/raid1/www/Hosts/bankrupt/TCR

/raid1/www/Hosts/bankrupt/TCR_Public/220128.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 28, 2022, Vol. 26, No. 27 Headlines 96 WYTHE ACQUISITION: Seeks to Hire Litigation Support Consultant 96 WYTHE: Has Cash Collateral Access Thru March 8 96 WYTHE: Williamsburg Okayed to Keep Brown as Bankruptcy Counsel ABC CARPET: Gets Court Okay to Seek Bankruptcy Plan Creditor Vote AETHON UNITED: Fitch Affirms 'B' LongTerm IDR, Outlook Stable ALL TEXAS ELECTRICAL: Suit vs. NSPS Metals Dismissed ALPHA HOUSE: Fine-Tunes Plan Documents ALPHA HOUSE: Gest Cash Collateral Access ALPHA LATAM: Gets Okay to Seek Creditors' Vote on Plan AMC ENTERTAINMENT: In Advanced Talks In Refinancing Debt AMERICAN EAGLE: Seeks to Employ Foley & Lardner as Bond Counsel AMERICAN EAGLE: Seeks to Employ Polsinelli as Bankruptcy Counsel AMERICAN EAGLE: Seeks to Hire FTI Consulting as Financial Advisor AMERICAN EAGLE: Taps Blueprint Healthcare as Real Estate Advisor AMERICAN EAGLE: Taps Epiq as Administrative Advisor APPALACHIAN BASIN: Seeks to Tap Anthony J. DeGirolamo as Counsel APPALACHIAN BASIN: Taps Phillips Organization as Financial Advisor ARCHBISHOP OF AGANA: Seeks to Hire Camacho Calvo as Special Counsel ASCENA RETAIL: Asks Court to Narrow Bankruptcy Plan Releases AUBURN RAVINE: Files for Chapter 11 to Avert Foreclosure AVIS BUDGET: S&P Upgrades ICR to 'BB', Outlook Stable BANTEC INC: To Sell 3 Billion Shares of Common Stock BAUSCH HEALTH: Fitch Affirms 'B' IDRs, Outlook Negative BED BATH: Moody's Lowers CFR to B1, Outlook Remains Stable BONNIE TILE: Gets Cash Collateral Access BRANCHES OF LIFE: Unsecureds Will Get At Least 3% in Plan CE ELECTRICAL: People's United Bank Says Disclosure Inadequate CHAMINADE UNIVERSITY: S&P Affirms 'BB+' Rating on Revenue Bonds CHESAPEAKE ENERGY: S&P Alters Outlook to Pos., Affirms 'BB-' ICR CHICK LUMBER: Gets Short Extension for Amended Disclosures CONFLUENT MEDICAL: Moody's Assigns First Time 'B3' CFR CONFLUENT MEDICAL: S&P Assigns 'B' ICR on Acquisition by TPG CVR ENERGY: Moody's Affirms Ba3 CFR & Alters Outlook to Negative CYPRESS PARK: Case Summary & 20 Largest Unsecured Creditors CYPRUS MINES: Fee Examiner Seeks to Tap Godfrey & Kahn as Counsel DBMP LLC: Saint-Gobain Sued Over Texas Two-Step Bankruptcy Tactic EDWARD ZENGEL: Seeks to Hire AG Employment Law as Labor Counsel EDWARD ZENGEL: Seeks to Hire The Spires Group as Accountant EXCELLENCE 2000: Bid to Extend Date to File Chapter 11 Plan Denied EXTERRAN ENERGY: S&P Places 'B+' ICR on CreditWatch Positive FIGUEROA MOUNTAIN: Court OKs 12th Cash Collateral Stipulation FIVETOWER LLC: Unsecureds' Recovery Hiked to 18% in Plan FLOOR-TEX: Wins Cash Collateral Access Thru Feb 22 FLUOROTEK USA: Exclusivity Period Extended to Feb. 11 FOLEY PRODUCTS: Moody's Assigns First Time B2 Corp. Family Rating FOLEY PRODUCTS: S&P Assigns 'B' Rating on Acquisition by Oaktree FOREST PARK: Case Summary & 20 Largest Unsecured Creditors FOUNDATION FOR IUP: S&P Cuts 2007A Revenue Bonds Rating to 'B' FOUNDATION FOR IUP: S&P Lowers 2008 Revenue Bonds Rating to 'CCC' FRUTTA BOWLS: Feb. 24 Plan & Disclosure Hearing Set FRUTTA BOWLS: Sale, Malpractice Suit to Fund Trustee's Plan GENESIS HEALTHCARE: Unsecured Claims to Get 100% in Plan GEO GROUP: S&P Lowers ICR to 'CCC' as Debt Exchange Risks Increase GIRARDI & KEESE: Erika Claims Ownership of Law Firm GIRARDI & KEESE: Erika Fights Motion to Surrender $750K Earrings GIRARDI & KEESE: Erika Refuses to Hand Over Diamond Earrings GLOBAL CARIBBEAN: March 2 Disclosure Statement Hearing Set GLOBAL CARIBBEAN: Unsecureds to Recover 46% Under Plan GRUPO AEROMEXICO: Cuts Deal With Unsecured Creditors GRUPO AEROMEXICO: Jr. Creditors Decry Plan as It Nears Ch. 11 Exit HOME DEALS OF MAINE: Taps North Star Realty as Real Estate Broker HOWARD BEND: Fitch Withdraws 'CCC' Rating on 2005 Bonds HUMAN HOUSING: Taps Guilfoyle Law Office as Bankruptcy Counsel HUNTER DOUGLAS: S&P Assigns 'B+' ICR, Outlook Stable I-70 PROPERTIES: Taps VonFeldt, Bauer & VonFeldt as Accountant IAMGOLD CORP: S&P Downgrades ICR to 'B', Outlook Negative ICAN BENEFIT: Trustee Taps Shraiberg, Landau & Page as Counsel INNERLINE ENGINEERING: Taps Resnik Hayes Moradi as Legal Counsel ION GEOPHYSICAL: Preps Up Bankruptcy Filing to Sell Itself JPA NO. 49 CO: Seeks Court OK to Hire Togut Segal as Legal Counsel JS KALAMA: Chapter 11 Trustee Gets Approval to Hire Realtor KING'S TOWING: Seeks to Hire the Bond Law Office as Legal Counsel KISMET ROCK HILL: March 8 Hearing on Disclosure Statement KRIESEL RENTALS: Unsecureds to be Paid in Full in Plan LATAM AIRLINES: Didn't Give $13-Bil. Offer a Fair Shot, Says Azul LIBERTY PARK: Case Summary & 18 Unsecured Creditors LIMETREE BAY: S&P Raises Senior Secured Term Loan Rating to 'CCC' LINDERIAN CO: Gets Interim Cash Collateral Access LTL MANAGEMENT: Bankruptcy Experts Join Call for Case Dismissal LUCKIN COFFEE: Centurium Is Controlling Holder After Shares Sale MESOBLAST LTD: M&G Investment Reports 8.89% Equity Stake MICRON DEVICES: Taps Cimo Mazer Mark as Special Litigation Counsel MIDTOWN DEVELOPMENT: Exclusivity Period Extended to March 21 MILFORD REGIONAL: S&P Lowers Bond Rating to 'BB', Outlook Neg. MLK ALBERTA: U.S. Trustee Unable to Appoint Committee MOLINA HEALTHCARE: S&P Affirms 'BB-' ICR, Outlook Positive MONROE COUNTY HCA: Moody's Affirms Ba3 Issuer Rating N.G. PURVIS: Taps Agri-Management Farm Services as Appraiser NEW HAPPY FOOD: Seeks More Time to File Bankruptcy Plan NOORJAHAN HAGGERTY: Seeks to Hire Wernette Heilman as Counsel NORDIC AVIATION: Affiliates Seek to Hire Virginia Conflicts Counsel NORDIC AVIATION: Affiliates Tap Cole Schotz as Conflicts Counsel NORDIC AVIATION: Affiliates Tap McDermott as Special Counsel NORDIC AVIATION: Affiliates Tap McDonald Hopkins as Special Counsel ORGANIC POWER: Court Confirms Chapter 11 Plan PATH MEDICAL: Plan Solicitation Period Extended to March 27 PEDIATRIC ASSOCIATES: S&P Assigns 'B' ICR, Outlook Stable PES HOLDINGS: Owner Reaches Chapter 11 Insurance Row Deal PHIO PHARMACEUTICALS: Empery Asset, et al., Report 4.99% Stake PIPELINE FOODS: Unsecureds Will Recover 1% to 1.9% in Plan PROSPECT-WOODWARD: Disclosure Violates Bankruptcy Code, Says PUERTO RICO: Religious Leaders Vital to Success of Restructuring QHC FACILITIES: Sale of Company Is Best Option, Says UST QHC FACILITIES: Searches for Buyer as Cash Depletes QHC FACILITIES: Taps Newmark Real Estate as Investment Banker RIVER HILL: March 1 Plan Confirmation Hearing Set SANGHA HOSPITALITY: Case Summary & Two Unsecured Creditors SCIENTIFIC GAMES: Fitch Assigns FirstTime 'B(EXP)' LongTerm IDR SCIENTIFIC GAMES: S&P Assigns 'B+' ICR, Outlook Stable SHASTHRA USA: Wins Cash Collateral Access Thru March 15 SMOKINKWR LLC: Wins Cash Collateral Access Thru March 6 SOUTH HARBOR: Seeks to Tap Wolff & Orenstein as Bankruptcy Counsel SPEED INDUSTRIAL: March 30 & 31 Plan Confirmation Hearing Set SPEED INDUSTRIAL: Unsecureds Will Recover 100% in Plan STARWOOD PROPERTY: Fitch Rates $500MM Unsec. Notes 'BB+' TECT AEROSPACE: Unsec. Creditors to Recover 0.2% to 3.3% in Plan TELINTEL LTD: Seeks to Hire Kaufman Rossin & Co. as Accountant TEN DOLLAR: To Seek Plan Confirmation on Feb. 23 TWISTED OAK: March 28 Plan Confirmation Hearing Set VETERAN HOLDINGS: Seeks Approval to Hire Bankruptcy Counsel WASHINGTON PLACE: Case Summary & 20 Largest Unsecured Creditors WESTBANK HOLDINGS: Case Summary & 20 Largest Unsecured Creditors [^] BOOK REVIEW: TAKING CHARGE: Management Guide to Troubled ********* 96 WYTHE ACQUISITION: Seeks to Hire Litigation Support Consultant ----------------------------------------------------------------- 96 Wythe Acquisition, LLC seeks approval from the U.S. Bankruptcy Court for the Southern District of New York to employ Glassratner Advisory & Capital Group, LLC, doing business as B. Riley Advisory Services, as its litigation support consultant. The firm will render these litigation support services: (a) review the Debtor's second amended Chapter 11 plan and related documents; (b) assess proposed "cram down" interest rates and terms in the plan using methodology prescribed by the United States Supreme Court in Till v. SCS Credit Corp. 541 U.S. 465 (2004) and other appropriate investigation and financial analysis; (c) prepare an expert witness report or affidavit; (d) provide expert witness testimony at deposition or trial; and (e) other services and related plan work as agreed to by B. Riley and the Debtor that is not being handled by the Debtor's other professionals. The hourly rates of the firm's professionals are as follows: James Howard, Senior Managing Director $725 Dan Berman, Senior Managing Director $550 Paul Dopp, Senior Managing Director $550 Steven Prager, Associate Director $395 Other staff $395 - $725 In addition, the firm will seek reimbursement for expenses incurred. James Howard, a senior managing director at B. Riley Advisory Services, disclosed in a court filing that the firm is a "disinterested person" as defined in Section 101(14) of the Bankruptcy Code. The firm can be reached through: James Howard B. Riley Advisory Services 299 Park Avenue New York, NY 10171 Telephone: (239) 404-3339 Email: jhoward@brileyfin.com 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 counsels, and Fern Flomenhaft, PLLC as insurance counsel. Getzler Henrich & Associates, LLC and Hilco Real Estate, LLC, serve as the Debtor's financial advisors. B. Riley Advisory Services, is the litigation support consultant. 96 WYTHE: Has Cash Collateral Access Thru March 8 ------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of New York has authorized 96 Wythe Acquisition LLC to use cash collateral on an further interim basis to pay the ordinary, necessary and reasonable expenses of operating the Williamsburg Hotel as they come due in the ordinary course of business during the Interim Period. The Debtor is permitted to use cash collateral through the earliest to occur of: (i) March 8, 2022, unless extended by its lender or a further extension of authority is granted by the Court, (ii) the entry of a Court order terminating such authority; (iii) the dismissal of the Chapter 11 case or conversion to a case under Chapter 7 of the Bankruptcy Code; and (iv) the date that is five days after the Lender provides a written notice of an Event of Default, except to the extent the Court has entered a further interim or final order authorizing the Debtor's continued use of cash collateral beyond the Interim Period. As adequate protection, the lender, Benefit Street Partners Realty Operating Partnership, L.P., is granted additional and replacement valid, binding, enforceable, nonavoidable, and automatically perfected postpetition security interests in and liens on, without the necessity of the execution by the Debtor (or recordation or other filing) of security agreements, control agreements, pledge agreements, financing statements, mortgages, or other similar documents, on all property. The Adequate Protection Liens will be junior only to: (A) the Lender's prepetition liens, and (B) other unavoidable liens, if any, existing as of the Petition Date that are senior in priority to the Lender's prepetition liens. The Adequate Protection Liens will be subject to a $10,000 carve-out for Chapter 7 administration expenses to the extent necessary for the Debtor's payment of fees incurred under 28 U.S.C. section 1930 and statutory fees required to be paid to the Clerk of the Court. The Lender is also granted an allowed administrative expense claim ahead of and senior to any and all other administrative expense claims in the Case, with the exception of the Carve-Out, to the extent of any diminution. The Debtor is required to maintain all necessary insurance as required under the Prepetition Loan Documents, naming the Lender as a notice party and additional insured, and will promptly provide the Lender with proofs of insurance for the Hotel and copies of all documents related to any insurance premium financing arrangement the Debtor may have. These events constitute Events of Default: (i) The Debtor's failure to comply with any of the terms of the Interim Order (including compliance with the Budget); (ii) The obtaining of credit or incurring of indebtedness outside of the ordinary course of business that is either secured by a security interest or lien that is equal or senior to any security interest or lien of the Lender or entitled to priority administrative status that is equal or senior to that granted to the Lender; and (iii) Entry of an order by the Court granting relief from or modifying the automatic stay under section 362 of the Bankruptcy Code to allow a creditor to execute upon or enforce a lien or security interest in any collateral that would have a material adverse effect on the business, operations, property or assets of the Debtor. The final hearing on the matter is scheduled for March 8 at 10 a.m. A copy of the order is available at https://bit.ly/32BB3p5 from PacerMonitor.com. About 96 Wythe Acquisition LLC 96 Wythe Acquisition LLC is a privately held company whose principal property is located at 96 Wythe Ave, Brooklyn, NY 11249. 96 Wythe Acquisition sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. S.D.N.Y. Case No. 1-22108) on February 23, 2021. In the petition signed by David Goldwasser, chief restructuring officer, the Debtor disclosed $0 in assets and $79,990,206 in liabilities. Judge Robert D. Drain oversees the case. Backenroth Frankel & Krinsky, LLP, led by Mark Frankel, is the Debtor's counsel. 96 WYTHE: Williamsburg Okayed to Keep Brown as Bankruptcy Counsel ----------------------------------------------------------------- James Nani of Bloomberg Law reports that the owner of Brooklyn's Williamsburg Hotel can maintain Mayer Brown LLP as bankruptcy co-counsel after a judge rejected the U.S. Trustee's bid to disqualify the firm over an alleged conflict of interest. The Justice Department's bankruptcy watchdog failed to show that Mayer Brown should be disqualified from representing hotel owner 96 Wythe Acquisition LLC merely because the firm also represents an entity under the control of 96 Wythe’s managing members, Judge Robert Drain said at a hearing Thursday, January 27, 2022. 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. ABC CARPET: Gets Court Okay to Seek Bankruptcy Plan Creditor Vote ----------------------------------------------------------------- Daniel Gill of Bloomberg Law reports that ABC Carpet & Home gets court approval to seek bankruptcy plan creditor votes. High-end New York home goods retailer ABC Carpet & Home won bankruptcy court approval to solicit creditor votes on its plan to liquidate after selling itself in bankruptcy last 2021. Judge David S. Jones of the U.S. Bankruptcy Court for the Southern District of New York approved ABC's disclosure statement at a hearing Thursday, January 27, 2022, allowing the voting process to begin. The plan would create a liquidating trust funded with cash on hand and assets that weren’t sold to lender group 888 Capital Partners in October 2021. About ABC Carpet & Home A.B.C. Carpet & Home, Inc., is a New York-based seller of luxury home goods. The company traces its roots to the late 1800s, when Austrian immigrant Samuel Weinrib started the business from a pushcart on Manhattan's Lower East Side. His great-granddaughter Paulette Cole helped build its red-brick building on Broadway into a high-end destination for designers and decorators and their affluent clients. A.B.C. Carpet Co. Inc., along with two affiliates, sought Chapter 11 protection (Bankr. S.D.N.Y. Lead Case No. 21-11591) on Sept. 8, 2021. It listed assets of up to $50 million and as much as $100 million of liabilities in its petition. The Debtors tapped GREENBERG TRAURIG, LLP as counsel; and B. RILEY SECURITIES, INC., as financial advisor. BANKRUPTCY MANAGEMENT SOLUTIONS, INC. (STRETTO) is the claims agent. AETHON UNITED: Fitch Affirms 'B' LongTerm IDR, Outlook Stable ------------------------------------------------------------- Fitch Ratings has affirmed Aethon United BR LP's (Aethon) Long-Term Issuer Default Rating (IDR) at 'B' and upgraded its senior unsecured notes to 'B+'/'RR3' from 'B'/'RR4'. The Rating Outlook is Stable. Aethon's ratings reflect is vertically integrated unit economics, contiguous positions in the Haynesville, leverage with visibility towards 1.5x during Fitch's forecast period and the expected transition to operating within its own FCF generation during 2022. The ratings also consider the company's RBL reliance ahead of its 2023 maturity and overall scale. The upgrade of Aethon's senior unsecured notes reflects the benefit of Aethon's robust hedging program under a weaker gas price environment, as well as the companies' largely completed infrastructure projects in 2021. KEY RATING DRIVERS Forecast Shift to Positive FCF: Aethon is expected to be close to FCF neutral in 2021, after which Fitch forecasts positive FCF under Fitch's price deck, which uses natural gas of $2.75 in 2023, $2.50 in 2024 and longer term for. The transition to positive FCF provides an avenue to reduce RBL borrowings from internally generated funds and move towards the company's 1.5x leverage target. FCF is supported by an active refrac program, which provides capital efficiencies and compressed timeline to cash generation. Low Leverage, but RBL Utilization Reliant: Fitch forecasts total debt with equity credit/EBITDA of 1.6x by year end 2022 and 1.5x, in line with Aethon's leverage target through the remainder of the forecast. Fitch forecasts the improvement in leverage to be partially due reduced reliance on RBL borrowings, which 3Q21 was utilized at 63%. This facility matures in September 2023, and meaningful reductions during 2022 or a refinancing of the facility prior to it turning current would be credit supportive for Aethon. Differentiated by Hedging Commitment: Aethon has maintained a comprehensive hedging program demonstrating its commitment to cash flow visibility and conservatism. Over 90% of Fitch estimated 2022 production is hedged as well as approximately two-thirds of 2023 production. The company targets hedging a majority of two-year forward development production, and continually layers hedges to cover the resulting proved developed producing production for up to six years. Many exploration and production (E&P) peers have recently reduced their hedge programs to increase their relative exposure to high commodity prices, further differentiating Aethon's extensive program. Low-Cost Gas Production Profile: Aethon's largely contiguous two core positions in the Haynesville basin within Northwest Louisiana and East Texas are supported by the company's own facility and pipeline transportation investments. Established infrastructure in the Haynesville and the proximity to henry hub and growing liquefied natural gas (LNG) demand destinations helps supports strong realized prices for their gas as well as reduces basis risk. Fitch expects Aethon to continue to develop and manage its inventory of Northwest Louisiana drilling locations, which are in the more established portion of the Haynesville and balance this with its East Texas acreage, which is in a more developing area of the Haynesville. Midstream Integration: Aethon's vertical integration into midstream assets includes 1,119 miles of pipe and more than 80,000HP of owned compression. In 2021 Aethon completed the construction of its Thorn Lake Pipeline and plant, which provides a connection to the Acadian pipeline that improves marketing options to the growing and price advantaged Gulf Coast LNG market, as well as it brought to near completion its Bland Lake plant in East Texas. The completion of these projects means Aethon can reduce its midstream capex spend going forward to largely maintenance capex of approximately $50 million annually. Aethon's overall midstream integration helps support margins by providing and uplift to net revenue interest volumes. At 3Q21, as reported by the company inclusive of Services, this uplift equated to $0.52/Mcfe. Fitch expects the midstream and marketing segment to grow in line with Aethon's upstream development program, with its contribution increasing to approximately $200 million EBITDA in 2022. DERIVATION SUMMARY Aethon's rating of 'B'/Stable reflects its smaller size at 765MMcfe/d production in 3Q21 relative to gas peers Comstock (B/Positive; 1,423MMcfe/d), Southwestern Energy pro forma its acquisition of Haynesville producer GEP Haynesville (BB/Stable, 4.7Bcfe/d), CNX Resources (BB+/Stable; 1,669MMcfe/d), Ascent Resources Utica Holdings, LLC (B/Stable; 1,979MMcfe/d) and Chesapeake Energy pro forma its acquisition of Vine (BB/Stable; 3.4bcfed). Aethon's core position in the Haynesville produces competitive 3Q21 cash netbacks of $3.10/Mcfe inclusive of the benefits from owning midstream and services assets that service its production and contributed $0.52/Mcfe to its netback in the quarter. This compares to $2.87/Mcf from Comstock, $2.38/Mcfe from Southwestern $2.70/Mcfe from CNX and $2.35/Mcfe from Ascent. Fitch forecasts Aethon's total debt leverage to be 1.9x at YE 2021, which compares well with higher rated peers at Southwestern 2.8x, CNX at 2.0x and also favorably with 'B'-rated peers Comstock and Ascent at 2.6x and 2.7x respectively at fiscal 2021. KEY RECOVERY RATING ASSUMPTIONS The recovery analysis assumes that Aethon would be reorganized as a going-concern (GC) in bankruptcy rather than liquidated. Fitch has assumed a 10% administrative claim. Going-Concern Approach The GC EBITDA estimate reflects Fitch's view of a sustainable, post-reorganization EBITDA level upon which Fitch bases the enterprise valuation, which reflects the decline from current pricing levels to stressed levels and then a partial recovery coming out of a troughed pricing environment. An EV multiple of 3.5x EBITDA is applied to the GC EBITDA to calculate a post-reorganization enterprise value. The choice of this multiple considered the following factors: -- The historical bankruptcy case study exit multiples for peer companies ranged from 2.8x-7.0x, with an average of 5.2x and a median of 5.4x; -- The multiple considers 2021 transaction in the Haynesville such as Southwestern Energy's acquisition of Indigo Natural resources at an approximated 3.85x forward multiple, Southwestern's acquisition of GEP Haynesville at a 2.9x forward multiple as well as Chesapeake's acquisition of Vine Energy at an approximate 4.0x multiple; -- The GC EBITDA estimate benefits from Aethon's hedging program which partially hedges into 2026. Liquidation Approach The liquidation estimate reflects Fitch's view of the value of balance sheet assets that can be realized in sale or liquidation processes conducted during a bankruptcy or insolvency proceeding and distributed to creditors. The senior secured revolver is expected to be 90% drawn given the likelihood of negative redetermination in a sustained lower price environment. Fitch considers valuations such as SEC PV-10 and M&A transactions metrics for each basin including multiples for production per flowing barrel, proved reserves valuation, value per acre and value per drilling location. The revolver (not rated) is senior to the senior unsecured bonds in the waterfall. The allocation of value in the liability waterfall for the results and a recovery corresponding to 'RR3' for the senior unsecured notes. KEY ASSUMPTIONS Fitch's key assumptions within the agency's rating case for the issuer include: -- Henry Hub natural gas (USD/mcf) of $3.80 in 2021, $3.25 in 2022, $2.75 in 2023, $2.50 in 2024 and longer term; -- WTI (USD/bbl) of $68 in 2021, $67 in 2022, $57 in 2023 and $50 in 2024 and longer term; -- Increase costs due to inflation incurred in 2022; -- FCF generation and excess cash supports RBL debt repayments during forecast; -- RBL refinanced under similar terms; -- No shareholder distributions during forecast. RATING SENSITIVITIES Factors that could, individually or collectively, lead to positive rating action/upgrade: -- Realization of production and capital efficiencies resulting in successful shift to material and sustained positive FCF generation; -- Reduced RBL usage and extending its maturity; -- Continued production growth supporting annual FFO approaching $700 million; -- Demonstrated commitment to stated financial policy, including hedging program resulting in maintenance of mid-cycle debt/EBITDA below 2.5x. Factors that could, individually or collectively, lead to negative rating action/downgrade: -- Failure to realize expected production and capital efficiency gains resulting in lower than expected unit economics and/or negative FCF; -- RBL utilization sustained over 70% or heightened refinancing risk ahead of RBL maturity; -- Debt/EBITDA (adjusted FFO Leverage) durably above 3.5x. 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 RBL Reliance: At 3Q21 the company had $312 million dollars of undrawn capacity on its $850 million RBL at a 63% utilization rate. Liquidity is supported by $83 million cash on hand and totals $395 million. Further increases to its borrowing base as Aethon develops its acreage and increases in commodity prices make reserves more economic, as well as forecast shift in 2022 to positive FCF generation that provides an opportunity for a reductions, should decrease Aethon's RBL utilization. Simple Maturity Profile: Aethon's debt consists of their RBL facility maturing in September 2023 and the $750 million senior unsecured notes due 2026. ISSUER PROFILE Aethon United BR LP (Aethon), is an independent E&P company focused primarily on the development of natural gas properties in North Louisiana and East Texas' Haynesville shale formation. With 765MMcfe/d of dry gas production averaged in 3Q21 and approximately 200,000 largely contiguous net acres split between East Texas and North Louisiana, Aethon is one of the largest private natural gas producers currently operating in the basin. ESG Considerations Unless otherwise disclosed in this section, the highest level of ESG credit relevance is a score of '3' -- 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. ALL TEXAS ELECTRICAL: Suit vs. NSPS Metals Dismissed ---------------------------------------------------- NSPS Metals, LLC, won dismissal of All Texas Electrical Contractors, Inc.'s amended complaint in the adversary proceeding captioned ALL TEXAS ELECTRICAL CONTRACTORS, INC., Plaintiff, v. NSPS METALS LLC and, AMERICAN COMMERCIAL CONTRACTORS, LLC, and JAMES ROZMAN, and DENHAM-BLYTHE COMPANY, INC. and SUSAN ROZMAN, Defendants, Adversary No. 21-3287 (Bankr. S.D. Tex.), for failure to state a claim pursuant to Federal Rule of Civil Procedure 12(b)(6). The dispute arises out of the construction of a multi-million-dollar steel processing facility in Houston, Texas organized by NSPS. Denham-Blythe Company was hired by NSPS to serve as project manager on this construction. While searching for a location to construct the facility, NSPS entered into negotiations for 14.297 acres of real property in Harris County, Texas. As a condition of the real property sale, NSPS was required to hire American Commercial Contractors, LLC as its general contractor. Prior to engaging ACC, Denham-Blythe advised NSPS against hiring ACC due to its previous history of, inter alia, not paying its subcontractors. Nonetheless, on February 15, 2019, the parties reached an agreement and a general warranty deed was conveyed to NSPS. On June 3, 2019, All Texas Electrical Contractors, Inc., entered into a lump sum subcontractor agreement with ACC in the amount of $915,405 to provide labor and materials, including but not limited to exterior lighting, interior lighting, pole lights, general electrical, electrical service, fire alarm and design services. All Texas asserted it timely performed its obligations pursuant to the Subcontract and timely submitted its pay applications to ACC. Plaintiff further pled ACC "slow-paid" Plaintiff's invoices before ceasing payment altogether. As of the date of the filing of the bankruptcy petition, Plaintiff maintains it was still owed $586,496.15 from ACC. On September 25, 2020, Plaintiff filed a voluntary petition under subchapter V of Chapter 11 of the Bankruptcy Code. On April 29, 2021, Plaintiff initiated an adversary proceeding by filing a complaint against NSPS, Denham-Blythe, ACC, and James Rozman. NSPS filed a motion to dismiss the Initial Complaint on June 7, 2021. Plaintiff then filed an amended complaint on June 22, 2021 against the same parties. Defendant filed the pending motion to dismiss on September 24, 2021. On January 4, 2022, the Court held a hearing and took the matter under advisement. In a Memorandum Opinion dated January 18, 2022, Judge Eduardo Rodriguez of the United States Bankruptcy Court for the Southern District of Texas, Houston Division, granted NSPS Metals' Motion to Dismiss. All Texas Electrical Contractors, Inc.'s claims for: (B) 11 U.S.C. Section 542 turnover; (D) 11 U.S.C. Sections 548(a)(1)(B) and 550 constructive fraudulent transfer; (E) TUFTA constructive fraudulent transfer; (F) quantum meruit; (G) unjust enrichment; and (O) civil conspiracy as against NSPS Metals, LLC, were dismissed. Additionally, All Texas Electrical's claims for: (A) negligent hiring and supervision and (L) breach of fiduciary duty, were dismissed with prejudice. 1. Claim A -- negligent hiring and supervision In a Motion to Dismiss previously filed by Defendant Denham-Blythe, this Court ruled that the economic loss rule precluded recovery by Plaintiff for negligent hiring and supervision as it pertained to Denham-Blythe. The facts, as they pertain to Defendant NSPS are very similar. Like Denham-Blythe, Defendant did not contract with Plaintiff directly. Instead, Defendant hired ACC as general contractor. ACC then engaged Plaintiff in a $915,405.00 subcontract for the provision of electrical services. The Texas Supreme Court has clarified that the lack of a contractual arrangement between Plaintiff and Defendant will not bar application of the economic loss rule. In fact, in LAN/STV v. Martin K. Eby Construction Company, the court specifically referenced construction disputes as an ideal situation to apply the economic loss rule between non-contracting parties due to the ability to allocate risk in related agreements. Therefore, the third-party relationship between Plaintiff and Defendant alone is not sufficient to bar application of the economic loss rule. Next, the duties of negligent hiring and supervision are not independent of Defendant's contractual obligation, the Court continued. In the Amended Complaint, Plaintiff flatly asserts that "[Defendant] . . . assumed an implied duty not to harm [Plaintiff] . . . ." and that "[s]uch assumed duty is independent of any contractual obligations they have to one another, or with ACC." However, Judge Rodriguez notes the Plaintiff fails to expand on this proposition in the Amended Complaint or cite any case law to support it. Plaintiff's argument seemingly relies on the premise that the claim is independent of contractual obligations simply because negligent hiring and supervision is an assumed duty of law. However, courts have repeatedly noted that claims for a breach of duty imposed by law, including negligent hiring claims, may still be subject to the economic loss rule if the injury is only the economic loss to the subject of the contract itself. Therefore, the key inquiry is whether the economic loss was subject to the contract. The Court says the damages sought by Plaintiff rest solely on the economic harm Plaintiff suffered when ACC breached the subcontract with Plaintiff. The factual basis of Plaintiff's claims against ACC was that ACC failed to pay Plaintiff on-time, or at all, in violation of the terms of the contract between them. Plaintiff's claim against Defendant was premised on Defendant allegedly negligently hiring and supervising a general contractor who both did not pay and failed to timely pay Plaintiff. Obviously, this economic harm is rooted in breach of contract. Furthermore, Plaintiff's attempt to classify the loss of materials purchased for use on the Project as "property damage" rather than economic harm58 has no merit. Plaintiff specifically pled that the Subcontract provided for the cost of materials in addition to labor.59 Therefore, as with Defendant Denham-Blythe in its previous motion to dismiss, here, the economic loss rule bars Plaintiff from recovering this loss from Defendant NSPS and the Court need not address Defendant's second argument for dismissal as to Claim A. In granting Defendant Denham-Blythe's previous motion to dismiss as to Plaintiff's negligent hiring and supervision claims, the Court did so with prejudice. The Court dismisses Plaintiff's negligent hiring and supervision claims with prejudice -- this time as to Defendant NSPS. The Court finds that any attempt to amend would be futile because the pleadings clearly demonstrate circumstances triggering the economic loss rule. Further, Plaintiff has already had one previous opportunity to amend61 and the period for amendment as a matter of course has long since expired. 2. Claim B -- Section 542 turnover In its Amended Complaint, Plaintiff fails to specify which subsection of Section 542 Claim B is brought under, Judge Rodriguez said. Plaintiff contends Defendant is "in possession of construction trust funds for which ATE is the beneficiary." However, the only definition of trust funds that Plaintiff provides in the Amended Complaint is "[p]ayments made to ACC (or to its officers or agents) on the NSPS Project . . ." Under either a Section 542(a) or Section 542(b) theory, Plaintiff has not sufficiently pled a plausible claim. First, under Section 542(a), Defendant cannot be in possession of the trust funds since Plaintiff defines these funds as those that have already been paid to ACC. Therefore, Plaintiff has not met its pleading burden under Section 542(a) to allege Defendant is in possession of property that is rightfully in Plaintiff's bankruptcy estate. Next, under Section 542(b) Plaintiff's claim fails because it is merely a disputed breach of contract claim. Plaintiff seeks to recover for unpaid materials and services subject to Plaintiff's agreement with ACC in the Subcontract. In the Motion to Dismiss, Defendant clearly disputes that it is personally liable to Plaintiff for the damages sought in the First Amended Complaint. Thus, Plaintiff cannot bring this turnover action to demand funds that are in dispute. 3. Claim D -- Sections 548(a)(1)(B) and 550 constructive fraudulent transfer At the outset, the Court noted a significant misstatement in Plaintiff's characterization of the alleged transfer. In the Amended Complaint, Plaintiff asserts that "ATE's performance of services under the Subcontract -- including without limitation, ATE's acquisition and provision to [NSPS and ACC] of equipment and building materials purchased by ATE from multiple job vendors -- were transfers of ATE property (or property in which ATE had an interest) for which ATE received less than a reasonably equivalent value in exchange for such transfers," and that Plaintiff is entitled to a judgment for avoidance and recovery of the transferred property. The problem with this pleading is that Plaintiff treats the transfer of building materials and equipment as one singular transfer when they were actually multiple transactions occurring over an extended period. For guidance on how to treat this pleading, the Court looks to precedent. In cases seeking avoidance actions where multiple payments were made to the same entity, the trustee is charged with demonstrating that each individual payment meets the elements of the avoidance action. Frequently, cases arise where some, but not all of the payments were transferred outside of the statutory look-back-period. Courts have not grouped these payments together but rather have parsed out which payments qualify for avoidance and which do not. Similarly, where multiple parcels of real property were transferred to the same entity, courts have not grouped the total real property transfer as one but have placed a burden on trustees to prove each element of each real property transfer. Thus, this Court finds that it must analyze not whether Plaintiff has met its burden in pleading that the sum total of alleged service, building equipment, and material transfers meet the elements of Section 548(a)(1)(B), but rather whether each individual transfer meets the requirements. The first element under Section 548(a)(1)(B) is that there be a transfer of property and that the debtor had an interest in that property. Plaintiff pled that it transferred services, building equipment, and materials to Defendant and ACC while performing under the Subcontract. Services are not "property of the debtor," Judge Rodriguez points out. Under Section 541, services are not classified as a form of property of the estate. Therefore, when Plaintiff performed building and construction services for ACC under the Subcontract, it was not transferring a property interest. The building equipment and materials, however, qualify as property of the estate under Section 541 and thus constitute property that the Plaintiff had an interest in. Because Plaintiff attached a list of each individual piece of building equipment and material purchased in Exhibit B and pled that it transferred these items to ACC and Defendant, Plaintiff has met its burden on the first element. For the second element, Plaintiff must sufficiently plead that it made a transfer to Defendant within two years before the petition filing date. Here, Plaintiff provides a long list of vendors, transferred materials, and dates of purchase in Exhibit B. However, the problem with this list is that it demonstrates when these materials became property of the Plaintiff, not necessarily when they were transferred to the Defendant. Plaintiff pled that all of these transfers occurred during its performance of the Subcontract. The Amended Complaint also states that the Subcontract was executed on June 3, 2019. Since Plaintiff's bankruptcy petition was filed on April 29, 2021, less than two years after the Subcontract was executed, the Court finds that Plaintiff has satisfied its burden in pleading sufficient factual context from which this Court ascertains that it is plausible the transfers occurred within two years. The third element requires Plaintiff to allege facts that plausibly show the debtor received less than a reasonably equivalent value in exchange for such transfers. In the Amended Complaint, Plaintiff pled that "ACC's promises to pay were not equivalent value" for the materials provided. The pleading shows that Plaintiff believes the value received was ACC's promise to pay. However, Plaintiff also states in other sections of its Amended Complaint that it received periodic payments from ACC. Since each transfer of building equipment and material is treated individually, Plaintiff bears the burden of pleading that it did not receive reasonably equivalent value for each transfer. If Plaintiff received periodic payments from ACC, it likely received reasonably equivalent value on at least some of the transfers. Whether this is true or not, it was Plaintiff's burden to break down each transfer and show that it did not receive reasonably equivalent value, and Plaintiff failed to do so. Plaintiff has not satisfied the third element. For the fourth element, Plaintiff offers little or no factual support. Plaintiff was required to plead that it "was insolvent at the time of such transfer, or became insolvent as a result of such transfer or obligation." Simply repeating the elements, Plaintiff pled generally that: (1) "ATE was insolvent on the date that such transfer was made or became insolvent as a result of such transfer"; (2) "was engaged in business or a transaction, or was about to engage in business or a transaction, for which any property remaining with ATE was an unreasonably small capital"; and (3) "ATE intended to incur, or believed that ATE would incur, debts that would be beyond ATE ability to pay as such debts matured." Plaintiff provides no factual support for these assertions such as balance sheets or additional financial information. Even the pleadings themselves are entirely open ended and noncommittal. Furthermore, Plaintiff was required to plead and provide factual context for each individual transfer it sought to avoid. By failing to carry its burden, Plaintiff has not satisfied the fourth element. 4. Claim E -- TUFTA constructive fraudulent transfer Plaintiff brings Claim E under the Texas Uniform Fraudulent Transfer Act ("TUFTA"). However, Plaintiff fails to clarify under which of the TUFTA subsections it brings its claim, Judge Rodriguez notes. In the Claim E section of the Amended Complaint, Plaintiff pled a series of factual allegations but only referenced specific TUFTA subsections once. The reference is in the form of an above-the-line-citation rather than a clear assertion of which subsections Plaintiff contends entitles it to relief. In the Amended Complaint, Plaintiff does not specify which subsection of 24.005(a) it believes entitles it to relief. Again, Plaintiff fails to specify which subsection it asserts in connection with its factual pleadings. 5. Claim F -- quantum meruit Plaintiff brings Claim F against Defendant for quantum meruit. Defendant argues Plaintiff should not be permitted to bring this cause of action for quantum meruit since there was a contract governing the services Plaintiff provided, and no exceptions apply. Here, Plaintiff and Defendant did not contract directly. However, Defendant executed a contract with ACC who then entered into the Subcontract with Plaintiff. Plaintiff seeks damages for unpaid services that were governed by the Subcontract. As the Fifth Circuit clarified in Kane Enters. v. MacGregor (USA) Inc., 322 F.3d 371, 376 (5th Cir. 2003), quantum meruit is not available in this scenario and the proper remedy for Plaintiff is to pursue a breach of contract claim. It does not matter that Plaintiff and Defendant did not contract directly as long as the services provided by Plaintiff were subject to one. Next, none of the exceptions will apply because Plaintiff alleges to have fully performed under the Subcontract. Each of the exceptions enumerated by the Texas Supreme Court requires partial performance of the contract. Even if the claim were not barred, however, Plaintiff's Claim F must still be dismissed because Plaintiff fails to plead a necessary element of quantum meruit. As Defendant notes in its Motion to Dismiss, Plaintiff does not plead that Plaintiff informed Defendant that it expected to be paid directly before beginning its work. Instead, Plaintiff merely alleges that "Defendants knew that ATE expected compensation for its labor and materials on the NSPS Project." Since Plaintiff fails to plead that it informed Defendant before beginning its work, Plaintiff has not met its burden in pleading an essential element of quantum meruit. 6. Claim G - unjust enrichment ATE asserts Claim G against NSPS for unjust enrichment. As with its quantum meruit claim, Plaintiff's Claim G for unjust enrichment fails because of the existing agreement between Plaintiff and ACC in the Subcontract. Plaintiff is seeking damages for the services retained by Defendant when Plaintiff performed under the Subcontract. Since the services were subject to the Subcontract, unjust enrichment is only available if an exception applies. Plaintiff does not allege that the terms of the Subcontract were ambiguous or that Plaintiff was overpaid. Furthermore, Plaintiff has not plausibly alleged any claims of fraud in the Amended Complaint which would trigger this exception. 7. Claim L - breach of fiduciary duty Plaintiff asserts Claim L against Defendant for breach of a fiduciary duty. On December 6, 2021, ATE filed a proposed order stipulating to the dismissal of Claim L with prejudice as to defendant NSPS. 8. Claim O - civil conspiracy ATE asserts Claim G against NSPS for civil conspiracy. The full extent of Plaintiff's pleading is that ACC, James Rozman, Susan Rozman, and Defendant "shared the object of completing the Project" and "had a meeting of the minds on such object or course of actions toward the object of completing the Project, one or more unlawful, overt [sic] acts occurred, including fraud, negligent misrepresentations, breach of fiduciary duty, misapplication of Constructions Trust Funds and fraudulent transfers; and as a proximate cause of the actions of such defendants, ATE suffered damages." This allegation, once again, is clearly just a formulaic recitation of the elements. Plaintiff offers no factual or circumstantial evidence of civil conspiracy and thus Plaintiff has failed to meet its burden to state a plausible claim. A full-text copy of the decision is available at https://tinyurl.com/2p8emzny from Leagle.com. About All Texas Electrical Contractors All Texas Electrical Contractors, Inc. -- http://www.alltexaselectrical.net/-- is a Houston-based company that provides electrical installation and services. All Texas Electrical Contractors filed a Chapter 11 petition (Bankr. S.D. Texas Case No. 20-34656) on Sept. 25, 2020. In the petition signed by Arthur Montemayor, president, the Debtor disclosed $1 million to $10 million in both assets and liabilities. Judge Eduardo V. Rodriguez presides over the case. O'Connor Wechsler, PLLC is the Debtor's bankruptcy counsel. ALPHA HOUSE: Fine-Tunes Plan Documents -------------------------------------- The Alpha House, Inc., and M Group Hotels, Inc., submitted a Third Amended Joint Small Business Plan of Liquidation dated Jan. 24, 2022. The Plan is a plan of liquidation, which contemplates and provides for a sale of the Real Property. Proceeds from the sale of the Real Property shall be distributed in accordance with the Plan. The Plan classifies creditors into the following classes: * Class 1 consists of Tax Secured Priority Claim of Miami-Dade ad valorem. The unpaid balance of the allowed Class 1 claim shall be paid at Closing of the sale of the Real Property. In the interim, Miami-Dade shall also be paid payments through confirmation in the monthly amount $550.00, and (ii) postConfirmation monthly payments, through closing, of $550.00. * Class 2 consists of the Secured Claim of Marianna. The allowed amount of the Class 2 claim shall be paid as follows: (a) the allowed amount of unpaid principal and nondefault interest, attorneys' fees and costs, at Closing, subject to the Reserved Rights as defined in Settlement; (b)The Bankruptcy Court reserves jurisdiction to determine any disputed amounts which may be claimed by Marianna. After such determination, paythe amount determined from Closing Proceeds held in escrow; and (c). -- Marianna shall also be paid (i) adequate protection payments through Confirmation in the monthly amount of $4,901.79, and (ii) postConfirmation monthly payments, through closing of the sale of the Real Property, in the amount of $4,901.79. The treatment proposed hereunder is subject to the Reserved Rights under the Settlement. The Settlement shall prevail in the event of any inconsistency with the Plan. * Class 3 consists of the Secured Claim of First Home. The allowed amount of the Class 3 claim shall be paid from proceeds from the sale of the Real Property held in escrow following satisfaction of the allowed amount of the allowed Class 2 claim. First Home shall also be paid adequate protection payments through confirmation in the monthly amount of $673.00, and (ii) postConfirmation monthly payments, through closing, of $673.00. * Class 6 consists of Unsecured General Claims against Alpha. Following payment in full of the Class 1 through Class 5 claims, the holders of allowed Class 6 claims shall be paid pro rata from any Alpha funds remaining from the Closing. * Class 7 consists of Unsecured General Claims against M Group. If M Group receives distributions from Alpha on account of M Group's allowed unsecured claim then the holders of allowed Class 7 Claims shall receive their pro rata share of any such distribution. * Class 8 consists of Shareholder. In the event, funds remain following payment in full of the allowed Class 1 through 6 claims, then the holder of the allowed Class 8 equity interest shall receive distributions of such remaining funds in Alpha following Closing of the sale of the Real Property. Additionally, if M Group receives distributions on account of its allowed unsecured claim against Alpha, then the holder of the allowed Class 8 equity interest shall receive distributions of any funds remaining following full satisfaction of the allowed Class 7 claims. This Plan is a plan of liquidation pursuant to which the proceeds from the sale of the Real Property shall be used to pay distributions to holders of allowed claims. The Debtors will sell the Real Property free and clear of all liens as permitted under 11 U.S.C. § 1123(a)(5)(D). The sale shall include the delivery of the intangible assets of the Debtor either through assignment or by transfer or by merger or consolidation. The purchaser of the Real Property shall be entitled to elect which method to deliver the intangible assets as provided under 11 U.S.C. § 1123(a). If the purchaser does not elect to obtain the intangible assets of the debtor under 11 U.S.C. § 1123(a), that shall not affect the sale of the Real Property under 1123(a)(5)(D). A full-text copy of the Third Amended Joint Plan of Liquidation dated Jan. 24, 2022, is available at https://bit.ly/3ID3Icv from PacerMonitor.com at no charge. Counsel for Debtors: Robert C. Meyer, Esq. Robert C. Meyer, P.A. 2223 Coral Way Miami, FL 33145 Telephone: (305)285.8838 Facsimile: (305)285.8919 Email: meyerrobertc@cs.com About The Alpha House The Alpha House, Inc., owner of the M Boutique Hotel in Miami, Fla., filed for Chapter 11 bankruptcy (Bankr. S.D. Fla. Case No. 21-12338) on March 11, 2021. At the time of the filing, the Debtor had between $1 million and $10 million in both assets and liabilities. Judge Robert A. Mark oversees the case. Affiliate M Group Hotels, Inc., filed for protection under Chapter 11 (Bankr. S.D. Fla. Case No. 21-13977) on April 26, 2021, listing $10,820 in total assets and $2,643,737 in total liabilities on the Petition Date. Judge Laurel M. Isicoff is assigned to the case. Both petitions were signed by Matthieu Mamoudi, president. The Debtors' cases are jointly administered, with The Alpha House's case (Bankr. S.D. Fla. Case No. 21-12338) as the lead case. The Debtors tapped Robert C. Meyer, PA, to serve as legal counsel and Alvin Hagerich, an accountant practicing in Hudson, Florida. ALPHA HOUSE: Gest Cash Collateral Access ---------------------------------------- Judge Robert A. Mark of the U.S. Bankruptcy Court for the Southern District of Florida authorized The Alpha House, Inc. and M Group Hotels, Inc. to use cash collateral in the ordinary course of business, to pay the expenses set forth in the budget, with a 5% variance through the date of the final hearing. The Debtors are authorized to make monthly adequate protection payments on the first of each month to three secured creditors: (1) Marianna Holding LLC for $4,970; (2) First Home Bank for $673 and (3) Miami-Dade County ad valorem tax for $550. Pursuant to the order, the Debtors will grant Marianna, First Land Bank and FHB, to the extent that Marianna's and/or FHB's cash collateral are used by the Debtors, a perfected post-petition security interest and lien against the Debtors' cash collateral, to the same priority, validity and extent that the creditors held a properly perfected prepetition security interest in such assets. A further hearing on the matter is scheduled for March 9, 2022 at 2PM. A copy of the order and the Debtor's budget for the period from January to June 2022 is available for free at https://bit.ly/3o3oryh from PacerMonitor.com. The Debtor projects $149,035 in total income and $125,877 in total expenses. About The Alpha House Inc. The Alpha House, Inc., owner of the M Boutique Hotel in Miami, Fla., filed for Chapter 11 bankruptcy (Bankr. S.D. Fla. Case No. 21-12338) on March 11, 2021. At the time of the filing, the Debtor had between $1 million and $10 million in both assets and liabilities. Judge Robert A. Mark oversees the case. Affiliate M Group Hotels, Inc., filed for protection under Chapter 11 (Bankr. S.D. Fla. Case No. 21-13977) on April 26, 2021, listing $10,820 in total assets and $2,643,737 in total liabilities on the Petition Date. Judge Laurel M. Isicoff is assigned to the case. Both petitions were signed by Matthieu Mamoudi, president. The Debtors' cases are jointly administered, with The Alpha House's case (Bankr. S.D. Fla. Case No. 21-12338) as the lead case. The Debtors tapped Robert C. Meyer, PA to serve as legal counsel and Alvin Hagerich, an accountant practicing in Hudson, Florida. ALPHA LATAM: Gets Okay to Seek Creditors' Vote on Plan ------------------------------------------------------ Steven Church of Bloomberg News reports that Alpha Latam Management, the Colombian payroll-deduction lender, won court approval to seek a vote of creditors on a plan to shut down and distribute money from the sale of its loan portfolio. U.S. Bankruptcy Judge J. Kate Stickles approved a so-called disclosure statement to be sent to noteholders and other creditors so they can decide how to vote on the proposal. Votes are due by Feb. 25, 2022. In March 2022, Stickles is scheduled to consider approving the plan, taking the tally into account. Company officials expect to close a sale of its assets in February 2022. About Alpha Latam Management Wilmington, Del.