/raid1/www/Hosts/bankrupt/TCR

/raid1/www/Hosts/bankrupt/TCR_Public/220114.mbx T R O U B L E D C O M P A N Y R E P O R T E R Friday, January 14, 2022, Vol. 26, No. 13 Headlines 1116 MAPLE STREET: Ravi, et al., Say Disclosures Inadequate 11500 SPACE: Feb. 11 Plan & Disclosure Hearing Set 152 S IRVING: Voluntary Chapter 11 Case Summary 96 WYTHE: Loses Bid in Limiting Investigation ACTITECH LP: Seeks to Tap Neligan LLP as Bankruptcy Counsel ACTITECH LP: Taps CRS Capstone Partners as Financial Advisor ACTITECH LP: Taps Friedman & Feiger as Special Litigation Counsel AGILE THERAPEUTICS: Stockholders OK Authorized Shares Increase AJBM DELI: Seeks to Hire Wisdom Professional Services as Accountant AJBM DELI: Taps Law Offices of Alla Kachan as Bankruptcy Counsel AJT SERVICES: Seeks Approval to Hire Bankruptcy Attorneys AUTOCANADA INC: S&P Upgrades ICR to 'B+' on Improved EBITDA AVINGER INC: Signs Deal to Sell $7.6M Worth of Preferred Shares AYRO INC: Invesco Ltd. No Longer a Shareholder BOY SCOUTS: Slams Abuse Victims Committee for Opposing $2.7B Deal BOYD TAXI: Taps Wisdom Professional Services as Accountant BRIGGS & STRATTON: Wisconsin Enters Into $200K Bankruptcy Case Deal BRODIE HOLDINGS: Taps Benson & Mangold as Real Estate Broker CALUMET SPECIALTY: Moody's Rates New 2027 Unsecured Notes 'Caa1' CALUMET SPECIALTY: S&P Alters Outlook to Stable, Affirms 'B-' ICR CAPS 21 MARKET: S&P Rates 2022B Revenue Bonds 'BB+,' Outlook Stable CARVANA CO: Baillie Gifford Holds 11.28% of Class A Shares CENTRAL AMERICA BOTTLING: Moody's Rates New $1BB Unsec. Notes 'Ba2' CF&G ENTERPRISES: Business Income to Fund Plan CICO ELECTRICAL: Taps Michael Jay Berger as Bankruptcy Counsel COLLECTIVE 545: 555 Broadway Property Up for Feb. 2 Auction COMMERCIAL METALS: Fitch Affirms 'BB+' LT IDR, Outlook Stable CROSS COUNTRY HOLDINGS: March 30 Plan Confirmation Hearing Set CUENTAS INC: Signs Deal to Acquire Mango Tel, SDI for $3.2 Million DARREN MARTIN: Unsecured Creditors to Get $3K over 3 Years DAVEY KENT: Unsecureds to Get Nothing in Amended Plan DT AUTO: DBRS Takes Rating Actions on 7 Trust Transactions DYNASTY ACQUISITION: Fitch Affirms 'B-' LT IDR, Outlook Stable ENSTAR FINANCE: Fitch Rates $500MM Junior Sub. Notes 'BB+' ENSTAR GROUP: S&P Rates $500MM Junior Subordinated Notes 'BB+' ESSA PHARMA: Blackstone Holdings, et al. Report 4.96% Equity Stake EVERGREEN I ASSOCIATES: Lender 710 Route Says Plan Not Feasible EYEPOINT PHARMACEUTICALS: Names Chief Corporate Development Officer EYEPOINT PHARMACEUTICALS: Reveals 2022 Clinical Plans FAMOUS ANTHONY'S: Files for Chapter 11 Bankruptcy FORCEPOINT: Fitch Raises LongTerm IDR to 'B+', Outlook Stable FOUNTAINS OF ST. AUGUSTINE: Case Summary & 8 Unsecured Creditors FUSE GROUP: Paris, Kreit & Chiu Replaces Prager Metis as Auditor GBT TECHNOLOGIES: Registers 5.5M Shares for Possible Resale GOLDEN NUGGET: Moody's Lowers Secured Bank Loans to B2 GOLDEN NUGGET: S&P Lowers Rating to 'B' on Sr. Secured Facilities GRANDMA BEA: Seeks to Employ Benson & Mangold as Real Estate Broker GULF COAST HEALTH: Okays Mediation to Address Recovery Plan Issues HERTZ CORP: CBS News Asks Court to Unseal Sealed Stolen Cars Docs IDEANOMICS INC: Amends Charter to Establish ESG Task Force INTELSAT SA: Moody's Assigns 'B3' CFR, Rates New Loans 'Ba3/B3' INTELSAT SA: Orders 2 Flexible Geo Satellites INTELSAT SA: S&P Assigns Prelim 'B+' ICR, Outlook Stable IOTA COMMUNICATIONS: L2 Capital Reports 9.99% Equity Stake J & R UNITED: U.S. Trustee Unable to Appoint Committee JOHNSON & JOHNSON: Court Upholds Halt of Dying Man's Talc Lawsuit JURASSIC JUMP: Taps Weintraub & Selth as Bankruptcy Counsel KBK ENTERPRISES: Taps Magee Goldstein Lasky & Sayers as Counsel KNOWLTON DEVELOPMENT: Fitch Affirms 'B-' LT IDR, Outlook Stable KR CALVERT: Taps Dunham Hildebrand as Bankruptcy Counsel LIMETREE BAY: St. Croix Energy Loses Fight in Halting Refinery Sale MALLINCKRODT PLC: Makes Final Plea $1.7-Bil. Plan MEDICAL ACQUISITION: Case Summary & One Unsecured Creditor NAKED JUICE: S&P Assigns 'B' ICR on Separation from PepsiCo NATIONAL CINEMEDIA: S&P Upgrades ICR to 'B-', Outlook Stable NATURE COAST: Seeks to Hire GovDeals Inc. as Auctioneer NEKTAR THERAPEUTICS: Vanguard Group Has 10% Stake as of Dec. 31 NINE DEGREES: Seeks to Employ Wisdom Professional as Accountant NN INC: Legion Partners, et al., Report 9.94% Equity Stake NO CALL EAST: Case Summary & Two Unsecured Creditors NORTONLIFELOCK INC: Fitch Alters Outlook on 'BB+' LT IDR to Neg. NORTONLIFELOCK INC: S&P Rates New 7-Year Term Loan B 'BB' NRS PROPERTIES: Case Summary & 4 Unsecured Creditors NS8 INC: Gets Court OK to Send Liquidation Plan for Voting NUZEE INC: Sabby Volatility, et al., Report 4.99% Equity Stake OWENS & MINOR: Moody's Reviews Ratings for Downgrade on Apria Deal PADDOCK ENTERPRISES: O-I Glass Unit Files Reorganization Plan PARTNERS A TASTEFUL: Case Summary & 20 Top Unsecured Creditors POWER SOLUTIONS: Neil Gagnon Reports 9.96% Equity Stake POWER STOP: Moody's Assigns B3 CFR; Outlook Stable PURDUE PHARMA: Judge Drain Orders Mediation Over Opioid Settlement Q BIOMED: YA II PN, et al., Hold 9.99% Equity Stake as of Dec. 31 QHC FACILITIES: CEO Voyna's Illness Disrupts Bankruptcy Case QUALITY REHABILITATION: Unsecured Creditors to Split $45K in Plan RISING PHOENIX: Secures Court Protection Under CCAA ROCKDALE MARCELLUS: Creditors Ask Conversion to Chapter 7 ROSEVILLE PROPERTIES: Unsecureds to Get $175K to $200K in Plan SAFE SITE: Taps Ronak Bhatt CPA as Financial Advisor SALINSGROVE INSTITUTIONAL: Owes More Than $2.4-Mil. to Businesses SAN LUIS & RIO: Trustee Taps Ozark Mountain Railcar as Broker SEADRILL NEW FINANCE: Wins Approval of Prepack Plan After One Day SEARS FARM: Seeks to Employ Mearstone Group as Appraiser SECOND LLC: Seeks to Employ Benson & Mangold as Real Estate Broker SEMILEDS CORP: Incurs $525K Net Loss in First Quarter SENIOR CARE LIVING: Muni-Funded Assisted Living Enters Chapter 11 SENIOR CARE: Seeks to Hire Michael Markham as Bankruptcy Counsel SHULAMIT HACKING: Seeks to Employ Wisdom Professional as Accountant SM ENERGY: Vanguard Group Has 11.37% Equity Stake as of Dec. 31 SORENSON COMMUNICATIONS: S&P Cuts ICR to B- on Increased Leverage SOUTHERN CALIFORNIA: Case Summary & 8 Unsecured Creditors TAYLORMADE HOLDINGS: S&P Assigns 'B' ICR, Outlook Stable TAYLORMADE: Moody's Assigns B1 CFR; Outlook Stable THUNDERHORSE MULTI-ELECTRIC: Taps Hicks Law Group as Legal Counsel UNITED STRUCTURES: In Chapter 11 After 2019 Cyberattacks VERDANT HOLDINGS: U.S. Trustee Appoints Creditors' Committee VETERAN HOLDINGS: Voluntary Chapter 11 Case Summary WILLSCOT MOBILE: Moody's Assigns 'Ba3' CFR; Outlook Stable YUNHONG CTI: Frank Cesario Rejoins as Chief Executive Officer [*] Colorado Bankruptcy Filings Decreased by 24% in 2021 [*] Zero U.S. Large Bankruptcy Filings in First Week of 2022 [] SierraConstellation Promotes Lynch to President & COO [^] BOOK REVIEW: The Sorcerer's Apprentice - Medical Miracles ********* 1116 MAPLE STREET: Ravi, et al., Say Disclosures Inadequate ----------------------------------------------------------- Ravi Financial, a Wyoming Limited Liability Company, Shane Family Trust dated December 7, 2002, and Monroe Family Trust dated February 11, 2003, secured creditors (collectively, "Ravi") object to approval of the adequacy of the Second Amended Chapter 11 Disclosure Statement describing Second Amended Plan of Reorganization filed by 1116 Maple Street, LLC. Ravi claims that while the Debtor provides projections with the Disclosure Statement, they are not supported by any evidence so it is impossible to determine what the projections mean or how they were developed. Projections necessarily have assumptions underlying them, but these assumptions are not explained or even referenced anywhere in the Disclosure Statement. Moreover, Debtor has failed to provide copies of its rent rolls to support these projections. Without the current and historical rent rolls or any information about how the projections were determined, Debtor's Disclosure Statement lacks adequate information. The Court should require that Debtor amend the Disclosure Statement to include both the current and historical rent rolls. Ravi points out that the Debtor fails to provide any information on how it will satisfy the Plan treatment of Ravi's claims (or the claim of the Insiders). For treatment of both the 1B and 1C claims, Debtor will either need to obtain a refinance or pay the claim in full as a balloon payment after 36 months. The Disclosure Statement provides no information on either treatment. Moreover, if Debtor intends to obtain a refinance at the time to pay Ravi, again, Debtor would need to provide evidence that such a refinance is possible, which has not occurred. This is simply inadequate information. Ravi asserts that because Debtor has failed to show how it will accumulate cash before the Effective Date, there is no disclosure of how much funds might be needed by Debtor to have the cash needed to make the Plan feasible. Failure to provide evidence of not only the fact that Insiders are willing and able to provide these funds is inadequate information. Given the numerous inadequacies of disclosures in the Disclosure Statement, it is necessary for Debtor to amend the Disclosure Statement to include this information and Ravi must be given sufficient time to review these changes. A full-text copy of Ravi's objection dated Jan. 4, 2022, is available at https://bit.ly/33rrhWH from PacerMonitor.com at no charge. Attorneys for Secured Creditors: HABERBUSH, LLP David R. Haberbush, Esq. Vanessa M. Haberbush, Esq. Lane K. Bogard, Esq. 444 West Ocean Boulevard, Suite 1400 Long Beach, CA 90802 Telephone: (562)435-3456 Facsimile: (562)435-6335 Email: vhaberbush@lbinsolvency.com About 1116 Maple Street 1116 Maple Street, LLC, is a single asset real estate debtor (as defined in 11 U.S.C. Section 101(51B)). It has 100 percent fee interest in a property located at 1116 East Maple St., Glendale, Calif., valued by the Debtor at $5 million. 1116 Maple Street filed a petition for Chapter 11 protection (Bankr. C.D. Calif. Case No. 20-16362) on July 14, 2020, listing $5,057,759 in assets and $4,871,355 in liabilities. Mihran Tcholakian, managing member, signed the petition. Judge Barry Russell oversees the case. Margulies Faith LLP is the Debtor's bankruptcy counsel. 11500 SPACE: Feb. 11 Plan & Disclosure Hearing Set -------------------------------------------------- On Dec. 31, 2021, Debtor 11500 Space Center, LLC, filed with the U.S. Bankruptcy Court for the Southern District of Texas a First Amended Disclosure Statement and First Amended Plan of Reorganization. On Jan. 4, 2022, Judge David R. Jones tentatively and conditionally approved the Disclosure Statement and ordered that: * Feb. 7, 2022, is set as the deadline for filing and serving written objections to the Disclosure Statement and Plan. * Feb. 7, 2022, is the deadline for filing acceptances or rejections of the Plan. * Feb. 11, 2022, at 12:15 pm in Courtroom 400, 4th floor, 515 Rusk, Houston, Texas 77002 is the hearing on confirmation of the Plan and final approval of the Disclosure Statement. A copy of the order dated Jan. 4, 2022, is available at https://bit.ly/3qmYRWw from PacerMonitor.com at no charge. About 11500 Space Center 11500 Space Center, LLC, a company based in Houston, filed a Chapter 11 petition (Bankr. S.D. Texas Case No. 21-32299) on July 6, 2021. At the time of the filing, the Debtor had between $10 million and $50 million in both assets and liabilities. John Kevin Munz, president, signed the petition. Judge David R. Jones oversees the case. Haselden Farrow, PLLC, serves as the Debtor's legal counsel. 152 S IRVING: Voluntary Chapter 11 Case Summary ----------------------------------------------- Debtor: 152 S Irving CG LLC 743 St Marks Avenue Westfield, NJ 07090 Business Description: 152 S Irving CG LLC is a Single Asset Real Estate debtor (as defined in 11 U.S.C. Section 101(51B)). Chapter 11 Petition Date: January 13, 2022 Court: United States Bankruptcy Court District of New Jersey Case No.: 22-10294 Judge: Hon. Kathryn C. Ferguson Debtor's Counsel: David L. Stevens, Esq. SCURA, WIGFIELD, HEYER, STEVENS & CAMMAROTA, LLP 1599 Hamburg Turnpike Wayne, NJ 07470 Tel: 973-696-8391 E-mail: ecfbkfilings@scuramealey.com Estimated Assets: $500,000 to $1 million Estimated Liabilities: $1 million to $10 million The petition was signed by Jonathan Greenstein, authorized representative. The Debtor stated it has no creditors holding unsecured claims. A full-text copy of the petition is available for free at PacerMonitor.com at: https://www.pacermonitor.com/view/W5RH2WA/152_S_Irving_CG_LLC__njbke-22-10294__0001.0.pdf?mcid=tGE4TAMA 96 WYTHE: Loses Bid in Limiting Investigation --------------------------------------------- James Nani of Bloomberg Law reports that 96 Wythe Acquisition LLC, the bankrupt owner of the Williamsburg Hotel in Brooklyn, has lost its bid to limit a probe by an examiner. The Debtor must give a court-appointed examiner access to all information related to his investigation regarding the company's transactions, a bankruptcy judge ruled. The examiner has a valid basis for his requests for information related to non-debtors, Judge Robert Drain of the U.S. Bankruptcy Court for the Southern District of New York said at a hearing Monday, January 10, 2022. Williamsburg Hotel owner 96 Wythe Acquisition LLC's accounts show that the company made pre-bankruptcy transfers to the non-debtors in question, the judge said. About 96 Wythe Acquisition 96 Wythe Acquisition, LLC, a privately held company in Brooklyn, N.Y., filed a petition for Chapter 11 protection (Bankr. S.D.N.Y. Case No. 21-22108) on Feb. 23, 2021, disclosing zero assets and $79,990,206 in liabilities. CRO David Goldwasser signed the petition. Judge Robert D. Drain oversees the case. The Debtor tapped Backenroth Frankel & Krinsky, LLP and Mayer Brown, LLP as bankruptcy counsel; and Fern Flomenhaft, PLLC as insurance counsel. Getzler Henrich & Associates, LLC and Hilco Real Estate, LLC serve as the Debtor's financial advisors. ACTITECH LP: Seeks to Tap Neligan LLP as Bankruptcy Counsel ----------------------------------------------------------- ActiTech, LP seeks approval from the U.S. Bankruptcy Court for the Northern District of Texas to employ Neligan LLP as its bankruptcy counsel. Neligan will render these legal services: (a) advise the Debtor and its management, officers and directors of their rights, powers, and duties; (b) counsel the Debtor and its management, officers and directors on issues involving operations and finances; (c) negotiate documents, prepare pleadings, and represent the Debtor at hearings related to those matters; (d) take all necessary actions to protect and preserve the Debtor's estate; (e) prepare legal papers; (f) prepare discovery and respond to discovery served on the Debtor, respond to creditor inquiries and information requests, represent the Debtor at the initial debtor interview and Section 341 creditors' meeting, represent the Debtor in connection with meetings, discussions and negotiations with creditors, and assist with the preparation of schedules, statements of financial affairs, and monthly operating reports; (g) counsel the Debtor in connection with its restructuring and plan of reorganization; (h) draft, negotiate, and pursue confirmation of a plan of reorganization, disclosure statement, and related documents; and (i) perform all other necessary legal services in connection with the Debtor's Chapter 11 case. Prior to the petition date, Neligan received a retainer of $100,000 on Nov. 4, 2021, and an additional retainer of $100,000 on Dec. 10, 2021. The hourly rates of Neligan's counsel and staff are as follows: Attorneys $525 - $775 Paralegals $150 In addition, the firm will seek reimbursement for expenses incurred. Douglas Buncher, Esq., a partner at Neligan, 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: Douglas J. Buncher, Esq. John D. Gaither, Esq. Neligan LLP 325 N. St. Paul, Suite 3600 Dallas, TX 75201 Telephone: (214) 840-5300 Email: dbuncher@neliganlaw.com jgaither@neliganlaw.com About ActiTech LP ActiTech, LP, a manufacturer of personal care, nutraceuticals, and food and beverage products, sought protection under Chapter 11 of the Bankruptcy Code (Bankr. N.D. Texas Case No. 22-30049) on Jan. 10, 2021. In the petition signed by Elysiann Bishop, president, the Debtor disclosed $1 million to $10 million in both assets and liabilities. The Debtor tapped Neligan LLP as bankruptcy counsel, Friedman & Feiger, LLP as special litigation counsel, and CRS Capstone Partners LLC as financial advisor. ACTITECH LP: Taps CRS Capstone Partners as Financial Advisor ------------------------------------------------------------ ActiTech, LP seeks approval from the U.S. Bankruptcy Court for the Northern District of Texas to employ CRS Capstone Partners, LLC as its financial advisor and to appoint John Koskiewicz, a managing director at CRS Capstone, as chief restructuring officer. CRS Capstone will render these services: (a) work with the Debtor to assess strategic alternatives and create a strategic plan for a reorganization; (b) work with the Debtor to prepare for and implement a reorganization strategy; (c) prepare and review statements, schedules, budgets, first day motions, monthly operating reports, and various other financial documents; (d) prepare a plan of reorganization and negotiate a consensus among various constituencies regarding the plan; (e) provide all services ordinarily provided by a chief restructuring officer; and (f) provide testimony as needed. Prior to the petition date, CRS Capstone received a retainer of $75,000. The hourly rates of CRS Capstone's professionals are as follows: Managing Directors $550 - $600 Senior Directors and Directors $450 - $500 Vice Presidents $400 - $450 Associates $350 - $400 Analysts $300 In addition, the firm will seek reimbursement for expenses incurred. Mr. Koskiewicz 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: John Koskiewicz CRS Capstone Partners LLC 1225 17th Street, Suite 1725 Denver, CO 80202 Telephone: (214) 886-7845 Email: jkoskiewicz@capstonepartners.com About ActiTech LP ActiTech, LP, a manufacturer of personal care, nutraceuticals, and food and beverage products, sought protection under Chapter 11 of the Bankruptcy Code (Bankr. N.D. Texas Case No. 22-30049) on Jan. 10, 2021. In the petition signed by Elysiann Bishop, president, the Debtor disclosed $1 million to $10 million in both assets and liabilities. The Debtor tapped Neligan LLP as bankruptcy counsel, Friedman & Feiger, LLP as special litigation counsel, and CRS Capstone Partners LLC as financial advisor. ACTITECH LP: Taps Friedman & Feiger as Special Litigation Counsel ----------------------------------------------------------------- ActiTech, LP seeks approval from the U.S. Bankruptcy Court for the Northern District of Texas to employ Friedman & Feiger, LLP as its special litigation counsel. The Debtor requires the assistance of a special counsel to represent its interests in an adversary proceeding against LaCore Nutraceuticals, Inc. to recover its property and also in a litigation pending in the 68th Judicial District Court, Dallas County, Texas (Cause No. DC-17-15206) styled JRjr33, Inc. and Agel Enterprises, Inc. v. Michael A. Bishop, Elysiann Bishop, Actitech, LP, Active Group Management, LLC, Actichem, LP and Snowflake, Inc. The hourly rates of the firm's attorneys are as follows: Ernest Leonard $475 Kyle A. Coker $400 In addition, the firm will seek reimbursement for expenses incurred. Ernest Leonard, Esq., an attorney at Friedman & Feiger, 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: Ernest Leonard, Esq. Friedman & Feiger, LLP 5301 Spring Valley Rd., Suite 200 Dallas, TX 75254 Telephone: (972) 788-1400 Email: info@fflawoffice.com About ActiTech LP ActiTech, LP, a manufacturer of personal care, nutraceuticals, and food and beverage products, sought protection under Chapter 11 of the Bankruptcy Code (Bankr. N.D. Texas Case No. 22-30049) on Jan. 10, 2021. In the petition signed by Elysiann Bishop, president, the Debtor disclosed $1 million to $10 million in both assets and liabilities. The Debtor tapped Neligan LLP as bankruptcy counsel, Friedman & Feiger, LLP as special litigation counsel, and CRS Capstone Partners LLC as financial advisor. AGILE THERAPEUTICS: Stockholders OK Authorized Shares Increase -------------------------------------------------------------- At a special meeting of stockholders of Agile Therapeutics, Inc. held on Jan. 7, 2022, the stockholders approved an amendment to the company's Amended and Restated Certificate of Incorporation to increase the number of shares of common stock authorized for issuance from 150,000,000 shares to 300,000,000 shares. Since there were sufficient votes at the time of the special meeting to approve the amendment to the company's certificate of incorporation, the proposal to approve the adjournment of the special meeting, if necessary, to solicit additional proxies was not called for at the special meeting. About Agile Therapeutics Agile Therapeutics, Inc. is a women's healthcare company dedicated to fulfilling the unmet health needs of today's women. The Company's product and product candidates are designed to provide women with contraceptive options that offer freedom from taking a daily pill, without committing to a longer-acting method. Its initial product, Twirla, (levonorgestrel and ethinyl estradiol), a transdermal system, is a non-daily prescription contraceptive. Agile reported a net loss of $51.85 million for the year ended Dec. 31, 2020, compared to a net loss of $18.61 million for the year ended Dec. 31, 2019. As of Sept. 30, 2021, the Company had $36.68 million in total assets, $26 million in total liabilities, and $10.68 million in total stockholders' equity. Iselin, New Jersey-based Ernst & Young LLP issued a "going concern" qualification in its report dated March 1, 2021, on the consolidated financial statements for the year ended Dec. 31, 2020, citing that the Company has generated losses since inception, used substantial cash in operations, anticipates it will continue to incur net losses for the foreseeable future and requires additional capital to fund its operating needs beyond 2021. AJBM DELI: Seeks to Hire Wisdom Professional Services as Accountant ------------------------------------------------------------------- AJBM DELI, LLC seeks approval from the U.S. Bankruptcy Court for the Eastern District of New York to hire Wisdom Professional Services, Inc. to prepare its monthly operating reports. Wisdom Professional Services will be paid at the rate of $250 per report. The firm received an initial retainer fee in the amount of $2,000. Michael Shtarkman, CPA, the firm's accountant 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: Michael Shtarkman, CPA Wisdom Professional Services Inc. 626 Sheepshead Bay Road, Suite 640 Brooklyn, NY 11224 Tel: (718) 554-6672 Email: mshtarkmancpa@gmail.com About AJBM DELI AJBM DELI, LLC filed a petition for Chapter 11 protection (Bankr. E.D. N.Y. Case No. 21-42812) on Nov. 05, 2021, listing up to $100,000 in assets and up to $500,000 in liabilities. Aleksander Mayvaldov, president of AJBM DELI, signed the petition. Judge Jil Mazer-Marino oversees the case. The Debtor tapped the Law Offices of Alla Kachan, P.C. as legal counsel and Wisdom Professional Services, Inc. as accountant. AJBM DELI: Taps Law Offices of Alla Kachan as Bankruptcy Counsel ---------------------------------------------------------------- AJBM DELI, LLC seeks approval from the U.S. Bankruptcy Court for the Eastern District of New York to hire the Law Offices of Alla Kachan, P.C. to serve as legal counsel in its Chapter 11 case. The firm's services include: (a) assisting the Debtor in administering the case; (b) making such motions or taking such action as may be appropriate or necessary under the Bankruptcy Code; (c) representing the Debtor in prosecuting adversary proceedings to collect assets of the estate and such other actions as the Debtor deems appropriate; (d) taking such steps as may be necessary for the Debtor to marshal and protect the estate's assets; (e) negotiating with creditors in formulating a plan of reorganization for the Debtor; (f) preparing the Debtor's plan of reorganization; and (g) rendering such additional services as the Debtor may require in the case. The firm's hourly rates are as follows: Attorney $475 Paraprofessional $250 The Debtor paid the firm a retainer fee in the amount of $15,000. Alla Kachan, 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: Alla Kachan, Esq. Law Offices of Alla Kachan, P.C. 2799 Coney Island Avenue, Suite 202 Brooklyn, NY 11235 Tel: (718) 513-3145 Email: alla@kachanlaw.com About AJBM DELI AJBM DELI, LLC filed a petition for Chapter 11 protection (Bankr. E.D. N.Y. Case No. 21-42812) on Nov. 05, 2021, listing up to $100,000 in assets and up to $500,000 in liabilities. Aleksander Mayvaldov, president of AJBM DELI, signed the petition. Judge Jil Mazer-Marino oversees the case. The Debtor tapped the Law Offices of Alla Kachan, P.C. as legal counsel and Wisdom Professional Services, Inc. as accountant. AJT SERVICES: Seeks Approval to Hire Bankruptcy Attorneys --------------------------------------------------------- AJT Services, Inc. seeks approval from the U.S. Bankruptcy Court for the Northern District of Illinois to hire Laxmi Sarathy, Esq., and David Herzog, Esq., both practicing attorneys in Chicago, to handle its Chapter 11 case. The services to be provided by the attorneys include: (a) advising the Debtor regarding its powers and duties; (b) negotiating, drafting and pursuing all documentation necessary in the case; (c) preparing legal papers; (d) performing necessary legal work regarding approval of the disclosure statements and Chapter 11 plan; (e) appearing in court; (f) assisting with any disposition of the Debtor's assets, by sale or otherwise; (g) attending all meetings and negotiating with representatives of creditors, the Office of the U.S. Trustee, and other parties-in-interest; (h) providing advice regarding bankruptcy law, corporate law, corporate governance, transactional, tax, labor, litigation, and other issues to the Debtor in connection with the Debtor's ongoing business operations; and, (i) performing other necessary legal work. The Debtor paid both attorneys a retainer fee of $2,500. Ms. Laxmi and Mr. Herzog disclosed in a court filing that they are "disinterested persons" as the term is defined in Section 101(14) of the Bankruptcy Code. The attorneys can be reached at: Laxmi P. Sarathy, Esq. 3553 W. Peterson Avenue, Suite 102, Chicago, IL 60659 Tel: 312-674-7965 Fax: 312-873-4774 Email: Lsarathylaw@gmail.com --and-- David R. Herzog, Esq. Law Office of David R. Herzog 53 West Jackson Blvd, Suite 1442 Chicago, IL 60604 Tel: (312) 427-1558 About AJT Services AJT Services, Inc. filed a petition for Chapter 11 protection (Bankr. N.D. Ill. Case No. 21-12986) on Nov. 13, 2021, listing up to $50,000 in both assets and liabilities. Serkan Kaputluoglu, president of AJT Services, signed the petition. Judge Carol A. Doyle oversees the case. The Debtor tapped Laxmi P. Sarathy, Esq., and David R. Herzog, Esq. as bankruptcy attorneys and Daniel Greenman & Co. as accountant. AUTOCANADA INC: S&P Upgrades ICR to 'B+' on Improved EBITDA ----------------------------------------------------------- S&P Global Ratings raised its issuer credit rating on AutoCanada Inc. to 'B+' from 'B'. S&P Global Ratings also raised its issue-level rating on the company's unsecured notes to 'B+' from 'B'. The '4' recovery rating on the notes is unchanged. The stable outlook reflects S&P's expectation that the company will sustain its improved credit measures over the next couple of years, including lease-adjusted debt to EBITDA in the low-3x area, while generating meaningful positive free cash flows. S&P said, "The upgrade reflects AutoCanada's improved EBITDA and leverage metrics, which we expect it will sustain over the next two years. AutoCanada's operating results have continued to materially improve over the past 12 months, with cash flows and credit measures materially stronger than historical levels and our expectations. The company is on pace to generate lease-adjusted debt to EBITDA of about 3x in 2021, which is well below our previous estimates and upside trigger of below 5x. We believe the company can maintain leverage near this level over the next two years, with continuing positive free cash flow generation that provides enhanced financial flexibility. In our view, the company has ample capacity to endure periods of weaker vehicle demand or complete acquisitions while maintaining credit measures commensurate with the rating. The company has generated a step-change improvement in its EBITDA over the past two years. AutoCanada has achieved measurable results from its Go Forward Plan, which notably includes increasing used vehicle sales volumes, expanding its finance and insurance business and improving its U.S. operations since 2019. The benefits from these initiatives were accelerated with the emergence of the COVID-19 pandemic. New vehicle inventory shortages due to global semiconductor supply constraints propped up demand for used vehicles and prices of new and used cars, and underpinned the strength in AutoCanada's operating results. We believe the sharp improvement in 2021 earnings and cash flow is likely to be temporary; we assume used vehicle demand and prices fall this year from very strong current levels, mainly as new vehicle supply gradually improves. However, we do not expect a corresponding significant deterioration in the company's operating results and credit measures. "The company's focus on increasing its higher-margin used vehicle volumes was a deliberate strategy that we expect will continue. A higher share of used vehicle sales, in tandem with contributions from recent acquisitions, in our view, provides a higher base of earnings and profitability relative to historical levels. In addition, we believe AutoCanada's U.S. operations, while modest, pose less downside risk. U.S. dealerships now account for about 10% of total EBITDA as compared with a deficit in 2019. We now expect AutoCanada will generate lease-adjusted debt to EBITDA in the low-3x area in 2022 and 2023, which provides ample cushion at the current rating. We also estimate the company will continue to generate meaningful FOCF and maintain FOCF to debt above 10% over this period. "Our rating incorporates the risk of volatility in cash flow metrics and higher leverage from acquisitions. Our estimated credit measures are strong for the company's financial risk assessment but incorporate the potential for future vehicle demand and price volatility, as well as acquisitions. In our view, 2021 was a peak year for auto retailers, but the lingering impact of the pandemic and prevailing macroeconomic conditions on AutoCanada's business are key sources of uncertainty. Inventories at dealerships remain low and an extended period of shortages could weaken the company's revenues and ability to efficiently operate AutoCanada's fixed dealership assets. In addition, the company's proportion of after-sale parts and services revenues, which are higher margin and comparably more stable than vehicle sales, is well below that of its U.S. peers. "In addition, AutoCanada is intent on expanding its scale and operating breadth through acquisitions. The company improved its cash position (C$221 million at Sept. 30, 2021, from about C$108 million at year-end 2020) which, in tandem with estimated free cash flow generation provides increased financial flexibility for its growth strategy. We assume acquisitions will be funded primarily with cash on hand, at least over the near term, thereby limiting the impact on leverage (we do not net cash from our adjusted leverage calculations). We also expect AutoCanada will be cautious with its deployment of capital, as demonstrated over the past couple of years. However, acquisitions are expected to remain a capital allocation priority of the company over the next several years as it seeks to grow as an industry consolidator. In our view, this strategy adds the potential for debt-financed acquisitions that could increase leverage beyond our expectations. "The stable outlook reflects our expectation that the company will sustain credit measures that are conservative for the rating over the next couple of years, following much improved operating results in 2021. We estimate AutoCanada's lease-adjusted debt to EBITDA in the low-3x area and FOCF to debt above 10% over the next couple of years. "We could lower the rating on AutoCanada over the next 12 months if adjusted debt to EBITDA approaches 5x with limited prospects of improvement. This could occur if vehicle demand falls significantly due to weaker economic conditions or from future acquisitions well above our expectations that lead to materially higher debt. "We could raise our rating on AutoCanada within the next 12 months if we expect the company will generate lease-adjusted debt to EBITDA well below 4x on a sustained basis, in tandem with enhanced margin stability near 2021 levels. In our view, an upgrade will likely require the company to continue to pursue a conservative financial policy that reduces the potential for materially higher leverage from large debt-financed acquisitions. A reduction in the estimated volatility of AutoCanada's profitability is likely to strengthen our view of its business." AVINGER INC: Signs Deal to Sell $7.6M Worth of Preferred Shares --------------------------------------------------------------- Avinger, Inc. has entered into a definitive agreement with certain institutional investors for the issuance and sale in a registered direct offering of an aggregate of 7,600 shares of Series D convertible preferred stock and warrants to purchase up to an aggregate of 16,150,000 shares of common stock for gross proceeds of $7.6 million. The shares of Preferred Stock will have a stated value of $1,000 per share and are convertible into an aggregate of 19,000,000 shares of common stock at a conversion price of $0.40 per share. The Preferred Stock will not be convertible until after the effective date of an amendment to the Amended and Restated Certificate of Incorporation of the Company to effect a reverse stock split at a ratio between and including 1-for-5 and 1-for-20. The warrants have an exercise price of $0.48 per share, and will become exercisable on the later of (i) the effective date the Reverse Split Amendment and (ii) six months following the date of issuance. The warrants will expire five years following such initial exercise date. The closing of the offering is expected to occur on or about Jan. 14, 2022, subject to the satisfaction of customary closing conditions. H.C. Wainwright & Co. is acting as the exclusive placement agent for the offering. The gross proceeds from the offering are expected to be $7.6 million before deducting placement agent fees and other offering expenses. The Company currently intends to use the net proceeds from the offering for general corporate and working capital purposes. The Company expects to call a special meeting of stockholders for the approval of the Reverse Split Amendment. The Preferred Stock has voting rights, with the common stock as a single class, equal to 750,000 votes per share of Preferred Stock on the proposal, provided that, in accordance with Nasdaq listing rules, any votes cast by the Preferred Stock with respect to the proposal to effect a reverse split of the common stock must be counted by the Company in the same proportion as the aggregate shares of common stock voted on such proposal. About Avinger Headquartered in Redwood City, California, Avinger -- http://www.avinger.com-- is a commercial-stage medical device company that designs and develops image-guided, catheter-based system for the diagnosis and treatment of patients with Peripheral Artery Disease (PAD). Avinger reported a net loss applicable to common stockholders of $22.87 million for the year ended Dec. 31, 2020, a net loss applicable to common stockholders of $23.03 million for the year ended Dec. 31, 2019, and a net loss applicable to common stockholders of $35.69 million for the year ended Dec. 31, 2018. As of Sept. 30, 2021, the Company had $33.74 million in total assets, $22.17 million in total liabilities, and $11.57 million in total stockholders' equity. AYRO INC: Invesco Ltd. No Longer a Shareholder ---------------------------------------------- Invesco Ltd. disclosed in an amended Schedule 13G filed with the Securities and Exchange Commission that as of Dec. 31, 2021, it beneficially owns zero shares of common stock of Ayro, Inc. A full-text copy of the regulatory filing is available for free at: https://www.sec.gov/Archives/edgar/data/1086745/000091420822000019/SEC13G_Filing.htm About AYRO Texas-based AYRO, Inc., f/k/a DropCar, Inc. -- http://www.ayro.com -- engineers and manufactures purpose-built electric vehicles to enable sustainable fleets. With rapid, customizable deployments that meet specific buyer needs, AYRO's agile EVs are an eco-friendly microdistribution alternative to gasoline vehicles. Ayro reported a net loss of $10.76 million for the year ended Dec. 31, 2020, a net loss of $8.66 million for the year ended Dec. 31, 2019, and a net loss of $18.75 million for the year ended Dec. 31, 2018. As of Sept. 30, 2021, the Company had $85.08 million in total assets, $6.76 million in total liabilities, and $78.33 million in total stockholders' equity. BOY SCOUTS: Slams Abuse Victims Committee for Opposing $2.7B Deal ----------------------------------------------------------------- Alex Wolf of Bloomberg Law reports that the Boy Scouts of America claims that the committee representing sex abuse victims in the Boy Scouts' bankruptcy is acting against its constituents' best interests by putting a $2.7 billion settlement at risk, the organization said. The "overwhelming majority" of survivors supports the deal to establish a settlement trust and resolve approximately 82,500 sex abuse claims, the Boy Scouts said in a filing Tuesday, January 11, 2022. The Justice Department-appointed tort claimants' committee is trying to derail that agreement, the organization said. Preliminary voting results "demonstrate that individual abuse survivors heavily support the Plan, while certain plaintiffs' firms—largely those aligned with the TCC," remain opposed, the Boy Scouts told the U.S. Bankruptcy Court for the District of Delaware. The deal is anticipated to pay abuse claims in full, the organization added. Advocating against a deal that garnered the support of 73% of abuse claimants shows disregard for the TCC's fiduciary duty, the Boy Scouts said. The TCC has opposed the plan's liability releases for the Boy Scouts’ insurers, nationwide network of local councils, and groups that have sponsored scouting activities. The plan also undervalues the amount victims should be able to recover, it says. The releases -- offered in exchange for contributing to the settlement trust -- likely need support from 90% of abuse claimants to pass muster in court, the committee added in a Jan. 7, 2022 court filing. But defeating the plan means "virtually no recovery in these chapter 11 cases and the only 'winners' will be the TCC’s professionals and those state court lawyers that believe public destruction of the Debtors' Plan will yield more for them in individual negotiations pertaining to their cases," the Boy Scouts told the court. The organization will continue mediating disputes and work to increase the size of the trust before seeking bankruptcy court approval of the plan next month, it said. About Boy Scouts of America The Boy Scouts of America -- https://www.scouting.org/ -- is a federally chartered non-profit corporation under title 36 of the United States Code. Founded in 1910 and chartered by an act of Congress in 1916, the BSA's mission is to train youth in responsible citizenship, character development, and self-reliance through participation in a wide range of outdoor activities, educational programs, and, at older age levels, career-oriented programs in partnership with community organizations. Its national headquarters is located in Irving, Texas. The Boy Scouts of America and affiliate Delaware BSA, LLC, sought Chapter 11 protection (Bankr. D. Del. Lead Case No. 20-10343) on Feb. 18, 2020, to deal with sexual abuse claims. Boy Scouts of America was estimated to have $1 billion to $10 billion in assets and at least $500 million in liabilities as of the bankruptcy filing. The Debtors have tapped Sidley Austin LLP as their bankruptcy counsel, Morris, Nichols, Arsht & Tunnell LLP as Delaware counsel, and Alvarez & Marsal North America, LLC as financial advisor. Omni Agent Solutions is the claims agent. The U.S. Trustee for Region 3 appointed a tort claimants' committee and an unsecured creditors' committee on March 5, 2020. The tort claimants' committee is represented by Pachulski Stang Ziehl & Jones, LLP, while the unsecured creditors' committee is represented by Kramer Levin Naftalis & Frankel, LLP. BOYD TAXI: Taps Wisdom Professional Services as Accountant ---------------------------------------------------------- Boyd Taxi, Inc. seeks approval from the U.S. Bankruptcy Court for the Eastern District of New York to hire Wisdom Professional Services Inc. to prepare its monthly operating reports. Wisdom Professional Services will be paid at the rate of $100 per report. The firm received an initial retainer fee in the amount of $1,000. Michael Shtarkman, CPA, the firm's accountant 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: Michael Shtarkman, CPA Wisdom Professional Services Inc. 626 Sheepshead Bay Road, Suite 640 Brooklyn, NY 11224 Tel.: (718) 554-6672 Email: mshtarkmancpa@gmail.com About Boyd Taxi Boyd Taxi, Inc. filed a petition for Chapter 11 protection (Bankr. E.D. N.Y. Case No. 21-42358) on Sept. 17, 2021, listing up to $1 million in assets and liabilities. David Navaro, president, signed the petition. Judge Nancy Hershey Lord oversees the case. The Debtor tapped the Law Offices of Alla Kachan, P.C. as legal counsel and Wisdom Professional Services, Inc. as accountant. BRIGGS & STRATTON: Wisconsin Enters Into $200K Bankruptcy Case Deal ------------------------------------------------------------------- Fox6 News reports that the Wisconsin Department of Workforce Development and the Wisconsin Department of Justice on Wednesday announced a $200,000 agreement in DWD's federal court claim filed in the Briggs & Stratton Corp. bankruptcy case. The funds, along with a $5 million surety bond, are available to pay worker's compensation claims of the formerly self-insured employer. Additionally, a Self-Insured Employers Liability Fund (SIELF) is available to make up any shortfall and protect payments to injured employees should these funds and the surety bond be exhausted. The SIELF is funded by assessments on other self-insured employers when needed. All worker's compensation claims are paid directly or indirectly by employers; no taxpayer funds are used to support this safety net for injured employees. "In 1911, Wisconsin became the first state in the nation to have a constitutionally valid worker's compensation law," DWD Secretary-designee Amy Pechacek said in a news release. "Whether an employer is commercially insured, self-insured, or illegally uninsured, our robust protection system for injured workers here in Wisconsin provides backstops to ensure injured employees continue to receive their worker's compensation benefits, even if their primary payer defaults." The state's self-insurance program, which includes employers covered by the state worker's compensation law who assume responsibility for their worker's compensation risk and payments – rather than insure through an authorized insurance carrier, will benefit significantly from the Briggs & Stratton agreement. In the case of Briggs & Stratton's bankruptcy, the $5 million surety bond and agreement proceeds will be used to pay unsatisfied claims by former Briggs & Stratton workers. Without these sources, payments would come out of the SIELF, for which other self-insured employers would be assessed. "Wisconsin's worker's compensation system provides critical security for Wisconsinites who are injured at work," said Wisconsin Attorney General Kaul. "This outcome will help protect the Self-Insured Employers Liability Fund and, in turn, save money for self-insured employers in Wisconsin." Briggs & Stratton bankruptcy case In July 2020, Briggs & Stratton Corp. filed for bankruptcy protection – citing challenges due to the coronavirus pandemic. As part of the Chapter 11 filing, the company said at the time that it had secured debtor-in-possession financing of $677.5 million from a private equity firm purchasing its assets, and its existing lenders to allow it to continue operating ahead of the closing of the deal. "Over the past several months, we have explored multiple options with our advisors to strengthen our financial position and flexibility," Chief Executive Todd Teske said in a statement. "The challenges we have faced during the COVID-19 pandemic have made reorganization the difficult but necessary and appropriate path forward to secure our business." The filing, Briggs & Stratton said at the time, allows the company to fully support its operations through the closing of the transaction. Wisconsin's worker's compensation law Under Wisconsin's worker's compensation law, both employees and employers receive a benefit in exchange for a stable system. Employers receive tort protection from workplace injury lawsuits and employees receive no-fault workplace coverage with a defined schedule of benefits if an injury results in lost time from work. Wisconsin's worker's compensation program has served as a national model for innovation and stability for more than a century, the DWD said. The requirements of 2017 Wisconsin Act 369 do not apply because this proposed resolution is part of a bankruptcy proceeding and is not a "compromise or discontinuance of a civil action." Information on the Wisconsin Worker's Compensation program, including information for self-insured employers, can be found on the DWD Worker's Compensation Employer Resources page. About Briggs & Stratton Corp. Briggs & Stratton Corporation is a producer of gasoline engines for outdoor power equipment and a designer, manufacturer and marketer of power generation, pressure washer, lawn and garden, turf care, and job site products. The Company's products are marketed and serviced in more than 100 countries on six continents through 40,000 authorized dealers and service organizations. On the Web: https://www.basco.com/ Briggs & Stratton Corporation and four affiliates concurrently filed voluntary petitions for relief under Chapter 11 of the Bankruptcy Code (Bankr. E.D. Mo. Lead Case No. 20-43597) on July 20, 2020. The petitions were signed by Mark A. Schwertfeger, senior vice president and chief financial officer. At the time of the filing, Briggs & Stratton Corporation disclosed total assets of $1,589,398,000 and total liabilities of $1,350,058,000 as of March 29, 2020. Judge Barry S. Schermer oversees the cases. The Debtors tapped Weil, Gotshal & Manges LLP as bankruptcy counsel; Carmody MacDonald P.C. as local counsel; Foley & Lardner LLP as corporate counsel; Houlihan Lokey Inc. as investment banker; Ernst & Young, LLP as restructuring and tax advisor; Deloitte LLP as auditor and tax consultant; and Kurtzman Carson Consultants, LLC as claims and noticing agent. The Office of the U.S. Trustee appointed a committee to represent unsecured creditors in Debtors' Chapter 11 cases. BRODIE HOLDINGS: Taps Benson & Mangold as Real Estate Broker ------------------------------------------------------------ Brodie Holdings, LLC seeks approval from the U.S. Bankruptcy Court for the District of Maryland to hire Benson & Mangold to sell its commercial and residential properties. The firm's services include: (a) professional imaging (photography, virtual tour); (b) digital marketing (social media, email marketing); (c) print marketing (signage, property brochures, new listing advertising, area and regional magazines and direct mailing adverting); (d) broker outreach (tours and open house); (e) preparing documents related to the listing, marketing, and sale of the properties; (f) attending at the closing of the sales; and (g) providing such other services which may be necessary in order to complete the sales. The firm will receive a commission of 5 percent for the successful sale of the properties. Coard Benson, the firm's broker 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: Coard Benson Benson & Mangold 24 N. Washington St. Easton, MD 21601 Tel.: (410) 310-4909/(410) 770-9255 Cell: 410-310-4909 Email: coard@coardbenson.com About Brodie Holdings Chestertown, Md.-based Brodie Holdings, LLC filed a petition for Chapter 11 protection (Bankr. D. Md. Case No. 21-16309) on Oct. 5, 2021, listing as much as $10 million in both assets and liabilities. Harry Kaiser, managing member, signed the petition. Judge Thomas J. Catliota oversees the case. The Debtor tapped Tate M. Russack, Esq., at RLC, PA Lawyers & Consultants as legal counsel and Larry Strauss, Esq., CPA and Associates, Inc. as accountant. CALUMET SPECIALTY: Moody's Rates New 2027 Unsecured Notes 'Caa1' ---------------------------------------------------------------- Moody's Investors Service assigned a Caa1 rating to Calumet Specialty Products Partners, L.P.'s ("Calumet") proposed senior unsecured notes due 2027. The existing ratings are unchanged, including the B3 Corporate Family Rating (CFR), B3-PD Probability of Default Rating, B1 rating on the senior secured notes and Caa1 ratings on the existing senior unsecured notes. The Speculative Grade Liquidity Rating is unchanged at SGL-3. The rating outlook is stable. The proceeds from the proposed $300 million senior unsecured notes will be used in conjunction with borrowings under the revolving credit facility to refinance $325 million of existing notes due 2023. "Calumet's debt refinancing and the extension of the revolving credit facility maturity date will improve its liquidity," stated James Wilkins, Moody's Vice President. "The company's leverage will not change meaningfully as a result of the refinancing transaction." The following summarizes the rating activity. Assignments: Issuer: Calumet Specialty Products Partners, L.P. Senior Unsecured Notes, Assigned Caa1 (LGD4) RATINGS RATIONALE Calumet's proposed senior unsecured notes are rated Caa1, one notch below the B3 CFR, reflecting the fact that the senior unsecured notes make up the majority of the debt capital structure, but are lower in priority ranking compared to the secured notes and secured obligations under the revolving credit facility. The secured notes have a first lien on substantially all the assets of Calumet and subsidiary guarantors, other than assets securing the ABL revolving credit facility (accounts receivable, inventory and cash) and the Great Falls refinery. Moody's believes the B1 rating on the secured notes are more appropriate than the ratings suggested by Moody's Loss Given Default (LGD) for Speculative Grade Companies methodology. Calumet's balance sheet debt (as of year-end 2021, pro forma for the proposed debt refinancing and redemption of the notes due 2023), included the secured ABL revolving credit facility (undrawn), the $200 million senior secured first lien notes and two unsecured notes issues totaling $850 million. Calumet's subsidiary, Montana Renewables, LLC (MRL), is the borrower under a $300 million senior secured term loan, which is non-recourse to Calumet. Borrowings under the term loan credit agreement are secured by substantially all of the assets of MRL and a pledge of 100% of the equity interests in MRL held by Montana Holdings. The B3 CFR reflects Calumet's modest scale, elevated leverage and generally improving operating performance, but history of inconsistent free cash flow generation. Calumet has weak credit metrics for the B3 CFR as a result of the decline in demand for its products and margin erosion during the coronavirus pandemic. However, Moody's expects volume growth and margin expansion in 2022 will result in higher EBITDA and improved credit metrics, although capital expenditures for growth projects may result in negative free cash flow and no reduction in debt balances. Earnings and cash flow from the company's Montana Renewables project, which is scheduled to be operational by the end of 2022, will further improve Calumet's credit metrics and could lead to debt reduction in future years. In the third quarter 2021, Calumet reduced its debt with part of the proceeds from the sale of the Great Falls hydrocracker unit to its MRL subsidiary, which was financed with a third party term loan at MRL that is non-recourse to Calumet. The company benefits from geographic diversity of operations, a diverse customer base (no customer represents ten percent or more of revenues) and its numerous specialty products (some are recognized brands), which offer exposure to diverse end markets. Calumet's SGL-3 Speculative Grade Liquidity rating reflects its adequate liquidity profile, supported by availability under the ABL revolving credit facility, cash balances ($10.8 million as of September 30, 2021) and operating cash flow that should cover most of its capital expenditures. The company has inventory financing agreements related to its two largest refineries (Great Falls and Shreveport) that mature June 30, 2023. The asset based revolver commitments total $600 million and it had a borrowing base of $346 million, and availability of $270 million as of September 30, 2021, after accounting for outstanding borrowings and letters of credit. The revolver has one springing financial covenant which currently provides that only if availability under the facility falls below the sum of the FILO loans plus the greater of: (i) 10% of the Borrowing Base; and (ii) $35 million, the company is required to maintain a Fixed Charge Coverage Ratio of at least 1.0 to 1.0 as of the end of each fiscal quarter. The stable rating outlook reflects Moody's expectation that the company's earnings will improve as the US demand for its products recovers and it successfully executes on the Great Falls, Montana renewable diesel project. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATING The ratings could be upgraded if Calumet consistently generates positive free cash flow, as well as maintains retained cash flow to debt above 10% and leverage (debt / EBITDA) consistently below 4x. The ratings could be downgraded if it generates negative free cash flow or leverage is expected to be above 6x or liquidity declines. Calumet Specialty Products Partners, L.P., headquartered in Indianapolis, Indiana, is an independent North America producer of specialty hydrocarbon products, such as lubricants, solvents and waxes, and fuel products. It is structured as a publicly traded Master Limited Partnership (MLP). Calumet operates three business segments: Specialty Products and Solutions, Montana/Renewables and Performance Brands. CALUMET SPECIALTY: S&P Alters Outlook to Stable, Affirms 'B-' ICR ----------------------------------------------------------------- S&P Global Ratings revised the rating outlook on Calumet Specialty Products Partners L.P. to stable from negative and affirmed the 'B-' issuer credit rating on the company. S&P said, "The recovery rating on the senior secured notes remains '1' (rounded estimate: 95%). We revised the recovery rating on the unsecured notes (including the new notes) to '3' (rounded estimate: 55%) from '4'. The issue-level ratings remain 'B+' and 'B-' for the senior secured debt and the unsecured debt, respectively. "We are assigning a 'B-' issue-level rating and '3' recovery to the proposed new unsecured notes." The stable outlook reflects that S&P Global Ratings' adjusted weighted-average credit metrics will remain highly leveraged for the next 12 months. Calumet is refinancing its existing $350 million 7.75% senior unsecured notes due 2023. Following the redemption of its 2022 notes in late 2021, Calumet is refinancing its 2023 senior unsecured notes with new $300 million five-year senior unsecured notes. The company will use $25 million of cash on hand as well to fund the remaining $25 million. The ABL Facility will be extended to 2026 with the commitment reduced by $100 million to $500 million (of which $35 million will be a FILO tranche). Under its respective indentures (11% 2025 notes being the most restrictive), the company has fully utilized its investment basket. The senior secured notes are secured by a first lien on all fixed assets that secure the company's secured hedge agreements (under a collateral trust agreement). In the fourth quarter of 2021, the company announced a strategic partnership with Oaktree Capital Management L.P. to monetize the value of its renewable diesel project in Great Falls, Mont. Calumet sought to monetize the value of its renewable diesel business project by carving it out under a partnership with Oaktree Capital Management L.P. (not rated). The carveout is known as Montana Renewables LLC (MRL) and will continue to be 100% owned by Calumet (with pre-existing environmental remediation obligations being retained by Calumet and not transferred to MRL) which is designated as an unrestricted subsidiary. MRL intends to switch an existing oversize mild hydrocracker (MHC) into a renewable diesel unit (RDU) such that it can process a mix of soybean oil, tallow, distillers corn oil and used cooking oil and produce renewable diesel and naphtha with the anticipation of a 12,000 barrels per day (bbl/d) capacity operation. As part of this transaction, MRL received a $300 million, three-year senior secured convertible term loan from Oaktree and a $145 million preferred equity investment (including Capital Expenditures) from Calumet. This transaction, along with the net proceeds received by Calumet, has led to deleveraging. The company financed its latest $50 million hydrogen project with funds from Stonebriar Commercial Finance. S&P said, "We continue to expect the company's credit measures to remain in line with our current financial assessment of highly leveraged. As economies have reopened following the COVID-19 pandemic, the demand for oil and gas products has increased and hence, we anticipate the company's debt to EBITDA to stabilize. The company has seen topline growth as the result of higher selling prices in 2021; however, turnarounds at Shreveport renewable identification numbers (RINs), and rising feedstock costs have hurt Calumet's profitability. As a result, we still expect S&P Global Ratings' adjusted debt to EBITDA of greater than 7.0x." Calumet will continue to shift its focus to the higher margin specialty products business. In the first quarter of 2021 Calumet re-segmented into discrete segments: Specialty Products & Solutions (SPS), Performance Brands (PB), and Montana/Renewables. As the company has shed refining assets over the years, it continues to focus on its specialty products and solutions and move away from traditional refining and fossil fuels. In addition, the company is in the process of converting a portion of its Great Falls, Mont. facility into a renewable diesel facility, which has the potential to drive future growth and profitability for Calumet given the increased focus on sustainability. Calumet's operations in Montana include two independent businesses: renewables through MRL and crude refining through Calumet Montana Refining LLC, where it will continue to refine about 12,000 bbl/d of Canadian sour crude for specialty asphalt. Rising RINs cost can have a negative impact on EBITDA and credit metrics. The company's RINs expense has more than quadrupled during the first half of fiscal 2021, which has diminished EBITDA margins. The company has received exemptions from paying RINs in the past and our base case assumptions incorporates the company being exempted from paying them in the near term. Credit metrics may be impaired if RINs are not exempted going forward. S&P said, "The stable outlook on Calumet reflects our expectation that the company S&P Global Ratings' adjusted credit metrics will remain in the highly leveraged category over the next 12 months. The revision to stable is supported by company de-levering. Our economic assumptions include a U.S. GDP growth in 2022 and West Texas Intermediate (WTI) crude pricing of $60 per bbl in 2022. Although from a topline perspective we would expect growth, the RIN expense affects EBITDA and credit metrics. On a weighted-average basis, we expect the company will maintain debt to EBITDA above 7x. "We could lower the rating on Calumet over the next 12 months if Calumet's credit metrics weaken such that adjusted debt to EBITDA rises above 8x on a sustained basis, driven by a prolonged low oil price environment and end markets hit harder by the uncertainty around COVID-19 than we are forecasting, diminishing operating performance and margins. We could also take a negative rating action if the company's financial policies become more aggressive, such that the company pursues material debt-funded shareholder rewards. Finally, if the company is not successfully able to refinance its 2023 notes, we could consider a downgrade. "We could upgrade Calumet in the next year if we believe it will maintain debt to EBITDA below 6.0x while maintaining adequate liquidity. Other factors that could result in a positive rating action include improvement in crack margins and success in reducing costs and streamlining operations while maintaining strong margins in the specialty chemicals business or if the company's end markets fare better than our expectations. In addition, given the company's past divestitures of fuel assets, if it sold additional assets and used the proceeds to reduce debt, this could lead to an upgrade." CAPS 21 MARKET: S&P Rates 2022B Revenue Bonds 'BB+,' Outlook Stable ------------------------------------------------------------------- S&P Global Ratings assigned its 'BB+' rating to the Public Finance Authority, Wis.' series 2022A (tax-exempt) and series 2022B (taxable) revenue bonds, issued for CAPS 21 Market LLC, on behalf of College Achieve Paterson Charter School (CAPS Paterson or Paterson), a New Jersey not-for-profit corporation. The outlook is stable. Pro forma debt outstanding is $14.9 million consisting solely of the series 2022 bonds. CAPS Paterson expects to issue $14.4 million series 2022A and $500,000 series 2022B revenue bonds for the purchase of its Market Street campus, which is currently being leased from an unrelated third party. Proceeds are also intended to fund a debt service reserve fund and pay costs of issuance. The financing is expected to result in a level, 35-year, fixed rate, debt and lease payment schedule with the bonds maturing in 2056. Bond covenants include ongoing disclosure requirements, a covenant to maintain at least 1.1x annual debt service coverage, unrestricted reserves of 15% of operating expenses, and an additional bonds test set at 1.1x historical debt service coverage and 1.2 pro forma MADS for the two years following issuance. "We assessed CAPS Paterson's enterprise profile as adequate, characterized by solid enrollment growth, good demand and academics with a moderate waiting list, and a skilled and highly capable management team," said S&P Global Ratings credit analyst Mel Brown. Additionally, Paterson recently received a renewal for the maximum term of five years through 2026 reflecting a stable relationship with its charter authorizer New Jersey Department of Education (NJDOE). "We assessed CAPS Paterson's financial profile as adequate, supported by consistently positive operating performance and sufficient lease adjusted pro forma MADS coverage," added Ms. Brown. "This is offset by a currently manageable debt burden that is constrained by the potential pressure from low funded state pension plans, and future additional debt , along with modest days' cash on hand." S&P's criteria indicates that it may adjust the rating up or down based on a number of factors. In its view the 'BB+' final rating better incorporates its view of the risks associated with Paterson's limited track record as a charter school in its fifth year of operations, along with its near-term expansion plans, which are better captured at the current rating level. S&P said, "The stable outlook reflects our expectation that CAPS Paterson will continue growing its enrollment to facility capacity, preserve its academic performance track record, meet all covenants related to the series 2022 financing, maintain MADS coverage near pro forma levels, and continue growing days' cash on hand in line with the current medians. Additionally, we anticipate that CAPS Paterson will formalize and articulate its expansion plans as well as its expectations for future lease payments, which we will incorporate into our view of the credit profile at that time." Located in Paterson, N.J., CAPS Paterson opened in the 2017-2018 school year, serving 288 Kindergarten, first-, fifth-, and sixth-grade students at its Market Street Campus. Since then, Paterson's enrollment has grown annually to over 1,200 students for the current school year, and has a fully enrolled elementary and middle school program across two school sites. CAPS 21st Market Street LLC is a single-purpose entity that is wholly owned by College Achieve Public Charter Schools Inc. (CAPS), CAPS Paterson's 501(c)(3) charter management organization. The bonds are secured by lease payments from CAPS Paterson to CAPS 21st Market Street LLC, which in S&P's view is equivalent to the underlying credit quality of the school. Therefore, the rating on the bonds is solely based on the credit quality of CAPS Paterson. The Market Street lease agreement is structured as five-year leases that automatically renew after each five-year term, corresponding with the length of the charter. The unique lease structure is based on New Jersey charter school law, which prevents charter schools from entering long-term debt or leases that exceed the term of the charter. The bonds are additionally secured by a mortgage on the financed facilities, and a debt service reserve fund. CARVANA CO: Baillie Gifford Holds 11.28% of Class A Shares ---------------------------------------------------------- Baillie Gifford & Co (Scottish partnership) disclosed in an amended Schedule 13G filed with the Securities and Exchange Commission that as of Dec. 31, 2021, it beneficially owns 9,655,855 shares of Class A common stock of Carvana Co., representing 11.28 percent of the shares outstanding. A full-text copy of the regulatory filing is available for free at: https://www.sec.gov/Archives/edgar/data/1088875/000108887522000012/Carvana31122021.txt About Carvana Founded in 2012 and based in Tempe, Arizona, Carvana Co. -- http://www.carvana.com-- is a holding company that was formed as a Delaware corporation on Nov. 29, 2016. Carvana is an e-commerce platform for buying and selling used cars. The Company owns and operates Carvana.com, which enables consumers to quickly and easily shop vehicles, finance, trade-in or sell the ir current vehicle to Carvana, sign contracts, and schedule as-soon-as-next-day delivery or pickup at one of Carvana's patented, automated Car Vending Machines. Carvana Co. reported a net loss of $462.22 million in 2020, a net loss of $364.64 million in 2019, and a net loss of $254.74 million in 2018. As of Sept. 30, 2021, the Company had $5.36 billion in total assets, $4.65 billion in total liabilities, and $708 million in total stockholders' equity. * * * As reported by the TCR on May 24, 2021, S&P Global Ratings revised its ratings outlook to positive from stable and affirmed its 'CCC+' issuer credit rating on online used-car retailer Carvana Co. "The positive outlook indicates that we could raise the ratings on Carvana if the company continues to make progress in leveraging its scale to improve margins such that it can achieve near breakeven EBITDA while maintaining sufficient liquidity to pay for its cash burn for at least 18 months," S&P said. CENTRAL AMERICA BOTTLING: Moody's Rates New $1BB Unsec. Notes 'Ba2' ------------------------------------------------------------------- Moody's Investors Service assigned a Ba2 rating to The Central America Bottling Corporation's (CBC) proposed $1.1 billion senior unsecured sustainability linked notes. CBC's existing ratings including its Ba2 Corporate Family, senior unsecured ratings and stable outlook remain unchanged. The proceeds of the notes will be used to refinance existing debt and for general corporate purposes including potential future acquisitions. The notes will include a sustainability linked structure associated to a reduction target in CBC's absolute greenhouse gases emissions (scope 1 and 2) and the obtention of a Carbon Trust Zero Waste to Landfill Certification for certain manufacturing plants operated by the company. The bonds have an interest rate step-up clause in which interest rate payable on the notes will increase if CBC has not achieved the KPIs by year-end 2026 or if the targets achieved have not been verified by an external verifier. Assignments: Issuer: Central American Bottling Corp. (The) Senior Unsecured Global Notes, Assigned Ba2 RATINGS RATIONALE "CBC's Ba2 ratings reflect its adequate credit metrics and liquidity, solid market position in its territories of operation, ample soft beverage products portfolio, geographic diversification and relationship with PepsiCo, Inc. (A1 stable), which has a 12% stake in CBC and two seats on its board." said Alonso Sánchez, a Vice President at Moody's. The ratings also incorporate CBC's relatively small scale compared with that of its industry peers, the company's presence in some riskier markets and the ongoing event risk, given its strategy to grow through acquisitions. CBC's credit metrics will improve in 2021-23, after being affected in 2020 from the Covid-19 outbreak, as operating conditions and economic growth recovers. The company's debt/EBITDA, as adjusted by Moody's, increased to 4.9x as of December 31, 2020, up from 3.7x as of December 31, 2019 mainly driven by higher debt. Similar to other companies in Latin America, in 2020 CBC withdrew $130 million from its lines of credit to further enhance its liquidity to face volatility caused by the coronavirus pandemic. However, Moody's estimates that, pro-forma for the new bond, CBC's adj. debt/EBITDA will decline below 4x by year-end 2022 and below 3.5x by year-end 2023 as the company's EBITDA increases from organic growth combined with incremental EBITDA from M&A activity. The company holds strong market positions in carbonated soft drinks (CSDs), which is its most important product category, contributing around 43% of total revenue. CBC has the first or second market position in CSDs in all the countries where it operates, except for Nicaragua and Peru, where it has the third-largest market share. According to Euromonitor, the PepsiCo brands maintained the 2nd market position in soft drinks in Guatemala with a 19% steady market share. Other competitors in Guatemala include Fabricas de Bebidas Gaseosas Salvavidas (24% market share), Aje Group (17% market share), and The Coca-Cola Company (14% market share). According to Euromonitor, the soft drink market in Guatemala will grow at a compound annual growth rate of 3.9% over 2019-24 and reach close to 3,572 million liters by 2024. CBC's strong market share, ample product portfolio and product innovation will allow the company to capture the growth potential in these markets. CBC has adequate liquidity. As of September 30, 2021, the company reported cash on hand of $171 million, which can cover 1.8x its short-term debt. Pro-forma for the issuance of the proposed notes and debt refinancing, CBC's cash on hand will total $583 million as of December 31, 2021 that will cover 8.1x its short-term debt. Pro-forma for the transaction, CBC will have a comfortable long-term debt maturity profile with $47 million due 2021, $86 million due 2022, $72 million due 2023, $21 million due 2024, $46 million due 2025, and $1,100 million due after 2029. CBC has close to $500 million in advised lines of credit. The company's free cash flow (defined as cash from operations minus dividends minus capital spending) was hurt in 2017-19 by the high capital spending used to increase the installed capacity in several plants and to acquire coolers and returnable bottles. As a result, the company posted negative free cash flow over the same period. However, Moody's expects CBC's free cash flow to benefit from a zero dividend payout in 2021-23 and relatively lower capital expenditures. The stable outlook incorporates an expected modest improvement in profitability, positive free cash flow generation and a gradual reduction in leverage over the next couple of years. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATING An upgrade could be triggered as a result of an increase in CBC's size while it maintains debt/ EBITDA below 2.5x. In addition, the company would need to generate free cash flow/debt of at least 15% on a sustained basis. A downgrade could be triggered if credit metrics deteriorate materially, for example, as a result of an acquisition or because of negative results in the markets in which CBC operates. An EBIT margin lower than 5%, debt/EBITDA above 4.3x or retained cash flow/net debt below 12% on a sustained basis could lead to a downgrade. CBC has been the anchor bottler of PepsiCo in Central America since 1998. CBC has 17 bottling facilities with a capacity to produce over 900 million-unit cases and has over 700,000 points of sale. The company's largest market is Guatemala where it generates 39% of its revenues, followed by Ecuador (16%). The company also operates in El Salvador, Puerto Rico, Peru, Honduras, Jamaica and Nicaragua. CBC also exports its products to over 32 countries including the US, Mexico, Colombia, Costa Rica, Panama, Dominican Republic, the UK and Senegal, among others. The company reported revenues of $1.8 billion over the twelve months ended September 30, 2021. CF&G ENTERPRISES: Business Income to Fund Plan ---------------------------------------------- CF&G Enterprises, Inc., filed with the U.S. Bankruptcy Court for the Northern District of Georgia an Amended Plan of Reorganization dated Jan. 4, 2022. The Debtor is a Georgia s-corp. that operates as a pre-school and daycare facility. Laura Federspiel will remain the President/CEO of the business. Class 1 shall consist of the Secured Claim of Cornerstone Bank. Cornerstone has filed a proof of claim for $3,137,077.53 (the "Secured Class 1 Claim"). Debtor values the Class 1 Collateral at $3,100,000. The Debtor shall make payments to Cornerstone based upon a 25-year amortization schedule at annual interest rate of 5.25% (fixed). Debtor estimates the monthly payments to be $18,576.68 per month for 300 months. Class 2 shall consist of the Secured Claim of the Internal Revenue Service ("IRS"). Upon information and belief, IRS holds a second priority security interest in the Class 1 Collateral. IRS has filed a proof of claim for $90,037.28 (the "Secured Class 2 Claim"). Debtor values the Class 2 Collateral at $3,100,000. Cornerstone's first priority lien encumbers any equity to which the Secured Class 2 Claim could attach; therefore, the entirety of Secured Class 2 Claim shall be unsecured. $65,128.53 of the Secured Class 2 Claim is entitled to priority status and shall be added to the IRS' unsecured priority claim of $56,427.23 for a total of $121,555.76 to be paid as an unclassified priority claim. The remaining amount not treated as a priority claim shall be treated as a general unsecured claim in Class 4. Class 3 shall consist of the Secured Claim of the U.S. Small Business Administration ("SBA"). Upon information and belief, SBA holds a third priority security interest in the Class 1 Collateral. SBA has filed a proof of claim for $155,917.81 (the "Secured Class 3 Claim"). Debtor values the Class 3 Collateral at $3,100,000. Cornerstone's first priority lien encumbers any equity to which the Secured Class 3 Claim could attach; therefore, the entirety of Secured Class 3 Claim shall be unsecured and treated as a Class 4 unsecured claim. Upon plan confirmation, the Secured Class 3 Claim shall be void and unenforceable. Class 4 shall consist of General Unsecured Claims: * Confirmation under Section 1191(a): If the Plan is confirmed under section 1191(a) of the Bankruptcy Code, Debtor shall pay the General Unsecured Creditors monthly payments of $700.00, commencing on the 1st of the month immediately following the Effective Date and continuing until the 36th month after the Effective Date. * Confirmation under Section 1191(b): If the Plan is confirmed under section 1191(b) of the Bankruptcy Code, Debtor shall pay all of its projected disposable income in the 3 year period beginning on the date the first payment is due under the Plan. The Debtor is proposing to make larger payments to creditors if it is confirmed under 1191(a) consensually. The Claims of the Class 4 Creditors are Impaired by the Plan. Class 5 consists of the Equity Holders of the Debtor. Each equity security holder will retain its/his Interest in the reorganized Debtor as such Interest existed as of the Petition Date. This class is not impaired and is not eligible to vote on the Plan. After the Confirmation Date, Debtor is authorized to sell or refinance all its assets, specific assets including its real property, free and clear of liens, claims and encumbrances (the "Sale Procedures"). In the event the applicable assets are subject to secured claims, Debtor is authorized to sell or refinance such property free and clear of liens, claims and encumbrances. The source of funds for the payments pursuant to the Plan is Debtor's income from operating its business as a pre-school/daycare. A full-text copy of the Amended Plan of Reorganization dated Jan. 3, 2022, is available at https://bit.ly/3r8c1pL from PacerMonitor.com at no charge. Attorney for Debtor: Will B. Geer Wiggam & Geer, LLC 50 Hurt Plaza, SE, Suite 1150 Atlanta, Georgia 30303 wgeer@wiggamgeer.com 404-233-9800 About CF&G Enterprises Inc. CF&G Enterprises, Inc. is a Georgia-based company that operates a day care center. CF&G Enterprises sought protection under Chapter 11 of the Bankruptcy Code (Bankr. N.D. Ga. Case No. 21-55042) on July 5, 2021, listing as much as $10 million in both assets and liabilities. Laura C. Federspiel, chief executive officer of CF&G Enterprises, signed the petition. Judge Paul Baisier oversees the case. Will B. Geer, Esq., at Wiggam & Geer, LLC and Steven Lazarou, CPA at Zeus Business Solutions, serve as the Debtor's legal counsel and accountant, respectively. Cornerstone Bank, the Debtor's lender, is represented by Ron C. Bingham, II, Esq., and John A. Thomson, Jr. Esq., at Adams and Reese, LLP. CICO ELECTRICAL: Taps Michael Jay Berger as Bankruptcy Counsel -------------------------------------------------------------- CICO Electrical Contractors, Inc. seeks approval from the U.S. Bankruptcy Court for the Central District of California to hire the Law Offices of Michael Jay Berger to serve as legal counsel in its Chapter 11 case. The firm's services include: (a) assisting the Debtor in planning a reorganization of its business; (b) assisting the Debtor with the compliance requirements of the Office of the United States Trustee; and (c) writing to, speaking to, and meeting in person with creditors of the Debtor as needed to ensure that they respect the automatic stay, explaining the facts and circumstances surrounding the case, investigating possible claims against the Debtor, and gaining its cooperation with regard to the continued business of the Debtor. The firm's hourly rates are as follows: Michael Jay Berger, Esq. $595 Stephen Biegenzahn, Esq. $595 Sofya Davtyan, Esq. $525 Debra Reed, Esq. $435 Carolyn M. Afari, Esq. $435 Samuel Boyamian, Esq. $350 Gary Baddin $275 Senior paralegals and law clerks $225 Paralegals $200 The firm received a retainer fee from the Debtor in the amount of $20,000. Michael Jay Berger, 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: Michael Jay Berger, Esq. Law Offices of Michael Jay Berger 9454 Wilshire Boulevard, 6th Floor Beverly Hills, CA 90212 Tel: (310) 271-6223 Fax: (310) 271-9805 Email: michael.berger@bankruptcypower.com About CICO Electrical CICO Electrical Contractors, Inc., an electrical contractor based in Paramount, Calif., filed a petition for Chapter 11 protection (Bankr. C.D. Calif. Case No. 21-19348) on Dec. 31, 2021, listing $785,610 in assets and $2,326,689 in liabilities. Cecelio Anthony Jaure, chief executive officer, signed the petition. Judge Vincent P. Zurzolo oversees the case. The Debtor tapped Michael Jay Berger, Esq., at the Law Offices of Michael Jay Berger as legal counsel. COLLECTIVE 545: 555 Broadway Property Up for Feb. 2 Auction ----------------------------------------------------------- In accordance with applicable provisions of the Uniform Commercial Code as enacted in New York, Gamma NY 555 Broadway LLC ("secured party") will sell of the limited liability company interests of Collective 545 Broadway LLC ("pledged entity") held by Collective Holdco 545 Broadway LLC to the highest qualified bidder at a public sale. The sale will take place on Feb. 2, 2022, at 2:00 p.m., via web-based video conferencing or telephonic conferencing program selected by the secured party. Remote log in credentials will be provided to registered bidders. Secured party's understanding is that the principal asset of the pledged entity is the parcels of real property commonly known as 555 Broadway, Brooklyn, New York, and 24 Boerum Street, Brooklyn, New York (Block 3076, lot 40, 22, 118, 18 and 101, respectively). The collateral will be sold to the highest qualified bidder; provided, however, the secured party reserves the right to cancel the sale in its entirety, or to adjourn the sale to a future date. The sale will be conducted by a licensed auctioneer. Interested parties who intend to bid on the collateral must contact Daniel O'Brien of Cushman & Wakefield at (212) 698-5584 or dan.obrien@cushwake.com, to receive the bidding procedures. COMMERCIAL METALS: Fitch Affirms 'BB+' LT IDR, Outlook Stable ------------------------------------------------------------- Fitch Ratings has affirmed Commercial Metals Company's (CMC) Long-Term Issuer Default Rating (IDR) at 'BB+'. Fitch also affirmed the senior unsecured notes at 'BB+'/'RR4', affirmed the company's senior secured revolving credit facility at 'BBB-' and revised the recovery rating to 'RR2' from 'RR1' in line with Fitch's updated criteria given the company has A/R securitizations in its capital structure. The Rating Outlook is Stable. The ratings reflect CMC's low-cost position and the flexible operating structure of its electric arc furnace (EAF) steel production. CMC benefits from exposure to strong construction demand regions within the U.S. and the European Union, which provides geographical diversification. The ratings also reflect Fitch's expectation total debt/EBITDA, below 1.5x in fiscal 2021, will generally remain at or below 2.0x barring any additional acquisitions. A commitment to maintaining an investment grade credit profile could lead to an upgrade of CMC's ratings. KEY RATING DRIVERS Conservative Leverage Profile: CMC has maintained total debt/EBITDA below 3.5x over the past seven years, despite operating in a highly cyclical industry that experienced a meaningful downturn during 2015-2016. Total debt/EBITDA was below 1.5x at fiscal 2021 and Fitch expects it to generally remain at or below 2.0x, barring any material leveraging acquisitions. Leverage Neutral Tensar Acquisition: In December 2021, CMC announced an acquisition of Tensar, a global provider of engineered solutions for subgrade reinforcement and soil stabilization used in road, infrastructure and commercial construction projects. Tensar generates around 60% of its sales in North America with additional exposure to EMEA and other parts of the world, providing additional geographic diversification. Fitch views the Tensar Acquisition as expanding upon CMC's existing operational mix while being complimentary to servicing CMC's current end markets. Tensar's exposure to economic cycles, through its exposure to the construction sector, is in line with how Fitch views CMC's current business profile. Tensar's 2021 EBITDA was approximately $60 million according to CMC, which is around 7.5% of CMC's Fitch-calculated fiscal 2021 EBITDA of $806 million. The acquisition size is significant but the majority of earnings will continue to be generated from CMC's steel production. Fitch believes the Tensar acquisition will benefit overall EBITDA margins as the company has significantly higher margins compared with CMC. Fitch expects CMC's total debt/EBITDA to peak around 2.0x in fiscal 2022, pro forma the transaction, and views the acquisition as neutral to CMC's credit ratings. CMC expects the acquisition to close in the first half of the 2022 calendar year with a purchase price of $550 million. Heavily Levered to Rebar: CMC, the largest producer of rebar in the U.S., is highly levered to nonresidential construction demand and rebar in particular. Fitch views CMC's heavy exposure to rebar as partially offset by its low-cost position and its fabrication operations, which provide a steady and consistent source of demand. Construction remained relatively resilient in 2020 as opposed to some other end markets such as auto and energy which were more heavily impacted by the pandemic. Fitch expects nonresidential construction to continue to be relatively resilient over the forecast period and will benefit from an infrastructure bill. International Footprint Provides Diversification: CMC's operations are concentrated primarily in strong nonresidential construction demand regions within the U.S. and secondarily in Central Europe. CMC's operations in Poland, which account for approximately 20% of total mill capacity, provide diversification from U.S. construction exposure. Europe EBITDA margins have contracted in fiscal 2020 partially driven by elevated imports in Europe but have since recovered significantly in FY21. Fitch expects Europe EBITDA margins to be benefit from EU infrastructure spend and CMC's investment in its Polish assets to lower the cost structure and provide a wider variety of products to the markets it serves. Vertically Integrated Business Model: CMC's vertically integrated business model and focus on pull-through volumes benefits consistent capacity utilization and positions the company as a low-cost producer. Approximately 50%-60% of scrap from CMC's recycling operations gets sold to CMC's mill operations. Additionally, nearly 100% of steel supply for its fabrication operations was sourced internally in fiscal 2020. CMC's recycling facilities are often located in close proximity to mills, resulting in reduced transportation costs. Mills also have a steady and captive source of demand through internal shipments to fabrication facilities leading to consistent utilization rates across these segments. Fitch believes the company's vertically integrated model also provides some margin resiliency through the cycle. Mills and fabrication operations tend to have lower margins in periods of rapidly increasing scrap prices, whereas recycling operations tend to perform well under the same conditions. The inverse correlation and timing difference of peak profitability during volatile scrap and rebar price environments across different segments helps provide some insulation against price volatility. FCF Provides Flexibility: In FY20, CMC announced its intention to construct a new 300,000-ton mini mill in Arizona. The mill is expected to cost $300 million to construct with expected completion in early 2023. In 1Q FY22, CMC announced a $350 million share repurchase program, which Fitch expects to be exhausted over the next year or two. Fitch believes CMC's stable margin profile and minimal capex requirements provides the ability to consistently generate FCF, which allows CMC to fund growth internal growth and shareholder returns largely with cash. In addition, in December 2021, CMC completed a sale of a large parcel of California land for $313 million, benefitting liquidity during a period of elevated capex. DERIVATION SUMMARY Commercial Metals is smaller in terms of annual shipments compared with EAF steel producer Steel Dynamics (BBB/Stable) and majority blast furnace producers United States Steel Corporation (BB-/Positive) and Cleveland-Cliffs (BB-/Positive) although the flexible operating structure of its EAF production and CMC's low-cost position results in much less volatile profitability and more consistent leverage metrics. Commercial Metals has lower product diversification compared with Steel Dynamics, U. S. Steel and Cleveland-Cliffs given its concentration in rebar although has geographic diversification through its European operations. CMC generally has lower margins, although more stable through-the-cycle margins and leverage metrics, compared with U. S. Steel and Cleveland-Cliffs and less favorable margins and leverage compared with Steel Dynamics. KEY ASSUMPTIONS Fitch's key assumptions within the rating case for the issuer include: -- Rebar prices decline in FY23 and remain relatively flat thereafter; -- Annual North America external shipments of around 3 million tons; -- EBITDA margins in the 11%-12% range; -- Elevated capex of $520 million in FY22 associated with the construction of the new Arizona mini mill, declining to roughly $200 million per year thereafter; -- Flat dividends and no additional acquisitions; -- Share repurchases of around $200 million per year. RATING SENSITIVITIES Factors that could, individually or collectively, lead to positive rating action/upgrade: -- Commitment to maintaining a conservative financial policy and investment grade credit profile; -- Total debt/EBITDA sustained below 2.5x; -- EBITDA margins sustained above 8%, representing an improved pricing environment for rebar, further cost reduction, and/or an expansion of the product portfolio into higher value-add mix. Factors that could, individually or collectively, lead to negative rating action/downgrade: -- Total debt/EBITDA sustained above 3.5x; -- Prolonged negative FCF driven by a material reduction in steel demand or an influx of rebar imports causing rebar prices to be depressed for a significant time period; -- Depressed metal margins leading to overall EBITDA margins sustained below 6%. BEST/WORST CASE RATING SCENARIO International scale credit ratings of Non-Financial Corporate issuers have a best-case rating upgrade scenario (defined as the 99th percentile of rating transitions, measured in a positive direction) of three notches over a three-year rating horizon; and a worst-case rating downgrade scenario (defined as the 99th percentile of rating transitions, measured in a negative direction) of four notches over three years. The complete span of best- and worst-case scenario credit ratings for all rating categories ranges from 'AAA' to 'D'. Best- and worst-case scenario credit ratings are based on historical performance. LIQUIDITY AND DEBT STRUCTURE Solid Liquidity: At Aug. 31, 2021, CMC had cash and cash equivalents of USD498 million and USD397 million available under its USD400 secured revolving credit facility due 2026. In addition, the company has approximately USD150 million available under its USD150 million U.S. accounts receivable securitization program and a PLN288 million (USD49 million available as of Aug. 31, 2021) accounts receivable securitization program. CMC also has approximately USD73 million of availability under its Poland credit facilities. ISSUER PROFILE CMC manufactures, recycles, and markets steel and metal products, related materials and services through a network of facilities in the United States and Poland. The company manufacturers long steel products, primarily rebar, which is particularly tied to construction demand. 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. CROSS COUNTRY HOLDINGS: March 30 Plan Confirmation Hearing Set -------------------------------------------------------------- On Oct. 15, 2021, debtor Cross Country Holdings Partnership, AGP, submitted an Amended Disclosure Statement and Amended Chapter 11 Plan. On Jan. 4, 2022, Judge Martin R. Barash approved the Disclosure Statement and ordered that: * March 4, 2022, at 5:00 p.m., is the deadline for the submission of ballots accepting or rejecting the Plan. * March 4, 2022, is the deadline to file any objections to confirmation of the Plan. * March 18, 2022, is the deadline for CCHP to file reply briefs to objections to confirmation of the Plan. * March 30, 2022, at 1:30 p.m., via ZoomGov is the hearing to consider confirmation of the Plan. A copy of the order dated Jan. 4, 2022, is available at https://bit.ly/34K7Ust from PacerMonitor.com at no charge. General Insolvency Counsel for the Debtor: Raymond H. Aver, Esq. Law Offices of Raymond H. Aver, APC 10801 National Boulevard, Suite 100 Los Angeles, CA 90064 Tel: (310) 571-3511 Email: ray@everlaw.com About Cross Country Holdings Partnership Cross Country Holdings Partnership, AGP, filed a voluntary petition for reorganization under chapter 11 of the Bankruptcy Code (Bankr. C.D. Cal. Case No. 20-11365) on August 3, 2020, disclosing $1,000,001 to $10 million in both assets and liabilities. The Debtor is represented by Raymond H. Aver, Esq. at Law Offices Of Raymond H. Aver. CUENTAS INC: Signs Deal to Acquire Mango Tel, SDI for $3.2 Million ------------------------------------------------------------------ Cuentas, Inc. has signed a Binding Letter of Intent with sellers, Mango Tell LLC and SDI Black 011 LLC, and owners, Sohel Kapadia and Saheda Kapadia, for the potential acquisition of 100% of the assets of Mango Tel LLC and SDI Black 011 in exchange for $3.2 million. The LOI provides that Cuentas will deposit $2 million into an escrow account while a definitive purchase and sale agreement is drafted and negotiated. The parties agree that the LOI is binding on each of them and that they will use their best efforts and good faith to enter into the agreement with terms and conditions consistent with this agreement. Pursuant to the agreement, Cuentas will acquire substantially all of the assets of SDI Black, and Mango Tel which also include the Mango Mobile MVNO, Black Wireless MVNO, Black 011 Long distance platform and operations and the SDI distribution platform and network of over 31,000 bodegas and convenience stores. Following the execution of the LOI, Cuentas will form a company into which all of the purchased assets will be transferred and, following the closing of the purchase and sale, all of the interests in Newco will be transferred to the company. The sellers and the oOwners have agreed to apply the purchase price paid by Cuentas to amounts due to the repay U.S. Small Business Administration loans taken by the sellers and that owners will pay an additional $1,000,000 towards repayment of additional SBA loans. Cuentas has agreed to offer employment agreements to certain Fisk/SDI key employees. The sellers and the owners have agreed to indemnify and hold harmless Cuentas from and against any liability for any amount owing to the sellers' creditors with respect to the purchased assets or the business operation of the sellers being transferred to buyer pursuant to this agreement, which liability arose prior to the transfer of the purchased assets and business operations from the sellers to the buyer. Cuentas agrees to indemnify and hold the sellers harmless from and against any liability for any amount owing with respect to the purchased assets and business operations of the sellers transferred by the sellers to buyer pursuant to this agreement, which liability arises subsequent to the transfer of the purchased assets and business operations from the sellers to the buyer under this agreement. The sellers have represented that 2021 gross revenues of SDI Black and Mango Tel were at least $9 million. Cuentas will have the right to cancel the LOI if 2021 gross revenues are materially less than $9 million. About Cuentas Headquartered in Miami, Florida, Cuentas, Inc. -- http://www.cuentas.com-- is a Fintech company utilizing technical innovation together with existing and emerging technologies to deliver accessible, efficient and reliable mobile, new-era and traditional financial services to consumers. Cuentas is proactively applying technology and compliance requirements to improve the availability, delivery, reliability and utilization of financial services especially to the unbanked, underbanked and underserved segments of today's society. Cuentas reported a net loss attributable to the company of $8.10 million for the year ended Dec. 31, 2020, a net loss attributable to the company of $1.32 million for the year ended Dec. 31, 2019, and a net loss of $3.56 million for the year ended Dec. 31, 2018. As of Sept. 30, 2021, the Company had $14.97 million in total assets, $3.08 million in total liabilities, and $11.89 million in total stockholders' equity. DARREN MARTIN: Unsecured Creditors to Get $3K over 3 Years ---------------------------------------------------------- Darren Martin Inc., filed with the U.S. Bankruptcy Court for the Northern District of Georgia a Plan of Reorganization dated Jan. 4, 2022. As of the Petition Date, Debtor owned four properties: (a) 1579 Montreat Ave, Atlanta, GA 30311 ("Montreat Property"), (b) 814 Greenhedge Way, Stone Mountain, GA 30088 ("Greenhedge Property"), (c) 2115 Honeysuckle Lane, Atlanta, GA 30311 ("Honeysuckle Property"), and (d) 2041 Albany Drive, Atlanta, GA 30311 ("Albany Property"). (Montreat Property, Greenhedge Property, Honeysuckle Property, and Albany Property are collectively referred to as the "Properties"). This Plan deals with all property of Debtor and provides for treatment of all Claims against Debtor and its property. Class 4 consists of the Secured Claim of Kirkland Financial LLC. Kirkland has relief from the automatic stay to pursue all state law remedies against the Albany Property and the Montreat Property as a result of an Order entered on October 19, 2021. Exercise of such rights shall constitute the realization of the indubitable equivalent of payment of the Class 4 Secured Claim and shall be in full satisfaction of the Class 4 Secured Claim, provided Debtor may pay the Class 4 Secured Claim as allowed by the Court prior to the exercise of such rights in full satisfaction of Kirkland's Class 4 Secured Claim and Kirkland shall thereafter release any and all Liens, Claims and encumbrances regarding Debtor's property including without limitation the Kirkland Collateral. Class 5 consists of the Secured Claims of Pinnacle Real Estate in the asserted amount of $150,900. Commencing on the 28th day of the first full month following the Effective Date and continuing by the 28th day of each subsequent month, Debtors shall pay Pinnacle monthly payments on the Class 5 Secured Claim in the amount of $527.71 and interest shall accrue on the principal balance of the Class 5 Secured Claim at the rate of 4.25% per annum. Debtor shall continue to make such $527.71 payments on the 28th day of each month through and including the 24th full month following the Effective Date, when Debtors will make a final payment of any accrued but unpaid interest as well as any remaining principal outstanding on the Class 5 Secured Claim. Class 6 consists of the Secured Claims of TDL Capital Partners LLC. TDL filed Proof of Claim No. 16 on October 6, 2021 in the asserted amount of $94,805. Commencing on the 28th day of the first full month following the Effective Date and continuing by the 28th day of each subsequent month, Debtors shall pay TDL monthly payments on the Class 6 Secured Claim in the amount of $208.96 per month, and interest shall accrue on the principal balance of the Class 6 Secured Claim (i.e. $59,000) at the rate of 4.25% per annum. Debtor shall continue to make such $208.96 payments on the 28th day of each month through and including the 24th full month following the Effective Date, when Debtors will make a final payment of any accrued but unpaid interest as well as any remaining principal outstanding on the Class 6 Secured Claim. Class 7 consists of the Secured Claims of INVESTA SERVICES FOR GSRAN−Z, LLC. * Class 7A: On the Effective Date, Investa shall have relief from automatic stay as to the Albany Property and Montreat Property (collectively, the "Class 7A Collateral") to exercise all remedies as to under applicable nonbankruptcy law. Exercise of such rights shall constitute the realization of the indubitable equivalent of payment of the Class 7A Secured Claims and shall be in full satisfaction of the Class 7A Secured Claims, provided Debtor may pay the Class 7A Secured Claim as allowed by the Court prior to the exercise of such rights in full satisfaction of Investa's Class 4 Secured Claim and Investa shall thereafter release any and all Liens, Claims and encumbrances regarding Debtor's property including without limitation the Class 7A Collateral. * Class 7B: Commencing on the 28th day of the first full month following the Effective Date and continuing by the 28th day of each subsequent month, Debtors shall pay Investa monthly payments on the Class 7B Secured Claim in the amount of $166.00 per month, with interest accruing on the principal balance of the Class 7B Secured Claim at the rate of 4.25% per annum. Debtor shall continue to make such $166.00 payments on the 28th day of each month through and including the 36th full month following the Effective Date, when Debtors will make a final payment of any accrued but unpaid interest as well as any remaining principal outstanding on the Class 7B Secured Claim. Class 8 consists of general unsecured claims. Debtor anticipates and projects but does not warrant the following Holders of Class 8 Claims: Internal Revenue Service (Proof of Claim No. 1 in the amount of $16,170) and Small Business Association (Proof of Claim No. 14 in the amount of $31,987). Debtor will pay Allowed Unsecured Claims a pro-rata share of the following monthly distributions commencing on the first anniversary of the Effective Date and continuing on the second and third anniversaries in the annual amount indicated: Year 1 = $1,000; Year 2 = $1,000; and Year 3 = $1,000. This Class shall have $3,000 estimated total distribution. Class 10 consists of the Interest Claims. Darren Martin shall retain his interest of the shares in Debtor. The source of funds for the payments pursuant to the Plan is Debtor's operations or funding by Debtor's principal. Debtor will continue its prepetition business and use this income to pay creditors under the Plan. A full-text copy of the Plan of Reorganization dated Jan. 04, 2022, is available at https://bit.ly/3HUl9VA from PacerMonitor.com at no charge. Attorney for Debtor: Nathan T. Juster Jones & Walden LLC 699 Piedmont Ave. NE Atlanta, GA 30308 Telephone: (404) 564-9300 Email: njuster@joneswalden.com About Darren Martin Darren Martin, Inc., is a Georgia corporation that renovates and sells residential real estate. It has no employees. Darren Martin, Inc., filed a voluntary petition for Chapter 11 protection (Bankr. N.D. Ga. Case No. 21-55682) on July 30, 2021, listing as much as $1 million in both assets and liabilities. Darren Martin, chief executive officer, signed the petition. Judge Paul Baisier oversees the case. Jones & Walden, LLC, serves as the Debtor's legal counsel while Viking CPA Group serves as the accountant. DAVEY KENT: Unsecureds to Get Nothing in Amended Plan ----------------------------------------------------- Davey Kent, Inc., submitted an Amended Plan of Reorganization dated Jan. 04, 2022. Davey Kent is involved in litigation with Malcolm Drilling Company based in San Francisco, CA. The litigation has been stayed as of the Petition Date. Malcolm has filed an unsecured claim, Claim No. 14, in the amount of $507,080.17 and a duplicate claim, Claim No. 19, in the same amount. Davey Kent's financial projections are based on over 10 years of historical data which has been conservatively used to develop a realistic projection while taking into account its new product development. Recent shipments and new sales of these products indicate that this strategy is working and that its conservative planned projections are, in fact, achievable. In addition, in December, 2021, the Debtor's landlord, Nypano Company LLC, sold its real estate to HTB. Nypano did not assume and assign the lease as a part of the sale to HTB. Davey Kent intends to negotiate a new lease with a lower monthly payment with HTB, thereby reducing Davey Kent's monthly expenses Davey Kent believes that this will lead to a stronger organization as it emerges from reorganization. The final Plan payment is expected to be paid on the Third Anniversary from the Effective Date of this Plan. This Plan proposes to pay creditors of the Debtor from the future cash flow of its business operations. Non-priority unsecured Creditors holding Allowed Claims are unlikely to receive distributions under the Plan. This Plan provides for full payment of administrative expenses and priority claims. Class 2 consists of all claims of Hometown Bank. Debtor Davey Kent has been making certain adequate protection payments on Hometown Bank's Claim pursuant to terms set forth in the Agreed Order Approving Continued Use of Cash Collateral and Providing Adequate Protection dated July 23, 2021. The value of the collateral securing the Allowed Claim of HTB is less than the balance owed to HTB, as such, the Allowed Claim of HTB will be bifurcated into a secured and unsecured claim. The secured portion of HTB's claim shall be allowed in the amount of $250,000 with an interest rate of 5% per annum, which claim may be subordinated, up to the maximum amount of $150,000, to any new working capital obtained by the Reorganized Debtor after the Effective Date. Thus, the Reorganized Debtor will pay the secured portion of the Allowed Claim of HTB over 3 years (1) in monthly payments of $2,000 and (2) an additional annual payment of