/raid1/www/Hosts/bankrupt/TCR

/raid1/www/Hosts/bankrupt/TCR_Public/211208.mbx T R O U B L E D C O M P A N Y R E P O R T E R Wednesday, December 8, 2021, Vol. 25, No. 341 Headlines 6TH AND SAN JACINTO: Voluntary Chapter 11 Case Summary AB ROBINSON: Taps William Gray of Dearborn LaSalle as Accountant ADVANZEON SOLUTIONS: Continued Operations to Fund Plan AFFORDABLE CONCRETE: Unsecureds Will Get 25.6% of Claims in Plan AIX VENTURES: Seeks to Hire Joel M. Aresty as Legal Counsel AIX VENTURES: U.S. Trustee Unable to Appoint Committee AMERICAN AIRLINES: Court Expunges 3 Ex-Pilots' Claims ANDREW JOSEPH BLANCHARD: Wins $1.8MM Judgment vs Jones ASK IMAGE: Seeks to Employ Marc A. Ominsky as Bankruptcy Counsel B N EMPIRE: Wins Cash Collateral Access Thru Jan 2022 BALDWIN RISK: $250MM Incremental Loan No Impact on Moody's B2 CFR BEATSTOC INC: Files for Chapter 7 Bankruptcy Protection BLUESTONE GROUP: Case Summary & 5 Unsecured Creditors BOY SCOUTS: Abuse Victims Caught in Chapter 11 Lobbying BOY SCOUTS: NJ Councils Sell Lands to Settle Abuse Claims BVI MEDICAL: Moody's Cuts CFR, Outlook Stable CADIZ INC: Heerema International Acquires 34.6% Equity Stake CFN ENTERPRISES: To Effect a 1-for-15 Reverse Common Stock Split CMC II LLC: Combined Plan & Disclosures Confirmed by Judge CRC BROADCASTING: Seeks Approval to Employ Financial Expert CROWNROCK LP: Fitch Raises LT IDR to 'BB-', Outlook Stable DIRECTV ENTERTAINMENT: Fitch Affirms 'BB+' LT IDRs, Outlook Stable DIRECTV FINANCING: $1.4BB Loan Add-on No Impact on Moody's Ba3 CFR DIVERSITECH HOLDINGS: S&P Cuts ICR to 'B-' on Elevated Leverage DJD LAND PARTNERS: Case Summary & 2 Unsecured Creditors DONALD SCHROEDER: Court to Confirm Plan Over Omni Objection DRI HOLDING: S&P Assigns 'B-' Issuer Credit Rating, Outlook Stable EPD INVESTMENT: John Kirkland Ordered to Testify in March 2022 FIRST CHOICE: Seeks to Employ Adam Law Group as New Counsel FUSE MEDICAL: Chief Financial Officer Resigns GBG SEAN JOHN: Sean Combs Is Stalking Horse Bidder for Brand GC EOS BUYER: $100MM Term Loan Add-on No Impact on Moody's B3 CFR GCP APPLIED TECHNOLOGIES: S&P Places 'BB' ICR on Watch Positive GLOBAL CARIBBEAN: Jan. 12, 2022 Disclosure Statement Hearing Set GLOBAL ENERGY: Wins Cash Collateral Access Thru Dec 15 GRUPO AEROMEXICO: Court OKs Exit Financing Commitment Letters GUIDEHOUSE LLP: S&P Withdraws 'B' Issuer Credit Rating HERTZ CORP: Attorneys Expand Wrongful Theft Charges HI TORK POWER: Unsecured Creditors to Recover 100% over 5 Years ICS US HOLDINGS: Moody's Rates New Incremental 1st Lien Loan 'B1' IDAHO COLLEGE: S&P Affirms 'BB+' Rating on 2017A/B Bonds INOC PROPERTIES: Voluntary Chapter 11 Case Summary LDG001 LLC: Case Summary & 4 Unsecured Creditors LEFT FRAME: Seeks to Hire Gooding Law Firm as Legal Counsel LIEB PROPERTIES: Taps Tarpy, Cox, Fleishman & Leveille as Counsel LIFE TIME: S&P Rates New $475MM Revolving Credit Facility 'B' LIFEPOINT HEALTH: Moody's Confirms B2 CFR & Alters Outlook to Pos. MAGNOLIA PET: Case Summary & 5 Unsecured Creditors MEDLEY LLC: Lowenstein Sandler LLP Defends Fee Deal in Bankruptcy MUSCLE MAKER: Registers 22.1M Common Shares for Possible Resale NATIONAL MENTOR: Moody's Cuts CFR to B3 & Alters Outlook to Stable NESV ICE: Wins Interim Cash Collateral Access NORTH PIER OCEAN: Creditors to Get Proceeds From Liquidation OBLONG INC: Registers 3M Common Shares for Possible Resale OMNIQ CORP: Receives Approximately $1-Mil. Order for Smart Kiosks PARTY CITY: Moody's Hikes CFR & Senior Secured Notes Rating to B3 PARUSA INVESTMENT: Amends Bestenheider Claims Pay Details PERKY JERKY: Taps r2 advisors as Business Management Advisor PHOENIX PROPERTIES: U.S. Trustee Unable to Appoint Committee PLAYA HOTELS: Won't Renew CMO's Employment Contract PRIME ECO: Seeks to Employ Abunden LLC as Financial Advisor PROFAC SERVICES: Moody's Ups CFR to Caa1, Under Review for Upgrade PWM PROPERTY: Affiliate 181 West Wins Cash Collateral Access PWM PROPERTY: Affiliate 245 Park Avenue Has Cash Collateral Access QUALITY MACHINE: Case Summary & 20 Largest Unsecured Creditors REHOBOTH PIPELINE: Taps Robleto Kuruce as Bankruptcy Counsel RITCHIE BROS: Moody's Rates New $935MM Unsecured Notes 'Ba3' RITCHIE BROS: S&P Assigns Prelim 'BB' Rating on Unsecured Notes SALEM CONSUMER: Court Rules on BELFOR Row SCRANTON-LACKAWANNA HEALTH: S&P Raises Bonds Rating to 'CCC+' SOFT FINISH: Unsecureds Will Get 2.5% of Claims in 5 Years SPEED INDUSTRIAL: U.S. Trustee Unable to Appoint Committee SRAMPICKAL DEVELOPERS: Case Summary & 4 Unsecured Creditors STANTON GLENN: Updates Greystone Claim Pay; Plan Hearing Dec. 15 STO-ROX SCHOOL: Moody's Lowers Issuer & GOULT Ratings to Caa1 TALEN ENERGY: Fitch Puts 'CCC+' LT IDR on Watch Negative TALEN ENERGY: Gets Loan from Silver Point, GoldenTree After Breach TALEN ENERGY: GoldenTree, Silver Point Pledge $788M Financing TEXAS PELLETS: 9th Cir. Rules on Doc Production Issue in CRO Rift TRUE ENTERPRISE: Seeks to Hire The Houston Firm as Special Counsel TRUE HOLINESS: Seeks to Hire Porter Law Network as Legal Counsel TWISTED OAK: Unsecured Creditors to Recover 100% in 60 Months U.S. TELEPACIFIC: S&P Downgrades ICR to 'CCC-', Outlook Negative USA GYMNASTICS: Nassar Abuse Survivors Voted to Accept Settlement VILLAGE REALTY: Case Summary & 9 Unsecured Creditors VISION ADELANTE: Taps Law Offices of Sheila Esmaili as Counsel WALDEMAR LLC: Seeks to Hire Snow Tax & Business as Accountant WALL009 LLC: Case Summary & 2 Unsecured Creditors WC 511 BARTON: Case Summary & 3 Unsecured Creditors WHISPER LAKE: Seeks to Hire Bush Kornfeld as Bankruptcy Counsel WHISPER LAKE: Taps Orse & Co. as Restructuring Advisor YOURELO YOUR: Amends Unsecured Claims Pay Details [] New Bankruptcy Filings in the U.S. Declined in November 2021 ********* 6TH AND SAN JACINTO: Voluntary Chapter 11 Case Summary ------------------------------------------------------ Debtor: 6th and San Jacinto, LLC 814 Lavaca St Austin, TX 78701 Business Description: 6th and San Jacinto, LLC is a Single Asset Real Estate debtor (as defined in 11 U.S.C. Section 101(51B)). Chapter 11 Petition Date: December 7, 2021 Court: United States Bankruptcy Court Western District of Texas Case No.: 21-10942 Debtor's Counsel: Mark H. Ralston, Esq. FISHMAN JACKSON RONQUILLO PLLC 13155 Noel Road, Suite 700 Dallas, TX 75240 Tel: 214-419-5500 Email: mhralston@fjrpllc.com Estimated Assets: $1 million to $10 million Estimated Liabilities: $1 million to $10 million The petition was signed by Natin Paul, authorized agent. The Debtor failed to include in the petition a list of its 20 largest unsecured creditors. A full-text copy of the petition is available for free at PacerMonitor.com at: https://www.pacermonitor.com/view/7YVJZKQ/6th_and_San_Jacinto_LLC__txwbke-21-10942__0001.0.pdf?mcid=tGE4TAMA AB ROBINSON: Taps William Gray of Dearborn LaSalle as Accountant ---------------------------------------------------------------- AB Robinson Trucking, Inc. seeks approval from the U.S. Bankruptcy Court for the Northern District of Illinois to hire William Gray, a certified public accountant at Dearborn LaSalle Advisors, Inc. Mr. Gray's services include: (a) assisting in the preparation of a Chapter 11 plan of reorganization and all the related financial documents, including financial projections; (b) assisting in the preparation of monthly operating reports; (c) performing all other necessary accounting services related to the Debtor's Chapter 11 case; and (d) performing other services as requested by the Debtor consistent with professional standards to aid its operations and reorganization. Mr. Gray will be paid at his hourly rate of $75, plus reimbursement of out-of-pocket expenses. In a court filing, Mr. Gray disclosed that he is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. The firm can be reached at: William R. Gray, CPA Dearborn LaSalle Advisors, Inc. 303 Main Street Antioch, IL 60002 Cell: (847) 710-4729 Phone: (844) 341-0007 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 and the Law Offices of Glenda J. Gray serve as the Debtor's legal counsel. William R. Gray of Dearborn LaSalle Advisors, Inc. is the Debtor's accountant. ADVANZEON SOLUTIONS: Continued Operations to Fund Plan ------------------------------------------------------ Advanzeon Solutions, Inc., filed with the U.S. Bankruptcy Court for the Middle District of Florida a Disclosure Statement for Plan of Reorganization dated Dec. 03, 2021. Advanzeon, (formerly Comprehensive Care Corp.), through its wholly-owned subsidiary Pharmacy Value Management Solutions, Inc., ("PVMS") and its wholly-owned subsidiaries during 2015, and partly in 2016, provided managed care services by acting as the administrator for certain administrative service agreements in the behavioral health and substance abuse fields. On September 7, 2020, Advanzeon filed its voluntary petition for relief under Chapter 11 of the Bankruptcy Code, which was designated as Case No. 8:20-bk-06764-MGW. The Debtor remains in possession of its properties and continues to manage its assets as debtor in possession. During the months leading up to the filing, and continuing post petition, the Debtor and PVMS have been significantly affected by COVID-19). It affected the very heart of the Company's focused revenue stream – interstate truck drivers holding commercial driver's licenses ("CDL's"). The Plan will treat claims as follows: * Class 2 is comprised of all Allowed Secured Claims of Sherfam. As of the Petition Date, the Debtor had an outstanding obligation to Sherfam of approximately $3.8 million. On the Effective Date, Sherfam shall be issued a note (the "Sherfam Plan Note") in the amount of the then-outstanding amount of the Sherfam Secured Claim, subject to reduction on account of any proceeds received from the UHC Receivable. The Sherfam Plan Note will be due and payable 60 months after the Effective Date (the "Sherfam Maturity Date"). * Class 3 is comprised of all Allowed Secured Claims of Katzman. As of the Petition Date, Katzman asserts a claim against the Debtor in the amount of $1,216,460.13, based on two judgments entered against Advanzeon. On account of its Secured Claim on the UHC Receivable, Katzman shall (i) retain its lien to the same extent, validity, and priority as existed on the Petition Date, which lien shall attach to the UHC Receivable or its proceeds, and (ii) receive such amount from the proceeds of the UHC Receivable based upon the priority of its lien, up to the amount of its Secured Claim. * Class 4 is comprised of all Allowed Secured Claims of the Related Party Secured Creditors, comprising Clark Marcus, Mark Heidt, James Koenig, and Elizabeth Dean. On account of their Secured Claim on the UHC Receivable, the Related Party Secured Creditors shall (i) retain their lien to the same extent, validity, and priority as existed on the Petition Date, which lien shall attach to the UHC Receivable or its proceeds, and (ii) receive such amount from the proceeds of the UHC Receivable based upon the priority of their liens, up to the amount of their respective Secured Claim. * Class 5 is comprised of all Allowed Secured Claims of TCA Global Credit Master Fund, LP. All security interests, liens, and other interests of TCA in its Collateral are expressly preserved. Following the Effective Date, the Reorganized Debtor shall continue to comply with the agreements and contracts in effect between TCA and the Debtor. * Class 7 is comprised of all Allowed Unsecured Claims not otherwise classified under the Plan. Holders of Allowed Class 7 Unsecured Claims shall be paid on account of their Allowed Unsecured Claims their Pro Rata Share of the Unsecured Creditor Distribution Fund. The Unsecured Creditor Distribution Fund shall be funded with the "Net Cash Flow" available from the operations of PVMS. "Net Cash Flow" shall be total cash receipts less labor, materials, operating, general, and administrative expenses, and less cash necessary for debt service, reserving for operating capital, and payment of applicable income taxes, as to each items for both PVMS and the Reorganized Debtor. Net Cash Flow shall be funded by the Reorganized Debtor, and shall be payable in quarterly payments. Class 7 is Impaired. * Class 11 is comprised of all Common Stock Equity Interests in the Debtor. Class 11 Common Stock Equity Interests will not be affected by the Plan; provided, however, that until all distributions under the Plan to Classes 1-8 have been made, except as otherwise set forth in the Plan, the Class 11 Common Stock Equity Interests shall not receive any distributions or dividends under the Plan on account of the Class 11 Common Stock Equity Interests. Class 11 is Unimpaired. The distributions under the Plan will be funded principally by (i) existing Cash on hand on the Effective Date, (ii) revenues generated by continued operations by the Debtor through PVMS following the Effective Date. A full-text copy of the Disclosure Statement dated Dec. 3, 2021, is available at https://bit.ly/3348gt7 from PacerMonitor.com at no charge. Attorneys for the Debtor: Daniel R. Fogarty, Esq. Stichter, Riedel, Blain & Postler, P.A. 110 East Madison Street, Suite 200 Tampa, FL 33602 Telephone: (813) 229-0144 E-mail: dfogarty@srbp.com About Advanzeon Solutions Based in Tampa, Fla., Advanzeon Solutions, Inc., provides behavioral health, substance abuse and pharmacy management services, as well as sleep apnea programs, for employers, Taft-Hartley health and welfare Funds, and managed care companies throughout the United States. Advanzeon Solutions sought protection under Chapter 11 of the Bankruptcy Code (Bankr. M.D. Fla. Case No. 20-06764) on September 7, 2020. At the time of the filing, Debtor had estimated assets of between $500,000 and $1 million and liabilities of between $1 million and $10 million. The petition was signed by Clark A. Marcus, chief executive officer. Stichter, Riedel, Blain & Postler, P.A. is Debtor's legal counsel. AFFORDABLE CONCRETE: Unsecureds Will Get 25.6% of Claims in Plan ---------------------------------------------------------------- Affordable Concrete, LLC, filed with the U.S. Bankruptcy Court for the District of Colorado a Corrected Plan of Reorganization under Subchapter V. The Debtor is a Colorado limited liability company engaged in business as a general contractor and concrete service provider for commercial and residential construction projects. The Debtor was formed in 2005 by Roger Bartlett, the sole owner and President of the Debtor. As a result of the ongoing financial difficulties experienced by the Debtor, and the threat of ongoing collection efforts by Ms. Frances Fitzgerald, the Debtor filed its voluntary petition for relief under Chapter 11 on September 2, 2021 in order to restructure its operations and continue as a going concern. The Debtor's physical assets, comprised of its office furniture, equipment, and computers are several years old, and would have minimal value in a liquidation. The Debtor's other assets are comprised of intangible assets, including its trademark, website, and customer list. The Debtor's intangible assets only have value if the Debtor continues to operate as a going concern, as it is only by using such intangible assets in continued operations that the assets have any value. The Class 3 Secured Claim consists of the Allowed Secured Claim held by CNH and secured by a purchase money security interest in the Debtor's CASE SR210 Skid Steer. The Class 3 Claim is unimpaired by the Plan. The Class 3 Claim will retain the liens securing its claim of the Petition Date, and will be paid in accordance with the applicable loan documents. The Class 4a Secured Claim consist of the Allowed Secured Claim of Ally Bank secured by a purchase money security interest on the Debtor's 2016 GMC Sierra 2500. The Class 4a Secured Claim is impaired by this Plan. The Class 4a Secured Claim will be treated and paid as follows: * The principal amount of the Class 4a Claim will be allowed in the amount owed on the Petition Date. Based on Proof of Claim No. 16, the amount of the Class 4a Claim is anticipated to be $15,960.28; * The Class 4a Claim shall bear interest at a rate of: (i) 4.25% per annum commencing on the Effective Date of the Plan; or (ii) if the Class 4a Claimant objects to such rate in writing and serves a copy of such objection on the Debtor at least 15 days prior to the commencement of the confirmation hearing, such rate will be determined by the Court as necessary to satisfy the requirements of 11 U.S.C. §1129(b) of the Code; or (iii) such other rate as agreed by the Debtor and the Class 4a Claimant; and * Based upon the interest rate and amortization period, the Class 4a monthly payment will be approximately $472.99. The Class 4b Secured Claim consist of the Allowed Secured Claim of Ally, secured by a purchase money security interest on the Debtor's 2019 GMC Medium-Duty Sierra 3500HD. The Class 4b Secured Claim is impaired by this Plan. The Class 4b Secured Claim will be treated and paid as follows: * The principal amount of the Class 4b Claim will be allowed (i) in the amount of $23,000.00; or (ii) if the Class 4b claimant objects, in an amount to be determined by the Court on or before the Confirmation Date; or (iii) an amount agreed upon by the Debtor and the Class 4b claimant on or before the Confirmation Date; * The Class 4b Claim shall bear interest at a rate of: (i) 4.25% per annum commencing on the Effective Date of the Plan; or (ii) if the Class 4b Claimant objects to such rate in writing and serves a copy of such objection on the Debtor at least 15 days prior to the commencement of the confirmation hearing, such rate will be determined by the Court as necessary to satisfy the requirements of 11 U.S.C. §1129(b) of the Code; or (iii) such other rate as agreed by the Debtor and the Class 4b Claimant; * Based upon the interest rate and amortization period, the Class 4b monthly payment will be approximately $521.90. Class 5 consists of the arguably contested secured claim held by Ryan and Deanna Pavlovec. The Class 5 Secured Claim is subject to potential preference claims, and may be avoidable. In the event of that the transfer granting security for the Class 5 Claim is avoided, the underlying claim shall be treated as a Class 9 General Unsecured Claim. To the extent the Class 5 Claim has not been adjudicated or settled prior to the sale of the Bennett Property, funds from the sale of the Bennett Property will be held in escrow in an amount sufficient to satisfy the Class 5 Claim. Class 6 consists of the contested secured claim held by Frances Fitzgerald, secured by a judgment lien(s) that the Debtor asserts is avoidable as a pre-petition preference. In the event of that the transfer granting security for the Class 6 Claim is avoided, the underlying claim shall be treated as a Class 9 General Unsecured Claim. To the extent the Class 6 Claim has not been adjudicated or settled prior to the sale of the Bennett Property, funds from the sale of the Bennett Property will be held in escrow in an amount sufficient to satisfy the Class 6 Claim. Class 7 consists of the secured claim held by Argonaut Insurance Company based on the Agreement of Indemnity executed by the Debtor on a pre-petition basis. Argonaut is secured to the extent it has paid claims asserted against a bond furnished on behalf of the Debtor and funds are available for payment on the project for which the bond was furnished. In the event Argonaut has a secured claim on the Effective Date of the Plan, such claim shall be unimpaired and paid in accordance with the Agreement of Indemnity. Class 8 consists of those unsecured creditors of the Debtor who hold Allowed Claims that were either scheduled by the Debtor as undisputed, or subject to timely filed proofs of claim to which the Debtor does not successfully object. Class 8 claimants shall receive payment of their Allowed Claims as follows: * Class 8 shall receive a pro-rata distribution equal to a variable percentage of the Debtor's Adjusted Gross Margin generated over a five-year period commencing on the earlier of: a) the first full month following the Effective Date of the Plan ("Repayment Term"); * The variable percentage of Adjusted Gross Margin paid to Class 8 creditors shall be equal to: -- 3.0% of the Adjusted Gross Margin during the first year of the Repayment Term; -- 4.0% of the Adjusted Gross Margin during the second and third year of the Repayment Term; and -- 5.0% of the Adjusted Gross Margin generated during the fourth and fifth year of the Repayment Term. * In addition to the payments, Class 8 shall receive a pro-rata distribution of 50% of the net proceeds from the sale of the Bennett Property after payment of any valid secured claims and cost of sale. * Based on the estimated distributions, Class 8 Claimants are anticipated to receive approximately 25.6% of their allowed claims. Upon request by any party in interest, the Debtor shall provide a quarterly financial statement, including amounts disbursed to creditors in accordance with the Plan. Class 10 includes Interests in the Debtor held by the preconfirmation shareholders. Class 10 is unimpaired by this Plan. On the Effective Date of the Plan, Class 10 shall retain its Interests in the properties which it owned prior to the Confirmation Date, subject to the terms of the Plan. The Debtor's Plan is feasible based upon the Debtor's prepared projections which reflect a conservative prediction of the Debtor's operations during the term of the Plan. As evidenced by the projections, the Debtor anticipates that its income will be positive each year of the Plan, and will generate sufficient revenue to meet its obligations under the Plan. The Debtor has used its best efforts to prepare accurate projections. The Debtor's actual income will fluctuate based on actual sales and changes in the market. On the Effective Date of the Plan, Roger Bartlett shall be appointed for the purpose of carrying out the terms of the Plan, and taking all actions deemed necessary or convenient to consummating the terms of the Plan. Mr. Bartlett shall continue to receive his annual salary in the amount of $128,960, subject to adjustment as the Debtor determines is reasonable and appropriate. Dennis McGrath, Vice President of the Debtor may also assist in effectuating the terms of the Plan. On or before the one-year anniversary of the Plan, the Debtor shall close on the sale of the Bennett Property. The Bennett Property is listed for sale on or with a commercial real estate brokerage at a reasonable listing price. The sale of the property shall be free and clear of liens, claims, and encumbrances pursuant to 11 U.S.C. § 365(f), with any valid, duly perfected liens to attach to the proceeds subject to the terms of this Plan. A full-text copy of the Corrected Plan of Reorganization dated Dec. 03, 2021, is available at https://bit.ly/3duTSvL from PacerMonitor.com at no charge. Debtor's Counsel: Keri L. Riley, Esq. Kutner Brinen Dickey Riley, P.C. 1660 Lincoln Street, Suite 1720 Denver, CO 80264 Tel.: (303) 832-2400 Email: klr@kutnerlaw.com About Affordable Concrete Affordable Concrete, LLC is a full-service general construction company in Commerce City, Colo., with specialties in concrete, commercial and office renovations, asphalt, civil, and demolition services. Affordable Concrete sought protection under Chapter 11 of the Bankruptcy Code (Bankr. D. Colo. Case No. 21-14587) on Sept. 2, 2021, listing as much as $10 million in both assets and liabilities. Roger Bartlett, as owner and president, signed the petition. Judge Kimberley H. Tyson oversees the case. The Debtor tapped Kutner Brinen Dickey Riley, P.C. as legal counsel. AIX VENTURES: Seeks to Hire Joel M. Aresty as Legal Counsel ----------------------------------------------------------- AIX Ventures, LLC seeks approval from the U.S. Bankruptcy Court for the Southern District of Florida to hire Joel M. Aresty, P.A. to serve as legal counsel in its Chapter 11 case. The firm's services include: (a) giving advice to the Debtor with respect to its powers and duties and the continued management of its business operations; (b) advising the Debtor with respect to its responsibilities in complying with the U.S. trustee's Operating Guidelines and Reporting Requirements and with the rules of the court; (c) preparing adversary proceedings and legal documents necessary in the administration of the case; (d) protecting the interest of the Debtor in all matters pending before the court; and (e) representing the Debtor in negotiation with its creditors in the preparation of a Chapter 11 plan. Joel Aresty, Esq., the firm's attorney who will be providing the services, will be paid at an hourly rate of $440. Mr. Aresty disclosed in a court filing that he is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. The firm can be reached at: Joel M. Aresty, Esq. Joel M. Aresty, P.A. 309 1st Ave S Tierra Verde, FL 33715 Tel.: 305-904-1903 Fax: 800-559-1870 Email: Aresty@Mac.com About AIX Ventures Key Biscayne, Fla.-based AIX Ventures, LLC filed a petition for Chapter 11 protection (Bankr. S.D. Fla. Case No. 21-20530) on Nov. 2, 2021, listing up to $10 million in assets and up to $500,000 in liabilities. Judge Robert A. Mark oversees the case. The Debtor tapped Joel M. Aresty, P.A. as legal counsel. AIX VENTURES: U.S. Trustee Unable to Appoint Committee ------------------------------------------------------ The U.S. Trustee for Region 21, until further notice, will not appoint an official committee of unsecured creditors in the Chapter 11 case of AIX Ventures, LLC, according to court dockets. About AIX Ventures AIX Ventures, LLC, a company based in Key Biscayne, Fla., filed a petition for Chapter 11 protection (Bankr. S.D. Fla. Case No. 21-20530) on Nov. 2, 2021, listing up to $10 million in assets and up to $500,000 in liabilities. Guillermo Lopez, manager of AIX Ventures, signed the petition. Judge Robert A. Mark oversees the case. Joel M. Aresty P.A. serves as the Debtor's legal counsel. AMERICAN AIRLINES: Court Expunges 3 Ex-Pilots' Claims ----------------------------------------------------- The United States Bankruptcy Court for the Southern District of New York granted the 199th Omnibus Objection with respect to the claims of Vincent Basset (Claim Numbers 8015 and 8016), Gregory Cordes (Claim Numbers 9613 and 9614), and Timothy Hall (Claim Number 11351). Reorganized American Airlines asserts the three claimants failed to timely file grievances with respect to their claims and their claims should therefore be expunged. All of the claimants are pilots. American Airlines, American Eagle Airlines, the Allied Pilots Association (the union representing American's pilots), and the Air Line Pilots Association (the union representing American Eagle's pilots), entered into a four-party collective bargaining agreement that is referred to as the "Flow-Through Agreement" or "Supplement W" by American Airlines and as "Letter 3" by American Eagle. This agreement allowed for American Eagle pilots to 'flow-up' to positions at American Airlines when American Airlines was hiring new pilots. Mr. Basset and Mr. Cordes were both American Eagle pilots. Mr. Cordes claims that he should have flowed up from American Eagle to American Airlines in January 2008, but was not transferred to American until January 2011. Mr. Basset claims he should have flowed from American Eagle to American Airlines in June 2007, but was not transferred to American until June 2010. Both claimants assert that this delay caused them financial damages. Two different collective bargaining agreements were in effect during the relevant time period. Neither Mr. Cordes nor Mr. Basset assert that they filed a grievance under the collective bargaining agreements. Instead, both argue that their rights are governed not by the collective bargaining agreements, but rather by the Flow-Through Agreement. But the Flow-Through Agreement trumps these two collective bargaining agreements. The Flow-Through Agreement provides that the parties to any dispute resolution procedures under the agreement are American, the APA, ALPA and American Eagle and that these parties agreed to arbitrate any grievance alleging a violation of the agreement before a single neutral arbitrator. Several grievances related to the Flow-Through Agreement were filed by ALPA. These became the subject of numerous arbitrations, which resulted in various arbitrator decisions and awards. One such dispute related to the flow of American Eagle pilots to American versus the placement of former TWA pilots with American Airlines. With respect to this dispute, Arbitrator Nicolau issued a liability decision in October 2009 and a remedy order in April 2010. During the hearing on the 199th Omnibus Objection, it became clear that Mr. Basset and Mr. Cordes were unhappy with Arbitrator Nicolau's award and believed that they were entitled to compensation under the Flow-Through Agreement. Mr. Cordes called a witness, Gavin MacKenzie, to testify at the hearing. Mr. MacKenzie acknowledged that the only way to challenge Arbitrator Nicolau's award was for an aggrieved party to seek to have the award vacated or for a pilot to bring a duty of fair representation claim against their union. Mr. MacKenzie noted that he and other individual American Eagle pilots had already sought to challenge Arbitrator Nicolau's award, but that the Court of Appeals for the Fifth Circuit ultimately held that under the terms of the Flow-Through Agreement, only the union, and not the pilots, could sue American with respect to the award. The pilots' petition for writ of certiorari was then denied by the Supreme Court. Given the Fifth Circuit's decision, it does not appear that Mr. Basset and Mr. Cordes have an individual right to sue under the Flow-Through Agreement and, therefore, their claims in this bankruptcy case must be expunged. Even assuming that they had such a right, their claims here would be time barred. Under the Railway Labor Act (the "RLA"), disputes regarding the interpretation or application of a collective bargaining agreement are minor disputes and must be resolved through arbitration. Minor disputes "must be resolved only through the RLA mechanisms, including the carrier's internal dispute-resolution processes and an adjustment board established by the employer and the unions." Under the 2003 CBA, any grievance concerning any action by American Airlines must be filed with 90 days (for individual grievances) or 180 days (for Presidential Domicile Chairman, or Base grievances). The time periods ran from the earlier of the point of occurrence or the earlier of the date that the party knew or should have known of the occurrence. See id. Under the 1997 American Eagle CBA, a pilot may file a grievance in writing "concerning any action of the Company affecting him" within 60 days of when the pilot "became aware or should have become aware of the event giving rise to the grievance. Failure to file a grievance in writing within the time limits specified constitutes a waiver of the grievance." There is no evidence that Mr. Cordes or Mr. Basset ever filed an individual grievance on the matters that are the subject of their proofs of claim. Thus, even if Mr. Cordes and Mr. Basset had the right to file an individual grievance on their own behalf based on their rights under the Flow-Through Agreement, they failed to take timely action under the contractually permitted time periods set out in the collective bargaining agreements. Separately, Mr. Hall -- an American Airlines pilot -- argues that he is entitled to furlough pay for the period of time that he was furloughed during a military leave of absence from which he returned to work at American in 2013. Mr. Hall's claim is also a minor dispute under the collective bargaining agreement and subject to the mandatory timelines and arbitration procedures of the 2003 CBA. Mr. Hall states that he could not have filed a grievance after he was furloughed because he was on military leave until he returned to work in 2013. But Mr. Hall has not provided evidence showing that he or his union was prevented from filing a grievance after he was furloughed. And even to the extent that Mr. Hall relies on tolling, he could have filed a grievance after returning from his military leave of absence in 2013. The Court has not been provided with any evidence that he filed a grievance after his return to employment, thus ultimately making his tolling argument unsuccessful. A full-text copy of the Memorandum of Decision and Order dated November 29, 2021, is available at https://tinyurl.com/2p8kpt9e from Leagle.com. About American Airlines AMR Corp. and its subsidiaries including American Airlines, the third largest airline in the United States, filed for bankruptcy protection (Bankr. S.D.N.Y. Lead Case No. 11-15463) in Manhattan on Nov. 29, 2011, after failing to secure cost-cutting labor agreements. The Debtors tapped Weil, Gotshal & Manges LLP as bankruptcy counsel; Paul Hastings LLP and Debevoise & Plimpton LLP Groom Law Group, Chartered, as special counsel; Rothschild Inc., as financial advisor; and Garden City Group Inc. as claims and notice agent. The Official Committee of Unsecured Creditors retained Skadden, Arps, Slate, Meagher & Flom LLP as counsel; Togut, Segal & Segal LLP as co-counsel for conflicts and other matters; Moelis & Company LLC as investment banker; and Mesirow Financial Consulting, LLC, as financial advisor. AMR Corp., emerged from Chapter 11 bankruptcy protection on Dec. 9, 2013, upon which it merged with US Airways Group. ANDREW JOSEPH BLANCHARD: Wins $1.8MM Judgment vs Jones ------------------------------------------------------ The United States Bankruptcy Court for the Eastern District of Louisiana conducted a one-day trial on August 26, 2021, to resolve the breach-of-contract and fraud claims asserted in the Adversary Complaint filed by Andrew and Christine Blanchard and the Answer to Adversary Complaint filed by Gregory Jones. At the Trial, the Court heard testimony from the Plaintiffs and the Defendant on his own behalf. The Court admitted into evidence Blanchard Exhibits 1-80. This dispute centers on a short-lived business relationship between the Blanchards and Jones. The Blanchards filed this adversary proceeding against Jones and his corporation, Gulf Coast Premium Seafoods, LLC, to recover damages for fraud and breach of an April 2018 agreement whereby the Blanchards quitclaimed the assets of their business, Pearl, Inc., in exchange for Jones's promise to pay the obligations of the business and salaries to each of the Blanchards for continuing to oversee day-to-day operations. Jones contends that no binding agreement between the parties exists because "no contract was signed." Upon listening to the testimony and observing the countenance of each witness, the Court finds Andrew and Christine Blanchard to be earnest witnesses and affords considerable weight to the testimony of each of them. The Court particularly found Christine Blanchard's testimony to be most reliable because of her extensive involvement in the daily operations and finances of Pearl, Inc. and because she personally exchanged the majority of e-mails with Jones. Based on the testimony and documentary evidence before the Court, the Court enters judgment in favor of the Blanchards. According to the Court, all of the elements required for confection of a valid contract are present, including mutual consent. The parties agreed to exchange all of Pearl, Inc.'s assets and operations for Jones's promise to pay $1,746,640 in debt and $50,000 annual salary to each of the Blanchards. The Blanchards performed under the contract, quitclaiming Pearl, Inc.'s assets to Jones. Jones did not fully perform under the contract, to the Blanchards' detriment, the Court said. The MOU is a binding contract. The Court pointed out that the record shows the language of the MOU clearly indicates Jones would pay Pearl, Inc.'s debt and $50,000 annually in salary to each of the Blanchards in exchange for the Blanchards quitclaiming Pearl, Inc.'s assets to Jones. The record also shows that the parties intended the MOU to be a binding agreement. Although Jones never paid off any of the debts in full, he performed under the MOU as if it were a binding agreement, paying outstanding penalties and interest to stave off foreclosure, paying months of Pearl, Inc.'s utility and payroll obligations, and negotiating on behalf of Pearl, Inc. with its creditors. The Blanchards likewise performed under the MOU as if it were a binding agreement by promptly quitclaiming the assets and continuing day-to-day operations at the company. Accordingly, the Court held that the Blanchards are entitled to judgment against Jones on their breach-of-contract claim in the amount of $1,867,473.33, plus legal interest from September 17, 2019, to the date of Judgment entered contemporaneously in this matter. All claims against Gulf Coast Premium Seafoods, LLC are dismissed. The adversary proceeding is captioned ANDREW AND CHRISTINE BLANCHARD, Plaintiffs, v. GULF COAST PREMIUM SEAFOODS, LLC AND GREGORY JONES, Defendants, Adversary No. 20-1054 (Bankr. E.D. La.). A full-text copy of the Memorandum Opinion and Order dated November 19, 2021, is available at https://tinyurl.com/2p94f5er from Leagle.com. Andrew Joseph Blanchard and Christine Laurent Blanchard sought Chapter 11 protection (Bankr. E.D. La. Case No. 19-12440) on Sept. 10, 2019. The Debtors tapped Robin R. DeLeo, Esq., as counsel. ASK IMAGE: Seeks to Employ Marc A. Ominsky as Bankruptcy Counsel ---------------------------------------------------------------- Ask Image Enterprises, LLC seeks approval from the U.S. Bankruptcy Court for the District of Maryland to hire the Law Offices of Marc A. Ominsky, LLC to serve as legal counsel in its Chapter 11 case. The firm's services include: (a) assisting and advising the Debtor relative to the administration of the proceeding; (b) advising the Debtor with respect to its powers and duties in the continued management and operation of its business and property; (c) representing the Debtor before the bankruptcy court and advising the Debtor on pending litigation, hearings, motions, and decisions of the court; (d) reviewing and advising the Debtor regarding applications, orders and motions filed by third parties; (e) communicating with the creditors and other parties in interest; (f) assisting the Debtor in preparing legal papers; (g) conferring with other professionals retained by the Debtor and other parties in interest; (h) negotiating and preparing the Debtor's Chapter 11 plan, disclosure statement and all related documents, and taking any necessary actions to obtain confirmation of the plan; and (i) performing all other necessary legal services. The firm's hourly rates are as follows: Marc A. Ominsky, Esq. $400 per hour Attorneys $350 - $450 per hour Paralegals/Law clerk $200 - $250 per hour Marc Ominsky, Esq., the firm's attorney who will be providing the services, disclosed in a court filing that he is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. The firm can be reached at: Marc A. Ominsky, Esq. Law Offices of Marc A. Ominsky, LLC 10632 Little Patuxent Pkwy, Ste 249 Columbia, MD 21044 Tel: (443) 539-8712 Email: info@mdlegalfirm.com About Ask Image Ask Image Enterprises, LLC filed a petition for Chapter 11 protection (Bankr. D. Md. Case No. 21-17504) on Nov. 30, 2021, listing up to $100,000 in assets and up to $500,000 in liabilities. Safari Charles, owner, signed the petition. The Debtor tapped Marc A. Ominsky, Esq. as legal counsel. B N EMPIRE: Wins Cash Collateral Access Thru Jan 2022 ----------------------------------------------------- The U.S. Bankruptcy Court for the Middle District of Florida, Tampa Division, has authorized B N Empire, LLC to use cash collateral on an interim basis for insurance, utilities, and any other debts agreed to by secured creditor, Elizon DB Transfer Agent, LLC. In consideration of and as adequate protection for the Debtor's continued postpetition use of cash collateral, the Debtor is authorized to make a one-time $22,295.86 adequate protection payment to Elizon on or before December 15, 2021. The Debtor grants in favor of Elizon -- as security for all indebtedness that is owed by the Debtor to Elizon, under its secured documentation, but only to the extent that Elizon's cash collateral is used by the Debtor -- a first priority post-petition security interest and lien, in, to and against all of the Debtor's assets, to the same extent Elizon held a property perfected prepetition security interest in such assets, which are or have been acquired, generated or received by the Debtor subsequent to the Petition Date. The Debtor's access to cash collateral will continue until the earlier of: (i) 5:00 p.m. on January 13, 2022; (ii) a further Court Order conditioning the use of cash collateral; or (iii) the entry of a further agreement between the parties and reflected in a subsequently entered Agreed Order. A further hearing on the matter is scheduled for January 13 at 10 a.m. A copy of the order is available at https://bit.ly/3IoJ7tr 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. BALDWIN RISK: $250MM Incremental Loan No Impact on Moody's B2 CFR ----------------------------------------------------------------- Moody's Investors Service says the ratings of Baldwin Risk Partners, LLC (corporate family rating B2) remain unchanged following the company's announcement that it plans to raise an incremental senior secured term loan of $250 million (rated B2). The company will use net proceeds to repay outstanding revolver borrowings and pay related fees and expenses. The rating outlook for BRP is unchanged at stable. RATINGS RATIONALE BRP's rating reflects its growing presence in property & casualty insurance brokerage and employee benefits, with a smaller presence in Medicare-related products. BRP offers a range of insurance products to middle market businesses and individuals through distinct channels across four business segments: Middle Market, Specialty, MainStreet and Medicare. The company generates strong organic growth by having tailored client engagement in each operating group and focusing resources on attractive market niches, notably including renter's insurance sold through sub-agent partners and property management software providers. BRP also seeks acquisitions with favorable growth prospects. The company has committed to its shareholders to operate with moderate net financial leverage (target range of 3.5x-4.0x per company calculations). The ratings reflect Moody's expectation that BRP will maintain its stated financial policy, and use a combination of equity and debt to fund internal growth and acquisitions. These strengths are offset by the BRP's limited scale and geographic scope relative to other rated insurance brokers. Other challenges include significant financial leverage (per Moody's calculations), modest interest coverage, and lower EBITDA margins compared to similarly rated peers. BRP's acquisition strategy carries execution and integration risks and could heighten the firm's exposure to errors and omissions, a risk inherent in professional services. Following the proposed transaction, Moody's estimates that BRP will have a pro forma