-based Alpha Latam Management, LLC, and its affiliates operate a specialty finance business that offers consumer and small business lending services to underserved communities in Mexico and Colombia. Alpha Latam Management and certain of its affiliates sought Chapter 11 protection (Bankr. D. Del. Case No. 21-11109) on Aug. 1, 2021, disclosing assets of between $100 million and $500 million and liabilities of between $500 million and $1 billion. Judge J. Kate Stickles oversees the cases. The Debtors tapped Richards, Layton & Finger, P.A., and White & Case, LLP as legal counsel; Rothschild & Co US Inc. and Rothschild& Co Mexico S.A. de C.V. as investment bankers; and AlixPartners, LLP, as financial advisor. Prime Clerk, LLC is the claims and noticing agent and administrative advisor. On Aug. 11, 2021, Alpha Holding, S.A. de C.V. and AlphaCredit Capital, S.A. de C.V. SOFOM, ENR commenced in Mexico City a jointly administered voluntarily filed proceeding pursuant to the Ley de Concursos Mercantiles. Through this proceeding, the MexicanDebtors intend to pursue a controlled restructuring and possible sale of their assets. AMC ENTERTAINMENT: In Advanced Talks In Refinancing Debt -------------------------------------------------------- According to a new report from The Wall Street Journal, AMC Entertainment is fast-tracking its plan to refinance its debt. The movie theater chain is in advanced refinancing talks with multiple interested parties to lower its interest burden and stretch out its maturities by several years. This follows comments made by CEO Adam Aron earlier this month that one of his major goals for 2022 was to improve the company's financial position. CNBC notes that AMC's total debt is north of $5 billion, but Aron has repeatedly advised investors that it does not have any maturities coming due until 2023. On Tuesday, January 25, 2022, AMC shares were down more than 4% on the debt refinancing news, amid robust selling in the broader market. According to CNBC, AMC's push to shore up its balance sheet comes as the company's stock value has slipped more than 40% since the beginning of the year, reversing major gains that helped AMC stave off bankruptcy last 2021. AMC’s stock value was bolstered in 2021 by retail investors who followed the stock closely on social media platforms such as Reddit. Caught up in the meme stock trading frenzy, AMC was able to refill its coffers through stock sales in early 2021, but twice failed to win shareholder approval to issue new equity in the company. This means the company is not able to issue more shares to help pay down its debt. About AMC Entertainment AMC Entertainment, through its subsidiaries, engages in the theatrical exhibition business. As of December 31, 2015, it owned, operated, or held interests in 387 theatres with a total of 5,426 screens primarily in North America. The company was founded in 1920 and is headquartered in Leawood, Kansas. The Company is a subsidiary of AMC Entertainment Holdings, Inc. AMERICAN EAGLE: Seeks to Employ Foley & Lardner as Bond Counsel --------------------------------------------------------------- American Eagle Delaware Holding Company LLC and its affiliates seek approval from the U.S. Bankruptcy Court for the District of Delaware to hire Foley & Lardner, LLP as bond counsel. The firm's services include: (a) rendering the traditional opinion of bond counsel regarding the validity and binding effect of the proposed issuance of bonds by Colorado Health Facilities Authority or other appropriate issuer, the source of payment and security for the 2022 bonds, and the excludability of interest on the 2022 bonds from gross income for federal income tax purposes (if intended to be tax-exempt) under applicable law; (b) drafting the basic agreements governing the issuance of the 2022 bonds and the loan of 2022 bond proceeds to the Debtors; (c) preparing and reviewing other documents necessary or appropriate to the authorization, issuance, and delivery of the 2022 bonds, coordinating the authorization and execution of documents, and reviewing and, where appropriate, drafting enabling legislation; (d) drafting or reviewing the Debtors' declaration of official intent to reimburse project costs paid by the Debtors prior to the issuance of the 2022 bonds; (e) assisting the issuer in seeking from other governmental authorities such approvals, permissions, and exemptions, as the firm determines, are necessary or appropriate in connection with the authorization, issuance, sale, and delivery of the 2022 bonds provided, however, that the firm will not be responsible for obtaining the approvals by the applicable governmental authorities of (i) any required interlocal agreements except with respect to host jurisdictions located within of the State of Florida, (ii) required approvals for purposes of Section 147(f) of the Internal Revenue Code of 1986, as amended, except with respect to host jurisdictions located within of the State of Florida, and (iii) any required Blue Sky filings; (f) reviewing legal and tax issues relating to the structure of the 2022 bond issue; (g) reviewing the necessary public notices and proceedings for the required public hearings with respect to the refinancing of the facilities and the forms of approval of the refinancing by the applicable elected representatives, the forms of which will be prepared by separate counsel to the issuer; and (h) reviewing those portions of the official statement, private placement memorandum or other form of offering or disclosure document to be disseminated in connection with the sale of the 2022 bonds involving (a) state and federal tax laws pertinent to the validity of the 2022 bonds and the tax treatment of interest paid thereon, (b) the terms of the 2022 bonds and the principal 2022 bond documents and (c) the firm's opinion. The firm will be paid a fixed fee in the amount of $260,000 for its services. The Debtors paid $130,000 to the firm as a retainer fee. Chauncey Lever, Jr., a partner at Foley & Lardner, 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: Chauncey W. Lever, Jr. Foley & Lardner, LLP 1 Independent Drive, Suite 1300 Jacksonville, FL 32202 Tel.: 904.359.2000 Fax: 904.359.8700 Email: clever@foley.com About American Eagle Established in 2018, Eagle Senior Living -- https://www.eagleseniorliving.org/ -- is a non-profit provider of senior living services across the United States, providing care on a daily basis to approximately 1,000 residents. Eagle Senior Living and related entities operate 15 residential senior care facilities located across the country, from Colorado, Minnesota, Wisconsin, and Ohio to Alabama, Tennessee, and Florida. On Jan. 14, 2022, American Eagle Delaware Holding Company LLC and 16 affiliated companies each filed a petition seeking relief under Chapter 11 of the Bankruptcy Code (Bankr. D. Del. Lead Case No. 22-10028) to seek confirmation of their prepackaged plan. The Debtors' cases have been assigned to Judge J. Kate Stickles. Parent company American Eagle Lifecare Corporation and management company Greenbrier Senior Living are not included in the Chapter 11 filing. Greenbrier Senior Living continues to manage all of the communities. American Eagle Delaware Holding estimated assets and debt of $10 million to $50 million as of the bankruptcy filing. The Debtors are represented in the Chapter 11 cases by Polsinelli PC as legal counsel. FTI Consulting Inc. and Blueprint Healthcare Real Estate Advisors, LLC serve as financial advisor and real estate advisor, respectively. Epiq Corporate Restructuring, LLC is the claims agent and administrative advisor. AMERICAN EAGLE: Seeks to Employ Polsinelli as Bankruptcy Counsel ---------------------------------------------------------------- American Eagle Delaware Holding Company LLC and its affiliates seek approval from the U.S. Bankruptcy Court for the District of Delaware to hire Polsinelli, PC to serve as legal counsel in their Chapter 11 cases. The firm's services include: (a) taking all necessary action to protect and preserve the estates of the Debtors, including the negotiation of claims and disputes in which the Debtors are involved, the prosecution of actions on the Debtors' behalf, the defense of any actions commenced against the Debtors, and the adjudication of claims filed against the estates; (b) providing legal advice with respect to the Debtors' powers and duties in the continued operation of their business; (c) preparing legal papers; (d) assisting with any disposition of the Debtors' assets by sale or otherwise; (e) taking all necessary or appropriate actions in connection with any plan of reorganization and such further actions as may be required in connection with the administration of the Debtors' estates; (f) appearing in court; (g) reviewing all pleadings filed in the cases; and (h) performing all other legal services. The firm's hourly rates are as follows: Shareholders $550 - $1,050 Associates $350 - $600 Paraprofessionals $200 - $400 Shanti Katona, Esq., the firm's attorney who will be providing the services, disclosed in a court filing that she is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. The firm can be reached at: Shanti M. Katona, Esq. Polsinelli PC 222 Delaware Avenue, Suite 1101 Wilmington, DE 19801 Tel: 302.252.0924 Fax 302.252.0921 Email: mcoury@glankler.com About American Eagle Established in 2018, Eagle Senior Living -- https://www.eagleseniorliving.org/ -- is a non-profit provider of senior living services across the United States, providing care on a daily basis to approximately 1,000 residents. Eagle Senior Living and related entities operate 15 residential senior care facilities located across the country, from Colorado, Minnesota, Wisconsin, and Ohio to Alabama, Tennessee, and Florida. On Jan. 14, 2022, American Eagle Delaware Holding Company LLC and 16 affiliated companies each filed a petition seeking relief under Chapter 11 of the Bankruptcy Code (Bankr. D. Del. Lead Case No. 22-10028) to seek confirmation of their prepackaged plan. The Debtors' cases have been assigned to Judge J. Kate Stickles. Parent company American Eagle Lifecare Corporation and management company Greenbrier Senior Living are not included in the Chapter 11 filing. Greenbrier Senior Living continues to manage all of the communities. American Eagle Delaware Holding estimated assets and debt of $10 million to $50 million as of the bankruptcy filing. The Debtors are represented in the Chapter 11 cases by Polsinelli PC as legal counsel. FTI Consulting Inc. and Blueprint Healthcare Real Estate Advisors, LLC serve as financial advisor and real estate advisor, respectively. Epiq Corporate Restructuring, LLC is the claims agent and administrative advisor. AMERICAN EAGLE: Seeks to Hire FTI Consulting as Financial Advisor ----------------------------------------------------------------- American Eagle Delaware Holding Company LLC and its affiliates seek approval from the U.S. Bankruptcy Court for the District of Delaware to hire FTI Consulting, Inc. as financial advisor. The firm's services include: (a) assisting in the preparation of financial information for distribution to creditors and others, including, but not limited to, cash flow projections and budgets, cash receipts and disbursement analysis, analysis of various asset and liability accounts, and analysis of proposed transactions for which court approval is sought; (b) assisting the Debtors in the preparation of financial-related disclosures required by the court, including schedules of assets and liabilities, statements of financial affairs and monthly operating reports; (c) assisting the Debtors with information and analyses required pursuant to the Debtors' use of cash collateral; (d) assisting the Debtors with respect to the identification of core business assets and the disposition of assets; (e) assisting with the identification of executory contracts and leases and performance of cost/benefit evaluations with respect to the affirmation or rejection of each; (f) assisting the evaluation of the present level of operations and identifying the areas of potential cost savings, including overhead and operating expense reductions and efficiency improvements; (g) assisting in the evaluation and analysis of avoidance actions, including fraudulent conveyances and preferential transfers; (h) assisting the Debtors' management team and counsel focused on the coordination of resources related to the reorganization effort; (i) assisting the Debtors' management team and counsel focused on the new bond issuance; (j) attending meetings and assisting in discussions with potential secured lenders, any official committees appointed in the Debtors' Chapter 11 cases, the United States Trustee, other parties in interest and professionals hired by same, as requested; (k) developing strategy, including communications, relating to residents, former residents, vendors, and employees; (l) analyzing creditor claims by type, entity, and individual claim, including assistance with the development of databases, as necessary, to track such claims; (m) assisting in the preparation of information and analysis necessary for the confirmation of a plan of reorganization in the Chapter 11 cases, including information contained in the disclosure statement; and (n) providing testimony as necessary or appropriate at the Debtors' request; and (o) rendering other general business consulting services. The firm's hourly rates are as follows: Senior Managing Directors $920 - $1,325 per hour Directors/Senior Directors/Managing Directors $590 - $960 per hour Consultants/Senior Consultants $370 - $695 per hour Administrative / Paraprofessionals $130 - $300 per hour The Debtors paid $200,000 to the firm as a retainer fee. Chad Shandler, senior managing director at FTI, 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: Chad J. Shandler FTI Consulting, Inc. 1166 Avenue of the Americas, 15th Floor New York, NY, 10036 Tel.: +1 212 841 9349 Email: chad.shandler@fticonsulting.com About American Eagle Established in 2018, Eagle Senior Living -- https://www.eagleseniorliving.org/ -- is a non-profit provider of senior living services across the United States, providing care on a daily basis to approximately 1,000 residents. Eagle Senior Living and related entities operate 15 residential senior care facilities located across the country, from Colorado, Minnesota, Wisconsin, and Ohio to Alabama, Tennessee, and Florida. On Jan. 14, 2022, American Eagle Delaware Holding Company LLC and 16 affiliated companies each filed a petition seeking relief under Chapter 11 of the Bankruptcy Code (Bankr. D. Del. Lead Case No. 22-10028) to seek confirmation of their prepackaged plan. The Debtors' cases have been assigned to Judge J. Kate Stickles. Parent company American Eagle Lifecare Corporation and management company Greenbrier Senior Living are not included in the Chapter 11 filing. Greenbrier Senior Living continues to manage all of the communities. American Eagle Delaware Holding estimated assets and debt of $10 million to $50 million as of the bankruptcy filing. The Debtors are represented in the Chapter 11 cases by Polsinelli PC as legal counsel. FTI Consulting Inc. and Blueprint Healthcare Real Estate Advisors, LLC serve as financial advisor and real estate advisor, respectively. Epiq Corporate Restructuring, LLC is the claims agent and administrative advisor. AMERICAN EAGLE: Taps Blueprint Healthcare as Real Estate Advisor ---------------------------------------------------------------- American Eagle Delaware Holding Company LLC and its affiliates seek approval from the U.S. Bankruptcy Court for the District of Delaware to hire Blueprint Healthcare Real Estate Advisors as real estate advisor and broker. The firm's services include: (a) providing assistance with determining the sale price of the Debtors' property known as Vista Lake in Leesburg, Fla.; (b) providing assistance with marketing, sale and closing on the sale of the property; (c) preparing marketing materials and recommending a strategy for the sale of the property; (d) screening and pre-qualifying prospective purchasers and facilitating negotiations between the Debtors and the prospective purchasers; and (e) providing the assistance of an agent licensed in Florida where the property is located. The firm will receive a commission equal to the greater of 3 percent of the purchase price for the property or $175,000, to be paid in full directly from sale proceeds upon closing. Steve Thomes, managing director and head of business development of Blueprint, 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: Steve Thomes Blueprint Healthcare Real Estate Advisors 191 N Wacker Dr, Ste 1680 Chicago, IL, 60606 Tel: (312) 300-4000 Email: sthomes@BlueprintHCRE.com About American Eagle Established in 2018, Eagle Senior Living -- https://www.eagleseniorliving.org/ -- is a non-profit provider of senior living services across the United States, providing care on a daily basis to approximately 1,000 residents. Eagle Senior Living and related entities operate 15 residential senior care facilities located across the country, from Colorado, Minnesota, Wisconsin, and Ohio to Alabama, Tennessee, and Florida. On Jan. 14, 2022, American Eagle Delaware Holding Company LLC and 16 affiliated companies each filed a petition seeking relief under Chapter 11 of the Bankruptcy Code (Bankr. D. Del. Lead Case No. 22-10028) to seek confirmation of their prepackaged plan. The Debtors' cases have been assigned to Judge J. Kate Stickles. Parent company American Eagle Lifecare Corporation and management company Greenbrier Senior Living are not included in the Chapter 11 filing. Greenbrier Senior Living continues to manage all of the communities. American Eagle Delaware Holding estimated assets and debt of $10 million to $50 million as of the bankruptcy filing. The Debtors are represented in the Chapter 11 cases by Polsinelli PC as legal counsel. FTI Consulting Inc. and Blueprint Healthcare Real Estate Advisors, LLC serve as financial advisor and real estate advisor, respectively. Epiq Corporate Restructuring, LLC is the claims agent and administrative advisor. AMERICAN EAGLE: Taps Epiq as Administrative Advisor --------------------------------------------------- American Eagle Delaware Holding Company LLC and its affiliates seek approval from the U.S. Bankruptcy Court for the District of Delaware to hire Epiq Corporate Restructuring, LLC as administrative advisor. The firm's services include: (a) assisting with, among other things, solicitation, balloting, and tabulation of votes, and preparing any related reports in support of confirmation of a Chapter 11 plan, and in connection with such services, processing requests for documents; (b) preparing an official ballot certification and, if necessary, testifying in support of the ballot tabulation results; (c) assisting with the preparation of the Debtors' schedules of assets and liabilities and statements of financial affairs, and gathering data in conjunction therewith; (d) providing a confidential data room, if requested; and (e) managing and coordinating any distributions pursuant to a Chapter 11 plan. The firm's hourly rates are as follows: Clerical/Administrative Support $29.75 – $55.00 per hour IT / Programming $55.25 – $75.25 per hour Case Managers $72.25 – $140.25 per hour Consultants/ Directors/Vice Presidents $140.25 – $165.75 per hour Solicitation Consultant $165.75 per hour Executive Vice President, Solicitation. $182.75 per hour The Debtors paid $25,000 to the firm as a retainer fee. Sophie Frodsham, consulting director at Epiq, disclosed in a court filing that she is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. The firm can be reached at: Sophie Frodsham Epiq Corporate Restructuring, LLC 1166 Avenue of the Americas, 15th Floor New York, NY, 10036 Tel: +1 212 841 9349 Email: chad.shandler@fticonsulting.com About American Eagle Established in 2018, Eagle Senior Living -- https://www.eagleseniorliving.org/ -- is a non-profit provider of senior living services across the United States, providing care on a daily basis to approximately 1,000 residents. Eagle Senior Living and related entities operate 15 residential senior care facilities located across the country, from Colorado, Minnesota, Wisconsin, and Ohio to Alabama, Tennessee, and Florida. On Jan. 14, 2022, American Eagle Delaware Holding Company LLC and 16 affiliated companies each filed a petition seeking relief under Chapter 11 of the Bankruptcy Code (Bankr. D. Del. Lead Case No. 22-10028) to seek confirmation of their prepackaged plan. The Debtors' cases have been assigned to Judge J. Kate Stickles. Parent company American Eagle Lifecare Corporation and management company Greenbrier Senior Living are not included in the Chapter 11 filing. Greenbrier Senior Living continues to manage all of the communities. American Eagle Delaware Holding estimated assets and debt of $10 million to $50 million as of the bankruptcy filing. The Debtors are represented in the Chapter 11 cases by Polsinelli PC as legal counsel. FTI Consulting Inc. and Blueprint Healthcare Real Estate Advisors, LLC serve as financial advisor and real estate advisor, respectively. Epiq Corporate Restructuring, LLC is the claims agent and administrative advisor. APPALACHIAN BASIN: Seeks to Tap Anthony J. DeGirolamo as Counsel ---------------------------------------------------------------- Appalachian Basin Capital, LLC seeks approval from the U.S. Bankruptcy Court for the Northern District of Ohio to employ Anthony J. DeGirolamo, Esq., a practicing attorney in Canton, Ohio, to handle its Chapter 11 case. Mr. DeGirolamo will render these legal services: (a) assist the Debtor in fulfilling its duties; (b) represent the Debtor with respect to motions filed in its Chapter 11 case; and (c) assist the Debtor in the administration of its Chapter 11 case. Mr. DeGirolamo will charge $375 per hour for his services and $215 per hour for paralegal services. In addition, the attorney will seek reimbursement for expenses incurred. As of the petition date, Mr. DeGirolamo holds a retainer in the amount of $25,405. Mr. DeGirolamo disclosed in a court filing that he is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. The attorney can be reached at: Anthony J. DeGirolamo, Esq. 3930 Fulton Dr., Ste. 100B Canton, OH 44718 Telephone: (330) 305-9700 Facsimile: (330) 305-9713 Email: tony@ajdlaw7-11.com About Appalachian Basin Capital Appalachian Basin Capital, LLC, a company in Canton, Ohio, filed its voluntary petition for relief under Chapter 11 of the Bankruptcy Code (Bankr. N.D. Ohio Case No. 22-60052) on Jan. 24, 2022, listing up to $1 million in assets and up to $10 million in liabilities. David Beule, member, signed the petition. Judge Russ Kendig oversees the case. The Debtor tapped Anthony J. DeGirolamo, Esq., as legal counsel and The Phillips Organization as accountant and financial advisor. APPALACHIAN BASIN: Taps Phillips Organization as Financial Advisor ------------------------------------------------------------------ Appalachian Basin Capital, LLC seeks approval from the U.S. Bankruptcy Court for the Northern District of Ohio to employ The Phillips Organization as its accountant and financial advisor. Phillips will render these services: (a) assist the Debtor in fulfilling its duties; (b) provide general accounting services; and (c) assist the Debtor by providing financial analyses necessary for its plan of reorganization, disclosure statement, sale of any assets, or other transaction related to its reorganization. The hourly rates of the firm's professionals are as follows: Russell Phillips Jr., Principal $250 Partners $225 Staff Services $145 Clerical Services $70 In addition, the firm will seek reimbursement for expenses incurred. Russell Phillips Jr., principal at The Phillips Organization, 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: Russell Phillips Jr., CPA The Phillips Organization 3924 Cleveland Avenue NW Canton, OH 44709 Telephone: (330) 493-3928 Facsimile: (330) 493-7657 Email: russ.phillipsjr@phillipsorg.com About Appalachian Basin Capital Appalachian Basin Capital, LLC, a company in Canton, Ohio, filed its voluntary petition for relief under Chapter 11 of the Bankruptcy Code (Bankr. N.D. Ohio Case No. 22-60052) on Jan. 24, 2022, listing up to $1 million in assets and up to $10 million in liabilities. David Beule, member, signed the petition. Judge Russ Kendig oversees the case. The Debtor tapped Anthony J. DeGirolamo, Esq., as legal counsel and The Phillips Organization as accountant and financial advisor. ARCHBISHOP OF AGANA: Seeks to Hire Camacho Calvo as Special Counsel ------------------------------------------------------------------- The Roman Catholic Archdiocese of Agana seeks approval from the U.S. Bankruptcy Court for the District of Guam to hire Camacho Calvo Law Group to represent its parishes and schools in the adversary proceeding (Case No. 19-00001) filed by the official committee of unsecured creditors. The firm's hourly rates are as follows: Vincent C. Camacho, Esq. $275 per hour Geri E. Diaz, Esq. $275 per hour Zachary G. Damian, Esq. $200 per hour Vincent Camacho, 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: Vincent C. Camacho, Esq. Camacho Calvo Law Group 356 E. Marine Corps Drive, Suite 201 Hagatna, Guam 96910 Phone: 671-472-6813 Fax: 866-491-2707 Email: vcamacho@camachocalvo.law About Archbishop of Agana Roman Catholic Archdiocese of Agana -- https://www.aganaarch.org/ -- is an ecclesiastical territory or diocese of the Catholic Church in the United States. It comprises the United States dependency of Guam. The Diocese of Agana was established on Oct. 14, 1965, as a suffragan of the Archdiocese of San Francisco, California. It is a tax-exempt entity (as described in 26 U.S.C. Section 501). The Archbishop of Agana, also known as the Roman Catholic Archdiocese of Agana, sought Chapter 11 protection (D. Guam Case No. 19-00010) on Jan. 16, 2019. Rev. Archbishop Michael Jude Byrnes, S.T.D., Archbishop of Agana, signed the petition. The Archdiocese scheduled $22,962,686 in assets and $45,662,941 in liabilities as of the bankruptcy filing. The Hon. Frances M. Tydingco-Gatewood is the case judge. The archdiocese tapped Elsaesser Anderson, Chtd. as bankruptcy counsel, Deloitte & Touche, LLP as human resource consultant, and Pacific Human Resource Services, Inc. as accountant. Blank Rome LLP, LegalWorks Apostolate PLLC, Davis & Davis P.C., and Camacho Calvo Law Group serve as the archdiocese's special counsels. The Office of the U.S. Trustee appointed an official committee of unsecured creditors on March 6, 2019. Stinson Leonard Street LLP, The Law Offices of William Gavras, and Hiller Law, LLC serve as the committee's bankruptcy counsel, local counsel, and special counsel, respectively. ASCENA RETAIL: Asks Court to Narrow Bankruptcy Plan Releases ------------------------------------------------------------ Jeremy Hill of Bloomberg News reports that The bankrupt shell of Ascena Retail Group, former owner of women's fashion brands including Ann Taylor and Lane Bryant, has asked a federal judge to whittle down legal protections doled out under its plan of reorganization. The move comes after Ascena, now called Mahwah Bergen Retail Group, had its bankruptcy plan invalidated over so-called third party releases that U.S. District Judge David Novak called "shocking." The company's plan of reorganization improperly bestowed insulation from lawsuits to "an incalculable number" of people associated with Ascena, Judge Novak said in his decision. About Ascena Retail Group Ascena Retail Group, Inc. -- http://www.ascenaretail.com/-- was a leading specialty retailer for women and girls. It operated a portfolio of recognizable brands, which included Ann Taylor, LOFT, Lane Bryant, Catherines, Justice, Lou & Grey, and Cacique. On July 23, 2020, Ascena Retail Group and its affiliates sought Chapter 11 protection (Bankr. E.D. Va. Case No. 20-33113). As of Feb. 1, 2020, Ascena Retail had $13,690,710,379 in assets and $12,516,261,149 in total liabilities. At the time of filing, it had approximately 2,800 stores in the United States, Canada, and Puerto Rico serving more than 12.5 million active customers and employing nearly 40,000 employees. The Hon. Kevin R. Huennekens is the case judge. The Debtors tapped Kirkland & Ellis LLP and Cooley LLP as bankruptcy counsel, Guggenheim Securities, LLC, as financial Advisor, and Alvarez and Marsal North America, LLC as restructuring advisor. Prime Clerk, LLC, is the claims agent. * * * In September 2020, FullBeauty Brands Operations, LLC, won an auction to acquire Ascena's Catherines intellectual property assets for a base purchase price of $40.8 million and potential upward adjustment for certain inventory. In November 2020, Ascena won approval to sell the intellectual property of its Justice Brand and other Justice brand assets to Justice Brand Holdings LLC, an entity formed by Bluestar Alliance LLC (a leading brand management company), for $90 million. The Company continues to operate its Ann Taylor, LOFT, Lane Bryant, and Lou & Grey brands as normal through a reduced number of retail stores and online. AUBURN RAVINE: Files for Chapter 11 to Avert Foreclosure -------------------------------------------------------- Ben van der Meer of Sacramento Business Journal reports that Auburn Ravine filed for bankruptcy protection to avert foreclosure on townhome project overlooking Folsom. A piece of property overlooking the American River and Folsom is tied up in a court battle between a developer and lenders, for the second time in a decade. Auburn Ravine Venture LLC, the ownership entity for the land at 9600 Greenback Lane in Orangevale, filed for Chapter 11 bankruptcy earlier this January 2022 in U.S. Bankruptcy Court for the Eastern District of California. Joe Bertolino, the managing member of the ownership group, didn't return a message from the Business Journal seeking comment. His bankruptcy attorney, Michael Mahon of Elk Grove, said adversarial claims to be filed in the case would lay out the filer's legal position. In late 2020, Bertolino submitted a proposal called Vista to Sacramento County for 30 for-sale townhomes on the site. The filing claims the primary asset as the land itself, a vacant 1.66-acre site valued in the filing at $2.2 million. The two secured creditors are an individual retirement account and a company called Rezar Properties Inc., both with listed addresses in Modesto. That address is home to The Land Group, which partner Jim Graham said he'd describe as a full-service real estate agency. Loan servicing is one of the functions the company performs, he said, adding he had no contact information for the lenders listed on the bankruptcy filing. The lenders have claims of about $1.4 million combined, according to the bankruptcy filing. In the meantime, Sacramento County is processing Vista, which would have townhomes of three stories each and ranging from 1,490 to 1,911 square feet. A meeting of creditors in the bankruptcy case is set for Feb. 17, while the docket report for the case notes it's considered incomplete at this point and could be dismissed without additional filings. For 9600 Greenback Lane, the lender-developer struggle is the second time in less than a decade that the land has had a disputed proposal. Three years ago, developer Duane Venhuizen abandoned a residential condominium project called Park Point on the same spot after filing for bankruptcy in 2015. Venhuizen proposed Park Point after previously getting approval over a decade earlier for an office project, but ran into his own disputes with lenders, and later, bankruptcy court rulings. About Auburn Ravine Venture Auburn Ravine Venture LLC is a Single Asset Real Estate debtor (as defined in 11 U.S.C.Section 101(51B)). Auburn Ravine Venture sought Chapter 11 bankruptcy protection (Bankr. E.D. Cal. Case No. 22-20091.) on Jan. 14, 2022. In the petition filed by Joseph Bertolino, president of JB Land Company, Inc., managing member, Auburn Ravine Venture listed estimated total assets of $2,200,000 and estimated total liabilities of $1,500,000. The case is handled by Honorable Judge Fredrick E. Clement.Michael Mahon, Esq., of LAW OFFICE OF MICHAEL D. MAHON, is the Debtor's counsel. AVIS BUDGET: S&P Upgrades ICR to 'BB', Outlook Stable ----------------------------------------------------- S&P Global Ratings raised its issuer credit rating on U.S.-based car renter Avis Budget Group Inc. to 'BB' from 'B+'. S&P said, "We raised our issue-level rating on Avis Budget's secured debt to 'BB+' from 'BB-'. The recovery rating remains '2', which indicates our expectation for substantial recovery (70%-90%, rounded estimate: 85%) in the event of a payment default. We also raised our issue-level rating on the company's unsecured debt to 'BB-' from 'B'. The recovery rating on this debt remains '5', which indicates our expectation for modest recovery (10%-30%, rounded estimate: 15%) in the event of a payment default. "The stable outlook on Avis Budget reflects our expectation that its improved operating performance will continue well into 2022. We expect airline traffic to continue to recover over this period as vaccinations become more widespread. In addition, we anticipate the company will continue to benefit from the substantial cost reductions and strong used-car prices that have reduced its depreciation expense. However, we expect the current very strong market conditions to moderate over the next several years." Avis Budget has continued to benefit from a strong car rental environment. Avis Budget is the parent of the Avis and Budget car rental brands. The company's revenues, cash flow, and credit metrics were negatively affected by the sharp decline in airline traffic from the onset of COVID-19 (Avis Budget generates the majority of its revenues at airports). However, airline traffic has since recovered to close to pre-COVID-19 levels on domestic U.S. routes as vaccinations have become widespread. In addition, international passengers have begun to return to the U.S. as the U.S. government has eased travel restrictions. Beginning in mid-summer 2020, the market for used cars recovered and since then used-car prices have reached historically high levels and have remained there due to a shortage of vehicles. Car renters depreciate their vehicles based on residual values that they set upon their acquisition. When used-car prices are high, such as now, a gain on sale is netted against, and thus reduces, depreciation expense upon sale of the vehicle. Conversely, when prices are low, as they were in 2020, this increases depreciation expense. Currently, demand is strong and there is a shortage of new vehicles due to the chip shortage that has caused new vehicle production to lag demand. The vehicle shortage, coupled with strong demand for rental vehicles, has resulted in a substantial increase in rental rates, a trend S&P expects to continue well into 2022. In the third quarter of 2021, the company's daily revenue per day in the Americas rose by 40% compared with the same period in 2019 and the company generated record net income of $675 million, compared with $189 million in that quarter. S&P said, "We now expect Avis Budget's credit metrics to improve significantly in 2021, and to remain close to these levels through 2023. We expect a continuation of the car rental industry's (including Avis Budget's) strong revenue environment and lower vehicle expense due to the strong used-car market, partly offset by high prices on new vehicles, well into 2022. Therefore, we now expect a substantial improvement in Avis Budget's credit metrics in 2021 and continuing thereafter. We expect revenue growth of around 70% in 2021, moderating to the mid-single-digit percent area thereafter. Based on continued strong operating performance, we expect EBIT interest coverage of around 3x in 2021, moderating to the mid-2x area thereafter (this compares with (0.5)x in 2020 and 1.5x in 2019 before the pandemic). We also expect funds from operations (FFO) to debt of about 20% in 2021 and to remain close to this level thereafter (compared with 8% in 2020 and 18% in 2019). "We are maintaining our assessment of Avis Budget's liquidity as adequate. Over the next 12 months, we expect the company's sources of liquidity to comprise around $900 million of unrestricted cash, $3.1 billion available under its various facilities, FFO of around $2.7 billion, and proceeds from vehicle sales. Uses include debt maturities of around $3.5 billion (all asset-backed debt used to finance vehicles) and capital spending for new vehicles, net of vehicle sales, of around $1.3 billion. "Although we expect the company's liquidity sources to be around 1.7x its uses over the next 12 months, we do not believe that Avis Budget meets qualitative conditions for a higher assessment than adequate. As evidenced by the recent COVID-19 variant outbreak and the financial crisis in 2008-2009, we believe the company would not have the likely ability to absorb high impact, low probability events without refinancing. "The stable outlook on Avis Budget reflects our expectation that its improved operating performance will continue well into 2022. We expect airline traffic to continue to recover over this period as vaccinations become more widespread. In addition, we anticipate the company will continue to benefit from the substantial cost reductions and strong used-car prices that have reduced its depreciation expense. However, we expect these very strong market conditions to moderate over the next several years, though remaining above pre-pandemic levels. We expect EBIT interest coverage of around 3x in 2021, declining to the mid-2x area through 2023 (compared with 1.5x in 2019). We also expect FFO to debt of about 20% over this period (compared with 18% in 2019). "We could lower ratings over the next year if EBIT interest coverage declined to below 1.3x and FFO to debt declined to below 12% for a sustained period. This could occur because of weaker-than-expected operating performance. This could also occur if the company engaged in a materially more aggressive than expected financial policy. "Although unlikely, we could raise our rating on Avis Budget over the next year if its EBIT interest coverage remained at least 2.4x and its FFO to debt remained above 20% and we believe those levels would be sustained over an extended period. This could occur if the volume of airline travel recovers significantly more than expected, resulting in higher demand and pricing, and used-car prices remain strong due to continued manufacturing constraints." ESG credit indicators E-2, S-3, G-2 BANTEC INC: To Sell 3 Billion Shares of Common Stock ---------------------------------------------------- Bantec, Inc. filed a preliminary Form S-1 registration statement with the Securities and Exchange Commission in connection with a public offering of its common stock, par value $0.0001 per share. The Company is selling 3,000,000,000 shares of its common stock. This offering will terminate on the date which is 270 days from the effective date of the prospectus, although the Company may close the offering on any date prior if the offering is fully subscribed or upon the vote of its board of directors. The Company currently expects the public offering price of the shares it is offering to be $0.0006 per share of its common stock. The Company is quoted on the OTC Pink market and there is a limited established market for the Company's stock. The offering price of the shares has been determined arbitrarily by the Company. The price does not bear any relationship to its assets, book value, earnings, or other established criteria for valuing a company. In determining the number of shares to be offered and the offering price, the Company took into consideration its capital structure and the amount of money it would need to implement its business plans. Accordingly, the Company said the offering price should not be considered an indication of the actual value of its securities. A full-text copy of the prospectus is available for free at: https://www.sec.gov/Archives/edgar/data/1704795/000121390022003023/ea154291-s1_bantec.htm About Bantec Bantec, Inc., a product and service company, through its subsidiaries and divisions, sells drones and related products manufactured by third parties to various parties, including facility managers, engineers, maintenance managers, purchasing managers and contract officers who work for hospitals, universities, manufacturers, commercial businesses, local and state governments and the US Government. The Company also offers technical services related to drone utilization. Bantec reported a net loss of $1.88 million for the year ended Sept. 30, 2021, compared to a net loss of $4.33 million for the year ended Sept. 30, 2020. As of Sept. 30, 2021, the Company had $1.46 million in total assets, $16.25 million in total liabilities, and a total stockholders' deficit of $14.80 million. Boca Raton, Florida-based Salberg & Company, P.A., the Company's auditor since 2017, issued a "going concern" qualification in its report dated Jan. 7, 2022, citing that the Company has a net loss and cash used in operations of $1,882,071 and $1,576,648 respectively, in fiscal 2021, and has a working capital deficit, stockholders' deficit and accumulated deficit of $14,709,592, $14,796,078 and $32,956,840 at Sept. 30, 2021. These matters raise substantial doubt about the Company's ability to continue as a going concern. BAUSCH HEALTH: Fitch Affirms 'B' IDRs, Outlook Negative ------------------------------------------------------- Fitch Ratings has affirmed Bausch Health Companies Inc.'s (BHC) and Bausch Health Americas, Inc.'s (BHA) Issuer Default Ratings (IDRs) at 'B' with Negative Rating Outlooks and the 'BB'/'RR1' ratings on the secured debt issued by BHC and BHA. The Negative Rating Outlooks reflect the spin-off target for RemainCo to net leverage of 6.5x-6.7x and plans to reduce it further after the IPO, which was announced in May 2021. Fitch has also placed BHC's and BHA's unsecured debt on Rating Watch Negative (RWN). The RWN reflects the potential that these ratings could be affirmed or downgraded depending on amounts of secured debt and unsecured debt at the time of the of the IPO and ultimate spin-off of BLCO. In addition, Fitch has assigned a 'BB'/'RR1' rating to BHC's $1.2 billion revolver for which BHA is also a co-borrower. The net proceeds from the offering, new term loans and the expected proceeds from the B+L IPO and related debt financing will be used to refinance its existing term loans, fund the redemption in full of the outstanding 6.125% senior notes due 2025 and fund a partial redemption of the outstanding 9.000% senior notes due 2025. Fitch has also withdrawn the 'BB'/'RR1' rating on BHA's $2.5 billion term loan, as BHA will not be a Borrower as originally expected. KEY RATING DRIVERS Outlook Reflects Stressed Leverage: The company's leverage remained above or around its 7x negative rating sensitivity beginning in 2020, owing to a $1.2 billion legal settlement and operational challenges from the coronavirus pandemic. The company has reduced Fitch-calculated leverage to around 6.9x at Sept. 30, 2021, mainly by debt reduction. While Fitch believes Bausch Pharma will continue to deleverage post spin-off, its gross leverage could remain elevated above 7x for an extended period if the company fails to execute. Coronavirus Headwinds: The pandemic adversely affected Bausch's operating performance during 2020, particularly in the second quarter. The company's Ortho Dermatologics, Dentistry and Global Surgical businesses, which account for roughly 13% of revenues, were hit the hardest. The company adjusted its operations to mitigate some of challenges, including manufacturing and marketing. The operating environment for Bausch has continued to improve throughout 2021, as the management of the pandemic continued to improve. Bausch's ratings reflect its track record in significantly reducing the absolute level of Fitch-calculated debt outstanding since Jan. 1, 2016 with a combination of internally generated cash flow and proceeds from asset divestitures. Bausch sold all of its equity interests in Amoun Pharmaceutical for approximately $740 million and used the net proceeds to repay debt. Bausch Spin-off Strategically Constructive: Fitch views planned spin-off of Bausch's eye care business as strategically sound, given limited synergies between the branded pharma business and eye care. The proposed transaction's effect on Bausch's credit profile will largely depend on the capital structure and financial strategy post spin. The company is working towards a post-spin pro forma net leverage profile of the eye care business and the legacy business of less than 2.5x and approximately 6.5x-6.7x, respectively. The company originally targeted post-spin proforma gross leverage of 4.0x and 5.5x, respectively. In addition, the company plans to IPO its medical aesthetics business in the near future. Even though Bausch's business risk profile will be negatively affected by less diversification, greater focus on innovative pharma should improve the company's R&D pipeline's probability of success. The company intends to focus on expanding its leadership in its gastroenterology, aesthetics/dermatology, neurology and international business. Good Progress in Business Turn-around: Bausch Health's 'B' IDR reflects progress in stabilizing operations and reducing debt since mid-2016 through the third quarter of 2021. Throughout the business turn-around, BHC consistently generated strong FCF relative to the 'B' category rating, pushed its nearest large debt maturity out until 2025, and loosened restrictive secured debt covenants through refinancing transactions. The company's stronger operating profile and consistent cash generation should enable it to further reduce leverage in the near term once the headwinds caused by the pandemic have abated. Intermediate-Term Growth Potential: Bausch Health operates with a reasonably diverse business model relative to its products, customers and geographies served. Many of the company's businesses are comprised of defensible product portfolios, which are capable of generating durable margins and cash flows. Post the spin-off of the eye health business, Fitch believes that the expected long-term growth of the gastrointestinal (GI/Salix) businesses support the company's operating prospects. Fitch also expects that the dermatology business will grow in 2022 as BHC successfully commercializes recently launched products. Reliance on New Products: The stabilization of Bausch Health's operating profile has involved an increased focus on developing an internal research and development pipeline, which Fitch believes is constructive for the company's credit profile over the long term. This strategy is not without risk since Bausch Health needs to ramp up the utilization of recently-approved products through successful commercialization efforts. These products include Siliq (for the treatment of moderate-to-severe plaque psoriasis, although with safety restrictions), Bryhali (plaque psoriasis), Lumify (red eye) and Vyzulta (glaucoma). Near-Term Maturities Manageable: Bausch Health consistently generates significant positive FCF (Sept. 30, 2021 LTM Fitch-calculated FCF margin of 17.9%) and has satisfied most debt maturities through 2024. The company has adequate access to the credit markets providing the flexibility to further refinance upcoming maturities. DERIVATION SUMMARY Bausch Health is significantly larger and more diversified than specialty pharmaceutical industry peers Mallinckrodt plc and Endo International plc. While all three manufacture and market specialty pharmaceuticals and have maturing pharmaceutical products, Bausch Health's Bausch + Lomb (B+L) business meaningfully decreases business concentration risk relative to Mallinckrodt and Endo. B+L offers operational diversification in terms of geographies and payers. Many of its products are purchased directly by customers without the requirement of a prescription. Post spin-off, Bausch will become more similar to its peers regarding diversification. Bausch Health's rating also reflects gross debt leverage that is higher than peers. But unlike its peers, BHC does not face contingent liabilities related to the opioid epidemic. Bausch accumulated a significant amount of debt through numerous acquisitions. In addition, Bausch Health had a number of missteps in the integration process and other operational issues. Management has been focusing on reducing leverage by applying operating cash flow and divestiture proceeds to debt reduction and returning the business to organic growth through internal product development efforts. Parent Subsidiary Linkage The approach taken is a weak parent (BHC)/strong subsidiary (BHA). Using Fitch's PSL criteria, Fitch concludes there is open ring fencing and access & control. As such, Fitch rates the parent and subsidiary at the consolidated level with no notching between the two. KEY ASSUMPTIONS -- Low to mid single-digit revenue growth during the forecast period; -- EBITDA of $3.4 billion-$3.5 billion in 2021 and lower post eyecare spin-off; -- Annual FCF of at least $900 million throughout the forecast period; -- Continued debt reduction utilizing FCF; -- Leverage declining to below 7.0x by the end of 2023; -- Eye Care spin-off executed in 2022-2023 with proforma post- spin-off net leverage of 6.5x-6.7x. RATING SENSITIVITIES Factors that could, individually or collectively, lead to positive rating action/upgrade: -- An expectation of gross debt leverage (total debt/EBITDA) durably below 6.0x; -- Bausch Health continues to maintain a stable operating profile and refrains from pursuing large, leveraging transactions including acquisitions; -- Forecast FCF remains significantly positive. Factors that could, individually or collectively, lead to negative rating action/downgrade: -- Gross debt leverage (total debt/EBITDA) durably above 7.0x; -- FCF significantly and durably deteriorates; -- Refinancing risk increases and the prospect for meaningful leverage reduction weakens. 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 Bausch Health had adequate near-term liquidity at Sept. 30, 2021, including restricted and unrestricted cash on hand of $1.9 billion. The company will use $1.2 billion of the cash to fund pending settlement of the U.S. Securities litigation. The company and has satisfied most debt maturities through 2024 and has consistently generated significantly positive FCF during 2015-2021, despite facing serious operating challenges. Fitch expects the company to maintain adequate headroom under the debt agreement financial maintenance covenants during the 2021-2024 forecast period. Recovery Assumptions The recovery analysis assumes that Bausch Health would be considered a going concern in bankruptcy and that the company would be reorganized rather than liquidated. The analysis is based on the current company (i.e. not pro forma for the loss of the eye care business and any resultant change in debt). Fitch estimates a going concern enterprise value (EV) of $18.2 billion for Bausch Health and assumes that administrative claims consume 10% of this value in the recovery analysis. The going concern EV is based upon estimates of post-reorganization EBITDA and the assignment of an EBITDA multiple. Fitch's estimate of Bausch Health's going concern EBITDA of $2.43 billion is roughly 26% lower than the LTM 2020 EBITDA. The assumed going concern EBITDA reflects a scenario where the pandemic continues to weigh on certain business segments during the intermediate term and the company experiences some shortfalls in commercializing the R&D pipeline, thereby resulting in a restructuring or default. The determination to revise the GC EBITDA below that of the last review reflects Fitch's belief that some of the pandemic headwinds will be semi-permanent and in-place at the time of the restructuring. Fitch assumes a recovery EV / EBITDA multiple of 7.5x for Bausch. This is generally above the 6.0x-7.0x Fitch typically assigns to specialty pharmaceutical manufacturers. However, BHC is more diversified than many of its peers and the BLCO business adds significant stability to the operations. The current average forward public market trading multiple of Bausch Health and the company's closet peers is about 9x. Fitch applies a waterfall analysis to the going concern EV based on the relative claims of the debt in the capital structure, and assumes that the company would fully draw the revolvers in a bankruptcy scenario. The senior secured credit facility, including the term loans and revolver, and senior secured notes (roughly $8.5 billion to $9 billion in the aggregate pre-refinancing), have outstanding recovery prospects in a reorganization scenario and are rated 'BB/RR1', three notches above the IDR. The senior unsecured notes ($14.9 billion in the aggregate pre-refinancing) have an average recovery and are rated 'B'/'RR4'. The Rating Watch Negative on the unsecured notes indicates the potential for these ratings to be affirmed or downgraded depending on the amount of secured and unsecured debt upon completion of the IPO and later the complete separation. ISSUER PROFILE BHC is a multinational healthcare company headquartered in Laval, Quebec that develops, manufactures and markets pharmaceutical and medical products. It has significantly expanded the scope and geographic reach of its product offering since the initial merger of Bausch and Biovail in 2009. ESG CONSIDERATIONS Bausch Health Companies Inc. has an ESG Relevance Score of '4' for Exposure to Social Impacts due to pressure to contain healthcare spending growth, a highly sensitive political environment, and social pressure to contain costs or restrict pricing. This has a negative impact on the credit profile, and is relevant to the ratings in conjunction with other factors. Unless otherwise disclosed in this section, the highest level of ESG credit relevance is a score of '3'. This means ESG issues are credit-neutral or have only a minimal credit impact on the entity, either due to their nature or the way in which they are being managed by the entity. BED BATH: Moody's Lowers CFR to B1, Outlook Remains Stable ---------------------------------------------------------- Moody's Investors Service downgraded Bed Bath & Beyond Inc.'s corporate family rating to B1 from Ba3, its probability of default rating to B1-PD from Ba3-PD and its senior unsecured notes rating to B2 from B1. The speculative grade liquidity rating remains at SGL-1. The outlook is stable. "The downgrade reflects the increased risks associated with the execution of Bed Bath's strategic turnaround given the supply chain and operational challenges the company faces have more than offset its successful efforts to roll out its private brand portfolio, increase its digital sales penetration, divest non-core banners and rationalize its store base. Bed Bath's leverage is expected to increase to around 4.2x at the end of fiscal 2021 as weaker sales and higher supply chain costs reduce profitability. The SGL-1 reflects its very good liquidity as cash balances remain high and its $1 billion revolver is undrawn" said Senior Vice President, Christina Boni. Downgrades: Issuer: Bed Bath & Beyond Inc. Corporate Family Rating, Downgraded to B1 from Ba3 Probability of Default Rating, Downgraded to B1-PD from Ba3-PD Senior Unsecured Regular Bond/Debenture, Downgraded to B2 (LGD4) from B1 (LGD5) Outlook Actions: Issuer: Bed Bath & Beyond Inc. Outlook, Remains Stable RATINGS RATIONALE Bed Bath's B1 corporate family rating reflects its scale as the largest dedicated retailer of domestic merchandise and home furnishing with a national footprint. It also reflects its very good liquidity and low level of funded debt both of which provide it with the financial flexibility to support its efforts to improve profitability. Nonetheless, the company remains challenged to maintain its market position particularly in the face of increased supply chain pressures that have resulted in higher costs and lower inventory availability. As demand shifted to the home segment during the pandemic, Bed Bath has been successful in growing its e-commerce business significantly to approximately 35% of its overall sales. Despite these efforts, the company remains vulnerable to intense competition from e-commerce as well as other value players and traditional discounters. Bed Bath is focused on improving assortments and layout, expanding private label, and enhancing its omni-channel capabilities and upgrading its systems as its works to reduce costs. The company introduced 8 new owned brands in fiscal 2021, which supports continued margin expansion efforts. Additionally, Bed Bath has worked to rationalize its banners as well as its store base with a total of 200 closed expected by the end of fiscal 2021. Bed Bath's SGL-1 reflects its very good liquidity as Moody's projects the company to have approximately $600 million of cash at the end of the year and no revolver borrowings. The acceleration of share repurchases with $625 million planned in fiscal 2021 has been primarily funded through excess cash generated from its sale of non-core assets. Bed Bath has also continued to make strategic capital expenditures and is expected to spend $350 million in fiscal 2021. Bed Bath's nearest note maturity is $285 million in 2024 with its undrawn $1 billion ABL expiring in August 2026. The stable outlook reflects the expectation that Bed Bath's very good liquidity provides it with the time to execute on its turnaround efforts and that capital allocation will be conservative until the business is stabilized. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS Ratings could be downgraded to the extent that the transformation does not result in operational improvement, market share erosion is sustained, liquidity deteriorates for any reason or financial strategy becomes more aggressive. Quantitatively, ratings could be downgraded if debt/EBITDA is sustained above 4.5x and EBIT/Interest is sustained below 1.25x. An upgrade would require that the company maintains very good liquidity and makes significant progress in its operational initiatives which results in positive free cash flow and market share stabilization while debt/EBITDA is sustained below 3.5x and EBIT/Interest is sustained above 1.5x. Headquartered in Union, NJ, Bed Bath & Beyond Inc. is a omni-channel retailer selling a wide assortment of domestics merchandise and home furnishings which operates under the names Bed Bath & Beyond, Harmon, Harmon Face Values or Face Values, buybuyBABY, and Decorist. LTM revenues for the period ending November 27, 2021 were approximately $8.4 billion. The principal methodology used in these ratings was Retail published in November 2021. BONNIE TILE: Gets Cash Collateral Access ---------------------------------------- The U.S. Bankruptcy Court for the Southern District of Florida, West Palm Beach Division, has authorized Bonnie Tile II, LLC to use cash collateral on an interim basis in the regular course of its business affairs pursuant to the budgets, with a 10% variance. The Debtor requires the use of cash collateral for an effective reorganization and to avoid harm to the Debtor's bankruptcy estate. The Debtor is a party to a UCC-1 with Knight Capital Funding in which Knight may purport to have a security interest in accounts receivable and other assets of the Debtor. In support of the foregoing Agreement and as perfection of the purported lien thereunder, the Court finds that a UCC-1 Financing Statement was filed on August 5, 2019 in which Knight claims a security interest in the collateral. The Debtor is a party to a UCC-1 with Wellen Capital, LLC in which Wellen may purport to have a security interest in all assets of the Debtor. In support of the foregoing Agreement and as perfection of the purported lien thereunder, the Court finds that a UCC-1 Financing Statement was filed on April 5, 2021 in which Wellen claims a security interest in the collateral. Debtor is a party to a UCC-1 with Caymus Funding, Inc. in which Caymus may purport to have a security interest in accounts receivable and other assets of the Debtor. In support of the foregoing Agreement and as perfection of the purported lien thereunder, the Court finds that a UCC-1 Financing Statement was filed on December 5, 2018 in which Caymus claims a security interest in the collateral. The Court accepts the Debtors proffer that this obligation has been paid although a UCC-3 Termination Statement has not been filed. A further hearing on the matter is scheduled for February 8, 2022 at 1:30 p.m. A copy of the order is available at https://bit.ly/3o4puhv from PacerMonitor.com. About Bonnie Tile II, LLC Bonnie Tile II, LLC operates a retail tile and tile installation business located in Jupiter, Florida. The Debtor sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. S.D. Fla. Case No. 21-16210) on June 25, 2021. In the petition signed by Dennis R. Hughes, managing member, the Debtor disclosed up to $50,000 in assets and up to $1 million in liabilities. Judge Mindy A. Mora oversees the case. Craig I. Kelley, Esq., at Kelley, Fulton & Kaplan, P.L is the Debtor's counsel. BRANCHES OF LIFE: Unsecureds Will Get At Least 3% in Plan --------------------------------------------------------- Branches of Life LLC filed with the U.S. Bankruptcy Court for the Eastern District of Virginia a Plan of Reorganization dated Jan. 24, 2022. Since 2018, BOL has been in the business of providing person-centered services to children, adults, and families in Richmond and central Virginia that have or are impacted by someone with an intellectual disability and/or autism. This Plan provides payment to unsecured creditors of at least 3% and allows the Debtor to continue its important service to the special needs community. The Debtor maintains that it will have enough cash over the life of the Plan to make the required Plan payments. Notably, the Debtor expects to receive an additional two payments on account of employee retention credits from the government, which it has already earned. The Debtor requires this income to continue as a going concern throughout the period of the Plan and beyond until the Debtor is able to consistently operate at a break-even level. Nevertheless, a portion of that income will be distributed to unsecured creditors. The Debtor's financial projections show that the Debtor will have Available Cash of $23,287 and projected Disposable Income of not more than $10,000. The final Plan payment is expected to be paid on Dec. 31, 2024. This Plan under Chapter 11 of the Bankruptcy Code proposes to pay creditors of BOL from Available Cash. Non-priority unsecured creditors holding allowed claims will receive distributions, which the proponent of this Plan has valued at approximately at least $0.03 cents on the dollar. This Plan also provides for the payment of administrative claims. On the Effective Date, all other Estate property shall revest in the Reorganized Debtor, subject to the Liens of the Small Business Administration (on account of the EIDL Loan) and Primis Bank, expressly preserved by this Plan, but otherwise free and clear of all other liens, claims, interests, and encumbrances. A full-text copy of the Plan of Reorganization dated Jan. 24, 2022, is available at https://bit.ly/3u1kuhl from PacerMonitor.com at no charge. Counsel for the Debtor: Robert S. Westermann, Esq. Brittany B. Falabella, Esq. Hirschler Fleischer, PC The Edgeworth Building 2100 East Cary Street P.O. Box 500 Richmond, VA 23218-0500 Telephone: (804) 771-9500 Facsimile: (804) 644-0957 Email: rwestermann@hirschlerlaw.com bfalabella@hirschlerlaw.com About Branches of Life Branches of Life, LLC, filed its voluntary petition for Chapter 11 protection (Bankr. E.D. Va. Case No. 21-33205) on Oct. 25, 2021, listing under $1 million in both assets and liabilities. Hirschler Fleischer, PC, serves as the Debtor's legal counsel. CE ELECTRICAL: People's United Bank Says Disclosure Inadequate -------------------------------------------------------------- People's United Bank, National Association ("PUB") objects to the Disclosure Statement for the Chapter 11 Plan of Reorganization revised January 19, 2022 filed by CE Electrical Contractors, LLC. PUB is the Debtor's senior secured lender, holding a first priority security interest in substantially all of the Debtor's assets. PUB is fully secured. Relevant loan documentation is attached to PUB's proof of claim. In addition to those objections set forth in PUB's Objection to the Initial Disclosure Statement, and specifically its objection to the proposed third-party temporary injunction, PUB objects to the Amended Disclosure Statement as follows: * The Amended Disclosure Statement provides that the Plan may include a thirdparty temporary injunction, if approved by the Court, or may not include such injunction, if rejected by the Court. Amended Disclosure Statement, p. 31. This essentially renders the proposed Plan equivocal and does not provide creditors adequate information to decide whether or not to support the Plan. The Amended Disclosure Statement, as currently drafted, does not give that creditor adequate information to make such a decision. * In addition, buttressing PUB's prior objections to the third-party injunction, the Amended Disclosure Statement now states that the Plan is feasible without the third-party injunction. Amended Disclosure Statement, p. 31. In other words, the Debtor concedes that this extraordinary relief is unnecessary. A full-text copy of PUB's objection dated Jan. 24, 2022, is available at https://bit.ly/33TThCM from PacerMonitor.com at no charge. Attorney for People's United Bank: Scott D. Rosen Nicholas P. Vegliante COHN BIRNBAUM & SHEA P.C. 100 Pearl Street, 12th Floor Hartford, CT 06103 Tel. 860-493-2200 Fax. 860-727-0361 Email: srosen@cbshealaw.com nvegliante@cbshealaw.com About CE Electrical Contractors CE Electrical Contractors LLC filed a voluntary petition for relief under Chapter 11 of the Bankruptcy Code (Bankr. D. Conn. Case No. 21-20211) on Mar. 5, 2021. Paul Calafiore, the managing member, signed the petition. In the petition, the Debtor disclosed total assets of $1,625,485 and total liabilities of $8,648,831. Judge James J. Tancredi oversees the case. The Debtor tapped The Fox Law Corporation, Inc. as lead bankruptcy counsel and Boatman Law LLC as local bankruptcy counsel. CHAMINADE UNIVERSITY: S&P Affirms 'BB+' Rating on Revenue Bonds --------------------------------------------------------------- S&P Global Ratings revised the outlook to stable from negative and affirmed its 'BB+' long-term rating on Chaminade University of Honolulu, Hawaii's series 2015A and 2015B special-purpose revenue bonds and taxable special-purpose revenue bonds. "The rating affirmation and revision of the outlook to stable reflect our view of the university's excellent operations in fiscal 2021, due in part to federal grant revenue provided through Higher Education Emergency Relief Fund II and the Payroll Protection Program (PPP), low debt levels, and healthy improvement of financial resources," said S&P Global Ratings credit analyst James Gallardo. The university has approximately $20.6 million of debt. Additionally, Chaminade have a modest amount of lease expenses and $6 million on a line of credit that had not been drawn on as of fiscal June 30, 2021. Annual debt service is approximately $1.5 million per year, resulting in a maximum annual debt service (MADS) burden of 2.3% of fiscal 2021 expenses, which S&P views as low. Securing the bonds is a general obligation pledge of the university. S&P said, "We assessed Chaminade's enterprise profile as adequate, characterized by a modest decline in full-time-equivalent (FTE) enrollment in fall 2021, pressured student retention, and weakened matriculation and selectivity. We assessed Chaminade's financial profile as adequate, characterized by positive operations in fiscal 2021, a low debt burden, and healthy improvement in financial resources. Combined, we believe these credit factors lead to an indicative stand-alone credit profile 'bbb-'. As our criteria indicate, the final rating can be within one notch of the indicative credit level. In our opinion, the 'BB+' rating on the university's bonds better reflects Chaminade's declining undergraduate FTE enrollment and weak demand metrics when compared to peers and medians." Chaminade University of Honolulu is a Catholic university, sponsored by the Province of the United States of America of the Society of Mary (Marianists). Founded in 1955, the school offers 22 bachelor's degrees, six graduate degree programs, a new doctorate of psychology (PsyD), and several professional certificate programs with a focus on education, business, science, and health sciences. In addition to traditional undergraduate and graduate programs, it also maintains a robust online undergraduate program for members of the Armed Forces, their family members, and other working professionals. "The stable outlook reflects our expectation that over the near term, Chaminade will work to stabilize total FTE enrollment and improve its demand characteristics. We also expect the university to improve operating performance on a GAAP basis in fiscal 2021 and to budget for positive operating results in fiscal 2022, reflecting additional federal appropriations funding through HEERF and continued implementation of strict expense controls while maintaining financial resources," added Mr. Gallardo. Vaccine progress in the U.S. has helped alleviate some of the health and safety social risk stemming from the pandemic, although the higher education sector remains one at a greater risk than others given the importance of resumption in pre-pandemic activities and the corresponding influence on operating revenues, including housing revenues. S&P said, "In addition, we believe Chaminade is also affected by changing demographics on the island, which we view as a social risk, and has led to several years of enrollment declines, with potential for further enrollment pressure over the near term. Despite the elevated social risk, we believe the university's environmental and governance risk are in line with our view of the sector." CHESAPEAKE ENERGY: S&P Alters Outlook to Pos., Affirms 'BB-' ICR ---------------------------------------------------------------- S&P Global Ratings affirmed its 'BB-' issuer credit and unsecured debt ratings on Oklahoma City-based oil and gas exploration and production company Chesapeake Energy Corp., and revised the outlook to positive from stable. The positive outlook reflects the potential for an upgrade if the company successfully integrates its recent acquisitions while maintaining a conservative financial policy that keeps discretionary spending within cash flows and funds from operations (FFO)/debt above 45%. The outlook revision reflects the potential for an upgrade over the next 12 months if Chesapeake continues to deliver strong operational results and maintains a conservative financial policy. Since emerging from bankruptcy early last year, Chesapeake has maintained production with low capital expenditures, kept shareholder distributions within cash flows, and funded acquisitions in a balanced manner. Going forward, we expect the company will continue executing this operating and financial strategy while successfully integrating the assets acquired from Vine Energy (in November 2021) and Chief Oil & Gas. The company has now "cored up" in three operating regions: the Haynesville shale, Marcellus shale and Eagle Ford/Brazos Valley, and we expect it to focus on improving efficiencies and capital intensity in each area. The Chief acquisition adds scale and should improve operating efficiency in the Marcellus region. The Chief acquisition will add 113,000 net acres (94% held by production) and 835 mmcfe/d of production (approximately 100% natural gas) in the Marcellus, bringing Chesapeake's total equivalent production to about 4.0 bcfe/d on average in 2022. It will also add more than 100 premium drilling locations, which generate over 50% rates of return at a Henry Hub natural gas price of $2.50/mmBtu, and will lower the company's total GHG emissions intensity. Because the acreage is adjacent to Chesapeake's existing Marcellus assets, the company believes it will be able to add about 200 mmcf/d (gross) of productive capacity by optimizing gathering and infrastructure systems by the end of 2023. Moreover, the company expects to achieve $50 million-$70 million of immediate annual synergies. The acquisition is expected to close around March 31, 2022. Chesapeake's credit measures remain very strong. Chesapeake plans to fund the $2.6 billion Chief acquisition with about $600 million of equity and $2.0 billion of cash. For the cash portion, it will use cash on hand, about $500 million of revolver draw, and $450 million of asset sale proceeds. The company announced that it has agreed to sell its Powder River Basin assets to Continental Resources for $450 million cash, with the sale expected to close on March 31, 2022. Although the transaction is modestly leveraging, S&P expects credit measures to remain strong, with FFO/debt in the 75% to 85% range, and debt to EBITDA of 1.0x to 1.2x over the next two years. S&P expects shareholder distributions to be within cash flows. Chesapeake expects to increase its base dividend by 14% to $2.00/share post close and to pay out a variable dividend of up to 50% of free cash flow. S&P said, "Based on our price deck assumptions, we expect total dividends of $700 million-$800 million this year. In addition, Chesapeake expects to complete its $1.0 billion share buyback program by the end of 2023. Despite the increase, we expect shareholder distributions to be within cash flows over the next two years." The company names a new COO, filling out the executive management team. The company has hired Josh Viets, a 20-year veteran of ConocoPhillips, as COO. Along with new chief financial officer Mohit Singh from BPX Energy hired in December, and chief executive officer Nick Del'Osso, who has been with Chesapeake since 2008, this hire rounds out the company's executive management team. S&P said, "The positive outlook on Chesapeake reflects our view that the company has demonstrated a favorable track record since emerging from bankruptcy in Feb 2021, reporting strong operational results, building out its executive management team, and keeping capital expenditures and dividends within cash flows. It has also funded two recent acquisitions in a relatively balanced manner. We estimate the company will maintain FFO to debt comfortably above 60% in 2022 and 2023, while generating positive free cash flow. "We could raise the rating on Chesapeake over the next 12 months if it successfully integrates the acquired assets and maintains a modest financial policy that keeps discretionary spending within cash flow and FFO/debt above 45%. "We could revise the outlook on Chesapeake back to stable if we expect its FFO to debt to approach 30% or its debt to EBITDA to approach 3x for a sustained period. This would most likely occur if natural gas prices decline and the company fails to rein in its spending levels accordingly or its natural production declines are greater than we currently expect. We could also revise our outlook if Chesapeake outspends discretionary cash flows for a sustained period." ESG credit indicators: E-4 S-2 G-5 S&P said, "Environmental factors are a negative consideration in our credit rating analysis of Chesapeake as the exploration and production industry contends with an accelerating energy transition and adoption of renewable energy sources. We believe falling demand for fossil fuels will lead to declining profitability and returns for the industry as it fights to retain and regain investors that seek higher return investments. Chesapeake has pledged to eliminate routine flaring from all new wells completed from 2021 onward, and for all wells by 2025. The company is also targeting net zero scope 1 GHG emissions by 2035. The company had all of its Haynesville shale natural gas production responsibly-sourced-gas (RSG) certified at the end of 2021, and expects to have its Marcellus gas (including the acquired Chief production) certified by the end of 2022. Given the company's 2020 bankruptcy and its very recent hiring of a new CFO and COO, governance factors are a very negative consideration." CHICK LUMBER: Gets Short Extension for Amended Disclosures ---------------------------------------------------------- Judge Bruce A. Harwood entered an order that the date by which Chick Lumber, Inc. must file its Amended Disclosure Statement and Plan is extended from Jan. 24, 2022 to Jan. 31, 2022. In seeking the extension, the Debtor explained that parties-in-interest are are participating in the re-drafting of the amended Disclosure Statement and Plan: Ann Marie Dirsa, Assistant United States Trustee, Rue Toland, counsel to Citizens Bank, Thomas Fawkes, counsel to the Committee, Joseph Foster, counsel to Carroll County Leasing Company, Adam Prescott, counsel to the Goldberg Foundation and James Lamontagne, counsel to Mr. and Mrs. Massa. According to the Debtor, resolving all or as many of the questions raised by parties before filing an amended Disclosure Statement and Plan will minimize the burden on the Court. The Debtor added that it needs to extend its Plan Financial Projections by approximately 6 months to show parties in interest the expected results of the Debtor's operations during the last 6 months of the Plan. About Chick Lumber Chick Lumber, Inc. -- https://www.chicklumber.com/ -- is a dealer of lumber, plywood, steel beams, engineered wood, trusses, steel and asphalt roofing, windows, doors, siding, trim, stair parts, and finish materials. It also offers drafting and design, installation, delivery, outside sales, and plan reading and estimating services. The Debtor sought Chapter 11 protection (Bankr. D.N.H. Case No. 19-11252) on Sept. 9, 2019, in Concord. In the petition signed by Salvatore Massa, president, the Debtor disclosed between $1 million and $10 million in both assets and liabilities. Judge Bruce A. Harwood oversees the case. William S. Gannon PLLC is the Debtor's legal counsel. The Office of the U.S. Trustee appointed a committee of unsecured creditors on Oct. 3, 2019. The Committee is represented by Goldstein & McClintock, LLLP as its legal counsel. CONFLUENT MEDICAL: Moody's Assigns First Time 'B3' CFR ------------------------------------------------------ Moody's Investors Service assigned first-time ratings to Confluent Medical Technologies, Inc. including a B3 Corporate Family Rating and a B3-PD Probability of Default Rating. Moody's also assigned a B2 rating to the company's senior secured first lien credit facility comprised of a 7-year $395 million term loan B and a 5-year $75 million revolving credit facility, as well as a Caa2 rating to the 8-year $105 million secured second lien term loan. The rating outlook is stable. TPG Capital ("TPG") will be acquiring a majority stake in Confluent. The transaction will be funded with proceeds from the term loan B, second lien term loan, and a significant amount of new equity from TPG. ESG factors are material to the ratings assignment. Confluent faces moderate social risks, primarily around responsible production which include compliance with regulatory requirements. With respect to governance, as the company pursues its growth strategy, it could potentially experience increased leverage. Assignments: Issuer: Confluent Medical Technologies, Inc. Corporate Family Rating, Assigned B3 Probability of Default Rating, Assigned B3-PD Senior Secured 1st Lien Term Loan, Assigned B2 (LGD3) Senior Secured 1st Lien Revolving Credit Facility, Assigned B2 (LGD3) Senior Secured 2nd Lien Term Loan, Assigned Caa2 (LGD6) Outlook Actions: Issuer: Confluent Medical Technologies, Inc. Outlook, Assigned Stable RATINGS RATIONALE Confluent Medical Technologies, Inc.'s (Confluent) B3 CFR is constrained by high financial leverage, modest scale and high customer concentration. Moody's estimates that the company's adjusted debt/EBITDA will approach 7 times over the next 12 to 18 months. The company has high customer concentration with the top 5 customers accounting for over 50% of annual revenues, though no single program with a customer makes up for more than 5% of the company's revenue. The rating also reflects risks associated with Confluent's reliance on a limited number of suppliers for its nitinol (nickel and titanium alloy) and other raw materials, though the company has longstanding contracted relationships with key suppliers. Confluent benefits from its niche position in component manufacturing for the medical device industry. The company supports medical device segments that exhibit above-average market growth rates. Confluent benefits from high customer switching costs due to the significant amount of time and investment required for its customers to obtain product regulatory approvals. The rating also reflects Confluent's good liquidity profile. This liquidity assessment is supported by Moody's expectations of $10-$25 million in free cash flow in the next 12 months. It also reflects Moody's expectation of $10 million in pro forma cash and full availability under the $75 million revolver at the close of the transaction. The B2 ratings assigned to the proposed first lien credit facilities reflect their senior secured interest in substantially all assets of the borrowers and the level of junior debt in the company's capital structure, comprised of a $105 million second lien term loan. The Caa2 rating assigned to the proposed second lien secured loan reflects its junior ranking. In its stable outlook, Moody's expects that Confluent's sales and earnings will grow at a moderate pace supported by Confluent's focus on higher-growth medical device segments. Moody's expects that Confluent will gradually deleverage absent any significant debt-financed acquisitions or shareholder distributions. ESG considerations are material to Confluent's ratings. Confluent's social risk is moderate, and primarily associated with responsible production including compliance with regulatory requirements for the safety of medical devices as well as adverse reputational risks arising from recalls associated with manufacturing defects. With respect to governance, Confluent is private equity owned, which could lead to an increasingly aggressive financial policy over time. Following are some of the preliminary terms in the marketing term sheet that are subject to change during syndication: The proposed first and second lien term loans are expected to have no financial maintenance covenants while the proposed revolving credit facility will, beginning with the second full fiscal quarter following closing, contain a springing maximum first lien net leverage ratio that will be tested when the revolver is more than 35% drawn. In addition, the first lien credit facility contains incremental facility capacity up to the greater of $77.3 million and 100% of consolidated EBITDA, plus any unused amounts under the general debt basket, plus unused amounts under the ratio debt starter basket (up to the greater of $20m and 25% of consolidated EBITDA) plus an additional amount subject to a 5.10x first lien secured net leverage ratio (for pari passu secured debt), plus the ability to incur first lien incremental debt up to the amount of any voluntary prepayments or repurchases of second lien loans. Amounts up to the greater of $77.3 million and 100% of consolidated EBITDA, plus amounts reallocated from the general debt basket may be incurred with an earlier maturity date than the then outstanding first lien term facility. At this time, 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. Also, at this time, 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 second lien has the ability to incur incremental debt up to 6.50x secured net leverage on a pro forma basis, if junior secured FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS The ratings could be upgraded if Confluent materially increases its size and scale through a balanced growth strategy. Ratings could be upgraded if the company further diversifies its product portfolio and reduces its customer concentration. Ratings could also be upgraded if the company further penetrates into higher-growth medical device segments. Adjusted debt/EBITDA sustained below 6.0 times could support an upgrade. The ratings could be downgraded if the company's operating performance substantially deteriorates. Ratings could also be downgraded if the company pursues an aggressive debt-funded acquisition strategy or issues a large debt-funded shareholder distribution. In addition, ratings could be downgraded if liquidity weakens, such that free cash flow becomes negative on a sustained basis. Confluent Medical Technologies, Inc. ("Confluent") is a materials science company that supports the design, development and manufacturing of implants, delivery systems and other medical devices. The company provides specialized design and development services, prototyping, production manufacturing and equipment to medical device companies focused in the peripheral vascular, neurovascular and structural heart markets. Confluent supplies nitinol (nickel & titanium alloy) materials, biomedical textiles and precision polymer components. The company is majority-owned by private equity firm TPG Capital. Revenues are approximately $250 million. The principal methodology used in these ratings was Medical Products and Devices published in October 2021. CONFLUENT MEDICAL: S&P Assigns 'B' ICR on Acquisition by TPG ------------------------------------------------------------ S&P Global Ratings assigned its 'B' issuer credit rating to Confluent Medical Technologies Inc., its 'B' issue-level rating and '3' recovery rating to its first-lien secured credit facilities, and its 'B-' issue-level rating and '5' recovery rating to the second-lien debt. The stable outlook reflects S&P's expectation that the company's leverage will remain in the 5x-6x range over the next 12 months given its assumption of favorable growth trends over its outlook horizon. Private-equity sponsor TPG Capital has entered into a definitive agreement to acquire a majority stake in Confluent Medical Technologies Inc.--a manufacturer of components, delivery systems, and finished devices for medical device customers. Confluent is planning to issue a new $470 million first-lien credit facility, comprising a $75 million revolving facility and a $395 million first-lien term loan B (TLB), as well as a $105 million second-lien term loan. Confluent Medical has limited scale and a narrow focus; however, these factors are somewhat offset by its sticky customer relationships and exposure to noncyclical end markets with high growth prospects. The company specializes in nitinol materials, biomedical textiles, and precision polymer components and provides design, development, and component manufacturing services to the medical device industry (primarily in the structural heart, electrophysiology, and neurovascular therapeutic areas). Confluent's revenue base is relatively small (about $237 million of revenue in the 12 months ended Sept. 30, 2021), though it is similar in size to those of the other contract manufacturing organizations (CMOs) S&P rates, like Avalign Holdings Inc., Femur Buyer Inc., and Spectrum Holdings III Corp. The company also has some client concentration given that its five largest customers account for about 55% of its total revenue, though no customer program makes up for more than 5% of the company's revenue. S&P said, "We believe these risk factors are partially offset by Confluent's sticky customer relationships, which stem from its important role in the outsourcing strategies of its original equipment manufacturer (OEM) customers. We believe the company's operating margins, which are at the higher end relative to those of most of its rated CMO peers, reflect its specialized, value-adding contributions to its nitinol-based products that consumers increasingly prefer due to their higher-end capabilities, as well as its position as the sole provider of many of the products in its portfolio. We also believe that Confluent's end markets benefit from favorable growth trends because minimally invasive therapies, such as transcatheter valve replacement (TAVR) and transcatheter mitral valve repair (TMVR), are becoming more common and being used to address larger population cohorts. Based on our projections, along with the company's increasing capabilities, we think Confluent compares favorably with other CMOs. In addition, we expect the company's record-high backlog will provide significant revenue visibility over the coming years. "Supply chain bottlenecks, labor turnover, and raw material cost inflation will be material operating risks in 2022, though we believe Confluent will likely preserve EBITDA margins of about 30%.The company operates mostly in the medical devices industry, which is relatively noncyclical but is now suffering from cross-industry headwinds, i.e. supply chain bottlenecks, labor turnover, and raw material cost inflation. That said, we believe Confluent's positioning as a single source supplier as well as its customer contracts, which feature mechanisms that allow it to pass-through some of the increases in its raw material costs, provide it with better pricing power than most CMOs. This will likely enable the company to maintain high profitability of about 30% in 2022, which we expect it will modestly improve as inflationary pressures gradually abate and it expands its scale over the coming years. "The spread of the omicron variant presents another short-term risk, though we believe the company's end markets are resilient.The recent outbreak of the omicron variant has once again led many medical facilities to delay certain non-essential, non-urgent procedures to preserve their capacity. Therefore, Confluent's OEM clients may suffer from the temporary rescheduling of their procedures, which could trickle down to suppliers such as Confluent, though we believe this disruption will be short-lived given the critical nature of the underlying procedures. "We expect Confluent's leverage to be somewhat lower than that of its other rated CMO peers, though view its financial-sponsor ownership as a significant risk factor.We forecast the company's S&P Global Ratings-adjusted debt to EBITDA will be about 6x as of year-end 2022, before improving toward the mid-5x range in 2023 as its deleverages through EBITDA growth. However, Confluent's leverage could increase if it becomes more acquisitive or its financial sponsor owner chooses to extract cash dividends. Our current base-case scenario does not incorporate any significant debt-funded acquisitions or shareholder returns. "The stable outlook on Confluent reflects our expectation that its leverage will remain in the 5x-6x range through the next 12 months given our expectation for favorable growth trends over our outlook horizon. "We could lower our ratings on Confluent if an unexpected deterioration in its operating trends causes its debt to EBITDA to increase above 7x with limited prospects for recovery. This could occur if the company loses a significant customer or experiences operating challenges that reduce its EBITDA margin by more than 500 basis points. We would also downgrade the company if aggressive financial policies, such as shareholder rewards or debt-financed acquisitions, increase its debt to EBITDA to more than 7x. "Although unlikely in the next 12 months, we could raise our rating on Confluent if we expect its debt to EBITDA to remain materially below 5x on a sustained basis and believe its financial sponsor is committed to maintaining financial policies that will support this improved level of leverage." ESG credit indicators: E-2 S-2 G-3 S&P said, "Environmental and social factors are an overall neutral consideration in our analysis of Confluent. Governance factors are a moderately negative consideration, as is the case for most rated entities owned by private-equity sponsors. We view financial-sponsor-owned companies with aggressive or highly leveraged financial risk profiles as demonstrating corporate decision-making that prioritizes the interests of their controlling owners." This also reflects private-equity owners' generally finite holding periods and focus on maximizing shareholder returns. CVR ENERGY: Moody's Affirms Ba3 CFR & Alters Outlook to Negative ---------------------------------------------------------------- Moody's Investors Service affirmed CVR Energy Inc.'s (CVI) Corporate Family Rating at Ba3, Probability of Default Rating at Ba3-PD and senior unsecured notes ratings at B1. Moody's downgraded CVI's Speculative Grade Liquidity (SGL) rating to SGL-2 from SGL-1. The outlook was changed to negative from stable. "The change in outlook at CVR Energy to negative reflects risks to the company achieving sustainable reduction in leverage to continue to support the current rating and risks and uncertainties related to RINs costs," commented Jonathan Teitel, a Moody's analyst. Affirmations: Issuer: CVR Energy Inc. Corporate Family Rating, Affirmed Ba3 Probability of Default Rating, Affirmed Ba3-PD Senior Unsecured Regular Bond/Debenture, Affirmed B1 (LGD4) Downgrades: Issuer: CVR Energy Inc. Speculative Grade Liquidity Rating, Downgraded to SGL-2 from SGL-1 Outlook Actions: Issuer: CVR Energy Inc. Outlook, Changed To Negative From Stable RATINGS RATIONALE CVI's Ba3 CFR reflects Moody's expectation for moderate leverage at CVR Refining in 2022 and the company's high sensitivity to volatile crack spreads offset by a solid operating track record, strong regional market position and good liquidity. CVI's debt capacity is largely supported by the refining business. The company benefits from diversification attributed to CVR Partners, LP's (CVRP, B2 stable) nitrogen fertilizer operations but CVRP's earnings and distributions to CVI and other unitholders are volatile. Given the volatile nature of both the refining and nitrogen fertilizer businesses, CVI's EBITDA and cash flow are volatile, leading to swings in leverage. Decreased demand for refined products caused by the pandemic caused a sharp decline in refining margins and a spike in CVI's leverage in 2020. While demand has increased and leverage improved in 2021, there are risks to the company reaching and maintaining earnings and leverage at levels supportive of its rating. A primary risk to CVI's earnings is its cost to comply going forward with Renewable Fuel Standards related to renewable identification numbers (RINs) and uncertainty around small refinery exemptions. This risk is a key environmental consideration related to carbon transition risk and social consideration related to demographic and societal trends, particularly the push by regulators for cleaner fuels. CVI is exposed to uncertainties around federal regulatory requirements for refiners and costs that can be substantial to settle obligations associated with Renewable Fuel Standards. CVI is increasing its focus on the production of renewable biofuels which will reduce the company's net exposure to fluctuations in costs to comply with regulatory requirements. There are uncertainties around the net impact on the company of these costs going forward. CVI's SGL-2 rating reflects Moody's expectation for the company to maintain good liquidity. As of September 30, 2021, the company had $465 million of cash (which excludes the $101 million at CVRP). CVR Refining had $371 million available under its undrawn $400 million ABL revolving credit facility due November 2022 ($29 million in letters of credit were outstanding). Moody's expects that CVI will extend the facility's maturity in the near term. The borrowing base includes $160 million of cash. The revolver has a springing minimum fixed charge coverage ratio covenant based on excess availability. Moody's does not expect this covenant to spring during 2022. CVR Refining has significant reliance on a crude oil supply agreement with Vitol Inc. for working capital which is important to support liquidity. CVI's $600 million of senior unsecured notes due 2025 and $400 million of senior unsecured notes due 2028 are rated B1, one notch below the Ba3 CFR, reflecting the seniority of the revolver's secured claims. The notes are guaranteed on an unsecured basis by the wholly-owned subsidiaries of CVI with the exception of CVRP and its subsidiaries and certain immaterial wholly-owned subsidiaries of CVI. The negative outlook reflects risks to achieving sufficient and sustainable earnings to reduce financial leverage, including the uncertainties regarding future regulatory costs. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS Factors that could lead to a downgrade include leverage relating to the refining business remaining above 3x; debt-funded acquisitions or dividends; or weakening liquidity. Factors that could lead to an upgrade include increased scale and diversification of refining assets and cash flow while reducing leverage relating to the refining business. CVI, headquartered in Sugar Land, Texas, is a publicly traded holding company focused on refining at its CVR Refining subsidiaries and nitrogen fertilizer through its ownership interest of the general partner and 36% of the common units for CVRP, a master limited partnership which is 36% owned by CVI. Icahn Enterprises L.P. and its affiliates own 71% of CVI's outstanding common stock. The principal methodology used in these ratings was Refining and Marketing published in August 2021. CYPRESS PARK: Case Summary & 20 Largest Unsecured Creditors ----------------------------------------------------------- Debtor: Cypress Park Apartments II, LLC 2010-2020 Cypress Acres Dr. New Orleans, LA 70114 Business Description: Cypress Park Apartments II is primarily engaged in renting and leasing real estate properties. Chapter 11 Petition Date: January 27, 2022 Court: United States Bankruptcy Court Eastern District of Louisiana Case No.: 22-10083 Judge: Hon. Meredith S. Grabill Debtor's Counsel: Frederick L. Bunol, Esq. THE DERBES LAW FIRM, LLC 3027 Ridgelake Drive Metairie, LA 70002 Tel: (504) 837-1230 Fax: (504) 832-0327 Email: fbunol@derbeslaw.com Estimated Assets: $1 million to $10 million Estimated Liabilities: $1 million to $10 million The petition was signed by Joshua Bruno as manager. A full-text copy of the petition containing, among other items, a list of the Debtor's 20 largest unsecured creditors is available for free at PacerMonitor.com at: https://www.pacermonitor.com/view/RDJZTCY/Cypress_Park_Apartments_II_LLC__laebke-22-10083__0001.0.pdf?mcid=tGE4TAMA CYPRUS MINES: Fee Examiner Seeks to Tap Godfrey & Kahn as Counsel ----------------------------------------------------------------- M. Jacob Renick, the fee examiner appointed in the Chapter 11 case of Cyprus Mines Corporation, seeks approval from the U.S. Bankruptcy Court for the District of Delaware to employ Godfrey & Kahn, SC as his legal counsel. Godfrey & Kahn will render these legal services: (a) monitor the case docket for matters of significance to the fee examiner; (b) consult with the fee examiner on a subset of retained professionals' compensation applications; (c) establish procedures to resolve disputes with retained professionals filing the applications; (d) assist in the preparation and presentation of reporting to the applicants; (e) negotiate with the applicants any concerns the fee examiner has concerning the applications; (f) resolve consensually any concerns the fee examiner has about the applications, subject to the court's approval; (g) appear and be heard on any matter before the bankruptcy court or an appellate court regarding the applications; (h) file comments and summary reports on the applications; (i) object to applications and litigate the objections; (j) conduct discovery; and (k) appeal, defend an appeal, or appear in appeal regarding an application. The hourly rates of the firm's counsel and staff are as follows: Katherine Stadler, Shareholder $660 Mark Hancock, Shareholder $640 Leah Viola, Special Counsel $480 Kathleen Boucher Paralegal $325 W. Andrew Dalton, Data Specialist $670 In addition, the firm will seek reimbursement for expenses incurred. Godfrey & Kahn also provided the following in response to the request for additional information set forth in Paragraph D.1. of the U.S. Trustee Guidelines. Question: Did you agree to any variations from, or alternatives to, your standard or customary billing arrangements for this engagement? Response: No. Question: Do any of the professionals included in this engagement vary their rate based on the geographic location of the bankruptcy case? Response: No. Question: If you represented the client in the 12 months prepetition, disclose your billing rates and material financial terms for the prepetition engagement, including any adjustments during the 12 months prepetition. If your billing rates and material financial terms have changed post-petition, explain the difference and the reasons for the difference? Response: Godfrey & Kahn has not previously represented the fee examiner. Question: Has your client approved your prospective budget and staffing plan, and, if so, for what budget period? Response: Godfrey & Kahn has provided a staffing plan; it has not been asked to provide a budget. Mark Hancock, Esq., a shareholder of Godfrey & Kahn, 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: Katherine Stadler, Esq. Godfrey & Kahn, S.C. One East Main Street, Suite 500 Madison, WI 53703 Telephone: (608) 257-3911 Facsimile: (608) 257-0609 Email: kstadler@gklaw.com About Cyprus Mines Corporation Cyprus Mines Corporation is a Delaware corporation and a wholly-owned subsidiary of Cyprus Amax Minerals Co., which is an indirect subsidiary of Freeport-McMoRan Inc. It currently has relatively limited business operations, which include the ownership of various parcels of real property, certain royalty interests that generate de minimis revenue (e.g., less than $1,500 in each of the past two calendar years), and the ownership of an operating subsidiary that conducts marketing activities. Cyprus Mines is a predecessor in the interest of Imerys Talc America, Inc. In June 1992, Cyprus Mines sold its talc-related assets to RTZ America Inc. (later known as Rio Tinto America, Inc.) through a two-step process. First, Cyprus Mines transferred its talc-related assets and liabilities (subject to minor exceptions) to Cyprus Talc Corporation, a newly formed subsidiary of Cyprus Mines, according to an Agreement of Transfer and Assumption, dated June 5, 1992. Second, Cyprus Mines sold the stock of Cyprus Talc Corporation to RTZ according to a Stock Purchase Agreement, also dated June 5, 1992 (as amended, the "1992 SPA"). The purchase price was approximately $79.5 million. Cyprus Talc Corporation was later renamed Imerys Talc America, Inc. Under the 1992 ATA, the entity now named Imerys expressly and broadly assumed the talc liabilities of Cyprus Mines and its former subsidiaries that were in the talc business. Cyprus Mines filed for Chapter 11 bankruptcy protection (Bankr. D. Del. Case No. 21-10398) on Feb. 11, 2021, listing between $10 million and $50 million in assets, and between $1 million and $10 million in liabilities. The Honorable Laurie Selber Silverstein is the case judge. The Debtor tapped Reed Smith LLP as bankruptcy counsel, Kasowitz Benson Torres LLP as special conflicts counsel, and Prime Clerk LLC as claims agent. The U.S. Trustee for Regions 3 and 9 appointed an official committee of tort claimants on March 4, 2021. The tort committee is represented by Caplin & Drysdale, Chartered, and Campbell & Levine, LLC. Province, LLC, and Axlor Consulting, LLC serve as the tort committee's financial advisor and consultant, respectively. Roger Frankel serves as the legal representative for future personal injury claimants. The FCR tapped Togut, Segal & Segal, LLP, Burr & Forman, LLP and Frankel Wyron, LLP as bankruptcy counsels; Anderson Kill, PC as special insurance counsel; Archer & Greiner, P.C. as New Jersey counsel; and Province, LLC as financial advisor. The FCR also tapped the services of economic expert, Berkeley Research Group, LLC. On May 11, 2021, the court appointed M. Jacob Renick as the fee examiner in this Chapter 11 case. The examiner tapped Godfrey & Kahn, SC as legal counsel. DBMP LLC: Saint-Gobain Sued Over Texas Two-Step Bankruptcy Tactic ----------------------------------------------------------------- Steven Church of Bloomberg News reports that industrial glassmaker Cie de Saint-Gobain was accused in a new lawsuit of fraudulently moving around its assets to avoid paying people harmed by asbestos, a cancer-causing substance used by an American affiliate of the company. A committee of asbestos victims filed the case as part of the bankruptcy of DBMP, a shell company created by Saint-Gobain and its U.S. building materials unit, CertainTeed. In the lawsuit, the committee accuses Saint-Gobain of setting up DBMP to insulate itself from liability claims by people who can prove they were harmed by the company's products. About DBMP LLC DBMP, LLC is a North Carolina limited liability company and the direct parent company of Millwork & Panel LLC, which manufactures vinyl siding and polyvinyl chloride (PVC) trim products for the construction market at facilities it owns in Claremont, N.C. and Social Circle, Ga. It is a defendant in tens of thousands of asbestos-related lawsuits pending in courts throughout the United States. DBMP sought protection under Chapter 11 of the Bankruptcy Code (Bankr. W.D.N.C. Case No. 20-30080) on Jan. 23, 2020. At the time of the filing, the Debtor disclosed assets of between $500 million and $1 billion and liabilities of the same range. Judge J. Craig Whitley presides over the case. The Debtor tapped Jones Day as bankruptcy counsel; Bates White LLC as consultant; Robinson, Bradshaw & Hinson, P.A. and Schiff Hardin LLP as special counsel; and Epiq Corporate Restructuring, LLC as claims, noticing and balloting agent. The Debtor also tapped Donlin, Recano and Company, Inc., to oversee the submission of personal injury questionnaires by claimants. The official committee of asbestos personal injury claimants appointed in the Debtor's case tapped Robinson & Cole, LLP and Caplin & Drysdale, Chartered as its bankruptcy counsel. Hamilton Stephens Steele Martin, PLLC is the committee's local counsel. The court approved the appointment of Sander L. Esserman as the future claimants' representative in the Debtor's case. Mr. Esserman tapped Young Conaway Stargatt & Taylor, LLP and Stutzman, Bromberg, Esserman & Plifka, a Professional Corporation, as his bankruptcy counsel. Alexander Ricks PLLC is the FCR's North Carolina counsel. EDWARD ZENGEL: Seeks to Hire AG Employment Law as Labor Counsel --------------------------------------------------------------- Edward Zengel & Son Express, Inc. seeks approval from the U.S. Bankruptcy Court for the Middle District of Florida to employ AG Employment Law, PLLC as its special labor counsel. AG Employment Law will render these legal services: (a) advise on labor and employment advisory matters; (b) draft employment policies; (c) advise on compliance matters; (d) answer pay and benefits questions arising under the Service Contract Act; (e) advise on employee medical leave and other leave requests; (f) advise on employment terminations and day-to-day employment issues; and (g) represent the Debtor in any employment related litigation that may arise. Amy Garrard, Esq., the main attorney in this engagement, will be paid at her hourly rate of $300, plus reimbursement of expenses incurred. Ms. Garrard 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: Amy L. Garrard, Esq. AG Employment Law, PLLC 1000 Tamiami Trail N., Suite 301 Naples, FL 34102 Telephone: (239) 984-9923 Facsimile: (610) 471-4370 About Edward Zengel & Son Express Edward Zengel & Son Express, Inc., a company in Fort Myers, Fla., filed its voluntary petition for relief under Chapter 11 of the Bankruptcy Code (Bankr. M.D. Fla. Case No. 22-00001) on Jan. 1, 2022, listing up to $500,000 in assets and up to $10 million in liabilities. Edward Zengel, Jr., president, signed the petition. The Debtor tapped Mike Dal Lago, Esq., at Dal Lago Law as legal counsel; AG Employment Law, PLLC as special labor counsel; and The Spires Group, PA as accountant. EDWARD ZENGEL: Seeks to Hire The Spires Group as Accountant ----------------------------------------------------------- Edward Zengel & Son Express, Inc. seeks approval from the U.S. Bankruptcy Court for the Middle District of Florida to employ The Spires Group, PA as its accountant. The Spires Group will render these services: (a) advise on financial advisory matters; (b) handle tax compliance filings; (c) prepare annual tax returns; (d) prepare and disburse payroll to the Debtor's employees; (e) prepare monthly operating reports; (f) compile and format data and analysis that are necessary and appropriate in this case; (g) prepare forecasts and budgets of the Debtor's operations and cash flows, as necessary; (h) assist the Debtor's counsel and any other professionals; and (i) other accounting related activities within the scope of this case as mutually agreed to between the parties. The firm will charge a monthly fee of $6,000 for its accounting services, plus reimbursement of expenses incurred. Erich Spires, CPA, an accountant at The Spires Group, 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: Erich Spires, CPA The Spires Group, PA 12734 Kenwood Lane Suite 25 & Suite 1 Fort Myers, FL 33907 Telephone: (239) 936-4336 Facsimile: (239) 936-4941 About Edward Zengel & Son Express Edward Zengel & Son Express, Inc., a company in Fort Myers, Fla., filed its voluntary petition for relief under Chapter 11 of the Bankruptcy Code (Bankr. M.D. Fla. Case No. 22-00001) on Jan. 1, 2022, listing up to $500,000 in assets and up to $10 million in liabilities. Edward Zengel, Jr., president, signed the petition. The Debtor tapped Mike Dal Lago, Esq., at Dal Lago Law as legal counsel; AG Employment Law, PLLC as special labor counsel; and The Spires Group, PA as accountant. EXCELLENCE 2000: Bid to Extend Date to File Chapter 11 Plan Denied ------------------------------------------------------------------ In this subchapter V proceeding, Excellence 2000, Inc. was ordered to file a plan of reorganization no later than December 27, 2021. Rather than filing a plan, however, Excellence 2000, Inc. filed on December 28 -- one day after the expiration of the statutory 90-day plan filing deadline in subchapter V cases -- an emergency motion to extend the deadline. Following a hearing on January 6, 2022, the Court denied the extension request. The Debtor is engaged in a dispute with the Texas Education Agency regarding ownership of two properties: 7803 Little York Road, Houston, Texas 77016 and 316 E Wheatland Road, Dallas, Texas 75241. Debtor's extension request rests on that dispute: "[w]hile the Debtor could file a plan, the plan will depend on ownership. If the State is not ultimately determined to own the Properties, then the plan may not and probably is not necessary." Judge Eduardo Rodriguez of the United States Bankruptcy Court for the Southern District of Texas, Houston Division, notes that the Debtor did not offer any evidence or witness testimony at the Hearing regarding the status of the Properties. Instead, the Debtor's counsel explained that "if the Court want[ed him] to file a plan, [he] could file a plan," but filing a plan may waste time of the parties in interest if the Court later found the Debtor was not the rightful owner of the Properties because the Properties are central to Debtor's plan. In closing, the Debtor's counsel stated that Dallas County filed a $1.1 million proof of claim for ad valorem taxes that the Debtor would need to address and requested that the Court take judicial notice of that claim. The Debtor's Motion is based on the active dispute between itself and the TEA over ownership of the Properties. While ownership of the Properties may not be within the Debtor's control, circumstances surrounding that matter certainly are within the Debtor's control, the Court noted. On November 1, 2021, the Debtor filed its Status Report. In compliance with paragraph 4(b) of the Court's September 29, 2021 order, the Debtor disclosed the TEA's allegation that the State of Texas is the rightful owner of the Properties and the Debtor's objection thereto was an anticipated complication to promptly proposing and confirming a plan. The Status Report also noted that the schools located on the Properties were closed by the TEA in August 2016 and the Debtor has not had access since the lockout. Thus, the Debtor has known at least since August 2016, but certainly since November 1, 2021, that there was an ownership dispute involving the Properties. The Debtor's Motion states that "Debtor has sent discovery request [sic] to the State of Texas and multiple banks" and that "Debtor is actively working on the ownership documents and status of the ownership of the Properties." Debtor's counsel represented the same at the Hearing. Yet, the Debtor provided no evidence of those requests, no evidence demonstrating when those requests were made, and no evidence demonstrating why this matter was unresolvable prior to the December 27, 2021 plan filing deadline, Judge Rodriguez points out. Moreover, by agreeing to continue the hearing to February 9, 2022, the Debtor was aware at the December 8, 2021 hearing that the ownership dispute would not be resolved before the plan filing deadline. Nevertheless, the Debtor waited until one day past the deadline to file its Motion on an emergency basis, providing no explanation for its failure to file the Motion before Section 1189(b)'s deadline. Instead, the Debtor's counsel represented to the Court that while working on the plan, he realized that the ownership of the Properties would determine what happens. Although that may be true, the Debtor's counsel never explained why it took him until one day after the 90-day filing deadline to come to that realization when he was aware of the TEA's claim at least 56 days before the plan was due. Because the Debtor failed to provide any evidence demonstrating why the ownership dispute could not be resolved before the plan filing deadline or why its Motion was untimely filed despite knowledge of the dispute well in advance of the plan filing deadline, the Court said the Debtor has not demonstrated that the circumstances necessitating an extension were outside its control. The Debtor's counsel represented to the Court that he had been working on a plan but produced no evidence of that plan at the evidentiary hearing on the Debtor's Motion. Absent any evidence of the draft, the Court said it cannot determine whether and to what extent progress was made in drafting a plan. The Debtor's Motion states that "a plan may not and probably is not necessary" if it is determined that the State of Texas is the rightful owner of the Properties. Yet, the Debtor's counsel represented to the Court that he had been working on a plan and could file a plan if the Court wanted him to do so. Filing a plan before the 90-day deadline is what the Bankruptcy Code compels, not what "the Court wants" the Debtor to do, Judge Rodriguez said. If, as stated in the Motion and represented by the Debtor's counsel, the Debtor could have filed a plan, then there really were no deficiencies that prevented filing of the plan prior to the December 27 deadline. The Debtor's own admission that it could have filed a plan prevents the Court from finding that the alleged plan deficiencies related to the ownership dispute over the Properties prevented the plan from being timely filed. Regardless, the Debtor offered no evidence at the Hearing of the progress made in drafting a plan or the deficiencies preventing finalization and filing of the plan as prescribed by Section 1189(b). Three other parties appeared at the January 6, 2022 hearing on the Debtor's Motion: the TEA, the subchapter V trustee, and the United States Trustee. The subchapter V trustee announced her support for an extension. The TEA initially took no position on an extension, but later noted that if the plan relies on the Properties, then the time to file should be extended. The United States Trustee also announced its support for an extension. Judge Rodriguez held that although the Court finds it has discretion to consider the Debtor's late filed Motion and grant retroactive relief if merited, the Debtor failed to file a properly supported Motion to Extend, resulting in only one of three of the Baker factors being satisfied. Therefore, the Debtor has not met its evidentiary burden in demonstrating that the need for the extension is attributable to circumstances for which the Debtor should not justly be held accountable. A full-text copy of the Memorandum Opinion dated January 