getting ready for an opening this fall at the former site of HopCat in downtown Royal Oak. HopCat, 280 W. Fifth Street, closed in the spring of 2020 as the COVID-19 pandemic surged and the company later filed for Chapter 11 bankruptcy. The new restaurant, called Pastaio, has signs on the front of the location announcing its pending opening with plans to hire staff. On Tuesday, Oct. 5, 2021, workmen were inside the three-story building painting. City Manager Paul Brake said he's heard the new Pastaio eatery has building plans in the works and is seeking transfer of a liquor license. "We're pleased to welcome them to the downtown," Brake said. "The bigger picture is that this shows the resiliency of our downtown with a new restaurant coming in that we expect will be a viable destination spot." Restaurateur Pasquale Lamarra has a Pastaio restaurant in Port St. Lucie, Fla. and began the application process with the city last September 2021 to open in Royal Oak. He could not be reached for comment Tuesday. Restaurants that serve alcohol first have to get approval for their plan of operations from the City Commission after the police department files a report with recommendation. Brake said he expects the matter will go before commissioners within several weeks. Lamarra told the Detroit News this week that the new eatery will have a nightclub on the top floor called 00 Bar, while the restaurant will have a full bar and serve a variety of pasta entrees, brick-oven pizza and Italian meals. "We just execute beautiful Italian food at pretty reasonable prices," Lamarra told the News. "It's affordable but it's also a really cool atmosphere. It's not your typical mom and pop Italian restaurant." Lamarra reportedly also created a steakhouse at a former HopCat location in Florida. The company's website at eatpastaio.com says it is seeking employees for the location in Royal Oak, and another location Palm City, Fla. The site highlights the restaurants' dishes and explains that Pastaio means pasta maker. About BarFly Ventures BarFly Ventures LLC is the parent company of HopCat, Stella's Lounge, and Grand Rapids Brewing Co. Founded in 2008, BarFly operates a chain of restaurants. Barfly Ventures and its affiliates sought Chapter 11 protection (Bankr. W.D. Mich. Case No. 20-01947) on June 3, 2020. Barfly Ventures was estimated to have $1 million to $10 million in assets and $10 million to $50 million in liabilities. The Hon. James W. Boyd is the case judge. The Debtors tapped WARNER NORCROSS & JUDD, LLP and PACHULSKI STANG ZIEHL & JONES LLP as counsel; ROCK CREEK ADVISORS LLC as financial advisor; and MASTODON VENTURES, INC., as investment banker. BASIC ENERGY: Berry Corp. Wins Auction for Its C&J Well Services ---------------------------------------------------------------- John Cox of Bakersfield.com reports that Kern County oil producer Berry Corp. has prevailed in its bid to purchase a locally active oilfield services company whose addition nearly quadruples Berry's payroll and positions it to compete for state contracts for properly plugging orphan and idle wells. C&J Well Services had been owned by Fort Worth-based Basic Energy Services Inc., which last year paid about $94 million for its California operations. Dallas-based Berry bought it out of Basic's bankruptcy case, effective Oct. 1, for about $43 million. Already under Berry's control, C&J will formally become a subsidiary of the oil producer by Nov. 1, and its 910 employees -- 97 percent of its payroll under Basic -- will join Berry's 347 employees engaged in oil exploration and production. C&J, which hopes to continue serving and even grow its existing customer base, does plugging and abandonment work, drilling, well servicing and maintenance, tool rentals, production and fluid logistics. It has won the Association of Energy Service Companies trade group's top safety award for 18 of the last 20 years. "We just plan on continuing to grow our safety culture," said Jack Renshaw, who will continue to lead the nearly 80-year-old service company now known as C&J Well Services LLC. Berry's president, CEO and chairman, A.T. “Trem” Smith, said C&J is profitable and that its earnings will be accretive to Berry's. He emphasized there are no plans for the new parent company to displace any of C&J's existing customers. Smith said C&J will help Berry work toward its strategy of aligning itself with California's climate goals, largely by plugging and abandoning orphan and idle wells, which are big sources of carbon dioxide and methane, a particularly potent greenhouse gas. About Basic Energy Services Basic Energy Services, Inc. -- http://www.basices.com/-- provides wellsite services essential to maintaining production from the oil and gas wells within its operating areas. Its operations are managed regionally and are concentrated in major United States onshore oil-producing regions located in Texas, California, New Mexico, Oklahoma, Arkansas, Louisiana, Wyoming, North Dakota, Colorado and Montana. Specifically, Basic Energy Services has a significant presence in the Permian Basin, Bakken, Los Angeles and San Joaquin Basins, Eagle Ford, Haynesville and Powder River Basin. Basic Energy Services and 12 affiliates sought Chapter 11 protection (Bankr. S.D. Tex. Lead Case No. 21-90002) on Aug. 17, 2021. As of March 31, 2021, Basic Energy disclosed total assets of $331 million and debt of $549 million. Judge David R. Jones oversees the cases. The Debtors tapped Weil, Gotshal & Manges LLP as legal counsel, Alixpartners LLP as restructuring advisor, and Lazard Freres & Company as financial advisor. Prime Clerk is the claims agent. The U.S. Trustee for Region 7 appointed an official committee of unsecured creditors in the Debtors' Chapter 11 cases. Snow & Green, LLP and Brown Rudnick, LLP serve as the committee's legal counsel. BEAR COMMUNICATIONS: Oct. 7-14 Ritchie Auction of Personal Property ------------------------------------------------------------------- Judge Dale L. Somers of the U.S. Bankruptcy Court for the District of Kansas authorized Bear Communications, LLC's online auction of personal property specified on Exhibit A. The online auction will be conducted by Ritchie Bros. Auctioneers (America) Inc. through its Iron Planet on‐line platform, IronPlanet.com, with bidding opening on Oct. 7, 2021, and conclude on Oct. 14, 2021. Any valid liens or security interests in and to the Property will be transferred to the proceeds of the sale. Proceeds from the sale of the Property will be held by the Debtor in an account the Debtor will establish at Central Bank of the Midwest pending further order of the Court. The closings on the sales of the Property will occur within 21 days after the sale concludes. The costs of sale and other amounts to be deducted from the sales proceeds and paid at closing will be as set out in the Motion. A copy of the Exhibit A is available at https://tinyurl.com/ycad2425 from PacerMonitor.com free of charge. About Bear Communications Lawrence, Kan.-based Bear Communications, LLC -- http://www.bearcommunications.net-- is a communications contractor offering aerial construction, underground construction, splicing, subscriber drop placement, residential and commercial installations, residential and commercial wiring, consulting, and testing services. Bear Communications filed its voluntary petition for Chapter 11 protection (Bankr. D. Kansas Case No. 21-10495) on May 28, 2021, disclosing total assets of up to $50 million and total liabilities of up to $100 million. Judge Dale L. Somers presides over the case. W. Thomas Gilman, Esq., at Hinkle Law Firm LLC, represents the Debtor as legal counsel. The U.S. Trustee for Region 20 appointed an official committee of unsecured creditors in the Debtor's case on June 29, 2021. The committee is represented by Robert Hammeke, Esq. BL SANTA FE: Wins Interim OK on Postpetition Financing ------------------------------------------------------ The U.S. Bankruptcy Court for the District of Delaware has authorized BL Santa Fe, LLC (Senior Borrower) and BL Santa Fe (MEZZ), LLC (Mezzanine Borrower) to obtain postpetition financing on an interim basis. Mezzanine Borrower is authorized to borrow, and Senior Borrower is authorized to guarantee, borrowings up to an aggregate principal amount of $5,858,670 in postpetition financing consisting of superpriority senior secured loans under the Mezzanine Loan Agreement dated as of June 14, 2019, among the Mezzanine Borrower, Juniper Bishops, LLC (Mezzanine Agent) and the DIP Lenders. Under the Senior Loan Agreement and other Senior Loan Documents, Senior Lender has made a loan to Senior Borrower in the aggregate maximum principal amount of up to $43,000,000. As of the Petition Date, Senior Borrower was indebted to Senior Lender pursuant to the Senior Loan Documents in the aggregate principal amount of $40,979,543.53. As of the Petition Date, the Prepetition Senior Obligations include default interest accruing at an additional 5% pursuant to Section 2.2.1(b) of the Senior Loan Agreement. Mezzanine Lender made a loan to Mezzanine Borrower in the aggregate maximum principal amount of up to $15,000,000. Additionally, prior to the Petition Date, Mezzanine Lender provided advances to Mezzanine Borrower pursuant to the Mezzanine Loan Documents in the amount of $8,416,183. Mezzanine Borrower owed Mezzanine Lender in the aggregate principal amount of $35,967,572 as of the Petition Date. The Debtors have an immediate need to obtain the DIP Facility and use Cash Collateral to, among other things, (A) permit the orderly continuation of their businesses; (B) pay certain Adequate Protection Payments; and (C) pay the costs of administration of their estates and satisfy other working capital and general corporate purposes of the Debtors. All of the DIP Obligations will constitute allowed superpriority administrative expense claims against each of the Debtors' estates. As security for the DIP Obligations, the DIP Agent, for the benefit of the DIP Secured Parties, is granted (a) Second Priority Lien On Any Mezzanine Unencumbered Property and (b) Liens Priming Mezzanine Lender's Prepetition Liens, subject to Permitted Encumbrances, Adequate Protection Liens, the Carve-Out, and the Intercreditor Agreement. The Carve-Out includes, among other things, (i) all reasonable fees and expenses up to $25,000 incurred by a trustee under Section 726(b) of the Bankruptcy Code, and (ii) Allowed Professional Fees of Professional Persons in an aggregate amount not to exceed $100,000 incurred after the first business day following delivery by the Senior Agent or the DIP Agent of the Carve Out Trigger Notice. All of the obligations under the Senior DIP Loan will constitute allowed superpriority administrative expense claims against each of the Debtors' estates. As security for the Senior DIP Obligations, the Prepetition Senior Secured Parties are granted fully perfected postpetition security interests in and liens on all (A) Prepetition Collateral; (B) DIP Collateral; (C) all Mezzanine Unencumbered Property; and (D) all Senior Unencumbered Property, subordinate only to the Carve-Out and other valid, perfected and unavoidable liens existing as of the Petition Date that are senior in priority to the Senior Liens. The Debtors are authorized to use all Cash Collateral of the Prepetition Secured Parties, pursuant to the Interim Order, and in accordance with the budget until the earlier of (x) November 13, 2021 or (y) if an Event of Default occurs and remains uncured for more than five business days following the delivery of a Termination Declaration. All of the Debtors' cash is considered the Prepetition Secured Parties' cash collateral. As adequate protection of their interests in the Prepetition Collateral including Cash Collateral, and for an amount equal to the aggregate postpetition diminution in value of such interests, the Senior Agent and the Mezzanine Agent, for the benefit of themselves and the other Prepetition Secured Parties, are granted: * Senior Adequate Protection Liens; * Mezzanine Adequate Protection Liens; * Senior Adequate Protection Superpriority Claims; and * Mezzanine Adequate Protection Superpriority Claims. As further adequate protection, the Debtors are directed to pay (i) all reasonable and documented fees and expenses; and (ii) postpetition monthly interest payments in cash to the Senior Agent of all accrued and unpaid interest. A copy of the Interim Order is available for free at https://bit.ly/3AfhSfk from Stretto, claims agent. The final hearing on the Motion is scheduled for October 19 at 11:30 a.m. About BL Santa Fe BL Santa Fe, LLC, and BL Santa Fe (MEZZ), LLC own and operate a luxury resort known as Bishop's Lodge located at 1297 Bishops Lodge Road, Santa Fe, New Mexico 87506, approximately three miles north of historic Downtown Santa Fe. The Debtors filed Chapter 11 Petition (Bankr. D. Del. Lead Case No. 21-11190) on August 30, 2021. The Hon. Mary F. Walrath oversees the case. In the petition signed by Michael Norvet as authorized person, the Debtor disclosed $50 million to $100 million in assets and liabilities. Young Conaway Stargatt & Taylor, LLP represents the Debtors as counsel. Stretto serves as the Debtors' claims and noticing agent. BLUE DOLPHIN: Unit Signs $10M Loan Agreement With Greater Nevada ---------------------------------------------------------------- Nixon Product Storage, LLC, a wholly owned subsidiary of Blue Dolphin Energy Company, entered into a loan agreement with Greater Nevada Credit Union, as lender, for a term loan in the aggregate principal amount of $10.0 million effective Oct. 1, 2021. The NPS loan has a 10-year term with a fixed interest rate of 5.75% and requires monthly interest-only payments beginning in October 2021 and continuing through the first 36 months. Thereafter, principal and interest payments shall be due monthly through loan maturity in October 2031. Proceeds of the NPS loan will be used for working capital purposes and for loan closing costs. The NPS loan is secured by a deed of trust lien on approximately 56 acres of land and improvements owned by LE in Wilson County, Texas, a leasehold deed of trust lien on certain property which is leased by Nixon from LE, an assignment of leases and rents, and certain personal property. The NPS loan contains various terms and conditions which are customary for loans of this type, including representations and warranties, affirmative and negative covenants respecting the business of the parties to the NPS loan, financial covenants respecting debt service coverage ratio, ratio of debt to net worth and ratio of current assets to current liabilities, and events of default. About Blue Dolphin Headquartered in Houston, Texas, Blue Dolphin Energy Company -- http://www.blue-dolphin-energy.com-- is an independent downstream energy company operating in the Gulf Coast region of the United States. The Company's subsidiaries operate a light sweet-crude, 15,000-bpd crude distillation tower with approximately 1.2 million bbls of petroleum storage tank capacity in Nixon, Texas. Blue Dolphin was formed in 1986 as a Delaware corporation and is traded on the OTCQX under the ticker symbol "BDCO". Blue Dolphin reported a net loss of $14.46 million for the 12 months ended Dec. 31, 2020, compared to net income of $7.36 million for the 12 months ended Dec. 31, 2019. As of June 30, 2021, the Company had $65.08 million in total assets, $83.14 million in total liabilities, and a total stockholders' deficit of $18.06 million. Sterling Heights, Michigan-based UHY LLP, the Company's auditor since 2002, issued a "going concern" qualification in its report dated March 31, 2021, citing that the Company is in default under secured and related party loan agreements and has a net working capital deficiency. These conditions raise substantial doubt about the Company's ability to continue as a going concern. BONANZA CREEK: Moody's Assigns Ba3 CFR & Rates New $400MM Notes B1 ------------------------------------------------------------------ Moody's Investors Service assigned ratings to Bonanza Creek Energy, Inc. (to be renamed Civitas Resources, Inc.), including a Ba3 Corporate Family Rating, a Ba3-PD Probability of Default Rating, a B1 rating to the proposed $400 million senior unsecured notes due 2026, and SGL-1 Speculative Grade Liquidity (SGL) rating. The outlook is stable. Net proceeds from the proposed notes will be used to fully repay revolver borrowings, to pay transaction fees and expenses, and to add cash to the balance sheet. The new notes will be mandatorily redeemable at par if the Crestone transaction does not close. The Extraction transaction has to close for the Crestone transaction to close. "After combining several DJ Basin exploration and production companies, Bonanza Creek (which will become Civitas Resources) will have a large-scale position as a leading producer in Colorado, a low-cost structure, low leverage, strong interest coverage and solid asset coverage," said Jonathan Teitel, a Moody's analyst. "Key risks include operations in a single basin, evolving environmental and social risks for oil and gas development in Colorado specifically, as well as integration including businesses that have recently restructured." Assignments: Issuer: Bonanza Creek Energy, Inc. Probability of Default Rating, Assigned Ba3-PD Speculative Grade Liquidity Rating, Assigned SGL-1 Corporate Family Rating, Assigned Ba3 Senior Unsecured Notes, Assigned B1 (LGD5) Outlook Actions: Issuer: Bonanza Creek Energy, Inc. Outlook, Assigned Stable RATINGS RATIONALE Bonanza Creek's (Civitas) Ba3 CFR reflects the pro forma company's large-scale position as a leading producer in the DJ Basin of Colorado, low cost structure, low leverage, strong interest coverage and solid asset coverage. The rating is constrained by risks of operating in a single basin, which are magnified by carbon transition risks, the evolving regulatory environment, and social risks for oil and gas development in Colorado, as well as integration risks including with businesses that have recently restructured. The combination of Bonanza Creek, HighPoint, Extraction Oil & Gas and Crestone meaningfully increases scale and provides for synergies and operating efficiencies. While the company is geographically concentrated, the business combinations increase diversification of assets within the DJ Basin. The company will continue to look for opportunities to consolidate assets in the DJ Basin through mergers and acquisitions, particularly involving adjacent acreage, further increasing scale and operating efficiencies while focusing on maintaining low leverage. Hedges increase cash flow visibility and mitigate risks from commodity price volatility. Efforts by governments and society to transition toward the use of low-carbon energy sources as well as increasing energy efficiency present risks to the demand for the company's production of fossil fuels. Carbon regulation, policy initiatives and consumer preferences could reduce long-term demand for oil. Colorado Senate Bill 181 passed in April 2019, establishing a rulemaking process which governs permitting for oil and gas drilling in the state. The Colorado Oil and Gas Conservation Commission (COGCC) regulates oil and gas development and production in the state. There are risks that current and future regulations impede drilling activities, increase time and difficulty to obtaining permits, and heighten operational costs. Mitigating these risks are the company's acreage in rural areas. The company currently has drilled but uncompleted (DUC) wells and locations with approved permits that should support at least a couple of years of drilling inventory. It also has a number of permits that have been approved at the local level but not yet at the state level. The SGL-1 rating reflects Moody's expectation that Bonanza Creek (Civitas) will maintain very good liquidity supported by cash on the balance sheet, positive free cash flow generation in 2022 and an undrawn revolver. The company will have a 4-year RBL revolving credit facility due 2025 with elected commitments of $800 million (on a $1 billion borrowing base and maximum lender commitments of $2 billion). The revolver's financial covenants will include a maximum net leverage ratio and a minimum current ratio. Moody's expects the company will maintain comfortable cushion to these covenants through 2022. Bonanza Creek Energy, Inc.'s (Civitas) $400 million of proposed 5-year senior unsecured notes due 2026 are rated B1, which is one notch below the CFR of Ba3, reflecting their effective subordination to the RBL revolving credit facility due 2025. The company also has $100 million of existing 7.5% senior unsecured notes due April 2026 that rank pari passu with the new notes. The stable outlook reflects Moody's expectation for Bonanza Creek (Civitas) to maintain production levels with good capital efficiency, low leverage and strong interest coverage while generating positive free cash flow in 2022. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS Factors that could lead to an upgrade include the establishment of a track record with the integrated businesses at increased scale in the context of the company's operational and financial strategies; demonstrating successful balancing of capital returns to shareholders and consistent positive free cash flow generation; maintenance of low leverage and strong credit metrics; and sustaining production levels. In terms of capital efficiency, a leveraged full cycle ratio (LFCR) sustained above 1.5x could be supportive of an upgrade. Factors that could lead to a downgrade include meaningful production decline; large increases to leverage; negative free cash flow or significant weakening of liquidity; an LFCR approaching 1x; or regulatory developments in Colorado adverse to the company. Bonanza Creek (Civitas), headquartered in Denver, Colorado, is a publicly traded independent exploration and production company operating in the DJ Basin in Colorado. The principal methodology used in these ratings was Independent Exploration and Production published in August 2021. BOY SCOUTS OF AMERICA: Former HQ in Lancaster Listed for Sale ------------------------------------------------------------- Jeff A. Chamer of the Telegram & Gazette reports that the sale of the Heart of New England Council's former home at 1980 Lunenburg Road in Lancaster, Massachusetts closed, said Mark Barbernitz, Scout executive and CEO of the local Boy Scouts of America chapter. The building was listed for sale after the multi-million dollar settlement between the Boy Scouts of America and tens of thousands of people who said they were sexually abused as Scouts, going back decades. Local councils were mandated to contribute toward the settlement. The building, which was listed at $799,000, sold for $700,000, Barbernitz said. The settlement came after the organization filed for Chapter 11 bankruptcy last year. Barbernitz said the executive board is still discussing how to fill the final settlement amount, but that some of the funds from the sale would be used for it. "We do have some holdings, some land, some properties not connected to camps that could be an option, but they haven't made a final determination," Barbernitz said. He said that borrowing funds may also be an option but they should have a firm plan that makes sense for the council and that is approved by the board by the end of the year. The council has since moved to a building at the Treasure Valley Scout Reservation in Rutland, which Barbernitz said made more sense because of its location at the center of the Scout camp, as well as the fact that his staff was downsized during the pandemic. "It served the council well, but times changed, councils merged, staff sizes changed. A lot of changes happened over the last 50 years," said Barbernitz. "Being a fiscally responsible nonprofit, we definitely needed to be very judicious about how we spent donor money. We hate to do that but we did have to reduce staff." He said the pandemic year made it tough financially as camps were unable to run, and fundraising became difficult, but this year both summer camps were able to run, some staff was able to be rehired, and they were able to recruit 500 scouts last September 2021. He also said the local council has done well with recruiting despite the BSA and other youth organization membership being down from the COVID-19 pandemic and national stories surrounding the lawsuit involving BSA. For now, Barbernitz looks forward to recruiting more scouts this fall. "Scouting is a very safe organization. We always have been. We have some of the strongest youth protection policies in place since the early 1980s," said Barbernitz. "Any negative publicity about things that happened 50 and 60 years ago, we're trying to overcome those stories." About Boy Scouts of America The Boy Scouts of America -- https://www.scouting.org/ -- is a federally chartered non-profit corporation under title 36 of the United States Code. Founded in 1910 and chartered by an act of Congress in 1916, the BSA's mission is to train youth in responsible citizenship, character development, and self-reliance through participation in a wide range of outdoor activities, educational programs, and, at older age levels, career-oriented programs in partnership with community organizations. Its national headquarters is located in Irving, Texas. The Boy Scouts of America and affiliate Delaware BSA, LLC, sought Chapter 11 protection (Bankr. D. Del. Lead Case No. 20-10343) on Feb. 18, 2020, to deal with sexual abuse claims. Boy Scouts of America was estimated to have $1 billion to $10 billion in assets and at least $500 million in liabilities as of the bankruptcy filing. The Debtors have tapped Sidley Austin LLP as their bankruptcy counsel, Morris, Nichols, Arsht & Tunnell LLP as Delaware counsel, and Alvarez & Marsal North America, LLC as financial advisor. Omni Agent Solutions is the claims agent. The U.S. Trustee for Region 3 appointed a tort claimants' committee and an unsecured creditors' committee on March 5, 2020. The tort claimants' committee is represented by Pachulski Stang Ziehl & Jones, LLP, while the unsecured creditors' committee is represented by Kramer Levin Naftalis & Frankel, LLP. BRAIN ENERGY: Unsecured Creditors Will Get 85% of Claims in Plan ---------------------------------------------------------------- Brain Energy Holdings LLC submitted a First Amended Disclosure Statement in connection with the First Amended Chapter 11 Plan of Liquidation dated October 4, 2021. The Plan contemplates a sale of the Property to the Successful Bidder at an Auction which will be conducted by an Auctioneer in accordance with Bankruptcy Court-approved Bid Procedures. The Debtor has entered into a proposed Asset Purchase Agreement with the Lender pursuant to which, among other things, the Lender has agreed to purchase the Property by way of a credit bid in the amount $4,375,000, subject to any higher or better offers made at the Auction. The Lender has also agreed to contribute up to $166,125.00 towards the distributions to creditors and other payments to be made under the Plan (the "Lender's Cash Contribution"). Class 3 consists of any and all Allowed Class 3 General Unsecured Claims against the Debtor other than Statutory Fees, Administrative Claims, Priority Tax Claims, or Secured Claims. The Debtor estimates that any other Allowed Class 3 General Unsecured Claims total approximately $30,000. Each holder of an Allowed Class 3 General Unsecured Claim will receive on account of such claim its Pro Rata share, in Cash, of the Net Sale Proceeds and the Lender's Cash Contribution, if any, remaining after payment of all Statutory Fees, Administrative Claims, Secured Claims, and Priority Tax Claims up to the full amount of its Allowed Class 3 General Unsecured Claim, with interest at the applicable rate, in Cash on the Effective Date or as soon thereafter as is reasonably practicable. At this time, and based upon, among other things, the claims asserted against the Debtor to date and estimates of final amounts of the Statutory Fees, Administrative Claims and Secured Claims, the Debtor anticipates that the recovery by holders of General Unsecured Claims under the Plan will be at least 85% of their Allowed Class 3 General Unsecured Claims. Distributions and other payments provided for under the Plan shall be made by the Disbursing Agent in accordance with the terms of this Plan from the Net Sale Proceeds and/or from the Lender's Cash Contribution. The Lender's Cash Contribution is presently in escrow with Pick & Zabicki LLP as Disbursing Agent pending Confirmation of the Plan. A full-text copy of the First Amended Disclosure Statement dated October 4, 2021, is available at https://bit.ly/3DlHF7O from PacerMonitor.com at no charge. Counsel to the Debtor: PICK & ZABICKI LLP 369 Lexington Avenue, 12th Floor New York, New York 10017 Tel: (212) 695-6000 Douglas J. Pick, Esq. Eric C. Zabicki, Esq. About Brain Energy Holdings Brain Energy Holdings LLC is a Single Asset Real Estate debtor (as defined in 11 U.S.C. Section 101(51B)). The Company is the fee simple owner of a 6 floor mixed use brownstone located at 153 Clinton Street, Brooklyn, NY having a current value of $4.5 million. The Debtor filed Chapter 11 Petition (Bankr. E.D.N.Y. Case No. 21 42150) on August 24, 2021. Hon. Nancy Hershey Lord oversees the case. Douglas Pick, Esq. of PICK & ZABICKI LLP is the Debtor's Counsel. In the petition signed by Anthony Spartalis, managing member, the Debtor disclosed $4,501,100 in assets and $4,411,145 in liabilities. BROADSTREET PARTNERS: Moody's Lowers CFR to 'B3', Outlook Stable ---------------------------------------------------------------- Moody's Investors Service has downgraded the corporate family rating of BroadStreet Partners, Inc. to B3 from B2, and the probability of default rating to B3-PD from B2-PD. The rating agency also downgraded BroadStreet's senior unsecured note rating to Caa2 from Caa1. The downgrade reflects BroadStreet's persistent financial leverage, which is likely to remain high as the company pursues its acquisition strategy. In the same action, Moody's affirmed BroadStreet's first-lien credit facility ratings at B1. BroadStreet has raised a $332.5 million incremental first-lien term loan (rated B1) and plans to issue $325 million of incremental senior unsecured notes to fund a new core agency partner and pay related fees and expenses. The rating outlook for BroadStreet was changed to stable from negative. RATINGS RATIONALE Moody's said the downgrade of BroadStreet's ratings reflects the company's high financial leverage and other credit metrics that are more consistent with a B3 corporate family rating. BroadStreet has grown through a combination of acquisitions and organic growth in middle market insurance brokerage while maintaining diversification across clients and carriers along with good EBITDA margins. Its unique co-ownership model of acquiring majority interests in large core agencies and allowing these agencies to retain operational autonomy differentiates it from other privately held rated brokers. These strengths are tempered by the BroadStreet's high financial leverage, the complexity of its majority/minority ownership structure across many core agencies, the sizable periodic dividends to non controlling interests, and exposure to errors and omissions, a risk inherent in professional services. The company's recent majority investment in a large core partner adds integration and execution risk. Giving effect to the proposed financing, BroadStreet will have pro forma debt-to-EBITDA around 8x, (EBITDA - capex) interest coverage around 2x, and free-cash-flow-to-debt in the low-to-mid single digits, according to Moody's estimates. These pro forma metrics reflect Moody's adjustments for operating leases, contingent earnout obligations, non controlling interest expense, certain non-recurring items and run-rate EBITDA from acquisitions. Moody's expects BroadStreet to reduce its leverage over the next 12-18 months. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS Factors that could lead to an upgrade of BroadStreet's ratings include: (i) debt-to-EBITDA ratio below 6.5x, (ii) (EBITDA - capex) coverage of interest consistently exceeding 2x, (iii) free-cash-flow-to-debt ratio consistently exceeding 5%, and (iv) successful integration of acquisitions. Factors that could lead to a rating downgrade include: (i) debt-to-EBITDA ratio above 7.5x, (ii) (EBITDA - capex) coverage of interest below 1.2x, or (iii) free-cash-flow-to-debt ratio below 2%. Moody's has downgraded the following ratings: Corporate family rating to B3 from B2; Probability of default rating to B3-PD from B2-PD; $725 million (including the add-on $325 million) senior unsecured notes maturing in April 2029 to Caa2 (LGD5) from Caa1 (LGD5). Moody's has affirmed the following ratings: $250 million first-lien senior secured revolving credit facility maturing in January 2025 at B1 (LGD3); $1.1 billion first-lien senior secured term loan maturing in January 2027 at B1 (LGD3). Moody's has assigned the following rating: $332.5 million first-lien incremental senior secured term loan maturing in January 2027 at B1 (LGD3). The rating outlook for BroadStreet has been changed to stable from negative. Headquartered in Columbus, Ohio, BroadStreet Partners, Inc. ranked as the 14th-largest US insurance broker based on 2020 revenue, according to Business Insurance. The company generated total revenue of $877 million for the 12 months through June 2021. The principal methodology used in these ratings was Insurance Brokers and Service Companies published in June 2018. BROWNIE'S MARINE: BLU3 Inc. to Start Nomad Pre-Order Shipments -------------------------------------------------------------- Brownie's Marine Group, Inc.'s subsidiary, BLU3, Inc. will be shipping out the first pre-ordered Nomads this week. Chris Constable, CEO of Brownie's Marine Group stated "Over the past couple of months, we received numerous pre-orders from eager divers across the country. And we can't thank our loyal customers enough because we know that Nomad is going to transform the way they explore beneath the surface. The BLU3 team has worked tirelessly to create and perfect a one-of-a-kind product that's portable, user-friendly and lightweight- one that puts an emphasis on diver safety and usability. This a pivotal moment for BLU3 and Brownie's Marine Group." "After years of research, development and testing, we are eager to finally roll out our first batch of Nomads! With the global supply chain delays that impacted our manufacturing and shipping throughout September, it's exciting to kick off this new month with Nomad moving full steam ahead," said Blake Carmichael, CEO of BLU3, Inc. Blake added, "Nomad's depth of 30 feet combined with its lightweight design, portability and other key features are differentiators that are sure to leave a long-lasting imprint on the diving industry. I can't wait for the world to be introduced to Nomad and discover diving in a brand-new light." About Brownie's Marine Headquartered in Pompano Beach, Florida, Brownie's Marine Group, Inc., is the parent company to a family of innovative brands with a unique concentration in the industrial, and recreational diving industry. The Company, together with its subsidiaries, designs, tests, manufactures, and distributes recreational hookah diving, yacht-based scuba air compressors and nitrox generation systems, and scuba and water safety products in the United States and internationally. The Company has three subsidiaries: Trebor Industries, Inc., founded in 1981, dba as "Brownie's Third Lung"; BLU3, Inc.; and Brownie's High-Pressure Services, Inc., dba LW Americas. The Company is headquartered in Pompano Beach, Florida. Brownie's Marine reported a net loss of $1.35 million for the year ended Dec. 31, 2020, compared to a net loss of $1.42 million for the year ended Dec. 31, 2019. As of June 30, 2021, the Company had $2.51 million in total assets, $1.50 million in total liabilities, and $1 million in total stockholders' equity. BROWNIE'S MARINE: Completes Private Placement of $365K Units ------------------------------------------------------------ Brownie's Marine Group, Inc. completed a private placement of an aggregate of 14,600,000 units to five purchasers at a purchase price of $0.025 per unit for gross proceeds of $365,000, with each unit consisting of one restricted share of the company's common stock and one two year common stock purchase warrant to purchase one restricted share of common stock at an exercise price of $0.025 per share. The units were offered and sold pursuant to the terms of a subscription agreement in private transactions exempt from registration under the Securities Act of 1933, as amended, in reliance on exemptions provided by Section 4(a)(2) of that act. The purchasers were accredited or otherwise qualified investors and included Mr. Charles F. Hyatt, a member of the company's Board of Directors and an affiliate of Mr. Hyatt, who purchased an aggregate of 10,600,000 units. The company did not pay any commissions or finder's fees and is using the proceeds for working capital. About Brownie's Marine Headquartered in Pompano Beach, Florida, Brownie's Marine Group, Inc., is the parent company to a family of innovative brands with a unique concentration in the industrial, and recreational diving industry. The Company, together with its subsidiaries, designs, tests, manufactures, and distributes recreational hookah diving, yacht-based scuba air compressors and nitrox generation systems, and scuba and water safety products in the United States and internationally. The Company has three subsidiaries: Trebor Industries, Inc., founded in 1981, dba as "Brownie's Third Lung"; BLU3, Inc.; and Brownie's High-Pressure Services, Inc., dba LW Americas. The Company is headquartered in Pompano Beach, Florida. Brownie's Marine reported a net loss of $1.35 million for the year ended Dec. 31, 2020, compared to a net loss of $1.42 million for the year ended Dec. 31, 2019. As of June 30, 2021, the Company had $2.51 million in total assets, $1.50 million in total liabilities, and $1 million in total stockholders' equity. Boynton Beach, Florida-based Liggett & Webb, P.A., the Company's auditor since 2018, issued a "going concern" qualification in its report dated March 31, 2021, citing that the Company has experienced net losses and has an accumulated deficit. These factors raise substantial doubt about the Company's ability to continue as a going concern. BUY MOORE: Unsecured Creditors to Get $17.5K in 60 Months --------------------------------------------------------- Buy Moore, LLC submitted a First Pre-Confirmation Amended Small Business Plan of Reorganization under Subchapter V dated October 4, 2021. This amendment fully incorporates the provisions of the originally proposed plan, except as modified, but significant changes are made and substantial additional information is provided. The Plan is intended to address the issues raised by the United States Trustee's and the subchapter V trustee's position statements in relation to the confirmability of the Plan, statutory deficiencies contained in the originally filed Plan of Reorganization, and items to be addressed pursuant to the Court's Scheduling Order that set the status conference. The Michigan Department of Treasury holds a priority tax claim for $6,402.57 as of the date of the petition date. Accordingly, Debtor proposes that, over the life of a five-year Plan, it pays the Michigan Department of Treasury's claim in full, once it has been amended. In total, the Michigan Department of Treasury will be paid in full in a fashion that comports with the Bankruptcy Code. Class 1 consists of Secured Claims, including claims subject to bifurcation. Debtor believes that there are no creditors over its personal property. Class 2 consists of General Unsecured, Non-Priority Claims: * Consensual Plan Treatment - General Unsecured Creditors shall be paid their pro-rata share of the funds remaining after payment of all Unclassified Claims. Debtor estimates the funds to be distributed to creditors holdings Class 2 claims will be a total of $17,500.00. Distributions shall be made over a period not to exceed 60 months. No claimant shall receive any interest on its claim. General Unsecured Creditors are believed to include Country Towne, DTE Energy, Chase Bank, and Frankenmuth Credit Union. After Professional Fees, and the claim of the State of Michigan have both been paid in full, payments to Class 2 General Unsecured Creditors shall commence. The Debtor's monthly payment shall be divided pro-rata among the Class 2 General Unsecured creditors, until each has received the total amount due to it pursuant to the Plan. * Non-Consensual Plan Treatment – General Unsecured Creditors shall be paid their pro-rata share of the greater of the liquidation value of the estate or $1,000.00, to be paid over 5 years, with all administrative expenses of the estate and priority unsecured creditors being paid in full in advance of the first payment to any General Unsecured Creditor. Under the Non-Consensual Plan, Debtor's projected monthly net profit is $900.00 and Debtor will only commit to paying for 36 months. That is, under a Non-Consensual Plan, in order to pay any amount to Class 2 General Unsecured Creditors, Debtor would adjust its operations, or extend the Plan's duration. This would result in an estimated distribution to Class 2 claimants creditors of approximately a pro-rata share of $1,000.00. Conversely, Debtor's Consensual Plan proposes more favorable treatment whereby Debtor will make payments to unsecured creditors over a period of 60 months, ultimately resulting in unsecured creditors receiving their pro-rata share of the funds remaining after paying claims with higher priority, of Debtor's $900.00 monthly payment over a 60 month term, provided that Debtor's belief about the correct amount of the State of Michigan Sales, Use and Withholding tax claim is correct, Debtor estimates that approximately $17,500.00 would be available for pro-rata distribution to Class 2 claimants. Class 2 General Unsecured Claimants are holders of impaired claims, and Class 2 is an impaired class that is entitled to vote its claims. Payments required under the Plan will be made from Debtor's budget and net profit. Payments (Consensual Plan): Debtor shall make payments directly to those holding claims in a total of $900.00 each month for a period of 60 consecutive calendar months. In making the required monthly payments, Debtor will be acting as disbursing agent for the bankruptcy estate. Payments (Non-Consensual Plan): Debtor wshall make payments to the subchapter V trustee, Scott A. Chernich, in the amount of $900.00 each month for a period of at least 36 consecutive calendar months and a minimum total distribution of $1,000 to those holding Class 2 claims. A full-text copy of the First Pre-Confirmation Amended Subchapter V Plan dated October 4, 2021, is available at https://bit.ly/3agNCGt from PacerMonitor.com at no charge. Attorney for Debtor: James R. Oppenhuizen, Esq. Oppenhuizen Law Firm, PLC 25 Division Ave. S, Suite 525 Grand Rapids, MI 49503 Telephone: (616) 730-1861 Email: joppenhuizen@oppenhuizenlaw.com About Buy Moore Buy Moore, LLC is a company that buys and sells toys and comics in Rockford, Mich. It conducts business under the name Buy Moore Toys & Comics. Buy Moore filed a petition under Subchapter V of Chapter 11 of the Bankruptcy Code (Bankr. W.D. Mich. Case No. 21-01230) on May 10, 2021. Jeff Moore, member, signed the petition. At the time of the filing, the Debtor listed up to $50,000 in both assets and liabilities. Judge Scott W. Dales oversees the case. Oppenhuizen Law Firm, PLC serves as the Debtor's legal counsel. BV GLENDORA: Creditor Glendora Plaza Reserves Rights as to Claims ----------------------------------------------------------------- Glendora Plaza Co., a California general partnership, secured creditor of Debtor BV Glendora, LLC said in a limited opposition to the Debtor's First Amended Disclosure Statement, that it reserves its rights to assert all claims in the Debtor's case. The Secured Creditor estimates its claims to be approximately $30,000, including attorney's fees, and said it would agree to monthly payments, to be negotiated with the Debtor, to pay the final amount. A copy of the opposition is available for free at https://bit.ly/3oFN31g from PacerMonitor.com. Counsel for Glendora Plaza Co., a California general partnership, secured creditor: Marc C. Forsythe, Esq. Goe Forsythe & Hodges LLP 18101 Von Karman Avenue, Suite 1200 Irvine, CA 92612 Telephone: (949) 798-2460 Facsimile: (949) 955-9437 Email: mforsythe@goeforlaw.com About BV Glendora BV Glendora, LLC, sought protection under Chapter 11 of the Bankruptcy Code (Bankr. C.D. Cal. Case No. 21-11627) on March 1, 2021. David B. Runberg, chief financial officer, signed the petition. In the petition, the Debtor disclosed assets of between $1 million and $10 million and liabilities of the same range. Judge Sheri Bluebond oversees the case. Jeffrey S. Shinbrot, APLC is the Debtor's legal counsel. BV GLENDORA: Plan Filed in Bad Faith, Plesnik Creditors Say ----------------------------------------------------------- Secured creditors, Palo and Crystal Plesnik, in an objection to the First Amended Disclosure Statement of BV Glendora, LLC, complained to the U.S. Bankruptcy Court for the Central District of California, among other things, that the Disclosure Statement failed to disclose the postpetition payments to unsecured creditors made by Cadence Capital Partners. As reported by TCR, Cadence will provide the Debtor with post-petition financing to pay the Debtor's post-petition obligations. According to Robert S. Marticello, Esq., at Smiley Wang-Ekvall, LLP, counsel for the Plesniks, the Disclosure Statement did not discuss the reduction of the Debtor's prepetition unsecured debtor, although, he said, it is undisputed that Cadence paid two creditors, but for some reason left small balances to these two creditors that the Debtor will pay in full over three years. Mr. Marticello added that the Amended Disclosure Statement is inconsistent with the monthly operating reports, which disclosed no unsecured debt. The Plesniks alleged that the Debtor is manufacturing an impaired consenting class in order to satisfy Section 1129(a)(10) of the Bankruptcy Code, and continue to assert that the Debtor's case was filed in bad faith and that the Amended Plan is being proposed in bad faith and is not fair and equitable. Mr. Marticello also disclosed that his firm requested a redline reflecting the changes between the Original Disclosure Statement and the Amended Disclosure Statement, but the Debtors' counsel indicated that one was not prepared. Mr. Marticello added that when his firm requested Microsoft Word versions of the disclosure statements in order to create its own redline, the Debtors' counsel did not respond. The Debtor should be required to clearly disclose the pre-petition debt that was paid postpetition (by amount, date, payor and payee), the reason for such payments, and the reasons that certain creditors were only paid in part while others were paid in full, Mr. Marticello asserted. He further asserted that the Debtor should be required to reconcile the conflicting statements under penalty of perjury in the declaration of the Debtor's manager, William R. Rothacker, and the June, July and August 2021 MORs, and the conflicting statements between the MORs and the Amended Disclosure Statement and Amended Plan. Rothacker, according to the counsel, declared under oath, that Cadence paid only "some" of the Debtor's pre-petition debt. The vague position that Cadence paid "some" (but not all) of the Debtor's pre-petition debt cannot be reconciled with the June, July and August MORs, which reflect $0 in pre-petition unsecured debt. Accordingly, the Plesniks asked the Court to deny approval of the Debtor's Amended Disclosure Statement. However, if the Court approves the Amended Disclosure Statement, the Plesniks propose that a confirmation hearing be set at the end of February 2022 or in March 2022 to allow the Plesniks sufficient time for discovery related to the Amended Plan, including requests for documents and depositions, and to retain their own experts. A copy of the objection is available for free at https://bit.ly/2WIQNU6 from PacerMonitor.com. The Court will consider the matter at a hearing on Oct. 13, 2021 at 2 p.m. Counsel for Palo and Crystal Plesnik, secured creditors: Robert S. Marticello, Esq. Michael L. Simon, Esq. Smiley Wang-Ekvall, LLP 3200 Park Center Drive, Suite 250 Costa Mesa, CA 92626 Telephone: (714) 445-1000 Facsimile: (714) 445-1002 Email: rmarticello@swelawfirm.com msimon@swelawfirm.com About BV Glendora BV Glendora, LLC, sought protection under Chapter 11 of the Bankruptcy Code (Bankr. C.D. Cal. Case No. 21-11627) on March 1, 2021. David B. Runberg, chief financial officer, signed the petition. In the petition, the Debtor disclosed assets of between $1 million and $10 million and liabilities of the same range. Judge Sheri Bluebond oversees the case. Jeffrey S. Shinbrot, APLC is the Debtor's legal counsel. CARNIVAL CORP: Moody's Rates Planned $1.5BB Term Loan Add-on 'Ba2' ------------------------------------------------------------------ Moody's Investors Service assigned a Ba2 rating to Carnival Corporation's (combined herein with Carnival plc "Carnival") planned $1.5 billion term loan B add-on. Carnival's other ratings remain unchanged, including its B1 corporate family rating, B1-PD probability of default rating, B1 senior secured second lien rating, and B2 senior unsecured rating. The outlook remains negative. Proceeds from the planned add-on will be used to partially refinance Carnival's 11.5% first lien secured notes due 2023. Carnival's ability to refinance more of this high cost debt is viewed positively. Carnival issued $4 billion of 11.5% secured notes in April 2020 to bolster its liquidity as it faced uncertainty around when it would resume sailing operations at the height of the pandemic. Pro forma for this planned transaction, about $700 million of the 11.5% notes remain outstanding. Assignments: Issuer: Carnival Corporation Senior Secured Term Loan B, Assigned Ba2 (LGD2) RATINGS RATIONALE Carnival's credit profile remains constrained by its extremely high leverage, which Moody's forecasts will remain above 7.0x into 2023. Moody's expect the modest restart and occupancy restrictions onboard its ships will dampen Carnival's earnings recovery into 2022. The normal ongoing credit risks include the highly seasonal and capital intensive nature of cruise companies, competition with all other vacation options, and the cruise industry's exposure to economic and industry cycles as well as weather related incidents and geopolitical events. Carnival's credit profile benefits from the restart of cruising in the US, increasing vaccination rates across the populations of countries that cruise the most, and the success the industry has had over the past three months as it has restarted cruising with no major outbreaks tied directly to a particular cruise. Carnival's credit profile is also supported by its good liquidity given its significant cash balances, its position as the largest worldwide cruise line in terms of revenues, fleet size and number of passengers carried, and its brand diversification. Carnival operates under nine brands which enables the company to operate in certain countries that may restrict cruising to locally-flagged vessels. Carnival also benefits from Moody's view that over the long run, the value proposition of a cruise vacation relative to land-based destinations as well as a group of loyal cruise customers supports a base level of demand once health safety concerns have been effectively addressed. The negative outlook continues to reflect Carnival's very high leverage and the pace and level of recovery in demand and occupancy levels that will enable the company to significantly reduce leverage. Carnival has good liquidity reflected by cash balances of $7.8 billion at August 31, 2021. Moody's expect the company's cash balances are sufficient to cover the company's cash needs over the next 12 months. In the first quarter of 2021 Carnival entered into an agreement with its revolver and bank loan lenders that delays testing of its interest coverage covenant to February 28, 2023 and amended the debt to capital covenant level to 75% from the November 30, 2021 testing date until the May 31, 2023 testing date, after which the level returns to 65% ratably to the May 31, 2024 testing date. The company's $3.0 billion revolver is fully drawn. The company's ability to access alternate forms of liquidity are deemed to be modest in the current operating environment. Carnival's revolving credit facility is comprised of the following: (a) a US $1.7 billion, EUR1.0 billion, and GBP150 million committed multi-currency revolving credit facility that expires in August 2024. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATING The outlook could be revised to stable if cruise operations resume in the US with occupancy levels, booking trends and pricing that would support positive free cash flow generation, the ability to repay debt and earnings growth trajectory that supports credit metrics returning to levels more in line with its current rating. Ratings could be upgraded if the company is able to maintain leverage below 4.5x with EBITA/interest expense of at least 3.0x. Ratings could be downgraded if the company's liquidity weakened in any way, including a monthly cash burn rate higher than currently expected without a corresponding increase in cash deposits received. The ratings could also be downgraded if any signs emerge that the ramp up in operations will not enable the company to generate EBITDA of at least 50% of 2019 levels in 2022 or if it appears that leverage will remain above 6.0x over the longer term. Carnival Corporation and Carnival plc own the world's largest passenger cruise fleet operating under multiple brands including Carnival Cruise Line, Holland America, Princess Cruises, AIDA Cruises, Costa Cruises, and P&O Cruises, among others. Carnival Corporation and Carnival plc operate as a dual listed company, headquartered in Miami, Florida, US and Southampton, United Kingdom. Annual net revenues for fiscal 2020 were approximately $4 billion. The principal methodology used in this rating was Business and Consumer Service Industry published in October 2016. CAROL C. FARLEY: Selling Pittsburgh Residential Property for $800K ------------------------------------------------------------------ Carol C. Farley, also known as Rachel Farley, asks the U.S. Bankruptcy Court for the Western District of Pennsylvania to authorize the sale of the residential real property located at 808 Morewood Avenue, in Pittsburgh, Pennsylvania, to Eric Schaffer and Alana Denison for $800,000, free and clear of all liens, claims, and encumbrances, subject to overbid. A hearing on the Motion is set for Dec. 13, 2021, at 1:30 p.m. The Objection Deadline is Nov. 26, 2021. The Debtor is an interior designer, and prior to the filing of the bankruptcy, she purchased the Real Property as a design project. She was utilizing in the property as her primary residence while overseeing the project renovation. The real estate to be sold is owned by the Debtor. The names and addresses of all respondents who may hold liens, claims and/or encumbrances against the Real Property are as follows: a. 931 Penn Avenue Partners, L.P., 5045 Fifth Avenue, Pittsburgh, PA 15235 and c/o Buchanan Ingersoll & Rooney, P.C., 501 Grant Street, Ste. 200, Pittsburgh, PA 15219. b. Judith M. Berger c/o Buchanan, Ingersoll & Rooney, P.C., 501 Grant Street, Ste. 200, Pittsburgh, PA 15219. c. Bernstein-Burkley, P.C., Suite 2200 Gulf Tower, 707 Grant Street, Pittsburgh, PA 15219. d. Internal Revenue Service, Centralized Insolvency Operation, P.O. Box 7346, Philadelphia, PA 19101-7346. e. Pennsylvania Department of Revenue, Bankruptcy Division, P.O. Box 280946, Harrisburg, PA 17128. f. County of Allegheny c/o GRB Law, 437 Grant Street, 14th Floor, Frick Building, Pittsburgh, PA 15219. g. City and School District of Pittsburgh c/o GRB Law, 437 Grant Street, 14th Floor, Frick Building, Pittsburgh, PA 15219. h. Pittsburgh Water and Sewer Authority c/o GRB Law, 437 Grant Street, 14th Floor, Frick Building, Pittsburgh, PA 15219. i. Office of the United States Trustee, Liberty Center, 1001 Liberty Avenue, Suite 970, Pittsburgh, PA 15222. On March 12, 2021, the Court approved the employment of Ted Knowlton and Coldwell Banker Real Estate Services to assist with the marketing and sale of the Real Property. The Debtor has extensively engaged in marketing efforts of the Real Property since the Court approved the employment of the Realtor/Broker. The Real Property has been shown to various interested parties in the last several months. The initial bidders for the Real Property are Eric Schaffer and Alana Denison. The terms of the sale by and between the Debtor and the Initial Bidders are set forth in the Standard Agreement for Sale (Exhibit A). As provided for in the Standard Agreement for Sale, the Initial Bidders have agreed to purchase the Real Property for $800,000. The Debtor valued the Real Property at $1.05 million in her Schedules based on the purchase price. The proposed sale to the Initial Bidders is made subject to higher and better offers for the Real Property at the sale hearing. Any party making the highest and best offer will be deemed the successful bidder. Contemporaneously with the filing of this Sale Motion and on an expedited basis, the Debtor will file a Motion for Entry of an Order Approving (I) Bidding Procedures for the sale of the Real Property free and clear of liens, claims and encumbrances; (II) scheduling a hearing for approval of the real property sale free and clear liens; (III) approving certain deadlines and the form, manner, and sufficiency of notices; and (IV) granting related relief, which, if approved by the Court, will govern the bidding procedures on the sale of the Real Property, as set forth. The Debtor believes the proceeds from the sale of the Real Property will lead to a meaningful distribution to creditors. Concurrent with the sale of the Real Property, the Debtor will file her chapter 11 plan. The Plan will transfer the real estate subject to 11 U.S.C. Section 1146 and it will propose a distribution of the sale proceeds to Administrative and Secured Creditors (excluding Judith Berger and Bernstein-Burkley). The secured claims of Judith Berger and Bernstein-Burkley, P.C. will be part of claims litigation and the determination of the secured status of these claims. The Debtor will hold any excess funds in escrow pending any claim and secured status litigation. The Debtor anticipates a closing date on the Real Property will occur no more than 45 days following the Court's entry of the sale order. Within 14 of the closing, the Debtor will file a Report of Sale. A copy of the Agreement is available at https://tinyurl.com/42bjk9z2 from PacerMonitor.com free of charge. Carol C. Farley sought Chapter 11 protection (Bankr. W.D. Pa. Case No. 20-23352) on Dec. 2, 2020. The Debtor tapped Matthew Herron, Esq., as counsel. CF INDUSTRIES: Moody's Alters Outlook on Ba1 CFR to Positive ------------------------------------------------------------ Moody's Investors Service affirmed the Ba1 corporate family rating and the Ba1-PD probability of default rating of CF Industries Holdings, Inc. and changed the ratings outlook to positive from stable on completed and anticipated further debt reduction after the company's management set a $3 billion balance sheet debt target, which will support credit metrics in trough nitrogen pricing conditions. Moody's also upgraded the senior unsecured rating of CF Industries, Inc. to Ba1 from Ba2 and downgraded the rating on the 2026 senior secured notes, which now rank with the company's senior unsecured, to Ba1 from Baa2 because the notes no longer benefit from a collateral package as a result of a security fall away provision in the indenture. The speculative grade liquidity rating is unchanged at SGL-1. "The positive ratings outlook reflects expected improvement in credit metrics due to debt reduction and still strong nitrogen market fundaments," said Anastasija Johnson, VP-Senior Credit Officer at Moody's Investors Service. "While credit metrics will be supportive of the investment-grade credit rating, uncertainty about the company's growth strategy constrains the credit profile at this time." Affirmations: Issuer: CF Industries Holdings, Inc. Corporate Family Rating, Affirmed Ba1 Probability of Default Rating, Affirmed Ba1-PD Downgrades: Issuer: CF Industries, Inc. Gtd Senior Unsecured Regular Bond/Debenture, (Changed from Senior Secured) Downgraded to Ba1 (LGD4) from Baa2 (LGD2) Upgrades: Issuer: CF Industries, Inc. Gtd Senior Unsecured Regular Bond/Debenture, Upgraded to Ba1 (LGD4) from Ba2 (LGD4) Outlook Actions: Issuer: CF Industries Holdings, Inc. Outlook, Changed To Positive From Stable Issuer: CF Industries, Inc. Outlook, Changed To Positive From Stable RATINGS RATIONALE The revision of the rating outlook reflects debt reduction and metrics improvement. CF paid off $500 million of debt this year, bringing balance sheet debt to $3.5 billion, and management also committed to paying off the remaining $500 million of 2023 notes on or before their maturity. Pro forma for the latest debt reduction, adjusted debt/EBITDA was approximately 2.3x in the twelve months ended June 30, 2020. Leverage is expected to decline below 2x in 2021 amid strong demand and pricing in the nitrogen fertilizer market. Production curtailments due to weather disruptions, delayed turnaround activity and high natural gas prices have resulted in supply shortages pushing nitrogen fertilizer prices to multi-year highs. Moody's expect strong pricing levels to hold through the winter and spring application season but to decline in the second half of 2022 as more normal pace of production resumes. Even with lower prices in 2022, Moody's do not expect the return to the recent pricing trough levels last seen in 2020 due to stronger commodity crop prices and continuing economic growth that support demand. As a result, Moody's expect leverage to remain below 2.0x in 2022. With the targeted debt reduction CF management is positioning the company to better weather the next cyclical downturn. At the current level, Moody's expects adjusted debt/EBITDA including standard adjustments for pensions and leases to be just below 4x at the trough of the cycle. Once the company reaches its debt reduction target, leverage should not exceed 3.5x at the trough of the cycle, better positioning the company for the upgrade to investment grade. Due to ongoing dividend payments and distributions to a minority holder, retained cash flow generation relative to debt will remain weak for the investment grade company at the trough of the cycle (below 15%), but Moody's expect the company to remain free cash flow positive and have strong liquidity. Peak nitrogen pricing conditions are supporting earnings growth in the near term, however, longer-term growth is constrained by current capacity. The announced green and blue ammonia projects will not start contributing earnings until 2023 and even then the contribution will not be meaningful. For example, the announced Donaldsonville green ammonia project is less than 1% of CF's ammonia production capacity and the larger blue ammonia project would not start until 2024. These and other investments into blue and green ammonia are currently estimated to cost in total approximately $400 million and can be funded from cash and operating cash flow without pressuring the company's credit metrics. Moody's views these projects as credit positive, but Moody's do not expect them to significantly improve the company's current earnings profile. Current strong nitrogen fertilizer pricing levels and free cash flow generation allow the company to build a significant amount of cash on the balance sheet to support potential future growth opportunities. However, without a clear growth strategy management will likely also feel pressure from shareholders to distribute that cash. The company's management publicly stated it intends to return to investment grade, pay down debt to $3 billion between now and 2023, pursue clean energy growth projects and return cash to shareholders through regular dividend and share repurchases, rather than special dividends. The company's existing share repurchase authorization runs through the end of 2021 and Moody's expect the board to renew it. The credit rating is constrained by a short history of operating with a less levered balance sheet and with low leverage metrics. Management will need to demonstrate its willingness to maintain significant cash cushion on the balance sheet to allow the company financial flexibility to fund future growth projects without significant increases in debt in order to support the investment grade rating. CF's Ba1 corporate family rating also reflects the company's position as a leading global producer of nitrogen fertilizers with world scale production facilities at the lower end of the global cost curve and consistently high operating rates. CF has idled one of its UK facilities due to high energy prices. The UK facilities account for just under 10% of the company's production capacity and will not have a significant impact on the company's overall performance, even if one of them remains idle for an extended period of time. CF's concentration in a single commodity fertilizer nutrient, reliance on the weather dependent and seasonal agricultural market and resultant earnings volatility remain constraining factors for the credit. Moody's SGL-1 speculative grade liquidity rating reflect Moody's expectations that the company will have excellent liquidity over the next 12 months. Moody's expect the company's total liquidity sources to exceed projected uses by more than 2.5x. Liquidity sources include about $520 million of balance sheet cash pro forma for the $250 million debt paydown and full availability under the company's $750 million revolver due in December 2024. The company is expected to generate close to $2 billion of EBITDA over the next four quarters. The company is projected to have over $1 billion of uses over the next four quarters, including interest, common dividend and minority distributions and capex. Projected capex increased to $500 million to fund elevated turnaround activity, but is projected to decline to $475 million in 2022. The revolver has the minimum interest coverage covenant of 2.75x and the maximum total leverage covenant of 3.75x, which can step up to 4.25x for four quarters in case of an acquisition. Moody's expect the company to remain in compliance with its covenants. As an owner and operator of nitrogen facilities, Moody's view CF Industries as having high environmental credit risks, including carbon transition risks, and high social credit risks because its operations could have a negative impact on local communities. Over time, the company could face increasingly stringent regulations aimed at reducing greenhouse gas emissions which could increase its costs. Moody's believes the company has established expertise in complying with these risks, and has incorporated procedures to address them in its operational planning and business models. The company is pursuing green and blue ammonia projects which are viewed as more environmentally friendly. Fertilizer applications by farmers also cause greenhouse gas emissions, while fertilizer runoff from farms can also cause nutrient pollution and contribute to algal growth, raising social risks such as public and regulatory concerns. CF, as a manufacturer, isn't responsible for over application of fertilizer and has taken initiatives to educate potential buyers on responsible usage. Governance risk is low, as CF is a public company with clear and transparent reporting. Management has set a new balance sheet debt target and desire to maintain investment grade rating, but does not have a leverage target and has to balance the need to fund growth with shareholder returns. Positive outlook reflects expected improvement in credit metrics due to proposed debt reduction and elevated commodity nitrogen prices and strong demand. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS Moody's could consider an upgrade if the company completes and maintains its announced debt reduction target, articulates a clear growth strategy or announces projects or offtake agreements that would significantly improve the earnings profile without weakening credit metrics. Moody's could also consider an upgrade if management commits to maintaining investment grade rating and builds financial flexibility to fund its growth strategy. For an upgrade to be considered, adjusted financial leverage needs to be sustained below 3 times and not to exceed 4 times during trough pricing conditions. Retained cash flow to debt needs to be sustained above 25% and the company needs to be free cash flow positive at trough pricing conditions. Moody's could downgrade the rating if adjusted financial leverage is sustained above 4 times, retained cash flow to debt is sustained below 15%; the company experiences substantive deterioration of liquidity. The rating could also be downgraded if the company changes its financial policy or capital allocation prioritizing shareholder returns. The principal methodology used in these ratings was Chemical Industry published in March 2019. CF Industries, Inc., headquartered in Deerfield, Illinois, is a leading global producer of nitrogen-based fertilizers. CF's production facilities include five nitrogen fertilizer manufacturing complexes in the US, two in Canada, two in the U.K. and a joint venture in Trinidad and Tobago. The company has annual capacity to produce between 19 - 20 million product tons of various nitrogen products. The company generated annual revenues of $4.6 billion for the LTM ending June 30, 2021. CIVITAS RESOURCES: Fitch Assigns First Time 'BB-' LongTerm IDR -------------------------------------------------------------- Fitch Ratings has assigned a first-time Long-Term Issuer Default Rating (IDR) of 'BB-' to Civitas Resources, Inc. (Civitas), a 'BB+'/'RR1' rating to its planned Reserve Based Loan (RBL) credit facility and a 'BB-'/'RR4' rating to its senior unsecured notes, including its planned $400 million issuance. The Rating Outlook is Stable. Civitas' ratings reflect the planned three-way closing of the Extraction Oil & Gas, Inc. (Extraction), Bonanza Creek Energy, Inc. (Bonanza) and Crestone Peak Resources (Crestone) mergers expected to occur on November 1. The ratings benefit from Fitch's forecast positive to neutral FCF profile and 0.5x total debt leverage, the scale of its operations, liquidity and simple capital structure. They also consider the company's concentration in the Denver-Julesburg (DJ) Basin, which is affected by higher regulatory and community standards from the state of Colorado and the related relative vulnerability to accessing debt capital markets. KEY RATING DRIVERS DJ Basin Focused: At close, planned for early 4Q21, Civitas will consolidate Bonanza, Extraction and Crestone's operations, to create the largest pure play DJ basin producer with proforma 2Q21 production of 162Mboepd (39% oil, 26% NGLs, 35% gas), 577MMboe of Proved Reserves and with approximately 525,000 net acres in the basin. Fitch expects Civitas to continue to act as a consolidator in the DJ basin when accretive acquisition opportunities become available. Fitch expects non-DJ basin acquisitions to be less likely. Civitas' single basin focus increases its risk to basin-specific factors, including Colorado's relatively more rigorous permitting environment and risk of community opposition. Colorado Regulatory Risk: Oil and gas developers in Colorado have been subject to regulatory scrutiny and ballot initiatives to severely curtail production in the state, including a failed state-wide 2018 ballot that would have restricted oil and gas development in the state by requiring all new development to be setback 2,500 feet from certain structures such as schools, homes and hospitals. In 2019, state law changed the mission of the Colorado Oil & Gas Conservation Commission (COGCC) from 'fostering' to 'regulating', with new rules reflecting this mandate coming into effect in January 2021. The new rules focus on community engagement, transparency and continuous dialogue. Among other items, the rules established a one permit process rather than the previous multi-step process, as well as expanded protective setbacks for schools, homes and building to 2,000 feet (the building setback can be less when the COGCC approves). The new rules have provided a framework that producers have improved visibility to navigate. Civitas holds 278 fully approved permits and has approximately two years of existing permitted drilling inventory at current rig pace. Fitch believes Civitas will be able to navigate the new rules, aided by weighting development in counties where there is more acceptance of drilling. Forecasted 0.5x Leverage: With total planned debt of $500 million at close of the merger transaction, Fitch forecasts Civitas to have mid-cycle total debt with equity credit/operating EBITDA leverage of approximately 0.5x throughout the forecast. This is exceptionally low, particularly for a non-investment-grade rating and translates to a debt-to-flowing barrel of just over $3,000/bbl. The benefit to Civitas' rating of its leverage level is tempered by it being a nascent capital structure without any operating history of maintaining it, and while Fitch does not believe the regulatory environment will materially affect operations, the overhang of potentially further regulatory initiatives could hamper Civitas' degree of debt capital market access. FCF Prioritized Over Drill Bit Growth: Civitas is expected keep production at approximately flat to low single digit growth through Fitch's forecast period. Under Fitch's base, Civitas is forecast to generate strong post dividend FCF in 2022, before it moderates to neutral FCF in the latter half of Fitch's forecast under Fitch's price deck of $50/bbl WTI and $2.45/Mcf Henry Hub in 2023 and 2024. FCF projections under current Strip pricing are significantly higher, facilitating Civitas to adhere to its financial policy of a 50% reinvestment rate and maintain production. FCF visibility is supported by Civitas' hedging program, which has approximately 70% 4Q21 oil hedged and a minimum rolling twelve months 50% of PDP hedging requirement when its below 1x leverage. Lower Cost Operations: Civitas expects an initial approximately $4.00/boe Lease Operation Expense and cash G&A cost structure, which compares favorably with peers and should continue to benefit from the $25 million in annual synergies expected from the Bonanza/Extraction merger and $45 million of annual synergies expected to be generated from the Crestone merger, as they are realized. Proforma for 2Q21 and Civitas' planned debt structure, Civitas has an unhedged cash netback of approximately $24.5 /boe. Simple Capital Structure: Civitas benefits from the clean capital structures that each of Bonanza, Extraction and HighPoint exited their respective bankruptcies with. At close of the planned $400 million senior unsecured offering, and with the $100 million legacy Bonanza senior unsecured bonds, both of which mature in 2026, Civitas will have a long maturity runway with no refinancing needs. Its new revolving credit facility will be undrawn and expected to mature in 2025. DERIVATION SUMMARY Civitas, proforma the merger as of 2Q21, compares favorably with 100% DJ Basin focused peer Great Western Petroleum, LLC (B-/Stable) in terms of production (162Mboepd compared with 53.6Mboepd), debt to flowing barrel ($3.1M/boe compared with $16.6M/boe) and are comparable in terms of liquids cut at approximately 2/3rds of production. In terms of leverage, Civitas' total debt with equity credit/operating EBITDA leverage of approximately 0.5x through Fitch's forecast is notably low compared with peers. The company's concentration in the DJ basin and its associated operational and capital market risks temper the impact of Civitas' low leverage on its rating. Murphy Oil Corporation (BB+/Stable) is similar to proforma Civitas with 2Q21 production of 182Mboepd and a 66% liquids cut, although Murphy's oil production of 109.4Mboepd, compared with Civitas 63.5Mboepd, makes up a larger Oil/NGLs percentage of it production. Compared with lower-rated SM Energy Corporation (B/Stable) and Penn Virginia Corporation (B-/Stable), Civitas production is modestly greater than SM's 136.5Mboepd and significantly greater than Penn Virginia's 36.7Mboepd proforma its Lonestar acquisition. Civitas netbacks trail those of SM and Penn Virginia, whose operations are located in the typically stronger economic Permian and Eagle Ford plays. KEY ASSUMPTIONS -- WTI (USD/bbl) of $60 in 2021, $52 in 2022 and $50 thereafter; -- Henry Hub (USD/mcf) of $3.40 in 2021, $2.75 in 2022 and $2.45 thereafter; -- Production in 2022-2024 of between 155Mboepd and 160Mbeopd; -- Midstream operations in line with historical results; -- Capex in ranges between $650 million and $850 million during forecast period; -- WTI differentials of approximately $6 through the forecast; -- Dividend distributions are approximately $160 million annually during forecast; -- No stock repurchases during the forecast period. RATING SENSITIVITIES Factors that could, individually or collectively, lead to positive rating action/upgrade: -- Increased scale in areas within the DJ basin that helps mitigate overall regulatory and community opposition event risks; -- Proven access to debt capital markets that moderates potential future liquidity and refinance risks; -- Material improvement in unit economics and sustained post dividend positive FCF through the cycle; -- Basin diversification through a significant production contribution outside of the DJ Basin; -- Mid-cycle Total Debt with Equity Credit maintained at or below 1.5x. Factors that could, individually or collectively, lead to negative rating action/downgrade: -- Mid-cycle Total Debt with Equity Credit / Operating EBITDA sustained over 2x; -- A regulatory change that impacts unit economics or visibility on future operations; -- Utilization of revolver commitment above 50%; -- Sustained negative post dividend FCF or underinvestment in asset base leading to a production decline to between 100Mboepd to 125Mboepd. 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 Proforma for the three-way closing of the Extraction, Bonanza and Crestone mergers, Civitas will have a simple capital structure with no short-term refinancing risk. It is expected to consist of a RBL credit facility with an initial $800 million commitment, $100 million of senior unsecured notes issued in April 2021 relating of Bonanza's acquisition of HighPoint Resources that mature in 2026 and a planned $400 million senior unsecured issuance maturing in 2026. Initial liquidity is expected to be provided by cash on hand, which stood at $79 million proforma 2Q21, and Civitas' credit facility. Civitas legacy credit facilities had $444 million drawn between Bonza Creek and Crestone at 2Q21, proceeds from Civitas' planned $400 million senior unsecured issue are expected to be largely applied to repaying revolver debt in addition to general corporate purposes. Post dividend FCF support to liquidity is expected to be diminished in the latter half of Fitch's forecast under Fitch's price deck of $50/bbl WTI and $2.45/Mcf Henry Hub in 2023 and 2024. ISSUER PROFILE Civitas Resources, Inc. is a DJ Basin focused E&P company, who proforma 2Q21 produced 162Mboepd, consisting of 39% oil, 35% natural gas, and 26% NGLs. Civitas' operations consist of the planned combination of Extraction Oil & Gas, Bonanza Creek and Crestone Resources, which is expected to close in 4Q21. ESG CONSIDERATIONS Civitas Resources, Inc. has an ESG Relevance Score of '4' for Exposure to Social Impacts due to the oil and gas sector regulatory environment in Colorado and its exposure to social resistance, 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. CLEANSPARK INC: Inks Power Services Deal for Georgia Facilities --------------------------------------------------------------- CleanSpark, Inc., through its subsidiary CleanBlok Inc., entered into agreements with Georgia Power Company effective Oct. 1, 2021, which agreements set forth the terms and conditions that govern Georgia Power's provision of electrical services to the company's facilities in Norcross, Georgia. The agreements have an initial term of five years, after which they shall remain in effect until terminated by either party. During the term of the agreements, CleanSpark shall make monthly payments to Georgia Power in exchange for the services. CleanSpark is on the Georgia Power Real Time Pricing (RTP) rate where a portion of the usage is priced hourly and another portion is billed at a conventional rate. Pursuant to the agreements, CleanSpark shall be entitled to purchase power from Georgia Power at the RTP rate in exchange for the company's agreement to purchase a minimum amount of power every month and to limit power usage during certain periods of peak use. In addition, CleanSpark agreed to pay Georgia Power a one-time fee of approximately $2.0 million to install certain excess facilities on the property. About CleanSpark Headquartered in Bountiful, Utah, CleanSpark, Inc. -- www.cleanspark.com -- is an energy technology and clean Bitcoin mining Company that is focused on solving modern energy challenges. The Company and its subsidiaries also own and operate a fleet of Bitcoin miners at its facilities outside of Atlanta, Georgia. CleanSpark reported a net loss of $23.35 million for the year ended Sept. 30, 2020, a net loss of $26.12 million for the year ended Sept. 30, 2019, and a net loss of $47.01 million for the year ended Sept. 30, 2018. As of June 30, 2021, the Company had $297.49 million in total assets, $15.69 million in total liabilities, and $281.80 million in total stockholders' equity. CONDUENT INC: Moody's Assigns 'B1' CFR, Outlook Stable ------------------------------------------------------ Moody's Investors Service assigned new ratings to Conduent Incorporated ("Conduent") with a corporate family rating of B1, a probability of default rating of B1-PD, and a speculative grade liquidity rating of SGL-1. Concurrently, Moody's assigned a B1 rating to the proposed senior secured notes due 2029 to be issued by the company's Conduent Business Services, LLC ("Conduent Business") subsidiary and affirmed the B1 ratings on Conduent Business' senior secured credit facilities. As proposed, the senior secured notes will rank pari passu with the credit facilities and the proceeds from this offering will be used to partially fund the refinancing of the company's existing debt. The CFR and PDR of Conduent Business have been withdrawn and the ratings on the existing bank debt due in 2022 and 2023 will be withdrawn upon completion of the debt refinancing. The ratings outlook is stable. Assignments: Issuer: Conduent Incorporated Corporate Family Rating, Assigned B1 Probability of Default Rating, Assigned B1-PD Speculative Grade Liquidity Rating, Assigned SGL-1 Issuer: Conduent Business Services, LLC Gtd Senior Secured Regular Bond/Debenture, Assigned B1 (LGD3) Affirmations: Issuer: Conduent Business Services, LLC Gtd Senior Secured Term Loan, Affirmed B1 (LGD3) Gtd Senior Secured Revolving Credit Facility, Affirmed B1 (LGD3) Issuer: Affiliated Computer Services Intl. BV Senior Secured Term Loan, Affirmed B1 (LGD3) Withdrawals: Issuer: Conduent Business Services, LLC Corporate Family Rating, Withdrawn, previously rated B1 Probability of Default Rating, Withdrawn, previously rated B1-PD Speculative Grade Liquidity Rating, Withdrawn, previously rated SGL-1 Outlook Actions: Issuer: Conduent Incorporated Outlook, Assigned Stable Issuer: Conduent Business Services, LLC Outlook, Remains Stable Issuer: Affiliated Computer Services Intl. BV Outlook, Changed To Stable From Negative RATINGS RATIONALE Conduent's B1 CFR is constrained by its relatively levered capital structure with Debt/EBITDA (Moody's adjusted) of approximately 3x. Additionally, competitive pressures from larger rivals, competitors in lower cost regions, and Conduent's susceptibility to weakening pricing trends which continue to weigh on revenue growth prospects and overall business performance, impact credit quality. Conduent's somewhat concentrated stock ownership and board representation by investment vehicles controlled by Carl Icahn presents meaningful corporate governance concerns, particularly with respect to potential debt-funded equity repurchases that would negatively impact credit quality. Conduent's credit profile is supported by the company's scale and solid market position as a provider of business process services to governments as well as clients operating in the healthcare industry and other private sector markets. Additionally, Conduent's highly recurring revenue base, longstanding customer relationships, and high client retention rates provide strong top-line visibility that buttress the company's credit fundamentals. The B1 ratings for Conduent Business' secured debt reflect the borrower's B1-PD PDR and a loss given default ("LGD") assessment of LGD3. The secured debt ratings are consistent with Conduent's CFR as secured debt will account for the preponderance of the company's pro forma debt structure following the completion of the proposed refinancing. Conduent's liquidity is presently very good, as indicated by the SGL-1 rating. Liquidity is supported by pro forma unrestricted cash and equivalents on the company's balance sheet that are expected to approximate $350 million following the completion of the proposed refinancing transaction. Liquidity is further supported by pro forma aggregate borrowing capacity of approximately $450 million under the company's proposed $550 milion revolver. As proposed, Conduent's term loan B will not be subject to a financial maintenance covenant, but the term loan A and revolver will be subject to a limitation based on a maximum consolidated first lien net leverage ratio of 3.5x. Based on current operating performance expectations, Moody's anticipates that the company will remain well in compliance with this covenant over the next 12-18 months. The stable outlook reflects Moody's expectation that Conduent will experience a modest 2% contraction in its revenues and a slightly more pronounced 4% drop in adjusted EBITDA in 2021. Moody's projections for this softness relate largely to declining year-over year anticipated performance in the company's government business which benefited from incremental, but likely non-repeatable, revenues related to the coronavirus pandemic in the prior year. Debt leverage (Moody's adjusted) throughout this period is expected to hover around the low 3x level. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS Albeit unlikely in the near-term, the ratings could be upgraded if Conduent realizes organic sales growth, demonstrates meaningful improvements in profitability and free cash flow generation, and adheres to conservative financial policies such that adjusted debt/EBITDA is sustained below current levels and free cash flow/debt approaches 10%. The ratings could be downgraded if Conduent's sales continue to decline, efforts to drive profitability stall, the company incurs sustained free cash flow deficits resulting in a material increase in debt leverage or if the company adopts aggressive financial policies. The principal methodology used in these ratings was Business and Consumer Service Industry published in October 2016. Conduent, the parent of Conduent Business, is a provider of business process services to clients operating in the healthcare industry and other private sector markets as well as domestic and foreign governments. Moody's forecasts that the company will generate sales of nearly $4.1 billion in 2021. CORONADO CAPITAL: Rental Income to Fund Plan Payments ----------------------------------------------------- Coronado Capital Investments, Inc., filed with the U.S. Bankruptcy Court for the Western District of Texas a Disclosure Statement and accompanying Plan of Reorganization dated Oct. 4, 2021. CCI is a Texas corporation operating in El Paso since September 19, 1994. It is an owner and operator of multi-family residential real estate in El Paso, Texas renting apartment units within its properties. The sole source of CCI's income are the rents collected from its Tenants. As a result of impending foreclosures of CCI's properties by first lienholders resulting from decreased rental income during the COVID-19 Pandemic, the only option available to be able to stay in business was to file for Chapter 11 relief. CCI's Plan is based on future rental income which is the sole source of monthly revenue for payment of Allowed Claims under the Plan. Claims will be paid as required by the Code, loan and security documents, or as otherwise agreed to by the creditor(s) on a consensual basis. The Plan will treat claims as follows: * Class 1 consists of the Claim of the City of El Paso Tax Assessor Collector. The City of El Paso's allowed secured claim in the estimated amount of $21,445.53 shall be paid in full in the ordinary course prior to delinquency on or before January 31, 2022. In the event the City of El Paso tax claim is not paid in full prior to delinquency, postpetition interest will accrue at the rate of 12% per annum from February 1, 2022 until the tax debt is paid in full. * Class 2 consists of the Claim of SM VER Enterprises, LLC (First Lien on 8919 Norton). The Secured Claim of SM VER Enterprises will be paid on a 240 month amortization with interest at 6.25% commencing on the Effective Date on a 7 year balloon. * Class 3 consists of the Claim of Aureliano Chaidez & Gloria Chaidez (Second Lien on 8919 Norton). The Secured Claim of Aureliano Chaidez & Gloria Chaidez will be paid on a 240 month amortization with interest at 6.25% commencing on the Effective Date on a 7 year balloon. * Class 4 consists of the Claim of Zia Trust as Custodian for Bradle E. Jarma, IRA (First Lien on 701 S. Campbell). The Secured Claim of Zia Trust as Custodian for Bradle E. Jarma, IRA will be paid on a 240 month amortization with interest at 6.25% commencing on the Effective Date on a 7 year balloon. * Class 5 consists of the Claim of Fernando Torres Macias & Bertha Lujan Macias (Second Lien on 701 S. Campbell). The Secured Claim of Fernando Torres Macias & Bertha Lujan Macias will be paid on a 240 month amortization with interest at 6.25% commencing on the Effective Date on a 7 year balloon. * Class 6 consists of the Claim of Wesley Keith Murchison Revocable Trust (First Lien on 9012 Matterhorn). The Secured Claim of the Wesley Keith Murchison Revocable Trust will be paid on a 240 month amortization with interest at 6.25% commencing on the Effective Date on a 7 year balloon. * Class 7 consists of the Claim of Frankie Marquez (Second Lien on 9012 Matterhorn). The Secured Claim of Frankie Marquez will be reduced to the principal amount of $40,000 in exchange for a Release for the cause of action scheduled for Deceptive Trade Practices (DTPA). The Secured Claim of Frankie Marquez will be paid on a 240 month amortization with interest at 6.25% commencing on the Effective Date on a 7 year balloon. * Class 8 consists of the Equity Holder of CCI Doug Rutter who will retain his equity interest in CCI. The Plan is based on the future earnings of CCI and it will commit this revenue to funding the Plan. CCI believes that the Estate will generate sufficient future income to fund the obligations under the proposed Plan and that no further reorganization proceedings are likely. A full-text copy of the Disclosure Statement dated October 4, 2021, is available at https://bit.ly/3uTAxMH from PacerMonitor.com at no charge. Debtor's Counsel: Carlos A. Miranda, Esq. Carlos G. Maldonado, Esq. Miranda & Maldonado, PC 5915 Silver Springs, Bldg. 7 El Paso, TX 79912 Telephone: (915) 587-5000 Facsimile: (915) 587-5001 Email: cmiranda@eptxlawyers.com cmaldonado@eptxlawyers.com About Coronado Capital Investment Coronado Capital Investment, Inc. is a Texas corporation formed in El Paso since September 19, 1994. It is the owner operator of multi-family residential real estate in El Paso, Texas renting apartment units and other residential property. The Debtor filed a voluntary petition for relief under Chapter 11 of the Bankruptcy Code (Bankr. W.D. Texas Case No. 21-30264) on April 5, 2021, listing under $1 million in both assets and liabilities. Doug Rutter, principal and sole shareholder, signed the petition. Judge H. Christopher Mott oversees the case. Miranda & Maldonado, PC serves as the Debtor's legal counsel. SM VER Enterprises, LLC, Zia Trust, Inc, as Custodian for Bradley E. Jarman, IRA, and Fernando Torres Macias/Bertha Lujan Mora, as Secured Lenders, are represented by: James Brewer, Esq. Kemp Smith, LLP P.O. Drawer 2800 El Paso TX 79999-2800 E-mail: Jim.Brewer@kempsmith.com Aurelio and Gloria Chaidez, as Secured Lenders, are represented by: Corey W. Haugland, Esq. James & Haugland, PC. 609 Montana Avenue Phone Tel: 915-533-0096 Fax: 915-544-5348 E-mail: chaugland@jghpc.com CREATD INC: Closes Purchase of Majority Stake in Dune Glow ---------------------------------------------------------- Creatd, Inc. has closed its purchase of a majority ownership stake in Dune Glow Remedy, a direct-to-consumer (DTC) brand focused on promoting wellness through its range of health-oriented beverages. The transaction was first announced in early August, when the Company entered into a Memorandum of Understanding with Dune and commenced its due diligence review. Creatd acquired a 50.4% equity stake in Dune in exchange for Creatd's common stock. Creatd will begin recognizing Dune's revenues in its consolidated financial statements, which is expected to generate between $750,000 to $1 million over the next 12 months. Commented Creatd co-CEO, Jeremy Frommer, "With the Dune acquisition now officially closed, it represents a strong addition to Creatd's portfolio of DTC brands. We are confident that, with Creatd's support, these brands can materially grow revenues in a cost-efficient, timely and scalable way, leveraging Vocal's powerful network and first-party data to identify and activate an enthusiastic and loyal consumer base." Dune's founder, Tom Punch, has recently joined Creatd as CEO of Creatd Ventures, the company's e-commerce pillar. In this role, Mr. Punch will oversee the operations and expansion of Dune as well as that of each brand within Creatd Ventures' growing portfolio. Mr. Punch joined Creatd with extensive experience spanning across all sides of the startup spectrum—from founder to growth marketer to advisor to investor. With a proven capacity to build and scale digital consumer businesses, Mr. Punch is uniquely suited for the role and is expected to secure repeatable success across each of the Creatd Ventures brands. Commented Mr. Punch, "The opportunity that exists within Creatd Ventures' growing family of brands is a direct result of the incredible value the Creatd team has been delivering to its brand clients over the past years through the Vocal platform. By partnering with and taking direct ownership stakes in up-and-coming DTC brands, we are maximizing the revenue potential for these early-stage businesses while at the same time investing in the value of Creatd, Inc. We believe Creatd Ventures and its partnerships are designed to be a win-win for all stakeholders." The company remains active in its efforts to further expand Creatd Ventures through the addition of DTC brands that demonstrate strong growth potential and that are aligned with Creatd's strategy and vision. Most recently, the company has entered into discussions with an emerging DTC beauty brand focused on inclusive, gender neutral products, and looks forward to providing updates on any further developments. Additionally, the company also announced that it is no longer pursuing the purchase of a majority ownership stake in DTC home improvement brand, Wobble Wedge. Continued Mr. Punch, "Creatd and Wobble Wedge have mutually agreed to cancel their non-binding memorandum of understanding (MOU) for the proposed transaction due to a range of timing and other factors. We look forward to continuing our relationship with Wobble Wedge in the capacity of marketing services provider, and to providing our next Creatd Ventures update later this month, with the release of the rebranding of Plant Camp." About Creatd Inc. Headquartered in Fort Lee, NJ, Creatd, Inc. -- https://creatd.com -- is the parent company behind Vocal Ventures, Creatd Partners, and Recreatd, empowers creators, brands, and entrepreneurs through technology and partnership. Creatd, Inc reported a net loss of $24.21 million for the year ended Dec. 31, 2020, compared to a net loss of $8.04 million for the year ended Dec. 31, 2019. As of June 30, 2021, the Company had $6.61 million in total assets, $7.06 million in total liabilities, and a total stockholders' deficit of $452,831. Somerset, New Jersey-based Rosenberg Rich Baker Berman, P.A., the Company's auditor since 2018, issued a "going concern" qualification in its report dated March 30, 2021, citing that the Company had a significant accumulated deficit, and has incurred significant net losses and negative operating cash flows. These factors raise substantial doubt about the Company's ability to continue as a going concern for a period of one year from the issuance of the financial statements. CRED INC: Ex-Exec. Rips Move to Block His Bankruptcy Discharge -------------------------------------------------------------- Elise Hansen of Law360 reports that an embattled former executive of bankrupt cryptocurrency venture Cred has objected to the Office of the U.S. Trustee's efforts to block his discharge from bankruptcy, saying he's been scapegoated and subjected to a "proxy criminal prosecution." "James Alexander, a former chief capital officer at Cred Inc., said he had "fully complied" with all the requirements in his personal bankruptcy case, and slammed the U.S. Trustee for filing an adversarial action seeking to deny his discharge. In a letter dated Sept. 30 and filed Wednesday, October 5, 2021, Alexander said the U.S. Trustee's efforts were based on poor facts. About Cred Inc. Cred Inc. is a cryptocurrency platform that accepts loans of cryptocurrency from non-U.S. persons and pays interest on those loans. Cred -- https://mycred.io/ -- is a global financial services platform serving customers in over 100 countries. Cred is a licensed lender and allows some borrowers to earn a yield on cryptocurrency pledged as collateral. Cred Inc. and its affiliates sought Chapter 11 protection (Bankr. D. Del. Lead Case No. 20-12836) on Nov. 7, 2020. Cred was estimated to have assets of $50 million to $100 million and liabilities of $100 million to $500 million as of the bankruptcy filing. Judge John T. Dorsey oversees the cases. The Debtors tapped Paul Hastings LLP as their bankruptcy counsel, Cousins Law LLC as local counsel, and MACCO Restructuring Group, LLC as financial advisor. Donlin, Recano & Company, Inc. is the claims agent. The U.S. Trustee for Region 3 appointed an official committee of unsecured creditors in the Debtors' Chapter 11 cases on Dec. 3, 2020. The committee tapped McDermott Will & Emery LLLP as counsel, and Dundon Advisers LLC as financial advisor. Robert Stark is the examiner appointed in the Debtors' cases. Ashby & Geddes, P.A., and Ankura Consulting Group, LLC serve as the examiner's legal counsel and financial advisor, respectively. D.W. TRIM: Unsecureds May Get 20% Dividend in Plan -------------------------------------------------- D.W. Trim, Inc. filed on Oct. 1, 2021 a First Amended Disclosure Statement, as revised on September 28, 2021. To address the problems that led to its bankruptcy, the Debtor has (i) lowered its cost of goods sold and expenses as percentage of revenue, (ii) worked to increase gross revenue, (iii) renegotiated contracts with builders, raising product prices or has stopped, or will stop doing work for general contractors who are a slow pay; (iv) increased its margins for new bids, and (v) estimated with more specificity the cost of jobs on which it is bidding. The Debtor said it enjoyed a positive net income during the Chapter 11 case and through June 30, 2021, and that all these steps will make it likely for the Debtor to reorganize and make payments on the Plan. The Plan alters the terms of the notes and security interests of the Debtor's secured creditors. Claims for default interests to the secured creditors are waived. Ally Financial, with $9,962 in allowed secured claim, will get a total payout of $5,186, with interest at 5.99%. The U.S. Small Business Administration, whose scheduled amount of secured claim for an EIDL Loan is $149,900, will be paid 100% of the contract amount, or a total payout estimated to be $249,916 with 3.75% interest on Year 30 of the loan. American Building Supply will get 100% total payment of its allowed claim, plus interest, or $64,439, after three years of payment. IOU Financial gets a total payout of $240,858, including 3.75% interest, after month 120. Its secured claim for hard money loan extended to the Debtor is scheduled for $197,956. Fox Capital Group, LLC will get $49,963 in total payout with 3.75% interest for its claim, which is scheduled for $41,603. It will be paid over 120 months. General unsecured claims in Class 6 aggregating $332,770 will get an estimated 20% dividend or a total payout of $281,780 at the end of 60 months, to be paid monthly at pre-determined amounts. General unsecured claims of current warrant claimants in Class 7 (a) and 7(b) under state law defect provision will get an estimated dividend of 100% of insurance proceeds. Assuming contractual law warranty rights and assuming state law concerning a 10-year statute for defects, the home owner members of this class could amount to 10,000. The Plan provides that any pending prepetition lawsuit or action naming the Debtor as a party (for claims arising from the construction of units by the Debtor) may, upon the effective date and on certain terms, go forward with the lawsuit/action on condition, among others, that the plaintiff pursue their claims against the general contractor, other suppliers, the property developer and any of their insurers only if the actions meet certain criteria. The Debtor maintains insurance coverage of $1 million per incident, $2 million in total, and has procured about 12 policies over the years it has been doing construction work. Claims of Christopher De Mint in Class 8 for loans amounting to $17,000 will have 1% recovery. Mr. De Mint, who holds 100% of the Debtor's stock, shall acquire the equity of the Reorganized Debtor, which equity shall not fully vest in Mr. De Mint until after two years of payment to holders of unsecured debts. Mr. De Mint intends to contribute $50,000 in new value money. If its income falls significantly short, the Debtor may be forced to modify the Plan, convert to a Chapter 7 case and liquidate its assets. A copy of the First Amended Disclosure Statement is available for free at https://bit.ly/3AadlLn from PacerMonitor.com. About D.W. Trim Inc. D.W. Trim, Inc., provides labor and materials as a finish carpentry sub-contractor on tract home projects, largely in the Inland Empire. It was incorporated in 2008 and operates its business in Riverside, Calif. D.W. Trim sought protection under Chapter 11 of the Bankruptcy Code (Bankr. C.D. Calif. Case No. 21-10758) on Feb. 15, 2021. In its petition, the Debtor disclosed assets of between $1 million and $10 million and liabilities of the same range. D.W. Trim President Christopher S. De Mint signed the petition. Judge Mark D. Houle oversees the case. The Fox Law Corporation, Inc., is the Debtor's legal counsel. DALLAS COUNTY SCHOOLS: Moody's Withdraws B3 Issuer Rating --------------------------------------------------------- Moody's Investors Service has withdrawn Dallas County Schools, TX's issuer, general obligation limited tax (GOLT) and Amended and Restated Promissory Notes ratings. At the time of withdrawal, Dallas County Schools, TX's issuer and GOLT ratings were B3, the Amended and Restated Promissory Notes rating was C and the outlook was stable. Moody's has decided to withdraw the ratings for its own business reasons. DAVID ARRIGONI: Sale of Tallahassee Property to Corey Gray OK'd ---------------------------------------------------------------- Judge Michael G. Williamson of the U.S. Bankruptcy Court for the Middle District of Florida authorized David Arrigoni's sale of all right, title, and interest in the property located at 8323 Portsmouth Court in Tallahassee, Florida, to Corey Martin Gray, pursuant to the terms of the Contract for Sale and Purchase. The Contract and all of its terms and conditions are approved. The sale is free and clear of any and all Liens and Interests, including, without limitation, the following: a. Judgment Lien in favor of Iberia Bank recorded on Nov. 17, 2014 at Official Records Book 4735, Page 262 of the public records of Leon County, Florida in the original amount of $448,575.26. b. Tax Lien recorded by the United States Department of the Treasury Internal Revenue Service on Feb. 23, 2016 at Official Records Book 4898, Page 496 of the public records of Leon County, Florida in the original amount of $19,890.14. c. Tax Lien recorded by the United States Department of the Treasury Internal Revenue Service on March 3, 2016 at Official Records Book 4901, Page 1096 of the public records of Leon County, Florida in the original amount of $159,662.85. d. Tax Lien recorded by the United States Department of the Treasury Internal Revenue Service on June 21, 2017 at Official Records Book 5077, Page 641 of the public records of Leon County, Florida in the original amount of $20,807.65. All liens, claims encumbrances and interests will attach to the proceeds of the sale of the Real Property. Upon closing of the sale of the Real Property to the Buyer, the Debtor is authorized to disburse from the sale proceeds: a. All amounts due to the Tax Collector of Leon County, Florida for delinquent property taxes owed on the Property. b. A sum equal to 6% of the sale price to Hector DeLao, the Court approved broker for the sale of the Real Property, in full satisfaction of all fees and expenses due the Broker in connection or in any way related to the Real Property or the sale thereof. c. All customary fees and costs associated with such a transaction including without limitation: taxes, recording fees, the settlement fee, owner's title insurance premium, title search costs, title disbursement fees, title closing fees, title document preparation/paraprofessional/notary fees, courtier, FedEx fees, recording fees, and other customary title and closing fees and costs. The Debtor will file the closing statement with the Court within seven days after the closing. The 14-day stay of Rule 6004(h) is waived. The bankruptcy case is In re: David Arrigoni, (Bankr. M.D. Fla. Case No. 8:17-bk-07940-MGW). DCG ACQUISITION: Moody's Affirms B3 CFR & Alters Outlook to Stable ------------------------------------------------------------------ Moody's Investors Service affirmed DCG Acquisition Corp.'s (dba DuBois Chemicals, Inc.) B3 Corporate Family Rating, B3-PD Probability of Default Rating, B2 first lien senior secured credit facility and Caa2 second lien term loan. The outlook was revised to stable from negative. "The outlook revision to stable reflects DuBois' improved operational performance that has led to organic growth and credit metrics that have exceeded previous expectations," said Domenick R. Fumai, Vice President and lead analyst for DCG Acquisition Corp. Affirmations: Issuer: DCG Acquisition Corp. Corporate Family Rating, Affirmed B3 Probability of Default Rating, Affirmed B3-PD Senior Secured First Lien Bank Credit Facility, Affirmed B2 (LGD3) Senior Secured Second Lien Term Loan, Affirmed Caa2 (LGD6) Outlook Actions: Issuer: DCG Acquisition Corp. Outlook, Changed To Stable From Negative RATINGS RATIONALE The outlook revision to stable is supported by DuBois Chemicals' improved financial performance versus prior expectations that has resulted in credit metrics more appropriate for the B3 rating. The company has been able to successfully implement price increases, which are expected to offset raw material cost inflation, and has demonstrated organic revenue growth as general industrial demand has been strong. DuBois Chemicals has also benefitted from capturing synergies and implementing cost controls. DuBois Chemicals is experiencing organic revenue growth and margin expansion as Moody's now expects improved profitability and EBITDA margins of approximately 20%. Through the first half of 2021, DuBois Chemicals' underlying organic revenue has increased 14% compared to the same period a year ago and 3% versus the comparable period in 2019. The B3 rating is constrained by elevated leverage because of an acquisitive growth strategy that has resulted in a substantial increase in absolute debt. Since the acquisition by Altas Partners in late 2019, total gross debt, including Moody's standard adjustments, has increased by over $180 million to $854 million at June 30, 2021. While absolute debt levels on the balance sheet remain elevated, Moody's now forecasts that adjusted Debt/EBITDA in FY 2021 will be between 6.5x-7.0x versus Moody's previous expectations of 7.5x-8.0x in FY 2021. DuBois Chemicals' rating is further tempered by its small scale and significant dependence on North America for revenue and earnings. Private equity ownership is another consideration limiting the rating. The rating is supported by exposure to a wide range of end markets, including metalworking, industrial lubricants, water treatment, transportation and pulp and paper. DuBois Chemicals' rating further benefits from extensive product offerings serving a diverse customer base in niche, middle market applications, and long-term customer and supplier relationships. DuBois Chemicals' credit profile further reflects the importance of many of its products to their customers, which on average represent a small portion of overall costs, and are typically more resilient to economic downturns. DuBois Chemicals also benefits from an asset-light business model that allows free cash flow generation. DuBois Chemicals is expected to maintain good liquidity with cash on the balance sheet in excess of $50 million and an undrawn $90 million revolving credit facility. The credit agreement governing the revolving credit facility contains only a springing net first lien leverage covenant when the revolver is drawn more than 35%, which is not expected to be triggered over the next 12 months. The B2 rating on the first lien senior secured credit facilities, one notch above the B3 CFR, reflects a first lien position on substantially all assets. The Caa2 rating on the second lien term loan, two notches below the B3 CFR, reflects effective subordination to the larger first lien credit facilities and limited recovery prospects in a default scenario. The stable outlook reflects expectations that credit metrics will remain consistent with the current rating as the company should continue to experience moderate growth in key end markets. The stable outlook also assumes the company will continue to pursue bolt-on acquisitions, but not substantially increase debt. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS Moody's would consider upgrading the ratings if the company achieves sustained adjusted financial leverage below 6.0x (Debt/EBITDA) and retained cash flow-to-debt (RCF/Debt) sustained above 10%. Moody's would likely consider a downgrade of the ratings if adjusted financial leverage is sustained above 8.0x, there is a significant deterioration in liquidity, or free cash flow remains materially negative for an extended period. Ratings could also be downgraded if there is a further considerable increase in gross debt as a result of acquisitions or dividend payment to the sponsor. ESG CONSIDERATIONS Moody's also considers environmental, social and governance risks in the rating. Although there are inherent environmental risks associated with being a chemical company, DuBois Chemicals' environmental risk is viewed as low compared to other companies in the chemical industry. DuBois states that it does not have any ongoing environmental investigations or remediation at any of its facilities. Moreover, the Water Treatment Services segment sells products that minimize water, energy and chemical usage allowing companies to reach their wastewater discharge requirements and helps promote sustainability. Governance risk is above-average due to private equity ownership, which does not require a majority of independent directors on the board, limited financial disclosure requirements compared to public companies and an aggressive financial policy that has completed four largely debt-financed acquisitions since the new owners acquired the company. The principal methodology used in these ratings was Chemical Industry published in March 2019. DuBois Chemicals, Inc., headquartered in Sharonville, Ohio, provides consumable, value-added specialty cleaning chemical solutions and services for manufacturing industrial processes. The company's extensive range of products include metalworking fluids, industrial lubricants, rust inhibitors, water treatment solutions, food and beverage sanitation, as well as performance improving chemistries for the paper and pulp industries. The company also serves the consumer car wash and fleet transportation wash markets. DuBois Chemicals was acquired by private equity sponsor, Altas Partners, in September 2019 and generated revenue of $610 million for the last twelve months ended June 30, 2021. DENNY'S CORP: Egan-Jones Keeps B Senior Unsecured Ratings --------------------------------------------------------- Egan-Jones Ratings Company, on September 10, 2021, maintained its 'B' foreign currency and local currency senior unsecured ratings on debt issued by Denny's Corporation. Headquartered in Spartanburg, South Carolina, Denny's Corporation operates as a full-service family restaurant chain directly and through franchisees. EMPOWER CLINICS: Incurs $579,320 Net Loss in Second Quarter ----------------------------------------------------------- Empower Clinics Inc. reported a net loss of $579,320 on $861,826 of revenues for the three months ended June 30, 2021, compared to a net loss of $396,073 on $85,775 of revenues for the three months ended June 30, 2020. For the six months ended June 30, 2021, the Company reported a net loss of $25.79 million on $2.82 million of revenues compared to a net loss of $920,281 on $136,730 of revenues for the same period a year ago. As of June 30, 2021, the Company had $10.77 million in total assets, $12.11 million in total liabilities, and a total shareholders' deficiency of $1.34 million. "Our second quarter was one of robust corporate development as we continue to execute our strategic growth vision while prioritizing the overall fiscal health of Empower Clinics," said Steven McAuley, Chairman and CEO. "By discontinuing certain operations in Q2, we paved the way for explosive growth across the company. We are excited about the R&D product development opportunities and increased testing available in Canada and the U.S. through the Kai Medical Laboratories expansion. We remain diligent on the progress of our Canadian clinic expansions and the distribution of MediSure devices. The entire Empower team is excited for the future." A full-text copy of the regulatory filing is available for free at: https://www.sec.gov/Archives/edgar/data/1109504/000165495421010849/exh_991.htm About Empower Clinics Headquartered in Vancouver, BC, Empower Clinics is an integrated healthcare company that provides body and mind wellness for patients through its clinics, with digital and telemedicine care, and medical diagnostics laboratories. Empower Clinics reported a net loss and comprehensive loss of $17.07 million for the year ended Dec. 31, 2020, compared to a net loss and comprehensive loss of $4.30 million for the year ended Dec. 31, 2019. Ottawa, Canada-based MNP LLP, the Company's auditor since 2015, issued a "going concern" qualification in its report dated June 30, 2021, citing that the Company has suffered recurring losses from operations and has a net working capital deficiency that raise substantial doubt about its ability to continue as a going concern. EXELA INTERMEDIATE: Debt Repurchase No Impact on Moody's Caa3 CFR ----------------------------------------------------------------- Moody's Investors Service appended a limited default (LD) designation to Exela Intermediate LLC's Caa3-PD probability of default rating changing it to Caa3-PD/LD. The LD designation reflects a limited default under Moody's definition following the company's repurchase of a portion of its senior secured notes and senior secured term loan. Moody's views the transactions as a distress exchange because of the purchase of a material portion of the outstanding bonds at a significant discount relative to the principal value as well as Exela's weak credit profile. The PDR will revert to Caa3-PD and the LD designation will be removed in several business days. RATING RATIONALE In its September 30, 2021 announcement, Exela disclosed that year-to-date, the company had bought back $95 million of debt in the open market using $64 million of cash on hand. Exela also announced that it plans to deploy up to $400 million of its capital (proceeds from the equity raised via at-the-market equity program ATM and current liquidity) to retire debt, invest in its business and for other general corporate purposes. Notwithstanding the debt reduction because of the debt repurchases, plans to reduce debt through additional debt retirement and cash savings as a result of reduced interest costs, Exela's existing ratings, including the Caa3 corporate family rating and negative outlook, remain unchanged at this time. Exela's Caa3 CFR and negative outlook reflect Moody's view that the company has an untenable capital structure given the still high debt burden despite the debt repurchases. Exela Intermediate LLC is a global, location-agnostic provider of business process automation services. The company is publicly traded (NASDAQ: XELA) and generated LTM 2Q 2021 revenue of approximately $1.2 billion. EYECARE PARTNERS: Moody's Affirms 'B3' CFR, Outlook Stable ---------------------------------------------------------- Moody's Investors Service affirmed EyeCare Partners, LLC's ("ECP") Corporate Family Rating at B3, the Probability of Default Rating at B3-PD, the first lien senior secured bank credit facility at B2, and the second lien senior secured bank credit facility at Caa2. At the same time, Moody's is assigning a B2 rating to the new incremental first lien term loan. The outlook is stable. ECP has announced that it will be acquiring several eye care targets in the near future. ECP will be funding the transaction and adding cash to the balance sheet by raising a $400 million incremental first lien term loan, $100 million delayed draw first lien term loan and an incremental $190 million second lien term loan. In addition, ECP will also be upsizing its senior secured revolving credit facility from $110 million to $195 million dollars to support the larger size of the overall business. The affirmation of the B3 CFR considers that while leverage is increasing to around 8.2x pro forma last twelve months ending June 30, 2021, the additional scale supported through the acquisitions help somewhat offset the risks associated with the elevated leverage. The acquisitions will also diversify ECP geographically. Without the acquisitions and associated debt, Moody's notes that ECP's leverage has improved to around 7.3x LTM 6/30/21. Moody's expects leverage to decline below 7.5x by the end of 2022 as growth continues and the acquisitions are fully integrated. The stable outlook reflects Moody's expectation that leverage will decline below 7.5x by the end of 2022 as growth continues and the acquisitions are fully integrated. The stable outlook also reflects Moody's favorable view of the longer-term prospects for vision care. Affirmations: Issuer: EyeCare Partners, LLC Corporate Family Rating, Affirmed B3 Probability of Default Rating, Affirmed B3-PD Senior Secured First Lien Bank Credit Facility, Affirmed B2 (LGD3) Senior Secured Second Lien Bank Credit Facility, Affirmed Caa2 (LGD5 from LGD6) Assignments: Issuer: EyeCare Partners, LLC Senior Secured First Lien Bank Credit Facility, Assigned B2 (LGD3) Outlook Actions: Issuer: EyeCare Partners, LLC Outlook, Remains Stable RATINGS RATIONALE The B3 CFR reflects ECP's high leverage, aggressive growth strategy and moderate geographic concentration in two states, Michigan and Missouri, which would make ECP more susceptible to an economic downturn or additional impact from the coronavirus. Moody's projects pro forma adjusted leverage of 8.2x debt/EBITDA (pro forma acquisitions) LTM 6/30/21. Without the acquisitions and associated debt, Moody's notes that leverage has improved to around 7.3x LTM 6/30/21. Moody's expects leverage to decline below 7.5x by the end of 2022 as growth continues and the acquisitions are fully integrated. Integration risk is a key issue as ECP has been aggressive in growth through acquisitions. In addition, while e-commerce penetration in the optical sector is likely to remain moderate, Moody's expects that, over time, traditional optical retailers will face margin and market share pressure from growing online competition. The rating considers that while leverage is increasing, the additional scale supported through the acquisitions help somewhat offset the risks associated with the elevated leverage. The acquisitions will also diversify ECP geographically. ECP benefits from the industry's favorable long-term growth prospects, including growing demand for optometrist and ophthalmological services and eyewear products. ECP also owns ambulatory surgery centers, which will benefit from growing demand as patients and payors generally prefer the outpatient environment (primarily due to lower cost and better outcomes) for certain specialty procedures, including cataract surgeries. The B3 rating is further supported by Moody's expectation that the company will maintain good liquidity over the next 12-18 months, with an estimated $63 million of free cash flow forecasted for 2021 and $86 million in 2022 net of repayment of about $30 million of accelerated payments related to CAREs funds. Liquidity is further supported by ECP's estimated $24 million pro forma cash balance and an undrawn $110 million revolver that will be upsized to $195 million. The addition of the delayed draw term loan will improve absolute liquidity, which is a credit positive. The B2 ratings for the company's senior secured credit facilities are one notch higher than the B3 CFR. This reflects the level of junior capital provided by the second lien term loan in the company's capital structure. The Caa2 rating to the proposed incremental second lien term loans are two notches below the B3 CFR, reflecting its substantial subordination to the meaningful amount of secured debt in the company's capital structure. Social and governance risks are material to ECP's ratings. ECP was negatively impacted by the coronavirus pandemic, a social risk, as volumes declined at the height of the pandemic causing leverage to increase. Aside from coronavirus, ECP faces other social risks, such as the rising concerns around the access and affordability of healthcare services. However, Moody's does not consider the eye care providers and ASCs to face the same level of social risk as hospitals as ASCs are viewed as an affordable alternative to hospitals for elective procedures. From a governance perspective, Moody's expects financial policies to remain aggressive given private equity ownership. The stable outlook reflects Moody's expectation that leverage will decline below 7.5x by the end of 2022 as growth continues and the acquisition is fully integrated. The stable outlook also reflects Moody's favorable view of the longer-term prospects for vision care. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS The ratings could be downgraded if revenue or profitability weakens or if the company fails to effectively manage its rapid growth. A downgrade could also occur if the company's liquidity weakens or if the company's financial policies become more aggressive or if adjusted debt/EBITDA is does not decline below 7.5 times by the end of 2022. The ratings could be upgraded if the company demonstrates stable organic growth while effectively executing its expansion strategy. An upgrade would be supported by sustained, stable free cash flow and debt to EBITDA that is expected to be maintained below 6.5 times. EyeCare Partners, LLC, headquartered in St. Louis, Missouri, is the largest medically-focused eye care services provider. ECP is vertically integrated, providing optometry, ophthalmology and retail products. Pro forma for the acquisitions, ECP will have more than 600 locations across 18 states. For the LTM June 30, 2021 period, ECP generated $1,487 million of pro forma revenues. The principal methodology used in these ratings was Business and Consumer Service Industry published in October 2016. FRONTIER COMMUNICATIONS: Fitch Affirms 'BB-' LT IDR, Outlook Stable ------------------------------------------------------------------- Fitch Ratings has affirmed the 'BB-' Long-Term Issuer Default Rating (IDR) of Frontier Communications Holdings, LLC (Delaware) and its subsidiaries, with a Stable Rating Outlook, and has assigned a 'BB-' Long-Term IDR to Frontier Communications Parent, Inc. Fitch has affirmed Frontier's 'BB+'/'RR2' rating on its first lien secured revolving credit facility, term loan and notes. The company's existing second-lien secured notes have been affirmed at 'BB-'/'RR4'. Fitch has assigned a 'BB-'/'RR4' rating to Frontier's issuance of $1 billion of second lien secured notes due 2030. Proceeds are expected to be used to fund capital investments and operating costs arising from the company's fiber build and expansion of the fiber customer base and for general corporate purposes. KEY RATING DRIVERS Low Leverage: Frontier's 'BB-' IDR and Stable Outlook are supported by relatively low leverage for the rating. Fitch expects gross leverage of 3.3x at YE 2021 and net leverage of 2.6x. With much lower rural broadband support in 2022, gross leverage could rise by approximately 0.4x. Frontier's cash generation has improved materially after the emergence from bankruptcy due to the $1 billion reduction in annual interest expense. The improved cash generation will enable Frontier to more aggressively invest in the business, focusing on fiber to the home and greater fiber investment to support enterprise and wholesale services, including fiber to the tower. The rating is constrained by the near-term expected decline in legacy revenues and the need to continue to take costs out of the business. Capital Allocation: The company's capital allocation policy has gained clarity post-emergence as the company has accelerated plans to invest in fiber to the home as well as to target fiber deployment to small and medium businesses, enterprises and the wholesale market. The company's financial policy targets a net leverage ratio in the mid-3x range, which provides for the flexibility to invest. Frontier's aggressive investment plan will broadly expand the deployment of fiber to 10 million locations by the end of 2025, or two-thirds of its footprint. As of June 30, 2021, the company has passed approximately 3.6 million locations and is targeting 4 million locations by the end of 2021. Penetration rates on the base fiber network have recently been in the 40%-41% range, but with the acceleration of new builds penetration rates may decrease modestly, as subscriber loading will lag locations passed in the near term. The company faces execution risk related growing fiber-based revenues. Risk is mitigated by the recent success in adding fiber customers, as demonstrated by eight consecutive quarters of positive net additions and success in lowering churn. The opportunity to capture additional broadband share is highlighted by a footprint that has only one or no competitors in 86% of its markets. The new locations to be served by fiber have material upside, as penetration rates for the company's legacy, less-competitive copper broadband network are in the 12%-13% range. FCF: Fitch estimates FCF will approximate breakeven in 2021. FCF is expected to be pressured in 2022 due to the expiration of CAF II funding and increased capital spending on fiber investments. The company's FCF deficits could approximate $1 billion annually on average over 2022-2024. Challenging Operating Environment: The rating incorporates a challenging operating environment for wireline operators. Fitch expects Frontier's revenue growth trends to remain negative in 2021 due to a material asset sale in in 2020 and the expiration of $332 million of annual Connect America Fund II (CAF II) funding at the end of 2021 will cause 2022 revenues to decline. Fitch expects this latter effect to be mitigated by the next generation of broadband support through the Rural Digital Opportunity Fund (RDOF); Frontier won $37 million annually (over a ten-year period beginning in 2022) in the RDOF auction. Over time, the de-emphasis of products, such as certain video offerings, will affect revenues but will have a far lower effect on EBITDA margins given programming cost offsets. Secured Debt Notching: For rated entities with IDRs of 'BB-' or above, Fitch does not perform a bespoke analysis of recovery upon default for each issuance. Instead, Fitch uses notching guidance whereby an issuer's first-lien secured debt can be notched upward one or to two rating levels. Frontier Parent's secured first-lien debt is notched up two levels from the Long-Term IDR to 'BB+'/'RR2'. The recovery is limited to 'RR2' given the first-lien debt is primarily secured by equity pledges and there is material subsidiary-level debt. The first mortgage bonds of Frontier Southwest Inc. are also notched up two levels from the IDR to 'BB+'/'RR1', the security provided by a first lien on substantially all of its assets supporting the 'RR1' recovery. Nonfirst-Lien Debt Notching: For corporate entities rated 'BB-' and above, the ratings assigned to an issuer's nonfirst-lien debt (second lien, unsecured and subordinated debt) are capped at 'RR4' and there is no notching above the IDR. This leads to 'BB-'/'RR4' ratings for Frontier's second-lien debt and subsidiary unsecured debt, except for Frontier Florida LLC. The 'B+'/'RR5' rating assigned to Frontier Florida's unsecured debt reflects that Frontier Florida is a guarantor of Frontier's secured credit facility. Parent-Subsidiary Relationship: Fitch linked Frontier's IDRs to its operating subsidiaries based on strong operational ties. DERIVATION SUMMARY Frontier has a higher exposure to the residential market compared with wireline peer Lumen Technologies, Inc. (BB/Stable), and to some extent Windstream Services, LLC (B/Stable). The residential market held up relatively well during the coronavirus pandemic, but continues to face secular challenges. Incumbent wireline operators face competition for residential broadband customers from cable operators, including Comcast Corp. (A-/Stable) and Charter Communications Inc. (Fitch rates Charter's indirect subsidiary CCO Holdings, LLC BB+/Stable). Both wireline and cable operators face pressure from over-the-top video services providers for their video products. Incumbent wireline operators such as Frontier are investing more aggressively in fiber in response to these threats. Frontier needs to improve its competitive position in the enterprise market. In this market, Frontier is smaller than AT&T Inc. (BBB+/Stable), Verizon Communications Inc. (A-/Stable) and Lumen. All three companies have an advantage with national or multinational companies given their extensive footprints in the U.S. and abroad. Compared with Frontier, AT&T and Verizon have wireless offerings that provide more service diversification. Fitch expects Frontier's gross leverage to be moderately higher over time than AT&T and Verizon with its fiber build plans. KEY ASSUMPTIONS Fitch's key assumptions within the rating case for the issuer include: -- Revenues decline just above 10% in 2021, reflecting the sale of the Pacific Northwest properties on May 1, 2020 and secular effects. Revenue declines in 2022 due to the loss of CAF II revenues in 2022. Revenue grows nominally in 2023, as the company starts to see the benefit of its focus on fiber and increasing fiber broadband penetration. In 2024, revenue grows in the low to mid-single digits with increased fiber penetration; -- The EBITDA margin declines from the high 30% range in 2020 and 2021 to the mid-30% range in 2022. The loss of CAF II funding further lowers EBITDA margins in 2022. Pressure in 2022 is partly offset by new rural broadband subsidies; -- Capital spending under Fitch's rating case reflects spending of approximately $1.8 billion in 2021. The four-year period of 2022-2025 could see capex related to the fiber expansion plan in the $5.5 billion to $6 billion range based on $900-$1000 per passing (6 million homes). Incremental success-based capex would also result depending on the pace of penetration; -- Cash taxes are nominal in 2021-2024. RATING SENSITIVITIES Factors that could, individually or collectively, lead to positive rating action/upgrade: -- Gross leverage, defined as total debt with equity credit/operating EBITDA, expected to be sustained at or below 3.0x, with FFO leverage of 3.0x, while consistently generating positive FCF margins in the mid-single digits; -- Successful execution on cost-reduction plans; -- Consistent gains in revenues from anticipated investments in fiber and broadband product areas; -- Demonstrated stable EBITDA and FCF growth. Factors that could, individually or collectively, lead to negative rating action/downgrade: -- A weakening of operating results, including deteriorating margins and an inability to stabilize revenue erosion in key product areas or offset EBITDA pressure through cost reductions; -- Discretionary management decisions, including but not limited to execution of M&A activity that increases gross leverage beyond 4.5x, with FFO leverage of 4.5x in the absence of a credible deleveraging plan. 