debt-to-EBITDA ratio above 6x, with (EBITDA - capex) interest coverage of 1.5x-2.5x and a free-cash-flow-to-debt ratio in the low single digits. These pro forma metrics include Moody's adjustments for contingent earnout liabilities, operating leases, run-rate earnings from recent and pending acquisitions and certain non-recurring items. Moody's expects that BRP will reduce its leverage below 6x through capital management and EBITDA growth over the next year. The following ratings remain unchanged: Corporate Family Rating B2; Probability of Default Rating B2-PD; $475 million senior secured revolving credit facility maturing in October 2025 at B2 (LGD3); $750 million (including proposed $250 million increase) senior secured term loan maturing in October 2027 at B2 (LGD3). The rating outlook for BRP is unchanged at stable. The principal methodology used in these ratings was Insurance Brokers and Service Companies published in June 2018. Based in Tampa, Florida, BRP provides a range of commercial and personal insurance, with some employee benefits and Medicare-related products, all distributed to middle market businesses and individuals. BRP generated revenue of $478 million for the 12 months through September 2021. BEATSTOC INC: Files for Chapter 7 Bankruptcy Protection ------------------------------------------------------- Jake Abbott of SacramentoInno reports that Rocklin, California-based music technology company Beatstoc recently filed for Chapter 7 bankruptcy after racking up $7.28 million in liabilities. In its Nov. 24, 2021 filing, the company stated it does not expect to be able to pay back unsecured creditors after administrative expenses are paid. Beatstoc, originally based in Santa Monica before relocating to Rocklin, describes itself as an exclusive experience platform that provides music artists with another avenue to generate royalties by selling what it called "Pieces of PoPularity," or "PoPs." Participating artists could offer a limited number of annually renewable PoP's through an "Initial Fan Offering." The company said in press materials that PoPs gave fans access to exclusive engagement and experiences with their favorite artists, through the Beatstoc platform. The company stated it has 30 creditors with unsecured claims for a total of $7,280,183 in liabilities, with zero assets. Its largest unsecured claim was for $3.5 million from PhilanTrepreneur Inc., which has a mailing address that traces back to Beatstoc's principal place of business on Stanford Ranch Road in Rocklin. Its next largest unsecured creditor with a claim of $1 million was listed as Carter Family Trust out of Bend, Oregon. According to the bankruptcy filing, the company stated that Covid-19 severely impacted the music marketplace in the spring of 2020 and the company was unable to recover. It stated it believes its technology became obsolete. Beatstoc is also named in two pending lawsuits in Placer County that stem from cases in 2020 alleging breach of contract. The filing stated the company's director, Gene Jackson, also filed for bankruptcy on Nov. 23, 2021. Jackson did not respond to a request for comment by the Business Journal. Attorney Joe Angelo, who filed the bankruptcy on behalf of Beatstoc, declined to comment. About Beatstoc Inc. Beatstoc Inc., a Rocklin, California-based music technology company, sought Chapter 7 protection (Bankr. E.D. Cal. Case No. 2123972) on Nov. 24, 2021. In the petition signed by Attorney Joe Angelo, Beatstoc listed $7,280,183 in liabilities. The case is handled by Honorable Judge Christopher M. Klein. Joseph Angelo is the Debtor's counsel. BLUESTONE GROUP: Case Summary & 5 Unsecured Creditors ----------------------------------------------------- Debtor: The Bluestone Group, LLC 100 M Street, SE Suite 450 Washington, DC 20003 Business Description: The Bluestone Group, LLC is a multi- faceted development management company offering services in the following areas: Professional Services - cM - design build; infrastructure; cyber & physical security; environmental & coastal engineering; micro grid & alternative energy; and green technology. Chapter 11 Petition Date: December 6, 2021 Court: United States Bankruptcy Court District of Columbia Case No.: 21-00288 Judge: Hon. Elizabeth L. Gunn Debtor's Counsel: Steven H. Greenfeld, Esq. COHEN, BALDINGER & GREENFIELD, LLC 2600 Tower Oaks Blvd. Suite 290 Rockville, MD 20852 Tel: (301) 881-8300 Email: steveng@cohenbaldinger.com Estimated Assets: $0 to $50,000 Estimated Liabilities: $1 million to $10 million The petition was signed by Vivian W. Bowers as managing member. A copy of the Debtor's list of five unsecured creditors is available for free at PacerMonitor.com at: https://www.pacermonitor.com/view/NECGCIQ/The_Bluestone_Group_LLC__dcbke-21-00288__0002.0.pdf?mcid=tGE4TAMA A full-text copy of the petition is available for free at PacerMonitor.com at: https://www.pacermonitor.com/view/MZ2PPKA/The_Bluestone_Group_LLC__dcbke-21-00288__0001.0.pdf?mcid=tGE4TAMA BOY SCOUTS: Abuse Victims Caught in Chapter 11 Lobbying ------------------------------------------------------- Soma Biswas and Becky Yerak of The Wall Street Journal reports that the abuse victims of the Boy Scouts of America are caught up in Chapter 11 lobbying. Thousands of men seeking compensation from the Boy Scouts of America for childhood sexual abuse are caught between two camps of victims' lawyers that are accusing each other of aggressive and improper tactics to swing the vote on the youth group's chapter 11 settlement plan. A law-firm coalition representing most of the men are urging yes votes on the Boy Scouts' settlement offer, which needs a strong show of support from abuse victims and bankruptcy-court approval to take effect. About Boy Scouts of America The Boy Scouts of America -- https://www.scouting.org/ -- is a federally chartered non-profit corporation under title 36 of the United States Code. Founded in 1910 and chartered by an act of Congress in 1916, the BSA's mission is to train youth in responsible citizenship, character development, and self-reliance through participation in a wide range of outdoor activities, educational programs, and, at older age levels, career-oriented programs in partnership with community organizations. Its national headquarters is located in Irving, Texas. The Boy Scouts of America and affiliate Delaware BSA, LLC, sought Chapter 11 protection (Bankr. D. Del. Lead Case No. 20-10343) on Feb. 18, 2020, to deal with sexual abuse claims. Boy Scouts of America was estimated to have $1 billion to $10 billion in assets and at least $500 million in liabilities as of the bankruptcy filing. The Debtors have tapped Sidley Austin LLP as their bankruptcy counsel, Morris, Nichols, Arsht & Tunnell LLP as Delaware counsel, and Alvarez & Marsal North America, LLC as financial advisor. Omni Agent Solutions is the claims agent. The U.S. Trustee for Region 3 appointed a tort claimants' committee and an unsecured creditors' committee on March 5, 2020. The tort claimants' committee is represented by Pachulski Stang Ziehl & Jones, LLP, while the unsecured creditors' committee is represented by Kramer Levin Naftalis & Frankel, LLP. BOY SCOUTS: NJ Councils Sell Lands to Settle Abuse Claims --------------------------------------------------------- Karen Wall of Patch reports that New Jersey Boy Scout councils are selling land to settle sex abuse claims. Two land sales have happened so far, and others are possible as councils try to meet their obligations in a proposed national settlement. When the Toms River Township Council approved the purchase in October 2021 of a 3.85-acre parcel of land at Ridgeway Road in late September, town officials trumpeted it as an important open space acquisition. But that land purchase was about more than just open space; it was part of the efforts of the Boy Scouts of America to meet the obligations set forth in a proposed settlement to pay the financial claims of thousands of victims of sexual abuse. Local Boy Scout Councils around the country are selling off property to cover what has been determined as their obligation to the $1.9 billion settlement proposed to compensate Scouts who were sexually abused by Boy Scout leaders, with claims dating back to the 1940s. That includes two land sales so far by councils in New Jersey: the Jersey Shore Council sale of a 3.85-acre parcel to Toms River Township, and the pending sale by the Patriots Path Council of a property that council owns in New York State, called Sabattis Adventure Camp. There have been more than 82,000 sexual abuse claims filed nationally against the Boys Scouts of America, according to a proposed bankruptcy settlement that is awaiting approval. A report by the Albany Times-Union from June puts the figure at nearly 92,000 claims. More than 50 percent of the claims allege a first instance of abuse prior to 1974, that report said. The volume of claims and lawsuits led to the Boy Scouts of America seeking Chapter 11 bankruptcy protection in 2020. The proposed settlement, filed Sept. 29, 2021, aims to allow the Boy Scouts of America to pay the victims of sexual abuse while allowing the organization to restructure. It is set to sell off millions of the national organization's assets. The proposed bankruptcy settlement includes a breakdown by local Boy Scout Council of how much each must contribute to the national settlement, a figure that represents a combination of a number of factors, including how many claims were filed against a particular council and the value of its unrestricted assets. In many cases, campgrounds and other land are the largest pieces of the local councils' assets, which is why many are considering or resorting to the land deals. The sale of campgrounds has been controversial in some areas. In Missouri, the plan to sell campgrounds was panned by the Joplin Globe, which called it a betrayal in an editorial. In other areas, there have been petitions and protests. There has not been a similar outcry in New Jersey in the two land sales so far. The Jersey Shore Council's sale of the Clayton Service Center, home to the council's operating office, was barely a blip in the Toms River area. At the council meeting where the purchase was approved, audience questions were focused on concerns that buying the property would somehow open the town up to liability in the sexual abuse lawsuits. Township Attorney Anthony Merlino assured residents the township would not face any responsibility for those claims, even though the town is leasing the property to the Jersey Shore Council for a nominal fee for the next several years. James Gillick, CEO of the Jersey Shore Council, said the sale of the Clayton Service Center to the township allowed the council to fulfill its share of national settlement. The council, which serves more than 6,000 Scouts in Ocean, Atlantic, and Southeast Burlington counties, plus Ocean City in Cape May County, is required to contribute $386,141, according to the proposed settlement. Toms River paid $1.1 million, based on an independent appraisal, for the Clayton Service Center property, which sits next to a former private campground, Camp Albocondo. That property is owned jointly by Ocean County and Toms River and was purchased in 2014 in part with Green Acres funding, meaning that site will remain open space. Gillick said the funds the council is receiving for the Clayton Service Center in excess of the council's $386,141 obligation to the national settlement will be used for local programs. There were 88 claims against leaders involved with the Jersey Shore Council, according to the settlement. The Patriots Path Council's sale of Sabattis Adventure Camp, a 1,250-acre camp on a 250-acre lake in the Adirondacks, has been a bit more attention-getting. The campground has been hosting Boy Scouts for more than 60 years. A report by NJ.com said there was a prior attempt to sell the campground in 2017 that was halted after hundreds of people signed a petition demanding it be stopped. The Sabattis Adventure Camp is appraised at $1,585,000; the Patriots Path Council's contribution is more than $3.7 million, according to the proposed settlement; there have been 197 claims filed against that council. Other Scout campgrounds in New Jersey also may be up for sale as the bankruptcy settlement process moves forward, depending on how other councils choose to approach their contributions, which can be from land sales or other assets, including cash investments. The Northern New Jersey Council, for instance, has more than 460 claims that have been filed, and has been tasked with a $3,064,566 payment. That council owns five properties — its service center/offices in Oakland, worth $2.7 million; Camp Conklin in Boonton, worth $350,000; Camp Turrell in the Catskills, appraised at $2.6 million; Camp No-Be-Bo-Sco in Hardwick, worth $1.66 million, and Floodwood Mountain Scout Reservation, near Saranac Lake in New York, appraised at $820,000. The Monmouth Council, which serves parts of Monmouth, Middlesex, Mercer, Somerset and Hunterdon counties, has 91 claims and a contribution of $3,170,811. It owns four parcels, including its service center and store in Marlboro, which is valued at $2.6 million, and its Forestburg Scout Reservation in New York State, which is appraised at $3.2 million. It also owns Quail Hill Scout Reservation in Manalapan, which is valued at just under $1 million, and a sliver of beach in Sea Bright, appraised at $1.18 million. Toms River made the purchase of the Clayton Service center to expand the open space around the Toms River, which flows through the area. In doing so, Toms River was able to fend off potential developers who would have loved to turn the property into more homes, Mayor Maurice Hill said at the time. Gillick said that is the only land sale the Jersey Shore Council is considering. The council also owns the Joseph A. Citta Scout Reservation, a 550-acre property in Barnegat, but that property will remain with the council, he said. 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. BVI MEDICAL: Moody's Cuts CFR, Outlook Stable --------------------------------------------- Moody's Investors Service downgraded BVI Medical, Inc.'s ("BVI") Corporate Family Rating to Caa1 from B3 and Probability of Default Rating to Caa1-PD from B3-PD. Moody's also downgraded the company's senior secured first lien term loan and revolver ratings to Caa1 from B3. The outlook is stable. The ratings downgrade reflects a significant increase in leverage owing to the company's slow pace of recovery from the disruptions caused by the coronavirus crisis. The company's debt/EBITDA (Moody's adjusted) exceeded 11.0 times at the end of September 2021 (including certain management addbacks), primarily because of weak earnings in recent quarters due to the pandemic. In the absence of earnings recovery and resultant deleveraging, Moody's anticipates that the company's revolver borrowing base will remain restricted to 35% of the total revolver amount in the near term to avoid testing of the springing covenant attached to the revolver. A reduced revolver availability will restrict the company's liquidity in the next few quarters when its business recovery remains uncertain due to the possibility of partial lockdowns in some of company's key markets in Europe. Governance risk considerations are material to the ratings downgrade. The company has employed aggressive acquisition strategy making at least 4 acquisitions in 2019 and 2020. While the acquisitions made good sense under normal operating conditions, some acquisition-related milestone payments will stress the company's liquidity at a time when operating performance is weak due to ongoing impact of the coronavirus pandemic. The following ratings were downgraded: Issuer: BVI Medical, Inc. Corporate Family Rating to Caa1 from B3 Probability of Default Rating to Caa1-PD from B3-PD EUR607 million GTD Senior Secured 1st Lien Term Loan to Caa1 (LGD3) from B3 (LGD3) EUR65 million GTD Senior Secured 1st Lien Revolving Credit Facility to Caa1(LGD3) from B3 (LGD3) Outlook Actions: Issuer: BVI Medical, Inc. Outlook, Remains Stable RATINGS RATIONALE BVI's Caa1 CFR reflects moderate scale of the company based on sales and narrow concentration within its chosen markets in ophthalmology. The rating also reflects Moody's expectations that debt/EBITDA will remain above 8 times for the next 12 to 18 months. Moody's expects that the company will face headwind, at least in the next couple of quarters, as the recovery of the company's business remains uncertain in the context of ongoing coronavirus pandemic. However, Moody's also expects that the majority of planned procedures will eventually occur, though the pace and timing of any recovery is uncertain. The company also competes against many larger peers who have significantly greater financial resources. The rating is supported by BVI's long-standing presence in the cataract surgery materials, equipment and intraocular lens (IOL) market, strong operating margins, and a diverse global customer base. The company's liquidity is adequate at this time -- supported by $23 million in cash at the end of 9/30/2021 and EUR50 million undrawn under the company's EUR65 million revolver. However, BVI's borrowing base will become restricted to 35% of total revolving capacity if the first lien net leverage ratio remains above the covenant level (8.6 times -- credit agreement calculation). Moody's estimates that the company will break even on free cash flow in the next 12 months. In its stable outlook, Moody's expects BVI's business to recover in the next 12-18 month assuming that the pandemic-related disruptions will ease in 2022. Social and governance considerations are material to the ratings. For BVI, the social risks are primarily associated with responsible production including compliance with regulatory requirements for the safety of medical devices as well as adverse reputational risks arising from recalls associated with manufacturing defects. Additionally, the company's revenue has been negatively impacted by the coronavirus outbreak which Moody's regards as a social risk. Additional lockdowns and procedures deferment will further slowdown BVI's recovery. With respect to governance, Moody's expects BVI's financial policies to remain aggressive reflecting its ownership by a private equity investor TPG Capital. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS Ratings could be upgraded if the company's operating performance recovers, resulting in EBITDA recovery comparable to pre-pandemic levels and positive free cash flow. Quantitatively ratings could be upgraded if BVI sustains debt/EBITDA below 8.0 times while maintaining a good liquidity profile. Ratings could be downgraded if elective vision procedures remain deferred beyond Moody's current expectations, free cash flow remains negative for an extended period of time, or if liquidity erodes further. Headquartered in Waltham, Massachusetts, BVI Medical, Inc. (BVI) is a global manufacturer of products used in eye surgeries (primarily cataract procedures). BVI was acquired by private equity firm TPG Capital in August 2016. LTM revenues are approximately $307 million. The principal methodology used in these ratings was Medical Products and Devices published in October 2021. CADIZ INC: Heerema International Acquires 34.6% Equity Stake ------------------------------------------------------------ In a Schedule 13D filed with the Securities and Exchange Commission, Heerema International Group Services S.A. disclosed that as of Dec. 1, 2021, it beneficially owns 15,109,823 shares of common stock of Cadiz Inc., which represent 34.6 percent of the shares outstanding. Heerema International Group is manager of certain funds of the Heerema Group. Pursuant to management agreements between Heerema International Group and the Heerema Funds, the former has voting and dispositive power of securities held directly by the Heerema Funds. Prior to Dec. 1, 2021, Heerema International Group and the Heerema Funds maintained a discretionary mandate with an independent wealth manager with discretionary and advisory mandates for multiple clients, whereby the advisor maintained voting and discretionary power on the shares of Cadiz's common stock held by the Heerema Funds, even though the Heerema Funds held the pecuniary interest on such shares. Solely as a result of the Heerema Funds' termination of the discretionary mandate with the advisor on Dec. 1, 2021, Heerema International Group acquired beneficial ownership of 15,109,823 shares of Cadiz's common stock, which was a portion of Cadiz's common stock that was previously beneficially owned by the advisor. A full-text copy of the regulatory filing is available for free at: https://www.sec.gov/Archives/edgar/data/727273/000121390021063389/ea151680-13dheerema_cadiz.htm About Cadiz Inc. Founded in 1983 and headquartered in Los Angeles, California, Cadiz Inc. -- http://www.cadizinc.com-- is a natural resources development company dedicated to creating sustainable water and agricultural opportunities in California. The Company owns 70 square miles of property with significant water resources in Southern California and are the largest agricultural operation in San Bernardino, California, where we have sustainably farmed since the 1980s. The Company is also partnering with public water agencies to implement the Cadiz Water Project, which was named a Top 10 Infrastructure Project that over two phases will create a new water supply for approximately 400,000 people and make available up to 1 million acre-feet of new groundwater storage capacity for the region. Cadiz Inc. reported a net loss and comprehensive loss applicable to common stock of $37.82 million for the year ended Dec. 31, 2020, compared to a net loss and comprehensive loss applicable to common stock of $29.53 million for the year ended Dec. 31, 2019. As of Sept. 30, 2021, the Company had $120.11 million in total assets, $72.99 million in total liabilities, and $47.12 million in total stockholders' equity. CFN ENTERPRISES: To Effect a 1-for-15 Reverse Common Stock Split ---------------------------------------------------------------- CFN Enterprises Inc. previously commenced a written consent solicitation from its stockholders on June 17, 2021, to approve an amendment to the Company's Certificate of Incorporation, as amended, to effect a reverse split of the Company's common stock, par value $0.001 per share, in the range from 1-for-2 to 1-for-50, with the exact ratio to be determined in the sole discretion of the Company's Board of Directors no later than one year after approval. As of July 15, 2021, the Company's stockholders had approved the Amendment and the Company ended the written consent solicitation. On Dec. 2, 2021, following the decision of the Company's Board of Directors to effect a reverse split in the ratio of 1-for-15, the Company filed a Certificate of Amendment to its Certificate of Incorporation with the Secretary of State of the State of Delaware pursuant to which Article Fourth of the Company's Certificate of Incorporation was amended to effect a reverse split such that every issued and outstanding share of Common Stock immediately prior to the effective time of 5:00 p.m. Eastern time on Dec. 6, 2021 will be automatically reclassified and converted into one-fifteenth of a share of Common Stock. No cash will be paid or distributed as a result of the Reverse Stock Split, and no fractional shares will be issued. All fractional shares which would otherwise be required to be issued as a result of the Reverse Stock Split will be rounded up to a whole share. Any stock certificate that, immediately prior to the Reverse Stock Split Effective Time, represented shares of the Old Common Stock, shall from and after the Reverse Stock Effective Time, automatically and without the necessity of presenting the same for exchange, represent that number of whole shares of New Common Stock into which such shares of Old Common Stock shall have been reclassified pursuant to the Reverse Stock Split. Outstanding convertible securities of the Company will be adjusted in accordance with their terms to reflect the Reverse Stock Split. The New Common Stock will be quoted on the OTCQB and will continue to be quoted under the symbol CNFN. A new CUSIP number (12529C 209) has been issued for the New Common Stock. No change in the Company's 500,000,000 authorized shares of Common Stock or the $0.001 per share par value of the Common Stock has occurred as a result of the Reverse Stock Split. About CFN CFN Enterprises Inc. owned and operated CAKE and getcake.com, a marketing technology company that provided a proprietary solution for advanced analytics, attribution and campaign optimization for digital marketers, and it sold this business on June 18, 2019. The Company contemporaneously acquired assets from Emerging Growth LLC related to its cannabis industry focused sponsored content and marketing business, or the CFN Business. Its initial ongoing operations will consist primarily of the CFN Business and the Company will continue to pursue strategic transactions and opportunities. The Company reported a net loss of $1.42 million in 2020. As of Sept. 30, 2021, the Company had $16.90 million in total assets, $8.57 million in total liabilities, and $8.33 million in total stockholders' equity. New York-based RBSM LLP, the Company's auditor since 2012, issued a "going concern" qualification in its report dated March 31, 2021, citing that the Company has suffered recurring losses from operations and will require additional capital to continue as a going concern. This raises substantial doubt about the Company's ability to continue as a going concern. CMC II LLC: Combined Plan & Disclosures Confirmed by Judge ---------------------------------------------------------- Judge John T. Dorsey has entered findings of fact, conclusions of law and order confirming the First Amended Combined Disclosure Statement and Chapter 11 Plan of Liquidation of CMC II, LLC, and its Debtor Affiliates. The Debtors have agreed with CPSTN Operations, LLC, on behalf of itself and its non-debtor affiliates (collectively, "CPSTN"), as follows: * CPSTN has and will provide the following adjustments to the Purchase Price set forth in the APA and the consideration set forth in the Settlement Agreements. -- Payment of $230,000 to the Debtors' estates at the closing of the CPSTN Settlement Agreements and Sale on November 30, 2021. -- Payment of $490,000 to the Debtors' estates or disbursing agent in 12 monthly installments of $40,833.33 beginning on the first business day of each month starting in January 2022. * The Combined Plan and Disclosure Statement's references to "Additional Cares Act Funds" are stricken. * Prior to the Petition Date, the Debtors held certain funds on account of deferred employer payroll taxes that were deferred pursuant to the CARES Act. As part of the Settlement Agreement transactions, CPSTN has assumed the Debtors' obligations to the Internal Revenue Service in respect of such taxes and shall pay such funds to the Internal Revenue Service when due, subject to CPSTN's receipt of the funds held by the Debtors in respect of such taxes. * The foregoing payments, together with the other amounts paid or assumed pursuant to the Settlement Agreements and APA, shall be in full and final satisfaction of any and all claims, amounts, liabilities or defenses of the parties whether under the APA, settlement agreements, or otherwise. In resolution of the Limited Objection to Confirmation of Debtors' First Amended Chapter 11 Plan of Liquidation (the "Limited Objection") and the Motion For Relief From The Automatic Stay Or Plan Injunction, As Applicable (the "Motion" and, together with the Limited Objection, the "Objecting Creditors' Pleadings") filed by Aretha Bradham, Katina Ford and Rosanna McCullough (collectively, the "Objecting Creditors"), the Debtors agree that the rights of the Objecting Creditors to pursue claims against and collect from non-debtor third parties are preserved and not limited by the Combined Plan and Disclosure Statement, as are the rights of such non-debtor third parties to contest and defend against such claims. Genesis Eldercare Rehabilitation Services, LLC ("Genesis") and the Debtors have agreed that Genesis shall have an allowed general unsecured claim for the portions of the proofs of claim it filed (Claim No. 407 in Case No. 21- 10462 and Claim No. 408 in Case No. 21-10463) related to the Promissory Note, as amended (the "Note") between Genesis, 803 Oak Street Operations, LLC, 207 Marshall Drive Operations, LLC, and other non-Debtor parties in the principal amount of $56,250,628 plus other obligations due under the Note as set forth in the above referenced proofs of claim (the "Genesis Note Claim"). A copy of the Plan Confirmation Order dated Dec. 03, 2021, is available at https://bit.ly/3dJc1q5 from Stretto, the claims agent. Counsel for the Debtors: CHIPMAN BROWN CICERO & COLE, LLP William E. Chipman, Jr. Robert A. Weber Mark D. Olivere Hercules Plaza 1313 North Market Street, Suite 5400 Wilmington, Delaware 19801 Telephone: (302) 295-0191 Facsimile: (302) 295-0199 E-mail: chipman@chipmanbrown.com weber@chipmanbrown.com olivere@chipmanbrown.com About CMC II LLC CMC II, LLC, 207 Marshall Drive Operations LLC, 803 Oak Street Operations LLC and three inactive affiliates sought Chapter 11 protection (Bankr. D. Del. Lead Case No. 21-10461) on March 1, 2021. CMC II, LLC, et al., are part of a group of Consulate Health care corporate affiliates that manage and operate 140 skilled nursing facilities. CMC II provides management and support services to approximately 140 SNFs, each of which is operated by an affiliate of the Debtors under the common ownership of non-Debtor LaVie Care Centers, LLC, doing business as Consulate Health Care. 207 Marshall Drive Operations LLC operates Marshall Health and Rehabilitation Center, a 120-bed SNF located in Perry, Florida. 803 Oak Street Operations LLC operates Governor's Creek Health and Rehabilitation, a 120-bed SNF located in Green Cove Springs, Fla. CMC II estimated assets and debt of $100 million to $500 million as of the bankruptcy filing. The Hon. John T. Dorsey is the case judge. The Debtors tapped Chipman Brown Cicero & Cole, LLP, as counsel; Alvarez & Marsal North America, LLC as restructuring advisor; and Evans Senior Investments as broker. Stretto is the claims agent. CRC BROADCASTING: Seeks Approval to Employ Financial Expert ----------------------------------------------------------- CRC Broadcasting Company, Inc. seeks approval from the U.S. Bankruptcy Court for the District of Arizona to hire Peter Davis, a senior managing director at JS Held, LLC, to provide expert services in furtherance of obtaining a confirmation of its Chapter 11 plan of reorganization. The firm's hourly rates are as follows: Peter Davis $495 per hour Scott Evans $410 per hour Keith Kenny $330 per hour Austin Singer $330 per hour William Johnston $175 per hour Other professionals $125 to $195 per hour The firm requires the Debtor to pay $15,000 as a retainer fee. Mr. Davis disclosed in a court filing that he is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. The firm can be reached at: Peter Davis, CPA JS Held, LLC 3101 North Central Avenue, Suite 670 Phoenix, AZ 85012 Tel: 602-279-7500 Email: pdavis@jsheld.com About CRC Broadcasting Company CRC Broadcasting Company, Inc., a broadcast media company based in Scottsdale, Ariz., filed a voluntary petition for Chapter 11 protection (Bankr. D. Ariz. Case No. 20-02349) on March 6, 2020, listing under $1 million in both assets and liabilities. Affiliate CRC Media West, LLC also filed for Chapter 11 petition (Bankr. D. Ariz. Case No. 20-02352) on March 6, 2020, listing under $1 million in both assets and liabilities. Judge Paul Sala oversees both cases, which are jointly administered. The Debtors tapped Allan D. NewDelman, P.C. as bankruptcy counsel; Michael W. Carmel, Ltd. and Radiotvlaw Associates, LLC as special counsel; Angelo Bellone as accountant; and Peter Davis, a senior managing director at JS Held, LLC, as financial expert. Desert Financial Federal Credit Union, a secured creditor, is represented by Squire Patton Boggs (US), LLP. CRC Broadcasting Company filed its proposed Chapter 11 plan and disclosure statement on Sept. 9, 2020. CROWNROCK LP: Fitch Raises LT IDR to 'BB-', Outlook Stable ---------------------------------------------------------- Fitch Ratings has upgraded the Long-Term Issuer Default Rating (IDR) of CrownRock, L.P. to 'BB-' from 'B+'. Fitch has affirmed the rating for the company's senior secured reserve-based lending credit facility (RBL) at 'BB+'/'RR1' and downgraded the rating on the company's senior unsecured notes to 'BB-'/'RR4' from 'BB'/'RR2'. The Rating Outlook is revised to Stable from Positive. The upgrade to the IDR reflects CrownRock's continued operational momentum with production size reaching 'BB-' category thresholds in addition to the company's continued repayment of its preferred units and RBL that allows for maintenance of mid-cycle debt/EBITDA below 1.5x. The unsecured notes downgrade is due to Fitch's recovery criteria and notching limitations on unsecured instruments for issuers in the 'BB-' IDR category. CrownRock's ratings reflect its core Permian asset base with high liquids exposure; large inventory of highly economic drilling locations; competitive cost structure; continued realization of production and capital efficiencies; forecast sub-1.5x leverage profile; and the expectation of moderately positive FCF through the rating horizon while maintaining double production digit growth. These factors are partially offset by the company's 12-month hedge program covering approximately 40% of oil production in 2022 which leaves future cash flows more susceptible to market price fluctuations. KEY RATING DRIVERS Strong Permian Asset Base: CrownRock's acreage position consists of approximately ~86,000 net acres in the core of the Midland basin split between Howard, Martin, Midland and Glasscock counties. The asset base has high liquids exposure (81%, 57% oil) as of 3Q21, with approximately 82% of its core acreage held by production. Drilling inventory remains robust with just under 2,200 net tier-1 horizontal drilling locations at 3Q21 (estimated at 15-20 years), targeting primarily the Lower Sprayberry, Wolfcamp A and Wolfcamp B, with a Fitch-calculated fully-cycle break-even oil price of $30/bbl-$35/bbl. Fitch believes the company's extensive inventory of highly economic wells, continued productivity and cost improvements and development track record reduces overall cash flow risk and supports targeted production growth. Double-Digit Production Growth Target: Fitch believes management's track record of production growth and asset development moderates execution risk to the company's growth strategy of over 150Mboepd by 2023. CrownRock's 3Q21 production increased approximately 50% from the prior year to 115Mboepd driven primarily by the completion of drilled and uncompleted wells built up during 2020 and increased capital spending following pandemic-linked reductions. Fitch believes the current growth plan is achievable, but understands a weakened pricing environment could delay growth which was seen throughout 2020. Fitch's base case currently forecasts production to average approximately 135Mboepd in 2022 with sub-1.5x gross debt/EBITDA. $30/bbl-$35/bbl Breakeven Full-Cycle Cost: CrownRock's cost structure is highly competitive relative to Fitch-rated U.S. onshore E&P peers and continues to improve. Fitch-calculated operating costs have improved from $11.6/boe in 2016 to $8.3/boe in 3Q21, driven by increased well productivity, greater operational efficiencies and lower service costs, with the majority expected to be sustained in the medium and long-term. Spud-to-spud days have improved from approximately 27 days in 1Q17 to under 14 days in 2020, and completion costs are down roughly 30% since YE 2019, leading to average DC&E costs per foot of approximately $450. Fitch views the company's continued operational and capital improvements favorably as they improve cost competitiveness and support the FCF profile. 12-Month Oil Hedging Program: The company's hedging program provides development funding protection for current development activities and an ability to lock in future returns. CrownRock has hedged approximately 30Mboepd of oil at an average price of $52/bbl throughout 2022 and 10Mboepd of oil at $58/bbl in 2023, which represents approximately 40% and 10% of its oil production rate, respectively. The company is hedging approximately 65% of natural gas production in 2022 at an average price of $1.89/MMbtu which should result in cash outflows in the near-term. Fitch believes the company will maintain similar levels and duration of hedges going forward and maintain some upside price potential given their low-cost structure and capital flexibility. Positive FCF, Sub-1.5x Leverage: Fitch forecasts positive FCF in 2022 despite growth-directed capital spending of approximately $750 million at Fitch's $52/bbl price assumption. Fitch expects FCF will remain moderately positive through the rating horizon with debt/EBITDA expected to fall below 1.5x by YE 2021 from 2.3x in 2020. Fitch projects CrownRock will be able to fund its 2022 capital program through internally generated cash flow, and expects the company to prioritize FCF toward repayment of the preferred units and the RBL with Fitch's expectation that both will be fully repaid by early 2022. Once repaid, Fitch expects the company will allocate FCF toward redemption of its 2025 notes and potential discretionary distributions to its equity holders. DERIVATION SUMMARY CrownRock is a relatively smaller-sized, growth-oriented operator with 3Q21 average daily production of approximately 115Mboepd, larger than Permian peers Matador Resources Company (B+/Stable; 90Mboepd) and Callon Petroleum Company (B/Stable; approximately 100 Mboepd pro forma the Primexx acquisition and recent divestitures), but smaller than Permian peer SM Energy Company (B/Stable; 156Mboepd) and investment-grade peers Endeavor Energy Resources, L.P. (BBB-/Stable; 185Mboepd in 2Q21) and Diamondback Energy, Inc., (BBB/Stable; 404Mboepd). The company's forecast sub-1.5x gross leverage is similar to Permian peers Matador and SM Energy, but stronger than Callon with leverage expected at sub-2.5x levels in 2022. In terms of cost structure, CrownRock's core position in the Midland Basin and continued efficiencies have resulted in Fitch-calculated operating costs improving from $11.6/boe in 2017 to $8.3/boe in 3Q21, which is about is about $1/boe-$3/boe more competitive than the Permian peer average. While CrownRock's average realized price has historically been slightly weaker than Permian peers given in-basin hydrocarbon pricing, their peer-leading cost structure results in mid-cycle unhedged cash netbacks generally in line with the Permian peer average at around $25/bbl. KEY ASSUMPTIONS Fitch's key assumptions within its rating case for the issuer include: -- WTI prices of $60/bbl for the remainder of 2021, $52/bbl in 2022 and $50/bbl in 2023 and thereafter; -- Henry Hub prices of $3.40/mcf for the remainder of 2021, $2.75/mcf in 2022 and $2.45/mcf in 2023 and thereafter; -- Average annual production growth in the 20% range; -- Capex of $750 million in 2022 with growth-linked increases thereafter; -- Prioritization of forecast FCF toward repayment of preferred units, RBL and then the 2025 notes; -- No material M&A activity. RATING SENSITIVITIES Factors that could, individually or collectively, lead to positive rating action/upgrade: -- Proactive management of the maturity profile that reduces medium-term refinance risks; -- Execution on production growth targets while de-risking prospective intervals that results in average production above 150Mboepd; -- Mid-cycle Debt/EBITDA or FFO Leverage sustained below 2.0x. Factors that could, individually or collectively, lead to negative rating action/downgrade: -- Inability to manage the maturity profile and/or access capital markets that heightens refinance risks; -- Mid-cycle Debt/EBITDA or FFO Leverage sustained above 2.5x. -- Change in financial policy or capital deployment strategy in a way that results in a substantially weaker liquidity position and/or leverage exceeding the threshold stated above. 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 3Q21, CrownRock's liquidity consists of $87 million of cash on its balance sheet and an additional $640 million of borrowing capacity under the $700 million ($925 million borrowing base) RBL facility. The RBL is subject to a semi-annual borrowing base redetermination and was affirmed at $925 million in November 2021. Fitch expects CrownRock to fully repay both the RBL and the preferred stock by early 2022 with FCF and believes the RBL will be used minimally for working capital needs in the near and medium term. Clear Maturity Profile: CrownRock's maturity schedule remains light with no near-term maturities until the RBL and 5.625% senior notes come due in 2024 and 2025, respectively. Fitch sees little refinance risk for the company's RBL and expects the company will begin repaying the 2025 notes with FCF in 2022 which should help reduce refinance risks. ISSUER PROFILE CrownRock, L.P. is a privately-owned exploration and production company with a core position of oil-weighted acreage in the Midland basin in West Texas. 