its projected disposable income, regardless of its actual disposable income, available after payment of Administrative and Priority Tax Claims and the repayment of up to $150,000 in working capital obtained by the Reorganized Debtor after the Effective Date, such that the Debtor will make an additional payment to HTB of $2,000 before the end of year 1; an additional payment of $4,000 before the end of year 2; and an additional payment of $2,805 before the end of year 3. The remaining balance of the secured portion of the Allowed Claim shall be paid in full in the month following 3 years after the Effective Date. The unsecured portion of the Allowed Claim will be paid pro rata with the Claims in class 3. Class 3 consists of General Unsecured Claims. Allowed Claims in Class 3 will not receive a distribution under the plan, as the Debtor's projected disposable income after and subject to the payment of Administrative Expenses and Priority Tax Claims is committed to pay Claims in Class 3. No interest shall accrue on any Claims in this Class. The Plan will be implemented and funded through the future business operations of the Reorganized Debtor. As a part of its reorganization, the Reorganized Debtor does not contemplate the sale of any assets except that assets may be sold to the extent that it is later determined they are no longer of value to the Reorganized Debtor's business operation or their useful life for the Reorganized Debtor has expired. A full-text copy of the Amended Plan of Reorganization dated Jan. 4, 2022, is available at https://bit.ly/3fdZH1B from PacerMonitor.com at no charge. About Davey Kent Inc. Davey Kent, Inc., a manufacturer of industrial machinery in Kent, Ohio, filed a petition for Chapter 11 protection (Bankr. N.D. Ohio Case No. 21-51022) on July 2, 2021, listing as much as $10 million in both assets and liabilities. Davey Kent President J. Thomas Myers, II signed the petition. Judge Alan M. Koschik oversees the case. Brouse McDowell, LPA and Escott & Company, LLC serve as the Debtor's bankruptcy counsel and accountant, respectively. DT AUTO: DBRS Takes Rating Actions on 7 Trust Transactions ---------------------------------------------------------- DBRS, Inc. upgraded 12 ratings, confirmed 12 ratings, and discontinued four ratings as a result of repayment from seven DT Auto Owner Trust transactions. The Affected Ratings are available at https://bit.ly/3eK2MGy The rating actions are based on the following analytical considerations: -- The transaction assumptions consider DBRS Morningstar's baseline macroeconomic scenarios for rated sovereign economies, available in its commentary "Baseline Macroeconomic Scenarios For Rated Sovereigns December 2021 Update", published on December 9, 2021. These baseline macroeconomic scenarios replace DBRS Morningstar's moderate and adverse COVID-19 pandemic scenarios, which were first published in April 2020. The baseline macroeconomic scenarios reflect the view that recent COVID-19 developments, particularly the new Omicron variant with subsequent restrictions, combined with rising inflation pressures in some regions, may dampen near-term growth expectations in coming months. However, DBRS Morningstar expects the baseline projections will continue to point to an ongoing, gradual recovery. -- The collateral performance to date and DBRS Morningstar's assessment of future performance, including upward revisions to the expected cumulative net loss (CNL) assumptions. -- The transaction parties' capabilities with regard to origination, underwriting, and servicing. -- The transactions' capital structure and form and sufficiency of available credit enhancement. The current level of hard credit enhancement and estimated excess spread are sufficient to support the DBRS Morningstar-projected remaining CNL assumption at a multiple of coverage commensurate with the ratings. DYNASTY ACQUISITION: Fitch Affirms 'B-' LT IDR, Outlook Stable -------------------------------------------------------------- Fitch Ratings has affirmed Dynasty Acquisition Co. Inc.'s (StandardAero; SA) 'B-' Long-Term Issuer Default Rating. Fitch has also affirmed the long-term ratings of the company's ABL revolver at 'BB-'/'RR1', first lien secured revolver and first lien term loan at 'B+'/'RR2'. The agency also has assigned the company's incremental term loan a long-term rating of 'B+'/'RR2'. The Rating Outlook is Stable. The rating and Outlook are supported by SA's strong market position, diversification, adequate FCF, and the high degree of regulation on aircraft maintenance, which is likely to increase over time. Revenue is also typically highly visible, which allows the company to manage working capital effectively. Fitch believes SA's liquidity will remain adequate at between $500 million and $650 million over the horizon as it manages the current downturn, while Fitch forecasts FCF margin will trend around or greater than 0.5% to 1.0% per year. Fitch believes SA's rating trajectory is generally positive and the company could experience upward momentum if the industry continues to stabilize, contributing towards consistently positive cash flow and lower leverage for the company. Concerns to the rating include the company's high leverage along with the potential weakness and fragility of the cyclical aviation industry's recovery from the pandemic. Airlines retiring older aircraft, which typically require much greater maintenance, repair and operation (MRO) services, is also a concern, though Fitch incorporates steadily paced retirements into its forecasts. KEY RATING DRIVERS High Leverage, Some Deleveraging Capacity: Fitch forecasts SA's 2021 leverage (debt/EBITDA) will be greater than 8.0x, which is high for the 'B-' rating, before fully incorporating the Signature Aviation MRO acquisition. However, Fitch expects leverage will trend towards the mid-6.0x level by 2023 as air traffic and flight capacity begin to return to 2019 levels. The agency assigns a relatively high importance to the company's financial structure given the relative fragility of the aviation industry, although Fitch also believes this concern is partially offset by the company's strategic profile, strong market position, and capacity to reduce debt over the next few years given its cash flow generation. Risks to deleveraging include potential debt-funded acquisitions, terming out additional ABL balances, failure to execute on outstanding contracts, or extended periods of negative FCF. Predictable Revenue, Temporary Disruption: SA's ratings in the 'B' category are supported by its relatively predictable revenue during a normal operating environment due to highly regulated aircraft and engine maintenance requirements. While this visibility was temporarily disrupted during the pandemic due to airlines taking a significant portion of their fleets out of service and delaying external maintenance by utilizing a greater proportion of spares, overall visibility on customers' needs has improved materially since mid-2020. Fitch forecasts the company's revenue will likely approach 2019 levels towards the end of 2023 as passenger traffic and flight capacity rebound. Strong Market Position, Supported by Certifications: Fitch believes SA's market position is strong and defensible. It is one of the largest independent commercial aviation MRO companies in the world, and has longstanding relationships with the largest aerospace engine OEMs. The company's main focus is engine repair and overhaul for commercial, military and business jet aircraft. Performing such work requires OEM authorizations and regulatory certifications -- one for each engine program -- that are expensive and take a significant amount of time for new market entrants to acquire. Fitch believes the company's wide range of program certifications, coupled with its strong OEM relationships, is a major differentiator compared with peers and creates a defensible barrier against competition. Most of SA's contracts span more than 10 years and often last through the life of an engine. When the contacts come up for re-negotiation, SA has been able to retain all of its contracts due to the company's consistent execution and longstanding customer relationships. During a typical year, approximately 50% of total revenue is provided under long-term agreements, with the other 50% being short cycle sales, mostly with long-term customers. Organic Growth Expected Post-Recovery: Fitch expects SA's revenue will continue to grow after recovering from the pandemic-stemmed downturn as it takes advantage of legacy certifications. The agency believes future revenue and cash flow will be supported by engine programs such as the PW127, CF34 and CFM56, for which MRO volumes are expected to grow significantly over the next several years. In particular, the CFM56 is an important program, as it is the largest engine program in the industry, and demand for additional MRO capacity will be high over the foreseeable future. Positive FCF Expected: Fitch projects SA will generate positive FCF over the next three to four years on average despite the current broader market headwinds. Fitch believes this is a significant factor supporting the Stable Outlook. During 2020 SA realized some cash flow benefit from working capital as inventory is drawn down, and Fitch expects modest cash inflows in 2021 as well. As revenue and EBITDA continues to recover in 2022, these working capital flows will likely reverse and become a cash use through 2023 while the company replenishes to meet increased demand, though overall FCF should remain breakeven to positive. Contract and Geographic Diversification: Fitch believes diversification across programs, geography and end markets further reduces the risks arising from a loss of any individual contract. The company estimates it has a top three market share on more than a dozen of the world's largest engine programs, including the CF34, PW 100/150 and CFM56, which should continue to grow over the next several years. SA has more than 40 locations in 10 countries, with around 35%-40% of sales occurring outside of the U.S. It also services several end-markets including military, energy, helicopters, airlines & fleets, and business aviation. Defense revenue has particularly mitigated some of the negative impact of the current aviation downturn. Execution Risk: Fitch considers continued operational execution to be a priority for SA. Fitch expects instances of poor execution would likely diminish the company's currently strong reputation and could result in customers switching to SA's competitors. Mitigating this risk is the fact that SA does not have a history of material contract cancellations over the past several years and has a very experienced management team, which Fitch believes would be capable of navigating potential challenges. Customer Concentration Enhances Execution Risk: Fitch believes the likelihood of significant customer loss is negligible in the near term, though the potential future risk is amplified by the company's degree of customer concentration, despite its diversified portfolio of contracts and certifications. Fitch estimates around 40% of revenue is derived from the company's top four customers, with General Electric Company (GE) and Rolls Royce each representing between 15% and 20% of sales. While much of the revenue derived from these top customers is subcontracted work stemming from other end-customers, poor execution on one or more contracts for one these major customers could lead to reduced work allocation. The loss of one of these OEMs as customers would likely result in negative rating momentum. Supplemental Acquisitions: Fitch expects SA will continue to supplement organic growth with incremental bolt-on acquisitions, in line with its strategy over the past few years. Fitch believes the company will be able to partially fund future purchases with internally generated cash. Fitch believes the company could pursue tactical transactions to acquire additional certifications or improve diversification over time. The company has recently drawn on its ABL facility to fund transactions, and the facility could remain a funding source depending on the magnitude of the transactions, though Fitch anticipates the company will prioritize liquidity over acquisitions in the near term. Necessity of Future Authorizations: While the company has historically maintained strong relationships with customers and OEMs, Fitch recognizes the company must continue to win future authorizations over the long term to maintain operations. Fitch believes the OEMs benefit from SA absorbing much of the required demand for MRO services on maturing engines so OEMs can focus their resources on new development programs. However, the OEMs maintain a certain degree of buying power over SA, and a change in the relationship could hinder the company's ability to win future authorizations as maturing engines exit the fleet. DERIVATION SUMMARY The rating and Stable Outlook are supported by the company's lesser degree of cyclicality compared to OEs, and its stable and predictable revenue stream, which Fitch considers strong for the rating. The company's leverage and financial structure are important factors to the rating, and have remained weak since mid-2020. The company's leading market position was also a consideration in deriving the rating, and is reinforced by the company's portfolio of certifications and diversification. No country ceiling, parent/subsidiary linkage or operating environment factors were in effect for these ratings. StandardAero is well positioned as the largest independent MRO provider in the world, although competition exists from OEMs and in-house airline MRO operations, including higher-rated GE (BBB/Stable), Honeywell International, Inc. (A/Stable), Rolls Royce plc (BB-/Stable), MTU Aero Engines AG (BBB/Stable), and Delta Air Lines (BB+/Negative), among others. The NORDAM Group LLC (CCC+) is also a peer, though SA maintains a more diversified product portfolio, stronger cash flow and a stronger market position. Meanwhile, Sequa Corp. (CCC+) has similar profitability to SA with mid-teen EBITDA margins, and slightly higher leverage. Free cash flow has also been significantly negative over several years, and is expected to remain negative until 2023. Overall SQAA maintains a materially more constrained credit profile than SA. KEY ASSUMPTIONS Fitch's key assumptions within its rating case for the issuer include: -- Overall revenue stabilizes in 2021 and rebounds in 2022 and 2023 as air traffic and flight capacity approaches 2019 levels; Signature acquisition results in proforma revenue growing by mid-teens in 2021; -- Military end market relatively stable over the rating horizon; business jet segment benefits heading into 2022, but could experience modest pullback in 2023 or 2024; freighter market remains strong; -- EBITDA margins remain pressured in early 2021 as the company navigates the current downturn, then trends towards 2019 levels in 2022 and 2023; -- Cash outflows from working capital between 2021 and 2023 as the company builds inventory back up to meet resumed demand; -- Capex in 2021 is predominantly maintenance-related; growth capex resumes in 2022; -- Forecasted debt repayment only includes scheduled amortization; -- Company completed the acquisition of Signature's MRO business in July 2021 for $230 million, financed with an incremental term loan; Modest additional acquisitions assumed in late 2021 and 2022; -- No dividends projected in Fitch's forecasts. Recovery Analysis The recovery analysis assumes that SA would be considered a going-concern in bankruptcy and that the company would be reorganized rather than liquidated. A 10% administrative claim is assumed in the recovery analysis. Fitch assumes $410 million as the going-concern EBITDA in the analysis. The agency's assumption represents an average of Fitch's forecasted EBITDA for SA over the next two years, which Fitch believes would be a reasonable going-concern expectation upon emergence from a hypothetical bankruptcy given the severe distress that the pandemic caused to the aviation industry. Fitch believes a GC EBITDA greater than 2021 EBITDA is appropriate in this instance, due to the highly cyclical nature of the industry, particularly following one of the greatest aviation downturns in history as a result of the coronavirus pandemic. In Fitch's recovery analysis, Fitch assumes the catalyst for a restructuring would likely be liquidity/refinancing issues, rather than a further deterioration in the business. However, other scenarios could contribute to the company's a significant deterioration, including one or more of: a significantly prolonged recovery from the coronavirus pandemic, which exceeds Fitch's forecasted industry recovery by one to two years; poor contract execution causes several periods of significant cash outflows and a materially negative hit to the company's reputation; or the company incurs significant cash costs resulting from failure to integrate one or more acquisitions. Fitch assumes SA will receive a going-concern recovery multiple of 6.5x EBITDA under this scenario. Fitch considers this multiple to be toward the upper middle range of recovery multiples assigned to companies in the Aerospace & Defense sector. Fitch's recovery assumptions are based on SA's industry-leading reputation, variable cost structure, solid and predictable backlog, diversified contract and certification portfolio, strong market position, and high industry barriers to entry. Each of these factors would likely support the company's ability to recover from severe distress in the case of bankruptcy, at a level greater than 2021 EBITDA. Fitch also considered the meaningful execution risk and potential for cost overruns, though unlikely. Most of the defaulters in the Aerospace & Defense sector observed by Fitch in recent bankruptcy case studies were smaller in scale, had less diversified product lines or customer bases and were operating with highly leveraged capital structures. Fitch generally assumes a fully drawn first lien revolver in its recovery analyses since credit revolvers are tapped as companies are under distress. Fitch assumed the company's $400 million ABL revolver was 85% drawn, which demonstrates the contraction of the borrowing base as a company becomes distressed. This is in line with other examples observed in bankruptcy studies. The 'BB-' rating and Recovery Rating of 'RR1' on the ABL revolver are based on Fitch's recovery analysis under a going-concern scenario, which indicates outstanding recovery prospects. The 'B+' rating and Recovery Rating of 'RR2' on the company's first lien term loan and senior secured revolver would indicate strong recovery prospects for the credit facility. RATING SENSITIVITIES Factors that could, individually or collectively, lead to positive rating action/upgrade: -- Leverage (total debt/EBITDA) around or below 6.0x for a sustained period; -- Structural improvement in the aviation market or SA's operations leads to sustained positive FCF; -- FFO Interest Coverage ratio greater than 1.7x over a sustained period. Factors that could, individually or collectively, lead to negative rating action/downgrade: -- Material contract cancellations caused by weakened reputation; -- Sustained negative FCF or weakened liquidity position, which could include greater than 50% draw on its ABL facility; -- FFO Interest Coverage ratio less than 1.2x over a sustained period. BEST/WORST CASE RATING SCENARIO International scale credit ratings of Non-Financial Corporate issuers have a best-case rating upgrade scenario (defined as the 99th percentile of rating transitions, measured in a positive direction) of three notches over a three-year rating horizon; and a worst-case rating downgrade scenario (defined as the 99th percentile of rating transitions, measured in a negative direction) of four notches over three years. The complete span of best- and worst-case scenario credit ratings for all rating categories ranges from 'AAA' to 'D'. Best- and worst-case scenario credit ratings are based on historical performance. LIQUIDITY AND DEBT STRUCTURE Adequate Liquidity: Fitch believes that StandardAero's liquidity will fluctuate between $500 million and $650 million over the rating horizon, comprised of between $75 million and $150 million in cash, as well as a combination of availability under its ABL facility and revolving credit facility. Liquidity, along with internally generated cash, should be sufficient to cover near term expenses such as working capital growth, debt amortization and capex. The company's capital structure includes a senior secured ABL facility, senior first lien revolver, senior first lien term loan B and senior first lien incremental term loan. The company also has private unsecured notes outstanding. 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. Previously Dynasty Acquisition had an ESG Relevance Score of '4' for Financial Transparency due to the risk of intermittent reporting, which has since been revised to a score of '3'. ISSUER PROFILE StandardAero, Inc. is the world's largest independent provider of MRO services for the commercial, business jet and military aviation markets. ENSTAR FINANCE: Fitch Rates $500MM Junior Sub. Notes 'BB+' ---------------------------------------------------------- Fitch Ratings has assigned a 'BB+' rating to the $500 million 5.5% fixed-rate reset junior subordinated notes due 2042 issuance by Enstar Finance LLC, a wholly owned subsidiary of Enstar Group Limited (Long-Term Issuer Default Rating (IDR) BBB/Positive; senior unsecured notes BBB-). Enstar Group has fully and unconditionally guaranteed the notes on a junior subordinated basis. The new issuance ranks equally with Enstar Finance's existing junior subordinated notes and is thus rated equivalently. KEY RATING DRIVERS The company intends to use the net proceeds from the offering to repay at maturity the outstanding $280 million of Enstar Group 4.5% senior notes due March 2022, with any remaining net proceeds for general corporate purposes, including, but not limited to, funding for acquisitions, working capital and other business opportunities. Pro forma for the $500 million new issuance and $280 million repayment, Enstar Group's financial leverage ratio (FLR) increases to 23.2% from 21.1% as of Sept. 30, 2021. Fitch considers the junior subordinated notes to have "minimal" nonperformance risk with notching set two below the Enstar Group IDR based on 'Poor' recovery expectations, with no additional notching for nonperformance. Fitch views the junior subordinated debt as dated deferrable securities, receiving 100% debt treatment in the FLR. Fitch expects the notes to qualify for Tier 2 treatment by the Bermuda Monetary Authority and as such would receive 100% regulatory override equity credit in Fitch's Prism factor-based model. RATING SENSITIVITIES Factors that could, individually or collectively, lead to positive rating action/upgrade: -- Maintaining an FLR at or below 25%; fixed-charge coverage of at least 8.0x; risk-adjusted capital growth with a capitalization score under Fitch's Prism factor-based model of at least 'Very Strong'; a net leverage ratio at or below 2.5x; -- Any potential future upgrade would likely be limited to one notch, however, due to the nature of the company's business model in acquiring large blocks of runoff business that can materially alter the company's balance sheet. While this risk has been managed well to date, it adds potential capital, earnings and business/exposure mix variability at levels greater than experienced by most insurance companies operating under more traditional business models. Factors that could, individually or collectively, lead to negative rating action/downgrade: -- An Outlook revision to Stable could occur if fixed-charge coverage does not improve to at least near 6x in 2021 or if Enstar is no longer meeting the other positive rating sensitivities. -- Failure to generate continued material levels of favorable non-life runoff reserve development; additional capital needs to support the current runoff business; significant new transaction(s) that Fitch views as materially increasing the overall risk profile; net leverage ratio above 3.5x; FLR approaching 30%; fixed-charge coverage below 5.0x; -- Enstar's hybrid securities ratings could also be lowered by one notch to reflect higher nonperformance risk should Fitch views Bermuda's regulatory environment as becoming more restrictive in its supervision of (re)insurers with respect to hybrid features. 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. BEST/WORST CASE RATING SCENARIO International scale credit ratings of Financial Institutions and Covered Bond 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. ENSTAR GROUP: S&P Rates $500MM Junior Subordinated Notes 'BB+' -------------------------------------------------------------- S&P Global Ratings today said it assigned its 'BB+' issue rating to Enstar Group Ltd.'s (BBB/Positive/--) $500 million 5.5% junior subordinated notes due 2042. The notes will be issued by Enstar Finance LLC, a wholly-owned financing subsidiary of Enstar, and will be fully and unconditionally guaranteed on a junior subordinated basis by Enstar Group Ltd. The 'BB+' issue rating is two notches below S&P's long-term issuer credit rating on Enstar, reflecting subordination and the mandatory deferability of interest payments. Although the notes are scheduled to mature in 2042, the redemption is subject to the Bermuda Monetary Authority's redemption requirement, wherein Enstar needs to maintain the "enhanced capital requirement" (ECR) above the threshold immediately before or after the redemption of the security. If the ECR requirement is not satisfied, the principal redemption at the scheduled maturity date will be deferred until the company replenishes its regulatory capital (i.e., ECR). A failure to repay the notes on the scheduled maturity date would not constitute an event of default under the indenture and would not accelerate any repayment on the notes. These notes are subordinated to all other obligations of Enstar's subsidiaries, including policyholder obligations, and they will rank junior to all existing and future secured and unsecured senior and subordinated indebtedness. S&P assigns intermediate equity content to these junior subordinated notes. The company intends to use the net proceeds from this offering to fully repay its outstanding $280.4 million 4.5% senior debt due 2022 and for general corporate purposes. Therefore, on a pro forma basis, as of Sept. 30, 2021, the company's financial leverage would increase to 32.8%, from 27.8% before the issuance. But with the redemption of the senior debt due 2022, S&P expects financial leverage to improve to about 25% in 2022, with fixed-charge coverage remaining above 4x. ESSA PHARMA: Blackstone Holdings, et al. Report 4.96% Equity Stake ------------------------------------------------------------------ In an amended Schedule 13D filed with the Securities and Exchange Commission, these entities and individual reported beneficial ownership of shares of common stock of Essa Pharma Inc. as of Jan. 10, 2022: Shares Percent Reporting Beneficially of Person Owned Class ------------ ------------ -------- Clarus Lifesciences III, L.P. 2,109,164 4.8% Clarus Ventures III GP, L.P. 2,109,164 4.8% Blackstone Clarus III L.L.C. 2,109,164 4.8% Blackstone Holdings II L.P. 2,187,912 4.96% Blackstone Holdings I/II GP L.L.C. 2,187,912 4.96% Blackstone Inc. 2,187,912 4.96% Blackstone Group Management L.L.C. 2,187,912 4.96% Stephen A. Schwarzman 2,187,912 4.96% The percentage of outstanding shares of the issuer which may be deemed to be beneficially owned by each reporting person is based on (i) the 43,984,346 shares outstanding as of Nov. 18, 2021, as set forth in the Annual Report on Form 10-K filed by the issuer on Nov. 18, 2021, plus (ii) the 106,061 shares issuable upon exercise of the warrants held by Clarus Lifesciences III, L.P. A full-text copy of the regulatory filing is available for free at: https://www.sec.gov/Archives/edgar/data/0001633932/000119312522007708/d236904dsc13da.htm About Essa Vancouver, BC-based Essa Pharma, Inc. -- www.essapharma.com -- is a clinical stage pharmaceutical company, focused on developing novel and proprietary therapies for the treatment of prostate cancer in patients whose disease is progressing despite treatment with current standard of care therapies, including second-generation anti-androgen drugs such as abiraterone, enzalutamide, apalutamide, and darolutamide. ESSA Pharma reported a loss and comprehensive loss of $36.81 million for the year ended Sept. 30, 2021, compared to a loss and comprehensive loss of $23.45 million for the year ended Sept. 30, 2020, and a net loss and comprehensive loss of $12.75 million for the year ended Sept. 30, 2019. As of Sept. 30, 2021, the Company had $198.17 million in total assets, $4.16 million in total liabilities, and $194 million in total shareholders' equity. EVERGREEN I ASSOCIATES: Lender 710 Route Says Plan Not Feasible --------------------------------------------------------------- Secured lender and judgment creditor 710 Route 38 ABL I Holdings, LLC, filed a preliminary objection and reservation of rights to the Disclosure Statement for the Joint Plan of Reorganization of Evergreen I Associates, LLC, et al. Lender claims that the Debtors inaccurately describe the events leading up to the Petition Date including, without limitation, that Lender allegedly misadministered escrowed funds as confirmed by the New Jersey Superior Court Law Division's recent rejection of those arguments and dismissal of all counterclaims against Lender premised on those same false allegations. Lender points out that the Debtors fail to provide adequate information on the feasibility of the proposed plan because, although the Debtors propose to pay Lender's claim and the secured tax debt claims in full from the "Post-Petition Financing Transaction," the Disclosure Statement fails to provide adequate information regarding (i) the total amount of the claims to be paid in the Post-Petition Financing Transaction and (ii) the total amount of funds to be provided by the Post-Petition Financing Transaction; * Although the Disclosure Statement states that the Debtors "currently owe approximately $1,091,867.55 in Tax Debt," the Debtors calculation of the outstanding Tax Debt does not include any accrued interest in that figure (Disclosure Statement § II.C(i)(a) (page 6) (emphasis added)); * The Debtors do not disclose any post-petition taxes due or that will become due prior to confirmation of the Plan or the interest that will accrue thereon; * The Debtors do not disclose how they intend to pay the Lender's claim in full if their motion to reduce the amount of Lender's claim, which remains pending before the Court, is unsuccessful; * To date, the Debtors have failed to disclose whether and when the non-binding letter of intent with Pioneer Construction and Development Corp. for a proposed $3,000,000 loan, a critical source of funding for the Plan, will become binding despite the Court's approval of the Debtors entering into the non-binding letter of intent on December 15, 2021; * To date, the Debtors have failed to disclose whether, when, and how much Mr. Nicholas J. Aynilian will deposit in additional financing into Debtors' counsel's trust account; * To date, the Debtors have failed to disclose when they will seek approval from the Court under Section 364 of the Bankruptcy Code of their proposed financing sources despite misleading the Court on several occasions that a Section 364 motion would be filed imminently. Lender asserts that the Debtors fail to disclose how broad, third-party releases for, among others, Mr. Aynilian, are fair and necessary to the reorganization of the Debtors particularly where Mr. Aynilian is currently proposed to provide less than 3% of the proposed funding for the Plan. Lender further asserts that the Debtors failed to attach any liquidation analysis even though the Debtors state that the best interests of creditors test is supported by an attached liquidation analysis. A full-text copy of Lender's objection dated Jan. 04, 2022, is available at https://bit.ly/3ffFOai from PacerMonitor.com at no charge. Counsel for 710 Route 38 ABL: BENESCH, FRIEDLANDER, COPLAN & ARONOFF LLP Michael J. Barrie Kevin M. Capuzzi Continental Plaza II 411 Hackensack Ave., 3rd Floor Hackensack, NJ 07601-6323 Telephone: (302) 442-7010 Facsimile: (302) 442-7012 E-mail: mbarrie@beneschlaw.com kcapuzzi@beneschlaw.com About Evergreen I Associates LLC, et al. Evergreen I Associates LLC and its affiliates, Evergreen II Associates LLC; Evergreen III Associates LLC; and Evergreen Plaza Associates, LLC, are engaged in activities related to real estate. The companies each filed a Chapter 11 petition on September 9, 2021. In the petitions signed by Nicholas Aynilian, manager, each of Evergreen I Associates and Evergreen II Associates estimated $1 million to $10 million in both assets and liabilities. In addition, Evergreen III Associates listed $100,000 to $500,000 in assets and $1 million to $10 million, while Evergreen Plaza Associates disclosed up to $50,000 in assets and likewise $1 million to $10 million in liabilities. The Debtors' cases are jointly administered under Evergreen I Associates (Bankr. D. N.J. Lead Case No. 21-17116). Judge Christine M. Gravelle presides over the cases. Riker, Danzig, Scherer, Hyland & Perretti LLP is tapped as the Debtors' counsel. EYEPOINT PHARMACEUTICALS: Names Chief Corporate Development Officer ------------------------------------------------------------------- EyePoint Pharmaceuticals, Inc. has appointed Michael C. Pine as chief corporate development and strategy officer. Mr. Pine brings over 20 years of business and corporate development expertise, leveraging experience from various roles at small and large pharmaceutical companies. "We are delighted to welcome Michael to our executive leadership team, bringing his impressive track record of successfully generating corporate growth and driving strategy for global pharmaceutical companies," said Nancy Lurker, chief executive officer of EyePoint Pharmaceuticals. "Michael's insight and strategic experience will make him an indispensable member of the team as we progress our vision of advancing our pipeline and bringing sustained release delivery technology to patients both in the United States and around the world." Mr. Pine has over 20 years of experience in the pharmaceutical industry, serving in various business development and strategy roles. Most recently, Mr. Pine was a senior vice president of Business Development and Strategy at Medexus Pharmaceuticals, where he identified, evaluated and executed several transactions critical to the growth of the organization. Mr. Pine held roles of increasing responsibility at Lupin Pharmaceuticals, Aralez Pharmaceuticals, and Novartis Pharmaceuticals, where he spent over eight years building a diverse skill set in business development, commercial, operational and strategy roles. Earlier in his career, Mr. Pine was in business development roles at Kos Pharmaceuticals, Organon Biosciences, and Pfizer, as well as an Investment Banking Analyst at JP Morgan Chase. Mr. Pine holds a B.S. in Consumer Economics from Cornell University and an M.B.A from Columbia Business School. "This is a particularly exciting time to be joining EyePoint, as the Company has shifted its focus into growing and developing its promising pipeline," said Mr. Pine. "I look forward to working alongside this talented team as we continue to expand our pipeline and build EyePoint's global retinal footprint to improve the lives of patients suffering with ophthalmic diseases." Pursuant to the Employment Agreement, Mr. Pine is entitled to receive an annual base salary of $420,000 and a sign-on bonus totaling $108,000. The Sign-On Bonus is payable in two equal tranches of $54,000, with the first tranche payable on the first regular payroll date following the Start Date, and the second tranche payable three months after the first tranche. Inducement Grants under Nasdaq Listing Rule 5635(c)(4) In connection with the hiring of Mr. Pine, the Compensation Committee of Eyepoint Pharmaceutical's Board of Directors granted stock options to purchase an aggregate of 100,000 shares of common stock as an inducement award material to Mr. Pine entering into employment with the Company in accordance with Nasdaq Listing Rule 5635(c)(4). The stock options have an exercise price equal to the closing price of EyePoint's common stock on Jan. 10, 2022, and will vest as follows: 25% on the first anniversary and monthly through the fourth anniversary of the date of grant, subject to the terms of grant. About EyePoint Pharmaceuticals EyePoint Pharmaceuticals, formerly pSivida Corp. -- http://www.eyepointpharma.com-- headquartered in Watertown, MA, is a specialty biopharmaceutical company committed to developing and commercializing innovative ophthalmic products in indications with high unmet medical need to help improve the lives of patients with serious eye disorders. The Company currently has two commercial products: DEXYCU, the first approved intraocular product for the treatment of postoperative inflammation, and YUTIQ, a three-year treatment of chronic non-infectious uveitis affecting the posterior segment of the eye. EyePoint reported a net loss of $45.39 million for the year ended Dec. 31, 2020, a net loss of $56.79 million for the year ended Dec. 31, 2019, and a net loss of $53.17 million for the year ended June 30, 2018. As of Sept. 30, 2021, the Company had $168.25 million in total assets, $75.50 million in total liabilities, and $92.75 million in total stockholders' equity. EYEPOINT PHARMACEUTICALS: Reveals 2022 Clinical Plans ----------------------------------------------------- EyePoint Pharmaceuticals, Inc. announced its 2022 clinical pipeline plans and highlighted recent corporate achievements driven by its lead pipeline candidate, EYP-1901, a potential six-month intravitreal treatment targeting wet age-related macular degeneration (wet AMD). "We are extremely proud of our significant progress and growth in 2021, as we successfully initiated, enrolled and reported positive data for our Phase 1 study of EYP-1901 for wet AMD, positioning the program for multiple Phase 2 trials in 2022 after a positive Type C meeting with the FDA in December and bringing us closer to potentially changing the standard of care for patients," said Nancy Lurker, chief executive officer of EyePoint Pharmaceuticals. "We also significantly improved our balance sheet and ended 2021 with approximately $210 million in cash and investments, providing us with a strong foundation as we work to expand our pipeline with additional programs." Ms. Lurker continued, "As we look ahead to 2022, EyePoint is focused on pipeline growth and expansion, with the ultimate goal of improving the lives of patients with serious eye disorders and bringing innovative products to patients in the United States and around the world. We look forward to continued advancement of our programs through clinical development, while also positioning our commercial franchises, DEXYCU and YUTIQ, to breakeven in 2022." 2022 Clinical Plans * Updated eight-month data from the Phase 1 DAVIO study of EYP-1901 for wet AMD has 7 of 17 patients (41%) out to eight months rescue free and continued positive safety profile. Detailed data will be presented on Feb. 12, 2022 at the Angiogenesis 2022 virtual meeting. * Initiate a randomized, controlled Phase 2 study of EYP-1901 for wet AMD in Q3 2022. The twelve-month wet AMD Phase 2 trial is expected to enroll 144 patients, randomly assigned to one of two doses of EYP-1901(approximately 2mg or 3mg) or aflibercept control with efficacy endpoints of change in BCVA (best corrected visual acuity), change in CST (central subfield thickness as measured by OCT), time to rescue and safety. * Initiate a randomized, controlled Phase 2 study of EYP-1901 in diabetic retinopathy (DR) in 2H 2022. * Continue investment in clinical and R&D organization to support pipeline expansion and growth. RECENT COMPANY HIGHLIGHTS Research and Development * Completed a collaborative and positive Type C meeting with the FDA on Dec. 1, 2021, obtaining specific guidance on both Phase 2 and future pivotal studies for EYP-1901. * Reported positive interim six-month safety and efficacy data from Phase 1 DAVIO study of EYP-1901 for the potential treatment of wet AMD at the American Academy of Ophthalmology annual meeting in November 2021. Corporate * Q4 2021 customer demand of approximately 650 units of YUTIQ and 13,800 units for DEXYCU, compared to approximately 560 units and 13,100 units, respectively for Q3 2021. * Approximately $210M in cash and investments at December 31, 2021 including over $230 million in proceeds from two successful follow-on offerings during the year. * Expanded U.S. commercial alliance with Harrow Health's division ImprimisRx, whereby ImprimisRx will assume full responsibility for U.S. sales and marketing activities of DEXYCU and absorb the majority of EyePoint's DEXYCU commercial organization. EyePoint has retained DEXYCU's NDA, revenue recognition, manufacturing and distribution responsibilities for all markets. This transaction continues EyePoint's pivot to being a retina-focused ophthalmology company. * Strengthened leadership team with the appointment of Dr. Jay Duker, MD, to chief operating officer in November 2021 and Michael C. Pine as chief corporate development and strategy officer in January 2022. About EyePoint Pharmaceuticals EyePoint Pharmaceuticals, formerly pSivida Corp. -- http://www.eyepointpharma.com-- headquartered in Watertown, MA, is a specialty biopharmaceutical company committed to developing and commercializing innovative ophthalmic products in indications with high unmet medical need to help improve the lives of patients with serious eye disorders. The Company currently has two commercial products: DEXYCU, the first approved intraocular product for the treatment of postoperative inflammation, and YUTIQ, a three-year treatment of chronic non-infectious uveitis affecting the posterior segment of the eye. EyePoint reported a net loss of $45.39 million for the year ended Dec. 31, 2020, a net loss of $56.79 million for the year ended Dec. 31, 2019, and a net loss of $53.17 million for the year ended June 30, 2018. As of Sept. 30, 2021, the Company had $168.25 million in total assets, $75.50 million in total liabilities, and $92.75 million in total stockholders' equity. FAMOUS ANTHONY'S: Files for Chapter 11 Bankruptcy ------------------------------------------------- Food Safety News reports that owners of a Roanoke, VA, restaurant chain, Famous Anthony's, have closed one location and have filed bankruptcy for two others in relation to a deadly hepatitis A outbreak that swept through the community this past fall. At least four people have died, more than 50 were sickened and 36 people were hospitalized in the outbreak associated with an infected employee who worked at three Famous Anthony's locations. An infected person can transmit the virus to others up to two weeks before and one week after symptoms appear. Attorney Andrew Goldstein said the Chapter 11 bankruptcy filing allows the company to reorganize and remain open. In 90 days, the company owners will submit a plan outlining a payment schedule for the people who have claims against their restaurants. In a public statement on behalf of the owners, Goldstein said: "Famous Anthony's has had the privilege of serving this community for over 35 years. This unforeseen hepatitis A exposure at two of our restaurants has impacted many in our close knit community including many loyal customers, employees and their families. In an effort to provide adequate compensation for those affected by the exposure and to preserve the jobs of the dedicated Famous Anthony's team members, Famous Anthony's at Oak Grove Plaza and Williamson Road have each filed voluntary Chapter 11 petitions with the bankruptcy court for the Western District of Virginia. This allows restaurants to operate as usual while also giving them an opportunity to reorganize their business and meet their obligations. Business generated over this time will enhance the outcome of these goals. As always, Famous Anthony's appreciates the support of their staff, patrons and the community, and hopes to continue serving this community for many years to come." Seattle food safety attorney Bill Marler who currently represents more than two dozen people who were sickened from or died in the outbreak has long advocated for restaurant owners and other foodservice operators to vaccinate their employees against the virus. About Famous Anthony's Famous Anthony's is a family owned and operated restaurant chain in Roanoke Valley, Virginia that offers breakfast, lunch and dinner. KBK Enterprises of Roanoke, Inc., Famous Anthony's Brookside, Inc. and Famous Anthony's Inc. filed for Chapter 11 bankruptcy (Bankr. E.D. Va. Case No. 22-70008 to 22-70010) on Jan. 10, 2022. Each of the Debtors estimated up to $50,000 in assets and liabilities as of the bankruptcy filing. The Debtors' counsel: Andrew S Goldstein Magee Goldstein Lasky & Sayers, P.C. Tel: (540) 343-9800 E-mail: agoldstein@mglspc.com FORCEPOINT: Fitch Raises LongTerm IDR to 'B+', Outlook Stable ------------------------------------------------------------- Fitch Ratings has upgraded the Long-Term Issuer Default Ratings (IDRs) for Panther Guarantor II, L.P., Panther Purchaser L.P., and Panther Commercial Holdings, L.P. (collectively d.b.a. Forcepoint) to 'B+' from 'B'. The Rating Outlook is Stable. Fitch has also upgraded Forcepoint's $75 million secured revolving credit facility (RCF) and $680 million first-lien secured term loan to 'BB+'/'RR1' from 'B+'/'RR3'. Panther Purchaser L.P. and Panther Commercial Holdings, L.P. are co-issuers of the RCF and term loan. Forcepoint's ratings are supported by its well-established market position within the growing government and commercial cybersecurity industry. The company successfully optimized operations after its separation from Raytheon Technologies in January 2021, eliminating risks associated with the separation. Forcepoint has also integrated tuck-in acquisitions, strengthening its position within the cybersecurity space. As a private equity owned entity, financial leverage is likely to remain at moderate levels as shareholders prioritize ROE maximization and limiting debt reduction. Fitch expects Forcepoint to continue its steady pace of tuck-in acquisitions to expand its technology and product portfolio. Fitch estimates Forcepoint's gross leverage to remain in the 4.0x-5.0x range through its rating horizon. KEY RATING DRIVERS Leader in Niche Cybersecurity Industry: Forcepoint is an industry leader across niche areas including Data Loss Prevention (DLP), Secure Web Gateway (SWG) and Next Gen Firewall (NGFW) technologies in the commercial segment, and Cross Domain Solutions (CDS) and User Activity Monitoring (UAM) products in the government segment. Through recent acquisitions, Forcepoint expanded its capabilities in threat removal, remote browser isolation, and cloud access security broker (CASB). While the number of competitors within cybersecurity is expansive, they typically compete in select subsegments. Fitch believes Forcepoint's leadership position in these markets would enable the company to capitalize on the secular industry growth. Secular Tailwinds Support Growth: Forcepoint is exposed to the growing cybersecurity industry, which Fitch forecasts will have a CAGR in the high-single digits in a normal economic environment. The importance of cybersecurity has been elevated in recent years with increasing complexity of IT networks and continuing digitalization of information. High profile cybersecurity breaches have also heightened awareness for more comprehensive cybersecurity solutions. Fitch believes these factors will benefit subsegment leaders such as Forcepoint as part of the overall solution. Highly Recurring Revenue with High Retention: Over 70% of Forcepoint's revenue is recurring with an over 90% gross retention rate. The strong revenue retention implies sticky products with high switching costs and demonstrates the mission criticality of its products. The high revenue retention and recurring revenue enhances the predictability of Forcepoint's financial performance and increases the lifetime value of customers. Diversified Customer Base: In the commercial segment, Forcepoint serves approximately 13,000 customers across diverse industry verticals including financial services, healthcare, consulting, telecom and energy. The broad exposure effectively reduces Forcepoint's customer concentration risks and reduces revenue volatility through economic cycles. Fitch views such characteristics favorably as it reduces industry-specific risks. Product Expansion Through Acquisitions: Forcepoint acquired Cyberinc Corp., Deep Secure Ltd., and Bitglass, Inc. during 2021 to expand its cybersecurity technology portfolio. Fitch expects Forcepoint to continue making acquisitions as a strategy to acquire necessary technologies in the rapidly evolving cybersecurity industry in order to address market needs for hybrid cloud IT infrastructure. Strengthening FCF: Since the separation from Raytheon Technologies in January 2021, Forcepoint has executed on operational improvements that has reversed the historically negative FCF to positive FCF as of 3Q 2021 and forecasted 2022. Fitch expects pre-dividend FCF margins to be maintained in the low-teens through the rating horizon consistent with industry peers. Elevated Leverage Profile with Deleveraging Capacity: Fitch estimates Forcepoint's gross leverage to be in the 4x-5x range in 2022, down from 5.7x in 2021 driven by EBITDA growth despite the incremental debt incurred for acquisitions. Despite the further deleveraging capacity projected supported by the company's FCF generation, Fitch expects limited debt prepayment as Forcepoint's private equity ownership would likely prioritize growth over debt reduction. DERIVATION SUMMARY Forcepoint operates in a sub-segment of the fragmented cybersecurity industry. The broader enterprise security market has been growing supported by greater awareness around security breaches and the increasing complexity of IT networks and applications. While the company operated under the larger Raytheon Technologies umbrella prior to 2021, Forcepoint has been established as a segment leader with a resilient customer base and modest revenue growth. Its profitability as measured by EBITDA and FCF margins have been below those of industry peers. As part of the plan to be acquired by Francisco Partners, the company executed on operational efficiency improvements to close the profitability gap with industry peers. Within the broader enterprise security market, peers include McAfee Enterprise (B/Stable), NortonLifeLock (BB+/Stable) and McAfee LLC (BB-/RWN). Forcepoint has a smaller revenue scale and lower EBITDA margins than peers. KEY ASSUMPTIONS Fitch's key assumptions within the Agency's rating case for the issuer include: -- Annual organic revenue growth in the low- to mid-single-digits through Fitch's forecast period; -- EBITDA margins in the low- to mid-20's; -- Debt repayment limited to mandatory amortization; -- Annual acquisitions of $150 million partly financed by incremental debt; -- Excess cash paid as dividend in 2024. KEY RECOVERY RATING ASSUMPTIONS -- The recovery analysis assumes that Forcepoint would be reorganized as a going-concern in bankruptcy rather than liquidated. -- Fitch has assumed a 10% administrative claim. Going-Concern (GC) Approach -- A possible bankruptcy scenario could be unsustainable capital structure driven by aggressive capital allocation or failure to capitalize on a series of debt-financed acquisitions. -- In the event of a bankruptcy reorganization, Fitch expects Forcepoint would suffer customer churn pressuring the revenue and compressed EBITDA on lower revenue scale. This would result in going concern EBITDA (GC EBITDA) of $150 million, approximately 15% below the projected level for 2022. This is higher than the previous assumption of $60.6 million as the company has successfully executed on its cost optimization plan since separating from Raytheon Technologies resulting in run rate EBITDA that is higher than previous operating performance. -- The GC EBITDA estimate reflects Fitch's view of a sustainable, post-reorganization EBITDA level that should be approaching industry norm while incorporating the risks associated with necessary operational improvements, upon which Fitch bases the enterprise valuation. An EV multiple of 7x EBITDA is applied to the GC EBITDA to calculate a post-reorganization enterprise value. The choice of this multiple considered the following factors: -- The historical bankruptcy case study exit multiples for technology peer companies ranged from 2.6x-10.8x; -- Of these companies, only three were in the software sector: Allen Systems Group, Inc; Avaya, Inc.; and Aspect Software Parent, Inc., which received recovery multiples of 8.4x, 8.1x, and 5.5x, respectively; -- The highly recurring nature of Forcepoint's revenue and mission critical nature of the product support the high-end of the range. -- Fitch arrived at an EV of $1.05 billion. After applying the 10% administrative claim, adjusted EV of $943.7 million is available for claims by creditors. RATING SENSITIVITIES Factors that could, individually or collectively, lead to positive rating action/upgrade: -- Fitch's expectation of Total debt with equity credit/Operating EBITDA remaining below 4.0x; -- (CFO-Capex)/Total Debt with Equity Credit above 10%; -- Revenue growth consistent with industry trends demonstrating stable market position and ability to increase product bundling. Factors that could, individually or collectively, lead to negative rating action/downgrade: -- Fitch's expectation of Total debt with equity credit/Operating EBITDA remaining above 5.5x; -- (CFO-Capex)/Total Debt with Equity Credit below 7%; -- Revenue growth below industry trends implying weakening market position. BEST/WORST CASE RATING SCENARIO International scale credit ratings of Non-Financial Corporate issuers have a best-case rating upgrade scenario (defined as the 99th percentile of rating transitions, measured in a positive direction) of three notches over a three-year rating horizon; and a worst-case rating downgrade scenario (defined as the 99th percentile of rating transitions, measured in a negative direction) of four notches over three years. The complete span of best- and worst-case scenario credit ratings for all rating categories ranges from 'AAA' to 'D'. Best- and worst-case scenario credit ratings are based on historical performance. LIQUIDITY AND DEBT STRUCTURE Adequate Liquidity: Forcepoint's liquidity is adequate and supported by its $58 million cash on balance sheet as of 3Q 2021, $75 million undrawn RCF, and projected FCF generation in 2022. With the successful execution of its operational improvements, Fitch expects Forcepoint to sustain FCF in the low-teens, consistent with its software peers. Debt Structure: Forcepoint has $680 million of secured first-lien debt due 2028. Fitch expects the company to generate sufficient FCF over the rating horizon to make its required debt payments. ESG CONSIDERATIONS Unless otherwise disclosed in this section, the highest level of ESG credit relevance is a score of '3'. This means ESG issues are credit-neutral or have only a minimal credit impact on the entity, either due to their nature or the way in which they are being managed by the entity. ISSUER PROFILE Forcepoint is a leading provider of cybersecurity solution, serving commercial enterprises, SMBs and governments worldwide. FOUNTAINS OF ST. AUGUSTINE: Case Summary & 8 Unsecured Creditors ---------------------------------------------------------------- Debtor: The Fountains of St. Augustine LLC 3960 Inman Rd Saint Augustine, FL 32084 Business Description: The Fountains of St. Augustine is a Single Asset Real Estate debtor (as defined in 11 U.S.C. Section 101(51B)). Chapter 11 Petition Date: January 13, 2022 Court: United States Bankruptcy Court Middle District of Florida Case No.: 22-00090 Debtor's Counsel: Thomas C. Adam, Esq. THE ADAM LAW GROUP P.A. 326 North Broad Street Ste. 208 Jacksonville, FL 32202 Tel: 904-329-7249 Fax: 904-516-9230 Email: tadam@adamlawgroup.com Estimated Assets: $1 million to $10 million Estimated Liabilities: $1 million to $10 million The petition was signed by Curt Geisler, manager. A full-text copy of the petition containing, among other items, a list of the Debtor's eight unsecured creditors is available for free at PacerMonitor.com at: https://www.pacermonitor.com/view/PS2PKOQ/The_Fountains_of_St_Augustine__flmbke-22-00090__0001.0.pdf?mcid=tGE4TAMA FUSE GROUP: Paris, Kreit & Chiu Replaces Prager Metis as Auditor ---------------------------------------------------------------- The Board of Directors of Fuse Group Holding Inc. approved the dismissal of Prager Metis CPAs, LLP as the Company's independent registered public accounting firm, effective immediately. Prager Metis' audit reports on the Company's consolidated financial statements as of and for the fiscal years ended Sept. 30, 2020 and 2019 did not contain an adverse opinion or a disclaimer of opinion and were not qualified or modified as to uncertainty, audit scope or accounting principles, except that the audit reports on the consolidated financial statements of the Company for the fiscal years ended Sept. 30, 2020 and 2019 contained an uncertainty about the Company's ability to continue as a going concern. During the fiscal years ended Sept. 30, 2020 and 2019, and in the subsequent interim period through Jan. 5, 2022, there were (i) no disagreements between the Company and Prager Metis on any matter of accounting principles or practices, financial statement disclosure or auditing scope or procedure, which disagreements, if not resolved to the satisfaction of Prager Metis, would have caused Prager Metis to make reference to the subject matter of the disagreement in their reports on the financial statements for those years, and (ii) no "reportable events" as that term is defined in Item 304(a)(1)(v) of Regulation S-K, except as noted in the following paragraph: During the fiscal years ended Sept. 30, 2020 and 2019, and through the interim period ended Jan. 5, 2022, there were the following "reportable events" (as such term is defined in Item 304 of Regulation S-K). The Company's management determined that the Company's internal controls over financial reporting were not effective as of the end of such period due to the existence of material weaknesses related to the following: "1. The We do not have an Audit Committee. While we are not legally obligated to have an audit committee, it is the management's view that such a committee, including a financial expert member, is of the utmost importance for entity-level control over the Company's financial statements. Currently, the Board of Directors acts in the capacity of an audit committee. 