/raid1/www/Hosts/bankrupt/TCR

/raid1/www/Hosts/bankrupt/TCR_Public/211224.mbx T R O U B L E D C O M P A N Y R E P O R T E R Friday, December 24, 2021, Vol. 25, No. 357 Headlines A&M HOME: Gets OK to Hire Keller Williams Lakeside as Realtor BLUE RIVER HOMES: Seeks to Hire Coyle Law Group as Legal Counsel CLUB 77 BAR: U.S. Trustee Unable to Appoint Committee CORE COMMUNICATIONS: Seeks to Tap Lawler Metzger as Special Counsel ELITE AEROSPACE: Taps 3-21 Capital Partners as Investment Banker ENERMEX INTERNATIONAL: Taps Jeff Pena of 5th Stream as Broker GENEVER HOLDINGS: Seeks to Hire Sotheby's as Real Estate Broker MID ATLANTIC PRINTERS: Seeks to Hire Brockman as Accountant NORDIC AVIATION: Milbank, Hunton Represent 33/34 Lenders Group ONE SKY: Fitch Alters Outlook on 'B' LT IDR to Positive PDG PRESTIGE: Plan Does not Provide for Payment of City Bay's Claim QUALITY MACHINE: U.S. Trustee Appoints Creditors' Committee REDWOOD EMPIRE: Unsecureds Will be Paid From Creditor Fund Payments TOP FLIGHT: U.S. Trustee Unable to Appoint Committee WESTERN GLOBAL: Fitch Affirms 'B+' LT IDR, Outlook Stable [^] BOOK REVIEW: Saga of America's Most Powerful Real Estate Baron ********* A&M HOME: Gets OK to Hire Keller Williams Lakeside as Realtor ------------------------------------------------------------- A&M Home Solutions, LLC received approval from the U.S. Bankruptcy Court for the Eastern District of Michigan to hire Keller Williams Lakeside to sell a residential property located at 436 Detroit Ave., Royal Oak, Mich. Keller Williams will get a commission of 6 percent of the gross sale price. Scott Bowles of Keller Williams disclosed in a court filing that he and other members of the firm are "disinterested persons" within the meaning of Section 101(14) of the Bankruptcy Code. The firm can be reached at: Scott Bowles Keller Williams Lakeside 7380 Bishop Road Brighton, MI 48116 Tel: (248) 541-4900 About A&M Home Solutions A&M Home Solutions, LLC is a Royal Oak, Mich.-based company engaged in activities related to real estate. A&M Home Solutions filed a petition for Chapter 11 protection (Bankr. E.D. Mich. Case No. 21-49264) on Nov. 29, 2021, disclosing up to $1 million in assets and up to $10 million in liabilities. Debora Lynn Gonzalez, managing member, signed the petition. Yuliy Osipov, Esq., at Osipov Bigelman, P.C. is the Debtor's legal counsel. BLUE RIVER HOMES: Seeks to Hire Coyle Law Group as Legal Counsel ---------------------------------------------------------------- Blue River Homes, LLC seeks approval from the U.S. Bankruptcy Court for the District of Maryland to hire The Coyle Law Group to serve as legal counsel in its Chapter 11 case. The firm's services include: a. Legal advice regarding the continued management of the Debtor's personal affairs; b. Preparation of bankruptcy schedules and statements of financial affairs; c. Representation of the Debtor in proceedings for relief from stay, which may be instituted in the bankruptcy court; d. Representation of the Debtor at any meetings of creditors convened pursuant to Section 341 of the Bankruptcy Code; e. Preparation of reports and legal papers, including disclosure statement and Chapter 11 plan; and f. Other necessary legal services. The hourly rates charged by the firm for its service are as follows: Partners $375 per hour Paralegal/Support Staff $125 per hour In addition, the firm will seek reimbursement for work-related expenses. Michael Coyle, Esq., at The Coyle Law Group disclosed in a court filing that he and his firm are "disinterested persons" within the meaning of Section 101(14) of the Bankruptcy Code. The Coyle Law Group can be reached through: Michael P. Coyle, Esq. The Coyle Law Group 7061 Deepage Drive, Suite 101B Columbia, MD 21045 Phone: 443-545-1215 Email: mcoyle@thecoylelawgroup.com About Blue River Homes Blue River Homes, LLC sought protection under Chapter 11 of the Bankruptcy Code (Bankr. D. Md. Case No. 21-17348) on Nov. 21, 2021, listing as much as $1 million in both assets and liabilities. Judge Lori S. Simpson oversees the case. Michael P. Coyle, Esq., at The Coyle Law Group is the Debtor's legal counsel. CLUB 77 BAR: U.S. Trustee Unable to Appoint Committee ----------------------------------------------------- The U.S. Trustee for Region 2 on Dec. 20 disclosed in a court filing that no official committee of unsecured creditors has been appointed in the Chapter 11 case of Club 77 Bar & Grill, Inc. About Club 77 Bar & Grill Inc. Club 77 Bar & Grill, Inc. filed a petition for Chapter 11 protection (Bankr. W.D.N.Y. Case No. 21-11067) on Oct. 21, 2021, disclosing under $1 million in both assets and liabilities. Judge Carl L. Bucki oversees the case. The Debtor tapped James Joyce, Esq., an attorney practicing in Grand Rapids, Mich., to handle its Chapter 11 case. CORE COMMUNICATIONS: Seeks to Tap Lawler Metzger as Special Counsel ------------------------------------------------------------------- Core Communications, Inc. seeks approval from the U.S. Bankruptcy Court for the District of Columbia to employ Lawler, Metzger, Keeney & Logan, LLC as its special counsel. The firm will represent the Debtor concerning pending matter before the Maryland Public Service Commission (MD PSC) Case No. 9013, and any appeals thereof. Lawler Metzger will be paid by the Debtor's corporate parent, CoreTel Communications, Inc., and it does not intend to seek payment for legal services from the Debtor's estate. James Falvey, Esq., a partner at Lawler, Metzger, Keeney & Logan, disclosed in a court filing that the firm is a "disinterested person" within the meaning of Section 101(14) of the Bankruptcy Code. The firm can be reached through: James C. Falvey, Esq. Lawler, Metzger, Keeney & Logan, LLC 1717 K Street, NW, Suite 1075 Washington, DC 20006 Telephone: (202) 777-7732 Facsimile: (202) 777-7763 Email: jfalvey@lawlermetzger.com About Core Communications Annapolis, Md.