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. DIRECTV ENTERTAINMENT: Fitch Affirms 'BB+' LT IDRs, Outlook Stable ------------------------------------------------------------------ Fitch Ratings has affirmed the Long-Term Issuer Default Ratings (IDRs) of DIRECTV Entertainment Holdings, LLC (DIRECTV) and DIRECTV Financing, LLC (DIRECTV Financing) at 'BB+'. The Rating Outlook is Stable. Fitch has also affirmed the 'BBB-'/'RR1' ratings of DIRECTV Financing's first lien revolver and term loan as well as senior secured notes. The rating action follows the company's announcement of a $1 billion tack-on notes offering to its existing senior secured notes. The terms of the add-on offering, including the 5.875% coupon and August 2027 maturity, are same as existing notes. The proceeds will be used to pay off outstanding TPG senior preferred equity and a portion of AT&T junior preferred equity. The refinancing will generate significant fixed charge cost savings. KEY RATING DRIVERS Scale: DIRECTV's video subscriber base (combined DIRECTV, U-verse, DIRECTV STREAM) is the second largest traditional multi-channel video programming distributor (MVPD) in the U.S. with approximately 16.5 million subscribers at the end of 1Q21, second only to Comcast which has 21.9 million cable subscribers. DIRECTV is largest by video revenue (excludes cable broadband). Scale is a crucial element with MVPD operators as secular pressures weigh on costs, and scale benefits MVPDs with respect to programming costs as it provides greater negotiating power with content providers and in retransmission consent negotiations with TV broadcasters. Subscriber Pressures: Secular pressures have resulted in declining subscribers of traditional linear television as a result of shifting consumer preferences and technology changes. The pandemic further accelerated the shift, increasing competition and the number of streaming options available to viewers. Although still significant, DIRECTV's premium subscriber loss rates have substantially improved over the past six quarters as video losses peaked in 3Q19 at 1.16 million subscribers. Net losses improved to 600,000 in 1Q21 from 896,000 in 1Q20. Execution on Next Generation DIRECTV Stream: AT&T launched its next generation AT&T TV product in March 2020 and the product now operates under DIRECTV Stream. This product delivers video over a software-based video architecture and is a more robust linear TV offering than its prior iterations of over the top (OTT) direct-to-consumer products. For the next generation product, DIRECTV has reported high satisfaction rates and strong attach rates with broadband services. Fitch believes successful execution on the deployment and growth of the DIRECTV Stream product will be a key risk factor for DIRECTV in mitigating secular subscriber losses in the traditional satellite-based DIRECTV product. DIRECTV Stream will also provide bundling opportunities with its parent, including in its wireline footprint where DIRECTV's video service can be readily bundled with high-speed data services over AT&T's fiber and IP-based broadband services. The companies entered into a series of commercial agreements, including product bundling & sales, at the close of the transaction. Financial Flexibility: FCF is expected to be relatively strong with annual capex intensity in the 1.0%-1.5% range going forward. The company does not anticipate the need to launch replacement satellites for an 8-10 year period, and the development costs of the DIRECTV Stream product are behind the company. A shifting product mix will also benefit FCF as the subscriber acquisition costs (SAC) for the DIRECTV Stream product are less than half of the satellite product. The equipment cost for DIRECTV Stream is lower, and the product generally does not require a truck roll as customers can self-install the equipment. As part of the transaction, AT&T will fund up to a total of $2.5 billion of NFL Sunday Ticket net losses in 2021 and 2022. AT&T's reimbursement of these losses provides further financial flexibility over the rating horizon. Conservative Leverage: Post transaction, Fitch expects DIRECTV to remain conservatively capitalized along with AT&T's and TPG's commitment to manage target net leverage near 1x. Fitch expects pro forma gross leverage at 1.2x in 2021, declining to approx. 1.0x by 2023 due to debt repayments from excess cash flow. Fitch also expects DIRECTV to pay down the outstanding TPG senior preferred notes and a portion of the AT&T junior preferred notes with the proposed add-on notes offering. There is also an assumption that AT&T would not sell down its equity stake after formation of the joint venture, as TPG recognizes the strategic benefit of AT&T as a partner. Parent/Subsidiary Linkage: Fitch believes the parent-subsidiary linkage is moderate and is based on a combination of factors including the size of DIRECTV and materiality to AT&T, and the opportunity to bundle DIRECTV product with AT&T's broadband and wireless services. DIRECTV is expected to sign several commercial agreements with AT&T at close, including related to product bundling, U-verse Ops as a service and AT&T Retail. The moderate linkage leads to a one notch uplift in the IDR from a stand-alone assessment. DERIVATION SUMMARY DIRECTV's publicly rated MVPD peers include Comcast Corp. (A-/Stable) and Charter Communications, Inc. (BB+/Stable). Comcast is rated higher than DIRECTV primarily due to significantly greater revenue size and segment diversification. DIRECTV is the second largest U.S. MVPD behind Comcast, which has over 19 million video subscribers. However, in Fitch's view, DIRECTV is more weakly positioned given its less competitive product offering that has disadvantaged it relative to MVPD peers who benefit from the ability to use bundling (mainly broadband services) to retain video subscribers. Charter's ratings also benefit from segment diversification, scale and higher FCF that is balanced against higher leverage metrics when compared with those of DIRECTV. DIRECTV is similar to DISH Network, which also provides satellite TV services and virtual MVPD services through Sling TV. DISH has a lower scale with a customer base and operates at a higher debt leverage. KEY ASSUMPTIONS -- Revenues are expected to decline in high single digits in 2021 and 2022 due to declines in premium and OTT subscribers partly offset by higher ARPUs and increased penetration of DIRECTV Stream; -- EBITDA margins are expected to be in the low 20s as most content costs decrease with subscriber declines, and as the company shifts to the lower cost DIRECTV Stream product; -- FCF is expected in the range of $1.5 billion to $2.0 billion on an annual basis, with capex intensity in the low single digits; -- Leverage is expected to be managed near 1x as the term loan amortizes and as excess cash under excess cash flow sweep provision is deployed towards debt reduction; -- TPG preferred equity is to be paid off using proceeds from $ 1 billion of proposed add-on notes offering; -- AT&T preferred interest assumed be paid in cash starting FY2022. RATING SENSITIVITIES Factors that could, individually or collectively, lead to positive rating action/upgrade: -- Strong execution on the deployment of the next-generation DIRECTV Stream software-based video platform while improving retention of DIRECTV customers. -- Successful execution on improving the customer experience (as evidenced by no material increases in churn or costs arising from the set-back office systems). -- Successful execution on initiatives to return to revenue/EBITDA growth, combined with gross leverage (total debt with equity credit/EBITDA) maintained at 2.5x or less. Factors that could, individually or collectively, lead to negative rating action/downgrade: -- Prolonged declines in revenue and EBITDA, not offset by reductions in debt, leading to total leverage of 3.5x or greater; -- Leveraging transactions, particularly in the absence of a credible deleveraging plan, or a more aggressive financial policy that leads to leverage greater than 3.5x; -- AT&T's ownership interest of DIRECTV falls below 51%. A reduction in AT&T's economic stake over time and changes to governance could lead to a 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 Solid Liquidity: Fitch expects the company to operate with a minimum cash of around $300 million and generate approximately $1.5 billion to $2 billion in FCF annually. The company's pro forma capital structure includes a $500 million five-year revolving credit facility. Owing to strong FCF generation, the facility is expected to be undrawn over Fitch's rating case forecast. The principal financial covenant in the RCF is 2.25x of springing first lien net leverage, if RCF is more than 35% drawn. FCF will be supported by low capex. Capital investment by DIRECTV is expected to be relatively stable over the coming years as major investments in the video platform (DIRECTV Stream) have been completed, and no new satellites are needed for 8-9 years. DIRECTV's pro forma capital structure consists of a $3.3 billion of senior secured notes (including $1 billion of proposed add-on offering), $3.9 billion first lien term loan, an undrawn $500 million RCF and approximately $195 million of rolled over unsecured notes at DIRECTV Holdings, LLC. The new debt is issued at DIRECTV Financing, LLC and is guaranteed by DIRECTV Financing HoldCo, LLC, a wholly owned subsidiary of DIRECTV. The maturity date of the new notes will coincide with the existing notes in August 2027. ISSUER PROFILE DIRECTV is owned 70% by AT&T and 30% by TPG, but jointly controlled by both. The video businesses consist of the DIRECTV direct to home satellite business, U-verse video and DIRECTV Stream. 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. DIRECTV FINANCING: $1.4BB Loan Add-on No Impact on Moody's Ba3 CFR ------------------------------------------------------------------ Moody's Investors Service said that DIRECTV Financing, LLC's (DirecTV) Ba3 corporate family rating and DirecTV's Ba3 senior secured rating were unaffected by the company's decision to add $1.4 billion of senior secured notes to the company's existing senior secured notes issued earlier this year. The proposed issuance by DIRECTV Financing, LLC (DirecTV) (Ba3 CFR) and DIRECTV Financing Co-Obligor, Inc. are both indirect wholly owned subsidiaries of DIRECTV Entertainment Holdings LLC. The notes will be pari passu to the company's existing $500 million senior secured revolving credit facility due 2026 and $3.9 billion senior secured term loan due 2027. Proceeds will be used to pay off the remaining outstanding TPG senior preferred equity and a portion of the AT&T junior preferred equity. The add on to the secured notes will increase indebtedness for DirecTV as Moody's do not consider the preferred equity to be debt, but a structured distribution agreement between the owners. However, Moody's expect the transaction will lower the company's cost of capital given the much higher preferred dividend rates for the TPG and AT&T preferred stock. In addition, the increased debt is also mitigated by better than expected performance since the closing of the 30% sale to TPG, including better than expected subscriber retention, cost savings and cash flows. Those excess cash flows resulted in significant paydown of the TPG preferred equity well ahead of forecasts. The result is also better than expected leverage metrics. Despite the higher debt level associated with the increase in secured notes, the company is not amending its financial policies including target leverage of 1.0x. Additionally, the Board has agreed in the Operating Agreement to not recommend incurring incremental third party debt in the future that would result in the total leverage ratio exceeding 1.5x, and Moody's expect the company will achieve and sustain leverage comfortably under 1.5x (with Moody's adjustments). DirecTV's Ba3 CFR reflects the company's modest financial leverage, which Moody's expects to remain under 1.5x debt to EBITDA (including Moody's adjustments) over the next 12 to 18 months, and strong free cash flow generation over the medium term. The Ba3 CFR also reflects DirecTV's significant scale and programming content advantage given its large subscriber base which will continue to advantage the company in negotiating content costs relative to peers, albeit, offset by the continuing secular decline of the US pay-tv market. However, DirectTV's subscriber losses have been disproportionality greater than industry metrics in recent years, which Moody's believes is directly related to underinvestment in marketing and retention capital under the ownership and direction of AT&T. This likely led to higher priced offerings than competitors starting in 2018, which in turn led to particularly high and disproportionate net subscriber losses and declines in revenue. Moody's expects a continued decline in DirecTV DBS subscribers, due to the time it will take to reverse the company specific negative trend and the impact on the brand, as well as the ongoing overall industry secular pressures. However, Moody's anticipate that losses will trend more in-line with industry metrics over several years as the company strengthens its marketing and implements smarter customer retention initiatives. Stronger than expected performance over the last few months increases Moody's confidence that this is achievable. As a result of the company specific exposure and industry wide secular pressure, the company's CFR is constrained at the Ba3 level. Moody's anticipate that the company will strike a harder line with cable networks and broadcast TV groups over rising carriage affiliate fee rates which will help to manage margins. Moody's expects promotional offerings to be used as bargaining power to help reduce churn. But as the NFL Sunday Ticket contract is not currently expected to be renewed or at least not with exclusivity in FY2023, if the company loses the NFL package completely, Moody's expects a moderate spike in churn as loyal sports customers may migrate to other providers with the NFL offering. Moody's believes that a new materially less costly non-exclusive NFL Sunday Ticket agreement could result in a more favorable outcome but is not considered in Moody's analysis considering the uncertainty. Moody's also believe that DirecTV has potential to benefit from being a provider of last resort as wireline cable and telecom companies de-emphasize and even eliminate their pay TV offerings as subscriber penetration sinks to levels inconsistent with profitability over the medium to long-term. This would create a longer tail for revenues and bolster the companies leverage with networks. The top line secular pressures will continue to be a headwind for the linear television industry and Moody's believes that beyond subscriber retention, emphasis on cost savings will be the primary focus. The company's new streaming product will help offset declines at DirecTV and generate new customer growth as the company will rely on its nationwide internet-delivered premium product. Moody's anticipates that subscriber acquisition and equipment costs will be materially lower than the DBS service, which can be passed on to consumers to alleviate secular pressures. The upfront costs will be more favorable relative to DirecTV's DBS service due to less equipment and self-installation capability, however, growth will remain a question as overall vMVPD growth has sputtered. Moody's is also concerned that high priced pay TV in any form other than full a-la-carte will continue to face significant secular headwinds. The credit profile is supported by the expected conservative financial policy driven by AT&T, and in Moody's view, key debt protection terms for debtholders that provides significant comfort that investors face little self-inflicted financial policy event risks. With DirecTV majority owned by AT&T, Moody's believes that the financial policy will be managed conservatively and will mitigate any event risks associated with the minority owned financial sponsor. The debt protections include a change of control provision being triggered if AT&T's economic ownership stake declines to under 50% or under 50% controlling governance rights. Limitations on debt incurrence, an excess cashflow sweep and restricted payments are also key terms that provide credit protection and support for the credit ratings. Moody's expects DirecTV to have a very good liquidity profile supported by strong free cash flow generation and a fully undrawn $500 million revolving credit facility. Moody's expects that the company will maintain cash balances around $300 million with the excess of the company's annual free cash flow to be allocated for debt repayment and distributions to the company's shareholders. The company's term loan amortizes 10% annually and includes a 50% excess cash flow sweep with first lien net leverage-based step-downs to 25% and 0%. The revolving credit facility also contains a springing first lien net leverage ratio covenant of 2.25x, tested when more than 35% of the revolver is drawn, which Moody's expects the company to maintain substantial cushion. The notes have a change of control provision, restrictions on additional indebtedness and paying dividends. The stable outlook reflects Moody's expectations of lower subscriber losses over the next 12 to 18 months. Moody's expect subscriber losses to improve closer to industry-wide metrics and average high single digits to low teens losses over the next 2 years. While sales and EBITDA will remain pressured for the next couple of years, Moody's expect the company to generate strong annual FCF to reduce debt to mitigate subscriber losses over the medium term. With moderating and stable capital expenditures of about 1% of revenue annually for the projected period, Moody's expect the company to use cash for debt repayment and maintain debt to EBITDA (Moody's adjusted) under 1.5x. Given the secular pressures causing substantial subscriber declines within the company's DirecTV Pay-TV and U-Verse businesses, the company's ratings are constrained at the Ba3 level so a ratings upgrade is unlikely. However, an upgrade could occur if the company invested in businesses consistent with material revenue growth and leverage (Moody's adjusted debt to EBITDA) remained low. Ratings could be downgraded if secular pressures accelerate further resulting in more rapid subscriber declines in the company businesses, if leverage (Moody's adjusted debt to EBITDA) is sustained above 2.00x, or if the company is controlled by private equity owners. DIRECTV Financing, LLC is comprised of the video entertainment services operations of the AT&T Video Entertainment Business, which include AT&T's DIRECTV, U-Verse video, AT&T TV, and WatchTV operations in the United States and was created when TPG bought a 30% stake from AT&T in July 2021. As of the last twelve months ended September 30, 2021, DirecTV generated about $26.5 billion of total revenue. DIVERSITECH HOLDINGS: S&P Cuts ICR to 'B-' on Elevated Leverage --------------------------------------------------------------- S&P Global Ratings lowered its rating on U.S.-based DiversiTech Holdings Inc. to 'B-'. At the same time, S&P assigned its 'B-' issue-level rating to the company's proposed first-lien debt, with a '4' recovery rating, and its 'CCC' issue-level rating to the company's proposed second-lien debt, with a '6' recovery rating. DiversiTech, a manufacturer and distributor of heating, ventilation, and air conditioning (HVAC) components, recently entered into a definitive agreement to be purchased by a company controlled by Partners Group Holding AG. The acquisition will be partially funded with a $725 million first-lien term loan and a $240 million second-lien term loan, both issued by DiversiTech's direct parent Icebox Holdco III Inc, resulting in pro forma leverage in excess of 8x. S&P said, "We expect DiversiTech's financial policy to remain aggressive, such that it prioritizes business growth over debt reduction and results in adjusted leverage in excess of 7x. Over the past few years, DiversiTech completed several tuck-in and midsize acquisitions, mostly financed by debt. We believe the company's financial policy will remain aggressive, such that it will continue prioritizing business growth--both organic and inorganic--before reducing debt. Specifically, we believe that incremental EBITDA provided by acquisitions will be outweighed by debt use to acquire them, leading to leverage remaining above 7x through at least 2022.1" The purchase of DiversiTech by Partners highlights more stable demand characteristics for DiversiTech's products, which are less prone to economic cycles because of its high exposure to nondiscretionary repair and replacement end markets. DiversiTech is the leading provider of a comprehensive portfolio of products and components for the residential and light commercial heating, ventilation, air conditioning and refrigeration (HVAC/R) aftermarket. It has top market position in key product categories for parts, supplies and accessories used by HVAC/R technicians and is the largest player in a highly fragmented market with approximately three times the scale of the next largest competitor and nearly total channel coverage. S&P believes while there may be periods of lessened demand for the company's products, the swings will be less severe than other discretionary high-value building products (such as composite decking, cabinetry, windows, etc.), and the long-term growth prospects are favorable. DiversiTech's ability to manage through the inflationary cost environment and pass through higher costs will be key to future earnings and cash flow. S&P said, "We believe the company can pass through increased costs, but with some lag. Elevated costs for commodities (e.g., resins and metals), freight and labor could lead temporarily compress margins in 2021 and 2022. We expect strong sales volumes and improved price realizations to help drive year-over-year earnings growth." S&P said, "The outlook is stable, reflecting elevated leverage of more than 8x pro forma for the transaction, which we believe will remain elevated over the next 12 months and result in a heightened risk of downgrade over that time. "We could lower the rating over the next 12 months if we were to view its capital structure as unsustainable. We believe this could occur if EBITDA interest coverage were to approach parity. A scenario in which liquidity is considered less than adequate could also lead us to lower the rating. "We could raise the rating on DiversiTech if adjusted leverage were to approach 6x over the next 12 months, which we believe could occur as a result of a combination of a less aggressive financial policy--with regard to either acquisitions or dividends--or, less likely, an unexpectedly large expansion of EBITDA margins into the mid-20% level in 2022." DJD LAND PARTNERS: Case Summary & 2 Unsecured Creditors ------------------------------------------------------- Debtor: DJD Land Partners, LLC 13901 Midway Road, Suite 102 Dallas, TX 75244 Business Description: DJD Land Partners, LLC is a Single Asset Real Estate debtor (as defined in 11 U.S.C. Section 101(51B)). Chapter 11 Petition Date: December 7, 2021 Court: United States Bankruptcy Court Southern District of Texas Case No.: 21-32190 Debtor's Counsel: Eric A. Liepins, Esq. ERIC A. LIEPINS 12770 Coit Road Suite 850 Dallas, TX 75251 Tel: 972-991-5591 Fax: 972-991-5788 Email: eric@ealpc.com Estimated Assets: $0 to $50,000 Estimated Liabilities: $1 million to $10 million The petition was signed by Tim Barton, president of managing member. A full-text copy of the petition containing, among other items, a list of the Debtor's two unsecured creditors is available for free at PacerMonitor.com at: https://www.pacermonitor.com/view/MQRI2WI/DJD_Land_Partners_LLC__txnbke-21-32190__0001.0.pdf?mcid=tGE4TAMA DONALD SCHROEDER: Court to Confirm Plan Over Omni Objection ----------------------------------------------------------- The United States Bankruptcy Court for the Middle District of Florida, Jacksonville Division, issued a memorandum opinion dated December 1, 2021, finding that the bankruptcy-exit plan for Donald J. Schroeder and Deirdre C. Schroeder meets all the requirements for confirmation under 11 U.S.C. Section 1129(b). A dispute arose from a right of first refusal on an oceanfront home located in Fernandina Beach, Florida. The home is the Debtors' homestead. The Debtors propose to sell the homestead to the highest bidder and use a portion of the proceeds to fund their plan. Omni Amelia Island, LLC, contends the Debtors filed their case in bad faith solely to avoid Omni's right of first refusal which was exercised prepetition and which resulted in litigation. Omni argues the Court should reject the Debtors' plan and grant stay relief for a variety of reasons including the Debtors' alleged bad faith. Omni complains that the Debtors' Plan will result in a windfall to the Debtors and primarily benefits insiders. In lieu of confirming the Plan, Omni asks the Court to instead grant relief from the stay to compel the Debtors to sell the Property to Omni for $3,500,000. Under the Plan, if the Court assumes the Property is sold for $9,000,000, which is less than the stipulated value, secured creditors will be paid in full and unsecured creditors will receive $600,000. The Debtors, as Omni points out, will receive proceeds of approximately $5,000,000 but this value comes from the Debtors' exempt homestead. The Court held that the Debtors cannot receive a windfall from the value of their own exempt property, which they are under no obligation to devote to creditors. Alternatively, if the Court rejected the Plan and granted Omni stay relief, Omni would receive property worth over $5,500,000 more than what it will pay -- truly a windfall -- while creditors other than Regions Bank and the Nassau County Tax Collector would receive nothing, the Court pointed out. "It is hard to imagine a worse result for the estate's creditors," the Court concluded. A full-text copy of the decision is available at https://tinyurl.com/57pdjm3b from Leagle.com. Donald J. Schroeder and Deirdre C. Schroeder sought Chapter 11 protection (Bankr. M.D. Fla. Case No. 21-00707) on March 25, 2021. The Debtors tapped Jason Burgess, Esq., as counsel. DRI HOLDING: S&P Assigns 'B-' Issuer Credit Rating, Outlook Stable ------------------------------------------------------------------ S&P Global Ratings assigned its 'B-' issuer credit rating to web-to-print provider DRI Holding Inc. S&P also assigned its 'B-' issue-level rating and '3' recovery rating to the first-lien credit facility. The '3' recovery rating indicates its expectation for meaningful (50%-70%; rounded estimate: 65%) recovery in the event of payment default. S&P's 'B-' issuer credit rating on DRI reflects its expectation that the company will continue to organically grow its business and web to print (W2P) product offerings, sustain healthy EBITDA margins relative to commercial printing peers, and maintain moderate levels of FOCF. These factors are somewhat offset by the substantial debt burden under the proposed transaction, its small scale and niche position in a competitive and highly fragmented commercial printing industry, the low barriers to entry in that industry, and the low switching costs for clients. The company's financial leverage will be elevated following the recapitalization. DRI's proposed financing comprises an undrawn $50 million first-lien revolver, a $340 million first-lien term loan, and $140 million second-lien term loan (not rated). Proceeds will be used to fund the leveraged buyout of the company by its new financial sponsor, Sycamore Partners. S&P said, "With the additional debt burden, we expect S&P Global Ratings-adjusted leverage to be in the mid-8x area in 2021, declining to the low-7x area in 2022 through organic revenue growth, incremental revenue from the full-year impact of recent acquisitions, and earnings growth. Importantly, we expect the company's cash generation will remain meaningfully positive even with the additional interest expense from its capital structure due to growing EBITDA generation, minimal working capital requirements, and modest capital expenditures (capex). As a result, we forecast FOCF to debt in the 2%-4% range in 2021 and in the 5% area in 2022." Competition among U.S. commercial printers remains intense. DRI operates in the U.S. print industry, where many traditional printing companies are reporting organic revenue declines every year due to the shift in client advertising and marketing toward digital formats and away from print-based products. S&P believes DRI's exposure to these industry headwinds may cause sales and earnings volatility as it scales up its platform and the industry consolidates. However, we believe the company will be somewhat insulated from these trends due to its W2P operations, which benefit from the shift in client demand to online storefronts from brick-and-mortar retailers. Additional risks to the business include its exposure to small to midsized business (SMB) marketing spending trends, limited opportunities for product quality differentiation, and the potential for increased competition in the short-run SMB W2P market from larger competitors, such as Cimpress PLC. The company has a significant dependence on the marketing spending of SMBs. DRI generates a significant portion of its revenue from marketing materials, such as display and signage, stickers and labels, professional forms and stationery, and other specialty print items, that it produces for businesses with less than 500 employees. In S&P's view, this product portfolio and client base are likely to be more volatile than traditional print-based revenues sold to larger corporations in the industry. Specifically, short-run print-based marketing materials are subject to discretionary client spending and are generally not purchased on a contractual basis. These factors, combined with the low switching costs for clients in this industry, can result in volatile client spending, especially during periods of economic contraction. Nevertheless, DRI has continued to grow its organic revenue and shown favorable client retention rates because of its marketing efforts, growing portfolio of products, and the ongoing shift of clients toward online offerings from brick-and-mortar retail print shops. In addition, DRI has be able to utilize its variable cost structure to partially offset historical swings in client demand, such as those experienced during the pandemic in 2020, and thus maintain positive EBITDA. S&P said, "We expect DRI will continue its M&A strategy, which may include incurring additional debt. The company has shown a track record of supplementing its organic revenue growth through an active acquisition strategy. Specifically, DRI buys established brands with stable customer bases and integrates them with its own platform through data-driven marketing techniques, production efficiencies, and product optimization. We expect DRI to continue expanding its product portfolio--as exemplified by its recent acquisition of Signs.com--over the coming years. However, we believe that even with these acquisitions the company will remain a relatively small player in a large, fragmented SMB W2P industry. From a financial perspective, we expect DRI to use incremental debt, along with cash on hand, to fund these acquisitions. While acquired revenue and EBITDA may be meaningful, we expect future acquisitions will be keep leverage elevated, despite earnings growth and FOCF generation. However, we have not explicitly included any future acquisitions in our forecast due to the uncertainty of timing and the unknown magnitude of these transactions. "The stable outlook reflects our expectation that DRI will benefit from the ongoing shift to online printing and marketing solutions from offline offerings resulting in solid organic revenue growth. We expect S&P Global Ratings-adjusted leverage in the low-7x area and FOCF to debt of about 5% in 2022." S&P could lower the rating on DRI over the next 12 months if: -- The company is generating sustained negligible free operating cash flow; -- S&P expects it to breach one of its covenants; or -- Operating performance worsens such that S&P views the capital structure as unsustainable. These scenarios could result from adverse economic conditions or intense industry competition that cause significant reductions in client order volumes, pricing volatility, and cost pressures. They could also result from poorly timed debt-funded acquisitions or substantial special dividends to shareholders. Although unlikely over the next 12 months, S&P could raise the rating if the company is able to: -- Consistently increases its organic revenue and improves the scale of its operations; -- Improve its FOCF to debt above 5% and leverage below 6x; and -- S&P believes the company's financial sponsor owners are committed to maintaining leverage at these levels. EPD INVESTMENT: John Kirkland Ordered to Testify in March 2022 -------------------------------------------------------------- The U.S. Bankruptcy Court for the Central District of California ordered John C. Kirkland and Poshow Ann Kirkland to appear on March 14, 2022, at 9:00 a.m., in the U.S. Bankruptcy Court, Courtroom 1568, 255 E. Temple Street in Los Angeles, California 90012, to testify in the bankruptcy case (or adversary proceeding). Further information, including instruction to appear by remote video transmission via Zoom.gov, contact Ryan F. Coy, at Brutzkus Gubner, at (818) 827-9141 or rcoy@bg.law. The order was entered in the adversary proceeding in EPD Investment Co., LLC's Chapter 7 case -- In re Jason M. Rund, Chapter 7 Trustee v. Kirkland, et al., Adv. No. 2:12-ap-02424-ER. EPD Investment Co., LLC, along with Jerrold S. Pressman, filed for Chapter 7 bankruptcy (Bankr. C.D. Cal. Case No. 10-62208) on Dec. 7, 2010. FIRST CHOICE: Seeks to Employ Adam Law Group as New Counsel ----------------------------------------------------------- First Choice Healthcare Solutions, Inc. and its affiliates seek approval from the U.S. Bankruptcy Court for the Middle District of Florida to hire Adam Law Group, P.A. to substitute for Akerman, LLP. The firm's services include: (a) advising the Debtors with respect to their powers and duties under the Bankruptcy Code; (b) preparing all necessary pleadings associated with the administration of the Debtors' Chapter 11 cases; (c) representing the Debtors at all court proceedings; (d) protecting the interests of the Debtors in all matters pending before the court; and (e) representing the Debtors in negotiations with creditors and in the preparation of a disclosure statement and plan of reorganization. Thomas Adam, Esq., the firm's attorney who will be providing the services, will be paid at his hourly rate of $350. The Debtor paid the firm a retainer fee of $15,000. Mr. Adam disclosed in a court filing that he is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. The firm can be reached at: Thomas C. Adam, Esq. Adam Law Group, P.A 326 N. Broad Street, Suite 208 Jacksonville, FL 32202 Phone: (904) 329-7249 Fax: (904) 615-6561 Email: tadam@adamlawgroup.com About First Choice Healthcare Solutions Headquartered in Melbourne, Fla., First Choice Healthcare Solutions -- https://www.myfchs.com -- is implementing a defined growth strategy aimed at building a network of localized, integrated care platforms comprised of non-physician-owned medical centers, which concentrate on treating patients in the following specialities: orthopaedics, spine surgery, neurology, interventional pain management and related diagnostic and ancillary services in key expansion markets throughout the Southeastern U.S. First Choice Healthcare Solutions and its affiliates concurrently filed voluntary petitions for relief under Chapter 11 of the Bankruptcy Code (Bankr. M.D. Fla. Lead Case No. 20-03355) on June 15, 2020. Phillip J. Keller, interim chief executive officer and chief financial officer, signed the petitions. Judge Grace E. Robson oversees the Debtors' bankruptcy cases while Aaron Cohen is the Subchapter V trustee appointed in the case. At the time of the filings, First Choice Healthcare Solutions had total assets of $1,283,553 and total liabilities of $1,855,427; First Choice Medical Group of Brevard, LLC had total assets of $2,260,116 and total liabilities of $3,016,161; FCID Medical, Inc. had total assets of $1,832,489 and total liabilities of $642,515; and Marina Towers, LLC had total assets of $6,149,380 and total liabilities of $6,558,440. The Debtors tapped Adam Law Group, P.A. as bankruptcy counsel and CBIZ MHM, LLC as accountant. Trenam Kemker Scharf Barkin Frye O'Neil & Mullis, P.A., Patel Law Group, P.A., and Sichenzia Ross Ference, LLP serve as special counsel. FUSE MEDICAL: Chief Financial Officer Resigns --------------------------------------------- William E. McLaughlin, III has resigned as chief financial officer and as a director of the Board of Directors of Fuse Medical, Inc. as well as from all other positions Mr. McLaughlin held with the company and its subsidiaries. Mr. McLaughlin had no disagreements with Fuse Medical on any matter related to the company's operations, policies or practices. On Dec. 3, 2021, Fuse Medical engaged CFO Consulting Partners, LLC to provide interim chief financial officer services, which include oversight and support to the current financial and operational processes and capabilities of the company, while also providing organizational assessments and tool development while the company searches for a permanent CFO. About Fuse Medical Headquartered in Richardson, Texas, Fuse Medical, Inc. -- www.fusemedical.com -- is a manufacturer and distributor of innovative medical devices for the orthopedic and spine marketplace. The Company provides a comprehensive portfolio of products in the orthopedic total joints, sports medicine, trauma, foot and ankle space, as well as, degenerative and deformity spine, osteobiologics, wound care, and regenerative medicine products. Fuse Medical reported a net loss of $1.43 million for the year ended Dec. 31, 2020, compared to a net loss of $3.32 million for the year ended Dec. 31, 2019. As of Sept. 30, 2021, the Company had $18.02 million in total assets, $21.14 million in total liabilities, and a total stockholders' deficit of $3.13 million. GBG SEAN JOHN: Sean Combs Is Stalking Horse Bidder for Brand ------------------------------------------------------------ Jeremy Hill of Bloomberg News reports that hip-hop entrepreneur Sean "Diddy" Combs has bid $3.3 million to buy the assets of Sean John, the fashion and lifestyle brand he founded in 1998, out of bankruptcy. GBG USA Inc., a bankrupt brand management firm, owns 90% of the Sean John brand through a joint venture with Combs, according to court papers filed Wednesday. GBG has been sounding out buyers for Sean John since May 2021. An entity affiliated with Combs has been named the so-called stalking-horse bidder for Sean John, setting a floor for further bids, court papers show. GBG USA Inc. GBG USA, Inc. is a company incorporated under the laws of Delaware and is an indirect wholly-owned subsidiary of Global Brands Group Holding Limited (SEHK Stock Code: 787). It is primarily engaged in operating the wholesale and direct-to-consumer footwear and apparel business in North America. Global Brands Group Holding Limited is a branded apparel and footwear company. It designs, develops, markets and sells products under a diverse array of owned and licensed brands. The Group's European wholesale business operates under legal entities entirely separate and independent from the wholesale business in North America. It primarily supplies apparel, footwear and accessories to retailers and consumers across Europe under licenses separately entered into by the European entities of the Group. The Group's global brand management business operates on a different business model and is distinctly separate from the wholesale businesses in North America and Europe. GBG USA and 10 affiliates sought Chapter 11 protection (Bankr. S.D.N.Y. Lead Case No. 21-11369) on July 29, 2021. In its petition, GBG listed between $1 billion and $10 billion in both assets and liabilities. The cases are handled by Judge Michael E. Wiles. The Debtors tapped Willkie Farr & Gallagher LLP as legal counsel, Ankura Consulting Group LLC as financial advisor, and Ducera Partners LLC as investment banker. Alan M. Jacobs, president of AMJ Advisors LLC, serves as the Debtor's chief strategy officer. Prime Clerk, LLC is the claims and noticing agent and administrative advisor. Moses & Singer, LLP serves as legal counsel to the first lien admin agent, first lien collateral agent and second lien collateral agent. The pre-bankruptcy first lien lenders are represented by Linklaters, LLP while ReStore Capital, LLC, as DIP administrative and collateral agent, is represented by Dechert LLP. The U.S. Trustee for Region 2 appointed an official committee of unsecured creditors on Aug. 16, 2021. Stroock & Stroock & Lavan, LLP and FTI Consulting, Inc. serve as the committee's legal counsel and financial advisor, respectively. Prime Clerk, LLC is the committee's information agent. About Sean John Sean John is the apparel brand founded by musical artist, record producer and entrepreneur Sean Combs. On Dec. 1, 2021, GBG Sean John LLC filed a voluntary petition for relief under Chapter 11 of the United States Bankruptcy Code. The Debtor's case is jointly administered under GBG USA's Case No. 21-11369. In its petition, GBG Sean John listed estimated assets of between $500 million to $1 billion and estimated liabilities of between $1 billion to $10 billion. GC EOS BUYER: $100MM Term Loan Add-on No Impact on Moody's B3 CFR ----------------------------------------------------------------- Moody's Investors Service said that GC EOS Buyer, Inc.'s (d/b/a BBB Industries) ratings, including the B3 senior secured and B3 corporate family rating, and stable outlook are unaffected at this time following the company's proposed $100 million incremental first lien term loan. Proceeds will be used to fund acquisitions and for general corporate purposes. Following the fungible add-on, the aggregate size of the company's first lien term loan (due 2025) will increase to about $954 million. Pro forma for the transaction, BBB Industries' debt/LTM EBITDA (Moody's adjusted) is expected to increase about a quarter turn to approximately 6.3x at September 30, 2021. Despite this uptick in leverage, Moody's expects BBB to maintain strong operating performance through next year, such that debt/EBITDA improves to about 5.5x by the end of 2022. Moody's anticipates that 5% organic revenue growth in 2022 and relatively steady margins will contribute to lower leverage over the next twelve months. Moody's expects BBB will remain opportunistic in pursuing tuck-in acquisitions to expand its geographic diversity and channel presence. Moody's expects BBB to fund these purchases through a mix of free cash flow and debt. The company is expected to maintain adequate liquidity through 2022 with moderate free cash flow of about 3% of total adjusted debt and full availability under its $150 million asset-based revolver. Headquartered in Daphne, Alabama, GC EOS Buyer, Inc. (d/b/a BBB Industries) is a supplier of primarily remanufactured automotive replacement parts to North America automotive and light truck OEMs and aftermarket. The company's main products include alternators, starters, brake calipers, power steering components and turbochargers. For the twelve-month period ended September 31, 2021 the company's net revenue was approximately $853 million. GCP APPLIED TECHNOLOGIES: S&P Places 'BB' ICR on Watch Positive --------------------------------------------------------------- S&P Global Ratings placed all of its ratings on GCP Applied Technologies Inc., including its 'BB' issuer credit rating, on CreditWatch with positive implications. S&P plans to resolve the CreditWatch upon the completion of the transaction. The CreditWatch placement follows Compagnie de Saint-Gobain S.A.'s announcement that it signed a definitive agreement to acquire GCP for about $2.3 billion. S&P said, "We expect the transaction to close in the second half of 2022. At that time, we will likely raise our rating on GCP, to equalize it with our rating on Saint-Gobain, and then withdraw all of our ratings on the company assuming its debt has been fully repaid." S&P said, "We expect to resolve the CreditWatch following the completion of the transaction. We will monitor any developments related to the transaction, including the receipt of necessary shareholder approvals and regulatory clearances. We expect that the transaction will be credit positive for GCP given