/raid1/www/Hosts/bankrupt/TCR

/raid1/www/Hosts/bankrupt/TCR_Public/220204.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, February 4, 2022, Vol. 26, No. 34 Headlines 12TH & K ST. MALL: Seeks Cash Collateral Access Thru July 2022 12TH & K ST. MALL: Taps Resnik Hayes Moradi as Bankruptcy Counsel 2192 TEXAS PARKWAY: Wants May 2 Plan Exclusivity Extension 3200 MYERS STREET: Seeks to Hire Grant Street Associates as Broker 6525 BELCREST: Seeks Cash Collateral Access A.B.C. CARPET: Unsecureds Will Recover 2.4% to 5.8% in Plan ABRAHAM LINCOLN CHRISTIAN: $327K Sale of Lowell Property Approved ADVAXIS INC: Delays Filing of Annual Report for Year Ended Oct. 31 AERKOMM INC: Chen & Fan Resigns as Auditor AFFINITY GAMING: S&P Alters Outlook to Positive, Affirms 'B-' ICR AKOUSTIS TECHNOLOGIES: Incurs $15.3 Million Net Loss in 2nd Quarter ALEX AND ANI LLC: Scott Burger Will Be New CEO ALPHA LATAM: Young Conaway, Brown Update on Consortium Group AMC ENTERTAINMENT: Moody's Upgrades CFR to Caa2; Outlook Positive AMC ENTERTAINMENT: S&P Rates New $500MM Sec. First-Lien Notes 'B-' ATHLETIC SPECIALTIES: Taps Weissberg and Associates as Counsel AVERY ASPHALT: Asset Sale Proceeds to Fund Plan AYTU BIOPHARMA: Secures $15 Million Debt Refinancing BASIC ENERGY: Seeks to Tap Jones Lang LaSalle Brokerage as Broker BASIC ENERGY: Taps David Dunn of Province LLC as Wind-Down Director BCP RENAISSANCE: S&P Upgrades ICR to 'B+', Outlook Stable BEAR COMMUNICATIONS: Wins Cash Collateral Access Thru Feb 28 BENNETT ROSA: Trustee Taps REMAX Gold as Real Estate Broker BETTY CLARKE DIXON: Poughs Buying Miami Property for $635K Cash BHCOSMETICS HOLDINGS: Feb. 15 Auction of Substantially All Assets BLUEAVOCADO CO: Seeks to Tap Sprinkle IP as Special Patent Counsel BLUEAVOCADO CO: Taps Lakewood Group as Executive Recruiter BOYNE USA: New $100MM Debt Add-on No Impact on Moody's B1 CFR BOYNE USA: S&P Affirms 'B' Issuer Credit Rating, Outlook Stable BRIGHT MOUNTAIN: Amends Credit Deal to Gets $350K Additional Loan CALIFORNIA ROOFS: Seeks to Tap Michael Jay Berger as Legal Counsel CARL MILLER FUNERAL: Seeks Chapter 11 Protection CASA DE CAPRI: Insurer Cannot Invoke Direct Benefits Estoppel CHICK LUMBER: Unsecureds to Get Share of Cash Flow for 10 Years CINEMARK USA: Moody's Affirms B3 CFR, Alters Outlook to Positive CLASSIC ACQUISITION: Seeks to Tap Grier Wright Martinez as Counsel CONSTRUCTION MAX: Seeks to Hire The Peters Firm as Legal Counsel DCERT BUYER: Fitch Affirms 'B' LT IDR, Outlook Stable DEL MAR: Fitch Rates $37.1MM Rev. Bonds 'BB-', Outlook Neg. DIOCESE OF CAMDEN: Slams Abuse Claimants on Chapter 11 Discovery DIVINIA WATER: Files Liquidating Plan After Sale to Cellular EDGEWATER HOLDINGS: Case Summary & Four Unsecured Creditors EDUCATIONAL TECHNICAL: Wins March 9 Plan Exclusivity Extension EL JEBOWL: Gets OK to Hire Tax and Accounting Services Provider ENDLESS POSSIBILITIES: Wins Cash Collateral Access ENTERPRISE DEVELOPMENT: Fitch Alters Outlook on 'B+' IDR to Stable FIRST STEP TRADEMARKS: Taps McGrail & Bensinger as Legal Counsel FLOWORKS INTERNATIONAL: Fitch Assigns 'B' LT IDR, Outlook Stable FRANK LARISCEY, JR.: Sale of Augusta Property for $61K Approved FREDERICK LLC: Court Modifies Order Approving Sale of All Assets GARDA WORLD: Fitch Assigns BB+ Rating on New $700MM TLB Issuance GARDA WORLD: S&P Assigns 'B' Rating on New US$700MM Term Loan B GIRARDI & KEESE: Erika Knew of Fraud, Crash Lawyer Claims GOPHER RESOURCE: S&P Affirms 'B' ICR, Off CreditWatch Negative GRAIL SEMICONDUCTOR: Court Trims Down Sedgwick Suit GREGORY LANE BARNHILL: Proposed Sale of Columbus Property Approved GRUBHUB INC: S&P Cuts ICR to 'B-' on Expected Cash Flow Deficits GVS TEXAS: Further Fine-Tunes Plan Documents HARRIS PHARMACEUTICAL: Trustee Seeks OK to Hire Litigation Counsel HEAVEN'S LANDING: Gets OK to Hire Carr Law as Special Counsel HELLO LIVING: Gets Court OK to Hire Leo Fox as Bankruptcy Attorney HILLSIDE OFFICE: Auction of $3.8M Hillside Property Set for Feb. 14 HR NORTH DALE: Court Approves Sale of Vacant Lutz Commercial Land I.C.S. CUSTOMS: Seeks to Tap Re-Max Suburban as Real Estate Broker INVESTFEED INC: Taps Zoem Tax Services as Accountant ISLAND INDUSTRIES: Case Summary & 18 Unsecured Creditors JOHNSON & JOHNSON: Talc Claimants Challenge Injury Suits Freeze JOSEPH RYAN ELLISON: Hardman Offers $300K for Junction City Bowl KEAVEN L. DOTTERY: $185K Cash Sale of Atlanta Property Approved KEEPITSIMPLE.US LLC: Sale of All Assets to Aligned Holdings Okayed KURNCZ FARMS: Wins Cash Collateral Access LA CASA CANAVERAL: Gets OK to Hire Zimmerman as Bankruptcy Counsel LEGAL ADVOCACY: Seeks Cash Collateral Access LEGAL ADVOCACY: Taps UHY LLP as Accountant LHS BORROWER: Moody's Assigns B2 CFR, Rates New Secured Debt 'B1' LHS BORROWER: S&P Assigns 'B' Issuer Credit Rating, Outlook Stable LIBERTY PARK: Seeks Cash Collateral Access LUCIEN HARRY MARIONEAUX: Bid for Trustee Appointment Granted LWO ACQUISITIONS: Files Emergency Bid to Use Cash Collateral MANN REALTY: Feb. 8 Hearing on Trustee's Sale of Harrisburg Asset MICHAEL ZOLLICOFFER: Unsecureds to Recover 0% in Subchapter V Plan MILLERKNOLL INC: S&P Alters Outlook to Negative, Affirms 'BB+' ICR MONTAUK CLIFFS: Montauk Property Up for Feb. 24 Auction MY SIZE: Appoints Ezequiel Brandwain as Chief Commercial Officer NATURE COAST: Seeks to Hire John Grayson as Accountant NAVEX TOPCO: S&P Upgrades ICR to 'B' on Improved Performance NB LOFT VUE: Trustee Seeks to Hire TPS-West as Accountant NB LOFT VUE: Trustee Taps O'Boyle Properties as Real Estate Broker NEW YORK OPTICAL: Feb. 8 Auction of Porsche Design Inventory Okayed NITROCRETE LLC: Seeks to Employ RSM US as Accountant NORDIC AVIATION: Seeks to Hire Clifford Chance as Special Counsel NORMAN C. BIJOU: Court Issues Show Cause Order on Property Sale NORTHERN OIL: Fitch Affirms 'B' LT IDR, Alters Outlook to Pos. NORTHERN OIL: S&P Upgrades ICR to 'B', Outlook Stable ORIGIN AGRITECH: Delays Filing of Fiscal 2021 Annual Report OWL FINANCE: S&P Downgrades ICR to 'CC', Outlook Negative PALADIN ENERGY: Insurer Loses Bid to Dismiss POGO Coverage Suit PARTNERS A TASTEFUL: Taps Bush Kornfeld as Bankruptcy Counsel PARTNERS A TASTEFUL: Taps Byrnes Keller Cromwell as Special Counsel PARTNERS A TASTEFUL: Taps Carney Badley Spellman as Special Counsel PARTNERS A TASTEFUL: Taps Stapleton Group as Financial Advisor PELCO STRUCTURAL: Gets Cash Collateral Access Thru April 30 PHI GROUP: Signs $64.1 Million Purchase Agreements With KOTA PIAGGIO AMERICA: Plan Exclusivity Extended Thru March 4 POINTCLICKCARE TECHNOLOGIES: S&P Places 'B+' ICR on Watch Negative POLARIS NEWCO: Moody's Says B3 CFR Unaffected by Spireon Deal POWER SOLUTIONS: Neil Gagnon Reports 10% Stake as of Jan. 27 PRECISION MANUFACTURED: Trustee Seeks to Hire Bicher & Associates PRESTIGE PAVERS: Wins Cash Collateral Access PURDUE PHARMA: Mediation Deadline Extended to Feb. 7 PURDUE PHARMA: Sacklers' Litigation Shield Extended to Feb. 17 QHC FACILITIES: Court Okays Interim DIP Financing Order RED PROPERTIES: Case Summary & Two Unsecured Creditors RIVERSTONE RESORT: Hires Sanjay R. Chadha Law as Special Counsel ROCKDALE MARCELLUS: Chemstream Steps Down as Committee Member ROMAN CATHOLIC: Feb. 4 Hearing on Santa Fe Asset Bid Procedures SHEKINAH OILFIELD: Unsecureds to Get $2K per Year for 5 Years SQUIRRELS RESEARCH: Seeks to Hire CliftonLarsonAllen as Accountant SUSGLOBAL ENERGY: Signs One Year Consulting Agreement With CFO TCP INVESTMENT: Non-Insider Unsecureds to Get 100% in 2 Years TEMERITY TRUST: Seeks to Tap Douglas Elliman as Real Estate Broker TLA TIMBER: March 9 Plan Confirmation Hearing Set TLA TIMBER: Unsecureds to Get Share of Income for 3 Years TRACER ROOFING: Voluntary Chapter 11 Case Summary TRANQUILITY GROUP: $8M Branson Cedars Resort Sale to Big Cedar OK'd USA GYMNASTICS: Gets Approval to Start Chapter 11 Claims Processing VERANO RECOVERY: Seeks to Hire O'Neil LLP as Special Counsel VIPER PRODUCTS: Vaughn Buying Gooseneck Flatbed Trailers for $7.5K VISIUM TECHNOLOGIES: Suit vs Petitioning Creditors' Owners Junked WITCHEY ENTERPRISES: Bid Procedures for Personal Property Denied X-TREME BULLETS: Appeal in Suit vs Capital Cartridge May Proceed X-TREME BULLETS: Royal Metal Loses Bid to Dismiss Trustee's Appeal ZAPPELLI BODY SHOP: Seeks OK to Hire Tamara Figlar as Accountant [*] January Starts With Low Bankruptcy Filings in New Hampshire [^] BOOK REVIEW: AS WE FORGIVE OUR DEBTORS ********* 12TH & K ST. MALL: Seeks Cash Collateral Access Thru July 2022 -------------------------------------------------------------- 12th & K St. Mall Partners, LLC asks the U.S. Bankruptcy Court for the Central District of California for authority to use the cash collateral of DCR Mortgage 10 Sub 3, LLC and the City of Sacramento for the months of February through July 2022. The Debtor requires the use of cash collateral to pay ordinary and necessary operating expenses. Currently, the Debtor is not using cash collateral and those funds are being segregated, but this is no longer sustainable. If the Debtor's ability to use cash collateral continues to be interrupted, the Debtor will be unable to maintain operations. While the Debtor has been historically solvent, it has been significantly affected by the Covid-19 pandemic. Due to the California Governor's shutdown orders in March 2020, some of the tenants stopped paying rent, including its largest commercial retail tenant. The rental income dropped by $65,000 per month. As a result, the Debtor defaulted on payments in 2020. The Restaurant Tenant has not paid rent for nearly a year and a half. It owes back rent of approximately $721,749 as of the petition date. After the Debtor defaulted, DCR Mortgage sent notice to the tenants for them to pay rent to it directly. Subsequently, the Debtor entered into a forbearance agreement with DCR Mortgage and then came current with the payments. The tenants resumed paying rent to the Debtor directly. However, when the Restaurant Tenant resumed paying rent in July 2021, it paid DCR Mortgage directly rather than the Debtor, despite multiple requests to pay the Debtor. The Restaurant Tenant's lease was slated to expired in September 2021. The Restaurant Tenant did provide timely notice to the Debtor in April 2021 that it was exercising the second of two options to extend that was available under the lease. The Debtor jumped through hoops to accommodate the Restaurant Tenant during the process of negotiating the extension, offering tenant improvements, free rent and other perks; the Restaurant Tenant agreed to sign off on the extension in September of 20201, but never actually signed the extension, and the lease has expired. It still occupies the space. In compliance with the City of Sacramento's rent moratorium, the Restaurant Tenant had until January 28, 2022 to pay all the back rent from March 2020 through September 2021. The Restaurant Tenant failed to tender the funds to cure the back rent by the deadline. The Restaurant Tenant did send the Debtor a partial payment of $649,079 on February 2, 2022. The Debtor is currently attempting to negotiate a resolution with the Restaurant Tenant again. If the Debtor is unable to reach an agreement within a reasonable period, it will seek to evict the Restaurant Tenant. The Debtor's situation was exacerbated by the foreclosure moratorium because it was not able to evict those tenants who were delinquent on rent. Now that the moratorium has expired, the Debtor is in the process of evicting another commercial retail tenant and a residential tenant. The loan to DCR Mortgage was set to mature in March 2021 but the Debtor was unable to obtain refinancing prior to the maturity date because of its financial situation in 2020. DCR Mortgage has worked with the Debtor while it looked for refinancing; postponing the foreclose sale to January 6, 2022. The Debtor negotiated a forbearance agreement with DCR Mortgage that would postpone the sale, but DCR Mortgage withdrew from the agreement on January 5, 2022. The Chapter 11 case was filed in order to stop a foreclosure sale of the Debtor's Property and so that it can reorganize its financial affairs. The Debtor believes it has turned the corner because the Property is now 97% leased. The Debtor will use this new solid financial footing to obtain postpetition financing to payoff DCR Mortgage. The Debtor anticipates that it can seek financing while it resolves the issue with the Restaurant Tenant. The first deed of trust is held by DCR Mortgage. The Debtor obtained a promissory note of $11,000,000 at 4%. The First Deed of Trust was due and payable on April 1, 2021. The First Deed of Trust was recorded on March 14, 2018. The principal balance is approximately $12,284,104 as of the petition date. The second deed of trust is held by City of Sacramento. The Debtor obtained a promissory note of $2,300,000 at 0%. The Second Deed of Trust is due and payable in February 2035. The Second Deed of Trust was recorded on February 24, 2005. The Debtor believes the lienholders are adequately protected by the continued and uninterrupted operation of the business. The Debtor also believes that the secured creditors are adequately protected by the Debtor's assets. Notwithstanding, the Debtor proposes to pay DCR Mortgage $45,000 per month, beginning February 16, 2022. The Debtor will also give to the alleged secured creditors a replacement lien on the revenue generated postpetition from the Property to the extent that the creditors' Cash Collateral is actually used. A copy of the motion and the Debtor's budget from February to July 2022 is available at https://bit.ly/34xVALy from PacerMonitor.com. The Debtor projects $1,429,064 in total budgeted income and $298,744 in total budgeted expenses for the period. About 2th & K St. Mall Partners, LLC 2th & K St. Mall Partners, LLC is a California limited liability company created on November 12, 2003, as a real estate investment company. Robert W. Clippinger is the managing member of the Debtor. The Debtor currently owns and operates a mixed-use property located at 1020 12th Street Sacramento, CA 95814; APN 006-0105-009-0000. On July 29, 2019, the Debtor transferred 8.1% equity ownership in the Property to the Ziegelman Family Trust. Ziegelman Family Trust is not a member of the Debtor. The Ziegelman Family Trust used sale proceeds from another investment to purpose a fractional interest in the Property. The Debtor sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. C.D. Cal. Case No. 22-10061) on January 6, 2022. In the petition signed by Robert W. Clippinger, managing member, the Debtor disclosed up to $50 million in assets and up to $50 million in liabilities. Matthew D. Resnik, Esq., at Resnick Hayes Moradi, LLP, is the Debtor's counsel. 12TH & K ST. MALL: Taps Resnik Hayes Moradi as Bankruptcy Counsel ----------------------------------------------------------------- 12th & K St. Mall Partners, LLC seeks approval from the U.S. Bankruptcy Court for the Central District of California to hire Resnik Hayes Moradi, LLP to serve as legal counsel in its Chapter 11 case. The firm's services include: (a) advising the Debtor regarding compliance with the requirements of the Office of the U.S. Trustee; (b) advising the Debtor regarding matters of bankruptcy law; (c) advising regarding cash collateral matters; (d) conducting examinations of witnesses, claimants or adverse parties, and preparing reports, accounts and pleadings; (e) advising the Debtor concerning the requirements of the Bankruptcy Code and applicable rules; (f) assisting in the negotiation, formulation, confirmation and implementation of a Chapter 11 plan of reorganization; and (g) making any appearances in the bankruptcy court and performing other services for the Debtor. The hourly rates of the firm's attorneys and staff are as follows: M. Jonathan Hayes, Partner $600 per hour Matthew D. Resnik, Partner $575 per hour Roksana D. Moradi-Brovia, Partner $500 per hour Russell J. Stong III, Associate $350 per hour David M. Kritzer, Associate $350 per hour W. Sloan Youkstetter, Associate $350 per hour Pardis Akhavan, Associate $250 per hour Boshra Khoder, Associate $250 per hour Rosario Zubia, Paralegal $135 per hour Priscilla Bueno, Paralegal $135 per hour Rebeca Benitez, Paralegal $135 per hour Max Bonilla, Paralegal $135 per hour Susie Segura, Paralegal $135 per hour In addition, the firm will seek reimbursement for expenses incurred. The Debtor has agreed to pay the firm an initial retainer fee of f $21,747. 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 12th & K St. Mall Partners Los Angeles-based 12th & K St. Mall Partners, LLC filed its voluntary petition for relief under Chapter 11 of the Bankruptcy Code (Bankr. C.D. Calif. Case No. 22-10061) on Jan. 6, 2022, listing as much as $50 million in both assets and liabilities. Robert W. Clippinger, managing member, signed the petition. Judge Barry Russell presides over the case. Matthew D. Resnik, Esq., at Resnik Hayes Moradi, LLP serves as the Debtor's legal counsel. 2192 TEXAS PARKWAY: Wants May 2 Plan Exclusivity Extension ---------------------------------------------------------- 2192 Texas Parkway Partners LLC requests the U.S. Bankruptcy Court for the Eastern District of New York to extend the exclusive periods during which the Debtor may file a plan of reorganization until May 2, 2022, and a corresponding extension of the exclusive period in which to solicit acceptances for 60 days thereafter. Since the filing, the Debtor has entered into a Consent Order with its lender, Jovia Financial Federal Credit Union (the "Lender") for the use of cash collateral, which Consent Order was entered by the Court on January 14, 2022. With cash collateral having been addressed, the Debtor has brought itself current with its operating expenses. The Debtor now intends to bring its primary focus on pursuing a restructuring of the mortgage. The Debtor has made an initial proposal to the Lender and hopes that a good-faith dialogue will now ensue. The case is progressing as well, as the Debtor has obtained approval of cash collateral stipulation and addressed concerns raised by the Office of the U.S. Trustee, which withdrew its motion. Operating reports are current, and the Debtor has no outstanding administrative expenses relating management and operation of the Property. A bar date of January 21, 2022, for filing claims, was fixed, and the Debtor is making progress on all fronts. This is the first request for an extension, and the Debtor submits that there is no prejudice to creditors by maintaining exclusivity, which will help keep the status quo in place while the Debtor continues to move forward. A copy of the Debtor's Motion to extend is available at https://bit.ly/3J2XClQ from PacerMonitor.com. About 2192 Texas Parkway Partners 2192 Texas Parkway Partners, LLC owns a commercial shopping center containing 17 retail stores located at 2192 Texas Parkway, Missouri City, Texas. 2192 Texas Parkway Partners filed its voluntary petition for Chapter 11 protection (Bankr. S.D.N.Y. Case No. 21-22563) on Oct. 4, 2021, listing as much as $10 million in both assets and liabilities. Judge Sean H. Lane oversees the case. Kevin J. Nash, Esq., at Goldberg Weprin Finkel Goldstein, LLP represents the Debtor as legal counsel. 3200 MYERS STREET: Seeks to Hire Grant Street Associates as Broker ------------------------------------------------------------------ 3200 Myers Street Partners, LLC seeks approval from the U.S. Bankruptcy Court for the Central District of California to employ Cushman & Wakefield Grant Street Associates, Inc. as broker. The Debtor needs a broker to sell its real property located at 64 Halstead Blvd., Zelienople, Pa. The firm will receive a commission of 6 percent of the listing price to be split with any buyer's broker. Dana Schatzel Grau, a real estate agent with Cushman & Wakefield | Grant Street Associations, 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: Dana Schatzel Grau Cushman & Wakefield | Grant Street Associates, Inc. The Grant Building, Suite 1825 Pittsburgh, PA 15219 Telephone: (412) 391-2636 Facsimile: (412) 512-3737 Email: dgrau@gsa-cw.com About 3200 Myers Street Partners 3200 Myers Street Partners, LLC filed a voluntary petition for relief under Chapter 11 of the Bankruptcy Code (Bankr. C.D. Calif. Case No. 22-10057) on Jan. 14, 2022, disclosing up to $10 million in both assets and liabilities. Robert P. Mosier, chief restructuring officer, signed the petition. Judge Scott C. Clarkson oversees the case. Goe Forsythe & Hodges LLP serves as the Debtor's counsel. 6525 BELCREST: Seeks Cash Collateral Access ------------------------------------------- 6525 Belcrest Road LLC asks the U.S. Bankruptcy Code for the Southern District of New York to approve a stipulation and order that retroactively authorizes the Debtor's use of cash collateral in accordance with the budget and retroactively grants adequate protection to Panasia Estate, Inc. The Debtor requires the use of cash collateral to pay for ordinary operating expenses as well as continued maintenance and repairs to its commercial real property. In 2015, the Debtor purchased a valuable, improved parcel of commercial real property known as 6525 Belcrest Road, Hyattsville, Maryland from a loan servicer at an auction. The successful bid with closing costs brought the total acquisition costs to approximately $7,500,000. Panasia Estate financed approximately $6,500,000 of the total acquisition costs and required the Debtor to show sufficient reserves to cover the difference in the closing costs, interest, and funds to cover anticipated capital improvements to the Property before it would agree to finance the purchase. Panasia Estate had reviewed the offering memorandum from the loan servicer which showed comparable properties valued at approximately $15,000,000 and performed other due diligence before it agreed to make the loan and the Debtor and Panasia Estate executed all the of the necessary documents when the Debtor was named the successful purchaser at the sale. As of this date, the Debtor is indebted to Panasia Estate for certain indebtedness and obligations in the approximate amount of $7,100,000. As of the Petition Date through October 2021, the Debtor has been making monthly adequate protection payments, with the consent of the Lender, equal to monthly interest at the contract rate under the Loan Documents in the total amount of $190,689. However, at this time, the Debtor submits it is necessary to seek Court approval of the Postpetition Adequate Protection Payments as well as its ongoing usage of Cash Collateral. Based upon the Debtor's operating projections, the Debtor expect to operate at a cash flow profit. However, due to the ongoing repairs and capital expenditures needed at the property, as well as the administrative costs of the chapter 11 case, the Debtor may expect to incur an overall deficit. As adequate protection for the Debtor's use of cash collateral, the Debtor has agreed to (a) grant to the Lender a replacement lien in all of the Debtor's now existing and hereafter acquired real and personal property and assets to the extent specified in the Stipulated Order; and (b) adequate protection payments in the amount of approximately $36,000 per month which is the equivalent of monthly interest due under the Debtor's loan documents. A copy of the motion is available at https://bit.ly/3sw6N87 from PacerMonitor.com. About 6525 Belcrest Road New York-based 6525 Belcrest Road, LLC owns Metro Center III, a commercial real property in Hyattsville, Md. 6525 Belcrest Road filed its voluntary petition for Chapter 11 protection (Bankr. S.D.N.Y. Case No. 21-10968) on May 19, 2021, listing as much as $10 million in both assets and liabilities. Judge Michael E. Wiles oversees the case. The Debtor tapped Robinson Brog Leinwand Greene Genovese & Gluck, PC as its bankruptcy counsel. Peckar & Abramson, PC and The Law Office of Michele Rosenfeld, LLC serve as the Debtor's special counsel. A.B.C. CARPET: Unsecureds Will Recover 2.4% to 5.8% in Plan ----------------------------------------------------------- A.B.C. Carpet Co., Inc., et al., submitted an Amended Plan of Liquidation and an Amended Disclosure Statement. The Plan is a plan of liquidation. To that end, the Plan contemplates the transfer of the Debtors' remaining assets into a Liquidating Trust followed by the formal dissolution of the Debtors' corporate existence; the Liquidating Trust is to be governed by a Liquidating Trust Agreement with its terms carried out by a Liquidating Trustee. The Plan provides for a waterfall payment structure in compliance with section 1129 of the Bankruptcy Code, whereby (i) Holders of Administrative Claims, Priority Tax Claims and Other Priority Claims are entitled to distribution ahead of Holders of General Unsecured Claims, (ii) Holders of General Unsecured Claims are entitled to distribution ahead of Holders of Subordinated Claims, and (iii) Holders of Secured Claims (if any) are entitled to their collateral or the proceeds of their collateral ahead of unsecured creditors. More specifically, pursuant to the terms of the Plan: * Holders of Allowed Administrative Claims shall be paid in full in Cash. * Holders of Allowed Priority Tax Claims shall be treated in accordance with Section 1129(a)(9)(C) of the Bankruptcy Code. * Holders of Allowed Secured Claims (to the extent any are determined to exist) and Allowed Other Priority Claims shall be paid in full in cash or receive such other treatment that renders such Claims Unimpaired. * Holders of Allowed Class 3 General Unsecured Claims shall receive a pro rata share (calculated based on the proportion that such Holder's Allowed General Unsecured Claim bears to the aggregate amount of Allowed General Unsecured Claims) of the Liquidating Trust Primary Recovery Units. * Holders of Allowed Class 4 Subordinated Claims shall receive a pro rata share (calculated based on the proportion that such Holder's Allowed Subordinated Claim bears to the aggregate amount of Allowed Subordinated Claims) of the Liquidating Trust Secondary Recovery Units. As of the Petition Date, general unsecured claims asserted against the Debtors were estimated to be in excess of $80 million. Unsecured claims against the Debtors include (a) unsecured insider loans from Ms. Cole and her family totaling more than $40 million, (b) non-insider loans from Northern Trust totaling more than $15 million, (c) trade and other unsecured debt incurred in the ordinary course of the Debtors' business, and (d) rent and other obligations under the Debtors' real property leases. Under the Plan, Class 3 General Unsecured Claims totaling $12.1 million to $15.3 million will receive its pro rata share (calculated based on the proportion that such Holder's Allowed General Unsecured Claim bears to the aggregate amount of Allowed General Unsecured Claims) of the Liquidating Trust Primary Recovery Units. Creditors will recover 2.4% to 5.8% of their claims. Class 3 is impaired. The Bankruptcy Court has scheduled the Plan Confirmation Hearing for March 3, 2022 at 10:00 a.m. (prevailing Eastern Time). Objections to confirmation must be filed and served on the Debtors, and certain other parties, by no later than February 22, 2022 at 4:00 p.m. (prevailing Eastern Time). Counsel for the Debtors: Oscar N. Pinkas, Esq. Leo Muchnik, Esq. Sara A. Hoffman, Esq. GREENBERG TRAURIG, LLP One Vanderbilt Ave. New York, New York 10017 Telephone: (212) 801-9200 Facsimile: (212) 801-6400 - and - Ari Newman, Esq. GREENBERG TRAURIG, PA 333 S.E. 2nd Avenue, Suite 4400 Miami, Florida 33131 Telephone: (305) 579-0500 Facsimile: (305) 579-0717 Counsel to the Creditors' Committee: John R. Ashmead, Esq. Robert J. Gayda, Esq. Catherine V. LoTempio, Esq. SEWARD & KISSEL LLP One Battery Park Plaza New York, New York 10004 Telephone: (212) 574-1200 Facsimile: (212) 480-8421 A copy of the Disclosure Statement dated Jan. 28, 2021, is available at https://bit.ly/3AIFElS from PacerMonitor.com. About A.B.C. Carpet New York-based A.B.C. Carpet Co., Inc. owns and operates ABC Carpet & Home, an iconic lifestyle brand and home furnishing retailer with stores in Manhattan and Brooklyn. A.B.C. Carpet Co. and its affiliates filed their voluntary petitions for Chapter 11 protection (Bankr. S.D.N.Y. Lead Case No. 21-11591) on Sept. 8, 2021. In the petition signed by Aaron Rose, chief executive officer, A.B.C. Carpet Co. listed up to $50 million in assets and up to $100 million in liabilities. Judge David S. Jones oversees the cases. The Debtors tapped Greenberg Traurig, LLP, as bankruptcy counsel; ASK, LLP as special counsel; and B. Riley Securities, Inc. as investment banker and financial advisor. Stretto is the claims, noticing and administrative agent. The U.S. Trustee for Region 2 appointed an official committee of unsecured creditors in the Debtors' bankruptcy cases on Sept. 22, 2021. Seward & Kissel, LLP and Province, LLC serve as the committee's legal counsel and financial advisor, respectively. ABRAHAM LINCOLN CHRISTIAN: $327K Sale of Lowell Property Approved ----------------------------------------------------------------- Judge Laura T. Beyer of the U.S. Bankruptcy Court for the Western District of North Carolina authorized Abraham Lincoln Christian Spiritist's sale of the property located at 200 Oakland St., in Lowell, Gaston County, North Carolina 28098, to South Fork Lodge #462 A.F. & A.M., Scott A. Shehan, William A. Bryson & Brian S. Carrigan Acting Trustee, for $327,500. The sale to the Buyer pursuant to the Contract attached to the Motion is approved. Upon receipt of funds from closing in the amount of $238,096.11, pursuant to the allowed OBT Claim and its 506(b) approved fees and expenses, provided the closing occurs on Jan. 28, 2022, the Deed of Trust of OBT will be cancelled by OBT and all further claims of OBT, if any, transferred to the remaining proceed of the sale. The liens, if any, will attach to the proceeds of sale, if any, subject to the Orders of Distribution that may be entered by the Court. The Debtor will pay the taxes owed to Gaston County Tax Office from the proceeds of the sale at closing. The proceeds of sale of any unencumbered or under-encumbered property will be subject to payment of all administrative costs of the proceeding and the remaining balance from the sales proceeds will be paid into the bankruptcy estate to be distributed pursuant to the Chapter 11 plan. The proceeds of sale of any over-encumbered property will be subject to the payment of the reasonable, necessary costs and expenses of preserving, or disposing of, such property, to the extent of any benefit to the holder of an allowed secured claim as provided for by Section 506(c) of the Bankruptcy Code, such costs and expenses, including commissions paid to the real estate broker, and the attorney fees and expenses of counsel, to be approved by the Court. Any stay that would otherwise be applicable pursuant to Bankruptcy Rule 6004(h) is waived. Following completion of the sale of the Property, the Debtor will file a Report of Sale within 10 business days thereafter. Any net sales proceeds will be forwarded to the Debtor's Attorney by the closing attorney or settlement agent and the closing attorney or settlement agent will provide a final settlement statement to be submitted to the Debtor's attorney (P.O. Box 1446, Raleigh, NC 27602), within three days of closing. About Abraham Lincoln Christian Spiritist Abraham Lincoln Christian Spiritist sought protection for relief under Chapter 11 of the Bankruptcy Code (Bankr. W.D.N.C. Case No. 21-30232) on April 22, 2021, listing as much as $1 million in both assets and liabilities. Judge Laura T. Beyer oversees the case. Robert Lewis, Jr., Esq., at The Lewis Law Firm, P.A. serves as the Debtor's legal counsel. ADVAXIS INC: Delays Filing of Annual Report for Year Ended Oct. 31 ------------------------------------------------------------------ Advaxis, Inc. filed a Form 12b-25 with the Securities and Exchange Commission notifying the delay in the filing of its Annual Report on Form 10-K for the year ended Oct. 31, 2021. The Company has experienced delays in completing its Annual Report within the prescribed time period, as it completes the assembly of information to be reviewed by its independent auditor. The delay could not be eliminated without unreasonable effort or expense. The Company estimates revenues, operating loss and net loss for the fiscal year ended Oct. 31, 2021 were approximately $3.2 million, $18.8 million and $17.9 million, respectively. Net revenues, operating loss and net loss for the fiscal year ended Oct. 31, 2020 were $0.2 million, $26.4 million and $26.5 million, respectively. The Company's operating results for the year ended Oct. 31, 2021, were impacted by the increase in revenue of approximately $3.0 million and a reduction in research and development expenses of approximately $5.0 million. About Advaxis Inc. Advaxis, Inc. -- http://www.advaxis.com-- is a clinical-stage biotechnology company focused on the development and commercialization of proprietary Lm-based antigen delivery products. These immunotherapies are based on a platform technology that utilizes live attenuated Listeria monocytogenes (Lm) bioengineered to secrete antigen/adjuvant fusion proteins. These Lm-based strains are believed to be a significant advancement in immunotherapy as they integrate multiple functions into a single immunotherapy and are designed to access and direct antigen presenting cells to stimulate anti-tumor T cell immunity, activate the immune system with the equivalent of multiple adjuvants, and simultaneously reduce tumor protection in the tumor microenvironment to enable T cells to eliminate tumors. Advaxis reported a net loss of $26.47 million for the year ended Oct. 31, 2020, a net loss of $16.61 million for the year ended Oct. 31, 2019, and a net loss of $66.51 million for the year ended Oct. 31, 2018. As of July 31, 2021, the Company had $51.02 million in total assets, $6.75 million in total liabilities, and $44.28 million in total stockholders' equity. AERKOMM INC: Chen & Fan Resigns as Auditor ------------------------------------------ Chen & Fan Accountancy Corporation resigned as the independent accounting firm of Aerkomm Inc., effective as of Jan. 27, 2022. The audit reports of Chen & Fan on the Company's financial statements as of and for the fiscal years ended Dec. 31, 2020 and 2019 contained no adverse opinion or disclaimer of opinion and were not qualified or modified as to uncertainty, audit scope or accounting principles. During the Company's two most recent fiscal years ended Dec. 31, 2020 and 2019, and for the subsequent interim period through Sept. 30, 2021, the Company had no "disagreements" (as described in Item 304(a)(1)(iv) of Regulation S-K) with Chen & Fan on any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedure, which disagreements, if not resolved to the satisfaction of Chen & Fan, would have caused it to make reference in connection with its opinion to the subject matter of the disagreements. During the Company's two most recent fiscal years ended Dec. 31, 2020 and 2019, and for the subsequent interim period through Sept. 30, 2021, there was no "reportable event," as that term is defined in Item 304(a)(1)(v) of Regulation S-K and the instructions related thereto. New Independent Registered Public Accounting Firm On Jan. 27, 2022, the Audit Committee and the Board of Directors of the Company appointed Friedman LLP as its new independent registered public accounting firm to audit and review the Company's financial statements, effective Jan. 27, 2022. During the Company's two most recent fiscal years ended Dec. 31, 2020 and 2019, and for the subsequent interim period through Jan. 31, 2022 (the date hereof) prior to the engagement of Friedman, neither the Company nor anyone on its behalf consulted Friedman regarding (i) the application of accounting principles to a specified transaction, either completed or proposed; or on the type of audit opinion that might be rendered on the consolidated financial statements of the Company, and neither a written report nor oral advice was provided to the Company that Friedman concluded was an important factor considered by the Company in reaching a decision as to the accounting, auditing or financial reporting issue; or (ii) any matter that was either the subject of a disagreement as defined in Item 304(a)(1)(iv) of Regulation S-K or a reportable event as described in Item 304(a)(1)(v) of Regulation S-K. About Aerkomm Headquartered in Nevada, USA, Aerkomm Inc. -- http://www.aerkomm.com-- is a full-service development stage provider of in-flight entertainment and connectivity (IFEC) solutions, intended to provide airline passengers with a broadband in-flight experience that encompasses a wide range of service options. Those options include Wi-Fi, cellular, movies, gaming, live TV, and music. The Company plans to offer these core services, which it is currently still developing, through both built-in in-flight entertainment systems, such as a seat-back display, as well as on passengers' own personal devices. Aerkomm reported a net loss of $9.11 million for the year ended Dec. 31, 2020, a net loss of $7.98 million for the year ended Dec. 31, 2019, and a net loss of $8.15 million for the year ended Dec. 31, 2018. As of June 30, 2021, the Company had $56.89 million in total assets, $22.29 million in total liabilities, and $34.60 million in total stockholders' equity. AFFINITY GAMING: S&P Alters Outlook to Positive, Affirms 'B-' ICR ----------------------------------------------------------------- S&P Global Ratings revised its outlook to positive from stable, and affirmed all ratings on Affinity Gaming, including its 'B-' issuer credit rating. The positive outlook reflects S&P's expectation that Affinity will continue to experience healthy demand and maintain some of the cost cuts made over the past few quarters, translating to adjusted leverage of about 6x. S&P said, "Good EBITDA growth in 2021 drove a significant reduction in adjusted leverage, which provides capacity to absorb a potential EBITDA decline and maintain leverage under our 6.5x upgrade threshold. Affinity's adjusted leverage improved to the mid-to-high-5x area as of Sept. 30, 2021, compared to about 11x at the end of 2020, which was negatively affected by temporary property closures and subsequent operating restrictions because of the pandemic. In the nine months ended Sept. 30, 2021, EBITDA (excluding cash flow from SIG) more than doubled compared to the same period in 2020 and grew about 55% compared to the same period in 2019, which was affected by flooding at Affinity's Midwest properties. We believe 2021 revenue was buoyed by a lack of many travel and leisure alternatives, consumers' accumulated savings, and government stimulus funds. Further, Affinity, like many commercial casino operators, realized good EBITDA margin improvement in 2021 from cost-cutting actions taken over the course of 2020, and a mix shift to higher-margin gaming revenue. EBITDA margin in the nine months ended Sept. 30, 2021, was in the mid-30% area, compared to about 20% for the same period in 2019. We expect many of these trends continued in the fourth quarter and forecast Affinity's leverage improved below 5.5x at the end of the year. "While we believe Affinity will maintain some of the cost cuts that helped drive margin improvement in 2021 over the next several quarters, we assume some expenses may increase in 2022 because of inflation, a tight labor market, modest increases in marketing to remain competitive with the broader availability of travel and leisure alternatives, and because we anticipate Affinity will increase investment its online sports betting business in Iowa. "We believe Affinity remains vulnerable to EBITDA volatility from event risks and competition. Before raising our rating on Affinity, we would want to ensure the company would maintain at least a half a turn of cushion relative to our 6.5x upgrade threshold to absorb some EBITDA volatility over time and stay below our threshold. This is because we view Affinity as vulnerable to the negative impact of adverse weather, and particularly flooding, given the location of its St. Jo Frontier casino on the Missouri River, and the company's Mark Twain casino location, near the Mississippi River, in Missouri. In 2019, revenue and EBITDA were negatively affected by flooding on the Missouri River that resulted in the temporary closure of, and damage to, the St. Jo Frontier property in Missouri. "Further, we believe Affinity's Silver Sevens property in Las Vegas is vulnerable to volatility from indirect competition from Las Vegas Strip properties. Given Silver Sevens targets value-oriented customers, we believe that in periods when Las Vegas Strip properties discount rooms, the Silver Sevens property becomes less attractive to its target customer base and its cash flow can beconstrained. Affinity's financial sponsor ownership introduces risk to sustaining adjusted leverage below 6.5x. This is because financial sponsors tend to use incremental leverage to fund acquisitions, investments, or cash distributions over time. Affinity's owner, investment funds managed by affiliates of Z Capital Group, has a track record of issuing debt at Affinity to fund dividends. Given the strong EBITDA performance and associated leverage reduction in 2021, we believe Z Capital could be opportunistic and pursue another dividend that may increase leverage. S&P said, "Nevertheless, Z Capital has made no indication that it is planning a special dividend and we have not incorporated any leveraging distribution into our forecast. Furthermore, Affinity has sizable cash balances that could support a material dividend without incremental leverage. We do not net cash in our measure of leverage because Affinity is sponsor owned." S&P said, "The positive outlook reflects our expectation that Affinity will continue to experience healthy demand and maintain some of the cost cuts made over the past few quarters, translating to adjusted leverage being maintained at about 6x, below our upgrade threshold. "We could raise our rating one notch if we believe Affinity will sustain adjusted leverage below 6.5x, which could occur if EBITDA is generally aligned with our forecast, and we believed that maintaining leverage below 6.5x was aligned with the company's financial policy. Before raising the rating, we would want to ensure Affinity had sufficient cushion relative to our 6.5x leverage threshold to absorb some EBITDA volatility from potential adverse weather events or increased operating restrictions. "We could revise the outlook to stable if we no longer expected Affinity to maintain leverage under 6.5x either because of EBITDA underperformance or financial policy decisions. Although unlikely given our forecast, we could lower ratings if we expect EBITDA coverage of interest to fall to 1.5x or lower or Affinity depleted its excess cash balances. This could occur if EBITDA is about 35% lower than our forecast." ESG credit indicators: E-2, S-3, G-3 AKOUSTIS TECHNOLOGIES: Incurs $15.3 Million Net Loss in 2nd Quarter ------------------------------------------------------------------- Akoustis Technologies, Inc. filed with the Securities and Exchange Commission its Quarterly Report on Form 10-Q disclosing a net loss of $15.25 million on $3.67 million of revenue for the three months ended Dec. 31, 2021, compared to a net loss of $11.91 million on $1.31 million of revenue for the three months ended Dec. 31, 2020. For the six months ended Dec. 31, 2021, the Company reported a net loss of $28.10 million on $5.54 million of revenue compared to a net loss of $23.86 million on $1.94 million of revenue for the same period in 2020. As of Dec. 31, 2021, the Company had $134.11 million in total assets, $10.44 million in total liabilities, and $123.67 million in total equity. Based on robust activity in both the sales and design win pipeline, the Company expects to report another quarter of record revenue in the current March quarter with a top-line sequential increase of greater than 25%. The Company had $67.5 million in cash as of Dec. 31, 2021. Jeff Shealy, founder and CEO of Akoustis, stated, "Despite the ongoing macro headwinds presented by both COVID and semi-conductor supply chain shortages, Akoustis was able to achieve record revenue and unit growth in the December quarter and we expect that growth to continue. This is being driven as we ramp production of our patented XBAW RF filter solutions to multiple customers across the Wi-Fi 6, Wi-Fi 6E, 5G network infrastructure and other markets." Mr. Shealy continued, "We continue to experience strong demand and a growing sales funnel for our Wi-Fi, 5G mobile and CBRS XBAW filters, as well as our new RFMi resonator and oscillator products. As we announced this morning, we have recently added five new Wi-Fi design wins, all of which are expected to ramp into production in calendar 2022. We are equally excited that our business development efforts in 5G mobile were rewarded with two new, additional 5G customer engagements in the December quarter." A full-text copy of the Form 10-Q is available for free at: https://www.sec.gov/ix?doc=/Archives/edgar/data/1584754/000121390022004333/f10q1221_akoustis.htm About Akoustis Technologies Headquartered in Huntersville, NC, Akoustis is focused on developing, designing, and manufacturing innovative RF filter products for the mobile wireless device industry, including for products such as smartphones and tablets, cellular infrastructure equipment, and WiFi premise equipment. Akoustis reported a net loss of $44.16 million for the year ended June 30, 2021, a net loss of $36.14 million for the year ended June 30, 2020, and a net loss of $29.25 million for the year ended June 30, 2019. As of June 30, 2021, the Company had $124.99 million in total assets, $7.58 million in total liabilities, and $117.41 million in total stockholders' equity. ALEX AND ANI LLC: Scott Burger Will Be New CEO ---------------------------------------------- Alexa Gagosz of Boston Globe reports that less than a year after Alex and Ani filed for bankruptcy, the Rhode Island-based jewelry company that grew into a billion-dollar business is getting a new leader. Scott Burger, chairman of the company's board, will take over as chief executive officer, confirmed Lyndon Lea, the co-founder of Lion Capital, which is the London-based investment fund that owns the majority of the company. Alex and Ani founder Carolyn Rafaelian left the company in October 2020. Burger is currently the CEO of Classic Brands, a mattress and sleep product design and manufacturing company in Maryland, where he reportedly helped double the company's business. It is unclear when he might leave that role. Prior to joining Classic Brands, Burger was the president of Danish charm maker Pandora Jewelry's Americas division. He left Pandora in 2019, telling reporters at the time that he was looking forward to leaving the company to work at a smaller brand "on a growth trajectory." Pandora executives told reporters that Burger was stepping down to "dedicate himself to new endeavors" after 10 years at the company. About Alex and Ani LLC Founded in 2004 by Carolyn Rafaelian, Alex and Ani has become a premier jewelry brand, quickly gaining popularity because of the novel and customizable nature of its signature expandable wire bracelet. Alex and Ani has been headquartered in East Greenwich, Rhode Island since 2014. Since opening its first retail store in Newport, Rhode Island in 2009, Alex and Ani has expanded to over 100 retail store locations across the United States, Canada, and Puerto Rico. On the Web: HTTP://www.alexandani.com/ Alex and Ani LLC and its affiliates sought Chapter 11 protection (Bankr. D. Del. Lead Case No. 21-10918) on June 9, 2021. In its petition, Alex and Ani listed assets and liabilities of $100 million to $500 million each. The Debtors tapped Kirkland & Ellis LLP as general bankruptcy counsel; Klehr Harrison Harvey Branzburg LLP as local bankruptcy counsel; and Portage Point Partners, LLC, as financial advisors and investment bankers. Kurtzman Carson Consultants LLC is the notice and claims agent. ALPHA LATAM: Young Conaway, Brown Update on Consortium Group ------------------------------------------------------------ In the Chapter 11 cases of Alpha Latam Management, LLC, et al., the law firms of Young Conaway Stargatt & Taylor, LLP and Brown Rudnick LLP submitted a revised verified statement under Rule 2019 of the Federal Rules of Bankruptcy Procedure, to disclose an updated list of Ad Hoc Consortium Group that they are representing. As of Feb. 1, 2022, members of the Ad Hoc Consortium and their disclosable economic interests are: Amundi Asset Management * Aggregate Senior Notes Holdings: $17,350,000.00 * 2022 Holdings: $6,050,000.00 * 2025 Holdings: $11,300,000.00 Arena Investors, LP * Aggregate Senior Notes Holdings: $19,515,000.00 * 2022 Holdings: $5,690,000.00 * 2025 Holdings: $13,825,000.00 Banco Nacional/Credit Suisse * Aggregate Senior Notes Holdings: $39,636,000.00 * 2025 Holdings: $39,636,000.00 BFAM Partners * Aggregate Senior Notes Holdings: 19,340,000.00 * 2022 Holdings: 2,300,000.00 * 2025 Holdings: 17,040,000 Doubleline Capital LP * Aggregate Senior Notes Holdings: $47,310,000.00 * 2022 Holdings: $17,000,000.00 * 2025 Holdings: $30,310,000.00 Eaton Vance Corp * Aggregate Senior Notes Holdings: $45,133,000.00 * 2022 Holdings: $15,116,000.00 * 2025 Holdings: $30,017,000.00 Emperia Fronteira Limited * Aggregate Senior Notes Holdings: $1,132.000.00 * 2022 Holdings: $1,132.000.00 Fidera Masters * Aggregate Senior Notes Holdings: $79,860,000.00 * 2022 Holdings: $18,640,000.00 * 2025 Holdings: $61,220,000.00 GDA Luma * Aggregate Senior Notes Holdings: $103,580,000.00 * 2022 Holdings: $64,520,000.00 * 2025 Holdings: $39,060,000.00 ICG Alternative Credit LLC * Aggregate Senior Notes Holdings: $13,000,000.00 * 2022 Holdings: $5,000,000.00 * 2025 Holdings: $8,000,000.00 J.P. Morgan * Aggregate Senior Notes Holdings: $12,128,000.00 * 2025 Holdings: $12,128,000.00 Kleinheinz Capital Partners Inc. * Aggregate Senior Notes Holdings: $36,750,000.00 * 2022 Holdings: $26,750,000.00 * 2025 Holdings: $10,000,000.00 Newfoundland Terra Nova Fund * Aggregate Senior Notes Holdings: $36,449,000.00 * 2022 Holdings: $13,304,000.00 * 2025 Holdings: $23,145,000.00 Pala Investments * Aggregate Senior Notes Holdings: $13,640,000.00 * 2022 Holdings: $7,800,000.00 * 2025 Holdings: $5,840,000.00 Paloma * Aggregate Senior Notes Holdings: TBD * 2022 Holdings: TBD * 2025 Holdings: TBD On or around August 12, 2021, the Ad Hoc Consortium retained Brown Rudnick to represent it in connection with the Debtors' restructuring. On or around August 2, 2021, the Ad Hoc Consortium retained Young Conaway. Counsel represents the Ad Hoc Consortium in connection with these Chapter 11 Cases. Each member of the Ad Hoc Consortium is aware of, and has consented to, Counsel's "group representation" of the Ad Hoc Consortium to the extent set forth herein. No member of the Ad Hoc Consortium represents or purports to represent any other entities in connection with these Chapter 11 Cases. The DIP Note Purchasers Consortium is also represented by Counsel. Counsel for the Ad Hoc Consortium can be reached at: YOUNG CONAWAY STARGATT & TAYLOR, LLP Pauline K. Morgan, Esq. M. Blake Cleary, Esq. Sean T. Greecher, Esq. Rodney Square 1000 North King Street Wilmington, DE 19801 Telephone: (302) 571-6600 E-mail: pmorgan@ycst.com mbcleary@ycst.com sgreecher@ycst.com - and - Jeffrey L. Jonas, Esq. Andrew P. Strehle, Esq. Jonathan A. Nye, Esq. BROWN RUDNICK LLP One Financial Center Boston, MA 02111 Telephone: (617) 856-8200 Facsimile: (617) 856-8201 E-mail: jjonas@brownrudnick.com astrehle@brownrudnick.com jnye@brownrudnick.com Uriel Pinelo, Esq. Seven Times Square New York, NY 10036 Telephone: (212) 209-4800 Facsimile: (212) 209-4801 E-mail: upinelo@brownrudnick.com A copy of the Rule 2019 filing, downloaded from PacerMonitor.com, is available at https://bit.ly/3uimeTL 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 are the Debtors' strategic advisors while PJT Partners LP serve as their investment banker. 