18, 2022, is available at https://tinyurl.com/34n5cmzn from Leagle.com. About Excellence 2000 Inc. Excellence 2000, Inc. filed its voluntary petition for Chapter 11 protection (Bankr. S.D. Texas Case No. 21-33136) on Sept. 27, 2021, listing up to $50 million in assets and up to $500,000 in liabilities. Sherwin Allen, president of Excellence 2000, signed the petition. Judge Eduardo V. Rodriguez presides over the case. Reese Baker, Esq., at Baker & Associates represents the Debtor as legal counsel. EXTERRAN ENERGY: S&P Places 'B+' ICR on CreditWatch Positive ------------------------------------------------------------ S&P Global Ratings placed all of its ratings on midstream energy company Exterran Energy Solutions L.P., including its 'B+' issuer credit rating, on CreditWatch with positive implications reflecting its view that all of Exterran's debt will be repaid upon transaction close. S&P expects to resolve the CreditWatch listing following the completion of the transaction. Midstream energy company Exterran Energy Solutions L.P. (Exterran) announced that its parent, Exterran Corp., has agreed to be acquired by Enerflex Ltd. for about $735 million. The CreditWatch placement follows the company's announcement that Enerflex Ltd., a Canadian midstream energy company with a global presence, signed an agreement to acquire Exterran Corp. in an all-share transaction. The companies expect the transaction to close in the second or third quarter of 2022 subject to customary closing conditions, including regulatory approvals. The all-stock transaction values Exterran Corp. at about $735 million. Under the transaction, S&P expects Enerflex to exchange 1.021 of its common shares for each share of Exterran. Upon the close of the acquisition, Enerflex expects to refinance all of Exterran's debt with a new capital structure using a committed $925 million bridge facility. The CreditWatch positive placement reflects the likelihood that Exterran's debt will be repaid upon the close of the transaction, assuming it is completed as proposed and there are no material changes to our current operating assumptions. Therefore, S&P expects to resolve the CreditWatch placement following the completion of the acquisition, which is expected in the second or third quarter of 2022. FIGUEROA MOUNTAIN: Court OKs 12th Cash Collateral Stipulation ------------------------------------------------------------- Judge Martin R. Barash of the U.S. Bankruptcy Court for the Central District of California approved the tenth stipulation between Figueroa Mountain Brewing, LLC, on the one hand, and secured creditors, White Winston Select Asset Funds, LLC and SCS Acquisition LLC (as successor in interest to Montecito Bank & Trust), on the other hand. Accordingly, the Debtor is au thorized to use cash collateral, on a final basis, to pay for the expenses set forth in the budget, with a 15% variance through the earlier of (a) March 13, 2022, or (b) the date on which the Debtor's cash on hand falls below the Cash Floor initially set at $698,865. If the Debtor's cash on hand falls below the Cash Floor, then John Carpenter of Openso Consulting will be permitted to perform a physical inventory and inspection of the Debtor's premises at his earliest availability during regular business hours, with all Openso fees for such services and its incurred travel and other expenses, if any, paid by the Debtor. The Debtor is authorized to use cash collateral to pay such fees and expenses. By no later than January 28, 2022, the Debtor will provide to the Secured Creditors the following reconciliations: (i) a reconciliation of the $516,000 for accrued postpetition taxes on page 2 of the December 17, 2021 Monthly Operating Report, including the types of taxes that are included in the $516,000, the amount of each tax due, the original due date for each such tax, and any extensions providing by any taxing authority; and (ii) a reconciliation of the $1,866,403 of postpetition accounts payable on the MOR as compared to the 57th weekly report, which shows substantially less in accrued accounts payable. The Secured Creditors will continue to receive replacement liens in post-petition collateral, as adequate protection, pursuant to the terms of the 12th Stipulation. A copy of the order is available for free at https://bit.ly/3nXDzgP from PacerMonitor.com. About Figueroa Mountain Brewing LLC Founded in 2020, Figueroa Mountain Brewing, LLC -- https://www.figmtnbrew.com/ -- is in the business of manufacturing beer with principal place of business in Buellton, Calif. Figueroa Mountain Brewing sought protection under Chapter 11 of the Bankruptcy Code (Bankr. C.D. Cal. Case No. 20-11208) on Oct. 5, 2020. Jaime Dietenhofer, the company's manager, signed the petition. At the time of filing, the Debtor had estimated assets of between $1 million and $10 million and liabilities of the same range. Judge Martin R. Barash oversees the case. Lesnick Prince & Pappas LLP is the Debtor's legal counsel. FIVETOWER LLC: Unsecureds' Recovery Hiked to 18% in Plan -------------------------------------------------------- FiveTower, LLC, submitted a Third Amended Subchapter V Chapter 11 Plan of Reorganization dated Jan. 24, 2022. On August 2, 2021, this Subchapter V, Chapter 11 reorganization became necessary to stabilize FiveTower's operations in light of its inability to settle or satisfy the judgment in the State Court Case. As of this date, FiveTower has resumed its foreign back office operations on a limited basis and with very limited personnel, both in Kiev and in Miami. The fact is FiveTower has continued to serve small business, employ staff and propose a confirmable amended Plan under adverse circumstances reflects on its integrity despite obstacles. The Plan includes reasonable back-stops to assure the creditors, the estate and the Court that the Plan, as filed, is feasible and will not lead to liquidation. In the end, the Debtor's Small Business Reorganization Subchapter V Chapter 11 Plan seeks to not only protect its own small business, which generates jobs and revenue here in South Florida, but all the small merchant customers who have for years relied upon the solid and respectable business model of FiveTower to keep their modest businesses afloat. In sum, the Plan provides creditors with assurances that they will receive payment within a short period of time after the Plan is confirmed. The alternative, liquidation, will provide very little, if anything to the creditors. More importantly, any payment to creditors in a liquidation scenario will not materialize for a long period, likely over a year, during which time the professionals will necessarily expend the limited resources in furtherance of their fiduciary obligations. Class 1 consists of General Unsecured Claims. This class shall receive approximately 18% of their combined Allowed Claim through sixty monthly payments. In addition to the (a) pro-rata distribution of $235,000 set forth in the Cash Flow Analysis; (b) the additional pro-rata distribution of $60,000 Avoidance Claim Substitution Payment; this class shall receive (c) its pro-rata distribution in cash of $50,000 reallocated from Plan Funding Assurance on the Effective Date. This class is impaired by the Plan and its members are entitled to vote. Class 3 consists of General Unsecured Convenience Class Claims. Any Unsecured Claim under $20,000, exclusive of interest; provided, however, that an Unsecured Convenience Class Claim does not include a Claim of a former or current employee, officer, director, or independent contractor of the Debtor; or a claim on account of a judicial, administrative, or other legal action or proceeding against the Debtor commenced on or before the Petition Date or during the Chapter 11 case. In addition to the (a) pro-rata distribution of $235,000 set forth in the Cash Flow Analysis; (b) the additional pro-rata distribution of $60,000 Avoidance Claim Substitution Payment; this class shall receive (c) its pro-rata distribution in cash of $50,000 reallocated from Plan Funding Assurance on the Effective Date. The eligible Unsecured Convenience Class Claim members shall receive their percentage share equal to the recovery of Class 1 General Unsecured Claimants (18%) within 60 days of the Effective Date of the Plan. This class is impaired. The Debtor will fund the Plan with funds from its continued operations, including amounts collected from its accounts receivables, cash in hand on the Effective Date. Debtor shall dedicate a portion of its operations and other receivables for funding the plan such that sufficient funds for disbursement of all Allowed Claims in Classes 1 and 3 are available on the Effective Date. If the Plan is confirmed, the sum 50,000 in cash will be reallocated and available on the Effective Date for immediate distribution to Classes 1 and 3. As of the Confirmation Date the Debtor shall have funds available in escrow with counsel in a sum equal to at least three months of payments to unsecured creditors and additional lines of credit through its principal to guarantee timely performance and payments of its obligations throughout the Plan. A full-text copy of the Third Amended Subchapter V Plan dated Jan. 24, 2022, is available at https://bit.ly/3IGUgor from PacerMonitor.com at no charge. Counsel to Chapter 11 Debtor: Aleida Martinez Molina, Esq. AXS LAW GROUP, PLLC 2121 NW 2nd Avenue, Suite 201 Miami, Florida 33127 Tel: (305) 297-1878 E-mail: Aleida@axslawgroup.com About FiveTower LLC FiveTower is a boutique Merchant Cash Advance company that facilitates and services funding to small businesses that are primarily subprime borrowers that do not qualify for traditional financing. FiveTower, LLC, sought Chapter 11 protection (Bankr. S.D. Fla. Case No. 21-17617) on Aug. 2, 2021, disclosing up to $1 million in assets and up to $10 million in liabilities. Judge Laurel M. Isicoff oversees the case. The Debtor tapped Aleida Martinez Molina, Esq., at AXS Law Group, PLLC as bankruptcy counsel; Markowitz Ringel Trusty & Hartog, PA and Richard P. Joblove, P.A. as special counsel; Dinnall Fyne & Co. as financial advisor; and Pinchasik Yelen Muskat Stein, LLC as accountant. FLOOR-TEX: Wins Cash Collateral Access Thru Feb 22 -------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of Texas, Houston Division, has authorized Floor-Tex Commercial Flooring, LLC to use cash collateral on an interim basis and pay prepetition materials and supplies. The Debtor is permitted to use its cash collateral subject to the terms and conditions set forth in the Interim Order for necessary business expenses incurred in the ordinary course of business in the categories and amounts listed in the budget until the final hearing on use of cash collateral. The final hearing is scheduled for February 22, 2022 at 2 p.m. The Cash Collateral Lenders will continue to have the same liens, encumbrances and security interests in the cash collateral generated or created post filing, plus all proceeds, products, accounts, or profits thereof, as existed prior to the filing date. The Debtor will provide to the Cash Collateral Lenders copies of all insurance policies, and continue to keep all collateral of the Cash Collateral Lenders fully insured against all loss, peril and hazard. The Debtor will pay to Westwood Funding Solutions, LLC, the amount of $2,000 during the time period for the projected budget and such payment will be made based on instructions for payment to be provided by counsel for Westwood. Westwood objects to its characterization as a lender in the Motion and the Order and reserves all rights with respect to a determination of the nature of its transaction with the Debtor and the extent and nature of its security interest. The Debtor will pay to Fresh Funding Solutions, LLC, the amount of $1,000 during the time period for the projected budget and such payment will be made based on instructions for payment to be provided by counsel for Fresh. Fresh also objects to its characterization as a lender in the Motion and the Order and reserves all rights with respect to a determination if the nature of its transaction with the Debtor and the extent and nature of its security interest. The Debtor will pay to Vox Funding, LLC, the amount of $1,200 during the time period for the projected budget and such payment will be made based on instructions for payment to be provided by counsel for Vox. Vox objects to its characterization as a lender in the Motion and the Order and reserves all rights with respect to a determination if the nature of its transaction with the Debtor and the extent and nature of its security interest. The Debtor may also pay any pre-petition amounts to subcontractors or vendors that are included in payments to the Debtor in order to obtain lien waivers, to prevent liens on construction jobs, and to maintain the ability to continue to work on construction job. A copy of the order is available at https://bit.ly/3r4aamX from PacerMonitor.com. About Floor-Tex Commercial Flooring, LLC Floor-Tex Commercial Flooring, LLC specializes in residential and commercial flooring contracting. The Debtor sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. S.D. Tex. Case No. 21-33751) on November 19, 2021. In the petition signed by Doris Springer, chief executive officer, the Debtor disclosed up to $10 million in assets and liabilities. Judge Eduardo V. Rodriguez oversees the case. Reese Baker, Esq., at Baker and Associates is the Debtor's counsel. FLUOROTEK USA: Exclusivity Period Extended to Feb. 11 ----------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of Florida extended the exclusivity period for Fluorotek USA, Inc. to file a Chapter 11 plan to Feb. 11. The company can solicit acceptances for the plan until April 12. About Fluorotek USA Inc. Fluorotek USA, Inc., a Riveria Beach, Fla.-based manufacturer of rubber products, filed its voluntary Chapter 11 petition (Bankr. S.D. Fla. Case No. 21-16236) on June 25, 2021, listing $4,171,101 in assets and $7,061,033 in liabilities. David J. Helbi, chief operating officer, signed the petition. Judge Mindy A. Mora oversees the case. Nardella & Nardella, PLLC and John F. Costello C.P.A. P.A. serve as the Debtor's legal counsel and accountant, respectively. FOLEY PRODUCTS: Moody's Assigns First Time B2 Corp. Family Rating ----------------------------------------------------------------- Moody's Investors Service assigned a first time B2 corporate family rating and B2-PD probability of default rating to Foley Products Company, LLC. Moody's also assigned a B2 rating to the new senior secured first lien credit facilities, including a $370 million term loan and $35 million revolving credit facility issued by Foley and FPC Holdco, LLC, Foley's direct parent, as co-borrowers. The rating outlook is stable. Concurrent with the new debt, Foley is receiving a $135 million of cash contribution from Oaktree Capital Management, L.P., a private equity firm, in the form of convertible preferred equity. Oaktree will have the right to control 37% shares in Foley through this investment. A substantial part of the term loan and the Oaktree investment will be paid to Foley's parent company, The Concrete Company, controlled by the founding family. A smaller part of the proceeds will be used to acquire five plants from Quikrete Holdings, Inc. (Ba3 stable) to expand Foley's operation outside of its historical core market in the US Southeast, and pay fees and expenses related to the transaction. "The B2 corporate family rating considers Foley's leading position in concrete pipes and precast concrete products in the US Southeast, its high margin, and the ability to generate positive free cash flow, which are counterbalanced with limited scale and geographic diversification," said Motoki Yanase, VP - Senior Credit Officer at Moody's. Moody's took the following actions: Assignments: Issuer: Foley Products Company, LLC Corporate Family Rating, Assigned B2 Probability of Default Rating, Assigned B2-PD Senior Secured First Lien Term Loan, Assigned B2 (LGD4) Senior Secured First Lien Revolving Credit Facility, Assigned B2 (LGD4) Outlook Actions: Issuer: Foley Products Company, LLC Outlook, Assigned Stable RATINGS RATIONALE The B2 CFR reflects Foley's leading position in concrete pipes for water infrastructure in the Southeast US; high profitability with EBITA margin in the high 20% range; track record of improving profitability along with scale over the past several years; the ability to generate free cash flow; and relatively restrained leverage around 4x pro forma for the proposed transaction. These credit strengths are counterbalanced with Foley's credit weaknesses, including its small scale operation that makes the company more vulnerable in the event of sudden shocks; limited geographic diversification that could increase vulnerability to regional economic swings; and execution risk to integrate the acquired plants and expand outside of historically core markets. Moody's expects Foley to have a good liquidity profile over the next 12 months, supported by positive free cash flow generation (excluding the one-time distribution for the proposed transaction) and an undrawn $35 million revolving credit facility. The company will have limited cash on hand, but Moody's expect liquidity to be supplemented by positive free cash flow that Foley will generate in the next 12 months and full availability of the revolver. The company's $35 million revolver expires in 2027 and the term loan expires in 2029. The revolver has a springing consolidated first lien secured leverage covenant of 6.71x, triggered at 35% utilization of the revolver. Moody's expect the company to maintain sufficient cushion under its covenant over the next 12 months. There are no financial covenants for the term loan. The term loan amortization is 1% a year. Most of the assets are fully encumbered by the senior secured credit facilities limiting alternative liquidity sources. The first lien revolver and the first lien term loan are rated B2, on-par with Foley's CFR since they account for a preponderance of obligation in the company's capital structure. Moody's views the convertible preferred equity held by Oaktree as 100% equity. for the environmental, social and governance (ESG) factors considered in the rating, Foley, as a family controlled business, has lower transparency than public companies with diverse shareholders and independent board of directors. This risk is somewhat mitigated by the family's track record of expanding the business through tack-in acquisitions without external debt and moderate initial leverage. As a founder-owned company that is making a transition, Foley also has key man risk. In addition, even though Oaktree Capital's ownership remains minority, the private equity sponsor could influence Foley's financial policy to drive further acquisitions and expand its business, and to favor shareholders' returns over creditors'. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS The stable outlook reflects Moody's expectation that Foley will continue to maintain high margins, generate positive free cash flow, and improve its leverage over the next 12-18 months. Moody's could upgrade Foley's ratings if operating performance sustainably exceeds Moody's forecasts, or the company pays down debt, realizing the following credit profile while maintaining a benign financial policy: - Debt/EBITDA below 4.0x for a sustained period of time - Maintain good liquidity - Achieve better geographic diversification along with operational growth Moody's could downgrade the ratings if Foley's operating performance falls below Moody's expectation, or the company adds further debt for acquisitions or shareholder returns, resulting in the following metrics: - Debt/EBITDA above 5.5x - EBITA/Interest expense is below 3.0x - The company's liquidity deteriorates As proposed, the new first lien term loans 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 $84 million and 100% EBITDA, plus unlimited amount so long as first lien net secured leverage ratio does not exceed 4.4x (if pari passu secured); senior secured net leverage does not exceed 4.9x for junior lien debt; and total net leverage does not exceed 4.9x or interest coverage of at least 2.0x for unsecured debt. - No incremental facilities 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 restricts investments by the borrower or restricted subsidiaries in a non-loan party to a cap of the greater of $29.4 million and 35% of consolidated EBITDA. - 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. The proposed terms and the final terms of the credit agreement may be materially different. Headquartered in Columbus, Georgia in the United States, Foley Products Company, LLC is a manufacturer of concrete pipes for sewage/culverts and precast concrete products mainly in the Southeastern region of the United States. Moody's expects the company to have $250 million revenue pro forma the Quikrete acquisition, based on the last twelve months ending November 2021. Oaktree Capital Management, L.P., a private equity sponsor, owns a 37% stake in Foley, and the remaining 63% is controlled by The Concrete Company and affiliates, a private company owned by the founding family. The principal methodology used in these ratings was Manufacturing published in September 2021. FOLEY PRODUCTS: S&P Assigns 'B' Rating on Acquisition by Oaktree ---------------------------------------------------------------- S&P Global Ratings assigned its 'B' issuer credit rating to U.S.-based concrete precast products producer Foley Products Co. and 'B' issue-level rating to the company's first-lien term loan. The stable outlook reflects S&P's view that despite increased debt, strong end-market tailwinds, and sustained profitability will result in adjusted leverage of 4x-5x in 2022. Risk associated with Foley's small scale and concentrated geographic footprint are somewhat offset by its strong position within these target markets, which enables it to pass through costs and drives its robust profitability. Foley has over 50% market share in the states of Georgia, Tennessee, and Alabama and in the Florida Panhandle region for its concrete pipe products, used for drainage, water management, and road infrastructure applications. This regional market position, along with lower freight costs due to an efficient distribution network, have allowed it to effectively pass through increased costs and consistently produce strong margins. With adjusted EBITDA margins at over 30% over the past few years, S&P views Foley's profitability as above average for the industry and peers. S&P said, "However, we believe the company faces stiff competition from large diversified national players such as Quikrete, Forterra, and OldCastle, as well as from other concrete substitute water infrastructure providers such as Advanced Drainage Systems Inc. With annual revenue of about $250 million (pro forma for the Quikrete acquisition), the company has a small scale and narrow product focus compared with peers. Further, while the Quikrete assets will improve its geographic exposure to regions other than the Southeast, about 70% of its revenue would still be concentrated in this region. We believe smaller and less diversified companies are more prone to volatility during periods of economic stress. "We expect Foley's performance to remain strong over the next 12 months, benefiting from increased infrastructure spending and a relatively high exposure to this end market to reduce cyclicality of its earnings and cash flows. While we expect new construction activity (both residential and non-residential), to remain robust over the next 12 months, the passage of the recent infrastructure bill adds further momentum to the demand for Foley's products. With increased investment in transportation and water infrastructure, primary areas of application for the company's products, we expect continued strong backlogs and sales' volumes to support mid-single-digit percent organic growth in revenue in 2022. Further, we expect the company to continue passing through input cost inflation such that it sustains EBITDA margins of 32%-34% over this period. "We regard public spending, a key demand driver for infrastructure end markets, as relatively stable and less correlated to housing and economic cycles. Since the company derives about 40% of its revenue from this end market, we believe the company's earnings and cash flows could possibly be less cyclical compared with peers that are more exposed to residential end markets. We expect adjusted leverage to be 4x-4.5x over the next 12 months, but an aggressive financial policy could weaken credit quality. The company's adjusted leverage of 4x-5x is less aggressive than with typical financial sponsor-backed companies. While the financial sponsor as a minority interest (about 37% stake), our view incorporates their ability to dictate Foley's strategy and cashflows. This could lead the company to adopt a more aggressive financial policy, such as pursuing debt-financed acquisitions or distributions, and result in a deterioration in credit measures. Further, continued elevated costs could pressure earnings and given the small earnings base, even a small underperformance could result in a quick deterioration in credit metrics. For instance, if earnings are 10% lower than our base case expectations, adjusted leverage could trend toward 5x. Nonetheless, the company generates annual free cash flows of $40 million-$50 million and EBITDA interest coverage of above 2x, which are some mitigating factors. "The stable outlook on Foley indicates our belief that robust demand conditions and the ability to sustain margins will offset the increased debt load, such that adjusted leverage is sustained at 4x-5x and EBITDA interest coverage is above 2x." S&P may lower its ratings over the next 12 months if: -- Business conditions materially weakened and adjusted EBITDA declined by more than 40%, such that adjusted leverage rose above 7x or EBITDA interest coverage fell below 2x, on a sustained basis. Such a scenario could materialize in case of a severe downturn, drastically reducing demand for the company's products or higher-than-expected inflation that cannot be passed on compresses margins by more than 5%; -- The company undertook an aggressive financial policy--for instance, using debt to fund distributions or acquisitions--resulting in elevated credit ratios; or -- S&P assessed increased redemption risk associated with the preferred equity contributed by the sponsors, and it viewed it as a debt-like obligation. S&P view an upgrade over the next 12 months as unlikely because of the company's small size and its controlling interest by a private-equity firm. However, S&P could raise the rating if: -- The company materially enhanced its scale and competitive position while sustaining adjusted leverage of under 4x; and -- S&P believed the owners were committed to maintaining leverage at this level. ESG credit indicators: E-2 S-2 G-3 S&P said, "Governance is a moderately negative consideration in our credit rating analysis of Foley. Our assessment of the company's financial risk profile as highly leveraged reflects corporate decision-making that prioritizes the interests of the controlling owners, in line with our view of most rated entities owned by private-equity sponsors. Our assessment also reflects its generally finite holding periods and a focus on maximizing shareholder returns." FOREST PARK: Case Summary & 20 Largest Unsecured Creditors ---------------------------------------------------------- Debtor: Forest Park Apartments, LLC 2309-11 Sixth Street New Orleans, LA 70115 Business Description: Forest Park Apartments is primarily engaged in renting and leasing real estate properties. Chapter 11 Petition Date: January 27, 2022 Court: United States Bankruptcy Court Eastern District of Louisiana Case No.: 22-10085 Judge: Hon. Meredith S. Grabill Debtor's Counsel: Frederick L. Bunol, Esq. THE DERBES LAW FIRM, LLC 3027 Ridgelake Drive Metairie, LA 70002 Tel: (504) 837-1230 Fax: (504) 832-0327 Email: fbunol@derbeslaw.com Estimated Assets: $1 million to $10 million Estimated Liabilities: $1 million to $10 million The petition was signed by Joshua Buno as manager. A full-text copy of the petition containing, among other items, a list of the Debtor's 20 largest unsecured creditors is available for free at PacerMonitor.com at: https://www.pacermonitor.com/view/RIEIGAY/Forest_Park_Apartments_LLC__laebke-22-10085__0001.0.pdf?mcid=tGE4TAMA FOUNDATION FOR IUP: S&P Cuts 2007A Revenue Bonds Rating to 'B' -------------------------------------------------------------- S&P Global Ratings lowered its long-term rating on Pennsylvania Higher Educational Facilities Authority's series 2007A (phase II) revenue bonds, issued for the Foundation for Indiana University of Pennsylvania (FIUP) to 'B' from 'B+'. The outlook is negative. "The downgrade reflects another year of significant enrollment declines at the university that led to occupancy at about 69% in fall 2021 and projected coverage of about 0.9x for fiscal 2022," said S&P Global Ratings credit analyst Sean Wiley. S&P said, "Given the existing debt service schedule, combined with our belief that the university will likely not increase enrollment, we do not expect that the project will be able to operate at or near break-even. The project still has a substantial amount of reserves that will allow it to continue to make debt service payments over the next few years given current occupancy. However, absent significant increases in occupancy or a debt restructuring, we believe the project will ultimately exhaust its reserve funds and not make its debt service obligations at some point in the future. Additionally, given that the project is in technical default for covenant violations and failure to replenish the reserves, the project also faces the risk of acceleration, which could result in a default depending on the project's ability to pay funds." The negative outlook reflects S&P's view that the project could face further rating pressure if its occupancy continues to decline or if reserve levels deteriorate more than anticipated. FOUNDATION FOR IUP: S&P Lowers 2008 Revenue Bonds Rating to 'CCC' ----------------------------------------------------------------- S&P Global Ratings lowered its long-term rating to 'CCC' from 'B-' on Pennsylvania Higher Educational Facilities Authority's series 2008 (phase III) revenue bonds, issued for the Foundation for Indiana University of Pennsylvania (FIUP). The outlook remains negative. "The two-notch downgrade reflects another year of significant enrollment declines at the university that led to occupancy of about 65% in fall 2021 and projected coverage of about 0.8x," said S&P Global Ratings credit analyst Sean Wiley. "Given the existing debt service schedule, combined with our belief that the university will likely not increase enrollment, we do not expect that the project will be able to operate at or near break-even during the outlook period." The project maintains reserves that will allow them to continue to make debt service payments over the next few years given current occupancy. The negative outlook reflects S&P's view that the project could face further rating pressure if the project's occupancy continues to decline or if reserve levels deteriorate further than anticipated. FRUTTA BOWLS: Feb. 24 Plan & Disclosure Hearing Set --------------------------------------------------- On Jan. 21, 2022, debtor Frutta Bowls Franchising, LLC filed with the U.S. Bankruptcy Court for the District of New Jersey a Small Business Plan and Disclosure Statement. On Jan. 24, 2022, Judge Michael B. Kaplan conditionally approved the Disclosure Statement and ordered that: * February 17, 2022 is fixed as the last day for filing and serving written objections to the Disclosure Statement and confirmation of the Plan. * February 17, 2022 is fixed as the last day for filing written acceptances or rejections of the Plan. * February 24, 2022 at 10:00 a.m. at the United States Bankruptcy Court, District of New Jersey, 402 East State Street, Trenton, New Jersey 08608, in Courtroom 8 is the hearing for final approval of the Disclosure Statement (if a written objection has been timely filed) and for confirmation of the Plan. A copy of the order dated Jan. 24, 2022, is available at https://bit.ly/3G3BCpm from PacerMonitor.com at no charge. About Frutta Bowls Franchising Frutta Bowls Franchising is a fast-casual franchise committed to becoming an active lifestyle brand within every local community. Frutta Bowls filed a voluntary Chapter 11 petition (Bankr. D.N.J. Case No. 19-13230) on Feb. 15, 2019, listing under $1 million in both assets and liabilities. The case is assigned to Judge Michael B. Kaplan. Spadea Lignana is the Debtor's counsel. A committee of unsecured creditors was appointed in the Debtor's case. Porzio, Bromberg & Newman, P.C., is the committee's counsel. FRUTTA BOWLS: Sale, Malpractice Suit to Fund Trustee's Plan ----------------------------------------------------------- Andrea Dobin, the Chapter 11 Trustee for Frutta Bowls Franchising, LLC, submitted a Plan and a Disclosure Statement for Frutta Bowls. According to information provided to the Chapter 11 Trustee, Frutta Bowls, LLC ("Bowls"), an entity owned by B. Gagliano, licensed the Debtor certain intellectual property utilized by the franchisees, including a system relating to the establishment, development and operation of Frutta Bowls businesses including certain know-how, trade secrets, copyrighted material (registered or unregistered) and trademarks, including the service mark "Frutta Bowls" design (U.S. Reg. No. 5184834), word mark, "Frutta Bowl" (Serial No. 87593542 – application pending), and word mark "This is How I Frutta" (Serial No. 87574888 – application pending) and other unregistered trade names, trademarks, service marks, logos, trade dress, commercial symbols and proprietary rights (collectively, "IP"). Once the Chapter 11 Trustee was appointed, it became clear that the sale of the Debtor's business and assets was the only viable option for any prospect of filing a Plan as the current owners had walked away from the business. Through FBH Investments, LLC's designee, Frutta Bowls Franchisor, LLC ("Stalking Horse"), the Chapter 11 Trustee negotiated and executed the Agreement of Sale ("Agreement") on Nov. 17, 2020. All interested parties insisted that the sale be consummated by Dec. 31, 2020. The Chapter 11 Trustee filed a Motion to approve the sale on Nov. 18, 2020 and bidding procedures on Nov. 20, 2020. On Dec. 17, 2020, the Chapter 11 Trustee conducted an auction sale. The Stalking Horse increased its offer to $580,000. After bidding between 2 other bidders, including the party making the First Offer, Restaurant Co., LLC d/b/a Saladworks ("Purchaser") was the highest and best bidder at $675,000, plus the additional consideration for the accounts receivable. The sale consummated by the Purchaser on December 28, 2020. The total sale proceeds were $692,878.78 (the "Sale"). Throughout the course of the Debtor's bankruptcy case, information was gathered by the Debtor's and Committee's professionals, and then also by the Chapter 11 Trustee, relating to potential claims against the Debtor's former franchising counsel. Upon the Chapter 11 Trustee's appointment, the Committee worked closely with the Chapter 11 Trustee to assist with identifying experienced franching counsel and engaging such counsel to pursue these claims. On Feb. 11, 2021, the Chapter 11 Trustee retained AY Strauss, LLC ("AY") as her special counsel to pursue malpractice litigation against Eric Melzer, Esq. and his employer, Berkowitz Lichtstein Kuritsky, Giasullo & Gross, LLC, for alleged faulty advice provided with respect to the franchise process ("Malpractice Litigation"). Pre-petition, this advice had led to the Debtor's being threatened with suit, necessitating the bankruptcy filing. AY Strauss was authorized to be retained by Order entered February 19, 2021, on a contingency basis of 25% percent of the gross recovery if the matter was resolved prior to commencing litigation, or thirty-three and 1/3 (33%) percent of the gross recovery and reimbursement of expenses if the matter proceeded to litigation. Pre-litigation efforts to settle the claim were unsuccessful. On August 31, 2021, the Chapter 11 Trustee's Special Counsel filed the Malpractice Litigation, pending in the United States District Court for the District of New Jersey at Case No. 21-16329 (FLW)(LGH). On November 9, 2021, the defendants in the Malpractice Litigation filed their Answer to the Chapter 11 Trustee's Complaint. Under the Plan, Class 1 General Unsecured Claims total $9,910,000. Allowed Class 1 Claims will be paid a pro rata portion of the Available Cash in the Trust. Class 1 is impaired. The Plan will be funded from cash on hand and any funds in connection with the Malpractice Litigation. For the avoidance of doubt, Class 1 claims will be funded by any remaining cash held by the Chapter 11 Trustee after payment of the Administrative Expenses and Priority Tax Claims. These funds shall be held in escrow by the Chapter 11 Trustee or Trust, which have been earmarked for distribution to Holders of Allowed General Unsecured Claims and will on the Effective Date be turned over to the Plan Administrator. Attorneys for Andrea Dobin, Chapter 11 Trustee: Andrea Dobin, Esq. Michele M. Dudas, Esq. MCMANIMON, SCOTLAND & BAUMANN, LLC 427 Riverview Plaza Trenton, NJ 08611 Tel: (609) 695-6070 E-mail: adobin@msbnj.com mdudas@msbnj.com A copy of the Disclosure Statement dated Jan. 21, 2021, is available at https://bit.ly/3nQw9Me from PacerMonitor.com. About Frutta Bowls Franchising Frutta Bowls Franchising is a fast-casual franchise committed to becoming an active lifestyle brand within every local community. Frutta Bowls filed a voluntary Chapter 11 petition (Bankr. D.N.J. Case No. 19-13230) on Feb. 15, 2019, listing under $1 million in both assets and liabilities. The case is assigned to Judge Michael B. Kaplan. Spadea Lignana is the Debtor's counsel. A committee of unsecured creditors was appointed in the Debtor's case. Porzio, Bromberg & Newman, P.C., is the committee's counsel. GENESIS HEALTHCARE: Unsecured Claims to Get 100% in Plan -------------------------------------------------------- Genesis Healthcare Institute LLC submitted a Third Amended Chapter 11 Subchapter V Plan of Reorganization. Since the Petition Date, and through Nov. 30, 2021, the estimated monthly net profit of the Debtor is slightly more than $28,000 per month which has significantly exceeded earlier projection. The Debtor is current or substantially current on all postpetition liabilities. The Plan of under chapter 11 of the Bankruptcy Code proposes to pay creditors of Genesis Healthcare Institute, LLC, from net cash flow from operations of the Debtor for a 3-year period. The Debtor estimates that all administrative, secured, priority claims and creditors holding allowed unsecured claims will receive distributions, which the Debtor has estimated at approximately 100%. The Debtor will begin paying non-priority unsecured creditors in Class 3 after Administrative claims, Class 1 and Class 2 have been paid in full. The Debtor will begin paying non-priority unsecured creditors in Class 4 after Class 3 has been paid in full. The Plan will treat claims as follows: Class 3 Non-priority unsecured creditors of Non-Insiders will begin receiving distributions under the Plan after Administration claims, Class 1 and Class 2 have been paid in full. This class is comprised of: IRS: $16,752 Warrenville: $125,000 PTMJ, Inc: $3,525 ----------- Total: $145,277 Class 3, which is impaired, will be paid on a quarterly basis. As part of its settlement with Warrenville, within 14 days of the Effective Date, each of the creditors in this class shall receive a payment equal to 28% of their allowed claim. It is anticipated the gross amount of this payment will be approximately $40,677.42 pro rata. Thereafter, a fixed amount equal to $26,491 quarterly will be paid pro rata and pari passu as follows: IRS: $3,007.25 Warrenville: $22,849.00 PTMJ: $634.50 Class 4 - Non-priority unsecured creditors of Insiders will not receive any distributions until all prior classes and Administrative claims are paid in full. To the extent the Debtor is unable to pay 100% to this class of creditors, this class will receive an amount equal to the Disposable Income of the Reorganized Debtor after payment in full of all prior classes and Administrative claims. Class 4 claims are as follows: Von Garcia: $7,532 Renzl Catignas: $3,000 Michelle Asbury: $5,538 Geogie Cordero: $7,692 M. Elena Catignas: $52,466 Corazon Cordero: $24,362 Encarnacion Hedriana: $116,000 --------- Total: $216,591 The Plan will be funded by the cash on hand and net Disposable Income of the Debtor following the Effective Date of the Plan. Attorney for the Debtor: Konstantine Sparagis, Esq. Law Offices of Konstantine Sparagis, P.C. 900 W. Jackson Blvd., Ste. 4E Chicago, IL 60607 Tel: (312) 753-6956 E-mail: gus@konstantinelaw.com A copy of the Disclosure Statement dated Jan. 21, 2021, is available at https://bit.ly/3GUcjHj from PacerMonitor.com. About Genesis Healthcare Genesis Healthcare Institute, LLC, is a provider of short-term post-acute, rehabilitation, skilled nursing and long-term care services. As of January 2017, Genesis operates approximately 500 skilled nursing centers and assisted/senior living residences in 34 states across the United States. Genesis Healthcare sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. N.D. Ill. Case No. 21-00245) on Jan. 9, 2021. In the petition signed by Corazon Cordero, member-manager, the Debtor disclosed up to $500,000 in both assets and liabilities. The Law Office of Konstatine Sparagis serves as the Debtor's counsel. GEO GROUP: S&P Lowers ICR to 'CCC' as Debt Exchange Risks Increase ------------------------------------------------------------------ S&P Global Ratings lowered its issuer credit rating on The GEO Group Inc. to 'CCC' from 'CCC+' and its rating on the senior secured credit facility to 'B-' from 'B'. S&P also affirmed its 'CCC' rating on the company's unsecured debt and raised the recovery rating to '4' from '5'. It partially reflects its expectation that the company's EBITDA decline will not be as severe as previously expected in our recovery analysis. The negative outlook reflects the risk of a distressed exchange offer or redemption over the next year. S&P said, "We expect GEO to engage in a distressed debt restructuring transaction before spring 2023. The company hired advisors in 2021 to explore capital structure alternatives considering its large $1.8 billion debt maturity wall in 2024 and its uncertain access to capital markets. In a January 2022 SEC filing, GEO disclosed the terms of comprehensive debt restructuring proposals made by the company and its lenders. While GEO has not yet agreed to terms with its lenders, we believe the discussions are ongoing and will likely result in a transaction before its nearest debt maturity in April 2023. "Under our criteria, we could view a transaction as distressed if lenders receive less value than the promise of the original securities without adequate offsetting compensation. We understand that neither the lenders nor GEO have proposed a subpar exchange; however the proposed transaction terms feature some elements that we deem distressed." These include: -- The ranking of the existing 2026 notes and any nonparticipating noteholders is effectively altered to more junior because participating unsecured noteholders receive a second lien on collateral; -- The new debt's maturity extends beyond the original; and -- The timing of payments for existing revolving credit lenders is slowed. The extent of any offsetting compensation in the form of a higher interest rate on the new debt is uncertain. GEO's solid operating performance and significant cash position support its negotiating leverage with lenders and near-term liquidity. S&P forecasts the company will build liquidity over the next 12 months, which should help with debt restructuring negotiations with lenders. Through solid cost control, strong utilization volumes, asset sales, and reductions in both growth capital expenditures and dividends, the company has built its liquidity position to $560.7 million as of Sept. 30, 2021, including its $537.1 million cash balance (of which $162 million remains at unrestricted subsidiaries) and $23.6 million available under the $900 million revolver expiring May 2024. In December 2021, the company announced it would terminate its REIT status and become a taxable C corporation resulting in significant one-time tax charges estimated at approximately $100 million, $75 million of which is non-cash. However, the transition to a C corporation provides additional flexibility to allocate cash flow towards debt reduction. S&P forecasts at least $150 million in free operating cash flow generation in 2022; however, it beieves a liquidity shortfall in 2024 is likely absent a restructuring transaction due to GEO's large maturities and uncertain access to capital markets amid elevated environmental, social, and governance (ESG) concerns. The negative outlook reflects the risk of a distressed exchange offer or redemption over the next year. S&P said, "We could lower our ratings if we expect a payment default, distressed exchange or redemption will be announced within the next six months. "We could revise the outlook to stable or raise our rating if we believe the likelihood of a distressed exchange has declined. In this scenario, the company has addressed its 2024 debt maturities and we believe there is the potential to achieve a sustainable capital structure over the long term without below market debt repurchases or a distressed exchange." GIRARDI & KEESE: Erika Claims Ownership of Law Firm --------------------------------------------------- Lindsay Croni of Reality Blurb reports that Erika Jayne is reportedly claiming ownership of estranged husband Thomas Girardi's defunct law firm, Girardi Keese. Amid Thomas' bankruptcy cases and the $25 million lawsuit against the Real Housewives of Beverly Hills cast member, attorney Ronald Richards, who was previously working alongside the trustee assigned to the Girardi Keese bankruptcy, has offered an update on the ongoing legal drama Erika is facing. "[Erika Jayne] is seeking her legal fees from the Estate plus [monetary] damages. She claims zero responsibility for any of the losses including the $25 [million] she was given which is booked as money she owes the firm, yet she claims ownership of [Girardi Keese]," Ronald shared on January 22, noting that she, of course, "can't have it both ways." The following day, Ronald shared additional information, revealing that Erika recently filed a request, asking for the court to give her a jury trial amid her husband's bankruptcy cases. "Some further flavor on [Erika] Girardi's Friday night quiet attempt to file a claim in the Girardi Keese bk. The attached below status report shows she is seeking a jury trial and discovery. Tom is getting a non-discharge so there will be no community property left," Ronald wrote. As RHOBH fans well know, Erika has been dragged into a number of lawsuits against her husband, including a $2 million case filed against Thomas, accusing him of using settlement money he won for the widows and orphans of a 2018 plane crash in Indonesia to support his and Erika's over-the-top lifestyle. Although Erika has proclaimed her innocence throughout the legal hardships, a judge ruled in July 2021 that the family of a burn victim could go after her for the $11 million her husband is accused of stealing from them. The Real Housewives of Beverly Hills season 12 is expected to premiere on Bravo sometime later this 2022. About Girardi & Keese Girardi and Keese or Girardi & Keese was a Los Angeles-based law firm founded in 1965 by lawyers Thomas Girardi and Robert Keese. It served clients in California in a variety of legal areas. It was known for representing plaintiffs against major corporations. An involuntary Chapter 7 petition (Bankr. C.D. Cal. Case No. 20-21022) was filed in December 2020 against GIRARDI KEESE by alleged creditors Jill O'Callahan, Robert M. Keese, John Abassian, Erika Saldana, Virginia Antonio, and Kimberly Archie. The petitioners' attorneys: Andrew Goodman Goodman Law Offices, Apc Tel: 818-802-5044 E-mail: agoodman@andyglaw.com Elissa D. Miller, a member of the firm SulmeyerKupetz, has been appointed as Chapter 7 trustee for GIRARDI KEESE. The Chapter 7 trustee can be reached at: Elissa D. Miller 333 South Grand Ave., Suite 3400 Los Angeles, California 90071-1406 Telephone: (213) 626-2311 Facsimile: (213) 629-4520 E-mail: emiller@sulmeyerlaw.com An involuntary Chapter 7 petition was also filed against Thomas Vincent Girardi (Case No. 20-21020) on Dec. 18, 2020. The Chapter 7 trustee can be reached at: Jason M. Rund Email: trustee@srlawyers.com 840 Apollo Street, Suite 351 El Segundo, CA 90245 Telephone: (310) 640-1200 GIRARDI & KEESE: Erika Fights Motion to Surrender $750K Earrings ---------------------------------------------------------------- Julius Young of Fox News reports that Erika Jayne is responding to a motion from a bankruptcy trustee who asked the reality star to turn over a set of diamond earrings valued at $750,000. The pricey piece of jewelry was a gift from her estranged husband Thomas Girardi, whose law firm was shuttered amid a fraud investigation. The trustee claimed in new court documents filed Tuesday that Girardi bought the lavish jewelry in 2007 using funds skimmed from a trust account represented by his firm, Girardi Keese (GK), according to TMZ. The documents further allege the purchase was simply justified as "cost" on the account. Jayne filed for divorce from Girardi in November 2020. She and the lawyer had been married over 20 years. In August 2021, the trustee began liquidating assets held by Girardi Keese in a concerted effort to repay Girardi's creditors, and in following a paper trail, appeared to uncover the large purchase. However, an attorney for the "Real Housewives of Beverly Hills" cast member, 50, told Fox News Digital in a statement that the singer and actress "innocently" received the earrings from her ex and is being roped into the investigation for his alleged crimes. "I am disturbed by everyone jumping to conclusions about Erika, who is innocent, and trying to blame her for the actions of others," the statement from Jayne's lawyer, Evan Borges, says. "If the law matters, the trustee’s motion is completely out of bounds. Even based on the incomplete hearsay evidence filed with the motion, the trustee has no claim based on Erika innocently receiving a gift of earrings 15 years ago from her now-estranged and then-extraordinarily wealthy husband." Borges further states in a motion filed Wednesday that in order to maintain the "status quo" and as a token of "good faith," Jayne "will agree and has agreed to hold and not transfer or sell the earrings" and "will provide the earrings to a third-party escrow to be held in trust pending the trustee finishing her investigation." In the six-page motion, Borges argues that "Erika is completely innocent" and "not even the trustee alleges that Erika knew the source of funds that her wealthy husband used to buy her a gift of earrings 15 years ago (which replaced a prior set of earrings bought years prior to that). "Erika, a non-attorney who had no role in managing GK, should not have to be the one arguing for full investigations and discovery into what GK did in the past," the document adds. "The trustee seeks to blame Erika for events of 15 years ago at a law firm in which Erika had no part." Jayne and Girardi are accused of embezzling funds designated for victims of the 2018 Lion Air plane crash after Girardi represented the plaintiffs in a class-action suit against the airline. Fox News Digital obtained court documents in August that indicated Girardi's law firm was more than $100 million in debt, and an entertainment company owned by Jayne, EJ Global LLC, had allegedly received $25 million from Girardi, 82. In December 2020, the couple was hit with a lawsuit for failing to pay an $882,715 judgment. In a Hulu documentary, "The Housewife and the Hustler," which was released in June and centered on the couple’s alleged fraud and legal troubles, Girardi was shown in a deposition admitting he was broke. "At one point I had about $80 million or $50 million in cash," he said in September 2020. "That’s all gone. I don’t have any money. I also had a stock portfolio of about $50 million, and that’s all gone." The law firm was also approved for a $1.5 million Paycheck Protection Program loan on April 15, 2020, five months before Girardi claimed he ran out of money. Girardi has been plagued by health issues, including an Alzheimer’s and early dementia diagnosis that ultimately led to the once-esteemed litigator losing his law license in March. Girardi's family has claimed Girardi is also suffering from memory loss due to his age. Jayne has not been formally charged with any crimes. About Girardi & Keese Girardi and Keese or Girardi & Keese was a Los Angeles-based law firm founded in 1965 by lawyers Thomas Girardi and Robert Keese. It served clients in California in a variety of legal areas. It was known for representing plaintiffs against major corporations. An involuntary Chapter 7 petition (Bankr. C.D. Cal. Case No. 20-21022) was filed in December 2020 against GIRARDI KEESE by alleged creditors Jill O'Callahan, Robert M. Keese, John Abassian, Erika Saldana, Virginia Antonio, and Kimberly Archie. The petitioners' attorneys: Andrew Goodman Goodman Law Offices, Apc Tel: 818-802-5044 E-mail: agoodman@andyglaw.com Elissa D. Miller, a member of the firm SulmeyerKupetz, has been appointed as Chapter 7 trustee for GIRARDI KEESE. The Chapter 7 trustee can be reached at: Elissa D. Miller 333 South Grand Ave., Suite 3400 Los Angeles, California 90071-1406 Telephone: (213) 626-2311 Facsimile: (213) 629-4520 E-mail: emiller@sulmeyerlaw.com An involuntary Chapter 7 petition was also filed against Thomas Vincent Girardi (Case No. 20-21020) on Dec. 18, 2020. The Chapter 7 trustee can be reached at: Jason M. Rund Email: trustee@srlawyers.com 840 Apollo Street, Suite 351 El Segundo, CA 90245 Telephone: (310) 640-1200 GIRARDI & KEESE: Erika Refuses to Hand Over Diamond Earrings ------------------------------------------------------------ Ryan Naumann of Radar Online reports that Real Housewives of Beverly Hills star Erika Jayne's estranged husband Tom Girardi purchased a pair of pricey earrings for his wife with his client's money - according to the attorney investigating him. According to court documents obtained by Radar, the Bravo star is refusing to hand over a pair of diamond earrings Girardi purchased her during their marriage. Earlier year, Girardi -- a once-respected LA attorney -- and his law firm were forced into Chapter 7 bankruptcy. Financial records show he ran his firm like a Ponzi scheme. Many of his former clients claim to have been screwed out of millions. His firm owes $101 million to various creditors. The court put a trustee in place to take control of Girardi's finances and figure out the best plan to pay the creditors back. As part of the investigation, the trustee has been reviewing bank statements and financial records. They recently learned that Girardi purchased Jayne $750,000 diamond earrings with funds from his law firm's client trust account. The earrings are now worth around $1.4 million The docs say Girardi purchased the earrings from M&M Jewelers. He allegedly concealed the theft from the client trust by "describing the purpose of the check" as a "cost" item as part of one of his lawsuits. "Erika has no legal or equitable right to the Diamond Earrings and the same are legally and equitably valuable assets of the GK Bankruptcy Estate that the Trustee can and should sell," the docs state. The trustee says they demanded the return of the earrings but Jayne has refused to comply with the request. The motion is asking the court to order Jayne to hand over the jewelry within 5 days and prohibit her from selling the earrings or transferring them to another person until then. The RHOBH star has yet to respond in court. Girardi is unable to answer for himself given he is currently under a conservatorship. His family claims he is suffering from dementia and they had to move him into a senior living home. Jayne slapped Girardi with divorce papers in 2020 after his legal problems started to mount. She denies having any knowledge of his alleged financial misdeeds. About Girardi & Keese Girardi and Keese or Girardi & Keese was a Los Angeles-based law firm founded in 1965 by lawyers Thomas Girardi and Robert Keese. It served clients in California in a variety of