our much stronger investment-grade rating on Saint-Gobain and its much larger scale. If the transaction is completed, we will likely raise our rating on GCP to equalize it with our rating on Saint-Gobain. We will withdraw our ratings on GCP upon the close of transaction after Saint-Gobain repays its debt. "If the transaction does not close as contemplated, we will likely affirm our 'BB' rating on GCP, remove our ratings from CreditWatch, and assign a stable outlook, assuming the company's operating performance and credit measures remain within our expectations." GLOBAL CARIBBEAN: Jan. 12, 2022 Disclosure Statement Hearing Set ---------------------------------------------------------------- On November 29, 2021, Debtor Global Caribbean, Inc., filed with the U.S. Bankruptcy Court for the Southern District of Florida a Disclosure Statement and Plan. On December 3, 2021, Judge Scott M. Grossman ordered that: * Jan. 12, 2022 at 2:30 p.m. at the United States Bankruptcy Court, 299 E. Broward Blvd. Courtroom: 308, Fort Lauderdale, FL 33301 is the hearing to consider approval of the disclosure statement. * Jan. 5, 2022 is the last day for filing and serving objections to the disclosure statement. * Dec. 13, 2021 is the deadline for service of order, Disclosure Statement and Plan. A full-text copy of the order dated Dec. 3, 2021, is available at https://bit.ly/3IrAEFM from PacerMonitor.com at no charge. Attorneys for Debtor: Brian S. Behar, Esq. Behar, Gutt & Glazer, P.A. DCOTA, Suite A-350 1855 Griffin Road Fort Lauderdale, FL 33004 Phone: (305) 931-3771 Email: bsb@bgglaw.com About Global Caribbean Global Caribbean, Inc. sought protection under Chapter 11 of the Bankruptcy Code (Bankr. S.D. Fla. Case No. 21-14402) on May 4, 2021. In its petition, the Debtor disclosed total assets of up to $500,000 and total liabilities of up to $1 million. Judge Scott M. Grossman oversees the case. Brian S. Behar, Esq., at Behar, Gutt & Glazer, P.A., is the Debtor's legal counsel. GLOBAL ENERGY: Wins Cash Collateral Access Thru Dec 15 ------------------------------------------------------ The U.S. Bankruptcy Court for the District of Maryland has entered a consent order between and among Global Energy Services, LLC, PNC Bank, National Association, United States Surety Company, U.S. Specialty Insurance Company, Roc Funding Group LLC and Fox Capital Group, Inc. authorizing the Debtor to use cash collateral on an interim basis and provide adequate protection. The Debtor requires immediate use of cash collateral to fund its operating expenses. United States Surety Company and U.S. Specialty Insurance Company, PNC Bank, National Association, Small Business Administration, ROC Funding Group LLC, Fox Capital Group, Inc., EBF Holdings, LLC d/b/a Everest Business Funding, Unique Funding Solutions, LLC, NewCo Capital Group VI LLC, Spartan Business Solution, LLC. On December 21, 2015, as a condition precedent to extending surety credit, Sureties and the Debtor entered into a General Indemnity Agreement with Sureties whereby the Debtor agreed to, inter alia, indemnify and hold Sureties harmless for all losses, costs, demands, judgments resulting from issuing bonds for the Debtor that were required for the Debtor to perform its business. As of the Petition Date, Sureties have a liquidated loss in the amount of $283,995, plus unliquidated penal exposure as a result of issuing payment and performance bonds to the Debtor. On May 8, 2017, the Debtor entered into a $2,000,000 revolving loan transaction with PNC. The PNC Loan is evidenced by, among other things, (i) a Committed Line of Credit Note, dated May 8, 2017, in the original principal amount of $2,000,000, executed and delivered by the Debtor to the order of PNC; (ii) Loan Agreement, dated March 8, 2017, by and between the Debtor and PNC, (iii) a Security Interest granting PNC a lien on all assets of the Debtor. PNC perfected its security interest by filing a UCC-1 Financing Statement with the SDAT on June 6, 2017. As of the Petition Date, the Debtor owed PNC a total of approximately $2,029,000. In addition to this amount, the Debtor is liable to PNC in the approximate amount of $1,363,000 as a result of the execution by the Debtor of a Guaranty and Suretyship Agreement dated May 10, 2017 pursuant to which the Debtor absolutely and unconditionally guaranteed the obligations owed by 20 W. Aylesbury Road, LLC to PNC. On June 24, 2020, the Debtor executed a Promissory Note in favor of the SBA in the principal amount of $150,000. On July 30, 2021, the SBA and Debtor entered into a First Modification of Note, increasing the loan amount to $500,000, and the Debtor executed an Amended Security Agreement for the benefit of the SBA. The SBA Amended Security Agreement grants the SBA a lien on all tangible and intangible assets of the Debtor. The SBA's security interest was perfected by the filing of a UCC1 Financing Statement with the SDAT on July 4, 2020. As of the Petition Date, the Debtor owed the SBA a total of approximately $500,000. The Debtor is permitted to use cash collateral from the date of the Interim Order through and including December 15, 2021 at 11:59 p.m., or until an "Event of Default", whichever comes first. The Debtor and Consenting Parties may extend the use of cash collateral, without further Court order, upon the agreement of the Debtor and Consenting Parties, which will be evidenced by a Line filed with the Court extending the time period for use of cash collateral. As adequate protection for the use and/or diminution of the interests of PNC in the cash collateral, PNC will, immediately upon entry of the Interim Order, be entitled to debit the Debtor's operating account existing on the Petition Date for the amount of $22,500, as an adequate protection payment for the obligations owed by the Debtor to PNC. Further, pursuant to Section 361 of the Bankruptcy Code and subject to the "carve-out," the Debtor grants in favor of PNC, Sureties, SBA, EBF Holdings, LLC d/b/a Everest Business Funding, Fox Capital Group, Inc., Unique Funding Solutions, LLC, NewCo Capital Group VI LLC, ROC and Spartan Business Solution, LLC, and any other unknown creditors that may have an interest in cash collateral, replacement liens in all assets of the Debtor which are or have been acquired, generated or received by the Debtor subsequent to the Petition Date, and proceeds of same, to the same extent, priority and validity as their pre-petition liens, to the extent Debtor's use of the cash collateral results in a decrease in the value of their interests in the cash collateral. The carve-out means statutory fees payable to the U.S. Trustee pursuant to 28 U.S.C. section 1930(a)(6). These events constitute an "Event of Default: a. a breach or failure to comply with any term, covenant, representation, warranty or requirement of the PNC Loan Documents or the Indemnity Agreement (except monetary defaults contained therein); b. a breach or failure to comply with any term or condition of the Interim Order, or any other Court order; c. the granting in favor of any party other than PNC, Sureties, SBA, EBF, Fox, Unique, NewCo, ROC and Spartan, and any other unknown creditors that may have an interest in Cash Collateral of a security interest in or lien upon any of the Cash Collateral or the Debtor's estate, or a claim against the Debtor having priority over the security interests, liens or claims in favor of PNC, Sureties, SBA, EBF, Fox, Unique, NewCo, ROC and Spartan, and any other unknown creditors that may have an interest in Cash Collateral, except to the extent that such party had a security interest in or lien upon any property of the Debtor on the Petition Date which had priority over the security interests, liens or claims of PNC, Sureties, SBA, EBF, Fox, Unique, NewCo, ROC and Spartan, and any other unknown creditors that may have an interest in Cash Collateral existing on the Petition Date; d. entry of an order converting the Case to a case under chapter 7 of the Bankruptcy Code; e. entry of an order appointing a trustee or an examiner with the expanded powers in this Case; or f. any stay, reversal or rescission. A final hearing to consider the Debtor's request to access cash collateral is scheduled for December 13 at 2 p.m. A copy of the order is available at https://bit.ly/3ow5SDL from PacerMonitor.com. About Global Energy Services LLC Global Energy Services, LLC filed its voluntary petition for relief under Chapter 11 of the Bankruptcy Code (Bankr. D. Md. Case No. 21-17305) on Nov. 19, 2021, listing as much as $10 million in both assets and liabilities. Judge Nancy V. Alquist presides over the case. Gary R. Greenblatt, Esq., at Coon & Cole, LLC represents the Debtor as legal counsel. PNC Bank, National Association, as secured creditor, is represented by: Michael D. Nord, Esq. GEBHARDT & SMITH, LLP One South Street, Suite 2200 Baltimore, MD 21202 Tel No: 410-385-5072 Email: mnord@gebsmith.com United States Surety Company and U.S. Specialty Insurance Company, as secured creditors, are represented by: Michael S. Zisa, Esq. Peckar & Abramson, P.C. 2055 L. Street, NW, Suite 750 Washington, DC 20036 Tel No: 202-293-8815 Email: mzisa@pecklaw.com ROC Funding Group LLC and Fox Capital Group, Inc., as secured creditors, are represented by: Shanna M. Kaminski, Esq. Kaminski Law, PLLC PO Box 725220 Berkley, MI 48072 Tel No: 248-462-7111 Email: skaminski@kaminskilawpllc.com GRUPO AEROMEXICO: Court OKs Exit Financing Commitment Letters ------------------------------------------------------------- Reuters reports that Mexican airline Aeromexico said late on Monday a bankruptcy court has approved its commitment letters regarding exit financing and set a confirmation hearing for the plan for Jan. 18, 2022. Aeromexico filed for Chapter 11 bankruptcy protection in the United States last year, and has been undergoing a restructuring process with creditors and investors. "The joint proposal has the support of our strategic partner Delta Air Lines and a solid group of long-term Mexican investors to meet requirements for foreign investment," Aeromexico said in a statement filed to Mexico's stock exchange. "Aeromexico will continue to work with all key stakeholders to obtain court approval and continues to work to exit the restructuring process under Chapter 11 as soon as possible." 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. GUIDEHOUSE LLP: S&P Withdraws 'B' Issuer Credit Rating ------------------------------------------------------ S&P Global Ratings withdrew all of its ratings on Guidehouse LLP, including its 'B' issuer credit rating, at the issuer's request. At the time of the withdrawal, S&P's outlook on the company was stable. Guidehouse refinanced all of its rated debt with the proceeds from a privately placed debt issuance (not rated). HERTZ CORP: Attorneys Expand Wrongful Theft Charges --------------------------------------------------- Louis Llovio of Business Observer reports that lawyers representing people accusing The Hertz Corp. of incorrectly reporting rented cars stolen are expected to expand their case Monday, Dec. 6, 2021, with several new filings. Monday's, December 6, 2021, filings will include "a significant number of new Hertz false arrest victims" and affidavits from several new litigants "with particularly egregious and explosive cases," according to a spokeswoman for Philadelphia attlorney Francis Malofiy. Malofiy is representing the claimants in the case. The lawsuit accuses the Lee County-based rental car company of reporting vehicles stolen while the drivers are in good standing, leading to dozens of false arrests. The lawsuit is being heard in federal bankruptcy court, where it moved after the company filed Chapter 11 last 2020. Hertz has denied the allegations. In an emailed statement to the Business Observer Nov. 4,2021 the company didn't dispute that it occasionally reports rented vehicles stolen, saying that "the vast majority of these cases involve renters who were many weeks or even months overdue returning vehicles and who stopped communicating with us well beyond the scheduled due date." The company did not respond to a request for comment Friday, Dec. 3, 2021. "Situations where vehicles are reported to the authorities are very rare," the statement says, "and happen only after exhaustive attempts to reach the customer." About Hertz Corp. Hertz Corp. and its subsidiaries -- http://www.hertz.com/-- operate a worldwide vehicle rental business under the Hertz, Dollar, and Thrifty brands, with car rental locations in North America, Europe, Latin America, Africa, Asia, Australia, the Caribbean, the Middle East, and New Zealand. They also operate a vehicle leasing and fleet management solutions business. On May 22, 2020, The Hertz Corporation and certain of its U.S. and Canadian subsidiaries and affiliates filed voluntary petitions for reorganization under Chapter 11 in the U.S. Bankruptcy Court for the District of Delaware (Bankr. D. Del. Case No. 20-11218). Judge Mary F. Walrath oversees the cases. The Debtors have tapped White & Case LLP as their bankruptcy counsel, Richards, Layton & Finger, P.A., as local counsel, Moelis & Co. as investment banker, and FTI Consulting as financial advisor. The Debtors also retained the services of Boston Consulting Group to assist the Debtors in the development of their business plan. Prime Clerk LLC is the claims agent. The U.S. Trustee for Regions 3 and 9 appointed a Committee to represent unsecured creditors in Debtors' Chapter 11 cases. The Committee has tapped Kramer Levin Naftalis & Frankel LLP as its bankruptcy counsel, Benesch Friedlander Coplan & Aronoff LLP as Delaware counsel, UBS Securities LLC as investment banker, and Berkeley Research Group, LLC, as financial advisor. Ernst & Young LLP provides audit and tax services to the Committee. * * * Hertz Global Holdings, Inc. (OTCPK:HTZGQ) on June 10, 2021, announced that the Bankruptcy Court confirmed its Plan of Reorganization. Hertz's Plan eliminates over $5 billion of debt, including all of Hertz Europe's corporate debt, and will provide more than $2.2 billion of global liquidity to the reorganized company. Hertz cut 14,400 jobs in 2020. Hertz Global Holdings Inc. selected investment firms Knighthead Capital Management LLC and Certares Management LLC as the winning bidders for control of the car-rental company after a fierce bidding drove up the expected payout for existing shareholders. The winning offer provides for an estimated distribution of close to $8 a share to the company's stockholders. The Court's approval cleared the way for Hertz to emerge from Chapter 11 by the end of June 2021. HI TORK POWER: Unsecured Creditors to Recover 100% over 5 Years --------------------------------------------------------------- Hi Tork Power, Inc., filed with the U.S. Bankruptcy Court for the Southern District of Texas a First Amended Plan of Reorganization dated Dec. 03, 2021. Hi Tork Power started operations in 2016. The company was formed due to a need for a fabricator and integrator of systems in the power general field. Hi Tork is still building control panels in addition to other products. Their products are being used in more than 10 countries and 3 continents. The Debtor filed this case on August 5, 2021 to save the business from aggressive collection efforts by merchant cash advance lenders and to reorganize itself and its debts. Debtor anticipates having receivables available to fund the plan and pay the creditors pursuant to the proposed plan. It is anticipated that after confirmation, the Debtor will continue in business. Based upon the projections, the Debtor believes it can service the debt to the creditors. The Debtor had approximately $244,838.60 in accounts receivable as of the Petition Date. The Debtor owns some office furniture and equipment. Debtor also owns various equipment including six trucks, three trailers, three forklifts, among other power generation equipment. Class 1 consists of Allowed Administrative Claims of Professionals and Subchapter V Trustee. These claims are not impaired and will be paid in cash and in full on the Effective Date of this Plan. Debtor's attorney's fees approved by the Court and payable to The Lane Law Firm, PLLC will be paid immediately following the later of Confirmation or approval by the Court out of the available cash. The Debtor will also pay the Texas Workforce Commission's administrative expense of $274.89 immediately following Confirmation. The Debtor's case will not be closed until all allowed Administrative Claims are paid in full. Class 1 Creditor Allowed Claims are estimated as of the date of the filing of this Plan to not exceed the amount of $25,000.00. The Class 1 Claimants are not impaired under this Plan. Class 2 consists of Priority Unsecured Tax Claim. This claim is not impaired. The Texas Workforce Commission filed a priority claim in the amount of $2,354.96 (Claim No. 5) and will be paid in full on the Effective Date of the Plan. Class 3 consists of the Internal Revenue Service Priority Unsecured Tax Claim. This claim is impaired. The Internal Revenue Service ("IRS") filed a claim in the amount of $404,739.73. The amount of the unsecured priority portion of the claim filed by the IRS is $118,259.56. The Debtor will pay the full amount of the claim in monthly installments and the claim will be paid in full in 60 equal monthly payments. The payments will be $1,970.99 per month with the first monthly payment being due and payable 30 days after the effective date. Class 4 consists of the Internal Revenue Service Secured Claim. This claim is impaired. The Internal Revenue Service ("IRS") filed a claim in the amount of $404,739.73. The secured portion of the claim is in the amount of $269,454.41. The Debtor will pay the full amount of the claim at 5.25% interest per annum in monthly installments and the claim will be paid in full in 60 equal monthly payments. The payments will be $5,115.86 per month with the first monthly payment being due and payable 30 days after the effective date. Class 5 consists of Secured Claims. These claims are not impaired. U.S. Small Business Administration has not filed a proof of claim. This claim is secured by a blanket lien on all assets of the Debtor. The Debtor will pay the full claim of $149,900.00 as listed on the schedules, plus any interest which may have accrued, pursuant to the original terms of the agreement. As set forth in the Note, the monthly payment will be $731.00. The first monthly payment is currently not due until May 2022. In the event the U.S. Small Business Administration further extends that initial payment date, the Debtor shall be permitted to wait until that later date. Class 6 consists of Secured Claims. These claims are impaired. Allowed Secured Claims are secured by property of the Debtor's bankruptcy estate. * 6-1 S&P Financial Services Inc. filed a secured claim (Claim No. 2) in the amount of $6,297.70. This claim is secured by a 1994 Hyster H155XL. Debtor will pay the full claim of $6,297.70, as listed on the filed proof of claim, at 5.25% interest per annum in monthly installments and the claim will be paid in full in 60 equal monthly payments. The payments will be $119.55 per month with the first monthly payment being due and payable 30 days after the effective date. * 6-2 Alejandro's Cars & Trucks, Inc. did not file a proof of claim. Debtor will pay the full claim of $10,813.25, as listed on the schedules, at 5.25% interest per annum in monthly installments and the claim will be paid in full in 60 equal monthly payments. The payments will be $205.30 per month with the first monthly payment being due and payable 30 days after the effective date. Class 7 consists of Allowed Unsecured Claims. These claims are impaired. All allowed unsecured creditors shall receive a pro rata distribution at zero percent per annum over the next 5 years with the first monthly payment being due and payable 30 days after the effective date. Nothing prevents Debtor from making monthly or quarterly distributions, so as long as 1/5 of the annual distributions to the general allowed unsecured creditors are paid by each yearly anniversary of the confirmation date of the plan. Debtor will distribute up to $19,161.90 to the general allowed unsecured creditor pool over the 5 year term of the plan. The Debtor's Allowed Unsecured Claimants will receive 100% of their allowed claims under this plan. Class 8 consists of Special Unsecured Claims. These claims are impaired. The Debtor will pay the arrears of its leases with GFRS Equipment Leasing and Financial Pacific Leasing as follows: * 8-1 GFRS Equipment Leasing filed a proof of claim (Claim No. 6) in the amount of $3,970.06 for arrears. The Debtor will pay the full amount of the claim at zero percent per annum over the next two years with the first monthly payment being due and payable after the effective date. The monthly payment will be $165.42. Nothing prevents Debtor from making monthly or quarterly distributions, so as long as the required yearly distribution of $1,985.03 is paid. * 8-2 Financial Pacific Leasing filed a proof of claim (Claim No. 1) in the amount of $2,356.92 for arrears. The Debtor will pay the full amount of the claim at zero percent per annum over the next two years with the first monthly payment being due and payable after the effective date. The monthly payment will be $98.21. Nothing prevents Debtor from making monthly or quarterly distributions, so as long as the required yearly distribution of $1,178.46 is paid. Class 9 consists of Equity Interest Holders (Current Owners). These claims are not impaired. The current owner will receive no payments under the Plan; however, they will be allowed to retain their ownership in the Debtor. Debtor anticipates the continued operations of the business to fund the Plan. Generally, a liquidation or forced sale yields a substantially lower amount. The Debtor owes approximately $25,000.00 in administrative claims. Claims to the administrative creditors must be paid prior to the unsecured creditors receiving any payment. The Debtor also estimates a large amount is owed to the Internal Revenue Service and has $149,900.00 owed to the U.S. Small Business Administration. The amount owed to the unsecured creditors is approximately $150,688.88. The Debtor's assets include funds in the bank, the accounts receivable, trucks, trailers, and other equipment. Administrative creditors must be paid before unsecured debts, and therefore, a liquidation would result in a smaller distribution to the unsecured creditors. A full-text copy of the First Amended Plan dated Dec. 03, 2021, is available at https://bit.ly/31xD4BH from PacerMonitor.com at no charge. Debtor's Counsel: Robert C. Lane, Esq. Joshua D. Gordan, Esq. The Lane Law Firm, PLLC 6200 Savoy, Suite 1150 Houston, TX 77036 Telephone: (713) 595-8200 Facsimile: (713) 595-8201 Email: notifications@lanelaw.com About Hi Tork Power Inc. Hi Tork Power, Inc. is in the power generation and supply business in Houston, Texas. On Aug. 5, 2021, Hi Tork Power filed a Chapter 11 petition (Bankr. S.D. Texas Case No. 21-32660), listing up to $500,000 in assets and up to $1 million in liabilities. Hi Tork Power President Jorge Tijerina signed the petition. Judge Christopher Lopez oversees the case. Robert Chamless Lane, Esq., at the Lane Law Firm, serves as the Debtor's legal counsel. ICS US HOLDINGS: Moody's Rates New Incremental 1st Lien Loan 'B1' ----------------------------------------------------------------- Moody's Investors Service has assigned a B1 rating to ICS US Holdings Inc's proposed USD140 million incremental senior secured first lien term loan B due 2028. ICS US Holdings Inc has been added as an additional borrower under Impala Bidco 0 Limited's ("Acacium" or the "company") existing senior secured first lien term loan. Impala Bidco 0 Limited's B1 Corporate Family Rating, B1-PD Probability of Default Rating and B1 ratings on existing GBP375 million senior secured first lien term loan due 2028 and GBP45 million senior secured first lien revolving credit facility due 2027 are unchanged. The rating outlook is stable. Acacium is acquiring a US based healthcare staffing business, with the transaction and related fees being funded by the proposed incremental USD140 million term loan, together with USD20 million of new equity from the shareholders, USD16 million cash and USD1 million from target management as an investment in Acacium. RATINGS RATIONALE The rating reflects Moody's expectation that despite the incremental debt increase, Acacium's leverage will remain within the rating agency's guidance for a B1 rating. This is supported by the company's stronger than expected growth in EBITDA during 2021, primarily driven by its Last Minute Nursing division where performance has been bolstered by the need for additional medical staff, as well as its Life Sciences and Managed Workforce divisions. Moody's expects proforma Moody's adjusted leverage for the proposed transaction and for fiscal 2021 to be around 4.7x, this factors an expected core EBITDA contribution from the target of around GBP14 million (USD 18 million), and to trend towards 4.5x over the next 12-18 months. The acquisition of the target enhances Acacium's business profile by increasing its geographic diversification outside of the UK and therefore reducing the company's reliance on NHS England. The US will represent over 24.8% of gross margins proforma the transaction, this is compared to total international operations for fiscal year 2020 accounting for 11% of gross margins. Acacium's B1 CFR continues to be supported by the company's (1) leading position in a fragmented market; (2) long term growth in demand for healthcare with supportive demographics in its key UK markets, alongside structural and sustained staff shortages which drive demand for agency services; (3) diversification strategy which has seen the company branch into life sciences, expand its service offering and increase international presence, all contributing to a reduced reliance on NHS England; (4) low capital expenditure and working capital requirements and; (5) strong, positive (Moody's adjusted) free cash flow. The CFR remains constrained by (1) the company's significant, albeit reducing, exposure to NHS England which faces pressure from increased demand and cost containment initiatives; (2) the potential risks of technological disruption through disintermediation or more efficient procurement practices; (3) potential for negative impact of regulator actions as occurred during 2015-2017 to limit agency spend, although Moody's notes that this is unlikely before 2024 (scheduled next general election); (4) proforma leverage of 4.7x is considered high but mitigated by Moody's expectation that the company will remain within Moody's rating guidance and; (5) potential for a re-leveraging transaction as a result of the company's M&A activity. ENVIRONMENTAL, SOCIAL AND GOVERNANCE CONSIDERATIONS In terms of governance, Acacium is a private company majority owned by the private equity firm Onex Partners. The rating agency projects only moderate de-leveraging for the company over the medium-term as it expects Acacium will undertake some small bolt-on M&A to strengthen and diversify its service offering and geographical presence. Acacium is positively impacted by social factors related to demographics given the growing healthcare requirements of an aging population in its key UK markets. Conversely, as a provider of healthcare staffing and services solutions, the company is exposed to reputational and regulatory risks if its contractors become involved in malpractice or fraud. LIQUIDITY Moody's views Acacium's liquidity as good, based on: (1) GBP26 million cash on balance sheet proforma for the transaction; (2) undrawn GBP45 million RCF with first lien springing covenant at 40% drawn with comfortable headroom; (3) positive free cash flow expected over the next 12 -18 months; (4) no term debt maturities before 2028 when the term loan matures, and; (5) no shareholder distributions expected. STRUCTURAL CONSIDERATIONS The B1-PD PDR is aligned with the CFR based on a 50% recovery rate, as is customary for transactions including bank debt with weak covenants. The proposed USD140 million term loan, together with the GBP375 million term loan and the GBP45 million RCF carry the same B1 rating as the CFR because there is only one class of debt. RATIONALE FOR STABLE OUTLOOK The stable outlook reflects Moody's expectation that Acacium's leverage will remain within Moody's rating guidance. The stable outlook also assumes that the company will not embark in any debt-financed transformative acquisitions or make further shareholder distributions. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATING Upward pressure on the rating would require a sustained period of stable profitability and positive cash flow generation, with a continued increase of scale and diversity of revenues. Quantitatively, upward rating pressure could arise if Moody's-adjusted debt/EBITDA is maintained comfortably below 3.5x and if FCF/debt exceeds 15%, both on a sustainable basis. The rating could experience downward pressure if Moody's-adjusted debt/EBITDA were to remain close to 5x. Aggressive debt-funded acquisitions or shareholder distributions could also trigger a downgrade. PRINCIPAL METHODOLOGY The principal methodology used in this rating was Business and Consumer Services published in November 2021. COMPANY PROFILE Headquartered in London, Acacium Group is one of the UK's leading healthcare solutions providers. The company operates predominantly in the UK, but has an increasing international presence in Europe, Australia, the Middle East, Asia and the USA. The company serves five segments: Last Minute Nursing, Managed Workforce, Diversified Healthcare, Health & Community Services, and Life Sciences. The group reported revenue of GBP790 million for the last 12 months to September 30, 2021 and proforma the acquisition it will be over GBP1 billion. Acacium Group is majority-owned by Onex Partners. IDAHO COLLEGE: S&P Affirms 'BB+' Rating on 2017A/B Bonds -------------------------------------------------------- S&P Global Ratings affirmed its 'BB+' ratings on Public Finance Authority's (PFA) series 2017A $29.85 million bonds and $26.89 million series 2017B bonds issued for Idaho College of Osteopathic Medicine LLC (ICOM). The recovery rating is '1', reflecting its expectation for very high (90-100%; rounded estimate: 95%) recovery in the event of a default. S&P's stable outlook reflects its expectations that ICOM will receive full accreditation in 2022 and will continue to attract students by delivering good-quality osteopathic education. S&P expects minimum DSCR to be 1.4x in 2025. ICOM is a private, for-profit, graduate school of osteopathic medicine operating out of a 94,000 sq.-ft. building on the Idaho State University (ISU) campus in Meridian. The project opened in August 2018 to its first class of students. ICOM has an affiliation agreement with ISU that expires in 2056 but is renewable. Its fully amortizing debt matures in 2031, assuming ICOM makes a mandatory redemption as scheduled in 2022 for a portion of its bonds. ICOM competes to attract qualified students to its program and is subject to the accreditation requirements of the Commission on Osteopathic College Accreditation (COCA). ICOM expects to receive full accreditation in mid-2022 before its first class will graduate, which is expected in June 2022. -- Relatively simple operations with minimal capital expenditure requirements. -- A level-payment debt structure in which annual debt service do not increase over time. -- Significant national demand for osteopathic education which should translate into consistently high enrollment rates. -- A good but nascent record of attracting paying students to its program with approximately five applications for every seat. -- Cash flows fully exposed to demand risk, in which a decline in reputation or future competition could reduce student enrollment rates. -- ICOM is still ramping up and is subject to ramp-up risks such as uneven cost profile, fluctuating demand risk, and lack of full accreditation. ICOM will graduate its inaugural class in spring 2022. -- Timely achievement of accreditation by its regulator, COCA. -- Consistently poor performance in licensure exam pass rates, if occurs would reduce the school's attractiveness to prospective students and require adjustments to ICOM's curriculum. S&P said, "Within our Operations Methodology (paragraph 65), we have limited ability to ignore a weak financial year (generally only if the weakness is due to a foreseeable operational reason). ICOM's pre-funding removes default risk in 2021, but the debt service coverage ratio (DSCR) is still expected to be weak. We are not rating to this weak, one-year minimum due to the pre-funding of debt obligations, and this is considered an exception. "We have revised our forecasts to incorporate higher operating costs, resulting in moderately lower cash flows available for debt service. Under our base-case projections, we forecast operating costs of $26 million in 2022 (from $21 million in 2021) growing to $31 million in 2025 and then increasing with inflation each year (we assume a long-term inflation rate of 2%). This compares with our operating costs of $24 million by 2025 in our prior forecasts. Higher staffing levels and associated payroll/salary expenses, and contingency funds related to student clerkship program costs are the primary drivers behind overall higher operating costs. We view both expense categories to be permanent since ICOM has added more educators acting upon inputs from the college's new dean and to proactively address any concerns COCA might have on staffing levels. The greater allocation of contingency funds for student clerkship programs is also a proactive approach by the college to be ready with sufficient funds if clerkship costs increase. "As a result of higher operating costs, we now forecast a minimum DSCR of 1.4x in 2025 compared to 1.6x based on our prior forecast. Our projected minimum DSCR for the project occurs in 2025 because we include the full repayment of $1.5 million loan that the project received under the CARES Act. We do not believe that the decline in the minimum DSCR indicates a lower rating at this point since overall ICOM remains very competitive and continues to attract qualified students. In addition, we expect ICOM's credit risk profile to improve significantly as it receives full accreditation, expected by mid-2022. "ICOM's business risk profile is converging with Burrell College of Osteopathic Medicine (BCOM), a fully accredited college, which we view as a peer to ICOM. We only rate two osteopathic colleges, ICOM and BCOM. BCOM is rated 'BBB-/Stable'. The rating difference between ICOM and BCOM is primarily due to their different accreditation status. BCOM is fully accredited, while ICOM is expected to receive full accreditation in mid-2022. In addition, BCOM has a longer operating history than ICOM and has already graduated two classes, while ICOM will graduate its first class in June 2022. Barring these differences, we view both colleges to be similar in that they both face demand risk with limited certainty of cash flows and rely on how students perceive the quality of education they provide over competing colleges. ICOM has managed its education quality and delivery without any material disruptions and without any loss of students during the worst months of the COVID crisis. As a result, we see ICOM's credit profile as converging with BCOM's, especially over the next six months, if ICOM receives full accreditation and its cost profile remains stable. We give benefit of this to ICOM's credit profile by assigning a one-notch uplift to the rating. "The stable outlook reflects our view that ICOM is on a path to receive full accreditation in mid-2022, and that ICOM will maintain 100% enrollment status given a strong national demand for osteopathic medicine education. Under our base-case forecast, we assume a minimum DSCR of 1.4x in fiscal 2025 and average DSCR of 1.8x during the life of the debt. "We could raise the rating if the college receives full accreditation in 2022 (expected in mid-2022) and other operating parameters remain stable, such as student attrition, exam pass rates, cost profile, post-graduate employment rates, and the quality and quantity of applying students." S&P would lower the rating if: -- ICOM fails to receive full accreditation. -- ICOM receives full accreditation but faces elevated operating costs resulting in a minimum projected DSCR below 1.3x. -- Its liquidity position suffers as a result from unexpected cash flow shortfalls such that project's cash flow resiliency is compromised in S&P's downside analysis. -- In 2021, ICOM enrolled 648 students in all its four classes (the maximum number it can enroll). The college's seats were significantly oversubscribed, which indicates ICOM's attractiveness among prospective students and generally high demand for osteopathic medicine study. Total applications received were 5,341 in 2021 compared to 4,369 in 2020. -- Average student attrition rate has stood close to 3% on average for the past four years. This rate is very close to the national average and to BCOM's attrition rate (about 3%). -- ICOM's student performance in COMLEX exams (a nationally recognized three-series osteopathic medical licensing exam taken by osteopathic physicians) has been mixed and we continue to monitor it. Overall, COMLEX scores for ICOM's students have been slightly below the national average but still acceptable for a new college with limited operating history. COMLEX exam performance has no direct bearing on the project's revenues, but it affects the college's reputation and future enrollments. -- Given the decreased number of COVID-19 cases in Idaho, ICOM has returned to full in-person classes while complying with the state's protocols around student and staff/faculty safety. INOC PROPERTIES: Voluntary Chapter 11 Case Summary -------------------------------------------------- Debtor: INOC Properties, LP 22063 FM 1098 Prairie View, TX 77446 Business Description: INOC Properties is a Single Asset Real Estate debtor (as defined in 11 U.S.C. Section 101(51B)). Chapter 11 Petition Date: December 6, 2021 Court: United States Bankruptcy Court Southern District of Texas Case No.: 21-33906 Judge: Hon. Christopher M. Lopez Debtor's Counsel: Brandon Tittle, Esq. TITTLE LAW GROUP, PLLC 5550 Granite Pkwy, Suite 220 Plano TX 75024 Tel: 972-987-5094 Email: btittle@tittlelawgroup.com Estimated Assets: $1 million to $10 million Estimated Liabilities: $1 million to $10 million The petition was signed by Kollye Kilpatrick as president. The Debtor failed to include in the petition a list of its 20 largest unsecured creditors. A full-text copy of the petition is available for free at PacerMonitor.com at: https://www.pacermonitor.com/view/W5XEQKA/INOC_Properties_LP__txsbke-21-33906__0001.0.pdf?mcid=tGE4TAMA LDG001 LLC: Case Summary & 4 Unsecured Creditors ------------------------------------------------ Debtor: LDG001, LLC 13901 Midway Road, Suite 102 Dallas, TX 75244 Business Description: LDG001, LLC is a Single Asset Real Estate debtor (as defined in 11 U.S.C. Section 101(51B)). Chapter 11 Petition Date: December 7, 2021 Court: United States Bankruptcy Court Northern District of Texas Case No.: 21-32189 Debtor's Counsel: Eric A. Liepins, Esq. ERIC A. LIEPINS 12770 Coit Road Suite 850 Dallas, TX 75251 Tel: 972-991-5591 Fax: 972-991-5788 E-mail: eric@ealpc.com Estimated Assets: $0 to $50,000 Estimated Liabilities: $1 million to $10 million The petition was signed by Tim Barton, president of managing member. A full-text copy of the petition containing, among other items, a list of the Debtor's four unsecured creditors is available for free at PacerMonitor.com at: https://www.pacermonitor.com/view/PZMUWPA/LDG001_LLC__txnbke-21-32189__0001.0.pdf?mcid=tGE4TAMA LEFT FRAME: Seeks to Hire Gooding Law Firm as Legal Counsel ----------------------------------------------------------- Left Frame Lofts, LLC seeks approval from the U.S. Bankruptcy Court for the Western District of Oklahoma to hire Gooding Law Firm, P.C. to serve as legal counsel in its Chapter 11 case. The firm's hourly rates are as follows: O. Clifton Gooding, Esq. $425 per hour Mark B. Toffoli, Esq. $425 per hour Angela N. Stuteville, Esq. $325 per hour Legal Assistants $125 per hour O. Clifton Gooding, Esq., the firm's attorney who will be providing the services, disclosed in a court filing that he is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. The firm can be reached at: O. Clifton Gooding, Esq. Gooding Law Firm, P.C. 204 North Robinson Avenue, Suite 1235 Oklahoma City, Oklahoma 73102 Tel: 405.948.1978 Fax: 405.948.0864 Email: cgooding@goodingfirm.com About Left Frame Left Frame Lofts, LLC, a company based in Oklahoma City, filed a petition for Chapter 11 protection (Bankr. W.D. Okla. Case No. 21-13153) on Dec. 1, 2021, listing $3.18 million in assets and $3.27 million in liabilities. Justin Schovanec, manager, signed the petition. The Debtor tapped O. Clifton Gooding, Esq. at Gooding Law Firm, P.C. as legal counsel. LIEB PROPERTIES: Taps Tarpy, Cox, Fleishman & Leveille as Counsel ----------------------------------------------------------------- Lieb Properties, LLC seeks approval from the U.S. Bankruptcy Court for the Eastern District of Tennessee to hire Tarpy, Cox, Fleishman & Leveille, PLLC to serve as legal counsel in its Chapter 11 case. The firm's hourly rates are as follows: Thomas Leveille, Esq. $350 per hour Lyn Tarpy, Esq. $300 per hour Ed Shultz, Esq. $300 per hour Taylor Drinnen, Esq. $250 per hour Paralegal $75 - $95 per hour The Debtor paid $7,500 to the firm as a retainer fee. Lynn Tarpy, Esq., the firm's attorney who will be providing the services, disclosed in a court filing that she is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. The firm can be reached at: Lynn Tarpy, Esq. Tarpy, Cox, Fleishman & Leveille, PLLC 1111 N. Northshore, Suite N-290 Knoxville, TN 37919 Tel: (865) 588-1096 About Lieb Properties Lieb Properties, LLC filed a petition for Chapter 11 protection (Bankr. E.D. Tenn. Case No. 21-31866) on Dec. 02, 2021, listing as much as $1 million in both assets and liabilities. Lindsey Lieb, managing member, signed the petition. Judge Suzanne H. Bauknight oversees the case. The Debtor tapped Lynn Tarpy, Esq., at Tarpy, Cox, Fleishman & Leveille, PLLC as legal counsel. LIFE TIME: S&P Rates New $475MM Revolving Credit Facility 'B' ------------------------------------------------------------- S&P Global Ratings assigned its 'B' issue-level and '1' recovery ratings to U.S.