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 for the ad hoc committee of shareholders. AMC ENTERTAINMENT: Moody's Upgrades CFR to Caa2; Outlook Positive ----------------------------------------------------------------- Moody's Investors Service has upgraded AMC Entertainment Holdings, Inc.'s ("AMC" or the "company"): (i) Corporate Family Rating to Caa2 from Caa3; (ii) Probability of Default Rating to Caa2-PD from Caa3-PD; (iii) senior secured debt ratings to Caa1 from Caa2 (comprising the $225 million revolving credit facility (RCF), $1.95 billion outstanding senior secured term loan facility and $800 million senior secured first-lien notes); and (iv) second-lien secured notes rating to Caa3 from Ca ($1.51 billion outstanding). Moody's also affirmed the Ca ratings on the $290 million outstanding senior subordinated notes given the debts' deeply subordinated position. Concurrent with this rating action, Moody's upgraded the Speculative Grade Liquidity (SGL) rating to SGL-2 from SGL-4 and assigned a Caa1 rating to the proposed $500 million senior secured first-lien notes due 2029 (the "2029 First-Lien Notes"). The outlook was revised to positive from negative. Net proceeds from the new 2029 First-Lien Notes will be used to prepay the $500 million 10.5% Senior Secured First-Lien Notes due 2025. The 2029 First-Lien Notes will be pari passu with AMC's existing senior secured credit facilities and senior secured first-lien notes. Moody's views the debt refinancing favorably due to the expected interest expense savings and maturity extension. Following is a summary of the rating actions: Assignment: Issuer: AMC Entertainment Holdings, Inc. $500 Million Senior Secured First-Lien Notes due 2029, Assigned Caa1 (LGD3) Upgrades: Issuer: AMC Entertainment Holdings, Inc. Corporate Family Rating, Upgraded to Caa2 from Caa3 Probability of Default Rating, Upgraded to Caa2-PD from Caa3-PD $225 Million Senior Secured Revolving Credit Facility due 2024, Upgraded to Caa1 (LGD3) from Caa2 (LGD2) $2,000 Million ($1,950 Million outstanding) Senior Secured Term Loan B1 due 2026, Upgraded to Caa1 (LGD3) from Caa2 (LGD2) $500 Million 10.500% Senior Secured First-Lien Notes due 2025, Upgraded to Caa1 (LGD3) from Caa2 (LGD2) $200 Million 10.5% Senior Secured First-Lien Notes due 2026, Upgraded to Caa1 (LGD3) from Caa2 (LGD2) $100 Million 10.5% Senior Secured First-Lien Notes due 2026, Upgraded to Caa1 (LGD3) from Caa2 (LGD2) $1,509 Million 10%/12% Cash/PIK Toggle Second-Lien Subordinated Secured Notes due 2026, Upgraded to Caa3 (LGD5) from Ca (LGD5) Affirmations: Issuer: AMC Entertainment Holdings, Inc. GBP500 Million (US$ 5.4 Million outstanding) 6.375% Senior Subordinated Notes due 2024, Affirmed at Ca (LGD6) $600 Million ($98.3 Million outstanding) 5.750% Senior Subordinated Notes due 2025, Affirmed at Ca (LGD6) $595 Million ($55.6 Million outstanding) 5.875% Senior Subordinated Notes due 2026, Affirmed at Ca (LGD6) $475 Million ($130.7 Million outstanding) 6.125% Senior Subordinated Notes due 2027, Affirmed at Ca (LGD6) Speculative Grade Liquidity Actions: Issuer: AMC Entertainment Holdings, Inc. Speculative Grade Liquidity, Upgraded to SGL-2 from SGL-4 Outlook Actions: Issuer: AMC Entertainment Holdings, Inc. Outlook, Changed to Positive from Negative The assigned rating is subject to review of final documentation and no material change to the size, terms and conditions of the transaction as advised to Moody's. Upon extinguishment of the 10.5% Senior Secured First-Lien Notes due 2025, Moody's will withdraw the rating. RATINGS RATIONALE The ratings upgrade reflects Moody's expectation for continuing improvement in AMC's operating performance and liquidity amid growing attendance levels at the global box office combined with Moody's expectation for a strong movie slate in 2022. This will be supported by the planned release of numerous blockbuster and franchise titles as well as Moody's belief that most of the big studios will adhere to the new 45-day theatrical window for major film releases before distribution to video-on-demand (VOD) streaming platforms. Moody's expects the domestic cinema industry will achieve $7.75 - $9 billion in ticket sales this year. However, given AMC's sizable gross debt ($5.5 billion) relative to its disproportionately low expected cash flow generation, risk of a balance sheet restructuring still exists, which heightens governance risk. The SGL-2 rating reflects Moody's expectation for improved liquidity supported by neutral-to-modestly positive free cash flow (FCF) generation that will help sustain high cash balances, which in turn, should alleviate reliance on debt and equity raises to enhance liquidity. The positive outlook reflects Moody's view that strong pent-up moviegoer demand combined with the upcoming robust movie release schedule and sustained economic expansion will continue to produce increased out-of-home mobility and support organic revenue growth and expanding positive EBITDA and cash flows over the course of the year. Moody's projects US GDP will increase 4.4% in 2022 (4.4% globally) and 2.8% in 2023 (3.2% globally). The outlook also embeds Moody's expectation that AMC will continue to effectively manage operating expenses, which will support profit expansion. Moody's projects AMC's total debt to EBITDA will approach the 8x-9x area over the next 18 months and FCF to debt will be in the -1% to +1% range by year end 2022, increasing to +2% in 2023 (all metrics are Moody's adjusted). While the impact of higher inflation in the economy could pressure margins and moderate revenue growth to some extent due to rising operating expenses and a pullback in consumer spending, Moody's recognizes that the average cost for movie tickets remains one of the most inexpensive forms of out-of-home entertainment. Except for a handful of AMC's theatres in Finland that remain closed, all of the company's global theatres are currently open. Over the course of 2021, moviegoer attendance gradually improved sequentially (quarter-over-quarter) as a growing percentage of the population received vaccinations against the virus, theatres reopened and resumed operations, government capacity restrictions were eased and lifted, and studios released more new films to theatres, especially major blockbusters during the year end holiday season that led to strong results in Q4 2021. While the domestic box office delivered only $4.5 billion of gross receipts last year, equivalent to around 39% of 2019's ticket sales, during December 2021 box office receipts were 80% of December 2019's receipts, with the last week of December 2021 generating receipts equivalent to 93% of December 2019's final week sales. December 2021's results were driven by strong moviegoer turnout (domestically and globally) for Sony's super-hero action movie Spider-Man: No Way Home and represents a marked improvement from Q1 2021 when domestic receipts were only 10% of Q1 2019's ticket sales. Given the structural challenges in the cinema industry, changes in consumer movie viewing preferences and increasing number of first-run movies distributed to competing streaming platforms, Moody's does not expect domestic box office receipts in 2022 to return to the industry's high watermark of $11 - $12 billion/annum. However, due to the strong movie slate expected this year, which includes several franchise titles across film genres that generally perform well at the box office (e.g., family-oriented, adaptation, adventure, comic book/super-hero and supernatural), Moody's believes domestic ticket sales can potentially reach $7.75 - $9 billion. The forecast considers the strong box office momentum witnessed in Q4 2021 that should continue into this year. The industry will return to its historical seasonality with the majority of annual revenue generated during the April to early September box office season. There is strong pent-up demand for moviegoing, especially with new blockbuster films expected to debut in 2022, which should enable AMC to return to positive EBITDA and operating cash flows. With AMC's theatres open, more new films released and a growing number of patrons returning to the cinema, the studios will likely observe the 45-day theatrical window exclusivity for big-budget film releases. The pandemic accelerated the compression of the theatrical window from the previous 60-75 days as a result of mandated theatre closures and strong subscriber growth on studios' streaming platforms. Last year, Warner Bros.' Warner Media subsidiary decided to release its entire slate of 17 films simultaneously in theatres and on its HBO Max streaming platform in the US. This year, WarnerMedia plans to revert to the exclusivity window, a credit positive. Moody's expects Universal, Paramount and Sony will also adhere to the theatrical window. However, the wildcard is Disney, which intends to decide theatrical exclusivity on a case-by-case basis. Disney's films typically represent 35%-40% of total domestic annual movie release volume. The potential exists for Disney to increasingly segregate its film content by producing certain movies specifically designated for its Disney+ streaming platform and other films designated for theatrical release. AMC's Caa2 CFR is supported by the company's position as the world's largest movie exhibitor and reflects the weak, albeit improving, operating and financial performance, which suffered from pandemic-induced revenue and operating losses in 2020 and 2021, and delayed recovery when economies reopened. While the rating reflects Moody's expectation for improvement in AMC's operating performance, it still embeds Moody's view for a balance sheet restructuring given AMC's untenable debt capital structure, the uncertainty surrounding Disney's adherence to the theatrical window and rising inflation concerns that could dampen moviegoer demand. Assuming AMC maintains close to its current 23% domestic market share, Moody's forecasts AMC will generate positive, albeit weak, EBITDA and neutral-to-modestly positive FCF (Moody's adjusted) in 2022. Conversely, the rating captures: (i) the cinema industry's excess screen capacity in North America, which will eventually require reduction; (ii) comparatively lower moviegoer demand as studios simultaneously release some films online via SVOD/PVOD or release them downstream in a shortened theatrical window; (iii) lower theatrical release volumes relative to historical levels; (iv) reduced show times compared to pre-pandemic periods; and (v) the impact from some cost-conscious consumers reducing their out-of-home entertainment and number of trips to the cinema amid affordable subscription-based VOD movie viewing. The rating also considers AMC's elevated financial leverage, which Moody's expects to decrease to the 8x-9x range (Moody's adjusted) over the rating horizon, and inability to meaningfully repay debt given the sizable interest burden that dampens FCF generation. Over the next 12-15 months, Moody's expects AMC to maintain good liquidity (SGL-2) supported by slightly positive FCF generation projected in the $10 - $25 million range (pressured by a high interest burden) and sizable cash balances, which totaled roughly $1.6 billion at September 30, 2021. Cash levels have remained above $1.6 billion in recent quarters as a result of AMC's diminishing cash burn, which Moody's expect to moderate this year. From January 2020 through September 2021, cumulative negative FCF totaled just over -$2 billion. Since April 2020, AMC has enhanced its liquidity position via several At-The-Market (ATM) new equity raises and debt issuances totaling $3.4 billion (before commission and fees). Liquidity is further supported by an undrawn $225 million RCF maturing April 2024. The RCF has a springing maximum net senior secured leverage covenant of 6x that becomes applicable when more than 35% of the facility is drawn. AMC previously obtained relief for this covenant through the quarter ending March 31, 2022. In December 2021, the company extended covenant relief through March 31, 2023. Prior to expiration of the waiver period, Moody's will closely monitor the covenant cushion. AMC is currently subject to minimum liquidity requirements of approximately $145 million, of which $100 million is required under the conditions for the extended Covenant Suspension Period, as amended, under the RCF, and GBP32.5 million (equivalent to approximately $44 million) under the $560.3 million Odeon Term Loan Facility (unrated) maturing August 2023. ESG CONSIDERATIONS Moody's expects AMC's governance to remain weak. Despite improving operating performance projected over the rating horizon, the rating incorporates governance risks, specifically the likelihood that leverage will remain above 8x over the next two years given the company's profitability challenges resulting from the pandemic and continued secular pressures facing the cinema industry. Governance risk also reflects the potential for a balance sheet restructuring to the extent gross debt and interest expense remain disproportionately elevated relative to earnings. STRUCTURAL CONSIDERATIONS The Caa1 ratings on the senior secured bank credit facilities and senior secured first-lien notes are one notch lower than the outcome from Moody's Loss Given Default (LGD) model to reflect the continued operating and financial challenges facing the company, including its unsustainable debt capital structure. The ratings also reflect the obligations' priority position in AMC's capital structure versus the second-lien notes, which are rated Caa3. The Ca ratings on the senior subordinated notes reflect the low anticipated recovery prospects given their junior position relative to a sizeable amount of first-lien and second-lien debt ahead of them. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS Ratings could be upgraded if AMC experiences positive growth in box office attendance, stable-to-improving market share, positive and expanding EBITDA with margins approaching pre-pandemic levels and enhanced liquidity; and exhibits prudent financial policies that translate into an improved credit profile. An upgrade would also be considered if financial leverage as measured by total debt to EBITDA approaches the 8.5x area (Moody's adjusted) and free cash flow as a percentage of total debt improves to the -1% to +1% range (Moody's adjusted). Ratings could be downgraded if there was: (i) an exhaustion of the company's liquidity or an inability to access additional sources of liquidity to cover cash outlays; (ii) poor execution on reducing or managing operating expenses; or (iii) limited prospects for operating performance recovery in 2022. A downgrade could also be considered if Moody's expects total debt to EBITDA to remain above 9x (Moody's adjusted) or free cash flow to remain negative on a sustained basis. Ratings could also be downgraded if Moody's expects AMC will pursue a balance sheet restructuring. Headquartered in Leawood, Kansas, AMC Entertainment Holdings, Inc. is the largest movie exhibitor in the US and globally, operating 947 movie theatres with 10,575 screens in 15 countries across the US, Europe and the Middle East. Revenue totaled approximately $1.5 billion for the twelve months ended September 30, 2021. The principal methodology used in these ratings was Business and Consumer Services published in November 2021. AMC ENTERTAINMENT: S&P Rates New $500MM Sec. First-Lien Notes 'B-' ------------------------------------------------------------------ S&P Global Ratings assigned its 'B-' issue-level rating and '2' recovery rating to AMC Entertainment Holdings Inc.'s proposed $500 million senior secured first-lien notes due 2029. The '2' recovery rating indicates its expectation for substantial (70%-90%; rounded estimate: 75%) recovery of principal in the event of a payment default. AMC plans to use the net proceeds from these notes to refinance its existing 10.5% senior secured first-lien notes due 2025. The new notes will rank equally with the company's existing first-lien debt. S&P said, "We believe extending this debt maturity will be marginally favorable for AMC's credit prospects. However, while we expect the transaction to somewhat reduce its annual cash interest, we don't expect these savings to be substantial relative to the company's total debt burden and annual interest costs." S&P said, "All of our existing ratings on AMC, including our 'CCC+' issuer credit rating, are unchanged. Our positive outlook reflects the potential that we will raise our rating on the company if it prioritizes using its sizable cash balance to reduce its heavy debt load and interest burden, thereby improving its cash flow prospects and the sustainability of its capital structure. Our outlook also incorporates the improving prospects for the U.S. box office and our expectation for a subsequent recovery in AMC's operating performance." S&P could raise its rating on AMC if it expects S&P to reduce its leverage below 6.5x and maintain consistently positive cash flow (after deferred lease costs). This could occur if: -- The company uses the majority of the proceeds from its recent equity raises for debt repayment and refinances the costly debt it raised during the pandemic at significantly lower interest rates, materially reducing its heavy debt load and interest burden; -- It generates positive cash flow without conserving capital expenditure (capex) at the expense of its long-term competitive position; and -- Its theater attendance materially recovers in 2022. S&P could revise its outlook on AMC to stable if: -- Despite its belief the company has sufficient liquidity to maintain its operations while its theater attendance recovers, it prioritizes acquisitions or other investments over debt reduction such that we expect its cash flow (after deferred lease costs) to remain negative even after its theater attendance recovers from the pandemic. In addition, we believe it has limited ability to materially reduce its leverage through organic growth; or -- Premium video on demand (PVOD) and streaming become the primary distribution model for a significant portion of the film slate such that we believe there will be permanent damage to the box office. ISSUE RATINGS--RECOVERY ANALYSIS Key analytical factors -- AMC's capital structure comprises GBP148 million and EUR312 million senior secured first-lien term loan facilities maturing in 2023 issued at Odeon (not rated), a $225 million senior secured revolving credit facility maturing in 2024, a $2 billion senior secured first-lien term loan maturing in 2026, $300 million of 10.5% senior secured first-lien notes due 2026, $500 million of proposed senior secured first-lien notes due 2029, $73 million of 15%/17% cash/pay-in-kind (PIK) toggle senior secured first-lien notes due 2026 (not rated), $1.4 billion of 10%/12% cash/PIK toggle senior secured second-lien notes due 2026 (about $1.5 billion outstanding as of Sept. 30, 2021), and $290 million of outstanding subordinated notes with maturities ranging from 2024-2027. -- The term loan facility issued at Odeon has a structurally senior claim on the company's European assets. -- The first-lien debt is contractually senior to the second-lien secured debt and all subordinated debt. -- The second-lien debt is contractually senior to the subordinated debt to the extent of the collateral, which has been exhausted by the fist-lien debt claims in our scenario analysis. Therefore, S&P believes the second-lien debt holders will have a pari passu deficiency claim with the unsecured debt holders. In the event of rejected leases in a bankruptcy, S&P believes the subordinated debt would be structurally subordinated to the rejected lease claims. Simulated default assumptions -- S&P's simulated default scenario contemplates a hypothetical default occurring in 2023 due to a slower-than-expected recovery in theater attendance and a sudden and sharp shift toward alternative film delivery methods. -- Other default assumptions include an 85% draw on the revolving credit facility, LIBOR is 2.5%, the spread on the revolving credit facility rises to 5% as covenant amendments are obtained, and all debt amounts include six months of prepetition interest. -- S&P assumes that in the event of a default or insolvency proceeding the company would reorganize, close its underperforming theaters, and unwind its leases. S&P used a distressed EBITDA multiple of 6x to value the company. Simplified waterfall -- EBITDA at emergence: About $545 million -- EBITDA multiple: 6x -- Net enterprise value (after 5% administrative costs): About $3.1 billion -- Obligor/nonobligor valuation split: 75%/25% -- Total value available to senior secured first-lien debt after structurally senior claims: $2.45 billion -- Estimated senior secured first-lien debt claims: $3.1 billion --Recovery expectations: 70%-90% (rounded estimate: 75%) -- Total value available to senior secured second-lien debt: $46 million -- Estimated senior secured second-lien debt claims: $1.8 billion --Recovery expectations: 0%-10% (rounded estimate: 0%) -- Total value available to subordinated debt: $0 -- Estimated subordinated debt claims: $299 million --Recovery expectations: 0%-10% (rounded estimate: 0%) ATHLETIC SPECIALTIES: Taps Weissberg and Associates as Counsel -------------------------------------------------------------- Athletic Specialties 2, Inc. seeks approval from the U.S. Bankruptcy Court for the Northern District of Illinois to employ the law firm of Weissberg and Associates, Ltd. as its legal counsel. The firm will render these legal services: (a) advise the Debtor regarding its powers and duties; (b) assist the Debtor in the negotiation, formulation and drafting of a plan of reorganization and disclosure statement and to represent the Debtor in the confirmation process; (c) examine claims asserted against the Debtor; (d) take such action as may be necessary with reference to claims that may be asserted against Debtor and to prepare legal papers; (e) assist and represent the Debtor in all adversary proceedings and contested matters; (f) represent the Debtor in its dealings with the Office of the United States Trustee and with creditors of the estate; and (g) assist and represent the Debtor in litigation in the state and federal courts. The firm agreed to accept an advanced payment retainer in the amount of $38,262 plus the Chapter 11 filing fee of $1,738. In addition, the firm will be billed at its hourly rate of $450. Ariel Weissberg, Esq., an attorney at Weissberg and Associates, 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: Ariel Weissberg, Esq. Weissberg and Associates, Ltd. 564 W. Randolph Street, 2nd Floor Chicago, IL 60661 Telephone: (312) 663-0004 Facsimile: (312) 663-1514 Email: ariel@weissberglaw.com About Athletic Specialties 2 Athletic Specialties 2, Inc. filed its voluntary petition for relief under Chapter 11 of the Bankruptcy Code (Bankr. N.D. Ill. Case No. 21-14328) on Dec. 19, 2021, listing up to $50,000 in assets and up to $10 million in liabilities. Scott Palmberg, president, signed the petition. Judge A. Benjamin Goldgar oversees the case. The Debtor tapped Ariel Weissberg, Esq., at Weissberg & Associates, Ltd. as legal counsel. AVERY ASPHALT: Asset Sale Proceeds to Fund Plan ----------------------------------------------- Avery Asphalt, Inc., and its debtor affiliates filed with the U.S. Bankruptcy Court for the District of Colorado a Joint Plan of Liquidation and a Disclosure Statement dated Jan. 31, 2022. These Bankruptcy Cases were filed due to losses incurred in the acquisition of Regional and due to losses occasioned by bookkeeping errors and unpaid taxes. In addition, Cordes & Company was appointed receiver of the assets of the Debtors on January 29, 2021. The receivership hampered Avery Asphalt's ability to operate profitably. These jointly administered bankruptcy cases were filed on February 19, 2021 in order to displace the receiver and allow the Debtors to reorganize. The Plan provides for the Debtors to continue to operate Avery Asphalt's business until Avery Asphalt's business is sold as a going concern (along with any remaining property of the Debtors) prior to August 31, 2022. After costs of sale, administrative expenses, and United States Trustee's fees are paid, the Debtors will distribute the net sale proceeds to satisfy the Allowed Secured Claims of their creditors. The remaining net sale proceeds will be distributed to holders of Allowed Priority Claims and then to holders of Allowed Unsecured Claims on a pro rata basis. Sunflower Bank, N.A. has filed a motion for relief from stay seeking to foreclose on the Debtors' remaining real estate and personal property that serves as collateral for Sunflower's Secured Claim. The Debtors' estimate the approximate liquidation value of such assets to be as follows: Colorado Springs Real Estate: $1.6 million; Denver Real Estate: $2.0 million; and Personal Property: $1.2 million for a total of $4.8 million. A sale of Avery Asphalt's business as a going concern (along with the Debtors' remaining assets) will provide a significantly higher return to creditors than a forced sale of the Debtors' remaining assets. Additionally, Avery Asphalt received $109,358.92 Pre-petition receivables Post-petition and filed a motion on January 12, 2022 seeking Court approval to transmit such funds to Sunflower. In the event Court authority is obtained, Avery Asphalt will transmit such funds to Sunflower to be applied against the principal amount of Sunflower's remaining Claim. Class 4 consists of the Unsecured Claim of Nationwide Mutual Insurance Company. On or before March 31, 2022, Avery Asphalt will remit $73,600.00 to Dillie & Kuhn, Inc. in full and final satisfaction of the alleged trust fund violation. Under this Plan, after resolution of the Avoidance Adversary and payment of the amount to Dillie & Kuhn, Inc., the remaining amount of Nationwide's Claim shall be treated as an Unsecured Claims under Class 9 of this Plan in full and final satisfaction of Nationwide's Claim, if any. Class 4 is Impaired. Class 7 consists of Unsecured Claim of Las Vegas Paving Corp. During the pendency of this case, Avery Asphalt received $429,155.83.00 from Walmart for the Project. Special counsel will initiate an interpleader action against Copper State and Las Vegas Paving Corp. on or before March 1, 2022 and will deposit any disputed funds into the registry of the court. In the event Avery Asphalt is held to be liable to LVP in connection with the litigation between and among Avery Asphalt, Copper State, and LVP, such Claim shall be treated as an Unsecured Claim under Class 9 of the Plan and full and final satisfaction of LVP's Claim. Class 7 is Impaired. Class 9 is comprised of creditors holding Allowed Unsecured Claims against the Debtors including any allowed penalty Claims held by any taxing authority which are not related to actual pecuniary loss. Allowed Class 9 Claims shall receive their pro rata share of the Net Profits Fund after the sale of Avery Asphalt's business and the Debtors' remaining assets on or before August 31, 2022 in full and final satisfaction of their Claims. Distributions to Class 9 claimants shall not exceed the amount of the Allowed Unsecured Claims plus interest calculated at 2.5% per annum. Class 10 includes those who hold ownership interests in the Debtors. On the Effective Date of the Plan, the owners of the Debtors shall retain their interests. The Plan provides for Avery Asphalt to be sold as a going concern along with all remaining assets of the Debtors. The proceeds from the sale will first be used to satisfy the claim of Sunflower. Then the proceeds will be used to satisfy the claim of Greenline. After payments to creditors with Priority claims, any remaining proceeds will be distributed pro rata among the unsecured creditors. The Debtor believes that the Plan, as proposed, is feasible. The business broker, BBC, estimates that the value of Avery Asphalt's business and the Debtors' assets are between $7.5 - $9 million and that a sale of the business in March or April of 2022 (to close before August 31, 2022) is the ideal time for a sale in order to obtain the best price possible. A full-text copy of the Disclosure Statement dated Jan. 31, 2022, is available at https://bit.ly/3steE6n from PacerMonitor.com at no charge. Attorneys for Debtors in Possession: David J. Warner, Esq. Wadsworth Garber Warner Conrardy, PC 2580 West Main Street, Suite 200 Littleton, CO 80120 Telephone: (303) 296-1999 Facsimile: (303) 296-7600 Email: dwarner@wgwc-law.com About Avery Asphalt, Inc. Avery Asphalt, Inc. is the main operating company and installs, maintains, and improves roadways, parking lots, and other outdoor surfaces. Avery Equipment, LLC owns the equipment used in Avery Asphalt's business. Avery Holdings, LLC owns the real estate used in Avery Asphalt's business. LBLA Ventures, Inc. is the holding company for a non-operating Arizona asphalt company and 1401 S. 22nd Ave., LLC owns the real estate that was formerly used by Regional Pavement Maintenance of Arizona, Inc. in its business. Avery Asphalt and its affiliates sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. D. Colo. Lead Case No. 21-10799) on February 19, 2021. The bankruptcy was filed after a receiver was appointed for all the Debtors. The receivership hampered Avery Asphalt's ability to operate profitably. In the petition signed by CEO Aaron Avery, the Debtors disclosed up to $50,000 in assets and up to $10 million in liabilities. Judge Michael E. Romero oversees the case. David J. Warner, Esq., at Wadsworth Garber Warner Conrardy, P.C. is the Debtor's counsel, while SL Biggs serves as the Debtor's financial advisor. AYTU BIOPHARMA: Secures $15 Million Debt Refinancing ---------------------------------------------------- Aytu BioPharma, Inc. has entered into an agreement with the Avenue Venture Opportunities Fund, L.P., an affiliate of Avenue Capital Group, to refinance the Company's existing senior secured loan facility. "We are pleased to partner with Avenue Capital and enhance Aytu's overall financial position," said Josh Disbrow, chief executive officer of Aytu BioPharma. "By mid-2022, we expect to begin our registrational study of AR101 in patients with vascular Ehlers-Danlos Syndrome, while advancing our sham-controlled study of Healight, our investigational endotracheal light catheter for use in patients with SARS-CoV-2. This financing further enables us to focus on our primary mission of creating value for patients and shareholders through the advancement of our pipeline and growth of our commercial business." Under the new financing agreement, Aytu is borrowing $15 million at an interest rate of the greater of prime and 3.25%, plus 7.4% and is using the proceeds to refinance its previous credit facility with Deerfield Private Design Fund III, L.P. and Deerfield Partners, L.P. The new facility with Avenue Capital provides a three-year term, consisting of 18 monthly payments of interest only followed by equal monthly payments of principal and accrued interest. The interest-only period may be extended to up to 36 months contingent upon Aytu achieving certain milestones. There are no minimum revenue or cash balance financial covenants in connection with the agreement. In addition, under the terms, Aytu issued the Avenue Venture Opportunities Fund warrants to purchase shares of its common stock equating to 7.00% of the principal amount. About Avenue Venture Opportunities The Avenue Venture Opportunities Fund seeks to provide creative financing solutions to high-growth, venture capital-backed technology and life science companies. The Avenue Venture Opportunities Fund focuses generally on companies within the underserved segment of the market created by the widening financing gap between commercial banks and larger debt funds. About Aytu BioPharma Englewood, Colorado-based Aytu BioPharma, Inc., formerly known as Aytu BioScience, Inc. -- http://www.aytubio.com-- is a specialty pharmaceutical company with a growing commercial portfolio of prescription therapeutics and consumer health products. The company's primary prescription products treat attention deficit hyperactivity disorder (ADHD) and other common pediatric conditions. Aytu markets ADHD products Adzenys XR-ODT (amphetamine) extended-release orally disintegrating tablets, Cotempla XR-ODT (methylphenidate) extended-release orally disintegrating tablets, and Adzenys-ER (amphetamine) extended-release oral suspension. Aytu Biopharma reported a net loss of $58.29 million for the year ended June 30, 2021, a net loss of $13.62 million for the year ended June 30, 2020, and a net loss of $27.13 million for the year ended June 30, 2019. As of Sept. 30, 2021, the Company had $227.73 million in total assets, $116.23 million in total liabilities, and $111.50 million in total stockholders' equity. BASIC ENERGY: Seeks to Tap Jones Lang LaSalle Brokerage as Broker ----------------------------------------------------------------- Basic Energy Services Inc. and its affiliates seek approval from the U.S. Bankruptcy Court for the Southern District of Texas to employ Jones Lang LaSalle Brokerage, Inc. as real estate broker. The firm will render these services: (a) market the properties on the Debtors' behalf to potential purchasers; (b) provide information to potential purchasers with respect to the properties; (c) communicate with potential purchasers regarding the properties; and (d) negotiate bids for the properties on the Debtors' behalf. The firm will be paid a fee equal to 6 percent of the gross selling price of each property sold. In addition, if the firm negotiates a sublease of a property leased by the Debtors, it will be entitled to a commission of 8 percent of the rental savings. Todd Burnette, a managing director at Jones Lang LaSalle Brokerage, 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: Todd Burnette Jones Lang LaSalle Brokerage, Inc. 201 Main Street, Suite 500 Fort Worth, TX 76102 Telephone: (817) 334-8105 Email: todd.burnette@am.jll.com About Basic Energy Services Basic Energy Services, Inc. -- http://www.basices.com/-- provides wellsite services essential to maintaining production from the oil and gas wells within its operating areas. Its operations are managed regionally and are concentrated in major United States onshore oil-producing regions located in Texas, California, New Mexico, Oklahoma, Arkansas, Louisiana, Wyoming, North Dakota, Colorado and Montana. Specifically, Basic Energy Services has a significant presence in the Permian Basin, Bakken, Los Angeles and San Joaquin Basins, Eagle Ford, Haynesville and Powder River Basin. Basic Energy Services and its subsidiaries sought Chapter 11 protection (Bankr. S.D. Texas Lead Case No. 21-90002) on Aug. 17, 2021. As of March 31, 2021, Basic Energy disclosed total assets of $331 million and debt of $549 million. Judge David R. Jones oversees the cases. The Debtors tapped Jackson Walker LLP as bankruptcy counsel, Gray Reed & McGraw LLP as special counsel, Alixpartners LLP as restructuring advisor, Lazard Freres & Company as investment banker, and Province, LLC as financial advisor. Prime Clerk is the claims agent. The U.S. Trustee for Region 7 appointed an official committee of unsecured creditors in the Debtors' Chapter 11 cases. Snow & Green, LLP and Brown Rudnick, LLP serve as the committee's legal counsels. Riveron RTS, LLC is the committee's financial advisor. BASIC ENERGY: Taps David Dunn of Province LLC as Wind-Down Director ------------------------------------------------------------------- Basic Energy Services Inc. and its affiliates seek approval from the U.S. Bankruptcy Court for the Southern District of Texas to employ David Dunn, a principal at Province, LLC, as their wind-down director. Mr. Dunn will manage the wind-down of the Debtors' estates and effectuate the terms of the global settlement order. Mr. Dunn will be paid a flat fee of $35,000 per month and he will be compensated 2.5 percent of the gross recovery value attributable to all prepetition secured notes collateral assets. In addition, he will seek reimbursement for expenses incurred. In a court filing, Mr. Dunn disclosed that he is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. Mr. Dunn can be reached at: David Dunn Province, LLC 2360 Corporate Circle, Ste. 330 Henderson, NV 89074 Telephone: (702) 685-5555 Email: ddunn@provincefirm.com About Basic Energy Services Basic Energy Services, Inc. -- http://www.basices.com/-- provides wellsite services essential to maintaining production from the oil and gas wells within its operating areas. Its operations are managed regionally and are concentrated in major United States onshore oil-producing regions located in Texas, California, New Mexico, Oklahoma, Arkansas, Louisiana, Wyoming, North Dakota, Colorado and Montana. Specifically, Basic Energy Services has a significant presence in the Permian Basin, Bakken, Los Angeles and San Joaquin Basins, Eagle Ford, Haynesville and Powder River Basin. Basic Energy Services and its subsidiaries sought Chapter 11 protection (Bankr. S.D. Texas Lead Case No. 21-90002) on Aug. 17, 2021. As of March 31, 2021, Basic Energy disclosed total assets of $331 million and debt of $549 million. Judge David R. Jones oversees the cases. The Debtors tapped Jackson Walker LLP as bankruptcy counsel, Gray Reed & McGraw LLP as special counsel, Alixpartners LLP as restructuring advisor, Lazard Freres & Company as investment banker, and Province, LLC as financial advisor. Prime Clerk is the claims agent. The U.S. Trustee for Region 7 appointed an official committee of unsecured creditors in the Debtors' Chapter 11 cases. Snow & Green, LLP and Brown Rudnick, LLP serve as the committee's legal counsels. Riveron RTS, LLC is the committee's financial advisor. BCP RENAISSANCE: S&P Upgrades ICR to 'B+', Outlook Stable --------------------------------------------------------- S&P Global Ratings raised its issuer credit rating on BCP Renaissance Parent LLC to 'B+' from 'B'. S&P said, "At the same time, we raised our issue-level rating on its $1.1 billion outstanding senior secured term loan B to 'B+' from 'B'. The recovery rating is unchanged at '3' indicating our expectation of meaningful recovery (60%) in the event of a payment default. "The stable outlook reflects our expectation that BCP will continue reducing its debt balance via the excess cash sweep and maintain debt to EBITDA of about 7.0x-7.5x over the next two years." On Feb. 1, 2022, BCP Renaissance announced it is amending its existing term loan B. The company has performed better than S&P's previous forecast, resulting in higher distributions and better leverage and coverage ratios. S&P said, "The 'B+' issuer credit rating on BCP reflects our expectation of debt to EBITDA in the 7.0x-7.5x range over the next two years, with support from stable cash flows from Rover and significant debt reduction through the company's cash flow sweep mechanism. As a result of better natural gas prices and higher volume flows on the Rover Pipeline over the past six months, BCP's cash flows have increased. As a result, our forecasted financial measures improved over the forecast period. We now forecast adjusted leverage of below 7.5x in 2022 compared with our previous expectations of 8.3x. Additionally, the company announced an amendment to its term loan B. The transaction will include a $57 million fungible add-on to the existing term loan B-1 tranche to refinance the B-2 tranche. BCP will also reduce the excess cash flow sweep provision to 75% from 100%, extend the maturity date on the term loan B to November 2026, and amend annual interest rate to SOFR+350 bps. Overall, this transaction is leverage neutral, and while the revision to the mandatory excess cash flow sweep from 100% is somewhat credit negative, we expect sweeps to remain in the $75 million-$85 million range over the forecasted period, which is higher than our previous expectations. "We base our rating on BCP on the differentiated credit quality between BCP and Rover. "BCP owns a 32% interest in Rover and does not have other substantive assets to service its $1.1 billion outstanding term loan B due in 2026. Our assessment of the company's credit profile incorporates its financial ratios, Rover's cash flow stability, as well as BCP's ability to influence Rover's financial policy and to liquidate its investment in Rover to repay the term loan. We assess these factors as either positive, neutral, or negative. "We expect BCP to receive stable distributions with support from Rover's high utilization rate, long-term take-or-pay contracts, and low levels of maintenance capital requirements." Additionally, the pipeline's average counterparty credit quality has also improved notably over the past few months as the commodity price environment continues to improve, further supporting our expectation of stable distributions from Rover. S&P said, "BCP's financial metrics are highly levered due to our expectation of debt to EBITDA below 7.5x in 2022 and about 7x in 2023, and EBITDA interest coverage ratio of about 2.8-3.0x. Our EBITDA assumptions for BCP incorporate the annual free cash flow it receives from Rover with no construction costs and minimal maintenance capital expenditures. Although our expectations for the company's credit metrics have improved, we continue to assess the BCP's financial metrics as negative." BCP has substantial governance rights over Rover and ET Rover Pipeline LLC. Both entities are also required to distribute all their free cash flow after maintenance capital spending to BCP, Traverse, and Energy Transfer Partners. BCP can veto changes to the distribution policies of both subsidiaries. Because Energy Transfer LP is structured as a master limited partnership, it relies on stable cash flows from Rover to pay its distributions. As such, Rover has an incentive to maintain consistent or growing dividends. S&P said, "Our view of BCP's ability to liquidate its investment in Rover is negative, as the company is privately owned. "The stable outlook reflects our expectation that BCP will continue to reduce its debt balance via the excess cash sweep and maintain debt to EBITDA of below 7.5x trending toward 7.0x during the next 24 months. Also supporting the outlook is BCP's ample liquidity and stable distributions from Rover Pipeline underpinned by take-or-pay contracts. "We could consider a negative rating action if we expect BCP's debt to EBITDA to approach 8x, which could happen due to a lower-than-anticipated excess cash sweep or a decline in distributions from Rover Pipeline. "Although unlikely in the near term, we could consider a positive rating action on BCP if it maintains interest coverage above 3x and debt to EBITDA below 4x, while reducing the term loan balance via the mandatory amortization and excess cash sweep." BEAR COMMUNICATIONS: Wins Cash Collateral Access Thru Feb 28 ------------------------------------------------------------ Judge Dale L. Somers of the U.S. Bankruptcy Court for the District of Kansas authorized Bear Communications, LLC to use cash collateral to pay the budgeted expenses necessary to sustain its operations prior to February 28, 2022. The Debtor requires access to cash collateral for payroll, working capital, capital expenditures, operating costs, and expenses during the Chapter 11 case. The Debtor's business activity has declined over the last several years and its operations were further hindered by its inability to collect approximately $12 million it claims due for work it did for Verizon in Birmingham, Alabama and Madison, Wisconsin. As a result, the Debtor filed for bankruptcy protection. After operating for several months after the Petition Date, the Debtor made the decision to liquidate its assets and close its business. In September 2021, the Debtor began the process of winding down its operations, selling vehicles and equipment assets, and collecting any remaining receivables to be disbursed through the case. The Debtor continues to wind down its operations. The parties with an interest in the Cash Collateral are Central Trust Bank f/k/a Central Bank of the Midwest and the Small Business Administration, which assert a lien on all assets of the Debtor. Only to the extent that the position of the Bank or SBA as secured creditors are altered or diminished, then the Bank and the SBA will be entitled to receive an additional and replacement security interest and lien that is in the same priority as existed on the Commencement Date between the Bank and the SBA. The Bank and the SBA will be treated as oversecured creditors based solely on the total value of the Debtor's prepetition assets as listed in the Debtor's Voluntary Petition. To the extent the Bank or the SBA has a claim against the Debtor arising from the diminution in value of the Bank's and/or SBA's Cash Collateral, the Bank and the SBA reserve their rights to assert superpriority claims pursuant to 11 U.S.C. sections 503(b) and 507(b). The Order provides for Carve-Outs of the Debtor's assets and the collateral of the Bank and the SBA to pay for allowed administrative expenses of the Debtor's professionals, and allowed fees and expenses of the Committee's professionals. The Carve-Out for the allowed fees earned and expenses incurred by the Debtor's Professionals will be $125,000. The Carve-Out will be $125,000 to pay the allowed fees earned and expenses incurred by the Committee's Professionals. A copy of the order is available for free at https://bit.ly/32Z34ak from PacerMonitor.com. About Bear Communications Lawrence, Kan.-based Bear Communications, LLC -- http://www.bearcommunications.net-- was a communications contractor offering aerial construction, underground construction, splicing, subscriber drop placement, residential and commercial installations, residential and commercial wiring, consulting, and testing services. Bear Communications filed its voluntary petition for relief under Chapter 11 of the Bankruptcy Code (Bankr. D. Kan. Case No. 21-10495) on May 28, 2021. Bryant Gray, vice president of Legal and Risk, signed the petition. At the time of the filing, the Debtor disclosed total assets of up to $50 million and total liabilities of up to $100 million. Judge Dale L. Somers presides over the case. W. Thomas Gilman, Esq., at Hinkle Law Firm LLC, represents the Debtor as legal counsel. The U.S. Trustee for Region 20 appointed an official committee of unsecured creditors on June 29, 2021. The committee is represented by Robert Hammeke, Esq., at Dentons US LLP and James R. Irving, Esq., at Dentons Bingham Greenebaum LLP. Central Bank of The Midwest, as secured creditor, is represented by Armstrong Teasdale LLP. BENNETT ROSA: Trustee Taps REMAX Gold as Real Estate Broker ----------------------------------------------------------- Christopher Hayes, Chapter 11 trustee for Bennett Rosa, LLC, received approval from the U.S. Bankruptcy Court for the Northern District of California to hire REMAX Gold to assist him in the marketing and sale of real property located at 4050 Grange Road and 4065 Grange Road, Santa Rosa, Calif. The firm will get a commission of 5 percent of the gross sale price of the property. Nathan Genovese, the firm's real estate broker, who will be providing the services, disclosed in a court filing that he is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. The firm can be reached at: Nathan Genovese REMAX Gold 140 Stony Point Rd Ste J. Santa Rosa, CA 95401-4188 Direct: (707) 205-6797 Office: (707) 284-1215/(707) 524-3500 Fax: (707) 205-6797 About Bennett Rosa Bennett Rosa, LLC, a company based in San Mateo, Calif., sought protection under Chapter 11 of the Bankruptcy Code (Bankr. N.D. Calif. Case No. 21-30623) on Sept. 3, 2021, disclosing up to $50,000 in assets and up to $10 million in liabilities. Judge William J. Lafferty oversees the case. The Law Offices of David A. Boone serves as the Debtor's legal counsel. Christopher Hayes is the Chapter 11 trustee appointed in the Debtor's case. Charles P. Maher, Esq., at Rincon Law, LLP and Bachecki, Crom & Co., LLP serve as the trustee's legal counsel and accountant, respectively. BETTY CLARKE DIXON: Poughs Buying Miami Property for $635K Cash --------------------------------------------------------------- Betty Clarke Dixon asks the U.S. Bankruptcy Court for the Southern District of Florida to authorize the sale of the real property known as 6920 NW 4 Avenue, in Miami, Florida 33150, to Livingston Pough and Leonie Pough for $635,000, cash. The Debtor has obtained a cash offer for $635,000 with closing scheduled for Feb. 15, 2022. The secured creditor will be paid in full and will not be prejudiced as a result of the sale. The sale is in the best interest of Debtor and Secured Creditor. The Debtor respectfully requests that the Motion be granted for the reasons stated therein and the Court enters an order authorizing the sale of the Property. A copy of the Sale Contract is available at https://tinyurl.com/2p8h8uy7 from PacerMonitor.com free of charge. Betty Clarke Dixon sought Chapter 11 protection (Bankr. S.D. Fla. Case No. 21-11479) on Feb. 16, 2021. The Debtor tapped Claudette Brevitt-Schoop, Esq., as counsel. BHCOSMETICS HOLDINGS: Feb. 15 Auction of Substantially All Assets ----------------------------------------------------------------- Judge Christopher S. Sontchi of the U.S. Bankruptcy Court for the District of Delaware authorized BHCosmetics Holdings, LLC, and affiliates' proposed bidding procedures in connection with the auction sale of substantially all assets. The Bid Protections are approved in their entirety, including, without limitation, the Termination Payment payable in accordance with, and subject to the terms of, the Stalking Horse Bid. Except as expressly provided for herein for the benefit of the Stalking Horse Bidder, no other termination payments, expense reimbursements, topping fees or any other similar fee or payment are authorized or permitted under the Order. The Debtors are authorized and directed to pay the Termination Payment, to the extent payable under the Stalking Horse Bid, without further order of the Court in accordance with the Stalking Horse Bid. The Debtors and their estates will be authorized to provide due diligence information to Qualifying Bidders provided that such Qualifying Bidders (except Secured Creditors, including but not limited to Fifth Third Bank, National Association, as Administrative Agent, Collateral Agent, Swing Line Lender, L/C Issuer, Lead Arranger, and Bookrunner, and the other participating lenders have delivered an executed confidentiality agreement in form and substance acceptable to the Debtors, if such an agreement is provided to the Qualifying Bidders as part of the sale process for the particular Asset(s). The salient terms of the Bidding Procedures are: a. Bid Deadline: Feb. 11, 2022, at 12:00 p.m. (ET) b. Initial Bid: Aggregate consideration which either when considered alone or in combination with other Qualifying Bidders equals or exceeds the sum of (A) the purchase price under the Stalking Horse Bid, (B) any Break-Up Fee, (C) any Expense Reimbursement, and (D) $100,000, unless otherwise agreed by the Debtors in consultation with the Consultation Parties c. Deposit: 10% of the cash purchase price d. Auction: In the event that the Debtors timely receive two or more Qualifying Bids for the same Assets, the Debtors will conduct the Auction for the subject Assets on Feb. 15, 2022, at 10:00 a.m. (ET) by videoconference or such other date and time as the Debtors, after consultation with the Consultation Parties, may notify Qualifying Bidders who have submitted Qualifying Bids. e. Bid Increments: To be identified at or prior to the commencement of the Auction f. Sale Hearing: Feb. 18, 2022, at 1:00 p.m. (ET) g. Sale Objection Deadline: Feb. 14, 2022 at 12:00 p.m. (ET) h. Closing: Feb. 24, 2022 i. The Prepetition Loan Lenders and any party who has a valid, perfected and enforceable lien on any Assets of the Debtors' estates will have the right to credit bid all or a portion of the value of such Secured Creditor's claim within the meaning of section 363(k) of the Bankruptcy Code and to the extent demonstrated by the Secured Claim Documentation. The Assumption Notice Deadline is Jan. 28, 2022. No later than one business day after conclusion of the Auction, the Debtors will cause to be served the Notice of Successful Bidder upon each affected Counterparty and all parties requesting notice. The Contract Objection Deadline is Feb. 14, 2022 at 12:00 p.m. (ET). The assumption and assignment to the Successful Bidder of the Target Contracts pursuant to Bankruptcy Rules 2002(a)(2), 6004, and 6006, and such notice and objection periods are approved. Within two business days of the entry of this Bidding Procedures Order, the Debtors will file the Sale Notice in these Chapter 11 Cases and serve upin the Sale Notice Parties. In addition, the Debtors will upload an electronic copy of the Sale Notice to the Data Room. The Debtors will also post the Sale Notice and the Bidding Procedures Order on the website of the Debtors' claims and noticing agent, https://dm.epiq11.com/BHCosmetics. The Debtors were to file and serve a proposed Sale Order on Feb. 1, 2022, at 4:00 p.m. (ET). The Debtors will have until 5:00 p.m. (ET) on the day prior to the Sale Hearing to file and serve a reply to any objection filed in connection with the Sale, including any Sale Objection or Contract Objection. The Bidding Procedures Order will be effective immediately upon entry and any stay of orders provided for in Bankruptcy Rules 6004(h) or 6006(d) or any other provision of the Bankruptcy Code, the Bankruptcy Rules, or the Local Rules is expressly waived. Further, to the extent applicable, the requirements of Bankruptcy Rule 6006(e) are waived. A copy of the Bidding Procedures is available at https://tinyurl.com/2p8c44rm from PacerMonitor.com free of charge. About BH Cosmetics Originally launched in 2009, BH Cosmetics is a beauty brand specializing in high quality, clean, vegan, and cruelty-free cosmetics and other beauty products. BH Cosmetics sells its products on its Shopify e-commerce platform directly to consumers and wholesale to various global retailers. On Jan. 14, 2022, BHCosmetics Holdings, LLC and three of its affiliates filed petitions seeking relief under Chapter 11 of the Bankruptcy Code (Bankr. D. Del. Lead Case No. 22-10050), to pursue a sale of the assets. BHCosmetics Holdings estimated assets and debt of $50 million to $100 million as of the bankruptcy filing. The Debtors tapped Young Conaway Stargatt & Taylor, LLP as bankruptcy counsel and Riveron Management Services, LLC as financial advisor. The Debtors also tapped the services of SB360 Capital Partners, LLC and Hilco IP Services, LLC, which act as sale and liquidation agents; and Traverse, LLC, which provides the controller and other accounting personnel. Epiq Corporate Restructuring, LLC is the claims agent. BLUEAVOCADO CO: Seeks to Tap Sprinkle IP as Special Patent Counsel ------------------------------------------------------------------ BlueAvocado, Co. seeks approval from the U.S. Bankruptcy Court for the Western District of Texas to hire Sprinkle IP Law Group as its special patent counsel. The Debtor needs the firm's legal assistance in connection with patent application preparation and prosecution, and strategic property advice. The hourly rates charged by the firm for its services are as follows: Partners $350 - $515 per hour Associates $330 - $345 per hour Paralegals $145 - $200 per hour Richard Ressler, Esq., a partner at Sprinkler IP, disclosed in a court filing that his firm is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. The firm can be reached through: Richard Ressler, Esq. Sprinkle IP Law Group 1301 W. 25th Street, Suite 408 Austin, TX 78705 Phone: (512) 637-9220 Fax: (512) 371-9088 Email: info@sprinklelaw.com About BlueAvocado Co. BlueAvocado Co., an Austin, Texas-based manufacturer and distributor of reusable grocery bags, filed its voluntary petition for Chapter 11 protection (Bankr. W.D. Texas Case No. 21-51384) on Nov. 10, 2021, disclosing $1,499,370 in total assets and $2,243,028 in total liabilities as of Sept. 30, 2021. Julie Mak, president of BlueAvocado, signed the petition. Judge Craig A. Gargotta oversees the case. The Debtor tapped Raymond W. Battaglia, Esq., at the Law Offices of Ray Battaglia, PLLC as bankruptcy counsel; Michael Best & Friedrich, LLP as special counsel; and AB Accretive, LLC as financial advisor. BLUEAVOCADO CO: Taps Lakewood Group as Executive Recruiter ---------------------------------------------------------- BlueAvocado, Co. seeks approval from the U.S. Bankruptcy Court for the Western District of Texas to hire Management Recruiters of Deschutes, LLC, an Oregon-based executive recruiter which conducts business under the name The Lakewood Group. The Debtor requires the services of an executive recruiter to find qualified candidates who will fill the positions for head of sales and director of operations. The firm will receive a non-refundable fee of $6,000, and 22 percent of the first year base compensation of any candidate employed by the Debtor, plus any applicable sales, use or similar tax. Bob Ludeman, managing director at Lakewood Group, disclosed in a court filing that his firm is a "disinterested person," as such term is defined in Bankruptcy Code Section 101(14). The firm can be reached through: Bob Ludeman Recruiters Of Deschutes LLC dba The Lakewood Group 532 SW 13th Street, Suite 201 Bend, OR 97702 Tel: (253)-582-8488 Email: bob@lakewoodgroup.com About BlueAvocado Co. BlueAvocado Co., an Austin, Texas-based manufacturer and distributor of reusable grocery bags, filed its voluntary petition for Chapter 11 protection (Bankr. W.D. Texas Case No. 21-51384) on Nov. 10, 2021, disclosing $1,499,370 in total assets and $2,243,028 in total liabilities as of Sept. 30, 2021. Julie Mak, president of BlueAvocado, signed the petition. Judge Craig A. Gargotta oversees the case. The Debtor tapped Raymond W. Battaglia, Esq., at the Law Offices of Ray Battaglia, PLLC as bankruptcy counsel; Michael Best & Friedrich, LLP as special counsel; and AB Accretive, LLC as financial advisor. BOYNE USA: New $100MM Debt Add-on No Impact on Moody's B1 CFR ------------------------------------------------------------- Moody's Investors Service says Boyne USA, Inc's proposed $100 million add-on has no impact to its B1 Corporate Family Rating, B1-PD Probability of Default Rating, the B1 rating for the senior unsecured notes, as well as its stable outlook. Boyne announced on February 2 a $100 million add-on to its existing $540 million senior unsecured notes due 2029. Proceeds from the add-on will be used to fund growth capex for planned capital upgrades at various resorts and facilities. RATINGS RATIONALE Boyne's B1 CFR reflects its elevated financial leverage Moody's debt/EBITDA in the high 5x for the year ended December 2021 (pro forma for the proposed transaction). Moody's expects debt-to-EBITDA leverage will decline to below 5.0x over the next 12 to 18 months due to earnings growth. Moody's expects strong volume, good yield management through dynamic pricing, cost discipline, good reinvestment as well as continued good performance from its non-ski related activities to support continued solid earnings growth in FY22. Boyne's operating results are highly seasonal, exposed to varying weather conditions and discretionary consumer spending. However, the rating reflects Boyne's strong position as one of the largest operators in the North American ski industry, operating nine mountain resorts across North America. The company has a well-diversified geographic footprint, and roughly 20%-25% of its revenue relates to non-snowsports activities, which helps to somewhat mitigate its exposure to weather and operating seasonality. The North American ski industry has high barriers to entry and has exhibited resiliency even during weak economic periods, including the 2007- 2009 recession. The company's very good liquidity reflects its ample cash balance (about $187 million at year end 2021 pro forma for the proposed transaction) and access to an undrawn $90 million revolver due 2026. Moody's regards the coronavirus outbreak as a social risk under Moody's ESG framework, given the substantial implications for public health and safety. Although an economic recovery is underway, and its continuation will be closely tied to containment of the virus. As a result, there is uncertainty around Moody's forecasts. Governance factors reflect that Boyne is a family-owned company and its CEO Stephen Kircher is the son of the founder. The family has a reinvestment orientation to build long-term value with low emphasis on shareholder distributions. As such, Moody's expects the company to favor a more conservative financial policy relative to private equity owned entities. Moody's does not anticipate that the company will pay any dividends over the next year or attempt to execute any large, transformational acquisitions. The company has demonstrated a willingness to utilize debt to fund acquisitions and capital upgrades/investments, but Moody's expects leverage to fall when earnings from the investments are realized. Environmental considerations in addition to exposure to adverse weather include the need to access large quantities of water, which may be challenging following periods of severe drought, and the vast amounts of forest land the company is responsible to properly operate and protect. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS The stable outlook reflects Moody's view that Boyne's debt-to-EBITDA leverage will decline to below 5x over the next 12 to 18 months with earnings growth. The stable outlook also reflects Moody's expectation that Boyne will maintain very good liquidity over the next year that provides flexibility for reinvestment and upgrades at various resorts and facilities. The ratings could be upgraded if the company continues to grow organically while sustaining debt-to-EBITDA below 4.0x, retained cash flow (RCF) -to-net debt exceeds 17.5%, and the company maintains very good liquidity. The ratings could be downgraded if debt-to-EBITDA is sustained above 5.0x, or RCF-to-net debt falls below 7.5%. Weak reinvestment, visitation declines, or margin deterioration could also lead to a downgrade. In addition, if there is a material weakening of liquidity for any reason, or the company's financial policies become more aggressive, including undertaking a large debt-funded acquisition or the payment of dividends, the ratings could be downgraded. The principal methodology used in these ratings was Business and Consumer Services published in November 2021. Boyne USA, Inc, headquartered in Petoskey, Michigan, operates ten mountain resorts (four with golf courses) and two non-ski properties consisting of one attraction (Gatlinburg Sky Lift) and one hotel/convention center with a 45 hole golf course (the Inn at Bay Harbor). The company is private and does not publicly disclose its financials. Boyne is also family owned by the Kircher family, direct descendants of the founder. The company generated revenue of approximately $487 million for the fiscal year ended on December 31, 2021. BOYNE USA: S&P Affirms 'B' Issuer Credit Rating, Outlook Stable --------------------------------------------------------------- S&P Global Ratings affirmed its 'B' issue-level rating an '4' recovery rating on the company's senior unsecured notes. S&P said, "The stable outlook reflects our forecast for leverage in the 5x-5.5x range in 2022, which provides significant cushion compared to our 7x downgrade threshold at the rating. We expect this even in the event of a modest pullback in demand, adverse weather conditions during the remainder of the ski season and later in 2022, or increased labor costs in 2022 and 2023. "The rating affirmation reflects our expectation that Boyne will maintain S&P Global Ratings-adjusted leverage of 5x-5.5x in fiscal 2022 despite the leveraging transaction. Demand for outdoor recreation remained strong throughout 2021 due to the perception that activities such as skiing are safe and compatible with social distancing guidelines. As a result, we expect Boyne ended fiscal 2021 with S&P Global Ratings-adjusted leverage of approximately 5.7x, pro forma for the proposed transaction. We expect trends across Boyne's portfolio of resorts have continued to improve during the 2021/2022 ski season, as the company has retained newcomers and skiers who returned to the sport during the pandemic, and that this has translated into a larger season pass base at Boyne. Furthermore, we believe the company's portfolio of regional and drive-to resorts, which account for approximately 75%-80% of Boyne's revenue, outperformed destination resorts during the COVID-19 pandemic as consumers opted to stay closer to home and that Boyne benefitted from a sales season for the 2021/2022 ski season amid greater uncertainty regarding the path of the pandemic. Most season pass sales are sold in the summer and fall before ski season. These two factors led to strong pass sales through the third quarter of 2021 that were meaningfully ahead of the prior two ski seasons. Lastly, with COVID-19-related capacity restrictions significantly reduced or eliminated across its resorts, we expect revenue from the company's ancillary segments such as retail, rental, food and beverage, and lodging will be meaningfully higher than prepandemic levels with higher skier visitation and spending patterns returning to normal. "As a result, we expect the company to generate adjusted EBITDA of approximately $130 million-$140 million and we expect the company to maintain leverage in the 5x-5.5x range in 2022. Moreover, underpinning our stable outlook is our expectation for Boyne to maintain leverage below 7x despite the leveraging transaction in the event that skier visitation and revenue return to prepandemic levels following this season and the company sees some margin compression resulting from increased labor and other costs. Prior to any ski season, there is typically some level of uncertainty around demand, revenue, and EBITDA generation based on snowfall conditions, and that adverse weather conditions in one or more of Boyne's major markets could cause EBITDA to be lower and leverage higher than our base-case forecast. "Boyne is investing heavily in its resorts, which we believe will translate to better service and an ability to sustainhigher visitation as the company expands. We expect Boyne spent approximately $140 million in capital expenditures in fiscal 2021 and we believe the company will continue to invest at significantly higher rates in 2022 compared to years leading up to the pandemic. We assume that the company will make capital expenditures of approximately $100 million-$110 million this year. This compares to capital expenditures of approximately $56 million in 2018 and $53 million in 2019. The company has spent substantial funds on improvements to base lodges, lift operations and increasing snowmaking capacity. We believe these investments have allowed Boyne to maintain service and cater to meaningfully more guests in the 2021/2022 ski season. Additionally, we believe the company's continued investments in its properties could increase retention of guests from year to year." Sensitivity to discretionary spending, adverse weather patterns, and the company's concentration in the North America market are key risks. Because of its high fixed-cost structure, Boyne could experience operating variability in years of poor snowfall that could increase leverage. Although the company has taken various steps over the past few years to diversify its business in the offseason through its investments in golf assets and Skylift Park in Gatlinburg, Tenn., the company generates most of revenue and EBITDA in the winter. Although we typically assume normal weather patterns, Boyne's revenue and EBITDA can be significantly reduced by poor snowfall. Rating upside would likely be predicated on S&P's belief that Boyne could withstand pressure arising from at least one of these key risks. S&P said, "The stable outlook reflects our forecast for leverage in the 5x-5.5x range in 2022, which would provide significant cushion compared to our 7x downgrade threshold, even in the event of a modest pullback in demand, potential adverse weather conditions in the remainder of the ski season and later in 2022, or increased labor costs in 2022 and 2023. "We could lower our ratings if we believe the company would sustain lease-adjusted debt to EBITDA above 7x. This would likely be the result of significantly adverse weather conditions in one or more of its major geographic regions or a significant leveraging transaction." S&P could raise the rating if: -- S&P expects the company to sustain leverage below 5x incorporating some volatility in skier visitation, revenue, and EBITDA over the economic cycle or resulting from poor snowfall; and -- S&P also believes the company would maintain leverage under 5x incorporating an expectation for modest leveraging mergers, acquisitions, or other transactions. Environmental, Social, And Governance ESG credit indicators: E-3, S-3, G-2 Environmental factors are a moderately negative consideration in S&P's credit rating analysis of Boyne. Because of climate change, Boyne is exposed to increasingly adverse weather patterns such as ski seasons with volatile or shorter winters and lower snowfall that can depress skier visitation. Additionally, increasing wildfires in the regions of Boyne's resorts could mean unforeseen costs that reduce profitability. Social factors are a moderately negative consideration. While Boyne's skier visitation did not suffer as significantly as other ski operators because of its drive-to resorts, revenue and EBITDA were still significantly impaired throughout the 2020/2021 ski season largely because of COVID-19-related capacity restrictions on its ancillary business segments. Additionally, with elevated consumer demand for outdoor activities perceived as safe, Boyne is recovering faster than the broader leisure industry. S&P said, "We believe the company could improve visitation during the 2021/2022 ski season in line with or just below prepandemic levels. We view the pandemic as a rare and extreme disruption unlikely to recur at the same magnitude, but safety and health scares are an ongoing risk." BRIGHT MOUNTAIN: Amends Credit Deal to Gets $350K Additional Loan ----------------------------------------------------------------- Bright Mountain Media, Inc. and its subsidiaries CL Media Holdings LLC, Bright Mountain Media, Inc., Bright Mountain LLC, MediaHouse, Inc. entered into an Eighth Amendment to Amended and Restated Senior Secured Credit Agreement. The Company and its subsidiaries are parties to a credit agreement with Centre Lane Partners Master Credit Fund II, L.P. as Administrative Agent and Collateral Agent dated June 5, 2020, as amended. The Credit Agreement was amended to provide for an additional loan amount of $350,000. This term loan shall be repaid on Feb. 28, 2022. About Bright Mountain Based in Boca Raton, Fla., Bright Mountain Media, Inc. -- www.brightmountainmedia.com -- is an end-to-end digital media and advertising services platform, efficiently connecting brands with targeted consumer demographics. In addition to its corporate website, the Company owns and/or manages 24 websites which are customized to provide its niche users, including active, reserve and retired military, law enforcement, first responders and other public safety employees with products, information and news that the Company believes may be of interest to them. The Company also owns an ad network which was acquired in September 2017. Bright Mountain reported a net loss of $72.71 million for the year ended Dec. 31, 2020, a net loss of $4.17 million for the year ended Dec. 31, 2019, and a net loss of $5.22 million for the year ended Dec. 31, 2018. As of Dec. 31, 2020, the Company had $36.53 million in total assets, $33.01 million in total liabilities, and $3.51 million in total shareholders' equity. East Brunswick, New Jersey-based WithumSmith+Brown, PC, the Company's auditor since 2021, issued a "going concern" qualification in its report dated Dec. 23, 2021, citing that the Company has suffered recurring losses from operations and has a net capital deficiency that raise substantial doubt about its ability to continue as a going concern. CALIFORNIA ROOFS: Seeks to Tap Michael Jay Berger as Legal Counsel ------------------------------------------------------------------ California Roofs and Solar, Inc. seeks approval from the U.S. Bankruptcy Court for the Eastern District of California to employ the Law Offices of Michael Jay Berger as its legal counsel. The firm will render these legal services: (a) communicate with creditors of the Debtor; (b) review the Debtor's Chapter 11 bankruptcy petition and all supporting schedules; (c) advise the Debtor of its legal rights and obligations in a bankruptcy proceeding; (d) work to bring the Debtor into full compliance with reporting requirements of the Office of the U.S. Trustee; (e) prepare status reports as required by the court; and (f) respond to any motions filed in the Debtor's bankruptcy proceeding. The hourly rates of the firm's attorneys and staff are as follows: Michael Jay Berger, Esq. $595 Stephen Biegenzahn, Esq. $595 Sofya Davtyan, Senior Associate Attorney $525 Debra Reed, Mid-level Associate Attorney $435 Carolyn M. Afari, Mid-level Associate Attorney $435 Samuel Boyamian, Associate Attorney $350 Gary Baddin, Bankruptcy Analyst/Field Agent $275 Senior Paralegals and Law Clerks $225 Bankruptcy Paralegals $200 The Debtor paid the firm $20,000 retainer plus Chapter 11 filing fee of $1,738. Michael Jay Berger, Esq., the sole owner of the Law Offices of Michael Jay Berger, 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 Jay Berger, Esq. Law Offices of Michael Jay Berger 9454 Wilshire Blvd., 6th Floor Beverly Hills, CA 90212-2929 Telephone: (310) 271-6223 Facsimile: (310) 271-9805 Email: michael.berger@bankruptcypower.com About California Roofs and Solar California Roofs and Solar, Inc. sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. E.D. Calif. Case No. 22-10061) on Jan. 17, 2022, listing as much as $1 million in both assets and liabilities. Carlos Colima, chief financial officer, signed the petition. Judge Rene Lastreto II oversees the case. Michael Jay Berger, Esq. at the Law Offices of Michael Jay Berger, is the Debtor's counsel. CARL MILLER FUNERAL: Seeks Chapter 11 Protection ------------------------------------------------ Jim Walsh of Cherry Hill Courier-Post reports that a funeral home founded in the 19th Century has filed for protection from creditors, citing unsecured debts of more than $1.5 million. Carl Miller Funeral Home Inc. owes more than $800,000 to New Jersey tax authorities and about $200,000 to the IRS, according to a filing in U.S. Bankruptcy Court in Camden. Its 20 largest creditors with unsecured debts include two funeral-supply firms that sued the Camden business over the alleged failure to pay its bills. The Jan. 20, 2022 filing reports assets between $50,000 and $100,000. The family-run firm, which is seeking to reorganize its finances under a Chapter 11 bankruptcy action, traces its roots to 1861. It operates on the 800 block of Carl Miller Boulevard, a street renamed in 1997 as a posthumous honor for a former funeral director. The funeral home's president, Pamela Dabney, and its attorney, Jenny Kasen of Cherry Hill, did not respond to requests for comment on the bankruptcy action. The filing describes as "disputed" all but one of the firm's debts to its largest unsecured creditors. The disputed debts have a combined total of $5.1 million. It does not dispute a $1.8 million claim from Dabney for the funeral home's lease. The business has faced multiple lawsuits in recent years, including two filed by creditors Bradbury Burial Vault Co. of Blackwood and AG Peters & Son, a funeral supply firm in Williamstown. The Chapter 11 filing lists disputed liabilities of $135,000 for Bradbury Burial Vault and about $65,000 for Peters & Son. The funeral home also faces a lawsuit over an alleged failure to embalm a man's remains in September 2018. Superior Court Judge Steven Polansky on Jan. 24 cited the bankruptcy filing in dismissing the company as a defendant in that lawsuit. But the Camden judge said the funeral home could be reinstated as a defendant "if the bankruptcy proceedings do not fully dispose of the issues" involving it. In addition, the funeral home has not satisfied a $13,500 judgment issued by a judge in a slip-and-fall case in April 2019, court records show. About Carl Miller Funeral Home Carl Miller Funeral Home, Inc., sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. D.N.J. Case No. 22-10479) on Jan. 20, 2022. In the petition signed by Pamela M. Dabney, shareholder and president, the Debtor disclosed up to $100,000 in assets and up to $10 million in liabilities. Jenny R. Kasen, Esq., at Kasen & Kasen, P.C., is the Debtor's counsel. CASA DE CAPRI: Insurer Cannot Invoke Direct Benefits Estoppel ------------------------------------------------------------- The Supreme Court of Arizona answers the first of two questions certified by the U.S. Court of Appeals for the Ninth Circuit in a garnishment proceeding. According to the Arizona Court, an insurer cannot invoke the doctrine of direct benefits estoppel to bind a judgment creditor to the terms of the insurance contract. From January 2012 to August 2013, Continuing Care Risk Retention Group insured Casa de Capri Enterprises, a skilled nursing facility. The insurance policy provided up to $1 million in liability coverage and contained an arbitration clause. Jacob Benson was a resident at Capri and is a "vulnerable adult." In December 2012, Jacob and his family sued Capri in Maricopa County Superior Court alleging negligence and abuse of Jacob. Capri sent the claim to CCRRG, which provided a defense. In August 2013, Capri filed a Chapter 11 bankruptcy petition, triggering an automatic stay of all litigation. Capri retroactively cancelled its insurance policy with CCRRG, effective August 1, 2013. CCRRG then discontinued defending Capri and disclaimed any further coverage. Three years later, the Bensons obtained an order partially lifting the bankruptcy stay so they could pursue their action against Capri. As part of the order, the Bensons obtained an assignment of Capri's bad faith insurance claim against CCRRG. In December 2017, the trial court entered a $1.5 million uncontested judgment in favor of the Bensons and against Capri. After the court entered judgment, the Bensons filed a writ of garnishment against CCRRG to collect the judgment. CCRRG removed the garnishment action to federal court and moved to compel arbitration under the policy's arbitration clause. CCRRG also disputed that it would owe any coverage to Capri because Capri cancelled the policy. The United States District Court for the District of Arizona granted CCRRG's motion to compel arbitration and dismissed the action. The Bensons appealed to the Ninth Circuit, which certified the following questions to the Supreme Court of Arizona: (1) In a garnishment action by a judgment creditor against the judgment debtor's insurer claiming that coverage is owed under an insurance policy, where the judgment creditor is not proceeding on an assignment of rights, can the insurer invoke the doctrine of direct benefits estoppel to bind the judgment creditor to the terms of the insurance contract?; and (2) If yes, does direct benefits estoppel also bind the judgment creditor to the arbitration clause contained in the insurance policy? The Supreme Court of Arizona answers the first question "no" and therefore does not reach the second question. "The common law doctrine of direct benefits estoppel cannot be invoked in a garnishment action to bind the judgment creditor to the terms of the contract because applying the doctrine in this context would contravene Arizona's statutory garnishment scheme," the Court holds. It is undisputed that insurance loss obligations can be garnished, the Court notes, citing Sandoval v. Chenoweth, 102 Ariz. 241, 245 (1967). The Ninth Circuit asks whether the doctrine of direct benefits estoppel can be applied in an Arizona garnishment proceeding as an exception to the general rule that nonparties are not bound by the terms of a contract. The Arizona Supreme Court holds it cannot. Permitting the application of direct benefits estoppel in garnishment proceedings would contravene the legislature's directive that garnishment proceedings adhere to prescribed statutory procedures, the Arizona Court says. This includes the statutory requirement that the trial court -- not an arbitrator -- resolve all factual and legal issues. The common law doctrine of direct benefits estoppel cannot be applied to supplant the legislative scheme for garnishment, the Court explains. Allowing the arbitration clause to control in a garnishment proceeding would undermine the legislature's intent that the trial court decide the issues of law and fact. Courts narrowly construe the garnishment statutes and apply them as prescribed by the legislature, citing Carey v. Soucy, 245 Ariz. 547, 551 (App. 2018). A common law equitable doctrine cannot supersede the legislature's clear mandate regarding garnishment proceedings, the Arizona Court points out. Additionally, courts in other jurisdictions have found that similarly worded garnishment provisions preclude arbitration entirely, such as in Penford Prods. Co. v. C.J. Schneider Eng'g Co., 808 N.W.2d 443, 448 (Iowa Ct. App. 2011). However, if the debt is contested, as is the case here, the judgment creditor must prove that the insurer was obligated to insure the loss under the insurance agreement. This does not mean the Bensons are bound by or effectively parties to the insurance contract, but rather they have standing to access the funds to the extent the original insured could have. The parties must necessarily refer to the insurance policy to determine the existence of a debt, but these issues must be resolved by a court. A full-text copy of the Opinion filed January 20, 2022, is available at https://tinyurl.com/bdhy8mce from Leagle.com. Justice Beene authored the Opinion of the Arizona Court, in which Chief Justice Brutinel, Vice Chief Justice Timmer, and Justices Bolick, Lopez, and Montgomery joined. The case is captioned JACOB BENSON, AN INDIVIDUAL; JOSEPH BENSON; DEBORAH BENSON, HUSBAND AND WIFE; K.B., A MINOR, BY AND THROUGH JACOB BENSON, GUARDIAN AD LITEM, Plaintiffs/Appellants, v. CASA DE CAPRI ENTERPRISES, LLC, AN ARIZONA LIMITED LIABILITY COMPANY; UNKNOWN PARTIES, NAMED AS JOHN DOES 1-20; ABC CORPORATIONS I-X; XYZ PARTNERSHIPS I-X, Defendants/Appellees, CONTINUING CARE RISK RETENTION GROUP, INC., GARNISHEE, Real Party in Interest/Appellee, No. CV-20-0331-CQ (Ariz.). H. Micheal Wright -- hmw@udallshumway.com -- David R. Schwartz (argued) -- das@udallshumway.com -- Udall Shumway, PLC, Mesa; Steven S. Guy , The Guy Law Firm, PLLC, Scottsdale, Attorneys for Jacob Benson, Joseph Benson, Deborah Benson, and K.B. Steven G. Mesaros -- smesaros@rcdmlaw.com -- Brian E. Cieniawski , Renaud Cook Drury Mesaros, PA, Phoenix; Terri A. Sutton (argued) -- tsutton@cozen.com -- Cozen O'Connor, Seattle, WA, Attorneys for Continuing Care Risk Retention Group, Inc. About Casa de Capri Phoenix, Arizona-based Casa de Capri Enterprises, LLC, filed a Chapter 11 Petition (Bankr. D. Ariz., Case No. 13-14269) on August 19, 2013. The case was assigned to Judge Eddward P. Ballinger Jr. The Debtor's counsel was Michael W. Carmel, Esq. CHICK LUMBER: Unsecureds to Get Share of Cash Flow for 10 Years --------------------------------------------------------------- Chick Lumber, Inc., filed with the U.S. Bankruptcy Court for the District of New Hampshire a Disclosure Statement pertaining to Amended Plan of Reorganization dated Jan. 31, 2022. This Plan is built around the Citizens Settlement negotiated by and among the Debtor, the Official Committee of Unsecured Creditors (the "Committee") and Citizens Bank, N.A. ("Citizens"), which obligates Citizens to actively support and vote its claims totaling $1,601,461.24 in favor of the confirmation of this Plan, including any claim held by Herget Building Supply, Inc. ("HBS") in the asserted amount of $1,116,847.95. As part of the Herget Settlement, HBS acknowledges that Citizens controls all of the claims held by HBS against the Debtor, had the right to enter into the Citizens Settlement insofar as it pertains to the HBS claims and that, insofar as the HBS claims are concerned, HBS is bound by the Citizens Settlement and has no further dividend rights or other rights, title or interests in the HBS claims and HBS Loan Documents or arising from, out of or incidental thereto. Pursuant to an Offer in Compromise made to SBA in connection with the funding and implementation of the Plan, Salvatore and Jacqueline Massa (the "Massa OIC" and the "Massas") and Citizens will enter into a written settlement agreement that resolves and settles any and all demands, causes of action, equitable and statutory rights and other claims and remedies therefor which Citizens and the Massas have or may have against each other. The Massas have agreed to sell or refinance their residence, pay to Citizens $235,197.77 from the net proceeds of the sale or refinancing after the satisfaction of senior liens and exchange mutual general releases with Citizens (except for their obligations under the Massa OIC as part of their contribution to the Citizens Settlement and new value because the payment is integral to the Citizens settlement, which cannot be implemented successfully outside of the Citizens Settlement and exchange general releases with Citizens. The Plan also provides for a resolution of all claims by and between the Debtor and the Massas and HBS, Carroll County Leasing Company ("CCLC") (the Debtor's former landlord), Makena Herget as: of the Thomas K. Herget 1983 Trust, U/I/D June 22, 1983, and Trustee of the Makena B. Herget 1983 Trust, U/I/D/ June 23, 1983 (together the "Herget Trusts") and as a Beneficiary of the Herget Trusts and all other beneficiaries of the Herget Trusts (together the "Herget Defendants") (the "Herget Settlement"). The Committee agreed that allowed unsecured claims will be paid from the Unsecured Creditors' Share of Free Standing Cash Flow as provided for in the Plan for a period of up to 120 months beginning on the Effective Date. The Goldberg Foundation ("Goldberg"), one of the Debtor's landlords, agreed to accept a payment of $10,000 and roll the balance of its post-petition rent claim into the new Lease to be entered into with the Debtor pursuant to the Plan (the "Goldberg Lease"). As a result of the agreements reached by senior creditors, the Plan gives non priority unsecured creditors a meaningful and realistic prospect of payment if this Plan is Confirmed by the Court. Class 3 consists of Non-Priority Unsecured Claims. The allowed unsecured claims total $1,967,455.88. This Class will receive a distribution of $683,840.81 dividend from ordinary income from operations. Class 4 consists of Citizens Subordinated Unsecured Claim. The allowed claims amount total $1,175,867.26. This Class will receive a distribution of $44,009.63 dividend from Free Standing Cash derived from Operations for a period of 10 years from the Effective Date. Class 5 consists of Equity Holder Interests. This Class includes Salvatore and Jacqueline Massa and all persons claiming by, through or under them. Under the Plan, the equity interest holders will retain their equity interests in the Debtor in consideration of the new value provided by them, including the payment of up to $235,197.77 of the net proceeds of the sale or refinancing of their home after the payment of all customary and usual closing costs and expenses and all amounts secured by liens senior to any lien held by Citizens and their agreement to implement the Plan. Following Confirmation, the Debtor, which may be referred to as the Reorganized Debtor, will continue to be a New Hampshire corporation. No changes will be made in its Articles of Organization or Bylaws as a result of the confirmation of the Plan. Salvatore and/or Jacqueline Massa will continue to own the issued and outstanding shares of the common, voting stock of the Reorganized Debtor following Confirmation in consideration of the new value contributed by them through the Citizens-Massa Agreement and their implementation of the Plan. A full-text copy of the Disclosure Statement dated Jan. 31, 2022, is available at https://bit.ly/34tIGOF from PacerMonitor.com at no charge. Counsel for the Debtor: WILLIAM S. GANNON PLLC William S. Gannon, BNH 01222 (NH) 740 Chestnut Street Manchester NH 03104 Tel: 603-621-0833 Fax: 603-621-0830 E-mail: bgannon@gannonlawfirm.com 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. CINEMARK USA: Moody's Affirms B3 CFR, Alters Outlook to Positive ---------------------------------------------------------------- Moody's Investors Service has affirmed Cinemark USA, Inc.'s B3 Corporate Family Rating, B3-PD Probability of Default Rating, Ba3 ratings on the senior secured debt (comprising the $100 million revolving credit facility (RCF), $634.8 million outstanding senior secured term loan facility and $250 million outstanding senior secured notes) and Caa1 ratings on the $1.17 billion outstanding senior unsecured notes. Moody's also upgraded the Speculative Grade Liquidity rating to SGL-2 from SGL-3. The outlook was revised to positive from negative. Following is a summary of the rating action: Affirmations: Issuer: Cinemark USA, Inc. Corporate Family Rating, Affirmed at B3 Probability of Default Rating, Affirmed at B3-PD $100.0 Million Gtd Senior Secured Revolving Credit Facility due 2024, Affirmed at Ba3 (LGD2) $634.8 Million Outstanding Gtd Senior Secured Term Loan B due 2025, Affirmed at Ba3 (LGD2) $250 Million 8.750% Senior Secured Notes due 2025, Affirmed at Ba3 (LGD2) $405 Million 5.875% Senior Unsecured Notes due 2026, Affirmed at Caa1 (LGD4) from (LGD5) $765 Million 5.250% Senior Unsecured Notes due 2028, Affirmed at Caa1 (LGD4) from (LGD5) Speculative Grade Liquidity Actions: Issuer: Cinemark USA, Inc. Speculative Grade Liquidity, Upgraded to SGL-2 from SGL-3 Outlook Actions: Issuer: Cinemark USA, Inc. Outlook, Changed to Positive from Negative Cinemark USA is a wholly-owned subsidiary of the parent entity, Cinemark Holdings, Inc. ("Cinemark" or the "company"), which is the financial reporting entity and guarantor of Cinemark USA's bank credit facilities. RATINGS RATIONALE The affirmation of the B3 CFR reflects Moody's expectation for continuing improvement in Cinemark's operating performance and liquidity amid growing attendance levels at the global box office combined with a strong movie slate in 2022. This will be supported by the planned release of numerous blockbuster and franchise titles as well as Moody's belief that most of the big studios will adhere to the new 45-day theatrical window for major film releases before distribution to video-on-demand (VOD) streaming platforms. Moody's expects the domestic cinema industry will achieve $7.75 - $9 billion in ticket sales this year. The SGL-2 rating reflects an improving liquidity profile supported by positive free cash flow (FCF) generation that will help sustain solid cash balances, which in turn, should alleviate reliance on debt raises to enhance liquidity. The positive outlook reflects Moody's view that strong pent-up moviegoer demand combined with the upcoming robust movie release schedule and sustained economic expansion will continue to produce increased out-of-home mobility and support organic revenue growth and expanding positive EBITDA and cash flows over the course of the year. Moody's projects US GDP will increase 4.4% in 2022 (4.4% globally) and 2.8% in 2023 (3.2% globally). The outlook also considers that Cinemark will continue to effectively manage operating expenses, which will support profit expansion. Moody's projects Cinemark's total debt to EBITDA will approach the 5.5x-6x area and positive FCF to debt will be in the 2% range by year end 2022 (all metrics are Moody's adjusted). While the impact of higher inflation in the economy could pressure margins and moderate revenue growth to some extent due to rising operating expenses and a pullback in consumer spending, Moody's recognizes that the average cost for movie tickets remains one of the most inexpensive forms of out-of-home entertainment. All of Cinemark's global theatres are currently open. Over the course of 2021, moviegoer attendance gradually improved sequentially (quarter-over-quarter) as a growing percentage of the population received vaccinations against the virus, theatres reopened and resumed operations, government capacity restrictions were eased and lifted, and studios released more new films to theatres, especially major blockbusters during the year end holiday season that led to strong results in Q4 2021. While the domestic box office delivered only $4.5 billion of gross receipts last year, equivalent to around 39% of 2019's ticket sales, during December 2021 box office receipts were 80% of December 2019's receipts, with the last week of December 2021 generating receipts equivalent to 93% of December 2019's final week sales. December 2021's results were driven by strong moviegoer turnout (domestically and globally) for Sony's super-hero action movie Spider-Man: No Way Home and represents a marked improvement from Q1 2021 when domestic receipts were only 10% of Q1 2019's ticket sales. Given the structural challenges in the cinema industry, changes in consumer movie viewing preferences and increasing number of first-run movies distributed to competing streaming platforms, Moody's does not expect domestic box office receipts in 2022 to return to the industry's high watermark of $11 - $12 billion/annum. However, due to the strong movie slate expected this year, which includes several franchise titles across film genres that generally perform well at the box office (e.g., family-oriented, adaptation, adventure, comic book/super-hero and supernatural), Moody's believes domestic ticket sales can potentially reach $7.75 - $9 billion. The forecast considers the strong box office momentum witnessed in Q4 2021 that should continue into this year. The industry will return to its historical seasonality with the majority of annual revenue generated during the April to early September box office season. There is strong pent-up demand for moviegoing, especially with new blockbuster films expected to debut in 2022, which should enable Cinemark to return to positive EBITDA and operating cash flows. With Cinemark's theatres open, more new films released and a growing number of patrons returning to the cinema, the studios will likely observe the 45-day theatrical window exclusivity for big-budget film releases. The pandemic accelerated the compression of the theatrical window from the previous 60-75 days as a result of mandated theatre closures and strong subscriber growth on studios' streaming platforms. Last year, Warner Bros.' Warner Media subsidiary decided to release its entire slate of 17 films simultaneously in theatres and on its HBO Max streaming platform in the US. This year, WarnerMedia plans to revert to the exclusivity window, a credit positive. Moody's expects Universal, Paramount and Sony will also adhere to the theatrical window. However, the wildcard is Disney, which intends to decide theatrical exclusivity on a case-by-case basis. Disney's films typically represent 35%-40% of total domestic annual movie release volume. The potential exists for Disney to increasingly segregate its film content by producing certain movies specifically designated for its Disney+ streaming platform and other films designated for theatrical release. Cinemark's B3 CFR is supported by the company's position as the third largest movie exhibitor in the US and reflects the weak, albeit improving, operating and financial performance, which suffered from pandemic-induced revenue and operating losses in 2020 and 2021, and delayed recovery when economies reopened. While Moody's expects improvement in Cinemark's operating performance, it still embeds the uncertainty surrounding Disney's adherence to the theatrical window and rising inflation concerns that could dampen moviegoer demand. Assuming Cinemark maintains close to its current 16% domestic market share, the company will likely generate positive EBITDA and FCF (Moody's adjusted) in 2022. Conversely, the rating captures: (i) the cinema industry's excess screen capacity in North America, which will eventually require reduction; (ii) comparatively lower moviegoer demand as studios simultaneously release some films online via SVOD/PVOD or release them downstream in a shortened theatrical window; (iii) lower theatrical release volumes relative to historical levels; (iv) reduced show times compared to pre-pandemic periods; and (v) the impact from some cost-conscious consumers reducing their out-of-home entertainment and number of trips to the cinema amid affordable subscription-based VOD movie viewing. The rating also considers Cinemark's elevated financial leverage, which Moody's expects to decrease to the 5.5x-6x range (Moody's adjusted) over the rating horizon. Cinemark's SGL-2 rating reflects good liquidity over the next 12-15 months supported by positive FCF generation and solid cash balances. Moody's assumes Cinemark will refrain from paying dividends and projects FCF in the $60 - $90 million range in 2022. This is chiefly due to Cinemark's EBITDA that Moody's forecasts to be lower than pre-pandemic levels and a higher interest burden arising from its leveraged balance sheet. Cash balances at September 30, 2021 were $543 million. Cash levels have remained above $500 million in recent quarters as a result of Cinemark's diminishing cash burn, which Moody's expect to cease this year. From January 2020 through September 2021, cumulative negative FCF totaled just over -$550 million. Since April 2020, Cinemark has enhanced its liquidity position via two incremental debt issuances totaling $710 million. Liquidity is further supported by an undrawn $100 million RCF maturing November 2024. The RCF has a springing maximum net senior secured leverage covenant of 4.25x that becomes applicable when the facility is drawn. Cinemark previously obtained covenant waivers from the majority of its revolver lenders through Q2 2022 to the extent the covenant is satisfied by calculating the covenant using substituted EBITDA from certain 2021 quarters with EBITDA from the respective 2019 quarters to compute LTM EBITDA beginning in Q4 2021 through Q2 2022. Since Moody's do not project RCF usage over the coming year, Moody's do not expect a covenant breach, however prior to expiration of the waiver period Moody's will closely monitor the covenant cushions under the credit facility. The company benefits from a fairly long dated capital structure, with no meaningful maturities until 2025 when the $634.8 million outstanding term loan (due March 2025) and $250 million 8.750% senior secured notes (due May 2025) mature. Given the concentrated maturity profile, Moody's expect the company to refinance some of these obligations well in advance of their maturities. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS Ratings could be upgraded if Cinemark experiences positive growth in box office attendance, stable-to-improving market share, positive and expanding EBITDA with margins approaching pre-pandemic levels and enhanced liquidity; and exhibits prudent financial policies that translate into an improved credit profile. An upgrade would also be considered if financial leverage as measured by total debt to EBITDA was sustained below 6x (Moody's adjusted) and positive free cash flow as a percentage of total debt improved to the 2% area (Moody's adjusted). Ratings could be downgraded if there was: (i) an exhaustion of the company's liquidity or an inability to access additional sources of liquidity to cover cash outlays; (ii) poor execution on reducing or managing operating expenses; or (iii) limited prospects for operating performance recovery in 2022. A downgrade could also be considered if Moody's expects total debt to EBITDA to remain above 7.5x (Moody's adjusted) or free cash flow to remain negative on a sustained basis. Headquartered in Plano, Texas, Cinemark USA, Inc. is a wholly-owned subsidiary of Cinemark Holdings, Inc., a leading movie exhibitor that operates 524 theatres and 5,897 screens worldwide with 324 theatres and 4,440 screens in the US across 42 states and 200 theatres and 1,457 screens across 15 countries in Latin America. Revenue totaled approximately $942 million for the twelve months ended September 30, 2021. The principal methodology used in these ratings was Business and Consumer Services published in November 2021. CLASSIC ACQUISITION: Seeks to Tap Grier Wright Martinez as Counsel ------------------------------------------------------------------ Classic Acquisition, LLC seeks approval from the U.S. Bankruptcy Court for the Western District of North Carolina to employ Grier Wright Martinez, PA as its legal counsel. The firm will render these legal services: (a) advise the Debtor regarding its powers and duties; (b) negotiate, prepare, and pursue confirmation of a Chapter 11, subchapter V plan and all related agreements and/or documents; (c) take all necessary action to protect and preserve the Debtor's estate; (d) prepare legal papers; (e) perform any and all other legal services for the Debtor in connection with this Chapter 11 case; (f) advise and assist the Debtor regarding all aspects of the plan and confirmation process at the earliest possible date; and (g) give legal advice and perform legal services with respect to other issues relating to the foregoing. The firm received a retainer in the amount of $20,000 from Anne Morrow, a member of the Debtor. The hourly rates of the firm's counsel and staff are as follows: Joseph W. Grier, III $625 A. Cotten Wright $425 Michael L. Martinez $385 Anna S. Gorman $375 Paraprofessionals $175 In addition, the firm will seek reimbursement for expenses incurred. Michael Martinez, Esq., an attorney at Grier Wright Martinez, 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 L. Martinez, Esq. Grier Wright Martinez, PA 521 E. Morehead St., Ste. 440 Charlotte, NC 28202 Telephone: (704) 375-3720 Facsimile: (704) 332-0215 Email: mmartinez@grierlaw.com About Classic Acquisition Asheville, N.C.