-based Core Communications, Inc. -- http://www.coretel.net/-- provides Carriers, ISPs and ASPs with tailored telecommunications services, leveraging voice and data convergence. Core Communications filed a Chapter 11 petition (Bankr. D.D.C. Case No. 17-00258) on May 2, 2017, listing up to $50,000 in assets and up to $10 million in liabilities. Christopher Van de Verg, general counsel, signed the petition. Judge S. Martin Teel, Jr. oversees the case. The Debtor tapped Offit Kurman, PA as bankruptcy counsel and Robins Kaplan, LLP and Lawler, Metzger, Keeney & Logan, LLC as special counsel. ELITE AEROSPACE: Taps 3-21 Capital Partners as Investment Banker ---------------------------------------------------------------- Elite Aerospace Group, Inc. and its affiliates seek approval from the U.S. Bankruptcy Court for the Central District of California to employ Three Twenty One Capital Partners, LLC as their investment banker. The firm will render these services: (a) work with the Debtors to devise the best course of action to effectuate the desired outcome for them; (b) conduct due diligence, review and analyze the estates' business, operations, and financial projections; (c) create financial modeling to aid in the transaction as well as advise and assist the Debtors in structuring and effecting one or more transactions. (d) work with stakeholders, third party professionals, and creditors, in consultation with the Debtors and their counsel; (e) create, develop, and implement a sale & marketing plan; (f) endeavor to locate parties who may have an interest in a transaction or series of transactions with the Debtors' assets and/or business and enterprise; (g) circulate materials, as appropriate and approved by the Debtors to facilitate a transaction; (h) respond, provide information, communicate, and negotiate with, and obtain offers from interested parties, as well as, make recommendations to the Debtors as to whether an offer should be accepted; (i) communicate regularly with the Debtors and their counsel, along with counsel to the unsecured creditors committee, if applicable, among other stakeholders about the status of 3-21's efforts with respect to the marketing efforts; (j) recommend to the Debtors the proper method of handling any specific situations, impediments, and/or, problems encountered with respect to the marketing of the Debtors' business; and (k) perform related services necessary to maximize the value and proceeds recovered from monetizing the Debtors and their asset equipment, intangible, and any other business assets & enterprise. The firm will be compensated as follows: (a) an initial retainer fee of $50,000; (b) a transaction fee of 15 percent of all transaction value of any transaction that is greater in any respect than the already selected Stalking Horse Bidder's transaction amount. If a new Stalking Horse bidder is required, the firm will be paid a transaction fee of 7 percent of all transaction value; (c) reimbursement for expenses incurred. Ervin Terwilliger, the founder and senior managing director at Three Twenty-One Capital Partners, 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: Ervin Terwilliger Three Twenty-One Capital Partners, LLC 5950 Symphony Woods Rd., Suite 200 Columbia, MD 21044 Telephone: (443) 325-5290 Facsimile: (443) 703-2330 Email: erv@321capital.com About Elite Aerospace Group Elite Aerospace Group, Inc. is an Irvine, Calif.-based company that designs and manufactures aerospace components. Elite Aerospace Group filed a petition for Chapter 11 protection (Bankr. C.D. Calif. Lead Case No. 21-12231) on Sept. 13, 2021, listing as much as $50 million in both assets and liabilities. Zeeshawn Zia, president, signed the petition. Its subsidiaries filed their voluntary Chapter 11 petitions on Oct. 5, 2021. Judge Theodor C. Albert oversees the cases. The Debtors tapped Levene, Neale, Bender, Yoo & Brill, LLP as bankruptcy counsel; K&L Gates, LLP and Hart David Carson, LLP as special counsel; and Three Twenty-One Capital Partners, LLC as investment banker. On Oct. 5, 2021, the U.S. Trustee for Region 15 appointed an official committee of unsecured creditors. The committee tapped Buchalter, a Professional Corporation, as its bankruptcy counsel. ENERMEX INTERNATIONAL: Taps Jeff Pena of 5th Stream as Broker ------------------------------------------------------------- Enermex International, Inc. seeks approval from the U.S. Bankruptcy Court for the Southern District of Texas to hire Jeff Pena of 5th Stream Realty as its real estate broker. The Debtor requires the services of a real estate broker in connection with the sale of its properties, including its light manufacturing and welding facility located at 12543 Unison Road, Houston, Texas. The broker will receive a 5 percent sales commission. No amount will be due from the Debtor if the sale is not completed. Mr. Pena disclosed in a court filing that he and his firm are "disinterested" within the meaning of Section 101(14) of the Bankruptcy Code. 5th Stream Realty can be reached at: Jeff Pena 5th Stream Realty 7941 Katy Fwy, Suite 787 Houston, TX 77024 Tel: (281) 752-6582 About Enermex International Houston-based Enermex International Inc. filed a voluntary petition for Chapter 11 protection (Bankr. S.D. Texas 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 John Akard Jr., Esq., at Coplen & Banks, PC as bankruptcy counsel and Hrbacek Law Firm, PC as special counsel. GENEVER HOLDINGS: Seeks to Hire Sotheby's as Real Estate Broker --------------------------------------------------------------- Genever Holdings, LLC seeks approval from the U.S. Bankruptcy