-based owner and operator of fitness clubs Life Time Inc.'s proposed $475 million revolving credit facility due December 2026 or 91 days prior to the December 2024 maturity on the company's term loan if the facility is still outstanding. The '1' recovery rating indicates its expectation for very high (90%-100%; rounded estimate: 95%) recovery for lenders in the event of a payment default. Life Time (CCC+/Stable) is refinancing its existing $325.25 million revolving credit facility due 2024 with the proposed facility to extend the maturity and increase its liquidity position for operating needs, including planned club development. S&P said, "We affirmed our 'CCC+' issue-level rating on the company's $475 million senior unsecured notes due 2026 and revised the recovery rating to '4' from '3'. The revised recovery rating reflects lower recovery coverage for unsecured lenders given the higher secured debt with the revolver upsize. Our hypothetical default scenario for recovery analysis includes the assumption that the revolver is 85% drawn at the time of default. The '4' recovery rating indicates our expectation for average (30%-50%; rounded estimate: 35%) recovery for lenders in the event of a payment default." ISSUE RATINGS--RECOVERY ANALYSIS Key analytical factors -- S&P's simulated default scenario contemplates a default occurring in 2023 due to a slow recovery in Life Time's memberships and EBITDA. This is due to prolonged economic weakness and increased competitive pressures that contribute to severe customer attrition and few membership joins. -- S&P believes if the company were to default, it would continue to have a viable business model given its high-end, full-service clubs and the high quality of its real estate. S&P anticipates its lenders would achieve the greatest recovery value through a reorganization rather than a liquidation. -- S&P assumes a reorganization following default and used an emergence EBITDA multiple of 6.5x to value the company. This is a higher multiple than we use for most other rated fitness club operators, which reflects Life Time's larger proportion of owned clubs and the high quality of its real estate relative to that of its peers. All of its clubs are designed to be easily converted into Class A office space. Simulated default assumptions -- Year of default: 2023 -- EBITDA at emergence: $312 million -- EBITDA multiple: 6.5x -- Revolving credit facility: 85% drawn at default Simplified waterfall -- Net enterprise value (after 5% administrative costs): $1.93 billion -- Obligor/nonobligor split: 100%/0% -- Estimated priority claims (mortgage debt): $103 million -- Remaining recovery value: $1.82 billion -- Estimated first-lien claims: $1.65 billion -- Value available for first-lien claims: $1.82 billion --Recovery expectations: 90%-10% (rounded estimate: 95%) -- Estimated senior unsecured notes claims: $495 million -- Value available for unsecured claim: $175 million --Recovery expectations: 30%-50% (rounded estimate: 35%) Note: All debt amounts include six months of prepetition interest. LIFEPOINT HEALTH: Moody's Confirms B2 CFR & Alters Outlook to Pos. ------------------------------------------------------------------ Moody's Investors Service confirmed all ratings of LifePoint Health, Inc. The ratings confirmed include the B2 Corporate Family Rating, the B2-PD Probability of Default Rating, B1 senior secured ratings and Caa1 senior unsecured ratings. The outlook was revised to positive from ratings under review. The rating actions conclude the review for downgrade which commenced on June 22, 2021. The confirmation of the ratings reflects Moody's view that the company's business profile will improve following the conclusion of the transaction involving Kindred Healthcare ("Kindred"). As part of the transaction, LifePoint will acquire Kindred's Rehab and Behavioral businesses and will also divest approximately 18 hospitals to ScionHealth ("Scion"). Scion is a newly formed entity that will acquire these hospitals from LifePoint as well as Kindred's long-term acute care business. Scion will be controlled by LifePoint's existing shareholders and LifePoint will also make a non-voting equity investment in Scion. LifePoint will utilize approximately $900 million of balance sheet cash ($1.8 billion as of September 30, 2021) to fund the transaction. Moody's expects the transaction will be largely leverage neutral and expects debt/EBITDA to be in the low to mid five times range on a pro-forma basis by the end of 2021. The positive outlook reflects Moody's expectations that LifePoint will continue to deleverage over time as the company will generate a higher portion of earnings from the faster-growing acquired businesses. The positive outlook also reflects LifePoint's track record of deleveraging since the 2018 acquisition of the company. Rating Actions: Confirmations: Issuer: LifePoint Health, Inc. Corporate Family Rating, Confirmed at B2 Probability of Default Rating, Confirmed at B2-PD Gtd Senior Secured Term Loan B, Confirmed at B1 (LGD3) Senior Secured Global Notes, Confirmed at B1 (LGD3) Senior Unsecured Global Notes, Confirmed at Caa1 (LGD5) Outlook Actions: Issuer: LifePoint Health, Inc. Outlook, Changed To Positive From Rating Under Review RATING RATIONALE LifePoint's B2 CFR reflects the company's high financial leverage, with debt to EBITDA in the low to mid 5 times range pro-forma for the transaction related to the acquisition of Kindred Healthcare. The rating also reflects the company's very good liquidity profile with pro-forma cash exceeding $900 million and access to an $800 million asset based revolver. Moody's also views the transaction positively as LifePoint will have a stronger organic growth profile following the transaction given the outlook for the acquired Kindred Rehab and Behavioral businesses. Moody's expects improvement in LifePoint's leverage and cash flow to be driven by a decline in capital expenditures as significant investments in replacement facilities are now complete. While manageable, the acquisition of the Kindred businesses and divestiture of certain hospitals to Scion present some level of execution risk. LifePoint's rating is supported by the company's large scale and good geographic diversity. The rating outlook is positive as successful integration of the acquired Kindred businesses will improve LifePoint's business risk. Successful integration would be evidenced by continued growth in earnings which would lead to further improvement in credit metrics. ESG considerations are material to the rating of LifePoint. With respect to governance, LifePoint's ownership by private equity firm Apollo Management will result in the deployment of aggressive financial policies. While LifePoint may pursue an IPO longer-term given its large scale, Apollo may take dividends along the way, particularly if the company achieves its cash flow and deleveraging goals. As a for-profit hospital operator, LifePoint also faces high social risk. The affordability of hospitals and the practice of balance billing has garnered substantial social and political attention. Hospitals are now required to publicly provide the list price of all of their services, although compliance and practice is inconsistent across the industry. Additionally, hospitals rely on Medicare and Medicaid for a substantial portion of reimbursement. Any changes to reimbursement to Medicare or Medicaid directly impacts hospital revenue and profitability. Further, as LifePoint is focused on non-urban communities, slow population growth tempers the company's capacity to grow admissions. FACTORS THAT COUJLD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS Ratings could be upgraded if LifePoint successfully executes the integration of the acquired Kindred businesses and maintains balanced financial policies. Ratings could be upgraded if debt/EBITDA approaches 5 times. Ratings could be downgrade if integration issues arise from the merger or if the operating environment weakened significantly. Ratings could be downgraded if financial policies became more aggressive including debt-financed dividends or leveraging acquisitions. Ratings could also be downgraded if the company's liquidity profile were to erode. Quantitatively ratings could be downgraded if debt/EBITDA was sustained above 6 times. LifePoint Health, Inc., headquartered in Brentwood, Tennessee, is an operator of general acute care hospitals, community hospitals, regional health systems, physician practices, outpatient centers and post-acute care facilities in non-urban markets. The company currently operates 84 hospitals in 29 states under the private ownership of funds affiliated with Apollo Global Management, LLC. LifePoint merged with RegionalCare in November 2018. Revenues are approximately $9 billion. The principal methodology used in these ratings was Business and Consumer Services published in November 2021. MAGNOLIA PET: Case Summary & 5 Unsecured Creditors -------------------------------------------------- Debtor: Magnolia Pet Resort & Spa, LLC 11500 Tara Blvd. Hampton, GA 30228 Chapter 11 Petition Date: December 6, 2021 Court: United States Bankruptcy Court Northern District of Georgia Case No.: 21-59059 Debtor's Counsel: William A. Rountree, Esq. ROUNTREE, LEITMAN & KLEIN, LLC Century Plaza I 2987 Clairmont Road, Ste 350 Atlanta, GA 30329 Tel: 404-584-1238 Fax: 404 704-0246 Email: swenger@rlklawfirm.com Estimated Assets: $100,000 to $500,000 Estimated Liabilities: $1 million to $10 million The petition was signed by Alfred Jackson Odom, IV, owner. 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/VU62R7A/Magnolia_Pet_Resort__Spa_LLC__ganbke-21-59059__0001.0.pdf?mcid=tGE4TAMA MEDLEY LLC: Lowenstein Sandler LLP Defends Fee Deal in Bankruptcy ----------------------------------------------------------------- Alex Wolf of Bloomberg Law reports that Lowenstein Sandler LLP made a "substantial contribution" to the bankruptcy proceedings of a Medley Management Inc. unit, justifying its $685,000 fee guarantee, the law firm said. The law firm responded Thursday, Dec. 2, 2021, to objections from the Securities and Exchange Commission and the Justice Department's bankruptcy watchdog, the U.S. Trustee. The agencies had objected to a settlement under which Lowenstein would receive more than half of its $1.1 million in legal fees before other unsecured creditors are paid out by a liquidating trust. Lowenstein exacerbated Medley LLC's Chapter 11 case instead of facilitating a speedy resolution, the agencies said. 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. MUSCLE MAKER: Registers 22.1M Common Shares for Possible Resale --------------------------------------------------------------- Muscle Maker, Inc. filed a Form S-3 registration statement with the Securities and Exchange Commission to register the offer and sale of up to 22,093,822 shares of its common stock, par value $0.0001 per share, which are comprised of (i) 6,772,000 shares of its common stock issued in a private placement on Nov. 22, 2021, pursuant to that certain Securities Purchase Agreement by and among the Company and certain investors, dated as of Nov. 17, 2021, (ii) 4,058,305 shares of its common stock issuable upon the exercise of the pre-funded warrants issued in the Private Placement pursuant to the Securities Purchase Agreement, (iii) 10,830,305 shares of the Company's common stock issuable upon the exercise of the warrants issued in the Private Placement pursuant to the Securities Purchase Agreement the Company issued to such investor and (iv) 433,212 shares of its common stock issuable upon the exercise of the placement agent warrants issued in connection with the Private Placement. The Company is registering the offer and resale of the Shares and Warrant Shares to satisfy the provisions of that certain Securities Purchase Agreement pursuant to which it agreed to register the resale of the Shares and the Warrant Shares. The Company is not selling any common stock under this prospectus and will not receive any of the proceeds from the sale of shares by the selling shareholders. The Company will, however, receive the net proceeds of any Warrants exercised for cash. The selling shareholders may offer the shares from time to time through public or private transactions at fixed prices, at prevailing market prices at the time of sale, at prices related to the prevailing market price, at varying prices determined at the time of sale, or at negotiated prices. The registration of the shares of common stock on behalf of the selling shareholders, however, does not necessarily mean that any of the selling shareholders will offer or sell their shares under this registration statement or at any time in the near future. The selling shareholders will bear all commissions and discounts, if any, attributable to the sale or disposition of the shares, or interests therein and all costs, expenses and fees in connection with the registration of the shares. The Company will not be paying any underwriting discounts or commissions in this offering or costs, expenses, and fees in connection with the registration of the shares of common stock described in this prospectus. The Company will pay the expenses of registering the shares. The Company's common stock is traded on The Nasdaq Capital Market under the symbol "GRIL." On Nov. 23, 2021, the last reported sale price of its common stock was $1.06 per share. A full-text copy of the prospectus is available for free at: https://www.sec.gov/Archives/edgar/data/1701756/000149315221030480/forms-3.htm About Muscle Maker Headquartered in League City, Texas, Muscle Maker is a fast casual restaurant concept that specializes in preparing healthy-inspired, high-quality, fresh, made-to-order lean, protein-based meals featuring chicken, seafood, pasta, hamburgers, wraps and flat breads. In addition, the Company features freshly prepared entree salads and an appealing selection of sides, protein shakes and fruit smoothies. Muscle Maker reported a net loss of $10.10 million for the year ended Dec. 31, 2020, compared to a net loss of $28.39 million for the year ended Dec. 31, 2019. As of Sept. 30, 2021, the Company had $18.36 million in total assets, $5.20 million in total liabilities, and $13.17 million in total stockholders' equity. Melville, NY-based Marcum LLP, the Company's auditor since 2016, issued a "going concern" qualification in its report dated April 15, 2021, citing that the Company has incurred significant losses and net cash used in operations and needs to raise additional funds to meet its obligations and sustain its operations. These conditions raise substantial doubt about the Company's ability to continue as a going concern. NATIONAL MENTOR: Moody's Cuts CFR to B3 & Alters Outlook to Stable ------------------------------------------------------------------ Moody's Investors Service downgraded National MENTOR Holdings Inc.'s (dba Sevita) Corporate Family Rating to B3 from B2 and Probability of Default Rating to B3-PD from B2-PD. At the same time, Moody's downgraded the Senior Secured 1st Lien credit facilities ratings to B3 from B1, and Senior Secured 2nd Lien term Loan rating to Caa2 from Caa1. Moody's also changed the outlook to stable from negative. The actions follow Sevita's announced $200 million incremental term loan B. Proceeds from the new debt will be used to repay the amount outstanding on its revolving credit facility that was used to fund recent acquisitions and to also fund future acquisitions that are expected to close by early 2022. The downgrade to B3 reflects the aggressive nature of Sevita's financial policies, a key governance issue. Sevita's leverage is elevated at 6.9x due in part to a $300 million shareholder distribution earlier in the year. Moody's forecasts that leverage will remain over 6.0x for the next 12 -18 months after including the announced debt funded acquisitions. Additionally, Moody's believes that Sevita will face earnings headwinds due to rising labor expenses. In addition, Sevita's liquidity is weakening with only $23 million of pro forma cash, as the company used cash combined with debt to fund acquisitions. However, while the acquisitions will delay deleveraging, the transactions will continue to build scale in existing states and will expand Sevita's footprint into new states that can serve as a starting point for future growth. The change in outlook to stable reflects the company's good track record of business execution. Further, Moody's believes that industry trends will continue to shift to smaller, lower-cost community settings, which will support future growth for Sevita. Following is a summary of Moody's rating actions: Downgrades: Issuer: National MENTOR Holdings Inc. Corporate Family Rating, Downgraded to B3 from B2 Probability of Default Rating, Downgraded to B3-PD from B2-PD Senior Secured 1st Lien Revolving Credit Facility, Downgraded to B3 (LGD3) from B1 (LGD3) Senior Secured 1st Lien Term Loan B, Downgraded to B3 (LGD3) from B1 (LGD3) Senior Secured 1st Lien Term Loan C, Downgraded to B3 (LGD3) from B1 (LGD3) Senior Secured 1st Lien Delayed Draw Term Loan, Downgraded to B3 (LGD3) from B1 (LGD3) Senior Secured 2nd Lien Term Loan, Downgraded to Caa2 (LGD6) from Caa1 (LGD6) Outlook Actions: Issuer: National MENTOR Holdings Inc. Outlook, Changed To Stable From Negative RATINGS RATIONALE Sevita's B3 CFR reflects the company's high business risk given its reliance on government payors and exposure to state budgets. Rising labor costs, moderately high geographic concentration, and an aggressive expansion strategy that includes both new facility openings and acquisitions also constrain the credit profile. Leverage will remain above 6.0x over the next 12-18 months due to some earnings headwinds, but should improve to below 6.0 times by the end of 2023. Further, pro forma cash of $23 million leaves limited cushion to absorb potential operating setbacks. Supporting the credit profile is the company's position as one of the leading providers of residential services to individuals with intellectual and developmental disabilities (I/DD) and catastrophic injuries. Industry trends are moving towards placing I/DD individuals in smaller, lower-cost community settings (such as those operated by Sevita) instead of large state operated institutions. The current reimbursement outlook is positive, with increases expected in several states. Since the LBO in 2019, notwithstanding shareholder dividends, the company has generally executed its strategy well and has demonstrated an ability to deleverage through earnings growth. Moody's expects Sevita to operate with good liquidity over the next 12-18 months. This reflects Sevita's anticipated $23 million pro forma cash balance. Moody's expects good cash flow and ample availability under its new $160 million committed bank revolving credit facility. Moody's projects that the company will generate consistently positive free cash flow of over $75 million per year, but that the majority of this will be used to fund tuck-in acquisitions. The B3 ratings of the Senior Secured 1st Lien credit facilities reflect the fact that the first lien credit facilities comprise a preponderance of debt in the capital structure with the incremental term loan B. The Caa2 rating on the Senior Secured 2nd Lien term Loan reflects the subordinated nature of the debt in the capital structure. The stable outlook reflects the company's good track record of business execution. Further, Moody's believes that industry trends will continue to shift to smaller, lower-cost community settings, which will support future growth for Sevita. Moody's believes Sevita faces high social risk in that it provides residential services to individuals with intellectual and developmental disabilities as well as those with catastrophic injuries. Failure to provide quality care to these populations can subject Sevita to significant regulatory scrutiny, headline risk, strained relations with key stakeholders and financial penalties. Further, there is heightened risk given that the company employs many low wage workers to care for this fragile population. That said, Moody's expects reimbursement rates for these services to remain relatively stable over the next 12-18 months. From a governance perspective, shareholder policies are aggressive, as Sevita has completed two shareholder distributions in the last 2 years. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS The ratings could be downgraded if any unexpected operating setback materially weakens Sevita's earnings. This could include reimbursement pressure due to growing state budgetary constraints or rising labor costs. A downgrade could also occur if the company's liquidity further weakens or the company pursues another shareholder dividend or a large debt funded acquisition. The ratings could be upgraded if Sevita continues to effectively manage its growth while maintaining its leading market position. Less aggressive financial policies including if the company's debt to EBITDA is sustained below 6.0 times could result in an upgrade to the ratings. National MENTOR Holdings Inc. (Sevita) provides residential and other services to individuals with intellectual or developmental disabilities, persons with acquired brain and other catastrophic injuries, at-risk youth, and the elderly. Revenues are approximately $2.2 billion pro forma for the last twelve months ending September 30, 2021. Sevita is owned by Centerbridge Partners LP and Vistria. The principal methodology used in these ratings was Business and Consumer Services published in November 2021. NESV ICE: Wins Interim Cash Collateral Access --------------------------------------------- The U.S. Bankruptcy Court for the District of Massachusetts, Eastern Division, has authorized NESV Ice, LLC and affiliates to use cash collateral under the same terms and conditions as the Second Interim Order, subject to the budget. A further telephonic hearing on the matter is scheduled for December 16, 2021 at 3 p.m. The Debtor is directed to file an updated budget and revised reconciliation statement by no later than December 14 at 4:30 p.m. As previously reported by the Troubled Company Reporter, the Second Interim Order provided that the Debtor is authorized to use cash collateral in the ordinary course of its business substantially in accordance with the budget for the period from the Petition Date through the earlier of conclusion of the continued hearing on the Motion or entry of a further order regarding use of Cash Collateral. SHS ACK, LLC asserts a security interest in Ice's property, including the cash proceeds thereof, and Ice's deposit accounts. A copy of the order is available at https://bit.ly/3DrxWfP from PacerMonitor.com. About NESV Ice, LLC NESV Ice, LLC and affiliates NESV Swim, LLC, NESV Field, LLC, NESV Hotel, LLC, NESV Tennis, LLC, NESV Land, LLC, and NESV Land East, LLC, offer fitness and sports training services. The Debtor sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. D. Mass. Case No. 21-11226) on August 26, 2021. The petitions were signed by Stuart Silberberg as manager. Judge Christopher J. Panos oversees the case. William McMahon, Esq., at Downes McMahon LLP is the Debtor's counsel. NORTH PIER OCEAN: Creditors to Get Proceeds From Liquidation ------------------------------------------------------------ North Pier Ocean Villas Homeowners Association, Inc., filed with the U.S. Bankruptcy Court for the Eastern District of North Carolina a Disclosure Statement and Plan of Liquidation dated Dec. 3, 2021. The Debtor was incorporated in 1984 as a North Carolina non-profit corporation pursuant to Chapter 47A of the North Carolina General Statutes, the North Carolina "Unit Ownership Act." It serves as the homeowners' association for North Pier Ocean Villas, a condominium/timeshare development located in Carolina Beach, North Carolina. The Debtor is the governing body for the development and exists to manage, operate and maintain the forty-seven condominium units and common areas that comprise it. In order to satisfy the debts, the Debtor intends to (i) terminate the timeshare regime and revert the timeshare interests to fractional interests in the underlying condominiums, (ii) consolidate the fractionalized tenants-in-common interest held by it and other owners, (iii) market and sell those consolidated interests, together with the associated common areas (collectively, the "Property"), and (iv) utilize the net proceeds from the Property (the "Liquidation Proceeds") to compensate the individual owners of timeshare interests and fund the Plan, including payment of administrative claims, secured claims, priority tax claims (including ad valorem taxes) and unsecured claims. Any funds remaining after full repayment of allowed senior classes of claims shall be paid pro-rata to the members of the Debtor association. The Debtor shall pay unpaid administrative costs in full from the Liquidation Proceeds or by such other mutually agreeable terms as the parties may agree. Class IV consists of Owners of Timeshare Units ("Unit Owners"). The class of Unit Owners includes any Person, other than the Debtor, holding an ownership interest in one or more interval timeshare weeks as of the Petition Date, and now holding an undivided fractional interest in one or more of the 42 condominiums comprising the North Pier development. The Debtor intends to market and sell the Property by way of a court-approved sale procedure. Unit Owners have been asked to sign and send to Debtor's bankruptcy counsel a Consent Order authorizing the sale of the Unit Owner's interest in the Property free and clear of all right, title and interest held by the Unit Owner in the Property. Any Unit Owner who does not sign a Consent Order permitting the sale of his or her interest will be named as a Defendant in a lawsuit for the purpose of obtaining clear title to the Property. Unit Owners are urged to execute the Consent Order in order to avoid litigation costs, prevent further delay of distributions and maximize the distribution to all Unit Owners from the Liquidation Proceeds. Following the sale of the Property and the repayment of any allowed claims asserted by creditors in Class II, which shall be pro-rated between those proceeds attributable to fractional interests owned by the Debtor (the "Debtor Proceeds") and those fractional interests owned by non-Debtor Unit Owners (the "Unit Owner Proceeds"), Unit Owners shall receive a distribution from the Unit Owner Proceeds on account of each Unit Owner's allocable fractional share in the Property, based on the number of timeshare units owned. Class V consists of Maintenance Fee Claims. These claims are held by Unit Owners who pre-paid or overpaid their maintenance fees prior to the filing of the bankruptcy petition on August 5, 2021. Members holding allowed claims in this Class will receive a pro-rata distribution of net Debtor Proceeds allocated to the Debtor from the sale of the Property, if any, following satisfaction of claimants in Classes I, II and III. Class VI consists General Unsecured Claims with $466,178.10 amount of claims. The Debtor shall pay holders of allowed general unsecured claims in this class the value of their respective claims, together with interest accruing at the fixed rate of 2.5% from and after the Effective Date, a pro-rata distribution of net Debtor Proceeds allocated to the Debtor from the sale of the Property, if any, remaining after satisfaction of claimants in Classes I, II, III, and V. This class will be impaired. Class VII consists of all pre-petition statutory ownership interests in the Debtor held by the Unit Owners. Members of this class shall not receive any distributions or retain any value on account of their interests in the Debtor unless all classes of creditors in Classes I, II, III, V and VI are satisfied in full. Each Unit Owner's distribution shall be reduced by the amount of any unpaid maintenance fees for any year prior to 2021 that were not otherwise recovered pursuant to the distributions made in accordance with the Class IV treatment. In the event that the administration of this case has not been completed by the date of the distribution of Sale Proceeds to Class VI creditors, the Debtor shall reserve funds from the Debtor Proceeds in an amount estimated to cover the projected costs to complete the administration of the case, including any litigation costs. The projection of costs shall take into account the likelihood of additional recoveries for the Bankruptcy Estate. At the conclusion of the administration of the Estate, the Debtor shall distribute any remaining Debtor Proceeds pro-rata to Class VII members. The Debtor proposes to make payments under the Plan from funds on hand, if any, and Liquidation Proceeds derived from the sale of the Property. More specifically, once the condominiums and common areas are sold, the Liquidation Proceeds will be divided into two portions. The first portion will relate to the sale proceeds attributable to fractional interests owned by the Debtor (the "Debtor Proceeds"); and the second portion will relate to sale proceeds attributable to fractional interests owned by Persons other than the Debtor (the "Unit Owner Proceeds"). A full-text copy of the Disclosure Statement dated Dec. 3, 2021, is available at https://bit.ly/3lCZybAfrom PacerMonitor.com at no charge. Attorneys for the Debtor: David J. Haidt, Esq. Ayers & Haidt, PA P.O. Box 1544 307 Metcalf Street New Bern, NC 28563 Tel: 252-638-2955 Email: davidhaidt@embarqmail.com About North Pier Ocean Villas Homeowners Association North Pier Ocean Villas Homeowners Association, Inc. filed a petition for Chapter 11 protection (Bankr. E.D.N.C. Case No. 21-01760) on Aug. 5, 2021, listing under $1 million in both assets and liabilities. David J. Haidt, Esq., at Ayers & Haidt, PA, represents the Debtor as legal counsel. OBLONG INC: Registers 3M Common Shares for Possible Resale ---------------------------------------------------------- Oblong, Inc. filed with the Securities and Exchange Commission a Form S-3 registration statement relating to the offer and resale of up to 3,000,000 shares of its common stock, par value $0.0001 per share. The shares of common stock, which may be resold are issuable upon exercise of Oblong's Series B common stock purchase warrants sold by the company in a private placement that closed effective June 28, 2021. The company is not selling any securities and will not receive any of the proceeds from the sale of shares by the selling stockholders. The selling stockholders may sell the shares of common stock in a number of different ways and at varying prices. The company will pay the expenses incurred in registering the shares, including legal and accounting fees. The selling stockholders will pay any brokerage commissions or similar charges incurred for the sale of these shares. The company's common stock is listed on the Nasdaq Capital Market under the symbol "OBLG". On Dec. 1, 2021 the last reported sale price of its common stock on the Nasdaq Capital Market was $1.20 per share. A full-text copy of the prospectus is available for free at: https://www.sec.gov/Archives/edgar/data/746210/000074621021000071/oblongforms-3seriesbwarran.htm About Oblong Inc. Oblong, Inc. -- www.oblong.com -- was formed as a Delaware corporation in May 2000 and is a provider of patented multi-stream collaboration technologies and managed services for video collaboration and network applications. Oblong reported a net loss of $7.42 million for the year ended Dec. 31, 2020, compared to a net loss of $7.76 million for the year ended Dec. 31, 2019. As of Sept. 30, 2021, the Company had $31.70 million in total assets, $3.55 million in total liabilities, and $28.15 million in total stockholders' equity. Iselin, New Jersey-based EisnerAmper LLP, the Company's auditor since 2010, issued a "going concern" qualification in its report dated March 30, 2021, citing that the Company has incurred losses and expects to continue to incur losses. These conditions raise substantial doubt about its ability to continue as a going concern. OMNIQ CORP: Receives Approximately $1-Mil. Order for Smart Kiosks ----------------------------------------------------------------- OMNIQ Corp. received a purchase order for the advanced Kiosks developed by its Israeli subsidiary Dangot Computers Ltd. The project was ordered by a leading U.S. automated solutions provider. OMNIQ will supply 500 Dangot smart kiosks integrated with AI-based machine vision technology and other advanced equipment. OMNIQ's customer operates across over 250 cities and thousands of locations in the U.S., generating more than $1 billion in revenue. The new project will roll out across locations in the US, with the first 100 kiosks shipped by the end of December and the additional units distributed over the next 18 months. Shai Lustgarten, CEO of OMNIQ commented, "We are proud to penetrate the US market so quickly with Dangot's Kiosks, further enhanced with OMNIQ technology. The combined offering is a unique technological solution, responding to the needs of the market. The introduction of our Smart Kiosks quickly created results in the form of orders, which is the ultimate indicator of the need for our products." 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 and 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. PARTY CITY: Moody's Hikes CFR & Senior Secured Notes Rating to B3 ----------------------------------------------------------------- Moody's Investors Service upgraded Party City Holdings Inc.'s ratings, including its corporate family rating to B3 from Caa1, probability of default rating to B3-PD from Caa1-PD, senior secured term loan and notes ratings to B3 from Caa1 and senior unsecured notes rating to Caa2 from Ca. The speculative grade liquidity rating was upgraded to SGL-2 from SGL-3. The rating outlook remains stable. The upgrade reflects Party City's improved operating performance and credit metrics as it anniversaries prior year quarters which were heavily impacted by the COVID-19 pandemic. The pandemic continued to impact Party City's operating performance after the initial period of store closures due to reduced demand for social gatherings and related products leading to Moody's adjusted debt/EBITDA of 14.5x for the LTM period ended December 31, 2020. For the LTM period ended September 30, 2021, Moody's adjusted debt/EBITDA improved but still remained high at 7x. The upgrade reflects that Moody's expects leverage to further improve to approximately 5.5x by the end of Q4'2021 as the company anniversaries Q4'2020 which had an inventory disposal charge of almost $90 million. Global supply chain issues, inflation, freight costs and the discovery of new variants of the virus increases the potential for earnings volatility but Moody's expects credit metrics to remain in line with the B3 rating category. The SGL upgrade to SGL-2 from SGL-3 reflects $61 million of cash on hand and $280 million of excess availability under the $475 million asset-based revolving facility as of September 30, 2021. Moody's expects modestly positive free cash flow in 2022. Upgrades: Issuer: Party City Holdings Inc. Corporate Family Rating, Upgraded to B3 from Caa1 Probability of Default Rating, Upgraded to B3-PD from Caa1-PD Speculative Grade Liquidity Rating, Upgraded to SGL-2 from SGL-3 Senior Secured Term Loan, Upgraded to B3 (LGD3) from Caa1 (LGD4) Senior Secured 1st Lien Notes, Upgraded to B3 (LGD3) from Caa1 (LGD4) Senior Unsecured Global Notes, Upgraded to Caa2 (LGD6) from Ca (LGD6) Outlook Actions: Issuer: Party City Holdings Inc. Outlook, Remains Stable RATINGS RATIONALE Party City's B3 CFR reflects the company's weak operating performance prior to the pandemic. Operating performance significantly deteriorated in 2020 and although credit metrics have recovered, the company is significantly exposed to COVID-19 related volatility and also must navigate global supply chain issues. Party City is also exposed to changing demographic and societal trends, including the shift of consumers purchasing goods and accessories online. The rating is supported by Party City's strong market presence in both retail and wholesale, geographic diversification, and the historically recurring and stable party goods and accessories segment. The B3 is also supported by Party City's good liquidity and lack of near dated debt maturities. The stable outlook reflects Moody's expectation that Party City will maintain good liquidity and appropriate credit metrics despite COVID-related volatility and current supply chain and freight cost pressure. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS An upgrade would require sustained growth in operating performance and maintenance of good liquidity. Quantitatively, the ratings could be upgraded if debt/EBITDA is sustained below 5x and EBIT/interest expense sustained above 1.75x. Ratings could be downgraded if the company's operating performance or liquidity weakens. Quantitatively, the ratings could be downgraded if debt/EBITDA rises above 6.5x and EBIT/interest expense below 1.0x. Party City Holdings Inc. is a designer, manufacturer, distributor and retailer of party goods and related accessories. The company's retail brands principally include Party City and Halloween City. Total revenue is approximately $2.1 billion for the LTM period ending September 30, 2021. The principal methodology used in these ratings was Retail published in November 2021. PARUSA INVESTMENT: Amends Bestenheider Claims Pay Details --------------------------------------------------------- Parusa Investment Corporation and FICO Financial Corporation filed with the U.S. Bankruptcy Court for the Middle District of Florida a Supplement to Disclosure Statement in support of the Modified Joint Plan of Reorganization. The Debtors file this Modified Plan of Reorganization to modify the treatment of Bestenheider in Classes 1, 3, and 4. Because no other creditors are affected by these modifications and the Plan, as modified, still contemplates payment to all other creditors in full, the Debtors do not believe that re-solicitation is necessary or required. Class 1 consists of the Unsecured Claims of Bestenheider against FICO. FICO disputes the Class 1 Claims. Pursuant to the terms of the Settlement Agreement, in full and final satisfaction, settlement, release, and discharge of and in exchange for its Allowed Class 1 Claim, FICO shall transfer to Bestenheider or his assignee the Lake Wales Property and the Smyrna Property, associated personal property, and all associated leases and material contracts at Closing which shall be assumed by the Class 1 Claimant with closing to occur on or prior to December 31, 2021, or on a date as otherwise agreed between FICO and Bestenheider. The transfer of the Lake Wales and Smyrna Properties to Bestenheider will be subject to the execution of two real estate transfer agreements (the "Real Estate Contracts"), pursuant to which FICO will transfer the Lake Wales Property, the Smyrna Property and assign all leases and material contracts associated with such Properties, but shall not include the transfer to Bestenheider of any cash associated with the existing properties. Within 7 days of the Settlement Effective Date, the Debtors and Bestenheider shall (1) file pleadings to cause the jury award entered in the State Court Case to be vacated; (2) file pleadings to voluntarily dismiss the State Court Case with prejudice; and (3) seek to withdraw or release all pending post-trial motions, appeals, causes of action, claims, and any other claims and actions between them, other than the Settlement Agreement, the Plan and the Plan Transaction Documents. The Debtors and Bestenheider anticipate the Settlement Effective Date occurring on or before December 31, 2021. Class 1 is Impaired. Class 2 consists of Unsecured Claims against FICO. Except to the extent that a Holder of an Allowed Class 2 Claim agrees to a less favorable treatment, in full and final satisfaction, settlement, release, and discharge of and in exchange for an Allowed Class 2 Claim, all Class 2 Claimants shall have their Allowed Class 2 Claims satisfied in full on the Effective Date from Cash in the Debtor's estate. The treatment shall be in full satisfaction of the Class 2 Claims. Class 2 is Impaired. Class 3 consists of Equity Interests in FICO. Holders of Equity Interests in FICO shall retain their equity interest in the FICO Debtor and receive distributions following the payment or reservation of sufficient funds to satisfy Class 1 and Class 2, less reservation by FICO of sufficient funds for capital operating needs related to any FICO Properties that have not been sold pursuant to the Plan, which distributions or reservation shall be proportionate to the shares of remaining Net Sale Proceeds from the sale of the FICO Properties and FICO's operating Cash on hand at the time. Class 3 is Impaired. Class 4 consists of the Claim of Bestenheider against Parusa. The sole Class 4 creditor's treatment under Class 1 shall be deemed to provide full and final satisfaction of his Class 4 Claim pursuant to the terms of the Settlement Agreement. Class 4 is Impaired and entitled to vote. Class 5 consists of Unsecured Claims against Parusa. Except to the extent that a Holder of an Allowed Class 5 Claim agrees to a less favorable treatment, in full and final satisfaction, settlement, release, and discharge of and in exchange for an Allowed Class 5 Claim, all Class 5 Claimants shall have their Allowed Class 5 Claims satisfied in full on the Effective Date from Cash in the Debtor's estate. The treatment shall be in full satisfaction of the Class 5 Claims. Class 5 is Impaired. Class 6 consists of Equity Interests in Parusa. Holders of Equity Interests in Parusa shall retain their equity interest in the Parusa Debtor and shall be entitled to distributions following payment or reservation for all other Classes as provided for in this Plan. To the extent Parusa sells the Grand Prairie Property, yet FICO has not yet sold the Tampa Property, and the sale of the Grand Prairie Property is not likely to occur in a matter of weeks, then Parusa shall make a capital contribution to FICO to pay or reserve for Class 2 Claims. Class 6 is Unimpaired. Plan Implementation Subject to the limitations, in addition to causing the transfers required in the Settlement Agreement, the Debtors will market and sell some or all of the Debtors' Properties located in Florida, and Texas in amounts necessary to fulfill all elements of the Plan, other than Class 1 and Class 4 Claims. The Debtors intend to sell the Properties through a structured sale process, with a goal of initial closing or closings to occur no later than December 31, 2021. The Net Sale Proceeds from the sale of the Debtors' Properties will be used to fund the Debtors' Plan and pay or reserve for all Allowed Claims, following payment of all administrative claims, including but not limited to all IRS tax liability, whether pass through to parent entities (indirect) or direct, and accruing post-petition in any form, including but not limited to income, appreciation, or capital gains liabilities. Parusa's largest disputed creditor, Xavier Bestenheider, asserted a disputed, unsecured jury verdict award in the approximate amount of $5,565,786.80, plus prejudgment interest and fees and claims against FICO in unknown amounts. The Lake Wales Property and the Smyrna Property will be transferred (not sold) to Bestenheider in full and complete satisfaction of his Class 1 and Class 4 Claims, as more thoroughly set forth in the Settlement Agreement between the Debtors and Bestenheider, arising from a mediation beginning November 15, 2021, and continuing until the Settlement Agreement was reached. Other than the transfer of certain Properties to Bestenheider, proceeds from the sale of other Properties will pay all Allowed Claims or reserve for all Disputed Claims. A full-text copy of the Disclosure Statement Supplement dated Dec. 3, 2021, is available at https://bit.ly/31w1njs from PacerMonitor.com at no charge. Counsel to the Debtors: Scott Underwood, Esq. Florida Bar Number 0730041 Megan W. Murray Florida Bar Number 0093922 Adam M. Gilbert Florida Bar Number 1011637 Underwood Murray, P.A. 100 North Tampa St 2325 Tampa, FL 33602 Tel: 813-540-8402 Email: sunderwood@underwoodmurray.com mmurray@underwoodmurray.com agilbert@underwoodmurray.com About Parusa Investment and FICO Financial Parusa Investment Corporation and FICO Financial Corporation, a Colorado Springs-based company engaged in renting and leasing real estate properties, filed their voluntary petitions for relief under Chapter 11 of the Bankruptcy Code (Bank. M.D. Fla. Case Nos. 21-03854 and 21-03853) on July 23, 2021. In the petitions signed by Christophe Rothpletz, president, Parusa disclosed $29,358,424 in assets and $5,879,577 in liabilities while FICO reported $14,351,778 in assets and $812,597 in liabilities. Underwood Murray P.A. represents the Debtors as bankruptcy counsel. Wright, Ponsoldt & Lozeau, Trial Attorneys, LLP and Link & Rockenbach, PA serve as special counsel. PERKY JERKY: Taps r2 advisors as Business Management Advisor ------------------------------------------------------------ Perky Jerky, LLC seeks approval from the U.S. Bankruptcy Court for the District of Colorado to hire r2 advisors, llc as marketing and business management advisor. The Debtor requires a marketing and business management advisor to oversee its business operation and to develop and implement a viable exit strategy from its Chapter 11 proceeding through the sale of its assets. The firm's hourly rates are as follows: Managing Director $500 per hour Director $250 per hour Analyst $100 - $150 per hour In addition, the Debtor agreed to pay the firm a bonus due and payable immediately upon, and concurrently with, the closing of a sale to any buyer equal to 5 percent of the gross sale price for amounts in excess of $1 million. The Debtor paid the firm $10,000 as a retainer fee. Thomas Kim, the firm's managing director, disclosed in a court filing that he is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. The firm can be reached at: Thomas Kim r2 advisors ilc 1518 Blake St Denver, CO 80202 Telephone: (303) 865-8460 Email: info@r2llc.com About Perky Jerky LLC Perky Jerky, LLC is a wholesaler of all natural meat jerky products and distributes to a variety of retailers, including grocery stores, drug stores, and other mass retailers. The Denver-based company also maintains an on-line sale presence. Perky Jerky filed a petition for Chapter 11 protection (Bankr. D. Colo. Case No. 21-15685) on Nov. 15, 2021, disclosing $1,934,044 in assets and $15,753,488 in liabilities. Brian Levin, chief executive officer, signed the petition. Judge Joseph G. Rosania Jr. oversees the case. Aaron A. Garber, Esq., at Wadsworth Garber Warner Conrardy, P.C. is the Debtor's legal counsel. r2 advisors, llc serves as the Debtor's marketing and business management advisor. PHOENIX PROPERTIES: U.S. Trustee Unable to Appoint Committee ------------------------------------------------------------ The U.S. Trustee for Region 21 on Dec. 6 disclosed in a court filing that no official committee of unsecured creditors has been appointed in the Chapter 11 case of Phoenix Properties of Savannah, LLC. About Phoenix Properties of Savannah Phoenix Properties of Savannah, LLC is a Savannah, Ga.