-based Classic Acquisition, LLC filed a petition for Chapter 11 protection (Bankr. W.D.N.C. Case No. 21-10164) on Sept. 1, 2021, listing as much as $10 million in both assets and liabilities. Anne Morrow, a member, signed the petition. Judge George R. Hodges oversees the case. Pitts, Hay & Hugenschmidt, PA and Grier Wright Martinez, PA serve as the Debtor's legal counsels while Benjamin C. Hamrick is the Debtor's accountant. CONSTRUCTION MAX: Seeks to Hire The Peters Firm as Legal Counsel ---------------------------------------------------------------- Construction Max, LLC seeks approval from the U.S. Bankruptcy Court for the Eastern District of Pennsylvania to hire The Peters Firm, PLLC to serve as legal counsel in its Chapter 11 case. Peters Firm will charge $275 per hour for its services. The firm received a retainer in the amount of $5,000. Paul Peters III, Esq., managing attorney at Peters Firm, disclosed in a court filing that his firm does not represent any interest adverse to the Debtor or its estate. The firm can be reached through: Paul S. Peters III, Esq. The Peters Firm, PLLC P.O. Box 11227 Elkins Park, PA 19027 Phone: +1 215-291-2944 Email: ppeters@thepetersfirm.com About Construction Max Construction Max, LLC sought protection for relief under Chapter 11 of the Bankruptcy Code (Bankr. E.D. Penn. Case No. 22-10188) on Jan. 25, 2022, listing up to $500,000 in both assets and liabilities. Judge Magdeline D. Coleman presides over the case. Paul S. Peters, III, Esq., at The Peters Firm, PLLC represents the Debtor as legal counsel. DCERT BUYER: Fitch Affirms 'B' LT IDR, Outlook Stable ----------------------------------------------------- Fitch Ratings has affirmed DCert Buyer, Inc.'s (operating as DigiCert) Long-Term Issuer Default Rating (IDR) at 'B'. The Rating Outlook is Stable. Fitch has also affirmed DigiCert's $135 million undrawn first lien secured revolver and $2.04 billion first-lien term loan at 'BB-'/'RR2'and its $515 million second-lien term loan at 'CCC+'/'RR6'. The ratings reflect DigiCert's resilient business model and dominant position within the Public Key Infrastructure (PKI) and Certificate Authority (CA) markets that enable continuing growth of digitalization of information supporting growth in use cases and internet traffic. The company's technology is utilized by 89% of Fortune 500 companies and 87% of e-commerce transactions. In spite of DigiCert's strong operating profile, its private equity ownership is likely to optimize return on equity (ROE) by maintaining some level of financial leverage. This is likely to limit positive rating actions. Fitch forecasts gross leverage to remain at over 6.5x through 2024. KEY RATING DRIVERS Strong Position in Niche Segment: DigiCert has effectively consolidated the CA industry with a solid leading position and an even stronger position in the core Extended Validation (EV) and Organizational Validation (OV) segments. The industry is expected to grow in the high single digits in the near term, with EV and OV growing at near 10% and Domain Validation (DV) at mid-single-digits. Limited Technology Obsolescent Risks: With increasing information being exchanged over the internet and expanding footprint of devices, the need to ensure data security will continue to rise. Secure Sockets Layer (SSL) and Public Key Infrastructure (PKI) provide important security by authenticating devices and websites and by encrypting data transported over the internet. Fitch believes SSL and PKI technologies will be continuously enhanced, including adaptation for quantum computing, by building on the existing foundations to ensure full backward compatibility rather than being replaced by new disruptive technologies. This technological evolution tends to favor incumbents such as DigiCert. Benefits from New Access Platforms and Applications: While access to internet data has evolved from browsers to mobile applications and increasingly to Internet of Things, PKI and SSL technologies provide authentication of access devices and secure data across various access platforms. Fitch expects applications of PKI and SSL technologies to continue to grow along with new access platforms and devices. In addition, the company also anticipates future growth opportunities in emerging technologies to enable greater digital security including code signing certificates, document signing certificates, and transport layer security (TLS) management. Browser Lifecycle a High Entry Barrier: CAs need to be embedded into various available access points, which could result in new CAs being incompatible with outdated browsers and devices, as it could take five to 10 years for older access points to be eliminated from the market. Without full compatibility with all existing access points, the value of certificates issued by new CAs diminishes. Fitch believes the inability to be fully compatible is an effective entry barrier. Recurring Revenue and Strong Profitability: Consistent with historical revenue trends, DigiCert revenue is expected to be 100% subscription-based with over 100% net retention rate. Fitch expects the continuing growth in the underlying demand for CAs should provide the foundation for resilient market growth. This results in a highly predictable and profitable operating profile for the company. Given the concentrated industry structure and high entry barriers, Fitch expects DigiCert to sustain strong profitability. Ownership Could Limit Deleveraging: DigiCert is majority owned by private equity firms Clearlake and TA Associates. Fitch believes private equity ownership is likely to result in some level of ongoing leverage to optimize ROE. Fitch expects the company to gradually delever through EBITDA growth with periodic dividend recapitalization that could reset financial leverage at elevated levels. This could constrain upside in the ratings. DERIVATION SUMMARY DigiCert Holdings, Inc. is a CA that enables trusted communications between website servers and terminal devices such as browsers and smartphone applications. Increasingly, applications are expanding to include Internet of Things terminal devices. A CA verifies and authenticates the validity of websites and their hosting entities, and facilitates the encryption of data on the internet. CA services are 100% subscription-based and generally recurring in nature. DigiCert is the revenue market share leader in the space after acquiring Symantec's Website Security Services (WSS) in 2017. The merger combined DigiCert's technology platform with Symantec's large customer base resulting in a robust operating profile. The 'B' IDR reflects Fitch's view that DigiCert's gross leverage is consistent with 'B' rating category peers with solid operating profiles. Despite the strong profitability, Fitch believes the private equity ownership is likely to prioritize ROE optimization over accelerated deleveraging, resulting in gross leverage remaining elevated over 6.5x. Fitch's ratings on DigiCert reflect its view of the resilience and the predictability of DigiCert's revenue and profitability as a result of the continuing demand for trust over the internet. DigiCert has solidified its strong position in the segment as illustrated through the company's operating profile. Within the broader internet security segment, NortonLifeLock Inc. (BB+/Negative) is also a leader in its space. NortonLifeLock has larger revenue scale and lower financial leverage than DigiCert but operates in a more competitive space and does not have the market dominant position DigiCert has in its niche space as reflected in their respective profit margins. KEY ASSUMPTIONS Fitch's key assumptions within the rating case for the issuer include: -- Revenue growth in high-single-digits; -- EBITDA margins remaining stable; -- Capex at 1.0%-2.0% of revenue; -- Dividend to the sponsors of $600 million between 2022 and 2023 funded with a combination of incremental debt and cash on balance sheet; -- $50 million aggregate acquisitions per year through 2024 funded with internal cash. KEY RECOVERY RATING ASSUMPTIONS The recovery analysis assumes that DCert Buyer would be reorganized as a going-concern in bankruptcy rather than liquidated. In estimating a distressed EV for DigiCert, Fitch assumes a combination of customer churn and margin compression on lower revenue scale in a distressed scenario to result in approximately 10% revenue decline leading to a going concern EBITDA that is approximately 20% lower relative to fiscal 2020 EBITDA. As DigiCert's business model depends on the ability to provide trust supported by its technology infrastructure, customer churn could rise in times of distress. Fitch applies a 7.0x multiple and a 10% administration claim to arrive at an adjusted EV of $1,583 million. The multiple is higher than the median TMT enterprise value multiple due to the company's strong market positioning that is reflected in its profitability. In the 21st edition of Fitch's Bankruptcy Enterprise Values and Creditor Recoveries case studies, Fitch notes nine past reorganizations in the Technology sector with recovery multiples ranging from 2.6x to 10.8x. DigiCert's operating profile is supportive of a recovery multiple in the upper-bound of this range. The company's revolving credit facility and first-lien secured debt are rated 'BB-'/'RR2'. The second-lien secured debt is rated 'CCC+'/'RR6'. RATING SENSITIVITIES Factors that could, individually or collectively, lead to positive rating action/upgrade: -- Fitch's expectation of forward total debt with equity credit/operating EBITDA sustaining below 6.0x or FFO leverage sustaining below 6.5x; -- (Cash from Operations-capex)/total debt with equity credit above 6.5%; -- Stable market position as demonstrated by mid-single-digits revenue growth and stable EBITDA and FCF margins. Factors that could, individually or collectively, lead to negative rating action/downgrade: -- FFO fixed-charge coverage below 1.5x; -- Fitch's expectation of forward total debt with equity credit/operating EBITDA sustaining above 7.5x or FFO leverage sustaining above 8.0x; -- (Cash from operations-capex)/total debt with equity credit below 3.5%; -- Weakening market position as demonstrated by sustained negative revenue growth and EBITDA and FCF margin erosion. BEST/WORST CASE RATING SCENARIO International scale credit ratings of Non-Financial Corporate issuers have a best-case rating upgrade scenario (defined as the 99th percentile of rating transitions, measured in a positive direction) of three notches over a three-year rating horizon; and a worst-case rating downgrade scenario (defined as the 99th percentile of rating transitions, measured in a negative direction) of four notches over three years. The complete span of best- and worst-case scenario credit ratings for all rating categories ranges from 'AAA' to 'D'. Best- and worst-case scenario credit ratings are based on historical performance. LIQUIDITY AND DEBT STRUCTURE Adequate Liquidity: The company had $52.7 million in readily available cash at end of 3Q 2021. Fitch forecasts DigiCert to generate EBITDA near $330 million in 2021, resulting in over $150 million in readily available cash exiting 2021. Additionally, DigiCert's liquidity is supported by an undrawn $135 million revolving facility and a favorable debt maturity schedule, with the nearest term loan maturing in 2026. Liquidity may potentially be hampered by special dividends to the sponsors. Fitch assumes special dividends of $600 million in 2023; however, liquidity remains solid as DigiCert continues to generate high FCF margins. ESG CONSIDERATIONS Unless otherwise disclosed in this section, the highest level of ESG credit relevance is a score of '3'. This means ESG issues are credit neutral or have only a minimal credit impact on the entity, either due to their nature or the way in which they are being managed by the entity. ISSUER PROFILE DigiCert is a CA that enables trusted communications between website servers and terminal devices such as browsers, smartphones, and IoT devices. Since the 2017 Symantec WSS aquisition, DigiCert has been the market share leader with an estimated 65% of revenue market share. DEL MAR: Fitch Rates $37.1MM Rev. Bonds 'BB-', Outlook Neg. ----------------------------------------------------------- Fitch Ratings has affirmed Del Mar Race Track Authority, CA's $37.1 million series 2015 revenue bonds at 'BB-'. The Rating Outlook is Negative. RATING RATIONALE The rating affirmation reflects the elevated vulnerability of Del Mar Race Track Authority's operating profile, which is affected by the accelerated decline in the California horse racing industry. Fitch's rating case forecast indicates horse-racing operations will not return to historical levels due to decline in popularity, with concession revenues stemming from the county fair serving as the sole source of revenues covering the bonds, thus calling into question the continued financial viability of the facility. Although net concession revenues bolster the debt service coverage ratio (DSCR) above 1.0x through 2033, this revenue stream is dependent on the continued operations of the facility at or above historical levels, which Fitch views as uncertain over the intermediate term. The Negative Outlook reflects the accelerating decline of the California horse racing industry. Continued attendance declines would likely lead to negative rating action. The Negative Outlook also incorporates heightened event risk from a state ballot referendum that has the potential to materially affect Del Mar Race Track Authority's ongoing financial sustainability by legalizing mobile sports betting. Although one other referendum may provide financial support to the horse racing industry, the race track remains exposed to longer-term trends of declining revenues. Fitch will continue to monitor the situation and incorporate future material credit events as they arise. KEY RATING DRIVERS Revenue Risk (League): N/A (There is no premier horse racing league) Declining Fan Base - Revenue Risk (Franchise): Weaker The declining nature of the California horse racing industry, as well as exposure to adverse events at other horse tracks has led to reduced attendance and uncertainty in fan support, which has put pressure on race track revenues. Race tracks also face increasing competition for gamblers, from both internet gaming and regional casinos, which has driven a declining trend in the satellite wagering component of the authority's revenues. These weaknesses are somewhat offset by a solid service area combined with semi-diverse revenues from wagering, non-race events, and concessions, as well as management's ability to control operating expenses and find additional revenue sources to somewhat mitigate near-term declines. However, given continued deterioration of the industry, sustainability of race track revenues become less viable over the longer term. State Support Ensures Maintenance - Infrastructure Development & Renewal: Stronger Del Mar has transferred the financial responsibility of capital improvement and maintenance to the District Agricultural Association (DAA). Some ongoing projects at the race track include the renovation of an existing satellite wagering building into a multi-purpose entertainment venue as well as a water treatment plant. Favorable Provisions & Reserves - Debt Structure: Stronger Debt is 100% fixed-rate and fully amortizes by 2038 with a flat debt service profile of $3.2 million per annum. A debt prepayment feature provides accelerated prepayment of principal in the amount of 30% of pledged net revenues (subject to a $4 million cap on net Concession Revenues) that exceed 2x debt service. A second prepayment feature offers further protection if coverage test revenues (i.e. pledged revenues including all available uncapped net Concession Revenue) should fall below 2x debt service. No debt may be issued senior to the 2015 bonds, and rating agency verification will be required for any additional parity bonds. A debt service reserve fund (DSRF) is fully cash funded at maximum annual debt service (MADS). Financial Profile Fiscal 2021 performance reached 1.44x DSCR, up from 0.68x in 2020. The authority's profile is expected to produce narrow near-term financial metrics under Fitch's rating case projection, with an average indenture DSCR (inclusive of all revenues with no caps on concession revenue) of 1.21x over the next 10 years, and falls below 1.0x by FY2034. Fitch's forecast shows horse racing operations becoming permanently unprofitable beginning in 2023 with increasing losses every year, thus calling into question the facility's ability to remain open and generate race-day concession revenues over the intermediate term. PEER GROUP There are no directly comparable peers, as this is the only race track that Fitch rates. RATING SENSITIVITIES Factors that could, individually or collectively, lead to negative rating action/downgrade: -- Continued decline of net race track revenues combined with an inability to adapt operations to retain fiscal balance over Fitch's forecast horizon would lead to a downgrade; -- Legislative action that could have a material impact on horse racing interest or operations in the State of California. Factors that could, individually or collectively, lead to positive rating action/upgrade: -- Stabilization of the California horse racing industry leading to financially sustainable horse racing operations over the forecast horizon would lead to a Stable Outlook; -- Managerial or legislative action that lead to viable cost reductions and/or consistent revenue growth resulting in a stable financial profile would lead to a Stable Outlook. 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. CREDIT UPDATE As a result of the coronavirus pandemic, horse racing operations at the Del Mar Fairgrounds were significantly curtailed. Spectators were barred from attending the 2020 Summer race meet due to pandemic-related restrictions, which in turn resulted in substantial declines in concession revenues. In 2021, despite the DAA not being able to hold the customary San Diego County Fair, it was able to hold a small-scale summer event, with an attendance of approximately 272,000 over the course of 19 days. In addition, the DAA was able to hold a Summer race meet in July with a total attendance of approximately 240,000 over 31 racing days. The Del Mar Race Track also served as the host for the 2021 Breeder's Cup in November, with an attendance of approximately 47,000 over two racing days. In fiscal 2020, although pledged revenues declined by 34% to $23 million, total expenses declined at a faster pace, down 39%, resulting in slightly higher net race track revenues of $2.3 million, up from $1.1 million in 2019. This gain was offset by net concession losses of $1.2 million. Under the 2015 issuance Pledge Agreement, the DAA has pledged $4 Million of net concession revenues per bond year to the owners of the bonds. Additionally, the bonds are protected from underperformance by DMTC, as the race track receives 100% of DMTC profits, but nothing if DMTC runs at a loss. As a result, for the purposes of calculating DSCR, net concession revenues in 2020 were $0. Fitch-calculated coverage fell to 0.68x in 2020, down from 1.55x in 2019. Leverage spiked to 32x due to no cash and lower CFADS. Del Mar Racetrack Authority had negative cash on hand at fiscal year-end 2020 due to a pending scheduled annual bank transfer from DAA. This was rectified in January 2021 and is expected to be updated once fiscal 2020 audited financials are posted. On-track attendance for the summer and fall in 2021 was 40% lower than 2019 due to limited attendance restrictions. Off-track attendance was down 34% compared with 2019. Net race track revenues were $3.3 million, up from 2020s $2.3 million. Net concessions reached $1.4 million, producing a DSCR of 1.44x in fiscal 2021. In 2021, Del Mar transferred the financial responsibility of capital improvement and maintenance to the District Agricultural Association (DAA), eliminating the capital improvement plan cited in prior reviews. Some projects include the renovation of an existing satellite wagering building into a multi-use entertainment and concert venue. The facility is expected to open in 2023. There are several other sports betting ballot initiatives that may appear on the November 2022 ballot that could affect Del Mar's revenues, some positively and others negatively. These initiatives range from limiting sports wagering to in-person betting to expanding off-track betting to electronic platforms. Both of these ballot initiatives have the capability to either broaden or siphon off Del Mar's attendance and fan base. Negative developments can potentially have a material impact on Del Mar because pari-mutuel wagering encompassed 57% of total race track revenues for DMTC in 2019. FINANCIAL ANALYSIS Given that the facility has not yet fully returned to normal operations and recovered to historical levels due to the current operating environment, Fitch's rating case is also considered the base case. The differences for each case focus on the level and speed of recovery starting in 2022 and through the next several years. Fitch ran a rating and downside case incorporating the effects of the coronavirus as well as the anticipated decline in popularity and support of horse racing. Fitch's rating case assumes net race track revenues to reach 50% of historical levels in 2022 before ceasing to support debt service through the remainder of the forecast. Concession revenues incorporate the issuer's projections for 2022 and are set to return to historical levels by 2024 before declining 5.4% annually through the forecast. Under this scenario, the 10-year average DSCR is 1.21x, but falls under 1.0x by 2034. In the downside case, net race track revenues cease to support debt service from 2022 onwards. Concessions steadily return to 90% of historical levels by 2024 before declining by 5.4% through the rest of the forecast period. Under this scenario, the 10-year average DSCR is 1.13x, but falls under 1.0x by 2032. ESG CONSIDERATIONS Del Mar Race Track Authority (CA) has an ESG Relevance Score of '4' for Financial Transparency due to the continued delay in publication of audited financial statements, which has a negative impact on the credit profile, and is relevant to the rating 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. DIOCESE OF CAMDEN: Slams Abuse Claimants on Chapter 11 Discovery ---------------------------------------------------------------- Jeannie O'Sullivan of Law360 reports that a bankrupt New Jersey Catholic diocese slammed the barrage of discovery requests it received from sex abuse claimants seeking a bigger payout from its Chapter 11 case, arguing Wednesday, Feb. 2, 2022, that they're trying to stall approval of an insurance settlement that will help compensate the victims. During a status conference before U.S. Bankruptcy Judge Jerrold N. Poslusny Jr. , diocese attorney Richard D. Trenk of Trenk Isabel PC bemoaned the "voluminous" discovery requests, including subpoenas for 73 depositions of parish officials, as the parties continue to fight over compensation for the claimants. The discovery bids followed the breakdown of mediation talks last Saturday, January 29, 2022. About The Diocese of Camden The Diocese of Camden, New Jersey is a non-profit religious corporation organized pursuant to Title 16 of the Revised Statutes of New Jersey. It is the secular legal embodiment of the Roman Catholic Diocese of Camden, a juridic person recognized under Canon Law. The Diocese of Camden sought protection under Chapter 11 of the Bankruptcy Code (Bankr. D.N.J. Case No. 20-21257) on Oct. 1, 2020. Reverend Robert E. Hughes, vicar general and vice president, signed the petition. In the petition, the Debtor disclosed total assets of $53,575,365 and liabilities of $25,727,209. Judge Jerrold N. Poslusny Jr. oversees the case. The Debtor tapped McManimon, Scotland & Baumann, LLC, as its bankruptcy counsel, Eisneramper, LLP, as financial advisor, Cooper Levenson P.A. and Duane Morris LLP as special counsel. Prime Clerk LLC is the Debtor's claims and noticing agent and administrative advisor. The U.S. Trustee for Regions 3 and 9 appointed an official committee of unsecured trade creditors in the Debtor's Chapter 11 case. The committee is represented by Porzio, Bromberg & Newman, P.C. DIVINIA WATER: Files Liquidating Plan After Sale to Cellular ------------------------------------------------------------ Divinia Water, Inc., an Idaho corporation, submitted a Chapter 11 Plan of Liquidation, which contemplates a liquidation of its remaining assets for the benefit of its creditor Despite marketing efforts, the Debtor did not receive a higher or better offer for its assets than the stalking horse bid of buyer Cellular Alchemy RX. Accordingly, the Debtor was unable to conduct an auction of its assets. On Jan. 31, 2022, after the sale hearing, the Court entered an order approving the sale of the Debtor's operating assets to the Buyer under the terms of its asset purchase agreement for a net sale price of $175,000. Under the terms of the sale, the Buyer also provided value to the Debtor's Estate by assuming all of the Debtor's executory contracts, which were the basis of all secured claims against the Debtor except for the $15,000 Secured Claim of Breen and Mezzetta. Further, by the Sale Order, the Debtor was authorized to distribute $15,000 of the proceeds of the sale directly to Breen and Mezzetta, thereby satisfying their Secured Claim in full. Accordingly, the Debtor has no remaining Secured Creditors. Finally, under the terms of the asset purchase agreement, the Buyer assumed responsibility for or paid all post-Petition Date expenses of the Debtor's operations, thus satisfying all accrued administrative expenses of the Debtor's estate except Professionals' fees and costs. Under the Plan, holders of Class 2 General Unsecured Claims will be given their pro rata share of distributions as beneficiaries of the Liquidating Trust. The Liquidating Trustee shall pay holders of Allowed Class 2 Claims their Pro Rata share (subject to the Disputed Claims Reserve) as funds become available in the Distribution Account, subject to the Liquidating Trustee's discretion. When the Bankruptcy Case is closed with the entry of the final decree, the Liquidating Trustee shall distribute the net amount available in the Distribution Account Pro Rata to Holders of Allowed Class 2 Claims. Class 2 is impaired. The Liquidating Trustee shall jointly reduce all property of the Estate and causes of action to cash and distribute such cash pursuant to the provisions of this Plan. The Liquidating Trustee shall use such Cash to pay the holders of Allowed Claims until such Cash is exhausted. The Liquidating Trustee will be Matthew McKinlay of CFO Solutions, L.C. d/b/a/ Amplēo, who will be compensated for his post-confirmation services at his customary hourly rate, which is currently $295 per hour, subject to yearly increase, and such other employees and staff at their then-prevailing rates. Attorneys for the Divinia Water: Brian M. Rothschild, Esq. PARSONS BEHLE & LATIMER 350 Memorial Drive, Suite 300 Idaho Falls, Idaho 83402 Telephone: (208) 562-4900 Facsimile: (208) 562-4901 E-mail: BRothschild@parsonsbehle.com ecf@parsonsbehle.com A copy of the Plan dated Jan. 28, 2021, is available at https://bit.ly/3uakkV7 from PacerMonitor.com. About Divinia Water Divinia Water, Inc., a company that develops, bottles, and sells drinking water, filed a Chapter 11 bankruptcy petition (Bankr. D. Idaho Case No. 21-40059) on Jan. 27, 2021. At the time of the filing, the Debtor estimated assets of between $100,001 and $500,000 and liabilities of between $500,001 and $1 million. Judge Joseph M. Meier oversees the case. The Debtor tapped Parsons Behle & Latimer as its legal counsel. EDGEWATER HOLDINGS: Case Summary & Four Unsecured Creditors ----------------------------------------------------------- Debtor: Edgewater Holdings Miami, LLC d/b/a Fortuna House Apartments 14261 Commerce Way Suite 205 Hialeah, FL 33016 Case No.: 22-10882 Business Description: The Debtor is part of the traveler accommodation industry. Chapter 11 Petition Date: February 2, 2022 Court: United States Bankruptcy Court Southern District of Florida Debtor's Counsel: Carlos de Zayas, Esq. LYDECKER LLP 1221 Brickell Ave. 19th Floor Miami, FL 33131 Tel: 305-416-3180 Email: cdz@lydeckerdiaz.com Total Assets: $5,037,200 Total Liabilities: $3,695,403 The petition was signed by Daniel Marzano as manager. A full-text copy of the petition containing, among other items, a list of the Debtor's four unsecured creditors is available for free at PacerMonitor.com at: https://www.pacermonitor.com/view/6APZDGA/Edgewater_Holdings_Miami_LLC__flsbke-22-10882__0001.0.pdf?mcid=tGE4TAMA EDUCATIONAL TECHNICAL: Wins March 9 Plan Exclusivity Extension -------------------------------------------------------------- Judge Edward A. Godoy of the U.S. Bankruptcy Court for the District of Puerto Rico extended the period within which Educational Technical College Inc. has the exclusive rights to file its Disclosure Statement and secure the votes to confirm a Plan of Reorganization until March 9, 2022. The deadline to procure the votes under the plan is extended for a term of 45 days after the order conditionally approves of the Disclosure Statement. A copy of the Court's Amended Extension Order is available at https://bit.ly/3L08wLf from PacerMonitor.com. About Educational Technical College Bayamon, P.R.-based Educational Technical College, Inc. filed a voluntary petition for Chapter 11 protection (Bankr. D.P.R. Case No. 21-02392) on Aug. 9, 2021, listing $1,969,503 in assets and $1,407,201 in liabilities. Emilio E. Huyke, president of Educational Technical College, signed the petition. Judge Edward A. Godoy oversees the case. Carmen D. Conde Torres, Esq., at C. Conde & Assoc., and Dage Consulting CPA's, PSC serve as the Debtor's legal counsel and accountant, respectively. EL JEBOWL: Gets OK to Hire Tax and Accounting Services Provider --------------------------------------------------------------- El Jebowl, LLC received approval from the U.S. Bankruptcy Court for the District of Colorado to employ Sumrall & Bondy, PC to provide professional tax and accounting services. The firm will assist the Debtor in preparing and filing its tax returns and any additional tax services that may be required by the Debtor. The hourly rates of the firm's professionals are as follows: Robert C. Bondy, III, CPA $255 Tax Specialists $125 Reviewers $150 Supervisors $180 Staff $85 Robert Bondy, III, CPA, a partner at Sumrall & Bondy, 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: Robert C. Bondy, III, CPA Sumrall & Bondy, PC 8150 N. Central Express Way Dallas, TX 75206 Telephone: (972) 233-2200 Email: admin@cpadallastx.com About El Jebowl LLC El Jebowl, LLC sought Chapter 11 protection (Bankr. D. Colo. Case No. 22-10004) on Jan. 2, 2022, listing up to $100,000 in assets and up to $500,000 in liabiities. Judge Thomas B. McNamara oversees the case. The Law Offices of Kevin S. Neiman, PC and Wadsworth Garber Warner Conrardy, PC serve as the Debtor's bankruptcy counsels. Sumrall & Bondy, PC is tapped to provide professional tax and accounting services. ENDLESS POSSIBILITIES: Wins Cash Collateral Access -------------------------------------------------- The U.S. Bankruptcy Court for the Middle District of Florida, Tampa Division, has authorized Endless Possibilities, LLC d/b/a Regymen Fitness to use cash collateral in accordance with the budget, with a 10% variance. The Debtor is permitted to use cash collateral to pay: (a) amounts expressly authorized by the Court; (b) the current and necessary expenses set forth in the budget; (c) additional amounts as may be expressly approved in writing by the Lenders. The Court says expenditures in excess of the line items in the budget or not on the budget will not be deemed to be unauthorized use of cash collateral, unless the recipient cannot establish that the expense would be entitled to administrative expense priority if the recipient had extended credit for the expenditure. Expenditures in excess of the line items in the budget or not on the budget may, nonetheless, give rise to remedies in favor of the Lenders. As adequate protection for the Debtor's use of cash collateral, each creditor with a security interest in cash collateral will have a perfected post-petition lien against cash collateral to the same extent and with the same validity and priority as the prepetition lien, without the need to file or execute any document as may otherwise be required under applicable non bankruptcy law. The Debtor will maintain insurance coverage for its property in accordance with the obligations under the loan and security documents with the Lenders. A further hearing on the matter is scheduled for February 22, 2022 at 3 p.m. A copy of the order is available at https://bit.ly/34ypTlD from PacerMonitor.com. About Endless Possibilities, LLC Endless Possibilities, LLC specializes in event planning of Themed Birthday Parties, Baby Showers, Bridal Showers, Brunches, Graduation Open Houses, Weddings, Anniversaries, Family Reunions and more. The Debtor sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. M.D. Fla. Case No. 22-00259) on January 21, 2022. In the petition signed by Gretchen Mitchell, managing member, the Debtor disclosed up to $500 in assets and up to $10 million in liabilities. Scott A. Stichter, Esq. at Stichter, Riedl, Blain and Poster, P.A. is the Debtor's counsel. ENTERPRISE DEVELOPMENT: Fitch Alters Outlook on 'B+' IDR to Stable ------------------------------------------------------------------ Fitch Ratings has affirmed the 'B+' Issuer Default Rating (IDR) of the Enterprise Development Authority (EDA) and has affirmed the 'BB'/'RR2' ratings on EDA's super priority revolver and secured term loan B. The Rating Outlook has been revised to Stable from Negative. The revision of EDA's Rating Outlook to Stable reflects better-than-expected performance at the property during 2021, continued solid demand across U.S. regional gaming despite the emergence of viral variants, and Fitch having greater confidence in EDA's ability to weather the competitive Wilton Rancheria Elk Grove Resort and Casino (Wilton) at its current rating level. EDA has ample headroom relative to Fitch's 4.0x negative sensitivity at the 'B+' IDR level to absorb the competitive impact from Wilton's expected opening later this year. Though Fitch believes a portion of demand will be cannibalized away from Hard Rock Sacramento, EDA is forecasted to maintain gross leverage in the mid-3xs through 2023. KEY RATING DRIVERS Conservative Balance Sheet: EDA's gross leverage is in the low 3x range, supported by strong operating performance at the Hard Rock Sacramento and debt amortization. Fitch expects EDA to operate in the mid-3xs through 2023, looking through the competitive Wilton opening, which will cannibalize some level of demand from the property. EDA's existing competitors are also expected to be cannibalized. Limited Geographic Diversification: EDA's conservative credit metrics are offset by its limited geographic diversification, operating a single-site casino in a competitive market. Fitch views the reliance on a single property and single market as a constraint on the credit profile. Higher-rated tribal peers typically have either greater diversification or operating monopolistic positions in deeper gaming markets. Notably, Hard Rock Sacramento has performed well since opening in 2019, with a solid brand and strong manager in Seminole Hard Rock International (BBB/Stable). Competition Increasing: The Wilton Rancheria Tribe is developing a tribal casino with Boyd Gaming Corp., which is reportedly opening in late 2022. The $500 million project will be roughly 50 miles south of Hard Rock Sacramento and will cannibalize from the broader Sacramento area casinos, including Hard Rock. Fitch expects the overall impact to be manageable given the strength of the Hard Rock brand, solid operating performance, and the property having a more established player database by the time Wilton opens. Fitch assumes a 10%-15% impact to Hard Rock's gross gaming revenue from the competitive opening of Wilton Rancheria, which is manageable in the context of its credit profile. Solid Regional Gaming Demand: U.S. regional gaming recovered fully in 2021 and outpaced 2019 levels in gaming revenue for the year. The strong performance can be accredited to resilient local customer demand, even during period of increased COVID-19 cases from emerging viral variants. Hard Rock Sacramento has also benefited from solid demand, reporting consecutive quarters of gaming revenue and win-per-day metrics in-line with other high performing regional properties since mid-2020. Despite having a limited track record of operations (opened in 2019), the property has reported stable levels of performance (excluding pandemic shutdown months in 2020). Stable Tribal Governance: The Estom Yumeka Maidu Tribe has a stable tribal council and tribal governance policies, with Fitch views favorably. The Tribal Chairwoman has served in her current role for nearly 20 years and the remaining members of tribal council have an average tenure of 10 years. Fitch expects the tribe to continue to adhere to conservative financial policies, evidenced by the decision to use excess cash at the Enterprise to de-lever during the refinancing in early 2021. DERIVATION SUMMARY EDA's 'B+' rating reflects its limited geographic diversification, conservative leverage profile, and healthy expected operating performance through the upcoming competitive opening. Single-site risks are common in tribal gaming, but higher rated peers typically have more conservative financial profiles with lower leverage, a monopoly position on a state or market, or better performing assets in deeper gaming markets. Some Native American issuers in Fitch's coverage have low investment-grade ratings, due to monopolistic positions and access to more favorable feeder markets, and/or geographic diversification from expansions into commercial markets (not on tribal land). Most of these tribal peers are larger in size and have longer operating track records when compared to Hard Rock Sacramento. Enterprise operates with lower leverage than single-site peers HRNI Holdings (Standalone Credit Profile [SCP]: b-; IDR: B) and Empire Resorts (SCP: b-; IDR: B+). Enterprise also generates stronger FCF. KEY ASSUMPTIONS -- Casino performance remains above pre-pandemic levels of slot and table win per day metrics for majority of 2022. The property experiences manageable cannibalization of demand from the Wilton Rancheria tribal opening starting in late 2022, with most of the impact seen in 2023; -- EBITDA margins gradually decline from current levels as cost structure normalizes and remain relatively stable in the outer years of the forecast; -- EDA distributes a manageable amount of priority and discretionary tribal distributions that are in-line with restrictive covenants; -- Manageable levels of maintenance capex with some minor growth capex related to the entertainment center that are funded through cash flow. RECOVERY ASSUMPTIONS The recovery analysis assumes that EDA would be considered a going concern in a distressed scenario, as traditional Chapter 11 bankruptcy for tribal entities is not an option. Fitch has assumed a 10% administrative claim and for the new revolver to be fully drawn at the time of restructuring. The current Recovery Ratings contemplate $511 million of secured debt claims. Fitch's going-concern EBITDA assumption reflects a minimum level of win-per-day metrics for the casino's operations, with a small degree of non-gaming revenues, in a scenario that considers greater-than-anticipated competitive pressures and a decline in broader U.S. regional gaming revenues. An EV/EBITDA multiple of 4.5x is used to calculate a post-reorganization sustainable leverage level for EDA. Since creditors cannot force a federally recognized tribe into a bankruptcy scenario or claim equity in gaming operations, recovery typically takes form of a debt-for-debt exchange. The 4.5x EBITDA multiple is Fitch's assumption for a sustainable post-restructuring leverage after a debt exchange occurs. Fitch caps the recovery rating on the revolver at 'RR2' due to Fitch having a 'RR2' cap on Native American debt instruments' recovery ratings. The cap is based primarily on the limited legal precedent and framework of tribal restructurings and other unique considerations that would differ from traditional commercial restructurings. RATING SENSITIVITIES Factors that could, individually or collectively, lead to positive rating action/upgrade: -- Total debt to EBITDA sustaining below 2.5x; -- Fitch having a greater degree of confidence on EDA's ability to weather the Wilton Rancheria casino opening; -- Consistent FCF margin (after tribal distributions) in excess of 10%. Factors that could, individually or collectively, lead to negative rating action/downgrade: -- Total debt to EBITDA sustaining above 4.0x either due to greater than expected impacts from the Wilton Rancheria casino opening or EDA pursuing a debt-funded expansion; -- Evidence of tribal council straying from its current conservative financial policies; -- FCF margins (after tribal distributions) falling to the single-digit percent range; -- Increased risk of financial covenant violation. 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 Enterprise has a sufficient amount of cash on hand to cover debt service, required distributions, and scheduled capex. They also have full availability on the $50 million revolving credit facility. Liquidity is comfortable in the context of the rating and when compared to other tribal peers. The casino will be able to send a healthy amount of cash up to the tribe should they choose to do so (beyond the small amount of required distributions). The property was built in 2019 and capex going forward will be mainly maintenance capex following the opening of Hard Rock Live. Amortization and interest are manageable, both benefitting from the refinancing in 2021. ISSUER PROFILE The Enterprise Development Authority is an instrument of the Estom Yumeka Tribe of the Enterprise Rancheria and owns and operates the Hard Rock Hotel & Casino Sacramento at Fire Mountain in Yuba County, CA. 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. FIRST STEP TRADEMARKS: Taps McGrail & Bensinger as Legal Counsel ---------------------------------------------------------------- First Step Trademarks, LLC seeks approval from the U.S. Bankruptcy Court for the Southern District of New York to hire McGrail & Bensinger, LLP to serve as legal counsel in its Chapter 11 case. The firm's services include: i. providing legal advice with respect to the Debtor's powers and duties in accordance with the provisions of the Bankruptcy Code; ii. preparing bankruptcy schedules, reports, adversary proceedings and legal documents; iii. assisting the Debtor in the development and implementation of a plan of reorganization and otherwise in connection with the prosecution of its bankruptcy case; and iv. performing all other necessary legal services for the Debtor. The hourly rates charged by the firm's attorneys and paralegals are as follows: Partners $535 per hour Counsel $495 per hour Associates $295 - $395 per hour Paralegals $175 per hour Ilana Volkov, Esq., a partner at McGrail & Bensinger, disclosed in a court filing that his firm neither holds nor represents any interest adverse to the Debtor's estate and creditors. The firm can be reached through: Ilana Volkov, Esq. McGrail & Bensinger, LLP 888-C Eighth Avenue, Suite 107 New York, NY 10019 Tel: (201) 931-6910 Email: ivolkov@mcgrailbensinger.com About First Step Trademarks New York-based First Step Trademarks, LLC filed its voluntary petition for relief under Chapter 11 of the Bankruptcy Code (Bankr. S.D.N.Y. Case No. 21-12147) on Dec. 31, 2021, listing up to $500,000 in assets and up to $10 million in liabilities. Alexander Dulac, managing member, signed the petition. Judge James L. Garrity, Jr. oversees the case. Ilana Volkov, Esq., at McGrail & Bensinger, LLP serves as the Debtor's legal counsel. FLOWORKS INTERNATIONAL: Fitch Assigns 'B' LT IDR, Outlook Stable ---------------------------------------------------------------- Fitch Ratings has assigned a Long-Term Issuer Default Rating (IDR) of 'B' to FloWorks International LLC (FLWK) and S-I Intermediate Holdings, Inc. The Rating Outlook is Stable. Fitch has also assigned ratings of 'BB'/'RR1' to the company's $60 million ABL facility and 'B+'/'RR3' ratings to the $270 million senior secured term loan. FLWK's IDR is supported by its steady demand profile as a result of its contracted revenue, MRO-focused products and mission critical nature for its customers. These characteristics are expected to be supportive of consistently positive FCF margins in the low-single digits in FY 2022 and beyond. The ratings also consider its overall small scale of operations within the larger industrial distributor market, elevated but declining leverage post-close, and inherent risks of a highly competitive marketplace associated with the distribution business model. Fitch expects FLWK's liquidity to be adequate post-close. KEY RATING DRIVERS SemiTorr Acquisition: FLWK is planning to enter into a new $270 million senior secured term loan facility that will be used to refinance existing borrowings that were in part used to complete the acquisition of SemiTorr. This acquisition is relatively large for FLWK, adding around 20% to annual revenue while also adding a higher margin business and diversifying the company's end market exposure by adding a flow control portfolio within the high growth microelectronics and semiconductors market. Mix Shifts Away from Commoditized Products: FLWK has repositioned its product portfolio over the last few years to refocus on higher-margin valves and automation offerings. Fitch believes FLWK has largely completed repositioning its existing product portfolio; however, it will continue to be acquisitive. Acquisition targets are likely to be small bolt-on deals, though larger platform transactions may be attractive. Integration risks are typically modest and there is opportunity to leverage new products across its national footprint. Recurring Revenue Adds Stability: FLWK's operating profile benefits from its high degree of recurring revenue that moderates demand volatility associated with chemical and industrial end markets. Pro forma for the SemiTorr acquisition, about 75% of revenue is tied to maintenance, repair and overhaul, and roughly one-third of overall revenue is under multi-year contracts that dictate volumes and pricing. Further, FLWK's products are generally categorized as mission critical and are relatively small-ticket purchases for is main chemicals and refining customers where maintaining production volume is critical to customer profitability. Liquidity and Cash Flow Provide Cushion: At closing, FLWK is expected to have about $72 million of liquidity supported by cash on hand and an undrawn $60 million ABL facility. There are not expected to be any near-term debt maturities, and the planned term loan will amortize at about $2.7 million per year. FFO interest coverage is expected to be in the mid-2x to low-3.0x range, which is moderately stronger than similarly rated industrial credits. Further, Fitch expects FCF margins to be positive in the low-single digits which is also supportive FLWK's financial flexibility. The company's working capital trends, prior to the SemiTorr acquisition, had been impacted by pandemic related trends and divestitures in recent period. Fitch assumes working capital investment will continue to be regular use of cash to support organic growth. FLWK's working capital, like other distributors, is expected to be counter-cyclical, which should support cash flow through down cycles. Moderately High but Improving Leverage: Fitch expects debt/EBITDA around 5.7x at FYE 2022, which includes the full year impact of SemiTorr. The level is moderately high relative to similarly rated industrial credits. The terms of the bank facilities are not expected to carry maintenance financial covenants. Fitch expects leverage to improve toward the low-5.0x over the forecast. Capital deployment priorities are focused on organic and M&A investments, with debt repayment as a secondary objective. Fitch's forecast does not assume a large debt funded transaction or shareholder distributions. Business Model Risks Moderated: The credit profile is limited by the company's small scale relative to the broader industrial distributor space as well as it's lower value-add position in the supply chain as a distributor. FLWKs has a leading yet niche market position that leaves exposure to competitive disruptions in core product lines. These concerns are balanced against the good diversification of customers and suppliers where no customers account for 10% or more of revenue and only one supplier accounts for approximately 10% of purchases. Profitability Reflective of Business Model: EBITDA margins reflect FLWK's business model as a distributor, and are expected to remain in the mid-single digits. Fitch does not anticipate significant operating leverage as a result of its highly variable cost structure. Fitch predicts FCF margins maintained around the low-single digits, though working capital fluctuations could drive FCF lower or higher during business cycle turns. DERIVATION SUMMARY FLWK compares favorably with other similarly rated industrial distributors in terms of its high proportion of recurring revenue and well-diversified mix of customers and suppliers. FLWK has significant exposure to the refinery and chemical end markets where its sales are driven by production volumes. The industrial distributor market is highly fragmented, and Fitch considers FLWK's to have a niche market position. Comparably, Wesco International (BB-) has a top market position in the electrical distribution industry and significantly larger scale. Fitch expects FLWK's debt/EBITDA to improve from 5.7x in FY2022 to around 5.0x in the medium term. While Wesco is integrating the large Anixter acquisition, debt/EBITDA is expected to decline to approximately 4.0x by FYE 2022. FCF margins are similar across the two businesses, and are expected to be in the low-single digits going forward. KEY ASSUMPTIONS Fitch's key assumptions within the rating case for the issuer include: -- Revenue reaches $700 million in FY 2022, after considering SemiTorr, and organic growth is sustained in the mid-single digits; -- EBITDA margins step up to nearly 7% in FY 2022, adding the higher margin SemiTorr. Profitability remains stable over the medium term; -- Working capital swings moderate from the last few years as the company has exited less desirable business and products; -- The company remains acquisitive, completing various bolt-on deals; -- No large debt-funded M&A or shareholder distributions are assumed. RECOVERY ANALYSIS The recovery analysis for FLWK reflects Fitch's expectation that the enterprise value (EV) of the company, and recovery rates for creditors, would be maximized as a going concern rather than through liquidation. Fitch has assumed a 10% administrative claim. A going concern EBITDA estimate of approximately $37 million reflects Fitch's view of a sustainable post-reorganization EBITDA. Fitch considers a bankruptcy scenario that could be caused by a combination of one or more of the following: heightened competitive intensity leading to sustained pressures on profitability and cash flow or a liquidity event potentially driven by working capital challenges or large corporate actions. The going-concern EBITDA of $37 million is about 20% below Fitch-calculated PF EBITDA. An EV multiple of 6.0x is used to calculate the post-reorganization valuation. The multiple considers precedent transactions for industrial distributors, including the acquisition of SemiTorr for about 10x FYE2021 EBITDA. The multiple also considers favorable characteristics such as the high proportion of recurring and contracted revenues, as well as the customer and supplier diversification. The multiple is in line with the cross-sector corporate median of 6.1x. The $60 million ABL facility is assumed to be 100% drawn upon default. The ABL is senior to the term loan in the recovery waterfall. The analysis results in an 'RR1' for the ABL facility and 'RR3' for the term loan, corresponding to above average recovery prospects. RATING SENSITIVITIES Factors that could, individually or collectively, lead to positive rating action/upgrade: -- Fitch believes an enhanced resilience of FLWKs operating and cash flow profile will be the main catalyst for a positive rating action; -- Reduced cash flow volatility as a result of some combination of increased scale, proportion of contracted revenue or continued diversification of end markets; -- Demonstrated adherence to a conservative financial policy supporting debt/EBITDA sustained below 5.0x and FFO interest coverage above 3.0x. Factors that could, individually or collectively, lead to negative rating action/downgrade: -- A change in recurring revenue profile leads to an inability to generate consistent FCF and heightened liquidity risk; -- Aggressive capital deployment actions that lead to debt/EBITDA sustained above 6.0x and FFO interest coverage below 2.0x. BEST/WORST CASE RATING SCENARIO International scale credit ratings of Non-Financial Corporate issuers have a best-case rating upgrade scenario (defined as the 99th percentile of rating transitions, measured in a positive direction) of three notches over a three-year rating horizon; and a worst-case rating downgrade scenario (defined as the 99th percentile of rating transitions, measured in a negative direction) of four notches over three years. The complete span of best- and worst-case scenario credit ratings for all rating categories ranges from 'AAA' to 'D'. Best- and worst-case scenario credit ratings are based on historical performance. LIQUIDITY AND DEBT STRUCTURE Total liquidity at the close of the transaction is expected to be $72 million, including $12 million of cash on hand and $60 million of undrawn availability under the ABL facility. Term loan amortization is expected to be $2.7 million per year. The term loan is expected to mature in 2029. ISSUER PROFILE FLWK is a specialty distributor of flow control products such as valves, actuators and pumps. It primarily serves chemical, refinery and industrial end markets. The recent acquisition of Semitorr adds a platform for microelectronic and semiconductor markets. SUMMARY OF FINANCIAL ADJUSTMENTS Fitch has made no material adjustments that are not disclosed within the company's financial documents. 