Court for the Southern District of New York to hire Sotheby's International Realty to market and sell its principal assets in New York. The Debtor's principal assets include an 18th floor apartment and auxiliary units at the Sherry-Netherland Hotel located at 781 Fifth Ave., New York. The agreed upon commission is 3 percent of the total purchase price for a direct sale involving no cooperating broker or 4 percent of the purchase price, to be split equally between a cooperating broker and Sotheby's' broker, Serena Boardman, who will be providing the services. In addition, the firm will receive reimbursement for marketing expenses. Ms. Boardman disclosed in a court filing that her firm is a "disinterested person" within the meaning of Section 101(14) of the Bankruptcy Code. The firm can be reached at: Serena Boardman Sotheby's International Realty 650 Madison Avenue New York, NY 10022 Mobile: (917) 667-2468 Office: (212) 606-7611 Fax: (212) 909-8157 Email: Serena.Boardman@Sothebys.Realty About Genever Holdings Genever Holdings LLC is the owner of the entire 18th floor apartment and auxiliary units in the Sherry Netherland Hotel located at 781 Fifth Ave., New York Genever Holdings filed its voluntary petition for Chapter 11 protection (Bankr. S.D.N.Y. Case No. 20-12411) on Oct. 12, 2020, listing up to $100 million in both assets and liabilities. Judge James L. Garrity, Jr. oversees the case. Kevin J. Nash, Esq., at Goldberg Weprin Finkel Goldstein, LLP serves as the Debtor's legal counsel. MID ATLANTIC PRINTERS: Seeks to Hire Brockman as Accountant ----------------------------------------------------------- Mid Atlantic Printers LTD seeks approval from the U.S. Bankruptcy Court for the Western District of Virginia to hire Brockman, Drinkard & Pennington, PC as its accountant. The firm's services include: a. preparing tax returns and other tax-related documents; b. assisting in the preparation of reports for the Office of the U.S. Trustee; c. assisting in the preparation of a Chapter 11 plan of reorganization; and d. performing other accounting services for the Debtor. The hourly rates charged by the firm for its services are as follows: Jeffrey Allen, President $225 per hour Associates $150 per hour Accounting/Paraprofessional Services $100 per hour Jeffrey Allen, president of Brockman, disclosed in a court filing that he and his firm neither hold nor represent an interest adverse to the Debtor's bankruptcy estate. The firm can be reached at: Jeffrey S. Allen Brockman, Drinkard & Pennington, PC 104 Archway Court Lynchburg, VA 24502 Phone: (434) 846-8458 About Mid Atlantic Printers Ltd. Mid Atlantic Printers, Ltd. is a full-service commercial sheet fed printer, with two production facilities and multiple sales offices. The Altavista, Va.-based company offers commercial printing services. Mid Atlantic Printers filed a petition for Chapter 11 protection (Bankr. W.D. Va. Case No. 21-61173) on Oct. 27, 2021, listing up to $10 million in assets and up to $1 million in liabilities. Nancy Edwards, president of Mid Atlantic Printers, signed the petition. Judge Rebecca B. Connelly oversees the case. Andrew S. Goldstein, Esq., at Magee Goldstein Lasky & Sayers, P.C. and Brockman, Drinkard & Pennington, PC serve as the Debtor's legal counsel and accountant, respectively. NORDIC AVIATION: Milbank, Hunton Represent 33/34 Lenders Group -------------------------------------------------------------- In the Chapter 11 cases of Nordic Aviation Capital Designated Activity Company, et al., the law firms of Milbank LLP and Hunton Andrews Kurth LLP submitted a verified statement under Rule 2019 of the Federal Rules of Bankruptcy Procedure, to disclose that they are representing the Ad Hoc Committee of 33/34 Lenders. In April 2021, the Ad Hoc Committee retained Milbank as its counsel with respect to the secured term loans under which NAC Aviation 33 Limited and NAC Aviation 34 Limited serve as borrowers. The Ad Hoc Committee subsequently retained Hunton to serve as its Virginia local counsel in connection with the chapter 11 cases of Nordic Aviation Capital Designated Activity Company and its affiliated debtors. In addition, a separate team of Milbank attorneys represents Silver Point Capital and certain of its affiliates and related funds in connection with these cases. Counsel does not represent or purport to represent any other entities in connection with these cases. In addition, the Ad Hoc Committee represents only the interests of its members, and the members of the Ad Hoc Committee do not represent or purport to represent the interests of any other entities in connection with these cases. As of Dec. 13, 2021, members of the Ad Hoc Committee and their disclosable economic interests are: Aozora Bank, Ltd 6-1-1, Kojimachi Chiyoda-ku Tokyo 102-8660 Japan * NAC 31 JOLCO Claims: $1,450,720.90 * NAC 32 JOLCO Claims: $1,495,412.01 * NAC 33 Claims: $11,921,341.74 * NAC 34 Claims: $3,381,496.82 * NAL 27 JOLCO Claims: $1,989,455.63 * NAL 28 JOLCO Claims: $2,843,343.35 BNP Paribas 16, boulevard des Italiens 75009 Paris, France * NAC 33 Claims: $235,675,227.52 * NAC 34 Claims: $86,236,419.65 BNP Paribas – NY Branch 787 7th Avenue New York, NY 10019 * NAC 29 RCF Claims: $15,193,883.47 CaixaBank, S.A. Calle Pintor Sorolla 2-4 46002 Valencia Spain * NAC 33 Claims: $14,901,677.16 * NAC 34 Claims: $4,226,871.05 ING Bank Hamburger Allee 1 60486 Frankfurt Germany * NAC 33 Claims: $68,788,277.99 Ironshield Special Situations L1 Master Fund LP 1 Nexus Way, Camana Bay Grand Cayman KY1-9005 Cayman Islands * NAC 27 Claims: $4,035,573.00 * NAC 29 RCF Claims: $17,350,000.00 * NAC 33 Claims: $16,391,845.00 * NAC 34 Claims: $4,649,558.00 Montlake UCITS Platform ICAV – Ironshield Credit Fund MontLake Management Ltd. 23 