/raid1/www/Hosts/bankrupt/TCR

/raid1/www/Hosts/bankrupt/TCR_Public/211227.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 27, 2021, Vol. 25, No. 360 Headlines 203 W 107 STREET: KHGF 2nd Update on NY Building Tenants AGUILA INC: U.S. Trustee Appoints Creditors' Committee ALASKA AIR: S&P Upgrades ICR to 'BB' on Improved Credit Measures AMERICAN FINANCE: S&P Places 'BB' ICR on CreditWatch Negative ARTERRA WINES: S&P Affirms 'B' ICR, Outlook Stable BOY SCOUTS: Buckfire Updates on Unsecured Claimants CITE LLC: Seeks to Tap The Golding Law Offices as Legal Counsel CRC INVESTMENTS: Seeks Approval to Hire Real Estate Brokers DEA BROTHERS: Seeks to Hire Khang & Khang as Litigation Counsel EMPIRE COMMUNITIES: Fitch Affirms 'B-' LT IDR, Outlook Stable FLOOR-TEX: Seeks to Hire Baker & Associates as Legal Counsel GENERATION BRIDGE: S&P Assigns 'BB' Rating on Term Loan B/C GRIFFON CORP: S&P Places 'B+' ICR on CreditWatch Positive GUAM EDUCATION: S&P Affirms 'BB' Long-Term Rating on 2016A Certs GUAM: S&P Alters Outlook to Stable, Affirms 'BB-' Rating on Bonds HH ACQUISITION: Dickinson Wright Represents Equity Holders HOLOGENIX LLC: Seeks to Employ Grobstein Teeple as Expert Witness MAD ENGINE: S&P Affirms 'B' Rating on Senior Secured Term Loan MAUI MEADOWS: Seeks to Hire Cain & Herren as Legal Counsel NITROCRETE LLC: Committee Taps Kutner Brinen as Co-Counsel NITROCRETE LLC: Committee Taps Seward & Kissel as Legal Counsel NORDIC AVIATION: Norton, et al. Represent Secured Lenders Group PCI GAMING: S&P Alters Outlook to Stable, Affirms 'BB+' ICR PHOENIX OF ALBANY: Gets OK to Hire Building Safety Consultant PHOENIX OF ALBANY: Taps Architect to Repair Central Warehouse PLAINS END: Fitch Rates Sub. Sec. Bonds 'B+', Outlook Stable PSP LOGISTICS: Gets OK to Hire Lasher Holzapfel Sperry as Counsel RIVERBED TECHNOLOGY: Taps Ernst & Young as Tax Services Provider RUSSO REAL ESTATE: Taps PSK CPA as Accountant SMARTER BUILDING: Seeks to Hire Rock Creek as Financial Advisor STRIKE LLC: Manier & Harod Represents Westchester, Aspen SUNOCO LP: Fitch Affirms 'BB' LT IDR, Outlook Positive TD REO: Unsecureds to be Paid From Available Cash VILLA DEVELOPERS: Taps Nichani Law Firm as Bankruptcy Counsel WATSONVILLE HOSPITAL: U.S. Trustee Appoints Creditors' Committee ZARA MANAGEMENT: Taps Frank & Frank as Legal Counsel ********* 203 W 107 STREET: KHGF 2nd Update on NY Building Tenants -------------------------------------------------------- Pursuant to Rule 2019 of the Federal Rules of Bankruptcy Procedure, the law firm of Kellner Herlihy Getty & Friedman, LLP, submitted a second supplemental statement to disclose an updated list of Ad Hoc Group of West 107th Street Tenants that it is representing in the Chapter 11 cases of 203 W 107 Street LLC et al. On Jan. 24, 2021, Kellner Herlihy Getty & Friedman LLP submitted a declaration statement pursuant to Bankruptcy Rule 2019 on behalf of the Ad Hoc Group of West 107th Street Tenants. The members of the Ad Hoc Group hold claims against the Debtors' estates. Thirteen tenants from 244 East 117th Street also retained KHGF to represent them with the Debtors' chapter 11 case. On Feb. 10, 2021 KHGF submitted a supplemental declaration statement on behalf of the Ad Hoc Group of West 107th Street Tenants to include 32 additional tenants to the Ad Hoc Group. Thirteen additional tenants residing on West 107th Street have retained KHGF to represent them in connection with the Debtors' chapter 11 case after the first supplemental declaration statement. The additional Ad Hoc Group members are as follows: * John Herr, who resides at 210 West 107th Street, Apt 1B, New York NY 10025. * Juan Diaz, who resides at 210 West 107th Street, Apt 2E, New York NY 10025. * Nichole Yang, who resides at 210 West 107th Street, Apt 2F, New York NY 10025. * Noemie Guilhem, who resides at 210 West 107th Street, Apt 3A, New York NY 10025. * Claude Bussieres, who resides at 210 West 107th Street, Apt 5E, New York NY 10025. * Rakesh Kumar, who resides at 210 West 107th Street, Apt 6D, New York NY 10025. * Katie Boushall, who resides at 210 West 107th Street, Apt 6F, New York NY 10025. * Nicholas Tolliver, who resides at 210 West 107th Street, Apt 6F, New York NY 10025. * Daniel Leaf, who resides at 220 West 107th Street, Apt 2C, New York NY 10025. * Daniel Leaf, who resides at 220 West 107th Street, Apt 2C, New York NY 10025. * Erica Ackerberg, who resides at 220 West 107th Street, Apt 2C, New York NY 10025. * Rashed Al Qudah, who resided at 230 West 107th Street, Apts 1B and LL2, New York NY 10025. * Jad Ayoujil, who resided at 230 West 107th Street, Apts 1B and LL2, New York NY 10025. * Nicholas Barbet, who resided at 230 West 107th Street, Apt 1B, New York NY 10025. As of Dec. 20, 2021, members of the Ad Hoc Group and their disclosable economic interests are: John Herr 210 West 107th Street, Apt 1B New York NY 10025 * The unsecured claim in the amount of his security deposit, rent abatement for the Debtors' breach of warranty of habitability, contempt fines, and attorney's fees pursuant to RPL § 234. Juan Diaz 210 West 107th Street, Apt 2E New York NY 10025 * The unsecured claim in the amount of his security deposit, rent abatement for the Debtors' breach of warranty of habitability, contempt fines, and attorney's fees pursuant to RPL § 234. Nichole Yang 210 West 107th Street, Apt 2F New York NY 10025 * The unsecured claim in the amount of her security deposit and rent abatement for the Debtors' breach of warranty of habitability. Noemie Guilhem 210 West 107th Street, Apt 3A New York NY 10025 * The unsecured claim in the amount of her security deposit and rent abatement for the Debtors' breach of warranty of habitability. Claude Bussieres 210 West 107th Street, Apt 5E New York NY 10025 * The unsecured claim in the amount of her security deposit and rent abatement for the Debtors' breach of warranty of habitability. Rakesh Kumar 210 West 107th Street, Apt 6D New York NY 10025 * The unsecured claim in the amount of his security deposit and rent abatement for the Debtors' breach of warranty of habitability. Katie Boushall 210 West 107th Street, Apt 6F New York NY 10025 * The unsecured claim in the amount of her security deposit and rent abatement for the Debtor's breach of warranty of habitability. Nicholas Tolliver 210 West 107th Street, Apt 6F New York NY 10025 * The unsecured claim in the amount of her security deposit and rent abatement for the Debtor's breach of warranty of habitability. Daniel Leaf 220 West 107th Street, Apt 2C New York NY 10025 * The unsecured claim in the amount of his security deposit and rent abatement for the Debtors' breach of warranty of habitability. Erica Ackerberg 220 West 107th Street, Apt 2C New York NY 10025 * The unsecured claim in the amount of her security deposit and rent abatement for the Debtors' breach of warranty of habitability. Rashed Al Qudah 230 West 107th Street Apts 1B and LL2 New York NY 10025 * The unsecured claim in the amount of his security deposit, rent abatement for the Debtors' breach of warranty of habitability, contempt fines, and attorney's fees pursuant to RPL § 234. Jad Ayoujil 230 West 107th Street Apts 1B and LL2 New York NY 10025 * The unsecured claim in the amount of his security deposit, rent abatement for the Debtors' breach of warranty of habitability, contempt fines, and attorney's fees pursuant to RPL § 234. Nicholas Barbet 230 West 107th Street Apt 1B, New York NY 10025 * The unsecured claim in the amount of his security deposit and rent abatement for the Debtors' breach of warranty of habitability. Counsel for the Ad Hoc Group of West 107th Street Tenants can be reached at: KELLNER HERLIHY GETTY & FRIEDMAN, LLP Douglas A. Kellner, Esq. 470 Park Avenue South, 7th Floor New York, NY 10016-6819 Tel: (212) 889-2121 E-mail: dak@khgflaw.com A copy of the Rule 2019 filing, downloaded from PacerMonitor.com, is available at https://bit.ly/3JevFc1 About 203 W 107 Street LLC 203 W 107 Street, LLC and 10 other entities affiliated with Emerald Equity Group sought Chapter 11 protection (Bankr. S.D.N.Y. Lead Case No. 20-12960) on Dec. 28, 2020. The Debtors are single asset real estate entities that own residential buildings on 107th Street and 117th Street in Manhattan. There are several hundred tenants currently residing in the properties. 203 W 107 Street disclosed total assets of $7,044,031 and total liabilities of $102,929,476 in its petition signed by Ephraim Diamond, chief restructuring officer. Mr. Diamond and Arbel Capital Advisors LLC have been retained to assist the Debtors and Emerald in complying with their obligations under a restructuring support agreement with LoanCore. The Honorable Lisa G. Beckerman presides over the case. Backenroth Frankel & Krinsky, LLP and Belkin Burden Goldman, LLP, serve as the Debtors' bankruptcy counsel and special counsel, respectively. AGUILA INC: U.S. Trustee Appoints Creditors' Committee ------------------------------------------------------ The U.S. Trustee for Region 2 appointed an official committee to represent unsecured creditors in the Chapter 11 case of Aguila, Inc. The committee members are: 1. Parkview Hotel, LLC P.O. Box 1550 Radio City Station New York, NY 10101 Attn: Albert Faks, Asset Manager Phone: 917-560-4774 E-mail: afaks@finance36.com 2. Intrepid Group, LLC 92 North Avenue New Rochelle, NY 10801 Attn: Daniel Blanco, Member Phone: 917-828-0312 E-mail: dannyblanco1@gmail.com 3. 437 Morris Park, LLC 2137 79th Street Brooklyn, NY 11214 Attn: Kalman Tabak, Managing Member Phone: 917-215-9665 E-mail: kalmantabak@gmail.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 Aguila Inc. Aguila Inc., a nonprofit homeless services organization in New York, filed a petition for Chapter 11 protection (Bankr. S.D.N.Y. Case No. 21- 11776) on Oct. 15, 2021, listing as much as $10 million in both assets and liabilities. Judge Martin Glenn oversees the case. Robert Leslie Rattet, Esq., at Davidoff Hutcher & Citron, LLP serves as the Debtor's legal counsel. ALASKA AIR: S&P Upgrades ICR to 'BB' on Improved Credit Measures ---------------------------------------------------------------- S&P Global Ratings raised its issuer credit rating on Alaska Air Group Inc. to 'BB' from 'BB-'. At the same time, S&P raised its issue-level ratings on the company's 2020-1 class A enhanced equipment trust certificates (EETC) to 'A+' from 'A' and on its class B EETCs to 'BBB' from 'BBB-'. S&P said, "The stable outlook on Alaska Air reflects our expectation that Alaska Air's operating performance will improve through 2022 supported by ongoing recovery in demand for domestic travel. "We expect Alaska Air to continue to benefit from improving domestic travel demand, given its predominantly domestic route network. Alaska Air is a largely domestic operator (domestic operations accounted for over 90% of its capacity in 2019), with some exposure to nearby international locations (primarily Mexico and Canada). Over the past few quarters, significant pent-up demand for vacation and visiting friends and relatives has resulted in strong demand for U.S. domestic leisure travel, although there was some weakness toward the end of the third quarter and the early part of fourth quarter attributable to the spread of the COVID-19 delta variant. We expect domestic demand will continue to lead the recovery in 2022 and that Alaska Air's financial performance will continue to benefit. Nevertheless, we believe the demand recovery path will remain uneven and dependent on the emergence and spread of new COVID-19 variants (including the recent omicron variant) and vaccine efficacy against them. Additionally, the emergence of newer variants could also continue to impact the recovery of busines travel (we estimate business travel accounted for about one-third of Alaska Air's revenues in 2019), as companies delay their return-to- office plans in response." S&P expects Alaska Air to report more than $600 million in pre-tax income in 2021 (after giving effect to about $888 million in grant inflows from the second and third rounds of federal payroll support program; PSP, which is counted as a contra-expense, partly offsetting labor costs), and improving further in 2022, but remaining below the pre-pandemic level of over $1 billion in 2019. This compares to a $1.8 billion pre-tax loss in 2020 (which was also negatively affected by impairment charges of about $627 million). Substantial federal aid, low capital spending requirements, and some expected tax refunds all benefit Alaska Air's adjusted debt and its credit metrics. Aided by inflows from the federal PSP grants under the Coronavirus Aid, Relief, and Economic Security (CARES) Act and various cost-reduction initiatives, Alaska Air restricted operating cash burn in 2020 to about $230 million. Furthermore, cash inflows received from the second and third rounds of PSP grants, estimated tax refunds of more than $100 million (currently expected to be received in the fourth quarter of 2021), and the company's improving financial performance all contribute to operating cash flow in 2021, which S&P estimates will be above $1 billion ($900 million for the nine-month period ended Sept. 30, 2021). Alaska Air also lowered its capital spending to about $200 million in 2020 through delivery deferrals (from about $700 million in 2019) and expects capital spending at around $250 million in 2021. Therefore, despite significant operating weakness over the past 18 months, the company's debt (on an S&P Global Ratings-adjusted basis) declined to about $1.9 billion as of Sept. 30, 2021 from about $2.6 billion as of Dec. 31, 2019. Capital spending is expected to increase to about $1.6 billion to $1.7 billion in 2022 and remain at similarly high levels in 2023, primarily related to Alaska Air's upcoming Boeing 737 MAX deliveries. As a result, we expect debt levels to increase somewhat into 2023 as the company finances its upcoming deliveries. S&P said, "We forecast funds from operations (FFO) to debt of over 60% area in 2021 (benefiting from PSP grant proceeds and tax refunds, as well as lower debt levels). We expect it to decline somewhat to the mid-40% area in 2022 as the PSP benefits roll-off and debt increases, offset by its improving operating performance. We forecast free operating cash flow (FOCF) to debt to be about 50% in 2021 before turning negative in 2022 due to high capital spending requirements. FFO to debt and FOCF to debt were both negative in 2020." S&P said, "We continue to view Alaska Air's liquidity as strong. We expect the company's liquidity sources to be about 2.5x its uses over the next 12 months, and about 1.7x its uses the following 12 months. The company had about $2.7 billion in unrestricted cash and short-term investments as of Sept. 30, 2021 (excluding $500 million of minimum liquidity it is required to maintain under covenants in its credit facilities), and availability of $400 million under its lines of credit. Additionally, in June 2021, Alaska Air repaid in full its $135 million U.S. Treasury loan drawn in relation to the CARES Act. After this repayment, the company's loyalty program is available (together with unencumbered aircraft) as a potential source of financing if required. As a result, despite significant upcoming capital spending requirements, we view the company's liquidity as strong. "The stable outlook on Alaska Air reflects our expectation that its operating performance will improve through 2022, supported by ongoing recovery in demand for domestic travel. We forecast FFO to debt of over 60% area in 2021 (benefiting from PSP proceeds and tax refunds). We expect it to decline somewhat to the mid-40% area in 2022 as the PSP benefits roll-off and debt increases, offset by its improving operating performance (compared with negative FFO to debt in 2020) as the PSP benefits roll-off but operating performance continues to improve. FOCF to debt is forecasted to be about 50% in 2021 before turning negative in 2022 due to higher levels of capital spending (compared with negative in 2020). "We could lower the rating on Alaska Air over the next year if we come to believe the demand recovery will be significantly more prolonged or weaker than expected such that we expect FFO to debt to approach and remain in the low-30% area. "We could raise our rating on Alaska Air over the next year if the recovery in demand is stronger than we anticipate such that we believe its FFO to debt will improve to well-above 50% on a sustained basis, while FOCF to debt approaches breakeven." AMERICAN FINANCE: S&P Places 'BB' ICR on CreditWatch Negative ------------------------------------------------------------- S&P Global Ratings placed all ratings on U.S.