legal areas. It was known for representing plaintiffs against major corporations. An involuntary Chapter 7 petition (Bankr. C.D. Cal. Case No. 20-21022) was filed in December 2020 against GIRARDI KEESE by alleged creditors Jill O'Callahan, Robert M. Keese, John Abassian, Erika Saldana, Virginia Antonio, and Kimberly Archie. The petitioners' attorneys: Andrew Goodman Goodman Law Offices, Apc Tel: 818-802-5044 E-mail: agoodman@andyglaw.com Elissa D. Miller, a member of the firm SulmeyerKupetz, has been appointed as Chapter 7 trustee for GIRARDI KEESE. The Chapter 7 trustee can be reached at: Elissa D. Miller 333 South Grand Ave., Suite 3400 Los Angeles, California 90071-1406 Telephone: (213) 626-2311 Facsimile: (213) 629-4520 E-mail: emiller@sulmeyerlaw.com An involuntary Chapter 7 petition was also filed against Thomas Vincent Girardi (Case No. 20-21020) on Dec. 18, 2020. The Chapter 7 trustee can be reached at: Jason M. Rund Email: trustee@srlawyers.com 840 Apollo Street, Suite 351 El Segundo, CA 90245 Telephone: (310) 640-1200 GLOBAL CARIBBEAN: March 2 Disclosure Statement Hearing Set ---------------------------------------------------------- Judge Scott M. Grossman has entered an order within which March 2, 2022 at 1:30 p.m. is the hearing to consider approval of the disclosure statement of Debtor Global Caribbean, Inc. In addition, February 23, 2022 is fixed as the last day for filing and serving objections to the disclosure statement. A copy of the order dated Jan. 24, 2022, is available at https://bit.ly/3IXpIzh from PacerMonitor.com at no charge. Attorneys for Debtor: Brian S. Behar, Esq. Behar, Gutt & Glazer, P.A. DCOTA, Suite A-350 1855 Griffin Road Fort Lauderdale, FL 33004 Phone: (305) 931-3771 Email: bsb@bgglaw.com About Global Caribbean Inc. Global Caribbean, Inc., sought protection under Chapter 11 of the Bankruptcy Code (Bankr. S.D. Fla. Case No. 21-14402) on May 4, 2021, disclosing total assets of up to $500,000 and total liabilities of up to $1 million. Judge Scott M. Grossman oversees the case. Brian S. Behar, Esq., at Behar, Gutt & Glazer, P.A. and Berkowitz Pollack Brant Advisors CPAS, LLP serve as the Debtor's legal counsel and accountant, respectively. GLOBAL CARIBBEAN: Unsecureds to Recover 46% Under Plan ------------------------------------------------------ Global Caribbean, Inc., submitted an Amended Chapter 11 Plan of Reorganization and a Disclosure Statement. The Plan contemplates that funding for the distribution to the secured creditors and the general unsecured creditors holding an allowed claim in this case will be derived from proceeds received by the Debtor in its operations, which at this point is mainly in recover on its accounts receivable. Further funding will be provided by personal funds of the Class 3 equity holders. Class 1 consists of the unsecured claims held by Citibank, N.A., ("Citibank"). Citibank has filed two separate proofs of claim. One claim, assigned claim # 13 by the Bankruptcy Clerk, is in the amount of $36,194.68, ("First Claim"). The second proof of claim filed by Citibank, was assigned claim # 14 by the Bankruptcy Clerk, and is in the amount of $103,079.84, ("Second Claim"). Both the First Claim and Second Claim arise from loans made to the Debtor under the Federal Paycheck Protection Program, ("PPP Program"), passed by Congress and signed into law by President Trump, during the COVID-19 outbreak. Both of these loans are subject to forgiveness, in the event that the Debtor utilized the funds in accordance with the PPP Program gridlines, which the Debtor believes it has. In fact, as to the Second Claim, Citibank has acknowledged that the loan has been satisfied. The Debtor has filed an objection to the Second Claim, and the Second Claim has been stricken and disallowed by Court Order. As to the First Claim, there has been a dispute as to whether the Debtor complied with the PPP Program guidelines. The Debtor has filed an objection to the First Claim, and believes the First Claim will be stricken and disallowed. To the extent that either the First Claim or Second Claim are not forgiven, and are otherwise allowed in this bankruptcy case, then within 14 days after a final determination on that issue by a court of competent jurisdiction to make that determination, the Debtor shall pay on account of the allowed Class one claim(s), and in full satisfaction of said class one claims, the following: $10,000. Class 1 is impaired under the Plan, in accordance with 11 U.S.C. Section 1124. Class 2 consists of the Unsecured General Claims (presently totaling of $1,502,920) that are not Class One claims. Upon the Effective Date of the Plan, the Debtor will cause a payment to the Class 2 creditors holding Allowed Class 2 claims, of a total combined sum of $80,000, ("Initial Distribution"). The Class 2 creditors will share in the Initial Distribution on a pro rata basis. The Debtor currently has sufficient funds to pay the Initial Distribution. The Debtor anticipates the Initial Distribution represents an approximate 24.5% distribution to the holders of Allowed General Unsecured Claims. Thereafter, on the third month anniversary of the Court entering the Order Confirming the Plan, and subject to sufficient funds being available from the Debtor's continuing efforts to collect its accounts receivable, another and final payment up to the total amount of $70,000, ("Second Distribution"), will be made to the Class 2 creditors holding Allowed Class 2 claims. The Class 2 creditors will share in the Second Distribution on a pro rata basis. The Second Distribution represents a potential additional distribution to the Class 2 creditors of 21.5% to the holders of Allowed General Unsecured class 2 claims. The Debtor estimates the total amount of Class 2 claims, subject to pending or future claim objections, is approximately $326,000, excluding an insider claim in the amount of $1,502,920, which will not receive a distribution pursuant to the Plan. The combined distribution from the Initial Distribution and the Second Distribution represents a potential distribution of 46% on account of the Allowed Class 2 claims. The Initial Distribution and Second Distribution will be on account of, and in full satisfaction of the Class 2 claims. The Debtor believes that it will have sufficient funds to pay the Second Distribution, as the Debtor has been advised that Westin Hotels is expected to make a sizable payment to one of the Debtor's distributors, who in turn advised the Debtor that upon receipt of that payment, the distributor will be paying to the Debtor approximately $75,000.00. This payment should be received within six months of the date of this Disclosure. It should be noted here that the class 3 creditors, have filed a proof of claim, assigned claim number "11" by the Clerk of the Court. This proof of claim evidences a general unsecured claim in the amount of $1,502,920.00. The class 3 creditors have agreed to waive any distribution on this claim in the event the Plan is confirmed by the Bankruptcy Court. Class 2 is impaired under the Plan, in accordance with Section 1124 of the Bankruptcy Code. Attorneys for the Debtor: Brian S. Behar, Esq. BEHAR, GUTT & GLAZER, P.A. DCOTA, Suite A-350, 1855 Griffin Rd. Ft. Lauderdale, FL 33004 Tel: (305) 931-3771 Fax: (305) 931-3774 A copy of the Disclosure Statement dated Jan. 21, 2021, is available at https://bit.ly/33AXBqA from PacerMonitor.com. About Global Caribbean Inc. Global Caribbean, Inc., sought protection under Chapter 11 of the Bankruptcy Code (Bankr. S.D. Fla. Case No. 21-14402) on May 4, 2021, disclosing total assets of up to $500,000 and total liabilities of up to $1 million. Judge Scott M. Grossman oversees the case. Brian S. Behar, Esq., at Behar, Gutt & Glazer, P.A., and Berkowitz Pollack Brant Advisors CPAS, LLP, serve as the Debtor's legal counsel and accountant, respectively. GRUPO AEROMEXICO: Cuts Deal With Unsecured Creditors ---------------------------------------------------- Steven Church and Andrea Navarro of Bloomberg News report Grupo Aeromexico SAB cut a last minute deal with the main group of its unsecured creditors, easing the way for the airline to seek final approval to exit bankruptcy from a judge in New York. The official committee of unsecured creditors in the company's Chapter 11 case agreed to join more senior debt holders who back the plan, including Apollo Global Management Inc. and Delta Air Lines Inc.In return, unsecured creditors will get a note for $40 million, contingent on future performance. About Grupo Aeromexico Grupo Aeromexico, S.A.B. de C.V. (BMV: AEROMEX) -- https://www.aeromexico.com/ -- is a holding company whose subsidiaries are engaged in commercial aviation in Mexico and the promotion of passenger loyalty programs. Aeromexico, Mexico's global airline, has its main hub at Terminal 2 at the Mexico City International Airport. Its destinations network features the United States, Canada, Central America, South America, Asia and Europe. Grupo Aeromexico and three of its subsidiaries sought Chapter 11 protection (Bankr. S.D.N.Y. Lead Case No. 20-11563) on June 30, 2020. In the petitions signed by CFO Ricardo Javier Sanchez Baker, the Debtors reported consolidated assets and liabilities of $1 billion to $10 billion. The Debtors tapped Davis Polk and Wardell LLP as their bankruptcy counsel, KPMG Cardenas Dosal S.C. as auditor, and Rothschild & Co US Inc. and Rothschild & Co Mexico S.A. de C.V. as financial advisor and investment banker. White & Case LLP, Cervantes Sainz S.C. and De la Vega & Martinez Rojas, S.C., serve as the Debtors' special counsel. Epiq Corporate Restructuring, LLC, is the claims and administrative agent. The U.S. Trustee for Region 2 appointed a committee to represent unsecured creditors on July 13, 2020. The committee is represented by Willkie Farr & Gallagher, LLP and Morrison & Foerster, LLP. GRUPO AEROMEXICO: Jr. Creditors Decry Plan as It Nears Ch. 11 Exit ------------------------------------------------------------------ Maria Chutchian of Reuters reports that Grupo Aeromexico SAB de CV is nearing the finish line of its restructuring with a proposed plan to reduce debt by more than $1 billion, but must first overcome opposition from junior creditors who say existing shareholder Delta Air Lines, among others, is benefiting from the deal at their expense. The Mexican airline, after nearly two years in bankruptcy, will make its case for the plan in a New York bankruptcy court on Jan. 27, 2022. Aeromexico, which in June 2020 filed for Chapter 11 protection in the United States with $2 billion in debt, says it has secured the votes needed from its creditor classes to move forward with the deal despite lingering objections from some groups. The plan, which Aeromexico says will result in a total enterprise value of $5.4 billion and preserve 13,000 jobs, would give its largest creditor, Apollo Global Management, the largest stake here in the company. But the committee representing general unsecured creditors, some of whom could see just pennies on the dollar, says the plan unfairly benefits insiders. The committee, which includes a pilots union, Falko Regional Aircraft Limited, Nordic Aviation Capital and the trustee to a group of noteholders, argues that the deal must be held to higher standards than a typical Chapter 11 settlement because insiders are involved. It said the voting results only show one class of general unsecured creditors in support of the plan because the company used a "loophole" to value certain claims lower than what the creditors say they are worth. Aeromexico, however, said creditors could have challenged that arrangement before the voting procedures were approved but failed to do so. The plan improperly gives insiders a chunk of the reorganized entity's equity, the committee said. That value, the committee asserts, is coming "primarily out of the recoveries" of junior creditors. The insiders that the committee takes issue with are Delta, which was Aeromexico's majority shareholder and is slated to emerge from the deal with a 20% stake here, and four Mexican individual shareholders who are also board members. The committee argued in court papers that neither Delta nor the four individuals have provided adequate contributions to the restructuring in exchange for that equity. "We have supported Aeromexico throughout the chapter 11 process and our proposed participation in the plan of reorganization would help Delta optimize our long-term relationship with Aeromexico, provide substantial benefits to our customers and secure many jobs for our people," a Delta spokesperson said. The committee said it would support a plan that includes some distribution to insiders as long as it offers fair recoveries to unsecured creditors. Representatives for Aeromexico and the committee did not immediately respond to requests for comment. Another group of unsecured creditors, including Invictus Global Management, also filed papers urging the judge overseeing the bankruptcy to reject the plan. They also argue that the Aeromexico plan was "dominated by conflicted insiders." Though Invictus opposes the plan, the judge recently ruled that it could not use $47.3 million in claims it purchased last summer to vote against the plan because the prior holders of the claims had already committed to supporting the deal. Invictus is appealing that ruling. Aeromexico was one of three major Latin American airlines to file for bankruptcy in the United States in 2020, alongside Colombia’s Avianca SA and Chile’s LATAM Airlines Group SA. About Grupo Aeromexico Grupo Aeromexico, S.A.B. de C.V. (BMV: AEROMEX) -- https://www.aeromexico.com/ -- is a holding company whose subsidiaries are engaged in commercial aviation in Mexico and the promotion of passenger loyalty programs. Aeromexico, Mexico's global airline, has its main hub at Terminal 2 at the Mexico City International Airport. Its destinations network features the United States, Canada, Central America, South America, Asia and Europe. Grupo Aeromexico and three of its subsidiaries sought Chapter 11 protection (Bankr. S.D.N.Y. Lead Case No. 20-11563) on June 30, 2020. In the petitions signed by CFO Ricardo Javier Sanchez Baker, the Debtors reported consolidated assets and liabilities of $1 billion to $10 billion. The Debtors tapped Davis Polk and Wardell LLP as their bankruptcy counsel, KPMG Cardenas Dosal S.C. as auditor, and Rothschild & Co US Inc. and Rothschild & Co Mexico S.A. de C.V. as financial advisor and investment banker. White & Case LLP, Cervantes Sainz S.C. and De la Vega & Martinez Rojas, S.C., serve as the Debtors' special counsel. Epiq Corporate Restructuring, LLC, is the claims and administrative agent. The U.S. Trustee for Region 2 appointed a committee to represent unsecured creditors on July 13, 2020. The committee is represented by Willkie Farr & Gallagher, LLP and Morrison & Foerster, LLP. HOME DEALS OF MAINE: Taps North Star Realty as Real Estate Broker ----------------------------------------------------------------- Home Deals of Maine, LLC seeks approval from the U.S. Bankruptcy Court for the District of Maine to hire North Star Realty to sell its real property located at 15 Kelley St., Fairfield, ME. Tyra-Marie Mitchell, the firm's broker who will be providing the services, will receive a commission of 5 percent on the agreed sale price of $140,000. In a court filing, Tyra-Marie Mitchell, associate broker at North Star Realty, disclosed that she is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. The firm can be reached at: Tyra-Marie Mitchell North Star Realty Suite 400, 6000 Poplar Avenue Memphis, TN 38119 Tel: 901-525-1322 Fax: 901-525-2389 Email: mcoury@glankler.com About Home Deals of Maine Home Deals of Maine, LLC filed a petition for Chapter 11 protection (Bankr. D. Maine Case No. 21-10267) on Oct. 6, 2021, listing $3,147,975 in assets and $1,650,258 in liabilities. Jo A. Roderick, sole member, signed the petition. Judge Peter G. Cary oversees the case. The Debtor tapped James F. Molleur, Esq., at Molleur Law Office as legal counsel. HOWARD BEND: Fitch Withdraws 'CCC' Rating on 2005 Bonds ------------------------------------------------------- Fitch Ratings has withdrawn the 'CCC' rating on the Howard Bend Levee District, MO (the district) Levee District refunding and improvement bonds, series 2005. Fitch has withdrawn the rating as the district has chosen to stop participating in the ratings process. Therefore, Fitch will no longer have sufficient information to maintain the rating and will no longer provide ratings (or analytical coverage) for Howard Bend Levee District. SECURITY The bonds are special limited obligations payable solely from a special levee assessment (SLA) against certain benefited properties within the district. The SLA is set annually to cover annual debt service. Under an emergency authorization, the levy may be increased to 1.1x debt service. The series 2005 bonds are also payable from a cash-funded debt service reserve fund (DSRF) of $2 million. KEY RATING DRIVERS Key Rating Drivers are no longer relevant given the rating withdrawal. RATING SENSITIVITIES Factor that could, individually or collectively, lead to a positive rating action/upgrade: -- Rating sensitivities are no longer relevant given the rating withdrawal. Factor that could, individually or collectively, lead to a negative rating action/downgrade: -- Rating sensitivities are no longer relevant given the rating withdrawal. BEST/WORST CASE RATING SCENARIO International scale credit ratings of Sovereigns, Public Finance and Infrastructure issuers have a best-case rating upgrade scenario (defined as the 99th percentile of rating transitions, measured in a positive direction) of three notches over a three-year rating horizon; and a worst-case rating downgrade scenario (defined as the 99th percentile of rating transitions, measured in a negative direction) of three notches over three years. The complete span of best- and worst-case scenario credit ratings for all rating categories ranges from 'AAA' to 'D'. Best- and worst-case scenario credit ratings are based on historical performance. HUMAN HOUSING: Taps Guilfoyle Law Office as Bankruptcy Counsel -------------------------------------------------------------- Human Housing Henrietta Hyatt, LLC seeks approval from the U.S. Bankruptcy Court for the Western District of Kentucky to employ Guilfoyle Law Office, LLP as its legal counsel. Guilfoyle Law Office will render these legal services: (a) advise the Debtor regarding its powers and duties in the continued operations of its business and management of its assets; (b) take all necessary action to protect and preserve the Debtor's estate; (c) prepare legal papers; and (d) perform any and all other legal services for the Debtor in connection with this Chapter 11 case. The hourly rates charged by the firm's attorneys and paralegals are as follows: Attorney $250 per hour Paralegal $75 per hour The firm will seek reimbursement for work-related expenses incurred. James Guilfoyle, Esq., an attorney at Guilfoyle Law Office, disclosed in a court filing that the firm is a "disinterested person" as that term is defined in section 101(14) of the Bankruptcy Code. The firm can be reached through: James F. Guilfoyle, Esq. Guilfoyle Law Office LLC 211 East Market Street New Albany, IN 47150 Telephone: (502) 208-9704 Email: james@guilfoylelawoffice.com About Human Housing Henrietta Hyatt Human Housing Henrietta Hyatt, LLC, a company in Louisville, Ky., sought protection for relief under Chapter 11 of the Bankruptcy Code (Bankr. W.D. Ky. Case No. 21-31099) on May 17, 2021, listing up to $1 million in both assets and liabilities. Judge Charles R Merrill presides over the case. Guilfoyle Law Office, LLP serves as the Debtor's legal counsel. HUNTER DOUGLAS: S&P Assigns 'B+' ICR, Outlook Stable ---------------------------------------------------- S&P Global Ratings assigned its 'B+' issuer credit rating to Solis III B.V. (to be renamed Hunter Douglas Finance B.V.), the ultimate parent of the group and the entity where consolidated financial statements will be issued going forward. The outlook is stable. S&P said, "We also assigned our 'B+' issue-level and '3' recovery rating to the company's proposed first-lien credit facility, including a $750 million revolving credit facility due in 2027 (undrawn at close), a $3.1 billion term loan B due in 2029, and a EUR1.35 billion term loan B due in 2029. The '3' recovery rating indicates our expectation for meaningful (50%-70%, rounded estimates: 55%) recovery in the event of a payment default. "The stable outlook indicates our expectations that global demand for window covering products will remain stable for the next 12 months, as the industry continues to benefit from the tailwinds of pandemic-related repair and remodel activities. In addition, we expect that the company will be able to maintain an S&P Global Ratings-adjusted EBITDA margin around 18% in an inflationary environment while maintain leverage above 5x." On Dec. 30, 2021, 3G Capital announced its acquisition of a 75% stake in Hunter Douglas, which will be taken private post transaction close. The founding Sonnenberg family will continue to hold a 25% interest in the company. The transaction will be financed with $4.6 billion of debt and $3.2 billion of common equity. The company intends to acquire several smaller regional players and has earmarked a portion of this debt raise toward funding these acquisitions in the next six months. S&P said, "Our rating reflects Hunter Douglas' leading market position in the global residential window coverings sector, good channel and geographical diversification, and decent scale (as it is three times larger than its nearest domestic competitor, Springs Window Fashions). It also reflects our expectation for the company to operate with leverage above 5x given its financial sponsor ownership by 3G Capital and its intent to grow through acquisitions." Hunter Douglas has benefited from the pandemic induced home renovation trends in North America and Europe. After a brief disruption during the onset of the COVID-19 pandemic in 2020, demand recovered quickly in the second half of 2020 and continued to be strong throughout 2021. S&P said, "We estimate that the company's 2021 organic revenue will exceed 2020 levels by approximately 20%, or $800 million. We believe the growth the company gained during the pandemic increased its scale and we do not expect revenue declines in 2022. In the near term, consumers will continue to spend more time at home than traveling and other social activities leading to a portion of discretionary spending being used on at home purchases. Furthermore, we believe the growth of hybrid work models will support the incremental household spend in this sector. As a result, we believe the industry will sustain the demand gains it achieved in 2021, while future growth rates will slow as repair and remodel activities gradually revert to historical norms. We forecast that revenue will be flat in 2022 compared to 2021 and growing 5% in 2023 from channel shifts and acquisitions. In addition, we believe Hunter Douglas, as a market leader and player of scale, has disproportionally benefited from the industry shifts compared to independent competitors--especially in Europe, where the markets continue to remain very fragmented. Nevertheless, we continue to view the window coverings market as discretionary and vulnerable to economic cycles, particularly if economic downturn correlates to rapidly declining consumer discretionary spending or housing prices." S&P said, "We expect the company to operate with leverage in the 5x area. S&P Global Ratings-adjusted pro forma leverage at the close of this transaction is in the mid 5x area, and we expect leverage will be maintained at this level for 2022 as the company invests in its supply chain capabilities and digital channel expansion. 3G Capital will bring cost-savings expertise and lean operating models to Hunter Douglas; however, given the complexity and the scale of the business we do not expect material incremental improvements in its cost structure for the next 12 to 24 months. In addition, we view 3G capital as a financial sponsor with a track record of using debt to fund transformational acquisitions and increase shareholder returns. We do acknowledge that it does have a history of owning its portfolio companies longer than other financial sponsors. However, given that there are still opportunities for consolidation in the global window treatment markets, leverage will likely be sustained above 5x." Hunter Douglas has good channel diversification and limited customer concentration. The company holds leading market positions across the global hard treatment window coverings market. It generates approximately 55% of its sales through third-party sellers, such as individual dealers and home center retailers (such as Lowe's). It has limited customer concentration in this channel, where the majority of its sales are made to mom-and-pop and regional dealers. The company's top 10 customers account for approximately 10% of its overall sales. The company generates approximately 25% of its sales through direct-to-consumer channels, including e-commerce and shop-at-home channels. S&P said, "The majority of consumers still purchase home furnishings and customized products such as window treatments at brick-and-mortar locations (digital sales is currently only 7% of the company's overall sales), but we believe as more millennial and Gen-Z consumers become homeowners sales of complex home products will continue to shift online. As such, the company is investing in its digital channel capabilities and we believe its direct-to-consumer channels will be able to take share from the brick-and-mortar channels and drive future growth." Despite recent improvements, its margin profile still lags its key North American competitor. S&P said, "We project that the company will generate adjusted EBITDA margin of around 18% in 2022 (this represents over 500 basis points of improvements over 2020 levels), this compares to the 22% we project for Springs Window Fashions. We believe the margin differential is largely due to Springs' higher-margin profile in North America because it services a material portion of its customers from its Mexico facilities. Hunger Douglas has more recently invested in its own Mexico operations and completed its North America SAP implementation, which should enable it to compete more effectively in its dealer channels in the region. Historically, Hunter Douglas' supply chain is more global and sources a material portion of products from Asia Pacific and Europe. In addition, it is our view that 3G's investment thesis includes elevating Hunter Douglas' operating margin profile over the next several years through cost-cutting measures and strategic realignment of its global manufacturing footprints. In the near term, we believe the company will likely sustain the margin improvements it was able to achieve over the last 12 months, despite input cost pressures. The company structurally altered portions of its cost structure during the pandemic to better support future growth, such as e-commerce channel investments and digital marketing. While we do expect inflationary pressures to persist over the next 12 months, the company should be able to offset input cost increases and necessary incremental investments in its business from price increases across its portfolio, favorable channel mix, and cost savings initiatives." S&P said, "The stable outlook indicates our expectations that global demand for window covering products will remain stable for the next 12 months, as the industry continues to benefit from the tailwinds of pandemic-related repair and remodel activities. In addition, we expect that the company will be able to maintain adjusted EBITDA margin around 18% in an inflationary environment while maintaining leverage above 5x." S&P could lower its ratings if leverage rises above 6x on a sustained basis. This could occur if: -- The company's financial policy becomes more aggressive and undertakes debt-funded acquisitions or shareholder returns above S&P's expectations. -- The macroeconomic environment worsens from our current expectations, and consumer spending on discretionary household furnishing including window coverings declines. -- The company is not able to effectively manage input cost pressures from either its inability to pass cost onto customers, or its ability to manage its operations to offset cost increases. S&P could raise its ratings if the company demonstrates a track record of adherence to a financial policy consistent with sustaining leverage below 5x. This could occur if: -- The company prioritizes debt reduction instead of acquisitions or shareholder returns, or funding acquisitions such that leverage is maintained below 5x; -- The company outperforms our expectations and grows faster from successful digital channel diversification and taking share from competitors or is able to expand margins faster than S&P expects due to successful implementation of 3G's cost savings initiatives. ESG credit indicators: E-2, S-2, G-3 Governance is a moderately negative consideration. S&P's assessment of the company's financial risk profile as highly leveraged reflects corporate decision-making that prioritizes the interests of the controlling owners by maximizing shareholder returns, in line with its view of the majority of rated entities owned by private-equity sponsors. I-70 PROPERTIES: Taps VonFeldt, Bauer & VonFeldt as Accountant -------------------------------------------------------------- I-70 Properties, LLC seeks approval from the U.S. Bankruptcy Court for the District of Kansas to employ VonFeldt, Bauer & VonFeldt, CPA as accountant. The Debtor needs the assistance of an accountant to complete its accounting records and prepare its federal and state income tax returns for the years ending 2018, 2019, and 2020. The hourly rates of the firm's accounting services are as follows: Staff $150 Partners $200 As disclosed in court filings, VonFeldt, Bauer & VonFeldt does not represent interests adverse to the Debtor or to the estate in the matters upon which it is to be engaged. The firm can be reached at: VonFeldt, Bauer & VonFeldt, CPA 2306 Anderson Ave. Manhattan, KS 66502 Telephone: (785) 320-2555 About I-70 Properties I-70 Properties, Inc. filed its voluntary petition for relief under Chapter 11 of the Bankruptcy Code (Bankr. D. Kan. Case No. 21-40768) on Dec. 13, 2021, disclosing up to $50,000 in assets and up to $10 million in liabilities. Connie L. Seymour, managing member, signed the petition. Judge Dale L. Somers oversees the case. Tom R. Barnes II, Esq., at Stumbo Hanson, LLP and VonFeldt, Bauer & VonFeldt, CPA serve as the Debtor's counsel and accountant, respectively. IAMGOLD CORP: S&P Downgrades ICR to 'B', Outlook Negative --------------------------------------------------------- S&P Global Ratings lowered its long-term issuer credit and unsecured debt ratings on Toronto-based gold producer IAMGOLD Corp. to 'B' from 'B+'. The negative outlook on IAMGOLD reflects S&P views that higher-than-expected free cash flow deficits to complete the Cote Gold project will lead to reduced liquidity and sustainably higher leverage over the next few years. The downgrade primarily reflects expected deterioration in IAMGOLD's operating cash flows and increased free cash flow deficits through 2023. S&P said, "We expect IAMGOLD will generate materially lower earnings and cash flows based on the company's weaker operating expectations over the next two years. Our estimated 2022 gold production for the company is 10% below our previous estimates and cash costs are 15%-20% higher than our previous expectations for the next two years." The revised production and cash costs estimates are primarily linked to the ongoing operating issues at the company's Rosebel mine and production ramp-up challenges at the Westwood mine. S&P said, "Based on the projected weaker operating results, along with the company's previously announced increase in capital cost estimates for the Cote Gold project last year, we estimate that IAMGOLD will incur higher-than-expected free cash flow deficits over the next 12-24 months. Under our base-case estimates, we believe IAMGOLD will generate close to US$900 million of free cash flow deficits through 2023 as it progresses its Cote Gold project toward commercial production. As a result, the company will deplete its sizable cash balance (about US$545 million at year-end 2021) and require a draw on its credit facility to complete the project. The resulting higher debt will likely materially increase leverage, with adjusted debt to EBITDA sustained above our 4x downgrade threshold over the next two years. In our view, a diminished liquidity position and higher debt weaken the company's financial risk profile and reduce financial flexibility for any further unforeseen events." Cote Gold is important for IAMGOLD's production growth and profitability improvement. Cote Gold is a large project estimated to contribute about 370,000 ounces annually (on a 100% basis) over its estimated 18-year mine life. In addition, its expected life-of-mine cash costs profile in the mid-US$600 per ounce (oz) area is very attractive compared with IAMGOLD's existing producing assets that are averaging above US$1,000/oz. Therefore, S&P believes the successful completion of the Cote Gold project is key for IAMGOLD to materially increase its production size and reduce its overall exposure to operations in high-risk jurisdictions. In addition, the relatively low-cost operations should support improvement in IAMGOLD's profitability and reduce earnings sensitivity associated with gold price volatility. The project is progressing on time and on revised budget expectations, and the company targets to reach commercial production by second-half 2023. However, a large project of this nature remains exposed to unexpected negative developments (such as delays, inflation, and supply chain issues), which could put further pressure on the company's financial position. In addition, with the ongoing operating issues at Rosebel and production ramp-up challenges at Westwood, IAMGOLD is now increasingly reliant on cash flows from its Essakane mine until the Cote Gold project is brought into production. The updated Rosebel life-of-mine plan requires a significant amount of capital spending (US$1.2 billion over the 12 years of remaining mine life) to increase production. Given the company's current capital allocation constraints, it remains unlikely IAMGOLD will commit to such a level of spending. The recent management changes also add an additional layer of risk over this period as the company undertakes a strategic review of the asset portfolio. S&P said, "The current liquidity position will fund free cash flow deficits, with potential upside from higher-than-assumed gold prices. Based on the company's year-end 2021 cash balance of US$545 million and our estimated operating cash flows this year, we believe IAMGOLD will cover the majority of its free cash flow deficits associated with the large capital spending (US$1 billion) in 2022. The company's almost full availability under the US$500 million revolving credit facility will likely be used to fund the balance of IAMGOLD's capital expenditures (capex) in 2022 and provide further liquidity support for the completion of the Cote Gold project in 2023. We believe the increased reliance on the revolver reduces the company's flexibility until Cote Gold starts contributing to production and cash flows. "We acknowledge that our estimates incorporate a gradual decline in gold price assumptions through next year--we assume gold prices will average US$1,600/oz in 2022 and US$1,400/oz in 2023-- which are well below current spot prices (greater than US$1,800/oz). Sustained strength in gold prices would meaningfully reduce the company's free cash flow deficits and reduce the need for debt to complete the Cote Gold project. For example, if gold prices average US$100/oz above our assumption for 2022-2023, the free cash flow deficits and debt would be about US$150 million lower compared with our base-case estimates. In such a scenario, leverage will meaningfully decline for both years, with adjusted debt to EBITDA well below 4x, and the liquidity position will improve with more availability under the revolver. However, IAMGOLD's liquidity and cash flows are increasingly sensitive to fluctuations in gold prices, especially with our now higher estimated cash costs, and the financial risks associated with completion of the Cote Gold project would continue to weigh negatively on the rating. "The negative outlook primarily reflects the estimated free cash flow deficits IAMGOLD faces in 2022, and our view of the company's reduced financial flexibility from the weaker-than-expected liquidity position. We believe the company is now more sensitive to potential project cost overruns, production delays, or weaker-than-expected gold margins over the next 12 months. "We could lower the rating if we believe IAMGOLD's liquidity will deteriorate to an extent that reduces its flexibility to fund the completion of the Cote Gold project. In our view, this could result from lower-than-expected gold margins, an increase in Cote Gold capital costs, or potential covenant issues that exhaust or constrain the company's availability under the revolver. In such a scenario, we would expect the company's prospective adjusted debt to EBITDA will increase to levels not viewed as commensurate with the rating, likely well above 5x. "We could revise the outlook to stable over the next 12 months, if better-than-expected operating results or sustained higher gold prices improve IAMGOLD's cash flows and liquidity position and reduce the amount of debt needed to complete Cote Gold. In such a scenario, we would also expect IAMGOLD to finish the project on time and on budget and to sustain adjusted debt to EBITDA below 4x." ESG credit indicators: E-3, S-4, G-3 S&P said, "Governance factors are now a moderately negative consideration in our credit rating analysis primarily associated with the company's ongoing operating challenges and execution of strategic plans. We believe these issues will weigh on the company's production and cash flow growth and return on capital over the next few years. "Social factors remain a negative consideration in our credit rating analysis of IAMGOLD. We view the company's social risk as higher than that of the broader mining industry. IAMGOLD conducts most of its operations in jurisdictions with high country risk, namely Burkina Faso and Suriname. This exposes the company to safety and security issues beyond what we would typically expect for more diversified miners. Environmental factors are a moderately negative consideration, as is the case for most of the company's mining peers." ICAN BENEFIT: Trustee Taps Shraiberg, Landau & Page as Counsel -------------------------------------------------------------- Alan Barbee, the trustee appointed in the Chapter 11 cases of iCan Benefit Group, LLC and iCan Holdings, LLC, seeks approval from the U.S. Bankruptcy Court for the Southern District of Florida to employ the law firm of Shraiberg, Landau & Page, PA as his counsel. The firm will render these legal services: (a) review financial and operational information, as well as other documents, furnished by the Debtor to the trustee; (b) assist the trustee in negotiations with parties-in-interest on any issue in this Chapter 11 case; (c) advise the trustee as to all matters in this Chapter 11 case; (d) investigate and analyze certain of the Debtor's prepetition conduct, transactions, and transfers; (e) provide the trustee with legal advice in relation to the Chapter 11 case; (f) prepare, review and file various motions, pleadings, orders, applications, adversary proceedings, and other legal documents to be submitted to this court for consideration; (g) represent the trustee in all proceedings before this court; and (h) perform such other legal services for the trustee as may be necessary and proper in these proceedings. The hourly rates of the firm's counsel and staff are as follows: Legal Assistants $275 Attorneys $350 - $600 In addition, the firm will seek reimbursement for expenses incurred. Bradley Shraiberg, Esq., an attorney at Shraiberg, Landau & Page, 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: Bradley S. Shraiberg, Esq. Shraiberg, Landau & Page, PA 2385 NW Executive Center Drive, Suite 300 Boca Raton, FL 33431 Telephone: (561) 443-0800 Facsimile: (561) 998-0047 Email: bss@slp.law About iCan Benefit Group iCan Benefit Group, LLC -- https://icanbenefit.com/ -- is a licensed insurance agency offering a variety of benefit programs and insurance products from a number of licensed insurance companies. iCan Benefit Group and its affiliates sought protection under Chapter 11 of the Bankruptcy Code (Bankr. S.D. Fla. Lead Case No. 21-12567) on March 18, 2021. Stephen M. Tucker, manager, signed the petitions. In its petition, iCan Benefit Group disclosed $10 million to $50 million in both assets and liabilities. Judge Mindy A. Mora oversees the cases. Agentis PLLC serves as the Debtors' legal counsel. Alan Barbee was appointed as trustee in the Chapter 11 cases of the Debtors. The trustee tapped the law firm of Shraiberg, Landau & Page, PA as his counsel. INNERLINE ENGINEERING: Taps Resnik Hayes Moradi as Legal Counsel ---------------------------------------------------------------- Innerline Engineering, Inc. seeks approval from the U.S. Bankruptcy Court for the Central District of California to employ Resnik Hayes Moradi LLP as its bankruptcy counsel. Resnik Hayes Moradi will render these legal services: (a) advise and assist the Debtor regarding compliance with the requirements of the United States Trustee (UST); (b) advise the Debtor regarding matters of bankruptcy law; (c) advise regarding cash collateral matters; (d) conduct examinations of witnesses, claimants or adverse parties and to prepare and assist in the preparation of reports, accounts and pleadings; (e) advise concerning the requirements of the Bankruptcy Code and applicable rules; (f) assist with the negotiation, formulation, confirmation and implementation of a Chapter 11 plan of reorganization; and (g) make any appearances in the bankruptcy court on behalf of the Debtor; and to take such other action and to perform such other services as the Debtor may require. The hourly rates of the firm's counsel and staff are as follows: M. Jonathan Hayes, Partner $600 Matthew D. Resnik, Partner $565 Roksana D. Moradi-Brovia, Partner $500 Russell J. Stong III, Associate $400 David M. Kritzer, Associate $350 W. Sloan Youkstetter, Associate $350 Pardis Akhavan, Associate $265 Boshra Khoder, Associate $165 Rosario Zubia, Paralegal $135 Priscilla Bueno, Paralegal $135 Rebeca Benitez, Paralegal $135 In addition, the firm will seek reimbursement for expenses incurred. The Debtor has agreed to pay the firm an initial retainer fee of $10,000. Roksana Moradi-Brovia, Esq., a partner at Resnik Hayes Moradi, 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: Roksana D. Moradi-Brovia, Esq. Matthew D. Resnik, Esq. Resnik Hayes Moradi LLP 17609 Ventura Blvd., Suite 314 Encino, CA 91316 Telephone: (818) 285-0100 Facsimile: (818) 855-7013 Email: roksana@RHMFirm.com matt@RHMFirm.com About Innerline Engineering Corona, Cal.-based Innerline Engineering, Inc. -- http://www.innerlineengineering.com/-- offers a variety of services to municipalities, utility owners, industrial facilities and commercial property owners for the maintenance of their underground utilities. Innerline Engineering filed a petition for Chapter 11 protection (Bankr. C.D. Cal. Case No. 21-14305) on Aug. 9, 2021, listing as much as $10 million in both assets and liabilities. Thomas J.C. Yeh, chief financial officer, signed the petition. Judge Wayne E. Johnson oversees the case. Resnik Hayes Moradi LLP serves as the Debtor's bankruptcy counsel. ION GEOPHYSICAL: Preps Up Bankruptcy Filing to Sell Itself ---------------------------------------------------------- Eliza Ronalds-Hannon and Jeremy Hill of Bloomberg News report that seismic mapper Ion Geophysical Corp. is preparing a potential bankruptcy filing to sell itself, according to people with knowledge of the matter. The Houston-based company, which makes software and provides data to the energy industry, may seek Chapter 11 bankruptcy protection in the next month, February 2022, said the people, who asked not to be named because the discussions are private. Ion is drawing interest from potential buyers and is working to line up a so-called stalking horse bidder, which would set the floor for further offers in bankruptcy, according to the people. About ION Geophysical Corp. Headquartered in Houston, Texas, ION (NYSE: IO) -- http://www.iongeo.com/-- is an innovative, asset light global technology company that delivers powerful data-driven decision-making offerings to offshore energy, ports and defense industries. The Company is entering a fourth industrial revolution where technology is fundamentally changing how decisions are made. The Company provides its services and products through two business segments -- E&P Technology & Services and Operations Optimization. ION Geophysical reported a net loss of $37.11 million for the year ended Dec. 31, 2020, compared to a net loss of $47.21 million on $174.68 million for the year ended Dec. 31, 2019. As of Sept. 30, 2021, the Company had $190.91 million in total assets, $256.07 million in total liabilities, and a total deficit of $65.17 million. Houston, Texas-based Grant Thornton LLP, the Company's auditor since 2014, issued a "going concern" qualification in its report dated Feb. 11, 2021, citing that as of Dec. 31, 2020, the Company had outstanding $120.6 million aggregate principal amount of its 9.125% Senior Secured Second Priority Notes, which mature on Dec. 15, 2021. The Notes, classified as current liabilities, caused the Company's current liabilities to exceed its current assets by $150.9 million and its total liabilities exceed its total assets by $71.1 million. These conditions, along with other matters, raise substantial doubt about the Company's ability to continue as a going concern. * * * As reported by the TCR on Jan. 6, 2022, S&P Global Ratings lowered its issuer credit rating on U.S.-based marine seismic data company ION Geophysical Corp. to 'D' from CCC'. S&P said the downgrade reflects ION Geophysical's missed interest and principal payments on its 8% senior secured notes due 2025 and its 9.125% unsecured notes due 2021. JPA NO. 49 CO: Seeks Court OK to Hire Togut Segal as Legal Counsel ------------------------------------------------------------------ JPA No. 49 CO., Ltd. and JPA No. 111 Co., Ltd. seek approval from the U.S. Bankruptcy Court for the Southern District of New York to hire Togut, Segal & Segal LLP to serve as legal counsel in their Chapter 11 cases. The firm's services include: (a) advising the Debtors regarding their powers and duties; (b) preparing and filing legal papers; (c) attending meetings and negotiating with representatives of creditors and other parties-in-interest; (d) preparing and filing the Debtors' schedules of assets and liabilities and statements of financial affairs; (e) seeking court approval for the retention of the Debtors' professionals as may be needed; (f) reconciling and, if appropriate, objecting to, claims filed against the Debtors; (g) effectuating the assumption, assignment and rejection, as appropriate, of executory contracts and unexpired leases; (h) negotiating, seeking court approval and consummating the sale of the Debtors' assets, subject to higher or better offers; (i) negotiating and seeking confirmation of a Chapter 11 plan; (j) appearing before the bankruptcy court and any appellate courts; (k) responding to inquiries from creditors and counsel to interested parties regarding pending assigned matters; and (l) performing other necessary legal services for the Debtors. The firm's hourly rates are as follows: Partners $890 - $1,270 per hour Counsel $795 - $975 per hour Associates $435 - $830 per hour Paralegals and law clerks $195 - $400 per hour Kyle Ortiz, Esq., a member of Togut, Segal & Segal, 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: Kyle G. Ortiz, Esq. Togut, Segal & Segal LLP One Penn Plaza, Suite 3335 New York, NY 10119 Tel: (212) 201-6582 Email: kortiz@teamtogut.com About JPA No. 49 and JPA No. 111 JPA No. 49 Co., Ltd. and JPA No. 111 Co., Ltd. are special purpose vehicles formed under the laws of Japan. The Debtors are direct, wholly owned subsidiaries of JP Lease Products & Services Co. Ltd. JPL offers financial services based on a financial scheme combining the borrowings from financial institutions and funds to manage valuable assets including aircraft, ships, containers for maritime transportation, and solar power generation equipment. JPA No. 49 Co. and JPA No. 111 Co. filed petitions for Chapter 11 protection (Bankr. S.D.N.Y. Lead Case No. 21-12076) on Dec. 17, 2021, listing up to $500 million in both assets and liabilities. Teiji Ishikawa, representative director, signed the petitions. Judge David S. Jones oversees the cases. The Debtors tapped Kyle G. Ortiz, Esq., at Togut, Segal & Segal, LLP as legal counsel. JS KALAMA: Chapter 11 Trustee Gets Approval to Hire Realtor ----------------------------------------------------------- Russell Garrett, the trustee appointed in the Chapter 11 case of JS Kalama, LLC, received approval from the U.S. Bankruptcy Court for the Western District of Washington to employ Pacific Real Estate Investments, LLC as realtor. The trustee needs a realtor to assist in the marketing of the Debtor's property located at 552 Hendrickson Drive, Kalama, Wash. The firm will receive a commission of 4 percent if a co-brokered with broker other than listing broker or 3 percent if no co-broker of the gross sale proceeds from the property's sale. John Kennedy, a realtor at Pacific Real Estate Investments, 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 A. Kennedy Pacific Real Estate Investments, LLC 15280 NW Central Drive, Ste. 216 Portland, OR 97229 Telephone: (503) 439-8924 Facsimile: (503) 217-6072 Email: kennedy@pacificinv.com About JS Kalama JS Kalama, LLC, a company primarily engaged in renting and leasing real estate properties, sought protection under Chapter 11 of the Bankruptcy Code (Bankr. W.D. Wash. Case No. 20-41495) on June 11, 2020, listing $1 million to $10 million in both assets and liabilities. John Somarakis, manager, signed the petition. Judge Brian D. Lynch oversees the case. The Debtor tapped J.D. Nellor, Esq., at Nellor Law Office, as its legal counsel. KING'S TOWING: Seeks to Hire the Bond Law Office as Legal Counsel ----------------------------------------------------------------- King's Towing and Recovery, LLC seeks approval from the U.S. Bankruptcy Court for the Western District of Arkansas to employ the Bond Law Office to handle its Chapter 11 case. The hourly rates of the firm's counsel and staff are as follows: Stanley Bond, Lead Attorney $350 Paraprofessional $100 Stanley Bond, Esq., an attorney at the Bond Law Office, disclosed in a court filing that the firm is a "disinterested person" as that term is defined in section 101(14) of the Bankruptcy Code. The firm can be reached through: Stanley V. Bond, Esq. Bond Law Office P.O. Box 1893 Fayetteville, AR 72702-1893 Telephone: (479) 444-0255 Facsimile: (479) 235-2827 Email: attybond@me.com About King's Towing and Recovery King's Towing and Recovery, LLC filed a voluntary petition for relief under Chapter 11 of the Bankruptcy Code (Bankr. W.D. Ark. Case No. 21-70549) on Apr. 19, 2021, disclosing up to $1 million in both assets and liabilities. Judge Bianca M. Rucker oversees the case. The Debtor tapped Bond Law Office, led by Stanley V. Bond, Esq., and Smith & Taylor Tax and Management LLC as its legal counsel and accountant, respectively. KISMET ROCK HILL: March 8 Hearing on Disclosure Statement --------------------------------------------------------- The Bankruptcy Court will convene a hearing to consider the approval of the Disclosure Statement of Kismet Rock Hill, LLC will be held at the Donald Stuart Russell Federal Courthouse, 201 Magnolia Street, Spartanburg, South Carolina on March 8, 2022, at 10:30 a.m. March 1, 2022, is fixed as the last day for filing and serving written objections to the Disclosure Statement. About Kismet Rock Hill Kismet Rock Hill, LLC, operates Holiday Inn, a hotel located at 503 Galleria Boulevard, in Rock Hill, S.C. Kismet Rock Hill filed its voluntary petition for Chapter 11 protection (Bankr. D. S.C. Case No. 21-01926) on July 23, 2021, listing as much as $50 million in assets and as much as $10 million in liabilities. Judge Helen E. Burris presides over the case. Christine E. Brimm, Esq., at Barton Brimm, PA, and Newpoint Advisors Corporation serve as the Debtor's legal counsel and accountant, respectively. KRIESEL RENTALS: Unsecureds to be Paid in Full in Plan ------------------------------------------------------ Kriesel Rentals, LLC, submitted a Second Amended Disclosure Statement relative to its Plan. The Debtor's goals in this restructuring is to (1) continue operating and (2) pay its debts in an orderly way. Under the Plan, the Debtor will continue operating. The Debtor owns real estate, and rents that to its long-term and stable tenant, Stampede of Treasures. Its rent received is regular and consistent. Likewise, its payments and expenses are regular and consistent. They are expected to remain consistent. In the event that the current expenses rise unexpectedly, the Debtor's tenant will increase its rent payment under its triple-net lease to compensate and ensure Debtor has a positive cash flow each month. Class 4 Unsecured Claims are believed to be only Anderson Law Office, and in an amount of $2,000. The Plan provides for payment of general unsecured and all claims in full. In a Chapter 7 case, the Debtor asserts there would be nothing available for payment to general unsecured creditors or Coe & Cusky, S.C., who hold a third-position judgment lien. Attorney for the Debtor: Joshua D. Christianson, Esq. CHRISTIANSON & FREUND, LLC 920 So. Farwell St., Suite 1800, P.O. Box 222 Eau Claire WI 54702-0222 Tel: (715) 832-1800 A copy of the Disclosure Statement dated Jan. 21, 2021, is available at https://bit.ly/3KCYpeS from PacerMonitor.com. About Kriesel Rentals Kriesel Rentals, LLC, filed a voluntary petition for relief under Chapter 11 of the Bankruptcy Code (Bankr. W.D. Wis. Case No. 21-10265 on Feb. 12, 2021, listing under $1 million in both assets and liabilities. Judge Catherine J. Furay oversees the case. Christianson & Freund, LLC serves as the Debtor's counsel. LATAM AIRLINES: Didn't Give $13-Bil. Offer a Fair Shot, Says Azul ----------------------------------------------------------------- Azul S.A. claims in a court filing that Latam Airlines Group SA "flatly rejected" Azul's offer to buy the bankrupt carrier even though the sale would be a better deal for creditors. On Nov. 26, 2021, the Debtors filed their proposed chapter 11 plan. But, according to Azul, its November 11 proposal to Latam Airlines was superior and provided a more value-maximizing transaction than the Plan. Azul asserts that if the Debtors believe that no viable alternative transaction with Azul exists or that Azul's proposal had "crucial missing details," that is because the Debtors declined any substantive engagement with Azul. Strategic discussions between Azul and LATAM (and, in particular, LATAM Brazil) date to the summer of 2020. In June 2020, Azul and LATAM announced their entry into a codeshare and related agreements, which, among other things, covered 50 non-overlapping domestic routes. As the Debtors progressed through chapter 11 and shifted toward considering exit strategies, Azul sought to revive the parties' prior discussions on a potential transaction. To assist Azul in developing a credible proposal, Azul retained investment bankers and financial advisors at Houlihan Lokey, Inc., and Seabury Securities LLC, which provides matchless expertise and experience with complex M&A in the airline industry, in addition to restructuring counsel at Akin Gump Strauss Hauer & Feld LLP. Both publicly and privately, Azul expressed its interest in pursuing a strategic transaction. The Debtors, however, categorically rejected Azul's expression of interest without further discussion, flatly declining to engage. In fact, to Azul's knowledge, the Debtors' investment banker never initiated any discussions with Houlihan or Seabury to discuss any questions relevant to a potential transaction. Not only did the Debtors rebuff Azul's overtures, but, on May 24, 2021, the same day Azul publicly announced it had hired advisors to explore M&A opportunities, the