/raid1/www/Hosts/bankrupt/TCR

/raid1/www/Hosts/bankrupt/TCR_Public/211213.mbx T R O U B L E D C O M P A N Y R E P O R T E R Monday, December 13, 2021, Vol. 25, No. 346 Headlines 1604 SUNSET PLAZA: Case Summary & Unsecured Creditor 801 ASBURY: Unsecureds Will Get 10% in Lender's Plan for 176 Route ADVANCED INTEGRATION: S&P Lowers ICR to 'CCC+, Outlook Developing ADVANTAGE HOLDCO: Asks Court Approval for Chapter 11 Liquidation ADVAXIS INC: Further Adjourns Special Meeting to Dec. 16 AL-VERDE FRUITS: Gets OK to Hire Langley & Banack as Legal Counsel AMERICANN INC: Incurs $863K Net Loss in FY Ended Sept. 30 APP REALTY: Wins Access to First Midwest's Cash Collateral ARIZONA AIRCRAFT: Property Sale & Continued Operations to Fund Plan AULT GLOBAL: BitNile Invests in Decentralized Finance Platform BABCOCK & WILCOX: Unveils Public Offering of $125M of Senior Notes BLACKBRUSH OIL: Fitch Affirms 'CCC+' LongTerm IDR BLUEAVOCADO CO: Seeks to Hire AB Accretive as Financial Advisor BLUEAVOCADO CO: Seeks to Tap Ray Battaglia as Bankruptcy Counsel BLUEAVOCADO CO: Taps Michael Best & Friedrich as Special Counsel BYRNA TECHNOLOGIES: Reports Prelim Q4 Revenue of $11.2 Million CAMBER ENERGY: Investors Extend Deadline to File Reports to Dec. 17 CARVANA CO: Baillie Gifford Has 10.56% Equity Stake as of Nov. 30 CARVANA CO: Unit Amends Deal to Increase Credit Line to $2.25-Bil. CBAK ENERGY: All Three Proposals Passed at Annual Meeting CEN BIOTECH: Appoints Rik Purdy as SVP of Deals and Acquisitions CWGS ENTERPRISES: $300MM Loan Add-on No Impact on Moody's Ba3 CFR DALTON CRANE: Wins Cash Collateral Access on Final Basis DUN & BRADSTREET: Fitch Rates Proposed Unsec. Notes 'BB-' EASTERDAY RANCHES: Farms Unsecureds to Get 89% or 94% in Plan EMMAUS CALLING: S&P Withdraws Bond Ratings on Three Projects ENERMEX INTERNATIONAL: Court Conditionally Approves Disclosures ESTIATORIO ENT: Odyssey Diner in Battle for Control of Building FLORIDA HOMESITE: Disclosure Statement Unclear, McKenna Says FORUM ENERGY: Appoints Neal Lux as President, CEO FROZEN FOODS: Gets Cash Collateral Access Thru Dec 14 FUELCELL ENERGY: Betsy Bingham Appointed to Board of Directors GAINCO INC: Gets Interim Cash Collateral Access GAMESTOP CORP: S&P Rates $500MM Asset-Based Lending Facility 'BB-' GIRARDI & KEESE: Edelson PC Could Get Dinged for Sitting on Concern GROWLIFE INC: Michael Fasci Quits as Chief Financial Officer HAWAIIAN VINTAGE: Seeks to Tap Wick Phillips as Bankruptcy Counsel HIGHTOWER HOLDING: Moody's Affirms B3 CFR, Outlook Remains Stable INTELSAT SA: Creditors Float $1.8-Billion Note Remedy IQ FORMULATIONS: Unsecureds to Get 15% Under Plan K&L TRAILER: Unsecured Creditors to Recover 5% in Trustee' Plan KINTARA THERAPEUTICS: Gets Noncompliance Notice from Nasdaq L&L WINGS: Wins Collateral Access Thru Feb 2022 LATAM AIRLINES: Reaches Plane Lease Claims Settlement With Sajama LIBERTY POWER: $25MM DIP Loan Maturity Extended Thru Feb. 28 LIFEPOINT HEALTH: S&P Affirms 'B' ICR on Kindred Transaction LTL MANAGEMENT: Letters Exchanged on Excessive Discovery Requests LTL MANAGEMENT: US Trustee Wants Jones Day Out as Ch.11 Counsel LUX AMBER: Incurs $314,541 Net Loss in First Quarter MA REAL ESTATE: Court Preliminary Approves Disclosure Statement MAGNOLIA PET: Seeks to Hire Rountree Leitman & Klein as Counsel MALLINCKRODT PLC: Considers Acthar, Opioid Deals Vital to Plan MAUNESHA RIVER: Wins Cash Collateral Access Thru Jan 2022 MEGA BROADBAND: $150MM Dividend Recap No Impact on Moody's B2 CFR MEGA BROADBAND: S&P Affirms 'B+' Rating on Secured First-Lien Debt MERCURITY FINTECH: Viner Total Acquires 14.6% Equity Stake MOUNTAIN PROVINCE: Receives $42.7 Million From Recent Diamond Sale NEW ERA CAP: Moody's Assigns First Time B1 Corporate Family Rating NEW ERA CAP: S&P Assigns 'B+' Issuer Credit Rating, Outlook Stable NITROCRETE LLC: U.S. Trustee Appoints Creditors' Committee NUVERRA ENVIRONMENTAL: Inks 3rd Amendment to 2020 Loan Agreement OCEAN POWER: Reschedules Annual Meeting to Dec. 14 OMAGINE INC: May Obtain $55,000 DIP Financing PEOPLE SPEAK: United States Trustee Opposes Disclosure Statement PHUNWARE INC: Stockholders Approve All Proposals at Annual Meeting PINECREST PIGEON: Voluntary Chapter 11 Case Summary PINNACLE MANAGEMENT: Taps the Salts Law Office as Legal Counsel POLYMER GRINDING: Seeks to Hire Calaiaro Valencik as Legal Counsel PRIME GLOBAL: Seeks Cash Collateral Access PURDUE PHARMA: Appeals Judge Will Rule in Third Week of December QORVO INC: Moody's Gives Ba1 Rating on New Senior Unsecured Notes RED HOOK SOLAR: Wins Cash Collateral Access REDWOOD EMPIRE: Wins Cash Collateral Access Thru Dec. 17 REGIONAL HEALTH: Shareholders Elect Four Directors REMARK HOLDINGS: Gets $30M of Debt Financing from Mudrick Capital REX INC: West Virginia Tax Department Says Plan Not Feasible RIVER HILL: Case Summary & 20 Largest Unsecured Creditors SAN DIEGO TACO: Business Income to Fund Plan Payments SEAGATE TECHNOLOGY: S&P Affirms 'BB+' ICR, Outlook Stable SEQUENTIAL BRANDS: Unsecureds to Get Nothing in Liquidating Plan SKILLZ INC: Moody's Assigns First Time B3 Corporate Family Rating SKILLZ INC: S&P Assigns 'B-' Issuer Credit Rating, Outlook Stable SOUTHWESTERN ENERGY: Fitch Rates Proposed Unsec. Notes 'BB' SRAMPICKAL DEVELOPERS: Seeks to Tap Adelstein & Kaliner as Counsel STRIKE LLC: $8MM DIP Loan, Cash Collateral Access OK'd SUGARHOUSE HSP: S&P Affirms 'B-' ICR, Outlook Negative SURREY DRIVE: Seeks to Hire Tracy A. Brown as Legal Counsel TALOS ENERGY: S&P Affirms B- Issuer Credit Rating, Outlook Stable URS HOLDCO: S&P Affirms 'CCC+' Issuer Credit Rating, Outlook Neg. US STEEL: Moody's Ups CFR to Ba3 & Sr. Unsecured Debt Rating to B1 VOS CRE I: Taps Berkowitz Pollack Brant as Financial Advisor VPR BRANDS: Agrees to Settle Patent Suit vs. NEPA for $275K VTV THERAPEUTICS: Cuts Workforce by 65% to Prioritize on TTP399 WATSONVILLE HOSPITAL: $16MM DIP Loan, Cash Collateral Access OK'd WATSONVILLE HOSPITAL: Gets Approval to Hire Stretto as Claims Agent WILLCO XII: Continued Operations to Fund Reorganization Plan YUNHONG CTI: Inks Stock Purchase Agreement With ICY Mellon [*] DOJ Asks Supreme Court to Review $324 Mil. Bankruptcy Fee Fight [^] BOND PRICING: For the Week from December 6 to 10, 2021 ********* 1604 SUNSET PLAZA: Case Summary & Unsecured Creditor ---------------------------------------------------- Debtor: 1604 Sunset Plaza, LLC 715 North Alpine Drive Beverly Hills, CA 90210 Business Description: The Debtor is a privately held company whose principal assets are located at 1604 Sunset Plaza Dr., Los Angeles, CA 90069. Chapter 11 Petition Date: December 9, 2021 Court: United States Bankruptcy Court Central District of California Case No.: 21-19157 Judge: Hon. Ernest M. Robles Debtor's Counsel: M. Douglas Flahaut, Esq. ARENT FOX LLP 555 West Fifth Street, 48th Floor Los Angeles, CA 90013-1065 Tel: 213-629-7400 Fax: 213-629-7401 Email: Douglas.Flahaut@arentfox.com Estimated Assets: $1 million to $10 million Estimated Liabilities: $10 million to $50 million The petition was signed by The Stuart and Annette Rubin Family Trust UAD 11/3/2003, manager. The Debtor listed Los Angeles Department of Water and Power as its sole unsecured creditor holding a claim of $10,626. A full-text copy of the petition is available for free at PacerMonitor.com at: https://www.pacermonitor.com/view/FUOQFDQ/1604_Sunset_Plaza_LLC__cacbke-21-19157__0001.0.pdf?mcid=tGE4TAMA 801 ASBURY: Unsecureds Will Get 10% in Lender's Plan for 176 Route ------------------------------------------------------------------ Plan proponent National Capital Management, L.P., submitted a Chapter 11 Plan of Liquidation and Disclosure Statement for 176 Route 50 LLC, a debtor Affiliate of 801 Asbury Avenue, LLC dated Dec. 7, 2021. The Debtor owns and operates commercial real property known as and located at 176 Route 50, Estell Manor, New Jersey. The Debtor acquired this abandoned warehouse property in 2016, rehabilitated the property into usable commercial lease space and has leased such space since 2017. According to the Debtor, the Debtor was forced to file its bankruptcy petition as a result of insufficient income and reduced cash flow due to various factors, but, most notably, the COVID-19 pandemic on its affiliated company, 801 Asbury Avenue. The Debtor's senior secured lender (NCM, the Plan Proponent) commenced a state court action against both 801 Asbury Avenue and the Debtor and sought the appointment of a rent receiver which precipitated the timing of the instant chapter 11 case. The Plan of Liquidation proposed by NCM provides that the Debtor may, if the Debtor chooses to do so, market the for sale during the 30 days following the Effective Date of the Plan. Should the Debtor obtain a bona fide agreement of sale for the Properties, or any of them, within the 30 day period following the Effective Date, such offer shall be deemed a stalking bid. An Auction Sale of the Properties shall be held at any time on or after 90 days after the Effective Date, at a date and time chosen by KMP and NCM, to be conducted by a third-party commercial real estate auctioneer acceptable to KMP and NCM, with such auction sale of the Properties to be free and clear of liens, claims and encumbrances with such liens, claims and encumbrances transferred to the proceeds in accordance with the applicable provisions of the Bankruptcy Code and state law. NCM shall be entitled to credit bid at the auction sale. In other words, the Plan Proponent seeks to accomplish payments under the Plan by liquidating the Debtor's assets to optimize the value of the assets. Class 1 consists of the NCM Secured Claim -- $1,847,500.00 Loan. From and after the Effective Date, NCM shall (i) continue to receive its portion of the Debtor's monthly adequate protection payment totaling $1,730, plus an overage, if any, in accordance with the Court approved cash collateral orders from the rent or lease proceeds of the Properties and (ii) after payment of normal and customary Closing costs, receive payment in full of any Allowed Claim from the proceeds of sale of the Properties. Class 2 consists of the Second Mortgage Secured Claim of NCM by virtue of its first priority mortgage on the Property securing the Debtor's obligations to NCM under the $525,000.00 NCM Loan Documents. From and after the Effective Date, NCM shall (i) continue to receive its portion of the Debtor's monthly adequate protection payment totaling $1,730, plus an overage, if any, in accordance with the Court approved cash collateral orders from the rent or lease proceeds of the and (ii) after payment of normal and customary Closing costs, receive payment in full of any Allowed Claim from the proceeds of sale of the 801 Asbury Avenue Property. Class 3 consists of Resdel Corporation's Judgment Claim. As of the Petition Date, Resdel Corporation asserts a Secured Claim in the amount of $972,233.32. As of the Petition Date, Resdel Corporation's Judgment Claim is subordinate to Allowed Secured Claims of NCM and the City of Estell Manor – Tax Collector against the Property. Based upon the fair market valuation of the Property, the Resdel Corporation Judgment Claim is a wholly Unsecured Claim and shall be treated as an Unsecured Claim. Class 4 consists of Unsecured Claims. The Unsecured Claims are Impaired. After payment of normal and customary Closing costs, plus the payment of all superior liens and claims, including Secured, Administrative and Priority Claims, Class 4 Unsecured Creditors shall receive payment on account of any Allowed Claim from the proceeds of sale of the Property within thirty (30) days following the Closing on the Property. Based upon the General Unsecured Claims scheduled by the Debtor and the Unsecured Claims timely filed by Class 4 Creditors, as well as the valuation of the Property, the Debtor estimates the percentage distribution to Class 3 and Class 4 Allowed Claims to be approximately 10% of Claims. Class 5 consists of all Interests in the Debtor. As of the Plan filing, the Debtor is aware of only the sole Interest Holder with 100% of the membership interests in the Debtor: James McCallion. Class 5 is Unimpaired. On the Effective Date, all Interests in the Debtor shall transfer and become Interests in the Reorganized Debtor for the purpose of fulfilling the obligations of the Reorganized Debtor under the Plan; the holder of Interests shall not receive any distributions on account of such Interests, unless and until all Creditors are paid in full in accordance with the Plan. The Debtor may, in its discretion, market the Properties for sale during the 30 days following the Effective Date. Should the Debtor obtain a bona fide agreement of sale for the Properties, or any of them, within the 30 day period following the Effective Date, such offer shall be deemed a stalking bid. An auction sale of the Properties shall be held at any time on or after 90 days after the Effective Date, at a date and time chosen by KMP and NCM, to be conducted by a third-party commercial real estate auctioneer acceptable to KMP and NCM, with such auction sale of the Properties to be free and clear of liens, claims and encumbrances with such liens, claims and encumbrances transferred to the proceeds in accordance with the applicable provision of the Bankruptcy Code and state law, to be paid at closing on the sale of the Properties in order of priority. A full-text copy of the Liquidating Plan dated Dec. 07, 2021, is available at https://bit.ly/3pKbTfl from PacerMonitor.com at no charge. Attorney for National Capital Management: FRIEDMAN SCHUMAN, P.C. Ron L. Woodman, Esquire 101 Greenwood Avenue, Suite 500 Jenkintown, PA 19046 Telephone: (215) 635-7200 Facsimile: (215) 635-7212 About 801 Asbury Avenue 801 Asbury Avenue, LLC is a New Jersey limited liability corporation which owns and operates commercial real property in Ocean City. 801 Asbury Avenue, LLC along with affiliate 176 Route 50, LLC sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. D. N.J. Case No. 21-14401 and 21-14402) on May 26, 2021. In the petition signed by James McCallion, sole member, 801 Asbury disclosed up to $10 million in both assets and liabilities. Judge Andrew B. Altenburg, Jr. oversees the jointly administered cases. David B. Smith, Esq., at Smith Kane Holman, LLC is the Debtors' counsel. ADVANCED INTEGRATION: S&P Lowers ICR to 'CCC+, Outlook Developing ----------------------------------------------------------------- S&P Global Ratings lowered its issuer credit rating on Advanced Integration Technology L.P. (AIT) to 'CCC+' from 'B-'. The outlook is developing. At the same time, S&P lowered its issue-level rating on the company's first-lien debt to 'CCC+' from 'B-'. The '3' recovery rating is unchanged. The developing outlook reflects the potential for a positive or negative rating action depending on earnings improvement and AIT's ability to refinance its debt. S&P said, "The downgrade reflects our expectation that debt to EBITDA will be above 10x in 2021.We previously expected debt to EBITDA to be about 7x due to the pandemic's impact on EBITDA, but unforeseen delays in significant contract awards have pushed a substantial amount of revenue into 2022. The problems have been in both defense and commercial aerospace operations, butthe defense delays have had a larger unexpected impact. Due to the unforeseen nature of the delays and the belief that work will pick up quickly at the end of 2021 and into 2022, the company did not make significant cost reductions in the current year to be prepared to operate at full capacity. Therefore, fixed costs remained high relative to revenue and EBITDA margins are lower than typical, expected to be in the 17%-19% range for 2021, further depressing EBITDA. "Liquidity might become a near-term concern. We expect AIT to generate negative free cash flow in 2021 due primarily to weak earnings. We also expect some working capital build up over the next 12 months as business picks up. These factors, combined with the company's inability to draw more than $18 million on its revolving credit facility to avoid a covenant test, could create a strain on liquidity. The company will also need to explore refinancing options because its revolver matures in January 2023 and its term loan matures in April 2023, and that could be a challenge if earnings don't improve significantly. There is a path to significant earnings growth in 2022. Order delays depressed 2021 earnings, but in most cases that revenue was just pushed into 2022 and 2023, rather than lost. AIT's backlog is the highest it has been since 2018, and the company should recognize a significant portion of that revenue in 2022. The defense segment should continue to grow consistently through 2023, largely due to increases in classified programs while S&P expects the commercial aerospace rebound to occur more in 2023. The developing outlook reflects that S&P could raise or lower the rating on AIT depending on the level of earnings improvement and the company's ability to refinance upcoming debt maturities. S&P could lower our rating if it believes the company will likely default within 12 months. This could occur if: -- A near-term liquidity crisis occurs, likely driven by earnings and free cash flow remaining weak due to further order delays; -- The company draws its revolver to the point that the covenant will be tested, and S&P expects a breach; -- S&P believes the company is considering a distressed debt exchange offer; or -- The company is unable to refinance its 2023 debt maturities and they become current. S&P could raise its rating on AIT if: -- Debt to EBITDA improves to 8x or below, and we expect it to remain there; and -- The company is able to refinance its existing debt and extend maturities. This would likely be driven by growing EBITDA and cash flows as the company works through its backlog and capitalizes on delayed orders. ADVANTAGE HOLDCO: Asks Court Approval for Chapter 11 Liquidation ---------------------------------------------------------------- Leslie Pappas of Law360 reports that the former parent of Advantage Rent A Car and its bankrupt affiliates will seek approval Friday, December 10, 2021, of a Chapter 11 plan to liquidate all remaining assets, asking a Delaware bankruptcy court to overrule objections from the Office of the U.S. Trustee that the plan would absolve too many nonfiduciary parties of liability. Advantage Holdco Inc. , which sold off its airport rental car business during its bankruptcy, filed a memorandum in support of its combined plan and company disclosures Wednesday. The U.S. Trustee's Office has objected to the plan because it would exculpate post-confirmation entities, or PCEs. About Advantage Rent A Car Advantage Holdco, Inc.-- http://www.advantage.com/-- doing business as Advantage Rent a Car is a car rental company with 50 locations in the U.S. and 130 international affiliate locations. The parent entity, Advantage Holdco, is owned by Toronto-based Catalyst Capital Group. According to its website, the Debtors have locations in 27 markets, including New York, Los Angeles, Orlando, Las Vegas, and Hawaii. Advantage Holdco, Inc., doing business as Advantage Rent a Car, sought Chapter 11 protection (Bankr. D. Del. Case No. 20-11259) on May 26, 2020. Six related entities also sought bankruptcy protection. Advantage Holdco was estimated to have $100 million to $500 million in assets and $500 million to $1 billion in liabilities as of the bankruptcy filing. Judge Craig T. Goldblatt replaced Judge John T. Dorsey as the case judge. The Debtors tapped COLE SCHOTZ P.C. as counsel; and MACKINAC PARTNERS, LLC, as restructuring advisor. ADVAXIS INC: Further Adjourns Special Meeting to Dec. 16 -------------------------------------------------------- Advaxis, Inc. reconvened its Special Meeting of Stockholders on Dec. 7, 2021, at which the stockholders approved: a. Proposal No. 1. The vote to approve the issuance of shares of common stock of Advaxis to shareholders of Biosight, pursuant to the terms of the merger agreement and the change of control resulting from the merger; and b. Proposal No. 4. The vote to approve, on a non-binding, advisory basis, the compensation that will or may become payable by Advaxis to its named executive officers in connection with the merger. In accordance with the authority granted pursuant to the previously approved Proposal 5, the Special Meeting was adjourned for a second time in order to allow additional time for stockholders to vote on Proposal 2 and 3. The adjourned Special Meeting will be reconvened at 10 a.m., Eastern Time, on Dec. 16, 2021 at www.virtualshareholdermeeting.com/ADXS2021SM. About Advaxis Inc. Advaxis, Inc. -- http://www.advaxis.com-- is a clinical-stage biotechnology company focused on the development and commercialization of proprietary Lm-based antigen delivery products. These immunotherapies are based on a platform technology that utilizes live attenuated Listeria monocytogenes (Lm) bioengineered to secrete antigen/adjuvant fusion proteins. These Lm-based strains are believed to be a significant advancement in immunotherapy as they integrate multiple functions into a single immunotherapy and are designed to access and direct antigen presenting cells to stimulate anti-tumor T cell immunity, activate the immune system with the equivalent of multiple adjuvants, and simultaneously reduce tumor protection in the tumor microenvironment to enable T cells to eliminate tumors. Advaxis reported a net loss of $26.47 million for the year ended Oct. 31, 2020, a net loss of $16.61 million for the year ended Oct. 31, 2019, and a net loss of $66.51 million for the year ended Oct. 31, 2018. As of July 31, 2021, the Company had $51.02 million in total assets, $6.75 million in total liabilities, and $44.28 million in total stockholders' equity. AL-VERDE FRUITS: Gets OK to Hire Langley & Banack as Legal Counsel ------------------------------------------------------------------ Al-Verde Fruits & Vegetables, LLC received approval from the U.S. Bankruptcy Court for the Western District of Texas to employ Langley & Banack, Inc. to serve as legal counsel in its Chapter 11 case. Langley & Banack received a retainer of $4,000, plus filing fee of $1,738, from the Debtor. William Davis, Jr., Esq., a partner at Langley & Banack, will be paid at his hourly rate of $400. Mr. Davis disclosed in a court filing that the firm is a "disinterested person" as defined in Section 101(14) of the Bankruptcy Code. The firm can be reached through: William Davis, Jr., Esq. Langley & Banack, Inc. 745 E. Mulberry, Suite 700 San Antonio, TX 78212 Telephone: (210) 736-6600 Email: wrdavis@langleybanack.com About Al-Verde Fruits & Vegetables Al-Verde Fruits & Vegetables, LLC filed its voluntary petition for relief under Chapter 11 of the Bankruptcy Code (Bankr. W.D. Tex. Case No. 21-51464) on Dec. 3, 2021, listing under $1 million in both assets and liabilities. Alejandro Santoyo, president, signed the petition. Judge Michael M. Parker oversees the case. Langley & Banack, Inc. serves as the Debtor's legal counsel. AMERICANN INC: Incurs $863K Net Loss in FY Ended Sept. 30 --------------------------------------------------------- Americann, Inc. filed with the Securities and Exchange Commission its Annual Report on Form 10-K disclosing a net loss of $862,893 on $2.03 million of rental income for the year ended Sept. 30, 2021, compared to a net loss of $709,343 on $503,512 of rental income for the year ended Sept. 30, 2020. As of Sept. 30, 2021, the Company had $15.06 million in total assets, $9.55 million in total liabilities, and $5.51 million in total stockholders' equity. Houston, Texas-based MaloneBailey, LLP, the Company's auditor since 2016, issued a "going concern" qualification in its report dated Dec. 3, 2021, citing that the Company has suffered recurring losses from operations and has an accumulated deficit that raises substantial doubt about its ability to continue as a going concern. A full-text copy of the Form 10-K is available for free at: https://www.sec.gov/ix?doc=/Archives/edgar/data/0001508348/000143774921027906/acan20210930_10k.htm About Americann Headquartered in Denver, AmeriCann is a specialized cannabis company that is developing cultivation, processing and manufacturing facilities. APP REALTY: Wins Access to First Midwest's Cash Collateral ---------------------------------------------------------- The U.S. Bankruptcy Court for the Northern District of Illinois, Eastern Division, has authorized App Realty, LLC and APP Car Wash, LLC to use the cash collateral of First Midwest Bank LLC through the close of business on February 3, 2022, solely in accordance with the budget, with a 10% variance. As of the Petition Date, APP Realty and APP Car Wash owe First Midwest Bank approximately $1,017,942 for APP Realty and $1,027,076 for APP Car Wash, respectively pursuant to certain loan agreements, promissory notes, security agreements, and other documents evidencing the Indebtedness executed by the Debtors in favor of the Lender. The Prepetition Senior Secured Lender further asserts that pursuant to the Loan Documents, the Debtors granted the Prepetition Senior Secured Lender a perfected prior security interest and lien on the property located at 4650 W. Fullerton Avenue, Chicago, Illinois, as well as all of the assets of the Debtors together with the proceeds thereof, some of which constitutes "cash collateral" within the meaning of section 363(a) of the Bankruptcy Code. The Prepetition Senior Secured Lender will be secured by a lien to the same extent, priority and validity that existed prior to the Petition date; that the Prepetition Senior Secured Lender will receive a security interest in and replacement lien upon all of the Debtors' now existing or hereafter acquired property, real or personal, whether in existence before or after the Petition Date. In return for the Debtors' continued interim use of cash collateral, the Prepetition Senior Secured Lender is granted adequate protection payments in the amounts set forth in the Budget per month until further Court order to protect against any diminution in value of the Collateral. For any diminution in value of the Prepetition Senior Secured Lender's interest in the cash collateral from and after the Petition date, the Prepetition Senior Secured Lender will receive an administrative expense claim pursuant to Section 507(b) of the Bankruptcy Code. In further return for the Debtors' continued interim use of cash collateral, the Prepetition Senior Secured Lender is granted adequate protection for its asserted secured interests in substantially all of the Debtors' assets, including cash collateral equivalents and the Debtors' cash and accounts receivable, among other collateral, to the same extent, priority and validity as the Prepetition Senior Secured Lender held in the Collateral prepetition. The failure to maintain insurance coverage and pay taxes and the failure to cure same within 10 business days after notice, shall constitute an event of default under the Interim Order. Any further use of cash collateral is reserved for further hearing scheduled for February 3, 2022, at 11:30 AM on Zoom for Government. A copy of the order and the Debtor's budget for the period from May 2021 to February 2022 is available at https://bit.ly/30jRpl6 from PacerMonitor.com. The Debtor projects $4,500 in income and $4,359 in total expenses for December 2021. About APP Realty and APP Car Wash APP Realty, LLC, a Chicago-based company, sought protection under Chapter 11 of the Bankruptcy Code (Bankr. N.D. Ill. Case No. 21-03839) on March 24, 2021. The case is jointly administered with the Chapter 11 case filed by an affiliate, APP Car Wash, LLC, on May 20, 2021 (Bankr. N.D. Ill. Case No. 21-06550). Judge Lashonda A. Hunt oversees the cases. At the time of filing, APP Realty had total assets of $1,226,027 and total liabilities of $1,028,763. Meanwhile, APP Car Wash disclosed total assets of up to $1 million and total liabilities of up to $10 million. Judge LaShonda A. Hunt oversees the case. Joyce W. Lindauer Attorney, PLLC and Bauch & Michaels, LLC serve as the Debtors' bankruptcy counsel and local counsel, respectively. ARIZONA AIRCRAFT: Property Sale & Continued Operations to Fund Plan ------------------------------------------------------------------- Arizona Aircraft Painting, LLC ("Debtor" or "AAP") filed with the U.S. Bankruptcy Court for the District of Arizona a First Amended Disclosure Statement describing Plan of Reorganization dated Dec. 7, 2021. AAP was formed on November 9, 2007, and is one of only a few Arizona based facilities in the for the purpose of painting aircraft. AAP currently owns 1 parcels of commercial property described as: 4911 E. Falcon Drive, Mesa, AZ 85215 (the "Falcon Property"). Debtor scheduled the value of the Falcon Property as $1,300,000.00. The Falcon Property is encumbered by a deed of trust in favor of Wells Fargo in the amount of $677,770.00. AAP anticipates the total amount of Allowed Unsecured Claims in this Class will be approximately $645,489.88 owed for business related debt. Class 2-A consists of the Allowed Secured Claim of Wells Fargo. Wells Fargo filed a proof of claim in the amount of $677,770.00. AAP has been making adequate protection payments (comprised of interest and principal) to Wells Fargo throughout the bankruptcy case consistent with the cash collateral stipulations with Wells Fargo. AAP and Wells Fargo have not formalized claim treatment, under a proposal by Debtor, AAP shall recognize an allowed secured claim in the amount of $603,391.16 ("Allowed Secured Claim"). The Allowed Secured Claim shall accrue interest at 5.25% annual interest. The Allowed Secured Claim shall be reamortized over 180 months. The Allowed Secured Claim would be paid in 23 equal monthly payments of $4,850.00 (subject to adjustment based on actual outstanding balance as reduced by the Post-Petition Principal Payments) and an irregular payment of the then outstanding loan balance on or before the 24th month. To the extent AAP sells the Falcon Drive Property prior to the 24th month, Wells Fargo shall be paid the then outstanding balance out of the sale proceeds Class 2-B consists of the Allowed Secured Claim of On Deck related to its blanket lien against the Debtor's property. On Deck filed a proof of claim in the amount of $14,349.51. Pursuant to the Stipulation for Claim Treatment with Secured Creditor On Deck Capital ("On Deck Stipulation"), AAP shall recognize an allowed secured claim in the amount of $13,666.20 ("On Deck Allowed Secured Claim"). The On Deck Allowed Secured Claim shall be paid in 60 equal monthly payments of $227.77 ("On Deck Monthly Payment"), without interest, with the first payment being due on the first day of the first month after the Effective Date of the Debtor's Plan, and in equal monthly payments thereafter until paid in full. Class 2-C consists of the Allowed Secured Claim of the I.R.S. related to its statutory lien created by the I.R.S.'s Notice of Filing Tax Lien. AAP shall recognize the I.R.S.'s Allowed Secured Claim in the amount of $8,960.77. The I.R.S.'s Allowed Secured Claim shall accrue interest at the Tax Rate and shall be amortized over 36 months and repaid in 23 equal monthly payments of $268.12 and an irregular payment on the 24th month for any amounts then owing on the Allowed Secured Claim. Class 2-D consists of the Allowed Secured Claim held by Maricopa County for real property taxes owing on the Falcon Property as of the Effective Date. Maricopa County did not file a proof of claim. Maricopa County will retain its lien on the Falcon Property and will be paid its Allowed Secured Claim. Class 3-A consists of the Allowed Unsecured Claims of Creditors. Class 3-A Creditors shall be paid a pro-rata share from AAP's Excess Cash Flow, on a semi-annual basis, after all senior Allowed Claims have been paid in accordance with the terms of the Plan, until the Allowed Unsecured Claim have been paid in full. AAP has operated overall profitably while in bankruptcy, to a large extent due to the extensive efforts of its staff and the patience of its creditors. AAP will continue to generate sufficient revenues to service its operating expenses, pay its debt service, and make the payments called for under the Plan. Projections demonstrate, AAP will be able to continue to operate profitably, and will generate sufficient income to be able to service the debt as is necessary under the Plan, and provide a return to the general unsecured creditors. AAP's plan will be funded by its operations, Excess Cash Flow and the sale of the Falcon Drive Property. The Reorganized Debtors shall act as the Disbursing Agent under the Plan. In the event any entity which possesses an Allowed Secured Claim, or any other lien in any of the Debtor's property for which the Plan requires the execution of any documents to incorporate the terms of the Plan, fails to provide a release of its lien or execute the necessary documents to satisfy the requirements of the Plan, Debtor may record a copy of their Plan and the Confirmation Order with the appropriate governmental agency and such recordation shall constitute the lien release and creation of the necessary new liens to satisfy the terms of the Plan. A full-text copy of the First Amended Disclosure Statement dated Dec. 07, 2021, is available at https://bit.ly/3q2Fb9p from PacerMonitor.com at no charge. Attorneys for the Debtor: MARTIN J. MCCUE PATRICK F. KEERY KEERY MCCUE, PLLC 6803 EAST MAIN STREET, SUITE 1116 SCOTTSDALE, AZ 85251 TEL. (480) 478-0709 FAX (480) 478-0787 E-mail: MJM@KEERYMCCUE.COM PFK@KEERYMCCUE.COM About Arizona Aircraft Painting Arizona Aircraft Painting, LLC specializes in aerospace performance coatings. It also offers design services, interior refurbishment, vortex generators, aircraft cleaning and detailing services, and window replacement services. Arizona Aircraft Painting operates out of a 10,000-square-foot facility in Mesa, Arizona. Arizona Aircraft Painting filed a Chapter 11 petition (Bankr. D. Ariz. Case No. 19-05477) on May 3, 2019. In the petition signed by Steven Head, member, the Debtor estimated $1 million to $10 million in assets and $500,000 to $1 million in liabilities. Judge Daniel P. Collins oversees the case. Keery McCue, PLLC serves as the Debtor's bankruptcy counsel. Wells Fargo Bank, N.A., secured creditor, is represented by its counsel, Engelman Berger, PC. AULT GLOBAL: BitNile Invests in Decentralized Finance Platform -------------------------------------------------------------- Ault Global Holdings, Inc. announced that its subsidiary, BitNile, Inc., was the lead investor in a Series A offering from Earnity Inc., a San Mateo, Calif. based decentralized finance marketplace. Joining the Series A investment round are institutional investors Thorney, an Australian Securities Exchange-listed LIC company, and blockchain fund NGC Ventures. The investment by BitNile complements the Company's announced plan to split into two public companies by pursuing a spin-off of Ault Alliance, Inc. to its stockholders. Following the spin-off of Ault Alliance, the Company, through BitNile, will be a pure-play provider of Bitcoin mining and data center operations, pursuing DeFi-related initiatives. Ault Alliance will continue its focus on the Company's legacy businesses and more recently initiated operations, including lending and investing in the real estate and distressed asset spaces, among others, defense, and power solutions, including electric vehicle charging products. Earnity has raised over $20 million in 2021 and aims to democratize access to the broadest array of cryptocurrency assets in a secure, educational, and community-oriented platform to global customers. In so doing, Earnity will provide users with the ability to earn, learn, collect and gift a variety of tokens and portfolios. Earnity was founded by Domenic Carosa, Founder and Chairman of Banxa Holdings Inc. (OTCQX: BNXAF), a fiat-crypto payment processor for the digital asset industry and Co-Founder & Chairman of Apollo Capital, a crypto-focused investment fund, and is also led by an international team of executives with blockchain, fintech, and crypto experience with leading institutions including PayPal, eBay, Okcoin, Abra, JPMorgan, Visa, Western Union, and Google. Earnity expects to formally launch its beta platform early in the first quarter of 2022. Earnity's website is www.earnity.com. As part of the investment, the Company's executive vice president of Alternative Investments, Christopher K. Wu, will join Earnity's board of directors. In addition, Earnity and BitNile have agreed to form joint ventures to develop and co-promote portfolios of non-fungible tokens and other DeFi products and protocols. The Company's Founder and Executive Chairman, Milton "Todd" Ault, III said, "Earnity is a transformational investment for BitNile as it embarks on not only mining Bitcoin, the foundation of the crypto revolution, but also on bringing the benefits of DeFi to individuals worldwide." Domenic Carosa, Earnity's founder, says, "We are thrilled to be partnering with Todd Ault, Chris Wu and the BitNile team, who share our vision of universal access to crypto in a safe, easy and engaging way, thereby aligning crypto’s original premise of fostering peer-to-peer interactions. We are looking ahead to launching many valuable services and supporting the growing crypto community in the coming months." About Ault Global Holdings Ault Global Holdings, Inc. (fka DPW Holdings, Inc.) is a diversified holding company pursuing growth by acquiring undervalued businesses and disruptive technologies with a global impact. Through its wholly and majority-owned subsidiaries and strategic investments, the Company provides mission-critical products that support a diverse range of industries, including defense or aerospace, industrial, telecommunications, medical, and textiles. In addition, the Company extends credit to select entrepreneurial businesses through a licensed lending subsidiary. Ault Global reported a net loss of $32.73 million for the year ended Dec. 31, 2020, compared to a net loss of $32.94 million for the year ended Dec. 31, 2019. As of Sept. 30, 2021, the Company had $225.72 million in total assets, $24.74 million in total liabilities, and $200.98 million in total stockholders' equity. BABCOCK & WILCOX: Unveils Public Offering of $125M of Senior Notes ------------------------------------------------------------------ Babcock & Wilcox Enterprises, Inc. has commenced an underwritten registered public offering of $125 million aggregate principal amount of senior notes due 2026. B&W expects to grant the underwriters a 30-day option to purchase additional Senior Notes in connection with the offering. The interest rate and certain other terms of the Senior Notes will be determined at the time of the pricing of the offering. The offering is subject to market and other conditions, and there can be no assurance as to whether or when the offering may be completed, or as to the actual size or terms of the offering. B&W and the Senior Notes both received a rating of BB+ from Egan-Jones Ratings Company, an independent, unaffiliated rating agency. The Company expects to use the net proceeds of this offering for general corporate purposes, which may include (without limitation) funding potential acquisitions, project-related capital and working capital and to support clean energy growth initiatives. Pending any specific use, the Company may use any remaining net proceeds to invest in short-term interest-bearing accounts, securities or similar investments. B. Riley Securities, Inc. is acting as lead book-running manager for the offering. D.A. Davidson & Co., Janney Montgomery Scott LLC, Ladenburg Thalmann & Co. Inc., William Blair & Company, L.L.C. and EF Hutton, division of Benchmark Investments, LLC are acting as joint book-running managers for the offering. Aegis Capital Corp., Boenning & Scattergood, Inc., Huntington Securities, Inc., InspereX LLC and Wedbush Securities Inc. are acting as co-managers for the offering. The Senior Notes will be offered under the Company's shelf registration statement on Form S-3, which was initially filed with the Securities and Exchange Commission on Nov. 8, 2021 and declared effective by the SEC on Nov. 22, 2021. The offering will be made only by means of the prospectus supplement dated Dec. 6, 2021 and the accompanying base prospectus dated Nov. 22, 2021, as may be further supplemented by any free writing prospectus and/or pricing supplement that the Company may file with the SEC. Copies of the preliminary prospectus supplement and the accompanying base prospectus and any free writing prospectus and/or pricing supplement for the offering may be obtained on the SEC's website at www.sec.gov, or by contacting B. Riley Securities by telephone at (703) 312-9580, or by email at prospectuses@brileyfin.com. The final terms of the proposed offering will be disclosed in a final prospectus supplement to be filed with the SEC. About Babcock & Wilcox Headquartered in Akron, Ohio, Babcock & Wilcox Enterprises is a growing, globally-focused renewable, environmental and thermal technologies provider with decades of experience providing diversified energy and emissions control solutions to a broad range of industrial, electrical utility, municipal and other customers. B&W's innovative products and services are organized into three market-facing segments which changed in the third quarter of 2020 as part of the Company's strategic, market-focused organizational and re-branding initiative to accelerate growth and provide stakeholders improved visibility into its renewable and environmental growth platforms. Babcock & Wilcox reported net losses of $10.30 million in 2020, $129.04 million in 2019, $724.86 million in 2018, $379.01 million in 2017, and $115.08 million in 2016. As of Sept. 30, 2021, the Company had $729.36 million in total assets, $708.96 million in total liabilities, and $20.40 million in total stockholders' equity. BLACKBRUSH OIL: Fitch Affirms 'CCC+' LongTerm IDR ------------------------------------------------- Fitch Ratings has affirmed BlackBrush Oil and Gas, L.P.'s and BBOG Holdings LLC's Long-Term Issuer Default Ratings (IDRs) at 'CCC+'. In addition, Fitch has affirmed BlackBrush's first-lien term loan at 'CCC+'/'RR4'. BlackBrush's ratings reflect its small scale, reduced operating momentum in 2021, working interest on its core Karnes county acreage and limited access to capital. After a material decline in production in 2021, resulting from sub maintenance capex investment, Fitch expects BlackBrush to regain this lost production during 2022, and be in a position to generate neutral to positive FCF under modest production growth investment through the latter half of Fitch's forecast. KEY RATING DRIVERS Regaining Production Growth in 2022: With a material decline in production in 2021 to below 5Mboepd, Fitch expects BlackBrush to regain this lost production in 2022, and to generate approximately $15 million-$25 million FCF annually under a modest growth drilling program through the latter half of Fitch's forecast. While the loss of operational momentum in 2021 affected BlackBrush's production, BlackBrush's production scale would have to increase materially for it to decrease the company's relative vulnerability to operational or market shocks. High, But Manageable Leverage: In September 2020, BlackBrush's out of court restructuring resulted in former lenders receiving a $75 million first lien term loan due in 2025 plus 2% PIK interest, as well as, preferred equity with $225 million plus 1% PIK interest with a mandatory redemption in 2026, and 70% of the company's common equity. Management and Ares retained the remaining 30% equity interest. This restructuring extended the company's first maturity to 2025, and initially re-sized the first lien term loan to approximately 1.0x PDP reserves, which has since improved to well under 1.0x. Under Fitch's Hybrids Treatment and Notching Criteria, BlackBrush's preferred equity receives 0% equity credit, which results in Fitch forecast leverage at YE 2021 of 9x. Refinancing Risk: BlackBrush benefits from a capital structure that does not include financial maintenance covenants, requires less than $5 million annually in cash interest payments to service due to the debts PIK features, and the current alignment of debt and equity holder interests with BlackBrush debt currently owned by pre-restructuring debt holders. Despite no near-term refinancing risk, Fitch would like to see the company to demonstrate access to capital, and position itself to refinance its term loan and preferred shares upon maturity to reduce medium-term refinancing risks. Limited Financial Flexibility: BlackBrush does not operate with a revolving credit facility, which in the absence of access to other external funding sources, greatly reduces the company's financial flexibility. Fitch expects BlackBrush to continue to explore other sources of financing (e.g. forward PDP sales, Drill Co agreements, non-core divestitures, etc.) to provide capital to develop its Karnes county Eagle Ford play acreage, and to a lesser extent, accelerate the development of South Texas Syndicate (STS), as well as, Frio and La Salle assets. Further development of these assets would help de-risk the company's asset profile and grow the company's reserve base, which was a relatively small 55 million proved boe at YE 2020. Asset Base Restricts Operational Flexibility: BlackBrush's asset base consists of approximately 255,000 gross acres in the Eagle Ford and Austin Chalk plays in Texas and Louisiana. BlackBrush core development acreage is located in Karnes (1,341 net acres), Frio/La Salle (26,430 net acres) counties, as well as the STS area of La Salle and McMullen counties (41,010 net acres). BlackBrush's development program targets their Karnes county assets, where low working interest and primarily non-op positions limit management's discretion on development pacing. This is partially offset by increased operating activity at STS, driven by higher gas prices. BlackBrush's more prospective Chittim, East Texas, and Louisiana assets may offer the company some option value, but entail increased execution risk as these plays are largely undeveloped. Unhedged Production: BlackBrush does not have any oil hedges in place after 2021, and its open gas hedges expire in 1Q22. Unhedged volumes in 2022 provide upside to strong oil and gas prices, but no certainty on future cash flows. BlackBrush's current hedge position, particularly given it doesn't have a revolving facility to draw down should a weaker oil and gas environment affect its ability to meet its operating capital needs, adds cash flow risk to its credit profile. DERIVATION SUMMARY BlackBrush's production of approximately 5Mboepd (72% liquids) at 3Q21, is materially lower than Eagle Ford operating peers Ranger Oil Corp (B-/Stable) and SM Energy (B/Stable) at 38Mboepd (91% liquids) inclusive of the Lonestar acquisition that closed in October, and 155.8Mboepd (66% liquids) respectively. It is also materially smaller than 'B-'/Outlook Stable rated Great Western Petroleum, which operates in the more highly regulated state of Colorado. BlackBrush's Fitch calculated unhedged cash netbacks of $24.0/boe at 3Q21 have improved materially through 2021 in line with the strong commodity pricing environment. This compares to $41.3/boe, $39.4/boe and $32.6/boe for peers Ranger Oil, SM Energy and Great Western, respectively. Each of these peers has greater financial flexibility than BlackBrush, with access to revolving credit facilities and demonstrated ability during 2021 to access public debt capital markets. BlackBrush's leverage at approximately 9x at fiscal 2021 is materially higher than the peers above; however, leverage is expected to decrease towards approximately 4x in 2022 as production and EBITDA improve, which were affected by sub maintenance capital investments made in 2020 when the company prioritized liquidity preservation. KEY ASSUMPTIONS -- WTI prices of $68.00/bbl in 2021, $67.00/bbl in 2022, $57.00/bbl in 2023 and $50.00/bbl thereafter; -- Henry Hub prices of $3.80/mcf in 2021, $3.25/mcf in 2022, $2.75/mcf in 2023 and $2.50/mcf thereafter; -- Majority of capex allocated to Karnes county assets, production in 2022 increases toward 8Mboepd and grows at single digit percent annually through the remainder of Fitch's forecast period; -- Increasing gross debt resulting from the PIK features of the company's first lien term loan and preferred stock (0% equity credit); -- Working capital in 2021 benefits from certain large capex expenses being paid in 2022; -- Liquids mix relatively stable through the forecast period. RATING SENSITIVITIES Factors that could, individually or collectively, lead to positive rating action/upgrade: -- Material improvement in ability to invest in, and de-risk, more prospective assets that reduces refinancing and liquidity risk; -- Average production trending toward 20 Mboepd on a sustained basis; -- Total Debt with Equity Credit / Operating EBITDA sustained below 3.0x. Factors that could, individually or collectively, lead to negative rating action/downgrade: -- Erosion of liquidity resulting in FFO Interest Coverage below 1.5x; -- Continued below-maintenance investment that heightens refinancing and liquidity risk. BEST/WORST CASE RATING SCENARIO International scale credit ratings of Non-Financial Corporate issuers have a best-case rating upgrade scenario (defined as the 99th percentile of rating transitions, measured in a positive direction) of three notches over a three-year rating horizon; and a worst-case rating downgrade scenario (defined as the 99th percentile of rating transitions, measured in a negative direction) of four notches over three years. The complete span of best- and worst-case scenario credit ratings for all rating categories ranges from 'AAA' to 'D'. Best- and worst-case scenario credit ratings are based on historical performance. LIQUIDITY AND DEBT STRUCTURE Liquidity: BlackBrush does not have access to a revolving credit facility, and utilizes on cash on hand ($28 million 3Q21) as their primary source of liquidity. BlackBrush has also managed its liquidity by reducing capex investment, and correspondingly production, to preserve cash. The company has explored and sourced other financing means to support development, including a September 2021 agreement where the company agreed to drill three STS acreage wells, and sell some of its interest in select STS wells for $8 million. Fitch forecasts neutral to positive annual FCF in its base case, supporting modest internally funded production growth. Debt Structure: BlackBrush's debt consists of an approximately $76.5 million, inclusive of accumulated PIK interest, first lien term loan due 2025 (L+500, 2% PIK) and a $227.5 million, inclusive of accumulated PIK interest, of preferred equity with a mandatory redemption in 2026 (1% PIK). The PIK interest features on both debt instruments reduce the company's total cash interest payment requirements to less than $5 million annually. KEY RECOVERY RATING ASSUMPTIONS The recovery analysis assumes BlackBrush would be liquidated in hypothetical bankruptcy rather than being reorganized as a going-concern. The liquidation assumption is informed by the low working interest in its core Karnes county acreage, as well as the more prospective nature of its non-core assets increasing the likelihood of its assets being sold off. Fitch has assumed that an administrative claim of 10% would be incurred in any reorganization. Going-Concern (GC) Approach The GC EBITDA estimate reflects Fitch's view of a sustainable, post-reorganization EBITDA level upon which Fitch bases the enterprise valuation, which reflects the decline from current pricing levels to stressed levels. Fitch believes that in a weakened commodity price environment, which BlackBrush's lack of 2022 and beyond oil and gas hedges exposes them to, could result in BlackBrush investing at sub maintenance capex levels resulting accelerating production declines after 2022. An EV multiple of 3.0x EBITDA is applied to the GC EBITDA to calculate a post-reorganization enterprise value. The choice of this multiple considered the following factors: -- The historical bankruptcy case study exit multiples for peer companies ranged from 2.8x-7.0x, with an average of 5.2x and a median of 5.4x; -- The multiple reflects the BlackBrush's relatively low working interest in their core Karnes county position and difficulty developing its asset base considering the company's limited liquidity and the prospective nature of much of its non-core acreage. Liquidation Approach The liquidation estimate reflects Fitch's view of the value of balance sheet assets that can be realized in sale or liquidation processes conducted during a bankruptcy or insolvency proceeding and distributed to creditors. Fitch considers valuations such as SEC PV-10 and M&A transactions for each basin including multiples for production per flowing barrel, proved reserves valuation, value per acre and value per drilling location. The allocation of value in the liability waterfall results in a recovery rating of 'CCC+'/'RR4' for the senior secured term loan, in line with the company's IDR. ISSUER PROFILE BlackBrush is a small (5Mboepd average in 2021, 71% liquids), privately-owned independent oil & gas exploration and production (E&P) company headquartered in San Antonio, TX that focuses on the development of approximately 255,000 gross acres in the Texas and central Louisiana Eagle Ford and Austin Chalk formations. 