-based real estate company American Finance Trust Inc. (AFIN), including the 'BB' issuer credit rating, on CreditWatch with negative implications. S&P said, "The CreditWatch placement indicates we could lower our issuer credit rating by one notch and our issue-level rating on the unsecured notes by one or more notches when the acquisition closes in the first half of 2022. "Leverage, pro forma for the acquisition, is likely to be materially higher in 2022 compared to our forecast when we assigned our issuer credit rating to the company in September 2021. Our ratings and stable outlook were predicated on the assumption that adjusted debt to EBITDA would fall to about 9.5x in 2022 on positive leasing momentum in AFIN's necessity-based retail portfolio. This forecast specifically assumed that growth would be pursued on a largely leverage neutral basis, with some deleveraging in 2022 from leasing initiatives. However, this acquisition is very large and is likely to be funded primarily with credit facility borrowings, assumed mortgage debt, cash (which we net against debt), and proceeds from the sale of cash flowing (albeit noncore) office assets. This could push our leverage forecast above 10.5x in 2022, in the absence of a credible plan to quickly raise a substantial amount of equity." This acquisition, while aggressively financed, should improve AFIN's scale while increasing exposure to grocery-anchored shopping centers and diversifying its tenant base. The $1.3 billion of shopping center assets will expand AFIN's real estate investments by about one-third, on a cost basis, to over $5 billion. At the same time, it lifts the percentage of rent derived from grocery centers to 22% and cuts the reliance on the top ten tenants by 9% to 30%. We also view the sale of suburban office assets (1% of rent on a pro forma basis) as a credit positive, given the longer-term headwinds we expect suburban office real estate to face because of the COVID-19 pandemic and its impact on workers commuting preferences. That being said, S&P still view AFIN's shopping centers as lower quality compared to higher rated peers, with weaker demographics and property performance." CreditWatch S&P said, "We expect to resolve the CreditWatch placement when the acquisition closes in the first or second quarter of 2022. We could lower our ratings on AFIN by one notch if we expect adjusted debt to EBITDA to remain above 9.5x in 2022. We could also lower our issue-level rating on the unsecured notes by an additional notch if acquired mortgage debt pushes our recovery estimates below 70% under our hypothetical default scenario." ARTERRA WINES: S&P Affirms 'B' ICR, Outlook Stable -------------------------------------------------- On Dec. 20, 2021, S&P Global Ratings affirmed its 'B' issuer credit rating on Mississauga, Ont.-based Arterra Wines Canada Inc. S&P said, "We have reassessed our treatment of Arterra Wines's shareholder loan and preferred shares (non-common equity [NCE]) such that we no longer exclude them from our adjusted debt calculations. "However, for the next few years we expect management will continue to accrue interest on these instruments and not make any cash payments from operating cash flow. As a result, we assess Arterra Wines' underlying creditworthiness and its cash flow characteristics as unchanged. "The stable outlook reflects our expectation that the company's leverage will be sustained at 11.5x-12.0x (6.5x-7.0x excluding loan and NCE) because of Arterra Wines' product sourcing diversity and branded product offerings that should enable the company to generate stable EBITDA despite supply chain bottlenecks. "Higher leverage from shareholder loans and NCE has no immediate effect on creditworthiness. Arterra Wines' capital structure consists of a C$685 million term loan, an C$87.5 million shareholder loan, and C$415 million of NCE (series A and B) plus common shares. Both the shareholder loan and NCE are interest bearing (and range from 6.80%-9.745%) that accrue on the balance sheet. Concurrent with the November 2020 recapitalization wherein the company repaid accrued interest, management entered into a new credit agreement. We now assess that the NCE could be redeemed at any time by the company directors at their discretion, in whole or in part, as long as certain requirements under the credit agreement are met. As a result, we no longer believe that the loan and NCE satisfy all of the qualitative conditions--including creating an alignment of economic incentives--necessary to exclude from our adjusted debt calculation. Therefore, we have reclassified these shares and included the value of the NCE and shareholder loans in our adjusted debt calculations. This reclassification increases Arterra Wines' debt to EBITDA (on an S&P Global Ratings' adjusted basis) to about 10.5x (compared with 6.3x excluding NCE) as of the last 12 months ended Aug. 30, 2021. "This reassessment does not affect our view of the company's short-term cash flow.Management's stated financial policy indicates that they plan to accrue interest for the next few years and will not pay any annual cash interest on shareholder loans and NCE from operating cash flow. As a result, our reassessment of the instruments to debt has no immediate effect on our view of the company's underlying creditworthiness and cash flow generation capability. While this treatment elevates Arterra Wines' debt levels on an S&P Global Ratings' adjusted basis, nothing fundamentally has changed in the company's cash flow-generating capacity. We foresee negligible risk to the company's liquidity since these instruments don't contain any financial maintenance covenants or cross default clauses that could trigger an acceleration of their repayment. However, any deviation from management's stated interest accrual policy would likely result in weaker liquidity and a reassessment of the ratings. "We expect increased leverage measures with inflation and supply chain pressures but positive free operating cash flow generation.For fiscal 2022, we anticipate EBITDA and margins to be lower compared with fiscal 2021, which benefited from increased retail sales. Lower retail volume sales and higher freight costs caused by global supply chain disruptions should lead to lower topline sales and increased operating expenses in the second half of fiscal 2022. Nevertheless, given the company's various market-branded products offering we still expect fiscal 2022 EBITDA will remain in line with fiscal 2020 levels. As a result, we forecast debt to EBITDA (S&P Global Ratings' adjusted) of about 11.5x-12.0x (6.5x-7.0x excluding loan and NCE), along with free operating cash flow (FOCF) to debt at about 2.0%-3.0% (4.0%-5.0% excluding loan and NCE). In addition, given the company's asset-lite operations, we believe Arterra Wines will continue to generate positive FOCF of C$30 million-C$40 million in fiscal 2022, which in our view supports the 'B' issuer credit rating. "The stable outlook reflects our expectation that despite increased freight costs and lower volume sales, Arterra Wines' supplier diversity and assorted branded product offerings in Canada would allow the company to generate EBITDA at least to 2020 levels. We expect Arterra Wines will maintain a debt-to-EBITDA ratio of 11.5x-12.0x (6.5x-7.0x excluding shareholder loans and NCE) in fiscal 2022. The outlook also assumes that Arterra Wines will accrue shareholder and NCE interest on its balance sheet. "We could lower the rating if operating performance deteriorates, and the debt-to-EBITDA ratio approaches 12.5x (7.5x excluding shareholder loans and NCE). This could be due to increased competition, unexpected key input cost headwinds, or operational missteps that could lead to lower EBITDA. "We could also lower the ratings over the next 12 months if the company is unable to generate sufficient free cash flow or an EBITDA interest-coverage ratio is sustained below 2x, or if the company pays annual interest on its shareholder loan or dividends instead of accruing it for the next few years. "Although unlikely, we could consider an upgrade if Arterra Wines' operating performance substantially improves, and leverage is sustained below 10x (5.0x excluding shareholder loans and NCE). In addition, we would expect the controlling shareholder to commit to not pursuing debt-financed dividends or acquisitions that would lead to a meaningful deterioration of credit ratios." BOY SCOUTS: Buckfire Updates on Unsecured Claimants --------------------------------------------------- Pursuant to Rule 2019 of the Federal Rules of Bankruptcy Procedure, the law firm of Buckfire & Buckfire P.C. submitted an amended and supplemental verified statement to disclose an updated list of Clients that it is representing in the Chapter 11 cases of Boy Scouts of America and Delaware BSA, LLC. On February 18, 2020, Boy Scouts of America and Delaware BSA, LLC filed voluntary petitions for relief under chapter 11 of title 11 of the United States Code. The Debtors continue to operate and manage their businesses as debtors in possession pursuant to sections 1107 and 1108 of the Bankruptcy Code. The names and contact details of the Clients were redacted from publicly available filings. The Clients each hold general unsecured claims against BSA, certain non-debtor Local Councils, or Chartered Organizations arising from childhood sexual abuse at the time the Clients were Scouts with the BSA and the applicable Local Councils and Chartered Organizations. Claim No: 42963 42941 42937 42956 42955 42957 42939 42952 42953 42961 42962 44276 42958 60598 96617 Counsel for Claimants can be reached at: BUCKFIRE & BUCKFIRE P.C. Robert J. Lantzy, Esq. 29000 Inkster Road, Ste. 150 Southfield, MI 48034 Tel.: (248) 569-4646 E-mail: robert@bucketfirelaw.com A copy of the Rule 2019 filing is available at https://bit.ly/3F9PgHz at no extra charge. About Boy Scouts of America The Boy Scouts of America -- https://www.scouting.org/ -- is a federally chartered non-profit corporation under title 36 of the United States Code. Founded in 1910 and chartered by an act of Congress in 1916, the BSA's mission is to train youth in responsible citizenship, character development, and self-reliance through participation in a wide range of outdoor activities, educational programs, and, at older age levels, career-oriented programs in partnership with community organizations. Its national headquarters is located in Irving, Texas. The Boy Scouts of America and affiliate Delaware BSA, LLC, sought Chapter 11 protection (Bankr. D. Del. Lead Case No. 20-10343) on Feb. 18, 2020, to deal with sexual abuse claims. Boy Scouts of America was estimated to have $1 billion to $10 billion in assets and at least $500 million in liabilities as of the bankruptcy filing. The Debtors have tapped Sidley Austin LLP as their bankruptcy counsel, Morris, Nichols, Arsht & Tunnell LLP as Delaware counsel, and Alvarez & Marsal North America, LLC as financial advisor. Omni Agent Solutions is the claims agent. The U.S. Trustee for Region 3 appointed a tort claimants' committee and an unsecured creditors' committee on March 5, 2020. The tort claimants' committee is represented by Pachulski Stang Ziehl & Jones, LLP, while the unsecured creditors' committee is represented by Kramer Levin Naftalis & Frankel, LLP. CITE LLC: Seeks to Tap The Golding Law Offices as Legal Counsel --------------------------------------------------------------- Cite LLC seeks approval from the U.S. Bankruptcy Court for the Northern District of Illinois to employ The Golding Law Offices, PC as its legal counsel. The firm will render these legal services: (a) advise the Debtor regarding its rights, powers and duties; (b) assist the Debtor in negotiation and formulation and confirmation of a plan of reorganization that deals with all creditors; (c) examine and investigate claims asserted against the Debtor; (d) take such actions as may be necessary with reference to the claims asserted against the Debtor; (e) investigate, advise and inform the Debtor about and take action as may be necessary to collect and recover or sell for the benefit of the estate and the property of the Debtor; (f) prepare legal papers; (g) assist the Debtor in obtaining refinancing of its secured debt from replacement lenders; and (h) perform all other legal services for the Debtor. The hourly rates of the firm's counsel and staff are as follows: Richard N. Golding $450 Other Attorneys $450 Paralegals $190 In addition, the firm will seek reimbursement for expenses incurred. Richard Golding, Esq., an attorney at The Golding Law Offices, 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: Richard N. Golding, Esq. The Golding Law Offices, PC 500 N. Dearborn Street, 2nd Fl. Chicago, IL 60610 Telephone: (312) 832-7892 Facsimile: (312) 755-5720 Email: rgolding@goldinglaw.net About Cite LLC Cite LLC, an American restaurant business, filed its voluntary petition for relief under Chapter 11 of the Bankruptcy Code (Bankr. N.D. Ill. Case No. 21-13730) on Dec. 3, 2021. In the petition signed by Evangeline Gouletas, managing member, the Debtor disclosed $5,517,547 in total assets and $7,945,223 in total liabilities. Judge Janet S. Baer oversees the case. The Golding Law Offices, PC serves as the Debtor's counsel. CRC INVESTMENTS: Seeks Approval to Hire Real Estate Brokers ----------------------------------------------------------- CRC Investments, LLC seeks approval from the U.S. Bankruptcy Court for the Western District of Tennessee to jointly employ Bennet Phillips of Asheville Realty Group, LLC and Bland Holland of 110 Broadway, LLC as real estate brokers. The Debtor requires the services of a real estate broker to sell its property used as a bed-and-breakfast restaurant and event space located at 85 Pine Crest Lane, Tryon, N.C. The brokers have agreed to split the 6 percent commission on the gross sales price. As disclosed in court filings, the brokers are "disinterested persons" within the meaning of Section 101(14) of the Bankruptcy Code. The firm can be reached at: Bennet Phillips Asheville Realty Group, LLC 47 Patton Ave. Asheville, NC 28801 Tel: (617) 426-9910 Email: bennet@ashevillerealtygroup.com -- and -- Bland Holland 110 Broadway, LLC 47 Patton Ave. Asheville, NC 28801 Tel.: (828) 702-2145 Email: bland.holland@gmail.com About CRC Investments CRC Investments, LLC, doing business as 1906 Pine Crest Inn and Restaurant, filed a petition under Subchapter V of Chapter 11 (Bankr. M.D. N.C. Case No. 21-80172) on May 6, 2021, listing as much as $10 million in both assets and liabilities. Carl Ray Caudie, Jr., general manager, signed the petition. Judge Lena Mansori James oversees the case. Joshua H. Bennett, Esq., at Bennett Guthrie PLLC, represents the Debtor as legal counsel. DEA BROTHERS: Seeks to Hire Khang & Khang as Litigation Counsel --------------------------------------------------------------- DEA Brothers Sisters, LLC seeks approval from the U.S. Bankruptcy Court for the Central District of California to hire Khang & Khang, LLP as its special litigation counsel. The Debtor requires legal assistance to prosecute an adversary case against A&G Enterprises, LLC and its managing member to resolve tax liabilities associated with the sale of a shopping center located at 16502 S. Main St., Carson, Calif. Khang & Khang will be paid at the rate of $350 per hour and will be reimbursed for work-related expenses. The firm received a retainer of $10,000. Joon Khang, Esq., at Khang & Khang, LLP disclosed in a court filing that his firm has no connection with the Debtor, creditors or any party in interest. The firm can be reached at: Joon M. Khang, Esq. Judy L. Khang, Esq. Khang & Khang, LLP 4000 Barranca Parkway, Suite 250 Phone: (949) 419-3834 Fax: (949) 385-5868 Email: joon@khanglaw.com About DEA Brothers Sisters DEA Brothers Sisters, LLC, is a Laguna Hills, Calif.