2. We did not implement appropriate information technology controls. As of June 30, 2021, the Company was retaining copies of all financial data and material agreements; however there is no formal procedure or evidence of normal backup of the Company's data or off-site storage of the data in the event of theft, misplacement, or loss due to unmitigated factors. 3. We currently lack sufficient accounting personnel with the appropriate level of knowledge, experience and training in U.S. GAAP and SEC reporting requirements. We have one employee assigned to a position that involves processing financial information, resulting in a lack of segregation of duties so that all journal entries and account reconciliations are reviewed by someone other than the preparer, heightening the risk of error or fraud. These material weaknesses have not been remediated as of the date of this Current Report on Form 8-K." On Jan. 6, 2022, the Company's Board of Directors approved the engagement of Paris, Kreit & Chiu CPA LLP as the Company's independent registered public accounting firm, effective as of Jan. 6, 2022. The Board of Directors also approved Paris Kreit to act as the Company's independent registered public accounting firm for the fiscal year ending Sept. 30, 2021. During the Company's two most recent fiscal years and through Jan. 5, 2022, neither the Company nor anyone on its behalf consulted Paris Kreit regarding (i) the application of accounting principles to a specified transaction, either completed or proposed, or the type of audit opinion that might be rendered on the consolidated financial statements of the Company; or (ii) any matter that was either the subject of a disagreement or a reportable event as described above; and there was neither a written report nor was oral advice provided to the Company by Paris Kreit that was an important factor considered by the Company in reaching a decision as to an accounting, auditing or financial reporting issue. About Fuse Group Headquartered in Arcadia, CA, Fuse Group provides consulting services to mining industry clients to find acquisition targets within the parameters set by the clients, when the mine owner is considering selling its mining rights. The services of Fuse Group and Fuse Processing, Inc. include due diligence on the potential mine seller and the mine, such as ownership of the mine and whether the mine meets all operation requirements and/or is currently in operation. Fuse Group reported a net loss of $51,411 for the year ended Sept. 30, 2020, compared to a net loss of $79,656 for the year ended Sept. 30, 2019. As of Sept. 30, 2020, the Company had $1.24 million in total assets, $191,102 in total liabilities, and 1.05 million in total stockholders' equity. El Segundo, Calif.-based Prager Metis, CPA's LLP, the Company's auditor since 2019, issued a "going concern" qualification in its report dated Dec. 16, 2020, citing that the Company had recurring losses from operations and an accumulated deficit. These conditions, among others, raise substantial doubt about the Company's ability to continue as a going concern. GBT TECHNOLOGIES: Registers 5.5M Shares for Possible Resale ----------------------------------------------------------- GBT Technologies, Inc. filed a Form S-1 registration statement with the Securities and Exchange Commission relating to the sale by GHS Investments LLC of up to 5,500,000 shares of of GBT Technologies' common stock, par value $0.00001 per share. The Company will not receive proceeds from the sale of the shares by the selling stockholder. However, the Company may receive proceeds of up to $10.0 million from the sale of its common stock to the selling stockholder, pursuant to an equity financing agreement entered into with the selling stockholder on Dec. 17, 2021, once the registration statement, of which this prospectus is a part, is declared effective. On Dec. 17, 2021, the Company entered into an equity financing agreement and a registration rights agreement with GHS Investments LLC, pursuant to which GHS will purchase from the Company, up to that number of Resale Shares having an aggregate purchase price of up to $10.0 million, subject to certain limitations and conditions set forth in the Equity Financing Agreement from time to time over the course of 24 months after an effective registration of the Resale Shares with the Securities and Exchange Commission pursuant to the Registration Rights Agreement, is declared effective by the SEC. The Equity Financing Agreement grants the Company the right, from time to time at its sole discretion (subject to certain conditions) during the Contract Period, to direct GHS to purchase Resale Shares of Common Stock on any business day, provided that at least ten trading days has passed since the most recent Put. The purchase price of the Resale Shares contained in a Put will be 90% of the lowest daily volume weighted average price (VWAP) of the Company's Common Stock during the ten consecutive trading days preceding the receipt by GHS of the applicable Put notice. Such sales of Common Stock by the Company, if any, may occur from time to time, at its option, during the Contract Period. Subject to the satisfaction of certain conditions set forth in the Equity Financing Agreement, on each Put the Company will deliver an amount of Resale Shares equaling 110% of the dollar amount of each Put. The maximum dollar amount of each Put will not exceed 200% of the average daily trading dollar volume for its Common Stock during the ten trading days preceding the trading day that GHS receives a Put. No Put will be made in an amount equaling less than $10,000 or greater than $500,000. Puts are further limited to GHS owning no more than 4.99% of the outstanding stock of the Company's company at any given time. The Equity Financing Agreement and the Registration Rights Agreement contain customary representations, obligations, rights, warranties, agreements and conditions of the parties. The Equity Financing Agreement terminates upon any of the following events: when GHS has purchased an aggregate of up to $10.0 million in the Common Stock of our company pursuant to the Equity Financing Agreement; on the date that is 24 calendar months from the date the Equity Financing Agreement was executed. Actual sales of Resale Shares to GHS under the Equity Financing Agreement will depend on a variety of factors to be determined by the Company from time to time, including, among others, market conditions, the trading price of the Common Stock and determinations by the Company as to the appropriate sources of funding for the company and its operations. The Selling Stockholder will sell their Resale Shares at prevailing market prices or in privately negotiated transactions. The Company will bear all costs relating to the registration of the Resale Shares, other than any legal or accounting costs or commissions of the Selling Stockholders. A full-text copy of the prospectus is available for free at: https://www.sec.gov/Archives/edgar/data/0001471781/000173112222000046/e3414_s-1.htm About GBT Headquartered in Santa Monica, CA, GBT Technologies, Inc. is targeting growing markets such as development of Internet of Things (IoT) and Artificial Intelligence (AI) enabled networking and tracking technologies, including wireless mesh network technology platform and fixed solutions, development of an intelligent human body vitals device, asset-tracking IoT, and wireless mesh networks. The Company derived revenues from the provision of IT services. The Company is seeking to generate revenue from the licensing of its technology. GBT Technologies reported a net loss of $17.99 for the year ended Dec. 31, 2020, compared to a net loss of $186.51 for the year ended Dec. 31, 2019. As of Sept. 30, 2021, the Company had $2.96 million in total assets, $31.87 million in total liabilities, and a stockholders' deficit of $28.91 million. Lakewood, CO-based BF Borgers CPA PC, the Company's auditor since 2017, issued a "going concern" qualification in its report dated March 31, 2021, citing that the Company's significant operating losses raise substantial doubt about its ability to continue as a going concern. GOLDEN NUGGET: Moody's Lowers Secured Bank Loans to B2 ------------------------------------------------------ Moody's Investors Service downgraded Golden Nugget, LLC's proposed senior secured revolver, senior secured term loan and senior secured notes ratings to B2 from B1. All other ratings remain unchanged including its B3 corporate family rating (CFR), B3-PD probability of default rating and Caa2 senior unsecured notes due 2030. The outlook remains positive. The ratings are subject to the receipt and review of final documentation. The downgrade of the senior secured bank credit facilities and senior secured notes ratings reflect the change in the capital structure with a significant increase in the amount of secured debt and a concurrent decline in amount of unsecured debt versus what was previously contemplated and announced. The downgrade acknowledges that following the change the senior secured debt will make up the large majority of the capital structure and that the smaller size of the unsecured notes provides less loss absorption to the secured debt at the point of any potential default. Proceeds from the proposed financing will be used to refinance all of Golden Nugget's existing debt, fund a $250 million dividend and place cash to the balance sheet. The B2 rating on the proposed $500 million senior secured revolver, $3.45 billion senior secured term loan and $850 million senior secured notes reflects the secured debts position in the capital structure with a significant amount of liabilities that are ranked junior to these facilities, particularly the $1.25 billion of senior unsecured notes. The B2 rating on the senior secured notes also reflects the notes pari passu first lien secured position in the capital structure alongside the senior secured revolver and term loan B. The Caa2 rating on the $1.25 billion senior unsecured notes reflect their junior position in the capital structure and the lack of any material liabilities that rank junior to these notes. Downgrades: Issuer: Golden Nugget, LLC Gtd Senior Secured First Lien Term Loan, Downgraded to B2 (LGD3) from B1 (LGD3) Gtd Senior Secured First Lien Revolving Credit Facility, Downgraded to B2 (LGD3) from B1 (LGD3) Senior Secured Regular Bond/Debenture, Downgraded to B2 (LGD3) from B1 (LGD3) RATINGS RATIONALE Golden Nugget's credit profile is constrained by its high leverage and history of debt financed acquisitions and shareholder returns. Moody's estimates pro forma for the January 2022 refinancing and debt financed dividend, Golden Nugget's debt to EBITDA will be about 6.9x for the twelve months ended September 30, 2021. Looking forward, Moody's expects improving operating performance and the maintenance of a lower cost structure to result in debt to EBITDA falling toward 6.0 times over the next 12 to 18 months. However, labor and commodity inflation present a key risk, which could pressure operating margins in 2022. Golden Nugget benefits from its material scale, the brand value of its various restaurant and gaming properties, good geographic diversification and very good liquidity. The positive outlook reflects Moody's view that earnings and credit metrics will continue to improve as consumer demand remains healthy and the company manages any increases in operating costs such that its improvement in operating margins is largely sustained. Restaurants by their nature and relationship with sourcing food and packaging, as well as an extensive labor force and constant consumer interaction are deeply entwined with sustainability, social and environmental concerns. While these factors may not directly impact the credit, they could impact brand image and impact consumers view of the brands overall. Golden Nugget's private ownership is a rating constraint given the potential implications from both a capital structure and operating perspective. Financial strategies are always a key concern of privately-owned companies with regards to the potential for higher leverage, extractions of cash flow via dividends, or more aggressive growth strategies. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS Factors that could result an upgrade include a more moderate financial policy with regards to acquisitions and shareholder returns as well as a sustained improvement in operating performance, liquidity and credit metrics. Specifically an upgrade would require debt to EBITDA sustained below 5.5 times and EBIT to interest sustained above 1.75 times. A higher rating would also require very good liquidity. Ratings could be downgraded in the event credit metrics failed to materially improve from current levels. Specifically, ratings could be downgraded if debt to EBITDA was sustained above 6.5 times or EBIT to interest were sustained around 1.25 times. A deterioration in liquidity for any reason could also negatively affect the ratings or outlook. Golden Nugget owns and operates the Golden Nugget hotel, casino, and entertainment resorts in downtown Las Vegas and Laughlin, Nevada, Lake Charles Louisiana, Biloxi Mississippi and Atlantic City New Jersey. The company also owns and operates mostly upscale and casual dining restaurants under the trade names Landry's Seafood House, ChartHouse, Saltgrass Steak House, Rainforest Café, Bubba Gump, McCormick & Schmicks, Dos Caminos, Bill's Bar & Burger, Joe's Crab Shack, Brick House Tavern + Tap, Morton's Restaurants, Inc, Del Frisco's Double Eagle, Del Frisco's Grille, and Mastro's as well as restaurants from RUI. Golden Nugget is wholly owned indirectly by Fertitta Entertainment, Inc. which is wholly owned by Tilman J. Fertitta. Revenues were approximately $3.1 billion for the twelve months ended September 30, 2021. GOLDEN NUGGET: S&P Lowers Rating to 'B' on Sr. Secured Facilities ----------------------------------------------------------------- S&P Global Ratings lowered its issue-level rating on Golden Nugget LLC's proposed senior secured facilities to 'B' from 'B+' following the company's aggregate $600 million upsizing of the proposed issuance. Specifically, Golden Nugget upsized the term loan to $3,450 million, from $1,850 million initially, and downsized the senior secured notes to $850 million, from $1,850 million initially. S&P revised its recovery rating on the senior secured facilities, which also include its proposed $500 million revolver, to '3' from '2'. The downgrade reflects the reduced recovery prospects for the company's senior secured lenders given the larger amount of secured debt relative to its overall debt. S&P's 'CCC+' issue-level rating and '6' recovery rating on Golden Nugget's downsized senior unsecured notes are unchanged. The company reduced the unsecured note issuance to $1,250 million from $1,850 million initially. The refinancing transaction will bolster the company's cash balance, which it will use a portion of to fund a $250 million dividend to its owner, Tilman Fertitta. S&P's 'B' issuer credit rating and stable outlook on Golden Nugget reflect its highly leveraged capital structure and its expectation that its good performance will support elevated EBITDA and cash generation. ISSUE RATINGS--RECOVERY ANALYSIS Key analytical factors -- S&P's simulated default scenario contemplates a hypothetical default occurring in 2025 due to a substantial increase in competitive pressure in the restaurant and gaming industries that dampens its traffic and profitability while its ability to control its costs is hampered by a weak economic environment. Together, these events lead to a significant deterioration in Golden Nugget's credit metrics and free operating cash flow generation. -- S&P said, "Our simulated default scenario also assumes the company reorganizes as a going concern to maximize its lenders' recovery prospects. We used an enterprise valuation approach to assess its recovery prospects and have applied a 6x multiple to our projected emergence-level EBITDA. This is higher than the multiples we use for some of its restaurant peers to reflect its gaming operations and our view of its competitive position." -- S&P's recovery analysis assumes that about $425 million of borrowings will be outstanding under the company's proposed $500 million revolving credit facility at the point of default. Simulated default assumptions -- Simulated year of default: 2025 -- EBITDA at emergence: $535 million -- Implied enterprise value (EV) multiple: 6x -- Estimated gross EV at emergence: About $3.2 billion Simplified waterfall -- Net EV after 5% administrative costs: $3 billion -- Valuation split (obligors/nonobligors/unpledged): 100%/0%/0% -- First-lien term loan and cash flow revolver claims: $3.9 billion -- Senior secured note claims: $0.9 billion --Recovery expectations: 50%-70% (rounded estimate: 60%) -- Senior unsecured note claims and non-debt unsecured claims: $1.3 billion --Recovery expectations: 0%-10% (rounded estimate: 0%) Ratings List ISSUE-LEVEL RATINGS LOWERED; RECOVERY RATINGS REVISED TO FROM GOLDEN NUGGET LLC Senior Secured B B+ Recovery Rating 3(60%) 2(70%) ISSUE-LEVEL RATINGS AFFIRMED; RECOVERY RATINGS UNCHANGED GOLDEN NUGGET LLC Senior Unsecured CCC+ Recovery Rating 6(0%) GRANDMA BEA: Seeks to Employ Benson & Mangold as Real Estate Broker ------------------------------------------------------------------- Grandma Bea, LLC seeks approval from the U.S. Bankruptcy Court for the District of Maryland to hire Benson & Mangold as real estate broker. The firm's services include: (a) professional imaging (photography, virtual tour); (b) digital marketing (social media, email marketing); (c) print marketing (signage, property brochures, new listing advertising, area and regional magazines and direct mailing adverting); (d) providing broker outreach (tours and open house); (e) preparing documents related to the listing, marketing, and sale of the properties; (f) attending at the closing of the sales; and (g) providing such other services which may be necessary in order to complete the sales. The firm will receive a commission of 5 percent for the successful sale of the properties. Coard Benson, the firm's broker 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: Coard Benson Benson & Mangold 24 N. Washington St. Easton, MD 21601 Tel.: (410) 310-4909/(410) 770-9255 Cell: 410-310-4909 Email: coard@coardbenson.com About Grandma Bea Centreville, Md.-based Grandma Bea, LLC filed a petition for Chapter 11 protection (Bankr. D. Md. Case No. 21-17146) on Nov. 12, 2021, listing up to $10 million in assets and up to $1 million in liabilities. Harry Kaiser, managing member, signed the petition. The Debtor tapped Tate M. Russack, Esq., at RLC, PA Lawyers & Consultants as legal counsel, and Larry Strauss, Esq., CPA and Associates, Inc. as accountant. GULF COAST HEALTH: Okays Mediation to Address Recovery Plan Issues ------------------------------------------------------------------ Lauren Coleman-Lochner of Bloomberg News reports that Gulf Coast Health Care LLC agreed to participate in mediation with its creditors and parties involved in its restructuring agreement to resolve some disagreements related to its disclosure statement and plan. Parties seek help with issues regarding general unsecured claims, including cash amount, according to Tuesday court filing. Mediation is scheduled to begin on Jan. 31, 2022. The parties agreed to the appointment of Hon. James Peck as mediator. About Gulf Coast Health Care Gulf Coast Health Care, LLC is a licensed operator of 28 skilled nursing facilities comprising nearly 3,350 licensed beds across Florida, Georgia, and Mississippi. It provides short-term rehabilitation, comprehensive post-acute skilled care, long-term care, assisted living, and therapy services in each of its facilities. Gulf Coast Health Care and 61 affiliates sought Chapter 11 protection (Bankr. D. Del. Lead Case No. 21-11336) on Oct. 14, 2021. In the petition signed by Benjamin M. Jones as chief restructuring officer, Gulf Coast Health Care listed up to $50 million in assets and up to $500 million in liabilities. The cases are handled by Judge Karen B. Owens. The Debtors tapped McDermott Will & Emery LLP and Ankura Consulting Group LLC as legal counsel and restructuring advisor, respectively. M. Benjamin Jones of Ankura serves as the Debtors' chief restructuring officer. Epiq Corporate Restructuring, LLC, is the claims, noticing and administrative agent. On Oct. 25, 2021, the U.S. Trustee for Region 3 appointed an official committee of unsecured creditors in the Debtors' Chapter 11 cases. Greenberg Traurig, LLP and FTI Consulting, Inc., serve as the committee's legal counsel and financial advisor, respectively. HERTZ CORP: CBS News Asks Court to Unseal Sealed Stolen Cars Docs ----------------------------------------------------------------- Louis Llovio of Business Observer reports that CBS News has filed a motion in federal court asking that The Hertz Corp. unseal information in a lawsuit accusing the rental car giant of incorrectly reporting rented cars stolen that includes the number of police reports filed and the number of those reports found to be inaccurate. The broadcaster filed the motion this January 2022 in response to a December filing where Hertz included the numbers but, citing confidentiality, filed the information under seal. CBS News, which has been reporting on the case, argues in court papers that withholding the numbers violates the public's right to know and that the information contains insights on the size and scope of the issue not available elsewhere. "The public has a constitutional and common law right to access judicial records such as the objections by Hertz already filed under seal and the information it seeks to (file) under seal," attorneys for the network write in the filing. They argue two sentences later "that Hertz cannot credibly assert, let alone prove, that the information it seeks to protect is sensitive, confidential or of any commercial value. Indeed, if this information is deemed confidential, it is difficult to contemplate what would not be." The lawsuit accuses the Lee County-based rental car company of reporting vehicles stolen while the drivers are in good standing, leading to dozens of false arrests. According to the Philadelphia law firm behind the lawsuit, more than 180 claimants are asking for $530 million. Hertz, for its part, argues in court papers that "this information contains highly sensitive confidential, commercial information" and that "due to the sensitive, commercial nature of the confidential information" must not be made public. But in another filing claims the numbers in question show that, rather than there being a systemic problem, the company very rarely reports vehicles stolen. The lawsuit is being heard in federal bankruptcy court, where it moved after Hertz filed Chapter 11 last 2021. Hertz has denied the accusations in the lawsuit, telling the Business Observer in December that it didn’t dispute that it occasionally reports rented vehicles stolen, but that "the vast majority of these cases involve renters who were many weeks or even months overdue returning vehicles and who stopped communicating with us well beyond the scheduled due date." Attorneys representing those suing the company, who were able to get the information CBS seeks but are not allowed to release it, agree with network. The attorneys argue in their own filing that they don’t believe the information should be under seal and believe it's appropriate to make it public. They also take issue with Hertz's assertion that revealing the information would hurt the company's competitiveness. Hertz "cannot have it both ways; it cannot argue that the proffered statistics do not demonstrate the 'systemic issues the (claimants) claim exists' and, at the same time, that this purportedly exonerating data would give competitors an unfair advantage." A hearing on the matter is scheduled for Feb. 9, 2022. About Hertz Corp. Hertz Corp. and its subsidiaries -- http://www.hertz.com/-- operate a worldwide vehicle rental business under the Hertz, Dollar, and Thrifty brands, with car rental locations in North America, Europe, Latin America, Africa, Asia, Australia, the Caribbean, the Middle East, and New Zealand. They also operate a vehicle leasing and fleet management solutions business. On May 22, 2020, The Hertz Corporation and certain of its U.S. and Canadian subsidiaries and affiliates filed voluntary petitions for reorganization under Chapter 11 in the U.S. Bankruptcy Court for the District of Delaware (Bankr. D. Del. Case No. 20-11218). Judge Mary F. Walrath oversees the cases. The Debtors have tapped White & Case LLP as their bankruptcy counsel, Richards, Layton & Finger, P.A., as local counsel, Moelis & Co. as investment banker, and FTI Consulting as financial advisor. The Debtors also retained the services of Boston Consulting Group to assist the Debtors in the development of their business plan. Prime Clerk LLC is the claims agent. The U.S. Trustee for Regions 3 and 9 appointed a Committee to represent unsecured creditors in Debtors' Chapter 11 cases. The Committee has tapped Kramer Levin Naftalis & Frankel LLP as its bankruptcy counsel, Benesch Friedlander Coplan & Aronoff LLP as Delaware counsel, UBS Securities LLC as investment banker, and Berkeley Research Group, LLC, as financial advisor. Ernst & Young LLP provides audit and tax services to the Committee. * * * Hertz Global Holdings, Inc. (OTCPK:HTZGQ) on June 10, 2021, announced that the Bankruptcy Court confirmed its Plan of Reorganization. Hertz's Plan eliminates over $5 billion of debt, including all of Hertz Europe's corporate debt, and will provide more than $2.2 billion of global liquidity to the reorganized company. Hertz cut 14,400 jobs in 2020. Hertz Global Holdings Inc. selected investment firms Knighthead Capital Management LLC and Certares Management LLC as the winning bidders for control of the car-rental company after a fierce bidding drove up the expected payout for existing shareholders. The winning offer provides for an estimated distribution of close to $8 a share to the company's stockholders. The Court's approval cleared the way for Hertz to emerge from Chapter 11 by the end of June 2021. IDEANOMICS INC: Amends Charter to Establish ESG Task Force ---------------------------------------------------------- The Board of Directors of Ideanomics, Inc. approved revisions, based on the recommendation of the Nominating and Corporate Governance Committee, to its Nominating and Corporate Governance Committee Charter. The Charter was revised to establish an ESG Task Force to support the company's and its subsidiaries' ongoing commitment to environmental, health and safety, corporate social responsibility, corporate governance, anthropogenic climate change mitigation, and other public policy matters relevant to the company. About Ideanomics Ideanomics, Inc. is a diversified solutions provider for electric mobility. The company provides turn-key vehicle, finance and leasing, and energy management services for commercial fleet operators. The Company is headquartered in New York, NY, with operations in the U.S., China, Ukraine, and Malaysia. Ideanomics reported a net loss of $106.04 million for the year ended Dec. 31, 2020, a net loss of $96.83 million for the year ended Dec. 31, 2019, a net loss of $28.42 million for the year ended Dec. 31, 2018, and a net loss of $10.86 million for the year ended Dec. 31, 2017. As of Sept. 30, 2021, the Company had $595.88 million in total assets, $62.01 million in total liabilities, $1.26 million in convertible redeemable preferred stock, and $532.60 million in total equity. INTELSAT SA: Moody's Assigns 'B3' CFR, Rates New Loans 'Ba3/B3' --------------------------------------------------------------- Moody's Investors Service assigned ratings to Intelsat S.A. ("Intelsat"), consisting of a B3 corporate family rating (CFR), B3-PD probability of default rating (PDR), Ba3 rating to the proposed senior secured revolving credit facility, and B3 ratings to the proposed senior secured term loan B and senior secured notes. Intelsat's main operating company, Intelsat Jackson Holdings S.A., is the borrower of the credit facilities and the issuer of the notes. The outlook is stable for both Intelsat and Jackson. On May 13, 2020, Intelsat and certain of its subsidiaries filed for Chapter 11 bankruptcy protection in the US Bankruptcy Court. Intelsat is expected to emerge from its Chapter 11 process in Q1/2022 with $6.375 billion of debt, which will constitute about 40% of its pre-emergence debt. Intelsat plans to raise new $3.375 billion secured term loan B and $3 billion secured notes. Net proceeds will be used to repay DIP amount outstanding, repay secured and unsecured claims, and to pay fees and expenses. The company will also put in a place a new $500 million secured revolving credit facility that is not expected to be drawn at close. Assignments: Issuer: Intelsat S.A. Corporate Family Rating, Assigned B3 Probability of Default Rating, Assigned B3-PD Issuer: Intelsat Jackson Holdings S.A. Senior Secured Super Priority Revolving Credit Facility, Assigned Ba3 (LGD1) Senior Secured Term Loan B, Assigned B3 (LGD4) Senior Secured Notes, Assigned B3 (LGD4) Outlook Actions: Issuer: Intelsat S.A. Outlook, Assigned Stable Issuer: Intelsat Jackson Holdings S.A. Outlook, Assigned Stable RATINGS RATIONALE Intelsat's B3 CFR is constrained by: (1) Moody's expectation that leverage (adjusted Debt/EBITDA) will start around 7x after emerging from bankruptcy, until about $1 billion of C-band cost reimbursements are received in 2022 and used to repay debt, improving leverage towards 6x by the end of 2023; (2) continuing pressure on revenue and EBITDA due to material structural shifts in the fixed satellite services (FSS) sector, including elevated business risk from evolving technology and an increasing supply of satellites and new entrants; (3) lower margins relative to those of FSS peers; and (4) negative free cash flow generation due to incremental capital spending required to build replacement satellites for its aged fleet in order to remain competitive. The rating benefits from: (1) a leading market position in the FSS sector; (2) relatively large scale and good but declining backlog; (3) long track record of expertise with satellite and related telecommunications technologies; and (4) good liquidity. The revolving credit facility is rated Ba3, three notches above the CFR, because of its senior ranking in the capital structure as well as loss absorption provided by the term loan B and the notes. The term loan B and the notes are rated B3, same as the CFR, because of their junior ranking and that they constitute nearly all of the company's debt capital. As proposed, the revolver and term loan are expected to provide covenant flexibility that if utilized could negatively impact creditors. Notable terms include the following: (1) incremental debt capacity not to exceed the sum of (A) the greater of $1,070 million and 100% of Consolidated EBITDA; plus (B) an unlimited amount as would not result in the first lien net leverage ratio exceeding 3.5x (on a pari passu basis) or the secured net leverage ratio exceeding 5.5x (on a junior basis). The maturity date of any incremental term loan shall be no earlier than the latest maturity date of existing term loan; (2) the borrower will be permitted to designate any existing or subsequently acquired subsidiary as an unrestricted subsidiary, subject to carve-out capacity and other conditions including restrictions to be set forth in the Facilities Documentation (including, but not limited to, restrictions on transfers of C-band assets (prior to receipt of all Phase II C-band proceeds and clearing cost payments), spectrum licenses, and transponders to unrestricted subsidiaries); (3) only wholly-owned subsidiaries are required to provide guarantees, raising the risk of potential guarantee releases if they cease to be wholly-owned, with no explicit protective provisions limiting such guarantee releases; and (4) there are some limitations on up-tiering transactions, including any amendments that would subordinate the loans in security or contractual right of payment to any senior indebtedness (including, in each case, any amendments that alter the "super priority" status of the revolving credit facility) to any other senior debt. The above are proposed terms and the final terms of the credit agreement may be materially different. Intelsat has low environmental risk. Satellite companies own operational satellites as well as those that have lived out their useful lives and have become space debris. Given the number of satellites to be launched in the future, debris from nonoperational satellites or damaged because of collisions will be costly for operators. However, this risk is more pronounced for LEO constellations. Intelsat has moderate social risk. The company's network offerings are integrated into the US and foreign government defense activities. As a result of the classified or sensitive nature of information it handles, a cyber breach could cause legal and reputation issues, and increased operational costs. Intelsat has high governance risk. The company's financial policy in the past reflected its dependence on debt funding, which drove its high leverage as EBITDA declined and free cash flow was not available to repay debt or invest in the business due to high interest payments. This led to the unsustainable capital structure over several years and the Chapter 11 filing in May 2020. Intelsat will emerge from Chapter 11 with still-high leverage and is dependent on C-band spectrum proceeds in 2024 to deleverage to a level that will allow it to invest in the business for future growth. Intelsat is expected to have good liquidity over the next 12 months after emerging from Chapter 11. Sources will approximate $970 million while it will have uses of about $134 million in 2022. Sources will include $466 million of post emergence cash and full availability under its new $500 million revolving credit facility due in 2027. Cash uses will comprise $34 million of term loan repayment and about $100 million of expected negative free cash flow through 2022, mainly due to capital spending to clear C-band spectrum and to build new satellites. While Intelsat is expected to receive cost reimbursements of about $1 billion in 2022 for clearing C-band spectrum, Moody's has not included the proceeds in the liquidity analysis as it will be used to repay debt rather than to boost liquidity. The revolver will be subject to a springing first lien leverage covenant when utilization hits a certain threshold and Moody's does not expect the covenant to the applicable in the next four quarters. Intelsat will have limited flexibility to generate liquidity from asset sales. The outlook is stable and is based on Moody's expectation that despite declining revenue and EBITDA in certain segments, the company will maintain good liquidity and reduce leverage towards 6x by the end of 2023, supported by the use of C-band cost reimbursement proceeds to repay debt. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS The ratings could be upgraded if the company establishes a track record of revenue and EBITDA growth (up 4% and down 24% respectively for LTM Q3/2021), successfully constructs and launches satellites for C-band spectrum transition, and sustains leverage below 6x (pro forma 7.1x post emergence). The ratings could be downgraded if liquidity becomes weak, if revenue and EBITDA declines accelerate (up 4% and down 24% respectively for LTM Q3/2021), or if leverage is sustained above 8x (pro forma 7.1x post emergence). Intelsat S.A., headquartered in Luxembourg and with administrative offices in McLean, Virginia, is one of the leading fixed satellite services operators in the world. The company's fleet consists of 52 geosynchronous satellites covering 99% of the Earth's population and is complemented with terrestrial infrastructure. Revenue for the twelve months ended September 30, 2021 was $2 billion. INTELSAT SA: Orders 2 Flexible Geo Satellites --------------------------------------------- Jason Rainbow of Space News reports that Intelsat SA has ordered two software-defined satellites from Thales Alenia Space as the operator edges closer to emerging from bankruptcy. The Intelsat 41 (IS-41) and Intelsat 44 (IS-44) satellites, scheduled to enter service in 2025, will be based on Thales Alenia Space's Space Inspire platform. They will join two other satellites that Intelsat ordered from Airbus in late 2020 for a new 5G-compatible network that can be reconfigured in-orbit. Based on Airbus' OneSat platform, Intelsat 42 and Intelsat 43 are slated to launch in 2023. IS-41 and IS-44 will provide commercial and government mobility services and cellular backhaul across Africa, Europe, the Middle East and Asia, Intelsat said in the Jan. 12, 2022 announcement. "With the addition of Intelsat 41 and Intelsat 44, in partnership with Thales Alenia Space, Intelsat will blanket the earth with software-defined satellites, progressing the world's first global 5G software-defined network, designed to unify the global telecoms ecosystem," said Intelsat CEO Steve Spengler, who plans to leave the company after it exits bankruptcy. Samer Halawi, who recently resigned as Intelsat's executive vice president and chief commercial officer, told SpaceNews in October that it had issued a request for proposals (RFP) for 10 software-defined satellites in geostationary orbit. They are part of a post-restructuring growth strategy that could include the operator's own low Earth orbit constellation. Intelsat has been operating under Chapter 11 protection since mid-May 2020, but reached a breakthrough Dec. 16, when the U.S. Bankruptcy Court for the Eastern District of Virginia approved a restructuring plan to cut debt from $16 billion to $7 billion. The approval put Intelsat on track to exit Chapter 11 in early 2022, once the company completes formalities that include fully securing the nearly $8 billion in financing that was committed in the restructuring plan. Intelsat has eight other satellites under-construction in addition to the four software-defined satellites. Maxar Technologies is building the Intelsat-40e (IS-40e) satellite that SpaceX is slated to launch this year for Intelsat's high-throughput Epic fleet. Intelsat has also ordered seven spacecraft to help clear C-band spectrum for terrestrial cellular 5G operators in the U.S. — five from Maxar and two from Northrop Grumman. Intelsat recently said in a regulatory filing that it had received a $1.2 billion milestone payment from the Federal Communications Commission for clearing part of the spectrum. The company said the proceeds could be used for capital expenditures (which would include satellite orders), reducing debt or other corporate purposes. Intelsat expects to receive nearly $5 billion in total from clearing C-band spectrum. However, satellite operator SES is disputing Intelsat's share of the proceeds through legal action, and a hearing before the U.S. Bankruptcy Court for the Eastern District of Virginia is scheduled to start Feb. 7, 2022. About Intelsat S.A. Intelsat S.A. -- http://www.intelsat.com/-- is a publicly held operator of satellite services businesses, which provides a diverse array of communications services to a wide variety of clients, including media companies, telecommunication operators, internet service providers, and data networking service providers. The Company is also a provider of commercial satellite communication services to the U.S. government and other select military organizations and their contractors. The Company's administrative headquarters are in McLean, Virginia, and the Company has extensive operations spanning across the United States, Europe, South America, Africa, the Middle East, and Asia. Intelsat S.A. and its debtor-affiliates concurrently filed voluntary petitions for relief under Chapter 11 of the Bankruptcy Code (Bankr. E.D. Va. Lead Case No. 20-32299) on May 13, 2020. The petitions were signed by David Tolley, executive vice president, chief financial officer, and co-chief restructuring officer. At the time of the filing, the Debtors disclosed total assets of $11,651,558,000 and total liabilities of $16,805,844,000 as of April 1, 2020. Judge Keith L. Phillips oversees the cases. The Debtors tapped Kirkland & Ellis LLP and Kutak Rock LLP as legal counsel; Alvarez & Marsal North America, LLC as restructuring advisor; PJT Partners LP as financial advisor & investment banker; Deloitte LLP as tax advisor; and Deloitte Financial Advisory Services LLP as fresh start accounting services provider. Stretto is the claims and noticing agent. The Office of the U.S. Trustee appointed a committee of unsecured creditors on May 27, 2020. The committee tapped Milbank LLP and Hunton Andrews Kurth LLP as legal counsel; FTI Consulting, Inc., as financial advisor; Moelis & Company LLC as investment banker; Bonn Steichen & Partners as special counsel; and Prime Clerk LLC as information agent. INTELSAT SA: S&P Assigns Prelim 'B+' ICR, Outlook Stable -------------------------------------------------------- S&P Global Ratings assigned its preliminary 'B+' issuer credit rating to Intelsat S.A., as well as its preliminary 'B+' issue-level rating to the company's first-lien DIP-to-exit term loan B and secured notes issued by Intelsat Jackson Holdings S.A. The first-lien debt carries a '3' recovery rating, indicating S&P's expectation for meaningful recovery (50%-70%, point estimate: 50%). S&P said, "We have also assigned our preliminary 'BB' issue-level rating to the super-priority $500 million revolver with a '1' recovery rating, indicating expectations for very high recovery (90%-100%; point estimate: 95%). "The stable outlook reflects our view that an upgrade is unlikely over the next year because of risks around operational performance, and to a lesser extent, collection of Phase II C-Band incentive payments may not be resolved in 2022. "We have weighted 2024 credit metrics more heavily in our rating because we believe there is a high probability that Intelsat will receive windfall payments for successful clearing of C-Band spectrum that will be applied toward debt reduction. The U.S. government has agreed to pay Intelsat a total of $4.9 billion for accelerated relocation payments to incentivize the company to make C-Band spectrum available for terrestrial wireless use as quickly as possible (of which $1.2 billion was recently received). Additionally, Intelsat has a $1.1 billion receivable as of Dec. 31, 2021 for costs incurred to clear the spectrum. "We have incorporated all contingent C-Band payments, totaling an additional net amount of about $1 billion in 2022 and $3.7 billion in early 2024, into our base case because the amounts have been agreed upon and the milestones have been set by a reliable counterparty. "We believe the biggest risk to not receiving the second milestone payment in early 2024 would involve two satellite launch failures out of the three dual-satellite launches planned in 2022. We view this as a very low probability event (at around 0.02%) given that the chance of a single launch failure is around 1.3%-1.4% based on historical evidence. Intelsat has contingency plans for launch failure that would involve reconfiguring capacity within its existing network while the lost satellites are rebuilt and ultimately relaunched. We believe there are provisions within contracts that would allow for preferential treatment in the manufacturing and launch schedule that would allow for re-launch in about two years, in time to replace in-orbit satellites that would be used to satisfy commitments to meet FCC clearing milestones. "While another risk is manufacturing delays, we believe this is manageable. Intelsat anticipated COVID-19 issues in early 2020 and moved up the procurement of the C-band satellites. Satellite manufacturers have now completed the first half of the construction project on time. The company has a roughly one-year margin buffer built into the current schedule before the existing satellites need to be replaced. The company would be able to use restoration capacity in the short term to bridge any delays beyond one year. "Our rating incorporates management's commitment to operate with a more conservative financial policy going forward. We believe that management values the financial flexibility afforded by a lower debt burden to make strategic capital investments in the business to remain competitive. We believe Intelsat's historically high debt burden starved the company of investment from 2017-2019, placing it in a compromised position. Therefore, our preliminary rating is based on management's intent to pay down debt with C-Band proceeds with a commitment to operate with leverage of around 2.5x. "Free operating cash flow (FOCF) is projected to be weaker than peers through 2024 as the company invests in its network, which is reflected in our financial risk profile assessment. We project roughly break-even amounts of FOCF in 2022-2024 due to heightened investments to capture growth opportunities. We believe this is necessary for the company to remain competitive, as growth in managed services and commercial aviation require software-defined high-throughput technologies. This will require not only new satellites but updates to ground infrastructure (teleports, antennas, virtual hub equipment) resulting in capital spending of about $450 million to $550 million per year through 2024. As a result, its ability to reduce leverage organically is limited over this time period. "However, we believe there is a path toward positive FOCF beyond 2024 from lower interest expense, growth from new satellites, and curtailment of capex as peers such as SES, Eutelsat and Telesat all generate meaningful FOCF. "We also recognize execution risk in achieving our base-case 2024 metrics-- primarily around achieving earnings stability, and to a lesser extent, around meeting FCC clearing milestones—which weighs on the rating somewhat. The company plans to offset secular declines in network services and media with growth in its mobility segment resulting in relatively flat EBITDA through the forecast period." However, S&P believes achieving the projected roughly 15% CAGR in mobility in our forecast is uncertain for the following reasons: Airlines path to recovery is determined by the evolution of the pandemic and vaccination efforts, but pre-pandemic levels of travel are unlikely until at least 2024. So far, the recovery has proven to be uneven by region and uncertainty regarding the pace and timing of a return in business travel is clouding industry prospects. S&P's forecast assumes roughly $100 million of revenue growth related to a return to pre-pandemic levels of air travel, which is subject to significant risk. S&P said, "Our forecast assumes Intelsat can maintain existing market share as new contracts emerge. We recognize meaningful upside potential as roughly two-thirds of global commercial aircraft do not offer Internet connectivity and we believe