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. BLUEAVOCADO CO: Seeks to Hire AB Accretive as Financial Advisor --------------------------------------------------------------- BlueAvocado, Co. seeks approval from the U.S. Bankruptcy Court for the Western District of Texas to employ AB Accretive, LLC as its financial advisor. The firm's services include: (a) assisting the Debtor in general matters related to its restructuring and Chapter 11 proceeding; (b) assisting the Debtor in the preparation of any bankruptcy required reporting; (d) completing the initial debtor interview (IDI) questionnaire and related information, as needed; (e) assisting the Debtor in the preparation of a plan of reorganization and analysis, as needed; and (f) performing other services as may be agreed upon between AB Accretive and the Debtor. Adam Brothers, a member of AB Accretive and the primary personnel in this engagement, will be paid at his hourly rate of $250. In addition, the firm will seek reimbursement for expenses incurred. Mr. Brothers disclosed in a court filing that his firm is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. The firm can be reached through: Adam Brothers AB Accretive, LLC Wyckoff, NJ Telephone: (646) 535-0782 Facsimile: (815) 366-8228 Email: adam@abaccretive.com About BlueAvocado Co. BlueAvocado Co., an Austin, Texas-based manufacturer and distributor of reusable grocery bags, filed its voluntary petition for relief under Chapter 11 of the Bankruptcy Code (Bankr. W.D. Texas Case No. 21-51384) on Nov. 10, 2021. In the petition signed by Julie Mak, president, the Debtor disclosed $1,499,370 in total assets and $2,243,028 in total liabilities as of September 30, 2021. Judge Craig A. Gargotta oversees the case. The Debtor tapped Raymond W. Battaglia, Esq., at the Law Offices of Ray Battaglia, PLLC as bankruptcy counsel; Michael Best & Friedrich, LLP as special counsel; and AB Accretive, LLC as financial advisor. BLUEAVOCADO CO: Seeks to Tap Ray Battaglia as Bankruptcy Counsel ---------------------------------------------------------------- BlueAvocado, Co. seeks approval from the U.S. Bankruptcy Court for the Western District of Texas to employ the Law Offices of Ray Battaglia, PLLC as its bankruptcy counsel. The firm's services include: (a) advising the Debtor regarding its powers and duties in the continued management and operation of its business and properties; (b) attending meetings and negotiating with representatives of creditors and other parties-in-interest, and advising the Debtor on the conduct of its Chapter 11 case; (c) taking all necessary actions to protect and preserve the Debtor's estate; (d) preparing legal papers; (e) advising the Debtor in connection with any sales of assets; (f) negotiating and preparing a plan of reorganization, disclosure statement, and all related documents, and taking any necessary action to obtain confirmation of such plan; (g) appearing before the bankruptcy court, any appellate courts, and the United States Trustee; and (h) performing all other necessary legal services. The firm received an initial retainer of $25,000, plus filing fee of $1,738, from the Debtor. Raymond Battaglia, Esq., an attorney at the firm, will be paid at his hourly rate of $475. In addition, the firm will seek reimbursement for expenses incurred. Mr. Battaglia disclosed in a court filing that his firm is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. The firm can be reached through: Raymond W. Battaglia, Esq. Law Offices of Ray Battaglia, PLLC 66 Granburg Circle San Antonio, TX 78218 Telephone: (210) 601-9405 Email: rbattaglialaw@outlook.com About BlueAvocado Co. BlueAvocado Co., an Austin, Texas-based manufacturer and distributor of reusable grocery bags, filed its voluntary petition for relief under Chapter 11 of the Bankruptcy Code (Bankr. W.D. Texas Case No. 21-51384) on Nov. 10, 2021. In the petition signed by Julie Mak, president, the Debtor disclosed $1,499,370 in total assets and $2,243,028 in total liabilities as of September 30, 2021. Judge Craig A. Gargotta oversees the case. The Debtor tapped Raymond W. Battaglia, Esq., at the Law Offices of Ray Battaglia, PLLC as bankruptcy counsel; Michael Best & Friedrich, LLP as special counsel; and AB Accretive, LLC as financial advisor. BLUEAVOCADO CO: Taps Michael Best & Friedrich as Special Counsel ---------------------------------------------------------------- BlueAvocado, Co. seeks approval from the U.S. Bankruptcy Court for the Western District of Texas to employ Michael Best & Friedrich, LLP as special counsel. The firm's services include: (a) advising the Debtor in general corporate legal matters that are not otherwise being directly handled by the Debtor's bankruptcy counsel; (b) representing the Debtor in connection with litigation pending in Travis County Texas styled, Lee Valkenaar, et al. v. Edward Roels, et al., Cause No. D-1-GN-19-001505; (c) representing the Debtor in connection with litigation pending in Travis County Texas styled, BlueAvocado, Co. v. Travelers; (d) representing the Debtor in all other litigation, licensing, regulatory, tax and other governmental matters; and (e) representing the Debtor in general administrative matters associated with its Chapter 11 case regarding Michael Best's employment and fee applications to be filed with the court. The hourly rates of the firm's attorneys and staff are as follows: Richard Ressler, Partner $475 per hour Lance Hevizy, Attorney $350 per hour Justin Mertz, Partner $550 per hour In addition, the firm will seek reimbursement for expenses incurred. Richard Ressler, Esq., a partner at Michael Best & Friedrich, disclosed in a court filing that his firm is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. The firm can be reached through: Richard Ressler, Esq. Michael Best & Friedrich, LLP 620 Congress Avenue, Suite 200 Austin, TX 78701 Telephone: (512) 320-0601 Facsimile: (512) 640-3170 Email: rjressler@michaelbest.com About BlueAvocado Co. BlueAvocado Co., an Austin, Texas-based manufacturer and distributor of reusable grocery bags, filed its voluntary petition for relief under Chapter 11 of the Bankruptcy Code (Bankr. W.D. Texas Case No. 21-51384) on Nov. 10, 2021. In the petition signed by Julie Mak, president, the Debtor disclosed $1,499,370 in total assets and $2,243,028 in total liabilities as of September 30, 2021. Judge Craig A. Gargotta oversees the case. The Debtor tapped Raymond W. Battaglia, Esq., at the Law Offices of Ray Battaglia, PLLC as bankruptcy counsel; Michael Best & Friedrich, LLP as special counsel; and AB Accretive, LLC as financial advisor. BYRNA TECHNOLOGIES: Reports Prelim Q4 Revenue of $11.2 Million -------------------------------------------------------------- Byrna Technologies Inc. announced preliminary revenue expectations for its fiscal fourth quarter ended Nov. 30, 2021 of $11.2 million, bringing sales for fiscal year 2021 to $42.2 million - slightly above the top end of Byrna's most recent guidance of $40.0 to $42.0 million and up approximately 150% from fiscal year 2020 sales of $16.6 million. The majority of Byrna's sales continue to be generated through Byrna's e-commerce efforts. For Q4 2021, the sales breakdown was as follows: * Byrna.com - $7.86 million (70.1%) * Amazon.com - $0.83 million (7.4%) * Dealer/Distributor - $1.47 million (13.1%) * International - $0.94 million (8.4%) * Law Enforcement - $0.1 million (1.0%) The Company expects to see continued strong growth in fiscal year 2022. As a result, Byrna is initiating full year revenue guidance of $60 to $65 million for the current fiscal year ending Nov. 30, 2022. Byrna believes that revenues for the first quarter of FY 2022 ending Feb. 28, 2022 will range between $11.0 to $11.5 million. The first quarter of each fiscal year is traditionally a slower quarter for Byrna, coming on the heels of the seasonally strong fourth quarter which benefits from holiday buying. The Company expects revenues to increase in each subsequent quarter with the introduction of new products and the opening of new markets. Share Repurchase Program The Company's Board of Directors has authorized the repurchase of up to $30 million of the Company's common stock over the next two years. This authorization reflects the Board's belief that the shares of the Company are currently undervalued. "Based on the strength of our balance sheet, coupled with our recent performance and long-term outlook, we believe an opportunity exists to create value for our shareholders while continuing to fund operations and invest in our key growth-driving strategies," explained Mr. Ganz. "The repurchases will partially offset the increase in shares outstanding resulting from the conversion of the Company's Series A Preferred Stock (March 2021) and warrant exercises by investors in the Company's historic PIPE offerings which took place from 2016 -2019." David North, CFO of Byrna added, "The decision to launch a stock repurchase program at this time reflects our strong financial position, as well as the successful start of the execution of our marketing strategy," said David North, CFO of Byrna. The Company's repurchases will be consistent with the requirements of section 4003 of the Coronavirus Aid Relief and Economic Security Act and relevant SEC rules. The timing and amount of common stock repurchases made pursuant to the Company's common stock repurchase program will be subject to various factors, including the Company's capital position, liquidity, financial performance, alternative uses of capital, stock price, regulatory requirements and general market conditions, and may be suspended at any time. The Company intends to cancel most or all the repurchased shares, which would reduce the total number of shares and the share capital accordingly. The common stock repurchases may be effected through open market purchases, privately negotiated transactions or by other means, including through plans that satisfy the conditions of Rule 10b5-1 of the Securities Exchange Act of 1934, as amended, through purchases in compliance with rule 10b-18 of the Exchange Act, or through the use of other techniques. Management Commentary Mr. Ganz stated, "We are very pleased to have ended FY 2021 on such a high note and to be able to provide robust revenue guidance for fiscal year 2022. Given our performance to date and confidence in Byrna's growth prospects, we believe this share repurchase program represents an attractive investment opportunity that aligns with our commitment to creating long-term shareholder value." With respect to the Company's revenue outlook, Mr. Ganz continued, "Excluding those quarters in which sales and orders were positively impacted by Sean Hannity's mention of Byrna (Q3 2020 and Q2 2021), Q4 2021 was a record quarter for both orders and sales. Sales for the quarter would have been even stronger but for the negative impacts of the worldwide supply chain strain, which prevented us from shipping significant orders during the quarter. Consequently, we enter FY 2022 with a $1.5 million backlog which we expect to fill in Q1 2022. "Revenue expectations for FY 2022 are based, in large part, on the success of the marketing campaign initiated after our capital raise in July 2021, coupled with anticipated, continued growth in Amazon sales. Dealer sales are also expected to grow as a percentage of overall sales as we no longer have the capacity constraints that limited dealer sales in FY 2021. Additionally, Byrna expects to enter the Canadian market in the first quarter of fiscal year 2022, a virgin territory for Byrna. Finally, we expect to see significant growth in the law enforcement market as we begin to reap the benefits of our strong sales push in this segment over the last twelve months (as evidenced by the recently announced $200,000 order from the Spokane Sherriff's Department). "Perhaps most importantly, new product introductions, including the Byrna LE (MSRP $499), the Byrna TCR (MSRP $699), the Byrna TCR-LE (MSRP $799) and Byrna's 12-gauge compatible ammunition should add significantly to sales in FY 2022 - with much of the increase being weighted to the second half of the year." The above information reflects preliminary estimates with respect to Byrna's Q4 2021 and FY 2021 revenues and FY 2022 outlook, based on currently available information. The preliminary financial results and other information provided above are subject to the completion of Byrna's audit processes, final adjustments (if any), and any other developments that may arise by the time that the financial results for Q4 2021, FY 2021 and FY 2022 are finalized. Forward looking estimates may also be negatively impacted if supply chain issues worsen. As a result, the preliminary financial results and forward-looking estimates as well as other information provided herein may materially differ from the final, actual results. Byrna intends to release final information regarding its Q4 2021 financial results on or before Feb. 15, 2022. About Byrna Technologies Headquartered in Byrna Technologies Inc. -- www.byrna.com -- develops, manufactures, and sells non-lethal ammunition and security devices. These products are used by the military, correctional services, police agencies, private security and consumers. Byrna Technologies reported a net loss of $12.55 million for the year ended Nov. 30, 2020, a net loss of $4.41 million for the fiscal year ended Nov. 30, 2019, a net loss of $2.15 million for the fiscal year ended Nov. 30, 2018, and a net loss of $2.8 million for the fiscal year ended Nov. 30, 2017. As of Aug. 31, 2021, the Company had $76.28 million in total assets, $8.02 million in total liabilities, and $68.26 million in total stockholders' equity. CAMBER ENERGY: Investors Extend Deadline to File Reports to Dec. 17 ------------------------------------------------------------------- Camber Energy, Inc. entered into two agreements as follows: one agreement was entered into with an investor that holds shares of Series C preferred stock of the company, and the second agreement was entered into with another investor that holds preferred shares along with three promissory notes, with an aggregate principal amount totaling $20,500,000, previously executed by the company in favor of the second investor. The December agreements are identical as to their terms. The original securities purchase agreements between the company and the investors regarding the purchase and sale of the preferred shares (the "SPAs") require Camber Energy to, among other things, timely file all reports required to be filed by company pursuant to the Securities Exchange Act of 1934, as amended, and to maintain sufficient reserves from its duly authorized common stock for issuance of all conversion shares (as such term is defined in the Certificate of Designation regarding the preferred shares), or the shares of company common stock to be issued upon conversion of the preferred shares). On Oct. 6, 2021, Camber Energy received notice from the investors that they believed the company breached the SPAs by failing to comply with those two requirements in the SPAs, and the notes also contain a provision stating a breach by the company of any terms within the SPA or COD is also a breach under the notes, which would result in an immediate acceleration of the notes at the holder's option. On Oct. 9, 2021 Camber Energy entered into amending agreements with each of the investors, pursuant to which the investors agreed to refrain from declaring defaults or bringing a breach of contract action under the SPAs, and the second investor agreed to refrain from declaring defaults or bringing a breach of contract action under the notes, provided the company: (i) within 30 days of the date of the October agreements, amended the COD to provide that holders of the preferred shares will vote together with holders of common stock on all matters other than election of directors and shareholder proposals (including proposals initiated by any holders of preferred shares), on an as-if converted basis, subject to the beneficial ownership limitation in the COD, even if there are insufficient shares of authorized common stock to fully convert the preferred shares; (ii) files by Nov. 19, 2021 all reports required to be filed by the company pursuant to the Exchange Act; and (iii) implements and maintains, as soon as possible but no later than Dec. 31, 2021, a sufficient reserve from its duly authorized common stock for issuance of all conversion shares. Camber Energy complied with the COD amendment requirement on Nov. 8, 2021. On Nov. 18, 2021 Camber Energy entered into amending agreements with each of the investors (as disclosed by the company in its Current Report Filed on Form 8-K filed with the Securities and Exchange Commission on Nov. 19, 2021). Pursuant to the November agreements, as a further accommodation to Camber Energy and in order to help facilitate implementation of the company's business plans and continued trading on the NYSE American, the investors agreed to extend the deadline for the filing requirement to Dec. 6, 2021. The deadline for the reserve requirement remained Dec. 31, 2021. Pursuant to the December agreements, as a further accommodation to Camber Energy and in order to help facilitate implementation of the company's business plans and continued trading on the NYSE American, the investors agreed to extend the deadline for the filing requirement to Dec. 17, 2021. The deadline for the reserve requirement remains Dec. 31, 2021, meaning the company is required to obtain on or before such date, approval of the proposals outlined in the preliminary proxy statement filed by the company with the Securities and Exchange Commission on Nov. 9, 2021 (to increase the company's authorized common stock). About Camber Energy Based in Houston, Texas, Camber Energy -- http://www.camber.energy -- is primarily engaged in the acquisition, development and sale of crude oil, natural gas and natural gas liquids from various known productive geological formations, including from the Hunton formation in Lincoln, Logan, Payne and Okfuskee Counties, in central Oklahoma; the Cline shale and upper Wolfberry shale in Glasscock County, Texas; and Hutchinson County, Texas, in connection with its Panhandle acquisition which closed in March 2018. Camber Energy reported a net loss of $3.86 million for the year ended March 31, 2020, compared to net income of $16.64 million for the year ended March 31, 2019. As of Sept. 30, 2020, the Company had $11.79 million in total assets, $32.48 million in total liabilities, $38 million in temporary equity, and a total stockholders' deficit of $58.68 million. Marcum LLP, in Houston, Texas, the Company's auditor since 2015, issued a "going concern" qualification in its report dated June 29, 2020, citing that the Company has incurred significant losses from operations and had an accumulated deficit as of March 31, 2020 and 2019. These factors raise substantial doubt about its ability to continue as a going concern. CARVANA CO: Baillie Gifford Has 10.56% Equity Stake as of Nov. 30 ----------------------------------------------------------------- Baillie Gifford & Co (Scottish partnership) disclosed in an amended Schedule 13G filed with the Securities and Exchange Commission that as of Nov. 30, 2021, it beneficially owns 9,035,214 shares of common stock of Carvana Co., representing 10.56 percent of the shares outstanding. A full-text copy of the regulatory filing is available for free at: https://www.sec.gov/Archives/edgar/data/1690820/000108887521000101/Carvana30112021.txt About Carvana Founded in 2012 and based in Tempe, Arizona, Carvana Co. -- http://www.carvana.com-- is a holding company that was formed as a Delaware corporation on Nov. 29, 2016. Carvana is an e-commerce platform for buying and selling used cars. The Company owns and operates Carvana.com, which enables consumers to quickly and easily shop vehicles, finance, trade-in or sell the ir current vehicle to Carvana, sign contracts, and schedule as-soon-as-next-day delivery or pickup at one of Carvana's patented, automated Car Vending Machines. As of Sept. 30, 2021, the Company had $5.36 billion in total assets, $4.65 billion in total liabilities, and $708 million in total stockholders' equity. * * * As reported by the TCR on May 24, 2021, S&P Global Ratings revised its ratings outlook to positive from stable and affirmed its 'CCC+' issuer credit rating on online used-car retailer Carvana Co. "The positive outlook indicates that we could raise the ratings on Carvana if the company continues to make progress in leveraging its scale to improve margins such that it can achieve near breakeven EBITDA while maintaining sufficient liquidity to pay for its cash burn for at least 18 months," S&P said. CARVANA CO: Unit Amends Deal to Increase Credit Line to $2.25-Bil. ------------------------------------------------------------------ A subsidiary of Carvana Co., Ally Bank, and Ally Financial Inc., have amended the Second Amended and Restated Inventory Financing and Security Agreement to, among other things, increase the line of credit to $2.25 billion, effective Dec. 1, 2021, as disclosed in a Form 8-K filed with the Securities and Exchange Commission. About Carvana Founded in 2012 and based in Tempe, Arizona, Carvana Co. -- http://www.carvana.com-- is a holding company that was formed as a Delaware corporation on Nov. 29, 2016. Carvana is an e-commerce platform for buying and selling used cars. The Company owns and operates Carvana.com, which enables consumers to quickly and easily shop vehicles, finance, trade-in or sell the ir current vehicle to Carvana, sign contracts, and schedule as-soon-as-next-day delivery or pickup at one of Carvana's patented, automated Car Vending Machines. As of Sept. 30, 2021, the Company had $5.36 billion in total assets, $4.65 billion in total liabilities, and $708 million in total stockholders' equity. * * * As reported by the TCR on May 24, 2021, S&P Global Ratings revised its ratings outlook to positive from stable and affirmed its 'CCC+' issuer credit rating on online used-car retailer Carvana Co. "The positive outlook indicates that we could raise the ratings on Carvana if the company continues to make progress in leveraging its scale to improve margins such that it can achieve near breakeven EBITDA while maintaining sufficient liquidity to pay for its cash burn for at least 18 months," S&P said. CBAK ENERGY: All Three Proposals Passed at Annual Meeting --------------------------------------------------------- CBAK Energy Technology, Inc. held its 2021 annual meeting of stockholders, at which the stockholders: (1) elected Yunfei Li, J. Simon Xue, Martha C. Agee, Jianjun He, and Xiangyu Pei to the Board of Directors of the company to serve until the 2022 annual meeting of stockholders; (2) ratified the appointment of Centurion ZD CPA & Co. as the company's independent registered public accounting firm for the fiscal year ending Dec. 31, 2021; and (3) voted to approve an amendment to the company's Articles of Incorporation to authorize 10,000,000 shares of preferred stock, par value $0.001 per share of the company, which may be issued in one or more series, with such rights, preferences, privileges and restrictions as shall be fixed by the company's Board of Directors from time to time. About CBAK Energy Liaoning Province, People's Republic of China-based CBAK Energy -- www.cbak.com.cn -- is a manufacturer of new energy high power lithium batteries that are mainly used in light electric vehicles, electric vehicles, electric tools, energy storage including but not limited to uninterruptible power supply (UPS) application, and other high-power applications. Its primary product offering consists of new energy high power lithium batteries, but it is also seeking to expand into the production and sale of light electric vehicles. CBAK Energy reported a net loss of $7.85 million for the year ended Dec. 31, 2020, compared to a net loss of $10.85 million for the year ended Dec. 31, 2019. As of June 30, 2021, the Company had $192.17 million in total assets, $90.34 million in total liabilities, and $101.84 million in total equity. Hong Kong, China-based Centurion ZD CPA & Co., the Company's auditor since 2016, issued a "going concern" qualification in its report dated April 13, 2021, citing that the Company has a working capital deficiency, accumulated deficit from recurring net losses and significant short-term debt obligations maturing in less than one year as of Dec. 31, 2020. All these factors raise substantial doubt about its ability to continue as a going concern. CEN BIOTECH: Appoints Rik Purdy as SVP of Deals and Acquisitions ---------------------------------------------------------------- The Board of Directors of CEN Biotech, Inc., has appointed Rick Purdy as senior vice president of Deals and Acquisitions. Mr. Purdy, 45, currently serves as the president of Herc Holdings, Inc., where he provides business consulting services. He has been in such position since Jan. 1, 2006. Mr. Purdy is also a member of CEN Biotech's Board, and has served in such capacity since April 19, 2021. He is also a member of the Board of Directors of Health Logic Interactive, Inc. where he has served in such capacity starting on July 9, 2020, and a member of the Board of Directors of Mineworx Technologies, Inc. where he has served in such capacity starting on June 4, 2015. On Dec. 6, 2021, Joseph Byrne resigned from his position as president of CEN Biotech, effective on that date. Mr. Byrne served as president of the company from April 19, 2021 to Dec. 6, 2021, and remains a member of the company's Board, and has served in such capacity since April 19, 2021. His resignation was not the result of any disagreement with the company on any matter relating to its operations, policies or practices. On Dec. 6, 2021, the Board approved the change in position of Bill Chaaban from co-president of CEN Biotech to the sole president of the company. Mr. Chaaban is currently the chief executive officer of the company as well as chairman of the Board. Executive Employment Agreement On Dec. 6, 2021, CEN Biotech entered into an Executive Employment Agreement with Mr. Purdy. Pursuant to the Employment Agreement, during the term of the Employment Agreement, the company agreed to employ, and Mr. Purdy agreed to accept employment with the company as senior vice president of Deals and Acquisitions. Pursuant to the Employment Agreement, CEN Biotech agreed to issue Mr. Purdy 2,500,000 shares of the company's common stock subject to the provisions of a Restricted Stock Agreement under the C\company's 2021 Equity Compensation Plan. Additionally, pursuant to the Employment Agreement, CEN Biotech agreed to pay Mr. Purdy a base salary of $31,200. The term of the Employment Agreement is for an indefinite period subject to termination in accordance with the terms of the Employment Agreement. The Employment Agreement can be terminated by Mr. Purdy for "Good Reason" as such term is defined in the Employment Agreement or without "Good Reason" by giving a minimum of 30 days' prior written notice to advise CEN Biotech that he is resigning his employment. In the event of termination of the Employment Agreement by Mr. Purdy by resignation without "Good Reason," no sums will be payable by the company except for: (i) any unpaid base salary through the effective date of resignation and (ii) reimbursement for any expenses for which Mr. Purdy had not been reimbursed. In the event of a termination of the Employment Agreement by Mr. Purdy for "Good Reason," the company would have a period of 30 days following receipt of such notice from Mr. Purdy to cure or revoke the event constituting "Good Reason." CEN Biotech can also terminate the Employment Agreement for "Cause" as such term is defined in the Employment Agreement, and if that occurs, no sums will be payable by the company except for: (i) any unpaid base salary through the date of termination, (ii) reimbursement for any expenses for which the Mr. Purdy had not been reimbursed and (iii) only if the act of "Cause" does not constitute willful misconduct, disobedience or willful neglect of duty that is not trivial and has not been condoned by the company, any other amount due under the Employment Agreement for termination pay or severance pay. The company can also terminate the Employment Agreement without "Cause" at any time. Pursuant to the Employment Agreement, in connection with the sale of the company or any other transaction constituting a "Change in Control" as such term is defined in the Employment Agreement or a strategic transaction, the company may, but will not be obligated, to provide Mr. Purdy with additional compensation (including, but not limited to additional stock options or restricted stock) for services outside of general scope of duties and responsibilities of Mr. Purdy. Restricted Stock Agreement On Dec. 6, 2021, CEN Biotech entered into a Restricted Stock Agreement under the Plan with Mr. Purdy, the company's senior vice president of Deals and Acquisition and a member of its Board. Pursuant to the RSA, the company granted Mr. Purdy 2,500,000 shares of the company's common stock under the Plan to vest as follows: * 700,000 of the Restricted Shares are to vest on the grant date of Dec. 6, 2021; * The remaining 1,800,000 of the Restricted Shares are to vest over a three year period with 1/36th or 50,000 of the number of Restricted Shares vesting on the one month anniversary of the Grant Date and an additional 1/36th or 50,000 of the number of Restricted Shares vesting at the end of each one (1) month anniversary thereafter, provided that Mr. Purdy continues to be an employee of the company in good standing, as of the applicable Vesting Date, such that 100% of the Restricted Shares will have vested on the third anniversary of the Grant Date. Notwithstanding the foregoing, the Restricted Shares will become immediately vested upon a change of control of the company. About CEN Biotech Inc. CEN Biotech, Inc. -- tp://www.cenbiotechinc.com -- is focused on the manufacturing, production and development of Light Emitting Diode lighting technology and hemp products. The Company intends to explore the usage of hemp, which it intends to cultivate for usage in industrial, medical and food products. Its principal office is located at 300-3295 Quality Way, Windsor, Ontario, Canada. CEN Biotech reported net income of $14.25 million for the year ended Dec. 31, 2020, compared to a net loss of $5.65 million for the year ended Dec. 31, 2019. As of Sept. 30, 2021, the Company had $8.40 million in total assets, $11.48 million in total liabilities, and a total shareholders' deficit of $3.08 million. Mazars USA LLP, in New York, New York, the Company's auditor since 2018, issued a "going concern" qualification in its report dated March 12, 2021, citing that the Company has incurred significant operating losses and negative cash flows from operations since inception. The Company also had an accumulated deficit of $27,060,527 at Dec. 31, 2020. The Company is dependent on obtaining necessary funding from outside sources, including obtaining additional funding from the sale of securities in order to continue their operations. The COVID-19 pandemic has hindered the Company's ability to raise capital. These conditions raise substantial doubt about its ability to continue as a going concern. CWGS ENTERPRISES: $300MM Loan Add-on No Impact on Moody's Ba3 CFR ----------------------------------------------------------------- Moody's Investors Service says CWGS Enterprises, LLC's ("Camping World") proposed $300 million add-on to its extant Term Loan B due 2028 will not impact its ratings, including the company's Ba3 corporate family rating, Ba3-PD probability of default rating, and Ba3 senior secured bank credit facility rating. Camping World's SGL-2 speculative grade liquidity rating also remains unchanged. The outlook remains stable. Proceeds from the proposed $300 million add-on will be used to fund near term acquisitions and development of RV dealerships and service centers. Camping World's Ba3 CFR is not impacted by the debt increase as proforma leverage will remain within Moody's current downward rating triggers. Moody's estimates that proforma for the $300 million TLB add-on, Camping World's debt/EBITDA will increase to 2.3x from 2.0x for the LTM period ending September 30, 2021. As Camping World deploys the funds from the term loan add-on towards additional acquisitions and improves the capabilities of its existing base of RV dealerships and service centers, Moody's expects additional EBITDA growth in 2022 which, barring any further increases in debt, will improve leverage. Camping World's Ba3 CFR reflects the company's strong quantitative credit profile, industry fundamentals that rebounded quickly from pandemic-related softness and are on pace for record-setting 2021 new vehicle shipments, its leading market position within the recreational vehicle segment, its flexible business model that provides multiple sources of revenue, with new and used retail sales, membership sales, and parts and accessories through its dealership and retail networks, as well as the risks inherent in its growth strategy, which includes both acquisitions and greenfield development. The stable outlook reflects Moody's view that the company has flexibility around its mix between new and used vehicles, as well as the fairly predictable profit streams from Good Sam, and a variable cost structure that can flex to limit the potential downside that could result from a lingering demand "shock." FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS Ratings could be upgraded if operating performance continues its positive trend resulting in Debt/EBITDA being sustained below 2.5 times and EBIT/interest being sustained above 6 times through any potential industry cycle; maintenance of at least adequate liquidity; and financial strategy remaining balanced. Ratings could be downgraded if either operating performance declines or a more aggressive financial strategy results in Debt/EBITDA increasing to over 3.5 times or EBIT/interest below 4 times, or liquidity weakens. CWGS Enterprises, LLC operates businesses predominantly involved in the recreational vehicle industry including: (1) FreedomRoads RV dealerships, which sells new and used RVs, parts, and services under the Camping World brand name (2) Membership Services, including Good Sam, which sells club membership, products, services and publications to RV owners, and (3) Retail, which includes Camping World retail stores that provide merchandise and services to RV users, as well as Gander RV & Outdoors stores. Annual revenues are around $7 billion. DALTON CRANE: Wins Cash Collateral Access on Final Basis -------------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of Texas, Houston Division, has authorized Dalton Crane, L.C. to use cash collateral on a final basis on the terms set forth in the Debtor's Cash Collateral Motion. The Debtor is authorized to make $9,000 in adequate protection payments to Signature per month starting November 15, 2021, and continuing monthly thereafter, provided that payment of adequate protection in the amount set forth in the final order, is without prejudice to the rights of Signature to seek further relief regarding use of cash collateral and/or seeking adequate protection. The Debtor is authorized to provide a post-petition lien on behalf of First State Bank in replacement of the Debtor's use of First State prepetition liens on account and inventory, to the extent of any diminution in value of such collateral as of the petition date, and that the post-petition lien shall be enforceable without further notice or documentation and is deemed perfected without further filings. The Debtor has agreed to make adequate protection payments to First State Bank in the amount of $2,700 per month, starting December 20, 2021, and continuing monthly thereafter, provided however that the payment of adequate protection is the amount set forth, is without prejudice to the rights of First State to seek further relief regarding cash collateral and/or other relief. The replacement liens being granted on behalf of First State will be in the same effect and priority as the prepetition liens of First State as of the date of filing, and will not be preempt or undermine the priority or extent of any perfected lien rights of tax creditors. The Debtor may at the request of other secured equipment lenders may be required to provide additional amounts of adequate protection payments to those creditors, and the Debtor may utilize cash collateral for the purpose of making adequate protection payments to secured equipment lenders following approval and agreement of First State. A copy of the order and the Debtor's one month budget is available at https://bit.ly/3oJLYFy from PacerMonitor.com. The budget provided for $665,300 in total expenses. About Dalton Crane, L.C. Dalton Crane, L.C. provides crane and related services within the Texas oil and gas industry, typically at wellhead or drill locations for oil and gas drilling and operational businesses. Dalton's activities involve acquisition, renting, operating and disposition of crane and related assets currently deployed to various oil and gas operational cites within south Texas. The Debtor sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. S.D. Tex. Case No. 21-33218) on October 1, 2021. In the petition signed by Joshua Dalton, CEO/member, the Debtor disclosed $22,113,730 in assets and $14,515,457 in liabilities. Judge Eduardo V. Rodriguez oversees the case. Michael G. Colvard, Esq., at Martin & Drought, P.C. is the Debtor's counsel. Signature Financial LLC, as creditor, is represented by Frances Smith, Esq at Ross and Smith PC and Morrit Hock and Hamroff LLP First State Bank, as secured creditor, is represented by Richard Chapman, Esq., at Anderson, Smith, Null & Stofer, LLP. DUN & BRADSTREET: Fitch Rates Proposed Unsec. Notes 'BB-' --------------------------------------------------------- Fitch Ratings has assigned a 'BB-'/'RR4' rating to Dun & Bradstreet Corporation's (DNB) proposed unsecured notes. The net proceeds will be used to redeem the company's 10.250% senior unsecured notes, resulting in interest expense savings and extending its maturity profile. Fitch expects the transaction, along with the earlier announced incremental TLB and related refinancing, to be largely leverage neutral. KEY RATING DRIVERS Sustained Margin Profile: DNB has been successful under new management at bringing its operating EBITDA margin in line with comparable indirect data analytics peers. Its operating EBITDA margin was 38.9% for the LTM period ending Sept. 30, 2021. Prior to the LBO, Dun & Bradstreet had margins in the low 30% and below range. Margin improvement reflects realization of sizable cost savings synergies of approximately $250 million. However, the company has also increased innovation its product development, while moving to more modern delivery methods, and taken a disciplined approach to pricing. Under conservative organic growth assumptions, Fitch believes DNB will grow its operating EBITDA mid- to high-single digits, reflecting its operating leverage, tempered only by continued acquisitions of complimentary assets in addition to WWN partners. Pivot to Organic Growth: Management has guided to 3% to 4.5% organic constant currency growth in 2021. Near-term growth is partially driven by reduced headwinds such as the winddown of Data.com, as well as lapping Covid-impacted periods. However, the company has been successful at winning new logos, maintaining high retention levels while being disciplined on pricing, as well as increasing cross-selling and growing client wallet share, which is supported in part by growing the proportion of multi-year contracts. DNB's prior efforts and investments in its product development have led to key wins with strategic clients for analytics, sales and marketing, as well as successful build out of its offerings to the SMB market. The company has noted particularly strong engagement related to e-commerce customers accessing self-service options. Fitch conservatively forecasts DNB's revenue growth will be in the lower-single digit range, while acknowledging upside. Financial Structure: With Fitch's still conservative growth and margin expectations Fitch continues to see DNB's leverage sustaining in the low to mid-4.0x region and gross leverage declining a further 0.3x organically. However, Fitch estimates the company will generate approximately $1 billion in free cash flow over the next three to four years, providing significant flexibility for further debt reduction, organic investment, capability acquisition, and potentially shareholder return. Financial Policy: DNB has not committed to using FCF for debt reduction, and it may shift to outright shareholder return. However, at the 'BB-' rating level it has headroom to Fitch's 4.5x negative gross leverage sensitivity providing flexibility for operational challenges, M&A and shareholder return. That said, the company has been vocal about taking further steps to address its capital structure and aligning it with its operational improvement since the take private transaction and subsequent IPO. DERIVATION SUMMARY DNB's business profile as a data analytics provider is supported by its market position with a meaningful market share of core commercial credit in North America, approximately 85% recurring revenue base with subscriptions representing three-quarters of revenue, and a long-standing customer base with an approximately 96% revenue retention rate. In 2020, no customer accounted for more than 5% of DNB's revenue, and the top 50 customers accounted for approximately 25%. The company is broadly diversified across sectors although it is weighted more toward North America (approximately 70% of revenue pro forma for the inclusion of Bisnode). These business profile characteristics are broadly comparable with DNB's data analytics peers, the majority of which are solid investment grade. However, DNB's organic growth profile has historically been muted relative to more highly rated peers that have consistently grown at mid-single-digits, although the company had higher single-digit organic constant currency growth in 2020. DNB's operating EBITDA margin was previously 10 to 20 points below its peers. Its FCF margin is lower as a result, although the company has made significant strides in improving its margins to a level (approximately 40%) in line with its more highly rated peers. Fitch has determined a parent-subsidiary relationship between DNB and its parent, Dun & Bradstreet Holdings, Inc., which has a weaker standalone credit profile than its operating subsidiary and issuer of debt DNB. Fitch has assigned the same Issuer Default Ratings (IDRs) to both companies given their strong operational and legal ties. No Country Ceiling constraints or Operating Environment influence affected these ratings. KEY ASSUMPTIONS Fitch's key assumptions within its rating case for the issuer include: -- Low- to mid-single-digit adjusted organic constant currency revenue growth in 2021 and mid-single digit assumed annually over the rating horizon thereafter; -- Operating EBITDA margin of approximately 39% in 2021 and 40% to 41% over the rating horizon, reflecting operating leverage; -- Capital expense of $160 million in 2021 line with guidance (exclusive of $77 million headquarters purchase) and a comparable amount annually thereafter; -- Allocation of portion of FCF to tuck-in acquisitions in line with recent acquisition strategy with potential for shareholder return. RATING SENSITIVITIES Factors that could, individually or collectively, lead to positive rating action/upgrade: -- Total debt with equity credit to operating EBITDA expected to be sustained below 4.0x; -- FCF to total debt with equity credit expected to be sustained above 5%; -- Expectation for sustained organic constant currency growth in excess of low single digit; -- Material voluntary debt reduction. Factors that could, individually or collectively, lead to negative rating action/downgrade: -- Total debt with equity credit to operating EBITDA expected to be sustained above 4.5x; -- FCF to total debt with equity credit expected to be sustained below 4%; -- Expectation for flat to negative organic constant currency growth; -- Shift to a more aggressive financial policy. BEST/WORST CASE RATING SCENARIO International scale credit ratings of Non-Financial Corporate issuers have a best-case rating upgrade scenario (defined as the 99th percentile of rating transitions, measured in a positive direction) of three notches over a three-year rating horizon; and a worst-case rating downgrade scenario (defined as the 99th percentile of rating transitions, measured in a negative