-based company that owns a strip shopping center located at 16502 S. Main St., Carson, Calif. DEA Brothers Sisters sought protection under Chapter 11 of the Bankruptcy Code (Bankr. D. Calif. Case No. 21-10608) on March 10, 2021, listing as much as $10 million in both assets and liabilities. Enayat Ali Jiwani, the sole managing member of DEA Brothers Sisters, signed the petition. Judge Erithe A. Smith oversees the case. Financial Relief Legal Advocates, Inc. and Osborn Plasse serve as the Debtor's bankruptcy counsel while Khang & Khang, LLP is the special litigation counsel. EMPIRE COMMUNITIES: Fitch Affirms 'B-' LT IDR, Outlook Stable ------------------------------------------------------------- Fitch Ratings has affirmed Empire Communities Corp.'s Long-term Issuer Default Rating (IDR) at 'B-'. The Rating Outlook is Stable. The company's rating reflects Empire's high leverage, limited geographic diversity, exposure to high-rise condominium projects, and long land position. The company's long history and leadership position in its Canadian housing markets and adequate liquidity are also factored into the ratings. The Stable Outlook reflects Fitch's expectation for a stable housing environment in the U.S. and Canada in 2022 and Empire's strong backlog heading into next year. KEY RATING DRIVERS High Leverage: Fitch expects Empire's leverage to remain elevated as the company continues to grow its U.S. operations and generates negative free cash flow, and increases debt to fund its growth. Net debt to capitalization (excluding CAD35 million of cash classified by Fitch as not readily available for working capital and excluding non-controlling equity interest) is expected to be about 82% at the end of 2021, up from 80.3% as of Sept. 30, 2021. Fitch expects net debt to capitalization will be at or below 80% at the end of 2022, leaving limited headroom relative to Fitch's negative rating sensitivity. Empire's total debt to operating EBITDA (after distributions from unconsolidated JVs and distributions to non-controlling interests) is forecast to be 9.4x for 2021, owing to lower EBITDA margins from rising construction costs and purchase price allocation of its acquisition in North Carolina earlier this year. Fitch expects total debt to operating EBITDA to decline to 7x at the end of 2022. Limited Geographic Diversification: During the third quarter of 2021, Empire had 53 average active communities across five markets in the U.S. (Austin, San Antonio and Houston, TX, Atlanta, GA and various locations in North Carolina) and operations in the Greater Golden Horseshoe (including the Greater Toronto area) in the Southern Ontario region of Canada. The company is meaningfully less geographically-diversified compared with most of the homebuilders in Fitch's coverage. Empire's geographic concentration in these select markets leaves the company exposed to an outsized impact if any of these markets were to experience a regional downturn. Strong Local Market Position in Canada: Empire was the #1 ranked low-rise builder in the Greater Golden Horseshoe region in 2019, and is the #4 ranked low-rise builder in the combined Greater Golden Horseshoe and Greater Toronto Area. Fitch views this as an advantage, as scale in local metro markets provides homebuilders with efficiencies in purchasing and enhances access to the local labor pool and land. Empire is predominantly a 2nd tier player (top 20 builder) in its U.S. markets given that it has only recently entered the U.S. Exposure to High-Rise Condominium Projects: Empire currently has six high-rise condominium projects, contributing about 8.6% of 3Q21 YTD revenues and 9.8% of gross profit. Fitch expects a larger contribution from these projects in 2022 as the company completes one of its projects. These projects typically require significant upfront capital before generating revenues. A majority of these projects also take an extended period of time to construct, thus increasing the risk particularly in a housing downturn. The six high-rise projects are about 98% pre-sold as of Sept. 30, 2021. Sales of high-rise units typically require at least a 20% down payment from the buyers, and, according to management, developers have recourse to the buyers should they decide to walk away from these contracts. Land Strategy: As of Sept. 30, 2021, Empire controlled 24,039 lots, including 1,327 lot equivalents for its high-rise business and 4,716 lots for its land development operations. The company has an 11.5-year land supply (including high-rise units and land development operations). The company's long land position is due to its exposure to the land-constrained Greater Golden Horseshoe market (including its high-rise operations), as well as its land development operations. Empire has successfully increased its lots under option in the U.S. and Canada, with optioned land accounting for about 25% of its total lots controlled, up from 7% last year. When isolating its U.S. homebuilding operations, Empire's total lots controlled of six years is in line with its large U.S. public peers, while its owned lot position of 3.6 years is slightly above average. The company's long overall land position makes the company susceptible to meaningful impairment charges if housing market conditions deteriorate. Cash Flow: Fitch expects Empire will generate negative cash flow from operations (CFFO, including distributions to non-controlling interests and distributions from unconsolidated JVs) of CAD175 million to CAD225 million in 2021 as it continues to build out its U.S. presence. By comparison, Empire generated CAD313 million of CFFO in 2020 as the company reduced land spending and froze spec construction during the pandemic and monetized its receivables last year. Fitch expects Empire will generate slightly positive CFFO in 2022. The rating reflects Fitch's expectation that management will lower inventory spending if market conditions deteriorate and monetize its housing inventory. This should allow Empire to generate strong cash flow and use these to pay down debt or build cash on the balance sheet during housing downturns. However, given the company's exposure to high-rise projects, the ability to generate cash may not be as immediate as homebuilders focused on single-family homes as the high-rise projects, which take longer to construct, would need to be completed before Empire can monetize their backlog. Slowdown in Housing Activity: Fitch projects housing activity will be relatively flat in 2022 compared with 2021. Concerns over affordability will weaken demand as home price appreciation continues, albeit at a slower pace compared with 2021. Supply-demand dynamics are expected to improve slightly, although supply chain disruptions and labor shortages will continue to constrain homebuilders' ability to increase home production. Nevertheless, Empire's strong backlog provides some visibility into 2022, resulting in Fitch's expectation of higher revenues and improved EBITDA margins next year. DERIVATION SUMMARY Empire Communities is meaningfully smaller and less geographically diversified when compared with the U.S. homebuilders in Fitch's coverage. The company's net debt to capitalization ratio of 80% is significantly higher than its peers. The company's overall land position is also longer than its peers, although its land position in the U.S. is comparable to the large U.S. public homebuilders. Lastly, Empire's risk profile is higher given its exposure to high-rise projects as well as its land development operations. Its EBITDA margin is comparable to U.S. peers. KEY ASSUMPTIONS Fitch's key assumptions within the rating case for the issuer include: -- Revenues increase 7%-8% in 2021 and 20%-25% in 2022; -- EBITDA margin of 14%-14.5% in 2021 and 14.5%-15.5% in 2022; -- Fitch-calculated net debt to capitalization of 82% at YE 2021 and at or below 80% at the end of 2022; -- Empire generates negative CFFO of CAD175 million to CAD225 million in 2021, and is slightly CFFO positive in 2022; -- EBITDA to interest incurred is about 2.0x in 2021 and 2.5x in 2022. RECOVERY ANALYSIS ASSUMPTIONS The recovery analysis assumes that Empire would be reorganized as a going-concern (GC) in bankruptcy rather than liquidated. Fitch assumed a 10% administrative claim. GC Approach -- The GC EBITDA estimate of CAD150 million reflects Fitch's view of a sustainable, post reorganization EBITDA level, upon which the agency bases the enterprise value (EV). This is higher than the CAD140 million used by Fitch previously, which did not incorporate the acquisition of Shea Homes North Carolina earlier this year. The GC EBITDA is about 17% lower than the company's proforma LTM EBITDA. An EV multiple of 6.0x EBITDA is applied to the GC EBITDA to calculate a post-reorganization EV. The choice of the multiple considered the following factors: -- Transactions involving homebuilding companies include a 9.5x enterprise value to EBITDA multiple on the 2018 acquisition of CalAtlantic Homes by Lennar Corporation (based on a transaction value of USD9.3 billion at the time of the announcement and Fitch-calculated EBITDA of USD981 million for CalAtlantic Homes for the LTM ending June 30, 2017); -- Trading multiples (EV/EBITDA) for public homebuilders currently average about 5.5x and has been in the 5x-12x range for the past 24 months; -- The senior secured revolving credit facility is assumed to be 75% drawn upon default. Fitch assumes that the borrowing base would shrink as the company monetizes its inventory in a housing downturn. The secured credit facility and Empire's high-rise project loans are senior to the company's proposed unsecured notes in the waterfall; -- The allocation of the value in the liability waterfall results in a recovery corresponding to an 'RR1' for the senior secured revolving credit facility and a recovery corresponding to an 'RR4' for the unsecured notes. A material increase in the secured high-rise debt without a corresponding increase in Fitch's EV assumptions in a recovery scenario could lead to negative rating action on the unsecured notes. RATING SENSITIVITIES Factors that could, individually or collectively, lead to positive rating action/upgrade: -- Net debt-to-capitalization below 65% and total debt/operating EBITDA consistently below 6x and the company maintains a healthy liquidity position; -- Fitch may also consider positive rating actions if the company further diversifies its operations in the U.S. while maintaining a leadership position in the Greater Golden Horseshoe and Greater Toronto areas, while reporting net debt to-capitalization approaching 65% and total debt/operating EBITDA around 6.0x. Factors that could, individually or collectively, lead to negative rating action/downgrade: -- Inventory to debt consistently below 1.0x; -- Net debt to capitalization consistently above 80%; -- Empire consistently generates negative cash flow from operations, leading to a deterioration of its liquidity profile, including EBITDA to interest paid sustaining below 1.25x. 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 Financial Flexibility: Empire has adequate financial flexibility with cash of CAD137.2 million and CAD160 million of borrowing availability under its USD225 million secured revolving credit facility that matures in December 2023. The company has CAD121 million of near-term mortgage and non-revolving credit maturities. Fitch expects some of these near term maturities will be rolled into new loans or extended. Nevertheless, Empire has sufficient cash and revolver availability to repay these if needed, although its liquidity will diminish somewhat. Fitch forecasts EBITDA to interest paid to be around 2.0x in 2021 and 2.6x in 2022. ISSUER PROFILE Empire Communities Corp. is one of the largest private homebuilders in North America. The company has leading market positions in the Greater Golden Horseshoe and Greater Toronto area in Canada and has a small, albeit growing presence in the U.S. FLOOR-TEX: Seeks to Hire Baker & Associates as Legal Counsel ------------------------------------------------------------ Floor-Tex Commercial Flooring, LLC seeks approval from the U.S. Bankruptcy Court for the Southern District of Texas to hire Baker & Associates to serve as legal counsel in its Chapter 11 case. The firm's services include: a. Analyzing the Debtor's financial situation; b. Advising the Debtor of its duties under the Bankruptcy Code; c. Preparing schedules of assets and liabilities, statements of affairs, motions and other legal papers; d. Representing the Debtor at the first meeting of creditors; e. Representing the Debtor in all proceedings before the bankruptcy court and in any other judicial or administrative proceeding where its rights may be litigated or otherwise affected; f. Preparing and filing a Chapter 11 plan of reorganization; and g. Assisting the Debtor in matters relating to its bankruptcy case. The hourly rates charged by the firm's attorneys and paralegals are as follows: Attorneys $400 - $525 per hour Paralegals $125 - $175 per hour In addition, the firm will seek reimbursement for work-related expenses. Prior to the filing of its case, the Debtor provided the firm with a deposit in the amount of $7,500, of which $1,738 was used to pay the filing fees. Reese Baker, Esq., the firm's attorney who will be providing the services, disclosed in a court filing that he is a "disinterested person" within the meaning of Section 101(14) of the Bankruptcy Code. Baker and Associates can be reached at: Reese W. Baker, Esq. Baker and Associates 950 Echo Lane, Suite 300 Houston, TX 77024-2824 Phone: (713) 869-9200 Fax: (713) 869-9100 About Floor-Tex Commercial Flooring Floor-Tex Commercial Flooring, LLC is a Conroe, Texas-based company that specializes in residential and commercial flooring contracting. Floor-Tex sought protection under Chapter 11 of the Bankruptcy Code (Bankr. S.D. Texas Case No. 21-33751) on Nov. 19, 2021, listing as much as $10 million in both assets and liabilities. Doris Springer, chief executive officer, signed the petition. Judge Eduardo V. Rodriguez oversees the case. Reese Baker, Esq., at Baker and Associates is the Debtor's legal counsel. GENERATION BRIDGE: S&P Assigns 'BB' Rating on Term Loan B/C ----------------------------------------------------------- S&P Global Ratings assigned its 'BB' rating to Generation Bridge LLC's $480 million term loan B (TLB) and $10 million term loan C (TLC). The recovery rating is '2'. The stable outlook reflects S&P's view that Generation Bridge's operational and financial performance will remain aligned with expectations and the portfolio will generate sufficient cash flows through its life to pay debt service obligations. Generation Bridge holds ownership interests in certain power generation facilities purchased by Arclight Capital Partners LLC (Arclight) from NRG Energy Inc. (NRG). The company owns an asset portfolio comprising six assets and an average net capacity of 3.6 GW across NYISO (Arthur Kill [873 MW], Oswego [1,635 MW]), CAISO (Sunrise [564 MW], Long Beach [209 MW]), and ISO-NE (CT Jets [169 MW], Devon [166 MW]). Generation Bridge is wholly owned by affiliates of Arclight. The project's merchant revenues represent a mix of cash flows from multiple assets across different markets. Generation Bridge's portfolio is diversified from an asset, technology, and geographic standpoint, which distinguishes it from single-asset generation facilities that primarily rely on a single fuel and market to generate cash flow. While the project is inherently a merchant portfolio that is exposed to various market forces during its operable life, diversification provides a degree of hedging against risks associated with a certain market (such as regulatory changes, weather, and fuel shortages), or a particular asset (for example, technical issues or equipment failures). S&P reflects this strength in its analysis of the project's operating risk with a positive performance-redundancy assessment. Tolling agreement with NRG provides a partial offset against merchant headwinds during its term. The project's Arthur Kill facility will operate under a tolling arrangement with NRG until April 30, 2025. Under the contract, Arthur Kill will be responsible for facility operations (excluding fuel procurement and delivery) and provide the contracted output throughout the toll period. In addition, Arthur Kill partially retains any upside to the market cleared capacity prices through a revenue-sharing mechanism. The tolling agreement provides a highly stable and predictable cash flow stream throughout its term, representing an average 30%-35% of the project's overall forecast cash flow available for debt service (CFADS) through the toll life. Capacity payments provide near-to mid-term cash flow visibility. Given the nature of the company's assets, capacity payments are Generation Bridge's primary source of uncontracted revenue. These cash flows can be viewed as quasi-contracted, and depending on the market, are known from six months to a few years in advance, providing cash flow visibility and certainty through the cleared periods. Although capacity prices are still sensitive to market-related factors, such as demand and supply dynamics, cost of new generation, and general bidding behavior, they are considered relatively stable compared with energy prices, which fluctuate daily and are only realized for the portion of generation that is dispatched into the grid on an hourly basis. Lack of material energy revenues exposes the project to potential revenue shortfall risk. With the exception of Sunrise, Generation Bridge's portfolio operates in the 10,000 British thermal units per kilowatt hour (btu/kWh) to 17,000 btu/kWh heat rate range. Given their high heat rates, these facilities fall at the very end of the dispatch curve, and therefore operate as peaking assets with minimal dispatch possibilities. Although capacity payments provide compensation for their operations, lack of energy revenues limits their ability to weather weak capacity pricing, exposing them to revenue shortfall risk if capacity prices remain depressed for a prolonged period. Conventional theory suggests that generation assets would seek compensation in some form, either energy or capacity. If energy prices are not supportive, generators would bid higher prices in capacity auctions to offset weaker energy revenues, and vice versa. The project faces regulatory risk, especially in New York, where 70% of Generation Bridge's capacity is located. Power markets globally are undergoing a significant transformation on the back of climate change and environmental concerns. Tighter emission-control regulations have narrowed the scope of coal-fired generation; and aggressive state-level clean energy mandates (renewable portfolio standards), as well as complementary policy-level support through various financial incentives (such as investment and production tax credits) have spurred substantial investment in renewable technologies. This has ultimately affected market dynamics and prices. For example, New York, where 70% of Generation Bridge's capacity is located, has one of the most ambitious clean energy targets. Under the Climate Leadership and Community Protection Act, the state has committed to a goal of achieving 70% clean energy by 2030 and 100% carbon-free electricity by 2040. Additional goals include the installation of 9 GW of offshore capacity by 2035, 6 GW of distributed solar capacity, and 3 GW of statewide storage capacity by 2030. Moreover, The New York State Department of Environmental Conservation adopted a "peaker rule" that targets old gas-fired peaker plants that operate simple-cycle and regenerative turbines by imposing tougher nitrogen oxide emissions requirements during the higher ozone season. These peaking facilities, which run at times of peak energy demand, can generate a large portion of the state's daily power plant nitrogen oxide emissions when operating, and thus