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. FRANK LARISCEY, JR.: Sale of Augusta Property for $61K Approved --------------------------------------------------------------- Judge Susan D. Barrett of the U.S. Bankruptcy Court for the Southern District of Georgia authorized Frank Lariscey, Jr., to conduct the sale of his real property located at 2018 Warren Street, Augusta, Georgia 30904, for the sales price of $61,000. All proceeds will be paid to the Trust Account of counsel for the Debtor, Hall & Navarro, LLC, maintained at Truist Bank until further order(s) of the Court. The bankruptcy case is In re: Frank Lariscey, Jr., Case No. 21-10495-SDB (Bankr. S.D. Ga.). FREDERICK LLC: Court Modifies Order Approving Sale of All Assets ---------------------------------------------------------------- Judge Elizabeth D. Katz of the U.S. Bankruptcy Court for the District of Massachusetts approved The Frederick, LLC's request to modify the Asset Purchase Agreement dated June 8, 2021, relating to the sale of substantially all assets to Shared Estates Asset Fund I, LLC. No objections have been filed. The Modification Agreement provided, in salient part, as follows: a. The Mortgagee will be paid $2.55 million from the Asset sale closing proceeds. b. At closing, the Purchaser will deliver a Promissory Note to the Mortgagee in the original principal amount of $300,000, payable in 60 monthly payments of $5,000 plus interest at LIBOR plus 13% per annum. c. The Debtor will not be entitled to 5% of any net profits from the ongoing business operation of the Assets. d. The Mortgagee will be entitled to 0.625% of the net profits from the ongoing business operation of the Assets. e. Upon the payment of $2.55 million, the delivery of the signed Promissory Note, and the recording of the deed from the Debtor to the Purchaser, all obligations of the Debtor, its principals, managers and members to the Mortgagee under any notes, mortgages, loan agreements, guaranties or any other documents evidencing or securing the debt from the Seller to Mortgagee will be deemed satisfied in full and the Debtor will have not further obligation to Mortgagee and will be released from all obligations to Mortgagee. f. The financing contingency is amended to provide the Purchaser 30 days from Court approval of the Modification Agreement to obtain a loan commitment. g. The Modification Agreement is subject to Court approval. h. In the event that Modification Agreement is not approved by the Court, the Debtor seeks to reject the APA as amended by the Modification Agreement, or the Debtor defaults under the Agreement by failing to consummate the transaction, the Purchaser reserves its rights to seek a breakup fee and the Debtor reserves the right to object to such breakup fee. About The Frederick, LLC The Frederick, LLC owns and operates the Kemble Inn, a nine-guestroom mansion built in the 1880s, and Table Six, a fine dining restaurant and bar, located in Lenox, Massachusetts. It sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. D. Mass. Case No. 21-30240) on June 28, 2021. In the petition signed by Scott M. Shortt, manager, the Debtor disclosed up to $10 million in both assets and liabilities. Judge Elizabeth D. Katz oversees the case. Andrea M. O'Connor, Esq., at Fitzgerald Attorneys At Law, P.C. is the Debtor's counsel. GARDA WORLD: Fitch Assigns BB+ Rating on New $700MM TLB Issuance ---------------------------------------------------------------- Fitch Ratings has assigned a rating of 'BB+'/'RR1' to Garda World Security Corporation's (GW) new USD700 million Term Loan B issuance. GW intends to use net Term Loan B proceeds to fund the acquisition of Texas-based Tidel Engineering, a cash management product provider which provides smart safes, cash recyclers, and related software-embedded products. Fitch believes this acquisition will strengthen the company's offering in North American cash management services, and expects GW to continue to follow its current strategy of growing its platform via targeted M&A. Fitch views this transaction as credit neutral, with pro forma leverage increasing by about 0.1x, which remains within Fitch's expectations. KEY RATING DRIVERS Limited Coronavirus Impact: GW has performed quite well through the pandemic, with increased demand in some areas (security services at pharmacies, healthcare providers, governments, financial institutions and grocery retailers) offsetting declines in other areas (event management). Its staffing level is higher now than pre-pandemic, and management reports it has been able to pass on price increases to clients. The company continues to sign new business and has been able to increase margins due to a combination of cost control and pricing power in some segments. Opportunistic M&A Approach: GW operates under an opportunistic financial policy that includes pursuing debt funded acquisitions, most recently Tidel Engineering. The company notes that these acquisitions are typically executed at deleveraging multiples. The company has completed more than 20 M&A transactions over the past three years, significantly contributing to its 40% revenue growth since 2018. In February 2021, GW dropped its bid to acquire much larger European rival G4S PLC, which would have been a transformative transaction for the company. Highly Leveraged Financial Structure: Following the 2018-2019 UAS and Whelan acquisitions, as well as several tuck-ins, leverage peaked over 7x in 2019 before receding to the low-6x range currently. The company delevered more quickly than Fitch expected during 2020-21 due to higher EBITDA margins, partly offset by a rebound in M&A spend. Fitch expects leverage to remain around the high-5x to low-6x range as EBITDA margins normalize. U.S. Security Services Entry: Starting with the UAS and Whelan acquisitions in 2018-2019, GW has begun to ramp up its footprint in the $25 billion U.S. security sector. This market has three large players (AlliedUniversal & G4S with a 36% share, and Securitas with 18%) and is otherwise fragmented. Management believes it can achieve scale quickly noting its U.S. customer retention rates are much higher than competitors. GW is already the top player in the C$2.5 billion Canadian security market. BC Partners Investment: In October 2019, BC Partners completed its purchase of a 51% interest in GW, valuing the company at C$5.2 billion. The management team, including founder & CEO Stephan Cretier, holds the remaining 49%. BC Partners is an established firm, which has raised over EUR25 billion in capital. BC Partners's investment in GW is predicated on buying into an entrepreneurial management team, which operates in an industry with favorable tailwinds. Management has increased its share of ownership to 49% presently from 26% when it was taken private in 2012, and Fitch continues to view this alignment of interests between the two ownership groups positively. Profitability Improvements: GW has grown its EBITDA margins consistently through a time of expansion, from 11% in 2011 to 15% in 2021, demonstrating its expertise in acquiring at reasonable multiples and integrating those acquisitions effectively. The Tidel acquisition is expected to be margin accretive. Margin improvements to date are driven by recent pricing increases as well as slight synergies from recent acquisitions. Strong Competitive and Market Position: GW is a leading provider of cash management and Security services, and its industry leading retention rates position it well to defend and grow its share. Although the company faces strong competition from several other large multinational competitors, GW continues to increase its size and scale to compete effectively against its peers. The security services market has been growing at a healthy rate, and Fitch expects further growth at least through the medium term. Solid Diversification: GW has good diversification given its large market positions in both Security and Cash Services segments. Additionally, within each segment, the company's end market exposure is diverse including exposure to natural resources, property management, retail, restaurants, financial institutions, healthcare, government agencies and special events. DERIVATION SUMMARY GW can be compared to The Brink's Company (BB+/Stable), a direct competitor in the Cash Services segment. Compared to Brink's, GW has significantly higher leverage and a more aggressive M&A strategy. KEY ASSUMPTIONS Key assumptions of the Fitch Base Case include: -- Revenue growth reflects mild organic improvements as well as a full year contribution from acquisitions. Organic growth is forecast to be 2% in Cash Services and 3% in Security Services. -- EBITDA margin improvements during 2020-21 were partly driven by pandemic effects, which Fitch expects to moderate during the next year. Margins are forecast to moderate, as improvements in increased fixed cost leverage are offset by integration costs under the M&A program. -- The company maintains positive FFO and FCF through the period, as working capital needs are limited. -- Capex is estimated in the $140 million - $160 million range. -- Total net debt/EBITDA is forecast around the high 5x-low 6x range over the next several years as the company profitable integrates acquisitions. Recovery Assumptions: The recovery analysis assumes that GW would be reorganized as a going concern in bankruptcy rather than liquidated. Fitch has assumed a 10% administrative claim. Fitch estimates GW's GC EBITDA at $600 million. This reflects pro forma adjustments for cash flows added via acquisitions including Tidel. The GC EBITDA estimate reflects Fitch's view of a sustainable, post-reorganization EBITDA level upon which Fitch bases the enterprise valuation. This estimate reflects a potential weakening of the cash services market and/or the loss of several significant customers. It also reflects corrective measures taken in the reorganization to offset the adverse conditions that triggered default such as cost cutting, contract repricing and industry recovery. Fitch assumes GW would receive a GC recovery multiple of 6.5x in this scenario. This multiple is applied to the GC EBITDA to calculate a post-reorganization enterprise value (EV). This multiple reflects: According to industry information, most of the large transactions announced over the past 15 years have indicated average purchase price values in the 8x-9x EBITDA range, while smaller acquisitions tend to have mid- to high single-digit multiples. -- GW's experience of acquiring small industry players in the 4x 6x range post synergies, and the larger Whelan acquisition at a multiple of 12x. -- Ultimately GW's 6.5x multiple is driven by the company's size and scale and by comparable EV valuations among security and cash service providers. Fitch's recovery scenario assumes GW's revolver is fully drawn. These assumptions generate a 'BB+' rating and an 'RR1' Recovery Rating for the senior secured debt and a 'B-' rating and 'RR6' Recovery Rating for the senior unsecured debt. RATING SENSITIVITIES Factors that may, individually or collectively, lead to positive rating action/upgrade: -- An upgrade is unlikely in the near term without a significant and sustained decrease in debt/EBITDA and a more coherent financial policy; -- Total debt/EBITDA sustained below 5.0x; -- Maintaining an FCF margin above 4%; -- Maintaining an EBITDA margin above 13%. Factors that may, individually or collectively, lead to negative rating action/downgrade: -- Pro forma total debt/EBITDA sustained above 6.5x; -- Debt funded shareholder-friendly activity, or a significant acquisition which weighs upon credit metrics; -- Sustained decline in EBITDA margin to below 10%; -- FFO fixed charge coverage sustained below 1.5x. 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 Adequate Liquidity: The company has adequate liquidity with a pro forma post-transaction cash balance around $363 million and full availability under its $335 million revolver. Fitch expects GW to continue to generate positive free cash flow of around $200 million annually. With no material debt maturities until 2026, Fitch views liquidity to be adequate. Debt Structure: Pro forma for the transaction, the company has $3.5 billion of debt at the senior secured level consisting of its USD570 million senior secured notes maturing 2027, USD$1.4 billion senior secured TLB maturing 2026, USD700 million senior secured TLB maturing 2029, and an undrawn $335 million revolver maturing in 2024. The company's senior unsecured debt balance of $1.4 billion consists of the USD604 million unsecured notes maturing 2027, USD500 million unsecured notes maturing 2029 and $29 million in other unsecured debt. ISSUER PROFILE Garda World is a global supplier of cash management and security services, with a focus on North America. 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. GARDA WORLD: S&P Assigns 'B' Rating on New US$700MM Term Loan B --------------------------------------------------------------- S&P Global Ratings assigned its 'B' issue-level rating and '3' recovery rating to Garda World Security Corp.'s proposed US$700 million term loan B due 2029. The '3' recovery rating indicates S&P's expectation for meaningful (50%-70%; rounded estimate: 60%) recovery in its simulated default scenario, resulting in an issue-level rating that is the same as its 'B' issuer credit rating on the company. The new term loan B will rank pari passu with the existing secured debt, which is composed of a revolving credit facility due 2024, a term loan due 2026, and secured notes due 2027. Garda intends to use the debt proceeds primarily to acquire Tidel Engineering, L.P., a U.S.-based automated cash management systems provider. S&P said, "We believe that Tidel's high-margin and recurring revenue offering in an attractive growth subsegment complements Garda's existing cash services business. We estimate the acquisition will meaningfully expand the company's EBITDA base and will be largely leverage-neutral." S&P said, "All other ratings on Garda are unchanged, including our 'B' long-term issuer credit rating with a stable outlook. The stable outlook reflects our expectation that Garda's credit measures will remain relatively stable over the next two years, including adjusted debt to EBITDA of about 8x and adjusted funds from operations cash interest coverage of about 2x." ISSUE RATINGS-RECOVERY ANALYSIS Key analytical factors -- S&P has updated its recovery analysis for the proposed debt transaction and assigned a '3' recovery rating and a 'B' issue-level rating to Garda's proposed US$700 million term loan B due 2029. -- The '3' recovery rating on the company's existing secured debt (term loan due 2026, credit facility due 2024, and secured notes due 2027) are unchanged. The '3' recovery rating indicates its expectation for meaningful (50%-70%; rounded estimate: 60%) recovery in the event of default. -- The '6' recovery rating on the company's senior unsecured debt (senior notes due 2027 and 2029) indicates its expectation for negligible (0%-10%; rounded estimate: 0%) recovery in the event of default. -- S&P said, "Our simulated default scenario contemplates a default in 2025, stemming from loss of customer contracts, heightened competition, and margin erosion caused by an unexpected increase in costs. We believe these factors could pressure Garda's ability to meet its financial obligations, prompting the need for a bankruptcy filing or restructuring." -- S&P said, "Our recovery analysis assumes a net enterprise value for the company of about C$2.1 billion, reflecting emergence EBITDA of about C$400 million and a 5.5x multiple. Our emergence EBITDA now reflects the expected contributions from Tidel and the acquisitions completed in 2021." -- S&P assumes that, in our hypothetical bankruptcy scenario, the US$335 million revolving credit facility is 85% drawn. Simulated default assumptions -- Simulated year of default: 2025 -- EBITDA at emergence: About C$400 million -- EBITDA multiple: 5.5x Simplified waterfall -- Net enterprise value (after 5% administrative costs): C$2.11 billion -- Obligor/non-obligor valuation split: 100%/0% -- Total value available to secured first-lien debt claims: C$2.11 billion -- Secured first-lien debt claims: C$3.5 billion --Recovery expectations: 50%-70% (rounded estimate: 60%) -- Total value available to unsecured claims: 0 -- Senior unsecured debt/pari passu unrecovered secured claims: C$2.88 billion --Recovery expectations: 0%-10% (rounded estimate: 0%) Note: All debt amounts include six months of prepetition interest. GIRARDI & KEESE: Erika Knew of Fraud, Crash Lawyer Claims --------------------------------------------------------- Ryan Naumann of Redar Online reports that Real Housewives of Beverly Hills star Erika Jayne knew about her husband Tom Girardi's alleged Ponzi scheme, the lawyer representing the orphans and widows screwed out of $2 million by the once-respected lawyer claims. Girardi represented a group of family members who lost their loved ones in a Boeing plane crash. Jayne's husband scored them a multi-million dollar settlement in the legal battle. However, they claim he used their money to fund his lavish lifestyle with the RHOBH star. They claim to have financial records proving Girardi directly used their money to pay bills for Jayne's company EJ Global. 'The Real' Host Loni Love Accuses Erika Jayne Of Claiming Black People Believe Her Over White People Amid Embezzlement Scandal The case was originally filed in federal court in Illinois. Recently, all the parties involved in the case agreed that the lawyer representing the orphans would dismiss the claims against Jayne in Illinois but would refile the case in California -- to make it easier since Jayne lives in Los Angeles. A tabloid magazine posted a story over the weekend making it appear Jayne had been fully dismissed from the embezzlement case. Jayne, her longtime publicist and her friend Mikey all decided to repost the story to push a false narrative that the reality star was in the clear. The problem not only is the lawsuit being refiled in the near future but the lawyer says he has uncovered additional evidence that he believes proves Jayne knew about Girardi's financial misdeeds but did nothing. Jay Edelson -- the lawyer representing the family members -- released a statement about filing an amended lawsuit against Jayne that he promises will be explosive. He spoke to podcast host Ryan Bailey about the new suit. He said, "The new complaint we are going to file is going to be fairly explosive. We have now gotten information from Bravo through our case, including unaired footage, as well as evidence from the Bankruptcy Trustee. We feel very confident that we will be able to prove to a jury that Erika knew about Tom's fraud and directly benefited from it." For her part, Jayne denies having any knowledge of her estranged husband's activity and claims she had no role in his law firm. Bank records show the firm owes around $101 million to various creditors. The Bravo star is also facing a $25 million lawsuit demanding she returns money Girardi used from the firm's account to pay for Jayne's bills. The trustee presiding over the bankruptcy is also demanding she return a pair of $1.4 million diamond earrings. Jayne has refused to give them up and is gearing up for a fight despite many of Girardi's former clients being owed millions. 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 GOPHER RESOURCE: S&P Affirms 'B' ICR, Off CreditWatch Negative -------------------------------------------------------------- S&P Global Ratings removed Gopher Resource LLC's ratings from CreditWatch, where S&P placed them with negative implications on March 30, 2021. At the same time, S&P affirmed its 'B' issuer credit rating and its 'B' rating on Gopher's senior secured term loan; the '3' recovery rating on the term loan is unchanged. The negative outlook reflects the potential for leverage to remain elevated if operational issues at the company's Tampa facility persist. While uncertainties remain, we believe the risk of a material operational and financial disruption to Gopher is reduced following the completion of the Occupational Safety and Health Administration's (OSHA's) and the local Environmental Protection Commission (EPC's) investigations and the resulting fines. Gopher is facing monetary fines of $312,000 from OSHA and a potential fine of up to $518,000 from the EPC. However, the outcome of pending civil litigation is unknown at this point and could take several years to resolve. As of Sept. 30, 2021, Gopher had liquidity of $22 million in cash and $30 million of availability under its revolver (maturing March 1, 2023). While the two investigations did not lead to any production stoppages, they demonstrate the risks of closure Gopher faces by operating in the heavily regulated lead-acid battery recycling industry. This is due to the strict safety and environmental requirements and the public's perception of risks associated with lead. The company's highly concentrated operating footprint--with just two facilities--further exacerbates this risk. While robust demand from battery producers and a shortage in lead battery recycling capacity should support a recovery in production and earnings, any further disruptions could lead to leverage sustained above 6x. Gopher's leverage remains above 6x following two years of production issues. Other risks to cash flow and credit metrics could come from incremental expenses to address any investigation findings or elevated legal fees and professional services fees from legal and public relations issues. However, absent any further developments or disruptions, S&P anticipates Gopher's production should return above 300,000 tons of refined lead in 2022. This follows lower production of 284,000 tons in 2020 due to the Tampa plant closure as a result of the COVID-19 pandemic and an estimated 295,000 tons in 2021 due to lengthy onsite inspections disrupting daily operations. Gopher is operating in an industry that is short of capacity at a time when demand is strong, leading to full order books and customers paying premiums to secure supply. However, Gopher's ability to achieve reliable production remains a key risk to capitalizing on these supportive market conditions. Gopher's earnings should stabilize in 2022, but headwinds from overall inflationary pressure and labor shortages could affect production and earnings. Absent any additional production disruptions, S&P's forecast Gopher will generate about $70 million of EBITDA in 2021 and $75 million-$85 million in 2022. This translates to leverage of about 5.5x-6x. Gopher should continue to enjoy solid demand, full order books, and price increases due to the deficit of battery recycling capacity in North America and the high recycling rate for lead batteries. As a low-cost lead battery recycler in North America, with a 15% market share, Gopher is well-positioned to benefit from the tight refined lead market. However, the company still faces headwinds in 2022 from input cost inflation and labor shortages, which could result in a production shortfall. Although Gopher has limited exposure to lead price volatility, its high fixed costs mean it's highly sensitive to volume changes, meaning modest production disruptions can affect the company's margins materially. The negative outlook reflects the potential for leverage to remain elevated if operational issues at Gopher's Tampa facility persist. While the financial impact from the OSHA and EPC investigations has been manageable, the outcome of pending civil litigation is unknown at this point and could take several years to resolve. S&P could lower the rating if it anticipates weaker earnings and cash flow resulting in leverage sustained above 7x. This could result from the following: -- One of its two facilities goes offline for an extended period, or it faces further environmental or safety standards scrutiny. -- Higher-than-anticipated capex resulting from the investigations or elevated legal and professional services fees from legal and public relations issues. -- More aggressive financial policies, such as additional debt-financed distributions. S&P could revise the outlook to stable if the company: --Is able to ramp-up run-rate production and manage cost inflation pressure at its Tampa facility, leading to leverage returning below 6x. -- Reports a better-than-expected improvement in its productivity at Tampa, leading to more stable, reliable production and lower operational volatility. ESG credit indicators: E-4, S-3, G-3 Environmental factors are a negative consideration in S&P's credit rating analysis of Gopher. Gopher participates in the lead-acid battery recycling industry, which is heavily regulated due to its potential environmental impact. A key constraining factor in its rating currently is a potential disruption in operational and financial performance due to the stringent environmental regulation its faces and the concentration in Gopher's operating footprint. These risks are a characteristic of the industry broadly, and other operators have had facilities shuttered due to environmental considerations. Social factors are a moderately negative consideration due to the hazardous nature of the materials employees are exposed to. The concentration in Gopher's footprint and the risk that environmental and safety factors could influence the company's earnings and creditworthiness were demonstrated by the 2021 investigations due to reports alleging inadequate safety measures at one of its sites earlier. Governance factors are 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, in line with its view of the majority of rated entities owned by private-equity sponsors. GRAIL SEMICONDUCTOR: Court Trims Down Sedgwick Suit --------------------------------------------------- Each party in the case captioned SEDGWICK FUNDINGCO, LLC, Plaintiff, v. MITCHELL NEWDELMAN et al., Defendants, 18-02180 HSL-2 (Bankr. E.D. Calif.), is a creditor of debtor Grail Semiconductor: (1) plaintiff/counter-defendant Sedgwick FundingCo, LLC, an affiliate of Gerchen Keller Capital, LLC; and (2) defendants/counter-claimants Willis "Woody" Higgins, Mitchell NewDelman, and Frank Holze. At stake is $2.1 million on deposit with the Clerk of the Court, which are remnant funds from a now completed Chapter 7 bankruptcy by Grail Semiconductor. Insofar as Sedgwick is concerned, also at stake is potential additional liability to the NewDelman Group of upwards of $2.85 million for breach of contract and/or common law torts. The source of the controversy is an intercreditor agreement between the parties. Intercreditor agreements are contracts between creditors of a common debtor that re-order or, in some cases, confirm each creditor's rights vis-a-vis other creditors. Sedgwick contends it holds a superior right to the disputed funds by virtue of the intercreditor agreement. In contrast, the NewDelman Group contends Sedgwick owes it money for breach of the intercreditor agreement and/or for common law torts (including conspiracy to commit fraud by concealment) arising out of that agreement. The disputed funds are the proceeds of prepetition state court litigation by the debtor. Grail Semiconductor sued a competitor, Mitsubishi Electric & Electronics USA Inc., for breach of a non-disclosure agreement; that litigation consumed it for eight years. Grail Semiconductor was represented by the law firm of Niro, Haller and Niro. After seven years of litigation, Grail Semiconductor needed additional funds to continue the fight; so, it took a secured loan from Gerchen Keller and/or Sedgwick using future proceeds of the Mitsubishi Electric action as collateral. As a part of Gerchen Keller's agreement to fund that loan, it demanded that existing secured creditors subordinate their rights to payment from litigation proceeds. Gerchen Keller and the NewDelman Group attempted to enter into a pre-settlement intercreditor agreement, known as the "Priority Agreement," for the division of the Mitsubishi Electric litigation proceeds. Bankruptcy Judge Frederick E. Clement explains that he uses the word "attempted" purposefully because Gerchen Keller, who last signed the agreement, added "Sedgwick FundingCo, LLC" as a party to, or third party beneficiary of, the agreement after all other parties had signed it. The record does not indicate that the NewDelman Group ever accepted the changed terms of the agreement. The Priority Agreement designated the Niro firm to receive litigation proceeds into its client trust account and instructed that firm to pay those monies out to Sedgwick and to the NewDelman Group. And the Niro firm agreed to do so. Indeed, the Mitsubishi Electric litigation did settle. But the amount of the settlement was not sufficient to pay all signatories to the Priority Agreement the amounts due them. And, unfortunately, the Priority Agreement was facially ambiguous as to how the Niro firm should distribute proceeds in the event of insufficiency. By describing Sedgwick as a "Second Priority" creditor and the NewDelman Group as a "Third Priority" creditor the agreement could reasonably be construed to require payment in full to Sedgwick before making any payment to the NewDelman Group. But the agreement also required the Niro firm to pay Sedgwick and the NewDelman Group "concomitantly" (at the same time) and in "pari passu" (at an equal rate) suggesting simultaneous, pro-rata payment of all parties from available funds. Aware that the settlement would not pay the Niro firm's fees and all signatories of the intercreditor agreement the full amounts due them, Grail Semiconductor, Sedgwick, the Niro firm, and their principals cut a side deal for immediate and full payment of Sedgwick. The side agreement was reduced to writing, known as a "Letter of Intent." The Letter of Intent, and the Niro firm's actions to implement it, satisfy all elements of a civil conspiracy for which Sedgwick is liable. The Niro firm's actions to carry out the Letter of Intent satisfy most of the elements of fraud by concealment. Having already agreed in the Priority Agreement to receive and disburse litigation proceeds to the signatories to the agreement, the Niro firm acted as the signatories' (including the NewDelman Group) agent with respect to those proceeds and owed them fiduciary duties, including the duty of full disclosure. Notwithstanding that obligation, the Niro firm did not inform the NewDelman Group of the terms of the Letter of Intent or of the Niro firm's intention to pay Sedgwick, while paying NewDelman nothing. Instead, the Niro firm paid Sedgwick. By doing so, the Niro firm concealed a material fact from one of its principals, i.e., the NewDelman Group, causing injury; the only elements of fraud by concealment not resolved by this motion are: (1) the NewDelman Group's inability to discover the concealed fact by reasonable inquiry; and (2) reliance resulting in damages, Judge Clement points out. According to Judge Clement, a genuine dispute of material facts exists as to: (1) whether the NewDelman Group accepted the Priority Agreement, as revised to add "Sedgwick FundingCo, LLC"; and (2) if so, that agreement's meaning. Not in dispute are the facts showing: (1) the Niro firm acted as an agent for both GKC/Sedgwick and the NewDelman Group in the receipt and disbursement of Mitsubishi Electric litigation proceeds and, therefore, owed each creditor fiduciary duties (including a duty of full disclosure); (2) Grail Semiconductor, GKC/Sedgwick, and the Niro firm entered into a civil conspiracy to defraud the NewDelman Group; (3) the Niro firm's disbursement of funds to Sedgwick, without payment to the NewDelman Group or notice, satisfies all the elements of fraud by concealment (except for the NewDelman Group's inability to discover the truth with reasonable inquiry and the existence, as well as amount, of damages); (4) the Niro firm's actions in disbursing funds were within the scope of the conspiracy with Grail Semiconductor and GKC/Sedgwick; and (5) Sedgwick is liable for the Niro's firm's fraud, if any. For these reasons, Judge Clement grants Sedgwick's motion in part and grants NewDelman Group's motion in part and denies in part. A full-text copy of the Memorandum dated January 20, 2022, is available at https://tinyurl.com/dtznrka7 from Leagle.com. Norman Neville Reid -- nreid@foxswibel.com -- Erik J. Ives -- eives@foxswibel.com -- Ryan Schultz -- rschultz@foxswibel.com -- Fox Swibel Levin & Carroll LLP, and Jeffrey I. Golden -- jgolden@wgllp.com -- Beth E. Gaschen -- bgaschen@wgllp.com -- Weiland Golden Goodrich LLP for Sedgwick FundingCo, LLC; Ivan K. Mathew , Ivan K. Mathew P.C. for Mitchell NewDelman, Frank Holze, and Willis Higgins. About Grail Semiconductor Carmichael, California-based Grail Semiconductor (Bankr. E.D. Calif., Case No. 15-29890) filed a Chapter 11 Petition on December 30, 2015. The case was assigned to Hon. Robert S. Bardwil. The Debtor's counsel was Paul J. Pascuzzi, Esq., at Felderstein Fitzgerald Willoughby & Pascuzzi LLP, in Sacramento, California. GREGORY LANE BARNHILL: Proposed Sale of Columbus Property Approved ------------------------------------------------------------------ Judge David M. Warren of the U.S. Bankruptcy Court for the Eastern District of North Carolina authorized Gregory Lane Barnhill's sale of the personal property and agricultural equipment located in Columbus County, North Carolina, which is more particularly identified and described on Exhibit A to the Sale Motion. Pursuant to Section 363 of the Bankruptcy Code, and through its employed professional, CBA, the Debtor is authorized to sell the Property, through the Public Sale, free and clear of the liens, claims, encumbrances, rights and interests, with said liens, claims, encumbrances, rights, and interests attaching to the proceeds of the sale, subject to any Orders that may be entered by the Court, including the Confirmation Order. Any determination the validity, priority, and extent of the liens, encumbrances, claims, rights, and interests of such lienholders and claimants in the Property is reserved and the Debtor, the Trustee, and any parties-in-interest, will not be estopped or abridged from challenging the validity of any liens, claims, encumbrances, or other interests in the Property. Gregory Lane Barnhill sought Chapter 11 protection (Bankr. E.D.N.C. Case No. 21-00881) on April 15, 2021. The Debtor tapped Joseph Frost, Esq., as counsel. GRUBHUB INC: S&P Cuts ICR to 'B-' on Expected Cash Flow Deficits ---------------------------------------------------------------- S&P Global Ratings lowered its issuer credit rating on U.S. food delivery company Grubhub Inc. to 'B-'from 'B' and its issue-level rating on the company's $500 million senior unsecured notes to 'B' from 'BB-'. S&P removed all ratings from CreditWatch with negative implications, where it placed them on March 26, 2020. S&P said, "Our negative outlook reflects the risk that Grubhub has no credible path to positive free operating cash flow (FOCF) generation and that JET may become unwilling or unable to provide financial support to cover Grubhub's material cash flow deficits if they persist beyond 2022. "The downgrade reflects our expectation for material cash flow deficits to continue in 2022. At the onset of the COVID-19 pandemic, local governments in key Grubhub markets enacted commission fee caps to protect restaurants' sustainability. These substantially reduced the company's profitability. Grubhub generated negative EBITDA in 2021, and we expect the company will report an FOCF deficit of over $250 million in 2021. We expect fee caps in the company's largest market, New York City, will remain in place throughout 2022. We also expect Grubhub to increase its investment to gain market share in 2022 through reduced or waived delivery fees to its customers and a higher marketing expenses. In total, we expect FOCF deficits in the $200 million-$250 million range in 2022 as this elevated investment is somewhat offset by total order growth and reduced one-time fees related to Grubhub's acquisition by JET. "Grubhub will likely need financial support from its parent. JET completed its purchase of Grubhub in June 2021 for over $7 billion. We view Grubhub as a core component of JET's consolidated operations and expect support from JET during financial distress. While the fee caps that have affected Grubhub's profitability are outside of JET's control, plans for Grubhub to invest in market-share growth in 2022 are similar to strategies JET is using in other markets such as the U.K. We believe JET's market capture strategy, along with ongoing fee caps, will result in negative EBITDA at Grubhub in 2022 and will drive cash flow deficits above $200 million, which would exceed Grubhub's cash balance as of Sept. 30, 2021. In addition, Grubhub terminated its revolving credit facility after being acquired. We expect JET will need to provide Grubhub with a cash injection over 2022. JET last reported cash and cash equivalents of over EUR1.5 billion on June 30, and we expect the company to have at least EUR1 billion as of Dec. 31, 2021. While Grubhub has access to JET's multicurrency revolving credit facility, JET agreed not to draw on it during 2022 to receive a waiver from its financial covenants. "Like Grubhub, JET generated EBITDA and cash flow deficits in 2021, and we expect that in 2022 as well. Our negative outlook on Grubhub is based on the risk that JET's and Grubhub's market growth strategy focused on providing the lowest costs to diners and increased marketing spending will extend beyond 2022. JET may be unable or unwilling to provide additional financial support to Grubhub. JET has publicly discussed selling its share of Brazilian food delivery company iFood, which could be valued at EUR3 billion-EUR4 billion. However, we have not factored asset sales into our view of JET's ability to support Grubhub." Grubhub faces intense competition with limited differentiation and ongoing regulatory risks. It is the No. 3 U.S. food delivery company by market share, behind Doordash and Uber Eats, but has a leading market share in some large U.S. cities such as New York. The company plans to invest heavily to strengthen its market position in 2022. However, the competition is much better capitalized, and elevated investment may be necessary to maintain or expand market share in 2022 and beyond. S&P believes restaurant order and delivery services are becoming commoditized as service is similar, and diners are likely to focus on the lowest cost. Grubhub and its peers now offer subscription plans with reduced delivery fees to incentivize loyalty. Market participants are also striking partnerships with grocery, retail, and other types of delivery services that could improve profitability over time. Industry consolidation, which could improve pricing discipline, is complicated by media reports of excessive fees. Debate centers on the labor rights of delivery drivers and the resulting political backlash. Many local governments implemented fee caps to support restaurants during the COVID-19 pandemic. New York, Grubhub's largest market, made fee caps permanent in August. S&P assumes fee caps will remain in place in our forecast, though Grubhub and its peers are challenging rulings in New York and San Francisco. Grubhub's drivers in most markets are considered independent contractors, and the company is not required to provide certain employee benefits such as a minimum wage or health insurance. Any change could drive up Grubhub's driver expenses and further weaken profitability. S&P's negative outlook reflects the risk that Grubhub has no credible path to positive FOCF and that JET may become unwilling or unable to provide financial support to cover Grubhub's material cash flow deficits if they persist beyond 2022. S&P could lower the rating to 'CCC+' if substantial cash flow deficits persist beyond 2022 and we do not expect JET to provide financial support. This could occur if: -- Fee caps on restaurants continue in key markets, and Grubhub cannot offset the impact through fee increases to diners; -- Increased investment to gain market share is unsuccessful in 2022, and S&P expects the company will need to maintain elevated marketing spending and reduced delivery fees; and -- JET's liquidity materially weakens, and S&P no longer expect it will financially support Grubhub. S&P could revise the outlook to stable if it expects the company to generate a profit with FOCF improving to break-even, and S&P continues to expect financial support from JET. This would likely occur from a combination of: -- Fee caps relaxed or eliminated in key markets; -- Planned investments in 2022 succeed in growing market share; and -- The company cannot pull back on marketing spending while increasing delivery fees. Environmental, Social, And Governance To E-2, S-4, G-2 from E-2, S-3, G-2 Social factors are now a more negative consideration in S&P's rating analysis of Grubhub. Through the COVID-19 pandemic, many local governments capped the fees that third-party delivery companies could charge restaurants, including those in Grubhub's largest market, New York City. The company reports that fee caps have impaired EBITDA roughly $250 million since the second quarter of 2020. Large markets such as New York and San Francisco have imposed permanent commission fee caps on third-party deliveries, which will continue to hurt profitability if not reversed through lawsuits or lobbying efforts. In addition, the concept of gig economy contractors has provoked legal and regulatory challenges following criticism that drivers make less than minimum wage and are not afforded certain labor rights or benefits of full-time employees. Because most of Grubhub's operating expenses cover employee-related costs, changes to employment laws could reduce profitability. Environmental, social, and governance (ESG) credit factors for this change in credit rating/outlook and/or CreditWatch status: -- Human capital -- Social capital GVS TEXAS: Further Fine-Tunes Plan Documents -------------------------------------------- GVS Texas Holdings I, LLC, and its Debtor Affiliates submitted a Third Amended Joint Chapter 11 Plan and Disclosure Statement dated Jan. 30, 2022. In formulating the Plan, the Debtors and their advisors considered the current assumed value of the Debtors' assets based on available information, the respective rights of claimholders and the best course to maximize value for all constituents post-emergence. The Debtors assert, based in part on the Stalking Horse Bid, that the orderly Sale process set forth in the Revised Bidding Procedures will maximize the value of the Debtors' Estates, which will benefit all stakeholders more than a forced liquidation or a contested plan. No Classes of Claims or Interests are Impaired under the Plan. Accordingly, each Class is conclusively presumed to have accepted the Plan pursuant to section 1126(f) of the Bankruptcy Code. The Debtors intend to conduct an auction (the "Auction") on February 21, 2022, in accordance with the Original Bidding Procedures and, as may be ordered by the Court, the Revised Bidding Procedures, in furtherance of the Sale that will generate sufficient Sale Proceeds to fund the payment of Allowed Claims in full. The Amended Disclosure Statement does not alter the proposed treatment for unsecured creditors: * Class 5 PropCo Debtor General Unsecured Claims totaling $13,018,023 will be paid in Cash from the available Net Sale Proceeds. Class 54 creditors will recover 100% of their claims. Class 5 is unimpaired. * Class 8 Senior Mezz Debtor General Unsecured Claims totaling $7,300 will be paid in Cash from the Net Sale Proceeds. Class 8 creditors will recover 100% of their claims. Class 8 is unimpaired. * Class 11 Junior Mezz Debtor General Unsecured Claims totaling $545,443 will be paid in cash from the available Net Sale Proceeds. Class 8 creditors will recover 100% of their claims. Class 11 is unimpaired. The Debtors' Assets will be marketed pursuant to the Original Bidding Procedures and, as appropriate, the Revised Bidding Procedures, to effectuate the Sale and to generate Sale Proceeds to be distributed in accordance with the Plan. The actions to implement the Sale may include: (1) the execution and delivery of appropriate agreements or other documents that are consistent with the terms of the Plan and that satisfy the applicable requirements of law and any other terms to which the applicable Entities may agree; (2) the execution and delivery of appropriate instruments of transfer, assignment, assumption, or delegation of any asset, property, right, liability, debt, or obligation on terms consistent with the terms of the Plan; (3) the filing of appropriate certificates or articles of incorporation, formation, reincorporation, merger, consolidation, conversion, amalgamation, arrangement, continuance, or dissolution pursuant to applicable state or provincial law; and (4) all other actions that the applicable Entities determine to be necessary, including making filings or recordings that may be required by applicable law in connection with the Plan. The Property Manager and World Class Capital Group, LLC ("WCCG") are defendants in a civil case styled Princeton Capital Corporation v. Great Value Storage, LLC, World Class Capital Group, LLC and Natin Paul, No. 2019-18855 currently pending in the 165th District Court, Harris County (the "Princeton Case") and a severed case with the same name, No. 2019-18855A. A final judgment was entered against the Property Manager and WCCG on March 4, 2021. On September 8, 2021, an order (the "Receiver Order") was entered appointing a receiver (the "Receiver") to, among other things, collect judgement from the Property Manager and WCCG. The Receiver Order was appealed to the Court of Appeals for the First District of Texas, in the case styled: Great Value Storage, LLC and World Class Capital Group, Inc. v. Princeton Capital Corporation, Cause No. 01-21-00284-CV (the "Princeton Appeal"). A full-text copy of the Third Amended Disclosure Statement dated Jan. 30, 2022, is available at https://bit.ly/3APkjqS from Omni Agent Solutions, the claims agent. Counsel for the Debtors and Debtors in Possession: Thomas R. Califano, Esq. Charles M. Persons, Esq. Maegan Quejada, Esq. Jeri Leigh Miller, Esq. Juliana L. Hoffman, Esq. SIDLEY AUSTIN LLP 2021 McKinney Ave., Suite 2000 Dallas, Texas 75201 Tel: (214) 981-3300 Fax: (214) 981-3400 About GVS Texas Holdings I GVS Texas Holdings I, LLC and its affiliates are primarily engaged in renting and leasing a wide array of properties functioning principally as self-storage and parking facilities in 64 locations in Texas, Colorado, Illinois, Indiana, Mississippi, Missouri, Nevada, New York, Ohio, and Tennessee. Six of the properties are in the Dallas-Fort Worth Metroplex, with an additional 28 located elsewhere in Texas. The properties are managed by Great Value Storage, LLC. GVS Texas Holdings I and its affiliates sought Chapter 11 protection (Bankr. N. D. Texas Lead Case No. 21-31121) on June 17, 2021. The parent entity, GVS Portfolio I C, LLC, filed a voluntary Chapter 11 petition (Bankr. N. D. Texas Case No. 21-31164) on June 23, 2021. GVS Portfolio's case is jointly administered with that of GVS Texas Holdings I. Judge Michelle V. Larson oversees the cases. In its petition, GVS Texas Holdings I listed disclosed $100 million to $500 million in both assets and liabilities. The Debtors tapped Sidley Austin, LLP as bankruptcy counsel; Houlihan Lokey Capital, Inc. as investment banker; and HMP Advisory Holdings, LLC, doing business as Harney Partners, as financial advisor. Getzler Henrich & Associates, LLC is the Debtors' accountant. HARRIS PHARMACEUTICAL: Trustee Seeks OK to Hire Litigation Counsel ------------------------------------------------------------------ Amy Denton Harris, the Subchapter V trustee for Harris Pharmaceutical, Inc., received approval from the U.S. Bankruptcy Court for the Middle District of Florida to hire David R. Softness, P.A. as her special litigation counsel. The firm will investigate and pursue claims of the estate, including: (i) Chapter 5 causes of action against Brian Harris, Janice Harris, and any other recipients of avoidable transfers; (ii) claims for damages, imposition of a constructive trust or equitable lien in connection with breaches of fiduciary duties, usurpation of corporate opportunities, and all other claims against Janice Harris, Smart Skin Health, LLC, and any other entities owned by Janice Harris; and (iii) any other claims against any person. David Softness, Esq., owner of the firm, will be the primary attorney assigned to this matter and his hourly rate is $600. Mr. Softness disclosed in a court filing that his firm neither represents nor holds any interest adverse to the trustee or to the estate with respect to the matters upon which it is to be engaged. The firm can be reached through: David R. Softness, Esq. David R. Softness, PA 201 S Biscayne Blvd. Miami, FL 33131 Phone: +1 305-341-3111 About Harris Pharmaceutical Harris Pharmaceutical, Inc., a Fort Myers, Fla.