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: At June 30, 2021, Frontier had $993 million of unrestricted cash and $535 million available on its $625 million RCF, after letters of credit. The RCF is due April 2025. First-lien debt totals approximately $4.2 billion, second-lien debt totals $1.75 billion ($2.75 billion pro forma for the current offering) and subsidiary debt totals $855 million. The second-lien debt amount includes $750 million of second-lien takeback debt. Other than the revolver maturity in 2025, there are no major maturities until 2027. ISSUER PROFILE Frontier is the nation's fourth largest incumbent local exchange carrier (ILEC) providing wireline voice, data and video service to residential and business customers. At the end of 2020, the company operated in 25 states and primarily serves medium-sized cities and suburban and rural areas. Pro forma for the sale of its Pacific Northwest properties in May 2020, the company had 2020 revenue of $7.0 billion. 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: Moody's Rates New $1BB 2nd Lien Notes Caa2 ------------------------------------------------------------------- Moody's Investors Service has assigned a Caa2 to Frontier Communications Holdings, LLC's proposed $1 billion of second lien secured notes due 2030. The net proceeds from the sale of the second lien notes will be used to fund capital investments and operating costs associated with the company's fiber build and expansion of its fiber customer base, and for other general corporate purposes. All other ratings, including Frontier's B3 corporate family rating and stable outlook, are unchanged. Assignments: Issuer: Frontier Communications Holdings, LLC Senior Secured 2nd Lien Regular Bond/Debenture, Assigned Caa2 (LGD5) LGD Adjustments: Senior Secured Regular Bond/Debenture, Adjusted to (LGD5) from (LGD6) RATINGS RATIONALE Frontier's B3 CFR rating reflects the high execution risks of the company's strategic modernization plan across its operating segments to reverse continuing revenue and EBITDA declines. Moody's expects the company's revenue and EBITDA contraction will be in the high single-digits through year-end 2022, well in excess of its rated peers. Moody's believes Frontier's acceleration of this plan to now reach 10 million fiber passings by year-end 2025, up considerably from 5.9 million household fiber passings targeted by 2028 under a previous buildout strategy, is well planned and highly targeted to optimize returns on capital allocations. While the company has secured key materials and labor suppliers, Moody's view the accelerated pace of this buildout as logistically ambitious and one that may face potential unforeseen execution difficulties. Under Frontier's pilot fiber upgrade program and moderate follow-on capital investments during 2021, the company believes it has gained greater insight into customer demand and achieved sufficient subscriber growth metrics to date to justify its quicker buildout plan. Moody's now expects stepped-up capital investments through 2025 with capital intensity peaking in 2023, and total capital spending of $13 billion for the five-year period from 2021 through 2025. This substantial effort will target multiple states across Frontier's footprint for copper network upgrades to fiber, with a focus on driving cash flow growth from its larger markets in Connecticut, California, Texas and Florida. Pre-bankruptcy, Frontier historically endured high new customer churn and mitigating this will be a critical element of the company's success-based investing stage when upgraded fiber networks are extended laterally to new customer locations. Sustained success is dependent upon effective customer targeting to better achieve economic paybacks and longer and higher value customer relationships. The company's updated modernization plan also incorporates significantly improved customer care efficiencies to proactively reduce churn, enhance sales force capabilities and productivity and reduce operational costs, including field costs. Despite a sizable reduction in its debt load after its emergence from bankruptcy, Frontier will continue to operate at a competitive disadvantage versus cable, fiber overbuilder and wireless competitors in the bulk of its market footprint until meaningful network upgrades bolster its value proposition. Evidence of good execution on this metric will be steady market share expansion and churn mitigation, especially with new customers under promotional terms, followed by sustained revenue and EBITDA growth. Until then, Frontier's broadband speeds and competitive value proposition to both consumer and commercial customers is largely limited by a legacy copper network spanning almost 80% of 15 million broadband-capable homes passed in its 25 state footprint, which includes about 3.6 million fiber home passings and 1.4 million fiber broadband subscribers currently. Frontier also faces steady top line and margin pressures in its commercial and wholesale business segments, comprising about 45% of overall revenue. While renewed attention to small and medium-sized businesses and select enterprises within its footprint is a critical part of stabilizing top line decline, Moody's believes improvement in sales traction will be difficult and protracted. Operational enhancements include new leadership, including Nick Jeffery as the company's new CEO effective March 4, 2021 and Scott Beasley as the company's new CFO effective June 14, 2021, as well as numerous other senior role and consultant hires, sales force and account management structural changes and a greater prioritizing of strategic product offerings. While strengthened financial flexibility will afford Frontier a longer turnaround runway than it had pre-bankruptcy, strengthening its existing core business will require deft operational skills in the face of current high single-digit revenue declines and strong EBITDA pressures the company will continue to face at least through 2022. The company's debt leverage (Moody's adjusted) will increase from low levels at bankruptcy exit of around 3x to nearer 4.5x by year-end 2022, which only heightens the need for steady and timely strategic execution success. Frontier's financial policy includes a long term, sustainable net leverage target (company defined) not to exceed the 3.5x area, the prioritization of reinvestment of discretionary cash flow into its business versus shareholder friendly actions and potential asset optimizations through non-core dispositions. Such potential optimizations would not be anticipated until the later years of the current modernization plan. The instrument ratings reflect the probability of default of Frontier, as reflected in the B3-PD probability of default rating, an average expected family recovery rate of 50% at default and the loss given default assessment of the debt instruments in the capital structure based on a priority of claims. The first lien term loan and first lien secured notes are rated B3, in line with the B3 CFR given the loss absorption provided by the Caa2 rated second lien secured debt, and also reflecting the benefits from a first lien pledge of stock of certain subsidiaries of Frontier which represent approximately 90% of Frontier's total EBITDA and 80% of Frontier's total assets, and guarantees from a subset of these subsidiaries (although the guarantor details are not disclosed). Based on a priority of claim waterfall, Moody's ranks the first lien revolving credit facility (unrated), first lien term loan and first lien secured notes behind structurally senior pension and trade payables of various operating subsidiaries. Moody's views Frontier's liquidity as good. As of June 30, 2021 Frontier had $993 million of balance sheet cash and $535 million of available borrowing capacity on its $625 million first lien revolving credit facility (unrated) maturing in April 2025, net of outstanding letters of credit issued under the facility. Moody's expects free cash flow to be around negative $1.1 billion in 2022 due to stepped-up capital spending and contracting revenue over the next several years. The company is expected to have high capital spending (Moody's adjusted) of approximately $1.9 billion in 2021 and $2.5 billion in 2022. Moody's expects Frontier to have sufficient liquidity such that it will not need to draw down its revolver through year-end 2022 to fund its front-loaded capital spending ambitions. As there is a high level of uncertainty regarding Frontier's ability to deliver sustained operational improvements through network investment, any shortfalls in expectations for future free cash flow generation would limit financial flexibility and likely impair the company's ability to maintain its planned pace of network upgrades. The stable outlook reflects Moody's expectations over the next 12-18 months for continuing high single-digit revenue and EBITDA declines, slightly decreasing EBITDA margins and moderately increasing debt/EBITDA (Moody's adjusted). Good liquidity, a well-planned fiber upgrade strategy and an expectation of fully funded discretionary capital spending further supports the stable outlook over the next 12-18 months. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATING Given the company's current competitive positioning, network upgrade execution risks and uncertainties regarding share growth traction across its end markets, upward pressure is limited but could develop should Frontier's free cash flow to debt (Moody's adjusted) track towards mid single-digit levels as a percentage of Moody's adjusted debt on a sustainable basis. An upgrade would also require steady market share capture gains across the company's network footprint in both consumer and commercial end markets over several years, consolidated revenue and EBITDA growth and maintenance of a good liquidity profile. Downward pressure on the rating could arise should the company's liquidity deteriorate or should execution of its share capture and growth strategy materially stall or weaken. The principal methodology used in this rating was Telecommunications Service Providers published in January 2017. Frontier is an Incumbent Local Exchange Carrier (ILEC) headquartered in Norwalk, CT and the fourth largest wireline telecommunications company in the US. Frontier generated $6.5 billion of revenue in the last 12 months ended June 30, 2021. FRONTIER COMMUNICATIONS: Taps Junk-Bond Market After Ch. 11 Exit ---------------------------------------------------------------- Paula Seligson and Allison McNeely of Bloomberg News report that Frontier Communications Holdings LLC tapped the junk-bond market for the first time since emerging from bankruptcy earlier this year, marking a turnaround as the company seeks to fund an ambitious overhaul of its telephone and internet network. The telecommunications company sold a $1 billion second-lien high-yield bond on Tuesday, October 5, 2021, with proceeds earmarked to fund capital investments and operating costs from building out its fiber network and customer base, and also for general corporate purposes, according to a person with knowledge of the matter. The note offering wrapped up at a yield of 6% after early pricing discussions in the range of 6.25%, the person added, asking not to be named discussing a private transaction. That level is lower that the average of CCC rated debt, the lowest junk tier, which has an average yield of 6.19%, according to Bloomberg Indices data. Frontier filed for bankruptcy in April 2020 with a plan to cut more than $10 billion of its $17 billion debt load by handing ownership to bondholders. It was the biggest telecom filing since WorldCom in 2002, reflecting years of decline in its business of providing internet, TV and phone service in 29 states. The company had earlier tapped the bond and loan markets in multiple deals to fund its exit from bankruptcy. It's among a flurry of companies taking advantage of the hot debt markets. American Tire Distributors is selling a loan to help finance its 2018 exit from bankruptcy, while Gulf Finance LLC, which operates gas station and petroleum terminals, is raising a new loan that will give the company breathing room following discussions with lenders. About Frontier Communications Frontier Communications Corporation (OTC: FTRCQ) offers a variety of services to residential and business customers over its fiber-optic and copper networks in 25 states, including video, high-speed internet, advanced voice, and Frontier Secure digital protection solutions. Frontier Business offers communications solutions to small, medium, and enterprise businesses. Frontier Communications Corporation and 103 related entities sought Chapter 11 protection (Bankr. S.D.N.Y. Lead Case No. 20-22476) on April 14, 2020. Judge Robert D. Drain oversees the cases. The Debtors tapped Kirkland & Ellis LLP as legal counsel; Evercore as financial advisor; and FTI Consulting, Inc., as restructuring advisor. Prime Clerk is the claims agent, maintaining the page http://www.frontierrestructuring.com/and https://cases.primeclerk.com/ftr The U.S. Trustee for Region 2 appointed a committee to represent unsecured creditors in Debtors' Chapter 11 cases. The committee tapped Kramer Levin Naftalis & Frankel LLP as its counsel; Alvarez & Marsal North America, LLC, as financial advisor; and UBS Securities LLC as an investment banker. GANNETT HOLDINGS: Moody's Rates New $400MM Secured Notes 'B1' ------------------------------------------------------------- Moody's Investors Service assigned a B1 rating to Gannett Holdings, LLC's proposed $400 million senior secured notes due 2026. Gannett Co., Inc.'s existing credit ratings, including its B3 corporate family rating, and stable outlook are unchanged. Proceeds from the proposed senior secured notes, together with the proceeds of the new senior secured term loan will be used to prepay in full the obligations outstanding under the existing term loan and for general corporate purposes. Moody's assumes that the aggregate amount of the proposed senior secured notes and the senior secured term loans will not exceed $950 million. Moody's considers the proposed refinancing to be a credit positive because the company will lower its interest costs and diversify its capital sources in a leverage-neutral manner. However, the company's CFR remains at B3 because leverage is still high and there is more progress to be made in delivering consistent revenue and EBITDA growth. Gannett's high financial leverage -- debt/EBITDA is currently about 5.6x -- is one of key credit challenges. Moody's expects that Gannett will apply its good free cash flow to materially reduce leverage over the next 12-18 months. Since its February 2021 debt issuance, Gannett paid down approximately $145.6 million of debt year-to-date through asset sale proceeds and free cash flow generation. Moody's projects that Gannett will be able to reduce its debt/EBITDA to under 3x (as adjusted by Moody's) by the end of 2022. Leverage reduction will be driven by voluntary and mandatory debt repayment and achieving further cost synergies in 2021-2022. Assignments: Issuer: Gannett Holdings, LLC Gtd Senior Secured Regular Bond/Debenture, Assigned B1 (LGD2) RATINGS RATIONALE Gannett Co., Inc.'s B3 CFR continues to reflect the company's revenue pressure because of the secular decline in its advertising and print focused activities, and the company's high leverage, with LTM 6/2021 Moody's adjusted debt/EBITDA of 5.6x. The print media industry has been affected by both changing demographics and ongoing shifts in consumer behavior towards the use of social media and digital platforms for news content. Moody's does not expect the structural pressures on Gannett's advertising and print circulation to ease in the future as demographics evolve and consumers' tastes continue to gravitate towards digital media. Gannett's credit profile benefits from good free cash flow generation and management's focus on repaying debt. We expect the company to use excess cash to reduce debt to bring leverage below 3x by the end of 2022. The B3 rating also reflects the company's position as the largest owner of daily newspapers in the United States and community newspapers in the UK. Gannett has the potential to mitigate the decline in print circulation by growing digital subscriptions from a low base through a more consistent approach to pay-walls and subscription promotions across its media portfolio. Other growth areas the company has been focusing on are Digital Marketing Services (DMS, 13% of LTM 2Q 2021 revenue) and the company's Local Events (1% of LTM Q2 2021 revenue). The B3 rating reflects Moody's expectation for improving cash flow generation over the next 12-18 months, as the company benefits from lower cash interest expense and the realization of further cost synergies. The company is facing demographical and societal shifts in the way consumers consume media that drive secular decline in its advertising and print focused activities. Gannett generated over 40% of its LTM Q2 2021 revenue from circulation -- most of which continues to be print based and in structural decline and is expected to continue to face double digit percentage rate declines. Around 38% of the LTM Q2 2021 revenue is derived from advertising, of which more than two thirds is print advertising, which is expected to continue to decline in the face of growing digital ad spend. The company is transforming its business model by diversifying revenue sources with growth potential to offset secular decline in traditional print advertising and circulation. Gannett reached 1.4 million paid digital subscribers in 2Q 2021 (up 41% vs 2Q 2020) and is aiming to reach 10 million paid subscribers over the next five years. The B1 rating on the proposed notes reflects the probability of default of Gannett Co., Inc, as reflected in B3-PD probability of default rating , an average expected family recovery rate of 50% at default, and the notes' ranking in the capital structure ahead of $500 million of convertible notes. Moody's expects that the company will maintain adequate liquidity over the next 12 to 18 months, driven by cash flow generation in the $130 - $150 million range over the next four quarters, though most of it is expected to be used for voluntary debt repayment or to satisfy the expected cash flow sweep requirement. The company's liquidity profile is constrained by the lack of a revolving credit facility. The stable outlook reflects Moody's expectations that the company will reduce leverage to below 3x by year end 2022, despite expected overall revenue decline because of EBITDA growth mostly through cost synergies and debt pay down. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATING Ratings could be upgraded if Gannet demonstrates consistent revenue and EBITDA growth, and sustains Moody's adjusted leverage below 2x. Ratings could be downgraded if Moody's adjusted leverage does not materially decline, progress in growing digital subscribers slows or if liquidity materially deteriorates. The principal methodology used in this rating was Media published in June 2021. Headquartered in McLean, Virginia, Gannett is the largest owner of daily newspapers in the United States and community newspapers in the United Kingdom. Gannett is also the owner of national USA Today publication. Gannett generated LTM 6/2021 revenue of $3.3 billion. GLATFELTER (P.H.) CO: S&P Lowers ICR to 'BB', Outlook Stable ------------------------------------------------------------ S&P Global Ratings lowered its issuer credit rating on Charlotte, NC–based Glatfelter (P.H.) Co. to 'BB' from 'BB+' and removed it from CreditWatch, where S&P placed it with negative implications on July 27, 2021. At the same time, S&P assigned its 'BB' issue-level rating and '4' recovery rating to the proposed notes. The stable outlook reflects S&P's expectation for leverage to remain elevated beyond the next 12 months, notwithstanding the company's objective to deleverage rapidly. Glatfelter announced it has entered into an agreement to acquire Jacob Holm Group (not rated), developer of spunlace nonwoven fabrics and finished goods. The acquisition will be financed with eight-year senior unsecured notes due 2029, which will also be used to reduce borrowings under the company's revolving credit facility. The proposed notes transaction to finance the Jacob Holm and Mt. Holly acquisitions (the latter initially financed by revolver borrowings that are expected to be repaid with this note offering) will increase gross debt by more than 2.5 times when compared to the end of 2020. The transaction will considerably increase S&P Global Ratings' adjusted debt leverage for the company to approximately 5x at the end of 2021 and nearly 3.5x by the end of 2022. This represents a substantial increase and Glatfelter will rely heavily on its current cash flow generation capabilities to reduce leverage toward 3x. For the quarter-ended June 30, 2021, the company's adjusted leverage was approximately 3.9x, which incorporates its EBITDA of nearly $120 million over the past 12 months. However, S&P anticipates it will increase its revenue and EBITDA in the second half of the year before the Jacob Holm acquisition closes as earnings from the Mt. Holly acquisition (closed in May 2021) are included. S&P said, "Glatfelter's aggressive acquisition policy remains a key risk, but we believe it will be able to deleverage outside of the 12-month horizon. Glatfelter's growth strategy focuses on expanding the business with new products and acquisitions, as well as optimizing its cost structure. While we expect EBITDA margins to improve over the next 12 months, Glatfelter's historically aggressive acquisition policy could pressure credit metrics and reduce the cushion at the current rating. The Mt. Holly and proposed Jacob Holm acquisitions are in line with Glatfelter's strategy to diversify into attractive and complementary segments serving the growing wipes, health care, and hygiene categories. The acquisitions will also expand Glatfelter's portfolio to include surgical drapes and gowns, wound care, face masks, facial wipes, and cosmetic masks as well as enhance Glatfelter's technological capabilities. Despite the sizable increase in debt and leverage over the next 12 months, we believe leverage will return to the mid-3x area in 2022, with the support of stable earnings from existing operations as the company realizes full-year earnings and additional cost synergies. "We expect demand for Glatfelter's products to remain robust past 2021 and into 2022 given the nondiscretionary nature of most of its products. The majority of Glatfelter's products, including food and beverage filtration products and personal hygiene and wipes, are considered essential. We believe demand will remain robust in the second half of 2021, despite some inventory being worked down by consumers and retailers over the first half of the year. We expect demand for tabletop products to remain weak until the restaurant industry recovers, which we estimate will not occur before the end of 2021 as COVID-19-related restrictions ease globally. We believe the continued recovery in most of the company's markets, as well as incremental volumes from its acquisitions, will result in revenue increasing by 20%-30% in 2021, relative to 2020, and 2022, relative to 2021, with acquisitions being the main driver of growth in these years. We believe these growth trends will support better operational performance and generate stable cash flows over the next 12-24 months." The stable outlook reflects S&P Global Ratings' view that Glatfelter's leverage will peak at 5x at the end of 2021 before decreasing to the mid-3x area by the end of 2022. S&P said, "We could lower our rating if leverage were sustained above 4x beyond 2022, which could occur if 2022 forecast EBITDA declined approximately 15% compared with our expectations as a result of persistent cost inflation that the company were unable to offset with price increases. "We could raise the rating on Glatfelter if the company maintained leverage near 3x. We would expect the company to deleverage toward this point--absent further large acquisitions--by 2023. An upgrade would also be contingent on the company improving and maintaining profitability through acquisitions, confirmed by sustained double-digit margins and return on capital." GROUP 1 AUTOMOTIVE: S&P Affirms 'BB+' ICR on Recent Acquisitions ---------------------------------------------------------------- S&P Global Ratings affirmed its 'BB+' issuer credit rating on auto retailer Group 1 Automotive Inc. S&P said, "At the same time, we affirmed our 'BB+' issue-level rating and '4' recovery rating to Group 1's $750 senior unsecured notes due 2028 (including its proposed $200 million add-on). The '4' recovery rating indicates our expectation for average recovery (30%-50%; rounded estimate: 35%) in the event of a default. The company intends to use the proceeds from these notes to fund its previously announced acquisition of Prime Automotive Group. "The stable outlook reflects our belief that Group 1 has solid earnings prospects over the next 12 months amid the sustained strong consumer demand for vehicles and steady after-sales activity. Group 1 Automotive has continued to outperform our expectations and its strong earnings are likely to offset the negative impact of higher debt related to recent acquisitions. "Despite the increase in its debt following its recent acquisitions, Group 1's earnings and cash flow metrics will remain in line with our current expectations. The major factors behind the company's higher-than-expected earnings were the significant improvements in its new and used vehicle margins and the substantial cost reductions it achieved, including a 20% improvement in the efficiency of its sales and service processes in the past year. We believe Group 1 will likely limit any large increases in its SG&A and manage its headcount below pre-pandemic levels. Though some of the recent reductions in its selling, general, and administrative (SG&A) expenses seem sustainable, we expect its level of overall SG&A relative to its gross profit to decline somewhat in 2022 and flatten out in 2023. We expect the company's gross margins in its new and used vehicle business to decline gradually over the next few quarters as its inventory levels increase and used car prices normalize next year. Based on these expectations, we assume its debt to EBITDA will remain in the 3.0x-4.0x range while its free operating cash flow (FOCF) to debt stays in the 10%-15% range." Group 1's management will follow a disciplined financial policy while enhancing its scale and geographic footprint. Pro forma for the Prime Automotive Group acquisition, the company's consolidated brand mix will tilt further toward luxury brands with a breakdown of approximately 43% luxury, 36% non-luxury import, and 21% non-luxury domestic. The transaction will also expand Group 1's presence in the Mid-Atlantic and New England markets. S&P said, "Acquisitions will remain a top capital allocation priority and we expect management to remain disciplined in executing its growth strategy, which will likely be less aggressive than those of its peers, such as Lithia and Asbury. Year to date in 2021, Group 1 has acquired $420 million of revenue and, with this proposed acquisition of Prime, it will have total acquired revenue of at least $2.25 billion as of the anticipated closing date in late November. We expect the company to continue to undertake shareholder-focused capital allocations, including accretive acquisitions, share repurchases, dividends, and return-driven capital expenditure." The company's resilient business model and adequate liquidity will protect it against potential downside risks if the economic recovery is slower than anticipated in 2022. Pro forma for the add-on notes, its expanded acquisition line, and the new real estate facility, the company has ample liquidity to cover its uses over the next 12 months. Last year, Group 1 refinanced its $550 million notes due 2028 in a leverage-neutral transaction, which reduced its interest cost and extended its maturities. The company typically uses operating cash flow to reduce its non-floorplan debt. Group 1's downside risks are limited because its parts and services (P&S) business is its most-profitable segment given that it contributes about 45% of its gross profit. Under this business model, the company benefits from recurring revenue that acts as a stabilizing force, which is especially helpful during a typical downturn. S&P said, "The stable outlook on Group 1 reflects its solid operating results, which we believe will offset the effects of the additional debt to fund its acquisitions such that its debt to EBITDA remains in the 3.0x-3.5x range over the next 12 months. "We could lower our rating on Group 1 in the next 12 months if its leverage exceeds 4x and its FOCF to debt falls below 10% for an extended period. This could occur if there is another material and extended reduction in the traffic at its dealerships over the next few quarters and management's actions to counteract the weaker demand prove to be insufficient. This could also occur if Group 1 pursues a large debt-financed acquisition prior to a sustained recovery in its credit metrics over the next few quarters. "For a higher rating, we would expect Group 1 to maintain debt to EBITDA of well below 3x and increase its FOCF to debt above 15% on a sustained basis. At the same time, we would expect consistency in its business strategy, management expertise, and a financial policy committed to maintaining an investment-grade rating." GRUPO AEROMEXICO: Seeks Exit Facility, Stock Participation in Plan ------------------------------------------------------------------ Grupo Aeromexico, S.A.B. de C.V. and its debtor affiliates filed a Chapter 11 Joint Plan of Reorganization and Disclosure Statement on Oct. 1, 2021. The Plan contemplates reducing $1 billion of debt from the Debtors' consolidated balance sheet, increasing its cash flow and preserve almost 13,000 jobs in Mexico, the United States and around the world, the Debtor said. The Debtor received three exit financing proposals, and the Board of Directors proceeded with a valuation based on the Joint Proposal that, if consummated, would (a) pay off the portion of the DIP Facility that remains after certain DIP Lenders exercise their Voluntary Equity Conversion, and (b) provide the greatest recovery to the Debtors' creditors. Under the Joint Proposal, the total enterprise value is $5.4 billion with a plan equity value of $2.680 billion, assuming a payoff of Tranche 2 DIP Obligations and funding in connection with the PLM Stock Participation Transaction. The proceeds of the Exit Financing shall be used for (a) refinancing all or a portion of the Tranche 2 Loans; (b) funding necessary costs of emerging from bankruptcy; (c) funding a cash out option to holders of the Debtors' general unsecured claims; (d) the refinancing or retiring of the total claims under the Tranche 1 Loans; (e) the PLM Stock Participation Transaction, as applicable; and (f) such other uses as shall be mutually agreed by the Company and the Required Commitment Parties. Pursuant to the PLM Stock Participation Transaction, PLM shall become a wholly-owned subsidiary of Grupo Aeromexico. The Plan also provides for the Debtors' assumption of the Club Premier Agreements. PLM is a joint venture that owns and operates the Club Premier loyalty program. Secured claims in Class 1 with estimated allowed amounts of $363,000,000 to $656,000,000 are unimpaired and are presumed to accept the Plan. General Unsecured Claims against the Debtors, which are impaired, have the following sub-classes: * General Unsecured Claims in Class 3(b) against Grupo Aeromexico, with estimated allowed amount between $47,500,000 and $48,000,000; * General Unsecured Claims in Class 3(c) against Aerovias having an estimated allowed amount of $2,023,000,000 to $2,272,000,000; * General Unsecured Claims in Class 3(d) against Aeromexico Connect with estimated allowed amount of $455,000,000 to $546,000,000; and * General Unsecured Claims in Class 3(e) against Aeromexico Cargo having an estimated allowed amount of $4,900,000 to $6,000,000. The Debtors have not yet determined the percentage recovery for each class of claims and cautioned that they make no representations as to the accuracy of the recovery estimates. With respect to non-fleet related debt, the Reorganized Debtors expect, as of the effective date, to have obligations under new senior secured first lien notes in aggregate principal amount of up to $537.5 million. In addition, the Reorganized Debtors expect to have approximately $679 million in secured financing obligations as of the effective date. For aircraft and equipment-related debt, the Reorganized Debtors expect to have approximately $348 million in secured financing arrangements and approximately $1.6 billion in operating leases related to aircraft and equipment as of the effective date. Pursuant to the Plan, Grupo Aeromexico expects to issue, if approved by shareholders at the Shareholder's Meeting, single series shares of Reorganized Grupo Aeromexico's common stock. A copy of the Disclosure Statement is available for free at https://bit.ly/3iwEQZx from claims agent, Epiq. 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. GRUPO AEROMEXICO: Shares Rise More Than 3% After Exit Plan Filed ---------------------------------------------------------------- Reuters reports that shares of Mexican carrier Grupo Aeromexico rose by more than 3% in early trading on Monday, October 4, 2021, after the company said it had presented a restructuring plan to debtors as part of its Chapter 11 bankruptcy process in the United States. Shares of Aeromexico, which in June last year filed for court protection while it reaches an agreement with its creditors, were up 3.24% to 5.73 pesos, on track to post their fourth straight day of gains. The airline did not give details of the plan in a statement issued late on Friday, October 1, 2021, evening, but said it expects a hearing for approval to take place around October 21, 2021. 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. GVS TEXAS: Unsec. Creditors Will Get 100% of Claims in Joint Plan ----------------------------------------------------------------- GVS Texas Holdings I, LLC and its Debtor Affiliates filed with the U.S. Bankruptcy Court for the Northern District of Texas a Disclosure Statement for the Joint Chapter 11 Plan of Reorganization dated October 4, 2021. The Plan is the result of extensive good faith negotiations, overseen by the Debtors' Board of Directors, among the Debtors and several of their key economic stakeholders. The Debtors plan to reinstate the Mortgage Loan and Senior Mezz Loan with modifications and to provide the Junior Mezz Lender with payment in full over time. Necessary funding for Confirmation will come from either the Holders of the Debtors' Existing Equity or from a sale of equity interests in the Reorganized Debtors. In formulating the Plan, the Debtors and their advisors considered the current value of the Debtors' assets as determined by their financial advisors, the respective rights of claimholders and the best course to maximize value for all constituents post reorganization. The Debtors and their advisors also considered that the maturity date for the debt when reinstated is through December of 2023. Based on the considerable equity value in the Debtors' assets, it was determined that the best course of action was a reinstatement to the extent possible of the existing capital structure, with certain modifications. The Debtors believe that the alternative to the Plan would involve costly and uncertain litigation. To ensure the restructuring transactions contemplated herein maximize value for all stakeholders, the Plan includes a toggle feature whereby the Debtors' Existing Equity shall have the opportunity to provide a binding Commitment to fund the Plan Funding Obligations (i.e., the Equity Infusion) while the Debtors and their advisors simultaneously market the assets to effectuate the Sale. Specifically, in parallel with their Disclosure Statement approval, the Debtors will seek approval of certain bid procedures that will set forth the process by which the Debtors and their advisors are authorized to conduct the Auction, if any, for the Sale of all or substantially all of the Assets. The Bid Procedures will facilitate an open and competitive Sale process that will maximize the value of the Debtors' estates. To that end, the Debtors shall commence the marketing process (the "Marketing Process") immediately upon the filing of the Plan and Disclosure Statement. Existing Equity shall continue to have the opportunity to raise the Equity Infusion until 10 days prior to the commencement of the Auction (the "Sale Trigger Date"). If Existing Equity produces a binding Commitment prior to the Sale Trigger Date and files with the Court a binding Commitment letter, the Sale process will be terminated and the Debtors will take all necessary steps to consummate the Equity Infusion and implement the Reorganization Transactions, including the reinstatement of debt in accordance with the Plan. Alternatively, if the binding Commitment is not produced prior to the Sale Trigger Date, the Debtors shall conduct the Auction, proceed to Close the Sale, and distribute Sale Proceeds in accordance with Plan, reserving the Default Interest and yield maintenance premium, as appliable, in escrow. Class 3 consists of Senior Lender Claims. This Class will receive a distribution of 100% of their allowed claims. (I) If the Equity Infusion occurs, then on or as soon as reasonably practicable thereafter, the Mortgage Loan shall be reinstated on existing terms; provided that Allowed Default Interest, in an amount to be agreed or determined by Final Order, shall be capitalized into a two-year note, junior to the Mortgage Loan but senior to the Senior Mezz Loan and the Junior Mezz Loan, and paid out according to the terms and conditions set forth in the documents evidencing the Junior Mortgage Loan. If the Sale occurs, then (i) the Mortgage Loan principal amount, along with all undisputed accrued but unpaid pre- and post petition Non-Default Interest and all reasonable allowed but unpaid expenses of the Senior Lender, shall be paid according to the priority scheme set forth in the Bankruptcy Code; and (ii) all Default Interest and/or disputed accrued but unpaid expenses of Senior Lender, if applicable, shall be held in escrow until Allowed subject to the objections of any party in interest. Class 4 consists of Senior Mezz Claims. This Class will receive a distribution of 100% of their allowed claims. (I) If the Equity Infusion occurs, then on the Effective Date, or as soon as reasonably practicable thereafter, then (i) the Senior Mezz Loan shall be reinstated on existing terms; provided that all Allowed Default Interest shall be capitalized into a two-year note, junior to the Senior Mezz Loan but senior to the Junior Mezz Loan, and paid out according to the terms and conditions set out in the documents evidencing the loan. If the Sale occurs, then (i) the Senior Mezz Loan principal amount, along with all undisputed accrued but unpaid pre- and post-petition Non-Default Interest and all reasonable allowed but unpaid expenses of the Senior Lender, shall be paid according to the priority scheme set forth in the Bankruptcy Code; and (ii) all Default Interest and/or disputed accrued but unpaid expenses of Senior Lender, including any yield maintenance premium, if applicable, shall be held in escrow until Allowed subject to all objections of any party in interest. Class 5 consists of Junior Mezz Claims. This Class will receive a distribution of 100% of their allowed claims. (I) If the Equity Infusion occurs, then on the Effective Date, or as soon as reasonably practicable thereafter, GVS Portfolio I B, LLC shall reinstate the Junior Mezz Loan on existing terms; provided that any accrued but unpaid pre- and post-petition Default Interest and Non-Default Interest and reasonable allowed but unpaid expenses of the Junior Mezz Lender (including expenses from retained Professionals), in an amount to be agreed upon or determined by Final Order, shall be added to the outstanding principal balance of the Junior Mezz Loan. If the Sale occurs, then (i) the Junior Mezz Loan principal amount, along with all undisputed accrued but unpaid pre- and post-petition Non-Default Interest and all reasonable allowed but unpaid expenses of the Senior Lender, shall be paid according to the priority scheme set forth in the Bankruptcy Code; and (ii) all accrued but unpaid pre and post-petition Default Interest and/or disputed accrued but unpaid expenses of Senior Lender, including any yield maintenance premium, if applicable, shall be held in escrow until Allowed subject to the objections of any party in interest. Class 6 consists of General Unsecured Claims. This Class will receive a distribution of 100% of their allowed claims. (I) With respect to Allowed Claims, on the Effective Date, or within 30 days thereafter, and (II) with respect to Disputed Claims, on the date that each Disputed Claim is Allowed by Final Order, each Holder of an Allowed General Unsecured Claim shall receive payment in full in Cash in full and final satisfaction of such Claim. Class 8 consists of Interests. Upon the Effective Date, all Interests shall either be Reinstated or canceled, released, and extinguished and shall be of no further force or effect. (I) If the Equity Infusion occurs, all Interests shall be Reinstated and all Holders of Interests shall retain their Interests if they fund the Equity Infusion. (II) If the Sale occurs, all Holders of Interests shall receive in full and final satisfaction of such Interests their Pro Rata share of the Sale Proceeds after payment of all Plan Obligations and reserve for disputed claims. Plan Transactions The Equity Infusion. At any point prior to the Sale Trigger Date, the Existing Equity Interests shall have the opportunity provide a binding Commitment to fund the Plan Funding Obligations. Specifically, the Equity Infusion shall be sufficient to pay in full in Cash on the Effective Date (i) pay all amounts to be paid on the Effective Date including but not limited to all Allowed Administrative, Priority, Class 1 and Class 6 Claims, (ii) fund an interest reserve equal to the interest shortfall, if any, to the Class 3, 4 and 5 Holders for the 2 years after the Effective Date, and (iii) fund such other reserves as may be required (collectively, the "Plan Funding Obligations"). If sufficient capital is raised to fund the Plan Funding Obligations, Existing Equity shall file with the Court a binding Commitment letter, which shall terminate the Sale process and allow the Debtors to pursue the Plan transactions contemplated in furtherance of the Equity Infusion (the "Restructuring Transactions"). If the Equity Infusion is made and the Plan Funding Obligations funded, then Existing Equity shall retain its Interests. The Sale. The Debtors shall continue to market their Interests and Assets pursuant to the Bid Procedures to facilitate an open and comprehensive Sale process. In the event a binding Commitment for the Plan Funding Obligations is not filed with the Court by the Sale Trigger Date, the Debtors shall conduct the Auction and close the Sale. The Sale Proceeds shall be distributed in accordance with the Plan. A full-text copy of the Disclosure Statement dated October 4, 2021, is available at https://bit.ly/3mBzAoN from Omni Agent Solutions, the claims agent. Counsel for the Debtors: Thomas R. Califano, Esq. Andres Barajas, Esq. Sidley Austin LLP 787 Seventh Avenue New York, NY 10019 Tel.: (212) 839-5300 Fax: (212) 839-5599 Email: tom.califano@sidley.com andres.barajas@sidley.com -- and -- Duston McFaul, Esq. Charles M. Persons, Esq. Maegan Quejada, Esq. Jeri Leigh Miller, Esq. Juliana L. Hoffman, Esq. 2021 McKinney Ave, Suite 2000 Dallas, TX 75201 Tel.: (214) 981-3300 Fax: (214) 981-3400 Email: cpersons@sidley.com dmcfaul@sidley.com mquejada@sidley.com jeri.miller@sidley.com jhoffman@sidley.com About GVS Texas GVS Texas Holdings I, LLC and its affiliates are primarily engaged in renting and leasing a wide array of properties functioning principally as self-storage and parking facilities in 64 locations in Texas, Colorado, Illinois, Indiana, Mississippi, Missouri, Nevada, New York, Ohio, and Tennessee. Six of the properties are in the Dallas-Fort Worth Metroplex, with an additional 28 located elsewhere in the State of Texas. The properties are managed by Great Value Storage, LLC, that maintains and manages the facilities. GVS Texas Holdings I and several affiliates sought Chapter 11 protection (Bankr. N. D. Texas Lead Case No. 21-31121) on June 17, 2021. In its petition, GVS Texas Holdings I listed assets and liabilities of $100 million to $500 million each. The parent entity, GVS Portfolio I C, LLC, filed a voluntary Chapter 11 petition June 23, 2021. The petitions were signed by Robert D. Albergotti, authorized party. Great Value Storage, LLC, is a non-debtor operating affiliate. Judge Michelle V. Larson oversees the case. The Debtors tapped Thomas R. Califano, Esq., at Sidley Austin LLP, as general bankruptcy counsel. HIGHLAND CAPITAL: Asks Court to End Shareholder Undervaluing Suit ----------------------------------------------------------------- Katie Buehler of Law360 reports that Highland Capital Management LP has asked a Texas federal court to lift a stay and dismiss a shareholder lawsuit accusing the bankrupt investment firm of undervaluing a steel manufacturer by $10 million, saying the court lacks jurisdiction to hear the case. Northern District of Texas Judge David C. Godbey issued the stay in September 2021 at shareholder PCMG Trading Partners XXIII LP's request, but Highland Capital said in a court filing Tuesday that Judge Godbey should reconsider the ruling, deny the stay and dismiss the case. PCMG requested the stay in August 2021, pending the results of a Fifth Circuit review of Highland. About Highland Capital Management Highland Capital Management LP was founded by James Dondero and Mark Okada in Dallas in 1993. Highland Capital is the world's largest non-bank buyer of leveraged loans in 2007. It also manages collateralized loan obligations. In March 2007, it raised $1 billion to buy distressed loans. Collateralized loan obligations are created by bundling together loans and repackaging them into new securities. Highland Capital Management, L.P., sought Chapter 11 protection (Bank. D. Del. Case No. 19-12239) on Oct. 16, 2019. Highland was estimated to have $100 million to $500 million in assets and liabilities as of the bankruptcy filing. On Dec. 4, 2019, the case was transferred to the U.S. Bankruptcy Court for the Northern District of Texas and was assigned a new case number (Bank. N.D. Tex. Case No. 19-34054). Judge Stacey G. C. Jernigan is the case judge. The Debtor's counsel is James E, O'Neill, Esq., at Pachulski Stang Ziehl & Jones LLP. Foley & Lardner LLP, is special Texas counsel. Kurtzman Carson Consultants LLC is the claims and noticing agent. Development Specialists Inc. CEO Bradley Sharp is a financial adviser and restructuring officer. The Office of the U.S. Trustee appointed a committee of unsecured creditors on Oct. 29, 2019. The committee tapped Sidley Austin LLP as bankruptcy counsel; Young Conaway Stargatt & Taylor LLP as co-counsel with Sidley Austin; and FTI Consulting, Inc., as financial advisor. HOME DEALS: Case Summary & 5 Unsecured Creditors ------------------------------------------------ Debtor: Home Deals of Maine, LLC 10 Country Way Waterville, ME 04901 Business Description: The Debtor owns 14 rental properties located in Maine having a total current value of $2.7 million. Chapter 11 Petition Date: October 6, 2021 Court: United States Bankruptcy Court District of Maine Case No.: 21-10267 Judge: Hon. Peter G. Cary Debtor's Counsel: James F. Molleur, Esq. MOLLEUR LAW OFFICE 190 Main Street, 3rd Floor Saco, ME 04072 Tel: (207) 283-3777 Fax: (207) 283-4558 Email: jim@molleurlaw.com/tanya@molleurlaw.com Total Assets: $3,147,975 Total Liabilities: $1,650,258 The petition was signed by Jo A. Roderick as sole 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/TMKRJMA/Home_Deals_of_Maine_LLC__mebke-21-10267__0001.0.pdf?mcid=tGE4TAMA HUMANIGEN INC: 4 Execs Elect to Receive Stock Compensation in Q4 ---------------------------------------------------------------- The compensation committee of the board of directors of Humanigen, Inc. offered the company's executive officers and employees the opportunity to receive all or a portion of their base salaries for the fourth quarter of 2021 in the form of stock options, in an effort to conserve cash and to provide additional incentives for achievement of the company's near term objectives. The following executive officers elected to receive such stock options in lieu of such cash compensation for the fourth quarter of 2021: 4th Quarter Base Salary Paid in Stock Name and Principal Number of Shares Options (Percentage Position Underlying Grant of Quarterly Amount) ------------------ ---------------- ------------------- Dr. Cameron Durrant Chairman and Chief Executive Officer 17,660 $79,959 (50%) Dr. Dale Chappell Chief Scientific Officer 22,626 $102,433 (100%) Dr. Adrian Kilcoyne Chief Medical Officer 5,863 $26,646 (25%) Edward Jordon Chief Commercial Officer 4,966 $22,485 (25%) All options granted have an exercise price equal to $5.93, the closing price of Humanigen's common stock on the Sept. 30, 2021 grant date, and vest in three ratable installments on each of Oct. 31, 2021, Nov. 30, 2021 and Dec. 31, 2021. About Humanigen Based in Brisbane, California, Humanigen, Inc. (OTCQB: HGEN), formerly known as KaloBios Pharmaceuticals, Inc. -- http://www.humanigen.com-- is a clinical stage biopharmaceutical company, developing its clinical stage immuno-oncology and immunology portfolio of monoclonal antibodies. The Company is focusing its efforts on the development of its lead product candidate, lenzilumab, its proprietary Humaneered anti-human GM-CSF immunotherapy, through a clinical research agreement with Kite Pharmaceuticals, Inc., a Gilead company to study the effect of lenzilumab on the safety of Yescarta, axicabtagene ciloleucel including cytokine release syndrome, which is sometimes also referred to as cytokine storm, and neurotoxicity, with a secondary endpoint of increased efficacy in a multicenter Phase Ib/II clinical trial in adults with relapsed or refractory large B-cell lymphoma. Humanigen reported a net loss of $89.53 million for the 12 months ended Dec. 31, 2020, compared to a net loss of $10.29 million for the 12 months ended Dec. 31, 2019. As of June 30, 2021, the Company had $121.73 million in total assets, $78.04 million in total liabilities, and $43.70 million in total stockholders' equity. INFORMATICA INC: S&P Assigned Prelim 'BB-' ICR, Outlook Stable -------------------------------------------------------------- S&P Global Ratings placed the 'B-' ratings on Ithacalux S.a.rl. on CreditWatch with positive implications. At the same time, S&P assigned Informatica Inc., the expected new parent of the group, our preliminary 'BB-' issuer credit rating. S&P said, "We are also assigning a 'BB-' preliminary issue-level rating based on a '3' recovery rating to Informatica LLC's new first-lien debt. We expect the company to repay its existing debt if it completes the transaction. "The stable outlook considers our view that upon a successful completion of the IPO, Informatica's credit quality will benefit from stronger credit metrics and potentially reduced influence by its current financial sponsor owners. The outlook also reflects expectations for S&P Global Ratings'-adjusted leverage will remain in the high-4x area or better over the next 12 months." Informatica Inc., a newly created entity for holding all assets of and obligations of Ithacalux S.a.r.l and its subsidiaries, announced that it has filed for initial public offering (IPO) with the U.S. Securities and Exchange Commission and, if successful, intends to use proceeds, along with new committed debt financing, to repay and refinance all its existing debt and related fees and expenses. Supporting the rating actions is our belief that prospects are favorable for Informatica to complete its IPO plans over the coming days. Informatica Inc. will become the new parent company and will be where it reports its financial statements, replacing Ithacalux S.a.r.l. The 'BB-' issuer credit rating reflects the potential for meaningful improvement to Informatica's high debt leverage levels as S&P believes its adjusted leverage should improve to the high-4x area with a successful IPO. The rating also reflects its view that a successful IPO would not alter the key factors supporting its current assessment of Informatica's competitive position and overall business risk over the next 12 months. These preliminary ratings are subject to successful completion of the IPO and recapitalization of the debt structure. S&P said, "We will review the final transaction documentation. Accordingly, if either the equity or debt financing does not close within what we consider a reasonable time, we reserve the right to withdraw the ratings. At that time, we would also expect to resolve the CreditWatch placement on Ithacalux S.a.rl at that time and depending on its role in the future group." Faster deleveraging from the IPO proceeds would significantly bolster Informatica's credit quality. Informatica had reported debt of $2.78 billion and S&P Global Ratings'-adjusted debt of $2.84 billion. Its S&P Global Ratings'-adjusted leverage for the 12-months-ended June 30, 2021, was roughly 7.2x. S&P said, "Assuming net debt repayment of at least $900 million under an IPO transaction, we estimate S&P Global Ratings' adjusted leverage will fall to roughly 4.8x. Moreover, this level of debt reduction should reduce the company's overall interest burden by at least $50 million lower than the annual interest expense in 2020 of roughly $150 million, which will enhance both interest coverage and cash flow generation prospects to fund working capital and growth initiatives. Over the next 12 months, we believe Informatica should continue to post strong operating performance and we expect leverage to further improve to around the mid 4x area in fiscal 2022." S&P expects Informatica will remain financial-sponsor controlled, but it should have a more clearly defined and less aggressive financial policies as a public company. After the IPO, Informatica will have three classes of common stock, including Class A common stock (the shares offered in the transaction), Class B-1 common stock, which have specific voting rights, and Class B-2 common stock which have no rights, except for the right to vote the election or removal of directors. S&P expects Permira and Canada Pension Plan Investment Board (CPP Investments) affiliates to exert significant control over Informatica's financial decision making since they will remain the primary holders of the voting shares and control five seats of the 10 board of directors. S&P said, "Potential decision making that prioritizes these interests remains a risk, but since the company communicated a net long-term leverage target of 2.0x or better during this IPO process, we think there is less incentive to pursue potentially leveraging acquisitions or shareholder returns in the future. We also expect Permira and CPP Investments to gradually reduce their stake in Informatica over the next several years." S&P believes a successful IPO will not have an impact on its view of Informatica's business. S&P's view of the business continues to balance its modest scale, the fragmented and competitive operating environment, and execution risk with its good market positions, a high proportion of recurring revenues, and large addressable markets that offer attractive growth prospects. Informatica has been participating in the large and fragmented enterprise data market for more than 25 years but competition from substantially larger vendors--such as IBM, SAP, and Oracle--and niche providers is intense and rapidly evolving. Informatica's operations are geographically balanced, and it has a diverse customer base of more than 5,000 customers with broad industry exposure and minimal concentration. Informatica also generates about 90% of its revenue from these customers under multi-year support and increasing subscription contracts. In S&P's view, this adds a degree of stickiness to the relationship and provides significant stability and visibility into future performance. In addition, secular trends such as digital transformation, the internet of things (IoT), and hybrid and multi-cloud architectures been key factors driving demand for data-management offerings. In this environment, S&P believes the automation and analytics capabilities (CLAIRE) Informatica has added to its data-management offerings (along with its long-standing strategic partnerships with cloud platform hyper scalers such as Microsoft Azure, Amazon Web Services, and Google Cloud and other leading technology companies like Salesforce, Snowflake, and Databricks) leave it well positioned to capitalize on these trends. A restructuring in advance of the IPO would make Informatica the new ultimate parent. Informatica initiated several reorganization transactions leading up to its S-1 filing that collectively reorganizes its corporate structure. Current owner and financial sponsor, Permira Funds, and CPP Investments created Informatica Inc. (a Delaware incorporated holding company) in June 2021. Per its S-1 filing, Informatica is expected to hold all the property and assets of Ithacalux indirectly and assumes all the debts and obligations of Ithacalux S.a.r.l. Informatica will sell shares in the IPO, make regulatory filings, and report financial statements. Ithacalux S.a.rl's (the historical parent company in private company structure) consolidated financial statements are presented in the company's prospectus but is expected to be dissolved in conjunction with or after a completed IPO. S&P said, "The stable outlook considers our view that upon a successful completion of an IPO, Informatica's credit quality would benefit from stronger credit metrics and with potentially less influence from its current financial sponsor owners. Over the next 12 months, we believe Informatica should continue improving its operating performance and adhere to moderate financial policies. Under our base case, we expect this combination to support its ability to maintain S&P Global Ratings'-adjusted leverage in the high-4x area or better over the next 12 months." S&P could consider lowering its ratings on Informatica if: -- If it experiences weaker-than-expected operating performance that increase the company's S&P Global Ratings-adjusted debt to EBITDA above 5x area. -- It pursues debt funded acquisitions or shareholder returns that increase S&P Global Ratings-adjusted debt to EBITDA above the same level. S&P could consider raising its ratings on Informatica if: -- It reduces its leverage below 3x over the next 12 months, either through earnings growth, increased cash flow generation, and/or debt repayment, and we're confident its financial policies will enable it to sustain its leverage at this level or below. -- S&P believes Informatica has strengthened its competitive position relative to peers. This could occur if Informatica can sustain its above-average growth trajectory, increase EBITDA margins, and generate higher FOCF. JAB ENERGY: Cash Collateral Access, $720,000 DIP Loan OK'd ---------------------------------------------------------- The U.S. Bankruptcy Court for the District of Delaware has authorized JAB Energy Solutions II, LLC to, among other things, use cash collateral on an interim basis and obtain postpetition financing. The Debtor is permitted to obtain postpetition financing up to an aggregate principal amount of $720,000 of new money funding from GarMark SBIC Fund II, L.P. The Debtor needs to obtain immediate access to the postpetition financing under the DIP Facility and use Cash Collateral to, among other things, protect and preserve the assets of the Debtor's estate and fund the administration of the Case. As of the Petition Date, the Debtor, together with Allison Marine Contractors II, LLC, a Delaware limited liability company (AMC II), Allison Land Development II, LLC, a Delaware limited liability company (ALD II), Allison Offshore Services II, LLC, a Delaware limited liability company (AOS II), Allison Industrial Services, LLC (formerly known as Allison Marine-Morgan City II, LLC), a Delaware limited liability company (AIS), Tarpon Systems International II, LLC, a Delaware limited liability company (TSI I), and Holdings (as Guarantor), were each indebted and jointly and severally liable to GarMark SBIC Fund II, L.P. (in its capacity as pre-petition lender under the Senior Secured Note) under a Senior Secured Promissory Note, Security Agreement and Guaranty in the aggregate principal amount of not less than $3,000,000 under the Senior Secured Note. As of the Petition Date, the Debtor, along with the Borrowers, were each indebted and jointly and severally liable to Castlegate Credit Opportunities Fund, LLC in its capacity as pre-petition junior lender under the Amended and Restated Credit Agreement, dated as of August 8, 2019, in the aggregate principal amount of not less than $13,934,866.60 under the Junior Credit Agreement. The DIP Lender is willing to provide the DIP Facility, and the Prepetition Lenders are willing to consent to the use of Cash Collateral, subject to the terms and conditions set forth in the DIP Documentation and the provisions of the Interim Order. The Court says all of the DIP Obligations will constitute allowed senior superpriority administrative expense claims against the Debtor -- without the need to file any proof of claim or request for payment of administrative expense -- with priority over any and all other administrative expenses, adequate protection claims, diminution claims and all other claims against the Debtor. As adequate protection for the Debtor's use of cash collateral, the Prepetition Lenders are granted a replacement security interest in and lien upon all of the DIP Collateral to the extent of any Diminution in Value, subject and subordinate only to the DIP Liens, the Carve Out, and the Permitted Liens. As further adequate protection, the Prepetition Lenders are granted superpriority claims with priority over any and all other administrative expenses now existing or hereafter arising. The "Carve Out" means, in all instances subject to the category and aggregate limitations in the Budget, the sum of (a) all unpaid and accrued fees required to be paid to the Clerk of the Bankruptcy Court and to the Office of the United States Trustee under 28 U.S.C. section 1930(a) and 31 U.S.C. section 3717; (b) all unpaid and accrued professional fees, as have been or may be approved by the Bankruptcy Court, incurred at any time before the earlier of the occurrence of an event of default as delineated in the DIP Term Sheet or the DIP Maturity Date, up to the amounts set forth for each professional in the Budget. A final hearing on the matter is scheduled for October 25 at 3 p.m. A copy of the order is available at https://bit.ly/3iyBh4R from PacerMonitor.com. About JAB Energy Solutions II JAB Energy Solutions II, LLC -- http://jabenergysolutions.com/-- is an EPIC (Engineering, Procurement, Installation & Commissioning) specialist providing comprehensive project management services for decommissioning, abandonment, construction and installation of offshore and onshore oil and gas facilities, platforms and pipelines. Based in Houston, with offices in Lake Charles, La., JAB Energy Solutions serves major and independent energy companies worldwide. JAB Energy Solutions filed a petition for Chapter 11 protection (Bankr. D. Del. Case No. 21-11226) on Sept. 7, 2021, listing as much as $50 million in both assets and liabilities. Judge Craig T. Goldblatt oversees the case. Pachulski Stang Ziehl & Jones, LLP serves as the Debtor's legal counsel. JONES SODA: Hires Armanino LLP as New Auditor --------------------------------------------- Through and with the approval of its Audit Committee, Jones Soda Co. appointed Armanino LLP as its independent registered public accounting firm. Jones Soda stated that during its two most recently completed fiscal years and through Sept. 30, 2021 (the date of engagement of Armanino), neither the company nor anyone on behalf of the company consulted with Armanino regarding (a) 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 as to which the company received a written report or oral advice that was an important factor in reaching a decision on any accounting, auditing or financial reporting issue; or (b) any matter that was the subject of a disagreement or a reportable event as defined in Items 304(a)(1)(iv) and (v), respectively, of Regulation S-K. As previously disclosed in a Current Report on Form 8-K filed Sept. 15, 2021, BDO USA, LLP, the former independent registered public accounting firm of Jones Soda, resigned as the company's independent registered public accounting firm effective as of Sept. 9, 2021. 