St. Stephen's Green Dublin 2 Ireland D02 AR55 * NAC 29 RCF Claims: $6,650,000.00 MUFG Bank Ltd. Ropemaker Place 25 Ropemaker Street London, EC2Y 9AN * NAC 33 Claims: $43,780,848.27 * NAC 34 Claims: $12,543,318.33 * NAL 18 JOLCO Claims: $3,891,219.00 * NAL 20 JOLCO Claims: $4,112,669.23 * NAL 21 JOLCO Claims: $4,228,673.66 * NAL 22 JOLCO Claims: $3,872,101.65 * NAL 23 JOLCO Claims: $4,245,850.27 * NAL 24 JOLCO Claims: $4,280,327.47 The Tokyo Star Bank, Limited 2-3-5 Akasaka Minato-ku Tokyo 107-8480 Japan * NAC 29 DBJ 2018 Claims: $7,097,357.88 * NAC 29 DBJ 2019 Claims: $10,144,114.36 * NAC 31 JOLCO Claims: $1,378,190.77 * NAC 32 JOLCO Claims: $1,420,635.42 * NAC 33 Claims: $4,878,355.54 * NAC 34 Claims: $1,383,748.92 * NAL 27 JOLCO Claims: $1,889,985.22 * NAL 28 JOLCO Claims: $2,701,177.78 Co-Counsel for the Ad Hoc Committee of 33/34 Lenders can be reached at: Gerard Uzzi, Esq. Nelly Almeida, Esq. Andrew Harmeyer, Esq. MILBANK LLP 55 Hudson Yards New York, NY 10001 Telephone: (212) 530-5000 Facsimile: (212) 530-5219 E-mail: guzzi@milbank.com nalmeida@milbank.com aharmeyer@milbank.com - and - Tyler P. Brown, Esq. Justin F. Paget, Esq. Jennifer E. Wuebker, Esq. HUNTON ANDREWS KURTH LLP Riverfront Plaza, East Tower 951 East Byrd Street Richmond, VA 23219 Telephone: (804) 788-8200 Facsimile: (804) 788-8218 E-mail: tpbrown@HuntonAK.com jpaget@HuntonAK.com jwuebker@HuntonAK.com A copy of the Rule 2019 filing, downloaded from PacerMonitor.com, is available at https://bit.ly/3pksJTa About Nordic Aviation Capital NAC is the industry's leading regional aircraft lessor serving almost 70 airlines in approximately 45 countries. NAC's fleet of 475 aircraft includes ATR 42, ATR 72, De Havilland Dash 8, Mitsubishi CRJ900/1000, Airbus A220 and Embraer E-Jet family aircraft. On Dec. 17, 2021, Nordic Aviation Capital Pte. Ltd., NAC Aviation 17 Limited, NAC Aviation 20 Limited, and Nordic Aviation Capital A/S each filed petitions seeking relief under chapter 11 of the United States Bankruptcy Code (Bankr. E.D. Va.). Additionally, on Dec. 19, 2021, Nordic Aviation Capital Designated Activity Company and 112 affiliated companies also each filed petitions seeking Chapter 11 relief. The lead case is In re Nordic Aviation Capital Designated Activity Company (Bankr. E.D. Va. Lead Case No. 21-33693). Kirkland & Ellis LLP is serving as the Company's restructuring counsel, Clifford Chance LLP and William Fry LLP are serving as legal counsel, Ernst & Young is serving as restructuring advisor, and Rothschild & Co is acting as investment banker. Epic is the claims agent. ONE SKY: Fitch Alters Outlook on 'B' LT IDR to Positive ------------------------------------------------------- Fitch has revised its Rating Outlook for One Sky Flight LLC to Positive from Stable and affirmed its Long-Term Issuer Default Rating (IDR) at 'B'. Fitch has also withdrawn One Sky's term loan B rating following its repayment. The affirmation of the IDR is driven by solid recent top-line performance and benefit from a structural shift in consumer sentiment towards private aviation. Fitch expects these tailwinds to persist through 2022, however, growth will likely subside as the pandemic subsides. The term loan rating has been withdrawn following its repayment. KEY RATING DRIVERS Solid Performance: The company's performance in 2021 is largely in line with Fitch's expectations. Fitch forecasts revenue to grow by 32%-33% from 2020, driven by over 40% improvement in flight revenue, as well as robust performance in fractional and on demand flying. Fitch believes these tailwinds will persist in 2022 as the worst of the coronavirus impact on aviation recedes, however, will likely slow over the forecast. Nonetheless, Fitch believes private aviation as a whole may be pressured due to lack of aircraft supply and increased costs related to labor. This is evidenced by the wide decision by jet card operators to cease new card sales, and One Sky Flights decision to only sell card hours to existing customers. Margins may compress: Fitch has revised its forecast for the company's margins to be roughly flat from 2021-2022 due to increased utilization of their partner fleet. Fitch believes margins may compress in 2022, due to inflationary costs such as wages and fuel prices. These costs will be partially offset from lower rental expenses. As such margins are expected to remain in the high single to low double digits throughout the forecast. FCF; Liquidity: Fitch expects FCF to be positive moving forward after dipping negative in 2021 due to large aircraft purchases. Additionally, the reduction of the jet card program due to limited supply of available lift on the market will likely reduce deposits over the short term, however, will likely normalize in 2023 as new aircraft enter the market. Fitch expects YE liquidity to be sizeable, supporting a solid level of financial flexibility through Fitch's forecast period. Asset Light Model Reduces Balance Sheet Risk: One Sky's balance sheet risk is limited with regards to its aircraft purchases. Under the fractional ownership model, the company is able to sell shares of an aircraft well in advance of that aircraft's delivery, allowing the company to collect cash up front and minimize its own capital outlay. Although One Sky will remain less asset intensive than competitors like Vistajet, the company is planning to grow its own core fleet to support future growth. Cyclical/Fragmented Industry: The business jet industry is cyclical due to the luxury nature of the product offering and the availability of commercial flights as a substitute. These risks are partly offset for OneSky by the management fees that it charges its fractional owners which are fixed through the life of the contract and do not depend on the