-based company engaged in renting and leasing real estate properties. Phoenix Properties of Savannah filed a petition for Chapter 11 protection (Bankr. S.D. Ga. Case No. 21-40785) on Dec. 2, 2021, listing as much as $10 million in both assets and liabilities. Judge Edward J. Coleman, III oversees the case. James L. Drake, Jr., PC serves as the Debtor's legal counsel. PLAYA HOTELS: Won't Renew CMO's Employment Contract --------------------------------------------------- Playa Hotels & Resorts N.V. will not be renewing the employment contract of Kevin Froemming, the company's chief commercial officer. Mr. Froemming's last day of employment will be Jan. 5, 2022, as disclosed in a Form 8-K filed with the Securities and Exchange Commission. About Playa Hotels & Resorts Playa Hotels & Resorts is an owner, operator and developer of all-inclusive resorts in prime beachfront locations in popular vacation destinations in Mexico and the Caribbean. As of Sept. 30, 2021, Playa owned and/or managed a total portfolio consisting of 22 resorts (8,366 rooms) located in Mexico, Jamaica, and the Dominican Republic. In Mexico, Playa owns and manages Hyatt Zilara Cancun, Hyatt Ziva Cancun, Panama Jack Resorts Cancun, Panama Jack Resorts Playa del Carmen, Hilton Playa del Carmen All-Inclusive Resort, Hyatt Ziva Puerto Vallarta, and Hyatt Ziva Los Cabos. In Jamaica, Playa owns and manages Hyatt Zilara Rose Hall, Hyatt Ziva Rose Hall, Hilton Rose Hall Resort & Spa, Jewel Grande Montego Bay Resort & Spa and Jewel Paradise Cove Beach Resort & Spa. In the Dominican Republic, Playa owns and manages the Hilton La Romana All-Inclusive Family Resort, the Hilton La Romana All-Inclusive Adult Resort, Hyatt Zilara Cap Cana and Hyatt Ziva Cap Cana. Playa owns two resorts in the Dominican Republic that are managed by a third-party and manages five resorts on behalf of third-party owners. Playa reported a net loss of $262.37 million for the year ended Dec. 31, 2020, compared to a net loss of $4.36 million for the year ended Dec. 31, 2019. As of Sept. 30, 2021, the Company had $2.02 billion in total assets, $1.39 billion in total liabilities, and $623.95 million in total shareholders' equity. * * * As reported by the TCR on Sept. 21, 2021, S&P Global Ratings revised its outlook on Playa Hotels & Resorts N.V. to positive from negative and affirmed its 'CCC+' issuer credit rating. At the same time, S&P affirmed its 'CCC+' issue-level rating on the company's secured debt. S&P said, "The positive outlook reflects our expectation that Playa will maintain adequate liquidity. In addition, it indicates that we could raise our rating on the company if the significant recent improvement in travel volumes to Mexico and the Caribbean is sustained and its package average daily rates (ADRs), which are currently significantly elevated relative to 2019 levels, do not moderate materially. Specifically, we could raise our rating if Playa increases its revenue and EBITDA such that it sustains EBITDA coverage of interest expense of more than 1.5x, which would indicate it is able to sustain its capital structure over the long term." PRIME ECO: Seeks to Employ Abunden LLC as Financial Advisor ----------------------------------------------------------- Prime Eco Group, Inc. and Prime Eco Supply, LLC seek approval from the U.S. Bankruptcy Court for the Southern District of Texas to hire Abunden, LLC as financial advisor. The firm's services include: (a) reviewing the necessary financial information in order to prepare loan packages; (b) assisting the Debtors with soliciting, evaluating, and potentially effectuating secured debtor-in-possession or exit financing or similar relief; (c) assisting the Debtors in connection with the initial evaluation of their business and financial impact of various operational, financial, and strategic restructuring alternatives, including analysis of the development of plans of reorganization, disclosure statement and forecasts, if requested by the Debtors; (d) evaluating and advising the Debtors' management with regard to financial aspects of a Chapter 11 plan and disclosure statement, including, without limitation, feasibility, if requested; (e) providing other financial and restructuring-related services that are requested by the Debtors and are within the firm's capabilities, including expert-related work to be performed in any adversary proceeding, if requested; and (f) providing testimony, to the extent necessary, upon request. The firm will be paid a flat fee of $14,000. Karl Maier, the firm's advisor who will be providing the services, disclosed in a court filing that he is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. The firm can be reached at: Karl K. Maier Abunden, LLC 1431 Martin Houston, TX 77018 Tel: 713.927.6182 Email: karl@abunden.com About Prime Eco Group and Prime Eco Supply Wharton, Texas-based Prime Eco Group, Inc. is a manufacturing company specializing in specialty chemicals. Prime Eco Group and Prime Eco Supply, LLC sought protection under Chapter 11 of the Bankruptcy Code (Bankr. S.D. Texas Case Nos. 21-32560 and 21-32561) on July 30, 2021. At the time of the filing, Prime Eco Group disclosed $3,057,685 in assets and $3,587,476 in liabilities while Prime Eco Supply disclosed $107,969 in assets and $527,681 in liabilities. Judge David R. Jones oversees the cases. The Debtors tapped the Law Office of Margaret M. McClure as legal counsel, Abunden LLC as financial advisor, and Wells & Bedard P.C. as accountant. PROFAC SERVICES: Moody's Ups CFR to Caa1, Under Review for Upgrade ------------------------------------------------------------------ Moody's Investors Service upgraded Profrac Services, LLC's Corporate Family Rating to Caa1 from Caa2, its Probability of Default Rating to Caa1-PD from Caa2-PD and its senior secured term loan rating to Caa1 from Caa2. Concurrently, Moody's placed Profrac's ratings on review for upgrade in light of its proposed acquisition of FTS International Inc. (FTSI) in an all-cash transaction for approximately $408 million. Headquartered in Fort Worth, Texas, FTSI is a pure-play hydraulic fracturing service company with operations across multiple basins in the United States. "Profrac benefited significantly from the increased pressure pumping activity in 2021 to improve its debt leverage and liquidity. The company will likely continue to improve its equipment utilization and cash flow" commented Sreedhar Kona, Moody's Senior Analyst. "The pending acquisition of FTSI will likely result in a significant improvement in Profrac's competitive positioning, capital structure and liquidity." Upgrades, Placed on Review for further Upgrade : Issuer: ProFrac Services, LLC Corporate Family Rating, Upgraded to Caa1 from Caa2 Probability of Default Rating, Upgraded to Caa1-PD from Caa2-PD Gtd. Senior Secured Term Loan, Upgraded to Caa1 (LGD4) from Caa2 (LGD4) Outlook Actions: Issuer: ProFrac Services, LLC Outlook, Changed To Rating Under Review From Stable RATINGS RATIONALE / FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS ProFrac's upgrade to a Caa1 CFR reflects the company's improved financial performance in 2021 tempered by its still tight covenant compliance headroom and modest market position in a highly cyclical and commoditized industry. While the company's financial leverage improved in 2021 and is likely to further improve in 2022, the company's small size and single service line focus continue to make it extremely reliant on sustained recovery in pressure pumping service demand. The hydraulic fracturing service within OFS is highly competitive with some significantly larger companies that have greater financial resources, and product and service line diversity. ProFrac benefits from its vertically integrated business model with manufacturing and distribution capabilities, helping the company somewhat differentiate itself in its ability to manage the delivery schedules of its fleet. Profrac's ratings were placed on review for upgrade based on the company's potential to significantly increase its size, market position and basin diversification through its merger with FTSI. The combined company will also benefit from a further diversified customer base. With the acquisition to be funded entirely by equity, it will also deleverage the company. Moody's rating review will focus on the combined entity's capital structure and liquidity, the incremental debt and cash flow forecasts for the combined business and the post-merger ownership structure. The acquisition is expected to close in the first quarter of 2022 after which the ratings review will be concluded. Based on the limited information currently available, the most likely outcome of the review appears to be a one notch upgrade of the CFR to B3. Profrac has adequate liquidity. At year-end 2020, the company had $9 million of cash and $52 million drawn under its $105 million Asset Based Loan (ABL) facility. The company will be able to meet its cash needs including interest, maintenance capital expenditures and cash taxes. The term loan facility must meet maximum leverage covenant of 2x. However, the company has a covenant holiday for the maximum leverage covenant until the end of 2022. The ABL facility requires the company to maintain a minimum fixed charge coverage ratio of 1x if the amount available under the ABL is less than 15% or $10 million. The company's Main Street Loan restricts the company to maintain a consolidated debt service coverage ratio above 2x. The company will remain in compliance with its fixed charge coverage ratio covenant and the consolidated debt service coverage ratio covenant in 2022 but compliance headroom for the maximum leverage covenant could be tight when the waiver lapses post-2022, depending on the pace and maintenance of cash flow recovery through 2023. Profrac's senior secured term loan due in September 2023 ($173 million outstanding as of September 30, 2021) is rated Caa1, the same as the CFR as it has a first lien on all the assets of the borrower and guarantors, including the subsidiaries, except for the ABL collateral. The $105 million ABL revolving credit facility with April 2023 maturity ($66 million drawn as of September 30, 2021), has a first lien on all the working capital assets of the borrower (ABL collateral) and a second lien on all other assets of the borrower and guarantors. The company also has a $35 million Main Street Loan ($32 million outstanding as of September 30, 2021) due in July 2025, and collateralized only by small subset of Profrac's tractor assets. ProFrac, headquartered in Fort Worth, Texas, is a privately owned vertically integrated provider of hydraulic fracturing services to E&P companies in the United States. The Wilks Family owns 100% of the company. The principal methodology used in these ratings was Oilfield Services published in August 2021. PWM PROPERTY: Affiliate 181 West Wins Cash Collateral Access ------------------------------------------------------------ The U.S. Bankruptcy Court for the District of Delaware has authorized 181 West Madison Property, LLC, an affiliate of PWM Property Management LLC, to, among other things, use cash collateral on an interim basis and provide adequate protection. The Debtor requires the use of cash collateral, among other things, to fund the orderly continuation of its business, maintain the confidence of its tenants, customers, and vendors, pay its operating expenses, and preserve its going-concern value, consistent with the budget. 181 West Madison owns the land located at 181 West Madison Street, Chicago, Illinois, and the commercial real estate building located thereon. The 181 West Madison property, the leases and rents thereof and therefrom, and various associated personal property are encumbered by a recorded, first priority Mortgage, Assignment of Leases and Rents, Security Agreement and Fixture Filing dated November 27, 2019. The Mortgage secures a loan in the original principal amount of $240 million made that date to 181 West Madison. The original note evidencing the Mortgage Loan has been split into multiple notes, and various of the Notes have been securitized. Certain of the Notes are now held by Wells Fargo Bank, National Association, as Trustee for the holders of J.P. Morgan Chase Commercial Mortgage Securities Trust 2020-LOOP, Commercial Mortgage Pass-Through Certificates, Series 2020-LOOP. The Prepetition Secured Party is the assignee of record of the Mortgage, holds the Mortgage on behalf of itself and holders of the other Notes evidencing the Mortgage Loan, and acts for itself and those other holders by and through Situs Holdings, LLC, its Special Servicer, with respect to the Mortgage Loan and the Loan Documents. As adequate protection for the Debtor's use, sale, or lease of cash collateral, the Prepetition Secured Party is granted: a. valid and perfected replacement security interests in and liens upon the Debtor's assets and properties; and b. a superpriority administrative claim against the Debtor's estate, as and to the extent provided in section 507(b) of the Bankruptcy Code. As additional adequate protection of the Prepetition Secured Party's respective interests, the Debtor will maintain the going concern value of the Prepetition Secured Party's collateral by using the cash collateral as provided by and only in accordance with the Second Interim Order. The final hearing on the matter is scheduled for December 13, 2021, at 11:30 a.m. A copy of the order is available at https://bit.ly/3lIh7XR from PacerMonitor.com. About PWM Property Management PWM Property Management LLC and its affiliates are primarily engaged in renting and leasing real estate properties. They own two premium office buildings, namely 245 Park Avenue in New York City, a prominent commercial real estate assets in Manhattan's prestigious Park Avenue office corridor, and 181 West Madison Street in Chicago, Illinois. On Oct. 31, 2021, PWM Property Management LLC and its affiliates sought Chapter 11 protection (Bankr. D. Del. Lead Case No. 21-11445). PWM estimated assets and liabilities of $1 billion to $10 billion as of the bankruptcy filing. The cases are pending before the Honorable Judge Mary F. Walrath and are being jointly administered for procedural purposes under Case No. 21-11445. The Debtors tapped White & Case LLP as restructuring counsel; Young Conaway Stargatt & Taylor, LLP as local counsel; and M3 Advisory Partners, LP as restructuring advisor. Omni Agent Solutions is the claims agent. PWM PROPERTY: Affiliate 245 Park Avenue Has Cash Collateral Access ------------------------------------------------------------------ The U.S. Bankruptcy Court for the District of Delaware has authorized 245 Park Avenue Property, LLC, an affiliate of PWM Property Management LLC, to, among other things, use cash collateral on an interim basis and provide adequate protection. The Debtor requires the use of cash collateral, among other things, to fund the orderly continuation of its business, maintain the confidence of its tenants, customers, and vendors, pay its operating expenses, and preserve its going-concern value, consistent with the Budget. 245 Park Avenue owns the land located at 245 Park Avenue in New York and the commercial real estate building located thereon. The 245 Park Avenue property, the leases and rents thereof and therefrom, and various associated personal property are encumbered by a recorded, first priority Consolidated, Amended and Restated Mortgage, Assignment of Leases and Rents, Security Agreement and Fixture Filing dated May 5, 201. The Mortgage secures a loan in the original principal amount of $1.2 billion made that date to the Debtor. The original note evidencing the Mortgage Loan has been split into multiple notes, and various of the Notes have been securitized. Certain of the Notes are now held by Wilmington Trust, National Association, as Trustee for the holders of 245 Park Avenue Trust 2017-245P, Commercial Mortgage Pass-Through Certificates, Series 2017-245P. The Mortgage Loan is guaranteed by Debtor 181 West Madison Holding LLC. The Prepetition Secured Party is the assignee of record of the Mortgage, holds the Mortgage on behalf of itself and holders of the other Notes evidencing the Mortgage Loan and acts for itself and those other holders by and through Situs Holdings, LLC, its Special Servicer, with respect to the Mortgage Loan and the Loan Documents. As adequate protection for the Debtor's use, sale, or lease of cash collateral, the Prepetition Secured Party is granted: a. valid and perfected replacement security interests in and liens upon the Debtor's assets and properties; and b. a superpriority administrative claim against the Debtor's estate, as and to the extent provided in section 507(b) of the Bankruptcy Code. As additional adequate protection of the Prepetition Secured Party's respective interests, the Debtor will maintain the going concern value of the Prepetition Secured Party's collateral by using the cash collateral as provided by and only in accordance with the Second Interim Order. The final hearing on the matter is scheduled for December 13, 2021 at 11:30 a.m. A copy of the order is available at https://bit.ly/3EtEGuO from PacerMonitor.com. About PWM Property Management PWM Property Management LLC, et al., are primarily engaged in renting and leasing real estate properties. They own two premium office buildings, namely 245 Park Avenue in New York City, a prominent commercial real estate assets in Manhattan's prestigious Park Avenue office corridor, and 181 West Madison Street in Chicago, Illinois. On Oct. 31, 2021, PWM Property Management LLC and its affiliates sought Chapter 11 protection (Bankr. D. Del. Lead Case No. 21-11445). PWM estimated assets and liabilities of $1 billion to $10 billion as of the bankruptcy filing. The cases are pending before the Honorable Judge Mary F. Walrath and are being jointly administered for procedural purposes under Case No. 21-11445. The Debtors tapped White & Case LLP as restructuring counsel; Young Conaway Stargatt & Taylor, LLP as local counsel; and M3 Advisory Partners, LP as restructuring advisor. Omni Agent Solutions is the claims agent. QUALITY MACHINE: Case Summary & 20 Largest Unsecured Creditors -------------------------------------------------------------- Debtor: Quality Machine of Iowa, Inc. 5800 69th Avenue N. Brooklyn Park, MN 55429 Business Description: Quality Machine of Iowa, Inc. is engaged in precision production machining of metal parts. The Debtor has two locations: Minneapolis, MN and Audubon, IA. Chapter 11 Petition Date: December 3, 2021 Court: United States Bankruptcy Court District of Minnesota Case No.: 21-42169 Debtor's Counsel: Cameron A. Lallier, Esq. FOLEY & MANSFIELD PLLP 250 Marquette Avenue, Suite 1200 Minneapolis, MN 55401 Tel: 612-338-8788 Fax: 612-338-8690 Email: jlavaque@foleymansfield.com Total Assets: $8,368,270 Total Liabilities: $10,343,162 The petition was signed by Timothy Greene as owner and CEO. 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/AB74LTI/Quality_Machine_of_Iowa_Inc__mnbke-21-42169__0001.0.pdf?mcid=tGE4TAMA REHOBOTH PIPELINE: Taps Robleto Kuruce as Bankruptcy Counsel ------------------------------------------------------------ Rehoboth Pipeline Construction Services, LLC seeks approval from the U.S. Bankruptcy Court for the Western District of Pennsylvania to hire Robleto Kuruce, PLLC to serve as legal counsel in its Chapter 11 case. The firm's services include: (a) assisting the Debtor in completing its bankruptcy schedules, statement of financial affairs and related documents, and in filing motions, applications and notices; (b) reviewing claims and filing objections to claims; and (c) representing the Debtor in all meetings and hearings. The firm's hourly rates are as follows: Aurelius P. Robleto, Esq. $320 per hour Renée M. Kuruce, Esq. $270 per hour Paralegals $110 per hour Renee Kuruce, Esq., a partner at Robleto Kuruce, disclosed in a court filing that he is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. The firm can be reached at: Renee Kuruce, Esq. Robleto Kuruce, PLLC 6101 Penn Ave., Ste. 201 Pittsburgh, PA 15206 Tel: (412) 925-8194 Fax: (412) 346-1035 Email: rmk@robletolaw.com About Rehoboth Pipeline Rehoboth Pipeline Construction Services, LLC filed a petition for Chapter 11 protection (Bankr. W.D. Pa. Case No. 21-22573) on Dec. 2, 2021, listing up to $50,000 in assets and up to $10 million in liabilities. Christopher P. Walker, managing member, signed the petition. The Debtor tapped Renee Kuruce, Esq., at Robleto Kuruce, PLLC as legal counsel. RITCHIE BROS: Moody's Rates New $935MM Unsecured Notes 'Ba3' ------------------------------------------------------------ Moody's Investors Service has assigned a Ba3 rating to Ritchie Bros. Holdings Inc. and Ritchie Bros. Holdings Ltd. proposed unsecured notes offering (equivalent to around $935 million). All of the Ritchie Bros. Auctioneers Incorporated (RBA) existing ratings, including its Ba2 corporate family rating, Ba2-PD probability of default rating and Ba3 senior unsecured rating remain unchanged. Moody's also assigned new negative outlooks for Ritchie Bros. Holdings Inc. and Ritchie Bros. Holdings Ltd. The outlook for RBA remains negative. The proposed unsecured notes issuance, combined with around $205 million on the company's senior secured credit facility, will be used to finance the GBP775 million (around $1.04 billion) acquisition of Euro Auctions (not rated), that was announced in August 2021, and the related transaction expenses. LIST OF DEBT: Issuer: Ritchie Bros. Holdings Inc. Senior Unsecured Regular Bond/Debenture, Assigned Ba3 (LGD5) Outlook, Assigned Negative Issuer: Ritchie Bros. Holdings Ltd. Senior Unsecured Regular Bond/Debenture, Assigned Ba3 (LGD5) Outlook, Assigned Negative RATINGS RATIONALE RBA benefits from: 1) a strong position in the industrial equipment auctions segment and an expanding global presence driven by the planned acquisition of Euro Auctions; 2) a multichannel strategy with strong online platforms that has enabled the company to maintain operations despite limitations on in-person events through the Coronavirus pandemic; and 3) exposure to multiple industry sectors and good growth potential. RBA is constrained by: 1) its small size relative to many Ba2-rated service companies; 2) aggressive financial policies highlighted by the company's willingness to undertake significant debt funded transactions (such as the planned Euro Auctions acquisition); 3) its participation in a competitive and fragmented marketplace that has some cyclical pressures; and 4) execution risks associated with the incorporation of Euro Auctions into the company's existing framework, as well as expanding into new segments and geographic areas. The negative outlook reflects the potential that transaction related execution risks and aggressive financial policies could delay RBA's ability to reduce leverage to below 3.5x beyond 2023. Governance issues include the company's shift towards more aggressive fiscal policies, highlighted by the material amount of debt required to finance the planned acquisition of Euro Auctions. While RBA's capital structure post transaction has not been publicly stated, Moody's expect the transaction will lead to the company more than doubling its Moody's adjusted debt with only a modest increase in operating earnings. RBA has good liquidity (SGL-2) over the next four quarters, with sources of liquidity of around $900 million compared to uses of around $2 million from mandatory debt amortization (excluding the impact of the announced acquisition of Euro Auctions). Sources include a cash balance of $363 million at September 30, 2021 (excluding restricted cash), around $500 million available under its $750 million in revolving credit facilities which are committed until September 2026 and Moody's expectations that RBA will generate around $35 million of free cash flow over the next 12 months. The company has seasonality with some quarters having a weaker cash flow resulting in revolver drawings to fund intermittent working capital needs. While the planned Euro Auctions acquisition will drive a material increase in leverage, Moody's expect that as part of RBA's post-acquisition capital structure the company will ensure it has adequate cushion under the financial covenants of its credit facilities. The senior ranking security position of RBA's senior secured credit facilities causes them to be rated Ba1, one notch above the company's Ba2 CFR. The unsecured debt, rated Ba3, rank behind the company's secured debt and are rated one notch below the corporate family rating due to subordination to the senior secured debt, in accordance with Moody's Loss Given Default for Speculative-Grade Companies methodology. The unsecured debt issuance by the three subsidiaries today is 100% guaranteed by RBA. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS The ratings could be upgraded if RBA is able to increase its scale and continue to broaden and diversify its product offerings through its multi-channel strategy while demonstrating organic revenue and cash flow growth. It would also require that leverage is maintained near 2x (2.2x at Q2/21) and FCF/debt is maintained above 15% (14.3% at Q2/21). The ratings could be lowered if business fundamental deteriorated, evidenced by organic revenue or profitability declines, or if debt to EBITDA (Moody's adjusted) is sustained above 3.5x (2.2x at Q2/21) and FCF/debt is maintained below 5% (14.3% at Q2/21). Ritchie Bros. Auctioneers Incorporated, headquartered in Vancouver, Canada, sells industrial equipment and other durable assets through its unreserved auctions, online marketplaces, listing services and private brokerage services. In 2020, the company's gross transaction value (GTV) was $5.4 billion and the company generated total revenue of $1.38 billion. The company's market capitalization is about $7.7 billion. The principal methodology used in these ratings was Business and Consumer Services published in November 2021. RITCHIE BROS: S&P Assigns Prelim 'BB' Rating on Unsecured Notes --------------------------------------------------------------- S&P Global Ratings assigned its preliminary 'BB' issue-level and '4' recovery ratings to the proposed approximately US$935 million equivalent senior unsecured notes issuances by Ritchie Bros. Auctioneers Inc.'s (RBA) subsidiaries. The notes will be issued in two series: Ritchie Bros. Holdings Inc.'s (U.S. subsidiary) U.S.-dollar-denominated unsecured notes due 2031 and Ritchie Bros. Holdings Ltd.'s (Canadian subsidiary) Canadian-dollar-denominated unsecured notes due 2029. The '4' recovery rating indicates its expectation for average (30%-50%; rounded estimate: 30%) recovery for the noteholders in the event of a default. S&P expects the noteholders' claim will rank pari passu with the company's existing senior unsecured lenders and that the notes would be guaranteed by RBA on consummation of the company's previously announced acquisition of the Euro Auctions Group. Proceeds from the notes offering will be used to fund the acquisition but will remain in escrow accounts until the acquisition closes. The Euro Auctions acquisition remains subject to regulatory approvals and we anticipate it will close in the first quarter of 2022. S&P said, "We base our preliminary rating on all the proposed senior unsecured notes on our expectation that we would lower our issuer credit rating on RBA by one notch to 'BB' from 'BB+' following the completion of the acquisition. This reflects the increase in RBA's leverage related to the incremental debt funding. At that time, we would also affirm our 'BBB-' issue-level rating, with a '1' recovery rating, on the company's existing secured debt and lower our issue-level rating on the existing US$500 million unsecured notes due 2025 by one notch to 'BB' from 'BB+' (the '4' recovery rating on the notes would be unchanged). "All of our existing ratings on RBA, including our 'BB+' issuer credit rating, remain on CreditWatch, where they were placed with negative implications Aug. 9, 2021. We expect to resolve the CreditWatch when the acquisition transaction closes, which we expect to occur in the first quarter of 2022." RECOVERY ANALYSIS S&P's recovery analysis assumes the acquisition and debt transactions are completed as proposed. Key analytical factors: -- S&P updated its recovery analysis to incorporate the company's updated capital structure and the corresponding increase in its estimated enterprise value in its simulated default scenario. -- RBA's capital structure following the acquisition of Euro Auctions will consist of US$750 million revolving credit facilities, a US$299 million delayed-draw term loan (at Sept. 30, 2021), US$500 million unsecured notes due 2025, and the proposed approximately US$935 million equivalent unsecured notes. -- S&P values the company on a going-concern basis using a 6.0x multiple of its projected emergence EBITDA. -- S&P's emergence EBITDA proxy represents a significant deterioration from RBA's pro forma EBITDA and is close to its estimate of the company's fixed charges in default. -- In S&P's hypothetical default scenario, it estimates that secured creditor claims are fully covered, with the remaining enterprise value available to RBA's unsecured creditors. -- S&P also assumes that the company draws down 85% of the US$750 million available under its revolving credit facilities. Simulated default assumptions: -- Simulated year of default: 2026 -- Implied enterprise value multiple: 6.0x -- EBITDA at emergence: US$213 million -- Jurisdiction: U.S. Simplified waterfall: -- Net enterprise value at default (after 5% administrative costs): US$1.213 billion -- Valuation split % (obligors/non-obligors): 85/15 -- Collateral value available to secured creditors: US$1.149 billion -- First-lien secured debt: US$722 million --Recovery expectations: 90%-100% (rounded estimate: 95%) -- Total value available to unsecured claims: US$491 million -- Senior unsecured claims: US$1.472 billion --Recovery expectations: 30%-50% (rounded estimate: 30%) All debt amounts include six months of prepetition interest. SALEM CONSUMER: Court Rules on BELFOR Row ----------------------------------------- Salem Consumer Square OH LLC, filed a petition for relief under Chapter 11 of the Bankruptcy Code on January 5, 2021. Since that time, the bankruptcy case has predominantly revolved around disputes with one creditor, BELFOR USA Group, Inc. On March 5, 2021, the Debtor filed a Complaint to (I) Determine Amount, Priority and Extent of Secured Status Pursuant to 11 U.S.C. Section 506(a) and (II) Determine Amount of BELFOR's Allowed Claim. Therein, the Debtor challenges BELFOR's contention that it is owed at least $2.8 million for emergency services and mitigation work on the Debtor's property, a shopping center located in Dayton, Ohio, following a tornado in May 2019. The Debtor asserts that BELFOR's invoices were inflated, challenges the quality of the work performed, and further alleges that the documents relied upon by BELFOR in support of its claim were not signed by authorized representatives of the Debtor. By filing the Complaint, the Debtor seeks a determination of whether BELFOR has an allowed claim against the estate, the value of such a claim, and the secured or unsecured nature of said claim. BELFOR filed a Partial Motion for Summary Judgment, seeking entry of an order providing that its claim is allowed in an amount of at least $2.8 million. According to BELFOR, the Debtor waived its right to contest that BELFOR is owed at least $2.8 million and is estopped from further contesting that amount. Whereas waiver involves a voluntary and intentional relinquishment of a known right, estoppel precludes a party from asserting certain facts where, by the party's own conduct, he has induced another to change position in good faith reliance. BELFOR asserts that, pursuant to the Work Authorization and Direct Pay Authorization, the Debtor waived any right it had under the insurance policy with Travelers to payment for the work BELFOR performed. Further, under the Work Authorization, BELFOR contends Travelers could negotiate the price and act as agent for the Debtor and Moonbeam in such negotiations. To the extent the Debtor seeks to challenge the performance and quality of BELFOR's work, BELFOR cites to the Certificate of Satisfaction to assert any such claims have been waived. However, whether the Debtor is bound by any of the documents depends on whether Osborne could bind the Debtor by executing these documents. BELFOR cites to Ammerman v. Avis Rent A Car System, Inc. 455 N.E.2d 1041 (Ohio Ct. App. 1982), and Republic Waste Servs. of Ohio Hauling, LLC v. Pepper Pike Props., Inc., No. 81525, 2003 WL 1361134, 2003 Ohio App. LEXIS 1281 (Ohio Ct. App. Mar. 20, 2003), in support of its argument that Thomas Osborne had authority, either actual or apparent, to bind the Debtor. Whereas express authority is directly granted by the principal on an agent or employee in direct terms, implied authority is that "which is incidental and necessary for the agent to carry into effect the powers expressly conferred upon him by the principal." Even where there is no actual authority conferred, a principal may nonetheless be held liable for the acts of the agent "if the principal has by his words or conduct caused the third party to reasonably believe that the agent had the requisite authority to bind the principal." The Lead Sheet is the primary evidence cited by BELFOR in support of Osborne's authority to bind the Debtor. The Lead Sheet identifies Osborne as "Primary Decision Maker." Notably, inconsistent with BELFOR's assertion, the Lead Sheet does not demonstrate any authorization provided by Leon Williams, the Court said. However, most significantly, the Court agrees the Debtor should have the opportunity for discovery regarding the document generated by BELFOR. Therefore, the Lead Sheet will not be considered for the purpose of resolving the Motion. As to actual authority of Osborne to bind the Debtor, BELFOR points to no evidence of direct authority; nor does BELFOR identify evidence showing that execution of the documents on behalf of the Debtor was incidental to his other maintenance duties as the court found in Republic Waste with respect to the maintenance supervisor's authority to sign a service agreement. Accordingly, the Court held that BELFOR, as the party moving for summary judgment, failed to meet its initial burden of identifying materials demonstrating the absence of a genuine dispute of material fact as to Osborne's actual authority. As to the apparent authority of Osborne, BELFOR asserts that it reasonably relied upon representations that Osborne had the authority to bind the Debtor and Moonbeam. BELFOR contends that Osborne, the Debtor's only employee, "was listed as 'Property Manager' of the Property and a member of Moonbeam Capital's Management Team." There is no citation to the record to support this allegation, the Court pointed out. BELFOR also states that "[h]e was the person who called BELFOR to obtain its service...." There is no citation to the record to support this allegation, and this allegation appears inconsistent with BELFOR's own assertion contained in its Concise Statement of Material Facts. Further, BELFOR asserts that "Virginia, Williams, and others were provided copies of the documents and never challenged the ability of Osborne to execute them." However, the citations to the Concise Statement of Material Facts and exhibits cited therein do not support this statement, and the Debtor contends that alleged contract was not provided to the Debtor until approximately two months after BELFOR ceased work at the Property. Ultimately, to make a determination of apparent authority, the Court will have to assess the nature of Osborne's responsibilities, the position in which the Debtor held him out to the public, and whether the documents in question involve responsibilities closely related to his assigned duties. BELFOR failed to identify evidence in support of Osborne's apparent authority to support its Motion, the Court held. In arguing that waiver nonetheless applies, BELFOR cites to State ex rel. Noble v. Ellas, No. CA-3507, 1990 WL 97605, 1990 Ohio App. LEXIS 2868 (Ohio Ct. App. July 9, 1990). Notably, that case provides that "[t]he party asserting waiver must prove a 'clear, unequivocal, decisive act of the party against whom the waiver is asserted, showing such a purpose or acts amount to an estoppel on his part.'" In Noble, the appellant asserted that the appellee waived his right to claim additional compensation as he accepted, cashed, and spent the checks paying him a lesser amount. The court disagreed as the appellee voted against a resolution to limit pay and, most significantly, continued to submit time sheets claiming more than the amount available under the resolution. Such acts did not indicate waiver, the Court says. BELFOR repeatedly argues the Debtor agreed to the payment of $2.8 million to BELFOR thereby waiving any challenge with respect thereto. There is no express agreement identified by BELFOR. With respect to any characterization of the amount owed to BELFOR as "undisputed," the evidence offered in support consists of Travelers' statements. As to conduct of the Debtor demonstrating a knowing and voluntary waiver of its right to contest the amount owed to BELFOR, as in Noble, the mere acceptance of funds does not necessarily establish waiver. To the contrary, the Debtor produced the Declaration of Leon Williams, in which Williams states that neither the Debtor nor Moonbeam agreed to pay BELFOR the amount of $2.8 million. Notably, Williams' statement is supported by the conduct of the Debtor and Moonbeam. The refusal to permit Travelers to issue payments directly to BELFOR belies the conclusion that the Debtor and Moonbeam agreed to pay any amount approved by Travelers. Though Travelers' goal may have been "to reach an agreed cost with no out of pocket costs to the insured," BELFOR was directed to deal with the Debtor and/or Moonbeam directly when BELFOR sought payment of the "undisputed amount." At this stage, the Court does not weigh the evidence. All justifiable inferences are to be drawn in favor of the Debtor as the non-moving party, and the mere acceptance of funds from Travelers fails to establish as a matter of law the Debtor waived the right to contest the amount owed to BELFOR. Further, the Debtor asserts it could not have waived its challenge to the charges it believes to be inflated as it lacked the information at the time of any alleged waiver. BELFOR also contends the Debtor's failure to challenge the quality and performance of BELFOR's work in the form of a counterclaim in the State Court Action is an omission which supports a finding of waiver. Upon review of the First Amended Answer filed in the State Court Action, it cannot be interpreted as establishing that the Debtor knowingly and voluntarily relinquished its rights. In fact, the First Amended Answer clearly challenges the quality of the work under the heading "First Defense." Further, to the extent BELFOR argues that Debtor can present no evidence of any damage caused by BELFOR, the Debtor has specifically set forth challenges regarding demolition performed by BELFOR in the form of the Declaration of Pete Hanewich, an individual with experience in the restoration industry. Accordingly, BELFOR failed to identify undisputed facts