the rule aims to reduce pollutants for the benefit of public health and ambient air conditions. In addition, the peaker rule is facilitating the deployment of energy storage through an option to incorporate electric storage or renewable generation into the affected facilities, to achieve compliance. This includes the construction of a 316 MW energy storage facility, which will be built near the Ravenswood Generating Station, part of which is occupied by the peaking plants. Although the tighter emission-control rules do not affect Generation Bridge's fleet in New York now (with the exception of Arthur Kill's 14 MW unit 10), given strong precedence of stringent plant regulations, as well as aggressive clean energy targets, in our opinion, older and inefficient generation assets are at increased risk of incurring elevated environmental compliance costs, or under worst circumstances, premature retirement due to potentially unfavorable regulations in the future. The project could be exposed to refinancing risk if the magnitude of sweeps was weaker than our current expectations. The repayment structure of the TLB is typical of transactions of this type, with 1% of mandatory amortization per year, as well as a requirement to sweep the higher of 75% of excess cash flow, or any amount needed to meet the target debt balance. Under this construct, most of the debt reduction through the TLB term occurs via cash sweeps, as only 7% of debt can be amortized through mandatory amortization during its life, representing a material reliance on sweep activity, which is influenced by market conditions and factors beyond corporate control (such as capacity prices, regulations, and carbon costs). Under S&P's base-case scenario, it forecasts that Generation Bridge will repay its TLB entirely by the proposed maturity date; however, this assumption is sensitive to the project's actual financial and sweep performance. If the broader market-related factors or the magnitude of sweeps were weaker than our forecast, the pace of the TLB debt repayment will be relatively slower than its current expectations and could lead to residual debt outstanding at maturity that will require refinancing. This will expose Generation Bridge to refinancing risk and the market outlook at that time. S&P said, "The stable outlook reflects our view that Generation Bridge's operational and financial performance will remain aligned with expectations and the portfolio will generate sufficient cash flows through its life to pay debt service obligations. Under our base-case scenario, we forecast a minimum DSCR of 2.5x though debt life (2021-2028). "We would consider a negative rating action if the project's performance and cash sweeps were weaker than our expectations, leading to its TLB balance outstanding exceeding the required target debt balance. This could occur if the assets in the project portfolio experience operational or financial difficulties, which could arise as a consequence of extended outages, higher operating expenses, and capital spending, or if capacity pricing was weaker than our forecast. "Given the age of the assets, as well as regulatory and environmental risks and uncertainties associated with the majority of the assets in Generation Bridge's portfolio, we envision very limited upside potential for the rating at this stage." GRIFFON CORP: S&P Places 'B+' ICR on CreditWatch Positive --------------------------------------------------------- S&P Global Ratings placed all its ratings on Griffon Corp., including its 'B+' issuer credit rating, on CreditWatch with positive implications. The positive CreditWatch placement reflects our expectations that S&P could either raise or maintain its existing ratings on Griffon Corp. upon resolution of the CreditWatch placement. This will depend on the timing of the transaction, the final capital structure, as well as the company's pro forma metrics. Griffon Corp. announced it has entered a definitive agreement to acquire MidOcean Hunter Holdings Inc. for total consideration of $845 million net of cash and outstanding debt. The company expects the acquisition to close in by the end of January 2022. The CreditWatch placement follows Griffon's announcement that it will acquire MidOcean Hunter Holdings Inc. d/b/a Hunter Fan for total consideration of $845 million. S&P said, "We expect the acquisition will be financed with a combination of cash and debt. Griffon had about $250 million of balance sheet cash as of the fiscal year ended Sept. 30, 2021. We expect to receive more information that could provide more clarity about the acquisition's financing, and the resulting rating action upon transaction close." Griffon exited 2021 (September year-end) with S&P Global Ratings-adjusted debt to EBITDA of 3.5x and EBITDA margins of 12.7%. These levels indicate an improvement in credit quality. S&P said, "However, at this point, we do not have details about the financing of the proposed acquisition and/or the timeline for the strategic review of alternatives for its defense electronics business, which, if sold, could provide proceeds toward debt reduction. Therefore, once more details become available, we will assess whether the improvement in credit quality is sustained, delayed, or reversed by the proposed transaction." CreditWatch S&P said, "We will resolve the CreditWatch placement following a review of Griffon's post-merger capital structure. We could raise our rating on Griffon or affirm our existing rating on the company depending on the final capital structure as well as the company's pro forma metrics." GUAM EDUCATION: S&P Affirms 'BB' Long-Term Rating on 2016A Certs ---------------------------------------------------------------- S&P Global Ratings revised the outlook to stable from negative and affirmed its 'BB' long-term rating on Guam Education Financing Foundation's (GEFF) series 2016A certificates of participation (COPs). The outlook revision reflects that on the Government of Guam general obligation (GO) rating (BB-/Stable); GEFF issued the COPs on behalf of the Guam Department of Education (DOE), a department of the executive branch of the Government of Guam. The COPs are payable from federal payments to Guam that consist of compact impact funds (CIFs). "The rating reflects S&P Global Ratings' view that legal structures and provisions to isolate obligors from pledged revenues, particularly in a distress scenario, differentiate credit quality by very little," said S&P Global Ratings credit analyst Peter Murphy. "Because of this, we believe that the credit quality of the COPs payable from CIFs is closely linked to the Government of Guam's fundamental credit quality (BB-/Stable), partially mitigated by the strength of the revenue pledge and structural features of the COPs." The rating further reflects S&P's view of: -- The potential of a future U.S. Congress changing the legislation that granted the CIFs, which could diminish COP security; -- The DOI's lack of direct obligations with respect to the COPs' debt service; and -- Weak essentiality, in S&P's view, as defined in its criteria, given that the funds affect less than 15% of the U.S. population, although they do extend beyond a singular geographic area, namely Guam, Hawaii, the Commonwealth of Northern Mariana Islands, and American Samoa, and they do serve important education funding needs for Guam. Partially offsetting the above weaknesses, in S&P's view, are: -- The program's 18-year history, including generally stable overall funding by the DOI Office of Insular Affairs during that period; -- The Government of Guam's direction that the DOI transfer pledged CIFs directly to the trustee to first cover total lease and debt service payments before CIF residuals flow to the Government of Guam, although we understand the DOI is under no obligation to do so; -- Good lease provisions, including the lack of construction risk or abatement risk; and -- Good debt service coverage by pledged 2020 CIFs on the COPs at 2.6x. S&P said, "We view the environmental, social, and governance (ESG) risks as aligned with that of the Government of Guam, which are elevated compared with other credits in the U.S. states sector. Governance risk stems from system support, the policy and fiscal relationship with the federal government, which differs for territories from those of all U.S. states. As a result, we apply a negative adjustment of three notches to the indicative rating." GovGuam also has a very high debt and liability profile, in part due to the level of services it provides and its small taxing base. The island's economic concentration in two major industries, the military and international tourism, also creates unique social risks for the territory. The COVID-19 pandemic has had a substantial effect on the tourism industry, which could weaken the economy, liquidity, and budgetary performance. Additionally, environmental risks exist due to its exposure to rising sea levels and adverse weather events as a small island territory in the Pacific Ocean. S&P said, "The stable outlook reflects that on the Government of Guam GO rating and our anticipation that, during the next two years, annual grants from the U.S. DOI will remain well in excess of debt service on the COPs. The outlook also reflects our anticipation that any changes in the migration-based allocation of the total compact funds would not materially alter Guam's share. "We do not anticipate raising the rating during the next year. The limiting factor to the rating's upward movement is the rating on the Government of Guam. "We could lower the rating over the next year to the extent that we lower the rating on the Government of Guam. We could also lower the rating in the case of a material decline in DSC provided by CIF funds, including if the DOI's funding is significantly reduced." GUAM: S&P Alters Outlook to Stable, Affirms 'BB-' Rating on Bonds ----------------------------------------------------------------- S&P Global Ratings revised its outlook to stable from negative on the Government of Guam's (GovGuam) general obligation (GO) debt and affirmed its 'BB-' long-term rating on the bonds. At the same time, S&P Global Ratings revised its outlook to stable from negative on GovGuam's appropriation-backed certificates of participation (COPs) and affirmed its 'B+' rating on the COPs. S&P also revised its outlook to stable from negative on the 'BB' long-term rating on GovGuam's business privilege tax (BPT), and section 30 revenues bonds that have a close linkage to the obligor. The ratings reflect the application of our priority-lien tax revenue debt criteria (published Oct. 22, 2018, on RatingsDirect), which factors in both the strength and stability of the pledged revenues, as well as the general credit quality of the obligor, which collects and transfers the pledged revenue for debt service payment. The priority-lien rating on these bonds is constrained to one notch above the state's creditworthiness. "The stable outlook reflects our view of recent stabilization in GovGuam's short-term finances despite uncertainties in economic and revenue trends. It also reflects the territory's stronger liquidity position supported by significant influx of federal funds as well as recent improvement in key general fund revenues," said S&P Global Ratings credit analyst Ladunni Okolo. GovGuam's small and concentrated economy, which is heavily reliant on international tourism, continues to face headwinds as a result of the COVID-19 pandemic and anemic recovery of its tourism sector. However, the territory has shown relative stability in its finances with structural balances reported for fiscal 2020 and estimated for fiscal 2021. Furthermore, the general fund's total cash balance, which improved to about $166 million or 24% of audited general fund expenditure for fiscal 2020, supports current credit stability. S&P believes GovGuam's 2022 projections support a continued trend of fiscal stability, although uncertainty remains. Through federal stimulus efforts to reduce the effects of the pandemic, Guam will receive about $3 billion through various programs. While the territory general funds are not directly affected by the federal aid received, some of the funding has helped reduce the pressure on liquidity and transfers to other funds. Projections target available ending cash balance (including general fund and special revenue funds) to be maintained at $139.5 million. GovGuam reports it will also receive ongoing earned income tax credits and child care tax credits payments to fund mandates previously by the general fund saving about $80 million annually. GovGuam's significantly negative but improving unassigned fund balance, considerably high debt levels, and limited capacity to grow reserves continue to weigh on the current credit rating level. However, S&P expects management will maintain fiscal discipline and budgetary balance if trends begin to soften or economic conditions worsen. "The state's structurally balanced operations in fiscal years 2019 and 2020 have slightly improved our view of the government structural budget performance, despite continued negative unassigned general fund balance," said Ms. Okolo. S&P said, "Although its finances has shown relative stability in the past year, we believe the current evolving pandemic and the policy measures to help control its spread will continue to present unique challenges to Guam, notably its tourism sector. The economic effects of a prolonged anemic tourism sector could erode revenues and financial performance, but current liquidity levels provide stability as the territory positions itself for recovery in the future. Continued construction and military activity also offer some support to the economy in the interim. Despite the government's non-investment-grade ratings, we consider it as having adequate resources to meet its obligations, although ongoing uncertainties surrounding economic conditions could have a material negative effect on its financial position. GovGuam's lack of reserves also creates budgetary risk should federal aid not materialize or revenues underperform." S&P said, "We view GovGuam's environmental, social, and governance (ESG) risks as elevated compared with other credits in the U.S. states sector. Governance risk stems from system support, the policy and fiscal relationship with the federal government, which differs for territories from those of all U.S. states. As a result, we apply a negative adjustment of three notches to the indicative rating. GovGuam also has a very high debt and liability profile, in part due to the level of services it provides and its small taxing base." The island's economic concentration in two major industries, the military and international tourism, also creates unique social risks for the territory. The COVID-19 pandemic has had a substantial effect on the tourism industry, which could weaken the economy, liquidity, and budgetary performance. Additionally, environmental risks exist due to its exposure to rising sea levels and adverse weather events as a small island territory in the Pacific Ocean. HH ACQUISITION: Dickinson Wright Represents Equity Holders ---------------------------------------------------------- Pursuant to Rule 2019 of the Federal Rules of Bankruptcy Procedure, the law firm of Dickinson Wright PLLC submitted a verified statement to disclose that it is representing the RHK Noble Capital Markets. RHK1 is an investment banking firm that served as lead placement agent for the sale of equity units in the Debtor pursuant to a Lead Placement Agent Agreement dated May 16, 2019 between the Debtor and RHK and in accordance with the Debtor's Confidential Private Placement Memorandum dated May 8, 2019 as supplemented August 19, 2019. The purpose of the PPM was to acquire funds to purchase the Hyatt House Colorado Springs Hotel, the property that was sold during this bankruptcy case. As of Dec. 20, 2021, the Equity Holders and their disclosable economic interests are: Kind of Interest ---------------- Bernard and Lera Bertrand Preferred Capital Investors 536 Irish Settlement Road Ogdensburg, NY 13669 Brigid Vine Preferred Capital Investors 9493 Five Mile Line Road Ogdensburg, NY 13669 Cathy and Marc McDonell Preferred Capital Investors 101 Country Route 28 Ogdensburg, NY 13669 Charles Butler Preferred Capital Investors 3519 Cobblestone Terrace Hopewell, VA 23860 Debbie Williams Preferred Capital Investors 1955 Zinia Street Golden, CO 80401 Deboarah Polniak Preferred Capital Investors 814 Washington Street Ogdensburg, NY 13669 Diyana, LLC Preferred Capital Investors 535 Fifth Ave., 20th Floor New York, NY 10017 Elizabeth Zimmerman Preferred Capital Investors 6795 Terry Court Arvada, CO 80007 Ezrine Alternative Investments, LLC Preferred Capital Investors 530 Avellino Circle, #7301 Naples, FL 34119 Gary Blok Preferred Capital Investors 6817 W. Yale Ave. Denver, CO 80227 Gilbert Douglas Ingram Preferred Capital Investors 1701 Native Dancer Drive Helena, AL 35080 Gulnn Webb Preferred Capital Investors 14140 Elk Mountain Trail Littleton, CO 80127 Counsel for RHK Noble Capital Markets can be reached at: Carolyn J. Johnsen, Esq. DICKINSON WRIGHT PLLC 1850 North Central Avenue, Suite 1400 Phoenix, AZ 85004 Tel: (602) 285-5000 Fax: (844) 670-6009 E-mail: cjjohnsen@dickinsonwright.com A copy of the Rule 2019 filing, downloaded from PacerMonitor.com, is available at https://bit.ly/3Fv6SOy and https://bit.ly/32p2d2g About HH Acquisition CS HH Acquisition CS, LLC, a company based in Colorado Springs, Colo., filed a petition for Chapter 11 protection (Bankr. D. Ariz. Case No. 21-05211) on July 6, 2021, listing as much as $50 million in both assets and liabilities. Ian Clifton, the Debtor's authorized representative, signed the petition. Judge Daniel P. Collins oversees the case. James E. Cross, Esq., at Cross Law Firm, P.L.C., and MCA Financial Group, Ltd. serve as the Debtor's legal counsel and financial advisor, respectively. The Debtor also tapped Hostmark Hospitality Group, LLC to manage its Hyatt House hotel in Colorado Springs, Colo. HOLOGENIX LLC: Seeks to Employ Grobstein Teeple as Expert Witness ----------------------------------------------------------------- Hologenix, LLC seeks approval from the U.S. Bankruptcy Court for the Central District of California to hire Grobstein Teeple, LLP as expert witness. The firm's services include: (a) preparing an expert report on the Debtor's solvency as of certain dates; (b) providing plan and best interest of creditors test consulting; and (c) providing accounting and consulting services requested by the Debtor and its legal counsel. The firm's hourly rates are as follows: Grobstein, Howard $525 per hour Teeple, Joshua $475 per hour Boffill, Kermith $375 per hour Howard, Benjamin $450 per hour Leonard, Jeffrey $390 per hour Lundeen, Brian $375 per hour Rasmussen, Erik $505 per hour Rojany, Rachel $325 per hour Roopenian, Steven $325 per hour Shamas, Eddie $350 per hour Stake, Kurt $485 per hour Wright, Kailey $335 per hour Howard Grobstein, a partner at Grobstein Teeple, disclosed in a court filing that he is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. The firm can be reached at: Howard Grobstein, CPA Grobstein Teeple LLP 6300 Canoga Avenue, Suite 1500W Woodland Hills, California 91367 Tel.: (818) 532-1020 Fax: (818) 532-1120 Email: hgrobstein@gtllp.com About Hologenix LLC Pacific Palisades, Calif.