2011 Plan Amendment On Sept. 30, 2021, Jones Soda's Board of Directors, upon the recommendation of the Compensation Committee, approved an amendment to the company's 2011 Equity Incentive Plan to decrease the number of shares of common stock available for issuance pursuant to future awards under the 2011 Plan from 4,785,597 shares of common stock to 2,500,000 shares of common stock. As of that date, there were outstanding awards exercisable into an aggregate of 3,194,573 shares of common stock previous granted under the 2011 Plan; after such amendment, there is an aggregate of 5,694,573 shares of common stock reserved for issuance under the 2011 Plan. In addition, the Board approved an amendment to the outstanding awards previously granted under the 2011 Plan to provide that upon the closing of the proposed statutory plan of arrangement outlined in that certain non-binding term sheet entered into by Jones Soda with Pinestar Gold Inc. and SOL Global Investments Corp. dated as of July 14, 2021 (as further disclosed in that certain Current Report on Form 8-K filed July 20, 2021), the vesting of such awards shall be accelerated, and such awards shall thereafter become immediately vested in full and the restrictions thereon shall lapse. If the Plan of Arrangement is not consummated, there shall be no accelerated vesting and the awards shall continue to vest in accordance with their original terms. About Jones Soda Headquartered in Seattle, WA, Jones Soda Co. -- www.jonessoda.com -- develops, produces, markets and distributes premium beverages primarily in the United States and Canada through its network of independent distributors and directly to its national and regional retail accounts. The Company also sells products in select international markets. The Company's products are sold in grocery stores, convenience and gas stores, on fountain in restaurants, "up and down the street" in independent accounts such as delicatessens, sandwich shops and burger restaurants, as well as through its national accounts with several large retailers. Jones Soda reported a net loss of $3 million for the year ended Dec. 31, 2020, compared to a net loss of $2.78 million for the year ended Dec. 31, 2019. As of March 31, 2021, the Company had $8.21 million in total assets, $3.72 million in total liabilities, and $4.49 million in total shareholders' equity. Seattle, Washington-based BDO USA, LLP, the Company's auditor since 2019, issued a "going concern" qualification in its report dated March 24, 2021, citing that the Company has suffered recurring losses from operations and has negative cash flows from operating activities that raise substantial doubt about its ability to continue as a going concern. KISMET ROCK HILL: U.S. Trustee Unable to Appoint Committee ---------------------------------------------------------- The U.S. Trustee for Region 4 on Oct. 6 disclosed in a court filing that no official committee of unsecured creditors has been appointed in the Chapter 11 case of Kismet Rock Hill, LLC. About Kismet Rock Hill Kismet Rock Hill, LLC operates Holiday Inn, a hotel located at 503 Galleria Boulevard, in Rock Hill, S.C. Kismet Rock Hill filed its voluntary petition for Chapter 11 protection (Bankr. D.S.C. Case No. 21-01926) on July 23, 2021, listing as much as $50 million in assets and as much as $10 million in liabilities. Judge Helen E. Burris presides over the case. Christine E. Brimm, Esq., at Barton Brimm, PA and Newpoint Advisors Corporation serve as the Debtor's legal counsel and accountant, respectively. LAMBRIX CRANE: Seeks Cash Collateral Access on Final Basis ---------------------------------------------------------- Lambrix Crane Service, Inc. asks the U.S. Bankruptcy Court for the Northern District of Oklahoma for authority to use cash collateral on a final basis. On October 1, 2021, the Bankruptcy Court gave Lambrix interim approval to access cash collateral to pay operating expenses. On October 4, the Debtor filed its request for final approval. On August 21, 2018, Commercial Credit Group lent money to the Debtor pursuant to the terms and conditions of the Negotiable Promissory Note and Security Agreement. To secure the Debtor's obligations under the Note and Security Agreement, the Debtor granted to CCG: (a) first priority purchase money security interests in and liens on (i) a 275-ton all-terrain crane with attachments (2009 Grove GMK5275), (ii) a 200-ton conventional lattice boom truck crane with 220' main and 60' jib (1996 Link-Belt HC248H) and (iii) a three-axle heavy haul trailer (2013 Eager Beaver 50GSL-L) -- PMSI Collateral -- and (b) security interests in and liens on the "All Assets Collateral." On March 22, 2019, the Debtor and Commercial Funding, Inc. (CFI) entered into a Purchase and Sale Agreement under which CFI would purchase invoices generated by the Debtor. To secure the Debtor's obligations under the PSA, the Debtor granted CFI security interests in all of the Debtor's owned or after acquired assets. On May 22, 2019, CFI filed a UCC-1 financing statement with Oklahoma County, Oklahoma County Clerk, document number 2019052202051188. On August 25, 2021, CCG subordinated its interest in CCG's Non-PMSI Collateral. In February 2021, the Debtor and Last Chance Funding, Inc. (LCF) entered into a "Merchant Agreement" whereby LCF providing funds for the purchase and sale of the Debtor's future accounts receivable. The Merchant Agreement provided that Debtor was "selling a portion of a future receipts to [LCF] at a discount, not borrowing money from [Debtor]. In January 2021, LCF filed a UCC-1 financing statement with Oklahoma County, Oklahoma County Clerk, document number 2021010802001935. On May 11, 2021, pursuant to a final arbitration award granted by Mediation and Civil Arbitration, Inc., the Debtor and LCF entered into a Stipulation of Settlement whereby LCF and the Debtor acknowledged that LCF owned a perfected security interest in the Debtor's accounts receivable. The Debtor submits for approval to the Court, after proper notice to parties-in-interest, a final cash collateral order that contains these terms: a. CFI is owed $470,379.56 as of the September 20, 2021, as set forth on CFI/CCG Exhibit 1077 presented to the Court at the preliminary hearing on the Motion, and owns the invoices identified on CFI/CCG Exhibit 104, more specifically identified as invoice no. 334 issued to account debtor E. ON Climate Renewables, and invoices nos. 314, 326, 330, 331, 333, 335, 338, 339, 347 and 348 issued to Siemens. b. Since the Petition Date, Siemens has paid to CFI pre-petition invoice 331. c. CFI is reassigning invoice no. 330 to Debtor, and will assert no further right, title, or interest in or to such invoice. d. Pursuant to the terms of the Interim Order, the Debtor will assign all right, title, and interest in and to an $85,000 invoice being billed prior to the entry of the Final Cash Collateral Order to Siemens for work performed in the month of October 2021, in the cumulative amount of $85,000. e. As further adequate protection to CFI, it has been granted a first priority replacement lien on all future accounts receivables -- to the extent the October invoice is not paid or underpaid, up to $85,000 total -- which will be deemed fully perfected without any further action by CFI. f. CFI will be entitled to collect the Prepetition Invoices directly from the account debtors, E. ON Climate & Renewables and Siemens, except for invoice no. 330, which is being reassigned to the Debtor. g. Excepting the $70,000 invoice as mentioned in the Interim Order and CFI's first priority replacement lien on post-petition accounts receivables, except as otherwise provided in the Final Cash Collateral Order, the Debtor owns and is entitled to collect all post-petition invoices and accounts, free of any claims of any creditor, including CFI, CCG and LCF. h. Except as otherwise provided in the Interim Cash Collateral Order or Final Cash Collateral Order, CFI and CCG will assert no security interest in the Debtor's post-petition receivables, under 11 U.S.C. section 552(b). i. The Debtor represents and warrants that all the Prepetition Invoices remain outstanding and fully due and payable, that the Debtor has provided the account debtors all goods and services referenced on the Prepetition Invoices, and that the Debtor has not collected, reduced, credited, or in any way compromised the amounts due thereunder. j. In the event, and to the extent, the representations are incorrect, CFI will be entitled to a first-priority replacement lien on the debtor’s post-petition receivables, which shall be deemed fully perfected without any further action by CFI. k. The Debtor will not object to the secured claims of CFI or CCG in the case, provided such amounts claimed are consistent with the Exhibits as admitted in the hearing on the Debtor's Motion. The Debtor understands such claims may include post-petition accruals not fully reflected in the amounts as included in the Exhibits. l. The Parties agree that the agreements memorialized by the Interim Cash Collateral Order and the Final Cash Collateral Order concern only cash collateral, not any other lien or security interests, and therefore have no impact on CCG's right to seek stay relief or adequate protection with respect to its security interests in the Debtor's equipment. m. LCF does not have a security interest in thee Debtor's Prepetition Invoices. A copy of the motion is available at https://bit.ly/3DdjRmo from PacerMonitor.com. A copy of the interim order is available at https://bit.ly/3Da1dvH from PacerMonitor.com. Lambrix Crane Broken Arrow, Okla.-based Lambrix Crane Service, Inc. filed a Chapter 11 bankruptcy petition (Bankr. N.D. Okla. Case No. 21-11056) on Sept. 16, 2021, listing $8,508,909 in assets and $4,787,668 in liabilities. Judge Terrence L. Michael oversees the case. The Debtor is represented by Ron D. Brown, Esq., at Brown Law Firm, PC. LASERSHIP INC: S&P Assigns 'B-' ICR on Acquisition of OnTrac ------------------------------------------------------------ S&P Global Ratings assigned its 'B-' issuer credit rating to Vienna, Va.-based LaserShip Inc., the same as its existing rating on ASP LS Acquisition Corp., the former parent company that has now merged into LaserShip. S&P said, "There is no change to our 'B-' issue-level rating and '3' recovery rating (rounded estimate: 60%) on the company's first-lien term loan, and our 'CCC' issue-level rating and '6' recovery rating (rounded estimate 0%) on the second-lien term loan. "The stable outlook reflects our view that the transaction expands LaserShip's geographic presence. We also believe leverage will decline in 2022 as the company benefits from full earnings contribution from the acquisition and a reduction in transaction-related expenses." Vienna, Va.-based LaserShip Inc. has announced its intent to acquire OnTrac Logistics Inc., a regional provider of last-mile parcel delivery services. The acquisition will be funded with incremental borrowings under the company's existing first- and second-lien term loans, as well as new and rollover equity. The OnTrac acquisition should expand LaserShip's operating scale and geographic presence. LaserShip operates in 22 states, primarily on the East Coast and Midwest U.S. Following the transaction, the company's network will include the eight western states in which OnTrac currently operates. Given the lack of overlapping regions, S&P views the networks as complementary. OnTrac also uses a similar asset-light operating model that utilizes regional service providers to deliver packages. S&P sid, "We expect this expansion will allow LaserShip to expand its transcontinental services and enter new geographies. Nonetheless, the company remains smaller than its larger package express and logistics peers, which operate large global route networks. We also believe there is some execution risk given the size of the transaction, which will approximately double the company's revenue base. Therefore, we have not changed our view of LaserShip's business risk at this time." EBITDA margins and credit metrics should improve in 2022.On a stand-alone basis, OnTrac operates with somewhat lower EBITDA margins than LaserShip, due in part to a somewhat higher number of facilities and higher corporate expenses. S&P said, "We anticipate LaserShip will be able to realize some cost savings as it integrates OnTrac's operations, but assume in our base case that the legacy OnTrac business continues to operate with somewhat lower margins than LaserShip. Overall, however, we believe LaserShip's operating results will improve in 2022, as one-time expenses related to the acquisition of the company by its current financial sponsor in April and expenses related to the proposed acquisition of OnTrac do not recur. In addition, the timing of the transaction close will limit the earnings contribution from OnTrac this year. As a result, we forecast debt to EBITDA (as calculated by S&P Global Ratings) will improve to the high-6x area in 2022. "LaserShip should continue to benefit from strong demand. In the first half of 2021, LaserShip's e-commerce volumes almost doubled and revenue increased over 80%. We expect this growth will continue in 2022 as the company adds new customers, grows volumes with existing customers, and enters new markets. Although consumer spending habits will probably shift as restrictions related to the pandemic are lifted and economic stimulus measures wane, LaserShip's e-commerce sales will likely continue to grow. "The stable outlook reflects our expectation that total debt will increase to finance LaserShip's acquisition of OnTrac, but the transaction will expand its geographic presence into the Western U.S. We expect credit metrics will improve in 2022 as the company benefits from full-year revenue contribution from OnTrac, a reduction in transaction-related fees, and organic growth. Therefore, we forecast debt to EBITDA in the high-6x area 2022, down from at least 10x in 2021, while funds from operations (FFO) to debt remains in the mid-single-digit percent area over the same period. "We could lower our ratings in the next 12 months if liquidity becomes constrained. We could also lower our ratings if we come to view the company's capital structure as unsustainable over the long term, even if we do not expect a near-term credit or payment crisis." This could occur if: -- The company encounters problems in integrating its acquisition of OnTrac; or -- Volumes decline significantly due to customer attrition or increased competition. S&P could raise its rating over the next 12 months if the company's debt to EBITDA declines below 6.5x and FFO to debt increases above 9% on a sustained basis. This could occur if: -- The company realizes greater-than-expected revenue and earnings growth from its acquisition; or -- It successfully integrates OnTrac and continues to enter new markets and regions. S&P would also need to expect its financial sponsor would remain supportive of credit metrics at these levels. LEE HI ASSOCIATES: Sale of Melrose, Roanoke Property Approved ------------------------------------------------------------- Judge Paul M. Black of the U.S. Bankruptcy Court for the Western District of Virginia authorized Lee Hi Associates, LLC's sale of the real estate located in the City of Roanoke, Virginia, commonly known as 3350 Melrose Avenue, N.W., Roanoke, VA 24017 (Parcel ID: 2660425). The sale is free and clear of all liens, encumbrances, and other interests, other than validly recorded easements. All liens in the Property will attach to the proceeds of the Property to the same extent, with the same validity and priority as the liens had in the Property. The Debtor is authorized to sign any documents on behalf of the Debtor necessary to provide the purchaser with clean and clear title to the Property. The Debtor is authorized to pay the Realtor's commission in the amount of $9,570 from the proceeds of the Property in accordance with the terms of the Order, the Motion, and the contract. In order to allow the Debtor to sell the Property as soon as possible, the Order will be effective and enforceable immediately upon entry. Upon request and payment of required fee, the Clerk of Court will send a certified copy of the Order as entered to the counsel for the Debtor at the address below who will then distribute the Order to all parties-in-interest. About Lee Hi Associates Lee Hi Associates, LLC sought protection under Chapter 11 of the Bankruptcy Code (Bankr. W.D. Va. Case No. 20-70467) on April 30, 2020. At the time of the filing, Debtor disclosed assets of between $1,000,001 and $10 million and liabilities of the same range. Magee Goldstein Lasky & Sayers, PC is Debtor's legal counsel. LEE HI ASSOCIATES: Sale of Peters Creek, Roanoke Property Okayed ---------------------------------------------------------------- Judge Paul M. Black of the U.S. Bankruptcy Court for the Western District of Virginia authorized Lee Hi Associates, LLC's sale of the real estate located in the City of Roanoke, Virginia, commonly known as 3783-3797 Peters Creek Road Ext., SW, Roanoke, VA (Tax ID: 5200113). The sale is free and clear of all liens, encumbrances, and other interests, other than validly recorded easements. All liens in the Property will attach to the proceeds of the Property to the same extent, with the same validity and priority as the liens had in the Property. The Debtor is authorized to sign any documents on behalf of the Debtor necessary to provide the purchaser with clean and clear title to the Property. The Debtor is authorized to pay the Realtor's commission in the amount of $32,550 from the proceeds of the Property in accordance with the terms of the Order, the Motion, and the contract. In order to allow the Debtor to sell the Property as soon as possible, the Order will be effective and enforceable immediately upon entry. Upon request and payment of required fee, the Clerk of Court will send a certified copy of the Order as entered to the counsel for the Debtor at the address below who will then distribute the Order to all parties-in-interest. About Lee Hi Associates Lee Hi Associates, LLC sought protection under Chapter 11 of the Bankruptcy Code (Bankr. W.D. Va. Case No. 20-70467) on April 30, 2020. At the time of the filing, Debtor disclosed assets of between $1,000,001 and $10 million and liabilities of the same range. Magee Goldstein Lasky & Sayers, PC is Debtor's legal counsel. LMMS INC: Wins Cash Collateral Access Thru Oct 20 ------------------------------------------------- The U.S. Bankruptcy Court for the Western District of Virginia, Roanoke Division, has authorized LMMS, Inc. to use cash collateral on an interim basis in accordance with the budget, through October 20, 2021. The Debtor requires the use of Cash Collateral in the ordinary course of its business to pay among other things, suppliers, wages and otherwise those expenses associated with the continued operations of its business. The Debtor is indebted these lenders who claim security interests in the Debtor's personal property interests, including accounts, inventory, goods, equipment: National Bank, the Small Business Administration, and Credibly of Arizona, LLC. The IRS issued a Release of Levy as to the Debtor's accounts on September 30, 2021. As adequate protection for the Debtor's use of the Cash Collateral, National Bank, SBA and Credibly of Arizona are granted replacement liens on the Debtor's collateral of the same type and nature that exists as of the Petition Date with the same validity (or invalidity) and priority as exists as of the Petition Date, including income and proceeds thereof, to the extent of any decrease in value of the Secured Lenders' interests in their collateral. A final hearing on the matter is scheduled for October 20 at 2 p.m. A copy of the order and the Debtor's daily cash flow projections from the month of October is available at https://bit.ly/3a5LIID from PacerMonitor.com. The Debtor projects $86,469 in total expenses for the period. About LMMS, Inc. LMMS, Inc. sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. W.D. Va. Case No. 21-70664) on September 29, 2021. In the petition signed by Lee W. Mills, president, the Debtor disclosed up to $500,000 in assets and up to $1 million in liabilities. Judge Paul M. Black oversees the case. David Cox, Esq., at Cox Law Group, PLLC represents the Debtor as legal counsel. LOGMEIN INC: S&P Upgrades ICR to 'B', Outlook Stable ---------------------------------------------------- S&P Global Ratings raised its issue-level rating on LogMeIn Inc.'s first-lien debt to 'B' from 'B-'. The '3' recovery rating is unchanged. LogMeIn has achieved a large portion of its cost optimization plan, leading to meaningful EBITDA growth and leverage reduction since it was taken private by Francisco Partners last August. The upgrade reflects substantial leverage reduction to about mid-6x as of June 30, 2021, down from about 9x as of May 31, 2020, supported by cost takeout and a drop in one-time costs. S&P expects leverage to decline to the low-6x area by the end of 2021 and to the high-5x area by the end of 2022, absent any large mergers, acquisitions, or shareholder returns. Since the takeover by Francisco Partners, the company has focused on realigning its compensation plans, relocation of certain operations to lower cost sites, and productivity, delivering a majority of its committed savings of $135 million. As a result, sales and marketing expenses declined 22% through the first half of 2021 compared to the same period last year. S&P said, "Our stable outlook reflects our expectation that LogMeIn's low-single-digit percent revenue growth and improved EBITDA margins through cost-reduction efforts will enable it to reduce leverage to the low-6x area by the end of 2021 and to the high-5x area by the end of 2022. We also expect free cash flow to debt in the mid-single–digit percent area over the next 12 months." Over the next 12 months, S&P could lower the rating if: -- Leverage remains above 7.5x; or -- FOCF to debt remains in the low-single-digit percent area. This would likely result from steeper-than-expected declines in the heritage collaboration business, execution missteps that could lead to material EBITDA margin compression, or more aggressive financial policy regarding shareholder returns or acquisitions. Although unlikely over the next 12 months, S&P could raise the rating if: -- The company demonstrates a commitment to reduce and sustain adjusted leverage below 5x; and -- Maintains consistent low-single-digit percent revenue growth and stable EBITDA margins. MALLINCKRODT PLC: Faces $93 Million Drug Royalty Claim In Ch. 11 ---------------------------------------------------------------- Rick Archer, writing for Law360, reports that drugmaker Mallinckrodt PLC was hit with more legal woes related to sales of its Acthar Gel infantile spasms drug Wednesday, Oct. 6, 2021, after three individuals filed a suit in Delaware bankruptcy court asserting a $93 million royalties claim. The suit -- coming a week after a bankruptcy judge told the drugmaker that claims for priority reimbursement for allegedly inflated Acthar prices will go to trial -- claims Mallinckrodt has gone a year and a half without paying the royalties it promised the plaintiffs in a 2015 settlement. 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. MCAFEE LLC: Fitch Corrects Sept. 29 Ratings Release --------------------------------------------------- Fitch Ratings issued a correction of a press release on McAfee LLC published on Sept. 29, 2021. It corrects the Rating Actions table, which did not accurately reflect the removal of the 'Under Criteria Observation' status from the Issuer Default Rating. The amended ratings release is as follows: 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.com. 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. MEDALLION MIDLAND: Fitch Assigns 'BB-' Rating on Sec. Term Loan B ----------------------------------------------------------------- Fitch Ratings has assigned a 'BB-'/'RR3' rating to Medallion Midland Acquisition, LLC's senior secured term loan B due 2028. The loan is guaranteed by its operating subsidiary, Medallion Gathering & Processing, Inc. Loan proceeds will be used to refinance the term loan B loan due 2024. The Rating Outlook is Stable. The rating reflects Medallion's limited size and scale, its position as a gathering and transportation service provider located in a single basin, counterparty and volumetric risk. Liquidity is adequate and near-term capital spending will be funded with excess cash flow. KEY RATING DRIVERS Leverage Continues Its Decline: Medallion is one of several Permian gathering borrowers that have steadily delevered since formation. Deleveraging continued during 2020, ahead of Fitch's forecast. EBITDA grew by about 15% in 2020 as volumes continued to increase and the system used its network for storage services to take advantage of an extreme contango. In its EBITDA calculation Fitch adds approximately $12 million of contingent liabilities among other adjustments, resulting in actual leverage for 2020 at 5.6x and the TTM 2Q21 at around 5.0x. Fitch forecasts leverage at YE 2021 at around 5.0x, with management's forecast slightly lower than Fitch's projections. Medallion's financial policy is to bring leverage down to approximately 4.0x, according to Fitch's calculations. Fitch notes Medallion's loan agreement requires excess cash flow sweeps, at certain leverage levels, to be split between owner distributions and loan prepayments, above the scheduled 1% repayments requirement. Fitch forecasts Medallion to post positive FCF, absent initiation of a dividend. 2020 Forecast Exceedance: The forecast for the 2020 West Texas Intermediate (WTI) price (three months actual, nine months forecast) was $38 per barrel 12 months ago, about where it ended up. Realization of this forecast exhibited significant volatility. The short-term contango in mid-April was one of the most pronounced ever. Medallion benefitted from this volatility by selling its excess storage capacity. The price path that emerged from the coronavirus/OPEC+ leadership dynamics of 2020 is unlikely to be replicated at the next price bust. Fitch believes a long-duration trough would be more harmful to Medallion. The Fitch price deck manifests Fitch's criterion to rate through the cycle, yet Fitch's through- the-cycle approach does not preclude the primacy of liquidity. If another price bust more severely tested Medallion and peers, having adequate liquidity will become even more important. Concurrent with this transaction, Medallion is doubling the size of its secured revolving credit facility to $100 million and extending the maturity to 2026. Customer Diversity and Pacing: Medallion has 26 customers that exhibit considerable variety in pace and phasing of growth, which is typical given the large number of customers. The company's most significant customer in 2020, according to Fitch, did not shut in any production. Another significant customer did shut in production, yet is expected in 2021 to be among the fastest-growing large companies in the Permian Basin. These significant customers are partly why Medallion's 2020 volumes were more robust than those in the six counties where Medallion operates. Fitch notes that rig count on Medallion acreage more than doubled in 1H21 from the trough experienced in mid-2020. Limited Size and Scale: Medallion's size and scale is limited and generally consistent with a 'B' range Issuer Default Rating. The lack of operational and geographic diversity, in Fitch's view, subjects Medallion to outsized event risk and capital market access risks should there be a slowdown in or longer-term disruption of Midland Basin area production. Fitch believes this limited size and scale to be offset in part by Medallion's operational focus within the Midland region of the Permian basin, which is expected to continue to see significant production growth in the near to intermediate term. Fitch expects Midland region production from Medallion's customers to continue to grow and that Medallion will be a beneficiary of this growth. Competitive Risks: Medallion is located in and around a significant amount of existing gathering infrastructure, including the flexible service of trucks, which could provide a significant amount of competition. The gathering sub-sector has low barriers to entry, relative to most other midstream sub-sectors. Offsetting the competitive risks is an increase in acres dedicated by producer counterparties to Medallion's operations. Medallion's dedicated acreage has increased by about 67% since October 2017. One of the barriers to entry in the gathering sector are acreage dedications. Medallion has worked pro-actively to extend the term of its foundational gathering service contracts. At inception of the term loan B, the company had a material amount of dedicated acreage under contracts that reached expiration over the past three and a half years. Through diligent partnering with customers, across its entire contract portfolio, no material acreage dedication contracts are set to expire before the YE 2025. Supportive Sponsor: The ratings recognize Medallion benefits from a supportive sponsor in Global Infrastructure Partners (GIP), which has, after the company's creation by GIP, invested a significant amount of equity into Medallion. Fitch anticipates GIP will continue to support accretive growth projects. Medallion has an ESG Relevance Score of '4' for Group Structure and Financial Transparency as private-equity backed midstream entities typically have less structural and financial disclosure transparency than publicly traded issuers. This has a negative impact on the credit profile, and is relevant to the rating in conjunction with other factors. DERIVATION SUMMARY Medallion's closest peer is Oryx Midstream Services Permian Basin LLC (Oryx; BB-/Stable). Oryx is a crude gathering and intra-basin transportation service provider. Oryx recently merged with Plains All American Pipeline L.P.'s (BBB-/Stable), transferring its assets into a joint venture (JV) for the two company's Permian assets. Oryx is significantly larger in size; however, it is a holding company with a minority ownership (35%) in the JV. Medallion is a Midland sub-basin company, and Oryx now has operations in both the Delaware and Midland sub-basins. Oryx's producers also have higher credit quality, with approximately 61% of 2020 volumes from investment-grade counterparties. Before the merger, Fitch expects Oryx's leverage to be over 6.0x in 2022, the first full year of operations compared with Medallion's leverage of around 5.0x at YE 2021. KEY ASSUMPTIONS Fitch's key assumptions within its rating case for the issuer include: -- Fitch's price deck, e.g., 2022 WTI of $52 per barrel; -- A rise in volumes by Medallion's customers under dedication contracts (2021 versus 2020); -- 2021 capex and other growth investments in line with 2020; -- All-in interest rates consistent with past history, as driven by a past long-term hedge. Recovery Rating Assumption For the Recovery Rating, Fitch's estimates the company's going-concern value was greater than the liquidation value. The going-concern multiple used was a 6.0x EBITDA multiple, which is in the range of most multiples seen in recent reorganizations in the energy sector. There have been a limited number of bankruptcies within the midstream sector. Two recent gathering and processing bankruptcies of companies indicate an EBITDA multiple between 5.0x and 7.0x, by Fitch's best estimates. In Fitch's recent bankruptcy case study report, "Energy, Power and Commodities Bankruptcies Enterprise Value and Creditor Recoveries," published in April 2019, the median enterprise valuation exit multiplies for 35 energy cases, that were available, was 6.1x, with a wide range. Fitch assumed a mid-cycle going-concern EBITDA of approximately $101 million, the same EBITDA as in the previous recovery rating exercise (March 2020). Fitch calculated administrative claims to be 10%, to arrive at $101 million, and fully drew down the revolving credit facility, which are the standard assumptions. RATING SENSITIVITIES Factors that could, individually or collectively, lead to positive rating action/upgrade: -- Leverage, measured as total debt with equity credit/operating EBITDA, is expected to be below 5.0x on a sustained basis; -- Forecast of meaningfully rising EBITDA after consideration, as part of the long-term forecast, of a small number of expirations of contracts of various sorts; -- A long-term plan to achieve a run-rate of $300 million per annum EBITDA. Factors that could, individually or collectively, lead to negative rating action/downgrade: -- Actual or forecast leverage, total debt with equity credit/operating EBITDA, is at or above 6.0x; -- FFO fixed-charge coverage sustained below 2.5x, or other conditions that raise a concern for liquidity; -- A significant increase in capex, compared with budget, or at inception of budget, compared with the run-rate, that Fitch believes carries a risk of failing to translate into prompt adequate EBITDA growth. An investment in a new service or frontier area that increased business risk would be two examples; -- The initiation of a distribution policy that Fitch forecasts will have the effect of increasing leverage from current expectations. BEST/WORST CASE RATING SCENARIO International scale credit ratings of Non-Financial Corporate issuers have a best-case rating upgrade scenario (defined as the 99th percentile of rating transitions, measured in a positive direction) of three notches over a three-year rating horizon; and a worst-case rating downgrade scenario (defined as the 99th percentile of rating transitions, measured in a negative direction) of four notches over three years. The complete span of best- and worst-case scenario credit ratings for all rating categories ranges from 'AAA' to 'D'. Best- and worst-case scenario credit ratings are based on historical performance. LIQUIDITY AND DEBT STRUCTURE Adequate Liquidity: Fitch expects Medallion's liquidity to remain adequate. Liquidity, as of June 30, 2021, consisted of full availability under its $50 million super senior secured revolving credit facility, which is effectively senior to its term loan, and $5 million of cash. The credit facility maturity is being extended to October 2026 and increased to $100 million. The term loan requires 1% per annum amortizations and requires the company to maintain a debt service coverage ratio (DSCR), as defined in the agreement, of above 1.1x. The DSCR was well above this threshold throughout 2020. The revolving credit facility contains restrictions on debt to capital, leverage, and debt service coverage ratios. Medallion was in compliance with its financial covenants as of June 30, 2021 and Fitch expects it to remain so throughout the forecast period. ISSUER PROFILE Medallion is a private midstream company owned by Global Infrastructure Partners. It owns and operates a crude oil gathering and processing business in West Texas, with most of its assets in the Midland sub-basin of the Permian Basin. The assets include 1,130 miles of crude gathering pipelines with an aggregate daily capacity of 1.1 million barrels per day. While small compared with public companies, Medallion is the largest privately held crude gathering and transportation system in the Midland Basin. Regarding unconsolidated affiliates, Fitch calculates midstream energy companies' EBITDA by use of cash distributions from those affiliates, rather than by use of equity in earnings. Non-cash mark-to-market expenses of various types are added back to the base profit figure to arrive at adjusted EBITDA. ESG CONSIDERATIONS Medallion Midland Acquisition LLC has an ESG Relevance Score of '4' for Group Structure due to {DESCRIPTION OF ISSUE/RATIONALE}, 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. MEDALLION MIDLAND: Moody's Rates New $735MM Secured Term Loan 'B2' ------------------------------------------------------------------ Moody's Investors Service assigned a B2 rating to Medallion Midland Acquisition, L.P.'s new $735 million senior secured term loan maturing in 2028. Concurrently, Moody's affirmed Medallion's B2 Corporate Family Rating and B2-PD Probability of Default Rating. Moody's also affirmed the B2 rating for the existing senior secured term loan maturing in 2024, and it will be withdrawn upon repayment. The rating outlook remains stable. Proceeds from the new term loan will be used to refinance the existing term loan. Medallion will also enter into a new $100 million senior secured credit facility (unrated) maturing in 2026 to replace its existing $50 million senior secured credit facility (unrated) maturing in 2024. "The refinancing transaction will opportunistically extend debt maturities and enhance liquidity," commented Amol Joshi, Moody's Vice President and Senior Credit Officer. Assignments: Issuer: Medallion Midland Acquisition, L.P. Senior Secured First Lien Term Loan, Assigned B2 (LGD4) Affirmations: Issuer: Medallion Midland Acquisition, L.P. Probability of Default Rating, Affirmed B2-PD Corporate Family Rating, Affirmed B2 Senior Secured First Lien Term Loan, Affirmed B2 (LGD4) Outlook Actions: Issuer: Medallion Midland Acquisition, L.P. Outlook, Remains Stable RATINGS RATIONALE Medallion's proposed term loan is rated B2, consistent with its B2 CFR. The $100 million revolving credit facility will have a super priority preference over the term loan; however, because of the still small size of the revolver compared to the term loan, the term loan is rated the same as the CFR. Medallion's B2 CFR reflects its limited scale, relatively high financial leverage and the volume risk involved in producer customers utilizing its oil gathering system to transport production volumes. The company is supported through operating a strategic system in the Permian's prolific Midland Basin, acreage dedications spread over more than 1.1 million acres with over 25 customers, large equity investment by an experienced sponsor and adequate liquidity. The company's credit profile also benefits from structural enhancements such as an excess cash flow sweep which could result in modest debt reduction when leverage is high. Medallion's contracts are 100% fee-based eliminating direct commodity price risk, although the absence of material minimum volume commitment contracts highlight its volume risk. The company's system comprises of over 1,100 miles of pipe with crude oil throughput capacity of over one million barrels per day (bbl/d) as well as approximately 1.5 million bbl of storage. Besides the gathering system, Medallion has secured roughly 28 thousand bbl/d of Permian takeaway capacity on a long-haul pipeline between the Permian and Corpus Christi, providing it export market connectivity. Moody's expects Medallion will maintain adequate liquidity through 2022. At the closing of the refinancing transaction, Medallion should have an undrawn $100 million revolver maturing in 2026. The new revolver will have financial covenants including a maximum super senior leverage ratio of 1x, maximum total debt to capitalization ratio of 50% and minimum debt service coverage ratio of 1.1x. The new term loan will have a minimum debt service coverage ratio covenant of 1.1x, consistent with the revolver. Moody's expects the company will be in compliance with its covenants through 2022. Moody's expects the company to generate free cash flow through 2022, after fully funding its debt service obligations and capital expenditures. Medallion will have a mandatory cash flow sweep provision on the term loan, which could lead to Medallion having a low cash balance while modestly reducing debt balances. Notable terms in the new credit facilities are expected to provide covenant flexibility that if utilized could negatively impact creditors. As proposed, incremental first lien debt capacity (in addition to $25 million of incremental super priority revolving facility capacity) will not exceed the greater of $150 million and 100% of consolidated EBITDA, plus an additional unlimited amount provided the consolidated first lien net leverage ratio does not exceed 5x. Up to $100 million of incremental term loans may be incurred with an earlier maturity date than the initial term loans. The credit agreement is expected to permit the transfer of assets to unrestricted subsidiaries, up to the carve-out capacities, subject to "blocker" provisions, which will prohibit: (1) the designation of any subsidiary of the company that owns Material Assets (to be defined) as unrestricted; and (2) the transfer (other than non-exclusive licenses) of Material Assets to unrestricted subsidiaries. Non-wholly-owned subsidiaries will not be required to provide guarantees. The credit agreement is expected to include certain customary release of guarantee protective provisions (TBD), mitigating the risk of dividends or transfers that result in partial ownership of subsidiary guarantors. The credit agreement is expected to provide some limitations on up-tiering transactions, including the requirement that all affected lenders consent to amendments that would subordinate: (1) the obligations in right of payment to other debt or obligations; (2) the priority of the liens securing the obligations; or (3) the priority of the lenders' right to proceeds of collateral. The proposed terms and the final terms of the credit agreement may be materially different. The stable outlook reflects Moody's expectation that Medallion will generate free cash flow and leverage metrics will modestly improve through 2022. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS The ratings could be upgraded if Medallion achieves meaningful scale while growing volumes and earnings, its debt to EBITDA falls below 5x and it maintains adequate liquidity. The ratings could be downgraded if Medallion's debt to EBITDA exceeds 6x or its liquidity weakens considerably. Medallion Midland Acquisition, L.P. is a privately owned crude oil gathering and intra-basin pipeline transportation system in the Midland Basin. In October 2017, Global Infrastructure Partners (GIP) acquired Medallion for about $1.8 billion, plus an additional cash consideration linked to GIP's realized profits at exit. The principal methodology used in these ratings was Midstream Energy published in December 2018. MEDLEY LLC: Notes Trustee Reacts to UST's Plan Objection -------------------------------------------------------- U.S. Bank National Association, as indenture trustee for the 7.25% Unsecured Notes and 6.875% Unsecured Notes, filed a reply to the U.S. Trustee's objection to confirmation of the Third Amended Combined Disclosure Statement and Plan of Medley LLC, particularly with respect to the payment of Notes Trustee fees in the Plan. The Notes Trustee refuted the United States Trustee's position that a chapter 11 plan may not provide for the payment of an indenture trustee's claim for fees and expenses unless they are allowed by the court as a post-petition administrative expense. "A showing of 'substantial contribution' may be required for an indenture trustee to receive an allowance of its claim as an administrative expense," Victoria Guilfoyle, Esq., at Blank Rome LLP, counsel for the Notes Trustee said. However, she added that there is no Bankruptcy Code provision or case law rule that prohibits debtors from providing for the payment of an indenture trustee's fees as a prepetition claim in their Chapter 11 plans. Ms. Guilfoyle also noted that while seeking allowance as an administrative expense may be an option for an indenture trustee, it can elect instead to rely upon its charging lien rights in cases where distributions are being paid to its noteholders, citing In re Flight Transp. Corp. Sec. Litig., 874 F.2d 576, 583 (8th Cir. 1989). In light of this and for other reasons, the Notes Trustee asked the Court to overrule the U.S. Trustee's objection to Plan confirmation. A copy of the limited reply is available for free at https://bit.ly/302DQG7 from claims agent, Kurtzman Carson Consultants. Counsel for U.S. Bank National Association, as indenture trustee for the 7.25% Unsecured Notes and 6.875% Unsecured Notes: Victoria Guilfoyle, Esq. Blank Rome LLP 1201 N. Market St., Suite 800 Wilmington, DE 19801 Telephone: 302-425-6400 Facsimile: 302-425-6464 Email: tori.guilfoyle@blankrome.com - and - Clark T. Whitmore, Esq. Maslon LLP 90 South Seventh Street, Suite 3300 Minneapolis, MN 55402 Telephone: 612-672-8200 Facsimile: 612-672-8397 Email: clark.whitmore@maslon.com About Medley LLC Medley LLC, through its direct and indirect subsidiaries, including Medley Capital LLC, is an alternative asset management firm offering yield solutions to retail and institutional investors. It provides investment management services to a permanent capital vehicle, long-dated private funds, and separately managed accounts, and serves as the general partner to the private funds. Medley is headquartered in New York City and incorporated in Delaware. As of Sept. 30, 2020, Medley had $3.4 billion of assets under management in two business development companies, Medley Capital Corporation (NYSE: MCC) and Sierra Income Corporation, and several private investment vehicles. Over the past 18 years, Medley has provided capital to over 400 companies across 35 industries in North America. Medley filed a Chapter 11 bankruptcy petition (Bankr. D. Del. Case No. 21-10526) on March 7, 2021. The Debtor disclosed $5,422,369 in assets and $140,752,116 in liabilities as of March 2, 2021. The Debtor tapped Lowenstein Sandler LLP and Morris James LLP as bankruptcy counsel, Eversheds Sutherland (US) LLP as special counsel, B. Riley Securities Inc. as investment banker, and Andersen Tax LLC as tax accountant. Corporation Service Company serves as the Debtor's independent manager. Kurtzman Carson Consultants, LLC is the claims agent. The U.S. Trustee for Region 3 appointed an official committee of unsecured creditors on April 22, 2021. The committee is represented by Potter Anderson & Corroon, LLP and Kelley Drye & Warren, LLP. MEDLEY LLC: Supporters of Chapter 11 Plan Clarify Cash Flow ----------------------------------------------------------- Vince Sullivan of Law360 reports that supporters of Medley LLC's proposed Chapter 11 plan on Wednesday clarified for a Delaware bankruptcy judge the asset management firm's cash flow from its operating subsidiaries. U.S. Bankruptcy Judge Karen B. Owens had asked the debtor and others to walk her through the cash management systems used by Medley after both the U.S. Securities and Exchange Commission and the U. S. Trustee's Office lodged objections against Medley's Chapter 11 plan. During a lengthy virtual hearing, attorneys for Medley and its nondebtor subsidiary Medley Capital LLC said that Medley Capital provides advisory services for a fee and transfers that revenue to the debtor. About Medley LLC Medley LLC, through its direct and indirect subsidiaries, including Medley Capital LLC, is an alternative asset management firm offering yield solutions to retail and institutional investors. It provides investment management services to a permanent capital vehicle, long-dated private funds, and separately managed accounts, and serves as the general partner to the private funds. Medley is headquartered in New York City and incorporated in Delaware. As of Sept. 30, 2020, Medley had $3.4 billion of assets under management in two business development companies, Medley Capital Corporation (NYSE: MCC) and Sierra Income Corporation, and several private investment vehicles. Over the past 18 years, Medley has provided capital to over 400 companies across 35 industries in North America. Medley filed a Chapter 11 bankruptcy petition (Bankr. D. Del. Case No. 21-10526) on March 7, 2021. The Debtor disclosed $5,422,369 in assets and $140,752,116 in liabilities as of March 2, 2021. The Debtor tapped Lowenstein Sandler LLP and Morris James LLP as bankruptcy counsel, Eversheds Sutherland (US) LLP as special counsel, B. Riley Securities Inc. as investment banker, and Andersen Tax LLC as tax accountant. Corporation Service Company serves as the Debtor's independent manager. Kurtzman Carson Consultants, LLC is the claims agent. The U.S. Trustee for Region 3 appointed an official committee of unsecured creditors on April 22, 2021. The committee is represented by Potter Anderson & Corroon, LLP and Kelley Drye & Warren, LLP. METAL CLASSICS: $185K Sale of Evansville Asset to 7th Heaven OK'd ----------------------------------------------------------------- Judge Andrea K. McCord of the U.S. Bankruptcy Court for the Southern District of Indiana authorized Metal Classics, Inc.'s private sale of the real property located at 1401 Park Street, in Evansville, Indiana, under the terms and conditions set forth in the Real Estate Purchase Contract, to 7th Heaven Park LLC for $185,070. The sale is free and clear of all interests (other than as expressly provided in the Real Estate Purchase Contract) with all such interests of any kind or nature whatsoever, including, without limitation, attaching to the net proceeds of the sale. On the closing date, the proceeds of the sale, $185,070, will be distributed as follows: a. Payment to or reimbursement for ALTA owner's policy of title insurance issued by Bosse Title Co., including cost for service which is equivalent to the abstract extension, attorney's examination of the title, cost of copies and documents and expenses to clear any title defect. b. Cost of or reimbursement of the cost of the preparation of a deed to the Purchaser, or its assignees. c. All remaining funds will be paid to Vanderburgh County, Indiana for application upon current and delinquent property taxes or assessments. d. Separately, and not as a part of the sale proceeds, the Purchaser will satisfy the claim of Randall Forester, the Debtor's realtor, in the amount of $13,390. As provided by Federal Rules of Bankruptcy Procedure 6004(h), the Sale Order will not be stayed for 14 days after the entry of the Sale Order and will be effective and enforceable immediately upon entry of the Sale Order. Pursuant to 11 U.S.C. Section 1146(a), since the transfer is being made under the terms of a confirmed plan, no transfer taxes, sales tax, stamp tax or similar tax or charge may result from the transaction. The bankrupcy case is In re: Metal Classics, Inc., (Bankr. S.D. Ind. Case No. 10-70397-AKM-11). METROPOLITAN COLLEGE: Fitch Affirms 'BB' IDR, Outlook Negative -------------------------------------------------------------- Fitch Ratings has removed from Rating Watch Negative and affirmed at 'BB' the Metropolitan College of New York (MCNY)'s Issuer Default Rating (IDR) and $66.7 million of revenue bonds, series 2014, issued by Build NYC Resource Corporation on behalf of MCNY. Fitch has assigned a Negative Rating Outlook. SECURITY The bonds are general obligations of the college and secured by a mortgage on the 40 Rector Street property (now 60 West) and a pledge of unrestricted revenues. ANALYTICAL CONCLUSION Removal of the Rating Watch Negative reflects MCNY's refinancing of the mortgage bullet maturity for its Bronx campus and federal relief funds from legislation to date that provide a meaningful cushion against near-term enrollment pressure. The refinancing was executed in November of 2020, retaining current debt service (DS) at historical levels and extending the bullet at maturity to November of 2025. The Negative Outlook reflects Fitch's continued concern that persistent declines in MCNY's enrollment base may pressure revenues and debt service coverage over the outlook period after federal institutional relief funds have been drawn. 2020 enrollment declined by 9% below 2019 levels and 15% below budget. Declines in 2020 were largely offset by federal aid, which Fitch expects will buoy revenues through 2022. Even with federal aid, weaker enrollment and limited remaining expense flexibility may pressure cash flow margins, which are necessary to service the college's very high debt burden. MCNY's 'BB' IDR and bond rating reflect the college's very high leverage relative to weak revenue defensibility and stronger operating risk management assessments. Revenue defensibility includes Fitch's assessment of the college's weak demand indicators, declining enrollment and reliance on student-dependent revenue sources. MCNY has maintained very strong cash flow margins through proactive cost management, but capacity for future cuts are limited and high cash flow generation is necessary to meet the college's high debt burden. MCNY has exceptionally limited intermediate-term capital needs following completion of entirely new facilities at its Manhattan and Bronx locations within the last five years, and Fitch expects capex to remain low in the near term with greater investment over the intermediate to long term. MCNY's balance sheet ratios remain weak, with available funds (AF) to adjusted debt ranging between 20% and 30% historically and in Fitch's stress case scenario. KEY RATING DRIVERS Revenue Defensibility: 'bb' Weak Demand; Limited Revenue Sources Revenue defensibility is characterized by weaker demand indicators, a history of volatile and declining enrollment, and high dependence on student tuition and fees. The effects of the coronavirus pandemic have resulted in sustained weak summer session and fall 2021 enrollment, hampering management's efforts to improve historically weak enrollment trends. Federal relief funds from all legislation passed to date should largely offset the financial impact of weaker enrollment through 2022. Operating Risk: 'aa' Strong Cash Flow; Limited Capital Needs MCNY's stronger operating risk assessment reflects strong and consistent cash flow margins resulting from active expense management relative to enrollment trends, though cash flow may soften if enrollment remains pressured beyond 2022. The nominal generation of cash flow at or near historical levels is necessary to maintain adequate debt service coverage. Operating risk related to capital is exceptionally low, as MCNY undertook financings in 2014 and 2015 to outfit two entirely new campuses in Manhattan and the Bronx. Financial Profile: 'bb' Elevated Leverage and Sensitivity to Stress The college's financial profile assessment incorporates very high institutional leverage resulting from a limited AF cushion relative to substantial debt undertaken in recent years for major capital projects. The rating remains vulnerable to demand and revenue volatility in Fitch's downside scenario analysis, with leverage metrics declining and pressured debt service coverage. Asymmetric Additional Risk Considerations No asymmetric additional risk considerations apply to MCNY's rating. RATING SENSITIVITIES Factors that could, individually or collectively, lead to positive rating action/upgrade: -- A sustained trend of enrollment and net tuition and fee revenue growth could support consideration of a Stable Outlook; -- A record of substantially improved leverage with AF to adjusted debt consistently exceeding 50% could support positive rating movement. Factors that could, individually or collectively, lead to negative rating action/downgrade: -- Persistent enrollment pressures with headcount and/or FTE remaining suppressed beyond 2021; -- Deterioration of cash flow margins below 15% or at levels below covenanted 1.2x DSC; -- Declining balance sheet ratios with AF to adjusted debt below 25%. BEST/WORST CASE RATING SCENARIO International scale credit ratings of Sovereigns, Public Finance and Infrastructure issuers have a best-case rating upgrade scenario (defined as the 99th percentile of rating transitions, measured in a positive direction) of three notches over a three-year rating horizon; and a worst-case rating downgrade scenario (defined as the 99th percentile of rating transitions, measured in a negative direction) of three notches over three years. The complete span of best- and worst-case scenario credit ratings for all rating categories ranges from 'AAA' to 'D'. Best- and worst-case scenario credit ratings are based on historical performance. CREDIT PROFILE Founded in 1964, MCNY is a private, not-for-profit institution offering certificate programs and associate and bachelor's degrees, as well as master's degrees in education, management, public affairs and administration. The college is accredited by the Middle States Association of Colleges and Schools. Total FTE enrollment has been somewhat volatile and declined in recent years to around 856 in fall 2020. Students are largely adult, non-traditional commuter students. Given this student population, courses are structured to be accessible to working adults (day, evening, weekend) and include distance-learning components. The college operates three full semesters each academic year, using a cohort model; however, the majority of students enter in the fall semester. In August 2016, MCNY relocated its primary campus to recently acquired space in a building in lower Manhattan near One World Trade Center and the Fulton Center transportation hub. Previously, the college had leased space in another downtown location. Additionally, the college relocated its Bronx extension program to a newly acquired condominium space in close to the prior Bronx location. According to management, both of these facilities opened on schedule and are now in full operation. 