-based manufacturer of pharmaceutical and medicine products, sought protection under Chapter 11 of the Bankruptcy Code (Bankr. M.D. Fla. Case No. 20-08071) on Oct. 29, 2020, disclosing $4,229,666 in total assets and $2,207,513 in total liabilities as of Sept. 30, 2021. Judge Caryl E. Delano oversees the case. The Debtor tapped the Law Office of Leon A. Williamson, Jr., PA as bankruptcy counsel. Amy Denton Harris is the Subchapter V trustee appointed in the Debtor's Chapter 11 case. Stichter, Riedel, Blain & Postler P.A., Westerman Ball Ederer Miller Zucker & Sharfstein, LLP, and David R. Softness, P.A. serve as the trustee's special counsels. HEAVEN'S LANDING: Gets OK to Hire Carr Law as Special Counsel ------------------------------------------------------------- Heaven's Landing, LLC received approval from the U.S. Bankruptcy Court for the Northern District of Georgia to employ The Carr Law Group, LLC as its special counsel for real estate matters. The firm will provide legal services to the Debtor regarding real estate issues, including representation in the recently filed adversary proceeding styled Heaven's Landing Development, LLC v. Heaven's Landing, LLC, Adversary Proceeding No. 22-2002. The hourly rates charged by the firm for its services are as follows: W. Spencer Carr $300 per hour Paralegals $100 per hour W. Spencer Carr, Esq., a partner at The Carr Law Group, disclosed in a court filing that his firm is a "disinterested person" within the meaning of Section 101(14) of the Bankruptcy Code. The firm can be reached through: W. Spencer Carr, Esq. The Carr Law Group, LLC 604 Green Street, Suite 3 Gainesville, Ga 30501 Tel: 470-691-0109 About Heaven's Landing Heaven's Landing, LLC -- https://www.heavenslanding.com/ -- operates a mountain estate airpark in Clayton, Ga. It is a 635-acre gated community surrounded by thousands of acres of National Forest. The aviation centerpiece of Heaven's Landing is a 5,069-foot paved concrete runway with pilot-controlled lighting and a GPS approach. The runway is designed to accommodate most any private plane but is exclusively used by community members and guests only. Heaven's Landing filed a voluntary petition for relief under Chapter 11 of the Bankruptcy Code (Bankr. N.D. Ga. Case No. 20-21350) on Oct. 4, 2020, disclosing $1 million to $10 million in assets and $500,000 to $1 million in liabilities. Michael J. Ciochetti, president and general manager, signed the petition. Judge James R. Sacca oversees the case. Kelley & Clements, LLP serves as the Debtor's legal counsel. HELLO LIVING: Gets Court OK to Hire Leo Fox as Bankruptcy Attorney ------------------------------------------------------------------ Hello Living Developer Nostrand, LLC received approval from the U.S. Bankruptcy Court for the Southern District of New York to hire Leo Fox, Esq., a practicing attorney in New York, to handle its Chapter 11 case. Mr. Fox's legal services include: a. advising the Debtor with respect to its powers and duties under the Bankruptcy Code; b. preparing legal papers and appearing before the court; d. meeting with and negotiating with creditors and other parties for a plan of reorganization, and preparing the plan and attendant documents; and e. performing all other necessary legal services for the Debtor. The hourly rates charged by the attorney and his firm are as follows: Partners $450 per hour Associates $275 per hour Paralegal $75 per hour The Debtor paid the attorney a retainer in the amount of $20,000. As disclosed in court filings, Mr. Fox neither holds nor represents any interest adverse to the Debtor and its estate. Mr. Fox holds office at: Leo Fox, Esq. 630 Third Avenue - 18th Floor New York, NY 10017 Tel: (212) 867-9595 Email: leo@leofoxlaw.com About Hello Living Developer Nostrand Hello Living Developer Nostrand, LLC is a single asset real estate debtor (as defined in 11 U.S.C. Section 101(51B)). Hello Living filed its voluntary petition for relief under Chapter 11 of the Bankruptcy Code (Bankr. S.D.N.Y. Case No. 21-22696) on Dec. 21, 2021, disclosing $50 million to $100 million in both assets and liabilities. Eli Karp, manager, signed the petition. Judge Sean H. Lane oversees the case. The Debtor tapped Leo Fox, Esq., a practicing attorney in New York, to handle its bankruptcy case. HILLSIDE OFFICE: Auction of $3.8M Hillside Property Set for Feb. 14 ------------------------------------------------------------------- Judge Vincent F. Papalia of the U.S. Bankruptcy Court for the District of New Jersey approved Hillside Office Park, LLC's bidding procedures in connection with the sale of the real property located in the Township of Hillside, Union County, New Jersey, known and designated as Block 604, Lots 25, 26 on the Tax Map of the Township of Hillside, to Aleksandra Kogen for $3.8 million, plus payment of realtor commission, subject to overbid. A hearing on the Motion was held on Jan. 27, 2022. The Notice of Auction is approved. The salient terms of the Bidding Procedures are: a. Bid Deadline: Feb. 11, 2022, at 4:00 p.m. b. Initial Bid: All bids must propose a purchase price equal to or greater than the aggregate of the sum of (i) the actual cash value of the Stalking Horse Bid (as calculated by the Debtor), plus (ii) cash consideration in excess of $100,000 over the Stalking Horse Bid or an amount greater than Stalking Horse Bidder's offer, which is $3.8 million, plus payment of realtor commission of 3%. c. Deposit: $100,000 d. Auction: If the Debtor receives competing Qualified Bids by the Bid Deadline in accordance with the terms of the Bidding Procedures, the Debtor will conduct an auction f the Subject Real Property at 11:00 a.m. (ET) on Feb. 14, 2022 via video conference conducted at the offices of Giordano, Halleran & Ciesla, PC, located at 125 Half Mile Rd., Suite 300, Red Bank, NJ 07701 or such later time or at such other place as the Debtor will determine in accordance with the Bidding Procedures. e. Bid Increments: $10,000 f. Sale Hearing: Feb. 17, 2022, at 2:00 p.m. (ET) g. Sale Objection Deadline: Feb. 15, 2022, 5:00 p.m. (ET) The sale will be on an "as is, where is" basis and without representations or warranties of any kind, nature, or description; and free and clear of all liens and other interests; provided that liens on any of the Purchased Assets will attach to the proceeds of such Purchased Assets. Not later than one business day after the entry of the Order, the Debtor will serve a copy of the Order together will all exhibits thereto upon the Sale Notice Parties. The Stalking Horse Bidder is authorized to be the stalking horse bidder and is deemed to be a Qualified Bidder and if not the successful bidder will be entitled to the expense reimbursement set forth in the contract of sale upon application to the court on notice to parties in interest and subject court approval. As provided by Bankruptcy Rules 6004(h) and 6006(d), the Order will not be stayed for 14 days after the entry thereof and will be effective and enforceable immediately upon its entry on the Court's docket. About Hillside Office Park Headquartered in Hillside, New Jersey, Hillside Office Park, LLC, filed for Chapter 11 bankruptcy protection (Bankr. D.N.J. Case No. 16-19617) on May 17, 2016. In the petition signed by Glen A. Fishman, member of Maplewood Acquisition, LLC, member, the Debtor estimated its assets and liabilities at between $1 million and $10 million. Judge Stacey L. Meisel presides over the case. Donald F. Campbell, Jr., Esq., at Giordano Halleran & Ciesla, P.C., serves as the Debtor's bankruptcy counsel. HR NORTH DALE: Court Approves Sale of Vacant Lutz Commercial Land ----------------------------------------------------------------- Judge Michael G. Williamson of the U.S. Bankruptcy Court for the Middle District of Florida (i) authorized in part HR North Dale Mabry, LLC's sale of the vacant commercial land located on North Dale Mabry Highway in Lutz, Hillsborough County, Florida, to WWP Acquisitions, LLC, and Flagship Companies Group, LLC; and (ii) denied in part, without prejudice, the Debtor's rescission contract with DRP Company of Alabama, Inc. The Debtor is authorized to sell, transfer and assign the Property to the Buyers consistent with the terms of the purchase agreements with WWP and Flagship, respectively. The Debtor may separately seek approval of the Recission Contract in a separate motion. Nevertheless, the Debtor may only close on such sales if the proceeds from such sales are collectively sufficient to satisfy all allowed secured claims in full, including principal, interest, costs and attorneys' fees. The Court's prior Order Approving the Sale Agreement with North Village dated Aug. 23, 2021, is vacated or superseded by the Order. The Purchase Agreements and the proposed sales to the Buyers are approved, free and clear of any and all liens, encumbrances, with any such Encumbrances, liens, claims or interests, not already provided for in the Debtor’s second plan of liquidation, attaching exclusively to the net proceeds of sale, provided, however, at closing, the Debtor is authorized and directed to pay the ordinary and net proceeds of sale. The Order constitutes a final appealable order within the meaning of 28 U.S.C. Section 158(a). Notwithstanding Rules 6004(h) and 6006(d) of the Federal Rules of Bankruptcy Procedure, the Order will be immediately effective and enforceable upon its entry. The closing may occur immediately consistent with the terms of the Purchase Agreements. Upon the closing of the sales, the Debtor will reflect the sales in the Court records and file the closing documents in either its monthly operating report or by a notice of filing. The Order will be accepted for recording in the public records. A copy of the Agreements is available at https://tinyurl.com/44rpwjam from PacerMonitor.com free of charge. About HR North Dale Mabry HR North Dale Mabry, LLC sought protection under Chapter 11 of the Bankruptcy Code (Bankr. M.D. Fla. Case No. 21-01958) on April 21, 2021. Claire Clement, manager, signed the petition. In its petition, the Debtor disclosed assets of between $1 million and $10 million and liabilities of the same range. Johnson Pope Bokor Ruppel & Burns, LLP is the Debtor's legal counsel. I.C.S. CUSTOMS: Seeks to Tap Re-Max Suburban as Real Estate Broker ------------------------------------------------------------------ I.C.S. Customs Service Inc. seeks approval from the U.S. Bankruptcy Court for the Northern District of Illinois to employ Re-Max Suburban as its residential real estate broker. The Debtor needs the assistance of a broker to market and sell its condominium unit known as the Schaumburg Condo located at 1926 Prairie Square, Unit 109, Schaumburg, Ill. Re-Max will receive a 5 percent commission of the sales price, but in the event a cooperating brokerage is involved in the transaction, the commission will be distributed 2.5 percent plus $395 of the sales price to Re-Max and 2.5 percent minus $395 of the sales price to the cooperating brokerage. Dave Lempa, a real estate agent at Re-Max Suburban, 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: Dave Lempa Re-Max Suburban 1310 N. Roselle Rd. Schaumburg, IL 60195 Telephone: (847) 533-1918 Email: Davelempa1@gmail.com About I.C.S. Customs Service Founded in 1989, I.C.S. Customs Service Inc. is a full-service customs broker with headquarters in Chicago, Illinois. The company offers a full range of customs brokerage and freight forwarding services to customers throughout Europe, Asia, and North America. I.C.S. Customs Service filed its voluntary petition for Chapter 11 protection (Bankr. N.D. Ill. Case No. 21-12153) on Oct. 25, 2021, listing $1 million to $10 million in both assets and liabilities. William Sharpe, president, signed the petition. Judge Jacqueline P. Cox oversees the case. Scott R. Clar, Esq., at Crane, Simon, Clar & Goodman represents the Debtor as legal counsel. INVESTFEED INC: Taps Zoem Tax Services as Accountant ---------------------------------------------------- InvestFeed, Inc. received approval from the U.S. Bankruptcy Court for the Eastern District of New York to hire Zoem Tax Services, Inc. as its accountant and business advisor. The firm's services include gathering and verifying all pertinent information, and preparing monthly operating reports for the Debtor. The firm will be paid a monthly fee of $500 and a retainer fee of $2,500. Noor Hassan, the firm's accountant who will be providing the services, disclosed in a court filing that he is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. The firm can be reached at: Noor Hassan Zoem Tax Services, Inc. 98-09 Astoria Flushing, NY 11235 About InvestFeed Inc. InvestFeed, Inc. filed its voluntary petition for relief under Chapter 11 of the Bankruptcy Code (Bankr. E.D. N.Y. Case No. 21-41025) on April 19, 2021, listing as much as $1 million in both assets and liabilities. Judge Elizabeth S. Stong oversees the case. The Law Office of Thomas A. Farinella, PC serves as the Debtor's legal counsel while Zoem Tax Services, Inc. serves as the Debtor's accountant and business advisor. ISLAND INDUSTRIES: Case Summary & 18 Unsecured Creditors -------------------------------------------------------- Debtor: Island Industries, Inc. 1083 N. Hollywood St. Memphis, TN 38108 Business Description: Island Industries is a distributor of pipe and component products serving a variety of markets including industrial, pipelines (oil, gas, industrial), HVAC, OEM's, oilfield and power plant services, and fire protection. Chapter 11 Petition Date: February 2, 2022 Court: United States Bankruptcy Court Western District of Tennessee Case No.: 22-20380 Judge: Hon. Jennie D. Latta Debtor's Counsel: Michael P. Coury, Esq. GLANKLER BROWN PLLC 6000 Poplar Ave Suite 400 Memphis, TN 38119 Tel: 901-525-1322 Fax: 901-525-2389 Email: mcoury@glankler.com Estimated Assets: $1 million to $10 million Estimated Liabilities: $1 million to $10 million The petition was signed by R. Glenn Sanders as president. 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/LDRMBFQ/Island_Industries_Inc__tnwbke-22-20380__0001.0.pdf?mcid=tGE4TAMA JOHNSON & JOHNSON: Talc Claimants Challenge Injury Suits Freeze --------------------------------------------------------------- Jonathan Randles of The Wall Street Journal reports that a committee representing consumers suing Johnson & Johnson over its talcum-based baby powder products is challenging a bid to use bankruptcy to freeze litigation against the company and retailers that sold the product. The committee, which represents consumers who allege exposure to J&J's talcum products caused cancer, said in a court filing Tuesday, February 1, 2021 in the U.S. Bankruptcy Court in Trenton, N.J., that pausing civil lawsuits against J&J, which is not in bankruptcy, could prevent tens of thousands of people dying from ovarian cancer. "The Debtor seeks a breathtaking extension of the automatic stay and a preliminary injunction to halt talc products liability litigation against approximately 650 non-debtor entities, including: (i) Johnson & Johnson ("J&J"), Johnson & Johnson Consumer Inc. ("New JJCI"), and over 400 additional non-debtor J&J affiliates; (ii) some 145 third-party retailers (such as Footlocker, Family Dollar Stores, CVS Pharmacy, and Giant Food Stores); and (iii) more than 100 insurance companies (that have not even been sued by talc claimants). The Debtor seeks such sweeping injunctive relief even though neither J&J nor any of the other allegedly "Protected Parties" has filed for bankruptcy or claimed financial distress," THE OFFICIAL COMMITTEE OF TALC CLAIMANTS II said in a court filing. "The Debtor's attempt to leverage its bankruptcy proceeding to protect its ultimate corporate parent parallels Purdue Pharma's improper attempt to secure third-party releases to protect its Sackler family owners, which the Southern District of New York rejected. See In re Purdue Pharma, L.P., No. 21 cv 7535, 2021 WL 5979108, *69 (S.D.N.Y. Dec. 16, 2021). The harm to victims of J&J's own conduct here, like the victims of Purdue Pharma's opioids, cannot be overstated. The Debtor would effectively bar the courthouse doors to tens of thousands of victims dying from ovarian cancer and mesothelioma due to J&J's products. When plaintiffs suffer from terminal cancer diagnoses, a stay of their actions is truly justice denied. Even for victims who do not have imminent trial dates, a stay will cause irreparable harm by delaying discovery, motion practice, and pretrial proceedings involving J&J and other so-called "Protected Parties." The Debtor would deep-freeze talc cases nationwide regardless of who the defendant is, including the approximately 35,000 cases consolidated in the multi-district litigation (the "MDL"), captioned In re Johnson & Johnson Talcum Powder Prods. Mktg., Sales Pracs. and Prods. Liab. Litig., MDL Case No. 2738, Case No. 16-02738, pending in this District. Bellwether trials in that proceeding are scheduled to start this spring. Victims of these terminal diseases who do not survive the delay intentionally occasioned by J&J -- a very real possibility, particularly for the mesothelioma victims—will forever lose the ability to utilize compensatory awards (including to offset medical, hospice, and funeral expenses) and, in some states, risk losing the ability to recover punitive damages or any damages for pain and suffering whatsoever." About Johnson & Johnson Johnson & Johnson is an American multinational corporation founded in 1886 that develops medical devices, pharmaceuticals, and consumer packaged goods. It is the world's largest and most broadly based healthcare company. Johnson & Johnson is headquartered in New Brunswick, New Jersey, the consumer division being located in Skillman, New Jersey. The corporation includes some 250 subsidiary companies with operations in 60 countries and products sold in over 175 countries. The corporation had worldwide sales of $82.6 billion in 2020. About LTL Management LTL Management, LLC, is a subsidiary of Johnson & Johnson (J&J), which was formed to manage and defend thousands of talc-related claims and oversee the operations of Royalty A&M. Royalty A&M owns a portfolio of royalty revenue streams, including royalty revenue streams based on third-party sales of LACTAID, MYLANTA/MYLICON and ROGAINE products. LTL Management filed a petition for Chapter 11 protection (Bankr. W.D.N.C. Case No. 21-30589) on Oct. 14, 2021. The case was transferred to New Jersey (Bankr. D. N.J. Case No. 21-30589) on Nov. 16, 2021. The Hon. Michael B. Kaplan is the case judge. At the time of the filing, the Debtor was estimated to have $1 billion to $10 billion in both assets and liabilities. The Debtor tapped Jones Day 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. JOSEPH RYAN ELLISON: Hardman Offers $300K for Junction City Bowl ---------------------------------------------------------------- Joseph Ryan Ellison asks the U.S. Bankruptcy Court for the District of Kansas to authorize the sale of the real estate and the personal property of the sole proprietorship identified as Junction City Bowl to John Hardman for $300,000, subject to higher and better offers. The contract calls for the sale of the following described property: Big Bowl Add, Acres 1.8, Pob Sw Cor Big Bowl Add; NE 250°; SE 296.66 to RR Row; SW on RR Row 252.75'; NW 334.58' to Pob Section 13 Township 12 RANGE 05, along with the personal property of the bowling operation and intellectual property. The Purchaser has made an offer to purchase the Junction City Bowl as a going concern, including the land, building, contents and business and intellectual property. The principal creditor, First Bank was made aware of the offer and told that if it could find a higher bidder it should. So far no higher bidder has come forward. In addition, First Bank has been provided with the appraisals, and income and expense information on the Junction City Bowl, so that it could consider an independent appraisal of the business, along with an indicated readiness of the debtor to provide any additional information or access necessary for the bank to find a buyer or appraise the property. Any of this information is available to a potential buyer upon request to the counsel and signing appropriate confidentiality agreements. Time is of the essence with respect to the closing of the sale in that the Debtor is no longer willing to operate the business, and the business is one where repeat business is what keeps the business going. Any interruption in the operation deflates the value significantly particularly in the winter. The agreed price represents a reasonable fair market value for the property and the sale should be approved and confirmed by the Court. Geary County, Kansas has an interest in the property by virtue of unpaid Ad Valorem taxes in the total amount of $74,069.28, plus interest thereon. First Bank, a North Carolina state bank with its principal office located at 300 SE Broad Street, Southern Pines, North Carolina 28387, has a claim by virtue of notes and mortgages executed originally on Sept. 20, 2017, and as more fully set forth in its suit Case No. 2020CV184, in the District Court of Geary County, and on information and belief its claims cover all the property, real and personal being sold. Other entities that have an interest in the property inferior to the liens or interests will have have their claims attached to the remainder of any funds available. Time is of the essence with respect to the closing of the sale. The Debtor requests that the Court orders closing to occur by March 1, 2022 and that the order entered based on the Motion will be sufficient to allow the passage of title to the property to the Purchaser. To the extent there are objections to the manner of the distribution of the proceeds or the priority of distribution, the proceeds of the sale of the property will be held in the escrow account of the title company pending further order of the Court and such disputes will not impede the transfer of title free and clear to the Purchaser. The objection deadline of is Feb. 14, 2022. If there are competing bids there will be a bid off and the sale will be completed to highest bidder. If there are issues over whom of the bidders is the highest bidder, the Court will be the final arbiter. The property will be sold in its present condition, as is and where is, with no express or implied warranties, and the Purchaser has agreed to accept the Property in its present condition. Pursuant to 11 U.S.C. Section 363, the sale will be free and clear of all liens and encumbrances of record. The sale will be subject to all easements, restrictions, covenants and mineral interests of record, if any. Objections to the sale of the property, the payment of the real taxes and expenses, including, but not limited to attorney fees and other administrative expenses as set forth therein. Upon approval of the sale and closing of the contract, the proceeds of the sale should be paid as follows: (a) To pay the Seller's reasonable and customary closing cost of sale, including title insurance, recording fees, and any other related expenses; (b) To Eric D. Bruce for attorney's fees of $2000, for processing the sale. (c) To any outstanding ad valorem taxes due to Geary County; (d) To First Bank; and (e) Any balance will be paid to the trustee for distribution to the unsecured creditors, if any. The Debtor submits the Motion pursuant to Sections 105, 363, and 365 of Title 11 of the United States Code, and rules 2002, 6004, 6006, and 9014 of the Federal Rules of the Bankruptcy Procedure. A copy of the Offer is available at https://tinyurl.com/yc4b3hds from PacerMonitor.com free of charge. Joseph Ryan Ellison sought Chapter 11 protection (Bankr. D. Kan. Case No. 22-10044) on Jan. 24, 2022. The Debtor tapped Eric D. Bruce, Esq., as counsel. KEAVEN L. DOTTERY: $185K Cash Sale of Atlanta Property Approved --------------------------------------------------------------- Judge Lisa Ritchey Craig of the U.S. Bankruptcy Court for the Northern District of Georgia authorized Keaven L. Dottery and Sandra P. Dottery to sell the real property located at 2166 Montrose Avenue, in Atlanta, Fulton County, Georgia 30311, to John Clark Intown Consulting Group LLc for $185,000, cash. A hearing on the Motion was held on Jan. 27, 2022. The Purchase Agreement, including any amendments, supplements, and modifications thereto, and all of the terms and conditions therein, is approved. The Debtors may sell the Montrose Property free and clear of all liens, claims and encumbrances. Upon closing of the Sale, all liens, claims, and encumbrances on the Property will attach to the proceeds of the Sale. The 14-day stays applicable under Rule 6004(h) of the Bankruptcy Rules is waived and the provisions of the Order will be immediately effective and enforceable upon its entry. Keaven L. Dottery and Sandra P. Dottery sought Chapter 11 protection (Bankr. N.D. Ga. Case No. 21-57546) on Oct. 7, 2021. The Debtors tapped William Rountree, Esq., at Rountree Leitman & Klein, LLC as counsel. KEEPITSIMPLE.US LLC: Sale of All Assets to Aligned Holdings Okayed ------------------------------------------------------------------ Judge D. Sims Crawford of the U.S. Bankruptcy Court for the Northern District of Alabama authorized KeepITSimple.us, LLC's sale of substantially all assets to Aligned Holdings, Inc., free and clear of any interests. The Sale Hearing was held on Jan. 26, 2022, at 9:30 a.m. (CT). The APA and all Ancillary Documents and all of the terms and conditions thereof are approved. Pursuant to sections 105(a), 363(b) and 363(f) of the Bankruptcy Code, the Debtor is authorized to transfer the Purchased Assets to Aligned Holdings on the Closing Date free and clear of all Liens. A certified copy of the Order may be filed with the appropriate clerk and/or recorded with the appropriate recorder to act to cancel any of the Liens and other encumbrances of record against the Purchased Assets. The Court specifically approved the Parties' agreement that $100,000 of the Purchase Price will be held in escrow by the subchapter V trustee, Brian Walding, for a period of 60 days following the Closing Date to be used to (1) retroactively reinstate the Debtor's lapsed Blue Cross Blue Shield of Alabama health insurance plan or, (2) to be used to mitigate against employee losses/expenses as to the benefits issues. As to the second category, Aligned Holdings is authorized to request such funds specifically for that purpose from counsel for the Debtor, Bill D. Bensinger and Subchapter V Trustee Brian Walding, whose consent will not be unreasonably withheld. If consent cannot be obtained, Aligned Holdings may petition the Court for relief as to the escrowed funds. The Debtor is authorized to pay the prepetition balance of $34,622.06 for premiums due to Blue Cross Blue Shield of Alabama on or before the Closing Date, which will be deducted from the Employee Escrow Funds. The Limited Objection is resolved by the allowance of $20,000 to be retained from the Purchase Price held by the Debtor as an escrow carveout for the payment of Court-approved professional fees and expenses of the Subchapter V Trustee or such other professionals as the Court may deem appropriate. Said funds will not create a presumption of allowed professional fees nor serve as a limitation of amount of allowed professional fees by the Subchapter V Trustee or any other professional. The parties may close and otherwise consummate the APA on or after 5:00 p.m. (CT), Jan. 28, 2022. The Debtor will serve the Order along with a copy of the proposed APA on (a) all known creditors of the Debtor, (b) all known creditors of Keep Information Technology Simple, LLC, and (c) such other parties entitled to receive notice. The stay provision of Bankruptcy Rule 6004(h) and any other similar rule will not apply to the Order, and hence, the Order will be effective immediately upon its entry. About KeepITSimple.us LLC KeepITSimple.us, LLC filed its voluntary petition for relief under Chapter 11 of the Bankruptcy Code (Bankr. N.D. Ala. Case No. 21-02986) on Dec. 31, 2021, listing up to $500,000 in assets and up to $1 million in liabilities. Thomas A. Kane, manager and member, signed the petition. Judge D. Sims Crawford oversees the case. Daniel D. Sparks, Esq., and Bill D. Bensinger, Esq., at Christian & Small, LLP serve as the Debtor's bankruptcy attorneys. KURNCZ FARMS: Wins Cash Collateral Access ----------------------------------------- The U.S. Bankruptcy Court for the Western District of Michigan has authorized Kurncz Farms, Inc. to use cash collateral on a final basis in accordance with the budget. The Debtor is permitted to use cash collateral to fund payment of normal and ordinary post-petition operating expenses as and when incurred. The Debtor's actual expenses and cash expenditures may not exceed more than 115% of the projected amounts set forth in the budget -- as provided to PNL Devine, LLC, the Official Committee of Unsecured Creditors, the Internal Revenue Service, and the U.S. Trustee -- on an aggregate basis in any given week. All milk proceeds under the Milk Assignment as defined in the Motion must be divided between the Debtor and PNL. PNL will receive $37,500 from each milk check and the remaining amount will be paid directly to the Debtor. The $37,500 sent to PNL directly will be applied to the indebtedness due to PNL in the following order: $3,157 to the Cattle Lease, 6.5% interest accruing on the principal balances of the Note and New Inputs Loan, and the remaining amount will be applied to principal on the New Inputs Loan and then to principal on the Note. As adequate protection, PNL will be granted continuing and replacement security interests and liens in all of the Debtor's post-petition property. The IRS will also be granted continuing and replacement security interests and liens in all of the Debtor's post-petition property. The adequate protection liens are deemed valid and perfected without the need to file any document as may otherwise be required by law. The Debtor's authority to use Cash Collateral will continue until the earlier of: (a) the Debtor fails to materially comply with the terms contained in the Final Order; (b) a chapter 11 trustee is appointed for the Debtor's estate; (c) the chapter 11 case is converted to a proceeding under chapter 7; (d) an Order is entered dismissing this case without PNL's consent; or (e) upon plan confirmation. Any adequate protection liens and any adequate protection will be subordinate to: (i) the fees of the Clerk of the Bankruptcy Court and fees of the U.S. Trustee pursuant to 28 U.S.C. section 1930(a); (ii) the fees and expenses incurred by professionals retained by the Debtor up to $40,000 (net of retainer) for the months of November 2021, December 2021, and January 2022; (iii) the fees and expenses incurred by professionals retained by the Committee up to $20,000 for the months of December 2021 and January 2022; (iv) the fees and expenses incurred by professionals retained by the Debtor up to $14,000 each month beginning February 2022; and (v) the fees and expenses incurred by professionals retained by the Committee up to $10,000 each month beginning February 2022. A copy of the order is available at https://bit.ly/3ojVpdS from PacerMonitor.com. About Kurncz Farms Kurncz Farms, Inc. is part of the cattle ranching and farming industry. The company is based in Saint Johns, Mich. Kurncz Farms sought protection under Chapter 11 of the Bankruptcy Code (Bankr. W.D. Mich. Case No. 21-02612) on Nov. 30, 2021, listing as much as $10 million in both assets and liabilities. Peter J. Kurncz, president of Kurncz Farms, signed the petition. Susan M. Cook, Esq., at Warner Norcross + Judd, LLP and Barron Business Consulting serve as the Debtor's legal counsel and business consultant, respectively. The U.S. Trustee for Region 17 appointed an official committee of unsecured creditors in the Debtor's case on Nov. 22, 2021. The committee is represented by Varnum, LLP. LA CASA CANAVERAL: Gets OK to Hire Zimmerman as Bankruptcy Counsel ------------------------------------------------------------------ La Casa Canaveral, LLC received approval from the U.S. Bankruptcy Court for the Middle District of Florida to hire Zimmerman, Kiser & Sutcliffe, P.A. to serve as legal counsel in its Chapter 11 case. Richard Blackstone Webber, III, Esq., will be the primary attorney assigned to this matter and his current hourly rate is $550. Mr. Weber disclosed in a court filing that his firm is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. The firm can be reached through: Richard Blackstone Webber, III, Esq. Zimmerman, Kiser & Sutcliffe, P.A. 315 E. Robinson St., Suite 600 Orlando, FL 32801 Phone: +1 407-425-7010 Email: rwebber@zkslawfirm.com About La Casa Canaveral La Casa Canaveral LLC is a single asset real estate debtor (as defined in 11 U.S.C. Section 101(51B)). It is based in Cocoa Beach, Fla. La Casa Canaveral filed its voluntary petition for relief under Chapter 11 of the Bankruptcy Code (Bankr. M.D. Fla. Case No. 21-05584) on Dec. 14, 2021, listing as much as $10 million in assets. Danny P. Ringdahl, managing member, signed the petition. Judge Grace E. Robson oversees the case. Michael A. Saracco, Esq., at Zimmerman, Kiser & Sutcliffe, P.A. serves as the Debtor's legal counsel. LEGAL ADVOCACY: Seeks Cash Collateral Access -------------------------------------------- Legal Advocacy, P.C. d/b/a Norman Yatooma & Associates, P.C. asks the U.S. Bankruptcy Court for the Eastern District of Michigan, Southern Division, for authority to, among other things, use cash collateral. The Debtor requires access to cash collateral to address its working capital needs and fund other costs and expenses associated with their reorganization efforts. The Debtor seeks to use cash collateral in an amount consistent with the expenditures described in the budget, with a 5% variance. The Debtor believes only PNC Bank assert an interest in the cash collateral. The Debtor was forced to seek Chapter 11 protection as a result of PNC Bank's aggressive collection efforts, which unfortunately included actions such as freezing the firm's IOLTA account and the accounts of shareholder Mr. Norman Yatooma's young daughters. PNC further placed a lien on the Debtor's case proceeds of $400,000, and the Debtor anticipated an order of the Superior Court turning over the $400,000 to PNC Bank. Since commencing the bankruptcy and PNC Bank's oppressive efforts have been controlled, the Debtor has been able to obtain new engagements. The Debtor anticipates resolving the bankruptcy case by either a settlement with PNC Bank or a plan of reorganization that bifurcates PNC Bank's secured claim-based on the value of PNC Bank's security and pays PNC Bank over time. Further, because of PNC Bank's blanket lien on Debtor's assets, Debtor is assuming all funds of Debtor are PNC Bank's cash collateral and will not be utilizing them for any purpose absent a Court order or absent additional information indicating that the Debtor's funds, or some portion of them, are not PNC Bank's cash collateral. The Debtor proposes to provide adequate protection to the Prepetition Secured Party as follows, subject in all respects to payment of the Carve-Out: (i) a continuing security interest in and lien on all collateral of the Debtor of the same type and nature that exists as of the Petition Date with the same validity (or invalidity) and priority as exists as of the Petition Date, including the income and proceeds thereof (ii) solely to the extent of any Diminution in Value, an additional and replacement security interest in and lien on all property and assets of the Debtor's estates, and (iii) to the extent provided by sections 503(b) and 507(b) of the Bankruptcy Code, an allowed administrative claim in the chapter 11 cases. The Carve-Out means: (i) U.S. Trustee Costs; (ii) the unpaid and outstanding reasonable fees and expenses actually incurred by Professionals on or after the Petition Date and through the day of delivery of a Termination Notice under the Interim Order, up to the amounts set forth for each Professional in the Budget for such period, to the extent allowed by Court order and payable under sections 326, 328, 330 and 331 of the Bankruptcy Code and any interim procedures order; and (iii) the unpaid and outstanding reasonable fees and expenses actually incurred by the Professionals from or after the day following the delivery of a Termination Notice under the Interim Order, to the extent allowed by Court order and payable under sections 326, 328, 330, and 331 of the Bankruptcy Code and any interim procedures order, in an aggregate amount not to exceed $250,000. The Replacement Lien and the Adequate Protection Lien will be valid, binding, enforceable, non-avoidable and automatically perfected, notwithstanding the automatic stay, without the necessity of filing or recording any financing statement, deed of trust, mortgage, or other instrument or document. A copy of the motion is available at https://bit.ly/34ptcvd from PacerMonitor.com. About Legal Advocacy, P.C. Legal Advocacy, P.C. is a provider of legal services in Bloomfield Hills, Michigan. The Debtor sought protection under Chapter 11 of the US Bankruptcy Code (Bankr. E.D. Mich. Case No. 21-50040) on December 31, 2021. In the petition signed by Christine L. Constantino, Jr., agent, the Debtor disclosed $1,757,849 in assets and $4,082,795 in liabilities. Randy Calvin, Esq., at the Law Offices of Randy Calvin, is the Debtor's counsel. LEGAL ADVOCACY: Taps UHY LLP as Accountant ------------------------------------------ Legal Advocacy, PC, doing business as Norman Yatooma & Associates, PC, seeks approval from the U.S. Bankruptcy Court for the Eastern District of Michigan to employ UHY, LLP as its accountant. The Debtor needs the assistance of an accountant to prepare its federal and state tax returns for the years 2019, 2020, and 2021 and to assist with other financial matters related to its Chapter 11 case. The hourly rates of UHY's professionals are as follows: Daniel P. Markey $425 Dan Felstow $375 Matt Munn $370 Brad Michael $235 Justine Campbell $185 Staff Accountants $150 - $200 Administrative Assistants $100 In addition, the firm will seek reimbursement for expenses incurred. Daniel Markey, a managing director at UHY, 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: Daniel P. Markey UHY LLP 12900 Hall Rd., Suite 500 Sterling Heights, MI 48313 Telephone: (586) 843-2500 Email: dmarkey@uhy-us.com About Legal Advocacy Legal Advocacy, P.C. filed a petition for Chapter 11 protection (Bankr. E.D. Mich. Case No. 21-50040) on Dec. 31, 2021, listing up to $1,757,849 in total assets and $4,082,795 in total liabilities. Christine Constantino, Jr., agent, signed the petition. Judge Lisa S. Gretchko oversees the case. The Debtor tapped Randy L. Calvin, Esq., as bankruptcy attorney and UHY, LLP as accountant. LHS BORROWER: Moody's Assigns B2 CFR, Rates New Secured Debt 'B1' ----------------------------------------------------------------- Moody's Investors Service assigned a B2 Corporate Family Rating and B2-PD Probability of Default Rating to LHS Borrower, LLC. Moody's also assigned a B1 rating to the company's proposed senior secured credit facilities consisting of a 7-year $1.410 billion term loan B and a $200 million revolving credit facility. The outlook is stable. Proceeds from the proposed term loan will be used to repay the company's existing term loan and pay fees and expenses associated with the transaction. "LHS has grown its business exponentially over the past several years and generated healthy EBITA margins and robust free cash flow through successful execution of its Direct-To-Consumer (DTC) business model and impactful LeafFilter gutter protection product. A primary focus now is to implement the DTC model through additional verticals and diversify the business mix, while continuing to grow," said Scott Manduca, Vice President at Moody's. Assignments: Issuer: LHS Borrower, LLC Probability of Default Rating, Assigned B2-PD Senior Secured 1st Lien Term Loan, Assigned B1 (LGD3) Senior Secured 1st Lien Revolving Credit Facility, Assigned B1 (LGD3) Outlook Actions: Issuer: LHS Borrower, LLC Outlook, Assigned Stable RATINGS RATIONALE The B2 CFR is supported by LHS' strong profitability, asset light business model, future revenue growth visibility, and robust free cash prior to dividends. The CFR is constrained by the company's aggressive financial policy, limited product diversity, and supplier concentration. Moody's expects LHS to continue to grow revenue, as it implements its effective direct-to-consumer (DTC) model. In turn, Moody's anticipates the company's asset light business model, with limited working capital and capital expenditure needs, will enable the company to grow free cash flow before dividends and maintain a healthy EBITA margin of around 25%. LHS is also expected to continue to venture into new business verticals, beyond LeafFilter Gutter Systems, through acquisitions and greenfield investment, including an expanded product offering in Leaf Home Safety Solutions and a greenfield investment in what is to become Leaf Home Water Solutions. The B2 CFR reflects governance risk given the company's private equity ownership and aggressive financial policy that includes a history of sizeable dividend distributions. Private equity representation on the board and its majority ownership may prioritize the interests of equity holders rather than those of creditors. In addition, LeafFilter Gutter Systems remains the majority of LHS' business mix and manufactured material for this business is derived from a limited number of suppliers at this point. Leaf Home Solutions' good liquidity is supported by access to an undrawn $200 million revolving credit facility expiring in 2027 and expected continued profitability and free cash flow generation. The first lien term loan amortizes at 1% per year. The only financial covenant on the revolver is a springing net leverage that will be set at a 35% cushion to closing first lien net leverage and applies if revolver utilization exceeds 35%. There are no financial covenants on the term loan. The credit facilities are not secured by Leaf Home Solutions' Canadian subsidiary, Leaf Holdings of Canada, Inc., which could provide an alternate source of liquidity in a distressed scenario. The revolver and term loan are rated B1, one notch above the Corporate Family Rating, reflecting their priority claim over the $541 million second lien PIK notes issued in February 2021. The revolving credit facility and first lien term loan are issued out of LHS Borrower, LLC, and are parri passu. Both debt instruments are secured by a first priority interest of substantially all assets of Leaf Home Solutions, LLC and guarantors. Guarantors include the Parent (Leaf Home Solutions, LLC) and all existing and future wholly-owned material domestic subsidiaries of the parent and borrower. The second lien PIK notes will incur losses ahead of the first lien revolver and term loan in a distressed scenario. The preliminary first lien term loan documentation allows for incremental first lien facilities not to exceed 2021 last twelve months adjusted EBITDA and 100% of Consolidated EBITDA for the most recently ended four quarters including appropriate pro forma adjustment events; plus other adjustments. An unlimited amount can be incurred so long as the pro forma net leverage ratio does not exceed 3.5x. With respect to indebtedness secured by the collateral on a junior lien basis to the first lien term loans, the pro forma secured net leverage ratio must not exceed 5.0x. And, with respect to the incurrence of unsecured debt, the pro forma cash interest coverage ratio must not be less than 2.0x and the pro forma total net leverage ratio must not exceed 5.0x. The terms also include a most favored nation clause on all incremental first lien, subordinated, and unsecured facilities. The use of proceeds of incremental facilities may be used for working capital, capital expenditures, and other general corporate purposes including permitted acquisitions and payment of permitted dividends. All of net after tax cash proceeds from specified asset sales, subject to certain conditions, are to be directed toward debt payment. If proceeds are reinvested within 18 months after receipt, the amount directed toward debt reduction steps down at certain leverage ratio thresholds. There is no financial maintenance covenant in the preliminary first lien term loan documentation. The stable outlook reflects Moody's expectations of continued revenue growth, strong profitability and cash flow, and high EBITA margin. While financial policy is aggressive, Moody's expects a balanced approach to debt leverage and dividend distributions. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS Moody's could upgrade the ratings if a more benign financial policy is implemented, there is material traction made in diversifying product offerings thereby reducing reliance on a single product, and there is a reduction in supplier concentration. Specifically, the ratings could be upgraded if debt to EBITDA is sustained below 4.0x and EBITA to interest expense is sustained above 3.5x. Moody's could consider a downgrade if debt to EBITDA is sustained above 5.0x, EBITA to interest expense is sustained below 3.0x, or there is a deterioration in the company's liquidity profile. LHS Borrower, LLC, a wholly-owned subsidiary of Leaf Home Solutions, LLC, is a direct-to-consumer home solutions platform serving underserved markets with innovative home safety and improvement solutions throughout the United States and Canada. Leaf Home Solutions, LLC was purchased through an LBO by Gridiron Capital in 2016. The principal methodology used in these ratings was Business and Consumer Services published in November 2021. LHS BORROWER: S&P Assigns 'B' Issuer Credit Rating, Outlook Stable ------------------------------------------------------------------ S&P Global Ratings assigned a 'B' issuer credit rating to LHS Borrower LLC (doing business as Leaf Home) a Hudson, Ohio-based direct-to-consumer home solutions provider. S&P said, "At the same time, we assigned our 'B' issue-level and '3' recovery ratings to the company's proposed revolving credit facility and term loan. The '3' recovery rating indicates our expectation for meaningful recovery (50-70%; rounded estimate: 55%) in the event of a default. "The stable outlook reflects our expectation for continued momentum in revenue growth and moderate margin compression due to marketing and IT investments resulting in leverage improving to the low- to mid-4x range by the end of 2022. "Our ratings on Leaf Home are constrained by its narrow product focus and limited revenue visibility. The company's gutter protection services account for majority of the company's revenues in the 12-month period ended September 2021. Its project-based repair or remodeling service revenues are nonrecurring by nature, and we believe the company's lack of a recurring revenue stream creates future sales volume uncertainty. We believe the company's ability to continue its rapid growth trajectory over the next two to three years carries risk and will require success entering new markets, getting more penetration in existing markets, and expanding its line of complementary offerings. As we estimate a relatively low penetration rate in the North American gutter protection market, we believe its marketing expertise and green fielding new locations in regions with favorable growth prospects. We believe the increased scale will help the company defend its strategic position and further expand its operations, amid increasing penetration of home improvement solutions. "Moreover, we believe demand for home repair services like gutter protection is volatile and vulnerable to a decline in consumer investment in repair and remodel projects. We also expect Leaf Home to face heightened competition from larger competitors (such as Belfor Holdings Inc. and Power Home Remodeling Group LLC) as it expands its breadth of services to complementary, yet discretionary home improvement solutions and expands its total addressable market beyond the aging population, who prioritize home safety and appreciation. While the company's revenues grew 83.7% in 2020 alone since the onset of the pandemic, we believe nesting trends from stay-at-home mandates may have accelerated a meaningful amount of remodeling work and sustainable growth trends outside of our 12-month time horizon remain uncertain. "Nevertheless, we expect Leaf Home to benefit from strong revenue growth due to high demand over the next 12 months. We expect revenue growth of well over 20% in 2022 due to expansion into new markets, new service offerings, and the development of new marketing channels with its expanding customer base. The company's revenue grew 42.3% over the 12-month period ended Sept. 30, 2021, more than tripling its scale over the last three years in a highly fragmented and competitive residential repair and remodeling industry faced with strong competition from a variety of different players, including DIY homeowners. While the industry has relatively low barriers to entry and limited differentiation among peers, we expect Leaf Home to continue to benefit and increase market share from its proprietary digital marketing platform, its patented product offerings, and its national scale with a robust network of third-party providers (installers, manufacturers, and sales representatives)." Leaf Home's financial sponsor owners have an aggressive financial policy, which may limit deleveraging. Since its leveraged buyout in 2016, the company has taken a dividend annually, including a significant dividend in the first quarter or 2021, which was partially financed by the issuance of an incremental first lien term loan and $505 million in 12% payment-in-kind notes. Despite the company's record of dividends, adjusted leverage has remained below 5x due to rapid EBITDA growth over the past few years. Still, large, debt-financed dividends put significant pressure on Leaf Home to continue its strong operating performance to grow into its capital structure, and future dividends could limit the company's ability to reduce leverage. Strong free operating cash flow generation helps fund shareholder distributions. The company's good EBITDA margins and asset-lite business model using third party installers, manufacturers and sales representative generated $199 million in reported free operating cash flow in the 12 months ended Sept. 30, 2021. However, the company has had consecutive years of negligible or negative discretionary cash flow (free cash flow after dividends) due to debt-financed dividends. The company also has an aggressive tax distribution policy where it distributes 50% of net income to shareholders each quarter. S&P said, "While we expect the company to convert a high percentage of its EBITDA to free operating cash flow, we expect its financial sponsor, GridIron, will continue to prioritize dividend distributions to maximize returns. However, we have not incorporated any dividends into our base-case scenario given the uncertainty around their size and timing." Investment in IT and marketing capabilities will compress EBITDA margins in the mid-20% area in the near term. S&P expects moderate EBITDA margin contraction of about 250-290 basis points in 2022 from investments in its omnichannel and IT capabilities to support growth. Moreover, we believe the impact of inflation on material costs and a tight labor market will likely keep EBITDA margins in the mid-20% area. With that said, the company benefits from a higher-margin profile relative to peers due to its robust network of third-party providers and flexible marketing strategy. Moreover, a majority of the company's business is on a purchase order basis, where pricing can be determined at time of order, allowing the company to pass through material cost increases at point of sale, which should help mitigate wage or raw material input cost volatility. S&P said, "The stable outlook reflects our expectation for continued momentum in revenue growth and moderate margin compression due to marketing and IT investments resulting in leverage improving to the low- to mid-4x range by the end of 2022. "We could raise the ratings if the company executes on its growth strategy to significantly diversify and expand its business scale and adjusted leverage improves below 4x with adjusted discretionary cash flow (DCF)-to-debt above 5% on sustained basis. In this scenario, we would believe Leaf Home is committed to a more conservative financial policy and is unlikely to take additional debt-financed dividends." S&P could lower its ratings over the next 12 months if adjusted leverage approaches 6x with DCF to debt in the low-single-digit-percent area on a sustained basis. This could occur with: -- A deterioration in operating performance from pricing pressure, an issue with product quality and reputation or a trend toward a less efficient sales and marketing strategy; or -- Additional large debt-financed dividends. LIBERTY PARK: Seeks Cash Collateral Access ------------------------------------------ Liberty Park Apartments, LLC asks the U.S. Bankruptcy Court for the Eastern District of Louisiana for authority to, among other things use cash collateral, and provide adequate protection to Federal National Mortgage Association d/b/a Fannie Mae, the prepetition secured lender. The Debtor requires immediate use of cash collateral to operate its property. Access to cash collateral, the Debtor believes, will preserve and increase value, and assist in pursuit of their restructuring goals. Alternatively, the Debtor is considering selling the Property as a fully operating concern if reorganization and refinancing through a plan cannot be achieved. Fannie Mae holds a first mortgage on the Property. The loan to Fannie Mae is cross-collateralized with the property of Forest Park Apartments, LLC, and Washington Place, LLC. Forest Place and Washington Place are related entities of the Debtor and also filed Chapter 11 on January 27, 2022. Due to a lack of rental income, the Debtor entered into a Forbearance Agreement with Fannie Mae on April 27, 2020. When the Forbearance Agreement expired on September 30, 2020, the Debtor was unable to make the required payments due to Fannie Mae. In April 2021, Fannie Mae filed a Verified Petition for Executory Process in the Civil District Court for the Parish of Orleans, Case #2021-03010, seeking to appoint a keeper and ultimately foreclose on the Property. In that petition, Fannie Mae alleged it was owed $2,171,412. As a result of the Debtor and Fannie Mae's inability to resolve the issues raised in the Foreclosure and the damage caused by Hurricane Ida, the Debtor was forced to seek chapter 11 relief. Fannie Mae is the holder of a multifamily promissory note dated December 23, 2014, in the principal amount of $2,163,750. The Note is secured pursuant to the terms of a Multifamily Loan and Security Agreement. The Fannie Mae Prepetition Claims are secured by the Property, accounts, tenant security deposits, rents, leases, proceeds, insurance proceeds and other intangibles that may be cash collateral. The Prepetition Liens upon personal property were perfected by the filing of UCC-1 financing statements at Instrument No. 36-2014-52387 on December 30, 2014 and continued by Instrument No. 36-2019-51975 on December 30, 2019 with the clerk of court for the Parish of Orleans, Louisiana, and evidenced of record with the office of the Louisiana Secretary of State. As adequate protection for the use of cash collateral, the Debtor proposes to grant the Prepetition Secured Lender adequate protection liens on postpetition property to the extent necessary to protect against the diminution of value of the Prepetition Liens. The Debtors anticipate that these postpetition liens and security interests will adequately protect the Prepetition Secured Lender from any diminution in the value of its interest in the collateral. A copy of the motion is available at https://bit.ly/3AYybzd from PacerMonitor.com. About Liberty Park Apartments Westbank Holdings, LLC, et al., are LLCs that operate five low-income apartment complexes in New Orleans. The complexes are owned and operated by Joshua Bruno. Westbank Holdings, LLC, Cypress Park Apartments II, LLC, Liberty Park Apartments, LLC, and Forest Park Apartments, LLC, sought Chapter 11 protection (Bankr. E.D. La. Case Nos. 22-10082 to 22-10086) on Jan. 27, 2022. In the petition signed by Joshua Bruno as manager, Liberty Park Apartments estimated assets between $500,000 and $1 million and estimated liabilities between $1 million and $10 million. The cases are handled by Honorable Judge Meredith S. Grabill. Frederick L. Bunol, Esq., of THE DERBES LAW FIRM, LLC, is the Debtors' counsel. LUCIEN HARRY MARIONEAUX: Bid for Trustee Appointment Granted ------------------------------------------------------------ On June 4, 2021, certain creditors commenced a proceeding against Lucien Harry Marioneaux, Jr., by filing an involuntary petition requesting relief under chapter 7 of the Bankruptcy Code. The Debtor initially challenged the involuntary petition and the venue of this case. However, on August 31, 2021, an agreed order for relief was entered under chapter 7. The Debtor then requested that his case be converted to one under chapter 11. The court converted the case on August 31, 2021. Before the commencement of this case, the Debtor was involved in two state court proceedings pending in Louisiana. Those actions are referred to as the "Trust Litigation" and the "Succession Proceeding," more particularly described as: Marioneaux vs. Marioneaux, Case No. 588,685-A, First Judicial District Court, Caddo Parish, Louisiana and Succession of Lucien H. Marioneaux, Case No. 594,235-B, First Judicial District Court, Caddo Parish, Louisiana. The Trust Litigation was filed by Mary Sue Marioneaux and the Lela Mae Johnson Marioneaux Trust. They are also the petitioning creditors in this bankruptcy case. Among other things, the suit alleges the Debtor and his father committed breaches of trust and fraud. Soon after the Trust Litigation was commenced, the Debtor's father died. His father's succession was substituted as a defendant. After a trial on the merits, the court entered a judgment finding the Debtor and his father breached their fiduciary duties as trustees of various trusts and fraudulently deprived Mary Sue Marioneaux and her trust of valuable assets. The Trust Judgment stated the Debtor breached his fiduciary capacity as a trustee, "including the duty of loyalty, by engaging in intentional acts of willful fault, misconduct, gross negligence and fraud" in his administration of certain trusts at issue in that litigation. The trial court rendered judgment against the Debtor, his father's succession, and the various companies to which they diverted the trust money and property. Among other things, the judgment awarded over $6 million in monetary damages plus judicial interest and over $1.5 million in