this will increasingly become table stakes for passengers over time. However, the company is undergoing a necessary rebranding effort, which carries risk in a competitive marketplace. It is possible that Intelsat is unsuccessful in securing new awards or that airlines delay these contract decisions if air travel does not recover at the rate we expect. "Furthermore, it is possible that secular pressures in media and network services intensify beyond our base case of 5% and 8% annual declines, respectively." Finally, there is execution risk associated with clearing C-Band spectrum. The relocation process is complex and includes procuring, designing and launching seven new satellites launched over four launches; building out two new leased teleport facilities in Maine and Washington; and repacking customers, including many frequency and satellite changes that involve new filters at earth stations. While S&P has incorporated successful execution into its base-case scenario, risks remain and failure to receive phase II accelerated payments of $3.7 billion would have a significantly negative impact on the company's credit profile. S&P said, "We believe Intelsat has significant exposure to industry segments under secular pressure. There is intensifying secular pressure in the company's media segment, which now provides less of a diversity benefit than it had in the past. Intelsat is also poorly positioned relative to peers in network services, which will continue to experience significant declines in revenue. Therefore, the company is now reliant on growth from mobility, which is uncertain, to stabilize earnings trends. These factors are partly offset by solid, albeit declining, profitability (approximately 45% EBITDA margins); high barriers to entry due to the capital-intensive nature of the industry, and scarcity of orbital slots and frequencies (which are granted by the ITU); and predictable revenue provided by the government segment (approximately 20%). While backlog represents about 3x revenue, providing decent near-term visibility, customers are shifting away from multi-year lease contracts and toward shorter-term service contracts. "The stable outlook reflects our assessment that an upgrade is unlikely over the next year given that execution risks around growing mobility are unlikely to be fully resolved in 2022, limiting ratings upside. However, we have incorporated capacity for a moderate level of underperformance relative to our base-case operating assumptions into the rating over the next year. "While unlikely in the near-term, we could raise the rating by one notch to 'BB-' if the company stabilizes earnings, with improving profitability in mobility sufficient to offset declines in media and network services that provide a path to positive FOCF. An upgrade would also be contingent upon certification to receive Phase II incentive payments, such that debt to EBITDA falls to 2.5x. "We could raise the rating to 'BB' if debt to EBITDA is sustained below 2.5x and FOCF to debt is sustained above 15%, with stable earnings and top-line trends, which is unlikely over the next year. "We could lower the rating if we believe leverage would be sustained above 3.5x, even factoring in C-Band payment in 2024, which could be caused by EBITDA tracking more than 20% below our base case. "We could lower the rating by more than one notch in the unlikely event that Intelsat fails to meet FCC requirements to qualify for Phase II incentive payments, particularly if the company's growth initiatives in mobility are unsuccessful and profitability continues to decline." ESG Credit Indicators: E-2 S-2 G-2 IOTA COMMUNICATIONS: L2 Capital Reports 9.99% Equity Stake ---------------------------------------------------------- In a Schedule 13G filed with the Securities and Exchange Commission, L2 Capital, LLC disclosed that as of Jan. 11, 2022, it beneficially owns 39,370,435 shares of common stock of Iota Communications Inc., representing 9.99 percent of the shares outstanding. This percentage is calculated based on approximately 394,098,452 shares of common stock outstanding as of Jan. 3, 2022. L2 Capital, LLC is deemed to beneficially own 9.99% of the common stock of the company, as a result of L2's ownership of that certain convertible promissory note, which gives L2 the rights to own an aggregate number of shares of the company's common stock in an amount not to exceed 9.99% of shares of common stock then outstanding. A full-text copy of the regulatory filing is available for free at: https://www.sec.gov/Archives/edgar/data/1095130/000121390022001537/ea153859-13gl2capital_iota.htm About Iota Newark, New Jersey-based Iota Communications, Inc., formerly known as Solbright Group, Inc. -- https://www.iotacommunications.com -- is a wireless network carrier and an energy-as-a-service (EaaS) company dedicated to IoT. The Company intends to expand the application of Software-as-a-Service model into the energy management sector. Iota reported a net loss of $56.78 million for the year ended May 31, 2019, compared to a net loss of $16.48 million for the year ended May 31, 2018. As of Feb. 29, 2020, the Company had $31.89 million in total assets, $111.09 million in total liabilities, and a total deficit of $79.20 million. Marlton, NJ-based Friedman LLP, the Company's auditor since 2016, issued a "going concern" qualification in its report dated Sept. 13, 2019, citing that the Company has an accumulated deficit and a working capital deficiency as of May 31, 2019, generated recurring net losses, and negative cash flows from operating activities that raise substantial doubt about its ability to continue as a going concern. J & R UNITED: U.S. Trustee Unable to Appoint Committee ------------------------------------------------------ The U.S. Trustee for Region 21, until further notice, will not appoint an official committee of unsecured creditors in the Chapter 11 case of J & R United Industries, Inc., according to court dockets. About J & R United Industries J & R United Industries, Inc. filed its voluntary petition for relief under Chapter 11 of the Bankruptcy Code (Bankr. S.D. Fla. Case No. 21-21670) on Dec. 13, 2021, listing under $1 million to $10 million in both assets and liabilities. Salomon P. Grosfeld, president, signed the petition. Judge Laurel M. Isicoff oversees the case. Luis Salazar, Esq., at Salazar Law, LLP serves as the Debtor's legal counsel. JOHNSON & JOHNSON: Court Upholds Halt of Dying Man's Talc Lawsuit ----------------------------------------------------------------- Steven Church of Bloomberg News reports that a bankruptcy judge ruled Johnson & Johnson doesn't have to immediately face a trial demanded by a man dying from cancer that he claims was caused by the company's iconic baby powder. U.S. Bankruptcy Judge Michael B. Kaplan refused to make an exception to the legal shield temporarily protecting J&J and hundreds of other companies from lawsuits related to baby powder. Lawyers for Vincent Hill argued that a trial against J&J should go forward in the coming weeks because their client is likely to die in the next 30 days. About Johnson & Johnson Johnson & Johnson is an American multinational corporation founded in 1886 that develops medical devices, pharmaceuticals, and consumer packaged goods. It is the world's largest and most broadly based healthcare company. Johnson & Johnson is headquartered in New Brunswick, New Jersey, the consumer division being located in Skillman, New Jersey. The corporation includes some 250 subsidiary companies with operations in 60 countries and products sold in over 175 countries. The corporation had worldwide sales of $82.6 billion in 2020. About LTL Management LTL Management, LLC, is a subsidiary of Johnson & Johnson (J&J), which was formed to manage and defend thousands of talc-related claims and oversee the operations of Royalty A&M. Royalty A&M owns a portfolio of royalty revenue streams, including royalty revenue streams based on third-party sales of LACTAID, MYLANTA/MYLICON and ROGAINE products. LTL Management filed a petition for Chapter 11 protection (Bankr. W.D.N.C. Case No. 21-30589) on Oct. 14, 2021. The case was transferred to New Jersey (Bankr. D.N.J. Case No. 21-30589) on Nov. 16, 2021. The Hon. Michael B. Kaplan is the case judge. At the time of the filing, the Debtor was estimated to have $1 billion to $10 billion in both assets and liabilities. The Debtor tapped Jones Day, Rayburn Cooper & Durham, P.A. and Wollmuth Maher & Deutsch, LLP as bankruptcy counsel; King & Spalding, LLP and Shook, Hardy & Bacon LLP as special counsel; McCarter & English, LLP as litigation consultant; Bates White, LLC as financial consultant; and AlixPartners, LLP as restructuring advisor. Epiq Corporate Restructuring, LLC is the claims agent. U.S. Bankruptcy Administrator Shelley Abel formed an official committee of talc claimants in the Debtor's Chapter 11 case. The committee tapped Bailey & Glasser, LLP, Otterbourg, P.C. and Brown Rudnick, LLP as bankruptcy counsel; and Massey & Gail, LLP and Parkins Lee & Rubio, LLP as special counsel. Houlihan Lokey Capital, Inc. serves as the committee's investment banker. JURASSIC JUMP: Taps Weintraub & Selth as Bankruptcy Counsel ----------------------------------------------------------- The Jurassic Jump, LLC seeks approval from the U.S. Bankruptcy Court for the Central District of California to hire Weintraub & Selth, APC to serve as legal counsel in its Chapter 11 case. The firm's services include: (a) advising the Debtor concerning its rights, powers, and duties under Sections 1107 and 1108 of the Bankruptcy Code; (b) advising the Debtor concerning all general administrative matters in the bankruptcy case and dealings with the Office of the United States Trustee; (c) representing the Debtor at all court hearings unless it is represented in that proceeding or hearing by a special counsel; (d) preparing bankruptcy schedules and legal papers; (e) advising the Debtor regarding matters of bankruptcy law, including its rights and remedies with respect to assets of the estate and creditor claims; (f) representing the Debtor in all contested matters; (g) representing the Debtor in any litigation commenced by, or against, the Debtor, provided that such litigation is within the firm's expertise and subject to a further engagement agreement with the Debtor on terms acceptable to the Debtor and the firm; (h) representing the Debtor in the negotiation, preparation and implementation of a plan of reorganization; (i) analyzing claims that have been filed in the bankruptcy case; (j) negotiating with the Debtor's creditors regarding the amount and payment of claims; (k) objecting to claims as may be appropriate; and (l) performing all other necessary legal services for the Debtor. The firm's hourly rates are as follows: Daniel J. Weintraub, Esq. $675 per hour James R. Selth, Esq. $275 per hour Paraprofessionals $250 per hour Legal Assistants $175 per hour The Debtor paid the firm $74,321.10 as a retainer fee. Daniel Weintraub, 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: Daniel J. Weintraub, Esq. Weintraub & Selth, APC 11766 Wilshire Boulevard, Suite 1170 Los Angeles, CA 90025 Tel: (310) 207-1494 Fax: (310) 442-0660 Email: dan@wsrlaw.net About The Jurassic Jump The Jurassic Jump, LLC owns and operates a trampoline park in Valencia, Calif. Jurassic Jump filed a petition for Chapter 11 protection (Bankr. C.D. Calif. Case No. 21-19516) on Dec. 30, 2021, listing up to $500,000 in assets and up to $10 million in liabilities. Atousa K. Afshari, managing member, signed the petition. Judge Sheri Bluebond oversees the case. The Debtor tapped Daniel J. Weintraub, Esq., at Weintraub & Selth, APC as bankruptcy counsel. KBK ENTERPRISES: Taps Magee Goldstein Lasky & Sayers as Counsel --------------------------------------------------------------- KBK Enterprises of Roanoke, Inc. seeks approval from the U.S. Bankruptcy Court for the Western District of Virginia to employ Magee Goldstein Lasky & Sayers, PC as its legal counsel. The firm will render these legal services: (a) advise the Debtor regarding its powers and duties in the continued management and operation of its business and properties; (b) advise and consult on the conduct of the Debtor's Chapter 11 case; (c) attend meetings and negotiate with representatives of the Debtor's creditors and other parties-in-interest; (d) take all necessary action to protect and preserve the Debtor's estate; (e) prepare legal papers; (f) represent the Debtor in connection with obtaining post-petition financing, if necessary; (g) advise the Debtor in connection with any potential sale of assets; (h) appear before the court; (i) take any necessary action to negotiate, prepare and obtain approval of a Chapter 11 plan and documents related thereto; and (j) perform all other necessary or otherwise beneficial legal services to the Debtor in connection with the prosecution of its bankruptcy case. On or about Dec. 6, 2021, the firm received a retainer of $6,818, which was used for pre-bankruptcy services. The hourly rates of the firm's attorneys and staff are as follows: Attorneys $250 - $400 Paralegals/Paraprofessionals $115 In addition, the firm will seek reimbursement for expenses incurred. As of the petition date, the firm holds a retainer in the amount of $5,577. Andrew Goldstein, Esq., president of Magee Goldstein Lasky & Sayers, 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: Andrew S. Goldstein, Esq. Magee Goldstein Lasky & Sayers, PC P.O. Box 404 Roanoke, VA 24003-0404 Telephone: (540) 343-9800 Facsimile: (540) 343-9898 Email: agoldstein@mglspc.com About KBK Enterprises of Roanoke KBK Enterprises of Roanoke, Inc. filed its voluntary petition for relief under Chapter 11 of the Bankruptcy Code (Bankr. W.D. Va. Case No. 22-70008) on Jan. 10, 2022, listing up to $50,000 in both assets and liabilities. Tony Triplette, president, signed the petition. Andrew S. Goldstein, Esq., at Magee Goldstein Lasky & Sayers, PC serves as the Debtor's legal counsel. KNOWLTON DEVELOPMENT: Fitch Affirms 'B-' LT IDR, Outlook Stable --------------------------------------------------------------- Fitch Ratings has affirmed Knowlton Development Corporation, Inc.'s (KDC, f/k/a Knowlton Development Holdco, Inc.), KDC US Holdings, Inc. and kdc/one Development Corporation, Inc.'s (f/k/a Knowlton Development Corporation, Inc.) Long-Term Issuer Default Ratings (IDRs) at 'B-'. The Rating Outlook is Stable. KDC's rating of 'B-' reflects elevated leverage following the company's $318.5 million partially debt-funded shareholder distribution to its equity holders in February 2021, as well as Fitch's expectations for negative FCF in fiscal 2022 (ending April 2022) as the company has dramatically increased capex for growth initiatives underpinned by customer contracts. The ratings continue to reflect KDC's position as a global leader in custom formulation, packaging and manufacturing solutions for beauty, personal care and home care brands, supported by a diverse product portfolio and customer base, ranging from blue-chip names to "indie" brands, with whom the company typically maintains long-term relationships. KEY RATING DRIVERS Acquisitions and Business Investment Drive Elevated Leverage: KDC has acquired over a dozen companies over the last five years with six acquisitions in the last two years. Fitch expects KDC to continue its acquisitive strategy, managing leverage within the 7.0x-8.0x range, increasing leverage to the higher end of the range to consummate acquisitions and deleveraging largely through EBITDA growth. In addition, KDC sharply increased capex in fiscal 2021 (ending April 2021), continuing into 2022, in order to support the company's organic growth initiatives and new contract wins. The elevated capex resulted in negative FCF of around $50 million in fiscal 2021 and Fitch expects slightly greater cash burn in fiscal 2022. Fitch expects a return to positive FCF in fiscal 2023 as growth capex tapers off though this could be delayed if there are new mandates requiring additional investment. Once KDC is through its period of heavy capex investment and benefits from some dissipation of pandemic-related costs, Fitch expects leverage to moderate to a mid-7x area from a high-8x in fiscal 2021 as EBITDA and FCF normalize. KDC launched an IPO in September 2021 with a goal to deleverage its business; however, the company subsequently withdrew from the process citing market volatility. Should they revisit the process and use the funds toward debt reduction, KDC's leverage profile and financial flexibility could improve meaningfully. Defensible Competitive Advantage: KDC is one of the largest players in the market for outsourced custom formulation, packaging and manufacturing solutions for beauty, personal care and home care brands following its acquisitions in early 2020 with fiscal 2021 revenue of over $2 billion. KDC's business model of partnering with its customers to create innovative products and rapidly bringing them to market creates deeply entrenched relationships. Significant investment in R&D and technology and a breadth of product expertise that enables KDC to provide global turnkey solutions solidify its competitive advantage. KDC has expanded from operating a single factory in Canada in 2002 to operating 27 manufacturing facilities worldwide. Within the beauty and personal care segment, the company's customers range from indie brands to giants in consumer-packaged goods, providing a natural hedge to rapidly changing industry dynamics. KDC also covers a wide range of products, such as personal care, skincare, cosmetics, deodorants, soaps, sanitizers, fragrances and hair care. The company's acquisitions in early 2020 provide critical mass to its home care segment while also diversifying its portfolio. Customer concentration is moderate; in fiscal 2021 the company's top two customers represented 20.3% and 14.4% of sales with the company serving over 700+ customers worldwide across over 1,000 brands. Stable End Markets: KDC benefits from operating in end markets where demand is relatively stable, even during recessionary conditions. Fitch estimates that personal care sales remained flat to positive during the global financial crisis as the sector benefits from low price points and due to the fact that health and beauty products are often everyday-use, consumable items. The company's flexible manufacturing base allows it to redirect capacity from segments of weak demand to areas of strength. The impact of the coronavirus on the company's sales has been mixed, with demand for personal care and home care products increasing and demand for "non-essential" products, particularly color cosmetics, down sharply. The net result for fiscal 2021 was 5.5% organic revenue growth for KDC YoY. These trends may continue in the near term despite the rollout of vaccines as lingering caution among consumers results in higher demand for personal care and home care products, while continued mask usage reduces demand for color cosmetics. Over the medium term, Fitch expects demand patterns for the company's products to return to normal, contributing to a mid-single-digit long-term organic growth rate. Acquisitive Strategy Supports Growth: KDC's acquisition strategy supplements organic growth by adding capabilities in adjacent new markets to enable the company to capitalize on cross-selling opportunities in its customer base, which helps KDC to grow its wallet share. The company's M&A activity focuses on companies with additive technologies, new geographies, strong customer bases and attractive growth, margin and FCF profiles. The acquisitions in 2020 were sizable, more than doubling the EBITDA of the company on a pro forma basis. Meaningful equity contributions from the sponsor and the roll of equity from one of the target's founders helped mitigate the impact on gross debt/EBITDA. Going forward, Fitch anticipates the company will continue to pursue bolt-on acquisitions to grow its capabilities that support cross-selling and synergy opportunities for the business. DERIVATION SUMMARY KDC's rating of 'B-' reflects elevated leverage following the company's $318.5 million partially debt-funded shareholder distribution to its equity holders in February 2021, as well as Fitch's expectations for negative FCF in fiscal 2022 (ending April 2022) as the company is dramatically increasing capex for growth initiatives underpinned by customer contracts. KDC IDR is below those of ACCO Brands Corporation (BB/Stable) and Central Garden & Pet Company (BB/Stable). ACCO's 'BB' IDR reflects the company's consistent FCF and reasonable gross leverage around 3.0x. The ratings are constrained by secular challenges in the office products industry and channel shifts within the company's customer mix, as evidenced by recent results, along with the risk of further debt-financed acquisitions. Central Garden & Pet Company's 'BB'/Stable rating reflects the company's diversified portfolio of products across the pet and lawn and garden segments with market leading brands and a commitment to maintain leverage (debt/EBITDA) between 3.0 and 3.5x offset by limited scale with EBITDA in the $300 million range. The rating incorporates expectations of modest organic revenue growth over the long term supplemented by acquisitions, with EBITDA margins in the 10% range and positive FCF in the $100 million to $200 million range annually. Mattel Inc's 'BB'/Stable rating reflects the company's meaningfully improved operating trajectory, which has increased Fitch's confidence in the company's longer-term prospects and financial flexibility. EBITDA in 2020 reached $708 million, up from the 2017/2018 trough of approximately $270 million, largely on cost reductions. EBITDA improvement caused FCF to turn positive in 2019/2020 after four years of outflows; gross debt/EBITDA improved from the 11x peak in 2017/2018 to 4.1x in 2019. Revenue has stabilized in the $4.5 billion range with many of Mattel's key brands demonstrating good consumer trends at retail. Fitch projects low single digit revenue growth beginning 2021, which could drive similar to slightly higher growth in EBITDA assuming some benefits from Mattel's recently announced $250 million cost reduction program. KEY ASSUMPTIONS Fitch's key assumptions within its rating case for the issuer include: -- Following a near doubling of revenue in fiscal 2021 to $2.1 billion, organic revenue growth moderates to low double-digits in fiscal 2022 benefiting from new business wins and a normalization in sales of certain categories negatively impacted by the pandemic. Organic revenue moderates to the low-to-mid single digits thereafter. -- Fitch-calculated EBITDA margins improve to 9.7% in fiscal 2022 from 9.3% in fiscal 2021 due to synergy capture from acquisitions, the dissipation of pandemic-related costs, and fixed cost leveraging from new business wins. -- Elevated capex in fiscal 2022 results in negative FCF. FCF turns positive in fiscal 2023 as growth capex needs moderate. -- Fitch anticipates further debt-funded investment in growth capex and/or acquisitions may result in leverage remaining between a mid-7.0x-8.0x over the forecast period, improving from the high-8x area at the end of fiscal 2021. RATING SENSITIVITIES Factor that could, individually or collectively, lead to positive rating action/upgrade: -- A positive rating action would be considered if KDC's operating trajectory exceeds Fitch's expectations, with business investments leading to better-than-expected EBITDA growth, a return to sustained positive FCF and debt/EBITDA sustained under 7.0x. Factor that could, individually or collectively, lead to negative rating action/downgrade: -- A negative rating action would be considered if top-line weakness, pressure on margins and increased capex lead to continued negative FCF beyond fiscal 2022, or an acceleration of the company's acquisition strategy or any debt-financed transaction such as special shareholder distributions results in sustained debt/EBITDA over 8.0x, leading to concerns around the viability of the company's capital structure. 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 Limited Liquidity: KDC's liquidity as of Oct. 31, 2021 totaled $153.4 million, including $89.3 million of cash and $64.1 million of availability on the company's $355 million revolver, net of $288.5 million drawn and $2.4 million in LOC's. With expectations of negative FCF in 2022, Fitch views KDC's liquidity as temporarily constrained, however Fitch expects it to return to more adequate levels in 2023 once the growth capex tempers and FCF turns positive. As of Oct. 31, 2021, the company had $1,551.4 billion of term loan outstanding split between USD ($877.4 million) and EUR tranches ($674.0 million). The revolver, which comes due in December 2023, is KDC's first maturity and, apart from modest quarterly amortization, the company has no maturities until December 2025 when the first lien term loan matures. The company is subject to a single springing financial covenant (based on revolver utilization) requiring first lien leverage to be no greater than 7.75x. Recovery Considerations For issuers with IDRs of 'B+' and below, Fitch performs a recovery analysis for each class of obligations of the issuer. The issue ratings are derived from the IDR, the relevant Recovery Rating and prescribed notching. The recovery analysis assumes that KDC would be reorganized as a going-concern in bankruptcy rather than liquidated. Fitch assumes a material loss in customers or significant integration issues result in a loss of revenue around 20% with pro forma EBITDA margins in the 10% area. Fitch applies a 6.0x enterprise value/EBITDA multiple, modestly below the 6.3x median multiple for Food, Beverage and Consumer bankruptcy reorganizations analyzed by Fitch. The multiple reflects the company's leading position in its formulation, packaging and manufacturing businesses, its diverse and sticky customer relationships, and its lack of consumer brand recognition. After deducting 10% for administrative claims, KDC's first lien secured credit facility including revolver and term loan are expected to have average recovery prospects (31%-50%) and have been assigned 'B-/RR4' ratings. The revolver and term loan are secured by a first priority interest in substantially all assets of the borrowers (kdc/one Development Corporation, Inc and KDC US Holdings, Inc.) and the guarantors (material direct and indirect wholly-owned U.S. subsidiaries). ISSUER PROFILE KDC is a global leader in custom formulation and manufacturing solutions for beauty, personal care and home care brands. It provides services from product ideation and formulation to design, packaging and manufacturing. KDC serves over 700 customers globally across over 1,000 brands. 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. KR CALVERT: Taps Dunham Hildebrand as Bankruptcy Counsel -------------------------------------------------------- KR Calvert Co., LLC and Calvert Health, LLC seek approval from the U.S. Bankruptcy Court for the Middle District of Tennessee to hire Dunham Hildebrand, PLLC to serve as legal counsel in their Chapter 11 cases. The firm's services include: (a) rendering legal advice with respect to the rights, powers and duties of the Debtors in the management of their property; (b) investigating and, if necessary, instituting legal action to collect and recover assets of the estates of the Debtors; (c) preparing legal papers; (d) assisting the Debtors in the preparation, presentation and confirmation of their disclosure statements and plans of reorganization; (e) representing the Debtors as may be necessary to protect their interests; and (f) performing all other legal services that may be necessary in the general administration of the Debtors' estate. The firm's hourly rates are as follows: Attorneys $300 - $350 per hour Paralegals $135 per hour Henry Hildebrand, IV, 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: Henry E. Hildebrand, IV, Esq. Dunham Hildebrand, PLLC 2416 21st Avenue South, Suite 303 Nashville, TN 37212 Tel: 615-933-5851 Fax: 615-777-3765 Email: ned@dhnashville.com About KR Calvert and Calvert Health KR Calvert Co., LLC and Calvert Health, LLC filed petitions for Chapter 11 protection (Bankr. M.D. Tenn. Case No. 21-03905 and 21-03906) on Dec. 27, 2021. Klein Calvert and Pamela Calvert, members, signed the petitions. At the time of the filing, KR Calvert listed up to $50,000 in assets and up to $10 million in liabilities while Calvert Health listed as much as $10 million in both assets and liabilities. Judge Randal S. Mashburn oversees the cases. The Debtors tapped Henry E. Hildebrand, IV, Esq., at Dunham Hildebrand PLLC as legal counsel. LIMETREE BAY: St. Croix Energy Loses Fight in Halting Refinery Sale ------------------------------------------------------------------- Jeremy Hill of Bloomberg News reports that St. Croix Energy lost an attempt to pause the sale of Limetree Bay Refining to a rival bidder, with U.S. Bankruptcy Judge David Jones finding he acted appropriately in re-opening an auction for the refinery last 2021. West Indies Petroleum and Port Hamilton Refining and Transportation won an auction for the U.S. Virgin Islands refinery last 2021 after initially bowing out of the bidding. Judge Jones approved the coalition's $62 million bid in December 2021. But St. Croix Energy, which had won an earlier iteration of the auction with a roughly $20 million bid, tried to halt the closing of the sale. About Limetree Bay Refinery Limetree Bay Energy is a large-scale energy complex strategically located in St. Croix, U.S. Virgin Islands. The complex consists of Limetree Bay Refining, a refinery with peak processing capacity of 650 thousand barrels of petroleum feedstock per day, and Limetree Bay Terminal, a 34-million-barrel crude and petroleum products storage and marine terminal facility serving the refinery and third-party customers. Limetree Bay Refining, LLC, restarted operations in February 2021, and is capable of processing around 200,000 barrels per day. Key restart work at the site began in 2018, including the 62,000 barrels per day modern, delayed Coker unit, extensive desulfurization capacity, and a reformer unit to produce clean, low-sulfur transportation fuels. The restart project provided much needed economic development in the U.S.V.I. and created more than 4,000 construction jobs at its peak. Limetree Bay Refining, LLC and its affiliates sought Chapter 11 protection on July 12, 2021. The lead case is In re Limetree Bay Services, LLC (Bankr. S.D. Texas Case No. 21-32351). Limetree Bay Terminals, LLC did not file for bankruptcy. In the petitions signed by Mark Shapiro, chief restructuring officer, Limetree Bay Services disclosed up to $10 million in assets and up to $50,000 in liabilities. Limetree Bay Refining, LLC, estimated up to $10 billion in assets and up to $1 billion in liabilities. The Debtors tapped Baker Hostetler as legal counsel and B. Riley Financial Inc. as restructuring advisor. The U.S. Trustee for Region 7 appointed an official committee of unsecured creditors in the Debtors' cases on July 26, 2021. The committee is represented by Pachulski Stang Ziehl & Jones, LLP. 405 Sentinel, LLC, serves as administrative and collateral agent for the DIP lenders. MALLINCKRODT PLC: Makes Final Plea $1.7-Bil. Plan ------------------------------------------------- Maria Chutchian of Reuters reports that Mallinckrodt PLC on Thursday, January made its final case in support of its proposed reorganization plan, telling the Delaware judge who must sign off on it that the $1.7 billion set aside to resolve lawsuits accusing it of deceptively marketing opioids is a fair settlement. Though the pharmaceutical company has lined up extensive support from state governments, municipalities, individual claimants and creditors for the deal, it still faces a string of objections to the plan that it has been litigating since November before U.S. Bankruptcy Judge John Dorsey in Wilmington. In particular, the state of Rhode Island took issue with legal protections, known as nondebtor releases, the deal grants to company executives who are not themselves in bankruptcy. The dispute mirrors the one in Purdue Pharma's bankruptcy. In that case, several states argue that the company's Sackler family owners should not receive the releases and a judge has ruled that the bankruptcy court that approved them did not have the authority to do so. While the Sacklers contributed $4.5 billion to secure those releases -- whose validity will be appealed -- Rhode Island argues that the Mallinckrodt executives made no such contribution to warrant the protections. At Thursday's hearing, Mallinckrodt attorney Christopher Harris of Latham & Watkins argued that the $1.7 billion trust set up for distribution to opioid claimants is enough to justify the releases. Mallinckrodt filed for bankruptcy in October 2020 to resolve widespread litigation brought by states, local governments and private individuals accusing it of deceptive marketing practices with respect to the sale of its opioids, including downplaying the risks of addiction and abuse. The company has spent the past 14 months striking deals with groups representing personal injury claimants and junior creditors, among others, to finalize a deal that would pave its way out of bankruptcy. In addition to the trust it has set up for opioid claimants, the plan cuts $1.3 billion from Mallinckrodt's $5.3 billion debt stack. Plaintiffs who have sued Mallinckrodt over antitrust violations related to its Acthar gel product, which is used to treat infantile spasms and multiple sclerosis, also opposed the plan. They argued that they are entitled to greater payouts than the less than 1% recoveries the plan provides them. Mr. Harris said during Thursday's hearing that the plan is the product of multiple deals with various stakeholders and the removal of any part could cause the entire plan to collapse. "This was fertile ground for even more litigation than you did see," Mr. Harris said. Dorsey said he would try to rule on the plan soon. For Mallinckrodt: Christopher Harris, George Davis, George Klidonas, Andrew Sorkin, Anupama Yerramalli, Jeff Bjork, Elizabeth Marks and Jason Gott of Latham & Watkins; and Mark Collins, Robert Stearn Jr, Michael Merchant, Amanda Steele, Robert Maddox of Richards, Layton & Finger About Mallinckrodt PLC Mallinckrodt -- http://www.mallinckrodt.com/-- is a global business consisting of multiple wholly-owned subsidiaries thatdevelop, manufacture, market and distribute specialty pharmaceutical products and therapies. The company's Specialty Brands reportable segment's areas of focus include autoimmune and rare diseases in specialty areas like neurology, rheumatology, nephrology, pulmonology and ophthalmology; immunotherapy and neonatal respiratory critical care therapies; analgesics; and gastrointestinal products. Its Specialty Generics reportable segment includes specialty generic drugs and active pharmaceutical ingredients. On Oct. 12, 2020, Mallinckrodt plc and certain of its affiliates sought Chapter 11 protection in Delaware (Bankr. D. Del. Lead Case No. 20-12522) to seek approval of a restructuring that would reduce total debt by $1.3 billion and resolve opioid-related claims against them. Mallinckrodt plc disclosed $9,584,626,122 in assets and $8,647,811,427 in liabilities as of Sept. 25, 2020. Judge John T. Dorsey oversees the cases. The Debtors tapped Latham & Watkins LLP and Richards, Layton & Finger P.A. as their bankruptcy counsel; Arthur Cox and Wachtell, Lipton, Rosen & Katz as corporate and finance counsel; Ropes & Gray LLP as litigation counsel; Torys LLP as CCAA counsel; Guggenheim Securities LLC as investment banker; and AlixPartners LLP as restructuring advisor. Prime Clerk, LLC, is the claims agent. The official committee of unsecured creditors retained Cooley LLP as its legal counsel, Robinson & Cole LLP as co-counsel, and Dundon Advisers LLC as its financial advisor. On Oct. 27, 2020, the U.S. Trustee for Region 3 appointed an official committee of opioid related claimants. The OCC tapped Akin Gump Strauss Hauer & Feld LLP as its lead counsel, Cole Schotz as Delaware co-counsel, Province Inc. as financial advisor, and Jefferies LLC as investment banker. A confirmation trial for the Debtors' First Amended Joint Plan of Reorganization was set to begin Nov. 1, 2021. The Confirmation Hearing is slated to have two phases. Phase 1 commenced the week of Nov. 1. Phase 2 will begin on or around the week of Nov. 15, when the Acthar Administrative Claims Hearing proceedings conclude. MEDICAL ACQUISITION: Case Summary & One Unsecured Creditor ---------------------------------------------------------- Debtor: Medical Acquisition Company, Inc. 2772 Gateway Road Suite 101 Carlsbad, CA 92009 Business Description: Medical Acquisition Company is a provider of lien-based medical financial services. Chapter 11 Petition Date: January 13, 2022 Court: United States Bankruptcy Court Southern District of California Case No.: 22-00058 Judge: Hon. Christopher B. Latham Debtor's Counsel: Deepalie Milie Joshi, Esq. JOSHI LAW GROUP 8555 Aero Drive, Ste 303 San Diego, CA 92123 Tel: (619) 822-7566 Email: milie@joshilawgroup.com Estimated Assets: $0 to $50,000 Estimated Liabilities: $1 million to $10 million The petition was signed by Charles Perez, CEO & CFO. The only unsecured creditor listed is the Tri-City Healthcare District holding a claim of $4.4 million. A full-text copy of the petition is available for free at PacerMonitor.com at: https://www.pacermonitor.com/view/KGMAF5A/Medical_Acquisition_Company_Inc__casbke-22-00058__0001.0.pdf?mcid=tGE4TAMA NAKED JUICE: S&P Assigns 'B' ICR on Separation from PepsiCo ----------------------------------------------------------- S&P Global Ratings assigned its 'B' issuer credit rating to Naked Juice LLC, 'B' rating to the first-lien credit facilities with a recovery rating of '3' (50%-70% recovery expectation, 65% rounded estimate), and 'CCC+' rating to the second-lien term loan with a recovery rating of '6' (0%-10% recovery expectation, 0% rounded estimate). PepsiCo Inc. is contributing a portfolio of North American juice brands valued at $4.1 billion to a joint venture in which private equity firm PAI Partners will have 61% ownership stake and PepsiCo 39%. Naked Juice, the joint venture's lead borrower, intends to establish $2.25 billion first-lien credit facilities (consisting of a $1.75 billion term loan, $350 million unfunded revolver, and $150 million unfunded delayed-draw term loan [DDTL]) and $520 million second-lien term loan. S&P said, "We expect the company to use proceeds from the DDTL to acquire certain PepsiCo European juice brands, albeit the transaction is still subject to regulatory review. We believe credit ratios will not materially weaken because use of the DDTL is governed by 6.5x credit-agreement defined pro forma net leverage test--which is equal to pro forma net leverage for the North American transaction. "We expect Naked Juice to exercise aggressive financial policies and maintain S&P Global Ratings' adjusted leverage above 6x. S&P Global Ratings' pro forma adjusted leverage is estimated at about 7.25x at close. Notwithstanding the sponsor's strategy to invest in and grow the business, Naked Juice could transact large debt-financed distributions, share repurchases, or bolt-on acquisitions. "S&P Global Ratings' pro forma adjusted EBITDA and our forecast include--immediately following separation from PepsiCo--100% of the expected ongoing costs to stand up and grow the business (approximately $70 million incremental expenses). Practically speaking, these expenses will gradually build into the cost base over the first two years following close. As such, actual S&P Global Ratings' adjusted leverage could be about 6.0x-6.5x over the first two years following close because these expenses will phase in over time. This compares to our fully costed pro forma adjusted leverage estimate of 7.25x at close. "In addition, we excluded from adjusted EBITDA one-time separation costs which are expected to be spent during the first two years following close." Top-line performance should remain healthy in 2022, though reported EBITDA could be somewhat volatile over the next 24 months because of inflation, supply chain risks, and the separation from PepsiCo. COVID-19 variants such as delta and omicron have resulted in a slower-than-expected return to social activities and increased time spent at home, which has resulted in higher overall consumption of the company's juice products. Moreover, people continue to focus on health and immunity support, which also bodes well for juice products--particularly orange juice, which accounts for about half the company's sales. However, it is not clear whether this heightened demand for previously out-of-favor drink products that contain sugar will persist once pandemic concerns subside. S&P said, "We estimate third-quarter 2021 EBITDA fell by around 8% because of supply chain, labor, and inflation headwinds. We attribute this relatively good performance to modestly higher (price-driven) sales, purchasing leverage with respect to Florida oranges, and the tightly controlled distribution system--including Naked Juice's chilled railcar network and access to PepsiCo's direct store delivery (DSD) network to small-format and foodservice customers. We expect the company's access to minority shareholder PepsiCo's DSD network to continue via long-term agreement." Nevertheless, the supply chain, inflation, and labor problems that have negatively impacted the U.S. economy could continue well into 2022. Moreover, these risks, in combination with efforts to separate the company from PepsiCo, could lead to profit volatility. The sponsor's medium-term organic growth plans are aggressive and assume both modest category expansion and share gains for most of Naked Juice's well-known brands without triggering a competitive backlash. Naked Juice's portfolio consists of two market-leading, category-captain juice brands: Tropicana with 36% share of chilled orange juice and Naked Juice with 46% share of chilled super premium juice category. It also owns or licenses several other well-known brands, which fortifies its position with retailers. S&P said, "We expect the company to invest heavily in advertising and marketing and new product innovation. While we believe Naked Juice can win share, the level of implied share growth on top of continued category expansion may prove optimistic. Moreover, its possible rivals could launch their own product upgrades or use pricing to protect market share or win business in subcategories where Naked Juice is the leader. Competitors include Coca-Cola Co. (Simply, MinuteMaid), Florida's Natural, Sunny D, Bolthouse Farms, and POM. Private label competition is not significant. "The stable outlook reflects our expectation that in 2022 Naked Juice will moderately improve pro forma adjusted EBITDA compared to our pro forma 2021 estimate, generate close to $95 million FOCF, and reduce pro forma adjusted leverage close to 6.5x from around 7.25x pro forma at close." S&P could lower the rating over the next year if it expects pro forma adjusted leverage will remain above 7x and FOCF will fall materially below our forecast, potentially due to: -- Operating problems resulting from COVID outbreaks, supply chain disruptions, or inefficiencies separating from PepsiCo; -- Intensifying competition or escalating inflation that the company cannot fully pass through to customers; or -- More aggressive financial policy including debt-financed distributions or acquisitions. S&P said, "Although unlikely over the next 12 months, we could raise the rating if Naked Juice substantially outperforms our expectations and we are confident the company will adopt less aggressive financial policies, including sustaining pro forma adjusted leverage below 5x. An upgrade would also be predicated on a commitment from the financial sponsor not to pursue debt-financed dividends or acquisitions that would lead to a meaningful deterioration of credit ratios." Environmental, Social, And Governance ESG credit indicator: E-2 S-2 G-2 Social factors are a neutral consideration because of the perceived immunity-support benefits that many consumers obtain from consuming certain juice products, despite containing sugar. Governance factors are neutral despite the majority financial sponsor ownership because of PepsiCo's sizable minority stake and a board that S&P believes will consist of more than one-third nonsponsor directors. NATIONAL CINEMEDIA: S&P Upgrades ICR to 'B-', Outlook Stable ------------------------------------------------------------ S&P Global Ratings raised its issuer credit rating on National CineMedia Inc. (NCM) to 'B-' from 'CCC+' and removed it from CreditWatch, where S&P placed it with positive implications on July 23, 2021. S&P said, "We raised our issue-level ratings on the secured debt to 'B-' from 'CCC+' and unsecured debt to 'CCC' from 'CCC-'. We assigned our 'B-' issue-level rating and '3' recovery rating to the new $50 million revolving credit facility. "The stable outlook reflects our expectations that U.S. box office attendance and associated in-theater advertising improves over the next 12 months such that NCM's revenues reach 60%-75% of 2019 levels, EBITDA margins grow to 35% or more, free operating cash flow (FOCF) is positive, and the company proactively extends its revolving credit facilities due in 2023. "The upgrade reflects NCM's additional liquidity from the $50 million revolver, favorable amendments to its covenants, and our expectations for improving revenues and profitability over the next 12 months, which we believe will cause leverage to decline to around 9x in 2022. We believe the company will be able to extend its drawn revolving credit facilities well ahead of their maturity date in June 2023. In our view, this means the company's capital structure is no longer unsustainable." The new $50 million revolver and amended covenants will alleviate near-term liquidity and covenant concerns. The company's new $50 million revolver is pari-passu with its exiting senior secured debt and was fully drawn at close. While the additional debt will reduce cash flow due to its high interest rate (SOFR + 800 bps), this facility adds to the company's existing liquidity sources for the next 12 months during the recovery of its business. Pro forma for the transaction, the company has about $100 million in cash at the operating subsidiary. In addition to the revolver, the company also amended its covenants. Namely, it extended its leverage covenant waiver through the end of 2022 and reset its leverage covenants in 2023, with various step downs throughout the year. Under this amendment, the company is subject to a $55 million minimum liquidity covenant. S&P expects the company to maintain a 15% or greater covenant margin of compliance. While the additional revolver and amendments are positive for credit quality, the company's existing and new revolving credit facilities, with aggregate current drawings over $215 million, are both due in June 2023. S&P said, "We don't expect the company will be able to fully pay down the balances of these revolvers before they mature, and therefore NCM will need to attain a further amendment to its credit agreements to extend these facilities or refinance them with new debt before the due date. We believe the company has shown a track record of working with its lenders over the past two years to raise debt capital and amend its facilities multiple times during the pandemic, and therefore we believe NCM will be able to successfully extend these facilities well before their current stated maturities." Revenues will improve substantially with the expected recovery in the U.S. box office and associated in-theater advertising. The U.S. box office has been steadily recovering over the past few months as most theaters are fully open, studios have returned to the theatrical release model, and patrons gain increasing confidence to attend movies in theaters despite ongoing COVID-19 cases. S&P said, "We expect 2022 will continue this trend due to a favorable film slate with many large tent-pole films slated for release throughout the year. Unlike the past two years, most studios have committed to an exclusive theatrical window in 2022, albeit shortened from the traditional release window in most cases. While advertisers were slower to return to theaters as quickly as patrons over the past six months, we believe the recent success of the box office in December 2021 and the favorable 2022 film slate will provide NCM's clients with an increasing confidence and prompt them to return to this advertising format. An example of this confidence is NCM's announcement that it has booked upfront revenues for 2022 at roughly 75% of 2019 levels. We view this as a favorable development because upfront advertising contributes the majority, roughly 60%, of annual revenues in a typical year, with scatter advertising making up the remainder. While there remains substantial uncertainty surrounding ongoing COVID variants that could provide ongoing disruptions to the business model, we believe these favorable revenue factors will result in NCM's revenues improving to 60%-75% of 2019 levels in 2022, improving further toward 90% or more of 2019 levels in 2023." S&P said, "We expect profitability and cash flows will scale with revenue growth over 2022 and beyond. Given our improving revenue forecast, we expect the company's EBITDA generation to improve substantially over the next 12 months due to its cost management initiatives and positive operating leverage. We believe the company will be able to manage its recently reduced overhead costs and gradually scale certain variable costs such as marketing and network costs such that profitability returns quickly to its advertising platforms. Specifically, we expect the company's S&P Global Ratings' adjusted EBITDA margins will be more than 35% in 2022 and improve toward 2019 levels in 2023. "This growing EBITDA generation will translate to better cash flows. Specifically, we estimate FOCF will turn at least marginally positive in 2022 relative to our estimation for substantially negative cash flows in 2021. While cash flows should improve throughout the next 12 months, we highlight that the first six months of 2022 are likely to experience substantial working capital outflows to support a growing revenue base before these working capital dynamics stabilize in the back half of 2022. "As a result of these expectations, we forecast leverage will improve to the 9x area in 2022 and decline toward the 5x area in 2023. "The stable outlook reflects our expectations that U.S. box office attendance and associated in-theater advertising improves over the next 12 months such that NCM's revenues reach 60%-75% of 2019 levels, EBITDA margins grow to 35% or more, free operating cash flow (FOCF) is positive, and the company is able to proactively extend its revolving credit facilities due in 2023." S&P could lower its rating under any of the following scenarios: -- If S&P expect in-theater advertising to remain weak in 2022 and beyond such that leverage will remain well above 9x or cash flows will remain negative. -- If NCM is unable to successfully extend its revolving credit facilities well ahead of when they mature in 2023. S&P said, "We could raise the rating if NCM successfully extends the maturity to its revolving credit facilities such that we do not expect any risk of a liquidity event and the return of in-theater advertising remains strong such that the company's leverage improves below 6x and the company generates substantially positive cash flow." ESG credit indicators: To: E-2 S-3 G-2; From: E-2 S-4 G-2 S&P said, "We revised our social risk indicator to 'S-3' from 'S-4' to reflect our expectations that health and safety social factors have improved and are now a moderately negative factor in our credit analysis. We expect the in-theater advertising market will improve in 2022 and 2023 due to a reduction in social distancing practices and movie theater closures brought on by the COVID-19 pandemic. Nevertheless, we expect these social factors will continue to affect NCM over our forecast period as the theatrical exhibition industry recovers." Environmental, social, and governance (ESG) factors relevant to the rating action: -- Health and safety NATURE COAST: Seeks to Hire GovDeals Inc. as Auctioneer ------------------------------------------------------- Nature Coast Emergency Medical Foundation, Inc. seeks approval from the U.S. Bankruptcy Court for the Middle District of Florida to employ Liquidity Services Operations LLC, doing business as GovDeals, Inc., as auctioneer. The Debtor needs the assistance of an auctioneer to market and sell its vehicles, equipment and other personal properties. GovDeals will receive a commission fee of 12.5 percent for its services. Steve Kranzusch, a general manager at GovDeals, 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: Steve Kranzusch Liquidity Services Operations LLC 100 Capitol Commerce Blvd., Suite 110 Montgomery, AL 36117 About Nature Coast