Debtors unilaterally terminated the value-accretive Codeshare Agreement. Nonetheless, Azul remained interested in a potential transaction and, with the help of its advisors, worked to develop a commercial framework for such a transaction. On Sept. 2, 2021, based on publicly available information as well as its advisors' collective expertise, Azul finalized an illustrative transaction proposal that contemplated a full combination between the two airlines (the "September 2 Proposal"). Given the Debtors' prior negative reactions to Azul's overtures, Azul believed any future transaction proposal would require support from a significant segment of the Debtors' creditors before the Debtors would agree to engage with Azul and, accordingly, Azul previewed the September 2 Proposal with certain creditors to gauge their interest. Support for the September 2 Proposal materialized at the end of October. The ad hoc group of creditors represented by White & Case LLP as well as Banco del Estado de Chile, as representative of the Chilean unsecured bonds, indicated that they would back a transaction between the Debtors and Azul, and the parties worked to refine the September 2 Proposal. Finally, with the support from these parties, as well as input from the Creditors' Committee, Azul sent the illustrative transaction proposal -- which the Debtors refer to as the "Azul Slide Outline" -- to the Debtors on November 11, 2021 (the "November 11 Proposal") for their consideration. The Debtors, however, again flatly rejected the November 11 Proposal without engaging in any discussions with Azul. As referenced in the Supplemental Brief, the rejection was not because the November 11 Proposal offered insufficient value to the Debtors' estates and their creditors, but primarily because the November 11 Proposal lacked certain details regarding implementation. The Debtors, however, appear to have misunderstood the November 11 Proposal as something other than a term sheet for initiating commercial discussions with the Debtors (and certainly not, as the Debtors would have it, a "straw man" propped up in service of a litigation strategy). Simply put, it is not clear why the Debtors would expect "real progress" to have been made on a proposed transaction with them when they have rejected every attempt at engagement. Counsel to Azul S.A.: AKIN GUMP STRAUSS HAUER & FELD LLP Ira S. Dizengoff Philip C. Dublin One Bryant Park New York, New York 10036 Telephone: (212) 872-1000 Facsimile: (212) 872-1002 E-mail: idizengoff@akingump.com pdublin@akingump.com About LATAM Airlines Group LATAM Airlines Group S.A. -- http://www.latam.com/-- is a pan-Latin American airline holding company involved in the transportation of passengers and cargo and operates as one unified business enterprise. It is the largest passenger airline in South America. Before the onset of the COVID-19 pandemic, LATAM offered passenger transport services to 145 different destinations in 26 countries, including domestic flights in Argentina, Brazil, Chile, Colombia, Ecuador and Peru, and international services within Latin America as well as to Europe, the United States, the Caribbean, Oceania, Asia and Africa. LATAM and its 28 affiliates sought Chapter 11 protection (Bankr. S.D.N.Y. Lead Case No. 20-11254) on May 25, 2020. Affiliates in Chile, Peru, Colombia, Ecuador and the United States are part of the Chapter 11 filing. The Debtors disclosed $21,087,806,000 in total assets and $17,958,629,000 in total liabilities as of Dec. 31, 2019. The Hon. James L. Garrity, Jr., is the case judge. The Debtors tapped Cleary Gottlieb Steen & Hamilton LLP as bankruptcy counsel, FTI Consulting as restructuring advisor, Lee Brock Camargo Advogados as local Brazilian litigation counsel, and Togut, Segal & Segal LLP and Claro & Cia in Chile as special counsel. The Boston Consulting Group, Inc. and The Boston Consulting Group UK LLP serve as the Debtors' strategic advisors. Prime Clerk LLC is the claims agent. The official committee of unsecured creditors formed in the case tapped Dechert LLP as its bankruptcy counsel, Klestadt Winters Jureller Southard & Stevens, LLP as conflicts counsel, UBS Securities LLC as investment banker, and Conway MacKenzie, LLC as financial advisor. Ferro Castro Neves Daltro & Gomide Advogados is the committee's Brazilian counsel. The Ad Hoc Group of LATAM Bondholders tapped White & Case LLP as counsel. Glenn Agre Bergman & Fuentes, LLP, led by managing partner Andrew Glenn and partner Shai Schmidt, has been retained as counsel to the Ad Hoc Committee of Shareholders. LIBERTY PARK: Case Summary & 18 Unsecured Creditors --------------------------------------------------- Debtor: Liberty Park Apartments, LLC 2817 S. Liberty Street New Orleans, LA 70115 Business Description: Liberty Park Apartments is primarily engaged in renting and leasing real estate properties. Chapter 11 Petition Date: January 27, 2022 Court: United States Bankruptcy Court Eastern District of Louisiana Case No.: 22-10084 Judge: Hon. Meredith S. Grabill Debtor's Counsel: Frederick L. Bunol, Esq. THE DERBES LAW FIRM, LLC 3027 Ridgelake Drive Metairie, LA 70002 Tel: (504) 837-1230 Fax: (504) 832-0327 Email: fbunol@derbeslaw.com Estimated Assets: $500,000 to $1 million Estimated Liabilities: $1 million to $10 million The petition was signed by Joshua Bruno as manager. A full-text copy of the petition containing, among other items, a list of the Debtor's 18 unsecured creditors is available for free at PacerMonitor.com at: https://www.pacermonitor.com/view/RMY5QVA/Liberty_Park_Apartments_LLC__laebke-22-10084__0001.0.pdf?mcid=tGE4TAMA LIMETREE BAY: S&P Raises Senior Secured Term Loan Rating to 'CCC' ----------------------------------------------------------------- On Jan. 26, 2022, S&P Global Ratings raised its issue-level rating on Limetree Bay Terminals LLC's (LTB) senior secured term loan to 'CCC' from 'CCC-'. At the same time, S&P removed the rating from CreditWatch, where it was placed with negative implications on June 2, 2021. The recovery rating of '3' (50%-70%; rounded estimate 60%) is unchanged, indicating its expectations of meaningful recovery in an event of default. The negative outlook reflects S&P's expectation of a default or distressed debt exchange within 12 months. LTB is a 34 million barrel (mmbbls) crude oil and refined product storage facility in St. Croix in the U.S. Virgin Islands. The facility consists of 167 tanks, with deepwater access to 11 docks including an offshore single point mooring (SPM) buoy capable of loading and discharging vessels up to very large crude carriers (VLCC) size. The project is owned by a consortium of sponsors through Limetree Bay Energy. LTB is the largest crude oil and refined product storage facility in the Caribbean, with an SPM buoy that provides VLCCs loading and unloading capabilities. LTB continues to lag its target debt balance schedule. Given the lag, S&P believes refinancing risk is increasing. When LBR's operations were suspended indefinitely in July 2021, LTB lost contracts for material amounts from its largest customer. Although the project has made progress in recontracting these volumes, most of what the refinery had under contract remains unleased. The financing that closed on Jan. 11, 2022, provides the project with approximately $40 million in incremental liquidity. S&P believes the increased liquidity reduces the near-term default risk for the project although it still envisions an event of default or distressed debt exchange within 12 months. However, unless the market improves such that the project can add a meaningful amount of long-term contracts at competitive rates, the capital structure remains highly unsustainable, in its view. S&P said, "We believe the backwardated crude oil price forecast and market conditions in the Caribbean are overly challenging to recontract this amount of capacity at a competitive storage rate. Therefore, we anticipate the project's cash flows will remain stressed. That said, if management can backfill the refinery's storage volumes, it could improve the project's liquidity. "With the latest financing, in our opinion, the project has sufficient liquidity to support its business and fund its remaining debt service over the next six months. A covenant holiday through 2022 provides further relief. As of September 2021, LTB's capital structure comprised $446 million of outstanding debt under its TLB, which matures in 2024. Our base case forecast assumes the refinery is not operational in the coming quarters. "If we raised our rating on LTB higher than the 'CCC' category, the rating would be constrained by our view of parental linkage given a cross-default provision with the holding company in the TLB's amended credit agreement. "The negative outlook reflects our expectation of a default or distressed debt exchange within the next 12 months. The project's capital structure remains unsustainable over the long term in the absence of significant, near-term contracting activity at competitive rates for its unleased storage capacity. "We could lower the rating if the situation is such that liquidity declines to the extent that we would expect a default or distressed debt exchange over the next six months. This could be a result of LTB being unsuccessful in recontracting meaningful volumes of unleased storage capacity at competitive rates. We will also lower the rating if the project misses an interest or amortization payment. "We could revise the outlook to stable if the project generates cash flows that provide a sufficient buffer to meet debt service payments. This could happen if LTB successfully obtains new, longer-term contracts for a meaningful portion of its unleased storage capacity at competitive rates." LINDERIAN CO: Gets Interim Cash Collateral Access ------------------------------------------------- The U.S. Bankruptcy Court for the Eastern District of Texas, Tyler Division, has authorized The Linderian Company Ltd. to use $20,000 solely to make payroll under section 363 of the Bankruptcy Code on an interim basis, and to provide adequate protection. As adequate protection for the Debtor's use of cash collateral, Internal Revenue Service, Fox Capital Group, Inc. d/b/a Fox Business Funding, EBF Holdings, LLC d/b/a Everest Business Funding, and Cloudfund LLC are granted a general and continuing lien upon and security interest in and to all of the Debtor's right, title, and interests in, to, and against the Secured Creditors' collateral, acquired by the Debtor after the Petition Date. As part of the adequate protection provided to the Secured Creditors, the Debtor will submit to the Secured Creditors copies of all monthly reports required to be made to the U.S. Trustee, all filings made by the Debtor with the Court, and all notices of hearings in the Reorganization Case. The Debtor will also give the Secured Creditors proof of insurance coverage and maintain same on the tangible portions of the collateral. The Court says in the absence of the filing of an agreement among the parties extending the interim authorization granted for an additional period of time, it will convene a virtual hearing on February 22, 2022 at 9:30 a.m. A copy of the order is available at https://bit.ly/3rNkuix from PacerMonitor.com. About The Linderian Company, Ltd. The Linderian Company, Ltd. operates a nursing care facility in Longview, Texas. The Debtor sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. E.D. Tex. Case No. 22-60024) on January 19, 2022. In the petition signed by Greg Sechrist, managing partner, the Debtor disclosed up to $1 million in assets and up to $10 million in liabilities. Judge Joshua P. Searcy oversees the case. Mark A. Castillo, Esq., at Curtis Castillo PC is the Debtor's counsel. LTL MANAGEMENT: Bankruptcy Experts Join Call for Case Dismissal --------------------------------------------------------------- Maria Chutchian of Reuters reports that a group of bankruptcy law professors are looking to weigh in on Johnson & Johnson's use of the bankruptcy system to settle lawsuits alleging that its talc products cause cancer, calling the strategy a "serious abuse." The group filed court papers on Tuesday seeking approval to submit a "friend of the court" brief in support of an effort by a committee representing people who have sued over J&J's talc products to get the bankruptcy of J&J subsidiary LTL Management LLC thrown out. The seven professors argued that the pharmaceutical giant should not be permitted to use bankruptcy to rid itself of its talc-related liabilities when it’s in strong financial health. The filing comes a few weeks before U.S. Bankruptcy Judge Michael Kaplan in New Jersey is set to hear arguments over the committee’s motion to dismiss the case. LTL's bankruptcy was filed in October to resolve around 38,000 claims alleging J&J’s talc-based products caused mesothelioma and ovarian cancer. J&J, which maintains that its talc products are safe, created LTL to offload talc-related liabilities and then placed it into bankruptcy with the goal of settling those claims instead of litigating them individually in various courts. The professors, including Jared Ellias of the University of California Hastings School of Law and Kenneth Ayotte of University of California Berkeley School of Law, accused J&J of attempting to “deprive innocent talc victims of their day in court.” While this is not the first time a company has used bankruptcy to handle tort liabilities, it is an "alarming" trend, the professors said. A spokesperson for LTL said in a statement on Wednesday that courts have recognized that resolving these types of claims through Chapter 11 is legitimate use of the restructuring process. The spokesperson also stated that while LTL does not believe the claims are valid, it expects them to grow in number. "Our overarching objective is to reach a fair and equitable resolution for claimants through a plan of reorganization," the spokesperson said. The professors echoed the talc committee's concerns over the validity of the bankruptcy, calling it a “direct attack on the fundamental integrity" of Chapter 11. Clay Thompson of Maune Raichle Hartley French & Mudd, who represents plaintiffs accusing J&J of causing their mesothelioma, said the "frank, unvarnished talk from academics is rare and highlights how egregious J&J’s abuse of the bankruptcy process is." The case is In re LTL Management LLC, U.S. Bankruptcy Court, District of New Jersey, No. 21-30589. For LTL Management: Gregory Gordon, Dan Prieto, Amanda Rush and Brad Erens of Jones Day For the committee: David Molton of Brown Rudnick; Melanie Cyganowski of Otterbourg; Daniel Stolz of Genova Burns; Brian Glasser of Bailey Glasser; Lenard Parkins of Parkins Lee & Rubio; and Jonathan Massey of Massey & Gail For the professors: Sean O'Donnell, Stephen Selbst, Steven Smith and Rachel Ginzburg of Herrick Feinstein About LTL Management LTL Management, LLC, is a subsidiary of Johnson & Johnson (J&J), which was formed to manage and defend thousands of talc-related claims and oversee the operations of Royalty A&M. Royalty A&M owns a portfolio of royalty revenue streams, including royalty revenue streams based on third-party sales of LACTAID, MYLANTA/MYLICON and ROGAINE products. LTL Management filed a petition for Chapter 11 protection (Bankr. W.D.N.C. Case No. 21-30589) on Oct. 14, 2021. The case was transferred to New Jersey (Bankr. D. N.J. Case No. 21-30589) on Nov. 16, 2021. The Hon. Michael B. Kaplan is the case judge. At the time of the filing, the Debtor was estimated to have $1 billion to $10 billion in both assets and liabilities. The Debtor tapped Jones Day and Rayburn Cooper & Durham, P.A., as bankruptcy counsel; King & Spalding, LLP and Shook, Hardy & Bacon LLP as special counsel; McCarter & English, LLP as litigation consultant; Bates White, LLC as financial consultant; and AlixPartners, LLP as restructuring advisor. Epiq Corporate Restructuring, LLC, is the claims agent. An official committee of talc claimants was formed in the Debtor's Chapter 11 case on Nov. 9, 2021. On Dec. 24, 2021, the U.S. Trustee for Regions 3 and 9 reconstituted the talc claimants' committee and appointed two separate committees: (i) the official committee of talc claimants I, which represents ovarian cancer claimants, and (ii) the official committee of talc claimants II, which represents mesothelioma claimants. The official committee of talc claimants I tapped Genova Burns LLC, Brown Rudnick LLP, Otterbourg PC and Parkins Lee & Rubio LLP as its legal counsel. Meanwhile, the official committee of talc claimants II is represented by the law firms of Cooley LLP, Bailey Glasser LLP, Waldrep Wall Babcock & Bailey PLLC, Massey & Gail LLP, and Sherman Silverstein Kohl Rose & Podolsky P.A. 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. LUCKIN COFFEE: Centurium Is Controlling Holder After Shares Sale ---------------------------------------------------------------- Erin McClam of Bloomberg News reports that Luckin Coffee says a buyer consortium has closed a secondary share sale, making Centurium Capital the controlling shareholder, holding more than 50% voting interest. Buyer consortium includes IDG Capital and Ares SSG Capital Management. Secondary sale is closed on January 25, 2022. Court sanctioned transactions for secondary sale on Jan. 17, 2022. About Luckin Coffee Luckin Coffee Inc., was a Xiamen, Fujian-based coffee chain. In July 2020, Luckin Coffee called in liquidators to oversee a corporate restructuring and negotiate with creditors to salvage its business, less than four months after shocking the market with a US$300 million accounting fraud, South China Morning Post said. The Company hired Houlihan Lokey as financial advisers to implement a workout with creditors. The start-up company also named Alexander Lawson of Alvarez & Marsal Cayman Islands and Tiffany Wong Wing Sze of Alvarez & Marsal Asia to act as "light-touch" joint provisional liquidators (JPLs) under a Cayman Islands court order, it said in a regulatory filing in New York. The move was in response to a winding-up petition by an undisclosed creditor. The Joint Provisional Liquidators of Luckin Coffee, Alexander Lawson of Alvarez & Marsal Cayman Islands Limited and Wing Sze Tiffany Wong of Alvarez & Marsal Asia Limited, on Feb. 5, 2021, filed a verified petition under chapter 15 of title 11 of the United States Code with the United States Bankruptcy Court for the Southern District of New York. The Chapter 15 Petition seeks, among other things, recognition in the United States of the Company's provisional liquidation pending before the Grand Court of the Cayman Islands, Financial Services Division, Cause No. 157 of 2020 (ASCJ) and related relief. MESOBLAST LTD: M&G Investment Reports 8.89% Equity Stake -------------------------------------------------------- M&G Investment Management Limited disclosed in an amended Schedule 13G filed with the Securities and Exchange Commission that as of Dec. 31, 2021, it beneficially owns 57,606,043 shares of Common Stock/American Depositary Receipt of Mesoblast Limited, representing 8.89 percent of the shares outstanding. M&G Investment Funds also reported beneficial ownership of 56,459,597 of shares of Common Stock/American Depositary Receipt. A full-text copy of the regulatory filing is available for free at: https://www.sec.gov/Archives/edgar/data/0001345099/000119312522012056/d291239dsc13ga.htm About Mesoblast Headquartered in Melbourne, Australia, Mesoblast -- www.mesoblast.com -- is a developer of allogeneic (off-the-shelf) cellular medicines for the treatment of severe and life-threatening inflammatory conditions. The Company has leveraged its proprietary mesenchymal lineage cell therapy technology platform to establish a broad portfolio of late-stage product candidates which respond to severe inflammation by releasing anti-inflammatory factors that counter and modulate multiple effector arms of the immune system, resulting in significant reduction of the damaging inflammatory process. Mesoblast has locations in Australia, the United States and Singapore and is listed on the Australian Securities Exchange (MSB) and on the Nasdaq (MESO). Mesoblast reported a net loss of US$98.81 million for the year ended June 30, 2021, a net loss of US$77.94 million for the year ended June 30, 2020, and a net loss of US$89.80 million for the year ended June 30, 2019. As of Sept. 30, 2021, the Company had US$721.82 million in total assets, US$162.07 million in total liabilities, and US$559.75 million in total equity. MICRON DEVICES: Taps Cimo Mazer Mark as Special Litigation Counsel ------------------------------------------------------------------ Tarek Kirk Kiem, the Subchapter V trustee appointed in Micron Devices, LLC's Chapter 11 case seeks approval from the U.S. Bankruptcy Court for the Southern District of Florida to hire Cimo Mazer Mark, PLLC to assist him in prosecuting litigation claims. The firm will be paid a contingency fee of 35 percent for all litigation claims. David Cimo, Esq., shareholder of Cimo Mazer Mark, 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: David C. Cimo, Esq. Cimo Mazer Mark PLLC 100 S.E. 2nd Street, Suite 3650 Miami, FL 33131 Tel: (305) 374-6482 Fax: (305) 374-6488 Email: dcimo@cmmlawgroup.com About Micron Devices Micron Devices, LLC is a Miami Beach, Fla.-based company that manufactures medical equipment and supplies. Micron Devices filed a voluntary petition for relief under Subchapter V of Chapter 11 of the Bankruptcy Code (Bankr. S.D. Fla. Case No. 20-23359) on Dec. 7, 2020, disclosing total assets of $2,520,764 and total liabilities of $6,254,656. Laura Perryman, manager, signed the petition. Judge Laurel M. Isicoff oversees the case. Michael Gulisano, Esq., at Gulisano Law, PLLC serves as the Debtor's legal counsel. Tarek Kirk Kiem is the Subchapter V trustee appointed in the Debtor's Chapter 11 case. The trustee tapped Furr Cohen, P.A. as legal counsel and Cimo Mazer Mark, PLLC as special counsel. MIDTOWN DEVELOPMENT: Exclusivity Period Extended to March 21 ------------------------------------------------------------ Midtown Development, LLC has received more time to file its plan for emerging from Chapter 11 protection. Judge Thad J. Collins of the U.S. Bankruptcy Court for the Northern District of Iowa extended the period during which the company has the exclusive right to file a combined Chapter 11 plan and disclosure statement to March 21 and to solicit acceptances for the plan to May 20. The extension will give Midtown Development more time to file certain documents related to the sale of the Black's Building, the company's primary asset located in downtown Waterloo. Midtown Development has already accepted an offer of $7.5 million from Covalt & Company Colorado Properties, LLC and executed a purchase agreement with the Denver-based company, according to court papers. About Midtown Development Midtown Development, LLC, a real estate developer in Iowa, sought protection under Chapter 11 of the Bankruptcy Code (Bankr. N.D. Iowa Case No. 21-00478) on May 25, 2021. In the petition signed by Donna L. Nelson, managing member, the Debtor disclosed $1 million to $10 million in both assets and liabilities. Judge Thad J. Collins oversees the case. The Debtor tapped Day Rettig Martin, PC as legal counsel, BerganKDV as accountant, and Moglia Advisors as financial advisor. Clark, Butler, Walsh & Hamann, and Greenstein Sellers PLLC represent MidWestOne Bank, a secured creditor. MILFORD REGIONAL: S&P Lowers Bond Rating to 'BB', Outlook Neg. -------------------------------------------------------------- S&P Global Ratings lowered its long-term rating on the Massachusetts Development Finance Agency's bonds, issued for Milford Regional Medical Center (Milford), to 'BB' from 'BB+'. The outlook is negative. "The downgrade and negative outlook reflect Milford's multi-year trend of accelerated weak operating performance, which is expected to continue through the end of fiscal 2022, combined with a light balance sheet that has weakened over the past few fiscal years given continued operating stress," said S&P Global Ratings credit analyst Matthew O'Connor. MLK ALBERTA: U.S. Trustee Unable to Appoint Committee ----------------------------------------------------- The U.S. Trustee for Region 18 on Jan. 26 disclosed in a court filing that no official committee of unsecured creditors has been appointed in the Chapter 11 case of MLK Alberta, LLC. About MLK Alberta MLK Alberta, LLC, a company in Portland, Ore., filed a Chapter 11 petition (Bankr. D. Ore. Case No. 22-30019) on Jan. 7, 2022, listing up to $50 million in assets and $10 million in liabilities. Meron Alemseghed, sole member of MLK Alberta, signed the petition. Judge Teresa H. Pearson oversees the case. Theodore J. Piteo, Esq., at Michael D. O'Brien & Associates, P.C. serves as the Debtor's bankruptcy counsel. MOLINA HEALTHCARE: S&P Affirms 'BB-' ICR, Outlook Positive ---------------------------------------------------------- S&P Global Ratings affirmed its 'BB-' issuer credit rating on U.S. health insurer Molina Healthcare Inc. The outlook remains positive. The positive outlook reflects the potential for a one-notch upgrade based on operating performance, capitalization, and leverage metrics. The affirmation reflects Molina's solid competitive position in the managed Medicaid and Affordable Care Act (ACA) marketplace segments, improving geographic diversity, with a market presence in 19 states, and solid operating performance. As of Sept. 30, 2021, Molina covered 3.98 million Medicaid members, 719,000 ACA marketplace members, and 138,000 Medicare members. In recent years, Molina significantly improved its operating performance by focusing on medical-cost management and operating efficiencies. Its adjusted EBIT return on revenue (ROR) increased to 5.5%-6.2% in 2018-2020 from 0.2%-1.8% in 2016-2017. S&P expects its ROR will stabilize at a healthy level of 3.5%-5% in 2021-2022. Molina's Medicaid concentration (76% of premium revenue through Sept. 30, 2021) and ACA marketplace profitability are key risks. The return of Medicaid redeterminations, once the public health emergency (PHE) period ends (currently April 2022), will be a revenue headwind in 2022-2023. Medicaid contract renewals are also a risk, within S&P's outlook horizon. S&P expects California and Texas, two key states for Molina, will place their Medicaid contracts up for bid in 2022 (for contract start dates in 2023-2024). In the ACA market, Molina faces intense price competition, which will likely persist, and medical-cost pressure, which Molina believes it addressed in its pricing and product designs for 2022. MONROE COUNTY HCA: Moody's Affirms Ba3 Issuer Rating ---------------------------------------------------- Moody's Investors Service has affirmed Monroe County Health Care Authority's issuer and general obligation limited tax (GOLT) ratings at Ba3, affecting $2.9 million in rated debt outstanding. The outlook has been revised to stable from negative. The pledge supporting the authority's debt is limited based upon Alabama's constitutional property tax limits. The issuer rating represents Moody's assessment of hypothetical debt of the authority supported by a general obligation unlimited (GOULT) pledge. There is no debt associated with this rating. RATINGS RATIONALE The authority's Ba3 issuer rating reflects its weak financial position that will remain pressured with speculative elements in light of challenges related to hospital operations and annual violations of reporting covenants. The rating further reflects the authority's liquidity position that has been enhanced by federal coronavirus aid, along with its moderate leverage and absence of near term borrowing plans. The rating also incorporates the strong legal provisions under which tax revenues are sent first to the trustee and only afterwards to the hospital. This separation provides the bonds with a degree of insulation from the hospital's ongoing operational woes. The pledged tax revenues provide more than sufficient debt service coverage. The absence of distinction between the issuer and GOLT ratings reflects the ample taxing headroom between current pledged revenue and maximum annual debt service. RATING OUTLOOK The revision of the outlook to stable reflects the stability of the pledge that secures the authority's rated debt. While the authority's liquidity will decline over the next three years, the recent influx of federal and state aid will allow for operational flexibility over the middle term. FACTORS THAT COULD LEAD TO AN UPGRADE OF THE RATINGS Significant improvement hospital financial operations Material and sustained increase in liquidity levels FACTORS THAT COULD LEAD TO A DOWNGRADE OF THE RATINGS Future covenant violations without trustee waiver Any additional narrowing of hospital liquidity or inability to meet financial obligations Sustained tax base contractions, narrowing debt service coverage LEGAL SECURITY The authority's rated debt is backed by a senior lien on 75% of a 4-mill ad valorem tax levied countywide without time limit. The security is furthermore enhanced by a lockbox structure where tax revenue is diverted by the county, which collects the taxes, to the trustee to pay debt service. PROFILE The Monroe County Health Care Authority is a public corporation that owns and operates Monroe County Hospital. The majority of the authority's board members are appointed by the Monroe County Commission, however the County Commission is not financially accountable for the authority. Monroe County Health Care Authority is a related organization of Monroe County but there is no flow of funds between the two entities and the county has no financial accountability for the authority. Monroe County Health Care Authority services a population of 19,772 in south western Alabama (Aa1 stable). The hospital is a 94-bed facility within the county, and provides in and outpatient medical services, home health care, and various physical practices. METHODOLOGY The principal methodology used in these ratings was US Local Government General Obligation Debt published in January 2021. N.G. PURVIS: Taps Agri-Management Farm Services as Appraiser ------------------------------------------------------------ N. G. Purvis Farms, Inc. seeks approval from the U.S. Bankruptcy Court for the Eastern District of North Carolina to employ Agri-Management Farm Services, LLC as its appraiser. The Debtor needs an appraiser to assist in the preparation of a report as to the liquidation valuation of the Debtor's real property and, if needed, to provide testimony with regard thereto. The firm will be compensated as follows: (a) $1500 for preparing the valuation and any report; (b) $200 per hour for testimony in court; and (c) $100 per hour for travel time, plus reimbursement of expenses incurred. Benjamin Isaacson, an appraiser at Agri-Management Farm Services, 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: Benjamin Isaacson Agri-Management Farm Services, LLC 5475 Dyer Avenue, Suite 141 Marion, IA 52302 About N. G. Purvis Farms N.G. Purvis Farms, Inc., operates throughout the Southeast as a farrow-to-finish pork producer, which breeds, farrows, weans, and raises weaner pigs, feeder pigs, and market hogs, and then sold to pork processors. It owns and operates 12 farms in North Carolina and two farms in Georgia, together with associated facilities, on which it maintains herds of sows, breeds piglets, and raises market hogs. It contracts with numerous independent growers to feed and finish at their facilities weaned pigs and feeder pigs furnished and owned by the company into market hogs. N.G. Purvis Farms sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. E.D.N.C. Case No. 21-01068) on May 6, 2021. In the petition signed by Jerry M. Purvis, Sr., president, the Debtor disclosed $34,268,361 in assets and $53,126,237 in liabilities. Judge Stephani W. Humrickhouse oversees the case. The Debtor tapped Butler & Butler, LLP and Hendren, Redwine, Malone PLLC as bankruptcy counsel, Robbins May & Rich LLP as special counsel, Frost PLLC as accountant, and NutriQuest Business Solutions LLC as restructuring advisor. Steve Weiss of NutriQuest Business Solutions serves as the Debtor's chief restructuring officer. Professional Swine Management, LLC and Dr. Attila Farkas of Carthage Veterinary Service, Ltd. are the Debtor's consultants. On May 27, 2021, the U.S. Bankruptcy Administrator for the Eastern District of North Carolina appointed an official committee of unsecured creditors. The committee tapped Waldrep Wall Babcock & Bailey, PLLC as legal counsel and Dundon Advisers, LLC as financial advisor. NEW HAPPY FOOD: Seeks More Time to File Bankruptcy Plan ------------------------------------------------------- New Happy Food Company and NHC Food Company Inc. ask the U.S. Bankruptcy Court for the Northern District of Georgia to extend the exclusivity period to file a Chapter 11 plan to June 24, and the period to solicit acceptances for the plan to Aug. 23. The companies' current exclusive filing period and solicitation period are set to expire on Feb. 24 and April 25, respectively. The companies anticipate filing and confirming a plan in the coming months and need an extension of the exclusivity periods to preclude the costly disruption and instability that would occur if competing plans were proposed before their own plan is confirmed, according to their attorney, Taner Thurman, Esq., at Rountree, Leitman & Klein, LLC. About New Happy Food Company New Happy Food Company operates a grocery store in Atlanta, Ga. Its affiliate, NHC Food Company Inc. operates a warehouse business. New Happy Food Company and NHC Food Company sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. N.D. Ga. Lead Case No. 21-54898) on June 29, 2021. In the petition signed by You Nay Khao, owner, NHC Food Company disclosed total assets of up to $1 million and total liabilities of up to $10 million. Meanwhile, New Happy Food Company listed up to $500,000 in assets and up to $10 million in liabilities. The Debtors tapped Rountree, Leitman & Klein, LLC as legal counsel and Chang Company, CPAs, PC as accountant. NOORJAHAN HAGGERTY: Seeks to Hire Wernette Heilman as Counsel ------------------------------------------------------------- Noorjahan Haggerty, Inc. seeks approval from the U.S. Bankruptcy Court for the Eastern District of Michigan to employ Wernette Heilman PLLC as its 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; (b) administer this case and the Debtor's affairs; (c) prepare legal papers; (d) appear in court and at meetings to represent the interests of the Debtor; (e) negotiate with creditors and other parties-in-interest; (f) serve as the Debtor's counsel in any adversary proceedings or other litigation related to this bankruptcy case; (g) prepare and prosecute a Chapter 11 plan of reorganization; and (h) perform all other legal services for the Debtor in connection with this Chapter 11 case. Before the petition date, the firm received a retainer of $10,000. The hourly rates of the firm's counsel and staff are as follows: Michael R. Wernette $345 Ryan D. Heilman $355 Paralegal $125 Ryan Heilman, Esq., an attorney at Wernette Heilman, 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: Ryan D. Heilman, Esq. Michael R. Wernette, Esq. Wernette Heilman PLLC 40900 Woodward Ave., Suite 111 Bloomfield, MI 48304 Telephone: (248)835-4745 Email: ryan@wernetteheilman.com About Noorjahan Haggerty Noorjahan Haggerty, Inc. filed its voluntary petition for relief under Chapter 11 of the Bankruptcy Code (Bankr. E.D. Mich. Case No. 22-40197) on Jan. 12, 2022, listing as much as $100,000 in both assets and liabilities. Syed Mutaher, president, signed the petition. Judge Thomas J. Tucker oversees the case. Wernette Heilman PLLC serves as the Debtor's counsel. NORDIC AVIATION: Affiliates Seek to Hire Virginia Conflicts Counsel ------------------------------------------------------------------- Nordic Aviation Capital Designated Activity Co.'s affiliates, NAC Aviation 33 Limited and NAC Aviation 34 Limited, seek approval from the U.S. Bankruptcy Court for the Eastern District of Virginia to hire Ronald Page, PLC as Virginia conflicts counsel. The firm will assist Jonathan Foster and Jake Wood, members of the Debtors' boards of directors, in matters in which a conflict exists between the Debtors and their shareholders, affiliates, directors or officers. Its services include: (a) investigating and advising the directors regarding whether a matter constitutes a conflict matter; (b) conducting investigation and analysis sufficient to advise the directors regarding conflict matters; (c) implementing the directions of the directors related to conflict matters; (d) providing all other necessary legal services for the Debtors related to conflict matters; (e) providing legal advice and services regarding local rules, practices and procedures; (f) reviewing, revising or preparing drafts of documents to be filed with the court as Virginia conflicts counsel; (g) appearing in court; (h) monitoring the docket, reviewing filings, and coordinating with Cole Schotz P.C. on pending matters; and (i) interacting and communicating with the court's chambers and clerk's office. The firm's hourly rates are as follows: Ronald A. Page, Jr., Esq. $400 per hour Paralegals $180 per hour Ronald Page, Jr., Esq., 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. Mr. Page also disclosed the following in response to the request for additional information set forth in Paragraph D.1 of the Revised U.S. Trustee Guidelines: 1. Question: Did you agree to any variations from, or alternatives to, your standard or customary billing arrangements for this engagement? Response: No. Ronald Page, PLC's professionals working on this matter will bill at the firm's standard hourly rates. 2. Question: Do any of the professionals included in this engagement vary their rate based on the geographic location of the bankruptcy case? Response: No. 3. Question: If you represented the client in the 12 months prepetition, disclose your billing rates and material financial terms for the prepetition engagement, including any adjustments during the 12 months prepetition. If your billing rates and material financial terms have changed post-petition, explain the difference and the reasons for the difference. Response: Not applicable. 4. Question: Has your client approved your prospective budget and staffing plan, and, if so for what budget period? Response: Due to the nature of the firm's engagement, it has not prepared a formal budget and staffing plan but has discussed its standing monthly budget with the directors. Ronald Page, PLC can be reached at: Ronald A. Page, Jr., Esq. Ronald Page, PLC N. Chesterfield, VA, 23235 Tel: (804) 562-8704 Fax: (804) 482-2427 Email: rpage@rpagelaw.com About Nordic Aviation Capital Nordic Aviation Capital is the leading regional aircraft lessor serving almost 70 airlines in approximately 45 countries. Its fleet of 475 aircraft includes ATR 42, ATR 72, De Havilland Dash 8, Mitsubishi CRJ900/1000, Airbus A220 and Embraer E-Jet family aircraft. On Dec. 17, 2021, Nordic Aviation Capital Pte. Ltd., NAC Aviation 17 Limited, NAC Aviation 20 Limited, and Nordic Aviation Capital A/S each filed petitions seeking relief under Chapter 11 of the U.S. Bankruptcy Code (Bankr. E.D. Va.). On Dec. 19, 2021, Nordic Aviation Capital Designated Activity Company and 112 affiliated companies also filed petitions seeking Chapter 11 relief. The lead case is In re Nordic Aviation Capital Designated Activity Company (Bankr. E.D. Va. Lead Case No. 21-33693). Judge Kevin R. Huennekens oversees the cases. The Debtors tapped Kirkland & Ellis and Kutak Rock, LLP as bankruptcy counsels and the law firms of Clifford Chance, LLP, William Fry, LLP and Gorrissen Federspiel as corporate counsels. N.M. Rothschild & Sons Limited, Ernst & Young, LLP and PricewaterhouseCoopers, LLP serve as the Debtors' financial advisor, restructuring advisor and tax advisor, respectively. Epiq Corporate Restructuring, LLC is the claims and noticing agent. NORDIC AVIATION: Affiliates Tap Cole Schotz as Conflicts Counsel ---------------------------------------------------------------- Nordic Aviation Capital Designated Activity Co.'s affiliates, NAC Aviation 33 Limited and NAC Aviation 34 Limited, seek approval from the U.S. Bankruptcy Court for the Eastern District of Virginia to hire Cole Schotz P.C. to serve as conflicts counsel. Cole Schotz will assist Jonathan Foster and Jake Wood, members of the Debtors' boards of directors, in matters in which a conflict exists between the Debtors and their shareholders, affiliates, directors or officers. The firm's services include: (a) advising the directors regarding whether an issue constitutes a conflict matter; (b) conducting investigation and analysis sufficient to advise the directors regarding conflict matters, and; (c) implementing the directions of the directors related to conflict matters. The firm's hourly rates are as follows: Members $420 to $1120 per hour Special Counsel and Associates $300 to $610 per hour Law Clerks $210 to $300 per hour Paralegals $230 to $370 per hour The Debtors paid the firm a retainer fee in the total amount of $742,422.16 Seth Van Aalten, Esq., member of Cole Schotz, disclosed in a court filing that he is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. Mr. Aalten also disclosed the following in response to the request for additional information set forth in Paragraph D.1 of the Revised U.S. Trustee Guidelines: 1. Question: Did you agree to any variations from, or alternatives to, your standard or customary billing arrangements for this engagement? Response: No. Cole Schotz professionals working on this matter will bill at the firm's standard hourly rates. 2. Question: Do any of the professionals included in this engagement vary their rate based on the geographic location of the bankruptcy case? Response: No. 3. Question: If you represented the client in the 12 months prepetition, disclose your billing rates and material financial terms for the prepetition engagement, including any adjustments during the 12 months prepetition. If your billing rates and material financial terms have changed post-petition, explain the difference and the reasons for the difference. Response: On September 1, 2021, Cole Schotz effectuated its customary annual rate increase, which was disclosed to the Debtors. Other than the customary rate increase, the material financial terms of Cole Schotz's representation of the Debtors did not change upon the filing of their Chapter 11 cases. 4. Question: Has your client approved your prospective budget and staffing plan, and, if so for what budget period? Response: Yes, for the period of December 19, 2021 through and including March 31, 2022. Cole Schotz can be reached at: Seth Van Aalten, Esq. Cole Schotz P.C. 1325 6th Avenue New York, NY 10019 Tel: 646-563-8926 Fax: 646-563-7926 Email: svanaalten@coleschotz.com About Nordic Aviation Capital Nordic Aviation Capital is the leading regional aircraft lessor serving almost 70 airlines in approximately 45 countries. Its fleet of 475 aircraft includes ATR 42, ATR 72, De Havilland Dash 8, Mitsubishi CRJ900/1000, Airbus A220 and Embraer E-Jet family aircraft. On Dec. 17, 2021, Nordic Aviation Capital Pte. Ltd., NAC Aviation 17 Limited, NAC Aviation 20 Limited, and Nordic Aviation Capital A/S each filed petitions seeking relief under Chapter 11 of the U.S. Bankruptcy Code (Bankr. E.D. Va.). On Dec. 19, 2021, Nordic Aviation Capital Designated Activity Company and 112 affiliated companies also filed petitions seeking Chapter 11 relief. The lead case is In re Nordic Aviation Capital Designated Activity Company (Bankr. E.D. Va. Lead Case No. 21-33693). Judge Kevin R. Huennekens oversees the cases. The Debtors tapped Kirkland & Ellis and Kutak Rock, LLP as bankruptcy counsels and the law firms of Clifford Chance, LLP, William Fry, LLP and Gorrissen Federspiel as corporate counsels. N.M. Rothschild & Sons Limited, Ernst & Young, LLP and PricewaterhouseCoopers, LLP serve as the Debtors' financial advisor, restructuring advisor and tax advisor, respectively. Epiq Corporate Restructuring, LLC is the claims and noticing agent. NORDIC AVIATION: Affiliates Tap McDermott as Special Counsel ------------------------------------------------------------ NAC Aviation 31 Limited and 18 other affiliates of Nordic Aviation Capital Designated Activity Company seek approval from the U.S. Bankruptcy Court for the Eastern District of Virginia to hire McDermott Will & Emery, LLP as special counsel. The firm will assist Gary Begeman and Julian Markby, members of the Debtors' boards of directors, in matters in which a conflict exists between the Debtors and their affiliates, shareholders, directors or officers. The firm's services include: (a) advising the directors regarding whether an issue constitutes a conflict; (b) conducting investigation and analysis sufficient to advise the directors regarding the conflict matters; (c) implementing the directions of the directors related to the conflict matters; (d) assisting with out-of-court planning and negotiation attendant to the Debtors' Chapter 11 cases; (e) serving the Debtors in any related litigation capacities that become necessary; and (f) providing other services related to the conflict matters, including transactional diligence and advice, corporate governance advice, fact investigation, legal research, briefing, argument, discovery, negotiation regarding motions, orders and the terms of a plan of reorganization, appearance and participation in hearings, and communications and meetings with parties in interest. The firm's hourly rates are as follows: Members $375 - $960 per hour Counsel $345 - $910 per hour Associates $250 - $495 per hour Paralegals $185 - $345 per hour The Debtors paid the firm a retainer fee in the total amount of $650,000. Felicia Gerber Perlman, Esq., a partner at McDermott, disclosed in a court filing that she is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. The firm can be reached at: Felicia Gerber Perlman, Esq. McDermott Will & Emery LLP 444 West Lake Street, Suite 4000 Chicago, IL 60606-0029 Tel: (312) 372-2000 Fax: (312) 984-7700 Email: fperlman@mwe.com About Nordic Aviation Capital Nordic Aviation Capital is the leading regional aircraft lessor serving almost 70 airlines in approximately 45 countries. Its fleet of 475 aircraft includes ATR 42, ATR 72, De Havilland Dash 8, Mitsubishi CRJ900/1000, Airbus A220 and Embraer E-Jet family aircraft. On Dec. 17, 2021, Nordic Aviation Capital Pte. Ltd., NAC Aviation 17 Limited, NAC Aviation 20 Limited, and Nordic Aviation Capital A/S each filed petitions seeking relief under Chapter 11 of the U.S. Bankruptcy Code (Bankr. E.D. Va.). On Dec. 19, 2021, Nordic Aviation Capital Designated Activity Company and 112 affiliated companies also filed petitions seeking Chapter 11 relief. The lead case is In re Nordic Aviation Capital Designated Activity Company (Bankr. E.D. Va. Lead Case No. 21-33693). Judge Kevin R. Huennekens oversees the cases. The Debtors tapped Kirkland & Ellis and Kutak Rock, LLP as bankruptcy counsels and the law firms of Clifford Chance, LLP, William Fry, LLP and Gorrissen Federspiel as corporate counsels. N.M. Rothschild & Sons Limited, Ernst & Young, LLP and PricewaterhouseCoopers, LLP serve as the Debtors' financial advisor, restructuring advisor and tax advisor, respectively. Epiq Corporate Restructuring, LLC is the claims and noticing agent. NORDIC AVIATION: Affiliates Tap McDonald Hopkins as Special Counsel ------------------------------------------------------------------- Nordic Aviation Capital A/S and four other affiliates of Nordic Aviation Capital Designated Activity Company seek approval from the U.S. Bankruptcy Court for the Eastern District of Virginia to hire McDonald Hopkins, LLC as special counsel. The four affiliates are NAC Aviation 8 Limited, NAC Aviation 25 Limited, NAC Aviation 27 Limited, and NAC Aviation 3 A/S. The firm will assist Jame Donath and Anthony Horton, members of the Debtors' boards of directors, in matters in which a conflict exists between the Debtors and their affiliates, directors or officers. The firm's hourly rates are as follows: Members $375 - $960 per hour Counsel $345 - $910 per hour Associates $250 - $495 per hour Paralegals $185 - $345 per hour The Debtors paid the firm a retainer fee in the total amount of $150,000. David Agay, Esq., member of McDonald Hopkins, 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: David A. Agay, Esq. McDonald Hopkins LLC 300 North LaSalle Street, Suite 1400 Chicago, Illinois 60654 Tel: (312) 280-0111/(312) 642-2217 Fax: (312) 280-8232 Email: dagay@mcdonaldhopkins.com About Nordic Aviation Capital Nordic Aviation Capital is the leading regional aircraft lessor serving almost 70 airlines in approximately 45 countries. Its fleet of 475 aircraft includes ATR 42, ATR 72, De Havilland Dash 8, Mitsubishi CRJ900/1000, Airbus A220 and Embraer E-Jet family aircraft. On Dec. 17, 2021, Nordic Aviation Capital Pte. Ltd., NAC Aviation 17 Limited, NAC Aviation 20 Limited, and Nordic Aviation Capital A/S each filed petitions seeking relief under Chapter 11 of the U.S. Bankruptcy Code (Bankr. E.D. Va.). On Dec. 19, 2021, Nordic Aviation Capital Designated Activity Company and 112 affiliated companies also filed petitions seeking Chapter 11 relief. The lead case is In re Nordic Aviation Capital Designated Activity Company (Bankr. E.D. Va. Lead Case No. 21-33693). Judge Kevin R. Huennekens oversees the cases. The Debtors tapped Kirkland & Ellis and Kutak Rock, LLP as bankruptcy counsels and the law firms of Clifford Chance, LLP, William Fry, LLP and Gorrissen Federspiel as corporate counsels. N.M. Rothschild & Sons Limited, Ernst & Young, LLP and PricewaterhouseCoopers, LLP serve as the Debtors' financial advisor, restructuring advisor and tax advisor, respectively. Epiq Corporate Restructuring, LLC is the claims and noticing agent. ORGANIC POWER: Court Confirms Chapter 11 Plan --------------------------------------------- Judge Edward A. Godoy entered an order confirming the Plan of Organic Power LLC on Jan. 21, 2022. On Oct. 12, 2021, debtor Organic Power LLC filed with the U.S. Bankruptcy Court for the District of Puerto Rico a Disclosure Statement referring to a Chapter 11 Plan. On Nov. 22, 2021, Judge Edward A. Godoy approved the Disclosure Statement and ordered a Jan. 12 hearing on the Plan. "Based on the debtor's proffer as to what the financial advisor would testify, and there no being no objection raised toeither the proffer or to the feasibility report (docket #195), the court accepted in open court the debtor's proffer and admitted into evidence the feasibility report (docket #195). Upon the court's review of the feasibility report (docket #195), the debtor's 1129 statement (docket #190), and based on the proffered testimony of the financial advisor, the court finds that the amended chapter 11 plan filed at docket#129, as supplemented at docket #194 and as clarified at docket #197, meets all the requirements of Sec. 1129(a) of the Bankruptcy Code and is hereby confirmed," according to the minutes of the Jan. 12 hearing. About Organic Power Organic Power, LLC, -- https://www.prrenewables.com/ -- is a Vega Baja, P.R.