number of hours flown, providing a steady source of revenue. However, fractional sales of new aircraft, jet card purchases and charter flying are all vulnerable to economic cycles. DERIVATION SUMMARY One Sky's closest comparable peer is NetJets, which Fitch does not currently rate. Vista Global (B/Stable) is One Sky's closest rated peer. One Sky assumes limited asset risk through its fractional model, while Vista faces steeper upfront capital costs by bringing its aircraft on balance sheet and carries more residual value risk. One Sky has more scale with a managed fleet of more than that materially exceeds Vista Global. One Sky also has a broader product offering both in terms of the types of aircraft available and ways to utilize them (fractional, jet card, on-demand), whereas Vista solely operate super-mid and larger aircraft and they primarily operate on take-or-pay contracts in which customers pay for a set amount of hours that will expire if unused. ESG Considerations: OneSky has an ESG Relevance Score of '4' for Exposure to Social Impacts due to concerns around energy management that stem from the potential for public/customer perception around private aviation, which may drive down demand as climate awareness and activism become more pronounced. This has a negative impact on the credit profile, and is relevant to the rating[s] in conjunction with other factors. OneSky has an ESG Relevance Score of '4' for Governance Structure. The governance structure score reflects the 40% ownership by Directional Aviation, which is controlled by CEO Kenn Ricci and CFO Mike Rossi. There is also an element of key person risk as the CEO and CFO have worked closely together for more than 30 years, and their loss could have a material impact on the company's operations. This has a negative impact on the credit profile, and is relevant to the rating[s] in conjunction with other factors. Unless otherwise disclosed in this section, the highest level of ESG credit relevance is a score of '3'. This means ESG issues are credit-neutral or have only a minimal credit impact on the entity, either due to their nature or the way in which they are being managed by the entity. KEY ASSUMPTIONS Fitch's key assumptions within the Agency's rating case for the issuer include: -- Consolidated revenues increase by ~33% as flight utilization and fractional share sales rebound to pre-coronavirus levels; -- Margins are flat from 2020-2021 driven by general inflationary cost pressures. RATING SENSITIVITIES Factors that could, individually or collectively, lead to positive rating action/upgrade: -- Continued topline growth evidencing the durability of private aviation in the post-coronavirus environment; -- Total adjusted debt/EBITDAR sustained below 5.0x; -- FFO fixed charge coverage sustained around 2.0x; -- EBITDA margins sustained in the high single digits or better. Factors that could, individually or collectively, lead to negative rating action/downgrade: -- Total adjusted debt/EBITDAR remaining above 6.5x; -- FFO fixed charge coverage sustained below 1.5x; -- EBITDA margins falling to the low single digits. BEST/WORST CASE RATING SCENARIO International scale credit ratings of Non-Financial Corporate issuers have a best-case rating upgrade scenario (defined as the 99th percentile of rating transitions, measured in a positive direction) of three notches over a three-year rating horizon; and a worst-case rating downgrade scenario (defined as the 99th percentile of rating transitions, measured in a negative direction) of four notches over three years. The complete span of best- and worst-case scenario credit ratings for all rating categories ranges from 'AAA' to 'D'. Best- and worst-case scenario credit ratings are based on historical performance. ISSUER PROFILE One Sky is a portfolio of three private jet travel labels covering the fractional ownership, fractional lease, prepaid charter/jet card and on-demand charter segments. Initially focused on the chartering segment, One Sky has grown its offering by purchasing SentientJet in 2012, and FlexJet from Bombardier in 2013. PDG PRESTIGE: Plan Does not Provide for Payment of City Bay's Claim ------------------------------------------------------------------- Creditor City Bay Capital LLC filed a Limited Objection to the Disclosure Statement in Support of a Plan of Reorganization proposed by PDG Prestige Inc. dated November 3, 2021. City Bay objects to the proposed dispute of the City Bay Claim to the extent the Debtor's Plan of Reorganization does not provide for payment of City Bay's Claim as an allowed general unsecured claim based on its proof of claim which has not been objected to and is thus presumed to be prima facie valid. The mere intention to object to the Claim as stated in the Disclosure Statement is not a substitute for filing a claim objection. City Bay objects to the Disclosure Statement to the extent the Debtor proposes to object to City Bay's Claim and/or seeks to classify City Bay's Claim separately from the other general unsecured claims and to treat City Bay's Claim differently therefrom. Counsel for City Bay Capital LLC: David W. Parham State Bar Number 15459500 AKERMAN LLP 2001 Ross Avenue, Suite 3600 Dallas, TX 75201 Tel.: (214) 720-4300 Fax: (214) 981-9339 E-Mail: david.parham@akerman.com -and- Mark S. Lichtenstein Benjamin R. Joelson AKERMAN LLP 1251 Avenue of the Americas, 37th Floor New York, New York 10020 Tel. No. (212) 880-3800 E-Mail: mark.lichtenstein@akerman.com E-mail: Benjamin.joelson@akerman.com About PDG Prestige PDG Prestige, Inc., a real estate developer in El Paso, Texas, sought protection under Chapter 11 of the Bankruptcy Code (Bankr. W.D. Tex. Case No. 21-30107) on Feb. 15, 2021. Michael Dixson, president, signed the petition. At the time of the filing, the Debtor disclosed assets of between $1 million and $10 million and liabilities of the same range. Weycer Kaplan Pulaski & Zuber, P.C., is the Debtor's legal counsel. QUALITY MACHINE: U.S. Trustee Appoints Creditors' Committee ----------------------------------------------------------- The U.S. Trustee for Region 12 appointed an official committee to represent unsecured creditors in the Chapter 11 case of Quality Machine of Iowa, Inc. The committee members are: 1. William Geary Neisen Steel & Wire, LP 9400 Belmont Avenue Franklin Park, IL 60131 Phone Number: (847) 671-8700 Ext: 260 2. Thomas Johansson Lyindrical Precision LLC dba Prestige Products 1403 W. Broadway Ave Minneapolis, MN 5541 Mr. Geary was designated as acting chairperson of the committee pending selection by the committee members of a permanent chairperson. 