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. MKS INSTRUMENTS: Moody's Confirms Ba1 CFR & Rates Secured Debt Ba1 ------------------------------------------------------------------ Moody's Investors Service confirmed MKS Instruments, Inc's ratings, including the Ba1 Corporate Family Rating, Ba1-PD Probability of Default Rating, and Ba1 rating of the existing senior secured bank credit facility (Existing Bank Facility). In addition, Moody's assigned a Ba1 rating to the new senior secured revolver (New Revolver) and senior secured term loan facilities (New Term Loan Facilities). The outlook is stable. This action concludes the review for downgrade initiated on July 1, 2021 upon MKS's announcement of its intention to acquire the of Atotech Limited (Atotech) for about $4.8 billion worth of cash and new MKS shares. The New Term Loan Facilities provide for a US dollar denominated term loan and Euro denominated term loan. Moody's expects to withdraw the rating of the Existing Bank Facility upon full repayment following closing of the acquisition. The Speculative Grade Liquidity (SGL) rating remains unchanged at SGL-1. Assignments: Issuer: MKS Instruments, Inc. Senior Secured Term Loan, Assigned Ba1 (LGD3) Senior Secured Revolving Credit Facility, Assigned Ba1 (LGD3) Confirmations: Issuer: MKS Instruments, Inc. Corporate Family Rating, Confirmed at Ba1 Probability of Default Rating, Confirmed at Ba1-PD Senior Secured Bank Credit Facility, Confirmed at Ba1 (LGD3 from LGD4) Outlook Actions: Issuer: MKS Instruments, Inc. Outlook, Changed to stable from rating under review RATINGS RATIONALE The ratings confirmation reflects Moody's expectation that MKS will be committed to reducing leverage towards 3.5x adjusted debt to EBITDA (Moody's adjusted) with FCF to debt (Moody's adjusted) of at least the mid teens level within two years following the close of the acquisition of Atotech. Funding the acquisition of Atotech will result in higher leverage at the close, which Moody's expects to be about 5x adjusted debt to combined company EBITDA (proforma for the twelve months ended June 31, 2021, excluding targeted synergies). The initial leverage is high for the rating given the execution risks of integrating Atotech, which will increase MKS's revenue base by over 50%, expand MKS into new industrial markets, and add 17 production facilities. In addition to combining the various administrative, sales, and research and development teams, MKS will need to integrate Atotech's network of production facilities globally into its own manufacturing base. This will also require setting research and capital spending priorities over an enlarged product portfolio and manufacturing base, which could be challenging over the intermediate term. At the same time, the acquisition will diversify MKS's product offerings, expanding the company's Advanced Markets product solutions. Atotech provides a strong portfolio of plating chemistry and equipment, and related software and services used in the manufacture of PCBs and semiconductors and plating finishes to a variety of consumer and industrial products. The plating equipment and chemistries complement MKS's existing industrial technologies product portfolio, particularly in MKS's laser-based systems for PCB manufacturing. Also, this acquisition will provide MKS with a recurring stream of consumable products and services revenues, comprising about 31% and 10%, respectively, of LTM June 30, 2021 proforma revenues. This recurring base contributes to revenue stability and free cash flow (FCF). Based on the composition of the acquisition funding, which is comprised of pre-payable secured bank debt, and MKS's stated intention to direct cash toward debt repayment, Moody's expects a steadily improving leverage profile. The de-leveraging will be supported by improving profitability and MKS's strong free cash flow generation. Moody's expects that debt to EBITDA (Moody's adjusted) will be reduced towards 3.5x over the two years following closing as debt is repaid and cost synergies are realized. MKS's Ba1 CFR reflects the company's broad portfolio of manufacturing technologies and consistent FCF due to the high profit margins and low capital intensity. Long customer relationships, customer qualification requirements, and a large intellectual property portfolio add a degree of protection to their competitive position and revenue base. The consumable products and services revenues, which are driven by installed base and the volume of electronics manufacturing and general industrial activity, further support stability of the revenues. Still, Moody's expects that leverage will remain over 4x debt to EBITDA (Moody's adjusted) over the near term, which is high for the rating and for the integration execution risks of the Atotech acquisition. Moreover, although services and consumables revenues comprise over 40% of the proforma revenue base, equipment revenues still comprise nearly 60% of proforma revenues. This equipment revenue base can be volatile since it is driven by the pace of customer capital spending. The stable outlook reflects Moody's expectation that MKS will successfully integrate Atotech, making steady progress toward capturing the projected cost synergies, and will prioritize FCF for debt reduction such that debt to EBITDA (Moody's adjusted) is on-course to decline toward 3.5x within two years of closing. The Ba1 rating of both the New Revolver and the New Term Loan Facilities reflects the single class debt structure and collateral, comprised of a first lien on all assets, as well as only modest cushion of unsecured liabilities in the capital structure. The Speculative Grade Liquidity (SGL) rating of SGL-1 reflects MKS's very good liquidity, which is supported by consistent FCF and a large cash balance. Moody's expects that MKS will generate annual FCF (Moody's adjusted) of at least $600 million over the next year and that cash will exceed $750 million. Given the consistent cash flows and large cash balance, Moody's expects that the new $500 million senior secured revolver (Revolver) will remain largely undrawn. The New Term Loan Facilities are not governed by any financial maintenance covenants. The New Revolver is only subject to an incurrence financial covenant ("net leverage" as defined in the credit agreement) tested when Revolver usage exceeds 35%. Moody's considers MKS's governance risk as low, since MKS is a public company with a broad investor base and a largely independent board of directors. Moody's expects that MKS will follow a conservative financial policy prioritizing debt repayment over returns to shareholders until FCF to debt (Moody's adjusted) is sustained at least in the mid-teens percent. FACTORS THAT COULD LEAD TO AN UPGRADE OR A DOWNGRADE OF THE RATINGS The ratings could be upgraded if MKS: -- Sustains organic revenue growth in the upper single digits -- Generates EBITDA margin (Moody's adjusted) above 30% -- Maintains leverage below 3x debt to EBITDA (Moody's adjusted) The ratings could be downgraded if MKS: -- Incurs significant operating disruptions or sustains a decline in organic revenue growth, -- Decreases EBITDA margin (Moody's adjusted) toward the low 20 percent level, or -- Does not remain on track to reduce leverage to 4x debt to EBITDA (Moody's adjusted) in the two years following closing MKS Instruments, Inc., based in Andover, Massachusetts, makes instruments, subsystems, and process control systems that measure, monitor, analyze, power, and control critical parameters of advanced manufacturing processes. The principal methodology used in these ratings was Manufacturing published in September 2021. MORNINGSTAR SENIOR: Fitch Alters Outlook on 'BB+' IDR to Negative ----------------------------------------------------------------- Fitch Ratings has assigned a 'BB+' Issuer Default Rating (IDR) to Morningstar Senior Living (MSL), and has affirmed the 'BB+' rating on the following bonds issued by Northampton County Industrial Development Authority on behalf of MSL: -- $36.6 million, series 2019; -- $25.2 million, series 2012. The Rating Outlook has been revised to Negative from Stable. SECURITY The bonds are secured by a pledge of the obligated group's (OG) gross revenues, a first mortgage lien, and a debt service reserve fund for the series 2012 and 2019 bonds. ANALYTICAL CONCLUSION MSL has maintained solid independent living (IL) occupancy over the past several years and throughout the pandemic. Despite a competitive market, MSL continues to adequately fill its incremental ILU expansions. Future plans for additional IL expansion are under consideration. However, cost management metrics have been weak for the past several years. These pressures were increased by the pandemic and continued growth. The Outlook revision to Negative reflects Fitch's expectation that continued weak profitability will pressure the rating downward. The 'BB+' rating reflects Fitch's expectation that MSL will maintain a stable but thin financial profile that is consistent with a below-investment grade rating through Fitch's forward-looking scenario analysis, within the context of MSL's midrange revenue defensibility, and weak operating risk. KEY RATING DRIVERS Revenue Defensibility: 'bbb' Stable Demand in a Stable Market MSL is located in a stable service area. Demand is also sustained by a healthy real estate market, with growing median home values in the Nazareth area. Entrance fees are in line with PMA pricing trends and rate increases occur regularly. As is typical in Pennsylvania, MSL has numerous competitors, but is capable of competing with its preferable location, amenities and incentives. IL demand has been midrange averaging 90% over the past five years. MSL's multi-phase Heritage Village expansion project has filled largely according to plan, indicating sufficient demand for expansion ILUs. Operating Risk: 'bb' Weak Profitability, Robust Capital Spending MSL's operating performance is consistent with a weak assessment. While Morningstar has predominately fee-for-service (FFS, type C contracts) at the Heritage Village campus, across the entire continuum, lifecare (type-A) contracts currently outnumber FFS contacts. However, Morningstar's proportion of FFS contracts is growing and it is Fitch's expectation that over time FFS will outnumber lifecare contracts across its continuum. MSL's operating ratio, net operating margin (NOM) and net operating margin-adjusted (NOMA) averaged 103.7%, 1.2%, and 13.4% over the past five years. While there has been some fluctuation from year to year, the ratios have largely remained consistent, indicating continued cost management pressure. Operational stress from the coronavirus pandemic along with expansion projects have contributed to the weak results. Fitch's weak assessment is further supported by soft capital related metrics. On average over the past five years, revenue-only MADS coverage averaged 0.3x, debt to net available has averaged 11.8 times and MADS has averaged 15.7% of revenue. Management actively invests in maintaining and expanding the campus with capital expenditures, averaging over 300% of depreciation over the past several years. The average age of plant is somewhat elevated at approximately 14 years. While investing in the campus, management has incrementally expanded, allowing the community to absorb additional ILUs in phases. Financial Profile: 'bb' Weak Financial Profile Given MSL's midrange revenue defensibility and weak operating risk assessments, Fitch expects it will maintain a financial profile that is consistent with the 'bb' assessment throughout the economic and financial volatility assumed in Fitch's stress case scenario. MADS coverage has been consistent with the weak assessment, averaging 1.1x over the past few years. MSL's balance sheet has been stable, albeit soft with unrestricted cash and investments at $20 million in 2020, or 40% cash-to-adjusted debt at year-end 2020. Unrestricted cash represented 314 days cash on hand (DCOH) in 2020, which is neutral to the assessment of MSL's financial profile. Asymmetric Additional Risk Considerations No asymmetric risk considerations were relevant to the rating determination. RATING SENSITIVITIES Factor that could, individually or collectively, lead to positive rating action/upgrade: -- Positive rating action is unlikely at this time. However, an increase in unrestricted liquidity resulting in cash-to adjusted debt near 75% could result in positive rating action. Factors that could, individually or collectively, lead to negative rating action/downgrade: -- Continued weak profitability margins including operating ratios above 100%, NOMs from 0 to 3%, and NOM-As from 11% to 15%; -- Continued weak capital-related metrics with Debt to Net available above 8%; -- Significant increase in debt such that cash-to-adjusted debt falls below or is sustained near 30%; -- Though not expected, significant softening of demand to IL occupancy levels near 85%. 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. MSL's Moravian Hall Square campus is located in Nazareth, PA, within the Lehigh Valley area, approximately 70 miles north of Philadelphia. Moravian Hall Square sits on approximately 16 acres. MSL is also in the process of incrementally expanding its new Heritage Village campus, which is located one mile away in Upper Nazareth Township. Phases I and II completed in 2019 and added 46 ILUs to the community. Phases III and IV are complete and nearly fully occupied with some discussion around final phases V and VI. The total Heritage Village campus when fully built out will include up to 148 ILUs as currently designed. The actual zoning for the Heritage Village campus would allow for up to 167 units. The Moravian Hall Square campus currently includes 134 ILUs, 61 personal care units, 25 dementia care beds (licensed as personal care), and 61 licensed SNF beds. There is some additional ILU capacity on the Moravian Hall Square as contiguous homes surrounding the campus are purchased and acreage added to allow for expansion. MSL provides full life care (Type A) and fee-for-service (Type C) contract options. In fiscal 2021 (unaudited), MSL reported total revenues of approximately $27 million. Fitch uses consolidated financial statements in its analysis. The OG includes MSL and Morningstar Senior Living Foundation, which represented substantially all assets and revenues of the consolidated entity in fiscal 2020. Not included in the OG is Morningstar Senior Solutions, which is a non-medical home care and care management business serving Lehigh Valley, and a wholly-owned subsidiary of MSL. 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. MORROW GA INVESTORS: Trustee Gets OK to Tap Special Counsel ----------------------------------------------------------- Tamara Miles Ogier, the trustee appointed in the Chapter 11 case of Morrow GA Investors, LLC, received approval from the U.S. Bankruptcy Court for the Northern District of Georgia to employ Wiles & Wiles, LLP as litigation counsel. The trustee needs the assistance of a special counsel to initiate an action to evict delinquent tenants occupying its property in Morrow, Ga. The hourly rates of the firm's attorneys and staff are as follows: John J. Wiles, Partner $525 per hour Caleb Swiney, Associate $280 per hour Debbie Grisham, Paralegal $275 per hour John Wiles, Esq., a partner at Wiles & Wiles, disclosed in a court filing that his firm is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. The firm can be reached through: John J. Wiles, Esq. Wiles & Wiles, LLP 800 Kennesaw Ave., Suite 400 Marietta, GA 30060 Telephone: (770) 426-4619 Facsimile: (770) 426-4846 About Morrow GA Investors Morrow GA Investors, LLC is a single asset real estate debtor (as defined in 11 U.S.C. Section 101(51B)). It owns a real property located at 1590 Adamson Parkway, Morrow, Ga., having an appraised value of $5.5 million. Morrow GA Investors filed a Chapter 11 petition (Bankr. N.D. Ga. Case No. 21-55706) on July 31, 2021, listing $5,502,000 in total assets and $2,698,079 in total liabilities. Judge James A. Sacca oversees the case. Limbocker Law Firm serves as the Debtor's legal counsel. The U.S. Trustee for Region 21 appointed Tamara Miles Ogier as trustee in this Chapter 11 case. The bankruptcy trustee tapped Ogier, Rothschild & Rosenfeld, PC as legal counsel; Wiles & Wiles, LLP as special counsel; and Stonebridge Accounting & Forensics, LLC as accountant. OCCIDENTAL PETROLEUM: Fitch Alters Outlook on 'BB' IDR to Positive ------------------------------------------------------------------ Fitch Ratings has affirmed the Long-Term Issuer Default Rating (IDR) of Occidental Petroleum Corp. (OXY) at 'BB', and senior unsecured notes and revolver at 'BB'/'RR4'. The Rating Outlook is revised to Positive from Stable. The main driver for the Positive Outlook is the company's accelerated debt reduction of approximately $4.5 billion year to date, most of which was completed in the third quarter, as well as strong FCF prospects, which should provide funding for additional de-leveraging. OXY's ratings reflect the company's large size, liquids-weighted profile, and robust asset base, including its anchor position in the Permian with over 2.9 million net acres. The ratings also reflect scope for significant incremental debt reduction, a manageable maturity wall, and above-average diversification vs independent peers from international exploration and production (E&P) in MENA, as well as chemicals and midstream businesses. Rating concerns center on still-elevated LTM debt leverage metrics, high interest costs associated with the Anadarko acquisition, including $800 million associated with the preferreds; and execution risk on remaining international asset sales. KEY RATING DRIVERS Significant Debt Repayment: OXY accelerated deleveraging in Q3 with the completion of a multi-tranche $3.1 billion tender in July (upsized from $2.5 billion), the repayment of $224 million in 2.6% notes in August, and $1.052 billion in floating rate 2022 notes in September. Separately the company retired $750 million in fixed-for-floating interest rate swaps. As a result of these actions, as well as earlier reductions in Q1, gross debt has been reduced by approximately $4.5 billion YTD (13% of OXY's reported debt at YE 2020), and interest expense around $170 million. Given strong projected FCF for the remainder of the year, Fitch anticipates the company is likely to make additional debt retirements in Q421. Strong FCF Generation: After FCF generation of just $120 million in Q1, OXY's FCF jumped sharply higher to $2.4 billion in Q2. Higher cash flow from operations was driven by stronger oil prices, robust performance in OXY's non-oil segments, and a partial reversal of a Q1 cargo related working capital draw. The company raised its OxyChem guidance 60% due to tighter market conditions for PVC and caustic soda. Midstream guidance is also higher due to better sulfur prices at the Al Hosn project, despite compressed Midland-Gulf coast crude spreads. Strong FCF generation should remain in place in the near term given low maintenance capex of levels of $2.9 billion and a slashed common dividend. Modest Asset Sales: OXY announced $1.3 billion in asset sales since 4Q20, including non-operated Denver-Julesburg basin properties ($285 million), Western Midstream Partners units ($200 million), non-core Permian acreage ($508 million), and other non-core acreage ($350 million), versus a $2 billion-$3 billion asset sale target. Despite rising oil prices, Fitch believes execution risk around international assets like Ghana is higher, given repositioning by European supermajors toward renewables, and reluctance by management to fire sale assets. For modelling purposes Fitch assumed no incremental asset sales beyond those achieved to date. Elevated But Improving Metrics: OXY's LTM debt/EBITDA leverage metrics remained elevated at 4.6x as of 2Q21, but should continue to improve as pandemic quarters roll off and incremental debt repayment takes hold. Total interest burden also remains high versus peers given high debt levels and $800 million in interest from the preferreds. As calculated by Fitch, OXY's LTM FFO interest coverage at 2Q21 was 4.5x. Maturity Wall Manageable: Following earlier refinancings and 2021 debt repayments, OXY's near term wall is moderate. As calculated by Fitch on a pro forma basis, maturities due over the next few years (excluding puttable 2036 bonds) include nothing due for the remainder of 2021, $728 million in 2022, $465 million in 2023, and $2.2 billion in 2024. The combination of cash balances, full availability on the $5.0 billion revolver, and strong projected FCF should comfortably address the remaining maturity schedule. Integrated Producer: OXY enjoys modest, but meaningful diversification through its chemicals segment, which has a top-three position in most basic chemicals in North America, and its midstream segment. Chemicals have historically contributed strong FCF given limited reinvestment, and are enjoying significant tailwinds in 2021 due to lingering pandemic supply issues in PVC and caustic soda product chains. While the midstream segment is expected to lose money given weak Permian-Houston differentials, this has been partly offset by higher sulfur prices at the Al Hosn project. Carbon Reduction Initiatives: OXY's commitment to scope 3 emissions stands out versus U.S. E&P peers. OXY plans to commercialize its Enhanced Oil Recovery (EOR) business to offer permanent carbon capture/storage in its geologic formations. OXY is constructing the world's largest direct air capture plant of up to 1 million metric tons of CO2 annually, with construction beginning 2022. Management views low carbon ventures as a growth engine which could eventually rival chemicals in earnings; however, many uncertainties surround the business given its early stage development. Equity Credit: For purposes of calculating leverage, Fitch currently assigns 50% equity credit for the $10 billion in Berkshire Hathaway 8% cumulative perpetual preferred stock based on the structural features of the notes as analyzed under Fitch's "Corporate Hybrids Treatment and Notching Criteria." DERIVATION SUMMARY OXY's credit profile is mixed. The rating is currently dominated by relatively high debt levels and interest costs associated with the Anadarko acquisition, which was completed just prior to a major downturn in oil prices. However, immediate refinancing risk is moderate, given recent debt repayments targeting 2022-2026 maturities and earlier bond market issuances to extend the wall. At the same time, OXY has several long-term characteristics of a high-grade credit. In terms of size and scale, at 1,203kboepd in production from continuing operations in 2Q21, it is among the largest independents, smaller than ConocoPhillips, but significantly larger than E&Ps such as Ovintiv Corporation (554.5kboepd), Devon Energy (566.8kboepd), Apache Corporation (395.2kboepd), and Hess (328.3kboepd). OXY's liquids weighting is above average. Upstream diversification is also above-average, with E&P operations split between the U.S. (Permian, DJ/Rockies, Gulf of Mexico offshore, Powder River Basin) and international in MENA (Algeria, Oman, the UAE, and Qatar). OXY is the number one producer in the DJ Basin, the number four producer in the Gulf of Mexico, and a large Permian producer, with one of the biggest net acreage positions (2.9 million acres, split roughly between Permian unconventional shale, and EOR). OXY has additional earnings diversification through its chemical and midstream segments, which also sets it apart from peers. No Country Ceiling, operating environment or parent-subsidiary-linkages constrain the rating. KEY ASSUMPTIONS -- Base Case West Texas Intermediate (WTI) oil prices of $60/barrel for the remainder of 2021, $52/barrel for 2022, and $50/barrel for 2023 and beyond; -- Henry Hub natural gas prices of $3.40/mcf for 2021, $2.75/mcf in 2022, and $2.45/mcf for 2023 and beyond; -- No incremental asset sales assumed beyond those announced YTD; -- Excess FCF largely dedicated to debt repayment over the life of the forecast; -- Capex flatlined at $2.9 billion in 2021 and 2022, and rising moderately thereafter; -- Production volumes of 1.16 million boepd in 2021 rising to 1.24 million boepd by 2024; -- Shareholder distributions held flat until 2024. RATING SENSITIVITIES Factors that could, individually or collectively, lead to positive rating action/upgrade: -- Incremental debt reduction, with company reported debt approaching $28 billion; -- Mid-cycle debt/EBITDA leverage approaching 3.2x; -- Mid-cycle FFO leverage approaching 3.6x. Factors that could, individually or collectively, lead to negative rating action/downgrade: -- Impairments to liquidity; -- Mid-cycle debt/EBITDA leverage approaching 3.7x; -- Mid-cycle FFO leverage approaching 4.1x. 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 Unrestricted cash on hand as of June 30, 2021 (prior to debt repayments) was $4.57 billion, and there was no draw on the company's committed $5.0 billion senior unsecured revolver (maturing January 2023), for core liquidity of just under $9.57 billion. Separately OXY had full availability on a $400 million accounts receivables securitization facility, which is subject to monthly redetermination and matures November 2022. OXY's maturity wall is manageable given the impact of recent debt repayments focusing on 2022-2026 maturities, as well as good liquidity and strong projected FCF, and asset sale proceeds. ISSUER PROFILE OXY is a large, diversified E&P with core upstream operations in the U.S. (Permian, DJ, Gulf of Mexico, Powder River Basin), and the MENA region (Algeria, Oman, the UAE, and Qatar). Non-E&P segments include chemicals (OxyChem) and Midstream and Marketing. 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. OMNIQ CORP: QShield Selected in Georgia to Crack Down on Crime -------------------------------------------------------------- OMNIQ Corp. announced that the Company has been selected by the City of Adrian Georgia to deploy its QShield vehicle recognition systems (VRS) technology and its cloud based citation management platform to identify any vehicle driving through the city which is on a National Crime Information Center (NCIC) data base or the Georgia Bureau of Investigations Database (GBI Database) and issue citations to scofflaws driving through the city with outstanding traffic violations. QShield, OMNIQ's AI-based machine vision VRS solution uses patented Neural Network algorithms that imitate human brains for pattern recognition and decision-making. More than 17,000 OMNIQ AI based machine vision sensors are installed worldwide, including approximately 7,000 in the U.S. Based on superior accuracy and patented features like identification of make and color combined with superior accuracy based on the sophisticated algorithm and machine learning that largely depends on accumulated data provided by thousands of sensors already deployed. "When a vehicle associated with a criminal investigation and on a National Crime Information Center data base or a scofflaw vehicle with outstanding traffic violations or expired, suspended or revoked registration passes QShield's sensors that are deployed throughout the city, OMNIQ's QShield system automatically triggers a real time alert to the Adrian Police Department. Additionally, scofflaws when captured by the sensors are issued, on behalf of the city, citations via the QShield citation platform. Citations are then mailed to the vehicle's registered owner and payments are processed through the QShield online payment platform," said Shai Lustgarten CEO of OMNIQ. QShield, OMNIQ's VRS solution will be installed in several key intersections throughout the city to efficiently and accurately capture vehicle data, including license plate number, color, make, and model. QShield's technology will also be used to provide local law enforcement with timely alerts for any vehicle on a federal, state, and local law enforcement wanted list in addition to enforcing the traffic violations above." "We are excited to provide our machine vision VRS technology to benefit the citizens of the city of Adrian, Georgia and assist the city's local Police Department," said Shai Lustgarten, CEO of OMNIQ. "Despite their usefulness in helping police solve crimes, automatic license plate and vehicle recognition (VRS) solutions are often beyond the reach of many smaller municipalities. The cost of such systems, can often exceed budgetary limits of a smaller city like Adrian, Georgia. With QShield by omniQ, we are able to offset these costs through our revenue share business model. We are proud to partner with omniQ in deploying QShield in our city. QShield provides us with a force multiplier, now available and affordable to protect the citizens of our community," said Chief of Police, Kyle Strickland. About omniQ Corp. Headquartered in Salt Lake City, Utah, omniQ Corp. (OTCQB: OMQS) -- http://www.omniq.com-- provides computerized and machine vision image processing solutions that use patented and proprietary AI technology to deliver data collection, real time surveillance and monitoring for supply chain management, homeland security, public safety, traffic & parking management and access control applications. The technology and services provided by the Company help clients move people, assets and data safely and securely through airports, warehouses, schools, national borders, and many other applications and environments. Omniq Corp. reported a net loss attributable to common stockholders of $11.31 million for the year ended Dec. 31, 2020, compared to a net loss attributable to common stockholders of $5.31 million for the year ended Dec. 31, 2019. As of June 30, 2021, the Company had $35.86 million in total assets, $44.50 million in total liabilities, and a total stockholders' deficit of $8.64 million. Salt Lake City, Utah-based Haynie & Company, the Company's auditor since 2019, issued a "going concern" qualification in its report dated March 31, 2021, citing that the Company has a deficit in stockholders' equity, and has sustained recurring losses from operations. This raises substantial doubt about the Company's ability to continue as a going concern. ONEWEB GLOBAL: Eutelsat Hikes Holding to More Than 20% ------------------------------------------------------ Kavit Majithia of Mobile World Live reports that satellite company Eutelsat, which last week rejected a takeover bid by telecoms entrepreneur Patrick Drahi, raised its holding in UK-based OneWeb to more than 20 percent, making it the company's second largest shareholder. Eutelsat said in a statement it had paid $165 million to up its shareholding from 17.6 percent to 22.9 percent, exercising a call option on a portion of the latest funding round which was agreed when it made its initial investment of $550 million in April earlier this 2021. The completion of the latest investment is expected to finalise at the end of 2021, subject to regulatory conditions. Eutelsat talked up OneWeb's progress since its initial investment, highlighting it had a 100 percent launch success rate leading to nearly half of its constellations in orbit, while commercially it had struck numerous distribution partnerships ahead of launch, which remained on track for end-2021. OneWeb was pulled out of chapter 11 bankruptcy by a UK government led consortium, which also included Bharti Airtel, in 2020 through a $1 billion rescue package. In total, it is now closing in on $3 billion in funding, as it pushes ahead with ambitions to tap into the commercial space market. Bharti Airtel is the company's largest shareholder with a 30 per cent holding, while Eutelsat said its latest move strengthened its position. Rodolphe Belmer, Eutelsat CEO, added a recent vote of confidence from both investors and future customers made it "convinced of OneWeb's right-to-win in the low earth orbit constellation segment." Eutelsat turned down an approach at €12.10 per share from Altice Europe founder Patrick Drahi last week, stating it had decided not to engage in takeover discussions. About OneWeb Global Limited Founded in 2012, OneWeb Global Limited is a global communications company developing a low-Earth orbit satellite constellation system and associated ground infrastructure, including terrestrial gateways and end-user terminals, capable of delivering communication services for use by consumers, businesses, governmental entities, and institutions, including schools, hospitals, and other end-users whether on the ground, in the air, or at sea. OneWeb's business consists of the development of the OneWeb System, which has included the development of small-next generation satellites that have been mass-produced through a joint venture and the development of specialized connections between the satellite system and the internet and other communications networks through the SNPs. For more information, visit https://www.oneweb.world/ OneWeb Global Limited and its affiliates sought protection under Chapter 11 of the Bankruptcy Code (Bankr. S.D.N.Y. Lead Case No. 20-22437) on March 27, 2020. At the time of the filing, Debtors disclosed assets of between $1 billion and $10 billion and liabilities of the same range. Judge Robert D. Drain oversees the cases. The Debtors tapped Milbank LLP as counsel; Guggenheim Securities, LLC as investment banker; FTI Consulting, Inc. as financial advisor; Grant Thornton LLP as tax consultant; and Dixon Hughes Goodman LLP as tax consulting and compliance services provider. Omni Agent Solutions is the claims, noticing and solicitation agent. P8H INC: Further Fine-Tunes Plan Documents ------------------------------------------ Megan E. Noh, solely in her capacity as Chapter 11 Trustee (the "Trustee") of P8H, Inc., d/b/a Paddle 8 (the "Debtor"), and the Official Committee of Unsecured Creditors ("Committee") of the Debtor submitted a Disclosure Statement accompanying Amended Plan of Liquidation of the Debtor dated October 4, 2021. Pursuant to Section 1129(a)(5) of the Bankruptcy Code, the Trustee will disclose at or before the Confirmation Hearing the identity and affiliations of any person affiliated with the Trustee, the Committee and/or the Debtor who may be proposed at that to assist the Trustee and/or the Plan Administrator in the wind down of the Debtor's Estate following confirmation of the Plan. To the extent any such Person is or was an "insider" of the Debtor, the Trustee will disclose the nature of any compensation to be paid to such Person. Each such Person shall serve from and after the Effective Date pursuant to the terms of his Plan to assist the Plan Administrator. Pursuant to Section 1129(a)(4) of the Bankruptcy Code, and after the Effective Date, the Trustee or the Plan Administrator, as applicable, may (without further court order) provide severance and other compensation to the Debtor's sole remaining employee as of the Confirmation Date for services provided to the Estate and the Trustee throughout the Case and for any services to be performed in the post-confirmation period. Article XI of the Plan provides for various releases to be granted. Creditors and interest holders may elect to opt-out of certain third-party releases to be granted under the Plan. Creditors, interest holders and parties in interest should carefully review the provisions of the Plan and the sections of the Disclosure Statement that address the releases and the right of creditors and interest holders to elect to opt-out of certain third party releases to be granted by the Plan. Creditors and interest holders have the opportunity to opt out of the third party releases granted under the Plan, but they are not required to opt out of the releases unless they wish to do so. To opt-out, they must complete, sign, date and timely return the release election form to be provided to them. The failure of a creditor or interest holder to complete and timely return the release election form may adversely affect such creditor's or interest holder's rights. Like in the prior iteration of the Plan, each Holder of Allowed General Unsecured Claims in Class 6 other than FBNK or Holders of Insider Unsecured Claims, shall receive a Pro Rata Distribution, in Cash, on account of such Allowed General Unsecured Claim, in full and final satisfaction, settlement, release, and discharge of such Claim, without pre- or post-petition interest. Estimated Amount of General Unsecured Claims excluding Insider Unsecured Claims total $2,500,000 and shall recover 10%. Estimated Amount of Insider Unsecured Claims total $8,600,000 and shall recover 0.0%. On the Effective Date, all Assets and property in the Estate including all Avoidance Actions and Causes of Action, with the exception of the Segregated Seller Fund, shall vest in the Plan Administrator as legal representative of the Estate, free and clear of all Liens, Claims, charges, or other encumbrances of any nature, except to the extent otherwise provided by the Plan. The Mediator shall remain designated to address any questions or disputes arising from, arising out of or related to the Litigation Settlement and the Settlement Agreement, subject to the supervision of the Bankruptcy Court. The Mediator shall have the procedural powers and administrative rights conferred by Local Bankruptcy Rule 9019-1 and General Order M-452 of the Bankruptcy Court date June 28, 2013. A full-text copy of the Disclosure Statement dated October 4, 2021, is available at https://bit.ly/3Bmlsps from PacerMonitor.com at no charge. Attorneys for Megan E. Noh: Richard Levy, Jr., Esq. PRYOR CASHMAN LLP 7 Times Square New York, NY 10036 Telephone: (212) 326-0886 Facsimile: (212) 798-6393 E-mail: rlevy@pryorcashman.com Attorneys for the Official Committee of Unsecured Creditors: Richard J. Corbi, Esq. Law Offices of Richard J. Corbi PLLC 1501 Broadway, 12th Floor, New York, NY 10036 Tel: (646) 571-2033 (516) 582-0649 Email: rcorbi@corbilaw.com About P8H, Inc. d/b/a Paddle8 Paddle8 was founded in 2011 by Alexander Gilkes, Aditya Julka, and Osman Khan. It is one of the first online auction house that specialized in the art world's "middle market." It announced a high-profile merger with the Berlin-based online auction house Auctionata in 2016, but the partnership was dissolved in 2017 when Auctionata filed for insolvency. P8H, Inc., doing business as Paddle 8, sought protection under Chapter 11 of the Bankruptcy Code (Bankr. S.D.N.Y. Case No. 20 10809) on March 16, 2020. At the time of filing, the Debtor was estimated to have assets of less than $50,000 and liabilities of between $50,001 and $100,000. Judge Stuart M. Bernstein oversees the case. The Debtor is represented by Kirby Aisner & Curley, LLP. Megan E. Noh is the Debtor's Chapter 11 trustee. The Trustee is represented by Pryor Cashman, LLP. FBNK Finance S.a.r.l., as lender, is represented by Jonathan I. Rabinowitz, Esq., at Rabinowitz, Lubetkin & Tully, LLC. PETROTEQ ENERGY: Provides Update on TSXV Reinstatement Application ------------------------------------------------------------------ Petroteq Energy Inc. provided the following update regarding its application for reinstatement of its common shares on the TSX Venture Exchange. The Ontario Securities Commission issued a cease trade order on Aug. 6, 2021, as a result of Company's failure to file its quarterly report on Form 10-Q (and related certifications) for the period ended May 31, 2021 on or before July 30, 2021, as required under Canadian National Instrument 51-102 - Continuous Disclosure Obligations. As previously disclosed, OSC revoked its cease trade order effective Aug. 24, 2021. The Company filed the 2021 Q3 Filings on SEDAR and with the United States Securities and Exchange Commission on Aug. 19, 2021. In addition, on Aug. 19, 2021, the Company's amended financial statements and management's discussion and analysis ‎for the eight quarters from May 31, 2019 to Feb. 28, 2021 were filed on SEDAR and with the SEC, as contained in the Company's amended annual reports on Form 10-K/A for the financial years ended Aug. 31, 2019 and Aug. 31, 2020, and in the Company's amended quarterly reports on Form 10-Q/A for the periods ended May 31, 2019, Nov. 30, 2019, Feb. 29, 2020, May 31, 2020, Nov. 30, 2020 and Feb. 28, 2021. The Company's amended financial statements and management discussion and analysis for the period ended Feb. 28, 2019, were filed on SEDAR on Aug. 23, 2021, and with the SEC on Aug. 25, 2021, as exhibits to the Company's current report on Form 8-K. As a result of the issuance of the CTO on Aug. 6, 2021, the Exchange suspended trading of the Company's Common Shares. As part of the Exchange's review of the Company's reinstatement application, the Exchange reviewed the Company's financial statements for the three and nine months ended May 31, 2021, and raised concerns over unapproved filings. As a result of an internal investigation the Company identified transactions reported on SEDAR and EDGAR which had not been submitted for approval by Toronto Stock Exchange. Based on the Company's initial review of the Transactions, it is estimated that a total of 54,370,814 Common Shares were issued as a result of the Transactions.‎ While some of the issued Common Shares, namely, 4,336,972, are estimated to have been issued at prices above what the Exchange ‎would have otherwise approved, 50,033,842 are estimated to have been issued at share prices below what the Exchange ‎generally approves for convertible securities. ‎ While the Company is now making the necessary submissions with the Exchange for the Transactions, they may not all be accepted for approval by the Exchange and as a condition of reinstatement to trading on the Exchange the Company may need to take remedial action to bring the Transactions into compliance. The Transactions, described below, were all disclosed in the Company's financial statements (all dollar amounts are expressed in U.S. currency unless otherwise indicated): * On May 7, 2020, the Company issued to an arm's length lender a $64,300 convertible note (including a 10% original issue discount) for a purchase price of $58,000, bearing interest at 12% per annum, maturing on May 7, 2021, and convertible into Common Shares. The note was ultimately converted on Nov. 12, 2020 ($25,000 at $0.0308 for 811,688 Common Shares), Nov. 13, 2020 ($20,000 at $0.0296 for 675,676 Common Shares) and Nov. 13, 2020 ($22,780, including $3,480 of accrued and unpaid interest, at $0.0296 for 769,595 Common Shares). There is currently no principal or interest remaining on the note. * On June 4, 2020, the Company issued to an arm's length lender a $69,900 convertible note (including a 10% original ‎issue discount) for a purchase price of $63,000, bearing interest at 12% per annum, maturing ‎on June 4, 2021, and convertible into Common Shares.‎ The note was ultimately converted on Dec. 15, 2020 ($18,000 at $0.0282 for 638,298 Common Shares), Dec. 22, 2020 ($18,000 at $0.0338 for 532,544 Common Shares‎), Dec. 28, 2020 ($20,000 at $0.0338 for 591,716 Common Shares), and Jan. 4, 2021 ($17,680, including $3,780 of accrued and unpaid interest, at ‎$0.0325 for 544,000 Common Shares). There is currently no principal or interest remaining on the note. ‎ * On June 19, 2020, the Company issued to an arm's length lender a $82,500 convertible note (including a 10% original ‎issue discount) for a purchase price of $75,000, bearing interest at 12% per annum, maturing ‎on June 19, 2021, and convertible into Common Shares. ‎ The note was ultimately converted on ‎Jan. 7, 2021 ($20,000 at $0.0326 for 613,497 common shares), Jan. 11, 2021 ($27,000 at $0.0326 for 828,221 Common Shares), Jan. 13, 2021 ($22,000 at $0.0326 for 674,847 Common Shares) and Jan. 20, 2021 ($18,000, including $4,500 of accrued and unpaid interest, at ‎$0.0326 for 552,147 Common Shares). There is currently no principal or interest remaining on the note.‎ * On July 22, 2020, the Company issued to an arm's length lender a $150,000 convertible note (including ‎a 15% original issue discount) for a purchase price of $135,000, bearing interest at 8% per ‎annum, maturing on April 22, 2021, and convertible into Common Shares based on a discount to the market price of the Common Shares upon conversion.‎ The note was ultimately converted on Jan. 25, 2021 ($21,805 at $0.03115 for 700,000 Common Shares), Jan. 28, 2021 ($46,725 at $0.03115 for 1,500,000 Common Shares), Feb. 5, 2021 ($30,957.50 at $0.0309575 for 1,000,000 Common Shares), Feb. 22, 2021 ($33,381.25 at $0.03338125 for 1,000,000 Common Shares) and March 2, 2021 ($34,011.25 at $0.03401125 for 1,000,000 Common Shares). There is currently $3,120 in principal remaining on the note, and, as of Aug. 31, 2021, interest and ‎penalties of $6,950.72. ‎ * On Aug. 26, 2020, a convertible debenture (which was originally approved by the Exchange), bearing interest at 10% per annum owing to an arm's length lender, which had matured on April 29, 2019, was acquired by another an arm's length lender pursuant to a Debt Assignment and Purchase Agreement. On Aug. 26, 2020, pursuant to a Securities Exchange Agreement, the convertible promissory note was exchanged for a convertible ‎redeemable note with an aggregate principal amount of $192,862, bearing interest at 10% ‎per annum, maturing on Aug. 26, 2021, and convertible into Common Shares. ‎ On Oct. 1, 2020, the $192,862 convertible ‎redeemable note was converted into ‎‎10,285,991 Common Shares at $0.01875 per share.‎ There is currently no principal or interest remaining on the note.‎ * On Nov. 6, 2020, the Company issued to an arm's length lender a $140,800 convertible note (including a 10% ‎original issue discount) for a purchase price of $128,000, bearing interest at 12% per annum, ‎maturing on Nov. 6, 2021, and convertible into Common Shares. The note was ultimately converted on May 10, 2021 ($50,000 at $0.036 for 1,388,889 Common Shares), May 14, 2021 ($50,000 at $0.0326 for 1,533,742 Common Shares), May 19, 2021 ($48,480, including $7,680 of accrued and unpaid interest, at ‎$0.0312 for 1,553,846‎ Common Shares). There is currently no principal or interest remaining on the note.‎ * Between August 2019 and March 2020, a director of the Company (Robert Dennewald), loaned $125,000 to the Company to assist the Company in meeting its financial obligations. Subsequently, on Feb. 12, 2021, in exchange for the three non-convertible promissory notes issued to Mr. Dennewald, the Company issued a convertible promissory note with an aggregate principal amount of $125,000, bearing interest at 8% per annum, maturing on Feb. 12, 2022, and convertible into Common Shares. On June 10, 2021, pursuant to an Assignment and Purchase of Debt Agreement, the $125,000 convertible promissory note was purchased and assigned by Mr. Dennewald to an arm's length lender. On June 15, 2021, the arm's length lender converted the $125,000 principal amount of the convertible promissory note into 3,048,780 Common Shares at $0.041 per share. * On Jan. 12, 2021, the Company issued an arm's length lender a $86,350 ‎‎convertible note (including a 10% original issue discount) for a purchase price of $78,500, ‎‎bearing interest at 12% per annum, maturing on Jan. 12, 2022, and convertible into Common ‎‎Shares.‎ The note was ultimately converted on July 13, 2021 ($50,000 at $0.0871 for 574,053 Common Shares) and July 14, 2021 ($41,060, including $4,710 of accrued and unpaid interest, at ‎‎$0.0863 ‎for 475,782 Common Shares. There is currently no principal or interest remaining on the note.‎ * On Feb. 25, 2021, the Company issued an arm's length lender a $86,350 convertible promissory note ‎‎(including a 10% original issue discount) for a purchase price of $78,500, bearing interest at ‎‎12% per annum, maturing on Feb. 24, 2022, and convertible into Common Shares.‎ The Company has since repaid the convertible promissory note in full (including principal and interest) in ‎cash.‎ * On March 22, 2021, the Company and an arm's length lender entered into an amending agreement extending the maturity date of a convertible debenture originally issued on Sept. 17, 2018 from March 31, 2021 to Oct. 31, ‎‎2021. The original issuance of the convertible debenture, including a prior amendment to the debenture, ‎was approved by the Exchange. The ‎current unpaid purchase price of the debenture ($2,900,000) is convertible at $0.055 per ‎share.‎ * On April 21, 2021, the Company issued an arm's length lender a $92,125 convertible promissory note (including a ‎‎10% original issue discount) for a purchase price of $83,750, bearing interest at 12% per ‎annum, maturing on April 21, 2022, and convertible into Common Shares based on a discount to the market price of the Common Shares upon conversion.‎ No Common Shares have been issued in connection with this convertible promissory note, which remains outstanding.‎ * On May 20, 2021, the Company issued an arm's length lender $141,625 convertible promissory note (including a ‎‎10% original issue discount) for a purchase price of $128,750, bearing interest at 12% per ‎annum, maturing on May 20, 2022, and convertible into Common Shares based on a discount to the market price of the Common Shares upon conversion. ‎ No Common Shares have been issued in connection with this convertible promissory note, which remains outstanding.‎ * On Oct. 30, 2018, an arm's length lender loaned ‎$350,000 to the Company. Subsequently, on June 16, 2021, pursuant to an Exchange ‎Agreement, the non-convertible promissory note was exchanged for a convertible redeemable note with an ‎aggregate principal amount of $191,779 bearing interest at 10% per annum, maturing on June ‎‎16, 2022, and convertible into Common Shares. ‎ On June 16, 2021, pursuant to an Assignment and Purchase of Debt Agreement, the $191,779 convertible redeemable note was ‎purchased and assigned to another arm's length lender and on the same day it was converted into 4,677,532 Common Shares at $0.04100004 per ‎share.‎ * On June 24, 2021, a non-convertible secured debenture, bearing interest at 12% per annum owing to ‎ an arm's length lender with an aggregate amount outstanding of CAD$962,085 (including interest and ‎penalty), which had matured, was acquired by another arm's length lender pursuant to an Assignment and ‎Purchase of Corporate Debt Agreement. On June 30, 2021, pursuant to a Securities ‎Exchange Agreement dated June 28, 2021, the debenture ‎was exchanged for a convertible redeemable note with an aggregate principal amount of ‎$771,610, bearing interest at 8% per annum, maturing on June 30, 2022, and convertible into ‎Common Shares at $0.041 per share.‎ On July 1, 2021, the convertible redeemable note was converted into 18,819,756 ‎Common Shares at $0.041 per share.‎ * On June 24, 2021, a non-convertible secured debenture, bearing interest at 12% per annum and owing to‎ an arm's length lender, with an aggregate amount outstanding of CAD$38,217 (including interest and ‎penalty), which had matured, was acquired by another arm's length lender pursuant to an Assignment and ‎Purchase of Corporate Debt Agreement. On June 30, 2021, pursuant to a Securities ‎Exchange Agreement dated June 28, 2021, the debenture ‎was exchanged for a convertible redeemable note with an aggregate principal amount of ‎$30,652, bearing interest at 8% per annum, maturing on June 30, 2022 and convertible into Common Shares at $0.041 per share.‎ On July 1, 2021, the convertible redeemable note was converted into ‎747,616 ‎Common Shares at $0.041 per share.‎ * On July 2, 2021, the Company issued to an arm's length lender a $114,125 convertible promissory note (including a ‎‎10% original issue discount) for a purchase price of $103,750, bearing interest at 12% per ‎annum, maturing on July 2, 2022 and principal and interest convertible into Common Shares based on a discount to the market price of the Common Shares upon conversion. ‎ No Common Shares have been issued in connection with this convertible promissory note.‎ The net proceeds of the Transactions that resulted in new funds to the Company were used for expansion of the Company's extraction plant and working capital.‎ Disclosure regarding the Transactions has been provided in the following filings: * Annual Report on Form 10-K for the year ended August 31, 2020, filed on December 15, 2020; * Amended Annual Report on Form 10-K/A for the year ended August 31, 2020, filed on December 28, 2020; * Amended Annual Report on Form 10-K/A for the year ended August 31, 2020, filed on August 19, 2021; * Amended Quarterly Report on Form 10-Q/A for the three months ended November 30, 2020, filed on August 19, 2021; * Quarterly report on Form 10-Q for the six months ended February 28, 2021, filed on April 20, 2021; * Amended Quarterly Report on Form 10-Q/A for the six months ended February 28, 2021, filed on August 19, 2021; and * Quarterly report on Form 10-Q for the nine months ended May 31, 2021, filed on August 19, 2021. The Company continues to work with the Exchange on a reinstatement of trading and will update the market as things progress. However, the Exchange has indicated that these matters and their review of the Transactions may take some time to resolve and that a reinstatement to trading is not expected in the near term. The Company continues to operate normally and is working diligently to answers questions from the Exchange. About Petroteq Energy Inc. Petroteq Energy Inc. -- www.Petroteq.energy -- is a clean technology company focused on the development, implementation and licensing of a patented, environmentally safe and sustainable technology for the extraction and reclamation of heavy oil and bitumen from oil sands and mineable oil deposits. Petroteq is currently focused on developing its oil sands resources at Asphalt Ridge and upgrading production capacity at its heavy oil extraction facility located near Vernal, Utah. Petroteq reported a net loss and comprehensive loss of $12.38 million for the year ended Aug. 30, 2020, compared to a net loss and comprehensive loss of $15.78 million for the year ended Aug. 31, 2019. Vancouver, British Columbia, Canada-based Hay & Watson, the Company's auditor since 2012, issued a "going concern" qualification in its report dated Dec. 15, 2020, citing that the Company has had recurring losses from operations and has a net capital deficiency, which raises substantial doubt about its ability to continue as a going concern. PRIMARY PRODUCTS: Fitch Assigns First Time 'BB(EXP)' LT IDRs ------------------------------------------------------------ Fitch Ratings has assigned first-time 'BB(EXP)' Long-Term Issuer Default Ratings (IDRs) to Primary Products Finance LLC (Primary) and Primary Products Holdings LLC. In addition, Fitch has assigned 'BBB-(EXP)'/'RR1' ratings to Primary's $300 million ABL revolving credit facility, and 'BB+(EXP)/RR2' ratings to the $100 million senior secured revolving facility and $1.06 billion senior secured term loan. The Rating Outlook is Stable. The ratings consider the company's strong market position in the mature corn-derived products industry for the food and industrial markets, ample liquidity supported by strong FCF expectations, and moderate Fitch-calculated leverage (total debt to EBITDA after associates and minorities) of approximately 3.0x at deal close. These factors are offset by narrow product diversification and limited scale with LTM June 2021 EBITDA of $325 million. Fitch projects annual FCF in the $125 million-$150 million range, which will provide Primary with financial flexibility to invest in organic growth, acquisitions, and to return capital to shareholders. KEY RATING DRIVERS Major Player in Mature Industry: In July 2021, KPS Capital Partners, LP entered into an agreement to purchase a controlling 50.1% stake in Primary, Tate & Lyle PLC's Primary Products Segment, which serves the Americas and generated $2.1 billion in revenue for fiscal 2021 (ended March). The expected enterprise value of $1.7 billion represents just over a 5x multiple on Fitch-calculated EBITDA of $325 million for LTM ended June 2021. Primary's main segments include sweeteners (42% fiscal 2021 net revenue), industrial starches (12%), acidulants (8%), and other co-products of the corn wet-milling process. The corn-derived products industry is stable and mature, and Primary will be one of four top players in the U.S. Fitch's base case does not contemplate any major new entrants or new competition; instead, large incumbents have been diversifying capacity away from corn-derived products. Structural Decline in HFCS: Primary is solely focused on corn-derived bulk ingredients, while other peers such as Ingredion Incorporated (Ingredion; BBB/Stable) and Tate & Lyle have pivoted towards higher growth specialty ingredients markets with a heavier focus on innovation. Fitch expects demand for HFCS (High Fructose Corn Syrup), which generated 28.2% of fiscal 2021 net revenue will experience structural top-line declines in the low-to-mid single digits annually. However, growth in demand for Primary's other sweeteners such as dextrose, and other corn-derived products such as industrial starches, is projected to offset the decline in HFCS, driving longer term revenue growth in the low single digits. HFCS Critical for Major Customers: HFCS is a critical input for major customers, as switching costs towards other sweetener alternatives are high given the inherent risk with altering formulations of packaged food products, particularly those with historic brands, flavors, and mouthfeel. Industry capacity utilization for HFCS has remained at approximately 75% over the last 20 years, and no new capacity has been added in the last 15 years. Consequently, the industry has rationalized marginal facilities and reallocated production capacity to alternative and growing uses. While high utilization rates benefit Primary over the medium term, the long-term reduction in capacity signals a mature HFCS market that is in structural decline, one that other competitors continue to exit in search of higher growth, higher margined products. Margin Mix and Operational Improvement: Fitch expects Primary's gross profit before fixed COGS to improve from the mix shift towards growth in higher margined products and away from lower margined HFCS. In conjunction with successful execution of management's initiatives targeting approximately $70 million of gross profit savings by fiscal 2025, Fitch expects EBITDA margins to improve to 15.3% by fiscal 2025, from 14.6% in fiscal 2021. Consistent EBITDA through Commodity Cycles: Primary's EBITDA has historically shown resiliency through commodity cycles. For example, EBITDA declined approximately 14% to $278 million in fiscal 2015 versus fiscal 2013, while over the same period, corn prices per bushel declined by over 40% to $4. Primary is relatively insulated from volatile commodity prices as approximately 75% of volumes are produced under tolling contracts, which effectively allows Primary to earn a spread, or fixed processing fee, regardless of the price of corn. The remaining 25% are flat price contracts, against which Primary has historically entered into hedging programs to help mitigate price risk. Modestly Levered, Strong FCF: Leverage (Total Debt / Fitch-calculated EBITDA after associates and minorities) of 3.0x at close is expected to decline modestly given Fitch's expectations of low-to-mid single digit EBITDA growth beginning fiscal 2023 and minimal debt paydown. Fitch assumes FCF, projected in the range of $125 million-$150 million annually, could be used towards acquisitions or return of capital to shareholders. DERIVATION SUMMARY Primary's ratings reflect the company's strong market position in the mature corn-derived products industry for the food and industrial markets, ample liquidity supported by strong FCF expectations, and moderate Fitch-calculated leverage (total debt to EBITDA after associates and minorities) of approximately 3.0x at deal close, offset by limited scale with LTM June 2021 EBITDA of $325 million. Ingredion Inc.'s 'BBB' rating is supported by its globally diverse product portfolio and stable underlying business model focused on starches and sweeteners, with increasing exposure to higher-value, on-trend specialty ingredients. Ingredion's business model remained relatively resilient during coronavirus restrictions with manageable pressure in food away-from-home, given its exposure to stable product categories. Ingredion has taken several actions to address operating pressures experienced prior to the pandemic related to secular changes in its core businesses combined with further efficiency initiatives expected during 2021. Fitch expects this should continue to reduce earnings volatility and support more predictable earnings growth. Darling Ingredients Inc.'s 'BB+' rating reflects the company's leading market position as a globally diversified ingredient processor through repurposing animal by-products and other food wastes into useable fats and proteins across a wide range of end markets. The company's ample liquidity supports FCF, which benefits from the company's 50% interest in Diamond Green Diesel (DGD), and moderate leverage offset by limited scale with Darling's core EBITDA (excluding its minority interest in DGD) and business susceptibility to commodity volatility. Central Garden & Pet Company's 'BB' rating reflects the company's strong market positions within the pet and lawn and garden segments, strong liquidity including robust FCF and moderate leverage offset by limited scale with EBITDA below $300 million. Fitch expects modest organic revenue growth over the medium term supplemented by acquisitions, with EBITDA margins in the 10% area and annual FCF of $150 million to $200 million. Gross leverage (total debt/EBITDA) is expected to trend to around 2.5x in fiscal 2020 (ending September 2020) and around 2.8x in fiscal 2021, given the top line and EBITDA pandemic-related benefits. Over time, Fitch expects the company to manage leverage within its targeted 3.0x to 3.5x range, reflecting debt financed acquisitions as Central continues to diversify its portfolio and increase scale within its segments ACCO Brands Corporation's 'BB' rating reflect the company's historically consistent FCF and reasonable gross leverage, which trended around 3x prior to pandemic-related operating challenges in 2020. 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. The company has taken actions 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 channels, as well as international markets. The acquisition of PowerA, which sells accessories for the fast-growing video gaming market, is an example of ACCO's good diversification strategy. Spectrum Brands, Inc.'s current 'BB' rating reflects the company's diversified portfolio and historical commitment to maintaining net leverage around 4.0x, which equates to a similar gross leverage target assuming $100 million-$150 million in cash longer term. The rating also reflects expectations for modest long-term organic revenue growth, reasonable profitability and positive FCF. The Positive Watch reflects 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+'. KEY ASSUMPTIONS Primary's revenues decrease by 5% to around $2 billion in fiscal 2022, driven largely by the expectations of double-digit declines in the company's co-products segment, assuming a normalization of corn commodity prices. Excluding the co-products, fiscal 2022 revenues are expected to be approximately flat to fiscal 2021, driven by continued mid-single declines in the HFCS segment, as away-from-home soda consumption remains pressured, and offset by growth in other categories including other sweeteners including dextrose and corn syrup. Beyond fiscal 2022, Fitch expects organic revenue growth in the low single digits. Fitch-calculated EBTIDA is expected to decline 6% to $280 million in fiscal 2022 due to the impact of the pandemic. Thereafter, Fitch expects EBITDA to grow in the low- to mid-single digits, reflecting margin improvement towards the low mid-15% range in fiscal 2024 from a projected mid-14% in fiscal 2022, driven by a mix shift towards higher gross margined products. Fitch expects FCF of $125 million-$150 million annually, reflecting capex of approximately $115 million. Fitch assumes FCF could be used towards acquisitions or return of capital to shareholders. RATING SENSITIVITIES Factor that could, individually or collectively, lead to positive rating action/upgrade: -- EBITDA growth to over $400 million based on increased product diversification away from corn derived products and/or geographic diversification, while committing to maintain gross leverage (total debt / operating EBITDA after associates and minorities) below 3.0x. Factor that could, individually or collectively, lead to negative rating action/downgrade: -- Gross leverage (total debt / operating EBITDA after associates and minorities) sustained above 4.0x as a result of financial performance below Fitch's expectations, and/or as a result of large M&A debt funded transaction, or leveraging capital returns. 