Nature Coast Emergency Medical Foundation, Inc. -- https://naturecoastems.org/ -- is Citrus County's exclusive, not-for-profit (501(c)3), Advanced Life Support 9-1-1 emergency responder and medical transportation provider. The organization was established on Oct. 1, 2000. Nature Coast Emergency Medical Foundation sought protection under Chapter 11 of the Bankruptcy Code (Bankr. M.D. Fla. Case No. 21-02357) on Oct. 2, 2021, listing $7,016,218 in total assets and $4,730,723 in total liabilities. Mary Hedges, president of Nature Coast Emergency Medical Foundation, signed the petition. Judge Roberta A. Colton oversees the case. David S. Jennis, Esq., at David Jennis, PA, doing business as Jennis Morse Etlinger, is the Debtor's bankruptcy counsel while The Hogan Law Firm serves as the special board counsel. Fitch & Associates, LLC is the Debtor's financial and operational consultant. NEKTAR THERAPEUTICS: Vanguard Group Has 10% Stake as of Dec. 31 --------------------------------------------------------------- In an amended Schedule 13G filed with the Securities and Exchange Commission, The Vanguard Group disclosed that as of Dec. 31, 2021, it beneficially owns 18,511,911 shares of common stock of Nektar Therapeutics, representing 10.03 percent of the shares outstanding. A full-text copy of the regulatory filing is available for free at: https://www.sec.gov/Archives/edgar/data/0000906709/000110465922002624/tv0014-nektartherapeuticscla.htm About Nektar Nektar Therapeutics is a biopharmaceutical company with a robust, wholly owned R&D pipeline of investigational medicines in oncology, immunology, and virology as well as a portfolio of approved partnered medicines. Nektar is headquartered in San Francisco, California, with additional operations in Huntsville, Alabama and Hyderabad, India. Further information about the company and its drug development programs and capabilities may be found online at http://www.nektar.com. Nektar reported a net loss of $444.44 million for the year ended Dec. 31, 2020, compared to a net loss of $440.67 million for the year ended Dec. 31, 2019. For the nine months ended Sept. 30, 2021, the Company reported a net loss of $378.19 million. NINE DEGREES: Seeks to Employ Wisdom Professional as Accountant --------------------------------------------------------------- Nine Degrees Hacking Corp. seeks approval from the U.S. Bankruptcy Court for the Eastern District of New York to hire Wisdom Professional Services, Inc. to prepare its monthly operating reports. Wisdom Professional Services will be paid at the rate of $100 per report. The firm received an initial retainer fee in the amount of $1,000. Michael Shtarkman, CPA, the firm's accountant 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: Michael Shtarkman, CPA Wisdom Professional Services, Inc. 626 Sheepshead Bay Road, Suite 640 Brooklyn, NY 11224 Tel: (718) 554-6672 Email: mshtarkmancpa@gmail.com About Nine Degrees Nine Degrees Hacking Corp. filed a petition for Chapter 11 protection (Bankr. E.D. N.Y. Case No. 21-42356) on Sept. 17, 2021, listing up to $500,000 in assets and up to $1 million in liabilities. David Navaro, president, signed the petition. Judge Nancy Hershey Lord oversees the case. The Debtor tapped the Law Offices of Alla Kachan, P.C. as legal counsel and Wisdom Professional Services, Inc. as accountant. NN INC: Legion Partners, et al., Report 9.94% Equity Stake ---------------------------------------------------------- In an amended Schedule 13D filed with the Securities and Exchange Commission, these entities and individuals reported beneficial ownership of shares of common stock NN Inc. as of Jan. 7, 2022: Shares Percent Reporting Beneficially of Person Owned Class --------- ------------ -------- Legion Partners, L.P. I 3,181,582 7.35% Legion Partners, L.P. II 248,392 Less Than 1% Legion Partners Special Opportunities, L.P. XI 868,877 2.01% Legion Partners, LLC 4,298,851 9.94% Legion Partners Asset Management, LLC 4,298,851 9.94% Legion Partners Holdings, LLC 4,299,151 9.94% Christopher S. Kiper 4,299,151 9.94% Raymond White 4,299,151 9.94% The aggregate percentage of shares reported owned by each person is based on a denominator that is the sum of: (i) 43,033,548 shares outstanding as of Nov. 1, 2021, which is the total number of shares outstanding as reported in the issuer's quarterly report on Form 10-Q filed with the SEC on Nov. 5, 2021 and (ii) 225,000 shares underlying the warrants. A full-text copy of the regulatory filing is available for free at: https://www.sec.gov/Archives/edgar/data/918541/000092189522000126/sc13da709050027_01112022.htm About NN Inc. NN, Inc. -- www.nninc.com -- is a global diversified industrial company that combines advanced engineering and production capabilities with in-depth materials science expertise to design and manufacture high-precision components and assemblies primarily for the electrical, automotive, general industrial, aerospace and defense, and medical markets. The Company has facilities in North America, Europe, South America, and China. NN, Inc. reported a net loss of $100.59 million for the year ended Dec. 31, 2020, a net loss of $46.74 million for the year ended Dec. 31, 2019, and a net loss of $262.99 million for the year ended Dec. 31, 2018. As of Sept. 30, 2021, the Company had $594.71 million in total assets, $318.49 million in total liabilities, $51.38 million in Series D perpetual preferred stock, and $224.83 million in total stockholders' equity. NO CALL EAST: Case Summary & Two Unsecured Creditors ---------------------------------------------------- Debtor: No Call East, LLC d/b/a Sky Zone Space Coast 201 North Drexel Avenue Haverton, PA 19083 Chapter 11 Petition Date: January 12, 2022 Court: United States Bankruptcy Court Eastern District of Pennsylvania Case No.: 22-10068 Judge: Hon. Ashely M. Chan Debtor's Counsel: Albert A. Ciardi, III, Esq. CIARDI CIARDI & ASTIN 1905 Spruce Street Philadelphia, PA 19103 Tel: 215-557-3550 Email: aciardi@ciardilaw.com Estimated Assets: $100,000 to $500,000 Estimated Liabilities: $1 million to $10 million The petition was signed by Michael Todd, member. A copy of the Debtor's list of two unsecured creditors is available for free at PacerMonitor.com at: https://www.pacermonitor.com/view/3FWVT5Q/No_Call_East_LLC__paebke-22-10068__0003.0.pdf?mcid=tGE4TAMA A full-text copy of the petition is available for free at PacerMonitor.com at: https://www.pacermonitor.com/view/7JKFQNQ/No_Call_East_LLC__paebke-22-10068__0001.0.pdf?mcid=tGE4TAMA NORTONLIFELOCK INC: Fitch Alters Outlook on 'BB+' LT IDR to Neg. ---------------------------------------------------------------- Fitch Ratings has affirmed NortonLifeLock Inc.'s (NLOK) Long-Term Issuer Default Rating (IDR) at 'BB+'. The ratings for the senior secured Term Loan A and revolver have also been affirmed at 'BBB-'/'RR1'. NLOK's planned issuance of $3.6 billion senior secured Term Loan B has been assigned a rating of 'BBB-'/'RR1'. This debt is being issued as part of the financing of the Avast Plc acquisition. NLOK's senior unsecured notes are affirmed at 'BB+'/'RR4'. The Rating Outlook has been revised to Negative from Stable. In August 2021, NLOK agreed to acquire Avast in a transaction which values Avast between $8.6 billion and $9.2 billion, depending on the election of stockholders. To fund the transaction, NLOK will issue $6.1 billion of debt including $3.5 billion of Term Loan A and the issuance of $3.6 billion Term Loan B. The transaction is expected to close in mid-2022 following regulatory approvals and customary closing conditions. KEY RATING DRIVERS Outlook Revised to Negative: The Negative Outlook reflects Fitch's concern that leverage may be above the negative rating sensitivity of 3.5x for a sustained period of time. Fitch notes that NLOK has the ability to generate significant FCF, which may be directed toward share repurchases, acquisitions, debt reduction and dividends. Should the company prioritize debt paydowns over the next several quarters, Fitch would expect leverage to fall below 3.5x and the Outlook could return to Stable. On the other hand, if NLOK prioritizes returns to shareholders and debt funded acquisitions, Fitch would expect leverage to remain over 3.5x for an extended amount of time, which could result in a one-notch downgrade to 'BB'. Increase in Leverage: With the acquisition of Avast, NLOK plans to increase debt significantly to fund the transaction. Assuming the transaction closes in the middle of 2022 as previously expected, Fitch forecasts leverage (defined as total debt with equity credit to operating EBITDA) at the end of fiscal 2024 to be in the range of 3.5x-4.0x. However, if NLOK prioritizes debt repayment, leverage is expected to be lower than this range. Fitch's concern is that NLOK may not prioritize debt reduction and leverage could remain elevated for an extended period of time. Fitch notes that management has a long-term net leverage target of 2x-3x and in Fitch's view, NLOK can delever to that range quickly if it chooses to lower debt. FCF (after dividends) is expected to be over $1 billion annually. Should NLOK become aggressive with share repurchases (which may happen if all Avast stockholders elect the majority of stock option) or if NLOK pursues additional acquisitions that are debt funded, leverage would remain high. Pending Acquisition of Avast: On Aug. 10, 2021, NortonLifeLock and Avast Plc announced that it agreed to merge. Avast is a Czech-based cybersecurity company that offers "freemium" software as well as premium. It has over 435 million users and 16.5 million are paying subscribers. Its six top markets are the US, Canada, Brazil, France, the UK, Russia and Germany. NLOK views the merger as one that brings together a complimentary product portfolio. Once combined, NLOK will have well over 500 million total users and approximately 40 million direct customers. Terms of the Transaction: Avast shareholders can elect one of two options: (1) exchange each share for $2.37 of cash and 0.1937 of NLOK stock (31% cash and 69% stock) or (2) exchange each share for $7.61 in cash and 0.0302 of NLOK stock (90% cash and 10% stock). If all Avast shareholders elected the first option, NLOK would pay out $2.5 billion in cash and $5.6 billion in stock. Avast directors account for about 37% of all outstanding shares and have agreed to the first option. Therefore, if all stockholders (excluding Avast directors) elected the majority of cash option, there would be $6.1 billion of cash paid out and $2.5 billion of stock issued. With the current price of NLOK stock at $26.45/share, Fitch assumes that Avast shareholders (excluding the directors) will elect the majority cash option. Should Avast shareholders all elect the majority stock option, then there would be $2.5 billion of cash paid and $5.6 billion of NLOK stock issued. If the majority of Avast stockholders elect this option, NLOK has stated that it would increase its share repurchase program up to $3 billion after the transaction closes which would bring its share repurchase program up to $4.8 billion. International Focus: With the pending Avast acquisition and the past Avira acquisition, NLOK is expanding its international footprint. In January 2021, NLOK acquired Avira, a German-based cybersecurity company that offers its customers freemium cyber security solutions. Just like Avast's freemium subscribers, NLOK's ultimate goal is to convert those users to paid subscription customers. Avira added nearly 2 million customers to NLOK's customer base. Strong Consumer Cybersecurity Brands: Norton and LifeLock are among the top cybersecurity brands in the consumer cybersecurity segment, albeit a fragmented market. In Fitch's view, brand value is particularly important for products that face competitive consumer markets as differentiations with product features are generally difficult and consumers rely on brand awareness and reputation. In the competitive consumer cybersecurity markets, Norton has consistently been recognized as a top-five brand in internet security along with other brands including McAfee, TotalAV, and Bitdefender. LifeLock also has strong brand awareness for identity protection along with Identity Guard, and McAfee Identity Theft Protection. DERIVATION SUMMARY NLOK's 'BB+' rating reflects its significant size, strong brand recognition, its operating profile and EBITDA margins above 50%. With a strong focus around the consumer market, the company has actively been looking to grow and has been expanding its international presence. The company's rating is two notches above MeridianLink (MLNK) and Instructure Holdings, Inc. (INST), which are not direct peers yet all three are public software companies. MLNK is focused on software systems for financial institutions. INST is focused on learning management systems for educational institutions. The rating for NLOK is higher given its size and stronger credit profile. MLNK and INST have EBITDA margins in the low 40's and 30's, respectively, which is much lower than NLOK. MLNK and INST are both significantly smaller than NLOK which generates about 10x the EBITDA of the smaller rated software companies. Gross leverage for both MLNK and INST are expected to be below 4.0x. NLOK is rated below other technology peers including Constellation Software (BBB+/Stable), Citrix Systems (BBB/Stable), and Cadence Design Systems (A-/Stable). These three are all higher rated than NLOK since they have stronger credit profiles. However, NLOK has consistently had stronger EBITDA and FCF margins which benefit from its strong consumer market position. KEY ASSUMPTIONS Fitch's key assumptions within its rating case for the issuer include: -- Revenue growth of 10% in fiscal 2022, in line with management's guidance of 8%-10% plus; -- The acquisition of Avast closes in mid-2022; both NLOK and Avast have revenue growth in the mid-single digits; -- EBITDA margins of approximately 50% and improving, reflecting recent performance as well as increased operating efficiencies post closing; -- Shareholder returns continue through flat dividends and share repurchases; -- The acquisition of Avast occurs as planned with no material changes. -- No other acquisitions are assumed. RATING SENSITIVITIES Factors that could, individually or collectively, lead to a Stable Outlook: -- Should Fitch anticipate NLOK to reduce leverage to below 3.5x by the end of fiscal 2024, the Outlook could be revised to Stable from Negative. Factors that could, individually or collectively, lead to positive rating action/upgrade: -- Fitch's expectation of leverage (defined as Total debt with equity credit/operating EBITDA) below 2.5x on a sustained basis; -- Total debt with equity credit/FCF ratio below 5x on a sustained basis. Factors that could, individually or collectively, lead to negative rating action/downgrade: -- Fitch's expectation of leverage (defined as total debt with equity credit/operating EBITDA) above 3.5x by the end of fiscal 2024; -- Total debt with equity credit/FCF ratio above 7.5x on a sustained basis; -- Evidence of negative organic revenue growth and/or erosion of EBITDA and FCF margins; -- Significant debt-financed acquisitions or share repurchases that significantly weaken the company's credit profile for a prolonged period of time. 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 Expected to Remain Solid: As of Oct. 1, 2021, NLOK had total liquidity of $2.5 billion including over $1.5 billion of cash on the balance sheet and a fully undrawn secured $1 billion revolving credit facility. In June 2022, NLOK has $400 million of senior unsecured notes due and in August 2022, there are $625 million of senior unsecured convertible notes due. With strong FCF (after annual dividends of $300 million), Fitch expects NLOK's liquidity to remain robust. Upon the closing of the transaction, NLOK intends to upsize its $1.0 billion secured revolver to $1.5 billion. ISSUER PROFILE NortonLifeLock, Inc. is a global consumer cybersecurity company with nearly 80 million users located in more than 150 countries. The company offers consumers both premium and "freemium" software. Approximately 30 million consumers use freemium software. 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. NORTONLIFELOCK INC: S&P Rates New 7-Year Term Loan B 'BB' --------------------------------------------------------- S&P Global Ratings assigned its 'BB' issue-level rating and '3' recovery rating to Tempe, Ariz.-based consumer cybersecurity and identity protection provider NortonLifeLock Inc.'s 7-year term loan B, which it will use to partially fund its acquisition of European cybersecurity software company Avast PLC. The company will also raise a $1.75 billion incremental term loan A (not rated) and $3.6 billion of new term debt, which will include the new term loan B and up to $500 million of new term loan A borrowings. The varying levels of new term loan A debt will not affect our ratings. NortonLifeLock will also upsize its existing revolving credit facility to $1.5 billion from $1.0 billion currently. S&P said, "Our 'BB+' issue-level rating on the company's existing credit facilities due 2026 remains on CreditWatch, where we placed them with negative implications on Aug. 11, 2021. If the transaction closes as expected, we will likely lower our issue-level rating on these facilities to 'BB' and revise our recovery rating to '3' from '2' after the transaction closes due to the increased mix of secured debt in NortonLifeLock's capital structure. "At the same time, we affirmed our 'BB-' issue-level rating on the company's unsecured debt. Our '5' recovery rating remains unchanged. The company expects the transaction to close in mid-2022. "Our 'BB' issuer credit rating on NortonLifeLock remains unchanged because we believe the strategic benefits of the transaction offset the decline in its credit metrics. We estimate the company's leverage will rise to the high-4x area for the trailing 12 months (excluding adjustments for cost savings) before falling to the mid-4x area as of the close of the transaction due to organic growth. Even though this exceeds our 4x downgrade threshold, our rating is unchanged because we expect its leverage to fall below 4x in the 12-18 months following the close of the acquisition as its realizes cost savings and continues to organically expand its revenue. We also view the strategic benefits of the deal as offsetting the increase in its financial risk. Finally, we had previously incorporated some cushion in the rating. For example, NortonLifeLock's current leverage of 2.2x could justify a higher rating; however, we held back on an upgrade because we believe acquisitions are an important part of its growth strategy. Given the high level of fragmentation in the consumer security and privacy space, we believe there are many potential targets that NortonLifeLock could pursue after it integrates Avast. We will continue to incorporate some cushion at the current rating for the company to undertake such transactions." ISSUE RATINGS--RECOVERY ANALYSIS Key analytical factors -- S&P values NortonLifeLock on a going-concern basis because it believes its reorganization would yield more value for its creditors than a liquidation due to the considerable value provided by the firm's recurring revenue and intellectual property. -- S&P valued the company using a 6.5x multiple of its projected emergence EBITDA. This multiple is at the midpoint of the range of multiples it uses for software companies. -- S&P's simulated default scenario contemplates a default occurring in 2026 due to missteps in integrating Avast and intense competition from smaller consumer security players. Simulated default assumptions -- Simulated year of default: 2027 -- Emergence EBITDA: $750 million -- Multiple: 6.5x -- The $1.5 billion revolving credit facility is 85% drawn at default -- Claims include six months of accrued interest -- Valuation split (obligors/nonobligors): 60%/40% Simplified waterfall -- Net enterprise value after 5% administrative expenses: $4.6 billion -- Value available to secured lenders: $4.3 billion -- Secured debt claims: About $7.6 billion --Recovery expectations: 50%-70% (rounded estimate: 55%) -- Value available to unsecured lenders: $300 million -- Unsecured debt claims: About $2.2 billion --Recovery expectations: 10%-30% (rounded estimate: 10%) NRS PROPERTIES: Case Summary & 4 Unsecured Creditors ---------------------------------------------------- Debtor: NRS Properties, LLC 20778 CR 55 Moffat, CO 81143 Chapter 11 Petition Date: January 12, 2022 Court: United States Bankruptcy Court District of Colorado Case No.: 22-10091 Judge: Hon. Thomas B. Mcnamara Debtor's Counsel: David V. Wadsworth, Esq. WADSWORTH GARBER WARNER CONRARDY, P.C. 2580 West Main Street Suite 200 Littleton, CO 80120 Tel: 303-296-1999 E-mail: dwadsworth@wgwc-law.com Estimated Assets: $0 to $50,000 Estimated Liabilities: $1 million to $10 million The petition was signed by Trenton N. Lund, managing member. A full-text copy of the petition containing, among other items, a list of the Debtor's four unsecured creditors is available for free at PacerMonitor.com at: https://www.pacermonitor.com/view/4VQIFQI/NRS_Properties_LLC__cobke-22-10091__0001.0.pdf?mcid=tGE4TAMA NS8 INC: Gets Court OK to Send Liquidation Plan for Voting ---------------------------------------------------------- Daniel Gill of Bloomberg Law reports that cybersecurity company NS8 Inc. got court approval to solicit votes for its liquidation plan from investors with tort claims related to the alleged fraud that plunged the company into bankruptcy. The Plan would pay those investors between 21% and 33% of their claims, which total nearly $136 million, according to disclosures. Another group of investors -- mainly entities allegedly involved in the company's fraud -- would get nothing under the plan. No other creditors can vote on the plan because it calls for a 100% return on their claims, including about $661,000 of general unsecured claims. About NS8 Inc. Las Vegas-based NS8 Inc. is a developer of a comprehensive fraud prevention platform that combines behavioral analytics, real-time scoring, and global monitoring to help businesses minimize risk. On the Web: https://www.ns8.com/ NS8 sought Chapter 11 protection (Bankr. D. Del. Case No. 20-12702) on Oct. 27, 2020. The petition was signed by Daniel P. Wikel, the chief restructuring officer. The Debtor was estimated to have $10 million to $50 million in assets and $100 million to $500 million in liabilities at the time of the filing. The Hon. Christopher S. Sontchi is the case judge. The Debtor tapped Blank Rome LLP and Cooley LLP as its legal counsel, and FTI Consulting Inc. as its financial advisor. Stretto is the claims agent. * * * The company changed its name to Cyber Litigation after it sold substantially all of its assets to Codium Software LLC in December 2020. NUZEE INC: Sabby Volatility, et al., Report 4.99% Equity Stake -------------------------------------------------------------- In an amended Schedule 13G filed with the Securities and Exchange Commission, Sabby Volatility Warrant Master Fund, Ltd., Sabby Management, LLC, and Hal Mintz disclosed that as of Dec. 31, 2021, they beneficially own 908,359 shares of common stock of Nuzee, Inc., representing 4.99 percent of the shares outstanding. Sabby Management, LLC and Hal Mintz do not directly own any shares of Common Stock, but each indirectly owns 908,359 shares of Common Stock. Sabby Management, LLC, a Delaware limited liability company, indirectly owns 908,359 shares of Common Stock because it serves as the investment manager of Sabby Volatility Warrant Master Fund, Ltd. Mr. Mintz indirectly owns 908,359 shares of Common Stock in his capacity as manager of Sabby Management, LLC. A full-text copy of the regulatory filing is available for free at: https://www.sec.gov/Archives/edgar/data/1527613/000153561022000016/nuze0122.txt About NuZee NuZee, Inc. (d/b/a Coffee Blenders) is a specialty coffee company and a single-serve pour-over coffee pouch producer and co-packer. The Company owns packing equipment developed in Asia for single serve pour over production. It co-packs single-serve pour-over coffee and tea bag style coffees for customers in the U.S. market and also co-packs for the South Korean market. NuZee reported a net loss of $18.55 million for the year ended Sept. 30, 2021, a net loss of $9.52 million for the year ended Sept. 30, 2020, and a net loss of $12.21 million for the year ended Sept. 30, 2019. OWENS & MINOR: Moody's Reviews Ratings for Downgrade on Apria Deal ------------------------------------------------------------------ Moody's Investors Service placed the ratings of Owens & Minor, Inc., on review for downgrade following the proposed acquisition of Apria, Inc. ("Apria"). The ratings placed under review for downgrade include the Ba3 Corporate Family Rating (CFR), Ba3-PD Probability of Default Rating (PDR), the Ba2 senior secured rating and the B1 senior unsecured rating. The outlook is revised to Ratings Under Review from Stable. There is no change to the Speculative Grade Liquidity Rating (SGL), at SGL-1. On January 10, 2022, Owens & Minor announced that it has signed a definitive agreement to acquire Apria, Inc. ("Apria") for a total equity consideration of $1.45 billion. The acquisition is subject to regulatory reviews and approval from Apria's shareholders. Owens & Minor expects the acquisition will close in the first half of 2022. The review for downgrade reflects higher financial leverage resulting from the acquisition. Debt/EBITDA for the LTM period ended September 30, 2021 was 2.0x and the company has stated that leverage may peak around 4 times (by its calculations) pro-forma for the transaction. While the transaction will increase leverage, it is strategically sensible. The acquisition of Apria will strengthen Owens & Minor's product and service offering and improve its margin profile. Apria's product offering includes home respiratory and wound care treatment products, which will complement Owens & Minor's product offering in diabetes, ostomy and incontinence. Owens & Minor is undertaking this acquisition while it continues to grow earnings and pay down debt. While the pandemic tailwinds will recede when the pandemic ebbs, Moody's expects solid business execution and robust contribution of the manufacturing business, which has higher profit margins than the distribution business. The review will focus on the pace of the company's deleveraging following the acquisition as well as the company's ability to continue to navigate through the coronavirus pandemic and ongoing supply and input cost price constraints. Moody's will also review the benefits of the transaction, including a stronger position in Owens & Minor distribution segment as well as the potential for revenue and cost synergies. The review will also consider possible changes to Owens & Minor's capital structure, notably the mix of secured and unsecured debt in the acquisition funding mix, which could have an impact on the rating of individual debt instruments. Moody's took the following action on Owens & Minor, Inc: On Review for Downgrade: Issuer: Owens & Minor, Inc. Corporate Family Rating, Placed on Review for Downgrade, currently Ba3 Probability of Default Rating, Placed on Review for Downgrade, currently Ba3-PD Senior secured rating, Placed on Review for Downgrade, currently Ba2 (LGD3) Senior unsecured rating, Placed on Review for Downgrade, currently B1 (LGD5) Outlook Actions: Issuer: Owens & Minor, Inc. Outlook, Changed To Rating Under Review From Stable Governance risk is a key driver of the rating action as the proposed debt-funded acquisition of Apria will materially increase Owens & Minor's leverage, above the company's public net leverage target of 2 to 3 times. RATINGS RATIONALE / FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS Excluding the ratings review, Owens & Minor's Ba3 CFR is supported by the company's track record of delivering good revenue and earnings growth. It also reflects low financial leverage with adjusted debt/EBITDA of 2.0 times in the twelve months ended September 30, 2021. The rating is also supported by Owens & Minor's leading position in the medical and surgical supply distribution business supplemented by a manufacturing business, which has higher profitability. Owens & Minor focuses on single-use consumable products which have low levels of technological obsolescence risk but are essential to the provision of healthcare in a wide range of settings. Moody's expects that Owens & Minor will maintain profitability and generate positive free cash flow even when the pandemic-related tailwind ebbs. The Speculative Grade Liquidity Rating of SGL-1 reflects the company's very good liquidity, including ample headroom under its financial covenants, positive free cash flow after required debt amortization and access to external credit facilities. At September 30, 2021, Owens & Minor had unrestricted cash of $40 million. The company has no maturity until 2024. Liquidity is supported by a $300 million revolving credit facility (unrated) that will expire in March 2026. Social factors are material for Owens & Minor's credit profile. Moody's expects Owens & Minor will be able to grow volumes over the longer term, largely because of demographic trends including the overall aging of the US population. However, near-term demand could be adversely affected by the trajectory of the coronavirus pandemic. In addition, while Owens & Minor is not exposed to direct reimbursement risk, its customers, most of which are acute care hospitals, face significant pressure from public and private payors to lower the overall cost of healthcare. Pricing pressure from payors will persist for the foreseeable future and in turn will cause pricing pressure to persist for suppliers to hospitals. With respect to governance, Moody's expects Owens & Minor to operate with moderate financial leverage in line with the company's public leverage target between 2x and 3x. The review will focus on the pace of the company's deleveraging following the acquisition as well as the company's ability to continue to navigate through the coronavirus pandemic and ongoing supply and input cost price constraints. Moody's will also review the benefits of the transaction, including a stronger position in Owens & Minor distribution segment as well as the potential for revenue and cost synergies. Owens & Minor, headquartered in Mechanicsville, VA, is a nationwide provider of distribution and logistics services to the healthcare industry. Owens & Minor operates two divisions: Global Solutions (80% of 2020 revenue) that includes a comprehensive portfolio of products and services to healthcare providers and manufacturers, and Global Products (20% of 2020 revenue) that manufactures and sources medical surgical products. In the twelve months to September 30, 2021 Owens & Minor had revenue of $9.7 billion. PADDOCK ENTERPRISES: O-I Glass Unit Files Reorganization Plan ------------------------------------------------------------- O-I Glass, Inc. on Jan. 12, 2022, disclosed that its wholly owned subsidiary, Paddock Enterprises, LLC, has filed its Plan of Reorganization and related disclosure statement with the United States Bankruptcy Court for the District of Delaware as part of the Chapter 11 bankruptcy case Paddock initiated on Jan. 6, 2020. The Plan, once confirmed by the courts, will result in a permanent resolution of all current and future asbestos personal injury claims ("Asbestos Claims"). The Plan is jointly proposed by the "Plan Proponents," which are O-I Glass, the Official Committee of Asbestos Personal Injury Claimants (the "ACC"), Paddock, and the legal representative for future asbestos personal injury claimants (the "FCR"). Andres Lopez, CEO of O-I Glass, said, "We are pleased that Paddock is one significant step closer towards achieving the goal of resolving its legacy liabilities in a manner that is fair and efficient for claimants and that provides finality for O-I Glass and Paddock. This Plan represents a favorable outcome for all parties, and we look forward to the Plan's implementation as Paddock moves toward emergence." The Plan's centerpiece is a trust established under section 524(g) of the Bankruptcy Code (the "Asbestos Trust") that will process and pay Asbestos Claims pursuant to Asbestos Trust Distribution Procedures ("TDP"). In exchange for funding the Asbestos Trust, Paddock and its parent company, O I Glass, as well as certain additional parties (collectively, the "Protected Parties"), will be protected by an injunction that will prohibit assertion of Asbestos Claims against the Protected Parties and will channel all such Asbestos Claims to the Asbestos Trust. The Asbestos Trust would be funded with $610 million on the effective date of the Plan. The Plan follows extensive informal negotiations and over a month of formal mediation proceedings among the Plan Proponents. A hearing to consider approval of the Disclosure Statement is scheduled with the Bankruptcy Court for February 16, 2022. Paddock anticipates a confirmation hearing on the Plan to be scheduled for the second quarter of 2022. Paddock is represented in the Chapter 11 case by Latham & Watkins LLP and Richards, Layton & Finger, PA, and O-I Glass is represented by Morris Nichols Arsht & Tunnell LLP. About Paddock Enterprises Paddock Enterprises, LLC's business operations are exclusively focused on (i) owning and managing certain real property and (ii) owning interests in, and managing the operations of, its non-debtor subsidiary, Meigs, which is developing an active real estate business. It is the successor-by-merger to Owens-Illinois, Inc., which previously served as the ultimate parent of the company. Paddock Enterprises is a direct, wholly-owned subsidiary of O-I Glass. Paddock Enterprises sought protection under Chapter 11 of the Bankruptcy Code (Bankr. D. Del. Case No. 20-10028) on Jan. 6, 2020. At the time of the filing, the Debtor disclosed assets of between $100 million and $500 million and liabilities of the same range. Judge Laurie Selber Silverstein oversees the case. The Debtor tapped Richards, Layton & Finger P.A. and Latham & Watkins LLP as legal counsel, Alvarez & Marsal North America LLC as a financial advisor, Riley Safer Holmes & Cancila, LLP as special counsel, and David J. Gordon of DJG Services, LLC as a chief restructuring officer. Prime Clerk, LLC is the claims, noticing, and solicitation agent and administrative advisor. PARTNERS A TASTEFUL: Case Summary & 20 Top Unsecured Creditors -------------------------------------------------------------- Debtor: Partners, A Tasteful Choice Company 2361 South 211th St Des Moines, WA 98198-5177 Business Description: Partners is a second-generation family owned bakery busiess. Chapter 11 Petition Date: January 13, 2022 Court: United States Bankruptcy Court Western District of Washington Case No.: 22-10060 Judge: Hon. Timothy W. Dore Debtor's Counsel: Thomas A. Buford, Esq. BUSH KORNFELD LLP 601 Union St., Suite 5000 Seattle, WA 98101-2373 Tel: (206) 292-2110 Fax: (206) 292-2104 Email: tbuford@bskd.com Total Assets: $25,975,698 Total Liabilities: $17,302,865 The petition was signed by Cara Figgins as president. A full-text copy of the petition is available for free at PacerMonitor.com at: https://www.pacermonitor.com/view/RYOOW3I/Partners_A_Tasteful_Choice_Company__wawbke-22-10060__0001.0.pdf?mcid=tGE4TAMA List of Debtor's 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ 1. Adams Vegetable Oils Ingredients $4,506 PO Box 956 Arbuckle, CA 95912 Gretchen Mross Tel: 530-668-2005 Email: gmross@adamsgrp.com 2. Alliance Packaging Packaging $49,906 PO Box 749702 Los Angeles, CA 90074-9702 Don Russell Tel: 206-849-7902 Email: drussell@alliancepackaging.net 3. American Key Food Products Ingredient $7,613 1 Reuten Dr Closter, NJ 07624 Edwin Pacia Tel: 201-767-8022 Email: edwin@akfponline.com 4. Bakemark Ingredient $11,266 PO Box 102566 Pasadena, CA 91189-2566 Barb Maki Tel: 262-251-0977 Email: barb.maki@bakemark.com 5. Biospringer Ingredient $8,284 PO Box 78209 Milwaukee, WI 53278-8209 Pam Rupp Tel: 408-776-3535 Email: p.rupp@biospringe r.lesaffre.com 6. Bridgewell Ingredient $65,159 Agribusiness LLC PO Box 2289 Clackamas, OR 97015-9594 Horace Harrison Tel: 503-702-2141 Email: hharrison@bridgewellab.com 7. Davis Wright Tremaine Legal $26,508 920 Fifth Ave Suite 3300 Seattle, WA 98104-1610 Heather Wight-Axling Tel: 206-757-8168 Email: heatherwiteaxling@dwt.com 8. DFMI Rep/Broker $4,663 4305 Lynburn Drive Tucker, GA 30084 Attn: Angela Gentry Tel: 770-493-8608 Email: AGentry@dfminc.biz 9. Gemsa Oils Ingredient $10,100 PO Box 1447 La Mirada, CA 90637-1447 Attn: Leo Sun Tel: 714-521-1736 Email: leo@gemsaoils.com 10. Grain Millers Ingredient $15,544 PO Box 912202 Denver, CO 80291-2202 Kelie Hardy Tel: 541-341-6461 Email Kelie.Hardy@grainmillers.com 11. Great Little Box Company Packaging $175,131 607 RIverside Rd, #100 Everett, WA 98201 Brad Weale 604-301-3700 Email: bweale@glbc.com 12. Lineage Logistics Warehousing $9,386 PO Box 101389 Pasadena, CA 91189 Greg Temple Tel: 206-584-8856 Email: Grtemple@lineagelogistics.com 13. Medosweet Ingredient $167,089 PO Box 749 Kent, WA 98035-0749 Todd Waiss Tel: 253-852-4110 Email: todd@medosweet.com 14. Napoleon Company Ingredient $9,108 310 120th Ave NE A203 Bellevue, WA 98005 Tony Magnano Tel: 425-455-3776 Email: tony@napoleon-co.com 15. Portco Packaging Packaging $31,678 211 5th St Woodland, WA 98674 Tracy Moore Tel: 360-992-523 Email: tmoore@portco.com 16. PSE Phone & Utilities $45,049 PO Box 91269 Bellevue, WA 98009-9269 Customer Care Dept. Tel: 888-225-5773 Email: customercare@pse.com 17. Rogers Foods LTD Ingredient $25,988 4420 Larkin Cross Rd Armstrong, BC V0E1B Mike Ward Tel: 604-818-3701 Email: mward@rogersfoods.com 18. Royal Ingredients Ingredient $31,875 PO Box 7287 Carol Stream, IL 60197 Austin Buffington Tel: 312-785-2233 Email: AustinBuffington@ royal-ingredients.com 19. Transcendia Packaging $26,783 PO Box 1418 Carol Stream, IL 60132-1418 Judy Gersch Tel: 708-240-0181 Email: Judy.gersch@Tran silwrap.com 20. Woodland Pallet Packaging $16,000 104 Whalen Rd Woodland, WA 98674 Oscar Betancourt Tel: 360-624-3935 Email: Oscar_palletrec@icloud.com POWER SOLUTIONS: Neil Gagnon Reports 9.96% Equity Stake ------------------------------------------------------- In an amended Schedule 13G filed with the Securities and Exchange Commission, these entities reported beneficial ownership of shares of common stock of Power Solutions International, Inc. as of Dec. 31, 2021: Shares Percent Beneficially of Reporting Person Owned Class ---------------- ------------ ------- Gagnon Securities LLC 1,297,667 5.7% Gagnon Advisors, LLC 626,584 2.7% Neil Gagnon 2,283,456 9.96% Mr. Gagnon has sole voting and dispositive power over 226,996 shares of the Issuer's Common Stock, par value $0.001 per share. In addition, Mr. Gagnon has shared voting power over 2,005,864 shares of the Issuer's common stock and shared dispositive power over 2,056,460 shares of common stock. Mr. Gagnon is the managing member and principal owner of Gagnon Securities LLC, an investment adviser registered with the U.S. Securities and Exchange Commission under the Investment Advisers Act of 1940, as amended, and a registered broker-dealer, in its role as investment manager to several customer accounts, foundations, partnerships and trusts to which it furnishes investment advice. GS and Mr. Gagnon may be deemed to share voting power with respect to 1,255,641 shares of common stock held in the Accounts and dispositive power with respect to 1,297,667 shares of common stock held in the Accounts. GS and Mr. Gagnon expressly disclaim beneficial ownership of all securities held in the Accounts. Mr. Gagnon is also the chief executive officer of Gagnon Advisors, LLC, an investment adviser registered with the SEC under the Advisers Act. Mr. Gagnon and Gagnon Advisors, in its role as investment manager to Gagnon Investment Associates, LLC, a private investment fund, may be deemed to share voting and dispositive power with respect to the 626,584 shares of the Issuer's common stock held by GIA. Gagnon Advisors and Mr. Gagnon expressly disclaim beneficial ownership of all securities held by GIA. A full-text copy of the regulatory filing is available for free at: https://www.sec.gov/Archives/edgar/data/0001137091/000101905622000045/power_13ga7.htm About Power Solutions Headquartered in Wood Dale, IL, Power Solutions International, Inc. (http://www.psiengines.com)designs, engineers, manufactures, markets and sells a broad range of advanced, emission-certified engines and power systems that are powered by a wide variety of clean, alternative fuels, including natural gas, propane, and biofuels, as well as gasoline and diesel options, within the energy, industrial and transportation end markets. The Company manages the business as a single segment. Power Solutions reported a net loss of $22.98 million for the year ended Dec. 31, 2020, compared to net income of $8.25 million for the year ended Dec. 31, 2019. As of June 30, 2021, the Company had $284.43 million in total assets, $311.82 million in total liabilities, and a total stockholders' deficit of $27.40 million. Chicago, Illinois-based BDO USA, LLP, the Company's auditor since 2018, issued a "going concern" qualification in its report dated March 30, 2021, citing that significant uncertainties exist about the Company's ability to refinance, extend, or repay its outstanding indebtedness and maintain sufficient liquidity to fund its business activities. These factors raise substantial doubt about the Company's ability to continue as a going concern. POWER STOP: Moody's Assigns B3 CFR; Outlook Stable -------------------------------------------------- Moody's Investors Service assigned first-time ratings to Power Stop, LLC, including a B3 Corporate Family Rating and B3-PD Probability of Default Rating. Moody's also assigned B3 ratings to Power Stop's senior secured first lien revolving credit facility and term loan. The outlook is stable. Proceeds from the company's $395 million term loan will be used to refinance existing indebtedness, fund a $158 million shareholder distribution, and pay related fees and expenses. Assignments: Issuer: Power Stop, LLC Corporate Family Rating, Assigned B3 Probability of Default Rating, Assigned B3-PD Senior Secured 1st Lien Revolving Credit Facility, Assigned B3 (LGD4) Senior Secured 1st Lien Term Loan, Assigned B3 (LGD4) Outlook Actions: Issuer: Power Stop, LLC Outlook, Assigned Stable RATINGS RATIONALE Power Stop's B3 CFR reflects the company's modest scale, lack of business diversity, high financial leverage, and weak free cash flow. The company's revenue was approximately $276 million for the twelve months ended September 30, 2021. Moody's expects the company's pro forma adjusted debt/EBITDA to decline to 5.7 times by the end of 2022, down from 6.7 times at September 30, 2021. Power Stop will generate very limited free cash flow during the next 12-18 months. The B3 CFR is supported by the strong brand recognition of Power Stop's brake kits, components and related accessories among DIY auto enthusiasts. Further, the non-discretionary nature of the company's products is likely to provide resiliency to its revenue during periods of economic weakness. The rating is also supported by the Power Stop's business model, where it sells product through the likes of online retailers and marketplaces in addition to traditional warehouse distributors. Moody's expects Power Stop to operate with high financial leverage and modest free cash flow (including required tax distributions) over the next 12-18 months. The rating agency also expects the company to continue to its track record of strong growth. Despite its association with the automotive industry, Power Stop has limited direct environmental risk because its brake kits, components, and accessories are not responsible for carbon emissions. Further, we view social risk for Power Stop as being moderate, given the importance of product safety for customers. Maintaining a strong record of product quality and safety helps to protect the company against brand erosion. Moody's expects Power Stop to exhibit aggressive financial policies that favor its private equity owners over creditors. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS The ratings could be upgraded if Power Stop pursues more conservative financial policies and effectively manages its growth. An upgrade could also be achieved if debt/EBITDA is sustained below 5.5 times alongside greater scale and/or business diversity. Higher levels of free cash flow that are commensurate with revenue and profit growth could also support an upgrade. The ratings could be downgraded if the company's liquidity erodes or operating performance weakens. Further, persistently negative free cash flow or large debt funded dividends could also result in a ratings downgrade. As proposed, the new senior secured first lien credit facilities are expected to provide covenant flexibility that if utilized could negatively impact creditors. Notable terms include the following. Incremental debt capacity up to the greater of $75.2 million and 100% of consolidated pro forma adjusted EBITDA plus the amount of the then available general debt basket plus unlimited amounts up to 0.25 times outside of closing date first lien net leverage. Amounts up to the greater of $75.2 million and 100% of consolidated pro forma adjusted EBITDA may be incurred with an earlier maturity date than the first lien term loans. There are no express "blocker" provisions which prohibit the transfer of specified assets to unrestricted subsidiaries; such transfers are permitted subject to carve-out capacity and other conditions. Non-wholly-owned subsidiaries are not required to provide guarantees; dividends or transfers resulting in partial ownership of subsidiary guarantors could jeopardize guarantees, with no explicit protective provisions limiting such guarantee releases. There are no express provisions prohibiting up-tiering transactions. The above are proposed terms and the final terms of the credit agreement may be materially different. Power Stop LLC sells brake kits, components and related accessories to traditional warehouse distributors and through major online retailers. Revenue was approximately $276 million for the twelve months ended September 30, 2021. The company is majority owned by private equity firm TSG Consumer Partners. PURDUE PHARMA: Judge Drain Orders Mediation Over Opioid Settlement ------------------------------------------------------------------ Maria Chutchian of Reuters reports that a U.S. judge ordered mediation in the Purdue Pharma bankruptcy, calling for the company, the Sackler family members that own it and nine states to determine whether they can reach a new opioid litigation settlement by Jan. 14, 2021. U.S. Bankruptcy Judge Robert Drain in White Plains, New York, issued an order directing the parties to negotiate changes to a previous deal rejected by another judge in December that provided the Sacklers protection against future opioid litigation. U.S. Bankruptcy Judge Shelley Chapman is serving as the mediator. If they do not reach agreement by then, the mediation will end and an appeal by Purdue against the deal's rejection will continue. Judge Chapman presided over prior mediation that led to the earlier settlement, under which the Sacklers said they would contribute $4.5 billion to Purdue’s reorganization plan, which directs money toward opioid abatement programs. In exchange, the Sacklers, who have denied wrongdoing, received legal protections known as nondebtor releases. Purdue, the maker of OxyContin, filed for bankruptcy in 2019 in the face of thousands of lawsuits accusing it and the Sacklers of fueling the opioid epidemic through deceptive marketing. Representatives for the Sacklers and Purdue did not immediately respond to a request for comment, nor did a lawyer representing most of the states that opposed the prior deal. U.S. District Judge Colleen McMahon on Dec. 16 reversed Drain's approval of Purdue's reorganization plan and the underlying settlement. Following McMahon's ruling, Drain urged the parties to negotiate in good faith. Purdue has taken steps to appeal McMahon's decision to the 2nd U.S. Circuit Court of Appeals. About Purdue Pharma LP Purdue Pharma L.P. and its subsidiaries -- http://www.purduepharma.com/-- develop and provide prescription medicines and consumer products that meet the evolving needs of healthcare professionals, patients, consumers and caregivers. Purdue's subsidiaries include Adlon Therapeutics L.P., focused on treatment for Attention-Deficit/Hyperactivity Disorder (ADHD) and related disorders; Avrio Health L.P., a consumer health products company that champions an improved quality of life for people in the United States through the reimagining of innovative product solutions; Imbrium Therapeutics L.P., established to further advance the emerging portfolio and develop the pipeline in the areas of CNS, non-opioid pain medicines, and select oncology through internal research, strategic collaborations and partnerships; and Greenfield Bioventures L.P., an investment vehicle focused on value-inflection in early stages of clinical development. Opioid makers in the U.S. are facing pressure from a crackdown on the addictive drug in the wake of the opioid crisis and as state attorneys general file lawsuits against manufacturers. More than 2,000 states, counties, municipalities and Native American governments have sued Purdue Pharma and other pharmaceutical companies for their role in the opioid crisis in the U.S., which has contributed to the more than 700,000 drug overdose deaths in the U.S. since 1999. OxyContin, Purdue Pharma's most prominent pain medication, has been the target of over 2,600 civil actions pending in various state and federal courts and other fora across the United States and its territories. On Sept. 15 and 16, 2019, Purdue Pharma L.P. and 23 affiliated debtors each filed a voluntary petition for relief under Chapter 11 of the U.S. Bankruptcy Code (Bankr. S.D.N.Y. Lead Case No. 19-23649), after reaching terms of a preliminary agreement for settling the massive opioid litigation. The Debtors' consolidated balance sheet as of Aug. 31, 2019, showed $1.972 billion in assets and $562 million in liabilities. U.S. Bankruptcy Judge Robert Drain oversees the cases. The Debtors tapped Davis Polk & Wardwell, LLP and Dechert, LLP as legal counsel; PJT Partners as investment banker; AlixPartners as financial advisor; and Grant Thornton, LLP as tax structuring consultant. Prime Clerk LLC is the claims agent. Akin Gump Strauss Hauer & Feld LLP and Bayard, P.A., represent the official committee of unsecured creditors appointed in the Debtors' bankruptcy cases. David M. Klauder, Esq., is the fee examiner appointed in the Debtors' cases. The fee examiner is represented by Bielli & Klauder, LLC. * * * U.S. Bankruptcy Judge Robert Drain in early September 2021 approved a plan to turn Purdue into a new company (Knoa Pharma LLC) no longer owned by members of the Sackler family, with its profits going to fight the opioid epidemic. The Sackler family agreed to pay $4.3 billion over nine years to the states and private plaintiffs and in exchange for a lifetime legal immunity. The deal resolves some 3,000 lawsuits filed by state and local governments, Native American tribes, unions, hospitals and others who claimed the company's marketing of prescription opioids helped spark and continue an overdose epidemic. Separate appeals to approval of the Plan have already been filed by the U.S. Bankruptcy Trustee, California, Connecticut, the District of Columbia, Maryland, Rhode Island and Washington state, plus some Canadian local governments and other Canadian entities. Purdue filed its Chapter 11 Plan on March 15, 2021. A twelfth amended Chapter 11 plan was filed on September 2, 2021, which was confirmed on September 17. Purdue divides the claims against it into several categories, one of which it calls "PI Claims," consisting of claims "for alleged opioid-related personal injury." The plan provides for the creation of the "PI Trust," which will administer all PI Claims. The trust will be funded with an initial distribution of $300 million on the effective date of the Chapter 11 plan, followed by a distribution of $200 million in 2024, and distributions of $100 million in 2025 and 2026. In sum, "[t]he PI Trust will receive at least $700 million in value, and may receive an additional $50 million depending on the amount of proceeds received on account of certain of Purdue's insurance policies." The plan further provides that Purdue's ability to recover from its insurers will be vested in a "Master Disbursement Trust." To the extent any proceeds are recovered from Purdue's insurers with respect to the PI Claims, up to $450 million of those proceeds will be channeled from the MDT to the PI Trust. However, the PI Trust will be funded regardless of whether anything is recovered from Purdue's insurers. Instead, "[d]istributions to the PI Trust are subject to prepayment on a rolling basis as insurance proceeds from certain of Purdue's