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 Quality Machine of Iowa Quality Machine of Iowa, Inc. is engaged in precision production machining of metal parts. The company has two locations: Minneapolis, Minn., and Audubon, Iowa. Quality Machine of Iowa sought protection under Chapter 11 of the Bankruptcy Code (Bankr. D. Minn. Case No. 21-42169) on Dec. 3, 2021. In the petition signed by Timothy Greene, owner and chief executive officer, the Debtor disclosed $8,368,270 in assets and $10,343,162 in liabilities. Judge William J. Fisher oversees the case. Cameron A. Lallier, Esq., at Foley and Mansfield, PLLP is the Debtor's legal counsel. REDWOOD EMPIRE: Unsecureds Will be Paid From Creditor Fund Payments ------------------------------------------------------------------- Redwood Empire Lodging, LP submitted a First Amended Disclosure Statement. The Plan will effectuate the Debtor's reorganization and allow the Debtor to continue operating its business under a restructured capital structure. Among other things, the Plan provides for the restructuring of the Debtor's debt obligations. The Debtor believes that, if the Plan is confirmed and implemented, the Reorganized Debtor will be able to achieve success in its future business operations. The Debtor's assets primarily consist of the Hotels and the personal property associated with the Hotels. Class 9: General Unsecured Claims. Class 9 consists of all Claims that are General Unsecured Claims, including the S&K Claim and the SBA Claim (as well as, potentially, a deficiency Claim of PPB). Any Liens held by S&K and SBA on the Petition Date will be deemed avoided as of the Effective Date, and the Reorganized Debtor shall be entitled to: (i) record a deed of release and reconveyance relating to the S&K Claim with the Sonoma County Recorder's office, and (ii) a termination of any UCC financing statement filed by the SBA. In full and final satisfaction of each Allowed General Unsecured Claim, the holder of such Allowed General Unsecured Claim will be paid a Pro Rata Share of each of the Creditor Fund Payments. Class 9 is impaired. All payments under the Plan that are due on the Effective Date will be funded from the cash held by the Reorganized Debtor or the proceeds of the New Investment. Attorneys for Debtor: Isaac M. Gabriel, Esq. (#021780) Jason D. Curry (#026511) Michael Galen (#035044) QUARLES & BRADY LLP Renaissance One Two North Central Avenue Phoenix, Arizona 85004-2391 TELEPHONE 602.229.5200 isaac.gabriel@quarles.com jason.curry@quarles.com michael.galen@quarles.com A copy of the Disclosure Statement dated December 8, 2021, is available at https://bit.ly/3dDiu5H from PacerMonitor.com. About Redwood Empire Lodging 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. Redwood Empire Lodging 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. TOP FLIGHT: U.S. Trustee Unable to Appoint Committee ---------------------------------------------------- The U.S. Trustee for Region 16 disclosed in a court filing that no official committee of unsecured creditors has been appointed in the Chapter 11 case of Top Flight Investments, LLC. About Top Flight Investments Top Flight Investments, LLC, a company based in Pacoima, Calif., is the fee simple owner of 14 residential real properties located in California having a total current value of $29.95 million. Top Flight Investments sought protection under Chapter 11 of the Bankruptcy Code (Bankr. C.D. Calif. Case No. 21-11875) on Nov. 16, 2021, listing $29,954,500 in assets and $1,038,950 in liabilities. Douglas Sanchez, the Debtor's managing member, signed the petition. Judge Victoria S. Kaufman oversees the case. Matthew Abbasi, Esq., at Abbasi Law Corporation is the Debtor's legal counsel. WESTERN GLOBAL: Fitch Affirms 'B+' LT IDR, Outlook Stable --------------------------------------------------------- Fitch Ratings has affirmed Western Global Airlines, Inc's (WGA) Long-Term Issuer Default Rating (IDR) at 'B+'. In addition, Fitch has affirmed the ratings on the senior unsecured notes at 'B+'/'RR4'. The Rating Outlook is Stable. The ratings consider WGA's strong profitability expected to be maintained over the long-term, favorable cost structure, near-term strength in the air freight market, and moderate leverage compared with peers. Fitch also considers the company's small fleet size that leaves WGA susceptible to operational challenges, cyclicality associated with air freight and concentrated ownership structure. KEY RATING DRIVERS Industry Trends Remain Favorable: WGA has been a beneficiary of tighter industry capacity beginning in 2020, that resulted from the drop off in cargo capacity in passenger airlines. Further e-commerce trends and early-stage economic recovery conditions, such as tight supply chains, are supporting high demand while alternative shipping methods remain tight and increasingly costly. Fitch assumes the