attorney fees and other costs. The judgment also required the Debtor to return property that had been improperly diverted from the trusts. The trial court permitted the Debtor to file a "suspensive appeal" with respect to certain portions of the judgment and a "devolutive appeal" with respect to the remainder. The appeal is pending. Before the Hon. John S. Hodge of the United States Bankruptcy Court for the Western District of Louisiana, Shreveport Division, is a motion filed by the judgment creditors that seeks appointment of a trustee. They allege the Debtor should be removed as a debtor-in-possession because he committed fraud and failed to perform various essential duties of a debtor-in-possession. Judge Hodge finds that "cause" exists for the appointment of a trustee as contemplated under 11 U.S.C. Section 1104(a)(1). The court also finds the appointment is in the interests of creditors and other interests of the estate as contemplated under 11 U.S.C. Section 1104(a)(2). Accordingly, a trustee must be appointed. Judge Hodge points out that prior to the commencement of this case, two different state court judges issued rulings which called into question the Debtor's competence and trustworthiness. Each judge independently concluded the Debtor failed to perform his duty as a trustee or administrator to properly account for property that was under his administration. "This court would be hard-pressed to justify letting Debtor remain as a debtor in possession when two separate judges have already concluded that he is not trustworthy and is not willing to provide an accurate accounting of property under his control," Judge Hodge writes in a Memorandum Ruling dated January 24, 2022, a full-text copy of which is available at https://tinyurl.com/y2um45tr from Leagle.com. The Chapter 11 case is In re: Lucien Harry Marioneaux, Jr., Chapter 11, Debtor, Case No. 21-10421 (Bankr. W.D. La.). LWO ACQUISITIONS: Files Emergency Bid to Use Cash Collateral ------------------------------------------------------------ LWO Acquisitions Company LLC, d/b/a Circuitronics, Inc., asks the U.S. Bankruptcy Court for the Northern District of Texas, Fort Worth Division, for authority to use cash collateral in accordance with the budget and provide adequate protection. The Debtor seeks emergency relief to use cash collateral of its prepetition secured lender in the operation of its business. The Debtor's business has suffered from the effects on the economy from the COVID-19 pandemic and the worldwide supply chain difficulties resulting therefrom. The Debtor has urgent need for the continued use of cash collateral to make payroll to employees and to pay post-petition operational expenses in order to continue operations. The relief requested for the use of cash collateral will serve to preserve the Debtor's operations and value of its assets to the collective benefit of creditors and parties-in-interest. To further demonstrate the impact of the pandemic, in late 2019, the Debtor had 119 employees. As of the Petition Date, the Debtor is down to 53 employees. A loan from the Paycheck Protection Program helped the Debtor survive through 2021. Starting 2022, many businesses impacted by the pandemic are recovering and getting back on track, the Debtor's largest customer included. Orders from existing and new customers are being placed, giving the Debtor hope for a reorganization. However, while the Debtor's outlook is improving with new bookings, the worldwide supply chain difficulties triggered by the pandemic pose challenges for the Debtor. The Debtor is dependent on availability of raw materials and parts to assemble its products. The supply chain constraints are leading to delays in the Debtor completing orders and as a result slows the Debtor from realizing on the income from the new business. To further propagate the situation, if the Debtor has even one electronic component delay the entire order cannot be completed, resulting in slower inventory turns, slow pay to vendors, and delayed payment from its customers. The Debtor is further financially hampered by an economically burdensome real property lease. The Debtor entered into the 20-year term Office Lease in 2014. Under the Office Lease, in addition to rent, the Debtor is responsible for all of the maintenance and repairs for the building. The Building is located in Las Colinas, Texas where it sits on deep, expansive clay soil. The shifting soil has caused a portion of the Building's slab foundation to sink resulting in a noticeable slant to the flooring. Furthermore, a gap has developed where one of the support wall panels adjoins the roof. Under the Office Lease, the Debtor is responsible for taking remedial actions to repair these damages. Minor remediation is estimated to require $250,000 to $500,000. More complete and longer lasting repairs that call for stabilizing the walls and bringing up the floor are anticipated to cost up to $1 million or more. The Debtor is without the financial wherewithal to carry out these remedial measures. Without the repairs, the Building will become increasingly unstable and will eventually pose a safety risk to the Debtor's personnel and personal property. For that reason, the Debtor has transitioned into a new location and is operating from the new location as of the Petition Date. The Debtor is party to a Credit Agreement dated as of December 19, 2014 with Gladstone Capital Corporation. Pursuant to a Pledge and Security Agreement dated December 19, 2014, the Debtor's obligations under the Credit Agreement and the Notes are secured by (1) a blanket lien in substantially all assets of the Debtor, including all accounts and proceeds thereof, (2) a guaranty by the Debtor's corporate parent, Circuitronics EMS Holdings, LLC, and (3) a blanket lien in all assets of Holdings, including the capital stock of the Debtor. The Debtor's obligations under the Credit Agreement, the Notes, and all accrued and unpaid interest, fees, and costs matured and became due and owing on June 19, 2021. As of the Petition Date, the Debtor owed $24,258,921 to the Prepetition Lender. As of the Petition Date, the Debtor's unaudited balance sheet reflected total assets of $12,412,700, total liabilities of $29,932,944, and equity of ($17,520,244). The Debtor submits that the Prepetition Lender is significantly under-secured. In an effort to maximize its chance to recover on the obligation owed by the Debtor, the Prepetition Lender has agreed to fund a plan of liquidation for the Debtor pursuant to which the Prepetition Lender agrees to purchase all or substantially all of the Debtor's assets via a credit bid of a portion of the Prepetition Secured Debt. The Prepetition Lender will ensure that administrative expenses of the Chapter 11 case and the U.S Trustee fees are paid. The Debtor anticipates filing such plan of liquidation within the coming week. As adequate protection for the use of cash collateral, the Debtor proposes to grant Prepetition Lender a replacement security interest in, and lien against, effective as of the Petition Date without the necessity of Prepetition Lender taking any further action, all right, title and interest in any property acquired by the Debtor. To the extent the Replacement Liens granted do not provide the Prepetition Lender with adequate protection of its interests in the cash collateral, the Prepetition Lender will have a superpriority administrative expense claim in the case and any successor case. A copy of the motion is available at https://bit.ly/3olO9hM from PacerMonitor.com. About LWO Acquisitions Company LLC LWO Acquisitions Company LLC, d/b/a Circuitronics, Inc. is a provider of specialized printed circuit board assembly and related electronic manufacturing services. The Debtor offers a broad set of capabilities to customers, including prototype development, complex and ruggedized PCB assembly, electromechanical assembly, system integration/configuration, and direct fulfillment solutions. The Debtor sought protection under Chapter 11 of the U.S. Bankrupcy Code (Bankr. N.D. Tex. Case No. 22-40256-elm11) on February 2, 2022. The petition was signed by Rob Subia, chief executive officer. As of the Petition Date, the Debtor's unaudited balance sheet reflected total assets of $12,412,700, total liabilities of $29,932,944, and equity of ($17,520,244). Jeff P. Prostok, Esq., at Forshey and Prostok LLP, is the Debtor's counsel. MANN REALTY: Feb. 8 Hearing on Trustee's Sale of Harrisburg Asset ----------------------------------------------------------------- Judge Robert N. Opel, II, of the Bankruptcy Court for the Middle District of Pennsylvania will convene a hearing on Feb. 8, 2022, at 11:00 a.m., to consider the proposed private sale by Markian R. Slobodian, the Trustee for the Estate of Mann Realty Associates, Inc., of the unimproved real property located at 1125 South 9th Street, City of Harrisburg, Dauphin County, Pennsylvania (Parcel No. 01-049-029-000-0000), to Shanois Associates, LLC, or its assigns for $150,000, free and clear of liens and encumbrances, subject to higher and better offers. About Mann Realty Associates Mann Realty Associates, Inc., previously filed a voluntary petition under Chapter 11 of the Bankruptcy Code (Bankr. M.D. Pa. Case No. 17-00080) on Jan. 10, 2017. The petition was a "pro se" filing, or case filed without attorney. The Debtor is an affiliate of Kimbob, Inc., which sought bankruptcy protection on March 1, 2017 (Case No. 17-00836). Mann Realty Associates again filed for Chapter 11 bankruptcy protection (Bankr. M.D. Pa. Case No. 17-01334) on March 31, 2017. In the petition signed by Robert M. Mumma, II, its president, the Debtor was estimated to have assets between $10 million and $50 million and debt between $1 million and $10 million. Judge Robert N. Opel II presides over the case. Craig A. Diehl, Esq., at the Law Offices of Craig A. Diehl, serves as the Debtor's bankruptcy counsel. MICHAEL ZOLLICOFFER: Unsecureds to Recover 0% in Subchapter V Plan ------------------------------------------------------------------ Michael L. Zollicoffer, MD, P.A., submitted an Amended Chapter 11 under Subchapter V Plan dated Jan. 31, 2022. During the term of this Plan, the Debtor shall submit the disposable income (or value of such disposable income) necessary to the creditors. The value of the property to be distributed under the Plan during the term of the Plan is not less than the Debtor's projected disposable income for that same period. Unsecured creditors holding allowed claims will receive distributions, which the Debtor has valued at approximately $0.00 cents on the dollar. The Plan also provides for the payment of secured, administrative, and priority claims in accordance with the Bankruptcy Code. The Debtor proposes to pay WH-NSMOB LLC (the "Landlord") by the following disposable income and monthly payments to the Landlord. The Debtor will be making its monthly rent payment of $15,107.64 to the Landlord, which includes $2,750.00 to the presently owed build out of the property, beginning on January 1, 2022 and continuing through the life of the Plan. The Landlord will receive the disposable income plan payments of $10,000 per payment for June, 2022 and October 2022 and $20,000 per payment from April, 2023 to October, 2025 and $30,000 for April, 2026 and October, 2026. Additionally, the Debtor will make two (2) lump sum payments of $57,508.13 in October, 2024 and October, 2026. Class 4 consists of the Landlord Claim - WHNSMOB LLC with $315,016.26 total amount of claims. This Class will receive a distribution of 100% of their allowed claims. Class 5 consists of Unsecured Creditors with $54,537.64 total amount of claims. This Class will receive a distribution of 0% of their allowed claims. Debtor will be able to make payments in June and October of $10,000 and payments of $20,000 every six months throughout the remainder of the Plan. The funds for distribution will be the disposable income available every six months. Plus, the Debtor will be paying the Landlord $2,750 per month with its monthly rent. A full-text copy of the Amended Plan dated Jan. 31, 2022, is available at https://bit.ly/3uk6Hmv from PacerMonitor.com at no charge. Attorneys for the Debtor: Daniel Alan Staeven, Esq, Frost & Associates, LLC 839 Bestgate Road, Suite 400 Annapolis, Maryland 21401 Tel: (410) 497-5947 E-mail: daniel.staeven@frosttaxlaw.com About Michael Zollicoffer, MD PA Michael L. Zollicoffer MD, P.A. is a Maryland company which operates a professional Pediatrics office in Baltimore, Maryland. The Debtor filed a Chapter 11 petition (Bankr. D. Md. Case No. 21 15494) on August 27, 2021. MILLERKNOLL INC: S&P Alters Outlook to Negative, Affirms 'BB+' ICR ------------------------------------------------------------------ S&P Global Ratings S&P Global Ratings revised its outlook on U.S.-based MillerKnoll Inc., the office and residential furniture manufacturer, to negative from stable. At the same time, S&P affirmed its 'BB+' issuer credit rating and 'BBB-' ratings on the senior secured debt. The recovery rating remains '2', indicating its expectations for substantial (70%-90%: rounded estimate 75%) recovery in the event of a payment default. The negative outlook reflects the potential for a lower rating over the next 12 months if S&P believes the company's operating performance will not recover, resulting in adjusted debt to EBITDA sustained above 3x. S&P said, "The outlook revision reflects weaker-than-expected operating results for the past two quarters due to raw material and labor cost inflation and global supply chain disruptions. Despite organic growth, the company's year-to-date adjusted EBITDA margin of 13% was below our expectations. We expect adjusted EBITDA margin to tighten further to around 11% for the full fiscal year 2022 (ending May 31). This is primarily due to the rise in commodity costs, mainly steel; higher labor and transportation costs; and supply chain challenges, which continue to pose capacity and fulfillment constraints. The company has taken three pricing actions in the past year and an additional one planned for January to offset these headwinds, but there is a price lag, and we expect some of the pricing will take hold in the fourth quarter of fiscal 2022. As such we expect continued margin pressure for the balance of the year. "We believe the integration of Knoll Inc. is on track, with the company now expecting an additional $20 million run-rate savings over and above the $100 million initially identified. "We believe substantial uncertainties remain in the North American office furniture market, partially mitigated by the company's presence in the growing international and retail markets. Return-to-office trends have yet to show meaningful recovery across large North American office hubs due to coronavirus variants delaying a full return to the office and many employers preferring hybrid models. We had expected a significant improvement in return to office by early 2022. We now expect employers will push target return to office dates and consequently, extend office renovation investments later into calendar 2022. Nevertheless, MillerKnoll's backlog increased significantly by $130 million quarter-over-quarter to $967 million as of November 2021, signaling pent-up demand associated with employers' return to office aspirations. "Substantial risk of employers permanently reducing occupied office space (particularly as office leases—which typically have terms of 5 to 10 years--come up for renewal) and moving to hybrid work from home models continue to cast a cloud on the long-term recovery for the industry. We believe MillerKnoll's wide range of residential and commercial product offerings including "resimercial"--which brings aspects of home into the contemporary workspace--partly mitigate the highly cyclical nature of the contract office furniture industry. The large mix of seating has benefitted the company during the pandemic as consumers purchased more chairs at home. While this serves as a mix benefit, risk of reversal of this impressive performance during the pandemic remains, potentially signaling there was a large pull forward of home office demand. "We expect MillerKnoll's financial policy will target reducing and sustaining adjusted leverage well below 3x over the longer term. We expect adjusted leverage to remain elevated at around 4x in 2022 compared to the 3.5x following the Knoll acquisition, improving to the high—2x area by 2023 as pricing action takes effect and supply chain issues ease. MillerKnoll has a company-defined leverage target of 1x-2x over the longer term. "The negative outlook reflects difficult operating conditions and the potential for a lower rating over the next 12 months if we believe MillerKnoll will no longer be able to de-lever and reach our base-case forecast." S&P could lower its rating if the company's profitability does not improve in line with its expectations, and it forecasts adjusted leverage sustained above 3x. This could happen if MillerKnoll: -- Is unable to pass on price increases or otherwise mitigate input cost increases or supply chain bottlenecks are worse than S&P expects. -- Reports declining sales, potentially signaling there was a large pull forward of home office demand in fiscal 2021. -- Experiences problems integrating Knoll, including operational disruptions or dealer network conflicts. S&P could also lower the rating if it believes demand in the contract office furniture space will be permanently lower over the medium term, which could lead to a weaker business risk profile, perhaps signaled by commercial enterprises meaningfully reducing office square footage; or if there is a significant re-emergence of the virus and strict lockdowns. S&P could revise the outlook to stable if it believes the company is on track to meet our forecasted deleveraging path, including adjusted leverage approaching the mid-2x area. This could result from a combination of: -- The company successfully passing on price increase to its customers; -- Input costs decline and supply chain bottlenecks ease, enabling the company to achieve our adjusted EBITDA margin projection; -- Volume growth continues, driven by recovery in the Americas contract segment as well as strong demand in both the retail and international contract channels; and -- The smooth integration of the Knoll business, including realization of planned synergies. ESG credit indicators: E-2 S-2 G-2 MONTAUK CLIFFS: Montauk Property Up for Feb. 24 Auction ------------------------------------------------------- Pursuant to a judgment dated Jan. 5. 2021, the property located at and commonly know as 38-42 Old Montauk Highway, Montauk, NY ("Property") currently held by Montauk Cliffs LLC and the rights together with the property and related collateral describe in the judgment and the mortgage being foreclosed thereby, will be sold to the highest qualified bidder at a public auction to be held on Feb. 24, 2022, at 2:30 p.m. EST, at the East Hampton Town Hall, 159 Pantigo Road, East Hampton, New York. The property is more particularly described as District: 0300, Section 021.00, Block: 02.00 and Tax Lots 23 and 24.4 in the County of Suffolk, State of New York. The approximate amount of sums due pursuant to the judgment, as of April 3, 2020, excluding costs and expenses of the sale, reimbursable costs and expenses incurred by plaintiffs in the foreclosure action, additional accrued interest, and protective advances made to preserve the Mortgaged premises through the date of sale, is $27,551,028.43. For all questions and inquiries, contact: James N. Faller, Esq. attorney(s) for plaintiff Reed Smith LLP 599 Lexington Avenue New York, NY 10022 Email: james.faller@reedsmith.com Tel: +1 (212) 521-5400 MY SIZE: Appoints Ezequiel Brandwain as Chief Commercial Officer ---------------------------------------------------------------- My Size, Inc. appointed Ezequiel Javier Brandwain to serve as the Company's chief commercial officer, effective as of Feb. 1, 2022. Mr. Brandwain brings more than two decades of global experience in retail and the fashion industry, mainly in business development, operations, and international markets. Before joining the Company, Mr. Brandwain held positions of increasing responsibility at several companies, including between June 2017 and November 2020, at 7 For All Mankind International, where he served as director, Latin America and Caribbean, managing business development and operations across Latin America and the Caribbean. Before that, between May 2016 and June 2017, Mr. Brandwain served as chief business development officer at Replay - Fashion Box SPA, where he oversaw business development and operations, expansion and control in the Americas, the Caribbean, and North-East Asia. Prior this role, between September 2015 and May 2016, he served as the Replay's managing director in Latin America and the Caribbean, leading the company's international expansion in these regions. Prior to that, Mr. Brandwain has held similar executive positions at Authentic Brands Group LLC, Flemingo International Ltd., Calvin Klein, Givenchy, Nautica, Report Collection/Modextil, Inc., and Andrew Koenig International, Inc. Between September 2019 and November 2020, Mr. Brandwain served as a member of the board of directors of 7 For All Mankind Brazil Importacao, Comercio E Distribuicao S.A. In connection with his appointment as chief commercial officer, on Jan. 27, 2022, Mr. Brandwain and My Size Israel 2014 Ltd., a subsidiary of the Company, entered into an employment agreement. Pursuant to the terms of the Employment Agreement, Mr. Brandwain will receive NIS 45,000 per month as his base salary and will be eligible to receive a monthly commission as determined by the Company. Under the Company's current commissions model, Mr. Brandwain will be entitled to commissions on the overall Company's sales of up to 5% of each direct sale of the Company's products or services, and up to 2% of indirect sales. In addition, Mr. Brandwain will be entitled to social benefits and other benefits, including, but not limited to, contributions towards an education fund, pension scheme, manager's insurance, insurance coverage, including insurance in case of disability, annual vacation days, sick leave, Company's car, Company's cell phone, and expense reimbursement. Pursuant to the terms of the Employment Agreement and subject to certain conditions, payments made by the Company to the pension fund or the manager's insurance fund shall be made in lieu of severance payments due to Mr. Brandwain. The term of the Employment Agreement shall be effective as of Feb. 1, 2022, and will continue until such time either party provides a written notice to the other party according to the applicable law in advance of the termination of such agreement. The Company may also terminate Mr. Brandwain's employment without prior written notice (or payment in lieu of such notice) for cause (as defined in the Employment Agreement). The Employment Agreement also includes provisions regarding loyalty, confidentiality, non-competition, and intellectual property undertaking. About My Size Headquartered in Airport City, Israel, My Size, Inc. -- www.mysizeid.com -- is a creator of mobile device measurement solutions that has developed innovative solutions designed to address shortcomings in multiple verticals, including the e-commerce fashion/apparel, shipping/parcel and do it yourself, or DIY, industries. Utilizing its sophisticated algorithms within its proprietary technology, the Company can calculate and record measurements in a variety of novel ways, and most importantly, increase revenue for businesses across the globe. My Size reported a net loss of $6.16 million for the year ended Dec. 31, 2020, compared to a net loss of $5.50 million for the year ended Dec. 31, 2019. As of Sept. 30, 2021, the Company had $4.97 million in total assets, $1.88 million in total liabilities, and $3.09 million in total stockholders' equity. Tel Aviv, Israel-based Member Firm of KPMG International, the Company's auditor since 2017, issued a "going concern" qualification in its report dated March 29, 2021, citing that the Company has incurred significant losses and negative cash flows from operations and has an accumulated deficit that raises substantial doubt about its ability to continue as a going concern. NATURE COAST: Seeks to Hire John Grayson as Accountant ------------------------------------------------------ Nature Coast Wellness Clinic, LLC seeks approval from the U.S. Bankruptcy Court for the Northern District of Florida to employ John Grayson, a certified public accountant at Grayson Accounting & Consulting, PA. Mr. Grayson will provide tax advice and accounting services to the Debtor and complete any necessary tax forms, including filing tax returns. Mr. Grayson 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 professional can be reached at: John Grayson, CPA Grayson Accounting & Consulting, PA 118 Salem Ct. Tallahassee, FL 32301 Telephone: (850) 216-4045 About Nature Coast Wellness Clinic Nature Coast Wellness Clinic, LLC filed a Chapter 11 bankruptcy petition (Bankr. N.D. Fla. Case No. 21-40250) on Aug. 2, 2021, listing as much as $500,000 in assets and as much as $1 million in liabilities. Judge Karen K. Specie oversees the case. The Debtor tapped Bruner Wright, PA as legal counsel and John Grayson, CPA, at Grayson Accounting & Consulting, PA as accountant. NAVEX TOPCO: S&P Upgrades ICR to 'B' on Improved Performance ------------------------------------------------------------ S&P Global Ratings raised its issuer credit rating on U.S.-based ethics and compliance (E&C) software as a service (SaaS) provider, NAVEX TopCo Inc. to 'B' from 'B-'. S&P said, "At the same time, we raised our issue-level rating on NAVEX's first-lien debt to 'B' from 'B-', and on its second-lien debt to 'CCC+' from 'CCC'. The recovery ratings remain '3' and '6', respectively. "The stable outlook on NAVEX reflects our expectation that continued growth in the E&C software market, increased penetration into the company's existing customer base and a high degree of recurring revenue will enable the company to maintain leverage in the 5.0x-6.0x area over the next 12 months. "NAVEX's financial performance in recent quarters led to adjusted debt to EBITDA that is lower than the 7.0x threshold for an upgrade, where we expect it to remain over the next 12 months. The company outperformed our expectations with leverage in the mid-5x area in the trailing-12-month period ended Sept. 30, 2021. This came as a result of mid- to high-single-digit percentage revenue growth from strong demand for governance, risk, and compliance solutions (GRC) as companies prioritize reputation management. Supporting this is its highly recurring revenue base with its subscription model and high retention rates. During this time, EBITDA margins expanded to the low-40% area from high-30% mainly because of pandemic-induced cost containment measures. We forecast potential revenue growth up to the high-single-digit percentage area in 2022, with a normalization of EBITDA margins around mid-30% over the same period. Our assumption for 2022 incorporates solid demand in the company's broad portfolio of GRC solutions and price increases, partially offset by the elevated investments for growth such as headcount, product innovation, sales and marketing. As a result, we expect leverage in the mid-to-high 5x area over the next 12 months. In our view, there may be additional upside to our base-case assumption as customers may spend incrementally on risk management due to the growth in hybrid work environments." The company has cushion in leverage, solid free operating cash flow, and liquidity to support moderate-sized potential acquisitions. Despite stronger metrics, the company remains exposed to aggressive financial policies as BC Partners and Vista Equity Partners retains its ability to influence NAVEX's operational and capital allocation strategy. S&P said, "We also note most of the company's earnings stem from the U.S. and it has historically broadened its footprint in Europe through acquisitions such as ExpoLink and WhistleB in 2019. With that said, modest working capital and capital expenditure requirements support our expectation for solid free operating cash flow (FOCF) generation, such that FOCF to debt improves to the 10%-15% area in 2021 and 15%-20% area in 2022 from 10% in 2020. Moreover, lower leverage, our expectation for strong FOCF generation, and its healthy cash balance and full availability under its $75 million revolving credit facility increase its capacity to make acquisitions." S&P said, "The stable outlook on NAVEX reflects our expectation that continued growth in the E&C software market, increased penetration into the company's existing customer base, and a high degree of recurring revenue will enable the company to maintain leverage in the 5.0x-6.0x area on a sustained basis. "We could lower the rating if an industry downturn, operational challenges, or intensifying competitive pressures lead to customer defections and margin erosion, such that leverage rises above 7.0x on a sustained basis. We could also lower the rating if the company engages in greater-than-expected debt-financed acquisitions and dividend distributions that drive adjusted leverage beyond 7.0x on a sustained basis. "Although unlikely over the next 12 months, we could raise our rating on NAVEX if the company increases its scale significantly (aligning it more comparably with higher-rated peers) and strengthens its operating performance such that leverage remains below 5x and FOCF as a percentage of debt above 10% on a sustained basis. An upgrade would also be contingent on a commitment to maintain leverage at or below these levels." NB LOFT VUE: Trustee Seeks to Hire TPS-West as Accountant --------------------------------------------------------- Randy Williams, the Chapter 11 trustee for NB Loft Vue, DST and NB Vue Mac, DST, seeks approval from the U.S. Bankruptcy Court for the Southern District of Texas to employ TPS-West, LLC as his accountant. The firm's services include: a. preparing federal and state tax returns and representing the trustee in dealings with the Internal Revenue Service and other government authorities in tax-related matters; b. reconstructing the books and records of the Debtor; c. preparing a list of missing records needed to complete an analysis of the Debtor's financial operations and transactions; d. overseeing the tracing of funds in and out of the Debtor's bank accounts and account records; e. preparing preference and fraudulent transfer analysis for the trustee; f. preparing an analysis of possible manipulations, falsification, alteration or destruction of accounting records and supporting documents; g. preparing operating reports as required by the Office of the U.S. Trustee. The hourly rates charged by the firm for its services are as follows: William G. West, CPA $365 per hour Richard P. Anderson, CPA $300 per hour James L. Clarke, CPA $280 per hour William A. Potter, CPA $280 per hour Rhonda B. Fronk, CPA $250 per hour Natalie S. Hinson, Paraprofessional $155 per hour William West, CPA, of TPS-West disclosed in a court filing that his firm is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. The firm can be reached through: William G. West, CPA TPS-West LLC 12837 Louetta Rd., Suite 201 Cypress, TX 77429 Phone: 281-552-8430 Fax: 281-552-8431 About NP Loft Vue and NB Vue Mac NP Loft Vue DST and NB Vue Mac DST sought protection under Chapter 11 of the Bankruptcy Code (Bankr. S.D. Texas Lead Case No. 21-32292) on July 6, 2021, listing as much as $50 million in both assets and liabilities. Patrick Nelson, the Debtors' authorized representative, signed the petition. Judge Marvin Isgur oversees the cases. The Debtors tapped Tucker Ellis, LLP and Munsch Hardt Kopf & Harr, P.C. as legal counsel. O'Boyle Properties, Inc. is the investment banker. Randy W. Williams is the Chapter 11 trustee appointed in the Debtors' cases. Jackson Walker, LLP and TPS-West, LLC serve as the trustee's legal counsel and accountant, respectively. NB LOFT VUE: Trustee Taps O'Boyle Properties as Real Estate Broker ------------------------------------------------------------------ Randy Williams, the trustee appointed in the Chapter 11 cases of NB Loft Vue, DST and NB Vue Mac, DST, seeks approval from the U.S. Bankruptcy Court for the Southern District of Texas to employ O'Boyle Properties, Inc. as real estate broker. The broker will assist the trustee in listing, marketing, and selling the Debtor's real property and improvements located at 3125 McCart Ave., Fort Worth, Texas. The broker will receive 1.88 percent of gross cash sale price; provided however that if the Debtor's real property and improvements are purchased by Fannie Mae (or Fannie Mae's designee) via credit bid then a broker commission of 1.50 percent will be paid by Nelson Partners, LLC. As disclosed in court filings, O'Boyle Properties is a "disinterested person" as that term is defined in section 101(14) of the Bankruptcy Code. The firm can be reached at: O'Boyle Properties, Inc. 14114 Dallas Pkwy., Ste. 520 Dallas, TX 75254-4349 Telephone: (972) 934-3400 About NP Loft Vue and NB Vue Mac NP Loft Vue DST and NB Vue Mac DST sought protection under Chapter 11 of the Bankruptcy Code (Bankr. S.D. Texas Lead Case No. 21-32292) on July 6, 2021, listing as much as $50 million in both assets and liabilities. Patrick Nelson, the Debtors' authorized representative, signed the petition. Judge Marvin Isgur oversees the cases. The Debtors tapped Tucker Ellis, LLP and Munsch Hardt Kopf & Harr, P.C. as legal counsel. O'Boyle Properties, Inc. is the investment banker. Randy W. Williams is the Chapter 11 trustee appointed in the Debtors' cases. Jackson Walker, LLP and TPS-West, LLC serve as the trustee's legal counsel and accountant, respectively. NEW YORK OPTICAL: Feb. 8 Auction of Porsche Design Inventory Okayed ------------------------------------------------------------------- Judge Scott M. Grossman of the U.S. Bankruptcy Court for the Southern District of Florida authorized New York Optical-International, Inc.'s sale at auction the Remaining Porsche Design Inventory free and clear of all liens, claims, encumbrances, and other interests of any kind or nature whatsoever, according to the terms of the proposed auction, Exhibit A to the Debtor's Motion. The Auctioneer will set initial minimum bids at its discretion on items or lots of items offered for sale as listed on the Sales Procedures Proposal, and will emphasize that all product is genuine and not knock-offs or counterfeit product, and will conduct the sale in a businesslike and professional manner. The Sale will be conducted on Jan. 18 and 26, 2022, and Feb. 8, 2022, and at the discretion of the Auctioneer, a possible fourth day. The Auction will be advertised in the same manner as the previous Court approved auction of Porsche Design Inventory. The Auctioneer may use the name “Porsche Design” in advertising so long as the advertising does not claim or imply that the seller is Porsche Design, Rodenstock GMBH, or any related entity, and does not make any false designation of origin or false or misleading claims. The Debtor and Auctioneer will not alter the Product in any way that might create a likelihood of consumer confusion. Any creditor or party in interest that did not object to the Motion is deemed to have consented to the Motion and Sale. In the event any party fails to release its liens, claims, encumbrances or interests against the Porsche Design Inventory, the Court will enter such further Orders as may be required to release such Liens from the assets so as to clear title to the assets and permit the sale. At the conclusion of the auction, the Debtor is authorized to pay the costs of the auction from the auction proceeds and will retain all net proceeds of the auction in the Debtor's Operation Account pending further order of the Court. A hearing on the Motion was held on Jan. 5, 2022, at 2:00 p.m. About New York Optical-International New York Optical-International, Inc., is a Davie, Fla.-based company that offers optical products. It conducts business under the name Tuscany Eyewear. New York Optical-International filed a petition for Chapter 11 protection (Bankr. S.D. Fla. Case No. 20-17961) on July 22, 2020, listing as much as $10 million in both assets and liabilities. New York Optical-International President Wayne R. Goldman signed the petition. Judge Scott M. Grossman oversees the case. David W. Langley, Esq., is the Debtor's bankruptcy attorney while Leto Law Firm and Alexander Duve, Esq., serve as the Debtor's special counsel. Connolly Wasserstrom & Castillo, LLC is the Debtor's accountant. NITROCRETE LLC: Seeks to Employ RSM US as Accountant ---------------------------------------------------- NITROcrete, LLC and its affiliates seek approval from the U.S. Bankruptcy Court for the District of Colorado to hire RSM US LLP as its accountant. The firm's services include: (a) preparing Federal Form 1065, Partnership Income Tax Return and state income tax return (per state); (b) preparing Forms 5471, 8858, or 8865 and Form 926 (if needed); (c) preparing Sec. 951A Computation (if needed based on tax structuring and planning opportunities); (d) preparing Sec. 250 Computation (if needed based on tax structuring and planning opportunities); (e) reporting Schedule K International Footnote; (f) reporting Foreign Bank Account; (g) filing Canadian income tax (if Canada operations are treaty-protected throughout 2021); (h) filing Canadian income tax (if Canada operations are not treaty-protected throughout the entirety of 2021, i.e. Debtors are taxable in Canada); and (i) preparing quarterly taxable income and estimated tax payment calculations (fee per quarter). The Debtors paid the firm a retainer fee of $45,014. Jason Johns, CPA, the firm's accountant who will be providing the services, disclosed in a court filing that he is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. The firm can be reached at: Jason Johns, CPA RSM US LLP 555 17th St., Suite 1200 Denver, CO 80202 Tel: 800.274.3978 About NITROcrete LLC NITROcrete, LLC and its affiliates filed petitions for Chapter 11 protection (Bankr. D. Colo. Lead Case No. 21-15739) on Nov. 18, 2021. Stephen De Bever, chief executive officer, signed the petitions. In its petition, NITROcrete listed up to $10 million in assets and up to $50 million in liabilities. Judge Kimberley H. Tyson oversees the cases. The Debtors tapped Matthew T. Faga, Esq., at Markus Williams Young & Hunsicker, LLC as bankruptcy counsel; Polsinelli, PC as special counsel; Cordes & Company as financial advisor; SSG Advisors, LLC as investment banker; and RSM US LLP as accountant. BMC Group, Inc. is the Debtors' noticing agent. The U.S. Trustee for Region 19 appointed an official committee of unsecured creditors in the Debtors' cases on Dec. 9, 2021. Seward & Kissel, LLP and Kutner Brinen Dickey Riley, P.C. serve as legal counsels for the committee while Province, LLC serves as the committee's financial advisor. NORDIC AVIATION: Seeks to Hire Clifford Chance as Special Counsel ----------------------------------------------------------------- Nordic Aviation Capital Designated Activity Company and its affiliates seek approval from the U.S. Bankruptcy Court for the Eastern District of Virginia to hire Clifford Chance, LLP as their special counsel. The firm's services include: a. providing the Debtors with legal advice regarding the aircraft they own, including the financing of such aircraft; b. providing legal advice regarding the aircraft leased by the Debtors, including the lease documentation relating to such aircraft; c. providing legal advice on any contracts relating to the purchase or sale of aircraft by the Debtors; d. advising the Debtors regarding the provisions of the Bankruptcy Code relating to the treatment of aircraft lease arrangements; e. providing legal advice on non-U.S. local law issues; f. advising the Board of Directors and management on certain corporate and financing matters; g. negotiating the terms and documentation for certain corporate and financing transactions; h. providing legal advice on necessary motions, complaints and other documents; and i. advising the Debtors on other matters related to their Chapter 11 cases. The hourly rates charged by the firm for its services are as follows: Partners $740 - $1,745 per hour Other Attorneys $247 - $1,365 per hour Law Clerks $195 - $610 per hour Paraprofessionals $195 - $610 per hour Clifford Chance received a retainer in the amount of $1 million. Jennifer DeMarco, Esq., a partner at Clifford Chance, disclosed in a court filing that her firm is a "disinterested person" as defined in Section 101(14) of the Bankruptcy Code. In accordance with Appendix B-Guidelines for reviewing fee applications filed by attorneys in larger Chapter 11 cases, Ms. DeMarco disclosed that: -- Clifford Chance has not agreed to any variations from, or alternatives to, its standard or customary billing arrangements for this engagement; -- None of the professionals included in the engagement vary their rate based on the geographic location of the bankruptcy cases; -- Clifford Chance has represented the Debtors for many years, and during that time, it has often provided discounts to its aggregate fees for particular matters, though to the attorney's knowledge, the firm has not agreed to hourly rate discounts; and -- The Restructuring Committee has approved the firm's proposed scope of work and its proposed staffing plan. Clifford Chance can be reached through: Jennifer C. DeMarco, Esq. Clifford Chance LLP 31 West 52nd Street New York, NY 10019-6131 Tel: +12128788000 Fax: +12128788375 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. NORMAN C. BIJOU: Court Issues Show Cause Order on Property Sale --------------------------------------------------------------- Judge Meredith S. Grabill of the U.S. Bankruptcy Court for the Eastern District of Louisiana ordered Norman C. Bijou and Virginia R. Bijou to appear and show cause before the Court on Feb. 9, 2022, at 1:00 p.m., why their sale of the real property bearing the municipal address 7210-12 Yorktown Drive, New Orleans, Louisiana, to LEM Investments, LLC, for $168,616.38, should not be denied without Court approval. A hearing on the Motion was held on Jan. 26, 2022, at 1:00 p.m. All parties and counsel review and comply with the Court's General Order 2021-2 for location and conduct of hearings, and General Order 21-17 issued by the United States District Court for the Eastern District of Louisiana which contains instructions for all parties, witnesses, and counsel to gain admittance to the federal building located at 500 Poydras Street, New Orleans, Louisiana. A link to these Orders is available at https://www.laeb.uscourts.gov/. Norman C. Bijou and Virginia R. Bijou sought Chapter 11 protection (Bankr. E.D. La. Case No. 21-10188) on Feb. 11, 2021. The Debtors tapped Robert L. Marrero, Esq., at Robert Marrero, LLC as counsel. NORTHERN OIL: Fitch Affirms 'B' LT IDR, Alters Outlook to Pos. -------------------------------------------------------------- Fitch Ratings has affirmed Northern Oil and Gas, Inc.'s (NOG) Long-Term Issuer Default Rating (IDR) at 'B'. Fitch also affirmed Northern's reserve-based lending credit facility (RBL) rating at 'BB'/'RR1', and senior unsecured notes rating at 'B'/'RR4'. The Rating Outlook has been revised to Positive from Stable. The Positive Outlook reflects Fitch's expectation of continued credit-friendly M&A activity, which should increase overall size, scale and diversification toward 'B+' category thresholds. The Positive Outlook also considers Fitch's expectation for continued positive FCF generation secured by NOG's strong hedging program, which is expected be applied to reduce gross debt and lead to improved credit metrics and liquidity over the next 12-18 months. Credit concerns include expectation for increased RBL borrowings following close of the Veritas acquisition and base dividend expansion, both of which Fitch believes are partially mitigated by strong FCF generation and management's track record of debt repayment following acquisitions. KEY RATING DRIVERS Credit Conscious, Diversifying Transactions: Fitch views NOG's four recently closed transactions positively given the credit-conscious funding mix, incremental size and diversification into new basins. The company's acquisitions throughout 2021 have been funded relatively conservatively through a combination of common equity, cash on hand and modest borrowings under the RBL. These acquisitions have increased production from 33.1 Mboepd in 2020 to approximately 70 Mboepd pro forma the Veritas acquisition. Fitch believes acquisitions will continue to be a part of the company's future growth strategy and expects management will continue to fund transactions in a credit-neutral manner. Non-Operator Status: The company acquires leasehold interests comprised of non-operated working interests in producing wells and nearby acreage, but does not control the drill bit or make operational decisions regarding timing and completion of wells. Fitch believes this limits operational and capital flexibility, especially in weak pricing environments, and leaves the company exposed to the decisions of its operating partners. Favorable Capital Deployment Flexibility: Fitch believes NOG's flexibility with well participation and capex allows for economic-driven decisions and improves overall returns. The company retains the ability to decline participation in uneconomic or lower return wells, even within a multi-well, multi-reservoir development in some cases, to help optimize returns. As a non-operator, NOG does not have rig, drilling or midstream contracts and has no personnel at the field level, which limits corporate operational and financial obligations, brings lower per-unit G&A costs and administrative costs. NOG has historically maintained approximately six years of PDP reserve life, which is expected to increase given recent acquisition. Favorable Liquidity, Capital Management: NOG's close relationship with its operators and the long lead times from initial new well development evaluation, investment decision, and funding provide visibility on future capital needs, and in conjunction with its hedging policy, help reduce overall liquidity risk despite the inability to control well timing and completion. The company is typically provided budgets and development plans from its operators a year in advance from the start of a new well, providing considerable time to manage capital flows with existing and future production. Fitch views these characteristics favorably and does not forecast material near-term liquidity needs in the base case. 18-Month Rolling Hedge Program: NOG has historically maintained a strong hedge book and expects to hedge approximately 65% of total production on a rolling 18-month basis going forward. The company currently has approximately 65% of oil production hedged at an average price of $60/bbl in 2022 and gas hedges of approximately 50% of gas production hedged at an average price of $3.20/MMBtu. NOG has also entered into 2024 hedges for a portion of the Veritas PDP volumes. Fitch believes NOG's hedge book provides future cash flow certainty which supports repayment of the reserve-based lending credit facility and supports the base dividend. Positive FCF; Sub-2.0x Leverage: Fitch forecasts positive FCF of approximately $200 million in 2022 and $100 million in 2023, assuming annual capex spend of approximately $415 million per year and WTI oil prices of $67/bbl and $57/bbl, respectively. However, Fitch recognizes that FCF generation could approach $375 million in 2022 if the current strip prices hold. Fitch-calculated gross debt/EBITDA is forecast to approach 1.5x in 2022 and increases toward 2.0x in 2024 at Fitch's long-term mid-cycle WTI price of $50/bbl. Increasing Base Dividend: NOG's plans to increase the dividend per quarter from $0.14/share in 1Q22 to approximately $0.33/share by 4Q23. Fitch believes NOG is in a position to implement shareholder returns going forward while maintaining liquidity and credit metrics given the company's increasing size and scale and positive FCF profile supported by management's rolling hedge program. DERIVATION SUMMARY NOG is a leading non-operator E&P company focused in the Permian, Marcellus and Williston Basins following the four transactions during 2021 with pro forma production following the closing of the Veritas acquisition of approximately 70 thousand barrels of oil equivalent per day (mboepd). The production size is larger than non-operated, mineral and royalty interest owner Viper Energy Partners, LP (BB-/Stable; 27.3 Mboepd) and offshore producer Talos Energy Inc. (B-/Stable; 56.5 Mboepd), but smaller than Permian operator Callon Petroleum (B/Stable; 99.7 Mboepd) and gas-focused peer Aethon United BR LP (B/Stable; 127.5 Mboepd at 3Q21). In terms of cost structure, NOG's Fitch-calculated unhedged cash netback of $33.5 per barrel of oil equivalent (boe)(69% margin) is weaker than Viper ($50.2/boe; 86% margin) but stronger than Talos Energy Inc. ($32.70/boe; 58% margin). As a mineral and royalty interest owner, Viper has minimal operating costs and no capex which results in netbacks that are generally the highest of Fitch's E&P peer group. Viper's IDR receives a one notch uplift given its significant operational and strategic ties with its higher rated parent Diamondback Energy, Inc. (BBB/Stable) which provides unique visibility into future development plans which reduces volumetric and cash flow uncertainty. On a debt/EBITDA basis, Fitch expects NOG to maintain a sub-2.0x leverage profile as it allocates FCF towards repayment of the RBL and then towards shareholder returns. This is in line with the 'B' category peers who typically see leverage oscillate between 2.0x and 3.0x on a mid-cycle basis. KEY ASSUMPTIONS Fitch's key assumptions within the rating case for the issuer include: -- West Texas Intermediate (WTI) prices of $67.00/bbl, $57.00/bbl, and $50.00/bbl in 2022, 2023 and 2024 respectively; -- Henry Hub prices of $3.25/mcf, $2.75/mcf, and $2.50/mcf in 2022, 2023, and 2024 respectively; -- Acquisitions of $100 million per annum which facilitate mid single digit production growth; -- Capex grows to $410 million in 2022 with growth-linked increases thereafter; -- Prioritization of forecast FCF towards repayment of the RBL along with increasing dividends per NOG's dividend policy. RECOVERY ASSUMPTIONS: -- The recovery analysis assumes that Northern Oil & Gas, Inc. would be reorganized as a going-concern (GC) in bankruptcy rather than liquidated. -- Fitch has assumed a 10% administrative claim. GC Approach Fitch assumed a bankruptcy scenario exit EBITDA of $340 million. This estimate considers a prolonged commodity price downturn ($32/WTI and $1.65/mcf gas lows in 2023, increasing to $42/bbl WTI and $2.25/mcf gas in 2023) coupled with a combination of prolonged, unexpected production shut-ins, new well/PDP underperformance, higher operating expenses per boe, or working capital delays causing lower than expected production and borrowing base-linked liquidity constraints. The GC EBITDA assumption 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. Fitch believes a weakened pricing environment will slow production and PDP reserve growth, reduce the borrowing base availability and materially erode the liquidity profile. An EV multiple of 3.50x EBITDA is applied to the GC EBITDA to calculate a post-reorganization enterprise value: -- 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 also reflects NOG's multi-basin, diversified portfolio of non-operated working interests with only a few potential buyers in addition to the company's recent transaction multiples of approximately 3.0x. Liquidation Approach -- The liquidation estimate reflects Fitch's view of the value of the company's E&P assets that can be realized in sale or liquidation processes conducted during a bankruptcy or insolvency proceeding and distributed to creditors. Fitch used NOG's recent transactions and historical third-party, non operated transaction data for both the Williston and Permian assets on a $/bbl, $/1P, $/2P, $/acre and PDP PV-10 basis to attempt to determine a reasonable sale. -- The RBL is assumed to be 100% drawn given the likelihood of negative redetermination in a sustained low-price environment. -- The allocation of value in the liability waterfall results in recoveries corresponding to 'RR1' for the senior secured RBL and 'RR4' for the senior unsecured notes. RATING SENSITIVITIES Factors that could, individually or collectively, lead to positive rating action/upgrade: -- Consistent FCF generation with proceeds used to reduce outstanding RBL borrowings that leads to mid-cycle debt/EBITDA or FFO leverage sustained below 2.0x; -- Consistent track record of reserve replacement and total production approaching 100 Mboepd; -- Continued track record of favorable risk management that leads to financial flexibility including adequate reserve maintenance. Factors that could, individually or collectively, lead to negative rating action/downgrade: -- Inability to generate FCF and reduce outstanding RBL borrowings that leads to mid-cycle debt/EBITDA or FFO leverage sustained above 3.0x; -- Total production sustained below 50 Mboepd and erosion of the reserve base; -- Limited financial flexibility and a decline in PDP reserves that limits future production growth potential. BEST/WORST CASE RATING SCENARIO International scale credit ratings of Non-Financial Corporate issuers have a best-case rating upgrade scenario (defined as the 99th percentile of rating transitions, measured in a positive direction) of three notches over a three-year rating horizon; and a worst-case rating downgrade scenario (defined as the 99th percentile of rating transitions, measured in a negative direction) of four notches over three years. The complete span of best- and worst-case scenario credit ratings for all rating categories ranges from 'AAA' to 'D'. Best- and worst-case scenario credit ratings are based on historical performance. LIQUIDITY AND DEBT STRUCTURE Adequate Liquidity: Fitch does not see material near-term liquidity needs given the company's operational and liquidity flexibility and believes NOG's forecast FCF generation supports repayment of the RBL. The current borrowing base is $850 million ($750 million elected commitment), which does not incorporate the reserves from the recently closed Williston acquisition or the announced Veritas transaction. Pro forma the Veritas transaction, NOG is expected to have approximately $300 million of borrowing capacity under the $750 million RBL facility. The RBL is subject to a semi-annual borrowing base redetermination in addition to financial covenants including a maximum total net leverage ratio of below 3.50x and a minimum current ratio of at least 1.0x. Clear Maturity Profile: Pro forma the transaction and unsecured notes issuance, NOG's maturity schedule remains light with no maturities until the RBL and senior unsecured notes come due in 2024 and 2028, respectively. ISSUER PROFILE Northern Oil and Gas, Inc. is a leading non-operator E&P company focused in the Permian, Marcellus and Williston Basins. ESG CONSIDERATIONS NOG have an ESG Relevance Score of '4' for energy management that reflects the company's cost competitiveness and financial and operational flexibility due to scale, business mix, and diversification. This factor 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. NORTHERN OIL: S&P Upgrades ICR to 'B', Outlook Stable ----------------------------------------------------- S&P Global Ratings raised its issuer credit rating on Northern Oil and Gas Inc., a Minnetonka, Minn.