direction) of four notches over three years. The complete span of best- and worst-case scenario credit ratings for all rating categories ranges from 'AAA' to 'D'. Best- and worst-case scenario credit ratings are based on historical performance. LIQUIDITY AND DEBT STRUCTURE Adequate Liquidity and Manageable Debt Structure: DNB had $234 million in cash and cash equivalents at Sept. 30, 2021. Following a previous amendment upsizing and extending the maturity of the revolver, DNB has access to a $850 million revolving credit facility maturing in 2025. Liquidity will be further supported by Fitch's expectation of in excess of $200 million of FCF in 2021 increasing to more than $300 million in 2022 driven by modest organic top-line growth at higher margin, improved collections and working capital dynamics, and lower interest expense. DNB's maturity schedule is manageable with final maturities expected to extend to 2029. ISSUER PROFILE DNB is a leading data and analytics provider of business information that informs credit and trade decisions among firms and lenders and that also supports sales & marketing efforts. ESG CONSIDERATIONS The Dun & Bradstreet Corporation has an ESG Relevance Score of '4' for Governance Structure due to board independence risk as a result of its complex ownership structure, which has a negative impact on the credit profile, and is relevant to the ratings in conjunction with other factors. Unless otherwise disclosed in this section, the highest level of ESG credit relevance is a score of '3'. This means ESG issues are credit-neutral or have only a minimal credit impact on the entity, either due to their nature or the way in which they are being managed by the entity. EASTERDAY RANCHES: Farms Unsecureds to Get 89% or 94% in Plan ------------------------------------------------------------- Easterday Ranches, Inc., et al., submitted a Plan and a Disclosure Statement. On the Effective Date, the Plan will be implemented through the Applicable Waterfall (OPTION A or OPTION B) with respect to distributions to Holders of Impaired Claims. The Applicable Waterfall shall consist of either the OPTION A Waterfall or the OPTION B Waterfall: * OPTION A Waterfall: subject to the unanimous agreement of the Easterday Family, (1) the Net Sale Proceeds and the Basin City Property shall be released, transferred, and/or assigned in their entirety to the Liquidation Trust to fund Plan distributions to Holders of Impaired Claims and the Easterday Family Tax Payments and (2) all rights of the Debtors, the Estates, and all Holders of Impaired Claims, on the one hand, and the Easterday Family, on the other hand, as to any and all Causes of Action shall be fully preserved, except as to the Net Sale Proceeds, the Allocation Dispute, the Basin City Property, and the Easterday Family Tax Payments. For the avoidance of doubt, the Basin City Property shall be transferred to the Liquidation Trust, and distributed in accordance with the OPTION A Waterfall, on account of Tyson's and Segale's restitution claims against Cody Easterday. * OPTION B Waterfall: (1) the Net Sale Proceeds shall be released, as determined by the Bankruptcy Court with respect to the Allocation Dispute, to the Liquidation Trust to fund Plan distributions to Holders of Impaired Claims, (2) no Easterday Family Tax Payments shall be funded by the Debtors' estates, and (3) all rights of the Debtors, the Estates, and Holders of Impaired Claims, on the one hand, and the Easterday Family, on the other hand, as to any and all Causes of Action shall be fully preserved. This Option shall be conditioned upon a ruling by the Bankruptcy Court on the Allocation Dispute that is acceptable to the Debtors and the Settling Parties, which the Debtors shall endeavor to obtain at or prior to the Confirmation Hearing. On the Effective Date, all restitution claims of Tyson and Segale against Cody Easterday shall be deemed assigned to the Liquidation Trust and any recoveries with respect thereto shall be distributed in accordance with the OPTION B Waterfall. In addition, all Holders of Impaired Claims voting on the Plan shall be required to assign their individual claims, if any, against the Easterday Family to the Liquidation Trust in order to receive full distributions under the Plan. Absent such affirmative assignment, distributions to non-supporting Holders of Impaired Claims shall be reduced by 25%. OPTION A shall be implemented to the extent that the Easterday Family unanimously agrees to it, which Option must be exercised no later than 7 days prior to the Voting Deadline. OPTION B shall be the fallback option absent such agreement. The Debtors shall file a notice with the Bankruptcy Court prior to the Confirmation Hearing disclosing which Option has been selected. Under OPTION A of the Plan: * The Easterday Family shall unanimously stipulate that the entirety of the Net Sale Proceeds, subject to the Easterday Family Tax Payments, belong to the Debtors' Estates. The Easterday Family will also agree to transfer the Basin City Property to the Liquidation Trust. This Option must be exercised no later than 7 days prior to the Voting Deadline. * On the Effective Date, the Easterday Family shall unanimously relinquish any rights and interests in and to the Net Sale Proceeds and the Basin City Property, subject to the Easterday Family Tax Payments. For the avoidance of doubt, the Net Sale Proceeds and the Basin City Property shall vest in the Liquidation Trust and shall be used to fund distributions under the Plan in accordance with the OPTION A Waterfall. * On the Effective Date, the Easterday Family shall unanimously relinquish any rights and interests in and to the Net Sale Proceeds, subject to the Easterday Family Tax Payments. For the avoidance of doubt, the Net Sale Proceeds shall vest in the Liquidation Trust and shall be used to fund distributions under the Plan in accordance with the OPTION A Waterfall. * The Liquidation Trustee shall pay out of the Net Sale Proceeds directly to the applicable taxing authorities up to $18 million of taxes owed by the Easterday Family on account of income and/or sales taxes directly related to the business operations of the Debtors or the sale of the Debtors' real estate. * The Easterday Family shall cooperate in good faith with the Liquidation Trustee in connection with the preparation and filing of applicable tax returns and provide the Liquidation Trustee with a reasonable amount of time to review and approve the filing of applicable tax returns. * The Easterday Family shall present the applicable tax bills to the Liquidation Trustee for direct payment to the applicable taxing authorities at least 7 days in advance of the requested payment date. * The Easterday Family shall be responsible for, and shall promptly pay, any taxes that may be owed with respect to the Debtors or their assets in excess of $18 million. * All Causes of Action of the Debtors, the Estates, and Holders of Impaired Claims, on the one hand, and the Easterday Family, on the other hand, are fully reserved, except as to the Net Sale Proceeds, the Basin City Property, the Allocation Dispute, and the Easterday Family Tax Payments. * The Easterday Family shall unanimously stipulate that the entirety of the Net Sale Proceeds, subject to the Easterday Family Tax Payments, belong to the Debtors' Estates. This Option must be exercised no later than 7 days prior to the Voting Deadline. Under OPTION B of the Plan: -- The Allocation Dispute will be resolved by the Bankruptcy Court. -- The Net Sale Proceeds shall vest with the Liquidation Trust to extent ordered by the Bankruptcy Court in the context of the Allocation Dispute and shall be used to fund distributions under the Plan in accordance with the OPTION B Waterfall. This Option shall be conditioned upon a ruling on the Allocation Dispute that is acceptable to the Debtors and the Settling Parties, which the Debtors shall endeavor to obtain at or prior to the Confirmation Hearing. -- The Debtors' Estates shall have no responsibility whatsoever for the Easterday Tax Payments, all of which shall be borne entirely by the Easterday Family. -- All Causes of Action of the Debtors, the Estates, and Holders of Impaired Claims, on the one hand, and the Easterday Family, on the other hand, are fully preserved as to all matters. General Unsecured Claims will only be paid from the Net Distributable Assets of the Liquidation Trust. The Net Distributable Assets consist of the Distributable Assets of the Liquidation Trust from and after the Effective Date once all such assets have been reduced to Cash, net of amounts necessary to fund the payment of, as applicable and except as otherwise agreed by the Holders of such Claims, Allowed Administrative Claims, Priority Tax Claims, Priority Claims, and Liquidation Trust Expenses, and/or reserves established for any of the foregoing, and excluding those Distributable Assets of the Debtors or the Liquidation Trust that were subject to any Liens or Secured Claims as of the Effective Date until such time that such Liens or Secured Claims are satisfied in full. General Unsecured Claims Holders of Class 5 Farms General Unsecured Claims will each receive, as the sole distribution or dividend by Farms or its Estate under the Plan on account of such Allowed Farms General Unsecured Claim, a Pro Rata share of the Class A Liquidation Trust Interests in the Liquidation Trust (calculated as a percentage of all Allowed General Unsecured Claims against Farms) which shall entitle such Holder to the treatment contemplated in the Applicable Waterfall. Estimated recoveries for Class 5 under the Plan are: Estimated Estimated Cash Recovery Percentage Recovery ----------------------- ------------------- OPTION A: $15.8 million 89% OPTION B: $16.8 million 94% Notwithstanding anything to the contrary in the Plan, each Holder of a Class 5 Claim shall be required to check a box on its Ballot affirmatively assigning any individual Causes of Action of such Holder against the Easterday Family to the Liquidation Trust. Absent such assignment, the distributions to such Holder of Farms General Unsecured Claims under the Plan shall be reduced by 25% and such funds shall instead be distributed to other Creditors in accordance with the Applicable Waterfall. Class 5 is impaired. Class 6: Ranches General Unsecured Claims will each receive, as the sole distribution or dividend by Ranches or its Estate under this Plan on account of such Allowed Ranches General Unsecured Claim, a Pro Rata share of the Class B Liquidation Trust Interests in the Liquidation Trust (calculated as a percentage of all Allowed General Unsecured Claims against Ranches) which shall entitle such Holder to the treatment contemplated in the Applicable Waterfall. Estimated recoveries for Class 6 under the Plan are: Estimated Estimated Cash Recovery Percentage Recovery ----------------------- ------------------- OPTION A: $2.9 million 48% OPTION B: $2.9 million 49% The Applicable Waterfall reflects that Holders of Ranches General Unsecured Claims shall receive the first $1 million of any net proceeds of any claims of the Ranches' estate, Tyson, and Segale against Cody Easterday, the next $3.2 million of such proceeds shall be distributed Pro Rata to Holders of Tyson Claims and Segale Claims, and the remainder of such net proceeds or any other proceeds of the Ranches' Estate shall be distributed Pro Rata to [Holders of Ranches General Unsecured Claims], Tyson Claims, and Segale Claims. Notwithstanding anything to the contrary in the Plan, each Holder of a Class 6 Claim shall be required to check a box on its Ballot affirmatively assigning any individual Causes of Action of such Holder against the Easterday Family to the Liquidation Trust. Absent such assignment, the distributions to such Holder of Ranches General Unsecured Claims under the Plan shall be reduced by 25% and such funds shall instead be distributed to other Creditors in accordance with the Applicable Waterfall. Class 6 is impaired. Objections to Confirmation of the Plan must be Filed and served on the Debtors and certain other entities, all in accordance with the Confirmation Hearing Notice, so that such objections are actually received by no later than [the date that is 14 days prior to the Confirmation Hearing] at 5:00 p.m. (prevailing Pacific Time). The deadline to vote on the Plan is [the date that is 14 days prior to the Confirmation Hearing] at 5:00 p.m. (prevailing Pacific Time). Attorneys for the Debtors: ARMAND J. KORNFELD THOMAS A. BUFORD RICHARD B. KEETON BUSH KORNFELD LLP 601 Union Street, Suite 5000 Seattle, WA 98101 Tel: (206) 292-2110 Fax: (206) 292-2104 Email: jkornfeld@bskd.com tbuford@bskd.com rkeeton@bskd.com RICHARD M. PACHULSKI JEFFREY W. DULBERG MAXIM B. LITVAK PACHULSKI STANG ZIEHL & JONES LLP 10100 Santa Monica Blvd., 13th Floor Los Angeles, CA 90067-4003 Tel: (310) 277-6910 Facsimile: (310) 201-0760 Emails: rpachulski@pszjlaw.com jdulberg@pszjlaw.com mlitvak@pszjlaw.com A copy of the Disclosure Statement dated December 1, 2021, is available at https://bit.ly/3G7ieIo from PacerMonitor.com. About Easterday Ranches and Easterday Farms Easterday Ranches, Inc., is a privately held company in the cattle ranching and farming business. Easterday Ranches sought protection under Chapter 11 of the Bankruptcy Code (Bankr. E.D. Wash. Case No. 21-00141) on Feb. 1, 2021. Its affiliate, Easterday Farms, a Washington general partnership, filed a Chapter 11 bankruptcy petition (Bankr. E.D. Wash. Case No. 21-00176) on Feb. 8, 2021. The cases are jointly administered under Case No. 21-00141. At the time of the filing, the Debtors disclosed assets of between $100 million and $500 million and liabilities of the same range. Judge Whitman L. Holt oversees the cases. The Debtors tapped Pachulski Stang Ziehl & Jones LLP as their lead bankruptcy counsel, Bush Kornfeld LLP as local counsel, and Davis Wright Tremaine LLP as special counsel. T. Scott Avila and Peter Richter of Paladin Management Group serve as restructuring officers. The U.S. Trustee for Region 18 appointed an official committee of unsecured creditors on Feb. 16, 2021. EMMAUS CALLING: S&P Withdraws Bond Ratings on Three Projects ------------------------------------------------------------ S&P Global Ratings withdrew its ratings on the following issues: -- New Hope Cultural Education Facilities Finance Corp., Texas' series 2017A-1 and A-2 (class I) bonds, rated 'B+'; series 2017B (class II) bonds, rated 'B'; and series 2017C (rated 'B-', issued for 4-K Housing Inc. [Stoney Brook Project]); -- New Hope Cultural Education Facilities Finance Corp., Texas' series 2016A bonds, rated 'BB-'; series 2016B bonds, rated 'B'; and series 2016C bonds, rated 'B-', issued for Cardinal Bay Inc. (Village on the Park/Carriage Inn Project); and -- Bexar County Housing Finance Corp., Texas' series 2011A (class I) senior housing revenue bonds and series 2011B subordinate (class II) bonds, both rated 'CCC', issued for Canton II Inc. (Inn at Los Patios). On Nov. 4, 2021, S&P placed these ratings on CreditWatch with negative implications for quality and sufficiency of information considerations. "We are withdrawing these ratings because we remain unable to obtain information from The Emmaus Calling Inc., the owner of these three projects, regarding its management policies, cash flow, and ability and willingness to pay upcoming debt service payments for the projects on Jan. 1, 2022," said S&P Global Ratings credit analyst Raymond Kim. "As such, we no longer have timely information of satisfactory quality from the owner to maintain our ratings on these projects." ENERMEX INTERNATIONAL: Court Conditionally Approves Disclosures --------------------------------------------------------------- Judge Jeffrey Norman has entered an order conditionally approving the Disclosure Statement of Enermex International, Inc. Jan. 18, 2022, at 9:30 a.m. is fixed for the hearing on final approval of the disclosure statement (if a written objection has been timely filed) and for the hearing on confirmation of the plan. The hearing shall be held in Courtroom 403, United States Courthouse, 515 Rusk St., Houston, Texas. Jan. 11, 2022, is fixed as the last day for filing and serving written objections to the disclosure statement and confirmation of the plan. Jan. 11, 2022, is fixed as the last day for filing written acceptances or rejections of the plan. About Enermex International Houston-based Enermex International Inc. filed a voluntary petition for Chapter 11 protection (Bankr. S.D. Tex. Case No. 21-32619) on Aug. 2, 2021, listing as much as $10 million in both assets and liabilities. Enermex President Edgar Padilla signed the petition. Judge Jeffrey Norman oversees the case. The Debtor tapped Coplen & Banks, PC as bankruptcy counsel and Hrbacek Law Firm, PC as special counsel. ESTIATORIO ENT: Odyssey Diner in Battle for Control of Building --------------------------------------------------------------- Bill Heltzel of Westchester and Fairfield County Business Journal reports that Odyssey Diner, a fixture in Eastchester for 50 years but dormant since the beginning of the Covid-19 pandemic, has filed for Chapter 11 bankruptcy protection, holding out the possibility of reopening. But Odyssey's landlord opposes those plans, alleging that the owner has gutted the building and sold assets without accounting for the funds. Estiatorio Ent. Ltd., the company that operates the diner, petitioned U.S. Bankruptcy Court in White Plains on Nov. 30, declaring $3,000,348 in assets and $417,092 in liabilities. Estiatorio's owner, Konstantinos Doukas, says in an affidavit that his family has served wholesome family-style food for 50 years at 465 White Plains Road, Eastchester. "For the most part," the diner operated at a profit and paid its obligations, he says, but in March 2020 he shut it down because of government restrictions enacted in response to the Covid-19 pandemic. He planned to reopen quickly but various circumstances made that goal unfeasible. Doukas has applied for a Restaurant Revitalization Fund grant that he would use to reopen the diner. Alternatively, he says, he would sell the building and reopen at another location. While Doukas' company owns the building, it does not own the land, instead renting from Stacey Realty Associates, New Rochelle. But Philip DeRaffele of Stacey Realty, says the building automatically transferred to the landlord when Doukas defaulted on lease payments. He says in an affidavit that Odyssey Diner owes Stacey $418,082: including $286,000 in rent and $132,082 in real estate taxes. Under the terms of the lease, Doukas had to surrender title to the building if he failed to cure a default, but has refused to do so. What's more, according to the landlord, Stacey is by far the largest creditor but bankruptcy schedules list the debt as disputed and the amount as unknown. The greatest debt listed is $250,000 to Doukas for advances that he made to the business. Even if Doukas still had a legitimate title to the building, DeRaffele claims, the building is not worth the $3 million that is claimed in bankruptcy schedules. Within months of closing the diner the building was gutted, according to DeRaffele. All furnishings and equipment, even HVAC systems, ceiling tiles 'and seemingly any other property that could conceivably be taken out,' were removed and sold. No portion of the proceeds were paid to the landlord, DeRaffele claims, and were "presumably retained' by the business. He claims that the Chapter 11 reorganization petition was filed in bad faith and he is asking the court to convert the case to Chapter 7 liquidation, on the grounds of gross mismanagement and in the best interests of creditors. Doukas argues in his affidavit that allowing Stacey to "seize possession" of the building will allow the landlord to “receive a windfall at the expense of the debtor and its creditors.” The Odyssey is represented by White Plains attorney Anne J. Penachio. Stacey is represented by Manhattan attorneys Douglas J. Pick and Eric C. Zabicki. About Estiatorio Ent. Ltd. Estiatorio Ent. Ltd. is the fee simple owner of an edifice and property located at 465 White Plains Road, Eastchester, NY valued at $3 million. Estiatorio Ent. Ltd. sought Chapter 11 bankruptcy protection (Bankr. S.D.N.Y. Case No. 21-22665) on Nov. 30, 2021. In the petition signed by Konstantinos Doukas as president, Estiatorio Ent. Ltd. listed estimated total assets of $3,000,348 and total liabilities of $417,091. The case is handled by Honorable Judge Robert D. Drain. Anne Penachio, Esq., of PENACHIO MALARA, LLP, is the Debtor's counsel. FLORIDA HOMESITE: Disclosure Statement Unclear, McKenna Says ------------------------------------------------------------ Timothy McKenna and McKenna Realty, LLC, filed an objection to Florida Homesite Developers, LLC's Disclosure Statement. McKenna points out that the Disclosure Statement is unclear as to whether the clubhouse was also purchased by the Debtor. Creditor further points out that the Disclosure Statement incorrectly states that "Stoneridge" received $873,173 from the closing. Creditors assert that the Disclosure Statement incorrectly states that the Debtor's operating expenses were paid by Compass Rose and E.O. Koch Construction and why and circumstances explaining why these other entities paid the Debtor's expenses. Creditors complain that the Disclosure Statement fails to explain why the Debtor did not make distributions in compliance with its operating agreement, and instead favored the majority equity holder and its managers. According to Creditors, the Disclosure Statement incorrectly states that McKenna paid nothing for its 20% share, that McKenna never loaned money to Debtor, and that Compass Rose Venture, LLC was a net lender to the Debtor. Creditors point out that the Disclosure Statement fails to inform unsecured creditors that the value of their claims may be impaired by the allowance of Creditors' claims. Creditor further point out that the Disclosure Statement fails to explain why loans and revenue which should have been obtained by the Debtor was instead disbursed to pay non-business-related Compass Rose expenses and personal obligations of the managers of Compass Rose. Creditors assert that the Disclosure Statement fails to adequately analyze potential tax consequences of the Debtor's Plan. Creditors complain that the Disclosure Statement fails to identify Timothy McKenna, John Lesousky and Valerie Johnson as affiliates of the Debtor. According to Creditors, the Disclosure Statement fails to explain that one or more of the various classes of creditors may be consolidated. Creditors point out that the Disclosure Statement fails to state that the Debtor may be liable for claims by the homeowners association for mismanagement of homeowners association funds due to Debtor's failure to provide notice to homeowner association members and Debtor's failure to provide periodic reports required by Florida statute to association members. Creditor further point out that the Disclosure Statement fails to explain that the Debtor may be able to seek recovery of fraudulent transfers and property conveyed for which the Debtor did not obtain reasonable value, and that said recovery may affect the amount of payment to various creditors. Creditors assert that the Disclosure Statement fails to explain that Debtor's rejection of executory contracts may be disallowed. Counsel for Timothy McKenna and McKenna Realty, LLC: Jeffrey M. Siskind, Esq. 1629 K Street, Ste. 300, NW Washington, DC 20006 113 N. Monroe Street, 1st Floor Tallassee, Florida 32301 3465 Santa Barbara Drive Wellington, Florida 33414 Tel: (561) 791-9565 Fax: (561) 791-9581 Email: jeffsiskind@msn.com jeffsiskind@gmail.com About Florida Homesite Developers Florida Homesite Developers, LLC, sought protection under Chapter 11 of the Bankruptcy Code (Bankr. S.D. Fla. Case No. 21-14081) on April 28, 2021. At the time of the filing, the Debtor had between $1 million and $10 million in both assets and liabilities. Judge Mindy A. Mora oversees the case. Susan D. Lasky, Esq., at Sue Lasky, PA, is the Debtor's legal counsel. FORUM ENERGY: Appoints Neal Lux as President, CEO ------------------------------------------------- Forum Energy Technologies, Inc. announced that as part of the Company's executive management succession planning process, its Board of Directors appointed Mr. Neal Lux as president and chief executive officer, effective Feb. 18, 2022. Mr. Lux currently serves as executive vice president and chief operating officer. Mr. C. Christopher Gaut, the current chairman, president and chief executive officer, will become executive chairman at that time. The Board has also appointed Mr. Lux as a Class II director, effective Feb. 18, 2022. Cris Gaut commented, "It has been an honor to lead FET since its inception. I was pleased to recommend Neal's appointment to the Board of Directors and I look forward to this next phase in our company's journey. Neal joined FET as part of our investment in Global Tubing in 2013 and since that time he has gained the respect and trust of our Board of Directors and management. I have the highest level of confidence in the executive management team's leadership and business judgment. I look forward to the continued growth and prosperity of the company under this team's leadership." "I want to thank Cris for his distinguished leadership and the Board of Directors for its confidence in me," said Neal Lux. "Cris has set a high standard of excellence and established a firm foundation from which we will grow FET's product portfolio. I look forward to working together with FET's management team to execute our business strategy and usher in the next generation of energy leaders. Together we will focus on developing our traditional energy equipment and grow our non-oil and gas portfolio, especially new energy products." Neal has held various operations roles of increasing responsibility with the Company and its subsidiaries, including executive vice president -- operations; senior vice president -- completions; managing director - global tubing; and president - global tubing. He holds a B.S. in Industrial Engineering from Purdue University. About Forum Energy Forum Energy Technologies is a global oilfield products company, serving the drilling, downhole, subsea, completions and production sectors of the oil and natural gas industry. The Company's products include highly engineered capital equipment as well as products that are consumed in the drilling, well construction, production and transportation of oil and natural gas. Forum is headquartered in Houston, TX with manufacturing and distribution facilities strategically located around the globe. For more information, please visit www.f-e-t.com Forum Energy reported a net loss of $96.89 million for the year ended Dec. 31, 2020, compared to a net loss of $567.06 million for the year ended Dec. 31, 2019. As of Sept. 30, 2021, the Company had $799.97 million in total assets, $453.95 million in total liabilities, and $346.02 million in total equity. * * * As reported by the TCR on July 15, 2021, Moody's Investors Service upgraded Forum Energy Technologies, Inc.'s Corporate Family Rating to Caa1 from Caa2. "The upgrade of Forum's ratings reflects reduced risk of default and our expectation that Forum will grow revenue and EBITDA through 2022 driving reduced leverage and better interest coverage," commented Jonathan Teitel, a Moody's analyst. As reported by the TCR on Aug. 25, 2021, S&P Global Ratings revised its outlook on Forum Energy Technologies Inc. to stable from negative and affirmed its 'CCC+' issuer credit rating. The stable outlook reflects S&P's view that despite expecting leverage to remain at unsustainable levels over the next 12 months, including funds from operations (FFO) to debt of about 5%, S&P expects Forum will maintain adequate liquidity and generate a small amount of FOCF. FROZEN FOODS: Gets Cash Collateral Access Thru Dec 14 ----------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of New York has authorized Frozen Foods Partners, LLC, d/b/a Gourmet Express, LLC, d/b/a Gourmet Express, to continue using cash collateral on an interim basis through December 14, 2021, in an aggregate amount not to exceed, at any time, $1,201,272. On November 5, 2021, the Court entered the Interim Order Authorizing Emergency use of Cash Collateral Pursuant to 11 U.S.C. section 363 and Granting Adequate Protection Pursuant to 11 U.S.C. sections 361 and 363. The Court says section 5 of the Interim Order is amended to provide that the Lender, Iron Horse Credit LLC, and the Debtor have identified a portion of the Debtor's Inventory as slow moving, which has been delivered by the Debtor to the Lender and has been agreed to between the Debtor and the Lender, in the aggregate amount of $1,080,522. As additional adequate protection, (i) the Debtor has presented a plan to the Lender to sell the Specified Inventory during the period of time and at the pricing parameters set forth in the plan, which remains subject to review and approval by the Lender, (ii) the Debtor has agreed to designate all such sales of the Specified Inventory in an agreed upon manner with the Lender for tracking purposes, and (iii) the Debtor has agreed to direct that all proceeds received from the sale of the Specified Inventory be remitted to the Lender and has agreed that the Lender is authorized to apply the proceeds received to the permanent reduction of the principal amount of the outstanding pre-petition Obligations (as defined in the Credit Agreement) due the Lender. To monitor the Debtor's performance, the Debtor has agreed to provide the Lender with these additional reporting: (i) in addition to the daily report of collections, the Debtor will provide the Lender with a daily flash report of Sales, Shipments, and changes to Inventory, including, Raw Materials, Packaging and Finished Goods, and (ii) the Debtor will conduct a weekly update call with the Lender on Thursday of each week. A copy of the order and the Debtor's budget from November 11 to December 14, 2021 is available at https://bit.ly/3yecMAF from PacerMonitor.com. The Debtor projects $1,201,272 in total cash expenditures for the period. About Frozen Foods Partners, LLC Frozen Foods Partners, LLC is a Delaware limited liability company, which was established in 2015. Frozen Foods is a consumer products company engaged in the production, distribution and marketing of frozen skillet meals under multiple consumer brands. It offers a diversified portfolio of frozen products including meal kits, skillet meals, combination of proteins, sauces, pastas and vegetables, Asian and Mediterranean cuisines, as well as authentic Latin specialties. Its products offer a quality dining solution for working families and young adults. Its brands include Gourmet Dining, Rosetto, La Sabrosa, and Tru Earth, which can presently be found in many retailers, including Associated Grocers and SuperValu, as well as private label brands. Frozen Foods sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. S.D.N.Y. Case No. 21-11897) on November 1, 2021. In the petition signed by Jeffrey Lichtenstein as chief executive officer, the Debtor disclosed up to $10 million in both assets and liabilities. Judge Martin Glenn oversees the case. Adam P. Wofse, Esq., at LaMonica Herbst and Maniscalco, LLP, is the Debtor's counsel. FUELCELL ENERGY: Betsy Bingham Appointed to Board of Directors -------------------------------------------------------------- FuelCell Energy, Inc.'s Board of Directors has appointed Betsy Bingham to serve as a new independent director, effective Dec. 3, 2021. Ms. Bingham is currently the Lean Operations Leader for GE Aviation. Named to this role in June 2021, she is responsible for leading GE Aviation's lean transformation and implementation of lean principles throughout the organization and daily operations. In addition, she has responsibility for Sustainability and Environmental, Health and Safety across the business. Previously, Betsy was the Lean & Operations Leader for GE Digital, having responsibility for leading the lean transformation as well as oversight of the operational management system across the Company. Prior to working at GE, Betsy served as vice president of Integrated Supply Chain for Honeywell International, Performance Materials and Technology business. Additionally, she was responsible for the Honeywell Operation System the Company's lean transformation system. Betsy brings additional quality, lean, and continuous improvement experience through leadership roles with Royal Philips' Diagnostics Imaging Business, and Danaher subsidiaries Tektronix, Inc. and Veeder-Root Co. Betsy received her Bachelor of Science in Ceramic Engineering from Alfred University, and an MBA from State University of New York at Buffalo. Ms. Bingham's appointment expands the Board to eight directors, seven of whom are independent. She will be a member of the Board's Audit and Finance and Nominating and Corporate Governance Committees. "Betsy will contribute meaningfully in multiple areas that are essential as we move FuelCell Energy forward, including scaling of operations and manufacturing, and deep expertise in world-class lean principles," said James England, Chairman of the Board. "Betsy brings significant experience at a number of world-class organizations renowned for lean manufacturing and effective operating systems, essential aspects to FuelCell Energy's business model as we position the Company for growth," said Jason Few, president, chief executive officer and chief commercial officer of FuelCell Energy. "We are incredibly pleased to have Betsy join the Board where her experience and mentorship will help management and the Board implement strategic actions that bolster FuelCell Energy's ability to achieve our goals and objectives." In connection with her election to the Board, Ms. Bingham received a pro-rated annual retainer for service on the Board of $16,667 and pro-rated annual non-chair committee fees of $3,333 for service on the Audit and Finance Committee and $2,500 for service on the Nominating and Corporate Governance Committee. The retainer and fees may be paid in cash or common stock of the Company at the election of Ms. Bingham. About FuelCell Energy Headquartered in Danbury, Connecticut, FuelCell Energy, Inc. -- http://www.fuelcellenergy.com-- is a global developer of environmentally responsible distributed baseload power solutions through its proprietary fuel cell technology. The Company targets large-scale power users with its megawatt-class installations globally, and currently offer sub-megawatt solutions for smaller power consumers in Europe. The Company develops turn-key distributed power generation solutions and operate and provide comprehensive service for the life of the power plant. FuelCell Energy reported a net loss attributable to common stockholders of $92.44 million for the year ended Oct. 31, 2020, a net loss attributable to common stockholders of $100.24 million for the year ended Oct. 31, 2019, and a net loss attributable to common stockholders of $62.17 million for the year ended Oct. 31, 2018. As of July 31, 2021, the Company had $879.63 million in total assets, $153.54 million in total liabilities, $59.86 million in redeemable series B preferred stock, and $666.23 million in total stockholders' equity. GAINCO INC: Gets Interim Cash Collateral Access ----------------------------------------------- Judge David R. Jones of the U.S. Bankruptcy Court for the Southern District of Texas has authorized Gainco, Inc. to use cash collateral on an interim basis, according to the approved budget, pending a final hearing. The Debtor requires access to cash collateral to avoid irreparable harm to the Debtor and its estate. As an adequate protection payment and to be applied pursuant to the Debtor's and Traditions Commercial Finance, LLC's settlement agreement incorporated into the Debtor's proposed plan of reorganization, the Debtor will pay to Traditions $15,000 in December 2021. The Debtor and Traditions each reserve their rights with respect to how such adequate protection payment will be allocated with regard to any claims asserted by Traditions. Pursuant to the setoff right of First Community Bank and also as an adequate protection payment (to be applied against FCB's allowed claim), the Debtor will pay FCB $2,101 in December 2021. In December 2021, the Debtor is authorized to make a $5,000 postpetition retainer payment to the Law Offices of William B. Kingman, P.C. The Debtor will deliver the payment to WBK's IOLTA account to be held until fees are approved pursuant to a subsequent court order. Subject to further Court order and/or subject to being subordinated, as additional adequate protection for alleged cash collateral used, Yellowstone Capital LLC, Traditions, Payroll Funding Company LLC, CHTD Company, FCB and Affiliated Funding Corporation -- alleged secured creditors who asserted or assert a security interest in cash collateral -- are granted a valid, perfected, and non-avoidable replacement lien and security interest on all of the Debtor's accounts, receivables and proceeds thereof to the extent acquired after the Petition Date. The replacement liens will be in the same priority as existed on the Petition Date. A continued hearing on the use of cash collateral is scheduled for January 3, 2022 at 11 a.m. A copy of the order and the Debtor's December 2021 is available at https://bit.ly/3GAxkWT from PacerMonitor.com free of charge. The budget projects $407,648 in sales and $185,032 in total operating expenses. About Gainco, Inc. Gainco, Inc. sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. S.D. Tex. Case No. 21-21122 on April 30, 2021. In the petition signed by Theresa Nix, president, the Debtor disclosed up to $1 million in assets and up to $10 million in liabilities. Judge David R. Jones oversees the case. The Law Offices of William B. Kingman, P.C. is the Debtor's counsel. GAMESTOP CORP: S&P Rates $500MM Asset-Based Lending Facility 'BB-' ------------------------------------------------------------------ S&P Global Ratings assigned its 'BB-' issue-level rating and '1' recovery rating to GameStop Corp.'s $500 million asset-based lending (ABL) facility maturing in 2026. The '1' recovery rating indicates its expectation for very high (90%-100%; rounded estimate: 95%) recovery in the event of a payment default. The undrawn facility replaces the company's prior $420 million ABL, which was due next year. In addition to extending its maturity, S&P believes the new ABL facility will provide GameStop with greater liquidity and lower its overall borrowing costs. ISSUE RATINGS--RECOVERY ANALYSIS Key analytical factors -- S&P's hypothetical default scenario assumes the company's EBITDA declines significantly from its recent results due to an inability to execute it's reimage strategy along with a step-up in digital competition from video game platform providers and other competitors. -- S&P also assume significant store closures and a loss of market share on the simulated path to default. -- That said, S&P assumes GameStop would emerge from bankruptcy, thus it values the company on a going-concern basis by applying a 5x multiple--the same multiple we use for similar specialty retailers--to its projected emergence-level EBITDA. -- S&P believes the first-lien ABL facility claims would benefit from a first-lien on substantially all of the assets of the company and its subsidiary guarantors, along with the value it attributes to the company in our bankruptcy/emergence valuation scenario. Simulated default assumptions -- Simulated year of default: 2024 -- EBITDA at emergence: About $78 million -- Implied enterprise value (EV) multiple: 5x -- Estimated gross EV at emergence: About $388 million Simplified waterfall -- Valuation split (obligors/nonobligors/unpledged): 70%/30%/0% -- First-lien ABL secured credit facility claims: Approximately $293 million* --Recovery expectations: 90%-100% (rounded estimate: 95%) *Debt amount includes six months of prepetition interest. GIRARDI & KEESE: Edelson PC Could Get Dinged for Sitting on Concern ------------------------------------------------------------------- Lauraann Wood of Law360 reports that an Illinois federal judge signaled Thursday, Dec. 8, 2021, that Edelson PC could catch heat alongside former Girardi Keese attorneys Keith Griffin and David Lira for sitting on concerns that Thomas V. Girardi was misappropriating settlement funds meant for plane crash victims' families. During the second day of contempt proceedings over Griffin and Lira's suspected role in helping Girardi embezzle millions in plane crash settlement funds, U.S. District Judge Thomas Durkin said the Edelson firm seems to have contributed to the issue by bringing its nonpayment concerns to the court in December 2020 instead of at least that September 2021. About Girardi & Keese Girardi and Keese or Girardi & Keese was a Los Angeles-based law firm founded in 1965 by lawyers Thomas Girardi and Robert Keese. It served clients in California in a variety of legal areas. It was known for representing plaintiffs against major corporations. An involuntary Chapter 7 petition (Bankr. C.D. Cal. Case No. 20-21022) was filed in December 2020 against GIRARDI KEESE by alleged creditors Jill O'Callahan, Robert M. Keese, John Abassian, Erika Saldana, Virginia Antonio, and Kimberly Archie. The petitioners' attorneys: Andrew Goodman Goodman Law Offices, Apc Tel: 818-802-5044 E-mail: agoodman@andyglaw.com Elissa D. Miller, a member of the firm SulmeyerKupetz, has been appointed as Chapter 7 trustee for GIRARDI KEESE. The Chapter 7 trustee can be reached at: Elissa D. Miller 333 South Grand Ave., Suite 3400 Los Angeles, California 90071-1406 Telephone: (213) 626-2311 Facsimile: (213) 629-4520 E-mail: emiller@sulmeyerlaw.com An involuntary Chapter 7 petition was also filed against Thomas Vincent Girardi (Case No. 20-21020) on Dec. 18, 2020. The Chapter 7 trustee can be reached at: Jason M. Rund Email: trustee@srlawyers.com 840 Apollo Street, Suite 351 El Segundo, CA 90245 Telephone: (310) 640-1200 Facsimile: (310) 640-0200 GROWLIFE INC: Michael Fasci Quits as Chief Financial Officer ------------------------------------------------------------ Michael Fasci resigned as the chief financial officer, secretary and director of GrowLife, Inc., effective Nov. 30, 2021. Mr. Fasci had no disagreement with the company on any matter relating to its operations, policies or practices, as disclosed in a Form 8-K filed with the Securities and Exchange Commission. Effective Nov. 30, 2021, Joseph Barnes resigned from all positions including as president of the company's wholly owned subsidiary, GrowLife Hydroponics, Inc. Mr. Barnes had no disagreement with GrowLife on any matter relating to the company's operations, policies or practices. Appointments Effective Dec. 1, 2021, GrowLife, Inc.'s Board of Directors has appointed its current chief executive, Marco Hegyi, to act as interim chief financial officer while the company identifies a qualified replacement candidate. Additionally, Mr. Thom Kozik, a current member of the company's Board has been appointed to act as interim secretary effective Dec. 1, 2021. On Dec. 1, 2021, the Board appointed Mr. David Dohrmann as president of GrowLife, Inc. In connection with the appointment, Mr. Dohrmann will receive annual compensation of $120,000. Mr. Dohrmann, 55, has served as a general partner of Penche Partners, a San Francisco based venture capital firm since January 2020. Prior to Penche, he served as the chief executive officer of Gazillion Entertainment from August 2015 until December of 2018. From February 2013 to October 2016, Dohrmann was also a managing director at Roth Capital Partners, an investment bank, where he focused on Venture Capital investments. From September 2010 to January 2012, Dohrmann was the founder and chief executive officer of Playchemy Inc., a San Francisco based developer of online and mobile games. From 2005 to 2010, Mr. Dohrmann served as a partner and headed the digital media and entertainment practice at Security Research Associates, a San Francisco based investment banking firm focused on the emerging growth small & microcap Companies. From 2002 until 2005 he served as a partner and investment banker at Halpern Capital, an investment banking firm also focused on serving emerging growth companies in the small and micro cap arena. From 2000 to 2002 Mr. Dohrmann was vice president of Corporate Development for Sagent Inc., a Nasdaq traded company acquired by Group 1 Software in 2003. From 1992 to 1997 Mr. Dohrmann was vice president of Institutional Sales at the investment banking firm Donaldson Lufkin & Jenrette. Mr. Dohrmann received a Bachelor of Arts Degree from the University of Southern California in 1989. Mr. Dohrmann's public company experience and knowledge of investment banking, corporate development, institutional sales, venture capital, his focus and work with public small and microcap companies and as an operating executive will provide GrowLife with valuable perspective and guidance for corporate development initiatives as president of GrowLife, Inc. About GrowLife GrowLife, Inc. (PHOT)-- http://www.shopgrowlife.com-- aims to become the nation's largest cultivation service provider for cultivating organics, herbs and greens and plant-based medicines. GrowLife is headquartered in Kirkland, Washington and was founded in 2012. GrowLife reported a net loss of $6.38 million in 2020, a net loss of $7.37 million in 2019, and a net loss of $11.47 million in 2018. As of Sept. 30, 2021, the Company had $4.53 million in total assets, $9.49 million in total current liabilities, $696,093 in total long-term liabilities, and a total stockholders' deficit of $5.65 million. Walnut Creek, California-based BPM LLP, the Company's auditor since 2019, issued a "going concern" qualification in its report dated April 15, 2021, citing that the Company has sustained recurring losses from operations and has an accumulated deficit since inception. These factors raise substantial doubt about the Company's ability to continue as a going concern. HAWAIIAN VINTAGE: Seeks to Tap Wick Phillips as Bankruptcy Counsel ------------------------------------------------------------------ Hawaiian Vintage Chocolate Company, Inc. seeks approval from the U.S. Bankruptcy Court for the Northern District of Texas to employ Wick Phillips Gould & Martin, LLP as its bankruptcy counsel. The firm's services include: (a) advising the Debtor on the conduct of its Chapter 11 case; (b) attending meetings and negotiating with representatives of creditors and other parties-in-interest; (c) taking all necessary actions to protect and preserve the Debtor's estate; (d) preparing legal papers; (e) representing the Debtor in connection with obtaining post-petition financing; (f) advising the Debtor in connection with any potential sale of estate assets; (g) analyzing and, as appropriate, challenging the validity of liens against assets of the estate; (h) appearing before the bankruptcy court and any other court to represent the interests of the estate; (i) formulating, drafting and seeking confirmation of a Chapter 11 plan and all documents related thereto; and (j) all other legal services. The hourly rates of the firm's attorneys and staff are as follows: Jason M. Rudd, Partner $615 per hour Scott D. Lawrence, Associate $450 per hour Catherine A. Curtis, Associate $415 per hour Brenda Ramirez, Paralegal $175 per hour In addition, the firm will seek reimbursement for expenses incurred. Jason Rudd, Esq., a partner at Wick Phillips Gould & Martin, disclosed in a court filing that his firm is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. The firm can be reached through: Jason M. Rudd, Esq. Scott D. Lawrence, Esq. Catherine A. Curtis, Esq. Wick Phillips Gould & Martin, LLP 3131 McKinney Avenue, Suite 500 Dallas, TX 75204 Telephone: (214) 692-6200 Facsimile: (214) 692-6255 Email: jason.rudd@wickphillips.com scott.lawrence@wickphillips.com catherine.curtis@wickphillips.com About Hawaiian Vintage Chocolate Company Hawaiian Vintage Chocolate Company, Inc., an Addison, Texas-based company that offers chocolate and cocoa products, filed its voluntary petition for relief under Chapter 11 of the Bankruptcy Code (Bankr. N.D. Tex. Case No. 21-32112) on Nov. 30, 2021. In the petition signed by James Walsh, chief executive officer, the Debtor disclosed $100,000 to $500,000 in assets and $1 million to $10 million in liabilities. Jason M. Rudd, Esq., at Wick Phillips Gould & Martin, LLP serves as the Debtor's counsel. HIGHTOWER HOLDING: Moody's Affirms B3 CFR, Outlook Remains Stable ----------------------------------------------------------------- Moody's Investors Service affirmed Hightower Holding, LLC's B3 corporate family rating, B2 senior secured credit bank facility rating, and Caa2 senior unsecured notes rating. The rating action follows Hightower's proposed $190 add-on to its existing term loan B due April 2028. Hightower's outlook remains stable. Affirmations: Issuer: Hightower Holding, LLC Corporate Family Rating, B3 Affirmed Senior Secured Bank Credit Facility, B2 Affirmed Senior Unsecured Notes, Caa2 Affirmed Outlook Actions: Issuer: Hightower Holding, LLC Outlook, Remains Stable RATINGS RATIONALE Moody's said that Hightower's planned $190 million add-on to its existing first lien term loan will be used (after expenses) to fund acquisitions of RIA/wealth management firms, purchases of additional stakes in already owned businesses and for cash retention. Moody's said the ratings' affirmation reflects Hightower's sustained growth in client assets, with billable assets under management (AUM) reaching $96 billion at September 30, 2021 compared to $70 billion and $49 billion at the end of 2020 and 2019, respectively. This has established a strong revenue growth trajectory, offset by elevated debt leverage which weakens its financial profile. The ratings' affirmation also reflects the credit benefits associated with Hightower's stable and recurring revenue model, tempered by partial reliance on the performance of broad financial markets. On a proforma basis that includes the proposed debt transaction, closed acquisitions and future acquisitions currently under letters of intent (LOIs), Moody's expects Hightower's Debt/EBITDA (Moody's adjusted) leverage ratio to be 7.1x at year-end 2022 assuming no further debt increases. Moody's measure of debt also includes the debt-like treatment of Hightower's cash portion of contingent earnout liabilities and lease liabilities. Moody's said Hightower has grown through the continued execution of a successful strategy of acquiring Registered Investment Advisors (RIAs). Moody's views the structure of such deals to be credit positive because of the alignment of interests between Hightower and the financial advisor partners. However, Hightower's debt increases have been rapid in order to execute and fund this strategy. The $190 million planned debt increase has arisen shortly after the firm's August 2021 $265 million debt raise ($150 million of which was a delayed draw until November 2021) and April 2021 $900 million debt raise and will result in a total debt balance of almost $1.4 billion. Moody's believe that the firm is capable of reducing leverage by the end of 2022, but view this as unlikely, and that leverage will remain near its current levels. Hightower's growth strategy is dependent on periodic acquisitions which may necessitate incremental increases in its debt balance. Due to the company's solid track record of identifying and integrating profitable targets, Moody's believes that maintenance of a higher leverage level for this purpose is consistent with the B3 rating level and stable outlook. So far, Hightower's acquisitions have contributed favorably to profitability and cash flows that will help service its debt. Hightower plans to deploy most of the net proceeds of the $190 million term loan add-on into acquisitions, and it expects AUM to reach $106 billion following these acquisitions. Hightower's stable outlook reflects Moody's expectation that the firm's strong growth trajectory, fueled by M&A transactions and solid organic growth, helps offset the firm's very high debt leverage. The affirmation of Hightower's B2-rated senior secured first lien term loan, delayed draw term loan and revolving credit facility is based on the application of Moody's Loss Given Default for Speculative-Grade Companies methodology and model, and is reflective of these instruments' priority ranking in Hightower's capital structure, ahead of Hightower's Caa2-rated $300 million in senior unsecured notes. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS Factors that could lead to an upgrade include: An improvement in profitability and debt reduction that results in Moody's-adjusted debt leverage being below 6.5x on a sustained basis. Increasing scale and evidence of strong organic revenue growth through asset gathering at existing partners resulting in stronger profitability while maintaining positive operating leverage Factors that could lead to a downgrade include: Maintaining debt leverage above 8.0x on a sustained basis because of increasing debt to fund acquisitions that outpaces the earnings benefit from these deals Revenue deterioration due to a slowdown in organic growth, rising competition and fee compression, underperformance or declines in broad financial markets resulting in lower levels of client assets Deterioration in the firm's free cash flow generation and liquidity as a result of weaker performance or integration issues following an acquisition transaction Deterioration in effective interest coverage through a reduction in cash flow and EBITDA combined with adverse changes in working capital position The principal methodology used in these ratings was Securities Industry Service Providers Methodology published in November 2019. INTELSAT SA: Creditors Float $1.8-Billion Note Remedy ----------------------------------------------------- Jeff Montgomery of Law360 reports that an Intelsat SA creditor quizzed a company financial adviser Thursday, December 9, 2021, on whether the bankrupt venture had taken a new look at reinstating some $1.8 billion in first lien notes to save cash and claims in its nearly $15 billion Chapter 11 debt restructuring case, pointing to recent success with the tactic in another proceeding. The questioning came during the fourth day of a plan confirmation hearing for the debtor, one of the world's largest satellite operators, in the U.S. Bankruptcy Court for the Eastern District of Virginia. C. Lee Wilson of Jones Day, counsel to the Jackson Crossover Ad Hoc Group. About Intelsat S.A. Intelsat S.A. -- http://www.intelsat.com/-- is a publicly held operator of satellite services businesses, which provides a diverse array of communications services to a wide variety of clients, including media companies, telecommunication operators, internet service providers, and data networking service providers. The Company is also a provider of commercial satellite communication services to the U.S. government and other select military organizations and their contractors. The Company's administrative headquarters are in McLean, Virginia, and the Company has extensive operations spanning across the United States, Europe, South America, Africa, the Middle East, and Asia. Intelsat S.A. and its debtor-affiliates concurrently filed voluntary petitions for relief under Chapter 11 of the Bankruptcy Code (Bankr. E.D. Va. Lead Case No. 20-32299) on May 13, 2020. The petitions were signed by David Tolley, executive vice president, chief financial officer, and co-chief restructuring officer. At the time of the filing, the Debtors disclosed total assets of $11,651,558,000 and total liabilities of $16,805,844,000 as of April 1, 2020. Judge Keith L. Phillips oversees the cases. The Debtors tapped Kirkland & Ellis LLP and Kutak Rock LLP as legal counsel; Alvarez & Marsal North America, LLC as restructuring advisor; PJT Partners LP as financial advisor & investment banker; Deloitte LLP as tax advisor; and Deloitte Financial Advisory Services LLP as fresh start accounting services provider. Stretto is the claims and noticing agent. The Office of the U.S. Trustee appointed a committee of unsecured creditors on May 27, 2020. The committee tapped Milbank LLP and Hunton Andrews Kurth LLP as legal counsel; FTI Consulting, Inc., as financial advisor; Moelis & Company LLC as investment banker; Bonn Steichen & Partners as special counsel; and Prime Clerk LLC as information agent. IQ FORMULATIONS: Unsecureds to Get 15% Under Plan ------------------------------------------------- IQ Formulations, LLC, submitted a Plan and a Disclosure Statement. With respect to Class 3 General Unsecured, Nutritional Sales and Customer Service LLC will cause a total payment of $25,000, ("Initial Distribution"), to be shared pro rata, by those creditors holding Allowed General Unsecured Claims of the Class 3. Thereafter, the Debtor will pay to the holders of Allowed General Unsecured Claims, a total combined distribution representing 15% of each holder's Allowed General Unsecured Claim, such distribution to be paid on a monthly basis, commencing with the first full month after the Order Confirming the Plan becomes final and non-appealable. Based on a review of the Debtor's bankruptcy schedules, along with certain orders of the Bankruptcy Court striking and disallowing certain claims, there exists approximately $727,820.92 in claims in this class. The source of funding for the distribution will be derived from funds of the Debtor, except for the Initial Distribution, which will be funded by Nutritional. The Debtor contemplates that there may be more claim objections filed, which may reduce the total amount of the claims of this class. This class does not include the scheduled claim held by JBJE Properties, in the amount of $454,660.00, ("JBJE Claim"). JBJE Properties has agreed to waive payment on the JBJE claim, if and only if, the Plan with the Debtor as the proponent is confirmed by the Bankruptcy Court. Class 3 is impaired. The Plan contemplates that funding the distributions set forth in the Plan will be derived from the operations of the Debtor's business, as well as from Nutritional and JBJE Vehicles. Attorneys for the Debtor: Brian S. Behar, Esq. BEHAR, GUTT & GLAZER, P.A. DCOTA, Suite A-350 1855 Griffin Road Ft. Lauderdale, Florida 33004 Telephone: (305) 931-3771 Fax: (305) 931-3774 A copy of the Disclosure Statement dated Dec. 1, 2021, is available at https://bit.ly/3DkVD9e from PacerMonitor.com. About IQ Formulations IQ Formulations, LLC is a Tamarac, Fla.-based company that operates in the dairy product manufacturing industry. It conducts business under the name Metabolic Nutrition. IQ Formulations filed its voluntary petition for relief under Chapter 11 of the Bankruptcy Code (Bankr. S.D. Fla. Case No. 21-15922) on June 18, 2021. Jay Cohen, chief executive officer and president, signed the petition. At the time of the filing, the Debtor disclosed total assets of up to $50,000 and total liabilities of up to $10 million. Judge Scott M. Grossman presides over the case. Behar, Gutt & Glazer, P.A. serves as the Debtor's legal counsel. K&L TRAILER: Unsecured Creditors to Recover 5% in Trustee' Plan --------------------------------------------------------------- Gary M. Murphey, Chapter 11 Trustee for Debtor K&L Trailer Leasing, Inc., filed with the U.S. Bankruptcy Court for the Eastern District of Tennessee a Disclosure Statement describing Plan of Liquidation dated Dec. 7, 2021. The Debtor had been in the business of leasing big rig trailers since 1994. Its business was located in conjunction with K&L Trailer Sales and Leasing, Inc. at 7828 Rutledge Pike in Knoxville, TN. It was founded and owned by Marvin and Linda Fellhoelter. The Debtor filed a Chapter 11 petition on June 29, 2020, along with on other affiliate, K&L Trailer Sales and Leasing Inc. The moving force for the filing of these cases was the setoff of certain accounts conducted on or about June 11, 2020 by SimplyBank, thus eliminating most of the Debtor's working capital needed to operate. By Order entered October 2, 2020, the Court approved procedures for the sale of the Debtor's trailers free and clear of liens at an auction held on October 20, 2020. JPM Financial, LLC ("JPM Financial") was the highest bidder and this sale was closed as of October 30, 2020. Upon the closing of the sale, the Debtor ceased to operate as a going concern and funds totaling $2,969,138.00 as paid to the Trustee. This sale amount was reduced to $2,781,288.00 when First Farmers elected to be paid its secured claim over the period of applicable leases that were subject to its security interest. The issue of whether the Trustee would be allowed to surcharged the proceeds in an amount equal to 5%of the sale for each trailer was reserved by order entered October 23, 2020. A motion seeking this surcharge was filed by the Trustee on October 29, 2020, which motion has been continued pending approval of a plan of liquidation. The total amount of the Debtor's unsecured debt will not be determined until the Escrow Adversary claims are resolved. The secured claims filed in this case total $6,085,622.21 in secured claims and $5,820,727.30 in unsecured claims. The secured claims are overstated because the total escrow amount held by the Trustee to pay these claims if $2,093,295.26, thus leaving a deficiency in the amount of $3,992,326.95. Consequently, once the Escrow Adversaries are resolved, the claims will be amended to reflect the satisfaction of the Secured Claim and allowance of the remaining Unsecured Claim. Other than the deficiency claims owed to secured creditors, the claims totaling $76,716.70 are the filed unsecured claims by trade creditors that are still subject to review and challenge by the Trustee. The Trustee expects that most of these claims will be allowed. The Trustee asserts that the Chapter 11 process has enabled the Trustee to sell assets as a going concern and thus maximize the amount to be collected and minimize the expenses to the estate. This knowledge of the operations has also enabled the Trustee to resolve disputes and pursue preference actions more efficiently. Accordingly, the Trustee asserts that this Plan is in the best interest of creditors and the equity holders. As of November 30, 2021, the Trustee estimates that he will have approximately $480,000 for payment of Unsecured Claims and $2,093,295.26 in escrow that is being held for the payment of Secured Claims with liens on trailers sold to JPM Financial. These escrow amounts will be paid upon the resolution of the Escrow Adversaries. The combined total of non-insider unsecured claims after the resolution of the Escrow Adversaries is approximately $9,889,770.95. The allowance of these unsecured claims remain subject to review and challenge by the Trustee, but based on these amounts, the Pro Rata Distribution under the Plan would be approximately 5% on Allowed Claims in Class 9 Unsecured Claims. Upon Confirmation, the Trustee will retain all any Excluded Assets as defined in the Asset Purchase Agreement with JPM Financial. In general, this includes tax credits, cash equivalents, certain books and records of the Debtor that have not otherwise been destroyed, assets removed from the sale by a Secured Creditor, and Causes of Action that the estate may holder under state law or the Bankruptcy Code. A full-text copy of the Disclosure Statement dated Dec. 7, 2021, is available at https://bit.ly/3ICiFfI from PacerMonitor.com at no charge. Attorneys for Trustee: William L. Norton, III BRADLEY 1600 Division St., Suite 700 Nashville, Tennessee 37203 Tel: (615) 252-2397 E-mail: bnorton@bradley.com About K & L Trailer Leasing K&L Trailer Leasing, Inc., a company based in Knoxville, Tenn., filed a Chapter 11 petition (Bankr. E.D. Tenn. Case No. 20-31620) on June 29, 2020. At the time of the filing, Debtor was estimated to have $10 million to $50 million in both assets and liabilities. Judge Suzanne H. Bauknight oversees the case. Gentry Tipton & McLemore, P.C., is the Debtor's bankruptcy counsel. Gary M. Murphey was appointed as Debtor's Chapter 11 trustee. He is represented by Bradley Arant Boult Cummings. KINTARA THERAPEUTICS: Gets Noncompliance Notice from Nasdaq ----------------------------------------------------------- Kintara Therapeutics, Inc. has received a written notice from the Listing Qualifications Department of The Nasdaq Stock Market indicating that the company is not in compliance with the $1.00 minimum bid price requirement set forth in Nasdaq Listing Rule 5550(a)(2) for continued listing on The Nasdaq Capital Market. The notice does not result in the immediate delisting of the company's common stock from The Nasdaq Capital Market. The Nasdaq Listing Rules require listed securities to maintain a minimum bid price of $1.00 per share and, based upon the closing bid price of Kintara's common stock for the last 30 consecutive business days, the company no longer meets this requirement. The notice indicated that the company will be provided 180 calendar days in which to regain compliance. If at any time during this period the bid price of Kintara's common stock closes at or above $1.00 per share for a minimum of 10 consecutive business days, the Nasdaq staff will provide the company with a written confirmation of compliance and the matter will be closed. Alternatively, if Kintara fails to regain compliance with Rule 5550(a)(2) prior to the expiration of the initial 180 calendar day period, the company may be eligible for an additional 180 calendar day compliance period, provided (i) it meets the continued listing requirement for market value of publicly held shares and all other applicable requirements for initial listing on The Nasdaq Capital Market (except for the bid price requirement) and (ii) it provides written notice to Nasdaq of its intention to cure this deficiency during the second compliance period by effecting a reverse stock split, if necessary. In the event Kintara does not regain compliance with Rule 5550(a)(2) prior to the expiration of the initial 180 calendar day period, and if it appears to the staff that the company will not be able to cure the deficiency, or if the company is not otherwise eligible, the staff will provide the company with written notification that its securities are subject to delisting from The Nasdaq Capital Market. At that time, Kintara may appeal the delisting determination to a Hearings Panel. Kintara intends to monitor the closing bid price of its common stock and is considering its options to regain compliance with the bid price requirement. The company's receipt of the notice does not affect its business, operations or reporting requirements with the Securities and Exchange Commission. About Kintara Located in San Diego, California, Kintara (formerly DelMar Pharmaceuticals) is dedicated to the development of novel cancer therapies for patients with unmet medical needs. Kintara is developing two late-stage, Phase 3-ready therapeutics for clear unmet medical needs with reduced risk development programs. The two programs are VAL-083 for GBM and REM-001 for CMBC. Kintara reported a net loss of $38.30 million for the year ended June 30, 2021, compared to a net loss of $9.13 million for the year ended June 30, 2020. As of Sept. 30, 2021, the Company had $22.34 million in total assets, $3.18 million in total liabilities, and $19.16 million in total stockholders' equity. San Francisco, CA-based Marcum LLP, the Company's auditor since 2019, issued a "going concern" qualification in its report dated Sept. 28, 2021, citing that the Company has incurred significant losses and needs to raise additional funds to meet its obligations and sustain its operations. These conditions raise substantial doubt about the Company's ability to continue as a going concern. L&L WINGS: Wins Collateral Access Thru Feb 2022 ----------------------------------------------- The U.S. Bankruptcy Court for the Southern District of New York has authorized L&L Wings, Inc. to use the cash collateral of TD Bank, N.A. on an interim basis in accordance with the budget, with a 15% variance and provide adequate protection. The Debtor does not have sufficient available sources of working capital and financing to carry on the operations of its business without the use of cash collateral. The Debtor's ability to pay employees and operating costs is essential to the Debtor's continued viability; and the Debtor's need for use of cash collateral is immediate. The Debtor is party to a Loan Agreement dated as of May 2013 with TD Bank. In connection with the Loan Agreement, the Debtor delivered an Amended and Restated RLOC B Note dated May 22, 2020, in the principal amount of $2,750,000 in favor of TD Bank. The Debtor's obligations under the Loan Agreement and Line of Credit Note are secured pursuant to a Security Agreement dated May 22, 2013, between the Debtor and TD Bank. As of the Petition Date, there was no outstanding obligation under the Line of Credit Note. In addition to the Line of Credit Loan Documents, the Debtor guaranteed certain obligations of several non-debtor affiliates which guaranties are secured by, among other things, the Debtor's deposit accounts and other property in possession of TD. The Debtor admits and acknowledges that as of September 3, 2021, the Guaranty Obligations totaled not less than $10,621,026. Further, as of the Petition Date, the Debtor is obligated to TD under a Payroll Protection Loan in the amount of approximately $2,600,800. The PPP Loan Obligation is unsecured. Unless extended further with the written consent of TD Bank, the authorization granted to the Debtor to use cash collateral under the Order will terminate immediately upon the earliest to occur of: (i) the date that is the earlier to occur of (a) February 1, 2022 and (b) the effective date under any Chapter 11 plan proposed by the Debtor and confirmed by the Court in the Bankruptcy Case; (ii) the entry of an order dismissing the Bankruptcy Case, (iii) the entry of an order converting the Bankruptcy Case to a case under Chapter 7; (iv) the entry of an order appointing a trustee or an examiner with expanded powers with respect to the Debtor's estate; (v) the entry of an order reversing, vacating, or otherwise amending, supplementing, or modifying this Order, (vi) the entry of an order granting relief from the automatic stay to any creditor (other than TD Bank) holding or asserting a lien in the TD Prepetition Collateral; (vii) the occurrence of an uncured monetary default under any of the affiliate loans comprising the Guaranty Obligations, provided there is less than a $500,000 equity cushion in the subject property; or (viii) the Debtor's breach or failure to comply with any term or provision of the Order. As adequate protection for the Debtor's use of cash collateral, TD Bank is granted valid, binding, enforceable, and automatically perfected post-petition liens that are co-extensive with the TD Prepetition Liens of security agreements, control agreements, pledge agreements, financing statements, or other similar documents, on all personal property, whether now owned or hereafter acquired or existing and wherever located, of the Debtor and the Debtor's "estate." The Replacement Liens are being given only to the extent of any diminution in value of the TD Prepetition Collateral or cash collateral. The Replacement Liens will be effective and perfected as of the date of the entry of the Order and without the necessity of the execution by the Debtor of any security agreement, pledge agreement, financing statement or any other documents and will have the same validity, priority, and enforceability as TD Bank's liens and security interests in and on the TD Prepetition Collateral on the Petition Date. To the extent the Replacement Liens granted to TD Bank in the Order do not provide TD Bank with adequate protection of its interests in the cash collateral, TD Bank will, pursuant to Bankruptcy Section 507(b), have an allowed administrative expense claim in the Bankruptcy Case ahead of and senior to any and all other administrative expense claims solely to the extent of any postpetition Diminution in Value. The Superpriority Claim is not and will not be junior to any claims. A final hearing on the Motion to consider entry of a Final Order will be held January 27, 2022, at 10 a.m. EST via zoom teleconference. A copy of the order and the Debtor's 18-week budget through the week ending April 3, 2022 is available at https://bit.ly/31Kd7zi from PacerMonitor.com. The Debtor projects $10,383,604 in total cash receipts and $12,282,477 in total operating payments for the period. About L&L Wings L&L Wings, Inc. is a New York-based retailer of beachwear and beach sundry items. It operates 26 stores throughout North Carolina, South Carolina, Florida, Texas and California. L&L Wings sought protection under Chapter 11 of the Bankruptcy Code (Bankr. S.D.N.Y. Case No. 21-10795) on April 24, 2021. In the petition signed by Ariel Levy, president, the Debtor disclosed up to $50 million in assets and up to $100 million in liabilities. Judge Shelley C. Chapman oversees the case. The Debtor tapped Davidoff Hutcher & Citron LLP as legal counsel, WebsterRogers LLP as accountant, and CFGI as financial advisor. A&G Realty Partners, LLC is its real estate consultant and advisor. On May 7, 2021, the U.S. Trustee for Region 2 appointed an official committee of unsecured creditors. Otterbourg PC and Thompson Hine, LLP serve as the committee's bankruptcy counsel and special counsel, respectively. LATAM AIRLINES: Reaches Plane Lease Claims Settlement With Sajama ----------------------------------------------------------------- Daniel Gill of Bloomberg Law reports that LATAM Airlines Group S.A., the Latin American carrier currently undergoing bankruptcy in the U.S., has reached a settlement with an investment firm that bought LATAM creditors' claims related to leased aircraft. Under the settlement, Sajama Investments LLC would hold a single $695 million claim in LATAM’s bankruptcy, according to a filing Wednesday in the U.S. Bankruptcy Court for the Southern District of New York. Sajama had argued that it holds claims worth $6.5 billion against multiple co-debtor LATAM affiliates. The claims originally derive from LATAM's 17 leased aircraft and their engines. LATAM rejected these leases in its bankruptcy. About LATAM Airlines Group LATAM Airlines Group S.A. -- http://www.latam.com/-- is a pan-Latin American airline holding company involved in the transportation of passengers and cargo and operates as one unified business enterprise. It is the largest passenger airline in South America. Before the onset of the COVID-19 pandemic, LATAM offered passenger transport services to 145 different destinations in 26 countries, including domestic flights in Argentina, Brazil, Chile, Colombia, Ecuador and Peru, and international services within Latin America as well as to Europe, the United States, the Caribbean, Oceania, Asia and Africa. LATAM and its 28 affiliates sought Chapter 11 protection (Bankr. S.D.N.Y. Lead Case No. 20-11254) on May 25, 2020. Affiliates in Chile, Peru, Colombia, Ecuador and the United States are part of the Chapter 11 filing. The Debtors disclosed $21,087,806,000 in total assets and $17,958,629,000 in total liabilities as of Dec. 31, 2019. The Hon. James L. Garrity, Jr., is the case judge. The Debtors tapped Cleary Gottlieb Steen & Hamilton LLP as bankruptcy counsel, FTI Consulting as restructuring advisor, Lee Brock Camargo Advogados as local Brazilian litigation counsel, and Togut, Segal & Segal LLP and Claro & Cia in Chile as special counsel. The Boston Consulting Group, Inc. and The Boston Consulting Group UK LLP serve as the Debtors' strategic advisors. Prime Clerk LLC is the claims agent. The official committee of unsecured creditors formed in the case tapped Dechert LLP as its bankruptcy counsel, Klestadt Winters Jureller Southard & Stevens, LLP as conflicts counsel, UBS Securities LLC as investment banker, and Conway MacKenzie, LLC as financial advisor. Ferro Castro Neves Daltro & Gomide Advogados is the committee's Brazilian counsel. The Ad Hoc Group of LATAM Bondholders tapped White & Case LLP as counsel. Glenn Agre Bergman & Fuentes, LLP, led by managing partner Andrew Glenn and partner Shai Schmidt, has been retained as counsel to the Ad Hoc Committee of Shareholders. LIBERTY POWER: $25MM DIP Loan Maturity Extended Thru Feb. 28 ------------------------------------------------------------ The U.S. Bankruptcy Court for the Southern District of Florida, Fort Lauderdale Division, has entered an order granting the motion filed by Liberty Power Holdings, LLC, LPT, LLC and affiliates which extends the maturity date of the Final DIP Financing Order and authorizing the Debtors to continue using cash collateral and obtain senior secured post-petition financing. The Maturity Date will be extended and the Debtors will be authorized to use cash collateral and obtain up to $25,000,000 in secured post-petition financing until the earlier of (a) February 28, 2022, or (b) the effective date of a Chapter 11 Plan; provided, however, that upon request of the Debtors made prior to the Planned Term Expiration Date, and subject to written consent of the Debtors and at DIP Lender's sole discretion, the Planned Term Expiration Date may be further extended to March 31, 2022. The Debtors need to use cash collateral to preserve their assets, including their valuable contracts, and pay their ordinary and necessary operating expenses, including to their vendors and employees. The Debtors also require continued access to the DIP Financing to continue to support their retail energy business while they consummate some transactions. As adequate protection for the Debtors' use of cash collateral, Boston Energy Trading and Marketing, LLC (BETM) is granted a security interest in and lien upon all the personal property of the Debtors, whether owned or existing as of the Petition Date or thereafter acquired or arising. The Replacement Liens will be junior and subordinate to the DIP Liens and the Carve Out. The Replacement Liens will be deemed attached, perfected, and enforceable against the Debtors and all other persons, including without limitation, any subsequently appointed trustee for the Debtors, without the filing of any financing statements or other compliance with non-bankruptcy law. These events constitute an "Event of Default:" a. The granting of relief from the automatic stay to foreclose a lien or the taking of control or possession of, or the exercise of any right of setoff with respect to, any Post-Petition Collateral; b. The entry by the Bankruptcy Court or another court of competent jurisdiction of an order disallowing any of the DIP Obligations or determining that any provision of the DIP Documents is not enforceable according to its terms; c. The entry by the Bankruptcy Court of an order determining that the DIP Liens are invalid or do not have the priority and extent provided in the DIP Documents, the Interim Order, the Final DIP Financing Order or this Order; d. The expiration or termination of the Debtors' exclusive right to file and solicit acceptances of a plan of reorganization under section 1121 of the Bankruptcy Code without the solicitation and filing of acceptances thereof; and e. The occurrence of an Event of Default under the DIP Documents (and the expiration of any period of cure, grace or notice, if any, set forth in such agreement relating to such default). The Replacement Liens and DIP Liens granted to the DIP Lender will be junior and subordinate to (a) all fees required to paid by the Debtors to the Office of the United States Trustee pursuant to 28 U.S.C. section 1930(a), (b) all fees due the Clerk of the Court, (c) with respect to the Debtors' professionals, the allowed fees and disbursements as may be awarded to such professionals from time to time pursuant to Bankruptcy Code section 330, in the aggregate amount set forth in the Budget and only to the extent such fees were incurred prior to an Event of Default but not yet paid, (d) up to $100,000 in fees and expenses incurred by the Debtor's professionals following an Event of Default, and (e) amounts to pay post-petition "trust fund" obligations. A copy of the order and the Debtor's budget for the period from December 3, 2021 to March 4, 2022 is available at https://bit.ly/3DBM1HD from PacerMonitor.com. The budget provided for total disbursements, on a weekly basis, as follows: $14,421,000 for the week ending December 3, 2021; $732,000 for the week ending December 10, 2021; $920,000 for the week ending December 17, 2021; $1,180,000 for the week ending December 24, 2021; $10,706,000 for the week ending December 31, 2021; $459,000 for the week ending January 7, 2022; $1,103,000 for the week ending January 14, 2022; $639,000 for the week ending January 21, 2022; $615,000 for the week ending January 28, 2022; $2,684,000 for the week ending February 4, 2022; $510,000 for the week ending February 11, 2022; $289,000 for the week ending February 18, 2022; $602,000 for the week ending February 25, 2022; and $3,516,000 for the week ending March 4, 2022. About Liberty Power Established in 2001 and headquartered in Fort Lauderdale, Florida, Liberty Power is one of the largest and longest-tenured owner-operated retail electricity provider in the United States. Liberty Power provides large and small businesses, government agencies and residential customers with competitively priced electricity, sustainability solutions and exceptional customer service. Liberty Power filed a voluntary petition for Chapter 11 reorganization (Bankr. S.D. Fla. Case No. 21-13797) on April 20, 2021. The Debtor estimated $50 million to $100 million in assets and at least $100 million in liabilities as of the bankruptcy filing. Judge Scott M. Grossman oversees the case. Genovese Joblove & Battista, P.A., is the Debtor's counsel. Boston Energy Trading and Marketing, LLC, as DIP Lender, is represented by Eversheds Sutherland (US) LLP LIFEPOINT HEALTH: S&P Affirms 'B' ICR on Kindred Transaction ------------------------------------------------------------ S&P Global Ratings affirmed the 'B' issuer credit rating, 'B' first-lien senior secured rating, and 'CCC+' senior unsecured rating on LifePoint Health Inc. LifePoint Health Inc. is acquiring Kindred Healthcare's Rehabilitation and Behavioral businesses. At the same time, it is divesting 18 hospitals in 16 markets to newly formed Knight Health Holdings LLC (B/Stable/--), which also will consist of Kindred's existing long-term acute care business. S&P said, "We corrected the issue-level rating on LifePoint's $800 million asset-based lending (ABL) facility by lowering it to 'BB-', two notches above the company's 'B' issuer credit rating, from 'BB'. Due to an error, we did not revise the issue-level rating in connection with our prior revision of the facility's recovery rating to '1' from '1+'. Concurrently we are withdrawing the rating on the ABL facility at the company's request." LifePoint's transaction with Kindred is positive for credit quality of its overall credit profile. LifePoint's sale of 18 hospitals represents about $1.2 billion, or about 15% of its current revenues with an estimated margin below 10%. They are swapping that revenue for about $900 million of revenue that is generated by Kindred's inpatient rehabilitation, contract rehabilitation, and behavioral businesses. These businesses generate a higher margin, which S&P estimates in the mid-high teens after considering the distributions to noncontrolling interests. The benefit to Lifepoint is that it can better focus on its more preferred markets, gain some diversity with businesses that have generally good prospects, and will grow faster than the base hospital business. Over the next several years, these businesses will become an increasing percentage of total revenues. S&P said, "Currently elevated acuity and favorable payor mix trend is a large tailwind, but we expect these trends to shift closer to historical trends and reimbursement constraints to again become a headwind. LifePoint, like its peers, is benefitting from favorable payor mix shifts as the patient volume of more lucrative privately insured patients are recovering faster than Medicare and Medicaid patients, and as overall acuity remains very elevated. This unique situation has boosted revenues as patient volumes have been recovering and average revenue per admission is significantly higher than pre-pandemic levels. It has enabled several hospital companies, including LifePoint, to overcome expense challenges such as higher labor expenses and still produce strong financial results. We expect that margins will decline from the currently elevated level, particularly if labor costs remain elevated, as payor mix and acuity start to normalize causing revenue per adjusted admission to possibly decline from currently very elevated levels." LifePoint may have more upside for patient volume recovery than its peers. Patient volume, as defined by equivalent admissions, for its acute care hospital business has been recovering, but remains below pre-COVID levels. This has been a relatively common theme with the small markets that define LifePoint's typical market. Because S&Pe believes LifePoint will ultimately recover closer to its pre-pandemic level, it thinks it may have further recovery potential than its larger market peer hospital companies that have experienced a faster recovery. There is some risk and uncertainty in the health care landscape. The pandemic has been an unprecedented event for the health care industry. While for-profit health care systems, including LifePoint, appear to be recovering and prospects are encouraging, there is significant risk and uncertainty beyond this year. S&P believes the strong recovery may not be based on underlying factors that will ultimately define the "new normal". Aside from the skewed underlying factors that may be skewing recent performance, S&P believes the pandemic could accelerate trends that were already ongoing before its onset and could become a greater threat to hospitals. These would include a faster migration to value-based care, which is intended to keep people away from high cost of hospital care. Moreover, greater uptake of technologies such as telemedicine and at-home medical devices could have a more significant impact on medical practice patterns and future demand for hospital services. S&P said, "The positive outlook reflects our belief that LifePoint's progress in improving its operating performance, and addition of the Kindred business provide the potential that as the pandemic subsides, the company can improve its cash flow and prevent leverage from increasing as the benefit of currently elevated acuity wanes such that its credit profile improves to a level consistent with a 'B+' rating. "We could return the outlook on LifePoint to stable if the company is unable to achieve and sustain the operating and cash flow improvements we include in our base case. This could occur if patient mix and volume trends are unfavorable, if the Kindred transaction does not achieve the expected benefits, or if there are unfavorable reimbursement or regulatory events. We could also return our outlook to stable if the company adopts more aggressive financial policies than we currently expect such as using cash flow or debt issuance to finance shareholder-friendly activity. "We could raise our ratings on LifePoint if we believe the company will meet the base case expectation of discretionary cash flow to debt in excess of 2.5%, with an expectation it will sustain leverage below 7x." LTL MANAGEMENT: Letters Exchanged on Excessive Discovery Requests ----------------------------------------------------------------- Harris Martin reports that parties involved in the LTL Management bankruptcy proceedings have exchanged letters regarding the deposition of the Debtor's president, with the Talc Claimants' Committee fighting back against claims that it has submitted "excessive discovery requests." In a response sent to Hon. Michael B. Kaplan of the U.S. Bankruptcy Court for the District of New Jersey on Dec. 7, 2021 LTL Management maintained that it has not refused to make Michelle W. Goodridge, former president of Old Johnson & Johnson Consumer Inc., and current president of New Johnson & Johnson Consumer Inc., available for deposition. About LTL Management LTL Management, LLC, is a subsidiary of Johnson & Johnson (J&J), which was formed to manage and defend thousands of talc-related claims and oversee the operations of Royalty A&M. Royalty A&M owns a portfolio of royalty revenue streams, including royalty revenue streams based on third-party sales of LACTAID, MYLANTA/MYLICON and ROGAINE products. LTL Management filed a petition for Chapter 11 protection (Bankr. W.D.N.C. Case No. 21-30589) on Oct. 14, 2021. The case was transferred to New Jersey (Bankr. D. N.J. Case No. 21-30589) on Nov. 16, 2021. The Hon. Michael B. Kaplan is the case judge. At the time of the filing, the Debtor was estimated to have $1 billion to $10 billion in both assets and liabilities. The Debtor tapped Jones Day and Rayburn Cooper & Durham, P.A. as bankruptcy counsel; King & Spalding, LLP and Shook, Hardy & Bacon LLP as special counsel; McCarter & English, LLP as litigation consultant; Bates White, LLC as financial consultant; and AlixPartners, LLP as restructuring advisor. Epiq Corporate Restructuring, LLC is the claims agent. U.S. Bankruptcy Administrator Shelley Abel formed an official committee of talc claimants in the Debtor's Chapter 11 case. The committee tapped Bailey & Glasser, LLP, Otterbourg, P.C. and Brown Rudnick, LLP as bankruptcy counsel. Massey & Gail, LLP and Parkins Lee & Rubio, LLP serve as the committee's special counsel. About Johnson & Johnson Johnson & Johnson is an American multinational corporation founded in 1886 that develops medical devices, pharmaceuticals, and consumer packaged goods. It is the world's largest and most broadly based healthcare company. Johnson & Johnson is headquartered in New Brunswick, New Jersey, the consumer division being located in Skillman, New Jersey. The corporation includes some 250 subsidiary companies with operations in 60 countries and products sold in over 175 countries. The corporation had worldwide sales of $82.6 billion in 2020. LTL MANAGEMENT: US Trustee Wants Jones Day Out as Ch.11 Counsel --------------------------------------------------------------- Jeannie O'Sullivan of Law360 reports that the U.S. Trustee's Office has told the New Jersey bankruptcy court that Jones Day can't serve as Chapter 11 counsel to a Johnson & Johnson talc liability spinoff because the firm's current and past representation of the personal care products giant and certain affiliates creates a conflict of interest. In an objection filed Wednesday, Dec. 8, 2021, to LTL Management LLC's retention application, the U. S. trustee detailed the complex divisional merger that dissolved the "old" J&J Consumer Inc., created LTL to shoulder massive tort liability from talcum powder users, and gave rise to a funding agreement obligating J&J to cover expenses. About LTL Management LTL Management, LLC, is a subsidiary of Johnson & Johnson (J&J), which was formed to manage and defend thousands of talc-related claims and oversee the operations of Royalty A&M. Royalty A&M owns a portfolio of royalty revenue streams, including royalty revenue streams based on third-party sales of LACTAID, MYLANTA/MYLICON and ROGAINE products. LTL Management filed a petition for Chapter 11 protection (Bankr. W.D.N.C. Case No. 21-30589) on Oct. 14, 2021. The case was transferred to New Jersey (Bankr. D. N.J. Case No. 21-30589) on Nov. 16, 2021. The Hon. Michael B. Kaplan is the case judge. At the time of the filing, the Debtor was estimated to have $1 billion to $10 billion in both assets and liabilities. The Debtor tapped Jones Day and Rayburn Cooper & Durham, P.A. as bankruptcy counsel; King & Spalding, LLP and Shook, Hardy & Bacon LLP as special counsel; McCarter & English, LLP as litigation consultant; Bates White, LLC as financial consultant; and AlixPartners, LLP as restructuring advisor. Epiq Corporate Restructuring, LLC is the claims agent. U.S. Bankruptcy Administrator Shelley Abel formed an official committee of talc claimants in the Debtor's Chapter 11 case. The committee tapped Bailey & Glasser, LLP, Otterbourg, P.C. and Brown Rudnick, LLP as bankruptcy counsel. Massey & Gail, LLP and Parkins Lee & Rubio, LLP serve as the committee's special counsel. About Johnson & Johnson Johnson & Johnson is an American multinational corporation founded in 1886 that develops medical devices, pharmaceuticals, and consumer packaged goods. It is the world's largest and most broadly based healthcare company. Johnson & Johnson is headquartered in New Brunswick, New Jersey, the consumer division being located in Skillman, New Jersey. The corporation includes some 250 subsidiary companies with operations in 60 countries and products sold in over 175 countries. The corporation had worldwide sales of $82.6 billion in 2020. LUX AMBER: Incurs $314,541 Net Loss in First Quarter ---------------------------------------------------- Lux Amber, Corp. filed with the Securities and Exchange Commission its Quarterly Report on Form 10-Q disclosing a net loss of $314,541 on $423,828 of revenue for the three months ended July 31, 2021, compared to a net loss of $560,609 on $290,260 of revenue for the three months ended July 31, 2020. As of July 31, 2021, the Company had $3.46 million in total assets, $2.62 million in total liabilities, and $836,858 in total equity. "The company has made additional acquisitions of products and assets. Since that acquisition has judicially added assets, which combined, provide the basic application equipment and rolling stock to support revenues significantly larger than the revenues produced in May, June, and July of the previous year. In the current quarter, those combined assets produced revenues which are 46 percent higher than the previous quarter. In June of 2021 the company's ability to increase its revenue has been enhanced by the addition of a Corporate President who has a broad network within the industries that the company serves; therefore, it is the opinion of management that the rate of growth in revenues and margins from the asset base will be sustained," Lux Amber stated in the filing. A full-text copy of the Form 10-Q is available for free at: https://www.sec.gov/ix?doc=/Archives/edgar/data/0001740695/000168316821006149/lux_i10q-073121.htm About Lux Amber Corp. Headquartered in Frisco, TX, Lux Amber, Corp., formed on Jan. 19, 2018, is an international specialty chemical company. LAC has three wholly owned subsidiaries: Worldwide Specialty Chemicals, Inc., Industrial Chem Solutions, Inc., and Safeway Pest Elimination, LLC. Lux Amber reported a net loss of $1.98 million for the year ended April 30, 2021, compared to a net loss of $1.49 million for the year ended April 30, 2020. Plano, Texas-based Whitley Penn LLP, the Company's auditor since 2020, issued a "going concern" qualification in its report dated Sept. 29, 2021, citing that the Company has suffered recurring losses from operations and has a net capital deficiency that raises substantial doubt about its ability to continue as a going concern. MA REAL ESTATE: Court Preliminary Approves Disclosure Statement --------------------------------------------------------------- Judge Daniel S. Opperman has entered an order granting preliminary approval the Disclosure Statement explaining the Plan of MA Real Estate and Investments, L.L.C. The hearing on objections to final approval of the Disclosure Statement and confirmation of the Plan will be held telephonically on Tuesday, January 11, 2022 at 11:00 a.m. and the parties should call (888) 557-8511 and use Access Code: 1287364. The deadline to return ballots on the Plan, as well as to file objections to final approval of the disclosure statement and objections to confirmation of the plan, is January 4, 2022. About MA Real Estate MA Real Estate and Investments, LLC, is primarily engaged in renting and leasing real estate properties. MA Real Estate and Investments filed its voluntary petition for relief under Chapter 11 of the Bankruptcy Code (Bankr. E.D. Mich. Case No. 20-21715) on Dec. 10, 2020. The petition was signed by Michael Reid, attorney-in-fact for Thomas P. LaPorte, the Debtor's managing member. At the time of filing, the Debtor estimated $1 million to $10 million in both assets and liabilities. Judge Daniel S. Opperman in Bay City, Mich., oversees the case. Warner Norcross & Judd, LLP represents the Debtor. MAGNOLIA PET: Seeks to Hire Rountree Leitman & Klein as Counsel --------------------------------------------------------------- Magnolia Pet Resort & Spa, LLC seeks approval from the U.S. Bankruptcy Court for the Northern District of Georgia to employ Rountree Leitman & Klein, LLC as its legal counsel. The firm's services include: (a) advising the Debtor regarding its powers and duties in the management of its property; (b) preparing legal papers; (c) examining claims of creditors; (d) assisting with formulation and preparation of the disclosure statement and plan of reorganization and with the confirmation and consummation thereof; and (l) performing all other necessary legal services. The hourly rates of the firm's attorneys and staff are as follows: William A. Rountree, Attorney $495 per hour Hal Leitman, Attorney $425 per hour David S. Klein, Attorney $425 per hour Alexandra Dishun, Attorney $425 per hour Benjamin R. Keck, Attorney $425 per hour Barret Broussard, Attorney $395 per hour Alice Blanco, Attorney $350 per hour Elizabeth Childers, Attorney $350 per hour Taner Thurman, Attorney $275 per hour Caitlyn Powers, Attorney $275 per hour Zach Beck, Law Clerk $195 per hour Sharon M. Wenger, Paralegal $195 per hour Megan Winokur, Paralegal $150 per hour Catherine Smith, Paralegal $150 per hour Yasmin Alamin, Paralegal $150 per hour The firm received a security retainer of $12,500 from the Debtor. William Rountree, Esq., a partner at Rountree Leitman & Klein, disclosed in a court filing that his firm is a "disinterested person" within the meaning of Section 101(14) of the Bankruptcy Code. The firm can be reached through: William A. Rountree, Esq. Rountree Leitman & Klein, LLC Century Plaza I 2987 Clairmont Road, Suite 175 Atlanta, GA 30329 Telephone: (404) 584-1238 Facsimile: (404) 704-0246 Email: wrountree@rlklawfirm.com About Magnolia Pet Resort & Spa Hampton, Ga.