imbalance will be temporary though the timing of a return in capacity and the level at which rates normalize is uncertain. Fitch estimates a low-teens decline in rates in 2021 and assumes that rates will move modestly lower in the medium term. International trade conflicts, which have seemed to stagnate after driving performance lower in 2019, remain a long-term risk for WGA. Small Size and Market Position: Key constraining factors to WGA's ratings are its relatively small size and concentrated customer base. Unexpected downtime across a few planes could drive significant operating volatility as observed in mid-2021 and 2019. WGA also has significant customer concentration among large shippers, and while this is a common trait for the air cargo airlines, there is a risk of competitive pressures or expansion of customer's internal capacity. Concerns are somewhat softened by the blue-chip nature of WGA's large customers, and flexibility that WGA's services offer over internalizing. WGA is also in the process of adding six aircraft to its active fleet, aiming to bring the total to 21 active aircraft. The additional aircraft are predominantly MD-11s that were already part of WGA's fleet but inactive or recently acquired from Lufthansa. The incremental aircraft are expected to be conformed and begin operating by FYE 2022 and management estimates incremental capacity of about 40%. Volatile Demand Characteristics: Fitch believes WGA is exposed to cyclicality associated with the global freight industry, particularly in the company's role of transporting excess cargo for large customers. While there is some comfort in the recurring nature of regular peak season demand, Fitch sees a risk of fluctuations in block rates and hours. WGA has contracted services in place for periods that span from six months to five years, though there is also a degree of short-term spot revenue. High Profitability: EBITDA margins have been uniquely high for the industry reflecting business model differences such as a fully-owned aircraft fleet, economics of MD-11 aircraft for WGA's services, a freight focused operation and a historically nonunionized workforce. WGA has also ramped up a large MRO facility with heavy maintenance capabilities that supports lower maintenance costs. WGA's cost structure also benefits from contract terms that effectively pass through all of its largest operating expense, fuel costs, and the absence of foreign exchange risks. The remaining portion of its cost structure is highly fixed which will likely drive some margin variability through demand cycles. Vote for Unionization: In 2021 WGA's pilots voted in favor of union representation by the Airline Pilots Association. The cargo and passenger airline industries are heavily unionized. While the company is beginning talks, there will likely be a multi-year period (management estimates potentially up to four or five years) before any material effect on its cost structure. While any estimates are preliminary, Fitch does not currently anticipate significant increase in costs that materially weaken WGA's financial profile. FCF is Long-Term Positive: Fitch expects a FCF usage in 2021 reflecting aircraft and equipment acquisition, temporarily increasing capex, and extraordinary downtime due to operational challenges and heavy C-check activity in 2021. FCF is expected to improve, reaching roughly around $100 million range going forward, assuming no more significant unplanned downtime and the activation of its incremental aircraft. Forecasted FCF margins are strong compared to similarly rated airline credits, though periods of unexpected downtime are an ongoing risk to FCF. Fluid Financial Policies: Fitch expects adjusted debt/EBITDAR of around 3.7x in 2021, before declining to the mid-2x as the additional aircraft are activated. The leverage forecast includes a healthy airfreight market through 2022, good operating performance and no significant investments or shareholder distributions. Fitch had originally expected that WGA would repay the term loan in the near-term however, fleet expansion has been a growing priority. Concentrated Ownership: Fitch considers the company to be subject to typical risks associated with a highly concentrated ownership structure, such as concentrated decision making and a lack of independent oversight. The founder and CEO (and family) continue to control a majority stake in the business following the partial sale to WGA's employee stock ownership plan controlling the remaining portion. DERIVATION SUMMARY When comparing WGA to passenger airlines such as Spirit Airlines 'BB-', Air Canada 'B+' and WestJet 'B', Fitch considers the business profile differences in freight airlines and industry structure. The passenger airline industry is recovering but remains well below pre-pandemic levels due to the wide-scale decline in passenger travel which is contributing to a favorable demand and capacity imbalance for air cargo operations such as WGA. Looking through the cycle, Fitch believes WGA's rating of 'B+' reflects the relative strengths of its profitability and plan to manage with modest leverage, moderated by its relatively small aircraft fleet size, high concentration of large customers and secondary market position. These relative characteristics hold true when compared to air freight peers, Air Transportation Services Group (NR) and Atlas Air Group (NR), though it is common for freight airlines to have high customer concentration. KEY ASSUMPTIONS Fitch's key assumptions within the Agency's rating case for the issuer include: -- An industry-wide shortage of air freight capacity supports block hours and rates in 2021 and 2022. Fitch assumes the favorable conditions somewhat unwind over the next few years as additional