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 Post transaction close, total debt structure is expected to be $1.46 billion consisting of a $300 million ABL revolver, a $100 million first lien cash flow revolver, and a $1.06 billion first lien term loan. The ABL revolver and the cash flow revolver are expected to have a five-year tenor, and the term loan is expected to mature two years thereafter. The ABL has a first lien on accounts receivable, inventory, tax refunds, deposit accounts and related ABL priority collateral. The cash flow revolver and the term loan are parri passu and have a second lien on the ABL assets and a first lien on all other tangible and intangible assets. At deal close, liquidity of $375 million is expected to be comprised of $15 million in cash, full availability on the $100 million senior secured revolving facility, and approximately $260 million availability on the $300 million ABL, with no amounts drawn at close, net of approximately $40 million in letters of credit. Fitch expects Primary could draw modestly on its ABL post-close to fund $60 million in working capital needs going into calendar 4Q22. The ABL agreement is expected to include a springing fixed charge coverage ratio (FCCR) of 1.0x if excess availability is less than the greater of $22.5 million and 10% of the line cap. The first lien cash flow revolver and term loan is expected to include an excess cash flow sweep provision at 50% with step downs to 25% and 0% at net 1st lien leverages of 2.55x and 2.05x, respectively. The cash flow revolver is subject to a springing net first lien leverage test at 5.25x, when 35% of the facility is drawn. ISSUER PROFILE Primary will be a leading provider of corn-derived products, including sweeteners (42% of fiscal 2021 net revenue), industrial starches (12%), acidulants (8%), and other co-products of the corn wet-milling process, and will employ 1,700 employees across three corn wet mills, three acidulant plants and a network of 13 grain elevators. SUMMARY OF FINANCIAL ADJUSTMENTS Summary of Financial Statement Adjustments - Stock-based compensation, standard lease adjustments that impact EBITDA, and other one-time adjustments related to the transaction. ESG CONSIDERATIONS Primary Products Finance LLC has an ESG Relevance Score of '4' for Exposure to Social Impacts due to shifting consumer preferences with reducing sugar consumption, and more acutely reducing HFCS, which has affected demand for certain packaged foods and beverages with higher levels of sugars or sweeteners. Fitch expects demand for HFCS to structurally decline in the low-to-mid single digits annually. These trends have caused large CPG companies, including Primary's major customers such as The Coca-Cola Company and PepsiCo Inc. to modify and extend portfolios by reformulation of brands to adapt to changing consumer behaviors. This 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. PRIMARY PRODUCTS: Moody's Gives First Time 'B1' Corp Family Rating ------------------------------------------------------------------ Moody's Investors Service assigned first-time ratings to Primary Products Finance LLC including a B1 Corporate Family Rating, a B1-PD Probability of Default Rating, and B1 ratings on the company's proposed senior secured credit facility consisting of a $100 million first lien revolver due 2026 and a $1,060 million first lien term loan due 2028. The outlook is stable. Proceeds from the $1,060 million term loan combined with a $294 million cash equity investment from KPS Capital Partners, LP ("KPS") will be used to finance KPS' acquisition of a controlling interest in Tate & Lyle PLC's ("Tate & Lyle") Primary Products business in North and Latin America along with Tate & Lyle's ownership stake in two joint ventures (Bio-PDO and Almex). Proceeds will also be used to pay transaction fees. The following ratings/assessments are affected by the action: New Assignments: Issuer: Primary Products Finance LLC Corporate Family Rating, Assigned B1 Probability of Default Rating, Assigned B1-PD Senior Secured 1st LienTerm Loan, Assigned B1 (LGD4) Senior Secured 1st Lien Revolving Credit Facility, Assigned B1 (LGD4) Outlook Actions: Issuer: Primary Products Finance LLC Outlook, Assigned Stable RATINGS RATIONALE Primary Products', CFR reflects the company's position as a leading provider of nutritive sweeteners, industrial starches, acidulants and other corn-derived products in North America and Brazil with longstanding blue-chip customer relationships. Sweetener products represent roughly 69% of revenue and are used as ingredients in end markets such as food and beverage that are relatively stable through economic cycles. Other end markets are somewhat more cyclical such as paper, packaging and building products. The ratings also reflect the company's ability to effectively pass through commodity price volatility through its contractual material pass-throughs (approximately 75% of volume). Offsetting these factors are the company's moderate leverage projected to be around 3.6x debt-to-EBITDA as of Fiscal year end March 31, 2022. The company's limited stand-alone operating history presents risk because it diminishes visibility into the sustainable cost structure as a stand-alone entity. The declining high fructose corn syrup (HFCS) market, and aggressive financial policies expected under controlling interest by a private equity sponsor are also credit negatives. The corn derived product manufacturing market in the US is concentrated with Primary Products representing one of four players that supply over 95% of the volume of HFCS and industrial starches. Competitors include companies such as Cargill, Archer Daniels Midland, and Ingredion that are larger, more diversified by product and geography, and lower leveraged. As a result, Primary Products has less financial flexibility and free cash flow to reinvest to maintain its competitive position. High barriers to entry, such as the high costs of a new production facility (+$800 million) and low growth prospects, are likely to insulate the market from new entrants. In addition to limited competition, Primary Products also benefits from the high price of sugar in the US, a result of the USDA's Sugar Program that places tariffs on sugar imports and provides domestic price support for sugar. Given the high price of sugar, many well known food and beverage companies use sweeteners such as high fructose corn syrup, corn syrup, and dextrose as alternatives to sugar in the formulation and manufacturing of their brands. Primary Products derives over 50% of its operating profit from these sweeteners and thus indirectly benefits from the US Sugar Program. If the USDA were to repeal this program, Primary Products could be negatively impacted. Moody's expects that Primary Products will operate with good liquidity. This incorporate the rating agency's estimate of $15 million of pro-forma cash, approximately $100 million in annual projected free cash flow in the fiscal years ending March 2022 and March 2023, full capacity on the undrawn $100 million revolver and the $300 million asset-based revolving credit facility, and no meaningful debt maturities through 2026. The cash sources provide ample resources for the $10.6 million of required annual amortization, reinvestment needs and potential acquisitions. The coronavirus outbreak and the government measures put in place to contain it continue to disrupt economies and credit markets across sectors and regions. Although an economic recovery is underway, it is tenuous, and its continuation will be closely tied to containment of the virus. As a result, there is uncertainty around Moody's forecasts. Moody's regards the coronavirus outbreak as a social risk under its ESG framework, given the substantial implications for public health and safety. Notwithstanding these factors, Primary Products and many other protein and agriculture companies are likely to be more resilient than companies in other sectors, although some volatility can be expected through 2022 due to uncertain demand characteristics, channel shifting, and the potential for supply chain disruptions and difficult comparisons following these shifts. Governance risk includes Primary Products' financial strategies, which Moody's views as aggressive given the company's private equity ownership. The company's manufacturing operations consume a large amount of energy and agricultural products (most notably corn) that present environmental risk. As a result, Primary Products must continue to invest to minimize the environmental effects of its operations. The company believes it is the only operator of wet mills that will fully transition from coal-driven energy usage. In addition, Primary Products has been very involved in sustainability practices and believes it was the first corn-wet mill based ingredient supplier to launch a sustainable agriculture program. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS The stable outlook reflects Moody's expectation that Primary Products will operate with an approximate 18% EBITDA margin as a stand-alone entity with relatively stable revenue. Moody's also expects the company to maintain good liquidity with free cash flow of approximately $100 million over the next year. The likelihood of an upgrade is low under private equity control. However, the ratings could be upgraded if the company diversifies its product profile, demonstrates financial policies consistent with maintaining lower leverage, sustains debt to EBITDA below 3.0x, and maintains good liquidity. Alternatively, the ratings could be downgraded if operating performance deteriorates, free cash flow to debt is below 5%, debt to EBITDA is above 4.5x, or liquidity deteriorates. As proposed, the $1,060 million senior secured term facility and the $100 million senior secured revolving facility are expected to provide covenant flexibility that if utilized could negatively impact creditors. Notable terms include the following: Provisions for incremental debt capacity in an amount up to the sum of: the greater of $365 million and 100% of trailing four quarter consolidated EBITDA plus amounts under the general debt basket, and such other amounts subject to a pro forma first lien net leverage ratio not to exceed 3.3x (if pari passu secured). The greater of $365 million and 100% of trailing four quarter consolidated EBITDA may be incurred with an earlier maturity than the initial term loans. There are no express "blocker" provisions which prohibit the transfer of specified assets to unrestricted subsidiaries; such transfers are permitted subject to carve-out capacity and other conditions. Non-wholly-owned subsidiaries are not required to provide guarantees; dividends or transfers resulting in partial ownership of subsidiary guarantors could jeopardize guarantees, with no explicit protective provisions limiting such guarantee releases. There are no express protective provisions prohibiting an up-tiering transaction. The proposed terms and the final terms of the credit agreement may be materially different. Primary Products is a leading provider of nutritive sweeteners, industrial starches, acidulants and other corn derives products. Annual sales are projected to be approximately $1.9 billion for the Fiscal year ended March 30, 2022. Following the proposed leveraged buyout, the company will be 50.1% owned by KPS Capital Partners, LP and 49.9% owned by Tate & Lyle. The principal methodology used in these ratings was Protein and Agriculture published in May 2019. PRINCETON-WINDSOR PEDIATRICS: Wins Cash Collateral Access --------------------------------------------------------- The U.S. Bankruptcy Court for the District of New Jersey in Newark has authorized Princeton-Windsor Pediatrics, PA to use cash collateral up to the aggregate amount of $75,040 on an interim basis, in accordance with the budget and provide adequate protection through October 29, 2021. The Debtor requires the use of cash, receivables, deposit accounts, and other cash equivalents upon which M&T Bank holds or might assert a lien or security interest. A UCC Search of the Debtor reveals that M&T Bank filed a UCC-1 Financing Statement against the Debtor on April 18, 2018. M&T Bank has asserted a secured claim against the Debtor in the approximate amount of $330,799.56 as of the Petition Date. The Debtor is authorized to use cash collateral to meet the ordinary cash needs of the Debtor (and for such other purposes as may be approved in writing by the Secured Creditor) for the payment of actual expenses of the Debtor necessary to (a) maintain and preserve its assets, and (b) continue operation of its business, including payroll and payroll taxes, and insurance expenses as reflected in the cash collateral budget. As adequate protection for the use of cash collateral, the Secured Creditor is granted a replacement perfected security interest under Section 361(2) of the Bankruptcy Code to the extent the Secured Creditor's cash collateral is used by the Debtor, to the extent and with the same priority in the Debtor's post-petition collateral, and proceeds thereof, that the Secured Creditor held in the Debtor's pre-petition collateral. The replacement lien and security interest granted is automatically deemed perfected upon entry of the Order without the necessity of the Secured Creditor taking possession, filing financing statements, mortgages or other documents. Although not required, upon request by the Secured Creditor, the Debtor will execute and deliver to the Secured Creditor any and all UCC Financing Statements, UCC Continuation Statements, Certificates of Title or other instruments or documents considered by the Secured Creditor to be necessary in order to perfect the security interests and liens in the Debtor's post-petition collateral and proceeds granted by the Order, and the Secured Creditor is authorized to receive, file and record the foregoing at the Secured Creditor's own expense, which actions will not be deemed a violation of the automatic stay. Within 14 days of the entry of the Order, the Debtor will provide monthly periodic adequate protection payments to Secured Creditor in the amount of $2,100, and monthly accountings to the Secured Creditor setting forth the cash receipts and disbursements made by the Debtor under the Order. The final hearing on the matter is scheduled for October 28 at 10 a.m. A copy of the order and the Debtor's monthly budget is available at https://bit.ly/3uFKu01 from PacerMonitor.com. The Debtor projects $$75,040 in total expenses. About Princeton-Windsor Pediatrics, PA Princeton-Windsor Pediatrics, PA operates a pediatric medical practice located at 88 Princeton-Hightstown Rd, Ste 103, Princeton Junction, NJ 08550; the location is an office condominium unit. Princeton-Windsor Pediatrics does not own the real property, but is the sole occupant; the condominium is owned by WC 88 Princeton-Hightstown LLC. Princeton-Windsor Pediatrics sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. D.N.J. Case No. 21-17501-MBK) on September 24, 2021. In the petition signed by Catherine M. Zelinsky, authorized representative, the Debtor disclosed up to $1 million in both assets and liabilities. Judge Michael B. Kaplan oversees the case. Brian G. Hannon, Esq., at Norgaard, O'Boyle & Hannon is the Debtor's counsel. PURDUE PHARMA: Colluded With Walgreens to Sell Opioid, Jury Told ---------------------------------------------------------------- Cara Salvatore, writing for Law360, reports that a Cleveland federal jury weighing groundbreaking claims against opioid-dispensing pharmacies heard testimony Wednesday, October 6, 2021, that Walgreens "colluded" with Purdue Pharma to drive sales, allegedly welcoming the drugmaker to sell to its supervisors and handing over pharmacy sales data. In the trial, which started on Monday, CVS, Walgreens, Walmart and Giant Eagle are seeking to rebut claims that their pharmacies contributed to a supposed flagrant public nuisance in Ohio's Lake and Trumbull counties. Stanford University psychiatrist and addiction specialist Dr. Anna Lembke took the stand all day Wednesday, October 5, 2021, telling the jury that Walgreens proactively promoted opioids by working side-by-side with Purdue Pharma. About Purdue Pharma Purdue Pharma L.P. and its subsidiaries -- http://www.purduepharma.com/-- develop and provide prescription medicines and consumer products that meet the evolving needs of healthcare professionals, patients, consumers and caregivers. Purdue's subsidiaries include Adlon Therapeutics L.P., focused on treatment for Attention-Deficit/Hyperactivity Disorder (ADHD) and related disorders; Avrio Health L.P., a consumer health products company that champions an improved quality of life for people in the United States through the reimagining of innovative product solutions; Imbrium Therapeutics L.P., established to further advance the emerging portfolio and develop the pipeline in the areas of CNS, non-opioid pain medicines, and select oncology through internal research, strategic collaborations and partnerships; and Greenfield Bioventures L.P., an investment vehicle focused on value-inflection in early stages of clinical development. Opioid makers in the U.S. are facing pressure from a crackdown on the addictive drug in the wake of the opioid crisis and as state attorneys general file lawsuits against manufacturers. More than 2,000 states, counties, municipalities and Native American governments have sued Purdue Pharma and other pharmaceutical companies for their role in the opioid crisis in the U.S., which has contributed to the more than 700,000 drug overdose deaths in the U.S. since 1999. OxyContin, Purdue Pharma's most prominent pain medication, has been the target of over 2,600 civil actions pending in various state and federal courts and other fora across the United States and its territories. On Sept. 15 and 16, 2019, Purdue Pharma L.P. and 23 affiliated debtors each filed a voluntary petition for relief under Chapter 11 of the U.S. Bankruptcy Code (Bankr. S.D.N.Y. Lead Case No. 19-23649), after reaching terms of a preliminary agreement for settling the massive opioid litigation. The Debtors' consolidated balance sheet as of Aug. 31, 2019, showed $1.972 billion in assets and $562 million in liabilities. U.S. Bankruptcy Judge Robert Drain oversees the cases. The Debtors tapped Davis Polk & Wardwell, LLP and Dechert, LLP as legal counsel; PJT Partners as investment banker; AlixPartners as financial advisor; and Grant Thornton, LLP as tax structuring consultant. Prime Clerk LLC is the claims agent. Akin Gump Strauss Hauer & Feld LLP and Bayard, P.A., represent the official committee of unsecured creditors appointed in the Debtors' bankruptcy cases. David M. Klauder, Esq., is the fee examiner appointed in the Debtors' cases. The fee examiner is represented by Bielli & Klauder, LLC. PURDUE PHARMA: Lobby Groups Join Battle Over Sackler Immunity ------------------------------------------------------------- Walker Bragman, David Sirota and Andrew Perez of the Newsweek report that as a coalition of lawmakers tries to hold the billionaire Sackler family accountable for its role in the opioid crisis, Washington's most powerful business lobby group has now jumped into the intensifying battle over whether courts can grant sweeping legal immunity to those accused of corporate crime. At issue is a feature of bankruptcy law known as a non-debtor release, which the Sackler family -- owners of opioid maker Purdue Pharma -- is trying to use to shield its entire corporate empire from current and future litigation. Facing a barrage of lawsuits over its role in the opioid epidemic, Connecticut-based Purdue declared bankruptcy in a New York court known for being friendly to corporate litigants. Last September 2021, Judge Robert Drain approved the Sackler family's sweeping immunity plan in the U.S. bankruptcy court for the Southern District of New York. The Biden administration is now appealing that ruling. Earlier this 2021, Democrats introduced the Stop Shielding Assets from Corporate Known Liability by Eliminating Non-Debtor Releases (SACKLER) Act, a bill that would have prevented the Sacklers from obtaining liability releases. Although the legislation has 63 co-sponsors, the measure has been stalled in committee since March, more than five months before the court accepted Purdue's plan. Meanwhile, federal records show the U.S. Chamber of Commerce, one of the nation's best-funded corporate lobbying groups, has joined Purdue Pharma in lobbying on the bill. Lobbying records filed with the Senate show that the Chamber began lobbying on the SACKLER Act between April and June. A Chamber affiliate, the Institute for Legal Reform, has also jumped into the fray. Disclosures show the group hired a former Republican aide to the Senate Judiciary Committee to lobby on the issue. Federal records show only that the Chamber and the Institute for Legal Reform have been lobbying on the bill, which would help determine whether or not the family is able to protect its hard-won immunity. The Chamber did not respond to a request for comment about what they are specifically lobbying for or against. For years, the Chamber has been leading a larger legislative campaign to try to shield corporations from legal liability. In the case of the SACKLER Act, the Chamber and its members may be trying to fortify a lucrative legal shield for not just the Sackler family, but for all of corporate America. Other interests lobbying on the bill include hospital chain Tenet Health, as well as drugmaker Johnson & Johnson, which has a direct connection to the opioid crisis, as it supplied poppies used in Purdue pills. Johnson & Johnson reported donating up to $500,000 to the Chamber in 2020, while Tenet gave $150,000. A recent investigation by The Intercept revealed that Purdue has spent $1.2 million over the past year and a half on lobbying despite telling a court it is bankrupt. In federal disclosure records, the company says it has been "monitoring" the SACKLER Act. Pushing for immunity The lobbying move comes as the Sacklers are making clear how much they value the legal immunity provisions of the pending bankruptcy settlement. Last month, the family threatened to scuttle the whole settlement and fight each individual case in court, unless the current court agreed to halt all current and future civil and criminal proceedings against the family and its empire. Though Purdue is headquartered in Stamford, Connecticut, and incorporated in Delaware, the Sacklers were able to bring their bankruptcy case in White Plains, New York, because Congress has not passed bipartisan legislation to halt so-called forum shopping by corporations. Without that reform, companies can pick and choose courts whose jurisprudence offer them the best chance to protect their assets and grant them immunity from liability and prosecution. Right now, there is a split between federal circuit courts of appeals over the issue of non-debtor releases from liability in bankruptcy cases. The Ninth and Tenth Circuits do not allow such releases under any circumstances. The Second, Fourth, and Sixth Circuits, on the other hand, allow non-consensual, non-debtor releases for third parties who contribute money to reorganization plans. The SACKLER Act would have settled the matter in favor of the Ninth and Tenth Circuit approach, barring courts from granting non-debtors liability waivers—at least against claims by governments. But that legislation is stalled. Closing the loophole Now, a group of House and Senate Democrats are racing to try to pass new legislation designed to explicitly prohibit such settlement arrangements, and short-circuit a deal that they see as unfairly generous to the drug kingpins whose products have killed hundreds of thousands of Americans. Introduced at the end of July, The Nondebtor Release Prohibition Act of 2021 is being spearheaded by Sens. Elizabeth Warren (Mass.), Dick Durbin (Ill.), and Richard Blumenthal (Conn.), as well as Reps. Jerry Nadler and Carolyn Maloney of New York and David Cicilline of Rhode Island. The legislation would similarly prevent courts from granting non-debtor releases where creditors do not agree to the liability waiver. "Since Purdue Pharma filed for bankruptcy, the Sackler family has tried to use non-debtor releases, or non-consensual third-party releases, to protect themselves and their assets from lawsuits linked to the opioid crisis," the lawmakers wrote in a press release. "This loophole in bankruptcy law has increasingly been used by bad actors who have not filed for bankruptcy to escape personal accountability for their actions by shielding themselves through a bankruptcy proceeding of another corporation or entity. The Nondebtor Release Prohibition Act of 2021 would virtually eliminate the use of non-consensual, non-debtor releases in private claims and those brought by the government." Lobbying disclosures are not yet available for this new bill. While Nadler, the House Judiciary Committee chair, introduced the legislation, it has been sitting in his committee since July 28—more than a month before a judge approved Purdue's settlement plan. About Purdue Pharma Purdue Pharma L.P. and its subsidiaries -- http://www.purduepharma.com/-- develop and provide prescription medicines and consumer products that meet the evolving needs of healthcare professionals, patients, consumers and caregivers. Purdue's subsidiaries include Adlon Therapeutics L.P., focused on treatment for Attention-Deficit/Hyperactivity Disorder (ADHD) and related disorders; Avrio Health L.P., a consumer health products company that champions an improved quality of life for people in the United States through the reimagining of innovative product solutions; Imbrium Therapeutics L.P., established to further advance the emerging portfolio and develop the pipeline in the areas of CNS, non-opioid pain medicines, and select oncology through internal research, strategic collaborations and partnerships; and Greenfield Bioventures L.P., an investment vehicle focused on value-inflection in early stages of clinical development. Opioid makers in the U.S. are facing pressure from a crackdown on the addictive drug in the wake of the opioid crisis and as state attorneys general file lawsuits against manufacturers. More than 2,000 states, counties, municipalities and Native American governments have sued Purdue Pharma and other pharmaceutical companies for their role in the opioid crisis in the U.S., which has contributed to the more than 700,000 drug overdose deaths in the U.S. since 1999. OxyContin, Purdue Pharma's most prominent pain medication, has been the target of over 2,600 civil actions pending in various state and federal courts and other fora across the United States and its territories. On Sept. 15 and 16, 2019, Purdue Pharma L.P. and 23 affiliated debtors each filed a voluntary petition for relief under Chapter 11 of the U.S. Bankruptcy Code (Bankr. S.D.N.Y. Lead Case No. 19-23649), after reaching terms of a preliminary agreement for settling the massive opioid litigation. The Debtors' consolidated balance sheet as of Aug. 31, 2019, showed $1.972 billion in assets and $562 million in liabilities. U.S. Bankruptcy Judge Robert Drain oversees the cases. The Debtors tapped Davis Polk & Wardwell, LLP and Dechert, LLP as legal counsel; PJT Partners as investment banker; AlixPartners as financial advisor; and Grant Thornton, LLP as tax structuring consultant. Prime Clerk LLC is the claims agent. Akin Gump Strauss Hauer & Feld LLP and Bayard, P.A., represent the official committee of unsecured creditors appointed in the Debtors' bankruptcy cases. David M. Klauder, Esq., is the fee examiner appointed in the Debtors' cases. The fee examiner is represented by Bielli & Klauder, LLC. * * * U.S. Bankruptcy Judge Robert Drain in early September 2021 approved a plan to turn Purdue into a new company (Knoa Pharma LLC) no longer owned by members of the Sackler family, with its profits going to fight the opioid epidemic. The Sackler family agreed to pay $4.3 billion over nine years to the states and private plaintiffs and in exchange for a lifetime legal immunity. The deal resolves some 3,000 lawsuits filed by state and local governments, Native American tribes, unions, hospitals and others who claimed the company's marketing of prescription opioids helped spark and continue an overdose epidemic. Separate appeals to approval of the Plan have already been filed by the U.S. Bankruptcy Trustee, California, Connecticut, the District of Columbia, Maryland, Rode Island and Washington state, plus some Canadian local governments and other Canadian entities. QUANTUM CORP: Extends Maturity of Revolving Credit Facility to 2026 ------------------------------------------------------------------- Quantum Corporation entered into an amendment to its Amended and Restated Revolving Credit and Security Agreement, dated as of Dec. 27, 2018, with Quantum LTO Holdings, LLC, the borrowers, guarantors and lenders from time to time party thereto, and PNC Bank, National Association, as administrative agent for such lenders. The amendments include extending the maturity date of the Revolving Credit Agreement to Aug. 5, 2026 and reducing the principal amount of the revolving commitments thereunder to $30,000,000. With respect to any LIBOR Rate Loan (as defined in the Revolving Credit Agreement), Quantum Corporation has agreed to pay Blue Torch Capital LP, on behalf of itself and certain of its affiliates and funds managed, advised or sub-advised by it, a cash fee equal to a percentage per annum equal to the sum of (x) 6.00%, minus (y) the Applicable Revolving Margin (as defined below), plus (z) if the LIBOR Rate (as defined in the Revolving Credit Agreement) applicable to such interest payment under the Revolving Credit Agreement is less than 0.75%, (i) 0.75% minus (ii) such LIBOR Rate. With respect to any Domestic Rate Loan or Swing Loan (in each case as defined in the Revolving Credit Agreement) under the Revolving Credit Agreement, the Company has agreed to pay Blue Torch Capital a cash fee equal to a percentage per annum equal to the sum of (x) 5.00%, minus (y) the Applicable Revolving Margin, plus (z) if the Alternative Base Rate (as defined in the Revolving Credit Agreement) applicable to such interest payment under the Revolving Credit Agreement is less than 1.00%, (i) 1.00% minus (ii) such Alternative Base Rate. The Applicable Revolving Margin is 2.25% per annum for LIBOR Rate Loans and 1.25% per annum for Domestic Rate Loans and Swing Loans through Dec. 31, 2021, and effective as of Jan. 1, 2022 on the first day of each fiscal quarter ending thereafter (the "Applicable Margin Adjustment Date"), between 1.75% and 2.25% per annum for LIBOR Rate Loans and between 0.75% and 1.25% per annum for Domestic Rate Loans and Swing Loans, based on the percentage of Average Undrawn Availability (as defined in the Revolving Credit Agreement) for the most recently completed fiscal quarter prior to the Applicable Margin Adjustment Date. If on the last day of any calendar quarter, the average Usage Amount (as defined in the Revolving Credit Agreement) during such calendar quarter does not equal the Maximum Revolving Advance Amount (as defined in the Revolving Credit Agreement), then the Company has agreed to pay Blue Torch Capital a cash fee at a rate per annum equal to 1.00% minus a fee percentage between 0.25% to 0.375% on the amount by which the Maximum Revolving Advance Amount exceeds such average Usage Amount. Amendment to Term Loan Credit and Security Agreement On Sept. 30, 2021, the Company entered into an amendment to the Term Loan Credit and Security Agreement, dated as of Aug. 5, 2021, among the Company, Quantum LTO Holdings, LLC, the borrowers and guarantors from time to time party thereto, the lenders from time to time party thereto, and Blue Torch Finance LLC, as disbursing agent and collateral agent for such lenders. The Term Loan Amendment amends certain terms of the Term Loan Credit Agreement, including updating certain reporting requirements and events of default provisions and the definition of permitted acquisitions and permitted investments. 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. QUOTIENT LIMITED: CEO to Get CHF600K Relocation Payment ------------------------------------------------------- Quotient Limited amended its employment agreement with Manuel O. Mendez, the company's chief executive officer, dated Feb. 23, 2021, to provide for (i) the surrender of Mr. Mendez's entitlement to the guaranteed portion of his discretionary bonus for the company's fiscal year ending in 2022, which under the employment agreement is 600,000 Swiss Francs, (ii) the company's prompt payment in cash to Mr. Mendez of 600,000 Swiss Francs, net of social security cost deductions, to further support his relocation to Switzerland. Mr. Mendez's surrender of his entitlement to the guaranteed portion of his discretionary bonus does not affect his eligibility for additional bonus compensation that may be awarded by the company's Board of Directors in its sole discretion. The amendment also confirms that, as provided in the original employment agreement, the company will reimburse Mr. Mendez, net of social security cost deductions, for all expenses he incurred in connection with his relocation to Switzerland, and that for relocation expenses incurred prior to the earlier of Dec. 31, 2021 and Mr. Mendez's move into his primary residence in Switzerland, such reimbursements will also be paid to Mr. Mendez net of tax deductions. About Quotient Limited Penicuik, United Kingdom-based Quotient Limited is a commercial-stage diagnostics company committed to reducing healthcare costs and improving patient care through the provision of innovative tests within established markets. With an initial focus on blood grouping and serological disease screening, Quotient is developing its proprietary MosaiQTM technology platform to offer a breadth of tests that is unmatched by existing commercially available transfusion diagnostic instrument platforms. The Company's operations are based in Edinburgh, Scotland; Eysins, Switzerland and Newtown, Pennsylvania. Quotient Limited reported a net loss of $108.47 million for the year ended March 31, 2021, compared to a net loss of $102.77 million for the year ended March 31, 2020. As of June 30, 2021, the Company had $276.55 million in total assets, $328.24 million in total liabilities, and a total shareholders' deficit of $51.70 million. RAM DISTRIBUTION: Unsecureds May Get 1% Payout Over 10 Years ------------------------------------------------------------ Ram Distribution Group, LLC, d/b/a Tal Depot, filed a Sixth Amended Disclosure Statement in connection with its Fifth Amended Plan filed on Oct. 1, 2021. The Plan seeks to resolve outstanding claims against the Debtor through the use of proceeds from (1) the Debtor's revenue from business operations during the course of its Chapter 11 Case; (2) the Debtor's Monthly Net Income over a 10-year period; (3) the recoveries, if any, from Preference Actions; and (4) the proceeds, if any, from the Special Counsel Litigation. The Debtor reviewed the transfers it made to creditors during the 90-day period prior to the bankruptcy. As of Oct 1, 2021, the Debtor has already recovered $238,051 from these Preference Actions, and are currently in the escrow account. The Special Counsel Litigation involved, among others, the adversary proceeding the Debtor filed against Joseph Gunnar & Co., LLC for gross negligence in the handling of the Debtor's attempted pre-petition IPO seeking $75,000,000 in damages. As of October 5, 2020, Gunnar's motion to dismiss (the complaint) filed July 2020 was fully briefed and is currently awaiting a ruling from the Court. The Debtor proposed to split the proceeds to be recovered from the Gunnar Litigation, as follows: proceeds will be applied, first, towards compensation of Special Litigation Counsel and the balance will be applied towards KeyBank's secured claim. If there are still proceeds remaining, the Debtor proposes to pay 5% pro rata to all allowed unsecured claims. The remaining proceeds shall vest solely in the Reorganized Debtor. Class 1 Secured Claim of KeyBank will be provided for under two scenarios. Under Scenario 1, while the Gunnar Litigation is still pending or if the Debtor receives no monetary settlement or judgment from the Gunnar Litigation, the Debtor shall make monthly principal and interest payments to KeyBank for 84 months. At the conclusion of the 84 months, a balloon payment shall be due to KeyBank for $1,211,093. Under Scenario 1, the Debtor intends to seek refinancing prior to the new maturity date. In the event the Debtor obtains a settlement or other monetary award from the Gunnar Litigation, under Scenario 2, proceeds net of special counsel fees shall be applied towards the secured claim of KeyBank, first to the balloon payment due at maturity then to any other outstanding balance. Class 3 Convenience Class consists of all Allowed General Unsecured Claims of Creditors in amounts less than $3,500. This class consists of 10 creditors and each creditor shall receive 1% of their claim for a total of $1,831. Class 4 General Unsecured Claims will be paid $1,175 monthly on a pro rata basis beginning on Month 17 after the effective date. The Debtor estimates an aggregate pay out to Class 4 Allowed Claims of $141,000 or a return of approximately 1% over a 10-year period. All Interest Holders of the Debtor in Class 5 Interest of the Debtor shall retain their Interests in the Reorganized Debtor in exchange for contributing new capital of $10,000 but shall not receive any distributions for such interests. A copy of the Disclosure Statement is available for free at https://bit.ly/2YtWpT9 from PacerMonitor.com. About Ram Distribution Group Tal Depot owns and operates an e-commerce website at https://taldepot.com/ that sells snacks, drinks, groceries, wellness, and home goods products. Ram Distribution Group, LLC, d/b/a Tal Depot, filed for Chapter 11 bankruptcy protection (Bankr. E.D.N.Y. Case No. 19-72701) on April 12, 2019. In the petition signed by CEO Jeremy J. Reichmann, the Debtor was estimated to have $100,000 to $500,000 in assets and $10 million to $50 million in liabilities. Btzalel Hirschhorn, Esq., at Shiryak, Bowman, Anderson, Gill & Kadochnikov LLP is the Debtor's counsel. Analytic Financial Group, LLC, d/b/a Corporate Matters, serves as financial advisors to the Debtor. RANDOLPH HOSPITAL: Bid to Use Cash Collateral Moot -------------------------------------------------- The U.S. Bankruptcy Court for the Middle District of North Carolina rendered moot the motion to use cash collateral filed by Randolph Hospital, Inc. d/b/a Randolph Health and its affiliates. The Court says the Debtor's Chapter 11 Plan was confirmed on August 25, 2021. The Effective Date of the Chapter 11 Plan occurred October 1, 2021, and the Interim Management Agreement has been terminated as of October 1, 2021. As a result, the Cash Collateral Motion is now moot. A copy of the order is available at https://bit.ly/2WHq6zj from Epiq Corporate Restructuring, LLC, the claims agent. About Randolph Hospital Randolph Hospital -- https://www.randolphhealth.org/ -- operates as a hospital that provides inpatient and outpatient services in North Carolina. The Company offers, among other services, cancer care, imaging, maternity services, cardiac services, surgical services, outpatient specialty clinics, rehabilitation services, and emergency services. Randolph Hospital, Inc. and its affiliates, MRI of Asheboro, LLC and Randolph Specialty Group Practice, each filed a voluntary petition for relief under chapter 11 of the Bankruptcy Code (Bankr. M.D.N.C. Lead Case No. 20-10247) on March 6, 2020. In the petition signed by CRO Louis E. Robichaux IV, Randolph Hospital was estimated to have $100 million to $500 million in both assets and liabilities. Judge Lena Mansori James oversees the case. The Debtor is represented by Jody A. Bedenbaugh, Esq. and Graham S. Mitchell, Esq., at Nelson Mullins Riley & Scarborough LLP. Epiq Corporate Restructuring, LLC is the claims agent. Bank of America, as Lender, is represented by Scott Vaughn, Esq. at McGuire Woods, LLP. The Official Committee of Unsecured Creditors is represented by Andrew H. Sherman, Esq. and Boris I. Mankovetskiy, Esq. at Sills, Cummis & Gross, P.C. RECON MEDICAL: Seeks to Tap Perry Clark as Litigation Counsel ------------------------------------------------------------- Recon Medical, LLC seeks approval from the U.S. Bankruptcy Court for the District of Nevada to employ the Law Offices of Perry R. Clark as its special litigation counsel. The Debtor needs the assistance of a special counsel to represent it in a dispute with Composite Resources, Inc. styled as Composite Resources, Inc. v. Recon Medical, LLC that was filed in the U.S. District Court for the District of Nevada. Perry Clark, Esq., the principal attorney in this representation, will be paid at his hourly rate of $385. In addition, the firm will be reimbursed for expenses incurred. The Debtor paid the firm an initial retainer of $15,000. Mr. Clark disclosed in a court filing that his firm is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. The firm can be reached through: Perry R. Clark, Esq. Law Offices of Perry R. Clark 825 San Antonio Road Palo Alto, CA 94303 Telephone: (650) 248-5817 Facsimile: (650) 618-8533 Email: perry@perryclarklaw.com About Recon Medical Recon Medical, LLC -- https://reconmedical.com/ -- is a retailer of lightweight medical devices and supplies, including Gen 4 Tourniquet, Bleed KitsTM, WoundClotTM soluble hemostatic gauze, and various related supplies. Its business is mainly comprised of online sales through its website, and on its Amazon.com "storefront." Recon Medical was formed on Dec. 1, 2015, and is managed by Derek Parsons and John Rood. It is headquartered at 1872 Buenaventura Blvd., Unit 1, Redding, Calif. Recon Medical filed a petition for Chapter 11 protection (Bankr. D. Nev. Case No. 21-14382) on Sept. 3, 2021, listing as much as $500,000 in both assets and liabilities. Derek Parsons, chief executive officer, signed the petition. Judge Natalie M. Cox oversees the case. The Debtor tapped Larson and Zirzow, LLC as bankruptcy counsel and Denko & Bustamante, LLP and the Law Offices of Perry R. Clark as special counsel. REGINA PECK: Proposed Sale of Horse Withdrawn --------------------------------------------- Judge Richard Taylor of the U.S. Bankruptcy Court for the Western District of Arkansas withdrew Regina Peck's proposed sale of a horse. On Sept. 7, 2021, the Debtor's Attorney filed a Motion to Sell Property. The Debtor no longer desires to sell the horse. The bankruptcy case is In re: Regina Peck, (Bankr. W.D. Ark. Case No. 5:20-bk-72405). REGIONAL WEST HEALTH: Fitch Alters Outlook on 'BB+' IDR to Stable ----------------------------------------------------------------- Fitch Ratings has revised the Outlook on Regional West Health Services (RWHS) from Negative to Stable and affirmed the Issuer Default Rating and revenue rating on approximately $64 million of series 2016A bonds issued through Hospital Authority No. 1 of Scotts Bluff County, NE on behalf of RWHS at 'BB+'. SECURITY The bonds are secured by a pledge of gross revenues and a mortgage lien from the obligated group (OG). ANALYTICAL CONCLUSION RWHS has demonstrated significant operating improvement in fiscal years 2020 and 2021, which is a main driver of the Outlook revision to Stable, as Fitch believes this is a sustainable operating baseline for this provider. RWHS's low liquidity position has begun to improve with revenue cycle efforts, improved revenue strategies and better alignment of clinical costs. Excluding Medicare accelerated payments, RWHS reported $49.5 million in unrestricted cash as of June 30, 2021 compared to $24.3 million as of Dec. 31, 2019. Fitch expects that this cash position will improve further in the near to mid-term, resulting in momentum towards an investment grade rating. However, the timeframe for significant liquidity improvement may occur beyond an 18-month horizon, precluding a Positive Outlook at this time. RWHS's days cash on hand (DCOH) as of YE 2020 remained at 51 days (excluding Medicare accelerated payments) and cash to adjusted debt was 47.5%. Fitch expects these metrics to improve by YE 2021 and again in 2022, but to still fall below the roughly 75% cash to adjusted expectation for an investment grade rating for a credit with a 'bbb' revenue defensibility and 'bbb' operating risk assessment. There are non-public developments that may result in accelerated balance sheet improvement, but they are not certain at this time and are not part of Fitch's forward-look scenario. KEY RATING DRIVERS Revenue Defensibility: 'bbb' Dominant Market Position; Weak Service Area RWHS's revenue defensibility is midrange, which is supported by its dominant market position and limited competition in a somewhat weak service area in the Nebraska panhandle. RWHS has a notable market share of 84% market in its primary service area. Although the service area has weak demographic trends, RWHS acts as a regional referral center in western Nebraska and is the largest provider within 150 miles. No other hospital has more than 25 licensed beds in RWHS's primary, secondary or tertiary service areas. Furthermore, RWHS's payor mix remains solid, as evidenced by combined Medicaid and self-pay accounting for less than 18% of gross revenues in recent years. Medicaid expansion in the state during fiscal 2021 resulted in an increase in Medicaid to 14% from 10%. RWHS added 20 critical care beds in 2020, which has helped drive improved volumes and top-line revenue growth in higher acuity services. Significantly higher surgical volume in 2021 and expected orthopedic volume growth support Fitch's expectations for higher margin contributions in 2022 and beyond. Operating Risk: 'bbb' Improvement in 2021 Fitch has raised RWHS's operating risk assessment to 'midrange' from 'weak' following demonstrated improvement in 2020 and 2021 despite the pandemic. RWHS had previously posted very weak operating profitability levels primarily due to issues related to its Cerner EMR implementation project. However, operating EBITDA improved to 6.1% in 2021 and 12.4% for the second quarter of 2020 (March-June) with no CARES stimulus funding included in the second quarter. Fitch believes that operating EBITDA in the coming years will be at least 8%-9% based on Fitch's analysis of revenue improvement and clinical growth strategies, decreased losses from its physician group and revenue cycle strategies. Revenue cycle has been a focus since the Cerner EMR implementation challenges and management's goal is decrease account receivable days to close to 50. With improved operating cash flow, RWHS expects to increase capital spending in the coming years to levels closer to $20 million annually to address its high average age of plant of approximately 16 years as of YE 2020. Financial Profile: 'bb' Improvement Expected Through the Cycle RWHS's financial profile assessment is 'bb' in context of its 'midrange' assessments for revenue defensibility and operating risk. Following substantial erosion in its cash reserve levels in 2018 and 2019 from disruptions, costs and revenue cycle issues related to its EMR implementation, RWHS had a very weak 27.3% cash to adjusted debt and 32 DCOH in fiscal 2019. These numbers improved significantly in 2020 to 47.5% and 51 days, respectively. In Fitch's forward-looking scenario, RWHS's net leverage metrics improve but remain at levels consistent with its 'bb' financial profile assessment through most of the scenario. Fitch's scenario includes a revenue stress and a portfolio stress of -7.3% that is specific to RWHS. The scenario does not include any additional debt and incorporates the assumption that RWHS's capex levels will remain slightly above deprecation over the next five years. Under these assumptions, RWHS's leverage metrics begin to approach levels closer to a 'bbb' assessment by the fifth year of the stress scenario. Asymmetric Additional Risk Considerations No asymmetric risk factors affected this rating determination. RWHS's maximum annual debt service (MADS) of $12.4 million is expected to fall to $9.8 million in 2022 before falling to approximately $6 million in the coming years. The current low DCOH does not result in a covenant asymmetric risk factor as RWHS does not have a liquidity covenant. RATING SENSITIVITIES Factor that could, individually or collectively, lead to positive rating action/upgrade: -- RWHS would need to significantly improve its unrestricted cash reserves to levels that result in cash to adjusted debt above 75% and/or improve its operating EBITDA levels consistently above 9% to be considered for a higher rating level. Factors that could, individually or collectively, lead to negative rating action/downgrade: -- Given the minimal financial cushion afforded by its current liquidity position, any deterioration in unrestricted reserves could result in a downgrade; -- Failure to maintain operating EBITDA of at least 7%. 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. RWHS is a non-profit corporation that is organized as a parent company for affiliated non-profit health care organizations. The OG consists solely of Regional West Medical Center (RWMC), an acute care general hospital in Scottsbluff, NE. RWMC is licensed to operate 188 acute care beds and is a regional referral center. Other affiliated entities of RWHS that are not part of the OG are: Regional West Physicians Clinic, Regional West Foundation, Regional West Village, Regional West Garden County and Regional Care. As of fiscal 2019, the OG accounted for approximately 81% of total revenues and 68% of total assets. Fitch's analysis is based on the consolidated entity. Total revenue in fiscal 2020 was $293 million. RICKENBAKER GIN INC: U.S. Trustee Unable to Appoint Committee ------------------------------------------------------------- The U.S. Trustee for Region 4 on Oct. 6 disclosed in a court filing that no official committee of unsecured creditors has been appointed in the Chapter 11 case of Rickenbaker Gin, Inc. About Rickenbaker Gin Inc. Rickenbaker Gin, Inc. is a company based in Davis Station, S.C., that provides support activities for crop production. Rickenbaker Gin filed a petition for Chapter 11 protection (Bankr. D.S.C. Case No. 21-02276) on Sept. 1, 2021, listing as much as $10 million in both assets and liabilities. Judge David R. Duncan oversees the case. Moore Bradley Myers Law Firm, P.A. serves as the Debtor's legal counsel. RIVERSTREET VENTURES: Gen. Unsecured Claims to Recover 100% ----------------------------------------------------------- Riverstreet Ventures, LLC, filed a Chapter 11 Plan of Reorganization and a Disclosure Statement to that Plan dated as of Oct. 1, 2021. The Debtor owns a real estate site located at 1321 Brooklyn Street in Algiers, Orleans Parish, Louisiana. The Property, which is the Debtor's primary asset, will be used for a newly-constructed multifamily development that will offer four seven-story mid-rise buildings containing 167 residential units, community areas, and an outdoor amenity area. The Plan contemplates payments to all holders of Allowed Claims against the Debtor by the liquidation of certain assets and cash flow from the operation of its business. Secured Classes consist of (i) Class 1 Secured Claim of Lion Financial, LLC allowed for $3,303,500; (ii) Class 2 Secured Claim of Jam Trading, LLC allowed for $200,000; and (iii) Class 3 Secured Claim of Mathes Brierre, A Professional Corporation, estimated at $600,000. All three secured claims are expected to get 100% recovery in the Plan. Class 3 claim is a contested claim which is currently on appeal. Mr. Brierre, however, may elect to accept a settlement payment from the Debtor on the effective date. Nonetheless, the Debtor proposes to pay the claim amortized over a period of 20 years, with a balloon payment on the remaining balance after 10 years and repaid in principal and interest at 3.5% per annum. Monthly payments begin 30 days after the judgment becomes final. Class 4 General Unsecured Claims estimated at $15,000 shall recover 100% of allowed claim. On the effective date, Class 4 Claims will be paid a pro rata share of $15,000 in full satisfaction of the claims. Class 5 Investor Claims aggregating $6,192,000 shall recover 60% of allowed claims. Should the Debtor liquidate its assets, Class 5 claimants shall receive their pro rata share of the sale proceeds after all Administrative Claims, Priority Tax Claims, and Classes 1 through 4 have been paid in full. Holders of Class 6 Equity Interests shall each receive its Class 5 Cash Interest Payment from the proceeds of a Construction Loan 30 days after the Loan Closing. Holders of Allowed Class 5 Investor Claims will also be issued a pro rata share of 7.5% of the membership interests in NEWCO, and will begin receiving, 90 days after the Construction Loan Closing, its quarterly interest payments until issuance of a certificate of occupancy to the NEWCO. A copy of the Disclosure Statement is available for free at https://bit.ly/3BlCbJu from PacerMonitor.com. About Riverstreet Ventures Metairie, La.-based Riverstreet Ventures, LLC, sought protection under Chapter 11 of the Bankruptcy Code (Bankr. E.D. La. Case No. 21-10818) on June 23, 2021, disclosing total assets of up to $10 million and total liabilities of up to $50 million. Philip J. Spiegelman, president, signed the petition. Judge Meredith S. Grabill oversees the case. Simon Peragine Smith & Redfearn, LLP and Middleburg Riddle Group serve as the Debtor's bankruptcy counsel and special counsel, respectively. ROCKDALE MARCELLUS: Pachulski to Represent Committee ---------------------------------------------------- Pachulski Stang Ziehl & Jones, LLP announced that it has been retained as lead counsel to the unsecured creditors' committee in the Chapter 11 bankruptcy case of Rockdale Marcellus, LLC, pending in the U.S. Bankruptcy Court for the Western District of Pennsylvania. The committee is required to submit an application that lay out the terms of the firm's engagement, to be approved by the bankruptcy court. About Rockdale Marcellus Rockdale Marcellus is a northeast Pennsylvania natural gas driller. It owns and operates 66 producing wells on 42,897 net acres in three northeast Pennsylvania counties. On Sept. 21, 2021, Rockdale Marcellus, LLC and Rockdale Marcellus Holdings, LLC filed petitions for Chapter 11 protection (Bankr. W.D. Pa. Lead Case No. 21-22080). The Debtors' cases have been assigned to Judge Gregory L. Taddonio. Rockdale Marcellus, LLC listed $100 million to $500 million in assets and liabilities as of the bankruptcy filing. The Debtors tapped Reed Smith, LLP as bankruptcy counsel; Quinn Emanuel Urquhart & Sullivan, LLP as special litigation counsel; Huron Consulting Services, LLC as restructuring advisor; and Houlihan Lokey Capital, Inc. as investment banker. Epiq is the claims and noticing agent and administrative agent. The U.S. Trustee for Regions 3 and 9 appointed an official committee of unsecured creditors in the Debtors' Chapter 11 cases on Oct. 1, 2021. The committee is represented by Pachulski Stang Ziehl & Jones, LLP. ROYAL ALICE: Unsecureds to Get 100% in Hoffman & RSB's Sale Plan ---------------------------------------------------------------- Mrs. Susan Hoffman, sole equity holder of Royal Alice Properties ("Debtor"), and aggrieved party Royal Street Bistro LLC ("RSB"), submitted a Disclosure Statement for Chapter 11 Plan dated October 4, 2021. The Debtor owns and manages three contiguous historic properties in the French Quarter, 900 Royal, Unit E 906 Royal and Unit C 912 Royal, or the Real Property Assets. Debtor is owned and managed by Susan Hoffman. Mr. and Mrs. Hoffman learned in 2012 that they were being investigated for Federal mail and wire fraud in connection with applications for Louisiana state infrastructure tax credits made by Seven Arts Pictures Louisiana LLC ("SAPLA"). As alleged in the Adversary Proceeding, disputes arose between Debtor and Mrs. Hoffman, on the one hand, and AMAG on the other hand regarding the balance due pursuant to the AMAG Loan. Debtor and Mrs. Hoffman sought a stay from the Civil District Court but that stay was denied without any ruling on the merits of Mrs. Hoffman's and Debtor's substantial claims against AMAG. This Reorganization Case was filed days before the schedule foreclosure sale of the Real Property Assets. The primary purpose of the Plan is to sell the Real Property Assets of the Debtor pursuant to the Real Property Sale to pay amounts to AMAG up to $5,230,000 as approved by the Court, to apply the Cash Assets of the Debtor to Administrative and Unsecured Claims and to provide for the assumption of any Unsecured Claims by RSB. Class 1 consists of the Secured Claim of AMAG, Inc. The Secured Creditor will receive the amount of the Allowed Secured Claim in cash up to $5,230,000 and the balance if any in the Secured AMAG Substitute Note as provided in the Plan. This Class will receive a distribution of 100% of their allowed claims. Class 2 consists of Allowed Unsecured Claims. After payment in full of Allowed Administrative Expense Claims and Allowed Class 1 Claims, the holders of Allowed General Unsecured Claims (including Allowed Unsecured Deficiency Claims) shall receive a pro rata share of the Plan Assets. This Class will receive a distribution of 100% of their allowed claims. Class 3 consists of Allowed Interests. The holders of Allowed Interests in the Debtor shall retain such Interests in the Debtor. After payment in full of Allowed Administrative Expense Claims, Allowed Class 1 Claims and Allowed Class 2 Claims, the holders of Allowed Interests shall receive the balance, if any, of the Plan Assets. The Debtor or Reorganized Debtor will be authorized to take all necessary steps and perform all necessary acts to consummate the terms and conditions of this Plan. The Bankruptcy Court may direct the Debtor and any other necessary party to execute or deliver or to join the execution or delivery of any instrument required to effectuate the Plan, and to perform any other act necessary to consummate the Plan. The Debtor will sell the Real Property Assets pursuant to the Real Property Sale and distribute the proceeds as provided in the Plan. A full-text copy of the Disclosure Statement dated October 4, 2021, is available at https://bit.ly/3BfrhoB from PacerMonitor.com at no charge. Attorneys for Royal Street Bistro: THE DERBES LAW FIRM, LLC Frederick L. Bunol 3027 Ridgedale Dr. Metairie, LA 70002 Phone: 504-837-1230 Email: FBunol@derbeslaw.com Attorneys for Susan Hoffman: MUMPHREY ZELAYA LAW FIRM Carlos A. Zelaya (#22900) 2118 Pakenham Dr. Chalmette, LA 70043 Phone: 504-277-8989 Email: carlos@mzfirm.law About Royal Alice Properties Royal Alice Properties, LLC, owns, manages and rents the building and real estate located on the 900 block of Royal Street in the French Quarter, New Orleans, Louisiana. The condominium units are located at 906, 910-12 Royal St. New Orleans, LA 70116. Royal Alice Properties sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. E.D. La. Case No. 19-12337) on Aug. 29, 2019. In the petition signed by Susan Hoffman, member/manager, the Debtor was estimated $1 million to $10 million in both assets and liabilities. The case is assigned to Judge Meredith S. Grabill. Leo D. Congeni, Esq., at Congeni Law Firm, LLC, represents the Debtor. Dwayne M. Murray has been appointed as Chapter 11 Trustee. He has retained Louis M. Phillips, Esq., at Kelly Hart & Pitre as counsel. SARATOGA & NORTH CREEK: Nov. 9 Disclosure Statement Hearing Set --------------------------------------------------------------- Judge Thomas B. McNamara of the U.S. Bankruptcy Court for the District of Colorado will consider the adequacy of the Disclosure Statement of Saratoga and North Creek Railway, LLC on Tuesday, Nov. 9, 2021 at 1:30 p.m. Objections to the Disclosure Statement must be filed and served no later than seven days before the hearing. A copy of the order is available for free at https://bit.ly/2WJvIZK from PacerMonitor.com. About Saratoga and North Creek Railway Saratoga and North Creek Railway, LLC, a privately held company in the rail transportation industry, filed a voluntary Chapter 11 (Bankr. D. Col. Case No. 20-12313) on March 30, 2020. In the petition signed by William A. Brandt, Jr., Chapter 11 trustee of San Luis & Rio Grande Railroad, Inc., Debtor was estimated to have $1 million to $10 million in both assets and liabilities. Judge Thomas B. McNamara oversees the case. The Debtor tapped Markus Williams Young & Hunsicker LLC as its legal counsel, and Development Specialists, Inc. as its accountant. SECURE ENERGY: Moody's Assigns First Time 'B1' Corp. Family Rating ------------------------------------------------------------------ Moody's Investors Service has assigned first-time ratings to Secure Energy Services Inc., including a B1 corporate family rating, a B1-PD probability of default rating, a B1 rating to the company's US$500 million second lien notes (US$300 million outstanding after a planned redemption expected to close October 2021), a B3 rating to the company's C$340 million unsecured notes, and an SGL-2 speculative grade liquidity rating. The outlook is stable. "The B1 CFR assigned to Secure reflects the company's strong market position in the Canadian oilfield services sector and our expectation that it will be able to integrate Tervita and improve leverage over the next 12-18 months" said Jonathan Reid, a Moody's Analyst. Assignments: Issuer: Secure Energy Services Inc. Corporate Family Rating, Assigned B1 Probability of Default Rating, Assigned B1-PD Speculative Grade Liquidity Rating, Assigned SGL-2 Senior Secured 2nd Lien Notes, Assigned B1 (LGD4) Senior Unsecured Notes, Assigned B3 (LGD5) Outlook Actions: Issuer: Secure Energy Services Inc. Outlook, Assigned Stable RATINGS RATIONALE Secure benefits from: 1) its good strategic positioning as the primary environmental and waste management company servicing oil and gas producers in Western Canada, with a high amount of EBITDA linked to oil production rather than drilling; 2) declining leverage, driven by EBITDA expansion from Tervita merger cost savings and by the dedication of free cash flow to reduce debt; and 3) good liquidity. The company is challenged by: 1) integration risk related to its merger with Tervita, completed July/21; 2) uncertainty associated with the ongoing Canadian Competition Bureau (CCB) challenge regarding the merger; and 3) its heavy exposure to the oil and gas sector in Western Canada, with potential for cash flow decline during periods of commodity price downturns, despite the strong link to production. The stable outlook reflects the balance between Secure's improving credit metrics and the integration risks of its merger with Tervita. Governance issues taken into considerations include Secure's conservative financial policies, highlighted by management's public goal of reducing leverage to below 2.5x debt-to-EBITDA (on a management basis). The company does pay a dividend to its shareholders; however, Moody's view this as manageable given the large amount of operating cash flow Moody's expect it to generate. The company produces detailed financial reporting that enables good visibility of business conditions. Secure's liquidity is good (SGL-2), with sources of around C$480 million over the next four quarters with no mandatory uses. The company's sources of liquidity are comprised of around C$7 million of cash on hand at the end of Q2 2021, around C$315 million available under the company's C$800 million revolving credit facility which expires in 2024 and around C$160 million in free cash flow in over the next four quarters. The company has three financial covenants, and Moody's expect it will remain in compliance with these over the next four quarters. Alternative sources of liquidity are limited as all assets are largely pledged to the secured lenders. Secure's second lien notes are rated B1, the same level as the company's B1 CFR, due to the priority ranking of the company's C$800 million first lien revolving credit facility together with the cushion provided by the unsecured notes below them in the debt capital structure. Secure's unsecured notes are rated B3, two notches below the CFR, as both the revolving credit facility and the second lien notes rank ahead of the unsecured notes in the company's debt capital structure. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS The ratings could be upgraded if Secure achieves the synergies assumed as part of the Tervita merger, if resolution of the ongoing CCB challenge has no material impact on Secure's operations, and if it sustains adjusted debt-to-EBITDA is below 3x (over 4X estimated LTM June/21). The ratings could be downgraded if adjusted debt-to-EBITDA is sustained above 4x (over 4X estimated LTM June/21), if the resolution from the ongoing CCB challenge has a material impact on Secure's operations, or if it sustains negative free cash flow or shifts towards a more aggressive shareholder return policy. The principal methodology used in these ratings was Oilfield Services published in August 2021. Secure Energy Services Inc. is an oilfield services company headquartered in Calgary Alberta, primarily focused on serving the Western Canadian oil and gas industry and the Northern US. The company has two main business segments: midstream infrastructure and environmental and fluid management (EFM). SHELTON BROTHERS: Trustee's $560K Sale of Progressive Interest OK'd ------------------------------------------------------------------- Judge Elizabeth D. Katz of the U.S. Bankruptcy Court for the District of Massachusetts the proposed private sale by Steven Weiss, the Chapter 7 Trustee for Shelton Brothers, Inc., of the estate's right, title and interest in the Debtor's 100% membership interest in Progressive Distribution, LLC, to RNSS, LLC, for $560,000. The Sale Hearing was held on Sept. 24, 2021. The sale is free and clear of all liens, claims and encumbrances, with valid liens, claims and encumbrances to attach to the Sale proceeds in their order of priority. Notwithstanding anything to the contrary in the Purchase Agreement attached to the Sale Motion, there will be no binding obligation on 3 Fonteinen NV to sell product directly or indirectly to RNSS. The Trustee is authorized to execute and deliver all instruments and documents that may be reasonably necessary or desirable to implement the sale and to take all further actions as may be requested by RNSS for the purpose of transferring, granting, conveying, and conferring the Membership Interest to RNSS, or as may be necessary or appropriate to the performance of the obligations as contemplated by the Sale Motion. Payment by RNSS may be by exercise of its right to "credit bid" pursuant to 11 U.S.C. Section 363(k), upon the following conditions: (1) from proceeds of accounts receivables collected by the Trustee from Progressive, the Trustee may retain the sum of $28,000, allocable to the Trustee's commission pursuant to 11 U.S.C. Section 326, and $25,000, from which the legal fees and expenses incurred by the Trustee in connection with the sale of the Membership Interest may be paid, pursuant to 11 U.S.C. Section 506(c), with allowance of such commissions, fees and expenses to be subject to further review and order by the Court; and (2) Contemporaneously with the consummation of the sale, RNSS will remit to the Trustee the sum of $28,000, to be held in escrow and be allocable to the break-up fee requested by Grizzly, as provided in the order approving the Bidding Procedures Motion, with the amount of the break-up fee to be subject to further order of this Court upon an application to be filed by Grizzly. Upon completion of the sale to RNSS, the Trustee will remit to Grizzly its deposit of $20,000. The 14-day stay of the Order under Bankruptcy Rule 6004(h) is vacated, for cause shown. About Shelton Brothers, Inc. Shelton Brothers, Inc. is a beer importing and distributing company located in Belchertown, Mass. Shelton Brothers filed a voluntary petition under the provisions of Chapter 11 of the Bankruptcy Code (Bankr. D. Mass. Case No. 20-30606) on Dec. 18, 2020. In the petition signed by Daniel W. Shelton, president, the Debtor disclosed between $1 million to $10 million in both assets and liabilities. Judge Elizabeth D. Katz oversees the case. Andrea M. O'Connor, Esq., at Fitzgerald Attorneys at Law, P.C., represents the Debtor as counsel. SITEONE LANDSCAPE: Moody's Raises CFR to Ba2, Outlook Positive -------------------------------------------------------------- Moody's Investors Service upgraded the Corporate Family Rating of SiteOne Landscape Supply Holding, LLC to Ba2 from Ba3 and the Probability of Default Rating to Ba2-PD from Ba3-PD. Moody's also upgraded the rating on SiteOne's senior secured term loan to Ba3 from B1. The Speculative Grade Liquidity rating is unchanged at SGL-2. The outlook is positive. "The upgrade to Ba2 and positive outlook are driven by SiteOne's commitment to a conservative financial policy, including maintaining Moody's adjusted leverage between 2-3x. SiteOne's ability to maintain a low leverage profile, while successfully executing its growth strategy and demonstrating strength in profitability will be key considerations during our outlook period", said Scott Manduca, Vice President at Moody's. The following actions were taken: Upgrades: Issuer: SiteOne Landscape Supply Holding, LLC Corporate Family Rating, Upgraded to Ba2 from Ba3 Probability of Default Rating, Upgraded to Ba2-PD from Ba3-PD Senior Secured Bank Credit Facility, Upgraded to Ba3 (LGD4) from B1 (LGD4) Outlook Actions: Issuer: SiteOne Landscape Supply Holding, LLC Outlook, Changed To Positive From Stable RATINGS RATIONALE SiteOne's Ba2 Corporate Family Rating reflects the company's national presence and leading market position in a fragmented market, recurring revenue of landscape services, and asset-lite business model requiring minimal capital expenditures of around 3% of annual revenue. The rating also reflects thin operating margins (common to companies in the distribution business), seasonality of services, and an active bolt-on acquisition growth strategy, which raises integration risk and could lead to higher debt levels. SiteOne's Speculative Grade Liquidity Rating of SGL-2 reflects Moody's expectation that the company will maintain good liquidity with strong free cash generation exceeding $200 million per year in fiscal 2022 and 2023. Moody's expects significant availability under the $375 million revolving credit facility, as acquisitions are expected to be financed with internally generated cash. The company's liquidity is constrained by the seasonality of its operations, which may result in negative free cash flow during the seasonally weaker first and fourth quarters. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS The ratings could be upgraded if SiteOne continues to practice conservative financial policies, while executing its growth through acquisition strategy. Important considerations include improving operating margins, sustained leverage of less than 2.5x, and retained cash flow to debt of greater than 25%. The ratings could be downgraded if the company experiences end market weakness resulting in revenue and operating margin declines or adopts a more aggressive financial policy (including large debt financed acquisitions). More specifically, the ratings could be downgraded if adjusted debt to EBITDA approaches 4.0x, retained cash flow to debt falls below 15% or EBITDA margin is less than 10%. The principal methodology used in these ratings was Distribution & Supply Chain Services Industry published in June 2018. SiteOne Landscape Supply Holding, LLC, headquartered in Roswell, GA, is a national wholesale distributor of landscaping supplies in the U.S. and Canada. In the twelve months ended July 4, 2021, SiteOne generated about $3.2 billion in revenues. SLIDEBELTS INC: May Use Cash Collateral Thru Dec 1 -------------------------------------------------- The U.S. Bankruptcy Court for the Eastern District of California has authorized SlideBelts, Inc. to, among other things, use cash collateral on a final basis until the effective date of the Debtor's Plan of Reorganization or December 31, 2021, whichever occurs first. Specifically, the Debtor is authorized, but not required, to use cash collateral, including the proceeds of sales of its inventory, in accordance with the Budget. The Debtor will be deemed in compliance with this requirement so long as the Debtor does not exceed the Budget by up to 15% on average across all expenditures during any four-week period. The Debtor will make adequate protection payments in the following amounts: a. Monthly payment to First U.S. Community Credit Union — $5,640 payable in the first week of every month. b. Monthly payment to Amazon Lending - 51,673.00. c. Monthly payment to Toyota Financial Services- $653.39. The Secured Creditors are granted replacement liens in the same priority, with respect to the same collateral, and to the same extent, whether valid or not, as the Secured Creditor's security interests attached before the Petition Date. A continued hearing on the matter is scheduled for December 16 at 1:30 p.m. A copy of the order and the Debtor's cash flow projections for the third and fourth quarter of 2021 is available for free at https://bit.ly/3mnbspH from PacerMonitor.com. The Debtor projects $441,962 in total cash receipts and $589,535 in total cash disbursements for the third quarter and $991,023 in total cash receipts and $768,742 in total cash disbursements. About SlideBelts Inc. SlideBelts, Inc. -- https://slidebelts.com -- is an El Dorado Hills, Calif.-based belt company founded in 2004. SlideBelts sought protection under Chapter 11 of the Bankruptcy Code (Bankr. E.D. Calif. Case No. 20-24098) on Aug. 25, 2020. Brig Taylor, president and chief executive officer, signed the petition. At the time of filing, the Debtor disclosed assets of between $1 million and $10 million and liabilities of the same range. Judge Fredrick E. Clement oversees the case. The Debtor tapped Reynolds Law Corporation as bankruptcy counsel, Goel & Anderson, LLC as special counsel, and Michael Nord of Nord & Associates CPAs and Frances Hernandez as accountant. SPORTTECHIE INC: Case Summary & 13 Unsecured Creditors ------------------------------------------------------ Debtor: Sporttechie Inc. 470 L'Enfant Plaza SW Washington, DC 20024 Business Description: Sporttechie Inc. is a media company that specializes in sports. Its coverage focuses on three main stakeholders within sports -- athletes, fans, and teams and leagues. Chapter 11 Petition Date: October 7, 2021 Court: United States Bankruptcy Court District of Delaware Case No.: 21-11306 Debtor's Counsel: Kevin S. Mann, Esq. CROSS & SIMON, LLC 1105 N. Market Street, Suite 901 Wilmington, DE 19701 Tel: 302-777-4200 Email: kmann@crosslaw.com Debtor's Provider of Interim Management & Restructuring Services: APPLIED BUSINESS STRATEGY, LLC Total Assets as of August 31, 2021: $32,670 Total Liabilities as of August 31, 2021: $2,005,007 The petition was signed by Taylor Bloom as CEO. A full-text copy of the petition containing, among other items, a list of the Debtor's 13 unsecured creditors is available for free at PacerMonitor.com at: https://www.pacermonitor.com/view/7A3KTUI/SPORTTECHIE_INC__debke-21-11306__0001.0.pdf?mcid=tGE4TAMA SUMMIT FAMILY: Beautiful Buying Substantially All Assets for $3.1M ------------------------------------------------------------------ Summit Family Restaurants Inc. asks the U.S. Bankruptcy Court for the District of Colorado to authorize the private sale of substantially all assets to Beautiful OPCO, LLC, for $3.1 million, free and clear of any liens, claims, and encumbrances. The Debtor owns and operates the famous Casa Bonita restaurant, located at 6715 W. Colfax Avenue, in Lakewood, Colorado 80214. The intellectual property associated with Casa Bonita is owned by a different company, Casa Bonita Denver, Inc. ("CBDI"). Summit did not identify any secured claims on its Schedule D. During the course of the case, three secured claims were filed: (a) the secured claim of the Internal Revenue Service in the sum of $175,910.04; (b) the secured claim of the U.S. Small Business Administration in the sum of $154,176.37; and (c) the secured claim of the Jefferson County Treasurer in the sum of $21,985.70. Summit does not dispute any of that debt. The total secured debt in the case, therefore, equals $352,072.11. On Sept. 12, 2014, Summit entered into a Shopping Center Lease, Lease Agreement with BSV Lamont JCRS LLC under which Summit leases the premises located at 6715 W. Colfax Avenue, Lakewood, Colorado. BSV filed a proof of claim asserting pre-petition damages against Summit in the amount of $1,064,529.05, including unpaid pre-petition rent and amounts alleged due under a certain liquidated damages clause. While Summit is current on its post-petition rental obligations, BSV alleges post-petition liquidated damages are due and owing as well. BSV and Summit entered into a Stipulation resolving BSV's claims in the bankruptcy case. The parties agreed BSV's damages claim is a general unsecured claim in the sum of $900,000, which amount is required to be paid under the Lease to cure the obligations thereunder. While nothing in the agreement between BSV and Summit alters Summit's ongoing obligation to pay rent, BSV has agreed to accept the sum of $900,000 in full and final satisfaction of all other sums due and owing. The parties are documenting the Stipulation, and the same will be filed with the Court at that time. After consideration of the secured claims and the settled claim of BSV, there remains an estimated $1,640,122.71 in outstanding claims, which amount includes estimated administrative claims, and of which $1,480,003.04 are disputed or contingent. Summit received two PPP loans from the SBA. As noted on the Claims Analysis, the first PPP loan was forgiven in its entirety and deemed paid in full. The second outstanding PPP loan makes up $1,001,563 of the $1,640,122.71 in unsecured claims. Summit expects most, if not all, of that loan will be forgiven. Out of an abundance of caution, however, the full $1,001,563 is included in the Claims Analysis. The other disputed claim in this case is the litigation claim of Samuel Hernandez. Mr. Hernandez filed an unsecured claim in the sum of $478,440.04. As with the PPP loan, out of an abundance of caution, the full amount of $478,440.04 is included in the universe of potential claims. On Sept. 23, 2021, Summit entered in an Asset Purchase Agreement with the Buyer. In relevant part, the APA provides the Buyer is purchasing substantially all of Summit's assets for the sum of $3.1 million. The Buyer will wire the Purchase Price to Summit at closing. Other than as described herein, Summit will use the Purchase Price to fully and finally wind up its affairs through a Plan of Liquidation. Given Summit’s Claims Analysis, the Purchase Price is in an amount sufficient to pay all claims in the case with room to spare. Summit picked the Buyer out of other interested parties. To that end, the APA specifically forbids Summit from soliciting other bids. Given the Buyer's offer is sufficient to pay all claims in the case in full, and that Buyer has committed significant time and resources to negotiating the terms of the APA at arm’s length, Summit asserts said term is commercially reasonable. As part of the APA, Summit is assigning the Lease to the Buyer and the Buyer is assuming the Lease. The APA contemplates Summit using $900,000 of the Purchase Price to cure Summit’s obligation to BSV. BSV has agreed to said treatment. The ongoing obligations under the Lease are the sole and exclusive obligation of Summit which Buyer is assuming under the APA. In accordance with L.B.R. 6004-1(b), Summit highlights the following terms of the APA: a. As noted, the proposed sale is a private sale and the APA specifically forbids Summit from soliciting other bids. Given the Purchase Price is sufficient to pay all creditors in full, Summit asserts the term is reasonable. b. The Closing Date has been set for two-days following the conclusion of all conditions precedent to closing, which are described in Article IX and X of the APA. It is anticipated closing will take place within two days after the order approving this Motion is considered final. c. The sale motion requests authority for Summit to immediately distribute the sum of $900,000 of the Purchase Price to BSV without further Order from the Court. The $900,000 represents the agreed cure obligation to BSV which will allow Summit to assume and assign the Lease to the Buyer. The remaining proceeds will be placed in Summit’s Debtor-in-Possession account and used to fund a liquidating subchapter v Plan to pay the remaining creditors in full. The Debtor will not use the Purchase Price for any purpose without further Order of the Court. d. Notwithstanding the sale of substantially all of its assets, Summit will retain access to all of its books and records as necessary to administer its bankruptcy estate. e. Summit and the Buyer seek a finding that the Buyer is not a "successor" to Summit or its bankruptcy estate by any theory of law or equity. f. Summit seeks relief from the 14-day stay imposed by Fed.R.Bankr.P. 6004(h). A sound business reason exists for the sale. The sale under the APA maximizes the value of Casa Bonita and provides Summit with sufficient resources to pay all its creditors in full. Summit further seeks authorization to assume the Lease and assign the Lease to the Buyer upon closing of the Sale. BSV has agreed to accept the sum of $900,000 from Summit out of the Purchase Price to cure any and all outstanding defaults and has consented to assumption of the Lease from the Buyer. A copy of the APA is available at https://tinyurl.com/6u4v35v2 from PacerMonitor.com free of charge. About Summit Family Restaurants Scottsdale, Ariz.-based Summit Family Restaurants Inc. owns and operates Denver restaurant Casa Bonita. The restaurant, which opened in 1974, shut its doors in March 2020, at the beginning of the COVID-19 pandemic. Summit's parent, Star Buffet, Inc., owns and operates restaurants in several western states, Oklahoma and Florida. It operates restaurants under the HomeTown Buffet, JB's Restaurants, BuddyFreddys, JJ North's Country Buffet, Holiday House, Casa Bonita, and North's Star Buffet names. Star Buffet's restaurants provide customers with a variety of fresh food at moderate prices. Summit Family Restaurants filed a petition under Subchapter V of Chapter 11 of the Bankruptcy Code (Bankr. D. Ariz. Case No. 21-02477) on April 6, 2021. The Debtor disclosed total assets of $3.682 million and total liabilities of $4.425 million as of March 31, 2021. On June 23, 2021, the Debtor's Chapter 11 proceeding was transferred to the U.S. Bankruptcy Court for the District of Colorado and was assigned a new case number (Case No. 21-13328). Judge Brenda K. Martin oversees the case. Kutner Brinen Dickey Riley, PC serves as the Debtor's legal counsel. SUNERGY CALIFORNIA: Trustee Taps Cushman & Wakefield as Broker -------------------------------------------------------------- Jeffery Perea, the trustee appointed in the Chapter 11 case of Sunergy California, LLC, seeks approval from the U.S. Bankruptcy Court for the Eastern District of California to employ Cushman & Wakefield U.S., Inc. as his real estate advisor and broker. The firm's services include: (a) assisting the trustee in finding a tenant to assume the lease on the Debtor's solar photovoltaic module manufacturing facility located at 4741 Urbani Ave., McClellan, Calif.; (b) negotiating the business terms of any transaction on behalf of the trustee; and (c) cooperating with other licensed real estate brokers in obtaining a transaction. Cushman & Wakefield will be paid as follows: (a) 5 percent of the purchase price if the transaction does not involve a cooperating or procuring broker; (b) 3 percent of the purchase price if the transaction involves a cooperating or procuring broker. Ken Reiff, a managing director at Cushman & Wakefield, disclosed in a court filing that his firm is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. The firm can be reached through: Ken Reiff Cushman & Wakefield U.S., Inc. 400 Capitol Mall, Suite 1800 Sacramento, CA 95814 Telephone: (916) 617-4241 About Sunergy California Sunergy California, LLC -- http://www.sunergyus.com/-- is a solar module supplier. It was founded in 2016 and is headquartered and has module production facilities in Sacramento, Calif. Sunergy California filed a petition for Chapter 11 protection (Bankr. E.D. Calif. Case No. 21-20172) on Jan. 20, 2021, listing $7,629,993 in assets and $17,226,553 in liabilities. Judge Christopher M. Klein oversees the case. Gonzalez & Gonzalez Law, P.C. and RKF Global, PLLC serve as the Debtor's bankruptcy counsel and special counsel, respectively. The U.S. Trustee for Region 17 appointed an official committee of unsecured creditors on March 17, 2021. The committee tapped Downey Brand, LLP as legal counsel and Dundon Advisers, LLC as financial advisor. On Aug. 11, 2021, the court approved the appointment of Jeffrey Perea as Chapter 11 trustee. Nuti Hart LLP, Conway MacKenzie LLC, and Cushman & Wakefield U.S. Inc. serve as the trustee's legal counsel, financial advisor, and real estate advisor and broker, respectively. SUNOCO LP: Fitch Rates Proposed Sr. Unsecured Notes 'BB' -------------------------------------------------------- Fitch Ratings has assigned a 'BB'/'RR4' rating to Sunoco LP's (SUN) proposed issuance of senior unsecured notes. Sunoco Finance Corp. is a co-issuer on the proposed notes. Proceeds are expected to be used, among other general corporate purposes, to fund a tender offer for the partnership's next maturing notes, the 5.5% notes due 2026. SUN's ratings and Positive Outlook reflect its improving leverage profile and resiliency in the face of the demand destruction wrought by the coronavirus pandemic. The ratings are supported by SUN's low leverage, healthy margins, and cash flows that benefit from a 15-year take or pay contract with a subsidiary of 7-Eleven, Inc. (7/11) for approximately 25% of its yearly volumes. KEY RATING DRIVERS Lower Leverage: LTM leverage as of June 30, 2021 was approximately 4.3x, up from 4.2x at YE 2020. Fitch expects SUN to partially debt-finance the acquisitions announced in July 2021. Fitch expects 2022 leverage to be approximately 4.2x. Management's leverage policy target is 4.0x (management and Fitch have a similar calculation). If leverage sustains at or below 4.3x it could lead to an upgrade. SUN's Positive Outlook is due to trends in profitability and management financial policy that, if they persist, are likely to lead to an upgrade. EBITDA Growth: Strong EBITDA performance enabled the partnership to meaningfully de-lever from 2018 to 2020. Growth was driven by cents-per-gallon (CPG) margins significantly higher than previous long-term expectations, and supported by the effective cost cutting measures implemented at the onset of the pandemic. Falling sales volumes resulted in higher breakeven levels for many industry players, which necessitated better margins for both retail and wholesale fuel distributors. The partnership continues to benefit from the resulting boost to its margins, which has more than offset the cash flow impact of lower volume levels. Cash Flow Stability: As part of the sale of its retail franchise in 2018, SUN entered into a 15-year take-or-pay fuel supply agreement with 7/11 and SEI Fuel Services, Inc. (NR), a wholly owned subsidiary of 7/11, under which SUN will supply approximately 2.2 billion gallons of fuel annually. This supply agreement has guaranteed annual payments to SUN and provides that 7/11 will continue to use the Sunoco brand at currently branded Sunoco stores. Wholesale revenues from SUN's other distributor, dealer and commercial channel sales are more sensitive to volume demand changes but should maintain stable cash flow generation through the volume swings and as conditions return to normal. Highly Fragmented, Competitive Sector: Concerns for SUN include high levels of competition within the fragmented wholesale motor fuel distribution sector. SUN's ability to drive growth after a recovery will depend largely on its ability to acquire wholesale customers organically or grow through acquisitions, which has the potential to weigh on balance sheet metrics, depending on how growth is financed. Fitch believes that management's leverage and distribution coverage targets indicate a willingness to prudently manage growth and distribution policy while maintaining reasonable credit metrics. Parent Subsidiary Linkage: SUN's ratings reflect its stand-alone credit profile with no express linkage to its parent company. Fitch views parent Energy Transfer LP (ET; BBB-/Stable) as possessing the stronger credit profile between the two entities given the size, scale, geographic, operational and cash flow diversity that ET possesses relative to SUN. No uplift is provided to SUN's ratings as Fitch considers legal, operational and strategic ties to be weak. DERIVATION SUMMARY SUN's primary focus on wholesale motor fuel distribution and logistics is unique relative to Fitch's other midstream energy coverage. Wholesale fuel distribution is a highly fragmented market with low operating margins and is largely dependent on motor fuel demand, which can be cyclical and seasonal. Fitch expects SUN to continue to face headwinds in the near term from lower motor fuel demand levels. The partnership is guiding to a higher margin level, and Fitch expects margin strength to continue to counterbalance the cash flow impact of the demand destruction. SUN's leverage has fallen significantly through the year as cash flow conservation efforts and strong margins have allowed the partnership to de-lever in spite of the challenging environment. Fitch expects SUN's leverage will be between 4.0x-4.3x by YE 2021, and near 4.2x by 2022, lower than similarly rated AmeriGas Partners, LP (APU; BB/Stable), which is forecast to have leverage around 4.4x-4.6x through 2024. APU provides retail propane and demand tends to be more seasonally affected (and weather affected) that motor fuel demand. SUN's size and scale are expected to be consistent with, though slightly larger than, Fitch's view on 'BB' category master limited partnerships, which tend to have EBITDA of roughly $500 million per year and a narrow business focus, such as SUN's focus on wholesale motor fuel distribution. KEY ASSUMPTIONS -- Margins remain in line with management's guidance range; -- Key contracts are not amended; -- Revolver borrowings and retained earnings used to fund capital needs; -- Distributions held at current levels throughout forecast; -- Total capex, inclusive of growth, and maintenance spending, of at least $170 million annually from 2021-2023; -- SUN's acquisition of eight refined product terminals to close in 4Q21 at the approximate cost of $250 million; -- Fitch base case commodity price deck including WTI oil prices $52/bbl in 2022, $50/bbl in 2023 and over the long term. RATING SENSITIVITIES Factor that could, individually or collectively, lead to positive rating action/upgrade: -- Leverage (total debt with equity credit/operating EBITDA) sustained at or below 4.3x with distribution coverage sustained above 1.1x could lead to an upgrade. Factors that could, individually or collectively, lead to negative rating action/downgrade: -- Distribution coverage ratio below 1x, combined with leverage (total debt with equity credit to operating EBITDA) at or above 5.0x on a sustained basis could result in negative rating action; -- EBIT Margin at or below 1.5% on a sustained basis 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 Liquidity Adequate: As of June 30, 2021, SUN had $87 million in cash and approximately $1.1 billion available on its $1.5 billion secured revolving credit facility. The revolving credit facility matures on July 27, 2023 and requires the partnership to maintain a net leverage ratio (as defined by the bank agreement) below 5.5x and an interest coverage ratio above 2.25x. The agreement allows for a maximum leverage ratio of 6.0x during a specified acquisition period. As of June 30, 2021, SUN was in compliance with its covenants, and Fitch believes that SUN will remain in compliance with its covenants through its forecast period. The revolver is secured by a security interest in, among other things, of all SUN's present and future personal property and all present and future personal property of its guarantors, the capital stock of its material subsidiaries (or 66% of the capital stock of material foreign subsidiaries), and any intercompany debt. ISSUER PROFILE Sunoco, LP (SUN) is a wholesale motor fuels distributor that distributes diesel and gasoline to retail service stations throughout the U.S., with a focus on the Northeast. SUN is organized as a master limited partnership. ESG CONSIDERATIONS Sunoco LP has an ESG Relevance Score of '4' for Group Structure due to significant related party transactions and ownership concentration arising from SUN's GP and incentive distribution rights ownership by Energy Transfer, 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'. 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. SUMMARY OF FINANCIAL ADJUSTMENTS Fitch applied an 8.0x multiple to operating leases for the purpose of reviewing Total Adjusted Debt to Operating EBITDAR, which served as an ancillary metric for Fitch's analysis. Fitch's sensitivities use total debt with equity credit to operating EBITDA. SUNOCO LP: Moody's Rates New $800MM Senior Unsecured Notes 'B1' --------------------------------------------------------------- Moody's Investors Service assigned B1 ratings to Sunoco LP's proposed $800 million in aggregate of both senior unsecured notes due 2030 and senior unsecured notes due 2032. Sunoco's other ratings, including the Ba3 Corporate Family Rating and SGL-2 Speculative Grade Liquidity (SGL) rating, and positive outlook, remain unchanged. Sunoco will use net proceeds from the new notes to refinance its $800 million of senior unsecured notes due 2026, leaving financial leverage unchanged. Sunoco will benefit from the extension of its debt maturity profile. Assignments: Issuer: Sunoco LP Senior Unsecured Notes, Assigned B1 (LGD4) RATINGS RATIONALE Sunoco's senior unsecured notes are rated B1, one notch below the CFR, reflecting their effective subordination to the secured revolver (unrated). Sunoco's Ba3 CFR reflects benefits from the strength of the Sunoco retail brand, geographic reach across more than 30 states, and economies of scale as a leading distributer of motor fuels. Sunoco's rating is constrained by high financial leverage though Moody's expects improvement over the next 12-18 months. Exposure to the long-term secular decline of demand for motor fuel poses risk. In August, Sunoco entered an agreement to acquire eight refined product terminals from NuStar Energy L.P. for $250 million. The acquisition is expected to close in the fourth quarter. Sunoco's SGL-2 rating reflects good liquidity supported by cash on the balance sheet and availability under the revolving credit facility. As of June 30, 2021, Sunoco had $87 million of cash and approximately $1.1 billion available on its $1.5 billion revolver that matures in July 2023. The positive outlook reflects Moody's expectation of reduced leverage. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS Factors that could lead to an upgrade include debt/EBITDA under 4.5x and EBITDA/interest exceeding 4x. Factors that could lead to a downgrade include debt/EBITDA exceeding 5.5x or distribution coverage falling below 1x. Sunoco, headquartered in in Dallas, Texas, is a publicly-traded master limited partnership (MLP) that distributes motor fuels in the United States. Sunoco's general partner is owned by Energy Transfer LP (Baa3 stable). The principal methodology used in these ratings was Midstream Energy published in December 2018. TASEKO MINES: Fitch Rates $50MM Revolver Credit Facility 'BB-' -------------------------------------------------------------- Fitch Ratings has assigned a 'BB-'/'RR1' to Taseko Mines Limited's USD50 million, three and one half year, senior secured revolving credit facility. Fitch has also affirmed Taseko's Long-Term Issuer Default Rating (IDR) at 'B-' and the senior secured notes at 'B-'/'RR4'. The ratings reflect Taseko's small size, concentration on one operation and cost position in the fourth quartile of the global copper cost curve. The Gibraltar mine benefits from a stable production profile, a favorable mining jurisdiction and a 17 year mine life. The Stable Outlook reflects Fitch's view that the Florence project is likely to go forward and that Florence project financing will be limited to USD50 million. Should the project not go forward, Fitch expects cash on hand and FCF would be used to de-leverage. KEY RATING DRIVERS Weak Business Profile: Taseko is relatively small and undiversified by operation and metal. Taseko owns 75% of one large-scale operating copper mine in a favorable mining jurisdiction but with costs in the fourth quartile of CRU's cost curve (Gibraltar in British Columbia [BC], Canada) and a near-term development copper project (Florence in Arizona, USA). Fitch estimates that the development of Florence would reduce the company's overall cost position by about 15% and increase production by about two-thirds. Florence Execution Risk: Taseko expects to obtain the remaining permit in late 2021 and has cash on hand to support the bulk of the development capital estimated to be about USD230 million. Without the permit and additional financing, the project cannot move forward. Details on a final financing structure will be necessary to assess the potential economic impact on Taseko. The project is designed to use in-situ copper recovery rather than conventional mining and it will take about 18 months to construct and 18 months to ramp-up. Execution risk has been reduced by the 2018 construction and subsequent operation of a production test facility. Detailed engineering was 60% complete as of Aug. 4, 2021. Other Development Longer-Term: The company is evaluating the Yellowhead copper project in BC, Canada and other early-stage projects include: Aley (niobium), and New Prosperity (gold and copper) each in BC, Canada. Fitch does not expect material spending on other development until after Florence has ramped-up. Subsidiaries owning Yellowhead, Aley and New Prosperity are unrestricted subsidiaries under the notes. Copper Sensitivity: Taseko reports that a USD0.25/lb. increase in copper prices increases annual cash flow by USD25 million. Fitch notes that cash flow from operations after interest paid was CAD64 million in 2020. Fitch assumes that the 2021 average copper price will be about USD4.08/lb. decreasing to about USD3.40/lb. in 2022 and 3.04/lb. thereafter. This compares with Taseko's 2020 average realized copper price of USD2.84/lb., and an average spot copper price of USD4.12/lb. in the first six months of 2021. Current copper prices are about USD4.27/lb. Taseko enters into copper option contracts to reduce short-term copper price volatility. As of Aug. 4 2021, the company had put options covering 34 million pounds of copper at a USD3.75/lb. strike price maturing in from August to December 2021 and collars covering 43 million pounds of copper at a USD4.00/lb. floor price maturing from January to June 2022. These volumes compare to Taseko's share of 2021 sales volume guidance of 93.8 million pounds. High Leverage: Taseko's capital structure includes Gibraltar equipment loans (75% at CAD16 million), Gibraltar finance leases (75% at CAD22 million) and Taseko's USD400 million senior secured note due 2026 (converts to CAD496 million at June 30, 2021). Consolidated total debt excluding finance leases of CAD512 million was 4.2x LTM June 30, 2021 operating EBITDA of CAD123.2 million. Total debt/operating EBITDA, assuming a 15% interest in Florence is sold to support remaining Florence capital spending is expected to have peaked and trend toward 3.0x and below. If Florence does not go forward, leverage would be about 5.4x in later years at Fitch's longer-term copper price assumption of USD3.04/lb., but cash on hand would be sufficient to de-leverage to levels consistent with the ratings. DERIVATION SUMMARY Taseko Mines Ltd. is smaller, less operationally diversified, and less profitable than HudBay Minerals Inc. (B+/Positive) and Eldorado Gold Inc. (B+/Stable). Taseko is higher levered than HudBay and Eldorado Gold but similarly levered compared with much larger and diversified First Quantum Minerals Ltd. (B-/Stable). Development of the low-cost Florence project would bring size, expected profitability and leverage comparable to Eldorado Gold. Should the Florence project be delayed, Fitch would expect the company to de-leverage from cash on hand but for the company to remain less diversified than peers. KEY ASSUMPTIONS Fitch's key assumptions within Fitch's rating case for the issuer include: -- Taseko's 75% of Gibraltar production at guidance; -- Copper prices incorporate hedges and Fitch assumptions of USD9,000/tonne in 2021, USD7,500/tonne in 2022 and USD6,700/tonne, thereafter; -- Gibraltar operating expenses at USD2.10/lb.; -- Taseko's share of Gibraltar Capex at roughly CAD50 million in each of 2021 and 2022 and CAD60 million thereafter; -- The Florence copper project goes forward roughly in line with the technical report dated Feb. 28, 2017 with the sale of a minority stake. KEY RECOVERY RATING ASSUMPTIONS The recovery analysis assumes that Taseko Mines Ltd. would be reorganized as a going-concern in bankruptcy rather than liquidated. Fitch notes that Florence Copper Inc. provides an unsecured guarantee of the notes but may be financed on a secured basis, take 18 months to construct and a further 18 months to fully ramp-up. Fitch has assumed a 10% administrative claim. Going-Concern (GC) Approach Taseko's GC EBITDA assumption comprises it's 75% interest in Gibraltar calculated at a copper price of USD2.50/lb, which compares to the average for the 1H21 of USD4.12/lb. and the current prices at around USD4.27/lb. The GC EBITDA assumption for 100% of Gibraltar is CAD107 million. The GC EBITDA estimate reflects Fitch's view of a sustainable, post-reorganization EBITDA level upon which Fitch bases the enterprise valuation. An EV multiple of 4.0x EBITDA is applied to the Gibraltar GC EBITDA to calculate a post-reorganization enterprise value to reflect Gibraltar's higher cost position and both entities solid reserve life and low country risk offset by low diversification. The choice of this multiple considered similar public companies trade at EBITDA multiples in the 4x-6x range. Gibraltar has secured equipment loans which are deemed to be recovered by Gibraltar before the new revolver and notes at the Taseko level. The residual adjusted post-reorganization EV of Gibraltar after the recovery of Gibraltar obligations becomes CAD362 million (residual value). 75% of the residual value results in outstanding recovery for Taseko's revolver assuming full utilization and average recovery corresponding to the 'RR4' rating on Taseko's senior secured notes. RATING SENSITIVITIES Factors that could, individually or collectively, lead to positive rating action/upgrade: -- The Florence copper project is well advanced, project capital expenditures are in the USD250 million range, project debt is in the USD50 million range and expected to be non-recourse, annual production is expected to be in the 80 million pound range and cash costs are in the first quartile of the global cost curve; -- Financial policies in place resulting in consolidated total debt/EBITDA after minority distributions anticipated to be sustained below 3.5x; -- Financial policies in place resulting in consolidated FFO leverage anticipated to be sustained below 4x. Factors that could, individually or collectively, lead to negative rating action/downgrade: -- A weakening FCF outlook; -- Increased costs or material disruption at Gibraltar; -- Addition of senior secured debt that weakens recovery prospects; -- Consolidated Total Debt/EBITDA after minority distributions anticipated to be sustained above 4.5x; -- Consolidated FFO leverage anticipated to be sustained above 5.0x. BEST/WORST CASE RATING SCENARIO International scale credit ratings of Non-Financial Corporate issuers have a best-case rating upgrade scenario (defined as the 99th percentile of rating transitions, measured in a positive direction) of three notches over a three-year rating horizon; and a worst-case rating downgrade scenario (defined as the 99th percentile of rating transitions, measured in a negative direction) of four notches over three years. The complete span of best- and worst-case scenario credit ratings for all rating categories ranges from 'AAA' to 'D'. Best- and worst-case scenario credit ratings are based on historical performance. LIQUIDITY AND DEBT STRUCTURE Supportive Liquidity: Taseko will have a USD50 million revolving credit and provides cash collateral for LOCs or surety bonds for reclamation. Restricted cash and reclamation deposits were CAD3.9 million and available cash on hand was CAD226 million at June 30, 2021. The company also has an uncommitted CAD9 million credit facility to provide LOCs to Gibraltar suppliers to support trade finance. Fitch expects positive FCF from Gibraltar through 2022 and fairly neutral thereafter. ISSUER PROFILE Taseko is a small mining company headquartered in Vancouver, BC that operates one large-scale, high-cost copper mine in Canada (Gibraltar) and owns a pipeline of projects including: Florence (copper), Aley (niobium), Yellowhead (copper) and New Prosperity (gold and copper). Taseko owns and consolidates 75% of the Gilbraltar mine. The company is working to advance development of the low-cost Florence copper project in Arizona. 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. TELKONET INC: Extends Maturity of Heritage Loan to Dec. 31 ---------------------------------------------------------- Telkonet, Inc. and Heritage Bank of Commerce, a California state chartered bank, entered into a twelfth amendment to the Loan and Security Agreement dated as of Sept. 30, 2014, as amended, governing a revolving credit facility in a principal amount not to exceed $2,000,000. The amendment extends the revolving maturity date to Dec. 31, 2021, unless earlier accelerated under the terms of the loan agreement. In addition, subject to certain conditions as specified in the amendment, Heritage Bank consents to the proposed transaction with VDA Group S.p.A. and acknowledges and agrees that certain events occurring in connection with the transaction, including the change of control of Telkonet resulting from the transaction, do not constitute events of default as defined in the loan agreement. As previously disclosed in a Current Report on Form 8-K filed with the Securities and Exchange Commission on Aug. 10, 2021, Telkonet has entered into a stock purchase agreement with VDA pursuant to which VDA will contribute $5 million to the company and, in exchange, the company will issue to VDA (i) 162,900,947 shares of common stock of the company and (ii) a warrant to purchase 105,380,666 additional shares of common stock. The transaction is expected to close in the fourth quarter of 2021. About Telkonet Headquartered in Waukesha, WI, Telkonet, Inc. is the creator of the EcoSmart and the Rhapsody Platforms of intelligent automation solutions designed to optimize energy efficiency, comfort and analytics in support of the emerging Internet of Things. The platforms are deployed primarily in the hospitality, educational, governmental and other commercial markets, and is specified by engineers, HVAC professionals, building owners, and building operators. Telkonet reported a net loss attributable to common stockholders of $3.15 million for the year ended Dec. 31, 2020, compared to a net loss attributable to common stockholders of $1.93 million for the year ended Dec. 31, 2019. As of June 30, 2021, the Company had $6.97 million in total assets, $5.72 million in total liabilities, and $1.25 million in total stockholders' equity. Minneapolis, Minnesota-based Wipfli LLP, the Company's auditor since 2020, issued a "going concern" qualification in its report dated March 31, 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 and obtaining the necessary financing to meet its obligations and repay its liabilities arising from normal business operations when they come due. These conditions raise substantial doubt about its ability to continue as a going concern. TENRGYS LLC: Gen. Unsecured Claims to Recover 100% in Plan ---------------------------------------------------------- Tenrgys, LLC and its debtor-subsidiaries filed a Joint Chapter 11 Plan of Reorganization and Disclosure Statement with the U.S. Bankruptcy Court for the Southern District of Mississippi. The Plan is supported by the Debtors, Tellus Operating Group, LLC ("TOG"), and FSEP Investments, Inc., as the sole stockholder of FS Energy and Power Fund (the "Consenting 2013 Loan Lender"). TOG, a non-debtor affiliate of the Debtors, operates the Debtors' oil and gas assets. The Debtors are generally operationally integrated. The Debtors related that during their Chapter 11 cases, they have succeeded in securing the support of the Consenting 2013 Loan Lender for a restructuring plan, which, if confirmed, will: (1) satisfy the 2012 RBL Facility debt in full through the Colombian Collateral Tender; (2) equitize a substantial portion of the 2013 Loan; and (3) keep all of the Debtors' other creditors and contractual counterparties current and unimpaired, avoiding disruption to the Debtors' business and preserving the jobs of the Debtors' and TOG's employees. * The Colombian Collateral Tender Pursuant to the Colombian Collateral Tender Transaction, the Debtors, on the effective date, shall convey to PanAm19 Holdings, LLC all of the Debtors' right, title, and interest in and to Telpico and the Colombian Assets in full and complete satisfaction of PanAm's Secured Claim. PanAm acquired the 2012 RBL Facility in 2019. * The 2013 Loan Transaction On the Effective Date, the 2013 Loan Claim shall be cancelled, and the Consenting 2013 Loan Lender shall receive, in full and final satisfaction of such Allowed 2013 Loan Claim: (i) Payment of $500,000 in Cash on the Effective Date; (ii) A membership interest equal to 10% of the equity in the Reorganized Tenrgys; and (iii) a new $40 million floating rate first-lien term loan with market pricing and other market terms to be agreed and set forth in New Secured Term Loan Documents. The Debtors' management may raise up to $5 million in Exit Financing Facility to be provided to the Reorganized Debtors on the Effective Date to fund, among other things, payments under the Plan. The Exit Facility will be subordinate to the New Secured Term Loan and any other creditors who are to receive cash payments under the Plan. Under the Plan, the Unsecured portion of the 2013 Loan Claims in Class 4 aggregating $114,190 will have 44% recovery. General Unsecured Claims in Class 5 aggregating $219,000 will recover 100% of the allowed amount. TOG Claims in Class 6, the amounts of which are yet undetermined, will have 100% recovery. Existing Tenrgys Equity Interests in Class 9, on the effective date, will receive pro rata share of 100% of the Reorganized Equity Interests, subject to dilution by the equity interests to be received by the holders of the 2013 Loan Claim. A copy of the Disclosure Statement is available for free at https://bit.ly/3lc22Ou from PacerMonitor.com. 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. THOR INDUSTRIES: Moody's Ups CFR to Ba2 & Alters Outlook to Stable ------------------------------------------------------------------ Moody's Investors Service upgraded its ratings for THOR Industries, Inc., including the corporate family rating to Ba2 from Ba3 and probability of default rating to Ba2-PD from Ba3-PD. Concurrently, Moody's upgraded the ratings on the company's senior secured term loans to Ba2 from Ba3. Moody's also assigned a B1 rating to the new senior unsecured notes. Proceeds from the offering, together with cash on hand, will be used to repay a portion of the borrowings outstanding on the asset based revolving credit facility and for the payment of fees and expenses. The speculative grade liquidity (SGL) rating remains unchanged at SGL-1. The ratings outlook has been changed to stable from positive. "THOR continues to post strong operating results with a healthy sales and earnings outlook over the next 12 months. Robust cash generation also provides significant financial flexibility to absorb any potential market slowdown in 2023 or beyond", says Eoin Roche, Moody's lead analyst for the company. "THOR's leading market positions, significant scale, and portfolio of well-known brands, coupled with a conservative financial policy are all supportive of the Ba2 Corporate Family Rating". The upgrades reflect Moody's expectations that THOR will continue to benefit from strong demand for RVs over the balance of 2021 and into 2022. Moody's expects low dealer inventories and record backlog to support earnings growth and robust credit metrics with debt-to-EBITDA expected to remain below 2x. The following is a summary of the rating actions: Upgrades: Issuer: THOR Industries, Inc. Probability of Default Rating, Upgraded to Ba2-PD from Ba3-PD Corporate Family Rating, Upgraded to Ba2 from Ba3 Senior Secured Term Loan, Upgraded to Ba2 (LGD4) from Ba3 (LGD4) Assignments: Issuer: THOR Industries, Inc. Senior Unsecured Notes, Assigned B1 (LGD5) Outlook Actions: Issuer: THOR Industries, Inc. Outlook, Changed To Stable From Positive RATINGS RATIONALE The Ba2 CFR broadly balances THOR's significant scale and leading market positions against the cyclical and competitive nature of the RV industry that is highly vulnerable to economic downturns. The rating favorably considers THOR's strong competitive standing in North America and Europe, its portfolio of well-known brands, and the company's broad recreational vehicle (RV) offering that touches multiple price points and segments. Demand for towable and motorized RVs will remain healthy over the coming quarters. Moody's attributes a portion of this demand to disruptions in normal recreational travel patterns from the pandemic, with the ongoing emphasis on social distancing and recognition of the safety benefits of RV travel given its more "self-contained" nature. Strong demand at the retail level has resulted in sharply reduced inventory at RV dealers and a corresponding increase in backlog for RV OEMS. THOR currently has a record backlog of almost $17 billion as of July 31, 2021 (this compares to backlog of $5.7 billion as of July 31, 2020). Moody's views THOR's recent acquisition of Airxcel for $750 million as favorable as it bolsters the company's control over some critical RV parts while giving the company access to high margin aftermarkets business. Moody's expects THOR to continue to maintain conservative financial policies and pro forma debt-to-EBITDA will be around 1.8x. Moody's expects THOR to forego additional M&A activity over the near-term as it instead directs a portion of its considerable free cash flow towards debt reduction. The SGL-1 speculative grade liquidity rating denotes Moody's expectation of very good liquidity over the next 12 months. Cash on hand at the end of July 2021 was $446 million. Moody's anticipates robust cash generation during fiscal 2022, with free cash flow-to-debt of around 20%. External liquidity is provided by a $1 billion ABL facility (recently upsized from $750 million) that expires in 2024. Pro forma for the notes offering, about $260 million will be drawn under the facility, leaving availability of around $710 million. The ABL contains a springing minimum fixed charge coverage ratio of 1.0x that comes into effect if availability is less than the greater of $60 million or 10% of the maximum available credit. Moody's does not expect the covenant to come into effect and anticipates adequate cushions to the extent that it does. The stable outlook reflects THOR's record backlog and the favorable demand environment for RVs which Moody's expects to extend into 2022. The stable outlook also incorporates THOR's very good liquidity and Moody's expectations of healthy cash generation that provides significant financial flexibility to absorb a softer market environment. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS Given THOR's vulnerability to highly cyclical end markets, Moody's expects the company to maintain credit metrics that are stronger than levels typically associated with companies at the same rating level. A ratings upgrade would involve expectations of stable and sustained demand for RVs at the retail level and would also require maintenance of strong liquidity, robust credit metrics and a conservative financial policy. A more diversified revenue stream that reduces the cyclicality of the business would also be supportive of an upgrade. A weakening of THOR's liquidity or a sustained drop in retail demand for RVs that led to a sustained deterioration of earnings could result in a ratings downgrade. Material market share losses could also pressure the rating. Debt-financed share repurchases or leveraging acquisitions over the near-term, could also result in downward ratings actions. Debt-to-EBITDA that is expected to be sustained over 3x could lead to a downgrade. THOR Industries, Inc., headquartered in Elkhart, Indiana, is a leading designer and manufacturer of recreational vehicles including travel trailers, fifth wheels, specialty trailers, motorhomes, caravans, and campervans. The company primarily operates in North America and Europe and sells its products under brands such as Keystone, Airstream, Heartland, Jayco, Thor Motorcoach, Hymer, and Niesmann Bischoff. Revenues for the fiscal year ended July 31, 2021 were around $12.3 billion. The principal methodology used in these ratings was Manufacturing published in September 2021. TOUCH OF HEAVEN: Dec. 14 Plan Confirmation Hearing Set ------------------------------------------------------ On July 8, 2021, Debtor Touch of Heaven Ministries, Inc. filed with the U.S. Bankruptcy Court for the Northern District of Ohio a motion seeking approval of its most recently amended disclosure statement. On Oct. 4, 2021, Judge Alan M. Koschik granted the motion and ordered that: * The Disclosure Statement, as amended on October 4, 2021, shall be, and hereby is, approved. * The UST Objection is deemed resolved by the revisions to the Disclosure Statement made subsequent to the Hearing and prior to the entry of this Order, and to the extent inconsistent with the most recent amended Disclosure Statement, is overruled; * Dec. 14, 2021, at 10:00 a.m. in Courtroom 260 of the United States Bankruptcy Court for the Northern District of Ohio, John F. Seiberling Federal Building and U.S. Courthouse, 2 South Main Street, Akron, Ohio 44308 is the Confirmation Hearing to consider the request of the Debtor for confirmation of the Plan. * Nov. 19, 2021 is the deadline for the receipt of Ballots accepting or rejecting the Plan. * Nov. 19, 2021, shall be, and hereby is, fixed as the last day for filing and serving written objections or responses to the Debtor's request for confirmation of the Plan (the "Objection Deadline"). * Dec. 8, 2021 is the deadline for the Debtor's brief in support of Plan confirmation. A full-text copy of the order dated October 4, 2021, is available at https://bit.ly/3uRbiuk from PacerMonitor.com at no charge. Attorney for the Debtor: James F. Hausen (0073694) 215 E. Waterloo Rd, Suite 17 Akron, OH 44319 Phone: 234-678-0626 Fax: 234-201-6104 About Touch of Heaven Ministries Touch of Heaven Ministries, Inc., a company based in Akron, Ohio, filed a Chapter 11 petition (Bankr. N.D. Ohio Case No. 19-53062) on Dec. 31, 2019. In the petition signed by Godess Clemons, chairwoman, Board of Directors, the Debtor disclosed $1,517,368 in assets and $1,688,729 in liabilities. The Hon. Alan M. Koschik is the presiding judge. The Debtor hired Bates and Hausen, LLC, as its legal counsel. TOUCH OF HEAVEN: Unsecured Creditors to Get $0 in Plan ------------------------------------------------------ Touch of Heaven Ministries, Inc., Church of Akron, Ohio, filed with the U.S. Bankruptcy Court for the Northern District of Ohio a Disclosure Statement in support of a Chapter 11 Plan. The Debtor filed this chapter 11 case as a means of maintaining the going concern value of their business and assets and conducting a process to maximize value for stakeholders. Touch of Heaven Ministries, Inc., Church of Akron, Ohio is an independent church located at 131 S. High Street, Akron, Ohio 44308. The church was founded in June 2004 as a religious non-profit corporation. The Debtor is currently in a repayment plan with the Summit County Fiscal Office for the prepetition property taxes on its buildings. The Debtor is hopeful that Summit County Fiscal Office will forgive the debtor's prepetition property taxes and make the debtor tax exempt in the future. The granting of the tax-exempt status by Summit County Fiscal Office is not guaranteed. If the tax-exempt status is not granted, the Debtor may not be able to make the anticipated plan payments. The Plan provides for payment of administrative expenses, priority claims, and secured creditors in full, either in cash or in deferred cash payments, and provides for payments to unsecured creditors in an amount greater than they would receive in the event of a Chapter 7 liquidation. Funds for implementation of the Plan will be derived from the Debtor's income. Class B consists of the claim of Summit County Fiscal Office for Real Property Taxes on 131 S. High St, Akron, OH 44308. The Debtor intends to stay current on their payment plan with Summit County by paying $1994/month for 60 months which started in August 2020. This class is impaired. Class C consists of the claim of Summit County Fiscal Office for Real Property Taxes on 1104 Johnston St, Akron, OH 44305. The Debtor intends to stay current on their payment plan with Summit County by paying $267/month that started prior to the commence of this Bankruptcy. This class is impaired. The Class D claim consisting of the Secured Claim of Herring Bank as Trustee for the benefit of the Bondholders of Touch of Heaven Ministries, Inc., is impaired and the bondholders shall be allowed to vote to accept or reject the Plan as an Impaired Class. The Class D claim is an Allowed Secured Claim and shall be paid in full as follows: * Herring's claim as of the Petition Date on December 31, 2019, was in the amount of $1,257,788.00 before prepetition attorney and trustee fees, which will be added thereto. From that total amount, Debtor will be given credit for all post-petition adequate protection payments paid prior to the first payment made under this Plan. * Although the Debtor does not believe that Herring Bank is fully secured, Herring's claim is fully secured, having elected to be treated as such pursuant to 11 U.S.C. Sec. 1111(b). Accordingly, Herring's post-petition fees and costs, including its maintenance fees for administration of the bond issue and its attorney fees and costs, are allowed as part of Herring's secured claim. * The Debtor will use its best efforts to sell the real property located at 1104 Johnston Street and apply the proceeds to Herring's claim, but may only close on any sale at a price less than full payoff of Herring's claim if sold with the consent of Herring. The Debtor will control the marketing of the Johnston Street location, but Herring will have access to complete information from any realtor for Debtor. * Herring's claim will accrue 4% interest per annum beginning January 1, 2020, the day after the Petition Date, and Debtor will make payments of $1,000 per week until the expiration of 10 years from the Petition Date, and therefore until December 31, 2029, when Debtor will make a final balloon payment of all principal, interest, and all other amounts owing. Class E-1 consists of the secured claim of Fromby Construction which filed a mechanics lien on 1104 Johnston St. The property securing the claim of Fromby Construction, which is secured against 1104 Johnston St shall be valued at $301,000 as of the Effective Date of the plan. As the claim of Summit County Fiscal Office reflects a Principal Balance of $26,026 and the claim of Herring Bank reflects a Principal Balance of $439,084 as of the Petition Date, which is greater than the value of the collateral, the Class E-1 claim is wholly unsecured and shall be treated for all purposes as a Class E claim, and the Mechanics Lien securing the Class E-1 Claim shall be deemed void. Class E-2 consists of the secured claim of Certified Professional Restoration which filed a judgment lien in the Summit County Fiscal Office. * The property securing the claim of Certified Professional Restoration which is secured against 1104 Johnston St shall be valued at $301,000.00 as of the Effective Date of the plan. As the claim of Summit County Fiscal Office reflects a Principal Balance of $26,025.59 and the claim of Herring Bank reflects a Principal Balance of $439,084.04 as of the Petition Date, which is greater than the value of the collateral, the Class E2 claim is wholly unsecured and shall be treated for all purposes as a Class E claim, and the Judgment Lien securing the Class E-2 Claim shall be deemed void on 1104 Johnston St, Akron, OH. * The property securing the claim of Certified Professional Restoration which is secured against 131 S. High St shall be valued at $686,770.00 as of the effective date of the plan. As the claim of Summit County Fiscal Office reflects a Principal Balance of $98,822.50 and the claim of Herring Bank reflects a Principal Balance of $856,001.57 as of the Petition Date, which is greater than the value of the collateral, the Class E-2 claim is wholly unsecured and shall be treated for all purposes as a Class E claim, and the Judgment Lien securing the Class E-2 Claim shall be deemed void on 131 S. High St, Akron, OH. Class E consists of all general unsecured claims against the Debtor, including Classes E-1 and E-2. Holders of Class E claims shall be paid, pro rata, a total of $0.00. The pro rata share of the claimed amount of any claims which are then subject to objections as to which a Final Order has not been entered shall be deposited in an interest bearing bank account until a Final Order is entered. When Final Orders are entered disallowing or allowing and liquidating all Class E claims, the remaining funds in the bank account shall be distributed to the holders of all Class E claims pro rata. The Debtor shall fund this Plan with income from tithes and offerings. The Debtor shall retain the Assets of the estate, and shall pay the operating expenses for the business, and pay the creditors the amounts set forth in the Plan from the proceeds thereof. Consistent with the provisions of the Plan and subject to any releases provided for therein, the Debtor reserves the right to begin or continue any adversary proceeding permitted under the Code and Rules to collect any debts, or to pursue claims in any court of competent jurisdiction. The Receipts in May 2020 includes receipt from the SBA loan for the amount of $135,300. The Expenses in 2021 includes Mold Removal in the amount of $18,000. The Mold removal is now completed. This will allow the Debtor to make their payments under the Plan. The Receipts from tithes and offerings has increased in 2021 compared to 2020. Receipts were lower in 2020 due to Covid. The Debtor expects the receipts to continue increase. The Bankruptcy Court has scheduled Dec. 14, 2021 at 10:00 a.m. as the confirmation hearing. Nov. 19, 2021 is the deadline to submit Ballots to be counted as votes to accept or reject the Plan. A full-text copy of the Disclosure Statement dated Oct. 4, 2021, is available at https://bit.ly/2YmMQ8a from PacerMonitor.com at no charge. Attorney for the Debtor: James F. Hausen (0073694) 215 E. Waterloo Rd, Suite 17 Akron, OH 44319 Phone: 234-678-0626 Fax: 234-201-6104 About Touch of Heaven Ministries Touch of Heaven Ministries, Inc., a company based in Akron, Ohio, filed a Chapter 11 petition (Bankr. N.D. Ohio Case No. 19-53062) on Dec. 31, 2019. In the petition signed by Godess Clemons, chairwoman, Board of Directors, the Debtor disclosed $1,517,368 in assets and $1,688,729 in liabilities. The Hon. Alan M. Koschik is the presiding judge. The Debtor hired Bates and Hausen, LLC, as its legal counsel. TRAXIUM LLC: Court OKs Disclosures; Dec. 6 Confirmation Hearing Set ------------------------------------------------------------------- Judge Alan M. Koschik of the U.S. Bankruptcy Court for the Northern District of Ohio approved the Third Amended Disclosure Statement dated September 27, 2021. Judge Koschik fixed Nov. 12, 2021 as the deadline for filing ballots voting to accept or reject the Plan. The deadline for filing a certification of ballots is Nov. 17. A telephonic pretrial conference is scheduled for Nov. 23 at 2 p.m. The Court will consider confirmation of the Plan on Dec. 6, 2021 at 10 a.m. Any objections to Plan confirmation must be filed and served so as to be received by Nov. 12. A copy of the order is available for free at https://bit.ly/3BlsieQ from PacerMonitor.com. About Traxium LLC Traxium, LLC is a holding company in Stow, Ohio, comprised of commercial printing and marketing businesses. It provides a complete platform of graphic design, marketing and printing solutions, and services consisting of print, bindery, finishing services, and mailing services to customers throughout the region and across the country. Traxium and its affiliate, Serendipity Holdings, LLC, filed voluntary petitions for relief under Chapter 11 of the Bankruptcy Code (Bankr. N.D. Ohio Case Nos. 20-51888 and 20-51889) on Oct. 16, 2020. On Oct. 20, 2021, another affiliate, Cadence Holdings LLC, filed a Chapter 11 petition (Bankr. N.D. Ohio Case No. 20-51908). The cases are jointly administered under Traxium LLC. The petitions were signed by George Schmutz, chief executive officer. On the petition date, Traxium reported $4,420,019 in total assets and $5,665,021 in total liabilities while Serendipity Holdings disclosed $2,435,809 in total assets and $9,870,438 in total liabilities. Cadence Holdings estimated between $500,001 and $1,000,000 in total assets and between $1,000,001 and $10,000,000 in total liabilities at the time of the filing. Judge Alan M. Koschik oversees the cases. Gertz & Rosen, Ltd., Stark & Knoll Co. L.P.A. and Rysenia Capital Solutions, LLC serve as the Debtors' bankruptcy counsel, special counsel and restructuring advisor, respectively. Dennis Durco of Rysenia Capital is the Debtors' operations consultant and chief restructuring officer. TRI-WIRE ENGINEERING: $1.1MM DIP Loan, Cash Collateral Access OK'd ------------------------------------------------------------------ The U.S. Bankruptcy Court for the District of Massachusetts, Eastern Division, has entered an order authorizing Tri-Wire Engineering Solutions, Inc. to use the cash collateral of JP Morgan Chase Bank, N.A., and obtain secured financing on a final basis in accordance with the budget. The Debtor has an ongoing and critical need to (i) use the Cash Collateral and (ii) obtain secured post-petition financing of up to $1,100,000 through the 9-week period covered by the Budget. The Cash Collateral is the Debtor's sole immediate source of funds with which to operate its business, preserve the value of its bankruptcy estate, and pursue and consummate the Proposed Sale. As of the Petition Date, the Debtor was indebted and liable to JPM under the parties' prepetition Credit Agreement dated December 30, 2016, in the aggregate amount of at least $10,714,135.40. JPM holds a first lien against all of the assets of the Debtor, pursuant to a UCC Financing Statement filed on December 30, 2016. JPM and the Debtor entered into a forbearance agreement dated as of June 11, 2019, pursuant to which the JPM agreed, among other things, to forbear