-based Magnolia Pet Resort & Spa, LLC filed its voluntary petition for relief under Chapter 11 of the Bankruptcy Code (Bankr. N.D. Ga. Case No. 21-59059) on Dec. 6, 2021. In the petition signed by Alfred Jackson Odom, IV, owner, the Debtor disclosed $100,000 to $500,000 in assets and $1 million to $10 million in liabilities. William A. Rountree, Esq., at Rountree Leitman & Klein, LLC is the Debtor's legal counsel. MALLINCKRODT PLC: Considers Acthar, Opioid Deals Vital to Plan -------------------------------------------------------------- Rick Archer of Law360 reports that a restructuring adviser for Mallinckrodt told a Delaware bankruptcy judge Friday, December 10, 2021, that the drugmaker's proposed Chapter 11 plan would be impossible without the company's settlements of opioid injury and federal Acthar reimbursement claims. On the virtual stand at the end of the second week of confirmation hearings on Mallinckrodt's Chapter 11 plan, AlixPartners consultant Randall Eisenberg said that without the settlements the drugmaker's future viability would be in danger and it would have no choice but to pursue a liquidation that would drastically cut recoveries for the company's unsecured creditors. About Mallinckrodt PLC Mallinckrodt -- http://www.mallinckrodt.com/-- is a global business consisting of multiple wholly-owned subsidiaries that develop, manufacture, market and distribute specialty pharmaceutical products and therapies. The company's Specialty Brands reportable segment's areas of focus include autoimmune and rare diseases in specialty areas like neurology, rheumatology, nephrology, pulmonology and ophthalmology; immunotherapy and neonatal respiratory critical care therapies; analgesics; and gastrointestinal products. Its Specialty Generics reportable segment includes specialty generic drugs and active pharmaceutical ingredients. On Oct. 12, 2020, Mallinckrodt plc and certain of its affiliates sought Chapter 11 protection in Delaware (Bankr. D. Del. Lead Case No. 20-12522) to seek approval of a restructuring that would reduce total debt by $1.3 billion and resolve opioid-related claims against them. Mallinckrodt plc disclosed $9,584,626,122 in assets and $8,647,811,427 in liabilities as of Sept. 25, 2020. Judge John T. Dorsey oversees the cases. The Debtors tapped Latham & Watkins LLP and Richards, Layton & Finger P.A. as their bankruptcy counsel; Arthur Cox and Wachtell, Lipton, Rosen & Katz as corporate and finance counsel; Ropes & Gray LLP as litigation counsel; Torys LLP as CCAA counsel; Guggenheim Securities LLC as investment banker; and AlixPartners LLP as restructuring advisor. Prime Clerk, LLC, is the claims agent. The official committee of unsecured creditors retained Cooley LLP as its legal counsel, Robinson & Cole LLP as co-counsel, and Dundon Advisers LLC as its financial advisor. On Oct. 27, 2020, the U.S. Trustee for Region 3 appointed an official committee of opioid related claimants. The OCC tapped Akin Gump Strauss Hauer & Feld LLP as its lead counsel, Cole Schotz as Delaware co-counsel, Province Inc. as financial advisor, and Jefferies LLC as investment banker. A confirmation trial for the Debtors' First Amended Joint Plan of Reorganization was set to begin Nov. 1, 2021. The Confirmation Hearing is slated to have two phases. Phase 1 commenced the week of Nov. 1. Phase 2 will begin on or around the week of Nov. 15, when the Acthar Administrative Claims Hearing proceedings conclude. MAUNESHA RIVER: Wins Cash Collateral Access Thru Jan 2022 --------------------------------------------------------- The U.S. Bankruptcy Court for the Western District of Wisconsin has authorized Maunesha River Dairy, LLC to use cash collateral through January 24, 2022, and provide adequate protection to BMO Harris Bank, N.A., Farmers & Merchants Union Bank and Agri-Max Financial Services, LP. The Debtor is permitted to use cash collateral in accordance with the budget, with a 15% variance. As set forth in the budget: a. Maunesha will make interest-only payments (at the contract rate of interest) to BMO in the amount of $20,257 per month. b. Maunesha will make interest-only payments (at the contract rate of interest) to FMUB in the amount of $622 per day ($18,661 in November,$19,283 in December and January, and $17,417 in February). c. Maunesha will also continue to make the contractual payments to secured creditors holding valid and perfected purchase-money security interests: 1. $2,855 per month to AGRI-MAX related to the milking parlor equipment and accessories; and 2. 52,671.52 per month to CNH Industrial Capital America, LLC (CNH) related to the 280 Magnum Tractor and CASE IH 330 34 Foot Turbo; and 3. $4,457 per month to Ascentium Capital related to the manure equipment. d. Maunesha will make interest-only payments (at the contract rate of interest) to SBA in the amount of $1,462 per month. e. Maunesha will continue to make lease payments for all equipment it continues to use, including those due to Dennis Ballweg, which Manuesha will pay directly to the lender, specifically: 1. $5,086 per month to Ag-Direct related to the Mower and Harvester; 2. $2,213 per month to CNH related to three Husky Spreaders. The Cash Collateral Creditors and Maunesha are authorized, in their sole discretion to agree to increase cash disbursements and operating expenditures in the Budget, an upon written agreement, to modify the Budget. As adequate protection for the Debtor's use of cash collateral, BMO, FMUB and AGRI-MAX will receive replacement liens in post-petition collateral in the same character, priority and extent of each party's pre-petition liens. These events constitute an "Event of Default:" a. Any failure to comply with a term or requirement of the Order; b. The dismissal of the pending bankruptcy case; c. Cancellation or lapse of any of the Maunesha's insurance policies that insure the Collateral; d. Cessation of normal business operations by Maunesha; e. Conversion of the pending bankruptcy case to one under chapter 7; f. The appointment in the pending bankruptcy case of an interim trustee or examiner to perform certain duties generally reserved to Maunesha as debtor-in-possession; or g. Maunesha's failure to comply with the Budget within the permitted variance, as provided for in the Order. A copy of the order is available at from https://bit.ly/3EKCBuI PacerMonitor.com. About Maunesha River Dairy, LLC Maunesha River Dairy, LLC sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. W.D. Wis. Case. No. 21-11157) on May 27, 2021. In the petition signed by Dennis E. Ballweg, the member, the Debtor disclosed up to $10 million in both assets and liabilities. Judge Catherine J. Furay oversees the case. Jane F. Zimmerman, Esq., at Murphy Desmond S.C. is the Debtor's counsel. MEGA BROADBAND: $150MM Dividend Recap No Impact on Moody's B2 CFR ----------------------------------------------------------------- Moody's Investors Service says Mega Broadband Investments Intermediate I, LLC's (MBI or the company) $150 million debt-funded dividend recapitalization is credit negative. Mega is financing the dividend with a $155 million incremental add-on to Eagle Broadband Investments, LLC's (Eagle) existing term loan. The excess proceeds, and balance sheet cash, will be used to pay down draws on the revolving credit facility and fees and expenses. The material terms and conditions of the credit agreement are unchanged. Despite the additional financial burden of the transaction, there is no effect on the B2 corporate family rating, B2 instrument level ratings or Stable outlook. Moody's expects the transaction, which weakens the credit profile, to raise pro forma leverage by approximately 1.25x, to approximately 6.25x at close, and to reduce free cash flow to debt by about 500 basis points, to approximately 1.75% from 2.25% given the higher interest burden. Moody's estimate this transaction pushes out the deleveraging path by approximately 1 year and highlights the governance and event risk inherent in the private equity ownership and its tolerance for high leverage. MBI, headquartered in Rye Brook New York, doing business as Vyve Broadband, provides video, high-speed internet and voice services to residential and commercial customers in three rural regions servicing sixteen markets located in the Northwest, Midsouth, and the Southeast. As of the period ended June 30, 2021, the Company had a total of approximately 269 thousand subscribers including 53 thousand video, 196 thousand high speed data (HSD), and 20 thousand voice. Revenues for the last twelve months ended June 30, 2021 were approximately $273 million. MBI is majority owned by GTCR LLC ("GTCR") with the remaining ownership interest owned by Cable One, Inc. (about 45%) and management. MEGA BROADBAND: S&P Affirms 'B+' Rating on Secured First-Lien Debt ------------------------------------------------------------------ S&P Global Ratings affirmed its 'B+' issue-level rating on Shawnee, Okla.-based internet and cable TV provider Mega Broadband Investments Intermediate I LLC's (d/b/a Vyve Broadband) senior secured first-lien debt following the company's proposed $155 million add-on to its $650 million term loan B due 2027. At the same time, S&P revised the recovery rating on the company's secured debt to '4' from '3'. The '4' recovery rating indicates its expectation of average (30%-50%; rounded estimate: 45%) recovery in the event of a payment default. S&P said, "We expect the company to use the proceeds from the term loan add-on to fund a $150 million dividend to its existing shareholders and pay down $5 million outstanding under the revolving credit facility. The lower recovery rating reflects the higher amount of secured debt, which reduces recovery prospects for existing first-lien lenders. "Our 'B+' issuer credit rating and stable rating outlook on the company are unaffected. We expect adjusted debt to increase to about 6.5x in 2021, which is at our threshold for a lower rating, from around 5.5x as of Sept. 30, 2021. That said, we believe that Vyve has good prospects to reduce leverage to the mid-to-high 5x area by 2022 and low-5x area in 2023. Our base case forecast assumes strong earnings growth, in the 10%-13% area in 2022, due to higher broadband penetration and a mix shift away from lower-margin video customers, which we expect will decline around 10%-12% over the next year." Issue Ratings-Recovery Analysis Key analytical factors: -- S&P's simulated default scenario contemplates a default occurring in 2025 due to intense competitive pressures from cable overbuilders and incumbent telephone companies Lumen and Frontier. -- S&P values the company on a going-concern basis using a 6x multiple of its projected emergence EBITDA of $70 million. The 6x valuation multiple is on the lower end of the typical 6x-7x range it typically uses for incumbent cable operators given Vyve's lower video and high speed data penetration rates relative to those of its peers. -- Other default assumptions include the $75 million revolver being 85% drawn and that all debt includes six months of prepetition interest. Simulated default assumptions: -- Simulated year of default: 2025 -- EBITDA at emergence: $70 million -- EBITDA multiple: 6x Simplified waterfall: -- Net enterprise value (after 5% administrative costs): $403 million -- Collateral value available to secured creditors: $403 million -- Secured first-lien debt: $861 million -- First-lien recovery rating: '4' (rounded estimate: 45%) MERCURITY FINTECH: Viner Total Acquires 14.6% Equity Stake ---------------------------------------------------------- In a Schedule 13G filed with the Securities and Exchange Commission, Viner Total Investments Fund disclosed that as of Dec. 1, 2021, it beneficially owns 1,399,199 ordinary shares of Mercurity Fintech Holding Inc., which represent 14.57499% of the shares outstanding. A full-text copy of the regulatory filing is available for free at: https://www.sec.gov/Archives/edgar/data/0001527762/000109991021000154/sc13g.htm About Mercurity Formerly known as JMU Limited, Mercurity Fintech Holding Inc.'s current principal business is to design and develop digital asset transaction platforms based on blockchain technologies for customers to facilitate asset trading, asset digitalization and cross-border payments and provide supplemental services for such platforms, such as customized software development services, maintenance services and compliance support services. The Company started this new business since its acquisition of Mercurity Limited (previously known as Unicorn Investment Limited) in May 2019. Mercurity reported a net loss of $1.65 million for the year ended Dec. 31, 2020, a net loss of $1.22 million for the year ended Dec. 31, 2019, a net loss of $123.24 million for the year ended Dec. 31, 2018, and a net loss of $161.90 million for the year ended Dec. 31, 2017. MOUNTAIN PROVINCE: Receives $42.7 Million From Recent Diamond Sale ------------------------------------------------------------------ Mountain Province Diamonds Inc. announced the results of its most recent December 2021 diamonds sale, as well as the aggregate sales results for the fourth quarter of 2021. During the most recent December 2021 sale, 388,573 carats were sold for total proceeds of $42.7 million (US$33.3 million), resulting in an average value of $110 per carat (US$86 per carat). This continues the steady improvement through the fourth quarter of 2021 where inclusive of the most recent December sale, 808,739 carats were sold for total proceeds of $85.2 million (US$67.5 million) resulting in an average value of $105 per carat (US$83 per carat). This brings FY21 sales to 3,158,418 carats, for total proceeds of $298.4 million (US$236.9 million) resulting in a FY21 average value of $94 per carat (US$75 per carat). The Company has now surpassed more than US$1billion in revenue since it began selling in Q1 2017. Recent sales have seen unprecedented levels of demand for the Company's brown diamonds, lower qualities and smaller sizes as supplies from other productions such as Argyle, are now largely absent from the market. Mark Wall, the Company's president and chief executive officer, commented: "The price acceleration that we've seen leading into the final quarter of the year has continued, most notably in the smaller size fractions of our diamonds. This price appreciation has resulted in the Company achieving the 3rd highest quarterly average value per carat figure in its history, and the highest since the first quarter of 2018. Additionally, the US$86 per carat achieved in our December sale further reinforces our confidence in a robust diamond market heading into 2022, a pivotal year for the Company as we progress the streamlining of the capital structure." About Mountain Province Mountain Province is a 49% participant with De Beers Canada in the Gahcho Kue diamond mine located in Canada's Northwest Territories. The Gahcho Kue Joint Venture property consists of several kimberlites that are actively being mined, developed, and explored for future development. The Company also controls 106,202 hectares of highly prospective mineral claims and leases that surround the Gahcho Kue Joint Venture property that include an indicated mineral resource for the Kelvin kimberlite and inferred mineral resources for the Faraday kimberlites. Mountain Province reported a net loss of C$263.43 million for the year ended Dec. 31, 2020, compared to a net loss of C$128.76 million for the year ended Dec. 31, 2019. As of Dec. 31, 2020, the Company had C$595.33 million in total assets, C$75.73 million in current liabilities, C$374.71 million in secured notes payable, C$750,000 in lease liabilities, C$70.44 million in decommissioning and restoration liability, and C$73.70 million in total shareholders' equity. Toronto, Canada-based KPMG LLP, the Company's auditor since 1999, issued a "going concern" qualification in its report dated March 29, 2021, citing that the Company has suffered recurring losses from operations that raises substantial doubt about its ability to continue as a going concern. NEW ERA CAP: Moody's Assigns First Time B1 Corporate Family Rating ------------------------------------------------------------------ Moody's Investors Service assigned first time ratings to New Era Cap, LLC (currently known as New Era Cap Co., Inc.) ("New Era") including a B1 corporate family rating and a B1-PD probability of default rating. In addition, Moody's assigned a B2 rating to New Era's proposed $300 million senior secured first lien term loan due 2028. The outlook is stable. Proceeds from the proposed term loan along with borrowings under a new unrated $150 million asset based revolving credit facility due 2026 ("ABL") will be used to repay borrowings under New Era's existing bank credit facilities, fund a dividend to shareholders, and pay related fees and expenses ("Recapitalization Transaction"). The pro forma capital structure also considers the conversion of New Era's existing unsecured subordinated promissory note into non-redeemable preferred equity as part of a planned reorganization of the company that is set to close around the time of the Recapitalization Transaction. At that time, New Era Cap, LLC will be formed and replace New Era Cap Co., Inc. in the organizational structure. The ratings are subject to the completion of the transactions as proposed, and review of final documentation. "The B1 CFR reflects governance considerations, particularly New Era's conservative pro forma leverage and majority ownership by its CEO, a fourth generation family member," stated Mike Zuccaro, Moody's Vice President. "The stable outlook reflects our expectation for continued moderate revenue and earnings growth, while maintaining a conservative financial policy, including Moody's-adjusted debt-to-EBITDA remaining below 3 times and interest coverage above 4 times over the next 12-18 months." Assignments: Issuer: New Era Cap, LLC Corporate Family Rating, Assigned B1 Probability of Default Rating, Assigned B1-PD Senior Secured 1st Lien Term Loan, Assigned B2 (LGD4) Outlook Actions: Issuer: New Era Cap, LLC Outlook, Assigned Stable RATINGS RATIONALE New Era's B1 CFR reflects governance considerations, particularly its conservative pro forma leverage profile, with Moody's adjusted debt-to-EBITDA of less than 2 times for the twelve month period ended September 2021, and majority ownership by its Chief Executive Officer, a fourth generation family member. New Era also benefits from its well-established position in the licensed headwear market with over 100 year business history, good brand awareness and long-standing relationships with key sports licensors with longer term expirations of key contracts. The rating is constrained by its small revenue scale and limited product diversity, as well as the need to demonstrate that recent accelerated revenue growth, margin improvement and free cash flow generation are sustainable over the longer term. While the company has a solid market position in global licensed headwear, its niche product focus on in this category makes its more susceptible to potential changes in consumer preferences. The rating further reflects high customer and licensor concentrations, which increases the risk related to larger customer financial performance or its partner merchandising strategies. New Era has very good liquidity, supported by Moody's expectation that balance sheet cash, positive free cash flow and ample excess revolver availability will more than support cash flow needs over the next 12-18 months. The company will have access to a proposed $150 million ABL due 2026 that is expected to have $50 million drawn at close as part of the Recapitalization Transaction. The ABL is expected to be used to cover seasonal working capital swings and contain a minimum fixed charge coverage ratio of 1.0x that is tested when the excess revolver availability is less than the greater of (i) 10% of the maximum revolver amount or (ii) $15 million. The company is expected to remain in compliance with the covenant. The proposed term loan will not contain financial maintenance covenants. The B2 rating assigned to the proposed senior secured term loan reflects its priority first lien on substantially all assets of the borrower, except short term assets such as inventory and receivables, on which it has a second lien behind the $150 million ABL revolver, and assets securing mortgages and aircraft debt. The term loan is guaranteed by its wholly-owned domestic subsidiaries. The pro forma capital structure also contemplates the conversion of its existing unsecured subordinated promissory note into preferred equity as described earlier. As proposed, the secured term loan is expected to provide covenant flexibility that if utilized could negatively impact creditors. Notable terms include the following: Incremental debt capacity up to the sum of (A) the greater of (1) a base level of EBITDA as defined in the agreement (increasing on the Adjusted Basket Date to the Increased EBITDA Amount) and (2) 65% of Consolidated Adjusted EBITDA for the Test Period most recently ended on or prior to such date (increasing on the Adjusted Basket Date to 100% of Consolidated Adjusted EBITDA for the Test Period most recently ended on or prior to such date), plus unlimited amounts subject to the Specified Permitted Indebtedness Ratio Requirement of 1.5x for pari passu secured debt. Amounts up to (a) the greater of (i) $52,500,000 (increasing on the Adjusted Basket Date to 35% of the Increased EBITDA Amount) and (ii) 35% of Consolidated Adjusted EBITDA minus incremental debt not subject to the terms of the credit agreement, may be incurred with an earlier maturity date than the initial term loans. There are no express "blocker" provisions which prohibit the transfer of specified assets to unrestricted subsidiaries; such transfers are permitted subject to carve-out capacity and other conditions. Non-wholly-owned subsidiaries are not required to provide guarantees; dividends or transfers resulting in partial ownership of subsidiary guarantors could jeopardize guarantees, with no explicit protective provisions limiting such guarantee releases. There are no express protective provisions prohibiting an up-tiering transaction The proposed terms and the final terms of the credit agreement may be materially different. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS A rating upgrade is unlikely over the near-to-intermediate term given New Era's limited revenue scale and significant product, customer and license concentrations relative to rated peers. Factors that could result in an upgrade include increased scale, brand and product diversification while maintaining solid credit metrics, consistent positive revenue and earnings growth, and very good liquidity. Specific metrics include debt to EBITDA sustained below 2 times and EBIT to interest coverage of over 5 times. A downgrade could occur if revenue and earnings were to materially decline, if liquidity were to weaken, or if financial strategies become more aggressive. Quantitatively, a downgrade could occur should debt to EBITDA rise above 4 times or EBIT to interest coverage falls below 4 times. Headquartered in Buffalo, New York, New Era is engaged in the design and global distribution of licensed and branded headwear, apparel and accessories. The company generates the majority of its revenues from products sold under licenses with major league sports leagues such as MLB, NFL and NBA, as well as media, entertainment, other sports and partnerships. The company was founded in 1920 and remains majority owned by fourth generation owner and Chief Executive Officer. Private equity firm ACON Investments invested convertible debt into New Era and upon the planned reorganization, the debt will convert to equity and it will became a minority investor. The principal methodology used in these ratings was Apparel published in June 2021. NEW ERA CAP: S&P Assigns 'B+' Issuer Credit Rating, Outlook Stable ------------------------------------------------------------------ S&P Global Ratings assigned its 'B+' issuer credit rating to New Era Cap LLC (currently known as New Era Cap.), the group parent and borrower. S&P also assigned its 'BB-' issue-level and '2' recovery ratings to the company's proposed first-lien term loan. The '2' recovery rating indicates its expectation for sustainable recovery (70% - 90%, rounded estimate: 85%) in the event of a default. S&P said, "The stable outlook reflects our view that the global headwear industry will continue to grow as casualization trends accelerated by the pandemic are sustained at least through the next 12 months. As a result, we expect the company's leverage would remain moderate in the 2x area. "Our rating reflects the company's product concentration in the highly fragmented and discretionary headwear category, customer concentration, its high reliance on the U.S. major sports leagues licenses, and its limited track record operating at current profitability levels. Our rating also incorporates the benefits of the company's leading market position in the sports and lifestyle headwear category, good geographic diversification, and our expectation for the company to operate with moderate leverage. "New Era benefitted from the acceleration of casualization in apparel during the pandemic but we expect growth to moderate as consumers behavior normalizes. Although the industry and the company suffered setbacks at the onset of the pandemic when non-essential retail stores were closed and live sports events were shuttered, the company rebounded quickly even as in-person sports restrictions continued. According to Euromonitor, the global headwear category declined by 18.8% in 2020, and is projected to grow by 14.4% in 2021. The company outperformed the industry, as they declined only 8.3% in 2020, and grew 65.8% in the 12 months ended Oct. 3, 2021. We project the company still has the capacity to grow, as it is the leading headwear provider globally with exclusive long-term on-court/on-field licensing contracts with the largest sports leagues in the U.S., including Major League Baseball (MLB), the National Basketball Association (NBA), and the National Football League (NFL). More notably, it has successfully branched into collaborations with digital savvy influencers and streetwear icons and is able to capitalize on the casualization trend for lifestyle and fashion consumers. In-venue sales at stadium and arenas only account for approximately 10% of the company's overall sales, and it is able to leverage it's on-court and on-field exclusivity to off-premise sales, which include non-sports venues, retail stores, and online channels. We believe the company's growth will be driven by its expansion in the lifestyle and fashion segments of the cap market, which we view to be more volatile and exposed to higher fashion risk." Baseball caps and related headwear are highly discretionary products, but the company has benefitted from sports fans' relatively stable demand driven by the desire to periodically refresh favored team merchandise periodically. New Era has high licensed partner and customer concentration. The company generates approximately 80% of revenue from its top three licenses: MLB, NFL, and NBA. The company's performance will deteriorate significantly if it loses any one of the top three licenses. At this time, given the company's long history of maintaining those key partnerships, S&P believes it will be able to continue to renew its contracts. The company's current long term licensed contracts include globally exclusive rights for on-field and on-court headwear products which can be distributed throughout all retail channels other than mass, such as Target and Walmart. The company generates approximately 27% of its revenue from its top two customers. The company's performance could be significantly impaired if these relationships deteriorate or the operations of the top customers declines. The company has a short record of operating at improved margin levels. New Era undertook significant modernizing initiatives in 2018 and 2019. It restructured its product, sales and marketing teams and right-sized its labor forces. In addition, it raised prices, reduced costs, and improved its supply chain such that, per our estimates, it was able to expand adjusted EBITDA margins significantly. The company's margins further expanded on operating leverage from its fast growth into consumer lifestyle/fashion in the second half of 2020 and throughout 2021. The company pays a fixed guaranteed minimum royalty (GMR) to the leagues for the licensing rights, and we believe that higher royalties paid above the GMRs is a positive performance indicator, and this should continue to positively impact margins as the company grows its topline. S&P said, "As such, we believe the impact of input cost and freight inflation will be relatively muted for the company compared to peers for the remainder of 2021 as the improvements in operating leverage more than offset the higher costs. Caps and headwear are also smaller items that lend themselves to air freight if necessary for key selling periods. We believe the margin improvement from the company's strategic initiatives would likely be sustainable even if baseball caps become out of favor with lifestyle/fashion consumers, but margins could shrink from current levels due to loss of operating leverage if demand were to decline." The company is a family run and owned enterprise, and will have a minority private equity ownership. The company is majority owned by its CEO, a member of the founding family. Pro forma leverage is moderate at around 3x and will improve into the 2x area by the end of 2021 with continued industry growth. S&P said, "In conjunction with this transaction, we expect ACON Investment's (ACON) convertible debt note investment in the company will convert to approximately $80 million of preferred equity as well as 15% of common equity. We include ACON's preferred shares as debt in our analysis of the company's credit metrics. ACON's minority interest upon the conversion is currently low, and we do not consider this a financial sponsored owned company." S&P said, "We believe the current CEO, a fourth-generation family member, with a 20-year tenure in the role, will continue to be in that role. The company's board is controlled by the CEO. The remainder of the board members are not family, but are executives of the company and representatives of ACON. Its board currently still has three vacant seats which the company plans to fill with independent board members. "The stable outlook reflects our view that the global headwear industry will continue to grow as casualization trends are sustained at least through the next 12 months. As a result, we expect the company's leverage would remain moderate in the in the 2x area." S&P could raise its ratings if the company demonstrates a track record of sustaining current margin levels as growth normalizes, while maintaining leverage below 3x. This could occur if the company: -- Effectively manages margins in an inflationary environment, through cost efficiencies and price increases while growth normalizes to a sustainable, stable level; and -- Maintains a financial policy consistent with leverage below 3x. S&P could lower its ratings if the company's leverage approaches 4x. This could occur if: -- Consumer trends become unfavorable, and the headwear categories decline rapidly; or if the company's products fall out of favor with consumers either from heightened competition or product design or quality issues; -- The company loses any of its key sports licenses; or -- Its financial policy becomes more aggressive either from incremental private equity ownership or additional debt-funded shareholder returns. NITROCRETE LLC: U.S. Trustee Appoints Creditors' Committee ---------------------------------------------------------- The U.S. Trustee for Region 19 appointed an official committee to represent unsecured creditors in the Chapter 11 case of NITROcrete, LLC. The committee members are: 1. Air Products & Chemicals, Inc. Representative: Todd Reynolds 7201 Hamilton Boulevard Allentown, PA 18195-1501 Tel: (610)481-5815 E-mail: parkssg@airproducts.com 2. Airgas Representatives: Grant Lawson and Rob Cosner 1349 Empire Central Dr., Ste. 300 Dallas, TX 75247 Tel: (469)533-1080 Fax: (469)553-1081 E-mail: Grant.Lawson@Airgas.com Rob.Cosner@airgas.com Official creditors' committees serve as fiduciaries to the general population of creditors they represent. They may investigate the debtor's business and financial affairs. Committees have the right to employ legal counsel, accountants and financial advisors at a debtor's expense. About NITROcrete NITROcrete, LLC and its affiliates filed petitions for Chapter 11 protection (Bankr. D. Colo. Lead Case No. 21-15739) on Nov. 18, 2021. Stephen De Bever, chief executive officer, signed the petitions. In its petition, NITROcrete listed up to $10 million in assets and up to $50 million in liabilities. Judge Kimberley H. Tyson oversees the cases. The Debtors tapped Matthew T. Faga, Esq., at Markus Williams Young & Hunsicker, LLC as bankruptcy counsel; Polsinelli, PC as special counsel; Cordes & Company as financial advisor; and SSG Advisors, LLC as investment banker. BMC Group, Inc. is the Debtors' noticing agent. NUVERRA ENVIRONMENTAL: Inks 3rd Amendment to 2020 Loan Agreement ---------------------------------------------------------------- Nuverra Environmental Solutions, Inc. entered into a third amendment to its Master Loan Agreement, dated Nov. 16, 2020, with lender, First International Bank & Trust, a North Dakota banking corporation, in order to (i) amend and restate the promissory note relating to the letter of credit facility to extend the maturity date to Nov. 18, 2022, (ii) amend and restated the promissory note relating to the undrawn $5.0 million operating line of credit loan to extend the maturity date to June 1, 2022, and (iii) permit the company to use approximately $1.3 million of asset sale proceeds to fund specified capital expenditures relating to its solid waste landfill facility in Arnegard, North Dakota. The third amendment also contains customary representations and warranties from Nuverra and is executed by each of the company's wholly-owned guarantor subsidiaries. About Nuverra Nuverra Environmental Solutions, Inc. provides water logistics and oilfield services to customers focused on the development and ongoing production of oil and natural gas from shale formations in the United States. Its services include the delivery, collection, and disposal of solid and liquid materials that are used in and generated by the drilling, completion, and ongoing production of shale oil and natural gas. The Company provides a suite of solutions to customers who demand safety, environmental compliance and accountability from their service providers. Nuverra Environmental reported a net loss of $44.14 million for the year ended Dec. 31, 2020, compared to a net loss of $54.94 million for the year ended Dec. 31, 2019. As of Sept. 30, 2021, the Company had $169.31 million in total assets, $55.02 million in total liabilities, and $114.29 million in total shareholders' equity. OCEAN POWER: Reschedules Annual Meeting to Dec. 14 -------------------------------------------------- Ocean Power Technologies, Inc.'s Board of Directors has determined to postpone the 2021 Annual Meeting of Stockholders from Dec. 13, 2021, to Dec. 14, 2021, with a new start time of 2 p.m. Eastern. The record date of Oct. 15, 2021 remains unchanged. The Board decided to postpone the 2021 Annual Meeting in order to provide the Company with additional time to solicit shareholder votes. The Company filed a definitive proxy statement with the Securities and Exchange Commission on Oct. 15, 2021. The Company will be filing an amendment to the definitive proxy statement with the SEC, which will contain information regarding the postponement. The Board encourages shareholders to cast their votes in advance of the 2021 Annual Meeting of Stockholders. Voting is simple and only takes a few moments and can be done in any of the following ways: * Vote Online: Registered shareholders can record their vote online at https://web.viewproxy.com/optt/2021. Please be sure to have your Proxy Control Number on hand to cast your vote online. * Vote by Phone: Call one of the Company's proxy specialists toll-free at 833-945-2704 Monday through Friday, from 9 a.m. to 10 p.m. Eastern Time. * Vote by Email: Send your voting instructions to ProxyVote@AllianceAdvisors.com. Please be sure to reference Ocean Power Technologies. About Ocean Power Technologies Headquartered in Monroe Township, New Jersey, Ocean Power Technologies, Inc. -- http://www.oceanpowertechnologies.com-- is a marine power equipment, data solutions and service provider. The Company controls the design, manufacture, sales, installation, operations and maintenance of its solutions and services while working closely with commercial, technical, and other development partners that provide software, controls, mechatronics, sensors, integration services, and marine installation services. Ocean Power reported a net loss of $14.76 million for the 12 months ended April 30, 2021, compared to a net loss of $10.35 million for the 12 months ended April 30, 2020. As of July 31, 2021, the Company had $81.19 million in total assets, $3.43 million in total liabilities, and $77.77 million in total stockholders' equity. OMAGINE INC: May Obtain $55,000 DIP Financing --------------------------------------------- The U.S. Bankruptcy Court for the Southern District of New York has authorized Omagine, Inc. and Journey of Light, Inc. to obtain post-petition financing and provide super-priority administrative expense status to the DIP financers as set forth in two Debtor-in-Possession Notes. Other than Omagine's claims to be brought in Oman, the Debtors have virtually no assets. Omagine has reached agreements with two private lenders who are willing to provide post-petition DIP Financing. The Debtors said access to post-petition DIP Financing is necessary to finance the Oman Litigation as the Debtors do not have sufficient capital absent the DIP Financing to finance either the bankruptcy proceedings or the Oman Litigation. If the Debtors are unable to obtain and access such post-petition DIP Financing, their ability to consummate a reorganization and satisfy any amount of obligations to creditors will be impossible to achieve. The DIP Financing will be provided through a DIP Note #1 for $20,000 to be provided by Jeffrey A. Grossman; and DIP Note #2 for $35,000 to be provided by Mohammed K. Al-Sada. Repayment of DIP Note #1 is contingent upon a Recovery being obtained as a result of the prosecution or settlement of the litigation in Oman and to the extent Recovery is sufficient, repayment of DIP Note #1 will consist of: 1. payment of the $20,000 Principal Amount, plus 2. payment of a Bonus Amount of $20,000, plus 3. payment of a Lender Fee equal to 0.4% of any such Recovery, or such other amounts as determined by the approved Chapter 11 plan of reorganization. Repayment of DIP Note #2 is contingent upon a Recovery being obtained as a result of the prosecution or settlement of the litigation in Oman and to the extent Recovery is sufficient, repayment of DIP Note #2 will consist: 4. payment of the $35,000 Principal Amount, plus 5. payment of a Bonus Amount of $35,000, plus 6. payment of a Lender Fee equal to 0.7% of any Recovery, or such other amounts as determined by the approved Chapter 11 plan of reorganization. The Court says the debt reflected in the Notes will be entitled to administrative expense status with priority over any and all administrative expense of the kind specified in 11 U.S.C. section 503(b) or section 507(b). The Debtors is permitted to immediately use the financing provided by the Notes to finance the pursuit of Omagine's claims in Oman, as reflected in the Notes. Oman Litigation Omagine-Oman was organized by Omagine, Inc. in November 2009 as its wholly owned subsidiary under the laws of the Sultanate of Oman to design, develop, own and operate a mixed-use entertainment, hospitality, and real estate development project in Muscat. In May 2011 Omagine, Inc.'s 100% ownership of Omagine-Oman was reduced to 60% pursuant to an Omagine-Oman shareholder agreement entered into by Omagine, Inc., JOL and three new Omagine-Oman minority shareholders, one of which minority shareholders was Royal Court Affairs, an Omani organization representing the hereditary personal interests of the ruler of Oman. In October 2014, Omagine-Oman and the Ministry of Tourism of the Government of Oman signed an agreement for the development of the Omagine Project. Pursuant to the terms of the Shareholder Agreement, the consideration RCA was obligated to pay to Omagine-Oman for its 25% ownership of Omagine-Oman was (i) a payment-in-kind represented by the transfer of the land rights to a 246-acre parcel of seaside land to Omagine-Oman, and (ii) a cash payment of the Omani Rial equivalent of $20 million. On July 2, 2015, Omagine-Oman's ownership of the Land Rights was perfected by registration of such Land Rights with the Government. The Land Rights to the Omagine Project Site were professionally valued in 2015 at $800 million. Ultimately, RCA defaulted on its $20 million cash payment obligation to Omagine-Oman which, in turn, crippled Omagine-Oman both financially and operationally. As a result of RCA's conduct, actions, lack of action, and continued breach of its obligations under the Shareholder Agreement, including but not limited to RCA's default on its obligation under the Shareholder Agreement to pay $20 million to Omagine-Oman, Omagine-USA has suffered damages of approximately $974 million consisting primarily of: a. the approximately $931 million of lost profits, dividends and distributions that would have, absent the RCA Defaults, accrued to Omagine, Inc., because of its 60% ownership of Omagine-Oman; and b. the approximately $33 million of reimbursable Pre-Development Expenses incurred by Omagine, Inc., directly related to the Omagine Project and which, absent the RCA Defaults, would have been reimbursed to Omagine, Inc. pursuant to the terms of the Shareholder Agreement; and c. the $10 million Success Fee memorialized in the Shareholder Agreement that would have been paid to Omagine, Inc., absent the RCA Defaults. The Debtors have determined that a successful Recovery on the Omani Claims depends on pursuing the Claims in Oman under Omani law, and in furtherance thereof, the Debtors have reached an agreement with an Omani law firm, BSA Al Rashdi & Al Barwani Advocates, located in Muscat, Oman to pursue the Omani Claims. A copy of the order is available at https://bit.ly/3rRuY1N from PacerMonitor.com. About Omagine and Journey of Light Omagine, Inc., and Journey of Light, Inc., sought Chapter 11 protection (Bankr. S.D.N.Y. Lead Case No. 20-10742) on March 10, 2020. At the time of filing, Omagine listed up to $50,000 in assets and up to $10 million in liabilities while Journey of Light listed as much as $50,000 in both assets and liabilities. Other than Omagine's claims to be brought in Oman, the Debtors have virtually no assets as of the bankruptcy filing date. Omagine, Inc., and Journey of Light were previously in the entertainment, hospitality and real estate development opportunities in the Middle East, including a mixed-use entertainment, hospitality, and real estate development project in Muscat, Oman. Judge Michael E. Wiles oversees the cases. The Debtors tapped Rotbert Business Law PC as bankruptcy counsel and BSA Al Rashdi & Al Barwani Advocates as litigation counsel. PEOPLE SPEAK: United States Trustee Opposes Disclosure Statement ---------------------------------------------------------------- David W. Asbach, Acting United States Trustee for Region 5 ("UST"), objects to the Disclosure Statement for the Plan of Reorganization filed by Debtor People Speak, LLC. The United States Trustee asserts that the Disclosure Statement does not meet the statutory requirement of adequate information, for the following reasons: * The Disclosure Statement contemplates a sale of the real property located at 4417 Dryades Street, New Orleans, which sale is expected to satisfy the Loan Partners Secured Claim (Class 3). The Debtor has not filed a Motion to Sell the Dryades Street property, and does not specify the timeframe or process for the sale. * The Disclosure Statement contemplates a sale of the SBA Collateral, which sale proceeds will be used to satisfy the SBA Secured Claim (Class 4). The Disclosure Statement does not specify any timeframe or process for the sale of the SBA Collateral. The Disclosure Statement does not provide the appraised value of the SBA Collateral. * The Disclosure Statement contemplates two scenarios for treatment of the LaGraize Claim (Class 5). But, the Disclosure Statement does not specify which scenario will be utilized by the Debtor, and whether the scenario chosen will impact payments to the general unsecured claims. * The Disclosure Statement does not provide sufficient financial history or projections to establish how it anticipates to satisfy the General Unsecured Claims (Class 6) within four years after the Effective Date. The Debtor expects to satisfy the General Unsecured Claims (Class 6) through sale proceeds and/or recoveries, without a listing of the Claims and Causes of Actions it intends to reserve. A full-text copy of the United States Trustee's objection dated Dec. 6, 2021, is available at https://bit.ly/33i82yG from PacerMonitor.com at no charge. About People Speak People Speak, LLC, a privately held company that operates in the traveler accommodation industry, sought protection under Chapter 11 of the Bankruptcy Code (Bankr. E.D. La. Case No. 21-10315) on March 11, 2021. Rachele Riley, owner, and member signed the petition. The Debtor disclosed $1 million to $10 million in both assets and liabilities in the petition. Judge Meredith S. Grabill oversees the case. Lugenbuhl, Wheaton, Peck, Rankin & Hubbard, led by Stewart F. Peck, Esq., serves as the Debtor's counsel. PHUNWARE INC: Stockholders Approve All Proposals at Annual Meeting ------------------------------------------------------------------ Phunware, Inc. held its 2021 Annual Meeting of Stockholders, at which the stockholders elected Randall Crowder and Alan Knitowski as directors to serve until the company's 2024 Annual Meeting of Stockholders or until their successors are duly elected and qualified, and ratified the appointment of Marcum LLP as the company's independent registered public accounting firm for the fiscal year ending Dec. 31, 2021. George Syllantavos, whose term as a director of the company expired on Dec. 2, did not stand for reelection at the 2021 Annual Meeting. About Phunware Headquartered in Austin, Texas, Phunware, Inc. -- http://www.phunware.com-- offers a fully integrated software platform that equips companies with the products, solutions and services necessary to engage, manage and monetize their mobile application portfolios globally at scale. Phunware reported a net loss of $22.20 million for the year ended Dec. 31, 2020, compared to a net loss of $12.87 million for the year ended Dec. 31, 2019. As of Sept. 30, 2021, the Company had $31.95 million in total assets, $18.93 million in total liabilities, and $13.03 million in total stockholders' equity. PINECREST PIGEON: Voluntary Chapter 11 Case Summary --------------------------------------------------- Debtor: Pinecrest Pigeon Forge HOA, Inc. 3729 Plaza Way Pigeon Forge, TN 37863 Business Description: Pinecrest Pigeon Forge HOA is a Single Asset Real Estate debtor (as defined in 11 U.S.C. Section 101(51B)). Chapter 11 Petition Date: December 10, 2021 Court: United States Bankruptcy Court Middle District of Florida Case No.: 21-03759 Judge: Hon. Randal S. Mashburn Debtor's Counsel: Blake Roth, Esq. WALLER LANSDEN DORTCH & DAVIS, LLP 511 Union St., Suite 2700 Nashville, TN 37219 Tel: (615) 850-8749 Email: blake.roth@wallerlaw.com Estimated Assets: $1 million to $10 million Estimated Liabilities: $50,000 to $100,000 The petition was signed by Jerry Bailey as president. The Debtor stated it has no creditors holding unsecured claims. A full-text copy of the petition is available for free at PacerMonitor.com at: https://www.pacermonitor.com/view/VLFZBEI/Pinecrest_Pigeon_Forge_HOA_Inc__tnmbke-21-03759__0001.0.pdf?mcid=tGE4TAMA PINNACLE MANAGEMENT: Taps the Salts Law Office as Legal Counsel --------------------------------------------------------------- Pinnacle Management Group LLC seeks approval from the U.S. Bankruptcy Court for the Southern District of New York to employ the Salts Law Office as its legal counsel. The firm's services include: (a) advising the Debtor regarding its powers and duties in the continued management of its business and property; (b) attending meetings and negotiating with representatives of creditors and other parties-in-interest; (c) taking all necessary actions to protect and preserve the Debtor's estate; (d) preparing legal papers; (e) taking all necessary action to (i) obtain confirmation of a plan of reorganization, (ii) negotiate any modifications to the plan that may be required, (iii) implement all transactions related thereto, and (iv) consummate the plan; and (f) performing all other necessary legal services for the Debtor in connection with its Chapter 11 case. The firm will charge the Debtor at its current hourly rate of $350. In addition, the firm will seek reimbursement for expenses incurred. Devon Salts, Esq., the sole member of the Salts Law Office, disclosed in a court filing that the firm is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. The firm can be reached through: Devon Salts, Esq. Salts Law Office 2537 Route 52, Bldg. 3 Hopewell Junction, NY 12533 Telephone: (914) 482-3137 Email: saltslaw@gmail.com About Pinnacle Management Group Pinnacle Management Group, LLC filed its voluntary petition for relief under Chapter 11 of the Bankruptcy Code (Bankr. S.D.N.Y. Case No. 21-35861) on Nov. 30, 2021, listing under $1 million in both assets and liabilities. Judge Cecelia G. Morris oversees the case. Devon Salts, Esq., at Salts Law Office serves as the Debtor's legal counsel. POLYMER GRINDING: Seeks to Hire Calaiaro Valencik as Legal Counsel ------------------------------------------------------------------ Polymer Grinding, Inc. seeks approval from the U.S. Bankruptcy Court for the Western District of Pennsylvania to employ Calaiaro Valencik as its legal counsel. The firm's services include: (a) attending the first meeting of creditors; (b) advising the Debtor with regard to its rights and obligations during its Chapter 11 reorganization; (c) representing the Debtor to any motions to convert or dismiss its Chapter 11 case; (d) representing the Debtor in relation to any motions for relief from stay filed by creditors; (e) preparing a plan of reorganization; (f) preparing any objections to claims; and (g) otherwise, representing the Debtor in general. The hourly rates of the firm's attorneys and staff are as follows: Donald R. Calaiaro $400 per hour David Z. Valencik $350 per hour Mark B. Peduto $300 per hour Andrew K. Pratt $300 per hour Paralegal $100 per hour The Debtor and Calaiaro Valencik agreed to a general retainer of $7,500. Donald Calaiaro, Esq., an attorney at Calaiaro Valencik, disclosed in a court filing that the firm and its members do not represent interests adverse to the estate. The firm can be reached through: Donald R. Calaiaro, Esq. Calaiaro Valencik 938 Penn Avenue, Suite 501 Pittsburgh, PA 15222-3708 Telephone: (412) 232-0930 Email: dcalaiaro@c-vlaw.com About Polymer Grinding Polymer Grinding, Inc. filed its voluntary petition for relief under Chapter 11 of the Bankruptcy Code (Bankr. W.D. Pa. Case No. 21-22585) on Dec. 3, 2021, listing under $1 million in both assets and liabilities. Donald R. Calaiaro, Esq., at Calaiaro Valencik serves as the Debtor's legal counsel. PRIME GLOBAL: Seeks Cash Collateral Access ------------------------------------------ Prime Global Group, Inc. asks the U.S. Bankruptcy Court for the Middle District of Florida, Orlando Division, for authority to use cash collateral on an interim basis and provide adequate protection to Ameristate Bank, Swift Financial, LLC, Rexel USA, Inc., State of Florida, Department of Revenue and Adams Air & Hydraulics, Inc. The cash collateral the Debtor seeks to use is comprised of funds on deposit in the bank and accounts receivable. As of the Petition Date, the Debtor had approximately $100,000 in bank accounts and approximately $32,000 in accounts receivable. The Debtor will use the cash collateral to make payroll, pay utilities, pay suppliers and vendors, and pay other ordinary course expenses to maintain its business, which may be subject to the alleged creditor liens. As adequate protection for the use of cash collateral, the Debtor proposes to grant the Secured Creditor a replacement lien on the Debtor's post-petition cash collateral with the same extent, priority, and validity as their pre-petition lien(s). The Debtor believes it will operate on a positive cash flow basis during the interim six-month period and asserts all interests in cash collateral will be adequately protected by replacement liens and the proposed adequate protection is fair and reasonable and sufficient to satisfy any diminution in value of the Secured Creditor's alleged prepetition collateral. A copy of the motion and the Debtor's budget for the period from December 2021 to May 2022 is available at https://bit.ly/3rXo3UT from PacerMonitor.com. The Debtor projects $148,777 in total cash available for operations and $137,383 in total disbursements. About Prime Global Group Ormond Beach Fla.