to establish waiver on this issue as well, the Court further held. BELFOR's final argument is that the Debtor is estopped from asserting that the value of BELFOR's services is less than $2.8 million and challenging the performance of BELFOR's work. Essentially, the rule behind estoppel "is that one party will not be permitted to deny that which, by his words, his acts, or his silence (when there was an obligation to speak), he has induced a second party reasonably and in good faith to assume and rely upon to that party's prejudice or pecuniary disadvantage." BELFOR cites the elements for estoppel to apply: "(1) a representation by the party to be estopped; (2) that communicates a fact or state of affairs in a misleading way; (3) and induces reasonable, actual reliance by the second party; and (4) the party seeking estoppel would be prejudiced unless the other party is prevented from asserting a right in contradiction with the earlier representation." As to the value of the services, BELFOR asserts the Debtor represented that BELFOR would be paid directly by Travelers through the Work Authorization and Direct Pay Authorization "as well as ... numerous communications with the employees and agents of Debtor and Moonbeam Capital." First, to the extent BELFOR relies on the documents executed by Osborne to bind the Debtor, as discussed supra, Osborne's authority to execute the documents has not been determined. Second, there is no citation to support the alleged "numerous communications" making this representation to BELFOR. Nonetheless, BELFOR asserts that "[a]s part of the audit process and after, Debtor repeatedly represented, both affirmatively and by omission, that it had agreed on the $2.8 million payment to BELFOR." BELFOR fails to cite any affirmative representations by the Debtor. With respect to alleged omissions indicating to BELFOR that the Debtor would not dispute payment in the amount of $2.8 million, BELFOR's general allegation regarding omissions during the audit process is insufficient. While BELFOR identifies communications between Williams and Engle, BELFOR fails to identify at what point the Debtor had an obligation to speak. Further, the Debtor presented evidence that it did not remain silent; rather, Williams indicted that direct payments by Travelers to BELFOR were not approved by the insured. As reasonable minds could differ regarding when the Debtor may have had a duty to speak, resolution is not appropriate on summary judgment. BELFOR expands on its argument regarding estoppel in a footnote in its Reply. BELFOR contends, for example, that the act of depositing the insurance proceeds could be an implied act of assurance to BELFOR that the amount would not be challenged. Though BELFOR cites to the standard for estoppel by acquiescence, BELFOR fails to complete the citation: "Acquiescence requires a finding of conduct on the plaintiff's part that amounted to an assurance to the defendant, express or implied, that plaintiff would not assert his... rights against the defendants. In addition, the party to be estopped must intend that his conduct shall be acted on or must so act that the party asserting the estoppel has a right to believe that it is so intended." The Court, however, notes BELFOR was not paid, and BELFOR was advised of the position of Moonbeam and the Debtor that the entities would not agree to direct payment by Travelers to BELFOR. Further, the Debtor contends that it was not previously aware of the alleged inflated charges. As such, the Debtor could not acquiesce in conduct of which it was not aware. As all justifiable inferences are to be drawn in favor of the non-moving party, the acceptance of funds from Travelers fails to establish as a matter of law that BELFOR was assured of an agreement regarding the amount of its claim. Further, to the extent BELFOR asserts it relied upon the Debtor's conduct in reducing its lien to the amount of $2.8 million, no evidence was provided by BELFOR to support the reason for the reduction. Specifically, no evidence was offered to support a finding that the mere acceptance by Moonbeam of the funds from Travelers induced detrimental action by BELFOR. Further, even if, BELFOR reduced its lien in reliance on the conduct of the Debtor and/or Moonbeam there is a question regarding whether such reliance was reasonable. Therefore, the Court cannot find that the Debtor is estopped as a matter of law from challenging the value of BELFOR's services. BELFOR also contends the Debtor is estopped from challenging the performance and quality of its work. In support of an affirmative representation to this effect, BELFOR cites to the Certificate of Satisfaction. This document was signed by Osborne, whose authority to bind the Debtor has not been established. Therefore, whether the statement within the document can be considered as a representation by the Debtor cannot be determined on this record and cannot establish estoppel at this juncture. Similar to BELFOR's argument regarding waiver, BELFOR contends the Debtor should be estopped from challenging the quality of BELFOR's work as the Debtor failed to raise these challenges in the form of a counterclaim in the State Court Action. BELFOR argues that the assertion of the affirmative defense of setoff in the State Court Action is insufficient. Upon review of the First Amended Answer filed in the State Court Action, it cannot be interpreted as any kind of assurance that the Debtor would not assert its rights regarding the quality of BELFOR's work. In fact, the First Amended Answer clearly challenges the quality of the work under the heading "First Defense." Construing the evidence in the light most favorable to the Debtor as the non-moving party, BELFOR failed to establish any representation that the Debtor would not challenge the quality of BELFOR's work. Finally, implicit in the application of estoppel is the prevention of fraud with a purpose of promoting justice. Therefore, as the Debtor has raised allegations of fraudulent overbilling, to the extent proven true, application of estoppel would serve to permit fraud rather than prohibit it. Each party portrays itself as the innocent victim of the opposing party's dishonest and fraudulent conduct. Amidst the accusations being leveled in both directions and with the need for additional discovery, the outcome of this case will likely be determined at trial, at which time the Court can assess the full record and the credibility of the witnesses. Based on these, the Court concludes BELFOR failed to establish that it is entitled to judgment as a matter of law regarding the alleged minimum amount of its claim. Accordingly, the Court says the Motion must be denied. A full-text copy of the Memorandum Opinion dated November 19, 2021, is available at https://tinyurl.com/5n83kd66 from Leagle.com. About Salem Consumer Salem Consumer Square OH LLC is a Single Asset Real Estate debtor (as defined in 11 U.S.C. Section 101(51B)). It owns and operates the shopping center known as "Salem Consumer Square" located at 5447 Salem Avenue, Dayton, OH 45426. On January 5, 2021, Salem Consumer Square sought Chapter 11 protection (Bankr. W.D. Pa. Case No. 21-20020). The Debtor disclosed total assets of $3,385,461 and total liabilities of $3,134,072. The case is assigned to The Honorable Carlota M. Bohm. Bernstein-Burkley, P.C., led by Kirk B. Burkley, is the Debtor's counsel. SCRANTON-LACKAWANNA HEALTH: S&P Raises Bonds Rating to 'CCC+' ------------------------------------------------------------- S&P Global Ratings raised its long-term rating to 'CCC+' from 'CCC' on the Scranton-Lackawanna Health & Welfare Authority (Scranton Parking System Concession Project), Pa.'s series 2016A senior parking revenue current interest bonds, series 2016B senior parking revenue current interest bonds, and series 2016C senior parking capital appreciation bonds outstanding. The outlook is developing. S&P said, "In accordance with our criteria, the upgrade to 'CCC+' reflects our opinion that parking system utilization and revenue performance have recovered incrementally to a point where the authority is vulnerable to non-payment of senior-lien debt service requirements due to lingering and ongoing effects associated with the COVID-19 pandemic, but we do not expect a payment default in the near term. However, we expect the authority will remain in default and miss an additional payment on the series 2016D subordinate-lien bond payment due Jan. 1, 2022, which we do not rate." "The developing outlook reflects our view that, over the next 12 months, we could raise, lower, or assign a stable outlook to the rating depending on parking system demand and revenue performance, which we view as uncertain at this time due to lingering and ongoing effects of the pandemic," said S&P Global Ratings credit analyst Scott Shad. S&P said, "The parking system is exposed to social risks related to the COVID-19 pandemic, which we view as direct negative effects related to health and safety concerns under our environmental, social, and governance factors, which have resulted in significant financial pressures. Furthermore, we believe social risks present ongoing operational challenges and constrain the parking system's rate-setting flexibility and financial performance due to its location in an economically weak service area, given affordability issues and significant competition, resulting in low parking utilization rates. We believe environmental and governance risk are in line with the sector. "We could lower the rating or revise the outlook to negative within the next 12 months, if we believe the parking system will likely experience a payment default absent unforeseen positive developments, given expected material depletion of its debt service reserve fund balances and available liquidity. Furthermore, we would lower the rating one or more notches if there is a waiver of indenture provisions, including acceleration, default, announcement of expected default, or announcement of any type of distressed exchange of senior-lien bonds. "We could revise the outlook to stable or raise the rating within the next 12 months if utilization rates recover to a point that we believe enables the parking system to maintain financial metrics consistent with a higher rating on a sustainable basis." SOFT FINISH: Unsecureds Will Get 2.5% of Claims in 5 Years ---------------------------------------------------------- Soft Finish, Inc., submitted a Second Amended Small Business Plan of Reorganization. Soft Finish, Inc, is a California C Corporation that operates a garment manufacturing business with a focus on denim and knit product such as jeans, jackets, skirts, shorts, shirts, t-shirts, sweatshirts & hoodie sweatshirts. Soft Finish operates out of only one facility with 100% of the product made in the USA. The most immediate reason for the chapter 11 filing was the collection efforts of judgment creditor Adriana Calleros. But the case was also filed because of the reduced operations of the business caused by the pandemic. Soft Finish has two creditors who appear to have blanket liens on its property. The two creditors are Pacific City Bank (SBA loan) and the Internal Revenue Service (IRS). Soft Finish was added to the SBA loan in 2020. There is an additional secured creditor Jeanologia LLC which has a lien on some equipment. Creditor Adriana Calleros claims to have a lien on the Debtor's assets based on a judgment entered on August 15, 2019 against its predecessor in interest US Garment, LLC. The lien purportedly arises from a Judgment Debtor's Exam Order entered in the US Garment case on August 27, 2020. Soft Finish asserts that there is no lien because the judgment was against US Garment and therefore could not attach to Soft Finish assets. Soft Finish leases industrial space of approximately 36,000 under a lease which ends on September 30, 2021. It was behind two months on the rent when the chapter 11 case was filed. Rent deferment, rent forgiveness, reduction of rent was requested but rejected. There is a three-year Option which Soft Finish advised the Landlord it would exercise. The Debtor and the landlord have agreed to a new lease and to the treatment of the back rent in the Plan. The bankruptcy court subsequently approved a second motion to use cash collateral through December 31, 2021 was granted on September 16, 2021. A third motion to use cash collateral for the period December 31, 2021 through April 30, 2022 was filed in early December 2021 and a hearing has been set for January 4, 2022. The Plan will treat claims as follows: * Class 1 consists of Secured Creditor Pacific City Bank. The amount of the claim on the petition date was $1,062,625 (per POC #12). The Pacific City Bank claim shall be paid in full according to its original terms as follows: Monthly payments $19,655. The monthly payments shall commence within one month of the effective date of the plan and shall continue each month thereafter pursuant to the terms of the promissory note. * Class 2 consists of Secured Creditor Jeanologia. The amount of its claim on the petition date was $40,000. The Jeanologia claim shall be paid in full as follows: $10,000 on the Effective Date and the remainder over 12 months. * Class 4 consists of Unsecured Creditors. The Debtor's unsecured creditors according to the Debtor's schedules and expected proofs of claim total approximately $2, 388,240. Class 4 will be paid $60,000 as payment in full, at $1,000 per month over five years in quarterly payments beginning on February 1, 2022. This amount is approximately 2.5% of the total unsecured claims. This Class is impaired. -- At least two of the Class 4 creditors claim to have liens on all personal property of the estate; Adriana Calleros and Los Angeles County Treasurer for personal property taxes. The Calleros lien to the extent that it attaches to personal property of Soft Finish are treated as unsecured because the lien perfection documents indicate that the liens attach to the personal property of US Garment. In addition, the lien can be stripped off as the amount of the senior liens exceed the total value of the assets. * Class 5 consists of Shareholder's Interest. Mr. Chung will retain his ownership interest in the Debtor. Soft Finish will assume its lease with M&C Property Management, LLC. It has entered into a new lease with M&C Management which will take the place of the old lease. It will also assume an auto lease it has with Hyundai Motor Finance and two auto leases with Toyota Financial Services. Soft Finish will assume any other executory contracts through this Plan which are still executory on the Effective Date and have not been rejected. Distributions to creditors under the Plan will be funded from the following sources: (1) the Debtor's projected cash on hand on the Effective Date; and (2) payments of the Debtor's Net Disposable Income. Attorneys for Debtor Soft Finish: M. Jonathan Hayes Matthew D. Resnik Pardis Akhavan RESNIK HAYES MORADI LLP 17609 Ventura Blvd., Suite 314 Encino, CA 913162 Telephone: (818) 285-0100 Facsimile: (818) 855-7013 E-mail: jhayes@RHMFirm.com matt@RHMFirm.com pardis@RHMFirm.com About Soft Finish, Inc. Soft Finish manufactures clothing, specifically denim product such as jeans, denim jackets, skirts, shorts, shirts. Soft Finish specializes in "distressing" garments, taking hard, rigid, untreated denim fabric and washing the product to soften garments and using techniques to "beat up" or "age" garments. Distressing includes hand sanding garments to create natural wear areas, adding holes to garments to make them look used or old, stone washing to give the garment a softer feel and a lighter color as well as other hand treatments. Soft Finish is the successor in interest to US Garment LLC. In late 2017, US Garment LLC transferred its assets to Soft Finish and Soft Finish assumed 100% of the US Garment debt. The owners of US Garment were Jae K. Chung and a minority interest with her son Wesley Chung. Jae K. Chung is the sole owner of Soft Finish. Soft Finish sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. C.D. Calif. Case No. 21-12038) on March 15, 2021. In the petition signed by Jae K. Chung, as president, the Debtor disclosed $203,316 in assets and $1,404,553 in liabilities. Judge Barry Russell oversees the case. M. Jonathan Hayes, Esq., at Resnik Hayes Moradi, LLP, is the Debtor's counsel. SPEED INDUSTRIAL: U.S. Trustee Unable to Appoint Committee ---------------------------------------------------------- The U.S. Trustee for Region 6 disclosed in a court filing that no official committee of unsecured creditors has been appointed in the Chapter 11 case of Speed Industrial Gas, LLC. About Speed Industrial Gas Speed Industrial Gas, LLC is a San Antonio, Texas-based company that offers welding supplies, industrial and specialty gas products. Speed Industrial Gas filed a petition for Chapter 11 protection (Bankr. W.D. Texas Case No. 21-51297) on Oct. 22, 2021, listing as much as $10 million in both assets and liabilities. Ernest W. Speed, III, owner and sole member of Speed Industrial Gas, signed the petition. Judge Craig A. Gargotta oversees the case. The Debtor tapped Lloyd A. Lim, Esq., at Balch & Bingham, LLP as legal counsel. SRAMPICKAL DEVELOPERS: Case Summary & 4 Unsecured Creditors ----------------------------------------------------------- Debtor: Srampickal Developers, LLC 1324 Wellington St. Philadelphia, PA 19111 Business Description: Srampickal Developers, LLC is the fee simple owner of two real properties in Doylestown & Philadelphia, Pennsylvania having a total value of $3.55 million. Chapter 11 Petition Date: December 6, 2021 Court: United States Bankruptcy Court Eastern District of Pennsylvania Case No.: 21-13224 Judge: Hon. Magdeline D. Coleman Debtor's Counsel: Jon M. Adelstein, Esq. ADELSTEIN & KALINER, LLC 3993 Huntingdon Pike Suite 210 Huntingdon Valley, PA 19006 Tel: 215-230-4250 Fax: 215-230-4251 Email: jadelstein@adelsteinkaliner.com Total Assets: $3,560,000 Total Liabilities: $2,197,000 The petition was signed by Tyson Thomas as managing partner. A full-text copy of the petition containing, among other items, a list of the Debtor's four unsecured creditors is available for free at PacerMonitor.com at: https://www.pacermonitor.com/view/SRO6WHA/Srampickal_Developers_LLC__paebke-21-13224__0001.0.pdf?mcid=tGE4TAMA STANTON GLENN: Updates Greystone Claim Pay; Plan Hearing Dec. 15 ---------------------------------------------------------------- Stanton Glenn Limited Partnership submitted a Disclosure Statement with respect to First Amended Plan of Liquidation dated Dec. 3, 2021. The Debtor proposes to satisfy all of its debts and pay all of its creditors through a sale of the Property, the approval of which is sought within the Plan. The sale of the Property will be free and clear of all liens, claims, encumbrances and other interests pursuant to § 363(f) of the Bankruptcy Code. The Debtor entered into discussions with the Concord Communities LLC ("Purchaser"), and began the process of negotiating a contract. A Sale Agreement has been executed, with a $2 million deposit posted. The proposed sale under the Sale Agreement has a base purchase price for the Property of $39,500,000.00. In accordance with the Sale Agreement, the Debtor sought Bankruptcy Court approval of a breakup fee in the amount of $500,000 in favor of Concord (the "Break-up Fee") in the event that the Bankruptcy Court approves a sale to a person or entity other than Concord. The parties agree that the Break-Up Fee is to cover the actual out of pocket costs and expenses to Concord for performing due diligence and making an offer on the Property and for serving as the "Stalking Horse" bidder on the sale of substantially all of the Debtor's assets. Class 3 consists of the Secured Claim of Greystone. Except to the extent that a holder of an Allowed Class 3 Claim agrees to a different and lesser treatment, the holder of an Allowed Class 3 Claim shall receive from the Debtor, in full and complete settlement, satisfaction and discharge of its Allowed Class 3 Claim, on the Sale Closing Date (or as soon as reasonably practicable thereafter), payment in full of its Allowed Class 3 Claim, with post-petition interest at the appropriate rate under the Loan Documents. Greystone represents that the Class 3 Claim is no less than $20,543,897.60. The Holder of the Class 3 Claim will retain its lien until the Property is sold. Class 5 consists of pending Litigation Claims. The Debtor will pay to each holder of an Allowed Class 5 Claim the value of the unliquidated claims asserted, in an amount to be determined by agreement of the parties, or if no agreement, by a court of appropriate jurisdiction. The amount of the Class 5 Claims are disputed and unknown. However, the Debtor has scheduled each of the known potential Class 5 Claims as disputed, unliquidated and contingent in the amount of $0.00. The Debtor believes that the Sale Proceeds will be more than sufficient to satisfy any amount ultimately determined to be owed by the Debtor on any Class 5 Claims. Like in the prior iteration of the Plan, each holder of an Allowed Class 4 Claim shall receive from the Debtor, in full and complete settlement, satisfaction and discharge of its Allowed Class 4 Claim, on the later to occur of (i) the Effective Date and (ii) the date on which such Claim shall become an Allowed Claim, payment in full, with post-petition interest at the Federal Judgment Rate in effect on the Petition Date. The Debtor believes that there are approximately $4,095,067.60 in unwaived Class 4 Claims, the vast majority of which are held by Insiders. The Bankruptcy Court has directed that written objections, if any, to approval of this Disclosure Statement or confirmation of the Plan must be filed on or before December 14, 2021. A combined hearing to consider approval of this Disclosure Statement and confirmation of the Plan will be held on December 15, 2021, at 9:30 a.m. A full-text copy of the Disclosure Statement dated Dec. 3, 2021, is available at https://bit.ly/3dmCVnh from PacerMonitor.com at no charge. Counsel for Stanton Glenn: Marc E. Albert Tracey M. Ohm Joshua W. Cox Stinson LLP 1775 Pennsylvania Ave., N.W., Suite 800 Washington, DC 20006 Tel.: (202) 785-9100 E-mail: marc.albert@stinson.com tracey.ohm@stinson.com joshua.cox@stinson.com About Stanton Glenn Limited Partnership Stanton Glenn Limited Partnership is a single asset real estate debtor (as defined in 11 U.S.C. Section 101(51B)). It is the fee simple owner of a 379-unit apartment complex known as Stanton Glenn Apartments located in Washington, DC. The property has a current value of $40 million. Stanton Glenn Limited Partnership filed its voluntary petition for Chapter 11 protection (Bankr. D.C. 21-00261) on Oct. 29, 2021, listing $40,503,154 in assets and $27,655,693 in liabilities. Joseph Kisha, president, signed the petition. Judge Elizabeth L. Gunn presides over the case. Marc E. Albert, Esq., at Stinson LLP and Gamma Law Firm, PLLC serve as the Debtor's bankruptcy counsel and special regulatory counsel, respectively. MN Blum, LLC is the Debtor's accountant. STO-ROX SCHOOL: Moody's Lowers Issuer & GOULT Ratings to Caa1 ------------------------------------------------------------- Moody's Investors Service has downgraded Sto-Rox School District, PA's issuer and general obligation unlimited tax (GOULT) ratings to Caa1 from B3. The issuer rating reflects the district's ability to repay debt and debt-like obligations without consideration of any pledge, security, or structural features. The district has $11.9 million in debt outstanding. The outlook is negative. RATINGS RATIONALE The downgrade of the issuer rating to Caa1 reflects the district's extremely weak reserve position that will continue to grow increasingly negative in the near term due largely to persistent and growing competition from charter schools, along with related expenses. Although the district's leverage and fixed costs will remain manageable due to an absence of near term borrowing plans, rising special education costs and capital needs will continue to weigh on the district's credit quality. Governance is material to the district's credit rating. Historically, the district has inadequately budgeted for expenses related to cyber and charter school tuition, leading to large multiyear operating deficits. The district has furthermore experienced significant managerial turnover, with the most recent business manager being hired in July of 2021. Simultaneously, the district was placed in Pennsylvania's Financial Recovery Status. The lack of distinction between the district's issuer rating and the Caa1 rating on the district's GOULT debt is based on the district's general obligation full faith and credit pledge. RATING OUTLOOK The negative outlook reflects the district's very weak financial position that will remain highly pressured in the near term. FACTORS THAT COULD LEAD TO AN UPGRADE OF THE RATINGS - Materially improved reserves and liquidity - Significantly improved wealth and income levels FACTORS THAT COULD LEAD TO A DOWNGRADE OF THE RATINGS - Inability to restore structurally balanced financial operations by the end of fiscal 2022 - Missed debt service payments LEGAL SECURITY All of the district's debt is backed by its full faith and credit, general obligation unlimited tax (GOULT) pledge. PROFILE Sto-Rox School District is located in Allegheny County (Aa3 stable) in central western Pennsylvania (Aa3 stable) and is a suburb of Pittsburgh (A1 stable). As of June 2021, the district enrolled 1,168 students. METHODOLOGY The principal methodology used in these ratings was US K-12 Public School Districts Methodology published in January 2021. TALEN ENERGY: Fitch Puts 'CCC+' LT IDR on Watch Negative -------------------------------------------------------- Fitch Ratings has placed the 'CCC+' Long-Term Issuer Default Rating (IDR) of Talen Energy Supply, LLC (Talen) on Rating Watch Negative. Fitch has also placed the ratings of the senior secured debt ('B+'/'RR1') and the senior unsecured notes ('CCC+'/'RR4'), including the outstanding $100 million Pennsylvania Economic Development Financing Authority Series A bonds, on Rating Watch Negative. The rating action follows a significant decline in available liquidity at Talen due to a requirement to post higher amounts of cash collateral in response to a run up in forward power prices and based on the company's hedge position. Talen has secured a $788 million first lien financing commitment from GoldenTree Asset management and Silver Point Finance but the closing by mid-December is subject to approval by the revolver bank group and final documentation. An inability to secure the new financing would significantly and materially impact the company leading to heightened probability of default. While the new financing, once executed, will stabilize the liquidity profile of Talen, the ratings of the existing debt issuances will be adversely affected. KEY RATING DRIVERS Liquidity Severely Constrained: Liquidity is a key credit concern. A sharp increase in power and natural gas prices through late summer and fall has resulted in higher cash collateral requirements related to Talen's hedge portfolio. As a result, available liquidity at Talen has become severely constrained with approximately $343 million available as of November 26, consisting of $140 million in cash, $13 million available under the revolving credit facility and $190 million available under the unsecured LC facilities. The new $788 million first lien financing is key to bolster Talen's liquidity. However, the closing of the financing is contingent upon finalization of terms and conditions and approval from the bank revolver group for a permanent waiver of the 4.25x senior secured leverage covenant. Talen has obtained a temporary waiver of the covenant through December 13 when it expects to deliver the financial statements for the third quarter. Fitch has not reviewed the terms and conditions for the new first lien financing. Pro forma for the new financing, liquidity will be bolstered to $855 million, which includes repayment of $238 million of revolver borrowings and a reduction in revolving credit facility to $439 million, from $690 million currently. If the new financing is secured, management expects to pay the $114 million of debt maturity in December. Challenging Winter Conditions: A colder than normal winter and extreme weather events typically lead to higher volatility and spikes in natural gas and coal prices. The price impact could get exacerbated this year given the tight demand and supply balance for these commodities. Aside from higher cash collateral requirements, Talen could be challenged in securing adequate coal supplies to perform under its market obligations under extreme winter conditions. Management is taking steps to adequately winterize its power equipment and believes it has secured enough coal inventory to last through the first quarter of 2022. Higher Forecasted Leverage: With the addition of the $788 million first lien financing, Fitch expects Talen's recourse Debt to EBITDA to be mid-9.0x at YE 2021 and average high 7.0x over 2022-2024. Fitch includes only recourse debt in its leverage calculation and includes distribution from Lower Mt. Bethel - Martins Creek non-recourse subsidiary in its adjusted EBITDA calculation. Fitch assumes that Talen will pay down 2021-2023 maturing debt using cash on hand. Even with the improvement in forward power prices, future capacity auction outcomes in PJM could be lower. Under these conditions, the capital structure of Talen looks untenable. Commodity Environment a Mixed Bag: 2021 financial outlook is lower than Fitch's prior expectation. This is being driven by, in part, underperformance on Talen's hedged positions due to an unexpected upward turn in power prices. The need to conserve coal in Q4 in order to ensure adequate supplies for the peak winter months is also driving the lower than expected performance. In its Q3 earnings call, management lowered 2021 adjusted EBITDA guidance to $420 million-$480 million, from a prior range of $500 million-$540 million. Adjusted FCF is expected to be between negative $10 million-negative $70 million, a decline from a prior range of $0-$30 million. Conversely, the strength in forward power prices is bolstering Talen's 2022 outlook. Talen has unwound some of its hedged positions for 2022 and 2023 to conserve liquidity. Once additional liquidity is secured and if the forward curve stays robust, Talen can lock in attractive hedges. Based on the current hedged position and market prices, management estimates 2022 adjusted EBITDA in a range of $550 million-$750 million. While the recent improvement in commodity environment provides upside to Fitch's estimates, Fitch believes a constructive outcome for future PJM capacity market auctions is also key for long-term stability of EBITDA at Talen and improvement in credit metrics. Recovery Analysis: Fitch rates the senior secured first lien debt 'B+'/'RR1' indicative of very high recovery and the senior unsecured guaranteed debt 'CCC+'/'RR4' indicative of average recovery. The individual security ratings at Talen are notched above or below the IDR as a result of the relative recovery prospects in a hypothetical default scenario. Fitch values the power-generation assets that guarantee the parent debt using a net present value (NPV) analysis. A similar NPV analysis is used to value the generation assets that reside in non-guarantor subsidiaries, and the excess equity value is added to the parent recovery prospects. The generation asset NPVs vary significantly based on future gas price assumptions and other variables, such as the discount rate and heat rate forecasts in PJM, ERCOT and the Northeast. For the NPV of generation assets used in Fitch's recovery analysis, Fitch uses the plant valuation provided by its third-party power market consultant, Wood Mackenzie, as well as Fitch's own gas price deck and other assumptions. The NPV analysis for Talen's generation portfolio yields approximately $140/kW for PJM coal, $600/kW for Susquehanna nuclear and an average of $400/kW for the natural gas generation assets. No Contribution from New Investments: Management remains focused on its strategic transformation and recapitalization strategy, which comprises moving Talen away from coal towards renewable and digital infrastructure assets and attracting third-party equity and joint-venture partners to fund future growth. Fitch has not assumed any benefit to accrue to Talen from these growth investments in the form of distributions and/or equity. DERIVATION SUMMARY Talen is unfavorably positioned compared to Vistra Energy Corp. (Vistra, BB+/Stable) and Calpine Corp. (B+/Stable) with respect to size, asset composition and geographic exposure. Vistra is the largest independent power producer in the country with approximately 39GW of generation capacity compared to Calpine's 26GW and Talen's 13GW. Talen lacks geographical diversity, but Fitch considers PJM as a constructive market for power generators given the capacity auction construct. Vistra benefits from its ownership of large and well entrenched retail electricity businesses in contrast to Calpine, whose retail business is much smaller. Talen has a modest retail business focused on C&I customers. Calpine's younger and predominant natural gas fired fleet bears less operational and environmental risk as compared to nuclear and coal generation assets owned by Vistra and Talen. In addition, Calpine's EBITDA is more resilient to changes in natural gas prices and heat rates as compared to its peers. Talen's forecasted leverage is the highest among its peers, which positions its rating lower than its peers. Fitch forecasts Talen's debt to EBITDA leverage ratio, excluding non-recourse subsidiaries, above 7.4x over 2022-2024, which is weaker than Calpine's 5.0x and significantly weaker than Vistra's 3.0x. KEY ASSUMPTIONS Fitch's key assumptions within its rating case for the issuer include: -- Recovery in energy prices in PJM and ERCOT; -- Hedges per management's current disclosures; -- 2022-2023 PJM capacity auction results as announced and assuming weaker results for the 2023-2024 auction; -- Maintenance capex averaging $200 million annually; -- No dividend to the owners and no equity contribution from the owners. RATING SENSITIVITIES Factors that could, individually or collectively, lead to positive rating action/upgrade: -- The Rating Watch could be removed once the new financing is secured and greater clarity is obtained regarding the sensitivity of Talen's collateral needs to future commodity movements. -- Further positive rating actions can be considered if recourse debt to adjusted EBITDA is below 7.0x on a sustainable basis. Factors that could, individually or collectively, lead to negative rating action/downgrade: -- Inability to lock in additional financing could lead to multi notch downgrades; -- Additional $788 million first lien financing would lead to diminished recovery for the existing secured and unsecured note holders in the event of default; -- Negative FCF generation on a sustained basis; -- Liability management activities that diminish the recovery for the unsecured note holders; -- Incremental secured leverage and/or deterioration in NPV of the generation portfolio. 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 Constrained Liquidity: As of Nov. 26, 2021, Talen had approximately $343 million of liquidity available, including $140 million of unrestricted cash, $13 million availability under the $690 million revolving credit facility, and $190 million availability under two unsecured LC facilities that provide for issuance of LCs of up to $100 million each. The new financing is therefore critical to bolster the liquidity of the company. The revolving credit facility matures in March 2024. The available revolver capacity is subject to 4.25x senior secured leverage ratio covenant at each quarter end, which stood at lower than the covenant level as of Sept. 30, 2021. Talen obtained a waiver for such breach and negotiations are ongoing for permanent waiver in connection with closing of the new financing facility. The two LC facilities expire in June 2023 and December 2023. Capacity revenue monetization and $300 million in second lien capacity could serve as additional funding sources. There are modest debt maturities over 2021-2023. $114 million of 4.6% senior unsecured notes are due on Dec. 15, 2021. After that, the nearest significant debt maturity consists of $543 million of senior unsecured notes due 2025. ESG CONSIDERATIONS Unless otherwise disclosed in this section, the highest level of ESG Credit Relevance is a Score of '3'. This means ESG issues are credit-neutral or have only a minimal credit impact on the entity, either due to their nature or the way in which they are being managed by the entity. ISSUER PROFILE Talen, a subsidiary of Talen Energy Corporation, is an independent power producer that owns approximately 13,000MW of generation capacity and is owned by the private equity firm, Riverstone Holdings, LLC. TALEN ENERGY: Gets Loan from Silver Point, GoldenTree After Breach ------------------------------------------------------------------ Allison McNeely of Bloomberg News reports that Talen Energy Corp. received a loan from a group led by GoldenTree Asset Management and a division of Silver Point Capital that will provide it with much-needed liquidity after it breached a term on its existing debt. The $788 million first-lien facility maturing in September 2024 will repay $238 million of borrowings on its revolving credit facility and provide working capital to help address soaring winter power prices, according to a statement Thursday, December 2, 2021. Its bonds plunged after the announcement. Riverstone Holdings-backed Talen told investors in a private presentation reporting third-quarter results that it breached its net leverage covenant. About Talen Energy Corp. Talen Energy Corporation is an independent power generation infrastructure company, headquartered in Allentown, Pennsylvania. TALEN ENERGY: GoldenTree, Silver Point Pledge $788M Financing ------------------------------------------------------------- Talen Energy Supply LLC, a wholly owned subsidiary of Talen Energy Corporation, has obtained a financing commitment led by GoldenTree Asset Management LP and Silver Point Finance, LLC for a new first lien facility in the aggregate amount of $788 million maturing September 2024. TES expects to use the proceeds from the financing to fund elevated commodity working capital requirements during the winter period, repay approximately $238 million of borrowings outstanding under its existing revolving credit facility, and to pay transaction fees and expenses related to the new financing facility. Allison McNeely and Rachel Butt, writing for Bloomberg News, report that the loan came after Talen breached a term on its existing debt. Riverstone Holdings-backed Talen told investors in a private presentation reporting third-quarter results that it breached its net leverage covenant on its existing credit facility during the quarter and is seeking a waiver from those lenders, according to people with knowledge of the matter who asked not to be identified discussing confidential information. According to the Bloomberg report, the $788 million first-lien facility will repay $238 million of borrowings on its revolving credit facility and provide working capital to help address soaring winter power prices. It also intends to repay its $114 million bond maturing Dec. 15 after it resolves the covenant breach and finalizes its new loan, the people said. One of the source told Bloomberg the new loan will have an interest rate around 8% and GoldenTree and Silver Point will hold at least 80% of the debt. The closing of the proposed financing is subject to a majority vote of lenders under the TES existing revolving credit facility, the execution of definitive documentation and other customary closing conditions. Although TES anticipates closing and entering into a definitive credit agreement by mid-December 2021, there can be no assurance that it will enter into the new credit agreement under the terms described above, or at all. "We are grateful for the capital, partnership and confidence of GoldenTree Asset Management, Silver Point Finance, and our bank group," said Alex Hernandez, Chief Executive Officer of Talen. "This financing will unlock the value of our TES assets in this strong winter commodity environment, while enabling Talen to continue executing our energy transition strategy to grow enterprise value for all of our stakeholders," continued Mr. Hernandez. "We are pleased to partner with Alex and his team to lead this important financing and advance the company's strategic objectives," said Paul Ardire, Principal at GoldenTree Asset Management. "Our firm's philosophy is to partner with experienced, differentiated management teams, which we have done with Talen over the last several years. We believe there is significant value in TES's asset base in this strong commodity environment, and longer-term as Talen executes its energy transition strategy to renewables and digital infrastructure." "Silver Point is pleased to work with Talen to provide a bespoke financing solution that addresses the company's near-term liquidity needs in the context of what we believe is a very strong fundamental operating environment," said Edward Mulé, Silver Point's CEO and Portfolio Manager. "Silver Point has significant experience and a longstanding history of partnering with companies and management teams that we believe in, with the goal of advancing their business objectives. We are particularly excited by the underlying value of Talen's generation portfolio and look forward to continuing to support the company as it plays a key role in the ongoing U.S. carbon-free energy transition." TES has retained White & Case LLP and Weil, Gotshal & Manges LLP as its legal advisors, and Evercore as its investment banker for this financing. GoldenTree Asset Management -- http://www.goldentree.com/-- is an employee owned, global asset management firm that specializes in opportunities across the credit universe in sectors such as high yield bonds, leveraged loans, distressed debt, structured products, credit-themed equities and emerging markets. GoldenTree was founded in 2000 and is one of the largest independent asset managers focused on credit. GoldenTree manages over $46 billion for institutional investors including leading public and corporate pensions, endowments, foundations, insurance companies and sovereign wealth funds. Silver Point Finance, LLC -- http://www.silverpointfinance.com/-- a subsidiary of global credit investor Silver Point Capital, L.P., is the Firm's dedicated customized financing solutions business. Founded in 2002, Silver Point was designed and built to have the deep resources, expertise and capital needed to invest in the global credit markets throughout credit cycles. Since inception in 2002, Silver Point has provided more than $14 billion of capital solutions to over 300 companies. Today, the Firm manages