insurance policies are received by the MDT and paid forward to the PI Trust." Q BIOMED: YA II PN, et al., Hold 9.99% Equity Stake as of Dec. 31 ----------------------------------------------------------------- In an amended Schedule 13G filed with the Securities and Exchange Commission, these entities and individuals reported beneficial ownership of shares of common stock of Q BioMed Inc. as of Dec. 31, 2021: Shares Percent Reporting Beneficially of Person Owned Class ----------- ------------ -------- YA II PN, Ltd. 3,174,091 9.99% YA Global Investments II (U.S.), LP 3,174,091 9.99% YA II GP, LP 3,174,091 9.99% YA II GP II, LLC 3,174,091 9.99% Yorkville Advisors Global, LP 3,174,091 9.99% Yorkville Advisors Global II, LLC 3,174,091 9.99% Mark Angelo 3,174,091 9.99% D-Beta One EQ, Ltd. 3,174,091 9.99% D-Beta One Blocker EQ, Ltd. 3,174,091 9.99% D-Beta One Growth and Opportunity Fund Offshore, LP 3,174,091 9.99% D-Beta One GP, LLC 3,174,091 9.99% SC-Sigma Global Partners, LP 3,174,091 9.99% The reporting persons directly or indirectly own an aggregate of 3,174,091, or 9.99%, shares of common stock of the company as of the date of this filing. YA II and the other reporting persons shared the power to vote and dispose any such common stock. The percentages were calculated based on 31,772,679 outstanding shares of issuer's common stock, consisting of 28,598,588 shares of common stock outstanding shares as of Jan. 11, 2022 (the date of this report) and an additional 3,174,091 shares of common stock that the reporting person has the right to acquire within 60 days of the date of the report. A full-text copy of the regulatory filing is available for free at: https://www.sec.gov/Archives/edgar/data/1596062/000110465922003202/tm222640d3_sc13ga.htm About Q BioMed Inc. Q BioMed Inc. -- http://www.QBioMed.com-- is a biotech acceleration and commercial stage company. The Company is focused on licensing and acquiring undervalued biomedical assets in the healthcare sector. Q BioMed is dedicated to providing these target assets the strategic resources, developmental support, and expansion capital needed to ensure they meet their developmental potential, enabling them to provide products to patients in need. Q Biomed reported a net loss of $13.49 million for the year ended Nov. 30, 2020, compared to a net loss of $10.28 million for the year ended Nov. 30, 2019. As of Aug. 31, 2021, the Company had $601,556 in total assets, $3.60 million in total liabilities, and a total stockholders' deficit of $3 million. New York, NY-based Marcum LLP, the Company's auditor since 2015, issued a "going concern" qualification in its report dated March 1, 2021, citing that the Company has a significant working capital deficiency, has incurred significant losses and needs to raise additional funds to meet its obligations and sustain its operations. These conditions raise substantial doubt about the Company's ability to continue as a going concern. QHC FACILITIES: CEO Voyna's Illness Disrupts Bankruptcy Case ------------------------------------------------------------ Lauren Coleman-Lochner of Bloomberg News reports that the illness of CEO Nancy Voyna has disrupted nursing-home chain QHC Facilities LLC's bankruptcy case. Nancy Voyna, chief executive officer of QHC Facilities LLC, is hospitalized "with extremely serious health conditions" and is unable to remain in her role, according to a Tuesday, January 11, 2022, court filing. QHC filed for bankruptcy Dec. 29 with a plan to seek a buyer, citing "crippling staffing and employee retention issues." The death of Voyna's husband and co-founder also "had a devastating impact" on the business, Nancy Voyna said in an earlier filing. About QHC Facilities QHC Facilities, LLC, based in Clive, Iowa, operates eight skilled nursing facilities. The facilities include Crestview Acres in Marion as well as in Tama, Madison, Humboldt, Jackson, Webster and Polk counties and two assisted living centers. Collectively, the facilities have a maximum capacity of more than 700 residents. The company employs roughly 300 full-time and part-time workers. QHC Facilities and its affiliates filed petitions for Chapter 11 protection (Bankr. S.D. Iowa Lead Case No. 21-01643) on Dec. 29, 2021. The affiliates are QHC Management LLC, QHC Mitchellville LLC, QHC Crestridge LLC, QHC Humboldt North LLC, QHC Winterset North LLC, QHC Madison Square LLC, QHC Humboldt South LLC, QHC Villa Cottages LLC, QHC Fort Dodge Villa LLC, and QHC Crestview Acres Inc. The Ccompany claimed $1 million in assets and $26.3 million in liabilities as of the bankruptcy filing. Judge Anita L. Shodeen oversees the cases. Jeffrey D. Goetz, Esq., and Krystal R. Mikkilineni, Esq., at Bradshaw Fowler Proctor & Fairgrave, PC are the Debtors' bankruptcy attorneys. Gibbins Advisors, LLC serves as QHC Facilities' financial advisor. QUALITY REHABILITATION: Unsecured Creditors to Split $45K in Plan ----------------------------------------------------------------- Quality Rehabilitation Network, Inc., filed with the U.S. Bankruptcy Court for the District of Arizona a Plan of Reorganization dated Jan. 4, 2022. Carl Malmquist acquired the Debtor in 2014. At the time, the Debtor was operating as a traditional physical therapy business. Under Mr. Malmquist's guidance, the Debtor began offering aqua therapy, a service otherwise not readily available in Yuma, Arizona. Despite the effects of the ongoing pandemic, the Debtor maintained its operations through 2020 and the majority of 2021. While the Debtor was evaluating its option to reorganize, AHCCCS, a significant source of the Debtor's revenue, froze payments to the Debtor pending an investigation into certain billings by the Debtor. Such a loss of income at a vulnerable time in the Debtor's operations made it evident that the Debtor would need to reorganize in order to manage its liabilities. Class I(a) consists solely of the Allowed Secured Claim of Ascentium. Class I(a) shall hold an Allowed Claim in the estimated value of the Endless Pool, $5,000. The Class I(a) Claim shall accrue interest at the rate of 4.25% per annum from the Confirmation Date. The Debtor shall pay Class I(a) in full through 60 equal monthly payments of $92.64 beginning on the Effective Date and continuing every month on the same day thereafter until paid in full. Class I(b) consists solely of the Allowed Secured Claim of Foothills. Class I(b) shall hold an Allowed Claim in the estimated value of the Foothills Collateral, $12,725. The Class I(b) Claim shall accrue interest at the rate of 4.25% per annum from the Confirmation Date. The Debtor shall pay Class I(b) in full through sixty (60) equal monthly payments of $235.79 beginning on the Effective Date and continuing every month on the same day thereafter until paid in full. Class I(c) consists solely of the Allowed Secured Claim of Navitas. Class I(c) shall hold an Allowed Claim in the estimated value of the Navitas Collateral, $3,345. The Class I(c) Claim shall accrue interest at the rate of 4.25% per annum from the Confirmation Date. The Debtor shall pay Class I(c) in full through 60 equal monthly payments of $61.98 beginning on the Effective Date and continuing every month on the same day thereafter until paid in full. Class I(d) consists solely of the Allowed Secured Claim of USAA. Class I(d) shall hold an Allowed Claim in the value provided under the parties' pre-petition loan documents. The Class I(d) Claim shall accrue interest as provided in the parties' pre-petition loan documents. The Debtor shall pay Class I(d) in full under the terms provided in the parties' pre-petition loan document. Class I(e) consists solely of the Allowed Secured Claim of FC Marketplace relating to its security interest encumbering substantially all of the Debtor's personal property. Class I(e) shall hold an Allowed Claim in the value of its unavoidable interests in the Debtor's Property as of the Petition Date, $108,425.46. The Class I(e) Claim shall accrue interest at the rate of 4.25% per annum from the Confirmation Date. The Debtor shall pay Class I(e) in full through 60 equal monthly payments of $2,008.89 beginning on the Effective Date and continuing every month on the same day thereafter until paid in full. Class I(f) consists solely of the Allowed Secured Claim of Bankers Healthcare. Class I(f) shall hold an Allowed Claim in the amount of $15,630.90, the estimated value of its unavoidable interests in the Debtor's Property as of the Petition Date after the higher-priority Class I(e) Claim. The Class I(f) Claim shall accrue interest at the rate of 4.25% per annum from the Confirmation Date. The Debtor shall pay Class I(f) in full through 60 equal monthly payments of $289.60 beginning on the Effective Date and continuing every month on the same day thereafter until paid in full. Class I(g) consists solely of the Allowed Secured Claim of the SBA relating to its security interest encumbering substantially all of the Debtor personal property. As of the Petition Date, the Debtor had no value above the higher priority Class I(e) and I(f) Claims to which the Class I(g) Claim could attach. As a result, Class I(g) shall hold no Allowed Secured Claim. The SBA shall have a Class II claim in the total amount of its Allowed Claim. Class I(g) consists solely of the Allowed Secured Claim of IOU Financial relating to its security interest encumbering substantially all of the Debtor personal property. IOU Financial does not appear to have perfected such security interest and has not filed a proof of Claim in this Case. Regardless, the Debtor had no value above the higher priority Class I(e) and I(f) Claims to which the Class I(g) Claim could attach as of the Petition Date. For such reasons Class I(g) shall hold no Allowed Secured Claim. IOU Financial shall have a Class II claim in the total amount of the its Allowed Claim. Class I(h) consists solely of the Allowed Secured Claim of Marlin relating to its purchase-money security interest encumbering the Debtor's Juvent Fyzical Bundle. Marlin does not appear to have perfected such security interest and has filed a proof of Claim indicating its Claim is unsecured. For such reasons, Class I(h) shall hold no Allowed Secured Claim. Marlin shall have a Class II claim in the total amount of its Allowed Claim. Class II consists of all Allowed Unsecured Claims against the Debtor. The Debtor shall pay holders of Allowed Class II Claims their Pro Rata share of total amount of $45,000 through the following annual payments beginning on the Initial Payment Date and continuing the same day each year: First Year: $5,000; Second Year: $5,000; Third Year: $10,000; Fourth Year: $10,000; and Fifth Year: $15,000. Class II is impaired. Class III consists of all Allowed Equity Interests arising by virtue of a member's ownership interest in the Debtor. Class III Equity Interest holders shall retain their Equity Interest in the Debtor to the same extent and validity and upon the same terms as their pre-petition Equity Interest. Class III is unimpaired. Upon the Effective Date, the Debtor will begin making payments to Creditors under the Plan. The Debtor will use funds in its Debtor-in-possession account to pay Administrative Claims, unless otherwise agreed, and initial payments to Priority Tax Claims and Class I Claims. The Debtor will fund the remaining payments through its post-confirmation operations as well as any funds remaining after the Effective Date payments. The Debtor will pay Allowed Priority Tax Claims and Class I Claims in full through equal monthly payments. The Debtor will use remaining Disposable Income to pay Class II Allowed General Unsecured Claims. A full-text copy of the Plan of Reorganization dated Jan. 4, 2022, is available at https://bit.ly/3GmZSDQ from PacerMonitor.com at no charge. Attorneys for the Debtor: Thomas H. Allen, Esq. David B. Nelson Allen Barnes & Jones, PLC 1850 N. Central Ave., Suite 1150 Phoenix, Arizona 85004 Tel: (602) 256-6000 Fax: (602) 252-4712 Email: tallen@allenbarneslaw.com About Quality Rehabilitation Network Yuma, Ariz.-based Quality Rehabilitation Network, Inc. filed a petition for Chapter 11 protection (Bankr. D. Ariz. Case No. 21-07539) on Oct. 6, 2021, listing up to $500,000 in assets and up to $10 million in liabilities. Carl Malmquist, president, signed the petition. Judge Brenda Moody Whinery oversees the case. The Debtor tapped Thomas H. Allen, Esq., at Allen Barnes & Jones, PLC as bankruptcy counsel, Gammage & Burnham, PLC as special counsel and Shippen Pope and Associates, PLLC as accountant. RISING PHOENIX: Secures Court Protection Under CCAA --------------------------------------------------- Rising Phoenix International Inc. and certain of its affiliates, including the entities which operates M College of Canada, CDE College and CCSQ, announced they have secured court protection from their creditors under the Companies' Creditors Arrangement Act in order to stabilize their operations and give them time to explore, where possible, the sale of certain colleges as going concerns. Richter Advisory Group Inc. was appointed to monitor the activities of the Companies for the duration of the CCAA proceedings and, as an officer of the Court, to control their receipt and disbursements, liaise with stakeholders, and periodically report to the Court on the progress of the CCAA Proceedings. The upheaval caused by the COVID-19 pandemic, its subsequent travel restrictions/delays, the health and safety protocols required within the Companies, has created a substantial increase of the operating costs and a drastic drop in enrolment and thus in company revenues. The Companies have had no alternative, but to seek Court protection from their creditors. The Companies will continue to operate, in cooperation with the Ministry of Education and Higher Education of Quebec, to implement solutions to allow existing students to complete their academic programs or to transition to other colleges where this can be achieved. More information about the CCAA proceedings is available at https://www.richter.ca/insolvencycase/rising-phoenix-international-inc The Monitor can be reached at: Richter Advisory Group Inc. 1981 McGill College, #1100 Montreal, QC H3A 0G6 Olivier Benchaya Tel: 514-934-8618 Email: obenchaya@richter.ca Andrew Adessky Tel: 514-934-3513 Email: aadessky@richter.ca Shawn Travitsky Tel: 514-934-3505 Email: stravitsky@richter.ca Counsel to the Monitor: Stikeman Elliott LLP 1155 Rene-Levesque Blvd., West 41st Floor Montreal, Quebec H3B 3V2 Joseph Reynaud Tel: 514-397-3019 Email: jreynaud@stikeman.com Nathalie Nouvet Tel: 514-397-3128 Email: nnouvet@stikeman.com William Rodier-Dumais Tel: 514-397-3298 Email: wrodierdumais@stikeman.com Counsel to the Companies: Kaufman Lawyers LLP 800 Rene-Levesque Boulevard West Suite 2220 Montreal, QC H3B 1x9 Martin P. Jutras Tel: 514-871-5320 Email: mjutras@klcanada.com Steven M. Shein Tel: 514-871-5303 Email: sshein@klcanada.com Montreal, Quebec-based Rising Phoenix International Inc., and its affiliates form part of the RPI Group that provide student recruitment services for partner colleges as well as educational services to local and international students in three colleges, namely M College, CCSQ and CDE. ROCKDALE MARCELLUS: Creditors Ask Conversion to Chapter 7 --------------------------------------------------------- James Nani of Bloomberg Law reports that two unsecured creditors of Rockdale Marcellus assert that Rockdale Marcellus LLC's Chapter 11 bankruptcy should be converted to Chapter 7 now that the shale driller is selling off its major assets. Converting Rockdale's case will maximize the amount that unsecured creditors recover, Regency Marcellus Gas Gathering LLC and ETC Aqua LLC told the U.S. Bankruptcy Court for the Western District of Pennsylvania Monday, according to the report. Regency and ETC, two of four remaining general unsecured creditors in the case, hold about $25.7 million -- or 79% -- of an estimated $32.6 million in remaining unsecured claims, they said. About Rockdale Marcellus Rockdale Marcellus is a northeast Pennsylvania natural gas driller. It owns and operates 66 producing wells on 42,897 net acres in three northeast PA counties. On Sept. 21, 2021, Rockdale Marcellus, LLC and Rockdale Marcellus Holdings, LLC filed petitions seeking relief under chapter 11 of the United States Bankruptcy Code (Bankr. W.D. Pa. Lead Case No. 21-22080). The Debtors' cases have been assigned to Judge Gregory L. Taddonio. Rockdale LLC listed $100 million to $500 million in assets and liabilities as of the bankruptcy filing. Reed Smith LLP is serving as the Debtors' counsel. Huron Consulting Services LLC is the restructuring advisor. Houlihan Lokey Capital, Inc., is the investment banker. Epiq is the claims agent. ROSEVILLE PROPERTIES: Unsecureds to Get $175K to $200K in Plan -------------------------------------------------------------- Roseville Properties, LLC, filed with the U.S. Bankruptcy Court for the Middle District of Florida a Chapter 11 Plan under Subchapter V dated Jan. 4, 2022. The Debtor is a real estate developer that holds six unrelated, noncontiguous properties in Central Florida, comprised of the Altamonte Lot, the Champions Gate Apartment, the Champions Gate Lot, the Warehouse, the Winter Haven Apartment, and the Winter Haven Residence. Roseville's Chapter 11 filing was precipitated by a dispute with an unsecured creditor, CHM, arising under a prepetition settlement agreement pursuant to which the Debtor agreed to make certain payments to CHM. Unfortunately, Roseville has been unable to make the payments contemplated by the settlement agreement. Class 14 consists of the Allowed General Unsecured Claim of CHM in the amount of $1,882,236.00. In the event that the Plan Sale Properties are sold through one or more Plan Sale(s), the Allowed Class 14 Claim of CHM will be treated as an Allowed Class 15 Claim and will receive its Pro Rata Share of (i) any Unsecured Sale Proceeds Distribution and (ii) any Net Disposable Income. Class 14 is Impaired. Class 15 consists of the Allowed General Unsecured Claims in the amount of $496,550.22. The Holders of Allowed Class 15 Claims shall receive their Pro Rata Share of the Unsecured Sale Proceeds Distribution, which amounts shall be distributed by the Disbursing Agent within 90 days after the Closing of each Plan Sale. Pending such Plan Sales, the Reorganized Debtor will also make semi-annual distributions of any Net Disposable Income Pro Rata among the Holder of the Allowed Class 14 Claim and the Holders of Allowed Class 15 Claims, with each installment being made within thirty days after each six-month anniversary of the Effective Date. Class 15 is Impaired. Estimated Total Class 14 and 15 Distributions shall be $175,000-$200,000. Class 16 consists of all Allowed Equity Interests. On the Effective Date, Garrett J. Kenny, as the sole Holder of all Equity Interests in the Debtor shall be entitled to retain all legal, equitable, and contractual rights in such Equity Interests; provided, however, that such Holder shall not be entitled to any Distribution from the Estate until all Allowed Administrative Expense Claims, Allowed Priority Tax Claims, and Allowed Claims in Classes 14 and 15 have received all payments provided under the Plan. Class 16 is Unimpaired and, therefore, is not entitled to vote to accept or reject the Plan. Class 16 is presumed to accept the Plan. On the Effective Date, the Reorganized Debtor will convey the Champions Gate Apartment to the Designated Entity in exchange for a cash in the amount of the Champions Gate Apartment Equity Payment. The Reorganized Debtor will pay all Allowed Administrative Expenses Claims from existing Cash and the Champions Gate Apartment Equity Payment, and utilize the remaining Cash therefrom for the maintenance and operation of the Plan Sale Properties pending the sale of such properties in accordance with the Plan. After the Effective Date, the Reorganized Debtor will attempt to sell the Plan Sale Properties. Within 15 days of the Effective Date, if not sooner, the Reorganized Debtor will engage a real estate broker to list the Plan Sale Properties for sale for a period of twelve months. At the Closing of any Plan Sale Properties, the Closing Agent shall pay the Sale Closing Costs and any Allowed Secured Claims secured by liens on the Plan Sale Properties sold. The Closing Agent will then transfer the remaining Net Sale Proceeds to the Disbursing Agent, which will be distributed pursuant to the Plan. Within 90 days of the Closing(s) of each the Plan Sale(s), the Disbursing Agent shall distribute the Unsecured Sale Proceeds Distribution. In the event that one or more of the Plan Sale Properties are not sold after twelve months of such properties being listed for sale with the Sales Agent, the Reorganized Debtor shall (i) execute quit claim deeds conveying each such unsold Plan Sale Property to the Holder of the Allowed Class 14 Claim or a designee thereof in full and complete satisfaction of CHM's then remaining Allowed Claim, (ii) after satisfaction of the Reorganized Debtor's post-confirmation obligations, distribute the Reorganized Debtor's remaining Cash pro rata to the Holders of Allowed Class 15 Claims, and (iii) if any Cash remains after such distributions, make a final distribution of Cash to the Holder of the Allowed Class 14 Claim. No distributions shall be made by the Debtor or Reorganized Debtor on account of the Holder of the Class 16 Equity Interests unless and until all senior classes of claims are paid in full. A full-text copy of the Subchapter V Plan dated Jan. 04, 2022, is available at https://bit.ly/3tg6H6v from PacerMonitor.com at no charge. Counsel for Debtor: Adam Lawton Alpert, Esq. Kathleen L. DiSanto Bush Ross, PA Post Office Box 3913 Tampa, FL 33601-3913 Telephone: (813) 224-9255 Facsimile: (813) 223-9620 E-mail: aalpert@bushross.com E-mail: kdisanto@bushross.com About Roseville Properties Roseville Properties, LLC filed its voluntary petition for relief under Chapter 11 of the Bankruptcy Code (Bankr. M.D. Fla. Case No. 21-06004) on Nov. 29, 2021, listing $500,000 to $1 million in assets and $1 million to $10 million in liabilities. Garrett J. Kenny, managing member, signed the petition. Bush Ross, PA, serves as the Debtor's counsel. SAFE SITE: Taps Ronak Bhatt CPA as Financial Advisor ---------------------------------------------------- Safe Site Youth Development, Inc. seeks approval from the U.S. Bankruptcy Court for the District of New Mexico to hire Ronak Bhatt CPA, LLC, doing business as Pillar CPAs & Business Advisors, as financial advisor and accountant. The firm's services include: (a) providing assistance to the Debtor in connection with analyzing, structuring, negotiating, and effecting a financial plan, and acting as financial advisor and consultant to the Debtor in connection with any potential restructuring of its outstanding indebtedness; (b) providing assistance to the Debtor in connection with analyzing, structuring, negotiating and effecting, and implementing policies to ensure adherence to a cash flow plan; (c) becoming familiar with, to the extent the firm deems appropriate, and analyzing, the business, operations, properties, financial condition, and prospects of the Debtor; (d) assisting the Debtor in ongoing operations; (e) rendering such other financial advisory or consulting services as may from time to time be agreed upon by the Debtor and the firm. The firm's hourly rates are as follows: Ronak Bhatt $160 per hour Second-tier consultants $150 per hour Clerk $90 per hour Ronak Bhatt, a member of the firm, 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: Ronak Bhatt, CPA Pillar CPAs & Business Advisors 2700 Palmilla Rd Los Lunas, NM 87031 Tel: 505-865-1040 Email: contact@pillarcpas.com About Safe Site Safe Site Youth Development, Inc., a company based in Los Lunas, N.M., filed a petition for Chapter 11 protection (Bankr. D. N.M. Case No. 21-11399) on Dec. 30, 2021, listing $1,277,033 in assets and $1,741,417 in liabilities. Felix and Sarah Candelaria, site directors, signed the petition. Judge Robert H. Jacobvitz oversees the case. The Debtor tapped Dennis A. Banning, Esq., at New Mexico Financial & Family Law, P.C. as legal counsel and Ronak Bhatt CPA, LLC as financial advisor and accountant. SALINSGROVE INSTITUTIONAL: Owes More Than $2.4-Mil. to Businesses ----------------------------------------------------------------- Marcia Moore of The Daily Item reports that several Valley businesses are owed money by Wood-Metal, according to the Selinsgrove company's Chapter 11 filing in federal court. In all, more than $2.4 million is owed to the company's top 20 creditors, according to the petition filed Friday in the U.S. Bankruptcy Court for the Middle District of Pennsylvania by Wood-Metal, also known as Selinsgrove Institutional Casework LLC. "It has a lot of tentacles and we are affected. The money we aren’t getting paid isn't going to buy new equipment from a local contractor or a new vehicle from a local dealer," said Barry Derr, owner of Sunbury businesses Northeastern Casework Installations, which is listed in the petition as being owed $79,012.50 and Educational Furnishings Co. which is listed as being owed $28,796.40. "It's a shame (but) we are going to get through it." Wood-Metal was purchased in August by Maurice and Deb Brubaker, a married couple who work together in a tax and accounting firm in Lewisburg and also own two other troubled Snyder County companies, William Penn Cabinetry, which they launched in February 2020, and a long-term Middleburg business, Stanley Woodworking, that they purchased one month later. Robert Chernicoff, a Harrisburg attorney specializing in bankruptcy cases, filed the Chapter 11 petition Friday on behalf of Wood-Metal and said he is negotiating with creditors regarding the Brubakers’ two other companies. William Penn, which stopped production in October, will probably not reopen, he said. Chernicoff said the aim is to keep both Wood-Metal and Stanley Woodworking in operation. Roger Hackenberg, owner of the Kreamer family trucking business, Hackenberg Brothers Inc., said problems arose when the Brubakers took over the businesses. "We delivered across Pennsylvania, New Jersey, New York and in the New England area. It would take months to get a check," he said. According to the bankruptcy petition, Hackenberg's company is owed $34,630.49 and he said another $7,000 is owed him by William Penn. "I hauled for Stanley Woodworking for 30 years. They wrecked that business," Hackenberg said. Among the other local creditors listed in the Wood-Metal petition are Tru-Bilt Lumber Company, Sunbury, for $246,941.20; Computer Support Services Inc., of Lewisburg, for $16,475; Wood Mode LLC, of Kreamer, for $16,000; Geisinger Health Plan, Danville, for $14,226.34 and Centerfire Display, Middleburg, for $13,835. About Wood-Metal Industries Wood-Metal Industries -- is a manufacturer of cabinets and casework for a variety of applications in education, healthcare and institutional environments. It offers wide of products like custom made wood, music and plastic laminate casework in various colours, thereby enabling clients to choose and enhance the style that complements their interior design schemes along with performance and strength. Selinsgrove Institutional Casework, LLC, doing business as Wood Metal Industries, sought Chapter 11 protection (Bankr. M.D. Pa. Case No. 22-bk-00021) on Jan. 7, 2022. The Debtor's counsel: Robert E Chernicoff Cunningham And Chernicoff PC Tel: (717) 238-6570 E-mail: rec@cclawpc.com SAN LUIS & RIO: Trustee Taps Ozark Mountain Railcar as Broker ------------------------------------------------------------- William Brandt, Jr., the trustee appointed in the Chapter 11 case of San Luis & Rio Grande Railroad, Inc., seeks approval from the U.S. Bankruptcy Court for the District of Colorado to employ Missouri Rail Group, LLC, doing business as Ozark Mountain Railcar, as broker. The trustee requires the services of a broker to market and sell railcars, which are stored at the Debtor's facility and owned by Donald Shank of South Fork, Colo., to recoup the Debtor's storage costs and pay off its lien. Ozark Mountain will be paid $1,000 per car or content load. John Suscheck, owner of Ozark Mountain Railcar, 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: John Suscheck Ozark Mountain Railcar P.O. Box 167 Kirbyville, MO 65679 Telephone: (417) 336-2401 Email: sales@ozarkmountainrailcar.com About San Luis & Rio Grande Railroad San Luis & Rio Grande Railroad, Inc., operates the San Luis & Rio Grande Railroad. On Oct. 16, 2019, an involuntary Chapter 11 petition was filed against San Luis & Rio Grande Railroad by creditors, Ralco LLC, South Middle Creek Road Association and The San Luis Central Railroad Co. (Bankr. D. Colo. Case No. 19-18905). The petitioning creditors are represented by Brownstein Hyatt Farber Schrec and Graves Dougherty Hearon & Moody. Judge Thomas B. McNamara oversees the case. Williams A. Brandt Jr. was appointed as Chapter 11 trustee for San Luis & Rio Grande Railroad. The trustee tapped Markus Williams Young & Hunsicker LLC as bankruptcy counsel, and Fletcher & Sippel LLC and Hall & Evans P.C. as special counsel. Development Specialists, Inc. and D'Almeida Consulting, LLC serve as the trustee's accountant and financial consultant, respectively. SEADRILL NEW FINANCE: Wins Approval of Prepack Plan After One Day ----------------------------------------------------------------- Seadrill Limited's Seadrill New Finance Limited has successfully received approval from the U.S. Bankruptcy Court for the Southern District of Texas just less than 24 hours since filing for Chapter 11 bankruptcy. The Court confirmed the Issuer's chapter 11 plan of reorganization, which received nearly unanimous support from existing stakeholders. The Plan provides Seadrill New Finance with financial and strategic flexibility and stability by amending and extending the Issuer's secured notes, effectuating a transfer of majority ownership of the Issuer from the wider Seadrill group to the secured noteholders, and facilitating the entry into management agreements with Seadrill for the continued provision of management services and operational support to the Issuer and its subsidiaries. The Plan also provides for the satisfaction of all trade, customer, and other non-funded debt claims in full in the ordinary course of business. Benefitting from both the new ownership structure and the continuity provided by the Seadrill group, the Issuer expects to continue to focus on maximizing value for all stakeholders from its portfolio of investments including the Seabras Sapura JV and the SeaMex group. The key terms of the Plan include: * the release by the holders of SNF's 12.0% Senior Secured Notes due 2025 (the "Noteholders" and the "Notes", respectively) of all existing guarantees and security and claims (if any) with respect to Seadrill and its subsidiaries (excluding the Issuer and certain of its subsidiaries); * the Noteholders receiving 65% of pro forma equity in SNF, with Seadrill Investment Holding Company (a subsidiary of Seadrill) retaining the remaining 35% of pro forma equity in the Issuer, which shall effect a separation of SNF and its subsidiaries (including the Seabras Sapura assets and the SeaMex group) from the consolidated Seadrill group; * the Noteholders will have appointment rights in respect of 4 out of 5 of the Issuer's directors on the board of the restructured SNF's group, with the remaining director to be appointed by Seadrill; * new notes will be issued pro rata to Noteholders on amended terms including: -- maturity date: July 15, 2026 -- interest: either (a) 9.0%, consisting of (i) 3.00% cash interest plus (ii) 6.00% PIK interest, or (b) 10.0% PIK, in each case payable quarterly -- call protection: redemption price: * the Noteholders will have a first priority right to fund any additional liquidity needs of the Issuer or its affiliates; and * Seadrill will continue to provide certain management services to the Issuer's group. Confirmation of SNF's Plan brings the Seadrill group one step closer to finalizing the comprehensive restructuring of the Seadrill group. SNF expects to emerge from chapter 11 in the near term. Seadrill's chapter 11 plan of reorganization was confirmed by the Court in October 2021 and is anticipated to go effective in the first quarter of 2022. Copies of the Plan and Disclosure statement are available at the following website: https://cases.primeclerk.com/SeadrillNewFinance/. Kirkland & Ellis LLP and Slaughter and May are serving as legal advisors to SNF in connection with the restructuring. Akin Gump Strauss Hauer & Feld are serving as legal advisors to an ad hoc group of the Noteholders (the "Ad Hoc Group"), and Ducera Partners LLC are serving as the Ad Hoc Group's financial adviser. This announcement relates to Seadrill New Finance Limited and is not expected to impact the recoveries existing shareholders of Seadrill Limited will receive under the Seadrill Limited Plan. Consummation of the Seadrill Limited Plan is subject to a number of customary terms and conditions, including court approval, which was obtained on October 26, 2021. About Seadrill Ltd. Seadrill Limited (OSE: SDRL, OTCQX: SDRLF) -- http://www.seapdrill.com/-- is a deepwater drilling contractor providing drilling services to the oil and gas industry. As of March 31, 2018, it had a fleet of over 35 offshore drilling units that include 12 semi-submersible rigs, 7 drillships, and 16 jack-up rigs. On Sept. 12, 2017, Seadrill Limited sought Chapter 11 protection after reaching terms of a reorganization plan that would restructure $8 billion of funded debt. It emerged from bankruptcy in July 2018. Demand for exploration and drilling has fallen further during the COVID-19 pandemic as oil firms seek to preserve cash, idling more rigs and leading to additional overcapacity among companies serving the industry. In June 2020, Seadrill wrote down the value of its rigs by $1.2 billion and said it planned to scrap 10 rigs. Seadrill said it is in talks with lenders on a restructuring of its $5.7 billion bank debt. Seadrill Partners LLC, a limited liability company formed by deepwater drilling contractor Seadrill Ltd. to own, operate and acquire offshore drilling rigs, along with its affiliates, sought Chapter 11 protection (Bankr. S.D. Tex. Lead Case No. 20-35740) on Dec. 1, 2020, after its parent company swept one of its bank accounts to pay disputed management fees. Mohsin Y. Meghji, authorized signatory, signed the petitions. On Feb. 7, 2021, Seadrill GCC Operations Ltd., Asia Offshore Drilling Limited, Asia Offshore Rig 1 Limited, Asia Offshore Rig 2 Limited, and Asia Offshore Rig 3 Limited sought Chapter 11 protection. Seadrill GCC estimated $100 million to $500 million in assets and liabilities as of the bankruptcy filing. Additionally, on Feb. 10, 2021, Seadrill Limited and 114 affiliated debtors each filed a voluntary petition for relief under Chapter 11 of the United States Bankruptcy Code with the Court. The lead case is In re Seadrill Limited (Bankr. S.D. Tex. Case No. 21-30427). Seadrill Limited disclosed $7.291 billion in assets against $7.193 billion in liabilities as of the bankruptcy filing. In the new Chapter 11 cases, the Debtors tapped Kirkland & Ellis LLP as counsel; Houlihan Lokey, Inc. as financial advisor; Alvarez & Marsal North America, LLC as restructuring advisor; Jackson Walker LLP as co-bankruptcy counsel; Slaughter and May as co corporate counsel; Advokatfirmaet Thommessen AS as Norwegian counsel; and Conyers Dill & Pearman as Bermuda counsel. Prime Clerk LLC is the claims agent. On April 9, 2021, the board of directors of Debtor Seadrill North Atlantic Holdings Limited unanimously adopted resolutions appointing Steven G. Panagos and Jeffrey S. Stein as independent directors to the board. Seadrill North Atlantic Holdings Limited tapped Katten Muchin Rosenman LLP as counsel and AMA CapitalPartners, LLC, as a financial advisor at the sole direction of independent directors. About NSN Debtors On Jan. 11, 2022, Seadrill New Finance Limited and eleven affiliated debtors each filed a voluntary petition for relief under Chapter 11 of the United States Bankruptcy Code (Bankr. S.D. Tex. Lead Case No. 22-90001). The cases are pending before the Honorable David R. Jones. Seadrill New Finance estimated $500 million to $1 billion in assets and liabilities as of the bankruptcy filing. The NSN Debtors tapped KIRKLAND & ELLIS LLP as general bankruptcy counsel; JACKSON WALKER LLP as local bankrutpcy counsel; SLAUGHTER AND MAY as co-corporate counsel; and PRIME CLERK LLC as claims agent. SEARS FARM: Seeks to Employ Mearstone Group as Appraiser -------------------------------------------------------- Sears Farm, LLC seeks approval from the U.S. Bankruptcy Court for the Eastern District of North Carolina to hire Mearstone Group, a commercial valuation and consulting firm, pursuant to its Chapter 11 plan. Sears Farm is required under its court-approved bankruptcy plan to employ a firm to conduct a "fair market value" appraisal of each lot of real estate to be sold by the company. E. Cody Jetton, the firm's appraiser 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: E. Cody Jetton, MAI, CRE Mearstone Group 1143 Executive Circle Unit F Cary, NC 27511 Tel.: (919) 803-5638 Fax: (919) 803-5639 Email: CJetton@mearstonegroup.com About Sears Farm Based in Cary, N.C., Sears Farm, LLC, which owns various land parcels with a total appraised value of $11.05 million, filed a Chapter 11 petition (Bankr. E.D.N.C. Case No. 18-00986) on March 1, 2018. William W. Sears, member and manager, signed the petition. At the time of the filing, the Debtor had total assets of $21.76 million and total liabilities of $7.75 million. Judge Stephani W. Humrickhouse oversees the case. William P. Janvier, Esq., at Janvier Law Firm, PLLC serves as the Debtor's legal counsel. On May 13, 2019, the Debtor obtained a court order confirming its Chapter 11 plan. The plan was amended by order dated Sept. 11, 2019. SECOND LLC: Seeks to Employ Benson & Mangold as Real Estate Broker ------------------------------------------------------------------ Second, LLC seeks approval from the U.S. Bankruptcy Court for the District of Maryland to hire Benson & Mangold as real estate broker. The Debtor requires the services of a real estate broker to sell its properties, most of which are industrial and commercial in nature. Benson & Mangold's services include: (a) professional imaging (photography, virtual tour); (b) digital marketing (social media, email marketing); (c) print marketing (signage, property brochures, new listing advertising, area and regional magazines and direct mailing adverting); (d) providing broker outreach (tours and open house); (e) preparing documents related to the listing, marketing, and sale of the properties; (f) attending at the closing of the sales; and (g) providing such other services which may be necessary in order to complete the sales. The firm will receive a commission of 5 percent for the successful sale of the properties. Coard Benson, the firm's broker 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: Coard Benson Benson & Mangold 24 N. Washington St. Easton, MD 21601 Tel.: (410) 310-4909/(410) 770-9255 Cell: 410-310-4909 Email: coard@coardbenson.com About Second LLC Second, LLC filed a petition for Chapter 11 protection (Bankr. D. Md. Case No. 21-17145) on Nov. 12, 2021, listing up to $500,000 in both assets and liabilities. Harry Kaiser, managing member, signed the petition. The Debtor tapped Tate M. Russack, Esq., at RLC, PA Lawyers & Consultants as legal counsel, and Larry Strauss, Esq., CPA and Associates, Inc. as accountant. SEMILEDS CORP: Incurs $525K Net Loss in First Quarter ----------------------------------------------------- SemiLEDs Corporation filed with the Securities and Exchange Commission its Quarterly Report on Form 10-Q disclosing a net loss of $525,000 on $1.47 million of net revenues for the three months ended Nov. 30, 2021, compared to a net loss of $707,000 on $719,000 of net revenues for the same period during the prior year. As of Nov. 30, 2021, the Company had $17.47 million in total assets, $13.32 million in total liabilities, and $4.15 million in total equity. As of Nov. 30, 2021 and Aug. 31, 2021, the Company had cash and cash equivalents of $4.1 million and $4.8 million, respectively, which were predominately held in U.S. dollar denominated demand deposits and/or money market funds. As of Jan. 7, 2022, the Company had no available credit facility. A full-text copy of the Form 10-Q is available for free at: https://www.sec.gov/ix?doc=/Archives/edgar/data/0001333822/000156459022001065/leds-10q_20211130.htm About SemiLEDs Headquartered in Miao-Li County, Taiwan, R.O.C., SemiLEDs -- http://www.semileds.com-- develops and manufactures LED chips and LED components for general lighting applications, including street lights and commercial, industrial, system and residential lighting, along with specialty industrial applications such as ultraviolet (UV) curing, medical/cosmetic, counterfeit detection, horticulture, architectural lighting and entertainment lighting. SemiLEDs reported a net loss of $2.86 million for the year ended Aug. 31, 2021, compared to a net loss of $547,000 for the year ended Aug. 31, 2020. As of Aug. 31, 2021, the Company had $18.24 million in total assets, $13.61 million in total liabilities, and $4.63 million in total equity. Diamond Bar, California-based KCCW Accountancy Corp., the Company's auditor since 2019, issued a "going concern" qualification in its report dated Dec. 29, 2021, citing that the Company incurred recurring losses from operations and has an accumulated deficit, which raises substantial doubt about its ability to continue as a going concern. SENIOR CARE LIVING: Muni-Funded Assisted Living Enters Chapter 11 ----------------------------------------------------------------- Martin Z. Braun of Bloomberg News reports that an assisted living facility in Lewisville, Texas with about $45 million of municipal-bond debt filed for Chapter 11 protection Monday, January 10, 2022, according to bankruptcy court records Senior Care Living VII LLC, owner of Inspired Living at Lewisville, filed in U.S. Bankruptcy Court, Middle District of Florida. Debt was issued in 2016 through the Woodloch, Texas, Health Facilities Development Corp. to finance construction of the 150-unit facility. Bonds with a 6.75% coupon maturing 2051 traded at about 55 cents on the dollar on Oct. 13, 2022. About Senior Care Living VII Senior Care Living VII, LLC, owns Inspired Living at Lewisville, an assisted living facility in Lewisville, Texas. Senior Care Living sought Chapter 11 bankruptcy protection (Bankr. M.D. Fla. Lead Case No. 22-00103) on Jan. 10, 2022. In the petition filed by Mark C Bouldin, president of Senior Care Ownership 4, LLC, manager, Senior Care Living listed estimated assets between $10 million and $50 million and estimated liabilities between $10 million and $50 million. Michael C. Markham, Esq., of JOHNSON, POPE, BOKOR RUPPEL & BURNS, LLP, is the Debtor's counsel. SENIOR CARE: Seeks to Hire Michael Markham as Bankruptcy Counsel ---------------------------------------------------------------- Senior Care Living VII, LLC seeks approval from the U.S. Bankruptcy Court for the Middle District of Florida to employ Michael Markham, Esq., a partner at Johnson, Pope, Bokor, Ruppel & Burns, LLP, to handle its Chapter 11 case. Mr. Markham will be paid at his current hourly rate at $450, plus reimbursement of expenses incurred. Mr. Markham disclosed in a court filing that he and the firm are "disinterested persons" as that term is defined in Section 101(14) of the Bankruptcy Code. The attorney can be reached at: Michael C. Markham, Esq. Johnson, Pope, Bokor, Ruppel & Burns, LLP 401 E. Jackson St., Suite 3100 Tampa, FL 33602 Telephone: (813) 225-2500 Facsimile: (813) 223-7118 Email: Mikem@jpfirm.com About Senior Care Living VII Senior Care Living VII, LLC, a privately held company in the health care business, filed its voluntary petition for relief under Chapter 11 of the Bankruptcy Code (Bankr. M.D. Fla. Case No. 22-00103) on Jan. 10, 2022, listing $10 million to $50 million in both assets and liabilities. Mark C. Bouldin, president, signed the petition. Michael C. Markham, Esq., at Johnson, Pope, Bokor, Ruppel & Burns, LLP serves as the Debtor's legal counsel. SHULAMIT HACKING: Seeks to Employ Wisdom Professional as Accountant ------------------------------------------------------------------- Shulamit Hacking Corp. seeks approval from the U.S. Bankruptcy Court for the Eastern District of New York to hire Wisdom Professional Services, Inc. to prepare its monthly operating reports. Wisdom Professional Services will be paid at the rate of $100 per report. The firm received an initial retainer fee in the amount of $1,000. Michael Shtarkman, CPA, the firm's accountant 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: Michael Shtarkman, CPA Wisdom Professional Services Inc. 626 Sheepshead Bay Road, Suite 640 Brooklyn, NY 11224 Tel: (718) 554-6672 Email: mshtarkmancpa@gmail.com About Shulamit Hacking Shulamit Hacking Corp. filed a petition for Chapter 11 protection (Bankr. E.D. N.Y. Case No. 21-42357) on Sept. 17, 2021, listing up to $1 million in both assets and liabilities. Orly Navaro, president, signed the petition. Judge Nancy Hershey Lord oversees the case. The Debtor tapped the Law Offices of Alla Kachan, P.C. as legal counsel and Wisdom Professional Services, Inc. as accountant. SM ENERGY: Vanguard Group Has 11.37% Equity Stake as of Dec. 31 --------------------------------------------------------------- The Vanguard Group disclosed in an amended Schedule 13G filed with the Securities and Exchange Commission that as of Dec. 31, 2021, it beneficially owns 13,811,934 shares of common stock of SM Energy Co., representing 11.37 percent of the shares outstanding. The Vanguard Group, Inc.'s clients, including investment companies registered under the Investment Company Act of 1940 and other managed accounts, have the right to receive or the power to direct the receipt of dividends from, or the proceeds from the sale of, the securities reported. A full-text copy of the regulatory filing is available for free at: https://www.sec.gov/Archives/edgar/data/102909/000110465922002612/tv0002-smenergyco.htm About SM Energy SM Energy Company is an independent energy company engaged in the acquisition, exploration, development, and production of crude oil, natural gas, and natural gas liquids in the state of Texas. SM Energy reported a net loss of $764.61 million for the year ended Dec. 31, 2020, compared to a net loss of $187 million for the year ended Dec. 31, 2019. As of Sept. 30, 2021, the Company had $5.06 billion in total assets, $1.10 billion in total current liabilities, $2.32 billion in total noncurrent liabilities, and $1.64 billion in total stockholders' equity. SORENSON COMMUNICATIONS: S&P Cuts ICR to B- on Increased Leverage ----------------------------------------------------------------- S&P Global Ratings downgraded Sorenson Communications LLC to 'B-' from 'B'. Ariel Alternatives LLC plans to purchase a 52% stake in Sorenson Communications LLC, which reflects an approximate enterprise value of $1.3 billion. S&P expects the proposed transaction to close in February 2022, subject to regulatory approval. Sorenson is proposing to issue series A and B Holdco payment-in-kind (PIK) notes (not rated) totaling $589 million, which it will use--along with $108 million of new common equity from its sponsor--to fund the transaction. The company's existing first-lien debt will remain unchanged. Pro forma for the transaction, we expect Sorenson's leverage will increase to about 5.0x from 2.6x as of Sept. 30, 2021. The proposed PIK loan, which is part of the announced leveraged buyout (LBO), will materially increase the company's leverage to the 5x area over the next 12 months. Pro forma for the transaction, we anticipate the proposed $589 million 8-year PIK loans will increase Sorenson's leverage to about 5.0x from 2.6x as of the 12 months ended Sept. 30, 2021. S&P said, "We expect the company's leverage to remain in the 4.5x-5.0x range in fiscal years 2022 and 2023 as the increasing PIK liabilities and S&P Global Ratings-adjusted EBITDA declines from its weakening reimbursement rates by the U.S. Federal Communications Commission (FCC) offset its lower first-lien term loan balance, due to its large mandatory debt amortization, and the roll-off of one-time accrual charges related to a marketing practices legal matter. Despite the increase in Sorenson's debt, we expect its cash flow generation to remain sufficient for its operating needs and to cover the $60 million of annual mandatory debt amortization under its first-lien term loan." Sorenson's potential designation as a minority business enterprise (MBE) provides it with an avenue for future revenue growth, though its Sorenson Interpreting business remains small. Created in Feb. 2021, Ariel Alternatives LLC focuses on creating MBEs of substantial scale to serve as leading suppliers to large companies with a commitment to drive meaningful change and wealth creation within Black and Latinx communities. Following the proposed transaction by Ariel Alternatives LLC and with recent management changes, Sorenson will become an MBE with a heightened focus on growing non-FCC-regulated revenue through its Sorenson Interpreting business. Sorenson Interpreting provides interpreting services to businesses that employ or serve members of the Deaf community. The company also announced a cost reduction program over the next 2 years, which will partially offset margin decline from lower expected revenue Although Sorenson Interpreting provides it with an opportunity for accelerated growth and will reduce its dependence on FCC-regulated revenue, S&P expects this business to account for less than 10% of its total revenue over the next two years. Sorenson faces significant regulatory risk due to its dependence on FCC reimbursement rates.The company relies on FCC reimbursement rates for its video relay service (VRS) and CaptionCall services. In addition, Sorenson generates the majority of its revenue from these services, thus it is exposed to revenue pressures stemming from the FCC's periodic downward revisions of its reimbursement rates, which have the potential to reduce the company's profitability given its semi-fixed cost structure and mature customer base. Current FCC reimbursement rates will remain active until June 30, 2022, at which time the commission will renew them for the next term. Specifically, S&P believes the FCC's reimbursement rates will likely decline by the 5%-10% range over the next year and anticipate a more pronounced decline for CaptionCall services. S&P said, "Sorenson's operational flexibility is limited by its heightened FCC scrutiny.The company faces the risk of considerable FCC intervention, which--in our view--offsets the benefits stemming from its leading position in the niche VRS and internet protocol captioned telephone service (IP CTS) markets. The FCC determines Sorenson's operating guidelines, including its service uptime requirements, its interoperability with competitors' platforms, and the limitations on its marketing and promotional techniques. Although the company has recently resolved the legal matters related to its marketing practices with the Enforcement Bureau of the FCC, future FCC intervention remains a key risk. We believe this limits Sorenson's operational flexibility and, potentially, its profitability. "The stable outlook on Sorenson Communications LLC reflects our expectation that its leverage will approach 5x over the next 12 months because we anticipate its debt repayment will partially offset its lower EBITDA generation, due to pricing pressure, and growing PIK liability. "We could lower our rating on Sorenson if we expect it to face liquidity risk or view its capital structure as unsustainable. Under such a scenario, we would expect the company to generate negligible cash flow or experience greater-than-expected declines in its CaptionCall rates and total minutes of use that cause its leverage to increase to the 7x area. "We could raise our rating on Sorenson over the next 12 months if we believe the future billing rates for its CaptionCall and VRS services will stabilize over the next two years and it will reduce its leverage to the high-3x area or below and sustain it at that level." SOUTHERN CALIFORNIA: Case Summary & 8 Unsecured Creditors --------------------------------------------------------- Debtor: Southern California Research, LLC 5550 Partridge Court Thousand Oaks, CA 91362 Business Description: Southern California Research, LLC is a private medical group that conducts clinical research trials. Chapter 11 Petition Date: January 12, 2022 Court: United States Bankruptcy Court Central District of California Case No.: 22-10022 Judge: Hon. Deborah J. Saltzman Debtor's Counsel: Craig G. Margulies, Esq. MARGULIES FAITH LLP 16030 Ventura Blvd., Suite 470 Encino, CA 91436 Tel: (818) 705-2777 Fax: (818) 705-3777 Email: Craig@MarguliesFaithLaw.com Total Assets: $184,280 Total Liabilities: $11,753,616 The petition was signed by Darrell Maag, managing member. A full-text copy of the petition containing, among other items, a list of the Debtor's eight unsecured creditors is available for free at PacerMonitor.com at: https://www.pacermonitor.com/view/CU63TOQ/Southern_California_Research_LLC__cacbke-22-10022__0001.0.pdf?mcid=tGE4TAMA TAYLORMADE HOLDINGS: S&P Assigns 'B' ICR, Outlook Stable -------------------------------------------------------- S&P Global Ratings assigned its 'B' issuer credit rating to Carlsbad, Calif.