-based company that offers food processing companies, restaurants, pharmaceuticals, and retail outlets an alternative to landfill disposal -- a low cost and environmentally friendly recycling option. Organic Power sought protection under Chapter 11 of the Bankruptcy Code (Bankr. D.P.R. Case No. 21-00834) on March 17, 2021. Miguel E. Perez, the president, signed the petition. In its petition, the Debtor disclosed assets of between $10 million and $50 million and liabilities of the same range. Judge Edward A. Godoy oversees the case. The Debtor tapped Fuentes Law Offices, LLC as bankruptcy counsel, and Godreau & Gonzalez Law, LLC, and Vidal, Nieves & Bauza, LLC as special counsel. PATH MEDICAL: Plan Solicitation Period Extended to March 27 ----------------------------------------------------------- Judge Scott Grossman of the U.S. Bankruptcy Court for the Southern District of Florida extended the exclusivity period for Path Medical Holding, Inc. and Path Medical, LLC to solicit acceptances for their proposed Chapter 11 plan to March 27. The companies' exclusivity period to file a plan expired on Jan. 26. On the same day, the companies filed a joint Chapter 11 plan of liquidation and disclosure statement. About Path Medical Path Medical Center Holdings, Inc. and Path Medical, LLC filed their voluntary petitions for Chapter 11 protection (Bankr. S.D. Fla. Lead Case No. 21-18339) on Aug. 28, 2021. Manual Fernandez, chief executive officer, signed the petitions. At the time of filing, Path Medical Center listed $220,060 in assets and $76,988,419 in liabilities while Path Medical listed $30,047,477 in assets and $86,494,715 in liabilities. Judge Scott M. Grossman oversees the cases. The Debtors tapped Edelboim Lieberman Revah Oshinsky PLLC as bankruptcy counsel, Foley & Lardner, LLP as special counsel, and Davis Goldman, PLLC as litigation counsel. KapilaMukamal, LLP, Keefe McCullough Co, LLP CPAs and SSG Advisors, LLC serve as the Debtors' financial advisor, ESOP auditor and investment banker, respectively. The U.S. Trustee for Region 21 appointed an official committee of unsecured creditors in the Debtors' Chapter 11 cases on Sept. 28, 2021. Greenberg Traurig, P.A. and Province, LLC serve as the committee's legal counsel and financial advisor, respectively. The Debtors filed a joint Chapter 11 plan of liquidation and disclosure statement on Jan. 26, 2022. PEDIATRIC ASSOCIATES: S&P Assigns 'B' ICR, Outlook Stable --------------------------------------------------------- S&P Global Ratings assigned its 'B' issuer credit rating to Pediatric Associates Holding Co. LLC and its 'B' issue-level and '3' recovery rating to the company's proposed $600 million first-lien term loan and $100 million revolving credit facility. The outlook is stable. The '3' recovery rating on the first-lien debt represents its expectation for meaningful recovery (50%-70%; rounded estimate: 50%) in the event of a hypothetical default. Pediatric Associates, a provider of pediatric primary care services with a focus on value-based care contracts, is recapitalizing after TPG Capital acquired 40% of the company from existing investors including Summit Partners. Pediatric Associates' business strength is constrained by its narrow focus in a competitive market with modest scale and substantial payor concentration. S&P said, "A provider of pediatric primary care services, Pediatric Associates operates in a highly fragmented and competitive market that has relatively low barriers to entry, in our view. We believe Pediatric Associates is larger than direct peers, but its market share in U.S. pediatric primary care services is only about 2%. We believe many competitors in this highly fragmented market are aggressively looking to increase their base of patients, limiting the company's pricing power with insurers. The company's scale, which is greater than most peers, its focus on value-based care contracts (VBCCs) and building a deeper relationship with payors, and its position in local markets provide a modest competitive advantage." For example, S&P believes the company has higher encounter rates, or number of interactions with its patients, than peers and that the company's telehealth solutions help reduce unnecessary urgent care and emergency room visits and lower hospital admission rates, reducing the total cost of health care relative to the broader pediatric population. Pediatric Associates also has substantial payor concentration, with Medicaid plans representing 54% of revenue (albeit through contracts with various insurers), while commercial payors represent 42%. The company's top-five contracts account for about 59% of its revenue. The company also has substantial geographic concentration, with 55% of revenue generated in Florida and 31% in Texas. Pediatric Associates derives a significant portion of its revenue (about 46%) from VBCCs, making profitability more volatile. Most of the revenue from VBCCs has some exposure to utilization risk (e.g., contracts in which the company is paid a set fee per member per month regardless of patients' utilization of its services) or various degrees of upside potential for reducing the total cost of patient care for the insurer, with limited or no penalties for failing to reduce the cost. However, the company has one contract contributing about 10% of revenue that is fully capitated. It receives a higher level of (gross) revenue from this contract, but it also takes on the risks traditionally held by a health insurer, including being liable for nearly all health care costs, including those due to third-party providers, such as hospitals (with limited exceptions). Although an unexpected increase in costs among this group of patients could lead to contract losses, S&P believes the risk is mitigated by several factors, including the limited proportion (10%) of revenues that are fully capitated, the company's more than 10 years of experience with this contract, the contract's above average profitability, the large and diversified population of covered children under the contract, and the relative infrequency in which children have high medical costs. Although the company does not have aggregate stop-loss protection (on this contract as a whole), the company does have stop-loss protection in the contract that covers 90% of costs that exceed a certain threshold per year for any individual patient. S&P believes that in the event of a significant and broad rise in medical costs across the pediatric population that could hurt the company's financial performance, Medicaid would likely increase rates to support insurers and providers, as has occurred in the past. In addition, the company can exit this contract with 90 days' notice, further limiting risk. S&P said, "Given the above average margins in these contracts, we expect the company to seek to double or triple the portion of revenue from capitated contracts over the next two to five years. We also expect it to exercise a prudent level of risk management in underwriting fully capitated contracts, using actuarial assessments of historical claims data, stop-loss agreements, and other provisions to limit risk. "That said, we do expect incremental volatility in profitability from these contracts, and we believe the substantial EBITDA margin expansion in 2020, to about 28% from 17% in 2019, was partially driven by a significant reduction in primary care and other health care services during the pandemic. We expect utilization to increase and margins to decline to the low 20's percentage range in 2022 as the pandemic subsides, especially considering the potential for utilization to rise above pre-pandemic levels in 2022 and 2023. This assumption is materially lower than the company's expectations for margins to remain in the high 20% area. We expect margins to rise gradually as the company enters more fully capitated contracts with above average margins. "We expect leverage to remain above 5x over the next couple of years given the company's private equity sponsor ownership and an acquisition-driven growth strategy. Since Summit Partners' investment in the company in March 2019, the company has pursued multiple acquisitions, increasing its geographic reach and scale. With the investment from TPG Capital, we expect Pediatric Associates to continue to pursue a strategy of aggressive growth through acquisitions. After the proposed transaction closes, we expect S&P Global Ratings-adjusted debt leverage of about 5.5x and for leverage to remain near this level over time. We expect an incremental degree of earnings volatility due to the nature of its VBCCs. "Other rated companies we view as comparable are Physician Partners LLC (B/Positive/--) and Cano Health Inc. (B/Stable/--). Pediatric Associates has better payor diversification than Physician Partners (top payor accounts for about 45% of its revenue), a higher level of profitability (EBITDA margins), and less exposure to fully capitated contracts (10% compared to nearly 100% for the other two). "Conversely, Pediatric Associates also has materially less scale than those peers, which is a relative weakness. We also view Pediatric Associates as likely to maintain leverage above 5x, given the aggressive financial policy of private equity owners. We see greater potential for deleveraging at Physician Partners, whose majority owner is not a private equity firm. Cano Health is a publicly traded company. Those two companies also maintain a substantially higher cash balance than Pediatric Associates. "The stable outlook reflects our expectation for adjusted leverage to be about 5.5x after the refinancing, and we expect it to remain in that range over the next couple of years, driven by an acquisition-driven growth strategy. We also assume EBITDA margins will decline to the low 20's percentage range in 2022 and 2023 as the pandemic subsides. "We could downgrade Pediatric Associates in the next 12 months if we expect its S&P Global Ratings-adjusted debt leverage to exceed 7.5x or if adjusted discretionary cash flow to debt falls well below 3% for a sustained period. This could occur if the company adopts a more aggressive acquisition strategy that leads to an increase in its debt. This could also occur if its margins and EBITDA deteriorate, potentially due to operational missteps or higher-than-anticipated costs from capitated contracts. "It is unlikely we will raise our rating on Pediatric Associates in the next 12 months given its financial-sponsor ownership and our expectation that it will use excess cash flows for acquisitions. That said, we could consider upgrading the company if it successfully executes on its expansion program, including steadily improving EBITDA margins, and maintains S&P Global Ratings-adjusted debt to EBITDA of less than 5x for a sustained period of time." PES HOLDINGS: Owner Reaches Chapter 11 Insurance Row Deal --------------------------------------------------------- Vince Sullivan of Law360 reports that the former owner of a Philadelphia oil refinery that suffered a catastrophic explosion in 2019 reached a deal this week to resolve a dispute with insurers over coverage for the property damage sustained in the blast and ensuing fire. In the midst of a nine-day trial in Delaware bankruptcy court over PES Holdings LLC's claim that it was owed $301 million from a group of insurers, the proceedings were suspended when a settlement was reached in principle among the parties. "We are extremely pleased with the settlement as it reflects PES obtaining the overwhelming majority of its property damage claim," PES said. About PES Holdings Headquartered in Philadelphia, Pennsylvania, PES Holdings, LLC -- http://pes-companies.com/-- owns an oil refining complex. The Philadelphia Energy Solutions Refining Complex operates two domestic refineries -- Girard Point and Point Breeze -- in South Philadelphia. The refinery processes approximately 335,000 barrels of crude oil per day (42 U.S. gallons per barrel). In addition to producing unbranded gasoline (87, 89 and 93 octane), PES also produces jet fuel, cleaner-burning diesel, petrochemicals, liquefied petroleum gas and sulfur in the Northeast. The company offers a variety of diesels, including ultra-low-sulfur diesel, non-road, heating oil, locomotive/marine and non-jet kerosene. PES employs over 1,000 people. PES is owned by The Carlyle Group and a subsidiary of Energy Transfer Partners, L.P. PES Holdings and eight of its subsidiaries sought protection under Chapter 11 of the Bankruptcy Code (Bankr. D. Del. Lead Case No. 18-10122) on Jan. 21, 2018. In the petition signed by Gregory G. Gatta, manager, PES estimated assets and liabilities of $1 billion to $10 billion. The Hon. Kevin Gross is the case judge. The Debtors hired Kirkland & Ellis LLP and Kirkland & Ellis International LLP as their bankruptcy counsel; Pachulski Stang Ziehl & Jones LLP as local bankruptcy counsel; PJT Partners LP as financial advisor; Alvarez & Marsal North America, LLC as restructuring advisor; and Rust Consulting/Omni Bankruptcy as claims and noticing agent. In addition, debtor North Yard GP, LLC, tapped Proskauer Rose LLP as its conflicts counsel, and Bielli & Klauder, LLC, as co-counsel. Debtor Philadelphia Energy Solutions Refining and Marketing LLC tapped Chipman Brown Cicero & Cole, LLP as Delaware counsel, and Curtis, Mallet-Prevost, Colt & Mosle LLP as its conflicts counsel. PHIO PHARMACEUTICALS: Empery Asset, et al., Report 4.99% Stake -------------------------------------------------------------- Empery Asset Management, LP, Ryan M. Lane, and Martin D. Hoe disclosed in an amended Schedule 13G filed with the Securities and Exchange Commission that as of Dec. 31, 2021, they beneficially own 789,063 shares of common stock issuable upon exercise of warrants of Phio Pharmaceuticals Corp., representing 4.99 percent of the shares outstanding. The percentage is based on 13,534,692 shares of common stock issued and outstanding as of Nov. 5, 2021, as represented in the company's Quarterly Report on Form 10-Q filed with the SEC on Nov. 10, 2021 and assumes the exercise of the company's reported warrants subject to the blockers. Empery Asset serves as the investment manager to each of the Empery Funds. Each of Mr. Lane and Mr. Hoe is a managing member of Empery AM GP, LLC, the general partner of the investment manager. A full-text copy of the regulatory filing is available for free at: https://www.sec.gov/Archives/edgar/data/1469336/000090266422000373/p22-0169sc13ga.htm About Phio Pharmaceuticals Marlborough, Massachusetts-based Phio Pharmaceuticals Corp. -- http://www.phiopharma.com-- is a biotechnology company developing the next generation of immuno-oncology therapeutics based on its self-delivering RNAi therapeutic platform. The Company's efforts are focused on silencing tumor-induced suppression of the immune system through its proprietary INTASYL platform with utility in immune cells and/or the tumor micro-environment. The Company's goal is to develop powerful INTASYL therapeutic compounds that can weaponize immune effector cells to overcome tumor immune escape, thereby providing patients a powerful new treatment option that goes beyond current treatment modalities. Phio Pharmaceuticals reported a net loss of $8.79 million for the year ended Dec. 31, 2020, a net loss of $8.91 million for the year ended Dec. 31, 2019, and a net loss of $7.36 million for the year ended Dec. 31, 2018. As of Sept. 30, 2021, the Company had $27.94 million in total assets, $2.70 million in total liabilities, and $25.25 million in total stockholders' equity. PIPELINE FOODS: Unsecureds Will Recover 1% to 1.9% in Plan ---------------------------------------------------------- Pipeline Foods, LLC, et al., and Official Committee of Unsecured Creditors submitted a Disclosure Statement. The Plan provides for the consolidation of the Debtors for Plan purposes only and the Distribution of the Debtors' assets, which have already been liquidated or will be liquidated in the future, to Holders of Allowed Claims in accordance with the terms of the Plan. As of the date of the Disclosure Statement, the assets are largely Cash, accounts receivable, fully encumbered real estate, a small grain elevator and storage facility, and the Causes of Action. The Plan provides for the transfer of all assets into the Liquidating Trust and the appointment of a Liquidating Trustee as a means to implement the Plan. The Liquidating Trustee shall be empowered to, among other things, administer and liquidate any and all remaining assets, object to and settle Claims, and prosecute Causes of Action in accordance with the Plan. The Plan also provides for Distributions to Holders of Allowed Claims, including Other Secured Claims, Administrative Expense Claims, Section 503(b)(9) Claims, Professional Fee Claims, Priority Tax Claims, Priority Non-Tax Claims and General Unsecured Claims. In addition, the Plan cancels all Equity Interests in the Debtors, and provides for the dissolution and wind-up of the affairs of the Debtor. Certain material terms of the Plan are: * All Allowed Secured Claims (including the Rabobank Secured Claim, the Compeer Secured Claims and the Other Secured Claims), Allowed Section 503(b)(9) Claims, Allowed Administrative Expense Claims, Allowed Professional Fee Claims, Allowed Priority Tax Claims and Allowed Priority Non-Tax Claims will be paid or otherwise satisfied in full as required by the Bankruptcy Code and provided for in the Plan, unless otherwise agreed to by the Holders of such Claims. * Holders of Allowed General Unsecured Claims will receive their Pro Rata share of (1) the Excess 503(b)(9) Atlantic Sale/Van Mol Proceeds, if any, to the extent the Liquidating Trustee deems advisable, with said funds being transferred to the Distribution Account and earmarked for Allowed General Unsecured Claims if the Liquidating Trustee declines to make said distribution; and (2) on each Subsequent Distribution Date, to the extent the Liquidating Trustee deems advisable, and the Final Distribution Date, subject to the prior payment in full of any amounts owed to Rabobank in respect of the Rabobank Liquidation Preference, all then-available proceeds (minus all actual and anticipated Post-Effective Date Expenses) of the Unsecured Creditor Post-Effective Date Distributable Assets. * As of the Effective Date, all Equity Interests of any kind will be cancelled, and the Holders thereof will not receive or retain any property, interest in property or consideration under the Plan on account of such Equity Interests. * The entry of the Confirmation Order shall constitute the Bankruptcy Court's approval of each of the compromises and settlements provided for in the Plan, and the Bankruptcy Court's findings shall constitute its determination that such compromises and settlements are in the best interests of the Debtors, their Estates, Holders of Claims and other parties in interest, and are fair, equitable and reasonable. Under the Plan, Class 5 General Unsecured Claims total $80 million to $84 million. Each Holder of an Allowed Class 5 General Unsecured Claim will receive a pro rata share of: (1) the Excess 503(b)(9) Atlantic Sale/Van Mol Proceeds, if any, to the extent the Liquidating Trustee deems advisable, with said funds being transferred to the Distribution Account and earmarked for Allowed General Unsecured Claims if the Liquidating Trustee declines to make said distribution; and (2) on each Subsequent Distribution Date, to the extent the Liquidating Trustee deems advisable, and the Final Distribution Date, subject to the prior payment in full of any amounts owed to Rabobank in respect of the Rabobank Liquidation Preference, all then-available proceeds (minus all actual and anticipated Post-Effective Date Expenses) of the Unsecured Creditor Post-Effective Date Distributable Assets. Unsecured creditors will recover 1.0 to 1.9% of their claims. Class 5 is impaired. The hearing to consider confirmation of the plan has been scheduled for Mar. 1, 2022 at 10:00 a.m. (Eastern Time). Objections to confirmation of the Plan must be filed on or before Feb. 22, 2022 at 4:00 p.m. (Eastern Time). The deadline to vote to accept or reject the Plan is 5:00 p.m. (Eastern Time) on Feb. 22, 2022. Counsel for the Debtors: Mark Minuti, Esq. Monique B. DiSabatino, Esq. Matthew P. Milana, Esq. SAUL EWING ARNSTEIN & LEHR LLP 1201 N. Market St., Suite 2300, P.O. Box 1266 Wilmington, DE 19899 Tel: (302) 421-6800 E-mail: mark.minuti@saul.com monique.disabatino@saul.com matthew.milana@saul.com - and - Michael L. Gesas, Esq. Barry A. Chatz, Esq. David A. Golin, Esq. Andrew J. Rudolph, Esq. SAUL EWING ARNSTEIN & LEHR LLP 161 North Clark St., Suite 4200 Chicago, Illinois 60601 Tel: (312) 876-7100 E-mail: michael.gesas@saul.com barry.chatz@saul.com david.golin@saul.com andrew.rudolph@saul.com Counsel to the Official Committee of Unsecured Creditors: Kevin G. Collins, Esq. BARNES & THORNBURG LLP 1000 N. West St., Suite 1500 Wilmington, DE 19801 Tel: (302) 300-3434 E-mail: kevin.collins@btlaw.com - and - Connie A. Lahn, Esq. Molly N. Sigler, Esq. BARNES & THORNBURG LLP 2800 Capella Tower, 225 South Sixth St. Minneapolis, MN 55402 Tel: (612) 333-2111 E-mail: connie.lahn@btlaw.com molly.sigler@btlaw.com - and - Kevin C. Driscoll, Jr., Esq. BARNES & THORNBURG LLP One N. Wacker Dr., Suite 4400 Chicago, IL 60606 Tel: (312) 214-8322 E-mail: Kevin.driscoll@btlaw.com A copy of the Disclosure Statement dated Jan. 21, 2021, is available at https://bit.ly/3Ap1N8u from PacerMonitor.com. About Pipeline Foods Pipeline Foods, LLC -- https://www.pipelinefoods.com/ -- is the first U.S.-based supply chain solutions company focused exclusively on non-GMO, organic, and regenerative food and feed. It is based in Fridley, Minn. Pipeline Foods and its affiliates sought Chapter 11 protection (Bankr. D. Del. Lead Case No. 21-11002) on July 8, 2021. The affiliates are Pipeline Holdings, LLC, Pipeline Foods Real Estate Holding Company, LLC, Pipeline Foods, ULC, Pipeline Foods Southern Cone S.R.L., and Pipeline Foods II, LLC. In the petition signed by CRO Winston Mar, Pipeline Foods disclosed between $100 million and $500 million in both assets and liabilities. Judge Karen B. Owens oversees the cases. The Debtors tapped Saul Ewing Arnstein & Lehr, LLP as legal counsel; Ocean Park Securities, LLC as investment banker; Baker Tilly US, LLP and Baker Tilly Windsor, LLP as tax consultants; and The Finley Group, Inc. as financial advisor. Matthew Smith, managing director at Finley Group, serves as chief restructuring officer. Stretto is the claims, noticing and administrative agent. Bryan Cave Leighton Paisner, LLP serves as legal counsel to the Board of Directors. On July 22, 2021, the U.S. Trustee for Region 3 appointed an official committee of unsecured creditors. The committee tapped Barnes & Thornburg, LLP as its legal counsel and Dundon Advisers, LLC as its financial advisor. Bryan Cave Leighton Paisner LLP serves as special counsel to the board of managers of Pipeline Holdings, LLC, one of the affiliated debtors. PROSPECT-WOODWARD: Disclosure Violates Bankruptcy Code, Says ------------------------------------------------------------ J.NR. Gutters, Inc. ("JNR") and Denron Plumbing & HVAC, LLC, object to the Motion of The Prospect-Woodward Home for Entry of an Order approving the Adequacy of the Disclosures in the Combined Plan and Disclosure Statement. The Movants point out that the combining the Plan and Disclosure Statement – rather than simply the hearings violates the Bankruptcy Code, and thus the motion should be summarily denied: * As a threshold matter, the Motion should be summarily denied because the Combined Plan and Disclosure Statement violates the clear terms of the Bankruptcy Code. The two-step plan and disclosure statement process is a bedrock feature of the chapter 11 process to ensure that informed creditor democracy. Section 1125(b) expressly conditions solicitation of votes on transmission of "the plan . . . and a written disclosure statement approved, after notice of hearing, by the court as containing adequate information." 11 U.S.C. Sec. 1125(b) (emphasis added). Moreover, the Court's local rules require the filing of a separate plan and disclosure statement. * The Debtor cites Section 105(a) in support of its attempt to circumvent the requirement of Section 1125(b). This attempt fails in light of Law v. Siegel, 571 U.S. 415 (2014), which prohibits using section 105(a) to circumvent other provisions of the Bankruptcy Code (like section 1125(b)). Also, section 105 itself already includes case management provisions that grant bankruptcy courts considerable discretion in regulating proceedings, including streamlining the confirmation process in chapter 11 cases. Specifically, section 105(d)(2)(B)(vi) authorizes a bankruptcy court to combine the hearings on the plan and the disclosure statement. Given the existence of this provision, it is clear that Congress did not intend for bankruptcy courts to combine plans and disclosure statements into a single document under section 105. * Moreover, courts have found that Section 105(d)(2), which specifically provides that bankruptcy courts cannot make an order "inconsistent with another provision of [the Bankruptcy Code and Rules]", is limited by its terms. The Movants further point out that the Combined Plan and Disclosure Statement does not provide adequate information under Bankruptcy Code Section 1125 and In re Ferretti. By any measure, the Combined Plan and Disclosure Statement fails to satisfy this standard, including for the following reasons: * It does not provide adequate information about the value of the Debtor's assets. In fact, this section is left entirely blank. The Debtor must provide "[a] complete description of the available assets and their value . . . ." In re Ferretti. * It does not provide adequate information or analysis about the Debtor's causes of action, including the avoidance actions. Instead, the Debtor provides a conclusory statement that it "believes that the value of causes of action will be zero . . . .". Notably, the Debtor's Statement of Financial Affairs discloses 117 transfers to dozens of transferees in the 90 days prior to the Petition Date. The Debtor must provide "[t]he actual or projected value that can be obtained from avoidable transfers . . . ." * It does not explain why a liquidating chapter 11 plan implemented by a plan administrator is in the best interests of creditors and superior to conversion to chapter 7 and appointment of an independent trustee. It is worth noting that the identity of the plan administrator is not yet disclosed, the service of the plan administrator could go on for up to three years, the plan administrator will not be required to give any bond or surety or other security for the performance of its duties if not ordered by the Court, and the plan administrator will be paid without order of the Court. * It does not provide adequate information about the Class 4 claims, including the amount of the claims. For instance, the Debtor estimates that the maximum Class 4 claim amount is $6,335,660.77 (because this is the sum of all recorded mechanic's lien attachments); there is no information provided about how this amount was calculated or any disclosure that it is substantially lower than the proofs of claim filed by the Movants and other Mechanics Lienholders. * It does not contain any information about accrued administrative expenses and estimated amounts through effective date and closure of the case. The Debtor must provide an "estimate of all administrative expenses, including attorneys' fees and accountants' fees. Moreover, the Movants assert that the Combined Plan and Disclosure Statement is patently unconfirmable. Here, even if the Combined Plan and Disclosure statement contains adequate information (it does not), the Court should not approve the disclosures – conditionally or otherwise – because the plan itself is patently unconfirmable for the following reasons: * It does not satisfy Section 1129(a)(1), which requires that a plan comply with applicable provisions of the Bankruptcy Code. Here, the Combined Plan and Disclosure Statement violates Section 1141(d)(3)(A), which prohibits a discharge following confirmation of a liquidating plan. * It also fails to satisfy Section 1129(a)(1) because it impairs Class 4, but attempts to prohibit the holders of Class 4 claims to vote under section 1126(g). Class 4 cannot be deemed to reject the Combined Plan and Disclosure Statement because the holders of such claims may, in fact, be entitled to receive distributions. As has been the situation throughout this case, the Debtor's treatment adopts a position advocated by the Bond Trustee and assumes that the Mechanics Lienholders are unsecured because the Bond Trustee's mortgage has priority. As discussed in the MacMillin Objection and in various papers filed with the Court, this is simply not true and creditors in Class 4 are fully secured by a senior lien under New Hampshire's well-established race-notice rules and by the provisions of RSA 447:12-a. * It does not satisfy Section 1129(a)(2), which requires that a plan proponent comply with applicable provisions of the Bankruptcy Code. Here, as described above, the Debtor has not filed and obtained approval of a separate disclosure statement containing adequate information, in violation of section 1125(b). * It does not satisfy section 1129(a)(7), which requires each impaired, rejecting class to receive at least as much under the plan as in a chapter 7 liquidation. Here, Class 4 is impaired and is deemed to have rejected the Combined Plan and Disclosure Statement, but the holders of such claims are not receiving at least as much as they would in a chapter 7. As described above, the Debtor attempts to limit Class 4 claims to $6,335,660.77, even though the holders of such claims have filed proofs of claim well in excess of that amount. Thus, the Combined Plan and Disclosure Statement may result in Class 4 claimants receiving significantly less than they would in a chapter 7, where their relative priority and entitlement to distributions would be adjudicated in the claims allowance process prior to distributions being made to the Bond Trustee. * It also fails to satisfy Section 1129(a)(7) because it proposes to release causes of action, including avoidance actions. The Debtor has not provided any analysis about why such a waiver benefits the estate, and under circumstances where the Combined Plan and Disclosure Statement proposes to distribute all sale proceeds and cash to the Bond Trustee, the waiver seems particularly misguided, as it the only source of recovery for other creditors. Attorney for J.NR. Gutters, Inc. and (by assignment of claims) American Building Supply Co. Inc.: Alan L. Braunstein, Esq. RIEMER & BRAUNSTEIN LLP 100 Cambridge St., 22nd Fl. Boston, MA 02114 Tel: (617) 880-3516 E-mail: abraunstein@riemerlaw.com Attorney for Denron Plumbing & HVAC, LLC: Frank P. Spinella, Jr., Esq. WADLEIGH, STARR & PETERS, PLLC 95 Market St. Manchester, NH 03101 Tel: (603) 206-7277 E-mail: fspinella@wadleighlaw.com About Prospect-Woodward Homes The Prospect-Woodward Home, doing business as Hillside Village Keene, owns and operates a licensed continuing care retirement facility with 222 units, comprised of 141 independent living units, 43 assisted living units, 18 memory care units, and 20 licensed but not yet opened long-term nursing care units located at 95 Wyman Road, Keene, N.H., comprising approximately 66 acres. On Aug. 30, 2021, Prospect-Woodward Home sought Chapter 11 protection (Bankr. D.N.H. Case No. 21-10523), listing up to $50 million in assets and up to $100 million in liabilities. Judge Bruce A. Harwood oversees the case. The Debtor tapped Polsinelli, PC, as bankruptcy counsel; Hinckley, Allen & Snyder, LLP as special counsel; Silverbloom Consulting, LLC as financial consultant; and OnePoint Partners, LLC as restructuring advisor. Toby B. Shea of OnePoint Partners serves as the Debtor's chief restructuring officer. Donlin, Recano & Company, Inc. is the claims and noticing agent and administrative agent. The U.S. Trustee for Region 1 appointed an official committee of unsecured creditors on Sept. 9, 2021. Perkins Coie, LLP and McLane Middleton, Professional Association serve as the committee's lead bankruptcy counsel and local counsel, respectively. PUERTO RICO: Religious Leaders Vital to Success of Restructuring ---------------------------------------------------------------- Michael Sean Winters of the National Catholic Reporter reports that religious leaders were essential to the success of Puerto Rico's debt restructuring. On Jan. 18, 2022, Judge Laura Taylor Swain approved a debt restructuring plan for Puerto Rico that was the culmination of five years of negotiations and legal challenges. The deal, which was overseen by a federal oversight board first appointed in 2016, dwarfs earlier bankruptcy cases and navigates the especially fraught legal and political terrain caused by Puerto Rico's status as a U.S. territory. "The court's confirmation of Puerto Rico's plan of adjustment completes the largest public debt restructuring in American history — far bigger than Detroit, the next biggest restructuring," David Skeel, the chair of the oversight board, said in an email. "The plan sharply reduces the amount of debt Puerto Rico will have going forward, and every dollar of Puerto Rico's $50 billion of unfunded, accrued pension obligations will be paid in full," he said. "These features and other protections — such as a pension trust to help fund pension payments — will ensure the problems of the past no longer burden Puerto Rico's future." The causes of the fiscal crisis were many. Part of the problem, as in most cases of sovereign debt, is that bond markets have been governed by neoliberal economic premises the past 40 years, and those premises often lead to inhumane results. Part of the problem has been the widespread corruption of the public sector on the island. Part of the problem was the departure of pharmaceutical factories that benefited from tax provisions that expired over 10 years from 1996-2006, and that fled to other locations once those tax benefits ceased to exist. Puerto Rico's economy was on its heel before the Great Recession of 2008. In 2015, the government announced it could no longer pay its bills and the federal oversight began. Mr. Skeel also pointed to the role that the island's religious leaders played in the long process of recovering from the bankruptcy. "Archbishop Roberto Gonzalez [of San Juan] and Reverend Heriberto Martinez [head of the Bible Society of Puerto Rico, the leading evangelical association] have played an essential role at every stage of the process, both before and after Congress enacted the legislation that made the restructuring possible," Mr. Skeel told NCR. "They have been a powerful and persistent voice for the most vulnerable Puerto Ricans -- the least of these -- whose views too often are not represented when major economic decisions are made. They have constantly reminded the participants that debt forgiveness and other economic issues are moral issues, and that it isn't accidental that Jesus so often framed his teaching in economic terms." Eric LeCompte, executive director at Jubilee USA, which advocates for debt relief for developing countries, concurs with Skeel's assessment as to the significance of the deal. "While some smaller portions of Puerto Rico's debt still need to be restructured, roughly out of the $72 billion in debt about 55% of the debt was cut," LeCompte said. "In comparison, the previous largest municipal bankruptcy was Detroit and the city saw its debt cut by 38%. We also saw innovations that protect Puerto Rico, its pensioners and people living in poverty." LeCompte also agreed with Skeel about the pivotal role played by religious leaders, both on the island and in the states. "At Jubilee USA we were privileged to walk with Archbishop Gonzalez and Reverend Martinez on this journey, and we saw a historic mobilization of U.S. and Puerto Rico religious groups aid the people of Puerto Rico," LeCompte said. "The leadership and mobilization of the US Conference of Catholic Bishops and Catholic Charities was absolutely incredible," he added. "New York Cardinal Timothy Dolan and other bishops raised their voices for Puerto Rico. That support from the Catholic bishops and the Episcopal, Lutheran, Methodist, Presbyterian and United Church of Christ churches continues to this day." Full disclosure: Early on in the Puerto Rican debt crisis, I asked Archbishop Gonzalez if he knew LeCompte and helped arrange their first meeting. I hope that when I stand before the judgment seat of God, and the angels have grown tired of listing my catalogue of sins, one of them will pipe up and cite this one good deed in my favor! It is impossible to overstate the importance of LeCompte's ability to combine biblical values with detailed knowledge of both the economics and the law surrounding sovereign debt. "Basic services like the police, public schools and municipal hospitals were left almost inoperable," said Archbishop Gonzalez, recalling the bankruptcy crisis in 2015. Gonzalez convoked a meeting of religious leaders on the island, "to try to identify a way in which we could be of service to this country." "None of us had either the experience or the knowledge of how to engage ourselves in a constructive way to serve the common good of our people," Gonzalez said, "until we learned of Eric LeCompte, the executive director of Jubilee USA." The archbishop acknowledges that the plan will involve some more pain, but that the protections for programs that assist the poor and for workers' pensions were an important victory. Will it be enough? That is harder to know. "The debt can be sustainable and we can tackle social problems on the island if we can raise revenue on the island and ensure disaster and economic aid are approved by Congress," LeCompte told NCR. "Our work continues to expand manufacturing jobs in Puerto Rico and win another $55 billion in disaster relief. Puerto Rico needs to get the same funding as U.S. states for nutrition, child poverty, health, disability and tax relief programs." Damon Silvers, policy director at the AFL-CIO, thinks that what is still needed is an industrial policy for the island. "While the bankruptcy is not perfect, it is a step forward," Silvers told NCR. "Until there is a viable economic and industrial policy in place, however, it is unclear if any debt strategy will be viable." He mentioned sustainable energy as the obvious candidate for rebuilding the island's economy. Gloria Gonzalez at Politico said the same thing in December, and I made a similar case back in 2017! Interestingly, the critics of the original creation of the federal oversight board and of the final debt restructuring deal fall into two categories. On the woke left are critics like MSNBC opinion columnist Julio Ricardo Varela who condemned the deal as the bitter fruit of colonization — "the restructuring is just the latest example of an utterly failed colonial experiment"—but offered no actual solutions to the fiscal problems facing the island. His criticisms are delivered in the language of the academic left, not the language of the Puerto Rican people and its actual leaders. The other principal critics are the hedge fund managers who purchased Puerto Rican debt at deeply discounted rates when it was apparent that the island's government would not be able to repay it, and who have pursued legal strategies to stop the restructuring. The bankruptcy deal did not reward the vulture funds. Explains Skeel: "The plan also provides fair treatment for creditors and other constituencies, paying more to creditors whose debt is unquestioned than to more legally problematic debt." Neoliberal economics will not be dismantled in one, full swoop. No debt restructuring deal will ever be perfect this side of the eschaton. Puerto Rico must still develop a political culture that is allergic to corruption. An industrial policy is still needed. But the role of the island's religious leaders in this long process is both interesting and instructive. Most bishops in the U.S. have become increasingly averse to the kind of civic engagement that Archbishop Gonzalez exercised in this situation, and indeed, the kind of civic engagement over the years that made his intervention possible. When aided by the kind of expertise developed by LeCompte and the staff at Jubilee USA, religious leaders can still make a difference in their support for public policies that help the poor and serve the common good. I hope Gonzalez' example might prove a model for the U.S. bishops' conference going forward. About Puerto Rico Puerto Rico is a self-governing commonwealth in association with the United States that's facing a massive bond debt of $70 billion, a 68% debt-to-GDP ratio and negative economic growth in nine of the last 10 years. The Commonwealth of Puerto Rico has sought bankruptcy protection, aiming to restructure its massive $74 billion debt-load and $49 billion in pension obligations. The debt restructuring petition was filed by Puerto Rico's financial oversight board in U.S. District Court in Puerto Rico (Case No. 17-01578) on May 3, 2017, and was made under Title III of 2016's U.S. Congressional rescue law known as the Puerto Rico Oversight, Management, and Economic Stability Act ('PROMESA'). The Financial Oversight and Management Board later commenced Title III cases for the Puerto Rico Sales Tax Financing Corporation (COFINA) on May 5, 2017, and the Employees Retirement System (ERS) and the Puerto Rico Highways and Transportation Authority (HTA) on May 21, 2017. On July 2, 2017, a Title III case was commenced for the Puerto Rico Electric Power Authority ("PREPA"). U.S. Chief Justice John Roberts has appointed U.S. District Judge Laura Taylor Swain to oversee the Title III cases. The Honorable Judith Dein, a United States Magistrate Judge for the District of Massachusetts, has been designated to preside over matters that may be referred to her by Judge Swain, including discovery disputes, and management of other pretrial proceedings. Joint administration of the Title III cases, under Lead Case No. 17-3283, was granted on June 29, 2017. The Oversight Board has hired as advisors, Proskauer Rose LLP and O'Neill & Borges LLC as legal counsel, McKinsey & Co. as strategic consultant, Citigroup Global Markets, as municipal investment banker, and Ernst & Young, as financial advisor. Martin J. Bienenstock, Esq., Scott K. Rutsky, Esq., and Philip M. Abelson, Esq., of Proskauer Rose; and Hermann D. Bauer, Esq., at O'Neill & Borges are on-board as attorneys. McKinsey & Co. is the Board's strategic consultant, Ernst & Young is the Board's financial advisor, and Citigroup Global Markets Inc. is the Board's municipal investment banker. Prime Clerk LLC is the claims and noticing agent. Prime Clerk maintains a case web site at https://cases.primeclerk.com/puertorico Epiq Bankruptcy Solutions LLC is the service agent for ERS, HTA, and PREPA. O'Melveny & Myers LLP is counsel to the Commonwealth's Puerto Rico Fiscal Agency and Financial Advisory Authority (AAFAF), the agency responsible for negotiations with bondholders. The Oversight Board named Professor Nancy B. Rapoport as fee examiner and to chair a committee to review professionals' fees. QHC FACILITIES: Sale of Company Is Best Option, Says UST -------------------------------------------------------- The U.S. Trustee said in a court filing that a sale is the best option for bankrupt nursing home chain QHC Facilities LLC. "There seems to be a consensus" among QHC, its creditors and regulatory authorities that a successful sale "would be the best outcome," according to a filing Tuesday, January 25, 2022. The U.S. Trustee asked for two more weeks to gather information on regulatory compliance and to evaluate prospects for a sale. "While those discussions are ongoing, there seems to be a consensus that a successful sale of Debtors' operation would be the best outcome, and would be in the best interests, of all parties. In furtherance of that goal, Debtors look to file sale pleadings by weeks end. To further assist the Court Debtors have filed a Declaration by Lanett Powers, Consultant for QHC. PCO Goodman will file a preliminary, summary report of her site visits and initial observations prior to Wednesday's hearing. Counsel for the various parties will also be prepared to brief the Court on the status of Debtors' operation, existing concerns, and future outlook," Acting U.S. Trustee James Snyder said in a court filing. "Additional time is needed to gather information regarding facility and patient care compliance, particularly with respect to the regulatory agencies. A continuance of the UST's Motion for a period of two weeks will allow interested parties to evaluate Debtors' sale prospects and to determine whether regulatory compliance concerns may be resolved, and therein resolve the UST's Motion. Counsel for Debtors, the Unsecured Creditor's Committee, Lincoln Savings Bank, Gibbins Advisors, and federal and state regulatory authorities (including the Department of Health and Human Services, Centers for Medicare and Medicaid, and Iowa Department of Inspection and Appeals), consent to the relief sought herein." About QHC Facilities, LLC Clive, Iowa-based QHC Facilities, LLC 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. QHC Facilities reported $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 the Debtors' restructuring advisor. QHC FACILITIES: Searches for Buyer as Cash Depletes --------------------------------------------------- Lauren Coleman-Lochner of Bloomberg News reports that advisers for QHC Facilities LLC are racing to find a new owner for the bankrupt nursing-home chain as two of the facilities face losing their Medicare payments in coming weeks and rising expenses deplete cash. "Facility and care concern issues" continue and are "significant and material," U.S. Trustee representative L. Ashley Wieck said during a Wednesday, January 26, 2022, status hearing. QHC filed for bankruptcy late last month, citing "crippling staffing and employee retention issues" from the pandemic and upheaval from the death of its co-founder in June 2021. About QHC Facilities LLC 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 Company 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. QHC FACILITIES: Taps Newmark Real Estate as Investment Banker ------------------------------------------------------------- QHC Facilities, LLC and its affiliates seek approval from the U.S. Bankruptcy Court for the Southern District of Iowa to employ Newmark Real Estate of Dallas, LLC as their investment banker. The firm will render these services: (a) assist in obtaining appropriate advisory services; (b) prepare materials in connection with advisory services in order to determine market valuation and strategy for all commercial properties of the Debtors; (c) assist with identifying both financial and strategic prospective buyers; (d) assist with the development and distribution to approved prospects of select information, documents and other materials; (e) advise the Debtors on the negotiation of any potential transaction; and (f) provide consulting services in regard to the following nursing homes and senior communities. Newmark's fee will include 2.5 percent up to $17,000,000 of the gross purchase price with 5 percent of every dollar over $17,000,000. In addition, the firm will seek reimbursement for expenses incurred. Ross Sanders, a member at Newmark Real Estate of Dallas, 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: Ross Sanders Newmark Real Estate of Dallas, LLC 2515 McKinney Avenue Dallas, TX 75201 Telephone: (469) 467-2000 About QHC Facilities Clive, Iowa-based QHC Facilities, LLC 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. QHC Facilities reported $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. Newmark Real Estate of Dallas, LLC and Gibbins Advisors, LLC serve as the Debtors' investment banker and restructuring advisor, respectively. RIVER HILL: March 1 Plan Confirmation Hearing Set ------------------------------------------------- On December 15, 2021, Debtor River Hill Ltd. filed with the U.S. Bankruptcy Court for the Middle District of Tennessee a Disclosure Statement to accompany Chapter 11 Plan of Reorganization. The United States of America, on behalf of its agency, the Department of Housing and Urban Development ("HUD"), filed an objection to the Disclosure Statemrnt based on lack of adequate disclosure. In order to resolve HUD's objection, the parties agree that the Debtor shall Amend the Disclosure Statement to include the following language: * HUD disagrees with the Debtor's valuation of River Hill Ltd. And believes that the total value is $1,920,000 according to the 2020 Etowah County Tax Assessment of the land and improvements. Further, HUD disagrees that Allowed Secured Claim of HUD is $0 based on the valuation of the collateral. Finally, HUD believes that the amount of the Third Contingent Note was amended so the original principal owed is not $413,413.26 as stated by the Debtor, but is instead $415,058.61. The Court conducted a hearing on the adequacy of the information contained in the Disclosure Statement on January 18, 2022. The matter was continued until January 25, 2022 by agreement of the parties to resolve HUD's objection. On January 24, 2022, Judge Marian F. Harrison approved the Disclosure Statement and ordered that: * February 23, 2022 at 5:00 PM is fixed as the last day for submitting written acceptances or rejectionsof the Plan by Ballot. * February 23, 2022 is fixed as the last day for filing written objections to confirmation of the Plan. * March 1, 2022 at 9:00 a.m. at Courtroom 3, United States Bankruptcy Court for the Middle District of Tennessee, 701 Broadway Nashville TN 37203 is the hearing to consider confirmation of the Plan. A copy of the order dated Jan. 24, 2022, is available at https://bit.ly/3u2InoU from PacerMonitor.com at no charge. Attorneys for Debtor: Robert J. Gonzales, Esq. Nancy B. King, Esq. EmergeLaw, PLC 4000 Hillsboro Pike, Suite 1112 Nashville, TN 37215 Telephone: (615) 815-1535 Email: robert@emerge.law nancy@emerge.law About River Hill River Hill Ltd. filed its voluntary petition for relief under Chapter 11 of the Bankruptcy Code (Bankr. M.D. Tenn. Case No. 21 03771) on Dec. 10, 2021, listing $74,452 in assets and $2,229,479 in liabilities. Robert R. Short, chief manager, signed the petition. Judge Charles M. Walker oversees the case. EmergeLaw, PLC serves as the Debtor's counsel. SANGHA HOSPITALITY: Case Summary & Two Unsecured Creditors ---------------------------------------------------------- Debtor: Sangha Hospitality LLC 108 First Street Macon, GA 31201 Business Description: Sangha Hospitality LLC is a Single Asset Real Estate debtor (as defined in 11 U.S.C. Section 101(51B)). Chapter 11 Petition Date: January 27, 2022 Court: United States Bankruptcy Court Middle District of Georgia Case No.: 22-50094 Debtor's Counsel: Christopher W. Terry, Esq. BOYER TERRY LLC 348 Cotton Avenue, Suite 200 Macon, GA 31201 Tel: (478) 742-6481 Fax: (770) 200-9230 E-mail: Chris@boyerterry.com Estimated Assets: $10 million to $50 million Estimated Liabilities: $1 million to $10 million The petition was signed by Rupinder S. Sangha as member. A full-text copy of the petition is available for free at PacerMonitor.com at: https://www.pacermonitor.com/view/6ZBRZZI/Sangha_Hospitality_LLC__gambke-22-50094__0001.0.pdf?mcid=tGE4TAMA List of Debtor's Two Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ 1. Bibb County Tax Real Property $63,620 Commissioner Taxes PO Box 4724 Macon, GA 31208 2. Bibb County Tax Personal Property $3,843 Commissioner Taxes PO Box 4724 Macon, GA 31208 SCIENTIFIC GAMES: Fitch Assigns FirstTime 'B(EXP)' LongTerm IDR --------------------------------------------------------------- Fitch Ratings has assigned Scientific Games Holdings LP (SG Lottery) an expected first-time Long-Term Issuer Default Rating of 'B(EXP)' with Stable Outlook. It has also assigned SG Lottery's senior secured credit facility, consisting of a USD440 million revolver, and a USD1.77 billion and EUR750 million term loan B, expected 'BB-(EXP) rating with a Recovery Rating 'RR2'. A full list of rating actions is detailed below. The 'B(EXP)' IDR of SG Lottery reflects its high leverage once it is acquired by Brookfield Business Partners' (Brookfield) for approximately $6 billion. Fitch estimates gross leverage of 7.5x at the closing of the acquisition, before it improves marginally over the medium term through EBITDA growth. Rating strengths are SG Lottery's solid market position in the lottery industry that generates high margins, durable cashflows and discretionary free cash flow (FCF). The final IDR and instrument ratings are contingent on the transaction closing as contemplated and receipt of final documents conforming materially to preliminary documentation reviewed, including sizing of all debt instruments. Changes to the amount of debt issued by class could have rating implications. SG Lottery is a diversified lottery company being sold by Scientific Games Corp. to funds affiliated with Brookfield. KEY RATING DRIVERS Solid Operating Profile: SG Lottery has a full-suite of lottery products, including instant games, lottery systems, iLottery products, and retail lottery service solutions. It is a leading operator in the global instant ticket business, with a company-estimated market share of about 70% globally. A long-term operating record is a competitive advantage when bidding on new concessions. SG Lottery is diversified by both customer (around 150) and location (operating in 60 countries). Lottery Exposure a Credit Strength: Lottery exhibits favorable characteristics relative to other forms of gambling. Lottery is convenient and has broad appeal, exhibits less cash flow volatility, and has delivered stable low-to-mid single-digit growth rates. The industry is less exposed to competitive threats seen elsewhere in the gaming industry. Moreover, the industry has exhibited positive lottery spend-per-capita trends despite meaningful casino development over the last 20 years, including in states that have legalized traditional casino gaming (e.g. Illinois, Massachusetts, Ohio, Pennsylvania). iLottery presents an additional growth driver to the extent jurisdictions legalize and Fitch expects SG Lottery to achieve consistent market share as its traditional lottery segments. High but Manageable Capital Intensity: Lottery is capital intensive as concessions can require meaningful upfront capex for systems/equipment installation and some jurisdictions mandate material, one-time payments as a condition to be awarded long-term concessions. Capital intensity for the instant tickets segment is relatively less. Capital intensity will be heightened in the near term, due to new contract wins and Fitch expects this to decrease to the mid-to-high single digits thereafter (which includes some assumed future growth capex). This is manageable given SG Lottery's solid EBITDA margins and strong operating cash flows. Fitch forecasts SG Lottery to generate discretionary FCF (cash flow from operations less capex) margins at around 10%, which are solid for the gaming industry. Reasonable Concession Payment Risk: SG Lottery's exposure to one-time concession payments is manageable as its ownership percentage in JVs that had to pay large upfront payments does not exceed 30%. Positively, the JVs pay meaningful recurring distributions to the owners (Fitch includes these distributions in its EBITDA calculation). Leverage to Remain High: Fitch forecasts gross leverage will improve to the high-6x range by 2023 from around 7.5x as EBITDA grows modestly through the lottery industry's healthy underlying fundamentals and recent new contract wins. Fitch believes the lottery business can withstand higher leverage than traditional casino gaming, given its favorable characteristics. Flexibility to Distributions and Leverage: SG Lottery's proposed debt agreements provide the company and its sponsor significant flexibility as to how they manage leverage and distribute cashflows given no discernible requirements to meaningfully de-leverage and flexibility with restricted payments. The company establishing a record of operating with gross leverage below 6.5x, in conjunction with the other Rating Sensitivities, could be more consistent with a higher rating (all things equal). Standalone Lottery Company: SG Lottery is being divested by Scientific Games Corp., a large diversified gaming supplier with traditional slot machine, table games, and digital segments and there will not be any rating linkage between the companies after the divesture. The incremental SG&A costs as a standalone company are manageable given SG Lottery's strong EBITDA margins. Fitch does not anticipate any cash flow disruption from the separation from Scientific Games as the benefits from being part of a larger, diversified gaming supplier were not meaningful outside of shared services. DERIVATION SUMMARY SG Lottery's 'B (EXP)' IDR reflects a high leverage profile, solid discretionary FCF generation, and favorable exposure to global lottery versus traditional casino gaming peers. SG Lottery has strong market positions in both instant tickets and draw lotteries and benefits from medium- to long-term operating concessions with its governmental partners. As a standalone lottery entity, the company will have initial gross leverage of 7.5x and could de-leverage to the high-6.0x range by 2023 through modest EBITDA growth. SG Lottery's credit profile is positioned similarly with mid-to-high 'B' category peers, Bally's Corp (B+/Stable), Great Canadian Gaming Corp. (B+/Stable), Scientific Games Corp., and Caesars Entertainment, Inc., albeit with higher leverage. The ratings reflect Fitch's view that the lottery business can withstand higher leverage than similarly-rated land-based casino operators and higher rated gaming supplier peers International Game Technology, Aristocrat Leisure (BBB-/Stable), and Everi Holdings (BB-/Stable). KEY ASSUMPTIONS Fitch's key assumptions within its rating case for the issuer include: -- Total revenue increase in low double-digits in 2021 and 2022, assuming continued growth in the global lottery business and additional contract wins (ie Pennsylvania). Thereafter, growth is in low-to-mid single digits, supported by solid growth in instant tickets and, to a somewhat lesser degree, by lottery services, iLottery, product sales. The Pennsylvania contract supports medium-term material growth in product sales, primarily of new equipment, to retailers; -- EBITDA margins (excluding JVs) are in the mid-30% range and include incremental standalone SG&A costs; -- Capex is elevated in 2022 and 2023. Thereafter capital intensity is assumed to be mid-to-high single digits which includes some degree of upfront capex for potential new contract wins. No major one-time concession payments are forecast in the medium term (Italy expires in 2028 and New Jersey in 2029); -- Distributions from JVs consistent with the historical range; -- Gross debt declines marginally from planned amortization; -- No material M&A. Excess cash flow is reinvested in the business or distributed to shareholders to extent permissible under debt covenants. RECOVERY ASSUMPTIONS The recovery analysis assumes that SG Lottery would be reorganised as a going-concern (GC) in bankruptcy rather than liquidated. Fitch has assumed a 10% administrative claim and that the company's $440 million revolver is fully drawn at the time of recovery. The current Recovery Ratings contemplate $2.96 billion of secured debt claims and $880 million of unsecured claims. Fitch forecasts a post-reorganization enterprise value of roughly $2.8 billion. Fitch assumes SG Lottery's GC EBITDA would be $330 million, which is before distributions from JVs, and that a default or restructuring could occur in the event of the loss of at least two major lottery contracts and marginal cyclical pressures on consumer discretionary spending. Fitch has assumed an enterprise value (EV)/EBITDA multiple of 8.0x for U.S.-based cash flows, which reflects SG Lottery's strong market position and operating record, as well as the industry's favorable characteristics like high, regulated barriers to entry, low customer churn, less cyclical cash flows, and high margins. This multiple is higher than the 5.5x used for Everi Holdings, which is exposed to the more volatile and competitive slot machine sub-sector. Fitch uses a 7.0x multiple for the foreign cash flows and SG Lottery's minority and JV investments (assumed to provide $45 million of EBITDA incremental to the GC EBITDA), the maximum permitted under Fitch's recovery criteria for non-U.S. based assets. The lower multiple, despite similar business characteristics, reflects lower transparency of insolvency valuation outside of the U.S. and historical multiple differentials in public market trading. The first lien's collateral package consists of only the company's U.S.-based subsidiaries, which represent 60%-65% of total cash flows and assets. The secured lenders and unsecured noteholders will benefit from the same guarantors, which are only the U.S.-based subsidiaries. As such, Fitch has assumed that all value estimated for the foreign subsidiaries is shared on a pro rata basis between any deficiency claims of secured lenders and the unsecured noteholders. RATING SENSITIVITIES Factors that could, individually or collectively, lead to positive rating action/upgrade: -- The company demonstrating a track record of sustaining gross debt/EBITDA below 6.5x; -- Discretionary FCF margin at or above 10% on a sustained basis. Factors that could, individually or collectively, lead to negative rating action/downgrade: -- Gross debt/EBITDA above 7.5x on a sustained basis; -- Discretionary FCF margin below 5% and/or becoming more volatile on a sustained basis; -- The company indicating a more aggressive financial policy, which could be demonstrated by shareholder returns or debt- funded JV investments; -- Loss of a material lottery contract(s). 