capacity is added to the industry; -- Six additional aircrafts are added to WGA's active fleet through the 2021-2022 timeframe; -- EBITDA margins are lower in 2021 due to lower-than-peak rates and higher than expected aircraft downtime and repair spending. Profitability improves as the additional aircrafts enter service; -- The company does not incur further significant one-time costs or operational challenges; -- Voluntary debt prepayment is not assumed. Recovery Analysis The recovery analysis for WGA reflects Fitch's expectation that the enterprise value (EV) of the company, and recovery rates for creditors, would be maximized as a going concern rather than through liquidation. Fitch has assumed a 10% administrative claim. A going concern EBITDA estimate of approximately $70 million reflects Fitch's view of a sustainable post-reorganization EBITDA. Fitch considers a bankruptcy scenario that could be caused by increased competitive pressures, the loss of a large customer and aircraft maintenance challenges driving higher downtime. The going-concern EBITDA estimate is well below current EBITDA expectations reflecting the current yet likely temporary strength in the air cargo market. The estimate also assumes about 15 active aircraft, though operating well optimal levels. An EV multiple of 5.0x is used to calculate the post-reorganization valuation. The multiple considers the reorganization of Atlas World Wide which was expected to be reorganized at about 6.0x EBITDA, according to its plan of reorganization. Additionally, Fitch considered various other airline bankruptcies which have historically reorganized around 3.1x-6.8x EBITDA with most of the airline multiples below the 6.1x cross-sector corporate median. The $47.5 million secured revolving credit facility is assumed to be fully drawn upon default. The credit facility and term loan are senior to the senior unsecured notes in the recovery waterfall. The analysis results in 'RR4' for the senior unsecured notes, corresponding to an average recovery prospect of (31%-50%). RATING SENSITIVITIES Factors that could, individually or collectively, lead to positive rating action/upgrade: -- Adjusted debt/EBITDAR sustained around the low 2.0x; -- Strong success in growth strategies that support sustainably higher capacity utilization rates and profitability; -- Greater customer diversification; -- Larger scale that reduces risk of severe impacts from unexpected aircraft downtime. Factors that could, individually or collectively, lead to negative rating action/downgrade: -- Adjusted debt/EBITDAR sustained above 3.5x; -- The loss of a large customer leads to a sustainably smaller scale of operations; -- Significant competitive pressures or persistent operating challenges drives EBITDA margins meaningfully lower and/or FCF margin in the single-digits or below. 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 Total liquidity as of Sept. 30, 2021 was $98 million including $48 million of revolver availability and $51 million of cash. FCF generation is expected to be temporarily weak in 2021 before strengthening in 2022. Near-term maturities are minimal, made up to term loan amortization. WGA has one leased aircraft which Fitch has capitalized beginning in Fiscal Year 2021. Fitch has included the lease liabilities in its calculation of adjusted debt/EBITDAR. The company is expected to begin reporting lease liabilities consistent with accounting standards and other airlines beginning in 2022. Fitch would review WGA's new reporting standards and make necessary adjustments at that time, however; any adjustments are not expected to be meaningful. ISSUER PROFILE WGA is an international cargo airline that currently operates a fleet of 15 long-range wide-body jet freighters, primarily MD-11s and B747s. It provides air freight services to large e-commerce, express, airlines, logistics companies as well as the U.S. government. 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. SUMMARY OF FINANCIAL ADJUSTMENTS Fitch has made no material adjustments that are not disclosed within the company's financial documents. [^] BOOK REVIEW: Saga of America's Most Powerful Real Estate Baron ------------------------------------------------------------------ Trump: The Saga of America's Most Powerful Real Estate Baron Author: Jerome Tuccille Publisher: Beard Books Hardcover: 262 pages List Price: US$34.95 This book is the remarkable unfinished saga of an extraordinary American. When this book was first published in 1985, Donald J. Trump was scarcely into his fourth decade. He had made the leap from local New York City boy who had made good to a national and even world-prominent figure. It all started some 10 years earlier when Trump gambled that New York City would rebound from its financial morass. People laughed and scoffed at the time, but he was right, and he has profited mightily from his faith and vision. This is compelling reading about the inside machinations of his glamorous world. Jerome Joseph Tuccille, known as Jerry, was an award-winning, best-selling author of more than 30 books covering a wide range of topics. He has also written books under the pseudonyms Paul Marano and Jack Daniels. He was a vice president of T. Rowe Price Investment Services, and he has worked in the investment area as a broker and supervisory analyst since 1975. From 1971 to 1973, he taught at the New School for Social Research in New York City, and in 1974 he was the Free Libertarian candidate for Governor of New York. He was born on May 30, 1937, in the Bronx. He died on February 16, 2017. ********* 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. 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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 ***