-based Hologenix, LLC is the inventor of Celliant technology (https://celliant.com), a patented, clinically-tested textile technology that harnesses and recycles the body's natural energy. Hologenix filed its voluntary petition under Chapter 11 of the Bankruptcy Code (Bankr. C.D. Calif. Case No. 20-13849) on April 22, 2020. In the petition signed by Seth Casden, chief executive officer, the Debtor listed $1 million to $10 million in both assets and liabilities. Judge Barry Russell oversees the case. Levene, Neale, Bender, Yoo & Brill L.L.P. represents the Debtor as bankruptcy counsel. The Debtor also hired Tucker Ellis LLP, Troutman Sanders LLP, Dermer Behrendt, Theodora Oringher PC, and Buchalter as special counsel. The Colony Group, LLC serves as the Debtor's accountant. MAD ENGINE: S&P Affirms 'B' Rating on Senior Secured Term Loan -------------------------------------------------------------- S&P Global Ratings affirmed its 'B' issue-level rating on Mad Engine Global LLC's senior secured term loan that has been upsized by $35 million to $310 million. S&P revised the senior secured debt recovery rating to '4' from '3', indicating its expectation for average (30%-50%; rounded estimate: 45%) recovery for lenders in the event of a payment default. The company intends to use the proceeds from the upsize to fund the acquisition of Fortune Screen Printing LLC (not rated) and repay a portion of the outstanding borrowings on its revolving credit facility. The lower recovery rating reflects lower recovery prospects for the term loan given the increase in claims relative to our estimated valuation at emergence from default. S&P said, "Our 'B' issuer credit rating and stable outlook are unchanged by this transaction. We believe Mad Engine will increase sales in the mid-single-digit percentage area and earnings by more than 25% in fiscal 2022 while sustaining leverage below 6.5x. Pro forma for the transaction, we forecast leverage at the end of fiscal 2022 will increase to the low-4x area from our previous expectation of 3.7x, and we expect EBITDA interest coverage will decrease to the mid-2x area from our previous expectation of 3.1x." MAUI MEADOWS: Seeks to Hire Cain & Herren as Legal Counsel ---------------------------------------------------------- Maui Meadows Management, LLC seeks approval from the U.S. Bankruptcy Court for the District of Hawaii to hire Cain & Herren, ALC to serve as legal counsel in its Chapter 11 case. The firm's services include the preparation of a Chapter 11 plan and legal documents, and other services necessary to administer the Debtor's bankruptcy estate. Cain & Herren's attorneys and paralegals charge $350 per hour and $175 per hour, respectively. Michael Collins, Esq., at Cain & Herren disclosed in a court filing that he does not have connection with the Debtor, creditors or any other party in interest. Cain & Herren can be reached at: Michael J. Collins, Esq. Cain & Herren, ALC 2141 W Vineyard St. Wailuku, HI 96793 Tel: 1-808-242-9350 Fax: 1-808-242-6139 Email: mike@cainandherren.com law@cainandherren.com About Maui Meadows Management Maui Meadows Management, LLC, a company based in Kihei, Hawaii, filed a petition for Chapter 11 protection (Bankr. D. Hawaii Case No. 21-01129) on Dec. 14, 2021, listing as much as $10 million in both assets and liabilities. Steven Michael Warsh, manager, signed the petition. Judge Robert J. Faris oversees the case. Michael J. Collins, Esq., at Cain & Herren, ALC is the Debtor's legal counsel. NITROCRETE LLC: Committee Taps Kutner Brinen as Co-Counsel ---------------------------------------------------------- The official committee of unsecured creditors of NITROcrete, LLC and its affiliates received approval from the U.S. Bankruptcy Court for the District of Colorado to hire Kutner Brinen Dickey Riley, P.C. as co-counsel with Seward & Kissel, LLP. The firm's services include: (a) providing the committee with legal advice with respect to its powers and duties; (b) conducting factual inquiries into matters relating to the Debtors' assets, liabilities and financial condition; (c) filing legal papers and actions, which may be required in the Debtors' Chapter 11 cases; (d) assisting the committee in determining the proper course of the Debtors' cases and issues that arise, including the potential sale of the Debtors' assets and the development of a plan; and (e) performing all other necessary legal services for the committee. The firm's hourly rates are as follows: Jeffrey S. Brinen $500 per hour Keri L. Riley $350 per hour Jonathan M. Dickey $350 per hour Keri Riley, Esq., the firm's attorney who will be providing the services, disclosed in a court filing that she is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. The firm can be reached at: Keri L. Riley, Esq. Kutner Brinen Dickey Riley, P.C. 1660 Lincoln Street, Suite 1720 Denver, CO 80264 Tel: 303-832-2910 Fax: 901-525-2389 Email: KLR@KutnerLaw.com 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. The U.S. Trustee for Region 19 appointed an official committee of unsecured creditors in the Debtors' cases on Dec. 9, 2021. Seward & Kissel, LLP and Kutner Brinen Dickey Riley, P.C. serve as legal counsel for the committee. NITROCRETE LLC: Committee Taps Seward & Kissel as Legal Counsel --------------------------------------------------------------- The official committee of unsecured creditors of NITROcrete, LLC and its affiliates received approval from the U.S. Bankruptcy Court for the District of Colorado to hire Seward & Kissel, LLP as its legal counsel. The firm's services include: (a) providing the committee with legal advice with respect to its powers and duties; (b) conducting factual inquiries into matters relating to the Debtors' assets, liabilities and financial condition; (c) filing legal papers and actions, which may be required in the Debtors' Chapter 11 cases; (d) assisting the committee in determining the proper course of the Debtors' cases and issues that arise, including the potential sale of the Debtors' assets and the development of a plan of reorganization or liquidation; and (e) performing all other necessary legal services for the committee. The firm's hourly rates are as follows: Partners $975 - $1,600 per hour Associates $450 - $875 per hour Paralegals $225 - $450 per hour Robert Gayda, Esq., the firm's attorney who will be providing the services, disclosed in a court filing that he is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. The firm can be reached at: Robert J. Gayda, Esq. Seward & Kissel, LLP One Battery Park Place Plaza New York, NY 10004. Tel: (212) 574-1200 Fax: (212) 450-8421 Email: gayda@sewkis.com 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. The U.S. Trustee for Region 19 appointed an official committee of unsecured creditors in the Debtors' cases on Dec. 9, 2021. Seward & Kissel, LLP and Kutner Brinen Dickey Riley, P.C. serve as legal counsel for the committee. NORDIC AVIATION: Norton, et al. Represent Secured Lenders Group --------------------------------------------------------------- In the Chapter 11 cases of Nordic Aviation Capital Designated Activity Company, et al., the law firms of Weil, Gotshal & Manges LLP, Norton Rose Fulbright LLP, and McGuireWoods LLP submitted a verified statement under Rule 2019 of the Federal Rules of Bankruptcy Procedure, to disclose that they are representing the Ad Hoc Group of Secured Lenders. As of Dec. 20, 2021, members of the Ad Hoc Group and their disclosable economic interests are: Allstate Investments, LLC 3075 Sanders Road Northbrook, IL 60062 with Copy to: Allstate Investments 444 West Lake Street, Suite 4500 Chicago, IL 60606 * NAC 8 Senior Facility: $17,309,451 * NAC 29 Facility: $8,254,533 Aozora Bank, Ltd. 6-1-1, Kojimachi Chiyoda-ku Tokyo 102-8660, Japan * NAC 31 JOLCO Facility: $1,450,721 * NAC 32 JOLCO Facility: $1,495,412 * NAL 27 JOLCO Facility: $1,989,456 * NAL 28 JOLCO Facility: $2,843,343 * NAC 33 Facility: $11,921,342 * NAC 34 Facility: $3,381,497 Apple Bank for Savings 122 East 42nd Street, 9th Floor New York, NY 10168 * NAC 8 Senior Facility: $22,575,518 * NAC 27 Facility: $19,765,338 Barings LLC 300 South Tryon Street, Suite 2500 Charlotte, NC 28202 * NAC 8 Senior Facility: $39,085,198 * NAC 29 Facilities Group: $108,111,542 BOT Lease Co., Ltd. Tokyo Nihombashi Tower, 2-7-1 Nihonbashi Chuo-ku Tokyo 103-8332, Japan * NAC 31 JOLCO Facility: $1,378,199 * NAC 32 JOLCO Facility: $1,420,632 * NAL 27 JOLCO Facility: $1,889,981 * NAL 28 JOLCO Facility: $2,701,171 Citigroup Financial Products Inc. 1209 Orange Street Wilmington, DE, 19801 Citibank Europe PLC 1 North Wall Quay Dublin 1, Ireland Citigroup Global Markets Limited Citigroup Centre, Canada Square London E14 5LB * NAC 8 Senior Facility: $1,607,409 * NAC 27 Facility: $8,376,717 * NAC 25 Facility: $5,000,000 * NAC 29 Facilities Group: $44,977,788 Credit Industriel et Commercial Financement d'Actifs 4 rue Gaillon, Paris, France, 75002 Attn: Stephane Bisiaux-Outeiral Damien Wolff, and Julien Natrella * NAC 27 Facility: $22,575,518 Deutsche Bank AG Winchester House, 1 Great Winchester Street EC2N 2DB London United Kingdom * NAC 31 JOLCO Facility: $6,736,839 * NAL 27 JOLCO Facility: $9,238,562 * NAL 28 JOLCO Facility: $13,203,817 Deutsche Bank AG Sanno Park Tower 2-11-1 Nagatcho, Chiyoda-ku Tokyo 100-6170, Japan * NAC 32 JOLCO Facility: $6,944,337 Development Bank of Japan Inc. Otemachi Financial City South Tower 9-6, Otemachi 1-chome, Chiyoda-ku, Tokyo 100-8178, Japan * NAC 31 JOLCO Facility: $3,771,890 * NAC 32 JOLCO Facility: $3,888,071 * NAL 18 JOLCO Facility: $1,945,609 * NAL 20 JOLCO Facility: $2,056,335 * NAL 21 JOLCO Facility: $2,114,337 * NAL 22 JOLCO Facility: $3,872,102 * NAL 23 JOLCO Facility: $4,245,850 * NAL 24 JOLCO Facility: $4,280,328 * NAL 27 JOLCO Facility: $5,172,572 * NAL 28 JOLCO Facility: $7,392,682 Export Development Canada 150 Slater Street Ottawa, ON, Canada K1A 1K3 * EDC Facilities: $347,665,517 Investec Bank PLC 30 Gresham Street London EC2V 7QP United Kingdom * NAC 8 Senior Facility: $32,643,842 * NAC 8 Junior Facility: $781,361 Invesco Senior Secured Management, Inc. 225 Liberty Street New York NY 10281 * NAC 8 Junior Facility: $28,859,270 Mizuho Leasing Company, Limited 1-2-6 Toranomon, Minato-ku Tokyo 105-0001, Japan * NAC 27 Facility: $21,041,508 * NAC 31 JOLCO Facility: $4,352,179 * NAC 32 JOLCO Facility: $4,486,228 * NAL 27 JOLCO Facility: $5,968,359 * NAL 28 JOLCO Facility: $8,530,022 MUFG Bank Ltd. Ropemaker Place 25 Ropemaker Street London, EC2Y 9AN * NAC 33 Facility: $43,780,848 * NAC 34 Facility: $12,543,318 * NAL 18 JOLCO Facility: $3,891,219 * NAL 20 JOLCO Facility: $4,112,669 * NAL 21 JOLCO Facility: $4,228,674 * NAL 22 JOLCO Facility: $3,872,102 * NAL 23 JOLCO Facility: $4,245,850 * NAL 24 JOLCO Facility: $4,280,327 NEC Capital Solutions Limited Shinagawa Intercity C Building 15-3 Konan 2-chome Minato-ku, Tokyo, 108-6219 Japan * NAC 31 JOLCO Facility: $1,450,721 * NAC 32 JOLCO Facility: $1,495,412 * NAL 27 JOLCO Facility: $1,989,456 * NAL 28 JOLCO Facility: $2,843,343 New York Life Insurance Company; and New York Life Insurance and Annuity Corporation 51 Madison Avenue, 2nd Floor New York, NY 10010 Attn: Structured Finance Group * NAC 8 Senior Facility: $39,085,084 * NYL Financing Arrangements: $91,396,746 The Korea Development Bank GranTokyo North Tower 36F, 1-9-1 Marunouchi, Chiyoda-ku Tokyo, 100-6736 Japan * NAL 18 JOLCO Facility: $3,891,219 * NAL 20 JOLCO Facility: $4,112,669 * NAL 21 JOLCO Facility: $4,228,674 * NAL 22 JOLCO Facility: $3,872,102 * NAL 23 JOLCO Facility: $4,245,850 * NAL 24 JOLCO Facility: $4,280,327 The Tokyo Star Bank, Limited 2-3-5 Akasaka, Minato-ku Tokyo 107-8480, Japan * NAC 29 Facilities Group: $17,241,472 * NAC 31 JOLCO Facility: $1,378,191 * NAC 32 JOLCO Facility: $1,420,635 * NAC 33 Facility: $4,878,356 * NAC 34 Facility: $1,383,749 * NAL 27 JOLCO Facility: $1,889,985 * NAL 28 JOLCO Facility: $2,701,178 Co-Counsel for the Ad Hoc Group of Secured Lenders can be reached at: K. Elizabeth Sieg, Esq. Sarah B. Boehm, Esq. McGUIREWOODS LLP Gateway Plaza 800 East Canal Street Richmond, VA 23219 Telephone: (804) 775-1000 Facsimile: (804) 775-1061 E-mail: dfoley@McGuireWoods.com sboehm@McGuireWoods.com Matthew S. Barr, Esq. Kelly DiBlasi, Esq. David J. Cohen, Esq. WEIL, GOTSHAL & MANGES LLP 767 Fifth Avenue New York, NY 10153 Telephone: (212) 310-8000 Facsimile: (212) 310-8007 E-mail: Matt.Barr@weil.com Kelly.DiBlasi@weil.com DavidJ.Cohen@weil.com - and - Steve Dollar, Esq. David Rosenzweig, Esq. Anthony Lauriello, Esq. NORTON ROSE FULBRIGHT US LLP 1301 Avenue of the Americas New York, NY 10019 Telephone: (212) 318-3000 E-mail: steve.dollar@nortonrosefulbright.com david.rosenzweig@nortonrosefulbright.com anthony.lauriello@nortonrosefulbright.com A copy of the Rule 2019 filing, downloaded from PacerMonitor.com, is available at https://bit.ly/33NdUA2 and https://bit.ly/3qjY5Zk 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. PCI GAMING: S&P Alters Outlook to Stable, Affirms 'BB+' ICR ----------------------------------------------------------- S&P Global Ratings revised its outlook on Alabama-based PCI Gaming Authority's (doing business as Wind Creek Hospitality) to stable from negative and affirmed all of its ratings, including its 'BB+' issuer credit rating. S&P said, "The stable outlook reflects our forecast for S&P Global Ratings-adjusted leverage in the mid- to high-1x range over the next two years, even after incorporating development spending, which will provide the company with an ample cushion relative to our 3x downgrade threshold. "PCI has built a significant cushion into its credit measures and we believe it has sufficient capacity to absorb development spending and some operating volatility next year. Under our forecast, we expect PCI's S&P Global Ratings-adjusted net leverage to increase to the mid- to high-1x area in fiscal year 2022 from the low-1x area in fiscal year 2021. This forecast incorporates our expectation that PCI's EBITDA will modestly decline (by 5%-10%) as it increases its development spending for a new hotel in Pennsylvania and a new casino development in Illinois. Our forecast also reflects our view that the demand for its Alabama properties will moderate following the roll off of government-provided stimulus funds and extended unemployment benefits, as well as the broader reopening of other travel and entertainment offerings and the drawdown of consumers' accumulated savings. We expect the performance of PCI's Wind Creek Bethlehem property in Pennsylvania will continue to recover in fiscal year 2022. The Pennsylvania property was negatively affected by a second casino closure in fiscal year 2021 (between Dec. 12, 2020, and Jan. 4, 2021) and stricter operating restrictions for much of the year. Therefore, Wind Creek Bethlehem's slot and table revenue remained below 2019 levels for almost all of fiscal year 2021 before improving above 2019 levels beginning in September 2021. "We expect PCI's development spending will ramp up in fiscal year 2022 as it works to complete a $150 million hotel development at Wind Creek Bethlehem and potentially embarks on an approximately $400 million casino development located in the southern suburbs of Chicago. The Illinois Gaming Board recently selected PCI's Wind Creek Illinois proposal to move forward to the final licensing process. If licensed, we expect that it could begin construction on the property later in fiscal year 2022 and open it by the end of 2023. "PCI has relatively low leverage relative to many regional U.S. gaming operators and we believe its financial policy