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 SG Lottery will have $30 million in cash initially and full availability under its $440 million revolver. The company generates a discretionary FCF margin of around 10%, which is solid for the gaming industry. It also benefits from about $50 million in annual JV distributions. This compares with manageable annual amortization of $25 million and no material upfront concession payments/investments until its JV's Italy Scratch and Win contract expires in 2028. SG Lottery contributed $180 million in 2018 to the JV as part of the prior concession and Fitch believes the company's liquidity sources are sufficient for potential upfront payments. Fitch assumes capital allocation will primarily be reinvestment and shareholder returns, to the extent covenants permit, instead of voluntary debt paydown. ISSUER PROFILE SG Lottery is a global lottery operator. The company provides solutions for instant ticket and draw lotteries that include instant ticket manufacturing and management, lottery systems, retail solutions, and iLottery platforms. 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. SCIENTIFIC GAMES: S&P Assigns 'B+' ICR, Outlook Stable ------------------------------------------------------ S&P Global Ratings assigned its 'B+' issuer credit rating to Scientific Games Holdings L.P. (SG Lottery). S&P said, "We assigned our 'B+' issue-level and '3' recovery ratings to SG Lottery's proposed secured credit facilities, comprising a $440 million revolver due 2027, a $1,770 million term loan B due 2029, and a $750 million equivalent euro-denominated term loan due 2029. "We also assigned our 'B' issue-level and '5' recovery ratings to SG Lottery's proposed $880 million unsecured notes due 2030. All ratings are subject to review and receipt of final documentation. "The stable outlook reflects our expectation that good lottery demand will support relatively predictable cash flow despite high forecast leverage in 2022, and our forecast for leverage to improve by about 0.5x in 2023." Brookfield Business Partners is raising $3.4 billion of debt and using $2.5 billion of common equity to finance its purchase of the lottery business from Scientific Games Corp. (SGMS) for $5.8 billion. S&P said, "Our issuer credit rating primarily reflects SG Lottery's high debt leverage and financial-sponsor ownership despite the company's good market position and resilient cash flow base. Our forecast for high leverage in 2022 and 2023 and financial-sponsor ownership are key credit risks. Under our base-case assumptions for operating performance, we estimate adjusted leverage in 2022 will be in the 7.5x-8x range and decrease to 7x-7.5x in 2023. Forecast leverage improvement results primarily from revenue and EBITDA growth as the company benefits from good lottery demand, increased iLottery adoption, and product sales under new contracts and includes our estimate of new stand-alone company costs and separation costs. "Despite high leverage, we assigned our 'B+' issuer credit rating because we believe the predictable, stable nature of lottery revenue and cash flow allows the business to support a modestly higher degree of leverage than more traditional gaming operators, and supports looking out to 2023 for leverage improvement. Furthermore, we include the potential earnout to SGMS in our measure of adjusted debt as we typically view these types of contingent consideration arrangements to be a form of financing and believe they represent a potential future call on cash at SG Lottery depending on the lottery business' performance. Brookfield will pay SGMS an earnout of up to $225 million based on the achievement of certain EBITDA targets in 2022 and 2023. This adds about 0.5x to our forecast leverage. However, based on our understanding of the calculation of the earnout and our forecast EBITDA in 2022 and 2023, we believe Brookfield may not owe a material amount of the earnout. "In addition to its high expected leverage, the company's financial-sponsor ownership increases business risk in our view, because financial sponsors tend to use incremental leverage to fund acquisitions, investments, or cash distributions over time. However, our base case forecast does not contemplate any material transactions in 2022 and 2023. Brookfield Business Partners, the private equity arm of Brookfield Asset Management, is acquiring SG Lottery and will control the board of directors. "High leverage could exacerbate the risks of carving out the lottery business from a larger enterprise, in our view. SG Lottery previously relied on its parent for shared services, including corporate functions, and will need to staff up to provide these functions on a stand-alone basis. The company estimates that these recurring incremental costs will be $30 million annually. This could introduce some volatility in profitability and operating performance. Additionally, SG Lottery has entered into a transitional services agreement where SGMS will provide it with services at cost for an initial 12-month term, which should provide SG Lottery time to transition these functions internally. Our forecast EBITDA incorporates both the expected recurring stand-alone costs, as well as one-time costs that the company estimates will be required to set up SG Lottery as a new stand-alone company. Nevertheless, we believe the lottery segment functioned as a silo in the larger SGMS entity with a broad executive team. As a result, we expect SG Lottery will have a qualified, experienced senior management team, comprised of many of the long-tenured members of the current Scientific Games Lotteries division's management team. Furthermore, we do not anticipate SG Lottery's high leverage will impair its relationships with its lottery customers, especially since the business' former parent has operated with very high leverage for a number of years." SG Lottery's competitive position benefits from its leading position in instant tickets and long contracts with high renewal rates, which support fairly predictable recurring revenue. SG Lottery maintains a leading position in the global instant ticket market with a 69% global market share of instant game retail sales and a second-place position in the lottery systems market behind International Game Technology PLC (IGT). SG Lottery benefits from recurring revenue from long-term contracts with jurisdictions for instant tickets, lottery systems, and iLottery, which along with the stability of demand for lottery contracts, provides SG Lottery good revenue and cash flow visibility. Long-term contracts can result in operators becoming entrenched in governments' lottery ecosystem, resulting in high switching costs for governments and generally high contract renewal rates. SG Lottery has long-standing customer relationships with approximately 130 government and nongovernment lottery entities in over 50 countries. SG Lottery's top 10 customers as a percentage of 2020 revenue have an average relationship length of 35 years with SG Lottery and average current contract lengths of about 15 years. Despite these long-term and entrenched relationships, SG Lottery does not have material revenue concentration. Its top 10 customers account for less than half of its total revenue, and its largest customer accounted for only 14% of 2020 revenue. The remaining customers in its top 10 accounted for 5% or less of its 2020 revenue. SG Lottery's good geographic and customer diversity can help mitigate some of the negative impact of a potential sales decline in a particular region or potential contract loss. The lottery industry is resilient over economic cycles and recovered faster from the pandemic than other gaming products. S&P said, "We view the lottery industry favorably given its long history of global revenue growth and resiliency in periods of economic stress, leading to less volatility compared to other leisure and gaming alternatives over an economic cycle. The lottery's stability is supported by the relatively low price points of lottery products and ease of access. Customers can purchase lottery products at grocery stores, gas stations, and convenience stores, compared to having to drive to a casino to gamble. These were also considered essential businesses in most countries and remained open during the pandemic. We believe the industry's growth will be supported over time given the habitual nature of lottery purchases for many consumers and since state and local governments often rely on lottery revenue as an important source of funding for education, health care, and other public programs. Furthermore, we expect over the next few years that more jurisdictions will legalize iLottery, which should support continued good revenue growth." SG Lottery benefits from high barriers to entry in its markets, but competition for lottery contracts and renewals can lead to upfront costs and pricing pressure. Lottery operators face complex regulatory and licensing requirements and require substantial upfront capital investment and expertise to put in place infrastructure and quality control measures to deliver lottery products at scale, including the ability to print millions of different tickets with an extremely high degree of accuracy. This limits the threat of new entrants. Notwithstanding the high barriers to entry in the industry, competition for new lottery contracts and renewals remains high among a small number of competitors, including SG Lottery, IGT PLC, Intralot, and Pollard. Intense competition for contracts, as well as governments' needs for additional funding to support their budgets, can result in pricing pressure. While lottery operators typically incur relatively modest levels of maintenance capital expenditures (capex), securing new contracts or renewals can be capital intensive because jurisdictions may require upfront payments to secure new contracts or renew existing ones, and lottery operators typically incur new contract or renewal capex to install or upgrade any required technology equipment. S&P said, "Nevertheless, we expect SG Lottery will continue to maintain its good position in the industry and particularly strong position within instant games. This is because of the additional value offered to customers through its Scientific Games Enhanced Partnership (SGEP) program, which uses analytics based on many years of data, to customize and distribute a higher yielding product suite for a given contract. SG Lottery is focused on continuing to convert existing customers to the SGEP program. The company reports that SGEP customers generated 45% higher per capita sales on average in 2020 than non-SGEP customers, which benefits SG Lottery because of increased revenue participation under these contracts and benefits governments because of increased sales. "The stable outlook reflects our expectation that good lottery demand will support relatively predictable cash flow despite high forecast leverage in 2022, and our forecast for leverage to improve by about 0.5x in 2023. "We could lower the rating if we no longer expected leverage to decline below 7x in 2023. This would likely occur if EBITDA modestly underperformed our forecast by about 5%. In that scenario, we believe the company would not trigger the payment of the earnout and we would no longer view it to be a debtlike obligation. We could also lower ratings if SG Lottery's owner aggressively pursued new contract acquisitions or other investments that limited leverage reduction. Lastly, if the company were to pay dividends that resulted in leverage sustained above 7x, we would lower ratings. "We are unlikely to raise the rating over the next few years given the company's financial-sponsor ownership and our forecast for leverage to be above 6x. Nevertheless, we could raise the ratings if we believed the company would sustain leverage under 6x, including potential growth investments and upfront costs for contract renewals, acquisitions, and returns to its financial-sponsor owner." ESG credit indicators: E-2, S-3, G-3 S&P said, "Social factors are a moderately negative consideration in our credit rating analysis of SG Lottery. The company is exposed to regulatory risks, as it, like all lottery and gaming operators, faces a high degree of regulation across all the jurisdictions in which it operates. SG Lottery proved resilient during the pandemic, and its cash flows were less affected than more traditional gaming operators. This is because its products are mainly sold in essential businesses, including gas stations, convenience stores, and grocery stores, which did not close. Governance factors are also a moderately negative consideration, as is the case for most rated entities owned by private-equity sponsors. We believe the company's highly leveraged financial risk profile points to corporate decision-making that prioritizes the interests of controlling owners, typically with finite holding periods and a focus on maximizing shareholder returns." SHASTHRA USA: Wins Cash Collateral Access Thru March 15 ------------------------------------------------------- The U.S. Bankruptcy Court for the Eastern District of Virginia, Alexandria Division, has authorized Shasthra USA Inc. to use cash collateral on an interim basis in the ordinary course of business in accordance with the budget and provide adequate protection to the US Small Business Administration. The Debtor has an immediate and critical need to be permitted access to funds to continue to operate its business and pay its direct operating expenses. Prior to the filing of the Debtor's bankruptcy petition, the Debtor entered into two secured loan agreements with the SBA per the EIDL program in the total loan amount of $500,000. The Note and the obligations owing to SBA thereunder are secured by a Security Agreement. A UCC-1 was properly filed by the SBA and encumbers certain property and rights to property belonging to the Debtor. Pursuant to the Security Agreement, the Debtor granted SBA a first-priority blanket lien on, among other things, all the Debtor's personal property, including but not limited to, equipment, inventory, accounts, general intangibles and fixtures. As of the petition date, the Debtor was indebted and liable to SBA in the aggregate amount of not less than $506,652.40. The Debtor represents that it has not been using SBA's cash collateral from the Petition Date through January 24, 2022. The Debtor has entered negotiations with SBA seeking SBA's consent to the use of SBA's cash collateral. On the terms and conditions set forth therein, the SBA has consented to the use of the SBA cash collateral. The Debtor will cease to be authorized to use cash collateral on the earlier to occur of one of the following: (i) March 15, 2022; (ii) the entry of an order authorizing the Debtor to incur post-petition indebtedness; (iii) non-compliance by the Debtor with any term, covenant or provision in the Budget or the Order, after having received written notice of the non-compliance and given 10 days to cure such non-compliance, except SBA's cash collateral may be used solely up to the amounts stated for in any line item in the Budget, plus 10% for each line item, during the respective monthly periods and for the purposes identified in the Budget; (iv) the appointment of a trustee or of an examiner for the Debtor or the property of the estates of the Debtor (other than the continued appointment of the Subchapter V Trustee); (v) the entry of a final order authorizing the Debtor's use of cash collateral that is not identical with respect to material terms, conditions and provisions contained in the Order; (vi) failure of the Debtor to maintain accounts receivable in an amount equal to the sum of $125,000; (vii) the entry of an order staying, vacating, amending, supplementing or modifying the Order or otherwise affecting the validity, priority, extent, or enforceability of any of the liens or claims granted therein; and/or (viii) conversion or dismissal of the Debtor's Chapter 11 Case. As partial adequate protection for the Debtor's use of cash collateral, all pre-petition liens and security interests of SBA are reaffirmed to the same extent and priority as such liens and security interests existed immediately prior to the Petition Date and to further secure the SBA Prepetition Debt, the SBA is granted a fully perfected security interest in and replacement lien upon all of the Debtor's now owned or hereafter acquired assets. As additional partial adequate protection, the Debtor grants SBA a fully perfected security interest in and lien upon: (i) any and all avoidance, recovery or similar remedies that may be brought by or on behalf of the Debtor or its estate. As additional partial adequate protection, the SBA is granted a super priority claim in the Debtor's Chapter 11 case. The Court says the liens and security interests of SBA in cash collateral will not be rendered invalid or unenforceable because of the Debtor's commingling of assets post-petition. A final hearing on the matter is scheduled for March 22, 2022 at 11 a.m. A copy of the order is available at https://bit.ly/35qWfiD from PacerMonitor.com. About Shasthra USA Inc. Shasthra USA Inc. sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. E.D. Va. Case No. 21-11740) on October 18, 2021. In the petition signed by Jayasekar Jayaraman, president, the Debtor disclosed up to $500,000 in assets and up to $10 million in liabilities. Judge Klinette H. Kindred oversees the case. Matthew G. Williams, Esq., at Mahdavi Bacon Halfhill and Young PLLC is the Debtor's counsel. SMOKINKWR LLC: Wins Cash Collateral Access Thru March 6 ------------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of Texas has authorized Smokinkwr, LLC to use cash collateral solely for the Debtor's business for the period of January 8 through March 6, 2022 in accordance with the budget, with a 5% variance. The Debtor and US Foods, Inc. are party to a Master Distribution Agreement effective October 21, 2018. By operation of the MDA and a UCC-1 financing statement filed on July 6, 2020, the Debtor granted to US Foods a first lien security interest in all of the Debtor's personal property, including, but not limited to, accounts, goods, inventory, equipment, fixtures and vehicles, together with the proceeds and products of any of them, all of which constitute cash collateral of US Foods. The Debtor is directed to provide US Foods and the Subchapter V Trustee with a comparison of the Debtor's budgeted to actual performance for the immediately preceding week. As adequate protection, US Foods is granted, without the need for any further filing, instrument, recording, or otherwise, an automatically perfected, valid, and binding replacement lien, with the same priority and validity as existed on the Petition Date. The Debtor will continue to make weekly adequate protection payments of $1,300 to US Foods in ready available funds, payable each Friday. During the Interim Period, the Debtor will make to US Foods contemporaneous payments for any goods or services delivered or rendered by US Foods to the Debtor. To the extent the adequate protection provided for hereby proves insufficient to protect US Foods's interest in and to the cash collateral, US Foods will have a superpriority administrative expense claim pursuant to section 507(b) of the Bankruptcy Code, senior to any and all claims against the Debtor under section 507(a) of the Bankruptcy Code, whether in the proceeding or any superseding proceeding. The replacement lien and security interests granted is automatically deemed perfected upon entry of the Order without the necessity of US Foods taking possession, filing financial statements, security agreements, or other documents. A continued hearing on the matter is scheduled for March 2, 2022 at 10 a.m. A copy of the order and the Debtor's budget for the period from December 14, 2021 to January 2, 2022 is available at https://bit.ly/3r2RUKB from PacerMonitor.com. About Smokinkwr LLC Smokinkwr LLC, a company based in Conroe, Texas, sought Chapter 11 protection (Bankr. S.D. Texas Case No. 21-33989) on Dec. 14, 2021, listing up to $10 million in both assets and liabilities. Brian M. Hubbard, sole member and managing member, signed the petition. Judge Christopher M. Lopez oversees the case. The Law Firm of Thomas F. Jones III serves as the Debtor's legal counsel. U.S. Foods, as secured creditor, is represented by: Brian Shaw, Esq. Cozen O'Connor 123 N. Wacker Dr., Ste. 1800 Chicago, IL 60606 Tel: (312) 382-3100 Fax: (312) 382-8910 E-mail: bshaw@cozen.com - and - Bryan P. Vezey, Esq. Cozen O'Connor 1221 McKinney, Suite 2900 Houston, TX 77010 Tel: (832) 214-3900 Fax: (832) 214-3905 E-mail: bvezey@cozen.com - and - Thomas M. Horan, Esq. Marla Benedek, Esq. 1201 N. Market St., Ste. 1001 Wilmington, DE 19801 Tel: (302) 395-2024 Fax: (302) 250-4498 E-mail: THoran@cozen.com E-mail: MBenedek@cozen.com SOUTH HARBOR: Seeks to Tap Wolff & Orenstein as Bankruptcy Counsel ------------------------------------------------------------------ South Harbor Irrevocable Trust seeks approval from the U.S. Bankruptcy Court for the District of Maryland to employ Wolff & Orenstein, LLC to handle its Chapter 11 case. The hourly rates of Wolff & Orenstein's counsel and staff are as follows: Members $490 Associate Attorneys $275 Legal Assistants $150 The Debtor agreed to pay the firm an initial retainer of $25,000. Michael Wolff, Esq., an attorney at Wolff & Orenstein, 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: Michael G. Wolff, Esq. Wolff & Orenstein, LLC 15245 Shady Grove Road, Suite 465 Rockville, MD 20850 Telephone: (301) 250-7232 Facsimile: (301) 816-0592 About South Harbor Irrevocable Trust South Harbor Irrevocable Trust filed its voluntary petition for relief under Chapter 11 of the Bankruptcy Code (Bankr. D. Md. Case No. 22-10347) on Jan. 24, 2022, listing as much as $1 million in both assets and liabilities. Alan A. Grochal, a member, signed the petition. Wolff & Orenstein, LLC serves as the Debtor's counsel. SPEED INDUSTRIAL: March 30 & 31 Plan Confirmation Hearing Set ------------------------------------------------------------- Speed Industrial Gas, LLC, filed with the U.S. Bankruptcy Court for the Western District of Texas a motion for entry of an order approving the Disclosure Statement. On Jan. 24, 2022, Judge Craig A. Gargotta approved the Disclosure Statement and ordered that: * March 21, 2022 by 11:59 p.m. is the deadline to file with the Court and serve any objections to the confirmation of the Plan. * March 30 and 31, 2022 at 9:00 am in Judge Gargotta's Courtroom in the Hipolito F. Garcia Federal Building and United States Courthouse, 615 E. Houston St., 5th Floor, SA Courtroom #3, San Antonio, Texas 78205 is the hearing on the confirmation of the Plan. * Objections to the Plan will not be considered by this Court unless such objections are timely filed and properly served in accordance with this Order. * The Debtor is authorized to make non-substantive or immaterial changes to the Disclosure Statement, the Plan, and related documents without further order of the Court and to make conforming changes among the Disclosure Statement, the Plan and related documents where doing so would better facilitate the confirmation process. A copy of the order dated Jan. 24, 2022, is available at https://bit.ly/3KNdkDx from PacerMonitor.com at no charge. Counsel to Speed Industrial: Lloyd A. Lim, Esq. Balch & Bingham, LLP 811 Louisiana Street, Suite 1010 Houston, TX 77002 Telephone: (713) 362-2550 Email: llim@balch.com About Speed Industrial Gas Speed Industrial Gas, LLC is a San Antonio, Texas-based company that offers welding supplies, industrial and specialty gas products. Speed Industrial Gas filed a petition for Chapter 11 protection (Bankr. W.D. Tex. Case No. 21-51297) on Oct. 22, 2021, listing as much as $10 million in both assets and liabilities. Ernest W. Speed, III, owner and sole member of Speed Industrial Gas, signed the petition. The Debtor tapped Lloyd A. Lim, Esq., at Balch & Bingham, LLP as legal counsel. SPEED INDUSTRIAL: Unsecureds Will Recover 100% in Plan ------------------------------------------------------ Speed Industrial Gas, LLC, submitted an Amended Combined Disclosure Statement and Chapter 11 Plan. The Debtor Proposes to assume its obligations under the Broadway Secured Loan Documents, and pay all principal and interest amounts as and when such amounts come due pursuant thereto. The Borrower will also assume all obligations owed to the Holders of any Other Secured Claims, and pay all principal and interest owed thereunder as and when due. Furthermore, the Debtor proposes payment in full of all General Unsecured Claims. Within 30 days of the Effective Date, the Debtor will pay all General Unsecured Claims using the proceeds of the Exit Financing provided by Mr. Speed in an amount up to $1,000,000.00. Mr. Speed's General Unsecured Insider Claims against the Debtor, including all prepetition advances and the general unsecured portion of the postpetition DIP Loan advances, shall be carried as a post-Effective Date unsecured claim of the Reorganized Debtor, and shall be paid upon a sale of the Reorganized Debtor's business. Such sale, however, is not projected to occur for at least two years following the confirmation of the Plan. Finally, Holders of Interests in the Debtor will retain their equity interests in the Reorganized Debtor. All equity interest in the Reorganized Debtor will vest in Mr. Speed on the Effective Date. Under the Plan, Class 2 General Unsecured Claims totaling $128,342.45. All Allowed General Unsecured Claims will be paid in full with advances from the Exit Financing, unless a Holder of a General Unsecured Claim agrees to alternative treatment in writing. Accordingly, and subject to the foregoing, under the Plan, each Holder of an Allowed General Unsecured Claim shall receive payment in full, in cash, on account of such Allowed General Unsecured. Creditors will recover 100% of their claims. Under the Plan, Class 3 General Unsecured Claims of Mr. Speed totaling $2,244,617.00. The General Unsecured Insider Claims of Mr. Speed, consisting of prepetition advances made by Mr. Speed to the Debtor in the amount of $1,994,617.00 and postpetition advances pursuant to the DIP Loan in the amount of $250,000.00 shall be: (i) carries as a post-Effective Date unsecured obligation of the Reorganized Debtor; and (ii) paid upon a sale of the Reorganized Debtor's business, with such sale not projected to occur until at least two years post-Confirmation. Creditors will recover 100% of their claims. The Plan contemplates that Mr. Speed will provide the Reorganized Debtor with Exit Financing up to $1,000,000.00 at an interest rate of 0% per annum. The Exit Financing will be available on the Effective Date pursuant to the Exit Financing Agreement included in the Plan Supplement. Additionally, the Debtor is projected to become cash flow positive in or around March, 2022, which means that the Reorganize Debtor will be able to meet its ordinary course of business operating expenses until the Reorganized Debtor's business is sold. A hearing on confirmation of the Plan has been set for March 30 and 31, 2022, beginning at 9:00 am (prevailing Central Time). The Confirmation Hearing will take place in Judge Gargotta's Courtroom of the Hipolito F. Garcia Federal Building and United States Courthouse, 615 E. Houston St., 5th Floor, SA Courtroom #3, San Antonio, Texas 78205. The objections to the confirmation of the Plan must be filed and served on or before March 21, 2022 at 11:59 p.m. (prevailing Central Time). Proposed Co-Counsel to the Debtor: Lloyd A. Lim, Esq. Rachel T. Kubanda, Esq. KEAN MILLER LLP 711 Louisiana St., Suite 1800 Houston, TX 77002 Tel: (713) 844-3000 E-mail: Lloyd.Lim@KeanMiller.com Rachel.Kubanda@KeanMiller.com A copy of the Disclosure Statement dated Jan. 21, 2021, is available at https://bit.ly/3KDidPB from PacerMonitor.com. About Speed Industrial Gas Speed Industrial Gas, LLC, is a San Antonio, Texas-based company that offers welding supplies, industrial and specialty gas products. Speed Industrial Gas filed a petition for Chapter 11 protection (Bankr. W.D. Tex. Case No. 21-51297) on Oct. 22, 2021, listing as much as $10 million in both assets and liabilities. Ernest W. Speed, III, owner and sole member of Speed Industrial Gas, signed the petition. The Debtor tapped Lloyd A. Lim, Esq., at Balch & Bingham, LLP as legal counsel. STARWOOD PROPERTY: Fitch Rates $500MM Unsec. Notes 'BB+' -------------------------------------------------------- Fitch Ratings has assigned a 'BB+' rating to the $500 million 4.375% senior unsecured notes issued by Starwood Property Trust, Inc. (Starwood), due Jan. 15, 2027. The assignment of the final ratings follows the receipt of documents conforming to information already received. The final ratings are the same as the expected rating assigned to the unsecured notes on Jan. 10, 2022. KEY RATING DRIVERS SENIOR DEBT The debt rating is equalized with the ratings assigned to Starwood's existing senior unsecured debt as the new notes rank equally in the capital structure. The unsecured debt rating is equalized with Starwood's Long-Term Issuer Default Rating (IDR), reflecting the availability of unencumbered assets and average recovery prospects for creditors in a stressed scenario. This transaction is expected to be neutral to Starwood's leverage, given that proceeds are expected to be used to repay existing borrowings. Fitch views Starwood's ability to access the unsecured debt markets and extend its debt maturity profile favorably; however, unsecured debt as a proportion of total debt remains below-average following the issuance. Fitch would view an increase in Starwood's unsecured funding mix favorably as it would enhance its financial flexibility. Still, Starwood's secured funding is diverse and comprised of warehouse lines, repurchase facilities, mortgages and securitizations, with a well-laddered maturity profile. Starwood's ratings reflect the strength of its affiliation with Starwood Capital Group and its affiliate manager, SPT Management, LLC. The affiliation provides access to deal flow and deep industry and collateral expertise; a solid market position as a commercial real estate (CRE), residential real estate and infrastructure lender, special servicer and property investor; diversity of its business model; strong asset quality; consistent operating performance; relatively low leverage; appropriate interest coverage; a diverse and well-laddered funding profile; and solid liquidity. Rating constraints include Starwood's primary focus on the CRE market, which exhibits volatility through the credit cycle, a continued challenging environment for certain CRE property types such as office and hotel, a largely secured funding profile and potential for margin calls on secured credit facilities, although the exposure is more modest than peers. The Stable Outlook for the Long-Term IDR reflects Fitch's view that Starwood will continue to maintain strong asset quality, generate stable and consistent operating cash flows and maintain leverage at a level appropriate for the risk profile of the portfolio. Additionally, Fitch believes the company will continue to opportunistically issue unsecured debt, to enhance its funding flexibility and appropriately manage its debt maturity profile. RATING SENSITIVITIES The unsecured debt rating is linked to the Long-Term IDR and would likely move in tandem. However, an increase in secured debt and/or a sustained decline in the level of unencumbered assets that weakens recovery prospects on the unsecured debt could result in the unsecured debt ratings being notched down from the IDR. Factor that could, individually or collectively, lead to positive rating action/upgrade: -- A sustained increase in the proportion of unsecured debt funding approaching 40% of total debt; a reduction in margin call exposure; and the maintenance of leverage at-or-below 2.5x on a Fitch-calculated basis, excluding all non-recourse debt. Positive rating action would also be conditioned on the maintenance of strong asset quality performance, consistent core earnings generation; and a solid liquidity profile. Factors that could, individually or collectively, lead to negative rating action/downgrade: -- A sustained increase in Fitch-calculated leverage, excluding all non-recourse debt, above 3.0x and/or a material increase in total leverage; an inability to maintain sufficient liquidity relative to near-term debt maturities, unfunded commitments and margin call potential; -- A reduction in business line diversity, material deterioration in credit performance, a reduction in core earnings and coverage of the dividend, and/or a sustained reduction in the proportion of unsecured debt funding below 10% could all yield a negative rating action. 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. ISSUER PROFILE The highest level of ESG credit relevance, if present, is a score of '3'. This means ESG issues are credit-neutral or have only a minimal credit impact on the entity(ies), either due to their nature or to the way in which they are being managed by the entity(ies). TECT AEROSPACE: Unsec. Creditors to Recover 0.2% to 3.3% in Plan ---------------------------------------------------------------- TECT Aerospace Group Holdings, Inc., et al., submitted a Plan and a Disclosure Statement. Based on the Debtors' need for liquidity to administer the Chapter 11 Cases, on April 6, 2021, the Debtors filed a motion (the "DIP Motion") seeking authorization to obtain post-petition financing from Boeing and use Boeing's cash collateral on an interim and final basis. On May 13, 2021, the Court entered the DIP Order approving the relief requested in the DIP Motion, with certain modifications negotiated with the Creditors' Committee and the U.S. Trustee, and other modifications ordered by the Bankruptcy Court, on a final basis. The DIP Order approved, among other things, a maximum commitment of $60,200,000. Since the Petition Date, Boeing has continued to support the Debtors' operations and liquidity needs, including advancing over $53,700,000 (although the outstanding amount under the DIP Credit Agreement and DIP Order has never exceeded the maximum commitment of $60,200,000). Among the support Boeing provided pursuant to the DIP Order and DIP Credit Agreement, in addition to funds required for the Debtors' continued operations postpetition, was over $4,800,000 in payment of prepetition amounts owed to critical vendors, accrued and ongoing employee healthcare and payroll obligations, and other obligations of the Debtors. Further, Boeing agreed to allow the Debtors to reserve $1,000,000 from the proceeds of the Asset Sales to support the winddown costs of the Estates and has committed to fund additional budgeted amounts pursuant to the DIP Order to fund the cost to administer the Chapter 11 Cases through the Effective Date. On June 24, 2021, the Bankruptcy Court conducted the Everett Sale Hearing and approved the Everett Sale to Wipro. The Everett Sale to Wipro closed on July 12, 2021. On July 13, 2021, the Bankruptcy Court conducted the Kansas Sale Hearing and approved the Kansas Sale to the Kansas Buyer. The Kansas Sale to the Kansas Buyer closed on August 6, 2021. Pursuant to the Kansas Sale, the Kansas Buyer has a designation rights period following the closing during which the Kansas Buyer can designate Executory Contracts and Unexpired Leases for assumption and assignment, or rejection. Since the closing of the Kansas Sale, the Kansas Buyer has worked with the Debtors to attempt to market certain assets of the Estates along with certain assets sold in the Kansas Sale, including some of the Executory Contracts and Unexpired Leases subject to the designation rights period. If those efforts are successful, the Debtors believe the Estates, as well as Boeing and the Kansas Buyer, will benefit from the sale of those assets. Under the Plan, Class 4 General Unsecured Claims totaling $35,272,666 includes General Unsecured Claims held by Boeing in the amount of $19,730,705, and General Unsecured Claims held by creditors other than Boeing in the amount of $15,541,961. Each Holder of an Allowed Class 4 General Unsecured Claim will receive its pro rata share of the GUC Distributable Assets; provided that, pursuant to the Plan Settlement, any Class 4 Claims held by Boeing will not share in any Distributions in respect of the Initial GUC Cash Distribution. Solely in the event that there are sufficient GUC Distributable Assets to pay the full amount of all Allowed Class 4 and Class 5 Claims as of the Petition Date, the Holders of such Allowed Claims shall also be paid their Pro Rata share of the remaining GUC Distributable Assets in respect of interest accruing at the Federal Judgment Rate from the Petition Date to the date payment is made. Creditors will recover 0.2% to 3.3% of their claims. This is the recovery range for General Unsecured Claims held by creditors other than Boeing and assumes that the sole source of recovery for General Unsecured Claims is the Initial GUC Cash Distribution and, pursuant to the Plan Settlement, Boeing has agreed to waive its right to recover from such amount. Holders of all General Unsecured Claims (including General Unsecured Claims held by Boeing) may also recover additional amounts if there are significant recoveries from the Retained Causes of Action. Class 4 is impaired. Under the Plan, holders of Class 5 Non-Released Party General Unsecured Claims will receive its Pro Rata share of the GUC Distributable Assets. Solely in the event that there are sufficient GUC Distributable Assets to pay the full amount of all Allowed Class 4 and Class 5 Claims as of the Petition Date, the Holders of such Allowed Claims shall also be paid their Pro Rata share of the remaining GUC Distributable Assets in respect of interest accruing at the Federal Judgment Rate from the Petition Date to the date payment is made. Creditors will recover 0.2% to 3.3% of their claims. The total claim for class 5 is to be determined. Class 5 is impaired. The Plan Settlement resolves controversies among the Settling Parties regarding, among other things, the Creditors' Committee's motion to convert the Chapter 11 Cases to chapter 7 of the Bankruptcy Code, the Creditors' Committee potential challenge to the DIP Lenders' and Prepetition Lenders' liens on certain collateral, the DIP Lenders' informal objections to certain Professional Fee Claims, the post-Effective Date administration of the Estates, the treatment of the DIP Claims and Prepetition Credit Agreement Claims, and the distribution of any recoveries on the Retained Causes of Action related to the Non-Released Parties. The terms of the Plan Settlement are set forth in the Plan and the Plan Settlement Term Sheet: * Pursuant to the Plan Settlement, the Creditors' Committee agreed to withdraw its motion to convert the Chapter 11 Cases to cases under chapter 7 of the Bankruptcy Code. The Creditors' Committee's challenge period under the DIP Order with respect to certain Estate assets is extended through and including the Effective Date; provided, however, that the Creditors' Committee shall not commence a challenge unless the Plan, consistent with the terms of the Plan Settlement, is withdrawn or abandoned by the Settling Parties or such a Plan is not consummated. * The Settling Parties resolved the DIP Lenders' informal objections to certain Professional Fee Claims as set forth in the Plan Settlement Term Sheet. * The Settling Parties agreed on the structure and provisions regarding the Trusts that are set forth in Article IV of the Plan. * The Settling Parties agreed on the limited consolidation of the Debtors for Plan purposes as set forth in Article IV.C of the Plan. * The Initial GUC Cash Distribution will be transferred to the GUC Distribution Trust on the Effective Date, which will be distributed to Allowed General Unsecured Claims other than General Unsecured Claims held by Boeing. In addition, on the Effective Date, the GUC Distribution Trust will be funded with the GUC Claims Determination Fund. * All remaining initial Liquidation Trust Assets, after satisfaction of all Allowed Administrative Claims, Professional Fee Claims, Priority Tax Claims, Priority Claims, and Other Secured Claims, and establishment of the Disputed Claims Reserve and the Litigation Cost Reserve, will be distributed to the Liquidation Trust Beneficiaries. * Any net Cash proceeds of the Liquidation Trust's prosecution or settlement of the Retained Causes of Action with respect to the Non-Released Parties will be allocated and distributed as follows (the "Litigation Recovery Split"): A. the first $300,000 to the Liquidation Trust Beneficiaries in respect of the initial funding of the Litigation Cost Reserve; B. of the next $4 million, 88% to the Liquidation Trust and 12% to the GUC Distribution Trust (the "GUC Litigation Recovery Participation"); C. next, to the Liquidation Trust until all Class 3 Claims are satisfied; and D. any additional proceeds to the GUC Distribution Trust (together with the GUC Litigation Recovery Participation, the "GUC Litigation Recovery"). Attorneys for the Debtors: Daniel J. DeFranceschi, Esq. Paul N. Heath, Esq. Amanda R. Steele, Esq. Zachary I. Shapiro, Esq. RICHARDS, LAYTON & FINGER, P.A. One Rodney Square, 920 N. King St. Wilmington, DE 19801 Tel: (302) 651-7700 Fax: (302) 651-7701 A copy of the Disclosure Statement dated Jan. 21, 2021, is available at https://bit.ly/3FTEx3C from Kccllc, the claims agent. About TECT Aerospace TECT Aerospace Group Holdings, Inc., and its affiliates manufacture high precision components and assemblies for the aerospace industry, specializing in complex structural and mechanical assemblies and machined components for various aerospace applications. TECT produces assemblies and parts used in flight controls, fuselage/interior structures, doors, wings, landing gear, and cockpits. TECT operates manufacturing facilities in Everett, Washington, and Park City, and Wellington, Kansas, and their corporate headquarters are located in Wichita, Kansas. TECT currently employs approximately 400 individuals nationwide. TECT and its affiliates are privately held companies owned by Glass Holdings, LLC and related Glass-owned or Glass-controlled entities. TECT Aerospace Group Holdings, Inc. and six affiliates sought Chapter 11 protection (Bankr. D. Del. Case No. 21-10670) on April 6, 2021. TECT Aerospace estimated assets of $50 million to $100 million and liabilities of $100 million to $500 million as of the bankruptcy filing. The Debtors tapped Richards, Layton & Finger, P.A. as counsel; Winter Harbor, LLC as restructuring advisor; and Imperial Capital, LLC as investment banker. Kurtzman Carson Consultants, LLC is the claims agent. The Boeing Company, as DIP Agent, is represented by Alan D. Smith, Esq. and Kenneth J. Enos, Esq. TELINTEL LTD: Seeks to Hire Kaufman Rossin & Co. as Accountant -------------------------------------------------------------- Telintel, Ltd seeks approval from the U.S. Bankruptcy Court for the Southern District of Florida to employ Kaufman Rossin & Co., PA as accountant. The Debtor needs the assistance of accountants to give advice with respect to its tax and accounting matters. The hourly rates of the firm's professionals are as follows: Tanya Ferreiro, CPA $700 Partners, Directors, and Senior Managers $430 - $775 Managers $330 - $425 Seniors and Staff $205 - $325 Tanya Ferreiro, CPA, a member at Kaufman Rossin & Co., 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: Tanya Ferreiro, CPA Kaufman Rossin & Co., PA 3310 Mary Street, Suite 501 Miami, FL 33133 Telephone: (305) 858-5600 Facsimile: (305) 856-3284 Email: tferreiro@kaufmanrossin.com About Telintel Ltd Telintel, Ltd., a Weston, Fla.-based provider of telecommunication services, filed a petition for Chapter 11 protection (Bankr. S.D. Fla. Case No. 21-22154) on Dec. 30, 2021, listing $751,038 in assets and $4,996,862 in liabilities. Mario Acosta, chief executive officer, signed the petition. Judge Peter D. Russin oversees the case. The Debtor tapped Thomas L. Abrams, Esq., at Gamberg & Abrams as legal counsel and Kaufman Rossin & Co., PA as accountants. TEN DOLLAR: To Seek Plan Confirmation on Feb. 23 ------------------------------------------------ Judge M. Ruthie Hagan has entered an order conditionally approving the Disclosure Statement of Ten Dollar Car Wash, LLC. Feb. 23, 2022, at 11:00 a.m., 200 Jefferson Avenue, Courtroom 945, Memphis, Tennessee, is fixed for the hearing on final approval of the Disclosure Statement, if a written objection is timely filed, and for hearing on confirmation of the Plan. Feb. 16, 2022, is fixed as the last day for filing written objections to the Disclosure Statement or to confirmation of the Plan. Feb. 16, 2022, is fixed as the last day for filing written acceptances or rejections of the Plan. On or before, Feb. 18, 2022, Counsel for the Debtor shall file with the Bankruptcy Court Clerk a summary tabulation of ballots stating: (1) the value of all allowed interests for each class; (2) the number and dollar amount of all votes cast for each class; (3) the number and dollar amount of all acceptances for each class; (4) the number and dollar amount of all rejections for each class; and (5) a concluding paragraph indicating whether the plan has received sufficient acceptances to be confirmed. About Ten Dollar Car Wash LLC Ten Dollar Car Wash, LLC, filed its voluntary petition for Chapter 11 protection (Bankr. W.D. Tenn. Case No. 21-23046) on Sept. 17, 2021, listing as much as $500,000 in both assets and liabilities. Judge M. Ruthie Hagan presides over the case. The Law Office of John E. Dunlap serves as the Debtor's legal counsel. TWISTED OAK: March 28 Plan Confirmation Hearing Set --------------------------------------------------- Twisted Oak Winery, LLC, filed with the U.S. Bankruptcy Court for the Eastern District of California a Second Amended Chapter 11 Plan. On Jan. 24, 2022, Judge Ronald H. Sargis ordered that: * March 28, 2022, at 2:00 p.m. in the United States Bankruptcy Court, Modesto Division, 1200 I Street, Second Floor, Modesto, CA 95354 is the hearing on confirmation of the Subchapter V Plan. * March 1, 2022, is fixed as the last day for all creditors and other parties in interest entitled to and choosing to vote on the Plan to transmit their completed ballot stating their acceptance or rejection of the Plan. * March 1, 2022, is fixed as the last day for any creditor or other party in interest to file objections to confirmation of the proposed Subchapter V Plan. * Responses, if any, to objection to confirmation and evidence in support of confirmation shall be filed on the objecting party, the Subchapter V Trustee, and the U.S. Trustee at least 7 days prior to the confirmation hearing. A copy of the order dated Jan. 24, 2022, is available at https://bit.ly/3fZAc4m from PacerMonitor.com at no charge. Attorney for Twisted Oak: Brian S. Haddix (230332) Haddix Law Firm 1224 I Street Modesto, CA 95354-0912 (209) 338-1131 bhaddix@haddixlawfirm.com About Twisted Oak Twisted Oak, LLC, specializes in wines that are made from Tempranillo, Grenache, Mourvedre, Viognier, and more. It filed a Chapter 11 petition (Bankr. E.D. Cal. Case No. 21-90484) on Oct. 4, 2021. In the petition signed by Jeff Stai, managing member, the Debtor disclosed $1 million to $10 million in assets and $1 million to $10 million in liabilities. The Hon. Ronald H. Sargis oversees the case. Brian S. Haddix, of HADDIX LAW FIRM, is the Debtor's counsel. VETERAN HOLDINGS: Seeks Approval to Hire Bankruptcy Counsel ----------------------------------------------------------- Veteran Holdings NY LLC seeks approval from the U.S. Bankruptcy Court for the Eastern District of New York to employ Robinson Brog Leinwand Greene Genovese & Gluck PC as its legal counsel. The firm will render these services: (a) advise the Debtor concerning its powers and duties in the continued management and operation of its business and property; (b) negotiate with creditors of the Debtor, prepare a plan of reorganization, and take the necessary legal steps to consummate a plan; (c) advise the Debtor regarding tax matters; (d) advise and consult on the conduct of this Chapter 11 case; (e) appear before this court to protect the interests of the Debtor and its estate, and represent the Debtor in all matters pending before this court; (f) take all necessary actions to protect and preserve the Debtor's estate; (g) represent the Debtor in connection with obtaining authority to continue using cash collateral and post-petition financing; (h) advise the Debtor in connection with any potential sale of assets; (i) appear before the court and any appellate courts to represent the interests of the Debtor's estate; (j) take any necessary action on behalf of the Debtor to negotiate, prepare, and obtain approval of a disclosure statement and confirmation of a Chapter 11 plan and all documents related thereto; and (k) perform all other necessary legal services for the Debtor in connection with the prosecution of this case. The hourly rates charged by the firm's attorneys and staff are as follows: Associates $410 - $500 Paralegal/Support Staff $250 - $285 Shareholders/Counsel $450 - $800 Fred Ringel, Esq., an attorney at Robinson Brog Leinwand Greene Genovese & Gluck, 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: Fred B. Ringel, Esq. Robinson Brog Leinwand Greene Genovese & Gluck PC 875 Third Avenue New York, NY 10022 Telephone: (212) 603-6300 Email: fbr@robinsonbrog.com About Veteran Holdings NY Veteran Holdings NY LLC, a real estate business in Brooklyn, New York, filed its voluntary petition for relief under Chapter 11 of the Bankruptcy Code (Bankr. E.D.N.Y. Case No. 22-40052) on Jan. 12, 2022. Pearl Schwartz, managing member, signed the petition. At the time of the filing, the Debtor disclosed $10 million to $50 million in both assets and liabilities. Judge Elizabeth S. Stong oversees the case. Robinson Brog Leinwand Greene Genovese & Gluck PC serves as the Debtor's counsel. WASHINGTON PLACE: Case Summary & 20 Largest Unsecured Creditors --------------------------------------------------------------- Debtor: Washington Place, LLC 2316 Washington Ave New Orleans, LA 70115 Business Description: Washington Place is primarily engaged in renting and leasing real estate properties. Chapter 11 Petition Date: January 27, 2022 Court: United States Bankruptcy Court Eastern District of Louisiana Case No.: 22-10086 Judge: Hon. Meredith S. Grabill Debtor's Counsel: Frederick L. Bunol, Esq. THE DERBES LAW FIRM, LLC 3027 Ridgelake Drive Metairie, LA 70002 Tel: (504) 837-1230 Fax: (504) 832-0327 Email: fbunol@derbeslaw.com Estimated Assets: $1 million to $10 million Estimated Liabilities: $500,000 to $1 million The petition was signed by Joshua Bruno as manager. A full-text copy of the petition containing, among other items, a list of the Debtor's 20 largest unsecured creditors is available for free at PacerMonitor.com at: https://www.pacermonitor.com/view/RWFVI2Q/Washington_Place_LLC__laebke-22-10086__0001.0.pdf?mcid=tGE4TAMA WESTBANK HOLDINGS: Case Summary & 20 Largest Unsecured Creditors ---------------------------------------------------------------- Debtor: Westbank Holdings, LLC d/b/a Stoney Brook Apartments d/b/a Oakmont Apartments 2200 Westbend Parkway New Orleans, LA 70114 Business Description: Westbank Holdings is primarily engaged in renting and leasing real estate properties. Chapter 11 Petition Date: January 27, 2022 Court: United States Bankruptcy Court Eastern District of Louisiana Case No.: 22-10082 Judge: Hon. Meredith S. Grabill Debtor's Counsel: Frederick L. Bunol, Esq. THE DERBES LAW FIRM, LLC 3027 Ridgelake Drive Metairie, LA 70002 Tel: (504) 837-1230 Fax: (504) 832-0327 Email: fbunol@derbeslaw.com Estimated Assets: $10 million to $50 million Estimated Liabilities: $10 million to $50 million The petition was signed by Joshua Bruno as manager. A full-text copy of the petition is available for free at PacerMonitor.com at: https://www.pacermonitor.com/view/RE3YEBQ/Westbank_Holdings_LLC__laebke-22-10082__0001.0.pdf?mcid=tGE4TAMA List of Debtor's 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ 1. Darrow Everrett Legal $8,765 One Turks Head Place Suite1200 Providence, RI 02903 2. Deborah Charles $988 2103 Cobblestone Lane Unit A New Orleans, LA 70114 3. Entergy Utility $71,452 P.O. Box 8108 Baton Rouge, LA 70891 4. HD Supply Facilities $7,669 Maintenance PO Box 509058 San Diego, CA 92150 5. Jeffrey Gray $908 2211 Cobblestone Lane Unit G New Orleans, LA 70114 6. John McCorpen $988 2215 Cobblestone Lane Unit H New Orleans, LA 70114 7. Keith Duncan $908 2105 Cobblestone Lane Unit M New Orleans, LA 70114 8. Kevin Boswell $988 2103 Cobblestone Lane Unit C New Orleans, LA 70114 9. Lucius Clark $909 2223 Cobblestone Lane Unit C New Orleans, LA 70114 10. Pipes Miles Legal $26,516 Beckman, LLC 1100 Poydras Street Suite 1800 New Orleans, LA 70163 11. Propertybase, Inc. Software $5,616 2100 Central Ave Suite 200 Boulder, CO 80301 12. Public Service Answering $1,666 Communications, Inc. Service 5824 Plauche Street New Orleans, LA 70123 13. Republic Services Waste Disposal $2,459 808 L and A Road Metairie, LA 70001 14. Sewerage & Water Utility $1,188,601 Board of New Orleans 625 St. Joseph St. New Orleans, LA 70165 15. Small Business EDIL Loan $242,500 Administration Disaster Loan Service Center 1545 Hawkins Blvd, Suite 202 El Paso, TX 79925 16. T & N Ground Keeping Landscaping $1,600 1728 Third Street New Orleans, LA 70113 17. Terryeall Elliott $950 2217 Cobblestone Lane Unit B New Orleans, LA 70114 18. Wandell Millien $926 2219 Cobblestone Lane Unit B New Orleans, LA 70114 19. West Centro $79,758 147 Carondelet St Ste 1137 New Orleans, LA 70130 20. Yardi Systems, Inc Software $4,500 2750 Park View Court, Suite 100 Oxnard, CA 93036 [^] BOOK REVIEW: TAKING CHARGE: Management Guide to Troubled ------------------------------------------------------------ Companies and Turnarounds Author: John O. Whitney Publisher: Beard Books Softcover: 283 Pages List Price: $34.95 Order a copy today at: http://beardbooks.com/beardbooks/taking_charge.html Review by Susan Pannell Remember when Lee Iacocca was practically a national hero? He won celebrity status by taking charge at a company so universally known as troubled that humor columnists joked their kids grew up thinking the corporate name was "Ayling Chrysler." Whatever else Iacocca may have been, he was a leader, and leadership is crucial to a successful turnaround, maintains the author. Mediagenic names merit only passing references in Whitney's book, however. The author's own considerable experience as a turnaround pro has given him more than sufficient perspective and acumen to guide managers through successful turnarounds without resorting to name-dropping. While Whitney states that he "share[s] no personal war stories" in this book, it was, nonetheless, written from inside the "shoes, skin, and skull of a turnaround leader." That sense of immediacy, of urgency and intensity, makes Taking Charge compelling reading even for the executive who feels he or she has already mastered the literature of turnarounds. Whitney divides the work into two parts. Part I is succinctly entitled "Survival," and sets out the rules for taking charge within the crucial first 120 days. "The leader rarely succeeds who is not clearly in charge by the end of his fourth month," Whitney notes. Cash budgeting, the mainstay of a successful turnaround, is given attention in almost every chapter. Woe to the inexperienced manager who views accounts receivable management as "an arcane activity 'handled over in accounting.'" Whitney sets out 50 questions concerning AR that the leader must deal with--not academic exercises, but requirements for survival. Other internal sources for cash, including judiciously managed accounts payable and inentory, asset restructuring, and expense cuts, are discussed. External sources of cash, among them banks, asset lenders, and venture capital funds; factoring receivables; and the use of trust receipts and field warehousing, are handled in detail. Although cash, cash, and more cash is the drumbeat of Part I, Whitney does not slight other subjects requiring attention. Two chapters, for example, help the turnaround manager assess how the company got into the mess in the first place, and develop strategies for getting out of it. The critical subject of cash continues to resonate throughout Part II, "Profit and Growth," although here the turnaround leader consolidates his gains and looks ahead as the turnaround matures. New financial, new organizational, and new marketing arrangements are laid out in detail. Whitney also provides a checklist for the leader to use in brainstorming strategic options for the future. Whitney's underlying theme--that a successful business requires personal leadership as well as bricks and mortar, money and machinery--is summed up in a concluding chapter that analyzes the qualities that make a leader. His advice is as relevant in this 1999 reprint edition as it was in 1987 when first published. ********* 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 ***