-based golf equipment and ball provider TaylorMade Holdings Inc. The outlook is stable. S&P said, "We also assigned our 'B' issue-level and '3' recovery ratings to the senior secured term loan. The '3' recovery rating indicates our expectation for meaningful recovery (50%-70%; rounded estimate: 50%) for secured creditors in the event of a payment default. "The stable outlook reflects our expectation that continued innovation and still healthy golf participation will help drive steady revenue and profit growth over the next year or two, though we expect adjusted leverage will remain above 5x." TaylorMade Holdings intends to raise a seven-year, $1.05 billion senior secured term loan B to refinance debt. It will also establish a five-year, $300 million asset-based lending (ABL) revolving credit facility. S&P said, "Our rating reflects TaylorMade's narrow focus in the highly competitive and discretionary golf equipment industry, in which it has a strong global presence. TaylorMade is a pure-play golf equipment company that derives most of its sales from golf clubs and balls. Given the increase in golf participation over the past 18 months and favorable demographics, including the baby boom generation entering prime golfing age, we expect strong industry trends will spur healthy organic growth. The company has a global presence, generating over half of its sales outside the U.S. However, notwithstanding its solid global market position and good brand equity, the company relies on a single brand and competes against many companies with well recognized brands including Acushnet (Titleist), Callaway, Ping, and Mizuno. "Industry players rely on innovation and player endorsements to drive product demand and maintain their market positions. We recognize TaylorMade's history of introducing innovative, high-quality products that have supported its solid sales growth over the last few years. This includes the release of its SIM2 driver in 2021 that we believe helped TaylorMade expand its market share in metal woods. Although we believe the company's good track record of innovation to develop premium performance clubs is a modest barrier to entry, we do not necessarily view TaylorMade as having a distinct technological advantage over its primary competitors. We also view the category as discretionary and vulnerable to economic downturns. If consumer discretionary spending were disrupted due to a severe recession, we believe the company's financial performance could be hurt by golfers delaying equipment purchases or trading down to lower-priced products. "We forecast leverage will remain elevated under financial sponsor ownership. Centroid Investment Partners acquired TaylorMade in August 2021, funded with debt that this transaction will refinance. We estimate leverage at close will be in the low-7x area including preferred stock as debt (low-5x area excluding the preferred). While we expect solid profit growth will support deleveraging over the next 12-24 months, we believe adjusted debt to EBITDA will remain high. We do not view mergers and acquisitions (M&A) as core to management's growth strategy, but we believe it will maintain an appetite for acquisitions to support its geographic expansion and in golf apparel. We forecast the company will pay cash preferred dividends of about $23 million annually. We have not incorporated dividends to common shareholders into our forecast but nevertheless view this as a possibility given financial sponsors' focus on maximizing shareholder returns. We believe these factors will likely prevent TaylorMade from deleveraging below 5x over the next couple of years." TaylorMade benefits from good organic growth prospects given favorable industry dynamics and a good pipeline of innovation. Supported by consumer desire for socially distanced outdoor activities, golf participation surged after the early stages of the COVID-19 pandemic. Despite lockdowns in spring 2020 across much of the country, an influx of new players and increased golf frequency from existing players led to nearly a 14% increase in rounds played in the U.S. in 2020 (per the National Golf Foundation). This led to more golf equipment purchases and helped drive record operating performance for TaylorMade in 2020, which increased sales over 60% in the second half. Despite very difficult comps, the company continued to deliver strong operating performance through 2021 (third-quarter revenue was still up about 20% year over year). S&P believes this is a result of participation rates remaining high, expanding popularity globally, and the company's ability to innovate. S&P said, "We expect a moderation in rounds played as the pandemic subsides and alternative forms of entertainment become more readily available. It is less clear how this will affect the industry's ability to retain new golfers over the long term, but we believe increased interest in the sport will drive sustained higher industry golf equipment sales compared to 2019. We further expect TaylorMade will deliver outsized growth through expansion into foreign markets (particularly Asia) and premium innovation. This includes the introduction of its Stealth Carbonwood driver in 2022, which includes a new technology platform it will incorporate into product releases for the next several years. "We view TaylorMade's marketing strategies as a competitive advantage.Athlete endorsements are a critical component of the marketing strategies for the top golf equipment manufacturers, serving as an additional barrier to industry entry. We believe TaylorMade has established the top collection of athlete endorsements in the industry, including Tiger Woods, Collin Morikawa, Rory McIlroy, and Dustin Johnson. The company showcases these endorsements through various social media offerings, building brand equity and attracting consumers. For example, it has a YouTube channel that features unique videos of its star athletes using its products. Its ability to leverage digital media and reach a large base of consumers has allowed the company to maintain a smaller but higher caliber pool of athlete endorsements. This has enabled it to achieve a higher return on its investment and underpins our outlook for continued expansion of EBITDA margins. "We expect the impact from supply chain constraints and inflation will moderate but remain ongoing challenges. TaylorMade's strong performance has overshadowed some supply chain constraints it faced in the second half of 2021, which resulted in at least $50 million in lost sales. At the same time, the company incurred higher commodity, labor, and freight costs that it largely offset with price increases, product mix, and productivity gains. Management has taken actions to improve production capacity and ensure product availability, though we assume supply availability for raw material inputs will remain tight in 2022. Although we expect the company will continue to incur higher costs next year, higher pricing (particularly as product mix shifts to premium priced new products) and positive operating leverage from higher production volumes should offset the input cost inflation. "The stable outlook reflects our expectation that TaylorMade will generate steady sales and profit growth, driven by healthy industry demand, good innovation, and expansion into foreign markets. This favorable operating outlook should support moderate deleveraging over the next year, including leverage near or below 6.5x." S&P could lower the rating if operating performance deteriorates and adjusted leverage approaches 8x. This could be caused by: -- Disruptions to consumer discretionary spending due to substantially weakened economic conditions. -- Lower perceived product quality due to unsuccessful product launches or key athlete endorsement losses. -- Difficulties managing supply chain disruptions and input cost fluctuations. S&P could raise the rating if: -- The company performs above our expectations. -- It reduces adjusted leverage below 5x. -- S&P believes the financial sponsor is committed to sustaining leverage below 5x. Environmental, Social, And Governance S&P said, "Governance factors are a moderately negative consideration in our credit rating analysis of TaylorMade, as it is for most rated entities owned by private equity sponsors. We believe the company's highly leveraged financial risk profile reflects corporate decision-making that prioritizes the interests of controlling owners. This also reflects the generally finite holding periods and a focus on maximizing shareholder returns." Environmental and social factors are neutral considerations. The golf equipment industry has expanded rapidly since the onset of the pandemic because golf was perceived as a safe outdoor activity, bringing many new participants to the sport. In S&P's view, the industry's ability to retain these new consumers longer term will primarily depend on the desirability and value of the sport compared with other entertainment options rather than its relative safety as an outdoor activity. TAYLORMADE: Moody's Assigns B1 CFR; Outlook Stable -------------------------------------------------- Moody's Investors Service assigned a B1 Corporate Family Rating (CFR) and a B1-PD Probability of Default Rating to 19th Holdings Golf, LLC (TaylorMade). Moody's also assigned a B1 rating to the company's proposed $1,050 million first lien term loan B. The outlook is stable. In August 2021, private equity firm, Centroid Investment Partners acquired TaylorMade for $1.9 billion. TaylorMade is now seeking to raise a $1,050 million first lien term loan B, proceeds of which will be used to refinance existing debt that was utilized to fund the Centroid buyout and related transaction fees and expenses. The company also plans to put in place a new $300 million asset-based revolver (ABL) that will not be rated and will be undrawn at close. Pro-forma for the transaction, the company will have total debt-to-EBITDA of 5.1x based on Moody's calculation as of projected period ending December 31, 2021. Moody's expects that consumer behavior will continue to benefit TaylorMade over the next 12-18 months as disruptions from the coronavirus and various variants linger. Moody's expects golfing will remain strong in 2022 given it is conducive to social distancing. However, there remains risk that some participants may reduce golfing as the coronavirus subsides. As families and office workers return to normal activities, there may also be constraints on the availability of golfers' time to play the sport given the sizable time investment necessary to practice and play. Further, the broadening of vacation travel alternatives may reduce participation and spending on golf equipment as consumers may shift focus to other activities even though golfers often incorporate golf activities in their travel plans. This risk is partially mitigated with TaylorMade's new Stealth Carbonwood product launches, global market share gains in golf balls, and focus on international expansion, particularly in Asia. Moody's expects that TaylorMade's 2022 sales will grow by approximately 6% reflecting new product launches and the continued popularity of the sport with some offset from strong pandemic related growth. Past 2022, sales and EBITDA growth will moderate to 2%-3% per year as the company will continue to increase pricing as new technologies and features are rolled out. Moody's also expects TaylorMade will generate free cash flow of $60 million to $70 million per year and that debt-to-EBITDA will decline to around 4.5x to 4.75x by the end of 2022 due to EBITDA growth and some debt amortization. There is nevertheless some risk that TaylorMade's revenue and EBITDA will fall in 2022 if consumers shift away from golf. However, there is cushion in TaylorMade's financial profile to support a modest pullback in operating performance as the company has the ability to repay debt with cash on hand and free cash flow to offset any potential headwinds. Moody's expects TaylorMade can maintain debt-to-EBITDA at or below 5.0x in such a scenario. The company's liquidity will remain good over the next 12 months supported by cash balances of $200 million as of September 30, 2021 and an unused $300 million ABL facility expected to be put in place as a result of the new capital structure. Moody's took the following rating actions: Assignments: Issuer: 19th Holdings Golf, LLC Corporate Family Rating, Assigned B1 Probability of Default Rating, Assigned B1-PD Gtd Senior Secured 1st Lien Term Loan B, Assigned B1 (LGD4) Outlook Actions: Issuer: 19th Holdings Golf, LLC Outlook, Assigned Stable RATINGS RATIONALE TaylorMade's B1 Corporate Family Rating (CFR) reflects its product concentration in the golf business that is highly discretionary and negatively affected by economic downturns as well as highly competitive end markets with other large golf equipment manufacturers. TaylorMade must continuously invest in new product development and marketing to maintain brand strength and market share. TaylorMade's credit profile is also constrained by high financial leverage of approximately 5.1x Moody's adjusted debt to EBITDA (pro-forma for the transaction as of projected December 31, 2021) and Moody's expectation for an aggressive financial policy under private equity ownership. Earnings have grown meaningfully in the last two years due to increased golf participation amid the coronavirus that led many consumers to reduce travel and other entertainment in favor of socially distanced activities such as golf. Sustainability of the earnings level is a risk with potential that reduced golf participation will translate to lower equipment sales as the coronavirus pandemic eases. These factors weakly position the company within the B1 rating category. Offsetting these risks are TaylorMade's strong brand name, leading market position in golf equipment, broad appeal among golf players and global diversification. The company focus on innovation of golf equipment enhances player performance and results in strong market share. The company's products are used by elite golf players that further provides brand strength throughout the golf community. The credit profile also reflects TaylorMade's large scale within the golf equipment industry with revenue around $1.4 billion for the last-twelve-month period ending September 30, 2021. The coronavirus outbreak and the government measures put in place to contain it continue to disrupt economies and credit markets across sectors and regions. Although an economic recovery is underway, it is tenuous, and its continuation will be closely tied to containment of the virus. As a result, there is uncertainty around Moody's forecasts. Moody's regards the coronavirus outbreak as a social risk under its ESG framework, given the substantial implications for public health and safety. The consumer durables industry is one of the sectors most meaningfully affected by the coronavirus because of exposure to discretionary spending. Moody's expects that consumer interest in golf will continue to benefit TaylorMade over the next year as golfing will remain strong given it is conducive to social distancing, but there is risk of demand falling as the coronavirus pandemic eases. Environmental factors have a moderate impact on TaylorMade's credit profile. Because the company utilizes various metals, resins, energy and other raw materials in the production process of its products, there is some environmental risk. The company must responsibly source raw materials and refine manufacturing processes to minimize the environmental effects. Governance factors take into account an aggressive financial policy and high leverage with private equity ownership. TaylorMade's closing debt-to-EBITDA leverage of 5.1x (Moody's calculated) is high and ownership by a private equity firm increases the risk of shareholder-friendly activities. The company has grown organically and Moody's does not expect acquisitions to be a meaningful focus. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS The stable outlook reflects Moody's expectation that TaylorMade's operating performance will remain stable over the next 12 to 18 months given new product launches, international expansion opportunities and continued popularity of golfing as the coronavirus lingers. Moody's also expects that TaylorMade will maintain good liquidity, generate at least $60 million of free cash flow, and that debt to EBITDA will fall to around 4.5x to 4.75x over the next 12-18 months. The ratings could be upgraded if the company meaningfully increases scale and operating performance, and successfully executes on its new product launches leading to improved free cash flow. The company would also need to demonstrate a more conservative financial policy with sustained debt to EBITDA below 4.0x. The ratings could be downgraded if the company's operating performance deteriorates such that free cash flow falls, or if liquidity weakens. Additionally, the company's rating may be downgraded if it debt-to-EBITDA financial leverage is maintained above 5.0x. As proposed, the new term loan credit facility is expected to provide covenant flexibility that if utilized could negatively impact creditors. Notable terms include the following: Incremental first lien debt capacity up to the greater of closing date EBITDA and 100% Consolidated EBITDA , plus the amount of the then-available General Debt Basket, plus unlimited amounts so long as these amounts do not exceed Closing Date First Lien Net Leverage Ratio (if pari passu secured). Amounts up to the greater of closing date EBITDA and 100% Consolidated EBITDA, plus any amounts incurred in connection with a permitted acquisition or other permitted investment may be incurred with an earlier maturity date than the initial term loans. The credit agreement permits the transfer of assets to unrestricted subsidiaries, up to the carve-out capacities, subject to "blocker" provisions which prohibit the transfer of material intellectual property to any unrestricted subsidiary. Non-wholly-owned subsidiaries are not required to provide guarantees; dividends or transfers resulting in partial ownership of subsidiary guarantors could jeopardize guarantees, with no explicit protective provisions limiting such guarantee releases. There are no express protective provisions prohibiting an up-tiering transaction. The above are proposed terms and the final terms of the credit agreement may be materially different. 19th Holdings Golf, LLC (TaylorMade), is headquartered in Carlsbad, California. TaylorMade designs, manufactures and sells high performance golf equipment, including golf clubs, golf balls and related accessories. Key products include SIM2 metalwoods, SIM2 irons, P Series irons, TP5/TP5X golf balls and Spider putters. TaylorMade was purchased in August 2021 by private-equity firm, Centroid Investment Partners, based in South Korea. The company generated annual revenues of $1.4 billion for the twelve months ending September 30, 2021. THUNDERHORSE MULTI-ELECTRIC: Taps Hicks Law Group as Legal Counsel ------------------------------------------------------------------ Thunderhorse Multi-Electric, Inc. seeks approval from the U.S. Bankruptcy Court for the Northern District of Texas to hire Hicks Law Group, PLLC to serve as legal counsel in its Chapter 11 case. The firm's services include: (a) advising Debtor with respect to the Debtor's powers and duties in the Chapter 11 case, filing bankruptcy schedules, statement of financial affairs, and other required documents; (b) appearing in court; (c) attending meetings as requested by the Debtor; and (d) performing all other legal services for the Debtor that may be necessary and proper in the case, including, but not limited to, provision of advice in areas such as corporate, bankruptcy, tort, employment, governmental, intellectual property and secured transactions. The firm's hourly rates are as follows: Attorney $325 Legal assistants and paralegals $100 - $150 Kevin Wiley, 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: Kevin S. Wiley, Esq. Hicks Law Group, PLLC 325 N St Paul Street, Suite 4400 Dallas, TX 7520 Tel: 469.619.5721 Email: kwiley@hickslawgroup.com About Thunderhorse Multi-Electric Thunderhorse Multi-Electric, Inc. filed a petition for Chapter 11 protection (Bankr. N.D. Texas Case No. 21-32033) on Nov. 12, 2021, listing up to $100,000 in assets and up to $1 million in liabilities. Michael Antee, president, signed the petition. Judge Stacey G. Jernigan oversees the case. The Debtor tapped Kevin S. Wiley, Esq., at Hicks Law Group, PLLC as legal counsel. UNITED STRUCTURES: In Chapter 11 After 2019 Cyberattacks -------------------------------------------------------- Vince Sullivan of Law360 reports that a Houston-based steel structure manufacturer, United Structures of America, filed for Chapter 11 protection late Tuesday, January 11, 2022, in Texas bankruptcy court, blaming a 2019 ransomware attack for its need to wind down operations. In initial court filings, United Structures of America Inc. said hackers broke into the company's computer system in May 2019 and wiped out all of its financial records and technical software to run its metal milling equipment, demanding a ransom for the return of the information and control of the company's computer system. About United Structures of America United Structures of America is a Houston-based manufacturer of steel structure. United Structures of America sought Chapter 11 bankruptcy protection (Bankr. S.D. Tex. Case No. 22-30104) on Jan. 11, 2022. The case is handled by Honorable Judge Jeffrey P Norman. The Debtor's attorneys are Mark Alan Platt and Bryan J Sisto of Frost Brown Todd LLC. VERDANT HOLDINGS: U.S. Trustee Appoints Creditors' Committee ------------------------------------------------------------ The U.S. Trustee for Regions 3 and 9 on Jan. 11 appointed an official committee to represent unsecured creditors in the Chapter 11 case of Verdant Holdings, LLC. The committee members are: 1. David J. Kwaham, Esq. DKsuites Professional Offices 600 South White Horse Pike Audubon, NJ 08106 Tel: (856) 858-1011 Fax: (856) 858-4674 E-mail: dksuites@dksuites.com 2. Stantec 61 Commercial Street Suite 100 Rochester NY 14614-1009 Attn.: Thomas Curran, Esq. Senior Counsel – Infrastructure Tel: (585) 500-1761 Fax: (585) 272-1814 E-mail: Thomas.Curran@stantec.com 3. St. Moritz Group/St. Moritz Security Services, Inc. 4600 Clairton Boulevard Pittsburgh, PA 15236 Attn.: Gary J. Bradley, Esq. Chief Legal Officer Tel: (818) 337-9860 Fax: (412) 253-1807 E-mail: gbradley@stmoritzgroup.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 Verdant Holdings Carlisle, Pa.-based Verdant Holdings, LLC filed its voluntary petition for Chapter 11 protection (Bankr. M.D. Penn, Case No. 21-01938) on Sept. 2, 2021, disclosing up to $50 million in assets and up to $10 million in liabilities. David Goldsmith, managing director, signed the petition. Judge Henry W. Van Eck oversees the case. The Debtor tapped Cunningham, Chernicoff & Warshawsky, PC as legal counsel and Chemel Kornick & Mooney, LLC and Gift CPAs as accountants. VETERAN HOLDINGS: Voluntary Chapter 11 Case Summary --------------------------------------------------- Debtor: Veteran Holdings NY LLC 670 Myrtle Avenue Suite 351 Brooklyn, NY 11205 Business Description: Veteran Holdings NY LLC is engaged in activities related to real estate. Chapter 11 Petition Date: January 12, 2022 Court: United States Bankruptcy Court Eastern District of New York Case No.: 22-40052 Judge: Hon. Elizabeth S. Stong Debtor's Counsel: Fred B. Ringel, Esq. ROBINSON BROG LEINWAND GREENE GENOVESE & GLUCK P.C. 875 Third Avenue New York, NY 10022 Tel: (212) 603-6300 E-mail: fbr@robinsonbrog.com Estimated Assets: $10 million to $50 million Estimated Liabilities: $10 million to $50 million The petition was signed by Pearl Schwartz, Trustee, South to East 2021 Trust, managing member. The Debtor failed to include in the petition a list of its 20 largest unsecured creditors. A full-text copy of the petition is available for free at PacerMonitor.com at: https://www.pacermonitor.com/view/TO2TSNQ/Veteran_Holdings_NY_LLC__nyebke-22-40052__0001.0.pdf?mcid=tGE4TAMA WILLSCOT MOBILE: Moody's Assigns 'Ba3' CFR; Outlook Stable ---------------------------------------------------------- Moody's Investors Service has assigned a Ba3 corporate family rating (CFR) to WillScot Mobile Mini Holdings Corp. (WillScot). Concurrently, Moody's withdrew the Ba3 CFR and affirmed the B2 senior secured debt rating of WillScot's indirect, wholly-owned subsidiary, Williams Scotsman International Inc. (WS International), following the completion of its merger into Williams Scotsman, Inc. WillScot's outlook is stable. WS International was merged with and into its direct wholly-owned subsidiary, Williams Scotsman, Inc. on 23 December 2021. As a result of the merger the rated debt obligations of WS International. were assumed by Williams Scotsman, Inc. The merger of the two indirect wholly-owned subsidiaries of WillScot, a publicly traded entity, occurred as part of a tax-related corporate re-organization, as well as to reduce administrative costs and to simplify WillScot's subsidiary structure. Assignments: Issuer: WillScot Mobile Mini Holdings Corp. Corporate Family Rating, Assigned Ba3 Affirmations: Issuer: Williams Scotsman International Inc. Senior Secured Regular Bond/Debenture, Affirmed B2 Withdrawals: Issuer: Williams Scotsman International Inc. Corporate Family Rating, Withdrawn , previously rated Ba3 Outlook Actions: Issuer: Williams Scotsman International Inc. Outlook, Changed To No Outlook From Stable Issuer: WillScot Mobile Mini Holdings Corp. Outlook, Assigned Stable RATINGS RATIONALE Moody's said that since the rated senior secured debt was previously guaranteed by Williams Scotsman, Inc., the internal merger has no impact on the credit profile of the rated debt and is the reason for the affirmation of the senior secured debt ratings. The rating agency withdrew WS International's CFR and assigned a CFR at the same Ba3 level to WillScot to reflect the corporate reorganization. The Ba3 CFR reflects WillScot's solid and improving profitability and leverage. It also reflects the company's strong franchise position as the largest lessor for modular space and portable solutions in North America. Moody's also assesses WillScot's asset quality as solid, with its fleet of modular space and portable storage units being long-lived assets with transparent contractual cash flows, and with limited technological obsolescence over time. WillScot's liquidity profile benefits from the absence of near-term maturities, including for its asset-backed lending (ABL) credit facility and senior secured notes. WS International's B2 senior secured notes' rating is two notches below WillScot's Ba3 CFR, because the preponderance of the group's borrowings are derived from its ABL credit facility, and this credit facility has first lien priority over its assets. WillScot's stable outlook reflects Moody's expectation that WillScot will maintain its solid profitability and likely will modestly improve its leverage over the next 12-18 months as the it pays-down debt and increases its EBITDA. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS Moody's said the ratings could be upgraded if WillScot continues to demonstrate strong financial performance, including profitability (measured by net income to average assets) maintained through the cycle at an average of 4.0%. An upgrade would also likely be dependent upon the company improving and maintaining at below 3.0x its debt/EBITDA leverage and improving its liquidity and financial flexibility by diversifying its funding sources and reducing its reliance on secured debt, including through the issuance of senior unsecured debt. Moody's said the ratings could be downgraded if the company's financial performance substantially deteriorates, such that its profitability (measured by net income to average assets) falls and remains below 2.0%, or if it increases debt/EBITDA leverage above 4.5x, for example due to additional borrowings, equity repurchases or debt-financed acquisitions. YUNHONG CTI: Frank Cesario Rejoins as Chief Executive Officer ------------------------------------------------------------- Frank Cesario, Yunhong CTI Ltd.'s former president, chief executive officer and chief financial officer, has been appointed as chief executive officer, effective January 2022. Mr. Cesario currently serves on the board of directors and is a member of the Audit Committee. The Company also announced the appointments of Mr. Douglas Bosley, Mr. Philip Wong, and Mr. Gerald (J.D.) Roberts to the Yunhong CTI Board of Directors, effective January 2022. Following the appointments of Bosley, Wong and Roberts, the Board will comprise five directors, the majority of whom are independent. "We are pleased to welcome Frank back to the Company as chief executive officer," said Mr. Yubao Li, Chairman of Yunhong CTI. "Frank is the right person to lead Yunhong CTI into the future, given his strong command of our business and proven ability to drive results. We are on a positive growth trajectory at Yunhong CTI and are well-positioned to continue building on our momentum. I am so pleased that Frank will lead our company, and I am excited to work with him -- along with our entire senior leadership team -- to ensure a seamless transition and on Yunhong CTI's next phase of growth." "I am honored to be named Chief Executive Officer of Yunhong CTI and look forward to the opportunity to work with Chairman Li, the Board and the executive team," said Frank J. Cesario, chief executive officer of Yunhong CTI. "We had to drive hard in order to streamline our operations and pay down a burdensome debt load. These were necessary steps to remake our company. Together with our Chief Operating Officer Jana Schwan's established leadership, we get to build something. We are very pleased that Douglas, Philip and J.D. have joined the Board and believe their collective contributions will be invaluable. We will be laser-focused on serving our customers, creating value for our shareholders and providing great opportunities for our people." Mr. Cesario entered into an employment agreement with the Company, effective Jan. 1, 2022, which includes a base salary of $250,000 per year. Mr. Cesario received an inducement grant of stock in the amount of 250,000 shares, 25,000 of which vested immediately, with the remaining shares scheduled to vest based upon the achievement of certain goals and objectives as set forth in the agreement. Mr. Cesario is eligible to receive a performance-based bonus of $300,000. In the event that Mr. Cesario is terminated without cause, he is eligible to receive 12 months of salary in accordance with the agreement. About Frank Cesario Mr. Cesario is a seasoned financial executive with 20 years of experience as a chief executive officer, chief financial officer, controller and financial and accounting manager. Mr. Cesario most recently served as chief financial officer of Radiac Abrasives, a leading manufacturer of high-performance products for the automotive, bearing, aviation, cutting tools and primary metals industries. Previously, Mr. Cesario served as chief executive officer, president and director of Yunhong CTI. Prior to joining Yunhong CTI as its then chief financial officer, Mr. Cesario served as chief financial officer for 15 years with Nanophase Technologies Corporation and ISCO International, Inc., publicly-traded global suppliers of advanced materials and telecommunications equipment, respectively, as well as Turf Ventures LLC, a privately-held chemicals distributor. He began his career with KPMG Peat Marwick and then served in progressively more responsible finance positions within Material Sciences Corporation and Outokumpu Copper, Inc. Mr. Cesario has a B.S. in Accountancy, Summa Cum Laude, from the University of Illinois Urbana-Champaign and an MBA in Finance, with distinction, from DePaul University. He is a registered Certified Public Accountant. New Board Members "We are pleased to welcome Douglas Bosley, Philip Wong and Gerald Roberts to the Yunhong CTI board as new independent directors," said Mr. Li. "These appointments come at an exciting time for the Company, as we continue our mission to grow our business and drive improved shareholder returns. Collectively, they add to the Board a deep and broad base of knowledge and a wide diversity of experience and skills that will complement and further enhance the perspectives represented on our Board. We look forward to their contributions." Mr. Li added, "I want to thank our three exiting board members, John Klimek, Wan Zhang and Yaping Zhang, for their tremendous service. Each of them made important contributions to Yunhong CTI. They provided much needed support and guidance during our operational transformation and helped position the company to achieve improved financial performance." New Board Member Bios Douglas Bosley is a founding partner of Witan Law Group and a member of the firm's Corporate Transactional and Securities practice. Mr. Bosley's practice focuses on of financing transactions, mergers and acquisitions and general corporate matters. Mr. Bosley is a frequent speaker on legal issues related to start-ups, mergers and acquisitions and venture capital transactions. Philip Wong was vice president and deputy manager of the San Francisco office of Bank of Communications Ltd., the fifth largest bank in China, and is now the chief executive officer and co-founder of Shark AI Capital Corporation. In addition to extensive service in the banking industry and speaking on financial topics, Mr. Wong is involved in a Special Training Project (China Services) at San Francisco State University. Gerald (J.D.) Roberts Jr. is vice president of Strategy and Business Development at a Fortune 50 healthcare company. Mr. Roberts has combined his credentials in Mechanical Engineering, Finance and Operations to build value in international business opportunities with significant experience in strategic planning, program management and restructuring activities, portfolio management and diversification efforts. With these new appointments, the updated Board of Directors is composed of five directors, the majority of whom are independent: * Mr. Yubao Li, Chairman * Mr. Frank Cesario, CEO * Mr. Douglas Bosley * Mr. Philip Wong * Mr. Gerald (J.D.) Roberts Messrs. Bosley, Wong and Roberts will each serve on the Audit Committee, the Compensation Committee, and the Nominating and Corporate Governance Committee. About Yunhong CTI Lake Barrington, Illinois-based Yunhong CTI Ltd. -- www.ctiindustries.com -- develops, produces, distributes and sells a number of consumer products throughout the United States and in over 30 other countries, and it produces film products for commercial and industrial uses in the United States. Many of the Company's products utilize flexible films and, for a number of years, it has been a leading developer of innovative products which employ flexible films including novelty balloons, pouches and films for commercial packaging applications. Yunhong CTI reported a net loss of $4.25 million for the 12 months ended Dec. 31, 2020, compared to a net loss of $8.07 million for the 12 months ended Dec. 31, 2019. As of Sept. 30, 2021, the Company had $24.88 million in total assets, $19.59 million in total liabilities, and $5.30 million in total shareholders' equity. New York, NY-based RBSM LLP, the Company's auditor since 2019, issued a "going concern" qualification in its report dated April 15, 2021, citing that the Company has suffered recurring losses from operations and will require additional capital to continue as a going concern. I n addition, the Company is in violation of certain covenants agreed to with PNC Bank which if not resolved could result in PNC Bank initiating liquidation proceedings. This raises substantial doubt about the Company's ability to continue as a going concern. [*] Colorado Bankruptcy Filings Decreased by 24% in 2021 -------------------------------------------------------- Christopher Wood of Greeley Tribune reports that bankruptcy filings continued their steep declines in December 2021, with Colorado reporting 24% fewer filings for the entire year, and posting a 32% decline for the month compared with the same prior a year ago. Filings also dropped in Boulder, Broomfield, Larimer and Weld counties, both for the month and year. That's according to a BizWest analysis of U.S. Bankruptcy Court data. Numbers cited include all new filings, including open, closed and dismissed cases. Colorado recorded 6,281 bankruptcy filings in 2021, compared with 8,279 in 2020 and 11,038 in 2019. December filings totaled 377, down 32%. Among counties in the Boulder Valley and Northern Colorado: * Weld County bankruptcy filings totaled 28 in December, down from 41 recorded a year ago. Filings for the year totaled 446, compared with 524 a year ago. * Larimer County filings totaled 17 in December, compared with 24 a year ago. Filings for the year totaled 312, down from 422 in 2020. * Boulder County recorded nine bankruptcy filings in December, compared with 22 in December 2020. Filings in 2021 totaled 222, compared with 305 in 2020. * Broomfield recorded three bankruptcy filings in December, down from seven in December 2020. Filings for the year totaled 72, down from 101 in 2020. [*] Zero U.S. Large Bankruptcy Filings in First Week of 2022 ------------------------------------------------------------ Jeremy Hill of Bloomberg News reports that no large companies filed for bankruptcy in the first week of 2022 while the pile of distressed debt outstanding declined once again. January 2022 has seen an average of 8.5 large bankruptcies -- those involving liabilities of at least $50 million -- since 2011, according to data compiled by Bloomberg. On average, more than half of those filings occurred in the last two weeks of the month. The total amount of traded distressed bonds and loans fell about 5.6% week-over-week to about $58.5 billion as of Jan. 7, 2022, data compiled by Bloomberg show. [] SierraConstellation Promotes Lynch to President & COO -------------------------------------------------------- SierraConstellation Partners LLC (SCP), an interim management and advisory firm to middle-market companies in transition, announced Jan. 13, 2022, it has promoted Tom Lynch to President and Chief Operating Officer. Since joining SCP in 2018, Lynch has played a pivotal role in building SCP's nationwide presence from his base in the Northeast. He has led some of SCP's most high-profile engagements, including serving as the interim CEO of David's Bridal and as the Chairman and CEO of MedMen. In addition to his stellar client and business development work, Lynch has served as a culture carrier and mentor to the next generation of SCP professionals. In his new position, Lynch will take a leadership role in driving SCP's next phase of growth, working alongside SCP Founder and CEO Larry Perkins to expand the firm's presence nationwide while continuing to be involved in client engagements. "When we brought Tom on board in 2018, we knew he would be a great addition to our team, and he has succeeded beyond our expectations," said Perkins. "In addition to his skills as an established business leader and operator, Tom's proven executive leadership experience and entrepreneurial spirit have helped him grow SCP's presence across the country as well as in new service verticals and industry sectors. He has also been a great mentor to so many professionals at the firm and epitomizes what we look for in a leader. We are thrilled to promote Tom into this new role and are looking forward to his continued success at SCP." "It's been such a pleasure working with Larry and the entire SCP team over the past few years, and I'm beyond excited to take on this new role in charting the company's growth," said Lynch. "Since joining SCP, I've been lucky enough to work with some of the smartest people in the industry who are not afraid to roll up their sleeves to deliver the best results for our clients. We are creating a new model for our industry at SCP which prioritizes hands-on, senior-heavy engagement with our clients, and there is plenty of room to scale this model across all of our areas of expertise. I am deeply appreciative of this opportunity and am looking forward to what the future holds." In addition to his work leading engagements at SCP, Lynch brings a wide range of leadership experience to his new role. Prior to joining SCP, Lynch was the Managing Partner and Founder of Woods Hole Capital, an asset management platform utilizing ABL strategies in the consumer sector. Prior to Woods Hole, he was the Chairman and CEO of Frederick's of Hollywood, a publicly traded apparel retailer, where he oversaw a six-year turnaround plan which culminated in a successful sale to a private equity buyer. Earlier in his career, Lynch served as the CEO of a global hedge fund with positions on five continents and as a senior executive with Mellon Institutional Asset Management, where he was a member of the senior management committee. Mr. Lynch can be reached at: Tom Lynch President & Chief Operating Officer SierraConstellation Partners Tel: (857) 305-0693 E-mail: tlynch@scpllc.com About SierraConstellation SierraConstellation Partners, LLC (SCP) is a national interim management and advisory firm headquartered in Los Angeles with offices in Boston, Chicago, Dallas, Houston, New York, and Seattle. SCP serves middle-market companies and their partners and investors navigating their way through difficult business challenges. Its team's real-world experience, operational mindset, and hands-on approach enable us to deliver effective operational improvements and financial solutions to help companies restore value, regain creditor confidence, and capitalize on opportunities. As former CEOs, COOs, CFOs, private equity investors, and investment bankers, our team of senior professionals has decades of experience operating and advising companies. On the Web: http://www.sierraconstellation.com/ [^] BOOK REVIEW: The Sorcerer's Apprentice - Medical Miracles ------------------------------------------------------------- Author: Sallie Tisdale Publisher: BeardBooks Softcover: 270 pages List Price: $34.95 Review by Henry Berry Order your own personal copy at http://is.gd/9SAfJR An earlier edition of "The Sorcerer's Apprentice" won an American Health Book Award in 1986. The book has been recognized as an outstanding book on popular science. Tisdale brings to her subject of the wide nd engrossing field of health and illness the perspective, as well as the special sympathies and sensitivities, of a registered nurse. She is an exceptionally skilled writer. Again and again, her descriptions of ill individuals and images of illnesses such as cancer and meningitis make a lasting impression. Tisdale accomplishes the tricky business of bringing the reader to an understanding of what persons experience when they are ill; and in doing this, to understand more about the nature of illness as well. Her style and aim as a writer are like that of a medical or science journalist for leading major newspaper, say the "New York Times" or "Los Angeles Times." To this informative, readable style is added the probing interest and concern of the philosopher trying to shed some light on one of the central and most unsettling aspects of human existence. In this insightful, illuminating, probing exploration of the mystery of illness, Tisdale also outlines the limits of the effectiveness of treatments and cures, even with modern medicine's store of technology and drugs. These are often called "miracles" of modern medicine. But from this author's perspective, with the most serious, life-threatening, illnesses, doctors and other health- care professionals are like sorcerer's trying to work magic on them. They hope to bring improvement, but can never be sure what they do will bring it about. Tisdale's intent is not to debunk modern medicine, belittle its resources and ways, or suggest that the medical profession holds out false hopes. Her intent is do report on the mystery of serious illness as she has witnessed it and from this, imagined what it is like in her varied work as a registered nurse. She also writes from her own experiences in being chronically ill when she was younger and the pain and surgery going with this. She writes, "I want to get at the reasons for the strange state of amnesia we in the health professions find ourselves in. I want to find clues to my weird experiences, try to sense the nature of being sick." The amnesia of health professionals is their state of mind from the demands placed on them all the time by patients, employers, and society, as well as themselves, to cure illness, to save lives, to make sick people feel better. Doctors, surgeons, nurses, and other health-care professionals become primarily technicians applying the wonders of modern medicine. Because of the volume of patients, they do not get to spend much time with any one or a few of them. It's all they can do to apply the prescribed treatment, apply more of it if it doesn't work the first time, and try something else if this treatment doesn't seem to be effective. Added to this is keeping up with the new medical studies and treatments. But Tisdale stepped out of this problem- solving outlook, can-do, perfectionist mentality by opting to spend most of her time in nursing homes, where she would be among old persons she would see regularly, away from the high-charged atmosphere of a hospital with its "many medical students, technicians, administrators, and insurance review artists." To stay on her "medical toes," she balanced this with working occasional shifts in a nearby hospital. In her hospital work, she worked in a neonatal intensive care unit (NICU), intensive care unit (ICU), a burn center, and in a surgery room. From this combination of work with the infirm, ill, and the latest medical technology and procedures among highly-skilled professionals, Tisdale learned that "being sick is the strangest of states." This is not the lesson nearly all other health-care workers come away with. For them, sick persons are like something that has to be "fixed." They're focused on the practical, physical matter of treating a malady. Unlike this author, they're not focused consciously on the nature of pain and what the patient is experiencing. The pragmatic, results-oriented medical profession is focused on the effects of treatment. Tisdale brings into the picture of health care and seriously-ill patients all of what the medical profession in its amnesia, as she called it, overlooks. Simply in describing what she observes, Tisdale leads those in the medical profession as well as other interested readers to see what they normally overlook, what they normally do not see in the business and pressures of their work. She describes the beginning of a hip-replacement operation, the surgeon "takes the scalpel and cuts--the top of the hip to a third of the way down the thigh--and cuts again through the globular yellow fat, and deeper. The resident follows with a cautery, holding tiny spraying blood vessels and burning them shut with an electric current. One small, throbbing arteriole escapes, and his glasses and cheek are splattered." One learns more about what is actually going on in an operation from this and following passages than from seeing one of those glimpses of operations commonly shown on TV. The author explains the illness of meningitis, "The brain becomes swollen with blood and tissue fluid, its entire surface layered with pus...The pressure in the skull increases until the winding convolutions of the brain are flattened out...The spreading infection and pressure from the growing turbulent ocean sitting on top of the brain cause permanent weakness and paralysis, blindness, deafness...." This dramatic depiction of meningitis brings together medical facts, symptoms, and effects on the patient. Tisdale does this repeatedly to present illness and the persons whose lives revolve around it from patients and relatives to doctors and nurses in a light readers could never imagine, even those who are immersed in this world. Tisdale's main point is that the miracles of modern medicine do not unquestionably end the miseries of illness, or even unquestionably alleviate them. As much as they bring some relief to ill individuals and sometimes cure illness, in many cases they bring on other kinds of pains and sorrows. Tisdale reminds readers that the mystery of illness does, and always will, elude the miracle of medical technology, drugs, and practices. Part of the mystery of the paradoxes of treatment and the elusiveness of restored health for ill persons she focuses on is "simply the mystery of illness. Erosion, obviously, is natural. Our bodies are essentially entropic." This is what many persons, both among the public and medical professionals, tend to forget. "The Sorcerer's Apprentice" serves as a reminder that the faith and hope placed in modern medicine need to be balanced with an awareness of the mystery of illness which will always be a part of human life. ********* Monday's edition of the TCR delivers a list of indicative prices for bond issues that reportedly trade well below par. Prices are obtained by TCR editors from a variety of outside sources during the prior week we think are reliable. Those sources may not, however, be complete or accurate. The Monday Bond Pricing table is compiled on the Friday prior to publication. Prices reported are not intended to reflect actual trades. Prices for actual trades are probably different. Our objective is to share information, not make markets in publicly traded securities. Nothing in the TCR constitutes an offer or solicitation to buy or sell any security of any kind. It is likely that some entity affiliated with a TCR editor holds some position in the issuers public debt and equity securities about which we report. Each Tuesday edition of the TCR contains a list of companies with insolvent balance sheets whose shares trade higher than $3 per share in public markets. At first glance, this list may look like the definitive compilation of stocks that are ideal to sell short. Don't be fooled. Assets, for example, reported at historical cost net of depreciation may understate the true value of a firm's assets. A company may establish reserves on its balance sheet for liabilities that may never materialize. The prices at which equity securities trade in public market are determined by more than a balance sheet solvency test. On Thursdays, the TCR delivers a list of recently filed Chapter 11 cases involving less than $1,000,000 in assets and liabilities delivered to nation's bankruptcy courts. The list includes links to freely downloadable images of these small-dollar petitions in Acrobat PDF format. Each Friday's edition of the TCR includes a review about a book of interest to troubled company professionals. All titles are available at your local bookstore or through Amazon.com. Go to http://www.bankrupt.com/books/to order any title today. Monthly Operating Reports are summarized in every Saturday edition of the TCR. The Sunday TCR delivers securitization rating news from the week then-ending. TCR subscribers have free access to our on-line news archive. Point your Web browser to http://TCRresources.bankrupt.com/and use the e-mail address to which your TCR is delivered to login. ********* S U B S C R I P T I O N I N F O R M A T I O N Troubled Company Reporter is a daily newsletter co-published by Bankruptcy Creditors Service, Inc., Fairless Hills, Pennsylvania, USA, and Beard Group, Inc., Philadelphia, Pa., USA. Randy Antoni, Jhonas Dampog, Marites Claro, Joy Agravante, Rousel Elaine Tumanda, Joel Anthony G. Lopez, Psyche A. Castillon, Ivy B. Magdadaro, Carlo Fernandez, Christopher G. Patalinghug, and Peter A. Chapman, Editors. Copyright 2022. All rights reserved. ISSN: 1520-9474. This material is copyrighted and any commercial use, resale or publication in any form (including e-mail forwarding, electronic re-mailing and photocopying) is strictly prohibited without prior written permission of the publishers. Information contained herein is obtained from sources believed to be reliable, but is not guaranteed. The TCR subscription rate is $975 for 6 months delivered via e-mail. Additional e-mail subscriptions for members of the same firm for the term of the initial subscription or balance thereof are $25 each. For subscription information, contact Peter A. Chapman at 215-945-7000. *** End of Transmission ***