is aligned with maintaining low leverage. Despite our forecast that it will increase its leverage in fiscal year 2022, PCI will still have one of the lowest leverage levels among the gaming operators that we rate. It is also able to convert a large percentage of its EBITDA to operating cash flow due to its low interest payments and lack of corporate taxes. Although PCI is taking on debt to fund its development spending and has increased its leverage in the past for acquisitions (and could do so again in the future), we do not believe it will increase its leverage above 3x, which is our downgrade threshold for the current rating. Furthermore, PCI has a history of allocating some of its excess cash flow for debt repayment. For example, PCI repaid $30 million of its term loan in the first nine months of fiscal year 2021 and $155 million in fiscal year 2020. "Notwithstanding its relatively low leverage and good cash conversion rate, we anticipate PCI will also make large annual distributions to the tribe to fund government services, as well as per capita distributions to tribal members. Therefore, given its development capex and distributions, PCI generates a discretionary cash flow (DCF) to debt ratio that we view as weak compared with its debt to EBITDA, which modestly increases its financial risk." PCI's good market position in Alabama and limited gaming tax expense will likely support relatively healthy margins and steady cash flow generation. PCI operates the only authorized casinos in Alabama and is insulated by the long distances to its competitors' properties in neighboring states, including Mississippi, Florida, and North Carolina. PCI's gaming facilities are also the closest offerings to the major population centers in Alabama and Georgia (which has no casinos). Given the limited nearby competition for its Alabama casinos (which account for about 80% of its EBITDA), PCI does not need to spend as heavily on marketing and promotional activity to attract customers compared with commercial casinos in other states. Furthermore, the majority of PCI's revenue is not subject to gaming taxes because its Alabama properties are exempt due to their tribal status. S&P said, "Despite high slot taxes at Wind Creek Bethlehem, which impair its EBITDA margins, we forecast PCI will sustain S&P Global Ratings-adjusted EBITDA margins in the high-30% area (after accounting for priority distributions), which will likely translate into fairly good operating cash flow generation even if its revenue declines modestly in future periods. PCI's EBITDA margin of more than 30% compares favorably with those of many gaming operators and other leisure companies and reflects its strong market position in Alabama and limited gaming tax expense. "We believe the risk to PCI's cash flow and credit measures from the spread of the new omicron variant is modest.Although we acknowledge the omicron variant is a stark reminder that the COVID-19 pandemic is far from over, we believe its spread is not likely to significantly impair PCI's cash flow. This is because PCI generates roughly 80% of its EBITDA from its Alabama properties and we believe it is unlikely that PCI will close those properties or implement material operating restrictions given Alabama's more relaxed attitude toward managing the pandemic. We believe there is a greater risk that the state of Pennsylvania will order another temporary closure or reimpose material operating restrictions, which could slow the recovery at Wind Creek Bethlehem, though this property is a modest contributor to PCI's overall cash flow. Furthermore, we believe PCI will maintain a leverage cushion of more than 1x relative to our downgrade threshold in fiscal year 2022. "The stable outlook on PCI reflects our forecast for S&P Global Ratings-adjusted leverage to be in the mid- to high-1x area over the next two years even after incorporating development spending. This will provide the company with an ample cushion relative to our 3x leverage downgrade threshold. We believe PCI's operating performance will be supported by relatively steady EBITDA generation at its Alabama properties and a further recovery in Wind Creek Bethlehem's revenue. "We could lower our rating on PCI if we believe it will sustain S&P Global Ratings-adjusted leverage of more than 3x. While we believe this is unlikely over the next two years, given substantial forecasted cushion even incorporating development spend, such an increase would most likely occur due to a more-aggressive use of debt to fund future potential acquisitions or a significant change in its competitive position--particularly in Alabama--that threatens its future profitability. "We could consider raising our rating on PCI if it improves its S&P Global Ratings-adjusted leverage to 1.5x and its DCF to debt to more than 20%. Under our base-case forecast, we believe this is unlikely over the next two years given expected development spending. "Before raising our rating, we would also need to believe that there would be no substantial changes to the competitive landscape in its core Alabama market over the foreseeable future, there would be continued stability in its tribal government and distribution policy, and its financial policy would support continued low leverage even when including potential future developments and acquisitions. We could also raise our rating if PCI reduces its business risk by significantly broadening its geographic and revenue diversity, improving its margins, and strengthening its Wind Creek brand while maintaining modest leverage." PHOENIX OF ALBANY: Gets OK to Hire Building Safety Consultant ------------------------------------------------------------- Phoenix of Albany, LLC received approval from the U.S. Bankruptcy Court for the Northern District of New York to hire Robert Cordell of Cordell Consulting Services, LLC as consultant in connection with code compliance, permitting, and addressing building structural, fire and safety building matters. Mr. Cordell will be paid at an hourly rate of $200. The Debtor paid $2,000 to Cordell Consulting Services as a retainer fee. Mr. Cordell disclosed in a court filing that he is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. Mr. Cordell holds office at: Robert J. Cordell Cordell Consulting Services LLC 11 Herbert Drive Latham NY 12110 Tel.: 518-857-3646 Email: codesrus@icloud.com About Phoenix of Albany Phoenix of Albany, LLC is a limited liability company organized under the laws of the State of New York. Its sole member is Evan Blum. It owns real property and improvements at 143 Montgomery St., and adjacent lots in Albany, N.Y., commonly known as the "Central Warehouse". Phoenix owns no other assets and is not currently conducting any business. Phoenix of Albany filed a voluntary Chapter 11 petition (Bankr. N.D. N.Y. Case No. 21-10584) on June 10, 2021. Judge Robert E. Littlefield Jr. oversees the case. Justin A. Heller, Esq., at Nolan Heller Kauffman, LLP is the Debtor's legal counsel. PHOENIX OF ALBANY: Taps Architect to Repair Central Warehouse ------------------------------------------------------------- Phoenix of Albany, LLC received approval from the U.S. Bankruptcy Court for the Northern District of New York to hire John Defino, an architect based in Delmar, N.Y., to assist with the design and implementation of repairs and other improvements to the Central Warehouse building. Mr. Defino will be paid at an hourly rate of $150 for his services. The Debtor paid Mr. Defino $1,000 as a retainer fee. Mr. Defino disclosed in a court filing that he is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. Mr. Defino holds office at: John Defino, RA, NCARB 12 Roweland Avenue Delmar, NY 12058 Tel.: 518-496-1656 Email: Jdefino19@gmail.com About Phoenix of Albany Phoenix of Albany, LLC is a limited liability company organized under the laws of the State of New York. Its sole member is Evan Blum. It owns real property and improvements at 143 Montgomery St., and adjacent lots in Albany, N.Y., commonly known as the "Central Warehouse". Phoenix owns no other assets and is not currently conducting any business. Phoenix of Albany filed a voluntary Chapter 11 petition (Bankr. N.D. N.Y. Case No. 21-10584) on June 10, 2021. Judge Robert E. Littlefield Jr. oversees the case. Justin A. Heller, Esq., at Nolan Heller Kauffman, LLP is the Debtor's legal counsel. PLAINS END: Fitch Rates Sub. Sec. Bonds 'B+', Outlook Stable ------------------------------------------------------------ Fitch Ratings has affirmed Plains End Financing LLC's (Plains End) senior secured bonds at 'BB+', and subordinated secured bonds at 'B+'. The Rating Outlook for both the senior secured and subordinate secured bonds is Stable. RATING RATIONALE The ratings reflect expectations of continued stable operational and cost profiles. Plains End benefits from fixed-price tolling-style power purchase agreements (PPAs) with an investment-grade counterparty. However, the cash flow profile is susceptible to fluctuations in project dispatch and operating costs, resulting in an average rating case debt service coverage ratio (DSCR) of 1.37x for the senior notes through the senior debt's maturity in 2028. Additionally, the junior note's three-notch rating difference reflects potential refinance risk, structural subordination, and a minimum consolidated rating case coverage of 1.15x through the subordinated debt's maturity in 2023. KEY RATING DRIVERS Operational Stability Mitigates Cost Increases - (Operation Risk: Midrange) The project consists of two peaking facilities (PEI and PEII) to provide backup generation for the region. Operating costs fluctuate based on the level of dispatch and, in the past, heightened dispatch substantially accelerated the timing of planned major maintenance events. However, dispatch has decreased from the 2008 high and future operating risk is partially mitigated by strong availability and a stabilized cost profile. Low Supply Risk - (Supply Risk: Stronger) The tolling-style PPAs are with Public Service Company of Colorado (PSCo; A-/Stable). Under the contracts, all variable fuel expenses are passed through to PSCo, subject to heat rate adjustments. The contracts represent a stronger attribute that limits the fuel supply risk to the project. Stable Contracted Revenues - (Revenue Risk: Midrange) The project benefits from stable and predictable revenues under two 20-year fixed price PPAs with a strong utility counterparty, PSCo. Under the PPAs, PEI and PEII receive substantial capacity payments that account for nearly 90% of consolidated revenues. However, energy margins may not sufficiently fund accelerated overhaul expenses resulting from increased dispatch. Typical Structural Features - (Debt Structure (Senior): Midrange) Plains End's senior debt has standard structural features, including a forward and backward looking dividend lock-up at 1.20x consolidated DSCR, a six-month debt service reserve, and is both fully amortizing and fixed rate. Refinance Risk for Subordinated Bonds - (Debt Structure (Subordinate): Weaker) While the senior debt benefits from a typical project finance structure, the 'B+' rating on the subordinate bonds reflects the potential for refinance risk in 2023 if the project is unable to meet target amortization amounts. Under the Fitch rating case, which demonstrates the effect of reduced cash flow to the subordinate tranche, sufficient cushion remains to repay the sub notes by 2023. If the project only pays the minimum amortization payments, there would be a balloon in 2023 for the outstanding amount. The project has met all target amortization to date. Financial Summary Historical average coverage ratios have remained consistent with Fitch's rating case metrics. Under Fitch's rating case, which incorporates lower availability as well as a 5% increase in operating costs, the average senior DSCR is 1.37x with a minimum of 0.96x during the final year. The consolidated DSCR from 2021 to 2023 for the subordinate bonds averages 1.15x with a minimum of 1.12x. PEER GROUP Mackinaw Power, LLC (Mackinaw; BBB-/Stable) is a portfolio of natural gas-fired plants that operates under tolling-style PPAs similar to Plains End. However, Mackinaw benefits from adequate cost recovery from higher dispatch. Mackinaw's average rating case DSCR is 1.47x, resulting in the higher rating. Lower rated projects typically exhibit higher sensitivity to operational stresses and have lower rating case coverages. RATING SENSITIVITIES Factor that could, individually or collectively, lead to negative rating action/downgrade: -- Sustained increased dispatch that accelerates major maintenance, or any increase in costs, that negatively impacts cash flow and financial metrics to below rating case expectations. Factors that could, individually or collectively, lead to positive rating action/upgrade: -- For the senior bonds, demonstrate continued stable operating history or any material improvements to cash flow resulting in coverage exceeding 1.4x on average in the rating case and liquidity sufficient to meet debt service obligations as the debt approaches maturity. -- For the subordinate bonds, improvements in cost savings, structural revenue enhancements, or any other material improvements to cash flow resulting in a consolidated coverage profile exceeding 1.2x in the rating case. BEST/WORST CASE RATING SCENARIO International scale credit ratings of Sovereigns, Public Finance and Infrastructure issuers have a best-case rating upgrade scenario (defined as the 99th percentile of rating transitions, measured in a positive direction) of three notches over a three-year rating horizon; and a worst-case rating downgrade scenario (defined as the 99th percentile of rating transitions, measured in a negative direction) of three notches over three years. The complete span of best- and worst-case scenario credit ratings for all rating categories ranges from 'AAA' to 'D'. Best- and worst-case scenario credit ratings are based on historical performance. TRANSACTION SUMMARY Plains End consists of two peaking facilities located in Arvada, Jefferson County, Colorado with a combined capacity of 228.6MW, used primarily as a back-up for wind generation, as well as other generation sources. The project is indirectly owned by Tyr Energy (50%), John Hancock (35%) and Prudential (15%). Combined cash flows from both plants service the obligations under the two bond issues. CREDIT UPDATE 2020 operating performance was favorable and in line with Fitch base case expectations, with overall dispatch at less than 1%, as renewable facilities in the region were generally stable. As a result, management forecasts dispatch to remain below 1% through the remainder of the debt term. Plant availability remained high at 99.9%, and capacity payments, the project's largest source of income, remained stable at about 88.0% of total revenues. Fitch views the project's continued benefits from a low capacity factor favorably, as sustained increases in dispatch and resulting energy sales may not fully compensate for the increases in associated maintenance costs. Year to date operating results through August 2021 show the project's operational and financial performance continues to remain stable. Total operating revenues are 1.5% above management's budget, while operating expenses are under budget by 4%. The project's availability and capacity factor are in line with budget at 99.9% and 0.8%, respectively. Fitch views Plains End's performance positively, and believes that the project's fiscal 2021 performance is likely to represent another year of favorable financial and operational performance. The Fitch-calculated 2020 DSCR of 1.40x (senior) and 1.14x (consolidated) is in line with Fitch base case expectations for the period. The year end 2021 performance is anticipated to perform close to Fitch base case expectations of 1.41x. FINANCIAL ANALYSIS Fitch Cases Fitch's base case assumes a forced outage rate of 0.8%, 99.2% availability, an average heat rate of 9,036 Btu/kWh, and a consolidated capacity factor of 1.6%. The resulting profile produces an average senior DSCR of 1.40x and minimum of 0.99x in the last year of the senior debt's tenor. The final year of repayment is adequately supported by liquidity available in the debt service reserve account. On a consolidated basis for evaluation of the subordinate bonds, the DSCR averages 1.18x with a minimum of 1.15x. Fitch's rating case assumes a forced outage rate of 1.0%, 99.0% availability, consolidated capacity factor of 1.6%, and elevated costs 5.0% above the base case. The resulting profile produces an average senior DSCR of 1.37x and minimum of 0.96x and, for the subordinate bonds, an average consolidated DSCR of 1.15x and a minimum of 1.12x. 