-based Prime Global Group, Inc. filed a petition for Chapter 11 protection (Bankr. M.D. Fla. Case No. 21-04689) on Oct. 15, 2021, listing up to $1 million in assets and up to $10 million in liabilities. Stephen Honczarenko, chief executive officer, signed the petition. Judge Karen S. Jennemann oversees the case. The Debtor tapped Herron Hill Law Group, PLLC as legal counsel and Forensic Internal Audit, Inc. as accountant. PURDUE PHARMA: Appeals Judge Will Rule in Third Week of December ---------------------------------------------------------------- Jeremy Hill of Bloomberg News reports that Purdue Pharma LP's appeals judge says she will rule in the third week of December 2021. U.S. District Judge Colleen McMahon expects to render a ruling on Purdue Pharma LP's opioid settlement next week. The deal would route billions of dollars to opioid abatement efforts and see Purdue's assets turned over to the states, cities and counties suing it over its role in the crisis. According to Bloomberg, particularly troubling to Judge McMahon is how aggressively Purdue's owners siphoned cash out of the company after a 2007 guilty plea over the way it marketed OxyContin. Distributions skyrocketed to more than $10 billion -- though close to half went to taxes -- from 2008 to 2018, compared to about $1.3 billion in a more-than 10-year period preceding the plea. That's important because members of the family are receiving sweeping legal protection from future opioid lawsuits in exchange for a more-than $4 billion contribution to the settlement. The releases would even bar people who don’t agree to them -- including a handful of state attorneys general --from bringing civil suits against the family members over their role in the opioid crisis. McMahon said Purdue's owners may have "made themselves necessary" to the settlement by taking so much cash out of the company. About Purdue Pharma LP Purdue Pharma L.P. and its subsidiaries -- http://www.purduepharma.com/-- develop and provide prescription medicines and consumer products that meet the evolving needs of healthcare professionals, patients, consumers and caregivers. Purdue's subsidiaries include Adlon Therapeutics L.P., focused on treatment for Attention-Deficit/Hyperactivity Disorder (ADHD) and related disorders; Avrio Health L.P., a consumer health products company that champions an improved quality of life for people in the United States through the reimagining of innovative product solutions; Imbrium Therapeutics L.P., established to further advance the emerging portfolio and develop the pipeline in the areas of CNS, non-opioid pain medicines, and select oncology through internal research, strategic collaborations and partnerships; and Greenfield Bioventures L.P., an investment vehicle focused on value-inflection in early stages of clinical development. Opioid makers in the U.S. are facing pressure from a crackdown on the addictive drug in the wake of the opioid crisis and as state attorneys general file lawsuits against manufacturers. More than 2,000 states, counties, municipalities and Native American governments have sued Purdue Pharma and other pharmaceutical companies for their role in the opioid crisis in the U.S., which has contributed to the more than 700,000 drug overdose deaths in the U.S. since 1999. OxyContin, Purdue Pharma's most prominent pain medication, has been the target of over 2,600 civil actions pending in various state and federal courts and other fora across the United States and its territories. On Sept. 15 and 16, 2019, Purdue Pharma L.P. and 23 affiliated debtors each filed a voluntary petition for relief under Chapter 11 of the U.S. Bankruptcy Code (Bankr. S.D.N.Y. Lead Case No. 19-23649), after reaching terms of a preliminary agreement for settling the massive opioid litigation. The Debtors' consolidated balance sheet as of Aug. 31, 2019, showed $1.972 billion in assets and $562 million in liabilities. U.S. Bankruptcy Judge Robert Drain oversees the cases. The Debtors tapped Davis Polk & Wardwell, LLP and Dechert, LLP as legal counsel; PJT Partners as investment banker; AlixPartners as financial advisor; and Grant Thornton, LLP as tax structuring consultant. Prime Clerk LLC is the claims agent. Akin Gump Strauss Hauer & Feld LLP and Bayard, P.A., represent the official committee of unsecured creditors appointed in the Debtors' bankruptcy cases. David M. Klauder, Esq., is the fee examiner appointed in the Debtors' cases. The fee examiner is represented by Bielli & Klauder, LLC. * * * U.S. Bankruptcy Judge Robert Drain in early September 2021 approved a plan to turn Purdue into a new company (Knoa Pharma LLC) no longer owned by members of the Sackler family, with its profits going to fight the opioid epidemic. The Sackler family agreed to pay $4.3 billion over nine years to the states and private plaintiffs and in exchange for a lifetime legal immunity. The deal resolves some 3,000 lawsuits filed by state and local governments, Native American tribes, unions, hospitals and others who claimed the company's marketing of prescription opioids helped spark and continue an overdose epidemic. Separate appeals to approval of the Plan have already been filed by the U.S. Bankruptcy Trustee, California, Connecticut, the District of Columbia, Maryland, Rhode Island and Washington state, plus some Canadian local governments and other Canadian entities. Purdue filed its Chapter 11 Plan on March 15, 2021. A twelfth amended Chapter 11 plan was filed on September 2, 2021, which was confirmed on September 17. Purdue divides the claims against it into several categories, one of which it calls "PI Claims," consisting of claims "for alleged opioid-related personal injury." The plan provides for the creation of the "PI Trust," which will administer all PI Claims. The trust will be funded with an initial distribution of $300 million on the effective date of the Chapter 11 plan, followed by a distribution of $200 million in 2024, and distributions of $100 million in 2025 and 2026. In sum, "[t]he PI Trust will receive at least $700 million in value, and may receive an additional $50 million depending on the amount of proceeds received on account of certain of Purdue's insurance policies." The plan further provides that Purdue's ability to recover from its insurers will be vested in a "Master Disbursement Trust." To the extent any proceeds are recovered from Purdue's insurers with respect to the PI Claims, up to $450 million of those proceeds will be channeled from the MDT to the PI Trust. However, the PI Trust will be funded regardless of whether anything is recovered from Purdue's insurers. Instead, "[d]istributions to the PI Trust are subject to prepayment on a rolling basis as insurance proceeds from certain of Purdue's insurance policies are received by the MDT and paid forward to the PI Trust." QORVO INC: Moody's Gives Ba1 Rating on New Senior Unsecured Notes ----------------------------------------------------------------- Moody's Investors Service rated Qorvo, Inc's new Senior Unsecured Notes (New Notes) at Ba1. Qorvo's other ratings and the stable outlook are unchanged. Qorvo intends to use net proceeds from the New Notes to repay in full, or in part, the Senior Unsecured Term Loan (Term Loan), which had a balance of $195 million as of October 2, 2021. Qorvo will use the remaining funds for general corporate purposes. Proforma for the New Notes leverage (Moody's adjusted) will increase modestly to at most 1.3x from 1.1x (twelve months ended October 2, 2021), with the resulting leverage depending on the amount of Term Loan repaid. Assignments: Issuer: Qorvo, Inc. Senior Unsecured Regular Bond/Debenture, Assigned Ba1 (LGD4) RATINGS RATIONALE Qorvo's credit profile reflects the company's modest leverage, which Moody's expects will remain below 1.5x over time. Qorvo maintains a strong niche position in the smartphone radio frequency (RF) front end (RFFE) market, with an established position in RF filters, and a portfolio of infrastructure and defense RF products, which tend to have longer product life cycles. RFFE providers such as Qorvo should enjoy sustained secular growth from both steady smartphone unit sales over time and increasing RF content per phone, particularly as Fifth Generation (5G) smartphones gain traction. Liquidity is good, supported by a $300 million unsecured revolver, which will likely remain undrawn, and cash and short term investments that Moody's expects will remain over $700 million. Still, the maintenance of a conservative financial policy is prudent given the very short product life cycle that characterize the smartphone industry. Moreover, Qorvo's large concentration to the smartphone market (over 70% of revenues) and the limited number of smartphone vendors results in customer revenue concentration, with the company's top two customers comprising about 39% of revenues for fiscal year ended April 3, 2021. The stable outlook reflects Moody's expectation of organic revenue growth of at least the upper single digits percent over the next 12 to 18 months despite supply disruptions negatively impacting revenue growth. Revenue growth will be driven by both unit volume growth and content gains in 5G smartphones. In addition, growth will also benefit from telecommunications carrier spending to construct 5G networks globally. Given the increasing revenues and EBITDA margin (Moody's adjusted) will remain in the mid 30s percent level, Moody's expects that adjusted debt to EBITDA will remain below 1.5x over the outlook period. Qorvo's speculative grade liquidity (SGL) rating of SGL-2 indicates good liquidity supported by Moody's expectation of cash in excess of $700 million (cash of $1.2 billion as of October 2, 2021) and free cash flow of more than $1 billion over the next year. These internal sources of liquidity are supplemented by a $300 million unsecured revolving credit facility maturing in September 2025, which Moody's expects will remain undrawn. Qorvo's Senior Notes due 2029 and 2031, and the New Notes, are rated Ba1, which equals the Ba1 corporate family rating (CFR). The debt ratings reflect the single class of debt and the limited cushion of subordinated liabilities in the capital structure. Moody's views Qorvo's governance risks as neutral to low. Qorvo follows a conservative financial policy of maintaining a financial leverage below 1.5x adjusted debt to EBITDA. Qorvo adheres to policies and standards of a listed company and demonstrates a strong management track record of delivering consistent profitability. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS The ratings could be upgraded if Qorvo: Substantially reduces the customer revenue concentration Generates organic revenue growth in excess of the industry Maintains a very conservative leverage profile, with debt to EBITDA (Moody's adjusted) below 1.5x on a sustained basis Qorvo's ratings could be downgraded if: There is sustained slowdown in revenue growth EBITDA margin falls below the low 20s percent level (Moody's adjusted) for an extended period If profitability pressure or a material increase in debt levels lead to debt to EBITDA (Moody's adjusted) sustained above 2.5x Qorvo, Inc. (Qorvo), based in Greensboro, North Carolina, produces radio frequency (RF) filters and modules used in smartphones and other RF products for a variety of end markets including cellular telephony base stations, military and commercial radar, and WiFi networks The principal methodology used in this rating was Semiconductors published in September 2021. RED HOOK SOLAR: Wins Cash Collateral Access ------------------------------------------- The U.S. Bankruptcy Court for the Northern District of New York has authorized Red Hook Solar Corp. to use cash collateral, nunc pro tunc, and effective as of the petition date. The Debtor requires the use of cash collateral to meet its ordinary operating expenses or maintain and preserve its property as a going business. The Debtor and NYBDC Local Development Corp. stipulate and agree to authorize the use of the cash collateral and to provide NYBDC with adequate protection. On August 14,2019, the Debtor delivered to NYBDC Local Development Corp. a Note and Security Agreement in the principal amount of $95,000. Pursuant to the terms of Note #1 as security for its prompt and complete payment, the Debtor granted NYBDC a continuing security interest in all of the Borrower's business assets. NYBDC properly perfected its interest in the pledged collateral by filing a UCC-1 Financing Statement with the New York State Department of State on August 23, 2019 (UCC #1), Filing Number-201908238379446. On August 14,2019, for good and valuable consideration, the Debtor delivered to NYBDC a second Note and Loan and Security Agreement in the principal amount of $5,000. Pursuant to the terms of the Security Agreement as security for its prompt and complete payment, the Debtor granted NYBDC a continuing security agreement in all of the Borrower's business assets. NYBDC properly perfected its interest in the pledged collateral by filing a UCC-1 Financing Statement with the New York State Department of State on August 23, 2019 (UCC #2), Filing Number-201908238379484: As of the Petition Date, NYBDC asserts and the Debtor acknowledges that the Debtor is indebted to NYBDC in the amount of $91,628. The Debtor is authorized to use cash collateral through the termination date in accordance with the terms and provisions of the Stipulation and Order. The Debtor will seek prior approval from NYBDC prior to making any single expenditure in excess of $2,500. As adequate protection of the interests of NYBDC against any diminution in value of such interests, the Debtor will grant NYBDC a "rollover" replacement lien on post-petition inventory, accounts, equipment, cash, and cash equivalents, contract rights, general intangibles and all other post-petition personal property of the Debtor, including proceeds and products thereof to the same extent and priority as existed as of the filing date. The Replacement Liens will be in addition to the liens that NYBDC had in the Property and the Debtor's assets as of the Petition Date, which liens extend to and encumber the proceeds and products of the property of the Debtor in existence at the time the bankruptcy petition was filed to the extent of NYBDC's lien at the time of the filing. The post-petition lien granted to NYBDC may be shared with other secured creditors as they are identified and as their interests may appear. The priority of each secured creditor in the post-petition property will be based on the priority each secured creditor held in property of the debtor as of the petition date. The Debtor's authority to use Cash Collateral pursuant to the Stipulation will immediately terminate without further order, notice or hearing, upon the occurrence of any of these events: a. The conversion of the chapter 11 case to one under chapter 7 of the Code; b. The dismissal of the Debtor's bankruptcy case; c. The cessation of Debtor s normal business operations or the sale of Debtor's business. A copy of the order is available at https://bit.ly/3meu0t9 from PacerMonitor.com. About Red Hook Solar Corp. Red Hook Solar Corp. is in the solar construction industry with a principal place of business located at 160 Nevis Rd. Tivoli, NY 12583, Columbia County, New York. The Debtor sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. N.D. N.Y. Case No. 21-10759 on August 9, 2021. In the petition signed by Chad Dickason, president, the Debtor disclosed $1,302,866 in total assets and $363,146 in total liabilities. Judge Robert E. Littlefield Jr. oversees the case. Michael L. Boyle, Esq., at Boyle Legal, LLC is the Debtor's counsel. NYBDC Local Development Corp., as secured creditor, is represented by: Paul A. Levine, Esq. Lemery Greisler, LLC 50 Beaver Street, 2nd Floor Albany, NY 12207 Tel No: (518) 433-880 REDWOOD EMPIRE: Wins Cash Collateral Access Thru Dec. 17 -------------------------------------------------------- The U.S. Bankruptcy Court for the District of Arizona has authorized Redwood Empire Lodging, LP to use cash collateral on an interim basis in accordance with the budget, with a 10% variance through and including December 17, 2021. The Court ruled that the Debtor will not make any payment to any professional employed under Bankruptcy Code section 327 before interim or final (as applicable) approval of such professional's application for payment of such fees and costs. The Debtor, however, may pay any fees owed to the Office of the United States Trustee, without regard to any amount set forth in the Operating Budgets. In addition to the replacement liens granted to the Debtor's Lenders under the First Interim Order, Second Interim Order, and the Third Interim Order, the Lenders are granted as adequate protection, valid and perfected security interests in the Debtor's postpetition assets of the same type and to the same extent and priority (if any) as existed prior to the Petition Date. During the pendency of the third interim order, the Debtor will maintain insurance on the Lenders' physical collateral and will provide proof of insurance to its secured creditors in addition to what the Debtor provided on June 25, 2021, promptly following a written request. With respect to the cash collateral relating to the Page Hotel, the Debtor will maintain at all times a minimum aggregate balance of the Page Hotel's bank accounts of $116,000, and any funds needed to pay for expenses of the Page Hotel that would otherwise cause the aggregate balance to fall below $116,000 will be funded from the Debtor's "savings account" consisting of funds that are not cash collateral of any secured creditor in the Bankruptcy Case. If the aggregate balance of the Page Hotel's bank accounts at any time falls below $116,000, the Debtor will cause funds to be deposited into such bank accounts to replenish such accounts to at least $116,000. These events constitute an "Event of Default:" a. The Debtor will be in breach of its agreements or undertakings, provided that with respect to any report that any Lender claims has not been provided, the Lender will provide written notice to the Debtor relating to such report and the Debtor will have two business days to cure; b. The Debtor will furnish or knowingly make any false, inaccurate, or incomplete representation, warranty, certificate, report or summary in connection with or under the Order; c. The appointment of a trustee in the Debtor's Bankruptcy Case; d. The dismissal of the Debtor's Bankruptcy Case; e. Except as permitted, the use of Cash Collateral under Bankruptcy Code section 363(c) without the Lenders' prior written consent; f. Best Western International, Inc. or any of its affiliates obtains a final order granting relief from the automatic stay applicable under Bankruptcy Code section 362 in the Debtor's Bankruptcy Case to exercise any of their rights under or terminate the membership agreements between Best Western and the Debtor (and then cash collateral will cease as to the affected Hotel); g. Any person or entity obtains a final order granting relief from the automatic stay with respect to the Lenders' collateral (and then cash collateral will cease as to the affected Hotel); h. A further interim order approving the Debtor's use of cash collateral is not entered by the Court on or the expiration of the Second Interim Period; i. The Debtor's Bankruptcy Case is converted to a case under Chapter 7 of the Bankruptcy Code; j. The Debtor will sell either of its Hotels without either (i) the applicable secured creditor's written consent (and in its sole and absolute discretion), or (ii) Court order after notice and a hearing; k. The Debtor's filing of a motion to abandon its interest in either of the Hotels; l. The Debtor's failure to maintain insurance in amounts and types as may be required under applicable loan and security documents, subject to 10 business days' written notice and opportunity to cure; or m. The Debtor's failure to cause all applicable sales and bed taxes to be paid on or before their due dates, or the Debtor's failure to provide the Lenders with evidence thereof subject to five business days written notice from the Lender and opportunity to cure. The Court has not determined if or to what extent the Lenders hold valid security interests in the Cash Collateral or any other collateral. In this regard, the Debtor fully reserves all of its rights to challenge any of the security interests that may be asserted by the Lenders, and the Lenders fully reserve all of their rights to assert alleged claims and liens in the cash collateral (and any other property). The Debtor has confirmed the authenticity of Pacific Premier's, Poppy's, and S&K's loan documents, which confirmation will be binding on the Debtor. The next hearing on the matter is scheduled for December 16 at 10 a.m. A copy of the order is available at https://bit.ly/31QT95K from PacerMonitor.com. About Redwood Empire Lodging, LP Redwood Empire Lodging, LP owns and operates two hotels: the Best Western Plus located at 208 N Lake Powell Boulevard, Page, Arizona 86040, and the Best Western Sonoma Winegrower's Inn, located at 6500 Redwood Drive, Rohnert Park, California 94928. The Debtor sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. D. Ariz. Case No. 21-04678) on June 16, 2021. In the petition signed by Debra Heckert, member, the Debtor disclosed up to $50 million in both assets and liabilities. Judge Eddward P. Ballinger Jr. is assigned to the case. Isaac M. Gabriel, Esq., at Quarles & Brady LLP is the Debtor's counsel. REGIONAL HEALTH: Shareholders Elect Four Directors -------------------------------------------------- Regional Health Properties. Inc.'s 2021 Annual Meeting of Shareholders was held on Dec. 2, 2021, at which Michael J. Fox, Brent Morrison, Kenneth W. Taylor, and David A. Tenwick were elected to the company's Board of Directors. The shareholders also ratified the appointment of Cherry Bekaert LLP as the company's independent registered public accounting firm for the year ending Dec. 31, 2021. About Regional Health Properties Regional Health Properties, Inc. (NYSE American: RHE) (NYSE American: RHEpA) -- http://www.regionalhealthproperties.com/-- is a self-managed healthcare real estate investment company that invests primarily in real estate purposed for senior living and long-term healthcare through facility lease and sub-lease transactions. Regional Health reported a net loss attributable to common stockholders of $9.68 million for the year ended Dec. 31, 2020, compared to a net loss attributable to common stockholders of $3.49 million for the year ended Dec. 31, 2019. As of Sept. 30, 2021, the Company had $107.02 million in total assets, $96.15 million in total liabilities, and $10.88 million in total stockholders' equity. REMARK HOLDINGS: Gets $30M of Debt Financing from Mudrick Capital ----------------------------------------------------------------- Remark Holdings, Inc. announced a $30 million debt financing deal with Mudrick Capital Management, L.P. The financing will be used to pay off certain debts and liabilities, provide working capital for existing projects, and to fund new business initiatives, including opportunities in infrastructure, security and data analytics, as well as invest in and grow NFT and Metaverse businesses. "We are excited to be working with an investor that is well known for recognizing undervalued companies, and providing the strategic capital and industry expertise to help capture and grow opportunities in the large total addressable markets we are pursuing," noted Kai-Shing Tao, chairman and chief executive officer of Remark Holdings. "This debt facility allows us to raise capital in a non-dilutive manner which protects shareholder value and, more importantly, provides the funds necessary to achieve the growth plans we have outlined for 2022. We are positioned to gain the benefits of the infrastructure bill in 2022 by working to operationally deploy in the security, transportation and public safety markets. We look forward to providing additional information on our NFT and Metaverse businesses in the coming weeks." About Remark Holdings Remark Holdings, Inc. (NASDAQ: MARK) -- http://www.remarkholdings.com-- delivers an integrated suite of AI solutions that enable businesses and organizations to solve problems, reduce risk and deliver positive outcomes. The company's easy-to-install AI products are being rolled out in a wide range of applications within the retail, financial, public safety and workplace arenas. The company also owns and operates digital media properties that deliver relevant, dynamic content and ecommerce solutions. The company is headquartered in Las Vegas, Nevada, with additional operations in Los Angeles, California and in Beijing, Shanghai, Chengdu and Hangzhou, China. Remark Holdings reported a net loss of $13.68 million for the year ended Dec. 31, 2020, compared to a net loss of $25.61 million for the year ended Dec. 31, 2019. As of Sept. 30, 2021, the Company had $93.08 million in total assets, $24.38 million in total liabilities, and $68.70 million in total stockholders' equity. Los Angeles, California-based Weinberg & Company, the Company's auditor since 2020, issued a "going concern" qualification in its report dated March 31, 2021, citing that the Company has suffered recurring losses from operations and negative cash flows from operating activities and has a negative working capital and a stockholders' deficit that raise substantial doubt about its ability to continue as a going concern. REX INC: West Virginia Tax Department Says Plan Not Feasible ------------------------------------------------------------ The West Virginia State Tax Department objects to the Amended Chapter 11 Small Business Plan proposed by debtor R.E.X., Inc., on the following grounds: * In reviewing the accounts of Debtor prior to hearing set for December 9, 2021, Counsel for the Tax Department was advised that Debtor had failed to file and pay its Corporate Franchise Return for June 30, 2021, which were due October 15, 2021. * Subsequently, the Tax Department filed Proof of Claim 12-6 containing estimated liabilities of $16,000.00. * Upon review of Debtor's October 2021 MOR, Counsel for the Tax Department notes that Debtor's state a Net Income of $11,536.34. * Assuming that Debtor's reported Net Income is correct and the Tax Department's Proof of Claim 12-5 is also correct their represents a monthly Net Income of -$4,463.66 for the month of October. * Debtor continues, despite strenuous admonishments by this Court, to fail to file post-petition taxes. * Debtor continues to demonstrate that it cannot put forth a feasible plan in this matter. A full-text copy of the Tax Department's objection dated Dec. 6, 2021, is available at https://bit.ly/30bTCie from PacerMonitor.com at no charge. Tax Department's Counsel: Eric M. Wilson, Esquire WV Bar no. 9755 West Virginia State Tax Department Bankruptcy Unit P.O. Box 766 Charleston, WV 25323-0766 (304)558-5330 About R.E.X. Inc. R.E.X., Inc., which has been operating and owning real estate since 1977, owns certain real property in West Virginia, including a shopping center located off U.S. Route 60 in Barboursville, which consists of space leased to certain shops and businesses. The Debtor filed a Chapter 11 bankruptcy petition (Bankr. S.D. W.Va. Case No. 20-30290) on July 27, 2020. The petition was signed by Rex Donahue, the company's manager. At the time of the filing, Debtor had estimated assets of between $1,000,001 and $10 million and liabilities of the same range. The Debtor has tapped Caldwell & Riffee, PLLC, as its legal counsel. Paul Khoury, CPA is employed as the Debtor's accountant. Michelle Steele is the Debtor's Subchapter V Trustee. RIVER HILL: Case Summary & 20 Largest Unsecured Creditors --------------------------------------------------------- Debtor: River Hill Ltd. d/b/a River Hill Estates 2930 Sidco Dr. Nashville, TN 37202 Business Description: River Hill Ltd. is a Single Asset Real Estate debtor (as defined in 11 U.S.C. Section 101(51B)). Chapter 11 Petition Date: December 10, 2022 Court: United States Bankruptcy Court Middle District of Tennessee Case No.: 21-03771 Judge: Hon. Charles M. Walker Debtor's Counsel: Robert Gonzales, Esq. EMERGELAW, PLC 4000 Hillsboro Pike 1112 Nashville, TN 37215 Tel: 615-815-1535 Email: robert@emerge.law Total Assets: $74,452 Total Liabilities: $2,229,479 The petition was signed by Robert R. Short, chief manager of LLC GP. 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/6DMX7TI/River_Hill_Ltd__tnmbke-21-03771__0001.0.pdf?mcid=tGE4TAMA SAN DIEGO TACO: Business Income to Fund Plan Payments ----------------------------------------------------- San Diego Taco Company, Inc., filed with the U.S. Bankruptcy Court for the Southern District of California a Plan of Reorganization for Small Business. The Debtor is a small corporation that operates a Mexican food restaurant in San Diego, CA. Ernest Becerra is sole shareholder of Debtor, its president, chief financial officer and corporate secretary, and its sole director. Becerra established Debtor in 2014. The Debtor has one restaurant, located in the Barrio Logan area of San Diego. The Debtor has 17 employees, including Mr. Becerra. The Debtor has $922,817.97 in total actual Nonpriority, Unsecured Claims. The Debtor shall continue in business and Ernest Becerra shall continue to manage the Debtor. Mr Becerra has not received any salary or other compensation since Debtor filed this case in early September 2021; Debtor intends to pay Mr. Becerra a salary of $3,200 per month,subject to Court approval. Commencing on January 1, 2022, Debtor shall make payments set forth in the payment schedules E(1) (5-year, consensual plan) or E(2) (3-year nonconsensual plan). There are two priority tax claims and these are not treated as Class under the Plan. Instead, under either a consensual or nonconsensual Subchapter V plan, Debtor proposes to pay each of these priority claims in full in 5 years. General, unsecured claims shall be paid monthly commencing on January 1, 2022 for the yearly amounts with the final payment to be made by December 31, 2026 (or December 31, 2024). In the event of default, Debtor's assets shall be liquidated and distributed pursuant to applicable bankruptcy law in satisfaction of its remaining Plan obligations. The Debtor shall continue to pay monthly contractual payments directly to Pacific Premier Bank on its secured claim. Debtor owes unsecured Payment Protection Program (PPP) loans to Pacific Premier Bank. If Debtor can qualify for forgiveness of these loans, then the percentage dividend to the remaining unsecured creditors will increase accordingly. Debtor will implement the Plan through its projected disposable income from its business operations. A full-text copy of the Plan of Reorganization dated Dec. 06, 2021, is available at https://bit.ly/3lSkuf4 from PacerMonitor.com at no charge. About San Diego Taco Company San Diego Taco Company, Inc., an operator of restaurants that specialize in Mexican cuisine, sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. S.D. Cal. Case No. 21-03594) on Sept. 2, 2021. In the petition signed by Ernie Becerra III, president, the Debtor disclosed $615,570 in total assets and $1,597,598 in total liabilities. Judge Christopher B. Latham oversees the case. The Debtor tapped Jason E. Turner, Esq., at J. Turner Law Group, APC as legal counsel and Bonilla Accounting Firm as accountant. SEAGATE TECHNOLOGY: S&P Affirms 'BB+' ICR, Outlook Stable --------------------------------------------------------- S&P Global Ratings affirmed its ratings on hard disk drive (HDD) maker Seagate Technology Holdings PLC, including the 'BB+' issuer credit rating. S&P said, "The stable outlook reflects our view that the rating is unlikely to change over the next 12 months given good cushion to our 3x downgrade threshold and solid business performance expected over the next year because of robust demand from hyperscale data center customers. "We take a more constructive view of Seagate's business because a critical mass of its revenue now comes from the expanding mass capacity segment. As of the last quarter, the company derived 71% of its HDD revenue from mass capacity products, which go into hyperscale data centers such as those of Amazon, Microsoft, and Google. It was only 43% in the quarter ended in December 2018. We estimate this revenue has increased year over year at about 30% over the last eight quarters. We believe the segment is now large enough to more than offset the declining legacy segment, which includes revenue from PC makers and consumers. We estimate segment revenue has fallen about 15% per quarter over the last eight quarters. Therefore, we now believe Seagate has transitioned to where it can deliver positive revenue growth over a multiyear horizon, a benchmark we were not confident it could achieve until now. "The stable outlook reflects our view that the rating is unlikely to change over the next 12 months given good cushion to our 3x downgrade threshold and solid business performance expected over the next year due to robust demand from hyperscale data center customers." S&P could lower its rating on Seagate if it sustains net leverage over 3x. This could occur if: -- Industry supply discipline wanes and leads to significant price competition; -- SSD prices fall faster than expected resulting in substitution for HDD data center products; or -- Another leveraged share repurchase takes debt to EBITDA near S&P's threshold. S&P said, "While unlikely over the next 12 months, we could consider raising our rating on Seagate over the longer term if we come to believe management is committed to maintaining net leverage below 2x through cyclical downturns and shareholder returns. Despite leverage already below our threshold, we are not likely to consider an upgrade over the next 12 months because we think the company's leveraged share buyback in fiscal 2021 could foreshadow similar additional transactions." To consider an upgrade, S&P would need to believe: -- Seagate can achieve its shareholder return objectives; and -- Maintain leverage below 2x. SEQUENTIAL BRANDS: Unsecureds to Get Nothing in Liquidating Plan ---------------------------------------------------------------- Sequential Brands Group, Inc., and its debtor affiliates filed with the U.S. Bankruptcy Court for the District of Delaware a Disclosure Statement for Joint Plan of Liquidation dated Dec. 7, 2021. The Plan is being proposed as a joint plan of liquidation of the Debtors for administrative purposes only and constitutes a separate chapter 11 plan of liquidation for each Debtor. The Plan is not premised upon the substantive consolidation of the Debtors with respect to the Classes of Claims or Interests set forth in the Plan. Pursuant to the Plan, each Holder of an Allowed Term B Secured Claim will receive a percentage of the Liquidating Trust Interests that equals such Holder's Allowed Term B Secured Claim when divided by the sum of all Allowed Term B Secured Claims. The Liquidating Trustee will distribute the appropriate Net Proceeds of the Liquidating Trust Assets to Holders of Allowed Term B Secured Claims in proportion to the Liquidating Trust Interests held by such Holder. The Plan also provides for the Wind-Down Reserve Accounts. On the Effective Date, Cash shall be placed into the Wind-Down Reserve Accounts comprised of the (i) Administrative/Priority Claims Reserve Account, (ii) Other Secured Claims Reserve Account, (iii) Professional Fee Claims Reserve Account, and (iv) Liquidating Trust Reserve Account, in each case, pursuant to the terms of the Plan. As of the Petition Date, the Debtors estimated they had unsecured Claims in an amount between $1.2 million and $1.4 million. On September 24, 2021, the Bankruptcy Court entered an order approving the Bidding Procedures Motion (the "Bidding Procedures Order"), thereby initiating the auction and sale process. The Bidding Procedure Order also authorized Galaxy as the Galaxy Stalking Horse Bidder for the Active Division Assets and Centric as the Centric Stalking Horse Bidder for the Joe's Jeans Brand on the terms set forth in the Galaxy APA and the First A&R Centric APA, respectively. On October 28, 2021, the Debtors, in accordance with the terms of the Bidding Procedures Order, determined to cancel the auction and identified Successful Bidders for each of their Assets as follows: * Gainline Galaxy Holdings LLC as Successful Bidder for the Debtors' Active Division Assets for a purchase price including, as may be adjusted in accordance with the terms of the Galaxy APA, (a) $55,500,000 in cash, (b) issuance to the Term B Lenders of Series A units of the Buyer in an amount equal to 11.3% of the aggregate outstanding Series A and Series B Units of the Buyer at Closing, such units to be valued at $50,000,000, (c) issuance of indebtedness of Buyer or its subsidiaries in an amount equal to $227,500,000, and (d) the assumption of certain assumed liabilities. * Centric Brands LLC as Successful Bidder for the Debtors' Joe's Jeans Brand for a purchase price including but not limited to (a) an amount in cash that, when combined with the Cash Consideration, and payable under, the WR APA, equals $48,500,000 and (b) the assumption of certain assumed liabilities, all as more further described by (i) the Second A&R Centric APA and (ii) the notices of assumption and assignment filed in the Chapter 11 Cases; and JJWHP, LLC as Successful Bidder for the Debtors' William Rast Brand for a purchase price including but not limited to (a) an amount in cash that, when combined with the Cash Consideration as defined in, and payable under, the Centric APA, equals $48,500,000 and (b) the assumption of assumed liabilities; and * With You Inc. as Successful Bidder for the Debtors' Unit Interests in With You LLC for a purchase price including but not limited to $65,000,000 in cash, subject to certain adjustments, all as more further described by the With You Notice and (ii) the notices of assumption and assignment filed in the Chapter 11 Cases. On November 9, 2021, the Centric Sale and the William Rast Sale both closed, pursuant to the terms of the Second A&R Centric APA and the William Rast APA. In accordance with the terms of the Second A&R Centric APA, Centric assigned all of its rights and obligations thereunder to JJWHP, LLC, which then assigned certain rights back to Centric. In accordance with the terms of the William Rast APA, JJWHP, LLC assigned all of its rights and obligations thereunder to WRWHP, LLC. On November 12, 2021, the Galaxy Sale and the With You Sale both closed, pursuant to the terms of the Galaxy APA and the With You APA. Following the exercise of its option of the Galaxy APA, Gainline Galaxy Holdings LLC purchased the Company's AND1, Avia, GAIAM, and SPRI brands for an adjusted purchase price of $328,950,000. Following the closing of the Sale Transactions, on November 12, 2021, pursuant to the Galaxy Sale Order, the Debtors applied the non-cash portion of the Purchase Price to partially paydown the total amount outstanding under the Wilmington Credit Agreement, which outstanding amount was $298,467,625 as of the Petition Date. As a result, the principal balance outstanding under the Wilmington Facility was reduced by $267,978,980. On November 24, 2021, pursuant to the orders approving the Sale Transactions and the DIP Order, $140,349,832.00 was repaid under the DIP Facility, leaving the balance outstanding under the DIP Facility at $1,000,000. The Plan will treat claims as follows: * Class 3 consists of all Term B Secured Claims. Each Holder of an Allowed Class 3 Claim shall receive its Pro Rata share of the Liquidating Trust Interests of the Plan on account of such Holder's Term B Secured Claim(s) against the Debtors, which shall entitle such holder to distributions from the Liquidating Trust as and to the extent set forth in the Plan and the Liquidating Trust Agreement. Class 3 is Impaired under the Plan. * Class 4 consists of all General Unsecured Claims. On the Effective Date or as soon as reasonably practicable thereafter, all General Unsecured Claims shall be cancelled and extinguished. Holders of General Unsecured Claims shall not receive any distribution or retain any property pursuant to the Plan. Class 4 is Impaired under the Plan. * Class 7 consists of all Intercompany Interests. On the Effective Date or as soon as reasonably practicable thereafter, in accordance with the Implementation Memorandum, each Intercompany Interest shall be (i) reinstated, in full or in part, and treated in the ordinary course of business or (ii) cancelled and discharged, as mutually agreed upon by the Debtors and the Requisite Consenting Lenders. Holders of such Intercompany Interests shall not receive or retain any property on account of such Interest to the extent that such Intercompany Interest is cancelled and discharged. * Class 8 consists of all Existing Parent Equity Interests. On the Effective Date or as soon as reasonably practicable thereafter, all Existing Parent Equity Interests shall be cancelled and extinguished. Holders of Existing Parent Equity Interests shall not receive any distribution or retain any property pursuant to the Plan. The Plan is being proposed as a joint plan of liquidation of the Debtors for administrative purposes only and constitutes a separate chapter 11 plan of liquidation for each Debtor. The Plan is not premised upon the substantive consolidation of the Debtors with respect to the Classes of Claims or Interests set forth in the Plan. On the Effective Date or as soon as practicable thereafter, as provided in the Implementation Memorandum, the Debtors shall effect the Plan Transactions. Notwithstanding anything to the contrary in the Plan, the means and timing for implementation of the Plan Transactions are set forth in the Implementation Memorandum. A full-text copy of the Disclosure Statement dated Dec. 7, 2021, is available at https://bit.ly/3EIAl73 from Kurtzman Carson Consultants, LLC, claims agent. Co-Counsel for the Debtors: GIBSON DUNN & CRUTCHER LLP Scott J. Greenberg Joshua K. Brody Jason Zachary Goldstein 200 Park Avenue New York, NY 10166 Telephone: (212) 351-4000 Facsimile: (212) 351-4035 PACHULSKI STANG ZIEHL & JONES LLP Laura Davis Jones Timothy P. Cairns 919 North Market Street, 17th Floor P.O. Box 8705 Wilmington, DE 19899 (Courier 19801) Telephone: (302) 652-4100 Facsimile: (302) 652-4400 About Sequential Brands Group Sequential Brands Group, Inc. (NASDAQ:SQBG), together with its subsidiaries, owns various consumer brands. The New York-based company licenses its brands for a range of product categories, including apparel, footwear, fashion accessories, and home goods. Sequential Brands Group and its affiliates sought Chapter 11 protection (Bankr. D. Del. Lead Case No. 21-11194) on Aug. 31, 2021. The company disclosed total assets of $442,774,937 and debt of $435,073,539 as of Aug. 30, 2021. Judge John T. Dorsey oversees the cases. The Debtors tapped Gibson, Dunn & Crutcher, LLP and Pachulski Stang Ziehl & Jones, LLP as legal counsel. Miller Buckfire & Co. and its affiliate, Stifel Nicolaus & Co., Inc., serve as financial advisor and investment banker. Kurtzman Carson Consultants, LLC, is the claims agent and administrative advisor. King & Spalding, LLP, is counsel to the debtor-in-possession lenders (and the consenting lenders under the restructuring support agreement) while Morris, Nichols, Arsht & Tunnell, LLP serve as the DIP lenders' local counsel. SKILLZ INC: Moody's Assigns First Time B3 Corporate Family Rating ----------------------------------------------------------------- Moody's Investors Service assigned a first-time B3 Corporate Family Rating and B3-PD Probability of Default Rating to Skillz Inc. in connection with the proposed debt issuance. Moody's also assigned a B3 instrument rating to the new $300 million senior secured notes. Net proceeds from the proposed debt issuance will add to cash balances and be available for general corporate purposes. The outlook is stable. The rating actions include the following: Assignments: Issuer: Skillz Inc. Corporate Family Rating, Assigned B3 Probability of Default Rating, Assigned B3-PD Speculative Grade Liquidity Rating, Assigned SGL-1 Senior Secured 1st Lien Global Notes, Assigned B3 (LGD3) Outlook Actions: Issuer: Skillz Inc. Outlook, Assigned Stable RATINGS RATIONALE The B3 CFR reflects Skillz' nascent business model, Moody's expectation for negative cash generation over the next three years, and very high financial leverage. Moody's estimates that Skillz will be able to fund free cash flow shortfalls through year-end 2025 with available cash balances, pro forma for the proposed notes offering. Since going public in December 2020 via a SPAC transaction, Skillz has funded operating expenses, including significant marketing and user acquisition ("UA") spending, with net proceeds from the initial and follow-on equity offerings (roughly $650 million combined). The company remains liquid with $540 million of cash balances as of September 2021, to be augmented with the proceeds from proposed notes offering. Skillz has grown its top line at a 49% CAGR to $343 million for LTM September 2021 from $51 million in 2018, and Moody's expects growth over the next four years at a 29% CAGR will position the company to reach revenues of $1 billion in 2025, at which point the company is projected to generate positive free cash flow. Moody's projects the company will utilize roughly $350 million of cash to fund operating expenses as well as cash interest on the new notes through the free cash flow break-even period. Since its founding in 2012, Skillz has emerged as a leader in hosting games and providing tournament players with financial prizes. For every dollar a player spends in a tournament, roughly 86 cents go into a prize pool to be distributed to the winners. The balance is split between the game developers and Skillz to fund operations. Moody's notes that ramping revenues to the $1 billion level is critical for the company to reach self-funding status, given the high levels of marketing spend. Skillz is the first platform to develop the ability to handle multi-player mobile games of skill at a large scale. Moody's believes the company benefits from first mover advantage and meaningful barriers to entry given the unsuccessful attempts by deep-pocketed, gaming and social media companies to develop their own skill-based gaming platforms that ensure fairness and prevent fraud. Skillz has been developing its proprietary algorithms since 2012 and has a good head start. To the extent, however, that a potential rival develops an effective platform for games of skill, competition would intensify, and revenue growth for Skillz could be muted. Moody's does not expect a viable rival in this mobile gaming genre over the next couple of years which provides some time for Skillz to gain additional scale and generate free cash flow. Moody's estimates negative adjusted free cash flow of ($160 million) in calendar 2022 will decline each year to roughly ($60 million) in 2024, before turning positive by the end of 2025. Existing cash balances are sufficient to fund projected cash shortfalls through 2025, but Skillz could cut back on a portion of budgeted UA spending targeting new users to preserve cash, if needed. Although Moody's would expect revenues will continue growing after a portion of UA spend is cut back, the rate of revenue growth would likely be reduced. Moody's expects the global demand for mobile games will continue increasing in the high single digit percentage range or better which provides Skillz with tailwinds for continuing revenue gains as the company expands the market for games of skill or competition. The commitment by Skillz to maintain unrestricted cash balances of $400 million or more provides a secondary source of repayment. In Moody's view, even after the company establishes positive free cash flow and brings adjusted debt leverage to less than 6.5x, Skillz will need to maintain disciplined financial policies given the company's small scale relative to deeper-pocketed gaming competitors, a rapidly evolving gaming sector, reliance on three games for more than 70% of revenues, and developer concentration. In addition, Skillz will need to establish a track record for adherence to financial policies and address potential challenges related to international expansion. Social risks are moderate reflecting regulatory concerns. Skillz operates in 41 states of the U.S. which permit skill-based gaming contests and are therefore not governed by a state's gambling laws and licensing requirements. To the extent laws change or the interpretation of existing laws are revised, there could be restrictions, including taxes, that reduce the number of jurisdictions in the US or abroad in which Skillz would be able to operate. Governance risk is another key consideration given Skillz is a controlled corporation. The company is publicly traded with its largest shareholders, Morgan Stanley, ARK Investment, Atlas Venture, and Wildcat Capital owning roughly 6% to 10% of common shares each, followed by other investment management companies holding less than 4.5%. Although good governance is supported by a board of directors with four of the company's seven board seats being held by independent directors, the combined ownership of common and super voting (100% of Class B super voting shares) shares held by co-founder, Andrew Paradise, represents just above 80% of total votes. As a result, Andrew Paradise controls voting for most matters including the election of directors and significant corporate transactions, such as mergers or divestitures. Skillz relies on NYSE "controlled company" exemptions to avoid certain corporate governance requirements. Accordingly, shareholders of Skillz are not afforded the same protections as shareholders of other NYSE-listed companies with respect to corporate governance. Skillz' Speculative Grade Liquidity (SGL) rating of SGL-1 reflects very good liquidity over the next year with cash balances exceeding $800 million pro forma for the notes issuance which should be sufficient to fund cumulative expected negative adjusted free cash flow totaling roughly ($350 million) for 2022-2024. Moody's expects adjusted free cash flow will turn positive by the end of 2025. Moody's does not expect that Skillz will have a committed revolver facility. If needed, the company could reduce a portion of spending on marketing costs targeting new users to preserve cash. The B3 instrument rating for the new senior secured notes is in line with the B3 CFR given the new notes represent the preponderance of funded debt. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS The stable rating outlook incorporates Moody's expectation that revenues will grow organically by more than 20% over each of the next few years before moderating to lower double-digit percentage growth rates. The outlook also reflects Moody's expectation that cash balances will be sufficient to cover anticipated shortfalls over the next few years. At all times, Moody's expects Skillz will maintain a minimum $400 million of unrestricted cash. To the extent Skillz underperforms its projections for revenue growth or free cash flow improvement, Moody's expects the company will cut back on discretionary spending to preserve liquidity while continuing to manage towards positive adjusted free cash flow by the end of 2025. The outlook does not include meaningful cash flow losses from international expansion. Although not likely over the next year, ratings could be upgraded if annual revenue growth exceeding 20% along with improving profit margins lead to adjusted debt to EBITDA improving to less than 6.5x with positive free cash flow. Very good liquidity would also need to be maintained with growing cash balances, good conversion of EBITDA to free cash flow, and more than 10% adjusted free cash flow to debt. Ratings could be downgraded if Skillz experiences declining operating metrics reflecting competitive pressures or operational missteps. There would be downward ratings pressure if Moody's expects annual revenue growth will fall to the mid-single digit percentage range or adjusted free cash flow shortfalls are greater than projected reflecting competitive pressures or underperformance related to execution of domestic or international expansion plans. Ratings could also be downgraded if liquidity deteriorates, including Moody's expectation that unrestricted cash balances will no longer exceed funded debt balances by $100 million. Skillz Inc., founded in 2012 with headquarters in San Francisco, CA, is a technology platform that enables game developers to monetize their content through multi-player competition. Skillz hosts an average 6 million of daily tournaments (including 2 million paid entry daily tournaments) for mobile players worldwide and offering over $150 million in prizes each month. Revenues are expected to exceed $500 million in 2022, but free cash flow will not turn positive until the end of 2025 reflecting growth investments. Skillz is publicly traded but also a controlled company with its co-founder, Andrew Paradise, holding 80% of voting control. The principal methodology used in these ratings was Business and Consumer Services published in November 2021. SKILLZ INC: S&P Assigns 'B-' Issuer Credit Rating, Outlook Stable ----------------------------------------------------------------- S&P Global Ratings assigned its 'B-' issuer credit rating to San Francisco-based mobile gaming platform operator Skillz Inc. S&P said, "Despite strong double-digit revenue growth, we expect EBITDA will remain negative for at least the next two years as it heavily invests in its business to grow subscribers and user engagement. "We also assigned a 'B-' issue-level rating and '4' recovery rating to the company's proposed senior secured notes reflecting our expectation for average (30%-50%; rounded estimate: 35%) recovery for lenders in the event of a payment default. "The stable outlook reflects our expectation that Skillz will have adequate liquidity to fund cash flow deficits driven by elevated user acquisition costs over the next few years given its sizable cash balance of about $840 million pro forma for the note issuance. "We expect Skillz's EBITDA and free operating cash flow (FOCF) will remain negative for at least the next two years due to high customer acquisition costs. Skillz has a niche market position with a skills-based competition business model that provides an alternative to advertising and in-app purchase monetization models for small developers in the casual gaming market. The company's platform enables small game developers to compete with larger game developers like Activision Blizzard, Electronic Arts (EA), Playtika, and Zygna that can easily outspend them on user acquisition marketing. Skillz often performs user acquisition marketing on behalf of the developer in exchange for a higher share of the game's profits. As developers grow, they can choose to perform their own user acquisition marketing in exchange for a lower profit share. The goal is to create a virtuous cycle where both the developer and the platform can grow its user base and the user remains engaged with a multitude of games to compete in. The company's platform is currently below the scale necessary to achieve this virtuous cycle. Because its platform is still sub-scale, the company plans to spend heavily on user-acquisition over the next few years to achieve greater scale. This presents significant execution risk over the next few years. It must grow users to the point that the profit from existing user cohorts is sufficient to fund enough user acquisition to replace any churn and grow total paying users. S&P does not believe the company will become EBITDA positive until it reaches at least 1.2 million paying monthly active users, which it does not expect to occur until 2024 at the earliest. Games on the Skillz platform face stiff competition in the mobile gaming space and compete with broader media for users' entertainment time. Online entertainment has benefited from positive secular trends that accelerated during the COVID-19 pandemic, shifting more social interactions and consumer entertainment toward digital venues. S&P said, "We expect these positive tailwinds to continue over the long-term leading to sustained growth in the total mobile entertainment market. However, we expect competition to continue increasing in-line with this growth. As more mobile gaming developers and platforms enter the market and existing large players continue to grow, it is becoming increasingly difficult to scale new games. We expect the cost-per-install to continue increasing significantly for the industry, making it more expensive to acquire users through acquisition marketing." This increases the execution risk for Skillz to achieve scale as the longer it takes to reach critical mass, the more expensive it will be to get there. Skillz has significant revenue concentration in games developed by two studios. Mobile games Solitaire Cube, 21 Blitz, and Blackout Bingo accounted for 73% of Skillz' revenue in year-to-date 2021. These games were developed by Tether (43% of total revenue) and Big Run (39% of total revenue). While this is a significant concentration, it is an improvement from 2019, when Tether accounted for 83% of revenue. Neither studio is locked into a long-term contract and could theoretically leave Skillz' platform, although they would lose access to their user base and would have to re-develop the game using an alternative monetization strategy. Nevertheless, Skillz is dependent on game studios to create successful games on their platform and have no control over the development of new game content. Over time, S&P expects user growth to plateau for existing top games and Skillz will need to present users with new games to maintain engagement. Additionally, each game needs a certain level of active users to provide enough liquidity for players to remain engaged and tournaments to run smoothly. Even as the company adds games and studios to its platforms, the success of new games will be dependent on its ability to successfully acquire paying users for that game. Even after spending heavily on user acquisition, new games could fail to reach critical mass. This could make it difficult for Skillz to diversify its revenue sources across a broad base of games and developers, and we expect its revenue concentration may remain high when compared to platform peers like Roblox or Applovin. Skill-based gaming is subject to regulatory risks and changes in app store policies. Skillz operates a platform that supports games of skill and not games of chance and is able to operate in 41 U.S. states without a gambling license. As its platform grows, it could potentially draw more attention to the regulatory environment for skills-based gaming. Additionally, the Google Play store currently does not allow any apps that offer skills-based gaming. This presents an incremental opportunity for Skillz if this policy were to change, but it also highlights the risk that any changes in Apple's app store policies related to skills-based gaming could significantly hinder the company's ability to attract new users. S&P said, "The stable outlook on Skillz reflects our expectation that the company will continue to spend heavily on user acquisition and engagement marketing over the next 12 months to increase the scale of its platform. We expect the company to remain EBITDA negative over the next few years, but its substantial cash balance (pro forma for the debt issuance) of over $800 million provides more than sufficient liquidity to fund its growth investments over the next 12 months." S&P could lower the rating if: -- User acquisition costs continue to increase and users churn faster than expected, such that S&P expects the company will never reach economies of scale and will remain EBITDA negative throughout our forecast; or -- The company's liquidity sources would not fund more than two years of its cash burn and S&P believed that it would need to raise additional capital to fund its operations. While unlikely over the next 12 months, S&P could raise its ratings if it expects the company to generate positive EBITDA without cutting back on user acquisition or limiting growth. This could occur if: -- The company increases the number of sponsored tournaments, leading to a take-rate of well over 20%; and -- It grows its paying monthly active users to over 1.2 million, which would allow the company to achieve the economies of scale necessary to fund user acquisition expenses organically. SOUTHWESTERN ENERGY: Fitch Rates Proposed Unsec. Notes 'BB' ----------------------------------------------------------- Fitch Ratings has assigned a 'BB'/'RR4' rating to Southwestern Energy's proposed senior unsecured notes. Proceeds, along with net proceeds from the proposed term loan credit agreement, will be used to fund the cash portion of the GEP Haynesville, LLC acquisition and to fund the tender of certain series of the company's outstanding senior notes. The Rating Outlook is Stable. Southwestern's ratings are supported by its production scale, expectation of material FCF generation at current Strip prices, manageable debt maturity profile, solid hedging program, and ample liquidity. This is partially offset by the need to integrate a large acquisition and increasing differentials in the Appalachian basin. The Stable Outlook reflects Fitch's belief that the GEP acquisition, while accretive on current Strip pricing, is not as accretive on lower price scenarios due to the amount of debt in the transaction. KEY RATING DRIVERS GEP Haynesville Acquisition: Southwestern has entered into a definitive agreement to buy GEP Haynesville for $1.85 billion. The transaction would add 700 million cubic feet per day of production, making Southwestern one of the largest natural gas producers in North America. The acquisition will be financed by $1.325 billion of cash, which Fitch believes will be funded by the term loan and issuance of senior unsecured debt, and $525 million of Southwestern common shares. Fitch believes the acquisition is credit accretive at current Strip prices, but not as accretive at prices similar to pre-2021 levels. Southwestern's overall natural gas differential is expected to reduce given its increased footprint in the Haynesville. The increased scale in this area should also result in operational efficiencies and provide for marketing synergies. Extended Debt Maturity Schedule: Fitch believes Southwestern has a manageable maturity schedule with approximately $700 million due in 2025, which will be reduced to ~$400 million pro forma for the tender offer. FCF is expected to reduce borrowings under the revolver ($665 million as of Sept. 30, 2021), which is due in 2024. Fitch does not expect the GEP transaction to have a material increase in near-term debt obligations. FCF Pivot: Fitch expects Southwestern to generate material FCF under its base case natural gas prices ($2.90 in 2021 and $2.45 over the long term). FCF projections under current Strip pricing are significantly higher and could result in faster debt reduction. Fitch expects near-term FCF will be applied to debt reduction, as management has lowered its debt/EBITDA target to 1.0x-1.5x. Achieving Scale Benefits: Southwestern's acquisition strategy is an attempt to reap the benefits of scale, which includes operating and cost synergies. The company has a strong footprint in Appalachia, with 789,000 net acres and net production of 3.0 billion cubic feet equivalent per day (bcfe/d). Pro forma for the GEP transaction, the Haynesville footprint would include 269,000 net acres and net production of 1.7bcfe/d. Combined, Southwestern would be one of the largest natural gas producers in North America. Fitch believes the Appalachian acreage continues to deliver favorable operational results and believes development spending in its liquids-weighted region combined with the recovery in NGL pricing should help support netbacks. Widening differentials and takeaway capacity remain long-term concerns for Appalachian operators. Netbacks in Appalachia are typically lower than operators in the Haynesville. Hedges Provide Near-Term Support: Southwestern has completed its plan of incremental hedging for the acquisition to protect against the additional debt and ensure FCF generation. Pro forma for the transaction, the company had hedged 84% of projected 2022 production at an average price of $2.72 and 58% of projected 2023 production at an average price of $2.90. DERIVATION SUMMARY Pro forma for the Indigo and GEP transactions, Southwestern remains one of the largest U.S. natural gas E&P companies at approximately 4.7bcfe/d, larger than CNX Resources (CNX; BB/Positive), but below EQT Corporation (EQT; BB+/Stable) at 5.5bcfe/d pro forma for its Alta Resources acquisition. Fitch estimates 2022 debt/EBITDA at 2.0x, which is lower than CNX (2.6x) and EQT (2.4x) based on Fitch's current price deck. Southwestern's liquidity as of Sept. 30, 2021 was weaker than CNX and EQT, although this is offset by expectations of positive FCF and lack of material near-term maturities. KEY ASSUMPTIONS Fitch's key assumptions within its rating case for the issuer include: -- WTI oil price of $60.00/bbl in 2021, $52.00/bbl in 2022, $50.00/bbl in 2023 and in the long term; -- Henry Hub natural gas price of $2.90/mcf in 2021 and $2.45 in the long term; -- Production of 3.4bcfe/d in 2021, 4.8bcfe/d in 2022 and flat over the long term; -- Liquids mix of 12% in 2022 and throughout the forecast; -- Capex above $1.1 billion in 2021 and $1.9 billion in 2022; -- No material M&A activity or shareholder activity. RATING SENSITIVITIES Factors that could, individually or collectively, lead to positive rating action/upgrade: -- Generation of material FCF with proceeds used to reduce debt and progress to management's leverage targets; -- Mid-cycle debt/EBITDA below 2.0x or FFO-Adjusted Leverage below 2.5x on a sustained basis; -- Operational execution of Appalachian and Haynesville development plans; -- Successful integration of the GEP acquisition; -- Demonstrated commitment to stated financial policy. Factors that could, individually or collectively, lead to negative rating action/downgrade: -- Mid-cycle debt/EBITDA above 2.5x or FFO-adjusted leverage above 3.0x on a sustained basis; -- Operational and financial plan that fails to execute on Appalachian and Haynesville development and support FCF neutrality; -- Weakening in differential trends and the unit cost profile. BEST/WORST CASE RATING SCENARIO International scale credit ratings of Non-Financial Corporate issuers have a best-case rating upgrade scenario (defined as the 99th percentile of rating transitions, measured in a positive direction) of three notches over a three-year rating horizon; and a worst-case rating downgrade scenario (defined as the 99th percentile of rating transitions, measured in a negative direction) of four notches over three years. The complete span of best- and worst-case scenario credit ratings for all rating categories ranges from 'AAA' to 'D'. Best- and worst-case scenario credit ratings are based on historical performance. LIQUIDITY AND DEBT STRUCTURE Adequate Liquidity: Southwestern's liquidity consists of $2 million of cash on hand and a $2.0 billion secured credit facility with availability of $1.2 billion after $665 million drawn and $159 million in LOC. The borrowing base and elected commitments were re-determined at $2.0 billion in October 2021. The revolver matures in April 2024. Financial covenants under the credit facility include a minimum current ratio (including unused commitments under the credit agreement) of 1.0x and a maximum total net leverage ratio of no greater than 4.00x after June 30, 2020. As of Sept. 30, 2021, Southwestern was in compliance with all of its covenants. The next material bond maturity is in 2025 of approximately $700 million. Fitch anticipates FCF will be used to reduce outstanding revolver borrowings in the near term. ISSUER PROFILE Southwestern Energy Company is an independent energy company engaged in exploration and development of, principally, natural gas. E&P operations are primarily comprised of Northeast Appalachia in Pennsylvania, Southwest Appalachia in West Virginia and the Haynesville Basin in Louisiana. 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. SRAMPICKAL DEVELOPERS: Seeks to Tap Adelstein & Kaliner as Counsel ------------------------------------------------------------------ Srampickal Developers, LLC seeks approval from the U.S. Bankruptcy Court for the Eastern District of Pennsylvania to employ Adelstein & Kaliner, LLC as its legal counsel. The firm's services include: (a) preparing records and reports as required by the Bankruptcy Rules and local Bankruptcy Rules; (b) preparing legal papers; (c) advising the Debtor of its powers and duties under U.S. bankruptcy laws; (d) identifying and prosecuting claims and causes of action assertable by the Debtor; (e) examining proofs of claim and prosecuting objections to certain of such claims; (f) preparing legal papers; and (g) performing all other necessary legal services for the Debtor. The Debtor proposed to employ the firm under a general retainer based on time and standard billable charges. Jon Adelstein, Esq., an attorney at Adelstein & Kaliner, disclosed in a court filing that the firm is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. The firm can be reached through: Jon M. Adelstein, Esq. Adelstein & Kaliner, LLC 3993 Huntingdon Pike, Suite 210 Huntingdon Valley, PA 19006 Telephone: (215) 230-4250 Facsimile: (215) 230-4251 About Srampickal Developers Philadelphia-based Srampickal Developers, LLC filed its voluntary petition for relief under Chapter 11 of the Bankruptcy Code (Bankr. E.D. Pa. Case No. 21-13224) on Dec. 6, 2021. In the petition signed by Tyson Thomas, managing partner, the Debtor disclosed $3,560,000 in total assets and $2,197,000 in total liabilities. Judge Magdeline D. Coleman oversees the case. Jon M. Adelstein, Esq., at Adelstein & Kaliner, LLC serves as the Debtor's counsel. STRIKE LLC: $8MM DIP Loan, Cash Collateral Access OK'd ------------------------------------------------------ Strike, LLC and its debtor-affiliates sought and obtained entry of an order from the U.S. Bankruptcy Court for the Southern District of Texas, Houston Division, authorizing, among other things, the use of cash collateral on an interim basis in accordance with the budget. Strike, Delta Directional Drilling, LLC and Strike Global Holdings, LLC and each of the DIP Guarantors are permitted to obtain postpetition financing up to $8 million on a superpriority priming senior secured basis from Lightship Capital II LLC. The Debtors have an immediate and critical need to use cash collateral and obtain the DIP Financing, in each case, on an interim basis, to, among other things, permit the orderly continuation of the operation of their businesses, maintain business relationships with customers, vendors, and suppliers, make payroll, pay the costs of administering the Chapter 11 Cases and satisfy other working capital and operational needs. Pursuant to the ABL Loan and Security Agreement, dated as of November 30, 2016, by and among Strike, Delta Directional Drilling, LLC and Strike Global Holdings LLC (Senior Loan Borrowers), Strike HoldCo and the other guarantors party thereto from time to time, Lightship Capital II LLC, as successor administrative agent to Bank of America, N.A. thereunder (Senior Loan Agent), and the lenders party thereto from time to time, the Prepetition Senior Lenders provided a first lien credit facility to the Senior Loan Parties. As of the Petition Date, the Senior Loan Parties were indebted to the Prepetition Senior Secured Parties in the aggregate amount of not less than $86.6 million on account of loans outstanding under the Senior Loan Facility. Pursuant to the Term Loan and LC Loan and Security Agreement, dated as of November 30, 2016, by and among Strike (Junior Loan Borrower), Strike HoldCo, the guarantors party thereto from time to time, Wilmington Trust, National Association, as administrative and collateral agent thereunder, and the lenders party thereto from time to time, the Prepetition Junior Lenders provided a junior term loan facility (the Junior Loan Facility) to the Junior Loan Parties. As of the Petition Date, the Junior Loan Parties were indebted to the Prepetition Junior Loan Secured Parties in the aggregate amount of not less than $260.73 million on account of loans outstanding under the Junior Loan Facility. The Prepetition Secured Parties are entitled, pursuant to sections 361, 362, 363(e) and 507 of the Bankruptcy Code, to adequate protection of their respective Prepetition Liens in Prepetition Collateral. The Senior Loan Agent, for the benefit of itself and the Prepetition Senior Lenders, is granted, to the extent of any Diminution in Value of the Prepetition Senior Liens in the Prepetition Senior Loan Collateral (including cash collateral), a superpriority administrative expense claim as contemplated by section 507(b) of the Bankruptcy Code, against each of the Debtors, subject and subordinate to the Carve Out and the DIP Superpriority Claims, but otherwise senior to any and all administrative expense claims or other claims against the Debtors. As security for and to the extent of any Diminution in Value of the Prepetition Senior Liens in the Prepetition Senior Loan Collateral, the Senior Loan Agent, for the benefit of itself and the Prepetition Senior Lenders, is granted valid, binding, enforceable and automatically perfected replacement liens on and security interests in all DIP Collateral, which ABL Adequate Protection Liens will be subject only to the Carve Out, the DIP Liens, and the Permitted Prior Senior Liens, but will be senior to any and all other liens and security interests in the DIP Collateral. The Prepetition Junior Loan Secured Parties are granted adequate protection of their Prepetition Junior Liens in Prepetition Junior Loan Collateral, including cash collateral. The Junior Loan Agent, for the benefit of itself and the Prepetition Junior Lenders, is granted to the extent of any Diminution in Value of the Prepetition Junior Liens in the Prepetition Junior Loan Collateral (including cash collateral), a superpriority administrative expense claim as contemplated by section 507(b) of the Bankruptcy Code, against each of the Debtors. As security for and to the extent of any Diminution in Value of the Prepetition Junior Liens in the Prepetition Junior Loan Collateral, the Junior Loan Agent, for the benefit of itself and the Prepetition Junior Lender is granted valid, binding, enforceable and automatically perfected replacement liens on and security interests in all DIP Collateral. The final hearing on the matter is scheduled for January 3, 2022, at 12 pm. Objections are due December 29, 2021. A copy of the Debtor's motion is available at https://bit.ly/3dIdz3e from PacerMonitor.com. A copy of the order and the Debtor's nine-week budget through February 4, 2022, is available at https://bit.ly/3pMF3KM from PacerMonitor.com. The budget provided for total disbursements, on a weekly basis, as follows: $8,531 for the week ending December 10, 2021; $8,355 for the week ending December 17, 2021; $14,265 for the week ending December 24, 2021; $9,795 for the week ending December 31, 2021; $7,805 for the week ending January 7, 2022; $8,545 for the week ending January 14, 2022; $7,095 for the week ending January 21, 2022; $10,155 for the week ending January 28, 2022; and $4,550 for the week ending February 4, 2022. About Strike LLC Strike LLC -- http://www.strikeusa.com/-- is a full-service pipeline, facilities, and energy infrastructure solutions provider. Headquartered in The Woodlands, Texas, Strike partners closely with clients all across North America, safely and successfully delivering a full range of integrated engineering, construction, maintenance, integrity, and specialty services that span the entire oil and gas life cycle. Strike LLC sought Chapter 11 protection (Bankr. S.D. Tex. Lead Case No. 21- 90054) on Dec. 6, 2021. In the petition was signed CFO Sean Gore, Strike LLC estimated assets between $100 million to $500 million and estimated liabilities between $100 million to $500 million. The cases are handled by Honorable Judge David R. Jones. Matthew D. Cavenaugh, Kristhy Peguero, and Genevieve Graham, of JACKSON WALKER LLP and Thomas E. Lauria, Matthew C. Brown, Fan B. He, Gregory L., of WHITE & CASE LLP, serve as the Debtor's attorneys. OPPORTUNE PARTNERS LLC is the Debtor's investment banker and financial advisor, and EPIQ CORPORATE RESTRUCTURING, LLC is its claims agent. SUGARHOUSE HSP: S&P Affirms 'B-' ICR, Outlook Negative ------------------------------------------------------ S&P Global Ratings affirmed its ratings on Philadelphia-based gaming operator Sugarhouse HSP Gaming Prop. Mezz. L.P., including its 'B-' issuer credit rating. S&P said, "At the same time, we revised our recovery rating on the company's secured notes to '3' from '4' because of a reduction in the size of the company's priority revolver. "The negative outlook reflects the higher risk of material impairment to EBITDA in the near term because of potential public health concerns around the new Omnicron variant, and the risk of another temporary casino closure or the reimplementation of significant operating restrictions. "We believe risks of another temporary closure of, or material operating restrictions at, Sugarhouse's casino are heightened because of the new COVID-19 variant." This is because of the uncertainties regarding the transmissibility, severity, and effectiveness of vaccines against Omicron, and the City of Philadelphia's track record of implementing and maintaining more stringent health and safety regulations for casinos compared with most other gaming jurisdictions. Sugarhouse's property, Rivers Philadelphia, closed in March 2020 at the outset of the pandemic like most U.S. casinos. Rivers reopened in July 2020 with significant capacity restrictions and indoor eating, drinking, and smoking was prohibited. The casino was required to close again for several weeks in November 2020 when virus cases spiked and significant restrictions remained in place when Rivers reopened in January 2021. Restrictions began to ease in May 2021 and were fully lifted in June 2021. That being said, mask mandates were implemented by the city in August 2021 and continue to remain in place. Suburban Pennsylvania casinos outside of Philadelphia are not subject to a mask mandate. S&P said, "Since Sugarhouse relies on Rivers as its sole source of cash flow, we believe a further closures, restrictions, or consumers staying home in light of uncertainties around the new variant, would impair EBITDA in the next few months and translate to 2022 credit measures that may be weak for the rating, at a time when Sugarhouse is still absorbing the impact of new competition. "Nevertheless, absent another casino shutdown or significant operating restrictions, we forecast Sugarhouse may maintain credit measures that are good for the rating." This is because the initial impact of new competition has largely been absorbed. S&P said, "We forecast some continued modest negative impact to Sugarhouse from the new competitor, and heightened competition in online sports betting and online gaming. However, absent another temporary closure or significant operating restrictions, we believe the company may maintain adjusted leverage in the mid- to high-5x area and interest coverage around 3x." The Live! Casino and Hotel Philadelphia, located about seven miles south of Rivers Philadelphia, opened in January 2021. S&P said, "Although we anticipate Live! will continue to market to the same customers as Rivers Philadelphia and Rivers Philadelphia may lose some incremental customers over the next year, we do not expect any significant changes in gross gaming revenue market share in the city." Before Live! Philadelphia opened, Rivers Philadelphia was the only casino operating within the city. In the first nine months of 2021, Rivers Philadelphia's gross gaming revenue (based on brick-and-mortar revenue) is about 28% below 2019 levels. S&P said, "Rivers' 2021 revenue has been negatively affected by the pandemic, but we believe the opening of Live! drove a more significant portion of the revenue decline. Nevertheless, Rivers' market share has remained above its fair share of slot and table game positions between the two casinos, which we believe is partially because it has an established database of players." S&P said, "We believe online sports betting and gaming will continue contributing modestly to EBITDA, but the market in Pennsylvania will remain highly competitive.This is because online sports betting and online gaming operators such as BetMGM, Barstool (owned by Penn National Gaming, Inc.), and Caesars Entertainment Inc. entered the Pennsylvania market in mid- to late-2020 and we expect these competitors to remain aggressive in marketing to the same customers as Sugarhouse. These competitors have significant resources to spend on marketing and customer acquisition. We expect competition to intensify in the online space, leading to a modest loss in online revenue over the next few quarters and an even greater loss in EBITDA since we assume Sugarhouse will increase its marketing spend to remain competitive. Online sports betting and gaming represents about 25% to 30% of EBITDA." The negative outlook reflects heightened risk for a material impairment to EBITDA in the near term because of potential public health concerns around the new Omnicron variant, which could lead to another temporary casino closure or the reimplementation of significant operating restrictions. S&P said, "We could consider a lower rating if we expect EBITDA coverage of interest to fall to the mid-1x area or if we become concerned about the company's liquidity position. This would likely be the result of an extended closure of the casino, the reimplementation of significant operating restrictions, and/or a more material impact from competition. "We could revise the outlook to stable if we believe Sugarhouse could absorb additional casino shutdowns or reimplementation of significant operating restrictions, and still maintain EBITDA coverage of interest of at least 2x. We could raise the rating if we believe Sugarhouse can sustain adjusted leverage below 6x and EBITDA interest coverage above 2x, incorporating potential operating volatility due to health and safety measures and the impact of new competition." SURREY DRIVE: Seeks to Hire Tracy A. Brown as Legal Counsel ----------------------------------------------------------- Surrey Drive, LLC seeks approval from the U.S. Bankruptcy Court for the Eastern District of Missouri to employ The Law Office of Tracy A. Brown, PC as its legal counsel. The firm's services include: (a) advising the Debtor regarding its rights, power and duties in this Chapter 11 case; (b) assisting and advising the Debtor in its consultations with any appointed committee relative to the administration of this Chapter 11 case; (c) assisting the Debtor in analyzing the claims of creditors and negotiating with such creditors; (d) assisting in investigating the assets, liabilities and financial condition of the Debtor and reorganizing the Debtor's business in order to maximize the value of its assets for the benefit of all creditors; (e) advising the Debtor in connection with the sale of assets or business; (f) assisting the Debtor in its analysis of and negotiation with any appointed committee or any third-party concerning matters related to, among other things, the terms of a plan of reorganization; (g) assisting and advising the Debtor with respect to any communications with the general creditor body regarding significant matters in this case; (h) commencing and prosecuting necessary and appropriate actions or proceedings on behalf of the Debtor; (i) reviewing, analyzing or preparing legal papers; (j) representing the Debtor at all hearings and other proceedings; (k) conferring with other professional advisors in providing advice to the Debtor; (l) assisting and advising the Debtor regarding pending litigation matters in which it may be involved; and (m) performing all other necessary legal services. The hourly rates of the firm's attorneys and staff are as follows: Partners $365 per hour Associates $250 per hour Paralegals/Law Clerks $125 per hour In addition, the firm will seek reimbursement for expenses incurred. The firm received a retainer of $1,750 from Anthony Butler, Jr., a member of the Debtor. Tracy Brown, Esq., a principal at The Law Office of Tracy A. Brown, disclosed in a court filing that the firm is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. The firm can be reached through: Tracy A. Brown, Esq. The Law Office of Tracy A. Brown, PC 1034 S. Brentwood Blvd., Suite 725 St. Louis, MO 63117 Telephone: (314) 644-0303 Facsimile: (314) 644-0333 Email: tbrownfirm@bktab.com About Surrey Drive Surrey Drive, LLC filed its voluntary petition for relief under Chapter 11 of the Bankruptcy Code (Bankr. E.D. Mo. Case No. 21-44388) on Dec. 2, 2021, listing under $1 million in both assets and liabilities. Anthony Butler, Jr., member, signed the petition. Judge Barry S. Schermer oversees the case. Tracy A. Brown, Esq., at The Law Office of Tracy A. Brown, PC serves as the Debtor's legal counsel. TALOS ENERGY: S&P Affirms B- Issuer Credit Rating, Outlook Stable ----------------------------------------------------------------- S&P Global Ratings affirmed its 'B-' issuer credit rating on Houston-based exploration and production (E&P) company Talos Energy Inc. and its 'B+' issue-level rating on its second-lien notes. S&P's '1' recovery rating on the notes remains unchanged, indicating its expectation for very high (90%-100%; rounded estimate: 95%) recovery of principal in the event of a payment default. S&P said, "The stable outlook reflects our expectation the company will maintain modest financial policies that support moderate free cash flow and debt repayment on its revolver, which will further improve its liquidity. We also expect Talos' production levels to remain relatively stable, which leads us to anticipate debt to EBITDA of well below 3x and average funds from operations (FFO) to debt of more than 30%. "We no longer view Talos as a financial sponsor-controlled company, though we continue to assess its financial risk profile as highly leveraged. Following the recent secondary stock offerings by its private equity investors Apollo and Riverstone, the two firms now collectively own less than 40% of Talos' common stock, which is a level we consider as no longer providing them with a controlling position over Talos' financial policies. Furthermore, given the speed and magnitude of the investors' exit from their investment in Talos, we believe their collective holdings and possibly their board representation, may continue to decrease in the coming months, further diminishing their influence. Although we expect solid financial measures, including FFO to debt averaging in the 35%-40% range and debt to EBITDA of about 2.25x over the next two years, we view the company's cash flows as inherently volatile and exposed to potential swings in oil and gas prices, as well as increasing regulatory scrutiny and disruptions from hurricanes in the Gulf of Mexico (GoM). We project Talos will generate more than $75 million of free cash flow this year and likely continue to operate within internally generated cash flow in 2022. We also expect capital expenditures to ramp up significantly next year due to inflationary pressures and increasing development activity, with cash flows supported by hedges on approximately 50% of next year's anticipated oil and gas production. "Our vulnerable assessment of Talos' business risk reflects its concentration in the GoM and the associated risks of offshore production and development. The company's footprint, which is primarily focused on deepwater assets, included proved reserves of 163 million barrels of oil equivalent (MMBoe) as of year-end 2020. Talos' proved reserves are mostly developed due to its strategy of producing and developing near existing infrastructure. Nevertheless, we view offshore operations as having higher operational risk than onshore assets due to their susceptibility to production disruptions or asset damage from hurricanes or similar events. In addition, Talos and its offshore competitors have heavier asset retirement obligations and generally higher operating cost structures than many onshore peers. Since going public in 2018, the company has increased its production by more than 35% and we expect full year 2021 production in the low- to mid-60's thousand barrel of oil equivalent per day (Mboe/d) range. However, it will likely modestly decline in 2022, partly due to the scheduled drydock of the HP-I production vessel. Historically, most of the company's growth was driven by acquisitions and we believe management will continue to consider consolidation opportunities." The company is also in the process of disputing operatorship of the Zama unit (where Talos holds interests in two blocks) with the Mexican government, whose Ministry of Energy recently designated the national oil company, Petroleos Mexicanos (Pemex), as operator. Talos' liquidity is improving, though the amount of outstanding borrowings on its revolving credit facility remains elevated. The company ended the third quarter with about $375 million of total liquidity, including $316 million of availability under its revolver, which was approximately 55% drawn. S&P expects Talos will continue to prioritize using free cash flow to further reduce outstanding debt on the facility to less than 50% of the committed amount by year-end. Earlier this year, the company extended the credit facility to November 2024 and added another lender to its syndicate, which raised its total commitments to $730 million from $655 million. The latest transactions followed a larger refinancing package it completed in January, which facilitated the redemption of a previous series of second-lien notes maturing in 2022, as well as a partial paydown on the revolver. S&P said, "The stable outlook on Talos reflects our expectation it will maintain modest financial policies that support moderate free cash flow and debt repayment on its revolver, which will further improve its liquidity. We also expect the company's production levels to remain relatively stable, which leads us to anticipate debt to EBITDA of well below 3x and average FFO to debt of more than 30%. "We could lower our ratings on Talos if we believe its capital structure is no longer sustainable or if liquidity meaningfully deteriorates. This would most likely occur if commodity prices were to fall below our price deck assumptions for a sustained period or if the company did not meet our production expectations." An upgrade would be possible if Talos improves its scale and scope of reserves and production to levels that are more consistent with those of its higher-rated peers, while reducing its revolver borrowings, maintaining adequate liquidity, and expected FFO/debt above 30%. Talos Energy Inc. is an offshore independent E&P company with operations focused in the GoM. The company was originally formed in 2011 and is headquartered in Houston. -- Western Texas Intermediate (WTI) price assumptions of $70 per barrel (bbl) for the remainder of 2021, $60/bbl in 2022, and $50/bbl in 2023 and thereafter; -- Henry Hub natural gas price assumptions of $4.50 per million Btus (/mmBtu) for the remainder of 2021, $3.50/mmBtu in 2022, $3.00/mmBtu in 2023, and $2.75/mmBtu in 2024 and thereafter; -- Average daily production of 63 mboe/d-65 mboe/d in 2021, declining modestly in 2022 primarily due to the scheduled maintenance of the HP-I floating production and offloading vessel; and -- Total capital spending of about $360 million in 2021, increasing to $450 million-$500 million in 2022. Based on these assumptions, S&P projects the following metrics: -- Average FFO to debt of approximately 35%-40% over the next two years; -- Average debt to EBITDA of about 2.25x; and -- Moderate FOCF in 2021 and 2022. S&P said, "We assess Talos' liquidity as adequate given our estimate that its liquidity sources will be at least 1.2x its uses over the next 12 months. In addition, we believe that the company's net sources would remain positive even if its forecast EBITDA declines by 15%. In our view, although Talos qualifies for a higher liquidity assessment on a numerical basis, its supporting qualitative factors--such as our assessment of Talos' standing in the credit markets, its relationships with its banks, and its ability to weather high-impact, low probability events without refinancing--more appropriately reflect an adequate assessment." Principal liquidity sources: -- Approximately $59 million of cash as of the end of the third quarter of 2021; -- $316 million of availability under the company's $730 million revolving credit facility due 2024; and -- Cash FFO in the $425 million-$475 million range over the next 12 months. Principal liquidity uses: -- Capital expenditure of $425 