from exercising its rights and remedies under the Prepetition Loan Documents. The Debtor and JPM amended the Forbearance Agreement seven times, with the Seventh Amendment to the Forbearance Agreement executed on September 9, 2021, which JPM agreed to loan up to $250,000 in excess of the revolving commitment defined in the Prepetition Loan Documents. As security for the payment of the Prepetition Secured Obligations, the Debtor granted to JPM security interests in and liens upon all or substantially all of Debtor's tangible and intangible personal property and assets. The Debtor negotiated in good faith and at arms' length with JPM on the terms of the Debtor's use of the Cash Collateral and the Post-Petition Loan. JPM has acted in good faith (i) in consenting to the Debtor's use of Cash Collateral under the terms of the Interim Order and the Final Order, and (ii) in agreeing to make the Post-Petition Loan pursuant to the Final Order. As adequate protection for the Debtor's use of Cash Collateral, JPM is granted post-petition replacement liens in all of the Debtor's assets generated in the post-petition period that would have, absent the Chapter 11 filing, constituted collateral subject to JPM's perfected, prepetition liens and security interests that are not subject to avoidance pursuant to the Debtor's estate's avoidance rights and powers under Chapter 5 of the Bankruptcy Code, which Adequate Protection Liens will have the same priority as the Prepetition Liens. JPM will also have an allowed superpriority adequate protection claim under Section 507(b) of the Bankruptcy Code to the extent the Adequate Protection Liens are shown to be inadequate to protect JPM against the diminution in value of the Prepetition Collateral. A copy of the final order and the Debtor's nine-week budget is available at https://bit.ly/3D6EmRC from PacerMonitor.com. The budget provided for total expenses, on a weekly basis, as follows: $760 for the week ending October 9, 2021; $308 for the week ending October 16, 2021; $906 for the week ending October 23, 2021; $638 for the week ending October 30, 2021; $1,121 for the week ending November 6, 2021; and $757 for the week ending November 13, 2021. About Tri-Wire Engineering Solutions, Inc. Tri-Wire Engineering Solutions, Inc. -- https://www.triwire.net/ -- provides installation, construction, maintenance and other technical support services to cable and telecommunications companies throughout North America. Tri-Wire Engineering was formed in 1999 and is headquartered in Tewksbury, Mass. The Debtor sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. D. Mass. Case No. 21-11322 on September 13, 2021. In the petition filed by Ruben V. Klein, president, the Debtor disclosed up to $10 million in assets and up to $50 million in liabilities. Casner & Edwards, LLP is the Debtor's counsel. Gentzler Henrich & Associates LLC is the financial advisor and turnaround consultant. SSG Advisors, LLC serves as investment banker. TRI-WIRE ENGINEERING: Committee Taps Jeffrey Sternklar as Counsel ----------------------------------------------------------------- The official committee of unsecured creditors appointed in the Chapter 11 case of Tri-Wire Engineering Solutions, Inc. seeks approval from the U.S. Bankruptcy Court for the District of Massachusetts to employ Jeffrey D. Sternklar, LLC as its legal counsel. The firm's services include: (a) advising the committee regarding its rights, duties, and powers in the Debtor's Chapter 11 case; (b) assisting the committee in its consultations with the Debtor relative to the administration of the case; (c) assisting the committee in analyzing the claims of creditors and the Debtor's capital structure and in negotiating with holders of claims and equity interests; (d) assisting the committee in its investigation of the acts, conduct, assets, liabilities, and financial condition of the Debtor and of the operation of the Debtor's businesses; (e) assisting the committee in its investigation of the acts, conduct, assets, liabilities, financial condition of, and the transactions among, the Debtor, its current and former shareholders, creditors, customers, employees, insiders and affiliates; (f) assisting the committee in its negotiations with the Debtor or any third-party regarding asset dispositions, financing of other transactions and the terms of a plan of reorganization; (g) assisting the committee in its analysis of the Debtor's tax attributes, if any, that can be used for the benefit of creditors; (h) assisting the committee in its review of the Debtor's insurance policies and representing the committee in connection with potential claims that may be covered under such policies; (i) assisting and advising the committee as to its communications to the general creditor body regarding significant matters in this Chapter 11 case; (j) representing the committee at all hearings and other proceedings before the court; (k) reviewing and analyzing motions, applications, orders, statements, operating reports, and bankruptcy schedules filed with the court and advising the committee as to their propriety, and, to the extent deemed appropriate by the committee, supporting, joining or objecting thereto, as applicable; (l) assisting the committee in preparing pleadings and applications in furtherance of the committee's interests and objectives; (m) assisting the committee in its review and analysis of all of the Debtor's various agreements; (n) preparing and prosecuting pleadings; and (o) performing other necessary legal services. The hourly rates of the firm's attorneys and staff are as follows: Jeffrey D. Sternklar, Esq. $450 per hour Paralegals $200 per hour In addition, the firm will seek reimbursement for expenses incurred. Jeffrey Sternklar, Esq., disclosed in a court filing that his firm is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. The firm can be reached through: Jeffrey D. Sternklar, Esq. Jeffrey D. Sternklar LLC 19th Floor 101 Federal Street Boston, MA 02110 Telephone: (617) 207-7800 Facsimile: (617) 507-6530 Email: jeffrey@sternklarlaw.com About Tri-Wire Engineering Solutions Tri-Wire Engineering Solutions, Inc. -- https://www.triwire.net/ -- provides installation, construction, maintenance and other technical support services to cable and telecommunications companies throughout North America. It was formed in 1999 and is headquartered in Tewksbury, Mass. Tri-Wire filed a petition for Chapter 11 protection (Bankr. D. Mass. Case No. 21-11322) on Sept. 13, 2021, listing up to $10 million in assets and up to $50 million in liabilities. Ruben V. Klein, president of Tri-Wire, signed the petition. The Debtor tapped Casner & Edwards, LLP as legal counsel; Gentzler Henrich & Associates, LLC as financial advisor and turnaround consultant; and SSG Advisors, LLC as investment banker. On Sept. 23, 2021, the U.S. Trustee for Region 1 appointed an official committee of unsecured creditors in the Debtor's bankruptcy case. The committee is represented by Jeffrey D. Sternklar, LLC. U.S. SILICA: To Explore Strategic Alternatives for ISP Segment -------------------------------------------------------------- U.S. Silica Holdings, Inc. is commencing a review of strategic alternatives for its Industrial & Specialty Products (ISP) segment. A range of options are under consideration, including a potential sale or separation of the ISP segment. "Our Board and management team regularly review strategic opportunities, and with our recent equity valuation tightly correlated to the energy markets, we believe now is the appropriate time to further assess the potential of creating two, focused standalone businesses," said Bryan Shinn, chief executive officer. "Both our ISP and O&G segments are industry leaders, and it is from this position of strength that we believe a separation or sale of ISP has the potential to unlock significant value and maximize returns for all of our stakeholders." Shinn continued, "Our ISP segment has built a market-leading portfolio of products and serves numerous essential, high growth and attractive end markets, including renewable energy, food and beverage, chemical additives, paints and coatings, and building products, among others. The business is well aligned with global sustainability initiatives, is positioned to benefit from increased U.S. infrastructure investment and has exposure to environmentally important value chains, including solar panels, wind turbines and green diesel. With its robust new pipeline of commercial products and clear, comprehensive plan, ISP is poised to significantly expand profitability over the next 3-5 years. As we undertake this review, we will continue to focus on our strategy to prioritize free cash flow generation and net debt reduction throughout this process." No specific timeline has been established for the completion of the review of strategic alternatives. The Company noted that there can be no assurance that a sale, separation or any other transaction will take place. The Company does not intend to disclose developments with respect to the progress of its evaluation of any strategic options until such time as the Board of Directors has approved a transaction or otherwise deems disclosure required or appropriate. The Company has retained Centerview Partners LLC as its exclusive financial advisor and Morrison & Foerster LLP as its legal advisor in connection with the strategic review. About U.S. Silica Headquartered in Katy, Texas, U.S. Silica Holdings, Inc. -- http://www.ussilica.com-- is a global performance materials company and a producer of commercial silica used in a wide range of industrial applications and in the oil and gas industry. In addition, through its subsidiary EP Minerals, LLC, the Company produces products derived from diatomaceous earth, perlite, engineered clays, and non-activated clays. U.S. Silica reported a net loss of $115.12 million in 2020, a net loss of $329.75 million in 2019, and a net loss of $200.82 million in 2018. As of June 30, 2021, the Company had $2.26 billion in total assets, $1.61 billion in total liabilities, and $648.74 million in total stockholders' equity. U.S. TOBACCO: Xcaliber Drops Support for Committee Formation ------------------------------------------------------------ Xcaliber International LTD, LLC has withdrawn its support for the motion to appoint an official committee of unsecured creditors in U.S. Tobacco Cooperative Inc.'s Chapter 11 case. Attorney for Xcaliber, William Curtis, Esq., at Womble Bond Dickinson (US) LLP, said in court papers that the company no longer qualifies as a "moving" or "willing" creditor. Last month, Xcaliber, together with two other claimants, sought the appointment of a committee, arguing that unsecured creditors are not "adequately represented" in U.S. Tobacco's bankruptcy case despite the fact that the cooperative owes them as much as $2.5 million. On Oct. 5, U.S. Tobacco asked the Court to deny the motion, saying the claimants are not holders of general unsecured claims. Xcaliber, the cooperative argued, holds only an administrative expense claim under Section 503(b)(9) of the Bankruptcy Code and enjoys a priority in payment over general unsecured claims. About U.S. Tobacco Cooperative U.S. Tobacco Cooperative produces U.S. flue-cured tobacco grown by more than 500 member growers in Florida, Georgia, South Carolina, North Carolina, and Virginia. Member-grown tobacco is processed and sold as raw materials to cigarette manufacturers worldwide. U.S. Tobacco Cooperative and affiliates sought Chapter 11 protection (Bankr. E.D.N.C. Lead Case No. 21-01511) on July 7, 2021. In the petition signed by Keith H. Merrick, chief financial officer, U.S. Tobacco Cooperative estimated assets of between $100 million and $500 million and estimated liabilities of between $100 million and $500 million. Judge Joseph N. Callaway oversees the cases. The Debtors tapped Hendren, Redwine & Malone, PLLC as bankruptcy counsel, and McGuireWoods, LLP and Robinson, Bradshaw & Hinson, P.A. as special counsel. BDO Consulting Group, LLC, SSG Advisors, LLC and CliftonLarsonAllen serve as the Debtors' financial advisor, investment banker and accountant, respectively. UNIVERSAL ENTERPRISES: Chapter 15 Case Summary ---------------------------------------------- Chapter 15 Debtor: Universal Enterprises Ltd. (in official liquidation) EY Cayman Ltd. 62 Forum Lane Camana Bay, P.O. Box 510 Grand Cayman, KY1-1106 Cayman Islands Foreign Proceeding: In the Matter of Universal Enterprises Ltd., The Grand Court of the Cayman Islands, Financial Services Division, Cause No. FSD 55 of 2020 Chapter 15 Petition Date: October 7, 2021 Court: United States Bankruptcy Court Southern District of New York Case No.: 21-11745 Judge: Hon. Martin Glenn Foreign Representatives: Eleanor G. Fisher and Hani Bishara c/o EY Cayman Ltd. 62 Forum Lane Camana Bay, P.O. Box 510 Grand Cayman, KY1-1106 Cayman Islands Foreign Representative's Counsel: Abid Qureshi, Esq. AKIN GUMP STRAUSS HAUER & FELD LLP One Bryant Park, 44th Floor New York, NY 10036 Tel: (212) 872-1000 Email: aqureshi@akingump.com Estimated Assets: Unknown Estimated Debt: Unknown A full-text copy of the Chapter 15 petition is available for free at PacerMonitor.com at: https://www.pacermonitor.com/view/LKHZC3Q/Universal_Enterprises_Ltd_in_official__nysbke-21-11745__0001.0.pdf?mcid=tGE4TAMA US STEEL: Fitch Raises IDR to 'BB-', Outlook Remains Positive ------------------------------------------------------------- Fitch Ratings has upgraded United States Steel Corporation's (U.S. Steel) Issuer Default Rating (IDR) to 'BB-' from 'B'. The Rating Outlook is Positive. Fitch has also upgraded U. S. Steel's ABL credit facility to 'BB+'/'RR1' from 'BB'/'RR1' and upgraded the unsecured notes and unsecured environmental revenue bonds to 'BB-'/'RR4' from 'B'/'RR4'. The upgrade reflects U. S. Steel's significant debt repayment over the near term, solid steel market conditions, including historically high steel prices, which result in significantly higher EBITDA generation and significantly lower leverage metrics. The ratings also reflect U. S. Steel's shifting focus to lower-cost, more-efficient mini mills as evidenced by the acquisition of Big River Steel Holdings LLC and the company's announcement of its intention to build a new three million-ton mini mill. The Positive Outlook reflects the possibility that total debt/EBITDA could be sustained below 2.5x and the new mini mill could be self-funded and constructed over the rating horizon. KEY RATING DRIVERS Significant Debt Repayment: In 1Q21, U. S. Steel completed an equity offering for proceeds of approximately $790 million. The company used the equity proceeds, together with new $750 million unsecured notes, to redeem all of its $1.056 billion secured notes due 2025. Additionally, in 1Q21, U. S. Steel repaid the remaining $500 million drawn on its $2.0 billion ABL credit facility due 2024. The company then redeemed $718 million of its 6.875% notes due 2025 in 3Q21 and has redeemed $180 million of the 6.625% BRS secured notes due 2029 and $370 million of the U. S. Steel 6.25% notes due 2026. Improved Leverage Expectations: Total debt/EBITDA was 2.9x at 2Q21 driven by significantly higher EBITDA generation and debt repayment. Fitch expects total debt/EBITDA to improve to below 2.0x by YE21 in line with solid steel market conditions, including historically high steel prices, the company's near-term focus on debt repayment and Fitch's expectation for approximately $4 billion of EBITDA in 2021. U. S. Steel's pro-forma debt outstanding debt at the time of BRS acquisition in January 2021 was approximately $7 billion. The company disclosed that it has repaid $2.7 billion of debt through Sept. 16, 2021. Solid Steel Market Conditions: HRC prices have recovered dramatically to historical highs and are supported by solid supply/demand dynamics, low imports and relatively high raw material costs. In its flat-rolled segment, U. S. Steel's shipments and realized prices improved 30% and 50% respectively in 2Q21 compared with the low point over the past year in 2Q20. The significantly improved domestic steel environment has led to stronger-than-expected EBITDA generation and lower leverage. EBITDA in 1H21 was more than $1.7 billion, which compares with full-year 2018, a high point in the cycle, EBITDA of around $1.5 billion. Big River Steel Acquisition: In October 2019, U. S. Steel acquired a 49.9% equity interest in Big River Steel Co. (BRS), an electric arc furnace (EAF) facility with 3.3 million tons of annual capacity, for approximately $700 million. In January 2021, U. S. Steel acquired the remaining equity interest in BRS for approximately $774 million. BRS's high EBITDA margins, driven by its flexible low-cost structure, should benefit U. S. Steel's overall cost position and operating profile, reducing earning volatility. Additionally, U. S. Steel recently announced a new three million-ton mini mill, with construction expected to begin in 2022 and production to begin in 2024 with the current expected investment to be $3 billion. Fitch views U. S. Steel's strategy to shift to lower cost more efficient assets positively and believes it will improve and result in more stable margins through the cycle. Asset Monetization: U. S. Steel granted Stelco Inc. a $100 million option to acquire a 25% interest in its Minntac iron ore mining operations for an aggregate purchase price of $600 million. Under the agreement, Stelco paid $100 million to U. S. Steel in 2020. Stelco will then have the ability to exercise its option any time before Jan. 31, 2027 to acquire a 25% interest for an additional $500 million. The transaction provides the potential to further improve liquidity and fits the company's reduced footprint following its indefinite idling of Great Lakes Works. In addition, U. S. Steel sold its Keystone Industrial Port Complex, a non-core real estate asset, for approximately $163 million. Additionally, in 2Q21, U. S. Steel announced the sale of Transtar for $640 million in proceeds. The liquidity from asset sales provides further capacity for debt repayment. DERIVATION SUMMARY U. S. Steel is similar in size compared with Cleveland-Cliffs (BB-/Positive) and has a comparable operating profile in that both companies are integrated and have both blast furnace and EAF production, but are primarily blast furnace producers. U. S. Steel is larger in terms of annual shipments compared with EAF steel producer Commercial Metals Company (BB+/Stable), has higher product and end-market diversification, although CMC's profitability is less volatile resulting in more stable margins and leverage metrics through the cycle. U. S. Steel is larger in terms of total shipments, although less profitable with weaker credit metrics historically through the cycle compared with EAF producer Steel Dynamics (BBB/Stable). KEY ASSUMPTIONS Fitch's key assumptions within the rating case for the issuer include: -- Flat-rolled steel prices decline from historical highs through the ratings horizon; -- Flat-rolled steel shipments of around 10 million tons in 2021 declining to around 9.5 million tons per year thereafter; -- Mini Mill Segment shipments of around 2 million tons in 2021 gradually improving thereafter; -- Capex around $800 million in 2021, increasing significantly in 2022 and 2023 for the construction of the planned new mini mill; -- Conservatively, no production from the new mini-mill in the forecast period; -- No significant dividends, no share repurchases and no acquisitions. RATING SENSITIVITIES Factors that could, individually or collectively, lead to positive rating action/upgrade: -- Total debt/EBITDA sustained below 2.5x; -- EBITDA margins sustained above 10%; -- Visibility into substantial de-risking of the $3 billion new mini mill. Factors that could, individually or collectively, lead to negative rating action/downgrade: -- Total debt/EBITDA sustained above 3.5x; -- EBITDA margins sustained below 8.5%; -- A material weakening of domestic steel market conditions leading to materially weaker than expected EBITDA; -- Prolonged negative FCF. 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, U. S. Steel had $1.39 billion of cash and cash equivalents and $1.918 billion available under its $2.0 billion ABL credit facility due 2024 (not drawn). In addition, the company had $579 million available under its USSK credit facilities due 2023 and 2021 and $350 million under BRS' ABL due 2022. On July 23, 2021, U. S. Steel reduced the ABL to $1.75 billion from $2 billion. ISSUER PROFILE U. S. Steel is an integrated steel producer of flat-rolled steel and tubular products with operations in North America and Europe. U. S. Steel is the second largest North American flat-rolled sheet producer, one of the largest producers of tubular goods in the U.S. and one of the largest integrated flat-rolled producers in Central Europe. In in addition to blast furnace production, U. S. Steel has some EAF production with its BRS and Fairfield Works facilities. 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. USA COMPRESSION: Fitch Affirms 'BB-' LT IDR, Outlook Remains Neg. ----------------------------------------------------------------- Fitch Ratings has affirmed the Long-Term Issuer Default Rating (IDR) of USA Compression Partners, LP (USAC) at 'BB-' and the senior unsecured ratings of USAC and co-issuer USA Compression Finance Corp.'s senior unsecured notes at 'BB-'/'RR4'. Additionally, Fitch has affirmed USAC's senior secured rating on USAC's secured asset-based revolving credit facility at 'BB+'/'RR1.' The Rating Outlook remains Negative. The Negative Outlook reflects continued weak demand for compression services. As to leverage, for full-year 2020, the partnership posted a figure that was below the level where Fitch had stated it may downgrade the IDR. Notwithstanding the good result, Fitch is concerned that the utilization of USAC's compression assets are lingering near trough levels. USAC's ratings are reflective of good customer diversity, the partnership's size, modest geographic diversity and a track record of stable EBITDA during commodity price downturns. USAC's ratings also reflect the partnership's exposure to relatively short average contract lengths, competitive intensity, and the threat of disintermediation should its customers transition mainly to the "buy" choice of the "buy versus lease" decision. KEY RATING DRIVERS Utilization Lower Than In Previous Cycle: In the 2015-2016 oil price trough (which coincided with a warm winter), utilization by customers of USAC's compressors fell to a level of approximately 85% for about three months. The coronavirus pandemic has seen this utilization percent touch 82%, with no material bounce-back occurring yet for the partnership. This 82% posting occurs notwithstanding that most producing regions of the U.S. are showing a trend of increasing volumes. The current trough being worse than the previous trough reflects an unfavorable comparison. In Fitch's view, utilization was boosted in 2015-2016 by the fact that the Permian region then was at an early stage of exploitation with new technologies, driving rapid development of pipeline and compression systems. Fitch will monitor closely the partnership's efforts to increase its utilization percent. Stable Cash Flows: USAC's contracts are 100% fixed-fee, take-or-pay contracts with no volumetric or commodity price-based revenues. USAC has a strong track record of average fleet horsepower utilization going back to 2007 of approximately 93%. USAC's focus on larger horsepower, midstream focused compression applications (like regional gathering, gas processing plant compression and central gathering with unit specific contracts) provides it some competitive advantages and creates high barriers to exit for some customers, making USAC's services costly to replace. Average contract length is relatively short, but USAC has historically had a good track record with renewals. Leverage: 2020 total debt (with equity credit) to adjusted EBITDA was 5.3x, better than Fitch's expectation of 5.9x. Utilization and EBITDA were better than expected, and capex was lower than expected. For 1H21, utilization has not bounced back to a level that is consistent with Fitch's previous 2021 forecast. Accordingly, the leverage forecast underlying today's rating affirmation is worse with respect to 2021 than the same forecast last year. Fitch forecasts leverage of approximately 5.4x. The leverage level above which Fitch may consider a downgrade is 5.5x. As was the case last year, management's decision to keep capital expenditures at a low level is proving important. Diversification: In 2020, the partnership's largest customer only accounted for 8% of revenues. The next biggest customer was 4% of revenues, and the top 20 provides less than 50% of revenues. Experience in the aftermath of the COVID recession showed an immaterial harm from bankruptcy. The company is also geographically diversified. Measured by horsepower, no region has more than 35% of the partnership's assets. The top two regions are ones about where Fitch Oil & Gas is particularly constructive, the Permian basin and the Appalachia basin. USAC has a relevance score of '4' for Group Structure due to significant related party transactions and ownership concentration. This has a negative impact on the credit profile and is relevant to the rating in conjunction with other factors. Energy Transfer, LP (ET; BBB-/Stable), which controls USAC's general partner, operates a large gas gathering and processing business, and ET leases compression from USAC, amounting to an immaterial amount of USAC revenues. DERIVATION SUMMARY USAC is unique in Fitch's midstream coverage insofar as its business line is the leasing of equipment. As to other features of the business, USAC's EBITDA size and Appalachia basin presence marries up well with DT Midstream, Inc. (DTM; BB+/Stable). DTM has more of its long-term EBITDA under take-or-pay contracts than does USAC. USAC has a more diversified customer base, and it has no major customer, i.e., revenues over 10%. DTM has a major customer which is below investment grade. Aggregating components of business risk, Fitch regards USAC to have higher business risk, which is exhibited in their sensitivity levels. For example, if USAC were persistently running leverage at 5.7x (not expected), it would likely be a 'B+' rated company. By contrast, at 5.7x (again not expected), DTM would likely be a 'BB' rated company. Fitch expects DTM to post 2021 leverage of approximately 4.7x. Due to lower leverage and lower business risk, DTM is rated two notches above USAC. KEY ASSUMPTIONS -- Fitch base case price deck, e.g., Henry Hub natural gas price in 2022 and 2023 of $2.75/mcf and $2.45/mcf, respectively; -- EBITDA rises slightly over the multi-year forecast period from the 1H21 annualized figure; -- Minimal capex; -- Current rate of distribution per unit is maintained; -- Libor (or substitute base rate) of 25 basis points. RATING SENSITIVITIES Factors that could, individually or collectively, lead to positive rating action/upgrade: -- Fitch would look to stabilize the outlook if leverage (Total Debt with Equity Credit/Operating EBITDA) is expected to be at or below 5.5x on a sustained basis, in conjunction with by sometime in 1H22 the utilization percent rising from its present level to reach a point that is not distant from its long-term trend; -- Leverage at or below 5.0x on a sustained basis could lead to an upgrade; -- An increase in size and contract term while maintaining leverage below 5.5x. Factors that could, individually or collectively, lead to negative rating action/downgrade: -- Leverage (Total Debt with Equity Credit/Operating EBITDA), above 5.5x on a sustained basis, inclusive of preferred equity receiving 50% debt treatment; -- Distribution coverage below 1.0x on a sustained 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 Liquidity Adequate: Fitch considers USAC's liquidity to be adequate and remain so over the near to intermediate term. USAC currently has a $1.6 billion revolving credit facility that matures in April 2023. USAC has the option to increase the amount of total commitments under the revolving credit facility by $400 million, subject to receipt of lender commitments and satisfaction of other conditions. As of June 30, 2021, USAC had outstanding borrowings of $473.4 million with borrowing base availability (based on USAC's borrowing base) of $1.1 billion and available borrowing capacity of $217.4 million under its covenants. Financial covenants permit a maximum funded debt to EBITDA ratio of 5.5x and a minimum EBITDA to interest coverage ratio of 2.5x. USAC was in compliance with its covenants as of June 30, 2021. Maturities are limited with the nearest term maturity for USAC being the 2023 revolving credit facility. The largest component of the borrowing base (95%) consists of compression units, and the rest consists of inventory (serialized and non-serialized parts) and AR. The security package underlying the borrowing base is significantly larger than the $1.6 billion commitment on the asset backed credit facility. ISSUER PROFILE USAC provides compression services in the United States of America. SUMMARY OF FINANCIAL ADJUSTMENTS Fitch has applied 50% debt credit to USAC's preferred equity units. ESG CONSIDERATIONS USA Compression Partners, LP has an ESG Relevance Score of '4' for Group Structure due to significant related party transactions and ownership concentration. ET operates a large gas gathering and processing business, and ET leases compression from USAC, amounting to an immaterial amount of USAC revenues. These matters have 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'. 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. WALKER & DUNLOP: Moody's Affirms 'Ba1' CFR on Alliant Capital Deal ------------------------------------------------------------------ Moody's Investors Service has affirmed the Ba1 Corporate Family Rating and Ba1 long-term senior secured rating of Walker & Dunlop, Inc. The outlook remains stable. The rating action follows Walker & Dunlop's announcement that it will raise a new $600 million term loan B in connection with its planned acquisition of Low Income Housing Tax Credits (LIHTC) syndicator Alliant Capital Ltd., and which refinances its current $300 million term loan B. Affirmations: Issuer: Walker & Dunlop, Inc. Corporate Family Rating, Affirmed Ba1 Backed Senior Secured Bank Credit Facility, Affirmed Ba1 Outlook Actions: Issuer: Walker & Dunlop, Inc. Outlook, Remains Stable RATINGS RATIONALE The ratings affirmation reflects Moody's unchanged view of Walker & Dunlop's credit profile, as reflected by its ba1 standalone assessment, following the Alliant acquisition and the related financing. Walker & Dunlop's ratings reflect its strong market position as an originator and servicer of multifamily agency loans, its strong profitability and its modest leverage compared to other rated nonbank commercial real estate (CRE) lenders. At the same time, the ratings reflect the credit challenges resulting from its niche business focus that is dependent on agency multifamily volumes and refinancing risks from its funding profile, which is highly reliant on confidence-sensitive secured sources of funding. Alliant is an established firm, having operated in the fragmented LIHTC market for over 20 years. Moody's has assessed that its business will provide Walker & Dunlop increased business diversification and will reduce its reliance on agency volumes. At the same time, the transaction provides Walker & Dunlop the opportunity to drive higher volumes in its core agency business, as property developers look for agency financing for properties approaching the end of their tax credit compliance period. Affordable housing has been a focus for US regulators in recent years, with the Federal Housing Finance Agency (FHFA) increasing the agencies' affordable housing target to 50% of total originations in 2020 (from 37.5% previously), while simultaneously loosening the definition of what qualifies as affordable housing. At the same time, Walker & Dunlop's ratings consider risks associated with the acquisition, namely a modest increase in leverage and the integration of the acquired business, which operates in a sector in which Walker & Dunlop has not historically participated. However, Moody's does not expect the acquisition to alter its assessment of the company's capital adequacy, given that its tangible common equity to tangible managed asset (TCE/TMA) will likely remain above 20%, notwithstanding normal fluctuations in agency volumes. The outlook remains stable, reflecting Moody's expectation that Walker & Dunlop will maintain stable leverage and profitability over the next 12-18 months. WHAT COULD CHANGE THE RATING UP The ratings could be upgraded if the company improves its overall funding profile while maintaining strong profitability and solid capital levels, such as a ratio of net income to average managed assets above 4% and a tangible common equity to tangible managed assets ratio above 20%. WHAT COULD CHANGE THE RATING DOWN The ratings could be downgraded if Moody's expects profitability as measured by net income over tangible managed assets to remain below 4% and if it expects tangible common equity to tangible managed assets to remain below 20%. The ratings could also be downgraded if the firm increases its asset risk or if its liquidity and funding profile deteriorate. The principal methodology used in these ratings was Finance Companies Methodology published in November 2019. WATER MARBLE: Confirmation Hearing Slated for Dec. 16 ----------------------------------------------------- The U.S. Bankruptcy Court for the Middle District of Florida, on Oct. 1, 2021, approved the Disclosures Statement of Water Marble Holding, LLC, according to the Court dockets. The Court will consider confirmation of the Debtor's Plan on Dec. 16, 2021 at 10:30 a.m., the dockets said. About Water Marble Holding LLC Water Marble Holding, LLC filed a Chapter 11 bankruptcy petition (Bankr. M.D. Fla. Case No. 21-01034) on April 28, 2021, listing as much as $10 million in both assets and liabilities. Judge Jerry A. Funk oversees the case. The Law Offices of Jason A. Burgess, LLC and Smith Hulsey & Busey serve as the Debtor's bankruptcy counsel and special counsel, respectively. WC CULEBRA: Files Amendment to Disclosure Statement --------------------------------------------------- WC Culebra Crossing SA, LP, submitted a First Amended Disclosure Statement for Plan of Reorganization dated October 4, 2021. On October 4, 2021, after notice and a hearing, the Bankruptcy Court approved this Disclosure Statement as containing information of a kind and in sufficient detail adequate to enable the holders of Claims against the Debtor to make an informed judgment to accept or reject the Plan. The Bankruptcy Court has entered an order fixing October 26, 2021, at 9:00 a.m. as the date for the initial commencement of a hearing on confirmation of the Plan, and fixing October 18, 2021, at 5:00 p.m by which all objections to confirmation of the Plan must be filed. The Debtor scheduled Timber Culebra's Secured Claim at approximately $8,444,378. The Debtor estimates Timber Culebra's claim in the financial projections in the total amount of $9,064,866 as of the Effective Date - this amount includes accrued default interest up to the Effective Date. Under all scenarios, Timber Culebra is significantly oversecured. On August 2, 2021, the Debtor commenced adequate protection payments to the Noteholder in the amount of $8,444,378.00, which represents the contractual non-default rate under the note. Class 1 consists of the Allowed Secured Claims of Timber Culebra. The Debtor estimates that it owes Timber Culebra as of the Petition Date approximately $8,444,378 under the mortgage loan. In full and final satisfaction of Timber Culebra's Allowed Secured Claim, Timber Culebra's Allowed Secured Claim shall be paid in full on or prior to May 4, 2022. If the Debtor has not identified replacement financing for its secured debt by May 4, 2022, the Debtor will then commence a simultaneous sales process. Class 2 consists of the Allowed Secured Claims of CC2 TX, LLC for the 2019 and 2020 Tax Year. The Debtor financed the payment of its property taxes for the 2019 and 2020 tax years, through a tax loan facility provided by CC2 TX,LLC, with that debt being secured by liens on the Property. The Property Lender's Allowed Secured Claim shall be paid in full within 60 months from the Petition Date, with 8% interest. The Amended Disclosure Statement does not alter the proposed treatment for unsecured creditors and the equity holder: * Class 4 consists of all Unsecured Claims that are not Insider Claims. The Debtor believes there are approximately $236,772 in non-insider Unsecured Claims. Each holder of an Allowed Unsecured Claim shall receive payment in full of the allowed amount of each holder's claim, to be paid on the later of (i) 30 days after the Effective Date or (ii) 10 days after such Claim becomes an Allowed Claim. * Each holder of an Equity Interest shall retain such interests, but shall not receive any distribution on account of such interests until Classes 1, 2, 3 and 4 Allowed Claims are paid in full. All consideration necessary for the payment or tender of Distributions under the Plan will be derived from (i) Cash on hand on the Effective Date, (ii) income generated by the Reorganized Debtor from operations, and (iii) the proceeds from any sale or refinancing of the Property. The Debtor or Reorganized Debtor plans to sell all or part of the Property or refinance all or any part of the existing obligations that encumber the Property, including the obligations to Timber Culebra. In the event such a transaction is consummated by the Debtor or Reorganized Debtor, the net proceeds from such sale or refinancing shall be paid to Timber Culebra until the Allowed Timber Culebra Secured Claim is satisfied. A full-text copy of the First Amended Disclosure Statement dated October 4, 2021, is available at https://bit.ly/3mwUIfH from PacerMonitor.com at no charge. Counsel for the Debtor: FISHMAN JACKSON RONQUILLO PLLC Mark H. Ralston State Bar No. 16489460 Fishman Jackson Ronquillo PLLC Three Galleria Tower 13155 Noel Road, Suite 700 Dallas, TX 75240 Telephone: (972) 419-5544 Facsimile: (972) 4419-5501 E-mail: mralston@fjrpllc.com About WC Culebra Crossing SA WC Culebra Crossing SA, LP is a Single Asset Real Estate debtor (as defined in 11 U.S.C. Section 101(51B)). WC Culebra Crossing SA, LP filed its voluntary petition for relief under Chapter 11 of the Bankruptcy Code (Bankr. W.D. Tex. Case No. 21-10360) on May 4, 2021. At the time of filing, the Debtor estimated $10 million to $50 million in assets and $1 million to $10 million in liabilities. Judge Tony M. Davis oversees the case. The Debtor tapped Mark H. Ralston, Esq. at Fishman Jackson Ronquillo, PLLC as counsel and Columbia Consulting Group, PLLC as financial advisor. WC CULEBRA: Oct. 26 Plan Confirmation Hearing Set ------------------------------------------------- On Sept. 15, 2021, the U.S. Bankruptcy Court for the Western District of Texas conducted a hearing to consider approval of the Disclosure Statement for Plan of Reorganization of WC Culebra Crossing SA, LP, and the Objection to Approval of Disclosure Statement filed by Timber Culebra, LLC ("Noteholder"). On Oct. 4, 2021, Judge Tony M. Davis ordered that: * The Disclosure Statement is approved on the condition that the Objection be appended thereto. * Oct. 18, 2021 at 5:00 p.m. is fixed as the last day for filing and serving written objections to confirmation of the Plan. * Oct. 18, 2021 at 5:00 p.m. is fixed as the last day for submitting ballots for acceptances or rejections of the Plan. * Oct. 26, 2021 at 9:00 a.m. at the U.S. Bankruptcy Court, Courtroom No. 1, 903 San Jacinto Blvd., Austin, Texas is the hearing on the confirmation of the Plan and any objections. A full-text copy of the order dated October 4, 2021, is available at https://bit.ly/3Fp5Fsk from PacerMonitor.com at no charge. Counsel for the Debtor: FISHMAN JACKSON RONQUILLO PLLC Mark H. Ralston State Bar No. 16489460 Fishman Jackson Ronquillo PLLC Three Galleria Tower 13155 Noel Road, Suite 700 Dallas, TX 75240 Telephone: (972) 419-5544 Facsimile: (972) 4419-5501 E-mail: mralston@fjrpllc.com About WC Culebra Crossing SA WC Culebra Crossing SA, LP is a Single Asset Real Estate debtor (as defined in 11 U.S.C. Section 101(51B)). WC Culebra Crossing SA, LP filed its voluntary petition for relief under Chapter 11 of the Bankruptcy Code (Bankr. W.D. Tex. Case No. 21-10360) on May 4, 2021. At the time of filing, the Debtor estimated $10 million to $50 million in assets and $1 million to $10 million in liabilities. Judge Tony M. Davis oversees the case. The Debtor tapped Mark H. Ralston, Esq. at Fishman Jackson Ronquillo, PLLC as counsel and Columbia Consulting Group, PLLC as financial advisor. WEST PHILADELPHIA ACHIEVEMENT: S&P Lowers Rev Bond Rating to 'BB-' ------------------------------------------------------------------ S&P Global Ratings lowered its long-term rating to 'BB-' from 'BB' on Philadelphia Industrial Development Authority, Pa.'s series 2011 revenue bonds issued for West Philadelphia Achievement Charter Elementary School (WPACES). The rating remains on CreditWatch with negative implications. "The downgrade reflects our view of the heightened risk surrounding WPACES's charter contract, which expired on June 30, 2021. While WPACES and other charter schools in Philadelphia have a history of operating under unsigned charters, our understanding is that other rated charter schools have recently signed their respective agreements and at this time there is limited transparency from the authorizer, the School District of Philadelphia, regarding the status of WPACES' charter framework. We capture our view of charter risk as an elevated governance factor under our environmental, social, and governance (ESG) analysis and view it as a driver of the rating action," said S&P Global Ratings credit analyst Robert Tu. "We could consider revising the outlook back to stable or raising the rating over time if WPACES is able to successfully renew and sign its charter with the SDP, including addressing the enrollment cap provision, while maintaining steady enrollment and demand and generating positive operations supporting sufficient maximum annual debt service coverage and liquidity for the rating level," Tu added. S&P said, "We maintained the CreditWatch with negative implications placement as we believe the SDP will make a determination within the 90-day timeframe. We expect to resolve the CreditWatch placement as soon as S&P Global Ratings has received information regarding the authorizer's renewal decision and the school's response. However, if WPACES does not receive a formalized charter renewal from the SDP within this timeframe provided with a clear understanding of the likely next steps, we could withdraw the rating, given the lack of transparency or sufficient information to allow us to determine the school's charter standing, which is a key risk under our criteria." WPACES, founded in 1999, is an open-enrollment kindergarten through fifth-grade charter school in West Philadelphia that currently serves approximately 660 students. WESTERN MIDSTREAM: Fitch Alters Outlook on 'BB' LT IDR to Positive ------------------------------------------------------------------ Fitch Ratings has affirmed Western Midstream Operating, LP's (Western) Long-Term Issuer Default Rating (IDR) at 'BB' and senior unsecured notes at 'BB'/'RR4'. The Rating Outlook has been revised to Positive from Stable. The rating affirmation and Positive Outlook are primarily driven by the rating affirmation and Positive Outlook of Occidental Petroleum Corp. (BB/Positive). The Positive Outlook is driven by Occidental's execution on $4.5 billion in debt repayment in Q3, which exceeds Fitch's earlier expectations for both amount and timing, and higher FCF, a portion which Fitch expects will be used to pay-down additional debt. Occidental is Western's largest counterparty and is expected to contribute approximately two-thirds of Western's 2021 revenue. Western's ratings reflect its contracted cashflows, multi-basin presence and increasing scale with 2021 EBITDA expected to be around $1.9 billion. The ratings also reflect Fitch's expectation that leverage will be below 3.8x through 2022. KEY RATING DRIVERS Counterparty Exposure: Occidental is Western's largest counterparty and consequently, Western is still predominately exposed to non-investment-grade counterparties as a gathering and processing company. Occidental is expected to contribute approximately two-thirds of Western's revenues in 2021, in line with 2020 numbers. Occidental's operational and financial strength influence Western's credit profile, because Western depends on Occidental for future growth. Fitch believes Western's midstream operations will remain strategically important to Occidental's production, particularly in the Permian Basin, despite uncertainties in near-term growth. Throughput Volumes to Remain Flat: Lower levels of capex and exploration and production (E&P) activities, particularly from Occidental, could prompt a slight EBITDA decline in 2021. 1Q21 volumes trended down in the Delaware Basin, but were back up in 2Q21. In 2021, Western is expected to generate 41% of EBITDA from the Delaware Basin, 36% of EBTIDA in the DJ Basin, about 11% from other noncore regions and 12% from equity investments. Western's leverage (as measured by total debt with equity credit to operating EBITDA) was 3.9x at YE 2020, and with the recent announcement of the tender offer, Fitch expects it could decline to below 3.8x by YE 2021. Western will likely continue to use a portion of excess cash flow to reduce leverage and management-forecast leverage declining below 3.5x by 2022 is possible. Asset and Contract Profile: Fitch believes Western will generate over 90% of its gross margin from fee-based and fixed-price contracts in 2021. Western had limited direct commodity price exposure. It is also diversified geographically, supported by a blend of contracts with minimum volume commitment (MVCs) and/or cost of service (COS) components, relative to the more standard requirements contracts prevalent in the industry. Approximately 79% of Western's natural gas throughput volume was protected by either MVCs or COS components in fiscal 2020, and approximately 85% of its crude oil and natural gas liquids and 100% of produced-water throughput were also supported by either MVCs or COS components. However, Fitch believes if any of the contracts' rates, whether in dollars per actual volume or dollars per contracted volume, are high relative to the market, there is a strong likelihood for Western's E&P customers to consider renegotiating the long-term contracts, especially those customers compelled to seek the shelter of bankruptcy. Short-Term Contracts: Fitch's rating case assumes the economic value of the contracts between Occidental and Western remains intact, with no renegotiation of contract terms deemed materially unfavorable to Western. Western's long-term weighted average contract life is 7-11 years (other than the life-of-lease contracts) collectively for its gas, crude oil and water businesses at YE 2020. Western also has a portfolio of equity investments, including ownership interests in long-haul pipelines in the Permian, which should maintain stable cash flow in the near term. Fitch believes the Permian will remain Western's cornerstone of growth. Ownership Uncertainties: Future ownership uncertainties remain an overhanging issue for Western, as Occidental continues to reduce its ownership stake in Western's publicly traded parent, Western Midstream Partners, LP (WES), now standing at less than 50% limited partner interest. Occidental continues to own the 2.2% general partner interest in WES. The operational alignment between Occidental and Western in the Permian remains intact in the long term, given the good fit between legacy Anadarko Petroleum Corporation's (rating withdrawn) and Western's assets in the basin. However, Occidental reeling back legacy Anadarko's historic focus on the DJ Basin may materially impede Western's future growth. Western targets company growth through third-party volumes, but Fitch believes such growth will be much slower as upstream customers become increasingly capital disciplined regarding production spending under the volatile commodities price environment. Parent-Subsidiary Linkage: Fitch rates Western on a standalone basis, as Western and Occidental do not have a parent-subsidiary relationship. WES and its subsidiaries, including Western, were deconsolidated from Occidental's balance sheet in December 2019. The WES limited partnership agreement was amended and significantly expanded unitholders' rights, including the right to remove and replace Occidental as the general partner. WES has a separate board of directors and separate management team from Occidental. Western is reported under the equity method of accounting in Occidental's financial statements. WES has an Environmental, Social and Governance (ESG) Relevance Score of '4' for Group Structure, as the company operates under a somewhat complex group structure of master limited partnership. This has a negative effect on the credit profile and is relevant to the rating in conjunction with other factors. DERIVATION SUMMARY Western primarily operates in the Delaware Basin and DJ Basin, and derives about 67% of its revenue from Occidental. EQM Midstream Partners, LP (BB/Negative) is one of Western's peers that operates primarily in the Appalachian Basin and has material, concentrated counterparty exposure to EQT Corporation (BB+/Stable). DCP Midstream, LP (BB+/Stable) and EnLink Midstream, LLC (BB+/Stable) operate in multiple basins and are more diverse than Western. Western derives over 90% of its margins from fixed-fee contracts, largely with MVC or COS provisions. DCP has higher volume risk, with only about 70% of its gross margins generated from fee-based contracts, compared with 90% of EnLink's gross margins. EQM had approximately 65% of revenues from firm reservation fees for the year ended Dec. 31, 2020. In terms of EBITDA, Western is expected to generate about $1.9 billion in 2021, which is larger than EQM, DCP and EnLink. However, each of the peers is sizable, generating over $1 billion in EBITDA annually. Western exhibits lower leverage than all three of its peers, with 3.9x at YE 2020, and around 3.8x expected leverage YE 2021. Fitch expects leverage of approximately 5.1x for EnLink, and around 5.0x-5.2x for DCP and 5.4x-5.6x for EQM for YE 2021. KEY ASSUMPTIONS -- Base case West Texas Intermediate oil price of $60/barrel for 2021, $52/barrel for 2022, and $50/barrel for 2023 and beyond; -- Henry Hub natural gas prices of $3.40/thousand cubic feet (mcf) for 2021, and $2.75/mcf for 2022 and $2,45/mcf for 2023 beyond; -- Declining throughput volume and operating performance in segments outside the Permian through 2021; -- Distribution increase as per management's forecast: 5% above 2020 distributions; -- No adverse changes in existing contract terms between Western and its major counterparties that would materially impair Western's expected cash flow; -- No significant change in the financial policy due to potential ownership changes. RATING SENSITIVITIES Factors that could, individually or collectively, lead to positive rating action/upgrade: -- Favorable rating action at Occidental may lead to positive rating action for Western, provided the factors driving a rating change at Occidental have benefits that accrue to Western's credit profile; -- Leverage (total debt to operating EBITDA) at or below 4.0x and a distribution coverage ratio above 1.1x on a sustained basis, with gross margin remaining above 90% fee based or fixed priced; -- Asset and business line expansion leading to a more diversified cash flow profile. Factors that could, individually or collectively, lead to negative rating action/downgrade: -- Leverage at or above 5.0x and a distribution coverage ratio below 1.1x on a sustained basis; -- Negative rating action at Occidental; -- Materially unfavorable changes in contract mix; -- Negative changes in law, either new laws or rulings on old laws, that cause volumetric declines and push profitability lower and leverage higher on a sustained basis; -- Adoption of a growth-funding strategy that does not include a significant equity component, inclusive of retained earnings. BEST/WORST CASE RATING SCENARIO International scale credit ratings of Non-Financial Corporate issuers have a best-case rating upgrade scenario (defined as the 99th percentile of rating transitions, measured in a positive direction) of three notches over a three-year rating horizon; and a worst-case rating downgrade scenario (defined as the 99th percentile of rating transitions, measured in a negative direction) of four notches over three years. The complete span of best- and worst-case scenario credit ratings for all rating categories ranges from 'AAA' to 'D'. Best- and worst-case scenario credit ratings are based on historical performance. LIQUIDITY AND DEBT STRUCTURE Adequate Liquidity: As of June 30, 2021, Western had approximately $306 million in cash, no outstanding borrowings on the revolver and $5.1 million in outstanding LOC at June 30, 2021, resulting in approximately $1.995 billion available on its $2.0 billion senior unsecured revolving credit facility (RCF). However, Western paid off a portion of its outstanding debt (around $500 million) with a mix of cash and revolver borrowings in September 2021, resulting in slightly lower cash availability. Fitch expects liquidity will remain adequate over the near term. Western paid off its $431 million in debt due in 1Q21. There is no additional maturity in the remainder of 2021. With the completion of the tender offer, Western now has an upcoming maturity of $502 million due in 2022 and $213 million due in 2023. With ample availability on its revolver and strong cash flows, Western has sufficient liquidity to pay off its debt. In December 2019, Western extended the RCF's maturity date to February 2025 from February 2024. The credit facility requires Western to maintain a consolidated leverage ratio at or below 5.0x, or a consolidated leverage ratio of 5.5x for quarters ending in the 270-day period immediately following certain acquisitions. Western is in compliance with this covenant, and Fitch expects it will remain so for the balance of the forecast. ISSUER PROFILE Western is a subsidiary of WES, which, in turn, is a publicly traded is a master limited partnership (MLP), the general partner of which is owned by Occidental Petroleum Corp. Western owns, operates, acquires and develops midstream energy assets generating its cash flow primarily from Delaware Basin within the Permian and the DJ Basin. ESG CONSIDERATIONS WES has an Environmental, Social and Governance (ESG) Relevance Score of '4' for Group Structure, as the company operates under a somewhat complex group structure of master limited partnership. This has a negative effect 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. WILLIAMS TRANSPORTATION: $750K Sale of Laurel Property Approved --------------------------------------------------------------- Judge Katharine M. Samson of the U.S. Bankruptcy Court for the Southern District of Mississippi authorized Williams Transportation Co. LLC's sale of 8.01 acres of real property and the 80 x 132 metal building located at 46 Doncurt Road, in Laurel, Mississippi 39440, for the minimum price of $750,000. The sale will be free and clear of liens or encumbrances. Upon consummation of the sale of the aforementioned real property and metal building, all proceeds of the proposed sale will be deposited into the Debtor's DIP operating account. Thereafter, the Debtor is authorized to apply the full net proceeds of the sale to the secured debt owed to BOM Bank. Pursuant to Fed. R. Bankr. P. 6004(f)(1), the Debtor will file with the Court a Report of Sale with a copy of the settlement, bill of sale, and/or auctioneer's report within seven days after the proposed sale of the aforementioned real property and metal building closes. About Williams Transportation Co. Williams Transportation Co, LLC sought protection under Chapter 11 of the Bankruptcy Code (Bankr. S.D. Miss. Case No. 21-50539) on April 30, 2021. Scott A. Williams, member and manager, signed the petition. In the petition, the Debtor disclosed assets of between $1 million and $10 million and liabilities of the same range. Judge Katharine M. Samson oversees the case. The Law Offices of Douglas M. Engell, Inc. is the Debtor's legal counsel. WINNEBAGO INDUSTRIES: Moody's Hikes CFR to Ba3, Outlook Stable -------------------------------------------------------------- Moody's Investors Service upgraded its ratings for Winnebago Industries, Inc., including the corporate family rating to Ba3 from B1 and probability of default rating to Ba3-PD from B1-PD. Concurrently, Moody's upgraded the ratings on the company's senior secured notes to Ba3 from B1. The speculative grade liquidity (SGL) rating remains unchanged at SGL-1. The ratings outlook has been changed to stable from positive. "The upgrades follow Winnebago's on-going strong operational performance and reflect our expectation of continued strength in retail demand for recreational vehicles (RVs) and ensuing strength in the company's financial performance over the next 12-18 months," according to Eoin Roche, Moody's lead analyst for Winnebago. "We expect record backlog and low dealer inventories to support robust earnings, strong free cash generation and a well-positioned set of key credit metrics which provide significant financial flexibility to absorb a potential slowdown in 2023 or beyond," added Roche. The following is a summary of the rating actions: Issuer: Winnebago Industries, Inc. Corporate Family Rating, upgraded to Ba3 from B1 Probability of Default Rating, upgraded to Ba3-PD from B1-PD Senior Secured Notes due 2028, upgraded to Ba3 (LGD3) from B1 (LGD3) Outlook, changed to Stable, from Positive RATINGS RATIONALE The Ba3 CFR broadly reflects the highly cyclical nature of the RV and motorboat industries and a competitive operating environment with limited barriers to entry. This is balanced against Winnebago's strong brand name and well-established market position. The rating also considers Winnebago's track record of strong execution along with a history of deleveraging after previous debt-financed acquisitions. The ratings are supported by Winnebago's conservative financial policy with adjusted debt-to-EBITDA of around 1.6x and ample cash balances of $406 million as of May 2021. Moody's expects low dealer inventory levels and record backlog of around $3.7 billion to support robust earnings for the balance of 2021 and through 2022. The SGL-1 speculative grade liquidity rating signifies Moody's expectation of very good liquidity supported by ample cash balances and robust cash generation. Moody's anticipates free cash flow-to-debt to comfortably exceed 20% over the next 12 months. External liquidity is provided by a $193 million ABL facility that expires in October 2024, and Moody's anticipates near full availability under the facility. The ABL contains a minimum fixed charge coverage ratio of 1.0x that is effective if availability is less than the greater of 10% of the revolving commitment or $19.2 million. Other alternative sources of liquidity are limited given the predominately all-asset pledge benefiting the company's various secured creditors. The stable outlook reflects the favorable demand environment for RVs which Moody's expects to extend into 2022. The stable outlook also incorporates Winnebago's very good liquidity, record backlog and strong balance sheet which provides significant financial flexibility to absorb a potential market slowdown in 2023 or beyond. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS Given Winnebago's vulnerability to highly cyclical end markets, Moody's expects the company to maintain credit metrics that are stronger than levels typically associated with companies at the same rating level. A ratings upgrade would involve expectations of stable and sustained demand for RVs at the retail level and would also require maintenance of strong liquidity, robust credit metrics and the maintenance of a conservative financial policy. A more diversified revenue stream that reduces the cyclicality of the business would also be supportive of an upgrade. Weakening liquidity or expectations of a meaningful weakening of retail demand that led to a sustained deterioration of earnings could result in a ratings downgrade. Debt-financed share repurchases or leveraging acquisitions over the near-term, could also result in downward ratings actions. Winnebago Industries, Inc., headquartered in Forest City, Iowa, is a leading manufacturer of RVs used primarily in leisure travel and outdoor recreational activities. Winnebago manufactures a variety of motor homes, travel trailers and fifth wheel trailers, as well as recreational powerboats. Revenues for the twelve months ended May 2021 were approximately $3.3 billion. The principal methodology used in these ratings was Manufacturing published in September 2021. [^] BOOK REVIEW: The Titans of Takeover --------------------------------------- Author: Robert Slater Publisher: Beard Books Softcover: 252 pages List Price: $34.95 Order your personal copy at http://www.beardbooks.com/beardbooks/the_titans_of_takeover.html Once upon a time -- and for a very long while -- corporate behemoths decided for themselves when and if they would merge. No doubt such decisions were reached the civilized way, in a proper men's club with plenty of good brandy and better cigars. Like giants, they strode Wall Street, fearing no one save the odd trust-busting politico, mutton-chopped at the turn of the twentieth century, perhaps mustachioed in the 1960s when the word was no longer trust but monopoly. Then came the decade of the 1980s. Enter the corporate raiders, men with cash in hand, shrewd business sense, and not a shred of reverence for the Way Things Have Always Been Done. These businesspeople -- T. Boone Pickens, Carl Icahn, Saul Steinberg, Ted Turner -- saw what others missed: that many of the corporate giants were anomalies, possessed of assets well worth possessing yet with stock market performances so unimpressive that they could be had for bargain prices. When the corporate raiders needed expert help, enter the investment bankers (Joseph Perella and Bruce Wasserstein) and the M&A attorneys (Joseph Flom and Martin Lipton). And when the merger went through, enter the arbitragers who took advantage of stock run-ups, people like Ivan "Greed is Good" Boesky. The takeover frenzy of the 1980s looked like a game of Monopoly come to life, where billion-dollar companies seemed to change ownership as quickly as Boardwalk or Park Place on a sweet roll of dice. By mid-decade, every industry had been affected: in 1985, 3,000 transactions took place, worth a record-breaking $200 billion. The players caught the fancy of the media and began showing up in the news until their faces were almost as familiar to the public as the postman's. As a result, Jane and John Q. Citizen's in Wall Street began its climb from near zero to the peak where (for different reasons) it is today. What caused this avalanche of activity? Three words: President Ronald Reagan. Perhaps his most firmly held conviction was that Big Business was Being shackled by the antitrust laws, deprived a fair fight against foreign competitors that has no equivalent of the Clayton Act in their homelands. Reagan took office on Jan. 20, 1981, and it wasn't long after that that his Attorney General, William French Smith, trotted before the D.C. Bar to opine that, "Bigness does not necessarily mean badness. Efficient firms should not be hobbled under the guise of antitrust enforcement." (This new approach may have been a necessary corrective to the over-zealousness of earlier years, exemplified by the Supreme Court's 1966 decision upholding an enforcement action against the merger of two supermarket chains because the Court felt their combined share of 8% (yes, that's "eight percent") of the Los Angeles market was potentially anticompetitive.) Raiders, investment bankers, lawyers, and arbitragers, plus the fun couple Bill Agee and Mary Cunningham --remember them? -- are the personalities Profiled in Robert Slater's book, originally published in 1987, Slater is a wonderful writer, and he's given us a book no less readable for being absolutely stuffed with facts, many of them based on exclusive behind-the-scenes interviews. About The Author Robert Slater has authored several business books, which have been on the best-seller lists. He has been a journalist for Newsweek and Time. ********* 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 ***