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. PSP LOGISTICS: Gets OK to Hire Lasher Holzapfel Sperry as Counsel ----------------------------------------------------------------- PSP Logistics Inc. received approval from the U.S. Bankruptcy Court for the Western District of Washington to hire Lasher Holzapfel Sperry & Ebberson PLLC to serve as legal counsel in its Chapter 11 case. The firm's services include: (a) taking all actions necessary to protect and preserve the Debtor's bankruptcy estate, including the prosecution of any actions on the Debtor's behalf, defense of any action commenced against the Debtor, negotiations concerning litigation in which the Debtor is involved, objections to claims filed against the Debtor in the bankruptcy case, and the compromise or settlement of claims; (b) preparing legal papers; (c) negotiating with creditors concerning a Chapter 11 plan, preparing the plan and related documents, and taking the steps necessary to confirm and implement the plan; and (d) providing other necessary legal services. The firm's hourly rates are as follows: Danial D. Pharris, Esq. $510 per hour Attorneys $260 - $525 per hour Paralegals $135 - $210 per hour Danial Pharris, Esq., a principal at Lasher Holzapfel Sperry & Ebberson, disclosed in a court filing that he is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. The firm can be reached at: Danial D. Pharris, Esq. Lasher Holzapfel Sperry & Ebberson PLLC 601 Union Street Ste 2600 Seattle, WA 98101-4000 Tel: 206-654-2408 Fax: 206-340-2563 Email: pharris@lasher.com About PSP Logistics PSP Logistics Inc. is a privately held company in the warehousing and storage business. The company is based in Kent, Washington. PSP Logistics filed a petition for Chapter 11 protection (Bankr. W.D. Wash. Case No. 21-12172) on Dec. 1, 2021, listing up to $500,000 in assets and up to $10 million in liabilities. K. Scott Alleman, president, signed the petition. Judge Marc Barreca oversees the case. The Debtor tapped Danial D. Pharris, Esq., at Lasher Holzapfel Sperry & Ebberson, PLLC as legal counsel. RIVERBED TECHNOLOGY: Taps Ernst & Young as Tax Services Provider ---------------------------------------------------------------- Riverbed Technology, Inc. and its affiliates seek approval from the U.S. Bankruptcy Court for the District of Delaware to hire Ernst & Young, LLP to provide tax services in connection with their Chapter 11 cases. The firm's services include: a. advising the Debtors on the tax implication of reorganization or restructuring alternatives they are evaluating with existing bondholders and other creditors that may result in a change in the equity, capitalization or ownership of the shares of the Debtors and their assets; b. preparing calculations and applying the appropriate federal, state and local tax law to determine the amount of tax attribute reduction related to debt cancellation income and modelling of tax consequences of such reduction (including the calculation of tax basis in the stock of the U.S. direct and indirect subsidiaries of the Debtors); c. analyzing federal, state and local tax consequences of restructuring and rationalization of intercompany accounts; d. analyzing federal, state and local tax consequences of potential bad debt and worthless stock deductions, including tax return disclosure and presentation; and e. providing documentation, as appropriate or necessary, of tax matters and of tax analysis, opinions, recommendations, conclusions and correspondence for any proposed restructuring alternative or other tax matters. The hourly rates charged by the firm for its services are as follows: Partner/Principal $1,145 per hour Executive Director $1,025 per hour Senior Manager $913 per hour Manager $810 per hour Senior $595 per hour Staff $330 per hour During the 90 days before the petition date, the Debtors paid as much as $620,000 to Ernst & Young, of which $250,000 is the retainer fee. Jennifer Christina Shearer, a partner at Ernst & Young, disclosed in a court filing that her firm is a "disinterested person" within the meaning of Section 101(14) of the Bankruptcy Code. Ernst & Young can be reached at: Jennifer Christina Shearer Ernst & Young, LLP 560 Mission Street, Suite 1600 San Francisco, CA 94105-2907 Direct: +1 415 894 8000 Fax: +1 415 894 8099 About Riverbed Technology Inc. Headquartered in San Francisco, Calif., Riverbed Technology, Inc. is the leading provider of Wide Area Network (WAN) Optimization and performance monitoring products and services. Its more than 30,000 customers include 99 percent of the Fortune 100. Riverbed was acquired by private equity funds Thoma Bravo and Teachers' Private Capital in April 2015. Revenues were $713 million for the 12 months ended Sept. 30, 2020. Riverbed Technology and its affiliates sought Chapter 11 protection (Bankr. D. Del. Lead Case No. 21-11503) on Nov. 16, 2021. In the petition signed by Dan Smoot, president and chief executive officer, Riverbed Technology estimated $1 billion to $10 billion in both assets and debt as of the bankruptcy filing. Judge Craig T. Goldblatt oversees the cases. Kirkland & Ellis and Pachulski Stang Ziehl & Jones, LLP serve as the Debtors' bankruptcy counsel. The Debtors also tapped Alixpartners, LLC as financial advisor; Ernst & Young, LLP as tax services provider; and GLC Advisors & Co., LLC and GLCA Securities, LLC as investment bankers. Stretto is the claims, noticing and administrative agent. RUSSO REAL ESTATE: Taps PSK CPA as Accountant --------------------------------------------- Russo Real Estate, LLC and DeRiso Development, LLC seek approval from the U.S. Bankruptcy Court for the Northern District of Texas to hire PSK CPA as accountant and tax return preparer. The firm's services include: (a) assisting in tax matters including the filing of Forms 1065, U.S. Return of Partnership Income, tax returns and reports; (b) participating in negotiations with the Internal Revenue Service; (c) preparing for and attending IRS hearings; and (d) conducting conferences and consultations as may be necessary. The Debtor will pay the firm a monthly fee of $1,000 for its services. Casey Campbell, a principal at PSK CPA, 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: Casey Campbell PSK CPA 3001 Medlin Dr. Arlington, TX 76015 Tel.: (817) 664-3000 Email: casey.campbel@pskcpa.com About Russo Real Estate LLC and DeRiso Development LLC Russo Real Estate LLC, and DeRiso Development, LLC are Arlington, Texas-based companies engaged in activities related to real estate. Russo Real Estate and DeRiso Development filed voluntary petitions for relief under Chapter 11 of the Bankruptcy Code (Bankr. N.D. Texas Lead Case No. 21-40220) on Feb. 1, 2021. At the time of the filing, Russo Real Estate listed as much as $10 million in both assets and liabilities while DeRiso listed up to $50,000 in assets and up to $10 million in liabilities. Judge Edward L. Morris oversees the cases. The Debtors tapped Griffith, Jay & Michel, LLP and Hixson & Stringham, PLLC as bankruptcy counsel; Curnutt & Hafer, LLP as special counsel; and PSK CPA as accountant. SMARTER BUILDING: Seeks to Hire Rock Creek as Financial Advisor --------------------------------------------------------------- Smarter Building Technologies Alliance, Inc. and its affiliates seek approval from the U.S. Bankruptcy Court for the Central District of Califonia to hire Rock Creek Advisors, LLC as financial advisor. The firm's services include: (a) assisting in the preparation of debtor-in-possession financing 13-week cash models and forecasting by analyzing business trends and their impact on cash and the Debtors' ability to meet short-term creditor obligations as well as determining the amount of financing required to meet the Debtors' business and operational requirements; (b) reviewing and negotiating terms with key stakeholders, vendors and debt holders to assist with extending liquidity runway; (c) reviewing and considering strategic options for the Debtors; (d) assisting the Debtors with running a capital raise or a sale process, including, but not limited to, the preparation of confidential information memorandum, developing and identifying potential interested targets, managing a data room, and marketing the assets; (e) providing guidance to the Debtors in completing the necessary information (APA schedules) to consummate a transaction in bankruptcy; (f) providing the court with information necessary to approve a plan of reorganization; and (g) supporting the Debtors in other matters, which the board of directors may request or require from time to time. The firm's hourly rates are as follows: James Gansman $595 per hour Heidi Lipton $495 per hour Brian Ayers $525 per hour Tim Peach $400 per hour The Debtors paid $25,000 to the firm as a retainer fee. Brian Ayers, a director at Rock Creek Advisors, disclosed in a court filing that he is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. The firm can be reached at: Brian E. Ayers Rock Creek Advisors, LLC 555 Fifth Avenue Email: bayers@rockcreekfa.com About Smarter Building Smarter Building Technologies Alliance, Inc. is a merchant wholesaler of professional and commercial equipment and supplies in Long Beach, Calif. Smarter Building Technologies Alliance and its affiliates filed voluntary petitions for relief under Chapter 11 of the Bankruptcy Code (Bankr. C.D. Calif. Lead Case No. 21-18337) on Oct 29, 2021. Benjamin Buchanan, the chief executive officer, signed the petitions. In its petition, Smarter Building Technologies Alliance listed $877,745 in assets and $1,942,876 in liabilities. Judge Barry Russell presides over the cases. The Debtors tapped DLA Piper LLP (US) as legal counsel, Rock Creek Advisors LLC as financial advisor, and John Worden of Cramer and Associates as accountant. Stretto is the claims and noticing agent. STRIKE LLC: Manier & Harod Represents Westchester, Aspen -------------------------------------------------------- In the Chapter 11 cases of Strike, LLC, et al., the law firm of Manier & Herod, P.C. submitted a verified statement under Rule 2019 of the Federal Rules of Bankruptcy Procedure, to disclose that it is representing Westchester Fire Insurance Company and Aspen American Insurance Company. Manier & Herod represents the Sureties in their capacity as sureties for certain of the Debtors on various bonds. Each of the Sureties holds contractual and common law indemnity and other claims against certain of the above-captioned debtors and debtors in possession arising in connection with various surety bonds issued on behalf of and at the request of certain of the Debtors. The amounts of any such claims held by each of the Sureties have not yet been determined. The aggregate penal amount of the active bonds issued by Aspen is approximately $29,300,000 and by Westchester is approximately $199,000. Manier & Herod may undertake additional representation of other parties in interest in the chapter 11 cases and Manier & Herod reserves the right to supplement this verified statement as appropriate. Counsel for Westchester Fire Insurance Company and Aspen American Insurance Company can be reached at: MANIER & HEROD, P.C. Michael E. Collins, Esq. 1201 Demonbreun Street, Suite 900 Nashville, TN 37203 Tel: 615-244-0030 Fax: 615-242-4203 E-mail: mcollins@manierherod.com A copy of the Rule 2019 filing, downloaded from PacerMonitor.com, is available at https://bit.ly/3Jifv10 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. SUNOCO LP: Fitch Affirms 'BB' LT IDR, Outlook Positive ------------------------------------------------------ Fitch Ratings has affirmed Sunoco LP's (SUN) Long-Term Issuer Default Rating (IDR) at 'BB'. Fitch has also affirmed the senior unsecured bonds co-issued by SUN and Sunoco Finance Corp. at 'BB'/'RR4'. In addition, Fitch has affirmed the senior secured revolver rating at 'BBB-'/'RR1'. The Rating Outlook remains Positive. The Positive Outlook reflects that the partnership is in the final stages of decreasing leverage to 4.0x, the long-term leverage target policy of the partnership. Fitch forecasts FY21 leverage will be 4.4x (per Fitch's calculation method). The leverage decrease was delayed by an acquisition of terminals in October 2021 that was financed with debt (plus some application of positive FCF). Integration of the acquired assets, completion and commercialization of the Brownsville terminal, retention of pricing power, and continued good cost control collectively demonstrate the improving leveraging. Fitch's 2022 forecast shows the company very near the leverage level where an upgrade could occur. The 'BB' rating reflects SUN's leverage, healthy margins, and resilient business. Challenges for SUN's credit quality are integration of terminal assets and macro uncertainty related to COVID and inflation. KEY RATING DRIVERS Free Cash Flow: Fitch expects SUN to be FCF positive in 2021 with higher EBITDA based on higher fuel gallons sold (with COVID being less of a factor) and good expense control. Fitch expects 2022 and 2023 will also feature positive FCF. The partnership has a long-term leverage target of 4.0x, and the cash flow profile gives the company capability to bring leverage down from Fitch's forecast of 4.4x for the LTM ending Dec. 31, 2021, a ratio result that features the debt for the acquisition in the numerator but in the denominator only a quarter of EBITDA from the acquisition. Stable Margins: A contract with 7-Eleven, Inc. (7-Eleven) with 12 years remaining provides a fixed price for a fixed number of gallons per annum. The specified base gallonage is 2.2 billion gallons per annum, which is sizeable against the partnership's run-rate total of about 7.5 billion gallons. In addition, the entire value chain stretching from retail stores (where the partnership is a lessor, and, in small numbers, a retailer) to wholesaling (the partnership core) features elements that make for resilient margins. The product is a necessity of most U.S. citizens' everyday lives, and the value chain in aggregate generally adjusts its selling price when volumes fall (like at the onset of COVID) to preserve a gross margin dollar value. Leverage Forecast: Fitch's leverage forecast is at the border of where an upgrade could occur. The forecast for both 2022 and 2023 is 4.3x. Fitch previously stated, at the time that the Outlook was changed to Positive, that leverage at or below 4.3x could lead to an upgrade. Fitch expects that in 1H22, after the Brownsville terminal is completed, that it will examine the posting of the 4Q21 and 1Q22 results to see if Fitch's forecast of 4.3x is on-track or if an even lower value is likely. Key to these quarters will be the newly acquired terminals and an about-to-be-completed terminal. Volumes and the per unit gross margin continue to be important rating factors. Inflation is a topic of general concern and political discussion, and gasoline is prominent in those discussions. Fitch believe SUN's management is committed to its leverage policy, and the company has a solid track record of execution, both before and during the pandemic. Highly Fragmented Sector: SUN is the largest independent distributor of motor fuels in the U.S. The overall sector (both independents and non-independents) is highly fragmented. SUN has a wide span of activities, from being the 'bridge' between credit card banks and Sunoco credit card customers, to wholesaling to other wholesalers at its terminals. Terminals are seeing growth in 2021, with one scheduled for completion in early 2022. Fitch acknowledges that the sector is likely to present attractive acquisition opportunities. In the event a series of deals are struck, Fitch will monitor acquisition multiples and financing plans, driven by Fitch's view that high credit quality would be inconsistent with the 4.0x long-term target policy being kept in abeyance in all or almost all years. Parent Subsidiary Linkage: SUN's ratings reflect its standalone credit profile with no express linkage to its parent company. Fitch views Energy Transfer LP (ET; BBB-/Stable; the general partner and owner of a minority but meaningful stake in the limited partnership units) as possessing the stronger credit profile between the two entities given the size, scale, geographic, operational and cash flow diversity that ET possesses relative to SUN. No uplift is provided to SUN's ratings as Fitch considers strategic, operational and legal (e.g., cross-defaults) incentives to be weak. Certain SUN board members are deemed as Independent Board members and service on a Conflicts Committee. DERIVATION SUMMARY SUN's status as a nearly pure play wholesale motor fuel distribution company makes it unique in Fitch's North American midstream energy coverage. Parkland Corporation (BB/Stable) performs such fuel wholesaling, yet the company possesses vertical integration both down (many gas stations/convenience stores) and up the chain (a refinery in British Columbia). Retailer AmeriGas Partners, LP (APU; BB/Stable) is the leading peer for SUN given that it shares a focus on trucking a necessary fuel (in APU's case, propane), requiring both companies to perform fuel sourcing operations, and meshing those operations with the price to the customer so as to negate commodity price risk. Both companies have leading positions in a fragmented industry. APU has weather volatility that SUN lacks, yet SUN is more subject to the business cycle than APU. SUN's 7-Eleven take-or-pay contract constitutes one advantage SUN has over APU, which has nothing similar to this contract. The annual run-rate EBITDA of partnerships is over $500 million, with SUN being somewhat bigger than APU. Fitch regards the two partnerships as having approximately equal business risk. Fitch expects SUN's leverage will be 4.3x in FY22. Fitch expects APU's leverage to fall in the years ahead to approximately 4.4x-4.6x; APU's recent LTM leverage is at or above the high end of this forecast range. KEY ASSUMPTIONS Fitch's key assumptions within its rating case for the issuer include: -- Fitch oil price deck, which bears, over the long term, a relationship to the price of motor fuels. -- Motor fuel sales gallons sold in line with management's forecast. Management's public guidance for 2022 is a range of 7.7 billion-8.1 