million-$475 million in the next 12 months. -- S&P expects Talos to remain in compliance with its financial covenants, which include a maximum debt to EBITDA ratio of less than 3x and a minimum current ratio of 1x, over the next 12 months. To: E-4 S-3 G-2 From: E-4 S-3 G-3 S&P said, "Environmental factors are a negative consideration in our credit rating analysis of Talos Energy Inc. as the exploration and production and downstream industries contend with an accelerating energy transition and adoption of renewable energy sources. We believe falling demand for fossil fuels will lead to declining profitability and returns for the industry as it fights to retain and regain investors that seek higher return investments. Given its material deepwater exposure, Talos faces higher environmental risks than onshore producers due to its susceptibility to interruption and damage from hurricanes. Additionally, social factors are a moderately negative consideration given offshore operations are more subject to fatal accidents given the inherent risks of operating oil rigs which involve air and water transportation of personnel, among other activities that could be life-threatening without proper care. To help address these concerns, Talos has committed to reduce its GHG intensity by 30% by 2025 and is aiming to build a scaled carbon capture and storage business along the Gulf Coast after its recent announcements of various initiatives in partnership with Storegga, TechnipFMC, and Freeport LNG. "Our simulated default scenario contemplates a default occurring in 2023 and assumes a sustained period of low commodity prices, consistent with the conditions of past defaults in this sector. "We base our valuation of Talos' reserves on a company-provided PV-10 report, which uses our recovery price deck assumptions of $50/bbl for WTI crude oil and $2.50/mmBtu for Henry Hub natural gas. "Our analysis assumes that the $730 million reserve-based lending (RBL) facility would be fully drawn at default. In our default scenario, we expect the claims on the second-lien notes to be effectively subordinated to the claims relating to the RBL facility." -- Simulated year of default: 2023 -- Net enterprise value (after 5% in administrative costs): $2.5 billion -- Senior secured RBL claims: $743 million --Recovery expectations: Not applicable -- Remaining value available to second-lien debt claims: $1.7 billion -- Second-lien debt claims: $695 million --Recovery expectations: 90%-100% (rounded estimate: 95%) Note: All debt amounts include six months of prepetition interest. URS HOLDCO: S&P Affirms 'CCC+' Issuer Credit Rating, Outlook Neg. ----------------------------------------------------------------- S&P Global Ratings affirmed its 'CCC+' issuer credit rating on vehicle and heavy haul transportation provider URS Holdco Inc. and maintained a negative outlook on the rating. S&P said, "At the same time, we affirmed our 'CCC+' issue-level on the company's senior secured debt; the recovery rating remains '3'. We also revised our liquidity assessment to less than adequate from adequate. "The negative outlook reflects our view that leverage will be elevated over the next year until automotive volumes recover. "We believe URS' credit metrics will continue to drag due to the ongoing semiconductor shortage through the first half of 2022.Roughly 55% of URS' revenue is derived from new vehicle transportation hauling. URS' volume challenges in the automotive segment is from auto manufacturers' significant production shortfalls because of the shortage of semiconductors used in new vehicles. URS' automotive transportation haul mix has shifted to include a greater percentage of used or "remarketed" vehicles, which are not affected by the semiconductor shortage, partially offsetting the drop in new car volume. URS maintains a solid position in the automobile transportation sector and should benefit from rising volumes once car production normalizes. Nevertheless, we expect debt to EBITDA to remain over 10x and negative FOCF through 2022." Higher fuel costs and an ongoing shortage of truck drivers also -drivers supply, that cost also affects URS' credit metrics. The negative outlook reflects S&P's view that URS' leverage will be elevated and FOCF negative through 2022. While S&P expects financial performance to improve as automotive volumes increase, it estimates debt to EBITDA will be above 10x next year. S&P could lower its ratings on URS if: -- Its liquidity becomes constrained; or -- A further unanticipated decline in its earnings leads us to conclude it will likely default over the following 12 months, likely if a recovery in automotive volumes does not occur or the company cannot manage elevated operating costs. These scenarios include--but are not limited to--a near-term liquidity shortfall or covenant breach. This could also occur if S&P believes URS will likely implement a distressed exchange or below-par debt redemption over the next 12 months. S&P could revise its outlook on URS to stable over the next 12 months if: -- It delivers a better-than-expected operating performance; or -- Generates stronger cash flow on a sustained basis. This could occur if market conditions improve more than we expect or URS increases operating efficiency; and -- It improves cushion under the covenants. US STEEL: Moody's Ups CFR to Ba3 & Sr. Unsecured Debt Rating to B1 ------------------------------------------------------------------ Moody's Investors Service upgraded United States Steel Corporation's ("U. S. Steel") Corporate Family rating to Ba3 from B1, its Probability of Default rating to Ba3-PD from B1-PD, its senior unsecured debt rating to B1 from B3, its senior unsecured shelf rating to (P)B1 from (P)B3, and Big River Steel LLC's ("Big River Steel") secured debt rating to Ba2 from Ba3.The ratings outlooks for U. S. Steel and Big River Steel remains stable. U. S. Steel's Speculative Grade Liquidity Rating was changed to SGL-1 from SGL-2. Upgrades: Issuer: United States Steel Corporation Corporate Family Rating, Upgraded to Ba3 from B1 Probability of Default Rating, Upgraded to Ba3-PD from B1-PD Speculative Grade Liquidity Rating, Upgraded to SGL-1 from SGL-2 Senior Unsecured Shelf, Upgraded to (P)B1 from (P)B3 Senior Unsecured Conv./Exch. Bond/Debenture, Upgraded to B1 (LGD5) from B3 (LGD5) Senior Unsecured Regular Bond/Debenture, Upgraded to B1 (LGD5) from B3 (LGD5) Issuer: Allegheny County Industrial Dev. Auth., PA Senior Unsecured Revenue Bonds, Upgraded to B1 (LGD5) from B3 (LGD5) Issuer: Bucks County Industrial Development Auth., PA Senior Unsecured Revenue Bonds, Upgraded to B1 (LGD5) from B3 (LGD5) Issuer: Hoover (City of) AL, Industrial Devel. Board Senior Unsecured Revenue Bonds, Upgraded to B1 (LGD5) from B3 (LGD5) Issuer: Indiana Finance Authority Senior Unsecured Revenue Bonds, Upgraded to B1 (LGD5) from B3 (LGD5) Issuer: Ohio Water Development Authority Senior Unsecured Revenue Bonds, Upgraded to B1 (LGD5) from B3 (LGD5) Issuer: Southwestern Illinois Development Authority Senior Unsecured Revenue Bonds, Upgraded to B1 (LGD5) from B3 (LGD5) Issuer: Big River Steel LLC Senior Secured Regular Bond/Debenture, Upgraded to Ba2 (LGD2) from Ba3 (LGD3) Issuer: ARKANSAS DEVELOPMENT FINANCE AUTHORITY Senior Secured Revenue Bonds, Upgraded to Ba2 (LGD2) from Ba3 (LGD3) Outlook Actions: Issuer: United States Steel Corporation Outlook, Remains Stable Issuer: Big River Steel LLC Outlook, Remains Stable RATINGS RATIONALE U. S. Steel's Ba3 corporate family rating reflects its inconsistent historical operating performance due to its exposure to cyclical end markets and volatile steel prices, and its inconsistent free cash flow which will continue to be impacted by elevated capital investments. The rating also incorporates the company's large scale and strong market position as a leading US flat-rolled steel producer and whose footprint is further enhanced by its diversification in Central Europe, as well as Moody's expectation for moderate financial leverage and ample interest coverage in a normalized steel price environment due to significant debt reduction in 2021. It also considers Moody's expectation for an historically strong operating performance through 2022 that will result in near term metrics that are strong for the rating, but are not likely sustainable as steel prices return to a more normalized level as supply and demand come into balance. U. S. Steel's operating results have materially strengthened in 2021 and Moody's anticipate it will generate adjusted EBITDA of about $6.0 billion due to a quicker than anticipated recovery in its key end markets, with the exception of the oil & gas sector, along with the addition of Big River Steel and a surge in steel prices. Its U. S. Steel Europe segment will also benefit from the same improved fundamentals as its domestic operations. Domestic steel prices surged in 2021 with hot rolled coil prices (HRC) hitting a record high of about $1,960 per ton in November 2021 after declining to a 4.5-year low around $440 per ton in July 2020 due to the effects of the pandemic. The price surge has been attributable to industry consolidation, a temporary dislocation of supply and demand, the replenishment of steel inventories and elevated raw material prices. U. S. Steel has taken advantage of the favorable steel sector dynamics and accommodative capital markets and has used its strong free cash flow along with the proceeds from debt and equity offerings and asset sales to materially reduce its outstanding debt, significantly lower its interest costs and to push out its debt maturities. Moody's anticipate further debt reduction in Q4 which will result in about a $3 billion pay down of its outstanding debt in 2021 including the debt assumed from the Big River Steel acquisition. Further debt reduction is unlikely considering the company's extended debt maturity profile and its lack of near-term callable debt, as well as its plans to add a new 3-million-ton EAF mill for about $3 billion, new coating capabilities ($280 million) and a non-grain oriented electrical steel line ($450 million) at Big River Steel and since it recently announced a new $300 million share repurchase program and raised its quarterly dividend. If U. S. Steel can produce adjusted EBITDA of $6.0 billion and retires additional debt in Q4, then its leverage ratio (debt/EBITDA) will be less than 1.0x and its interest coverage (EBIT/Interest) above 10.0x. These metrics will be strong for the Ba3 corporate family rating, but are expected to return to a level more commensurate with its rating when steel prices and metal spreads decline towards more normalized historical levels. Moody's anticipate that demand will somewhat ebb as inventories are replenished and supply will continue to ramp up as new capacity comes online, and imports rise due to the wide spreads between domestic and overseas prices and the possibility of further tariff rate quota agreements like the recent deal with the European Union. This will cause prices to gradually decline, but anticipate they will settle above the 10-year average price range of about $600 - $700 per ton and that metal spreads will remain historically wide due to sector consolidation and decarbonization initiatives. U. S. Steel has a speculative grade liquidity rating of SGL-1 since it is expected to maintain very good liquidity. It had $2.0 billion of unrestricted cash and borrowing availability of $1.746 billion on its $1.75 billion asset based revolving credit facility as of September 30, 2021. The company amended this facility in July 2021 and reduced its size to $1.75 billion from $2.0 billion but maintained the maturity date of October 2024. The facility had no borrowings outstanding and $4 million of letters of credit issued. The facility requires the company to maintain a fixed charge coverage ratio of 1.0x should availability be less than the greater of 10% of the total aggregate commitment and $175 million. The company also has a $350 million undrawn revolver at Big River Steel and an undrawn Euro 300 million ($347 million equivalent on September 30, 2021) unsecured credit facility at its U. S. Steel Kosice (USSK) subsidiary in Europe, both with a maturity date in 2026. Big River Steel's secured debt is rated one notch above U. S. Steel's CFR due to its priority position in the consolidated capital structure and the benefit of U. S. Steel redeeming all its secured notes and issuing additional unsecured debt in 2021, which enhances the loss absorbing buffer below the secured debt. The B1 ratings on U. S. Steel's convertible notes, senior unsecured notes and IRB's reflects their effective subordination to the secured ABL, secured notes and bonds as well as priority payables. The stable ratings outlook incorporates Moody's expectation for an historically strong operating performance through 2022 that will result in credit metrics that are strong for the company's rating, but that its credit metrics will return to a level more commensurate with its rating when steel prices and metal spreads decline towards more normalized historical levels. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS U. S. Steel's ratings could be considered for an upgrade if steel prices and metal spreads are sustained above historical averages, the strategic benefits of the "Best for All" strategy is achieved and the company demonstrates a clearly defined and more conservative financial policy and pursues further debt reduction. Quantitatively, if U. S. Steel can sustain leverage of no more than 3.0x through varying steel price points and its CFO less dividends is in excess of 30% of its outstanding debt, then its ratings could be positively impacted. The company's ratings could be downgraded should steel sector conditions materially deteriorate such that its leverage ratio is sustained above 4.0x, its CFO less dividends falls below 15% of its outstanding debt, or it fails to maintain a strong liquidity profile. Headquartered in Pittsburgh, Pennsylvania, United States Steel Corporation is the third largest flat-rolled steel producer in the US in terms of production capacity. The company manufactures and sells a wide variety of steel sheet, tubular and tin products across a broad array of industries including service centers, transportation, appliance, construction, containers, and oil, gas and petrochemicals. It also has an integrated steel plant and coke production facilities in Slovakia (U. S. Steel Kosice).Revenues for the twelve months ended September 30, 2021 were $17.2 billion. The principal methodology used in these ratings was Steel published in November 2021. VOS CRE I: Taps Berkowitz Pollack Brant as Financial Advisor ------------------------------------------------------------ VOS CRE I, LLC seeks approval from the U.S. Bankruptcy Court for the Southern District of Florida to employ Berkowitz Pollack Brant Advisors and CPAs as its financial advisor and tax accountant. The Debtor needs the assistance of the firm to keep accurate accounting records, prepare its 2020 tax returns, and perform other financial advisory and tax services. The hourly rates of the firm's professionals are as follows: Directors $495 - $550 per hour Associate Directors $400 - $425 per hour Senior Managers $320 - $325 per hour Managers $250 - $300 per hour Senior Associates $180 - $225 per hour Associates $125 - $165 per hour Paraprofessionals $95 - $125 per hour In addition, the firm will seek reimbursement for expenses incurred. Joel Glick, a member of Berkowitz, disclosed in a court filing that his firm is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. The firm can be reached through: Joel D. Glick, CPA/CFF, CFE Berkowitz Pollack Brant Advisors and CPAs 200 S. Biscayne Boulevard Seventh and Eighth Floors Miami, FL 33131-5351 Telephone: (305) 379-7000 Facsimile: (305) 379-8200 About VOS CRE I Boca Raton, Fla.-based VOS CRE I, LLC filed its voluntary petition for relief under Chapter 11 of the Bankruptcy Code (Bankr. S.D. Fla. Case No. 21-21082) on Nov. 22, 2021, listing as much as $10 million in both assets and liabilities. James Vosotas, authorized representative, signed the petition. The Debtor tapped Isaac Marcushamer, Esq., at DGIM Law, PLLC as legal counsel and Berkowitz Pollack Brant Advisors and CPAs as financial advisor and tax accountant. VPR BRANDS: Agrees to Settle Patent Suit vs. NEPA for $275K ----------------------------------------------------------- VPR Brands, LP has reached an agreement with NEPA 2 Wholesale, LLC to settle a lawsuit it filed against the company over an alleged patent infringement relating to U.S. Patent No. 8205,622. Pursuant to the terms of the settlement, VPR Brands agreed to settle the case in exchange for payment of $275,000 by NEPA. VPR Brands also agreed to license U.S. Patent No. 8205,622 and related patents and applications to NEPA and certain of its affiliates. About VPR Brands Headquartered in Ft. Lauderdale, FL, VPR Brands -- http://www.VPRBrands.com-- is company engaged in the electronic cigarette and personal vaporizer business. As of Sept. 30, 2021, the Company had $1.23 million in total assets, $3.36 million in total liabilities, and a total partners' deficit of $2.13 million. Hackensack, New Jersey-based Prager Metis CPA's LLC, the Company's auditor since 2018, issued a "going concern" qualification in its report dated April 15, 2021, citing that the Company incurred a net loss of $563,779 for the year ended Dec. 31, 2020, has an accumulated deficit of $10,342,173 and a working capital deficit of $1,892,210 at Dec. 31, 2020. These factors, among others, raise substantial doubt regarding the Company's ability to continue as a going concern. VTV THERAPEUTICS: Cuts Workforce by 65% to Prioritize on TTP399 --------------------------------------------------------------- VTV Therapeutics Inc. announced a strategic decision to prioritize the development of its lead program TTP399, a novel, oral, liver-selective glucokinase activator, as disclosed in a Form 8-K filed with the Securities and Exchange Commission. The decision includes a reduction in VTV Therapeutics' workforce affecting approximately 65% of its employees and the company expects to incur severance costs of approximately $1.5 million. In addition, the company expects these actions to result in annualized cost savings of approximately $2.8 million. Some of these reductions may be offset by higher costs for outsourced services which cannot be quantified at this time. About vTv Therapeutics vTv Therapeutics Inc. is a clinical-stage biopharmaceutical company focused on developing oral small molecule drug candidates. vTv has a pipeline of clinical drug candidates led by programs for the treatment of type 1 diabetes, Alzheimer's disease, and inflammatory disorders. vTv's development partners are pursuing additional indications in type 2 diabetes, chronic obstructive pulmonary disease (COPD), and genetic mitochondrial diseases. vTv Therapeutics reported a net loss attributable to common shareholders of $8.50 million for the year ended Dec. 31, 2020, compared to a net loss attributable to common shareholders of $17.91 million for the year ended Dec. 31, 2019. As of Sept. 30, 2021, the Company has an accumulated deficit of $259.0 million as well as a history of negative cash flows from operating activities. WATSONVILLE HOSPITAL: $16MM DIP Loan, Cash Collateral Access OK'd ----------------------------------------------------------------- The U.S. Bankruptcy Court for the Northern District of California, San Jose Division, has authorized Watsonville Hospital Corporation and affiliates to, among other things, use cash collateral on an interim basis and obtain postpetition secured financing. The Debtors are authorized to obtain post-petition loans, advances and other financial accommodations in an amount up to $16,000,000 on an interim basis for a period through and including the date of the Final Hearing from MPT of Watsonville Lender, LLC. The Debtor is permitted to use the proceeds of the loans under the DIP Facility, subject to the terms, restrictions, and other conditions of the DIP Note, to (a) upon entry of the Final Order, repay the outstanding MPT Prepetition Note up to $9,250,000, (b) upon entry of the Interim Order, accrue fees and expenses related to the DIP Note and the Cases, and (c) upon entry of the Interim Order, fund working capital in the ordinary course of the business of the Debtors and other general corporate purposes, in each case, to the extent set forth in the Budget and permitted under DIP Loan Documents. As of the Petition Date, certain of the Debtors and the DIP Lender are parties to various loan documents including the Amended and Restated Promissory Note, dated September 30, 2019. As of the Petition Date, the outstanding Prepetition Obligations totaled no less than $37,812,665, inclusive of all principal and accrued and unpaid interest, exclusive of all costs, expenses, and fees owed to the Lender. To secure the prompt payment and performance of any and all obligations of the Debtors to the Lender of whatever kind, nature or description, absolute or contingent, now existing or hereafter arising, the Lender will have and is granted, effective as of the Petition Date, valid and perfected first priority security interests and liens, superior to all other liens, claims or security interests that any creditor of the Debtors' Estates may have. As adequate protection for the diminution in value of its interests in the Prepetition Collateral, the Prepetition Lender in respect of the Prepetition Obligations, is granted, valid, binding, enforceable and perfected replacement liens upon and security interests in all DIP Collateral. To the extent that the Adequate Protection Replacement Liens are insufficient protection against the diminution in value of their interests in the Prepetition Collateral, the Prepetition Lender is granted an allowed superpriority administrative expense claim in each of the Cases and any Successor Cases with priority over all administrative expense claims and unsecured claims against the Debtors or their Estates. A final hearing on the matter is scheduled for January 5, 2022, at 10 a.m. A copy of the order and the Debtor's 17-week budget through the week of April 1, 2022 is available at https://bit.ly/3rUjD0Z from PacerMonitor.com. The Debtor projects $42,697,393 in total net collections and $52,127,356 in total operations spend for the 17-week period. About Watsonville Hospital Watsonville Hospital Corporation and affiliates operate Watsonville Community Hospital, a 106-bed acute care facility located in Watsonville, California. As the only acute care facility in the area, the Hospital provides vital services to its surrounding community, including emergency, cardiac, pediatric, surgical, pharmaceutical, laboratory, radiological, and other critical services. The Debtors sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. N.D. Cal. Case No. 21-51477) on December 5, 2021. In the petition signed by Jeremy Rosenthal, chief restructuring officer, the Debtors disclosed up to $50 million in both assets and liabilities. Judge Elaine M. Hammond oversees the case. Pachulski Stang Ziehl and Jones LLP represents the Debtors' as counsel. The Debtors tapped Cowen and Company, LLC as investment banker and Stretto as claims, noticing, and solicitation agent. MPT of Watsonville Lender, LLC, as DIP Lender, is represented by: Thomas E. Patterson, Esq. KTBS Law LLP 1801 Century Park East, 26th Floor Los Angeles, CA 90067 WATSONVILLE HOSPITAL: Gets Approval to Hire Stretto as Claims Agent ------------------------------------------------------------------- Watsonville Hospital Corporation and its affiliates received approval from the U.S. Bankruptcy Court for the Northern District of California to hire Stretto, Inc. as claims and noticing agent. The firm will oversee the distribution of notices and will assist in the maintenance, processing and docketing of proofs of claim filed in the Debtors' Chapter 11 cases. The Debtors will pay the firm an advance of $20,000 for its services. Sheryl Betance, the firm's senior managing director, 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: Sheryl Betance Stretto, Inc. 410 Exchange, Ste. 100 Irvine, CA 92602 Tel: 714.716.1872 Email: sheryl.betance@stretto.com About Watsonville Hospital Watsonville Hospital Corporation and its affiliates operate Watsonville Community Hospital, a 106-bed acute care facility located in Watsonville, Calif. The hospital, which is the only acute care facility in the area, provides emergency, cardiac, pediatric, surgical, pharmaceutical, laboratory, radiological and other critical services. Watsonville Hospital Corporation and its affiliates filed petitions for Chapter 11 protection (Bankr. N.D. Calif. Lead Case No. 21-51477) on Dec. 5, 2021. Jeremy Rosenthal, chief restructuring officer, signed the petitions. In its petition, Watsonville Hospital Corporation listed as much as $50 million in both assets and liabilities. Judge Elaine M. Hammond oversees the case. The Debtor tapped Pachulski Stang Ziehl & Jones, LLP as legal counsel; Cowen and Company, LLC as investment banker; and Jeremy Rosenthal of Force Ten Partners, LLC as chief restructuring officer. Bankruptcy Management Solutions, Inc., doing business as Stretto, is the Debtors' claims, noticing and solicitation agent and administrative advisor. WILLCO XII: Continued Operations to Fund Reorganization Plan ------------------------------------------------------------ Willco XII Development, LLLP, a Colorado Limited Liability Limited Partnership, filed with the U.S. Bankruptcy Court for the District of Colorado a Disclosure Statement describing Plan of Reorganization dated Dec. 07, 2021. Willco XII Development, LLLP, also known as the Comfort Suites Johnstown (CSJ) took out a construction loan with FirstBank on March 28, 2016, in the amount of $6,725,627 (the "FirstBank Loan"). The FirstBank Loan was secured by a senior deed of trust on the Hotel, and was guaranteed by William Albrecht, Robby Uehran and Spirit Hospitality, LLC, jointly and severally (the "Guarantors"). The Debtor filed for Chapter 11 Bankruptcy in order protect the equity in CSJ until such time as the market returned to a more favorable environment. The market has substantially improved post petition and as of October 31, 2021, the Debtor has more than $900,000 in cash on hand, despite resuming interest only payments on the FirstBank Loan in December of 2020 and making an additional payment on the FirstBank loan of $115,711.22 in October of 2021 pursuant to the Settlement Agreement. The Reorganized Debtor will continue to own and operate CSJ through its general partner, Spirit Hospitality, LLC. Following confirmation of its Plan and will pay its creditors with allowed claims pursuant to the provisions of the confirmed Plan from revenue generated through its business operations. Under a settlement agreement between the Debtor and FirstBank which was approved by the bankruptcy court on October 6, 2021, the Debtor must sell or refinance CSJ and pay off the FirstBank Loan, together with accrued interest and attorney's fees, on or before August 1, 2023. Upon confirmation of the Debtor's Plan, the Bankruptcy Estate's Assets will be transferred to the Reorganized Debtor. The holders of pre-petition partnership interests in the Debtor will retain such interests following confirmation of the Plan. Spirit Hospitality, LLC, the Debtor's general partner, will manage the Debtor's hotel property. William G. Albrecht and/or Chad Schneider will be appointed to implement the provisions of the Confirmed Plan. The Plan will treat claims as follows: * Class 1 consists of the secured claim of FirstBank. Class 1 creditor shall be paid in accordance with the terms set forth in the parties' Settlement Agreement (the "Settlement Agreement"). FirstBank will receive interest only payments of $27,000 per month through July 31, 2022, and principal and interest payments of $40,000 per month beginning on August 1, 2022. Unpaid interest which accrued pre-petition and during the first 90 days post-petition in the amount of $245,021.23 as of October 15, 2021, shall be repaid in two equal installments of approximately $122,510.62 in October of 2021, and January of 2022. * Class 2 consists of the secured claim of Colorado Lending Source. The Debtor shall resume making interest only payments of $16,993.42 within 5 days of the Effective Date, which payments shall continue for the first 24 months of the Plan Term. Beginning in the 25th month of the Plan Term, the Debtor shall resume making principal and interest payments to Colorado Lending Source in the amount of $25,367.91, which payments shall continue for the duration of the Plan Term. * Class 3 consists of the secured claim of the Colorado Department of Revenue for occupational sales tax consists of the principal amount of $63,131, plus penalty of $11,364 and interest of $10,987, for a total of $85,482 as of the Petition Date, together with accrued post-petition interest at the rate of 9% per annum. This amount shall be paid in full within 30 days of the Effective Date. * Class 4 consists of the Allowed Claims of Spirit Hospitality. The Debtor is indebted to Spirit Hospitality, which is the Debtor's general partner and majority owner, for pre-petition loans in the amount of $210,000, and pre-petition management fees of $9,004. Within 30 days of the Effective Date the Debtor shall make 60 payments of $4,021.66 to repay this debt in full, with interest at 4%. * Class 5 consists of the unsecured claim of the SBA in the amount of $150,000 for an EIDL Loan, which has a term of 360 months and an interest rate of 3.75%. No payments are required during the first two years, but interest accrues during that time. * Class 6 consists of the allowed claim of Synchrony Bank in the amount of $4,075.42. Synchrony Bank's claim will be paid in full within 30 days after the Effective Date of the Plan. * Class 7 consists of the Secured Limited Partners, who shall retain their aggregate shareholder interest in Debtor of 34.64% following confirmation of Debtor's Plan and subject to the provisions of Debtor's Plan. Such payments shall not be made unless: (1) the Class 1 claim has been fully repaid consistent with the terms of the previously approved Settlement Agreement by and between the Debtor and FirstBank; (2) the Debtor is substantially current on its obligations under the Plan to its Class 2 and Class 4 creditors; and (3) all administrative expenses have been paid in full. * Class 8 consists of the Preferred Limited Partners and the General Partner. The Preferred Limited Partners shall retain their aggregate 17.34% shareholder interest in the Debtor following confirmation of Debtor's Plan and subject to the provisions of Debtor's Plan. Likewise, the General Partner shall retain its 54.084% ownership interest in the Debtor following confirmation of the Debtor's Plan and subject to the provisions of the Debtor's Plan. Neither the Preferred Limited Partners nor the General Partner shall receive any distributions on account of their ownership interests during the 5-year life of the Plan. Upon confirmation of the Plan, the Reorganized Debtor will implement its Plan as follows: * The Reorganized Debtor will operate its business following entry of the Confirmation Order. * The Reorganized Debtor will adequately and properly maintain its Real and Personal Property. * The Reorganized Debtor will pay secured Allowed Chapter 11 Administrative Expenses and Allowed Secured and Unsecured Claims under the Plan. * The Reorganized Debtor will appoint William Albrecht and/or Chad Schneider to implement the provisions of the Confirmed Plan. Messrs. Albrecht and Schneider will not be compensated for their services in implementing the provisions of the Confirmed Plan. Messrs. Albrecht and Schneider will be employed by Spirit Hospitality, LLC to manage the Debtor's ongoing business and will be paid a salary for such services by Spirit Hospitality, LLC. Spirit Hospitality, LLC shall receive a management fee of 5% of gross revenues. The management fee currently ranges between $12,000 to $14,000 per month. The Debtor projects that under its Plan, its general unsecured creditors will realize a return of 100% of its allowed unsecured claim. The Debtor estimates that liquidation under Chapter 7 of the Bankruptcy Code would result in a gross sale price for the property of $10,500,000. After deduction of 5% for a real estate commission and closing costs, the payoff of the FirstBank Loan ($6,731,001.98) and the Colorado Lending Source second ($3,840,302.89) plus the Chapter 7 Trustee's Fee ($34,252.40) the Debtor projects that there would be no funds available to pay a dividend to the general unsecured creditors. A full-text copy of the Disclosure Statement dated Dec. 7, 2021, is available at https://bit.ly/3IwyCEp from PacerMonitor.com at no charge. Counsel for Debtor-in-Possession: GOFF & GOFF, LLC Lance J. Goff, #27301 3015 47th St., Ste. E-1 Boulder, CO 80301 Telephone: (303) 415-9688 Facsimile: (720) 222-5161 E-Mail: lance@goff-law.com About Willco XII Development, LLLP Willco XII Development, LLLP, owns the hotel property at 4851 Thompson Parkway, in Johnstown Colorado, currently identified as the Comfort Inn & Suites in Johnstown. The company is a unit of William G. Albrecht's Spirit Hospitality, LLC. Willco XII Development sought Chapter 11 protection (Bankr. D. Colo. Case No. 20-16307) on Sept. 23, 2020, to stop its lender from foreclosing on the property. The Debtor disclosed $14.2 million in assets and $10.274 million in liabilities as of the bankruptcy filing. The Debtor's property is valued at $13 million and secures a $6.4 million first mortgage to the FirstBank of Colorado and a $3.46 million second mortgage to Wells Fargo. Lance J. Goff represents the Debtor as the counsel. FirstBank, as lender, is represented by Chad Caby, Esq. at LEWIS ROCA ROTGHERBER CHRISTIE LLP. YUNHONG CTI: Inks Stock Purchase Agreement With ICY Mellon ---------------------------------------------------------- Yunhong CTI Ltd. entered into a stock purchase agreement with ICY Mellon LLC, pursuant to which the company agreed to issue and sell, and the investor agreed to purchase, 170,000 shares of the company's newly created Series D convertible preferred stock. On Dec. 1, 2021, pursuant to the purchase agreement, Yunhong issued the investor a warrant to purchase up to 128,572 shares of its common stock, at an exercise price of the lower of (a) $1.75 per share, or (b) 85% of the lowest daily volume-weighted average price of the common stock during the 10 trading days prior to the date of exercise. Series D Certificate of Designations On Dec. 1, 2021, Yunhong filed with the Secretary of State of the State of Illinois a Certificate of Designations, Preferences and Rights of Series D Preferred Stock, which designates 170,000 shares of Series D Redeemable Convertible Preferred Stock, no par value per share with a stated value of $10.00 per share (as may be adjusted for any stock dividends, combinations or splits with respect to such shares). Under the Series D Certificate of Designations, holders of the Series D Preferred will be entitled to receive quarterly dividends at the annual rate of 8% of the Stated Value. Such dividends may be paid in cash or in shares of Yunhong's common stock in the company's discretion. In the event of any liquidation, dissolution or winding up of the company, the holders of record of shares of Series D Preferred will be entitled to receive, in preference to any distribution to the holders of the company's other equity securities (including the company's common stock), a liquidation preference equal to $10.00 per share plus all accrued and unpaid dividends. Each holder of Series D Preferred shall have the right to convert the Stated Value of such shares, as well as accrued but unpaid declared dividends thereon into shares of Yunhong's common stock. The number of shares of common stock issuable upon conversion of the Conversion Amount shall equal the Conversion Amount divided by the conversion price of $1.00, subject to certain customary adjustments. The Series D Preferred may not be converted to common stock to the extent such conversion would result in the holder beneficially owning more than 4.99% of the company's outstanding common stock except as provided in the Series D Certificate of Designations. Holders of Series D Preferred shall vote together with the holders of Yunhong's common stock, Series A Convertible Preferred Stock and Series B Convertible Redeemable Preferred Stock on an as-if-converted basis, whereby each share of Series D Preferred will be entitled to 4.65 votes, subject to certain downward adjustments. In addition, so long as there are more than 37,500 shares of the Series D Preferred outstanding, the company will be prohibited from taking certain actions without the consent of the holders of a majority of the outstanding shares of Series D Preferred, including among other actions the following: amend its Articles of Incorporation, as amended, the Series D Certificate of Designations or the by-laws of the company in any manner to decrease the number of authorized shares of common stock or in any manner that would otherwise adversely affect the rights, preferences or privileges of the holders of the Series D Preferred, except for an amendment to increase the number of authorized shares of common stock. About Yunhong CTI Lake Barrington, Illinois-based Yunhong CTI Ltd. -- www.ctiindustries.com -- develops, produces, distributes and sells a number of consumer products throughout the United States and in over 30 other countries, and it produces film products for commercial and industrial uses in the United States. Many of the Company's products utilize flexible films and, for a number of years, it has been a leading developer of innovative products which employ flexible films including novelty balloons, pouches and films for commercial packaging applications. Yunhong CTI reported a net loss of $4.25 million for the 12 months ended Dec. 31, 2020, compared to a net loss of $8.07 million for the 12 months ended Dec. 31, 2019. As of Sept. 30, 2021, the Company had $24.88 million in total assets, $19.59 million in total liabilities, and $5.30 million in total shareholders' equity. New York, NY-based RBSM LLP, the Company's auditor since 2019, issued a "going concern" qualification in its report dated April 15, 2021, citing that the Company has suffered recurring losses from operations and will require additional capital to continue as a going concern. In addition, the Company is in violation of certain covenants agreed to with PNC Bank which if not resolved could result in PNC Bank initiating liquidation proceedings. This raises substantial doubt about the Company's ability to continue as a going concern. [*] DOJ Asks Supreme Court to Review $324 Mil. Bankruptcy Fee Fight ------------------------------------------------------------------- Maria Chutchian of Reuters reports that the U.S. Department of Justice's bankruptcy watchdog is urging the U.S. Supreme Court to take up a dispute over bankruptcy fees Chapter 11 debtors are required to pay the government that has divided top appellate courts across the country. Solicitor General Elizabeth Prelogar said in a brief on behalf of the U.S. Trustee program on Wednesday that the high court should review the matter to resolve confusion over the fees created by the conflicting rulings. She also argued the court should find that a 2017 law increasing government fees that many Chapter 11 debtors must pay complies with the U.S. Constitution's Bankruptcy Clause, which requires bankruptcy laws to be uniform. The law's imposition of higher fees in most, but not all, U.S. bankruptcy courts has caused uncertainty about the legal status of around $324 million in fees imposed under the 2017 law, according to the U.S. Trustee. The dispute stems from a lawsuit filed by Alfred Siegel, the trustee who oversaw Circuit City's liquidation process. He claims the law violated the uniformity requirement by increasing U.S. Trustee fees for Chapter 11 debtors in most states but failed to do the same for two states that use a different government entity, known as the Bankruptcy Administrator program, to perform similar duties in overseeing large corporate bankruptcies. Siegel argued in a September petition to the Supreme Court that the alleged disparity forced the Circuit City liquidating trust to pay substantially higher fees than it had in prior years, while Chapter 11 debtors in North Carolina and Alabama, the states with the alternative program, went several months without being subject to the same fee increases. North Carolina and Alabama opted in 1986 for the Administrator program. While the U.S. Trustee opposes Siegel’s view of the law, it agrees that the Supreme Court should review the case. The law has been challenged in several districts with conflicting outcomes – the 4th and 5th U.S. Circuit Courts of Appeal have upheld the law while the 2nd and 10th Circuits have deemed it unconstitutional. The government argued that the constitution’s uniformity requirement does not restrict Congress’s ability to amend U.S. Trustee fees. Additionally, it said, the bankruptcy clause gives Congress flexibility in creating new statutes that govern bankruptcy court administration. "There is no basis for concluding that any of those administrative variations are unconstitutional," the government said in Wednesday's filing. The case is Alfred Siegel v. John Fitzgerald III, U.S. Supreme Court, No. 21-441. For the Circuit City liquidating trustee: Jeffrey Pomerantz, Andrew Caine and Robert Feinstein of Pachulski Stang Ziehl & Jones and Daniel Geyser and Ben Mesches of Haynes and Boone For the U.S. Trustee: Solicitor General Elizabeth Prelogar, Acting Assistant Attorney General Brian Boynton, DOJ Attorneys Mark Stern and Jeffrey Sandberg, U.S. Trustee General Counsel Ramona Elliott, Associate General Counsel Matt Sutko, Trial Attorneys Beth Levene and Wendy Cox [^] BOND PRICING: For the Week from December 6 to 10, 2021 ---------------------------------------------------------- Company Ticker Coupon Bid Price Maturity ------- ------ ------ --------- -------- AIG Global Funding AIG 2.700 99.836 12/15/2021 AIG Global Funding AIG 2.700 99.828 12/15/2021 BP Capital Markets America Inc BPLN 3.216 105.113 11/28/2023 BPZ Resources Inc BPZR 6.500 3.017 3/1/2049 Basic Energy Services Inc BASX 10.750 8.819 10/15/2023 Basic Energy Services Inc BASX 10.750 8.819 10/15/2023 Buffalo Thunder Development Authority BUFLO 11.000 50.000 12/9/2022 Carolina Trust Bancshares CART 6.900 96.314 10/15/2026 Columbia Property Trust Operating Partnership CXP 4.150 106.824 4/1/2025 Diamond Sports Group LLC / Diamond Sports Finance Co DSPORT 6.625 23.632 8/15/2027 Diamond Sports Group LLC / Diamond Sports Finance Co DSPORT 6.625 23.546 8/15/2027 Endo Finance LLC ENDP 5.750 93.075 1/15/2022 Endo Finance LLC ENDP 5.750 93.075 1/15/2022 Energy Conversion Devices ENER 3.000 7.875 6/15/2013 Energy Future Competitive Holdings Co LLC TXU 0.998 0.072 1/30/2037 Federal Home Loan Banks FHLB 0.090 99.879 12/14/2021 Finisar Corp IIVI 0.500 98.000 12/15/2036 First Niagara Financial Group Inc KEY 7.250 99.870 12/15/2021 Flushing Financial Corp FFIC 5.250 99.813 12/15/2026 GNC Holdings Inc GNC 1.500 0.488 8/15/2020 GTT Communications Inc GTTN 7.875 12.500 12/31/2024 GTT Communications Inc GTTN 7.875 12.750 12/31/2024 General Electric Co GE 5.150 99.780 12/15/2021 Goodman Networks Inc GOODNT 8.000 43.000 5/11/2022 Jaguar Holding Co II / PPD Development LP PPD 5.000 107.782 6/15/2028 Jaguar Holding Co II / PPD Development LP PPD 4.625 103.378 6/15/2025 Lannett Co Inc LCI 4.500 27.500 10/1/2026 MAI Holdings Inc MAIHLD 9.500 17.077 6/1/2023 MAI Holdings Inc MAIHLD 9.500 17.077 6/1/2023 MAI Holdings Inc MAIHLD 9.500 19.125 6/1/2023 MBIA Insurance Corp MBI 11.384 9.100 1/15/2033 MBIA Insurance Corp MBI 11.384 9.591 1/15/2033 MF Global Holdings Ltd MF 9.000 14.000 6/20/2038 MF Global Holdings Ltd MF 6.750 14.000 8/8/2016 NantHealth Inc NH 5.500 99.284 12/15/2021 National Rural Utilities Cooperative Finance Corp NRUC 3.000 99.756 12/15/2021 National Rural Utilities Cooperative Finance Corp NRUC 3.000 99.755 12/15/2021 National Rural Utilities Cooperative Finance Corp NRUC 3.000 99.756 12/15/2021 NextEra Energy Capital Holdings Inc NEE 3.150 100.540 4/1/2024 NextEra Energy Capital Holdings Inc NEE 3.250 106.095 4/1/2026 Nine Energy Service Inc NINE 8.750 46.847 11/1/2023 Nine Energy Service Inc NINE 8.750 48.126 11/1/2023 Nine Energy Service Inc NINE 8.750 48.479 11/1/2023 OMX Timber Finance Investments II LLC OMX 5.540 0.836 1/29/2020 Renco Metals Inc RENCO 11.500 24.875 7/1/2003 Revlon Consumer Products Corp REV 6.250 42.287 8/1/2024 Riverbed Technology Inc RVBD 8.875 66.019 3/1/2023 Riverbed Technology Inc RVBD 8.875 66.019 3/1/2023 Sears Holdings Corp SHLD 6.625 1.124 10/15/2018 Sears Holdings Corp SHLD 6.625 2.052 10/15/2018 Sears Roebuck Acceptance SHLD 7.000 1.325 6/1/2032 Sears Roebuck Acceptance SHLD 7.500 1.548 10/15/2027 Sears Roebuck Acceptance SHLD 6.750 1.438 1/15/2028 Sears Roebuck Acceptance SHLD 6.500 1.333 12/1/2028 Sempra Texas Holdings TXU 5.550 13.500 11/15/2014 Starwood Property Trust STWD 5.000 99.814 12/15/2021 Sysco Corp SYY 3.550 106.571 3/15/2025 Talen Energy Supply LLC TLN 4.600 97.384 12/15/2021 Talen Energy Supply LLC TLN 9.500 83.730 7/15/2022 Talen Energy Supply LLC TLN 9.500 83.730 7/15/2022 TerraVia Holdings Inc TVIA 5.000 4.644 10/1/2019 Trousdale Issuer LLC TRSDLE 6.500 33.000 4/1/2025 UnitedHealth Group Inc UNH 2.875 99.998 12/15/2021 ********* Monday's edition of the TCR delivers a list of indicative prices for bond issues that reportedly trade well below par. Prices are obtained by TCR editors from a variety of outside sources during the prior week we think are reliable. Those sources may not, however, be complete or accurate. The Monday Bond Pricing table is compiled on the Friday prior to publication. Prices reported are not intended to reflect actual trades. Prices for actual trades are probably different. Our objective is to share information, not make markets in publicly traded securities. Nothing in the TCR constitutes an offer or solicitation to buy or sell any security of any kind. It is likely that some entity affiliated with a TCR editor holds some position in the issuers public debt and equity securities about which we report. Each Tuesday edition of the TCR contains a list of companies with insolvent balance sheets whose shares trade higher than $3 per share in public markets. At first glance, this list may look like the definitive compilation of stocks that are ideal to sell short. Don't be fooled. Assets, for example, reported at historical cost net of depreciation may understate the true value of a firm's assets. A company may establish reserves on its balance sheet for liabilities that may never materialize. The prices at which equity securities trade in public market are determined by more than a balance sheet solvency test. On Thursdays, the TCR delivers a list of recently filed Chapter 11 cases involving less than $1,000,000 in assets and liabilities delivered to nation's bankruptcy courts. The list includes links to freely downloadable images of these small-dollar petitions in Acrobat PDF format. Each Friday's edition of the TCR includes a review about a book of interest to troubled company professionals. All titles are available at your local bookstore or through Amazon.com. Go to http://www.bankrupt.com/books/to order any title today. Monthly Operating Reports are summarized in every Saturday edition of the TCR. The Sunday TCR delivers securitization rating news from the week then-ending. TCR subscribers have free access to our on-line news archive. Point your Web browser to http://TCRresources.bankrupt.com/and use the e-mail address to which your TCR is delivered to login. ********* S U B S C R I P T I O N I N F O R M A T I O N Troubled Company Reporter is a daily newsletter co-published by Bankruptcy Creditors Service, Inc., Fairless Hills, Pennsylvania, USA, and Beard Group, Inc., Washington, D.C., USA. Jhonas Dampog, Marites Claro, Joy Agravante, Rousel Elaine Tumanda, Valerie Udtuhan, Howard C. Tolentino, Carmel Paderog, Meriam Fernandez, Joel Anthony G. Lopez, Cecil R. Villacampa, Sheryl Joy P. Olano, Psyche A. Castillon, Ivy B. Magdadaro, Carlo Fernandez, Christopher G. Patalinghug, and Peter A. Chapman, Editors. Copyright 2021. All rights reserved. ISSN: 1520-9474. This material is copyrighted and any commercial use, resale or publication in any form (including e-mail forwarding, electronic re-mailing and photocopying) is strictly prohibited without prior written permission of the publishers. Information contained herein is obtained from sources believed to be reliable, but is not guaranteed. The TCR subscription rate is $975 for 6 months delivered via e-mail. Additional e-mail subscriptions for members of the same firm for the term of the initial subscription or balance thereof are $25 each. For subscription information, contact Peter A. Chapman at 215-945-7000. *** End of Transmission ***