approximately $19 billion in investable assets across its credit strategies for institutional investors globally, including pensions, sovereign wealth funds, endowments, foundations, insurance companies, and family offices. Talen Energy Corporation -- https://www.talenenergy.com/ -- through its subsidiary, Talen Energy Supply LLC, is one of the largest competitive power generation and infrastructure companies in North America. TES owns and/or controls approximately 13,000 megawatts of generating capacity in wholesale U.S. power markets, principally in the Mid-Atlantic, Texas and Montana. Through its subsidiary, Cumulus Growth, Talen is developing a large-scale portfolio of renewable energy, battery storage, and digital infrastructure assets across its expansive footprint. TEXAS PELLETS: 9th Cir. Rules on Doc Production Issue in CRO Rift ----------------------------------------------------------------- German Pellets Texas, LLC, seeks mandamus relief from an order requiring production of documents and communications between counsel for German Pellets as relator and a deponent, Bryan Gaston, shared during the process of preparing Gaston for his deposition. German Pellets argues the attorney-client privilege applies to the documents and communications because Gaston served as a client representative. Relator further argues the trial court abused its discretion by denying use of the attorney-client privilege despite evidence that Gaston and the attorney created an independent attorney-client relationship. Finally, Relator contends it lacks an adequate remedy by appeal. After examining the petition, the response of the Real Parties in Interest, Relator's reply, and the records submitted by the parties, the Court of Appeals of Texas for the Ninth District, Beaumont, conditionally grants the mandamus relief in part. This discovery dispute arises out of two consolidated suits filed by the Real Parties in Interest, residents who reside in Port Arthur, Texas, and who allege that in 2017 they suffered personal injuries and property damage from a months-long fire that occurred in a silo (the Silo Fire) at the German Pellets' Port Arthur facility. German Pellets was already in a Chapter 11 bankruptcy restructuring when the Silo Fire occurred. The person with management authority for German Pellets during the bankruptcy proceedings was Gaston, who was the court-appointed Chief Restructuring Officer. Gaston coordinated German Pellets' accident response until the bankruptcy court terminated his appointment on November 27, 2017. In March 2021, the Real Parties issued a deposition notice with subpoena duces tecum to take the deposition of Gaston. The Real Parties requested Gaston to produce "[a]ny notes, diaries, correspondence, and documents related to the 2017 Silo Fire, including but not limited to its cause, suppression efforts, duration, and effects." After Gaston appeared for the deposition but did not produce the documents, Kelley filed a motion to compel production of the withheld documents and to extend Gaston's deposition time. German Pellets filed a motion for a protective order as to communications between Gaston and other German Pellets representatives and Gaston and German Pellets' legal counsel at the time of the incident and as to present-day communications between Gaston and, his personal counsel, and German Pellets' legal counsel. Additionally, German Pellets claimed it had a work product privilege for any communications between its counsel and Gaston, as its client representative, made in anticipation of litigation or for trial. In an affidavit submitted in support of German Pellets' motion for protection, Gaston states that German Pellets' counsel "is my attorney on behalf of the Debtor . . . as the former CRO for the Debtors and as it related to any matter, interpreted broadly, that is the subject of this lawsuit[.]" Gaston further states that he wishes to continue the legal representation throughout the course of the lawsuit. In addition to Gaston's affidavit, German Pellets submitted its lawyer's declaration that on February 9, 2021, he advised Gaston that he was prepared to represent Gaston in the case and defend him in his deposition, that Gaston agreed to have the firm represent him in his capacity as German Pellets' CRO, and that his communications and information shared with Gaston commencing February 9, 2021, were confidential communications in furtherance of legal services. The trial court held a hearing on the motions. Kelley conceded that Gaston was German Pellets' client representative while acting as CRO but argued the communications between Gaston and German Pellets or its counsel were not privileged under Rule 503 because Gaston, after his appointment expired, was no longer acting in the scope of his employment by Germen Pellets. Because Gaston was no longer employed on behalf of German Pellets in 2021, Kelley argued the recent communications between Gaston and the lawyer were not privileged under Rule 503. Kelley further argued that the work product privilege did not apply for the same reason. Kelley argued German Pellets' counsel was not acting as Gaston's attorney for purposes of the deposition. Kelley argued that the lack of an attorney-client relationship was evident because Gaston brought his own lawyer to the deposition and when asked in his deposition Gaston flatly denied that German Pellets' counsel was his personal legal representative. German Pellets argued the attorney-client and work product privileges apply to communications between German Pellets' counsel and Gaston as a former corporate representative after they confirmed an attorney-client relationship. German Pellets argued Kelley had not established a need for a communication made in anticipation of litigation, and that all of Gaston's communications with counsel in connection with any decision he made in undertaking a response to the Silo Fire were protected because the privilege was German Pellets' to assert. On July 1, 2021, the trial court extended Gaston's deposition by three hours and ordered counsel for German Pellets to produce "all documents, communications, and emails" (1) sent between counsel and Gaston in preparation for Gaston's April 15, 2021 deposition and (2) "otherwise exchanged from September 2017 to the present date." Mandamus relief is available when a trial court commits a clear abuse of discretion for which the Relator lacks an adequate remedy by appeal. But with respect to the resolution of factual issues, the reviewing court may not substitute its judgment for that of the trial court, and the relator must establish that the trial court could reasonably have reached only one decision. According to the Ninth District, a trial court has no discretion in determining what the law is or applying the law to the facts, even when the law is unsettled. The Court held that the trial court resolved conflicting evidence concerning the formation of an attorney-client relationship between Gaston and the attorney for German Pellets in 2021, with respect to whether German Pellets' attorney represented Gaston in the deposition. For example, Gaston testified during his oral deposition that the German Pellets' attorney was not acting as Gaston's attorney, whereas in Gaston's affidavit Gaston stated the German Pellets' attorney was acting as an attorney for Gaston. The Ninth District defers to the trial court's determination of that disputed issue. That said, German Pellets also argues that Texas Rule of Evidence 503 extends to present communications with a past client representative. The Ninth District says it applies the same rules of construction that govern the interpretation of statutes in construing procedural rules. The use of the present tense in Rule 503 indicates that a person's status as a client representative is determined at the time of the communication. Based on the record, the Ninth District says it cannot say that the trial court abused its discretion in concluding that in 2021 Gaston was no longer a client representative of German Pellets, so communications between German Pellets' lawyer and Gaston in 2021 would not be protected under the attorney-client privilege. But communications and documents containing communications between German Pellets' counsel and Gaston while Gaston was CRO were and continue to be privileged by virtue of his status as a client representative. Confidential attorney-client communications made to facilitate legal services are generally insulated. While it is true that the privilege may be waived if the lawyer or client voluntarily discloses the privileged communications to a third party, if Gaston is the person with whom counsel communicated while he was CRO, he is not a third party for purposes of waiving the privilege. In the appeals court's record, Kelley has not requested a privilege log and the documents have not been produced for an in-camera inspection. It is undisputed that Gaston was a client representative until November 17, 2017. There could be documents that were created while Gaston was a client representative and that were privileged when they were created. If communications between counsel for German Pellets and Gaston were privileged, counsel would not have waived the privilege by showing them to Gaston in 2021. The Ninth Circuit concludes the trial court abused its discretion by compelling production of all communications between Gaston and German Pellets' attorney from September 2017 to the present. It says it is confident that the trial court will vacate that part of its order of July 1, 2021, that compelled production of documents, and that the trial court will conduct an in-camera review of any claimed attorney-client and work product documents before requiring their production. A writ of mandamus will issue only if the trial court fails to comply. A full-text copy of the Memorandum Opinion delivered November 24, 2021, is available at https://tinyurl.com/4twzb6sf from Leagle.com. About Texas Pellets Texas Pellets, Inc., based in Woodville, Texas, filed a Chapter 11 petition (Bankr. E.D. Tex. Case No. 16-90126) on April 30, 2016. The petition was signed by Anna Katherin Leibold, president and chief executive officer. German Pellets Texas, LLC, also based in Woodville, Texas, filed a Chapter 11 petition (Bankr. E.D. Tex. Case No. 16-90127) on April 30, 2016. The petition was signed by Peter H. Leibold, its chief executive officer. The cases have been jointly administered under Texas Pellets' case. Judge Bill Parker presides over the cases. The Debtors employ William Steven Bryant, Esq., at Locke Lord LLP as their legal counsel; Searcy & Searcy, P.C. as local/conflicts co-counsel; and Guggenheim Securities, LLC as investment banker. Bryan M. Gaston, and the firm Opportune, LLP, serve as the Debtors' Chief Restructuring Officer. No Chapter 11 trustee or examiner has been appointed in these Bankruptcy Cases. An official committee of unsecured creditors was appointed on May 17, 2016. TRUE ENTERPRISE: Seeks to Hire The Houston Firm as Special Counsel ------------------------------------------------------------------ True Enterprise, LLC seeks approval from the U.S. Bankruptcy Court for the Southern District of Florida to hire The Houston Firm, P.A. to serve as special counsel. The Debtor requires legal assistance to pursue the assumption of an unexpired lease agreement and any ancillary litigation involving the lease premises. The firm will be paid at an hourly rate of $400. Bart Houston, Esq., the firm's attorney who will be providing the services, disclosed in a court filing that he is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. The firm can be reached at: Bart A. Houston, Esq. The Houston Firm, P.A. 633 S.E. Third Avenue, Suite 4R Ft. Lauderdale, FL 33301 Tel: (954) 900-2615 Email: bhouston@thehoustonfirm.com About True Enterprise LLC True Enterprise, LLC is a licensed compost facility in Broward County that properly disposes of vegetative landscaping waste by recycling it into composted soil. True Enterprise filed its voluntary petition for Chapter 11 protection (Bankr. S.D. Fla. Case No. 21-19977) on Oct. 18, 2021, listing up to $10 million in assets and up to $1 million in liabilities. Ron Nigro, trustee of The Ron Nigro Living Trust, signed the petition. Judge Scott M. Grossman oversees the case. David Brown, Esq., at David Marshall Brown, P.A. represents the Debtor as legal counsel, while Bart A. Houston, Esq. at The Houston Firm, P.A. serves as the Debtor's special counsel. TRUE HOLINESS: Seeks to Hire Porter Law Network as Legal Counsel ---------------------------------------------------------------- True Holiness Church of God in Christ seeks approval from the U.S. Bankruptcy Court for the Northern District of Illinois to hire Porter Law Network to serve as legal counsel in its Chapter 11 case. The firm's services include: (a) giving the Debtor legal advice with respect to its powers and duties in the continued management of its assets; (b) preparing reports, Chapter 11 plan, disclosure statement and other legal papers; (c) assisting the Debtor in preparing and obtaining the court's approval of a plan of reorganization and disclosure statement; (d) taking such action as may be necessary with respect to claims that may be asserted against the Debtor; and (e) performing all other legal services for the Debtor. The firm's hourly rates are as follows: Karen J. Porter, Esq. $450 per hour Associates $350 - $200 per hour Legal assistants $175 per hour The retainer fee is $5,000. Karen Porter, Esq., the firm's attorney who will be providing the services, disclosed in a court filing that she is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. The firm can be reached at: Karen J. Porter, Esq. Porter Law Network 230 West Monroe, Suite 240, Chicago, IL 60606 Tel.: (312) 372-4400 Fax: (312) 372-4160 Email: porterlawnetwork@gmail.com About True Holiness True Holiness Church of God in Christ filed a petition for Chapter 11 protection (Bankr. N.D. Ill. Case No. 21-13335) on Nov. 22, 2021, listing as much as $500,000 in both assets and liabilities. Carl J. Harris, pastor and president, signed the petition. The Debtor tapped Karen J. Porter, Esq. at Porter Law Network as legal counsel. TWISTED OAK: Unsecured Creditors to Recover 100% in 60 Months ------------------------------------------------------------- Twisted Oak Winery, LLC, filed with the U.S. Bankruptcy Court for the Eastern District of California a Plan of Reorganization for Small Business. The Debtor is a Limited Liability Company. Since 2002, the Debtor has been in the business of growing grapes, making and bottling wine, leasing a tasting room, and hosting events. This Plan of Reorganization proposes to pay creditors of Twisted Oak Winery, LLC from cash flow from future operations over a 60-month period. Non-priority unsecured creditors holding allowed claims will receive distributions, which the proponent of this Plan has valued at approximately 100 cents on the dollar. This Plan also provides for the payment of administrative and priority claims. Class 2 consists of the Secured Claims of Mechanics Bank. Class 2 is impaired by this Plan. Mechanics Bank shall retain its security interest according to the instruments and statutes creating same. Class 2 principal shall be paid in full with interest at 3.75% per annum on 25 years amortization with a January 1, 2033 maturity date, beginning with interest only payments of $5,804 per month, commencing January 1, 2022 and continuing for 12 months, then interest and principal payments of $9,548 per month, commencing January 1, 2023 and continuing for 132 months (11 years), then a balloon payment for the remaining balance due January 1, 2033. Class 2 accrued pre-petition interest shall be paid in full with 0% interest per annum in the amount of $1,000 per month, commencing January 1, 2022, then a balloon payment for the remaining balance due January 1, 2033. Class 3 consists of the Secured Claims of SBA. Class 3 is unimpaired by this Plan, and Class 3 will be paid pursuant to the terms of the original documents with no modification by this Plan. The monthly payment is currently $0 and payments are current. Class 4 consists of Noninsider nonpriority unsecured creditors. Class 4 is unimpaired in this Plan. Class 4 consists of one creditor: Stange/Matate. The claim of Stange/Metate is disputed, but to the extent Stange/Metate has an allowed claim, Class 4 shall be paid as follows: To the extent Class 4 is entitled to any recovery, it shall first be offset against any claim or recovery by the Debtor. If there is no net recovery by Debtor, in equal installments commencing July 1, 2022, for a period of 6 months. Class 5 consists of Insider non-priority unsecured creditors. Class 5 is unimpaired and will be paid only after all other allowed claims have been paid in full, and then on such terms as the Debtor and the holders of Class 5 agree. Class 6 consists of Equity security holders of the debtor. Equity Holder will retain its current membership interest in Debtor. With the business assets and ongoing operations, Debtor will have sufficient cash to pay all allowed unclassified claims, future allowed expenses of administration, and all Class 1 claims (nominal, if any), and to purchase the additional equipment and supplies needed to continue the manufacture of wine and to maintain operations. The Plan is relatively simple as only one creditor is impaired. Allowed unclassified claims and priority claims will be paid upon confirmation of the Plan. Subsequent unclassified claims will be paid as the Court allows them. Only one of the claims of the two secured creditors will be impaired: Mechanics Bank. SBA is not impaired and will receive their usual monthly payments $713 with no changes in interest rate, monthly payment, or maturity. Non-priority unsecured creditors will be paid 100 cents on the dollar over a 60 month period, with the class dividing $1,500 per month. The only unusual aspect of the Plan is the new value ($20,000) being contributed by Bridgette N. Berry and Becky Berry in exchange for new shares, with the old shares (75% of which are already owned by these same parties) being extinguished, much as in a more complex Chapter 11 reorganization. A full-text copy of the Plan of Reorganization dated Dec. 2, 2021, is available at https://bit.ly/3dnERfb from PacerMonitor.com at no charge. About Twisted Oak Twisted Oak, LLC specializes in wines that are made from Tempranillo, Grenache, Mourvedre, Viognier, and more. It filed a Chapter 11 petition (Bankr. E.D. Cal. Case No. 21-90484) on Oct. 4, 2021. In the petition signed by Jeff Stai, managing member, the Debtor disclosed $1 million to $10 million in assets and $1 million to $10 million in liabilities. The Hon. Ronald H. Sargis oversees the case. Brian S. Haddix, of HADDIX LAW FIRM, is the Debtor's counsel. U.S. TELEPACIFIC: S&P Downgrades ICR to 'CCC-', Outlook Negative ---------------------------------------------------------------- S&P Global Ratings lowered all of its ratings on U.S.-based competitive telecommunications and cloud provider U.S. TelePacific Holdings Corp. (doing business as TPx Communications), including its issuer credit rating, by two notches to 'CCC-' from 'CCC+'. The negative outlook reflects the company's narrowing liquidity and high debt balances, which could lead to a distressed exchange or default over the next six months. The downgrade follows the company's receipt of a notice of default because it failed to deliver its third-quarter financials and compliance certificate on time. S&P believes that TPx is looking to negotiate an amendment to its senior secured credit facility that would provide it with additional runway to transition its business model amid the ongoing declines in its legacy telecommunications segment. This amendment would likely include extending the maturity of its $25 million senior secured revolving credit facility due May 2022 and $573 million outstanding term loan due May 2023, as well as covenant relief. Based on S&P's view that, absent this proposed amendment, the company would likely default on its debt obligations over the next couple of years, a maturity extension would be treated as a distressed restructuring because the company would not fulfill its obligation in accordance with the original terms of the credit agreement. The company's liquidity position is narrowing. As of June 30, 2021, TPx had about $37 million of cash and equivalents, full availability under its $25 million revolving credit facility, and $60 million available under its equipment receivables facility, which it uses to fund the working capital deficits associated with its sale of equipment to its customers on an installment basis. That said, the revolver matures in May 2022 and the receivable facility matures in August 2022, which will reduce its sources of liquidity. At the same time, TPx recorded a free operating cash flow deficit of about $27 million during the first six months of the year and will be challenged to improve this trend in the near term as it looks to transition its business toward managed and information technology (IT) services and away from legacy telecommunications. As such, S&P believes there is a high likelihood the company will exhaust its internal liquidity sources over the next six months unless it is able to negotiate an extension of these facilities or receives an equity infusion from its private-equity sponsor, Siris Capital. The negative outlook on TPx reflects its narrowing liquidity and high debt balances, which could lead it to engage in a distressed exchange or experience a default over the next six months. S&P could lower its rating on TPx if it announces a transaction that it views as distressed or we believe a default is a virtual certainty. S&P could raise its rating on TPx if it no longer believes there is a high probability for a distressed exchange, default, or other forms of debt restructuring over the next year. USA GYMNASTICS: Nassar Abuse Survivors Voted to Accept Settlement ----------------------------------------------------------------- Patrick Burke, writing for Inside the Games, reports that majority of Nassar abuse survivors vote to accept settlement with USA Gymnastics. A large majority of the survivors of abuse by disgraced former USA Gymnastics team doctor Larry Nassar have voted to accept a settlement plan with the governing body. Nassar was accused by hundreds of women of abuse under the guise of medical treatment, and is effectively serving a life sentence in prison as a convicted serial sex offender. In August 2021, USA Gymnastics reached a settlement with a committee representing survivors. This was initially thought to be $425 million (£321 million/€376 million), but according to USA Today has been revised to more than $400 million (£302 million/€354 million). It is nearly double last 2020's rejected $215 million (£162 million/€190 million) proposal, which was widely criticised. USA Gymnastics will also be required to implement a series of reforms aiming to prevent future abuse of gymnasts, including requiring member clubs to appoint a "Safety Champion" to update the National Federation on its compliance with safeguarding rules. It has taken years to approach an agreement between USA Gymnastics and abuse victims. A $500 million (£378 million/€442 million) agreement with 332 survivors of Nassar’s crimes was reached with Michigan State University in 2018. Judge Robyn Moberly at the United States Bankruptcy Court for the Southern District of Indiana passed the latest plan in October. Verification documents filed at the Court in Indianapolis this week showed 476 of the 505 ballots submitted by survivors were in favour of the plan, USA Today reported. The other 29 ballots either missed a signature or were duplications of another ballot, meaning they were invalid. A further 76 creditors were also balloted, and they largely accepted the proposal, with three voting against it. The settlement still needs to be confirmed at a hearing in Indianapolis on December 13 and 14. 2021. At least one insurance company is reported to be disputing the contribution it should make towards the plan and funding remains an issue, but a partial settlement could be reached under the accepted proposal, and negotiations are set to continue prior to the hearing. If a settlement is confirmed at the US Bankruptcy Court for the Southern District of Indiana, survivors would not be able to seek further legal action against USA Gymnastics, the US Olympic and Paralympic Committee (USOPC) and Bela and Martha Karolyi, who ran and own the Karolyi ranch in Texas where some of the abuse took place. USA Gymnastics filed for bankruptcy in 2018, but lawsuits by survivors including Olympic champions Simone Biles and Aly Raisman would be allowed to resume should it exit without a deal, according to USA Today. In September, survivors at a Senate Judiciary Committee hearing criticised USA Gymnastics' handling of the investigation into Nassar, with Biles accusing it and the USOPC of allowing Nassar’s abuse of gymnasts to continue. The Federal Bureau of Investigation (FBI) also came under fire. The US Department of Justice in October 2021 agreed to launch a new probe into the FBI's botched inquiry into abuse committed by Nassar. About USA Gymnastics USA Gymnastics -- https://www.usagym.org/ -- is a not-for-profit organization incorporated in Texas. Based in Indianapolis, Indiana, USAG's organization encompasses six disciplines: women's gymnastics, men's gymnastics, trampoline and tumbling, rhythmic gymnastics, acrobatic gymnastics, and group gymnastics. USAG provides educational opportunities for coaches and judges, as well as gymnastics club owners and administrators, and sanctions approximately 4,000 competitions and events throughout the United States annually. More than 200,000 athletes, professionals, and clubs are members of USAG. USAG sets the rules and policies that 1`govern the sport of gymnastics in the United States, including selecting and training the United States gymnastics teams for the Olympics and World Championships. As of the Petition Date, USAG employs 53 individuals, nearly all of whom work for USAG full time. USA Gymnastics sought Chapter 11 protection (Bankr. S.D. Ind. Case No. 18-09108) on Dec. 5, 2018. USAG estimated $50 million to $100 million in assets and the same range of liabilities as of the bankruptcy filing. The Hon. Robyn L. Moberly is the case judge. USAG tapped JENNER & BLOCK LLP as counsel; ALFERS GC CONSULTING, LLC and SCRAMBLE SYSTEMS, LLC, as business consulting services providers; and OMNI Management Group, Inc., as claims agent. VILLAGE REALTY: Case Summary & 9 Unsecured Creditors ---------------------------------------------------- Debtor: Village Realty Associates, LLC 1755 Todd Rd Toms River, NJ 08755-2143 Business Description: Village Realty Associates, LLC is the fee simple owner of three real properties located in Forked River, NJ valued at $1.05 million. Chapter 11 Petition Date: December 6, 2021 Court: United States Bankruptcy Court District of New Jersey Case No.: 21-19386 Debtor's Counsel: Daniel E. Straffi, Jr., Esq. STRAFFI & STRAFFI 670 Commons Way Toms River, NJ 08755-6431 Tel: (732) 341-3800 Fax: (732) 341-3548 E-mail: bkclient@straffilaw.com Total Assets: $1,050,110 Total Assets: $839,224 The petition was signed by Carmelen B. Chiusano, power of attorney for Antonio Buenviaje. A full-text copy of the petition containing, among other items, a list of the Debtor's nine unsecured creditors is available for free at PacerMonitor.com at: https://www.pacermonitor.com/view/EJCHQMA/Village_Realty_Associates_LLC__njbke-21-19386__0001.0.pdf?mcid=tGE4TAMA VISION ADELANTE: Taps Law Offices of Sheila Esmaili as Counsel -------------------------------------------------------------- Vision Adelante seeks approval from the U.S. Bankruptcy Court for the Central District of California to hire the Law Offices of Sheila Esmaili to serve as legal counsel in its Chapter 11 case. The firm's services include: (a) advising the Debtor regarding matters of bankruptcy law, the requirements of the Bankruptcy Code and Bankruptcy Rules relating to the administration of the case, and the operation of the Debtor's estate; (b) representing the Debtor in proceedings and hearings in the court involving matters of bankruptcy law; (c) assisting in the compliance with the requirements of the Office of the United States Trustee; (d) advising the Debtor regarding its powers and duties in the continued operation of its business and management of its property; (e) assisting the Debtor in the administration of the estate's assets and liabilities; (f) preparing legal documents; (g) assisting in the collection of all accounts receivable and other claims that the Debtor may have, and in the resolution of claims against the Debtor's estate; (h) providing advice concerning the claims of creditors and the prosecution or defense of all actions; and (i) preparing, negotiating, prosecuting, and attaining confirmation of a plan of reorganization. The firm's hourly rates are as follows: Sheila Esmaili, Esq. $450 per hour M. Jonathan Hayes, Esq. $535 per hour Law clerk/Paralegal $200 per hour The Debtor paid $20,000 to the firm as a retainer fee. Sheila Esmaili, Esq., the firm's attorney who will be providing the services, disclosed in a court filing that she is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. The firm can be reached at: Sheila Esmaili, Esq. Law Office of Sheila Esmaili 11601 Wilshire Boulevard, Suite 500 Los Angeles, CA 90025 Tel: 310.734.8209 Email: selaw@bankruptcyhelpla.com About Vision Adelante Torrance, Calif.-based Vision Adelante filed a petition for Chapter 11 protection (Bankr. C.D. Calif. Case No. 21-18528) on Nov. 8, 2021, listing as much as $10 million in both assets and liabilities. Rosana A. Torres, principal, signed the petition. The Debtor tapped the Law Offices of Sheila Esmaili as legal counsel. WALDEMAR LLC: Seeks to Hire Snow Tax & Business as Accountant ------------------------------------------------------------- Waldemar, LLC seeks approval from the U.S. Bankruptcy Court for the Eastern District of Arkansas to hire Snow Tax & Business Services as its accountant. The firm's services include: (a) completing all necessary financial reports, monthly reports, quarterly summary reports, reconciliations, and any other documents relating thereto so that the Debtor can provide accurate information to the court, the Office of the U.S. Trustee, the Subchapter V trustee, creditors, and other parties; and (b) performing all other necessary accounting services for the Debtor. The firm will be paid at an hourly rate of $60 and will receive reimbursement for necessary costs and expenses. Honsley Snow, the firm's enrolled agent who will be providing the services, disclosed in a court filing that he is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. The firm can be reached at: Honsley Snow, E.A. Snow Tax & Business Services 11215 Hermitage Road, Suite 202 Little Rock, AR 72211 Tel: (501) 771-1712 Fax: (501) 771-1752 Email: hsnow@acctsvcar.com About Waldemar LLC Waldemar, LLC filed a petition for Chapter 11 protection (Bankr. E.D. Ark. Case No. 21-13089) on Nov. 17, 2021, listing up to $10 million in both assets and liabilities. Lanette Davis Beard, sole member, signed the petition. Judge Bianca M. Rucker oversees the case. The Debtor tapped Wingfield & Corry, P.A. as legal counsel and Snow Tax & Business Services as accountant. WALL009 LLC: Case Summary & 2 Unsecured Creditors ------------------------------------------------- Debtor: WALL009, LLC 13901 Midway Road, Suite 102 Dallas, TX 75244 Business Description: WALL009, LLC is a Single Asset Real Estate (as defined in 11 U.S.C. Section 101(51B)). Chapter 11 Petition Date: December 7, 2021 Court: United States Bankruptcy Court Northern District of Texas Case No.: 21-32191 Debtor's Counsel: Eric A. Liepins, Esq. ERIC A. LIEPINS 12770 Coit Road Suite 850 Dallas, TX 75251 Tel: 972-991-5591 Fax: 972-991-5788 Email: eric@ealpc.com Estimated Assets: $0 to $50,000 Estimated Liabilities: $1 million to $10 million The petition was signed by Tim Barton, president of managing member. A full-text copy of the petition containing, among other items, a list of the Debtor's two unsecured creditors is available for free at PacerMonitor.com at: https://www.pacermonitor.com/view/MJ24XRQ/WALL009_LLC__txnbke-21-32191__0001.0.pdf?mcid=tGE4TAMA WC 511 BARTON: Case Summary & 3 Unsecured Creditors --------------------------------------------------- Debtor: WC 511 Barton Blvd, LLC 814 Lavaca St. Austin, TX 78701 Business Description: WC 511 Barton Blvd, LLC is a Single Asset Real Estate debtor (as defined in 11 U.S.C. Section 101(51B)). Chapter 11 Petition Date: December 7, 2021 Court: United States Bankruptcy Court Western District of Texas Case No.: 21-10943 Debtor's Counsel: Mark H. Ralston, Esq. FISHMAN JACKSON RONQUILLO PLLC 13155 Noel Road, Suite 700 Dallas, TX 75240 Tel: 214-419-5500 Email: mralston@fjrpllc.com Estimated Assets: $10 million to $50 million Estimated Liabilities: $1 million to $10 million The petition was signed by Natin Paul as president. A full-text copy of the petition is available for free at PacerMonitor.com at: https://www.pacermonitor.com/view/NFKIOJQ/WC_511_Barton_Blvd_LLC__txwbke-21-10943__0001.0.pdf?mcid=tGE4TAMA List of Debtor's Three Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ 1. City of Austin Trade $7,834 PO Box 2267 Austin, TX 78783 2. Julia Clark, CPA Trade $2,950 1700 West Ave Austin, TX 78701 3. West Texas Stone Solutions Trade $3,885 5206 Orsini Blfs Round Rock, TX 78665 WHISPER LAKE: Seeks to Hire Bush Kornfeld as Bankruptcy Counsel --------------------------------------------------------------- Whisper Lake Developments, Inc. seeks approval from the U.S. Bankruptcy Court for the Western District of Washington to hire Bush Kornfeld, LLP to serve as legal counsel in its Chapter 11 case. The firm's services include: (a) giving the Debtor legal advice with the respect to its powers and duties in the continued operation of its business and management of its property; (b) preparing legal papers; (c) advising the Debtor with respect to a potential settlement with secured lenders and taking necessary action to obtain court approval of any settlement agreement; (d) to the extent necessary, advising the Debtor with respect to all processes surrounding a proposed sale of its assets and preparing all pleadings associated therewith; (e) assisting the Debtor in reviewing all claims and in determining all issues associated with the distribution on allowed claims; (f) taking necessary actions to avoid any liens subject to the Debtor's avoidance (g) performing other necessary legal services. The firm's hourly rates are as follows: Thomas A. Buford, Esq. $450 per hour Professionals/Support Personnel $75 - $585 per hour Thomas Buford, Esq., the firm's attorney who will be providing the services, disclosed in a court filing that he is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. The firm can be reached at: Thomas A. Buford, Esq. Bush Kornfeld LLP 601 Union St., Suite 5000 Seattle, WA 98101-2373 Tel.: (206) 292-2110 Fax: (206) 292-2104 Email: ctobin@bskd.com About Whisper Lake Developments Inc. Whisper Lake Developments, Inc. is a Ferndale, Wash.-based company engaged in activities related to real estate. It is the owner of five real properties in Washington having a total current value of $9.53 million. Whisper Lake Developments sought protection under Chapter 11 of the Bankruptcy Code (Bankr. W.D. Wash. Case No. 21-12060) on Nov. 10, 2021, disclosing $9,666,063 in assets and $5,562,777 in liabilities. Judge Timothy W. Dore oversees the case. Thomas A. Buford, Esq., at Bush Kornfield, LLP and Orse & Co. serve as the Debtor's legal counsel and restructuring advisor, respectively. WHISPER LAKE: Taps Orse & Co. as Restructuring Advisor ------------------------------------------------------ Whisper Lake Developments, Inc. seeks approval from the U.S. Bankruptcy Court for the Western District of Washington to hire Orse & Co. as restructuring advisor. The firm's services include: (a) controlling the Debtor's bank accounts and assets; (b) employing persons as needed in the management, operation or liquidation of the Debtor's businesses and assets; (c) performing or contracting accounting, consulting and tax services with respect to the Debtor's assets; and (d) performing any action reasonably necessary in the ordinary course of the Debtor's business. Eric Orse, president of Orse & Co. who will be providing the services, will be paid at $275 per hour. The Debtor paid $8,400 to the firm as a retainer fee. Mr. Orse disclosed in a court filing that he is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. The firm can be reached at: Eric D. Orse Orse & Co. 200 West Mercer Street, Suite E407 Seattle, WA 98119 Email: orseco@orseco.com About Whisper Lake Developments Inc. Whisper Lake Developments, Inc. is a Ferndale, Wash.-based company engaged in activities related to real estate. It is the owner of five real properties in Washington having a total current value of $9.53 million. Whisper Lake Developments sought protection under Chapter 11 of the Bankruptcy Code (Bankr. W.D. Wash. Case No. 21-12060) on Nov. 10, 2021, disclosing $9,666,063 in assets and $5,562,777 in liabilities. Judge Timothy W. Dore oversees the case. Thomas A. Buford, Esq., at Bush Kornfield, LLP and Orse & Co. serve as the Debtor's legal counsel and restructuring advisor, respectively. YOURELO YOUR: Amends Unsecured Claims Pay Details ------------------------------------------------- Plan proponent Devyap Realty Group, Inc., submitted a Third Amended Disclosure Statement describing Third Amended Plan of Reorganization for Debtor Yourelo Your Full-Service Relocation Corporation dated Dec. 03, 2021. Under the terms of the Plan, the Plan Proponent will pay the City of Revere's Allowed Claim, all Administrative Claims and all Priority Tax Claims in full on the Effective Date. Furthermore, under the Plan, the Plan Proponent will pay all unsecured creditors of the Debtor the full amount of their Allowed Claims on the Effective Date. At or prior to Confirmation, Devyap shall transfer the Confirmation Escrow Deposit, in the amount of $925,757.51, to the Disbursing Agent, Curran Antonelli, LLP to be held in a separate escrow account. The Confirmation Escrow Deposit will be used to pay on the Effective Date: (i) the full amount of the City of Revere's Allowed Claim, which is estimated to be no greater than $438,985.13;2 (ii) all Priority Tax Claims in the amount of $7,543.27; (iii) all allowed Administrative Claims which are estimated to be approximately $300,000.00; and (iv) the full amount of all allowed General Unsecured Claims which are estimated to total $179,229.11. Each Class Two Unsecured Claimant will receive the full amount of his/her/its Allowed Claim(s) on the Effective Date. Class two claims are not impaired and are not entitled to vote on the Plan. This Class is Unimpaired and not eligible to vote. Devyap Realty Group, Inc. is a Massachusetts corporation, formed in October 2016, and is engaged in the leasing and management of residential and commercial real estate throughout Massachusetts. Devyap has a total of $745,000.00 in available lines of credit from Citizens Bank and Raymond C. Green Inc., as well as in excess of $250,000.00 in retained earnings which Devyap intends to use to fund the Confirmation Escrow Deposit and the Distributions under the Plan. Moreover, the Plan Proponent, Devyap, does however have sufficient resources to make all disbursements called for under the Third Amended Plan of Reorganization. Devyap is prepared to use retained earnings that it has generated and will generate, through these operations to fund any of its immediate cash obligations under the Plan as well as any newly accrued property taxes, property insurance costs and/or costs associated with the routine upkeep of the Property along with its credit facilities. A full-text copy of the Third Amended Disclosure Statement dated Dec. 3, 2021, is available at https://bit.ly/3EtEZ97 from PacerMonitor.com at no charge. Devyap Realty is represented by: Thomas H. Curran Christopher Marks Curran Antonelli, LLP Ten Post Office Square, Suite 800 South Boston, MA 02109 Tel: 617-207-8670 E-mail: tcurran@curranantonelli.com cmarks@curranantonelli.com About Yourelo Your Full-Service Relocation Yourelo Your Full-Service Relocation Corporation is a real estate lessor based in Revere, Mass. It conducts business under the name Gentle Movers. Yourelo sought protection under Chapter 11 of the Bankruptcy Code (Bankr. D. Mass. Case No. 19-13602) on Oct. 23, 2019. The petition was signed by Umida Yusupova, president. At the time of filing, the Debtor had estimated assets of $1 million to $10 million and liabilities of $100,000 to $500,000. Judge Christopher J. Panos oversees the case. The Debtor is represented by Casner & Edwards, LLP. [] New Bankruptcy Filings in the U.S. Declined in November 2021 --------------------------------------------------------------- On Dec. 3, 2021 Epiq, a global technology-enabled services leader to the legal services industry and corporations, released its November 2021 bankruptcy filing statistics from its AACER bankruptcy information services business. Overall, November new filings were down with 29,325 across all chapters, down 5.6% from October 2021 which had 31,053 new filings. Total commercial filings across all chapters were 1,563, down 10.3% over October 2021, which had 1,743 new filings. A chart accompanying this release is available at https://www.globenewswire.com/NewsRoom/AttachmentNg/8dd30f8b-a9f3-4e2f-9504-01324e4dea22 For 2021 through November, the total number of new bankruptcy filings across all chapters was 373,474, down 24.7% over the same period last year which had 496,044. This downward trend continues as the COVID-19 global pandemic continues to affect bankruptcy activity. Chapter 7 individual bankruptcies had 17,378 new filings in November, down 6.6% over October 2021, which had 18,608 new filings. Chapter 13 individual bankruptcies had 10,336 new filings, down 2.9% over the prior month that had 10,642. This is the first month in the last 6 consecutive months where new Chapter 13 filings decreased. However, as November has only 30 calendar days along with the shortened U.S. Thanksgiving holiday week, it slightly impacts month-over-month new filing comparison metrics. Chapter 11 commercial filings, including Sub Chapter V, had 195 new filings in November, down 29.1% over the prior month that had 275 new filings. Of these, 73 were Sub Chapter V, down from 85 the prior month. "November new bankruptcy filing activity continued the downward trend since the COVID-19 global pandemic manifested in the U.S. in March 2020. While it was a shorter month, the fact remains that new filing levels are considerably less than the pre-COVID-19 levels," said Chris Kruse, senior vice president of Epiq Bankruptcy Technology. ********* 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. 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