billion gallons, up materially from management's original guidance for 2021. -- Cents per gallon (CPG) immaterially lower than management forecast, reflecting mainly the intensity of consumer focus on gasoline prices at a time of general inflation concerns. Fitch acknowledges that if the motor fuel sales gallons sold exceeds Fitch's expectations (which, as mentioned are in-line with management), then Fitch expects CPG to be below management's guidance. -- Distributions to unitholders held level. -- Maintenance capital expenditures in the $50 million-$55 million range. -- Some small acquisitions, based on the company's demonstrated successful track record, the fragmented nature of the industry, and SUN's versatile operating span of activities. -- Pro-active refinancing of the partnership's revolving credit facility, which is currently drawn, on similar pricing terms. RATING SENSITIVITIES Factor that could, individually or collectively, lead to positive rating action/upgrade: -- Leverage (total debt with equity credit [no equity credit exists] to operating EBITDA) is forecast for a sustained period starting in 2022 to be at or less than 4.3x, which, in the context of the current business risk profile, could result in an upgrade. Factors that could, individually or collectively, lead to negative rating action/downgrade: -- Distribution coverage ratio below 1x, combined with leverage (total debt with equity credit to operating EBITDA) at or above 5.0x on a sustained basis could result in negative rating action; -- EBIT margin at or below 1.5% on a sustained basis; -- A transformative acquisition that increases business risk, unless balanced as to its financing. BEST/WORST CASE RATING SCENARIO International scale credit ratings of Non-Financial Corporate issuers have a best-case rating upgrade scenario (defined as the 99th percentile of rating transitions, measured in a positive direction) of three notches over a three-year rating horizon; and a worst-case rating downgrade scenario (defined as the 99th percentile of rating transitions, measured in a negative direction) of four notches over three years. The complete span of best- and worst-case scenario credit ratings for all rating categories ranges from 'AAA' to 'D'. Best- and worst-case scenario credit ratings are based on historical performance. LIQUIDITY AND DEBT STRUCTURE Liquidity Adequate: SUN has a $1.5 billion revolving credit agreement that matures in July 2023. There are no bond maturities in the near future, the next maturity date is 2027. As of Sept. 30, 2021, SUN had $88 million in cash and $1.2 billion in availability under its revolving credit agreement. Fitch forecasts that the revolving credit facility at Dec. 31, 2021 will be drawn more than it was at Sept. 30, 2021. The revolving credit agreement requires the partnership to maintain a net leverage ratio below 5.5x and an interest coverage ratio above 2.25x. The agreement allows for a maximum leverage ratio of 6.0x during a specified acquisition period. As of Sept. 30, 2021, SUN was in compliance with its covenants, and Fitch believes that SUN will remain in compliance with its covenants through its forecast period. The revolver is secured by a security interest in, among other things, of all its present and future personal property and all present and future personal property of its guarantors, the capital stock of its material subsidiaries (or 66% of the capital stock of material foreign subsidiaries), and any intercompany debt. ISSUER PROFILE Sunoco, LP (SUN) is a wholesale motor fuels distributor that distributes diesel and gasoline to retail service stations throughout the U.S., with a focus on the Northeast. SUN is organized as a master limited partnership. Energy Transfer LP (ET) owns SUN's general partner. SUMMARY OF FINANCIAL ADJUSTMENTS Fitch applies an 8.0x multiple to operating leases. For unconsolidated investees, Fitch incorporates in EBITDA distributions from such entities, not equity-method income, nor pro-rata EBITDA. ESG CONSIDERATIONS Fitch has revised SUN's ESG score for 'Group Structure' (an element under Governance) to '3' from '4.' Transactions with the general partner are not meaningful and are limited to SUN gasoline purchases from ET that were only approximately 9% of SUN's total motor fuel sales in 2020. Other elements of the group structure are benign. 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. TD REO: Unsecureds to be Paid From Available Cash ------------------------------------------------- TD REO Fund, LLC, filed a Disclosure Statement describing its Chapter 11 Plan of Liquidation. The Plan contemplates the Debtor will liquidate its assets and distribute the proceeds and funds on hand to its Creditors and Interest Holders in accordance with the priorities set forth in the Bankruptcy Code. The Debtor was created in August 2013. The Debtor's sole owner and managing member is WJAAM. The Debtor was formed to manage the foreclosure process for loans in default. As a borrower defaulted, the loan and deed of trust were assigned by the Fund that was the original lender to the Debtor pursuant to a foreclosure agreement and/or a buyout agreement. The Debtor would foreclose on the collateral and sell it, or would reach a more favorable accommodation. The Debtor's obligations to repay the loans assigned to it are reflected as loans to the Debtor from the assigning Fund. The formation of the Debtor centralized the process for handling defaulted loans. Moreover, the expectation was that the profit from some loans would offset the loss on other loans. The Debtor owned a note (the "Smokiam Note") secured by a seasonal RV park in Washington State known as Smokiam RV Resort ("Smokiam"). The note was in the principal sum of $1,884,000.00. The borrower defaulted. Postpetition, the Debtor and Smokiam reached a settlement agreement, which was approved by Court order entered on July 20, 2018. Under the terms of the settlement agreement, Smokiam agreed to pay the Debtor a lump sum payment of $2 million plus monthly installment payments of $16,440.00 within a specified period of time. If the lump sum payment was not timely made, then the Debtor would be entitled to the immediate entry of a stipulated judgment for decree of foreclosure and order of sale, which would allow the Debtor to bypass a potentially contested foreclosure sale process in the State of Washington. Smokiam made four monthly installment payments of $16,440.00 due under the settlement agreement, but failed to timely make the required lump sum payment of $2 million. Based thereon, the Debtor issued a notice of default to Smokiam. Smokiam failed to cure its default. Consequently, the Debtor employed counsel in Washington to assist with the entry of the stipulated judgment and the foreclosure of the property. The Debtor's Washington counsel filed a complaint in Grant County, Washington, to obtain entry of the stipulated judgment and order of sale. Rather than use the sale procedures which didn't contemplate overbids, the Debtor filed a motion for order authorizing the sale of real property located at 45610 Corte Vista Clara, Temecula, California, for the purchase price of $1.1 million. The Debtor did not receive any opposition or overbids. The order granting the motion was entered on November 30, 2018. The sale closed in March 2019 and the Debtor received net proceeds of $958,651.75. One of the assets of the Estate was the real property located at 37370 Horsemans, Temecula, California. The property was secured by a lien in favor of TD Opportunity Fund in the original principal amount of $945,000.00. The Debtor held a second priority lien against the same property and, after its loan went into default, foreclosed against the property and became the owner, subject to the lien in favor of TD Opportunity Fund. In mid-2019, the Debtor received an offer to purchase the property for $925,000.00, which represented fair value. The Debtor obtained Court authority to sell the property. Because TD Opportunity Fund believed that agreeing to a short sale was in the best interests of its estate, it sought Court approval of a short sale agreement. Under that agreement, which the Court approved in May 2019, TD Opportunity Fund received the entirety of the net sale proceeds of approximately $791,785.00 in satisfaction of its note. The Debtor was the lender on a $55,200.00 loan that was obtained by AKW Circle Trust and Stacie M. Brasso, Trustee. The loan was secured by real property located at 41 Juniper Street, Winchendon, Massachusetts. The Debtor sought authority to abandon the loan as of the Petition Date, because the property which secures the loan was condemned by the Town of Winchendon and a receiver appointed. The abandonment was approved by Court order entered October 3, 2018 Class 2 - General Unsecured Claims totaling $28,333,736.86. Within 120 days of the Effective Date, the Debtor will make an initial Pro Rata Distribution of the Available Cash, if any, to the holders of Allowed Class 2 Claims. To the extent Allowed Class 2 Claims are not Paid in Full by the initial Pro Rata Distribution and provided that there is Available Cash, The Debtor will make additional interim and/or final Pro Rata Distributions of Available Cash. The timing of such additional Distributions will be in the discretion of the Debtor. If there is sufficient Available Cash for all Allowed Class 2 Claims to be fully satisfied, then payments on Allowed Class 2 Claims will include simple interest at the federal judgment rate in effect on the Effective Date from the Petition Date through the date that each Allowed Class 2 Claim is Paid in Full. If a Class 2 Claim is disputed when a Distribution is made, then pending resolution of the dispute by a Final Order, the Debtor will reserve sufficient funds to pay the higher Distribution amount. Once the dispute is resolved by a Final Order, the Debtor will make a Distribution on account of the Allowed Class 2 Claim in accordance with the treatment described in the foregoing paragraph. Class 2 is impaired. The Debtor will continue to liquidate its Estate assets and distribute the proceeds and funds on hand to its Creditors and Interest Holders as set forth in the Plan. As of March 31, 2022, the Debtor is projected to have Available Cash of approximately $3,000,000.00 and no accrued operating liabilities other than its Professional Fee Claims and ordinary expenses of its Estate. Attorneys for Debtors-in-Possession: Philip E. Strok, State Bar No. 169296 Kyra E. Andrassy, State Bar No. 207959 Robert S. Marticello, State Bar No. 244256 Michael L. Simon, State Bar No. 300822 SMILEY WANG-EKVALL, LLP 3200 Park Center Drive, Suite 250 Costa Mesa, California 92626 Telephone: 714 445-1000 Facsimile: 714 445-1002 pstrok@swelawfirm.com kandrassy@swelawfirm.com rmarticello@swelawfirm.com msimon@swelawfirm.com A copy of the Disclosure Statement dated December 8, 2021, is available at https://bit.ly/3lRXEny from PacerMonitor.com. About WJA Asset Management Luxury Asset Purchasing International, LLC, et al., are part of a network of entities or "Funds" formed to offer a range of investment opportunities to individuals. Many of the existing funds are performing and some Funds had substantial gains. However, certain Funds, i.e., those invested in private trust deeds secured by real estate, suffered losses. William Jordan Investments, Inc. ("Advisor"), is a registered investment advisor. Laguna Hills, California-based WJA Asset Management, LLC ("Manager"), is the managing member of Luxury, et al. William Jordan was the president and sole owner of Advisor and was the sole member and manager of Manager. On May 18, 2017, Luxury and its affiliates filed voluntary petitions under Chapter 11 of the United States Bankruptcy Code. On May 25, 2017, four other affiliated filed voluntary Chapter 11 petitions. On June 6, 2017, CA Real Estate Opportunity Fund III filed its Chapter 11 petition. The Debtors' cases are jointly administered under Bankr. C.D. Cal. Lead Case No. 17-11996, and the Debtors continue to operate their businesses and manage their affairs as DIP. Pursuant to court orders, Howard Grobstein is now serving as the chief restructuring officer of the Debtors and Mr. Jordan no longer has any ongoing role in the Debtors' operations. At the time of the filing, WJA estimated assets of less than $500,000 and liabilities of $1 million to $10 million. Judge Scott C. Clarkson presides over the cases. Lei Lei Wang Ekvall, Philip E. Strok, Robert S. Marticello, and Michael L. Simon, at Smiley Wang Ekvall, LLP, are serving as counsel to the Debtors. Ann Moore of Norton Moore Adams has been tapped as special counsel. Elite Properties Realty is the broker. VILLA DEVELOPERS: Taps Nichani Law Firm as Bankruptcy Counsel ------------------------------------------------------------- Villa Developers & Investment, LLC seeks approval from the U.S. Bankruptcy Court for the Northern District of California to hire Nichani Law Firm to serve as legal counsel in its Chapter 11 case. The firm's services include: (a) giving the Debtor legal advice with respect to its powers and duties in the continued management of the estate; (b) representing the Debtor in connection with reclamation proceedings if instituted in the court by creditors; (c) preparing legal papers; and (d) performing all other necessary legal services for the Debtor. Vinod Nichani, Esq., the firm's attorney who will be providing the services, will be paid at an hourly rate of $385. The Debtor paid $21,738 to the firm as a retainer fee. Mr. Nichani disclosed in a court filing that he is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. The firm can be reached at: Vinod Nichani, Esq. Nichani Law Firm 111 North Market Street, Suite 300 San Jose, CA 95113 Tel.: 408-800-6174 Fax: 408-290-9802 Email: vinod@nichanilawfirm.com About Villa Developers San Jose, Calif.-based Villa Developers & Investment, LLC filed a petition for Chapter 11 protection (Bankr. N.D. Calif. Case No. 21-51429) on Nov. 16, 2021, listing up to $10 million in both assets and liabilities. Adeel Mahmood, chief executive officer, signed the petition. Judge Stephen L. Johnson oversees the case. The Debtor tapped Vinod Nichani, Esq., at Nichani Law Firm as legal counsel. WATSONVILLE HOSPITAL: U.S. Trustee Appoints Creditors' Committee ---------------------------------------------------------------- The U.S. Trustee for Region 17 appointed an official committee to represent unsecured creditors in the Chapter 11 cases of Watsonville Hospital Corporation and its affiliates. The committee members are: 1. California Nurses Association Representatives: David B. Willhoite Kyrsten B. Skogstad 155 Grand Avenue Oakland, CA 94612 E-mail: dwillhoite@calnurses.org kskogstad@calnurses.org 2. SEIU United Healthcare Workers – West Representative: Cassaundra Curtis 560 Thomas L. Berkeley Way Oakland, CA 94612 E-mail: ccurtis@seiu-uhw.org 3. Health Trust Workforce Solutions, LLC Representative: Howell S. Arnold 1100 Dr. Martin L. King, Jr. Blvd., Ste. 1100 Nashville, TN 37203 E-mail: howell.arnold@healthtrustpg.com 4. Firm Revenue Cycle Management Services, Inc. Representative: Nancy Momcilovic 5590 S. Fort Apache Las Vegas, NV 89148 E-mail: Nancy@Firmrcm.com 5. Heroic Security, LLC Representative: Chad Bennett 1881 W. Traverse Parkway, Ste E #257 Lehi, Utah 84043 E-mail: chad@heroic.com 6. Temasters 853 Representative: Steven Lua 22 E. 5th St. Watsonville, CA 95076 E-mail: slua@teamsters853.org 7. Medhost Direct, Inc. Representative: William P. Anderson 6550 Carothers Parkway, Ste. 160 Franklin, TN 37067 E-mail: Bill.Anderson@medhost.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 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. ZARA MANAGEMENT: Taps Frank & Frank as Legal Counsel ---------------------------------------------------- Zara Management, LLC received approval from the U.S. Bankruptcy Court for the Eastern District of Michigan to hire Frank & Frank, PLLC to serve as legal counsel in its Chapter 11 case. Jerome Frank, Esq., and Tami Salzbrenner, Esq., are the firm's principal attorneys who will be providing the services. Mr. Frank and Ms. Salzbrenner will charge $390 per hour and $200 per hour, respectively. The attorneys will also seek reimbursement for work-related expenses. The firm has received a retainer in the amount of $7,000 as of Dec. 15. The retainer was used to pay debts owing to the firm in the amount of $2,662 and the filing fee of $1,738, leaving a retainer balance of $2,600. Mr. Frank, a member and manager of Frank & Frank, disclosed in a court filing that he is a "disinterested person" within the meaning of Section 101(14) of the Bankruptcy Code. Frank & Frank can be reached at: Jerome D. Frank, Esq. Tami R. Salzbrenner, Esq. Frank & Frank, PLLC 30833 Northwestern Hwy. Suite 205 Farmington Hills, MI 48334 Phone: (248) 932-1440 Fax: (248) 932-1443 Email: mfrank@frankfirm.com tami@frankfirm.com About Zara Management Zara Management, LLC, a company based in Riverview, Mich., sought protection under Chapter 11 of the Bankruptcy Code (Bankr. E.D. Mich. Case No. 21-49032) on Nov. 17, 2021. Dr. Iqbal Nasir, managing member, signed the petition. As of Dec. 31, 2020, the Debtor had $5,267,008 in assets and $1,653,308 in liabilities. Jerome D. Frank, Esq., and Tami R. Salzbrenner, Esq., at Frank & Frank, PLLC are the Debtor's bankruptcy attorneys. ********* 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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