-based oil and gas exploration and production company, to 'B' from 'B-'. S&P said, "Additionally, we raised our rating on the company's 8.125% senior unsecured notes due 2028 to 'B+' from 'B'. The '2' recovery rating indicates our expectation for substantial (70%-90%; rounded estimate: 85%) recovery of principal to creditors in the event of a payment default. "The stable outlook reflects our view that Northern's funds from operations (FFO)/debt and leverage metrics will remain modest over the next two years with FFO to debt well above 45% and debt to EBITDA comfortably below 2x. The outlook also reflects our expectation Northern will maintain adequate liquidity over the next year. "Our upgrade is driven by expectations for improved credit measures under our revised crude oil price assumptions. "We expect higher cash flows and the company's recent paydown of its reserve-based lending facility to meaningfully improve Northern's credit metrics. Moreover, we anticipate lower debt levels to support the company's ability to handle future commodity price volatility. Additionally, credit metrics have been supported by the company funding well over 50% of capital investments through equity issuance and warrants in 2021 and early 2022." Acquisitions have boosted the company's scale relative to 'B'-rated peers and improved geographic diversity. From the beginning of 2021 through January 2022, the company has completed greater than $800 million in acquisitions, resulting in pro forma production reaching the low 70 mboe/d range. In addition to added scale, the company now is diversified in three major basins with production in the Williston (63%), Permian (21%), and Marcellus (16%), while its product mix is also more diversified with 63% liquids and 38% natural gas. S&P expects the company to increase dividends. S&P said, "We continue to expect the company will use excess cash flow for acquisitions, though increasingly we anticipate dividends will be part of the equation. Last December, Northern announced its intention to increase dividends by at least 20% on average per quarter through 2023 at a minimum WTI strip price of $50/bbl. Despite the increase, we expect dividends to remain within free operating cash flow." Liquidity has improved on recent RBL repayment with a current balance of $55 million. Since the beginning of 2021, Northern has paid down nearly all of the outstanding borrowings on its reserve base lending facility, with an elected commitment of $750 million. The percentage drawn has decreased from approximately 81% at the beginning of 2021 to about 7% currently. S&P continues to view Northern's nonoperator business model as an overall disadvantage compared with that of its peers, because it limits the company's ability to control the allocation and timing of its development capital spending. Partially offsetting these factors are the cost savings associated with the nonoperator business model through lower overhead expenses as well as the diversification benefits of participating in a greater number of wells. S&P said, "The stable outlook reflects our expectation that Northern's credit metrics will remain strong over the next 12-24 months, and its improved liquidity profile given the significant revolver paydown in 2021. We anticipate FFO to debt will rise meaningfully above 45% and debt to EBITDA below 2x over the next two years. "We could lower the rating should metrics weaken such that FFO/debt declines well below 45% on a sustained basis or if the company's acquisitions and/or shareholder rewards result in a material weakening of the company's liquidity or free cash flow profile. "We could raise the rating if the company's credit metrics improve such that FFO/debt rises well above 60% and debt to EBITDA declines below 1.5x on a sustained basis, while its liquidity profile remains adequate. This would most likely occur if commodity prices improved materially on a sustained basis and the company continued to demonstrate prudent funding of future acquisitions. Alternatively, we could raise the rating should the company increase its proved reserve base and production to levels in line with higher-rated peers, while maintaining appropriate credit measures." Environmental, Social, And Governance ESG credit indicators: E-4, S-2, G-2 S&P said, "Environmental factors are a negative consideration in our rating analysis on Northern Oil And Gas Inc. 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. Given its non-operator status, Northern has less control over its internal emissions selections but looks for operators that have a high standard for environmental and safety procedures and is focused on improving the percentage capture of its gas targeting 94% in the Williston Basin." ORIGIN AGRITECH: Delays Filing of Fiscal 2021 Annual Report ----------------------------------------------------------- Origin Agritech Limited filed a Form 12b-25 with the Securities and Exchange Commission notifying the delay in the filing of its Annual Report on Form 20-F for the year ended Sept. 30, 2021. According to the Company, the verification and review of the information required to be presented in the Form 20-F has required additional time rendering timely filing of the Form 20-F impracticable without undue hardship and expense to the Company. About Origin Agritech Founded in 1997 and headquartered in Zhong-Guan-Cun (ZGC) Life Science Park in Beijing, Origin Agritech Limited (NASDAQ GS: SEED) -- http://www.originseed.com.cn-- is an agricultural biotechnology company, specializing in crop seed breeding and genetic improvement, seed production, processing, distribution, and related technical services. Origin operates production centers, processing centers and breeding stations nationwide with sales centers located in key crop-planting regions. Product lines are vertically integrated for corn, rice and canola seeds. Origin Agritech reported a net loss of RMB102.84 million for the year ended Sept. 30, 2020, a net loss of RMB65.65 million for the year ended Sept. 30, 2019, and a net loss of RMB152.79 million for the year ended Sept. 30, 2018. As of Sept. 30, 2020, the Company had RMB254.88 million in total assets, RMB340.34 million in total liabilities, and a total deficit of RMB85.46 million. Lakewood, Colorado-based B F Borgers CPA PC, the Company's auditor since 2020, issued a "going concern" qualification in its report dated Feb. 16, 2021, citing that the Company incurred recurring losses from operations, has net current liabilities and an accumulated deficit that raise substantial doubt about its ability to continue as a going concern. OWL FINANCE: S&P Downgrades ICR to 'CC', Outlook Negative --------------------------------------------------------- S&P Global Ratings lowered its issuer credit rating on Owl Finance Ltd. (parent of Yell) to 'CC' from 'CCC'. S&P also lowered its issue rating on the senior secured notes issued by Yell Bondco PLC to 'CC' from 'CCC', and our issue rating on the super senior revolving credit facility (RCF) issued by Yell Ltd. to 'CCC' from 'B-'. S&P said, "The negative outlook reflects our expectation that we will lower our issuer credit rating on the company and the ratings on the affected senior secured notes to 'D' either upon expiry of the 30-day grace period if it does not make the coupon payment on March 15, 2022 or upon signing of the proposed restructuring agreement, whichever takes place first. "If the exchange occurs as planned, we will review the ratings following the transaction's completion based on the new capital structure." The downgrade follows Yell's announcement that it has reached an agreement in principle with 97% of its current noteholders to exchange GBP214 million of its outstanding senior secured notes for GBP65 million in new notes and 95% of equity in its parent company, Yell Holdco Ltd. S&P said, "We view the proposed debt-for-equity transaction as distressed in line with our criteria, and, if completed, tantamount to a default because we think the noteholders will receive less than they were originally promised. Absent the proposed transaction, we view the company's capital structure as unsustainable given the operating challenges it is facing in the highly competitive and fragmented digital marketing industry in the U.K. Despite a modest recovery in operating performance over the past several quarters, we expect leverage to remain very high under the current capital structure, with S&P Global Ratings-adjusted debt to EBITDA exceeding 9x in the fiscal year ending March 31, 2022 (FY2022). "In our view, Yell has sufficient cash on balance to make the next coupon payment due on March 15, 2022, but if the proposed transaction completes, it will not pay it in cash because it will obtain a waiver. Yell's GBP225 million senior secured notes (GBP214 million outstanding) pay semi-annual interest at 8.5%, about GBP18 million per year, which Yell pays in March and September. We understand that the company had about GBP24 million cash on balance at Dec. 31, 2021, which would be sufficient to make the upcoming GBP9 million coupon payment on March 15, 2022. However, as part of the announced transaction, the company will obtain a waiver for this payment, and would not make it in anticipation of the new capital structure, which the company intends to put in place shortly. We expect to lower the rating on the company to 'D' either within the 30-day grace period if it does not make the coupon payment on March 15, 2022 or upon effective signing of the proposed restructuring agreement, whichever takes place first. "The new GBP65 million notes will have a coupon of 8.75% and a maturity date of March 31, 2027. The company will have an option to capitalize the coupon payments on the new notes, instead of paying them in cash, until March 2023, which will allow it to preserve liquidity. We intend to reassess Yell's capital structure and the rating upon the transaction's completion. "The negative outlook reflects our expectation that we will lower our issuer credit rating on Owl Finance and the ratings on the affected senior secured notes to 'D' either upon expiry of the 30-day grace period if it does not make the coupon payment on March 15, 2022, or upon signing the proposed restructuring agreement, whichever takes place first. "It is unlikely we could raise our rating on Owl Finance if it does not proceed with the proposed exchange offer because we think there would be a high chance of a conventional default or another form of debt restructuring in this scenario. Assuming the exchange occurs as planned, we will review the ratings following the transaction's completion based on the new capital structure." ESG credit indicators: E-2, S-2, G-2 PALADIN ENERGY: Insurer Loses Bid to Dismiss POGO Coverage Suit --------------------------------------------------------------- Magistrate Judge Irma Carrillo Ramirez of the United States District Court for the Northern District of Texas, Dallas Division, denied St. Paul Fire and Marine Insurance Company's Motion to Dismiss an insurance coverage dispute captioned POGO RESOURCES, LLC, Plaintiff, v. ST. PAUL FIRE AND MARINE INSURANCE COMPANY, A MEMBER COMPANY OF THE TRAVELERS GROUP OF INSURERS, Defendant, Civil Action No. 3:19-CV-2682-BH (N.D. Tex.). Defendant issued Plaintiff a commercial general liability policy and an umbrella excess protection insurance policy for its oil and gas operations, effective March 1, 2017 to March 1, 2018. Paladin Energy Corporation was a Dallas-based oil and gas company that owned and operated oil and gas assets in Texas and New Mexico. Defendant issued Paladin a CGL policy and an Umbrella policy, effective from July 1, 2016 through July 1, 2017, which provide insurance coverage for, among other things, bodily injury and property damage and for pollution clean-up costs. In February 2017, saltwater spills occurred at two of Paladin's well sites in New Mexico (Spill A). The New Mexico Oil Conservation Division (NMOCD) assigned a release remediation permit for Spill A, and Paladin filed a claim with Defendant for coverage under the Paladin Policies. On May 15, 2017, Paladin and Plaintiff executed a Stalking Horse Purchase and Sale Agreement, effective May 1, 2017, for the purchase of substantially all of Paladin's oil and gas property, including, among other things, "any interests related to insurance policies that may be in place to cover any liability outlined in or related to" the environmental obligations assumed by Plaintiff, and "[a]ll Claims arising from acts, omissions or events, or damage to or destruction of" such property "whether on or after the Effective Date, and all related rights, titles, claims and interests of" Paladin. On June 11, 2017, a spill occurred at another Paladin well site in New Mexico (Spill B), and Paladin notified Plaintiff of Spill B on June 14, 2017. It also notified Defendant and filed a claim for coverage under the Paladin Policies for the costs associated with Spill B, and the NMOCD assigned a release remediation permit for Spill B. On July 13, 2017, Plaintiff's insurance broker sent Defendant a schedule of the Paladin wells Plaintiff had acquired, and reminded it of the outstanding pollution claims for Spills A and B. On the same day, a claims adjuster for Defendant confirmed that it "would be paying for both claims." By email dated July 14, 2017, the adjuster to Paladin stated that she had reviewed the Paladin Policies and did not see a deductible under Defendant's general liability policy. On July 21, 2017, the bankruptcy court approved the sale of substantially all of Paladin's assets to Plaintiff under the PSA. The sale closed on August 18, 2017. On September 7, 2017, Defendant sent Paladin two letters stating that it had "settled the property damage claim filed against your St. Paul Fire And Marine policy" in connection with Spill A. In October 2017, Plaintiff, Paladin, and EeTradeco, LLC, entered into a Transition Agreement "to vest EeTradeco with the power and authority to assist in effectuating the orderly transitions of the rights and responsibilities relating to" Spills A and B and to certain properties assigned to Plaintiff under the PSA. On November 29, 2017, Defendant's adjuster emailed EeTradeco requesting "information on the status of [NMOCD's] approval of the completed clean-up on Spill A, and the proposed remediation plan on Spill B." On the same day, EeTradeco notified the adjuster that Plaintiff "had been operating the assets since mid-August and forwarded the environmental consulting invoices for reimbursement." On June 11, 2018, NMOCD emailed Plaintiff, Defendant, and a third-party remediation contractor that the proposed remediation plan for Spill B was approved. On January 19, 2018, the bankruptcy court issued an order confirming the Chapter 11 liquidation of Paladin. On February 28, 2019, a conference call was conducted between Defendant, Plaintiff, the impacted landowners, their lawyers, and the remediation contractor, regarding the approved remediation plan for Spill B. The landowners rejected the plan and demanded a complete removal and replacement of soil at an estimated cost of $3.5 million. On May 28, 2019, Defendant sent Plaintiff a letter denying coverage for Spill B under the Paladin Policies based, among other things, on the "total pollution exclusion" endorsement that altered coverage for "pollution clean-up costs." Plaintiff's Second Amended Complaint asserts claims under the Paladin and Pogo Policies for breach of contract, bad faith, violations of Chapter 541 of the Texas Insurance Code, tortious interference, and declaratory judgment. Plaintiff seeks actual and exemplary damages, prejudgment and post-judgment interest, court costs, and attorneys' fees under Tex. Civ. Prac. & Rem. Code Sections 38.001 and 37.009 and Tex. Ins. Code Section 541.152. It also requests an order declaring that Defendant "owes a duty under the Paladin and Pogo policies to 1) defend [it] against the landowner's demands related to Spill B; and 2) to indemnify [it] for the costs it has incurred and will continue to incur as a result of its legal liability to clean-up Spill B." On July 14, 2021, Defendant moved to dismiss the tortious interference claim and the claims for breach of contract and bad faith under the Paladin Policies under Rule 12(c) of the Federal Rules of Civil Procedure. Magistrate Judge Carrillo Ramirez finds that Plaintiff has met its burden to allege facts that give rise to a plausible claim of standing to assert claims under the Paladin Policies. The magistrate also finds the Plaintiff has adequately alleged that Spill B is covered under the "Bodily injury and property damage liability" and "Pollution clean-up costs" provisions, as modified by the WD Endorsement, of the Paladin Policies, and therefore states a plausible claim for breach of contract. As to the bad faith claims, Plaintiff alleges that Paladin assigned its interests in the Paladin Policies to it. Plaintiff's common law bad faith claims under the Paladin Policies, as alleged in the Second Amended Complaint, are based on Plaintiff's "special relationship" with Defendant that formed when Paladin assigned its interests in the policies to Plaintiff. While "statutory remedies under the Texas Insurance Code are personal and punitive in nature and the Insurance Code makes no provision for assignability," Plaintiff has alleged privity of contract with Defendant as the assignee of the Paladin Policies, and the alleged violations of the Texas Insurance Code are based on Defendant's conduct when it was in privity with Plaintiff under the policies, the magistrate points out. Whether Plaintiff can show reliance and loss based on misrepresentations by Defendant is a material fact issue best left for summary judgment determination, the magistrate holds. Plaintiff's Second Amended Complaint alleges a plausible basis of independent standing to pursue bad faith claims under the Paladin Policies, and includes sufficient allegations of how Defendant breached its common-law duty of good faith and violated the Texas Insurance Code after privity had been established between it and Plaintiff. A full-text copy of the Memorandum Opinion and Order dated January 24, 2022, is available at https://tinyurl.com/yckvruz2 from Leagle.com. About Paladin Energy Paladin Energy Corp. sought chapter 11 protection (Bankr. N.D. Tex. Case No. 16-31590) on Apr. 21, 2016. The Debtor is represented by Davor Rukavina, Esq., at Munsch, Hardt, Kopf & Harr, P.C., in Dallas, Texas. The Debtor estimated assets ranging from $10 million to $50 million and estimated debts ranging from $10 million to $50 million. PARTNERS A TASTEFUL: Taps Bush Kornfeld as Bankruptcy Counsel ------------------------------------------------------------- Partners, A Tasteful Choice Company seeks approval from the U.S. Bankruptcy Court for the Western District of Washington to hire Bush Kornfeld, LLP as its bankruptcy counsel. The firm's services include: a. giving the Debtor legal advice with respect to its powers and duties in the continued operation of its business and management of its property; b. preparing legal papers; c. advising the Debtor on matters related to a plan of reorganization; d. assisting the Debtor in reviewing claims and in determining all issues associated with distribution on allowed claims; e. performing other necessary legal services for the Debtor. As of the petition date, Bush Kornfeld held $43,725.15 in retainer funds. The hourly rates charged by the firm for the services of its attorneys and support personnel range from $85 to $600. Thomas Buford, Esq., the lead attorney, will charge $500 per hour. Mr. Buford disclosed in a court filing that his firm is a "disinterested person" within the meaning of Section 101(14) of the Bankruptcy Code. The firm can be reached through: Thomas A. Buford, Esq. Bush Kornfeld, LLP 601 Union St., Suite 5000 Seattle, WA 98101-2373 Telephone: (206) 292-2110 Facsimile: (206) 292-2104 Email: tbuford@bskd.com About Partners, A Tasteful Choice Company Partners, A Tasteful Choice Company is a second-generation family owned bakery business based in Des Moines, Wash. Partners filed its voluntary petition for relief under Chapter 11 of the Bankruptcy Code (Bankr. W.D. Wash. Case No. 22-10060) on Jan. 13, 2022, listing $25,975,698 in assets and $17,302,865 in liabilities. Cara Figgins, president, signed the petition. Judge Timothy W. Dore presides over the case. The Debtor tapped Thomas A. Buford, Esq., at Bush Kornfeld, LLP as bankruptcy counsel; Byrnes Keller Cromwell, LLP and Carney Badley Spellman, PS as special counsels; and Stapleton Group, Inc. as financial advisor. PARTNERS A TASTEFUL: Taps Byrnes Keller Cromwell as Special Counsel ------------------------------------------------------------------- Partners, A Tasteful Choice Company seeks approval from the U.S. Bankruptcy Court for the Western District of Washington to hire Byrnes Keller Cromwell, LLP as its special counsel. The Debtor needs the firm's legal assistance in connection with litigation matters. Paul Taylor, Esq., an attorney at Byrnes, will charge his hourly rate of $550. The hourly rates for other attorneys and support personnel at the firm range from $275 to $295. As disclosed in court filings, Byrnes does not represent any interest adverse to that of the estate or the Debtor in the matters upon which it is to be engaged. The firm can be reached through: Paul R. Taylor, Esq. Byrnes Keller Cromwell LLP 1000 Second Avenue, 38th Floor Seattle, WA 98104 Phone: 206-622-2000 Fax: 206-622-2522 Email: ptaylor@byrneskeller.com About Partners, A Tasteful Choice Company Partners, A Tasteful Choice Company is a second-generation family owned bakery business based in Des Moines, Wash. Partners filed its voluntary petition for relief under Chapter 11 of the Bankruptcy Code (Bankr. W.D. Wash. Case No. 22-10060) on Jan. 13, 2022, listing $25,975,698 in assets and $17,302,865 in liabilities. Cara Figgins, president, signed the petition. Judge Timothy W. Dore presides over the case. The Debtor tapped Thomas A. Buford, Esq., at Bush Kornfeld, LLP as bankruptcy counsel; Byrnes Keller Cromwell, LLP and Carney Badley Spellman, PS as special counsels; and Stapleton Group, Inc. as financial advisor. PARTNERS A TASTEFUL: Taps Carney Badley Spellman as Special Counsel ------------------------------------------------------------------- Partners, A Tasteful Choice Company seeks approval from the U.S. Bankruptcy Court for the Western District of Washington to hire Carney Badley Spellman, PS to provide the company with legal advice on general corporate matters. The hourly rates for attorneys and support personnel who may perform services for the Debtor range from $140 to $780. Patrick Lamb, Esq., the lead attorney, will charge $650 per hour. Mr. Lamb disclosed in a court filing that his firm neither represents nor holds any interest adverse to the interest of the estate or the Debtor. The firm can be reached through: Patrick R. Lamb, Esq. Carney Badley Spellman PS 701 5th Ave., Suite 3600 Seattle, WA 98104 Phone: +1 206-622-8020 Fax: 206-467-8215 Email: Lamb@carneylaw.com About Partners, A Tasteful Choice Company Partners, A Tasteful Choice Company is a second-generation family owned bakery business based in Des Moines, Wash. Partners filed its voluntary petition for relief under Chapter 11 of the Bankruptcy Code (Bankr. W.D. Wash. Case No. 22-10060) on Jan. 13, 2022, listing $25,975,698 in assets and $17,302,865 in liabilities. Cara Figgins, president, signed the petition. Judge Timothy W. Dore presides over the case. The Debtor tapped Thomas A. Buford, Esq., at Bush Kornfeld, LLP as bankruptcy counsel; Byrnes Keller Cromwell, LLP and Carney Badley Spellman, PS as special counsels; and Stapleton Group, Inc. as financial advisor. PARTNERS A TASTEFUL: Taps Stapleton Group as Financial Advisor -------------------------------------------------------------- Partners, A Tasteful Choice Company seeks approval from the U.S. Bankruptcy Court for the Western District of Washington to hire Stapleton Group, Inc. as its financial advisor. The firm's services include: a. assisting with the development of collateral budgets, projections and financial modeling; and b. assisting with financial reporting pursuant to cash collateral or other orders of the court, and with the preparation of monthly financial reports. Neal Gluckman, managing director at Stapleton Group, will charge an hourly fee of $425. The hourly rates for other personnel at the firm range from $95 to $425. Mr. Gluckman disclosed in a court filing that his firm is a "disinterested person" within the meaning of Section 101(14) of the Bankruptcy Code. The firm can be reached through: Neal Gluckman Stapleton Group, Inc. 1420 Fifth Avenue, Suite 2200 Seattle, WA 98101 Phone: (206) 212-0023 Fax: (213) 235-0620 Email: ngluckman@stapletoninc.com About Partners, A Tasteful Choice Company Partners, A Tasteful Choice Company is a second-generation family owned bakery business based in Des Moines, Wash. Partners filed its voluntary petition for relief under Chapter 11 of the Bankruptcy Code (Bankr. W.D. Wash. Case No. 22-10060) on Jan. 13, 2022, listing $25,975,698 in assets and $17,302,865 in liabilities. Cara Figgins, president, signed the petition. Judge Timothy W. Dore presides over the case. The Debtor tapped Thomas A. Buford, Esq., at Bush Kornfeld, LLP as bankruptcy counsel; Byrnes Keller Cromwell, LLP and Carney Badley Spellman, PS as special counsels; and Stapleton Group, Inc. as financial advisor. PELCO STRUCTURAL: Gets Cash Collateral Access Thru April 30 ----------------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of Texas, Victoria Division, has authorized Pelco Structural, L.L.C. to use cash collateral on an interim basis in accordance with the budget. The Debtor requires the use of funds in which certain parties may assert an interest, to pay the day-to-day operating expenses associated with its business, maintain its property interests, make payments authorized by the Court, cover the administrative costs incurred in the case, and for such other expenses necessary to preserve the value of the Debtor's estate. Pelco Industries, Inc. claims an interest in the Debtor's cash on account of security interests granted by the Debtor prior to the Petition Date. Exelon Business Services Company, LLC is also claiming an interest in certain of the Debtor's cash by virtue of supplementary proceedings on a prepetition judgment. The Debtor is permitted to use cash collateral through the date which is the earliest to occur of (a) the occurrence of an Event of Default; or (b) April 30, 2022, subject to renewal by the entry of a further Order. The Budgeted expenses will not exceed 120% of the amount set forth for the respective expense category set forth in the Budget. An "Event of Default" will occur if the Debtor fails to perform fully and in a timely manner any provision, term, or condition of the Order. Upon the occurrence of an Event of Default, any person claiming an interest in cash collateral, including Industries and Exelon, will give notice to the Debtor, Industries, and Exelon describing the alleged Event of Default and stating that the Debtor's right to use cash collateral will automatically terminate if the Debtor does not cure such Event of Default within 10 business days. As adequate protection against any diminution in value of their validly perfected and unavoidable prepetition security interest or lien (if any) as a result of the use of cash collateral, Industries and Exelon will receive adequate protection in the form of Replacement Liens up to the value of such creditor's validly perfected and unavoidable prepetition security interest or lien (if any) as of the Petition Date. Subject to the Carve-Out, the Replacement Liens will be (i) first priority perfected liens on all of the Post-petition Collateral as to which such relevant creditor had a valid and perfected first priority lien or security interest as of the Petition Date; and (ii) junior perfected liens on all Post-petition Collateral that is subject to a validly perfected lien or security interest with priority over such creditor's liens or security interests as of the Petition Date, in the same priority as existed prior to the Petition Date. The Carve-Out means: (i) statutory fees payable to the United States Trustee; (ii) fees payable to the clerk of the Bankruptcy Court; (iii) reasonable and documented expenses payable to any statutory committee appointed in the case; and (iv) professional fees and expenses incurred by professionals retained by the Debtor pursuant to 11 U.S.C. sections 327(a) and 1103 and allowed by the Court. The Replacement Liens are deemed valid and perfected without the need to file any document as may otherwise be required by law. As additional adequate protection, to the extent that the Replacement Liens prove insufficient to provide adequate protection against any diminution in value of their validly perfected and unavoidable prepetition security interest or lien, Industries and Exelon are granted allowed superpriority administrative expense claims. A further hearing on the matter is scheduled for April 21 at 10 a.m. A copy of the order is available at https://bit.ly/3HpeuTL from PacerMonitor.com. About Pelco Structural LLC Pelco Structural LLC sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. W.D. Okla. Case No. 21-11926) on July 16, 2021. In the petition signed by Stephen P. Parduhn, president and CEO, the Debtor disclosed up to $50 million in both assets and liabilities. Clayton D. Ketter, Esq. at Phillips Murrah P.C. is the Debtor's counsel. Pelco Industries, Inc., as lender, is represented by, Stephen J. Moriarty, Esq. at Fellers, Snider, Blankenship, Bailey & Tippens, P.C. Exelon Business Services Company, LLC, as lender, is represented by Kiran A. Phansalkar, Esq. at Conner & Winters, LLP, Charles S. Stahl, Jr., Esq., at Swanson, Martin & Bell, LLP, and Joseph P. Kincaid, Esq. at Swanson, Martin & Bell, LLP. PHI GROUP: Signs $64.1 Million Purchase Agreements With KOTA ------------------------------------------------------------ Effective Jan. 26, 2022, PHI Group, Inc. signed Agreements of Purchase and Sale with KOTA Construction LLC and KOTA Energy Group LLC, both of which are California limited liability companies, to acquire 50.10% of Kota Energy Group LLC for $12,524,469 and 50.10% of Kota Construction LLC for $51,600,531, totaling $64,125,000, to be paid in cash. The closing date of these transactions will be the date on which the closing actually occurs, which is expected to happen as soon as possible and no later than forty-five days from the effective day. KOTA, operating under two legal entities as Kota Energy Group LLC and Kota Construction LLC, provides solutions for solar energy to residential and commercial customers, with unique competitive advantages. As one of the fastest growing sales and installation engines in the country, KOTA prioritizes itself to have the best employee and customer experience possible, through its high standard of installation quality, its industry leading technology platforms, which enable increased sales volume, while maintaining fast, and transparent project timelines. Its strategic partnerships with key players in the solar industry, have increased margins, while delivering top tier products to customers, without sacrificing quality. KOTA's guiding core values of "Become, Create, Give" have been the driving factor in decision making that have led it to become the most highly sought-after solar company to work with in the solar industry. Website: KOTA Energy Group: https://www.kotasolar.com KOTA's management has devised a plan to accelerate the company's growth and expansion and is confident that with adequate financial resources KOTA can generate up to one billion dollars in revenue within the next twelve months. About PHI Group Headquartered in Irvine, California, PHI Group, Inc. (www.phiglobal.com) primarily focuses on advancing PHILUX Global Funds, a group of Luxembourg bank funds organized as "Reserved Alternative Investment Fund", and building the Asia Diamond Exchange in Vietnam. The Company also engages in mergers and acquisitions and invests in select industries and special situations that may substantially enhance shareholder value. PHI Group reported a net loss of $6.55 million for the year ended June 30, 2021, a net loss of $1.32 million for the year ended June 30, 2020, and a net loss of $2.93 million for the year ended June 30, 2019. As of Sept. 30, 2021, the Company had $3.56 million in total assets, $6.08 million in total liabilities, and a total stockholders' deficit of $2.51 million. PIAGGIO AMERICA: Plan Exclusivity Extended Thru March 4 ------------------------------------------------------- At the behest of Piaggio America, Inc., Judge Erik P. Kimball of the U.S. Bankruptcy Court for the Southern District of Florida, West Palm Beach Division extended the period in which the Debtor may file and solicit acceptances of the Plan through and including March 4, 2022, and May 4, 2022, respectively. This is Debtor's fourth extension of the Exclusive Periods. The prior extensions were granted in two-month increments, resulting in an extension period to the date of 6 months. The Debtor is committed to continuing its momentum in their chapter 11 proceeding and submits that the extension of the Exclusivity Periods is reasonable and necessary, will not prejudice the legitimate interests of creditors and other parties in interest, will afford a meaningful opportunity for the Debtor to pursue a confirmable plan, and will avoid unnecessary motion practice. In addition, the Debtor has been working closely with its Financial Advisor to prepare its liquidation and sales analysis and to formulate feasible plan scenarios that incorporate the Debtor's projected sales revenues, operating expenses, and market conditions. The extension will provide the Debtor and its creditors with sufficient opportunity to continue negotiating to come to a consensus on the terms of a proposed plan of reorganization that will maximize the benefit for all stakeholders. A copy of the Court's Extension Order is available at https://bit.ly/34euQzZ from PacerMonitor.com. About Piaggio America West Palm Beach, Fla.-based Piaggio America Inc. -- http://www.piaggioaerospace.it/-- is a manufacturer of aerospace products and parts. It designs, develops, and supports unmanned aerial systems, business, special missions, and ISR aircraft and aero engines. Piaggio America filed its voluntary petition for relief under Chapter 11 of the Bankruptcy Code (Bankr. S.D. Calif. Case No. 21 13491) on April 13, 2021. Paolo Ferreri, chief executive officer, signed the petition. In the petition, the Debtor disclosed $1 million to $10 million in assets and $10 million to $50 million in liabilities. Judge Erik P. Kimball presides over the case. Holland & Knight, LLP and Sonoran Capital Advisors, LLC serve as the Debtor's legal counsel and financial advisor, respectively. POINTCLICKCARE TECHNOLOGIES: S&P Places 'B+' ICR on Watch Negative ------------------------------------------------------------------ S&P Global Ratings placed the ratings on Ontario, Canada-based health care technology company PointClickCare Technologies Inc. (PCC), including the 'B+' issuer credit rating, on CreditWatch with negative implications. S&P plans to resolve the CreditWatch once it can fully assess details of the proposed transaction, including the impact on leverage, liquidity, and the business profile. PCC plans to acquire Audacious Inquiry to expand its customer network. Transaction terms were not disclosed, but S&P believes it could be leveraging based on PCC's recent history with debt-financed acquisitions and high valuation multiples in the industry. This also comes before PCC has significantly increased EBITDA from Collective Medical Technologies (CMT), which it acquired in December 2020. The CreditWatch placement reflects uncertainty about PCC's pro forma capital structure and the possibility it could have meaningfully higher adjusted leverage than S&P's forecast. Transaction terms have not been disclosed, but PCC's stagnant customer base in its core business increases the likelihood of a debt-financed acquisition to add new customers, especially outside of skilled nursing and senior living facilities. PCC's adjusted debt to EBITDA is in the high-3x area. But with very high valuation multiples in the industry and PCC's relatively small size, a midsize acquisition can materially weaken credit metrics. At the 'B+' rating, S&P expects adjusted debt to EBITDA to generally remain in the 4x-5x range. S&P said, "Although PCC's planned acquisition of Audacious Inquiry expands its customer base, like its 2020 acquisition of CMT, we believe this is part of an ambitious long-term strategy that is unlikely to increase the bottom line in the next 1-2 years. To support this strategy, we think the company will make subsequent debt-funded acquisitions that could further weaken credit metrics. PCC's core business of electronic health record software to skilled nursing and senior care facilities is performing well, increasing revenue and EBITDA steadily primarily from additional installations and products to existing customers. "We plan to resolve the CreditWatch over the near term once we can fully assess details of the proposed transaction, including the impact on leverage, liquidity, and the business profile. We could lower the issuer credit and issue-level ratings if we think PCC will sustain adjusted pro forma debt to EBITDA above 5x." POLARIS NEWCO: Moody's Says B3 CFR Unaffected by Spireon Deal ------------------------------------------------------------- Moody's Investors Service said Polaris Newco, LLC's ("Polaris", dba "Solera") B3 corporate family rating, B3-PD probability of default rating and B2 senior secured first lien term loan rating remain unchanged following the proposed $300 million of incremental borrowings under its first lien term loan due 2028 (bringing the total first lien debt to $5.8 billion). The Ba3 rating on the $500 million superpriority revolving credit facility is also unchanged. The company also has $2.5 billion outstanding under its second lien term loan (unrated) due 2029. The outlook is unchanged at stable. Proceeds from the incremental term loan, together with about $338 million of equity and $100 million of revolver draw will be used to fund the acquisition of Spireon Holdings, Inc.("Spireon") in a transaction totaling $737.5 million. The incremental term loan is expected to be fungible with the existing term loan. The proposed acquisition will enhance Polaris' existing service offering into the field of GPS based tracking solutions to commercial fleet operators, franchise dealerships and independent dealers. Polaris' pro forma debt-to-LTM EBITDA for the transaction is unchanged at 8x at September 30, 2021 (including Moody's standard adjustments). Moody's projects leverage will decline as a result of good EBITDA growth, but additional acquisitions may impact the pace of deleveraging. Polaris' B3 rating reflects the company's high financial leverage following the combination of the businesses of Solera, Omnitracs and DealerSocket last year. The company's credit profile benefits from its large revenue scale and limited cyclical exposure, with over 85% of its $2.3 billion in annual revenue generated by recurring subscriptions. The company also benefits from high EBITDA margin, around 44% (Moody's adjusted, excluding unrealized cost savings that could lead to sizeable margin expansion). Polaris has a diversified geographical footprint, with presence in over 90 countries. Lastly, the company's proprietary databases create barriers to entry, especially in less penetrated markets outside of the US where Polaris is a leading provider. Polaris Newco, LLC is a global provider of information services and software to the automotive and fleet industries. Customers include automobile and property insurance companies, collision repair and maintenance service facilities, auto dealers, fleet operators and other. The company was formed in July of 2021 from the combination of Solera, LLC, Omnitracs, LLC and DealerSocket LLC. Private equity sponsor Vista Equity Partners ("Vista") is the majority owner of the combined entity. Vista acquired Solera, LLC in 2016, Omnitracs, LLC in 2013 and DealerSocket LLC in 2014. The company operates in four different segments: Vehicle Solutions, Vehicle Claims, Vehicle Repair and Fleet Solutions. Revenue for the LTM period ended September 30, 2021 was $2.3 billion. POWER SOLUTIONS: Neil Gagnon Reports 10% Stake as of Jan. 27 ------------------------------------------------------------ In an amended Schedule 13G filed with the Securities and Exchange Commission, these entities reported beneficial ownership of shares of common stock of Power Solutions International, Inc. as of Jan. 27, 2022: Shares Percent Beneficially of Reporting Person Owned Class ---------------- ------------ ------- Gagnon Securities LLC 1,307,732 5.7% Gagnon Advisors, LLC 626,584 2.7% Neil Gagnon 2,293,521 10% Neil Gagnon has sole voting and dispositive power over 226,996 shares of the Issuer's Common Stock, par value $0.001 per share. In addition, Mr. Gagnon has shared voting power over 2,015,929 shares of the Issuer's common stock and shared dispositive power over 2,066,525 shares of common stock. Mr. Gagnon is the managing member and principal owner of Gagnon Securities LLC, an investment adviser registered with the SEC under the Investment Advisers Act of 1940, as amended, and a registered broker-dealer, in its role as investment manager to several customer accounts, foundations, partnerships and trusts to which it furnishes investment advice. GS and Mr. Gagnon may be deemed to share voting power with respect to 1,265,706 shares of common stock held in the Accounts and dispositive power with respect to 1,307,732 shares of common stock held in the Accounts. GS and Mr. Gagnon expressly disclaim beneficial ownership of all securities held in the Accounts. Mr. Gagnon is also the chief executive officer of Gagnon Advisors, LLC, an investment adviser registered with the SEC under the Advisers Act. Mr. Gagnon and Gagnon Advisors, in its role as investment manager to Gagnon Investment Associates, LLC, a private investment fund, may be deemed to share voting and dispositive power with respect to the 626,584 shares of the Issuer's common stock held by GIA. Gagnon Advisors and Mr. Gagnon expressly disclaim beneficial ownership of all securities held by GIA. A full-text copy of the regulatory filing is available for free at: https://www.sec.gov/Archives/edgar/data/1070170/000101905622000109/power_13ga8.htm About Power Solutions Headquartered in Wood Dale, IL, Power Solutions International, Inc. (http://www.psiengines.com)designs, engineers, manufactures, markets and sells a broad range of advanced, emission-certified engines and power systems that are powered by a wide variety of clean, alternative fuels, including natural gas, propane, and biofuels, as well as gasoline and diesel options, within the energy, industrial and transportation end markets. The Company manages the business as a single segment. Power Solutions reported a net loss of $22.98 million for the year ended Dec. 31, 2020, compared to net income of $8.25 million for the year ended Dec. 31, 2019. As of June 30, 2021, the Company had $284.43 million in total assets, $311.82 million in total liabilities, and a total stockholders' deficit of $27.40 million. Chicago, Illinois-based BDO USA, LLP, the Company's auditor since 2018, issued a "going concern" qualification in its report dated March 30, 2021, citing that significant uncertainties exist about the Company's ability to refinance, extend, or repay its outstanding indebtedness and maintain sufficient liquidity to fund its business activities. These factors raise substantial doubt about the Company's ability to continue as a going concern. PRECISION MANUFACTURED: Trustee Seeks to Hire Bicher & Associates ----------------------------------------------------------------- Richard Marshack, the trustee appointed in the Chapter 11 case of Precision Manufactured Developments, Inc., seeks approval from the U.S. Bankruptcy Court for the Central District of California to employ Bicher & Associates as his field agent and forensic analyst. The firm will render these services: (a) locate, collect, review and analyze the Debtor's books and records and source information for possible avoidable transfers, insider transactions, preference actions and other potential claims; (b) coordinate collection of the books and records and act as a liaison between the trustee and the Debtor's principal and support staff; (c) provide litigation support as requested; (d) support the trustee and trustee's professionals' efforts to maximize recovery for creditors through financial and other analysis; (e) assist the trustee with the monthly operating reports; and (f) any other services mutually agreed upon by the trustee and the firm. The hourly rates of the firm's services are as follows: Field Agent Services $95 Forensic Support $230 Lori Ensley, a member at Bicher & Associates, 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: Lori J. Ensley Bicher & Associates 1220 Monte Vista Dr. Redlands, CA 92373 About Precision Manufactured Developments Precision Manufactured Developments, Inc., a company based in Newport Beach, Cal., sought protection under Chapter 11 of the Bankruptcy Code (Bankr. C.D. Cal. Case No. 21-12354) on Sept. 29, 2021, listing up to $10 million in assets and up to $500,000 in liabilities. Judge Theodor Albert oversees the case. Andy Warshaw, Esq., at DiMarco Warshaw, APLC, is the Debtor's legal counsel. Richard A. Marshack is the Chapter 11 trustee appointed in the Debtor's bankruptcy case. The trustee tapped Ristine A. Thagard, Esq., at Marshack Hays, LLP as counsel and Bicher & Associates as field agent and forensic analyst. PRESTIGE PAVERS: Wins Cash Collateral Access -------------------------------------------- The U.S. Bankruptcy Court for the Northern District of Texas has authorized Prestige Pavers, LLC to use cash collateral on a final basis and provide adequate protection to the secured lenders, First Corporate Solutions; Samson Horus; Corporate Service Company; Acme Company; and Internal Revenue Service. An immediate and critical need exists for the Debtor to obtain funds to continue the operation of its business. The Debtor is permitted to use cash collateral in accordance with the budget, with a 15% variance. The Debtor is also authorized to collect and receive all cash funds. The Debtor will account each month to the Secured Lenders for all funds received. As adequate protection, the Secured Lenders are granted valid, binding, enforceable, and perfected liens co-extensive with the Secured Lenders' pre-petition liens in all currently owned or hereafter acquired property and assets of the Debtor. The Debtor is permitted to pay Subchapter V Trustee fees incurred during the case, including any amount required as a post-petition security deposit as approved by the Court. As adequate protection for the diminution in value of the interests of the Secured Lenders, the Secured Lenders are granted replacement liens and security interests. The replacement liens granted to the Secured Lenders are automatically perfected without the need for filing of a UCC-1 financing statement with the Secretary of State's Office or any other such act of perfection. A copy of the order and the Debtor's budget for January and February 2022 is available for free at https://bit.ly/3GpAvjZ from PacerMonitor.com. The Debtor projects $163,119 in gross income and $123,603 in total expenses. About Prestige Pavers Prestige Pavers, LLC filed its voluntary petition for relief under Chapter 11 of the Bankruptcy Code (Bankr. N.D. Tex. Case No. 21-32271) on Dec. 23, 2021, listing up to $500,000 in assets and up to $1 million in liabilities. Judge Stacey G. Jernigan oversees the case. Joyce W. Lindauer, Esq., at Joyce W. Lindauer Attorney, PLLC serves as the Debtor's legal counsel. PURDUE PHARMA: Mediation Deadline Extended to Feb. 7 ---------------------------------------------------- Vince Sullivan of Law360 reports that a New York bankruptcy judge extended a mediation deadline Tuesday, February 1, 2022, in the Chapter 11 case of Purdue Pharma after the mediator reported the parties were close to a deal that would see members of the Sackler family significantly increase their more than $4.3 billion in payments under the debtor's scuttled plan. U.S. Bankruptcy Judge Robert D. Drain granted the request of his colleague, U.S. Bankruptcy Judge Shelley C. Chapman, to extend the mediation deadline to Feb. 7. Judge Chapman said in her report late Monday, January 31, 2022, that after about 100 meetings and dozens of calls throughout January 2022. About Purdue Pharma LP Purdue Pharma L.P. and its subsidiaries -- http://www.purduepharma.com/-- develop and provide prescription medicines and consumer products that meet the evolving needs of healthcare professionals, patients, consumers and caregivers. Purdue's subsidiaries include Adlon Therapeutics L.P., focused on treatment for Attention-Deficit/Hyperactivity Disorder (ADHD) and related disorders; Avrio Health L.P., a consumer health products company that champions an improved quality of life for people in the United States through the reimagining of innovative product solutions; Imbrium Therapeutics L.P., established to further advance the emerging portfolio and develop the pipeline in the areas of CNS, non-opioid pain medicines, and select oncology through internal research, strategic collaborations and partnerships; and Greenfield Bioventures L.P., an investment vehicle focused on value-inflection in early stages of clinical development. Opioid makers in the U.S. are facing pressure from a crackdown on the addictive drug in the wake of the opioid crisis and as state attorneys general file lawsuits against manufacturers. More than 2,000 states, counties, municipalities and Native American governments have sued Purdue Pharma and other pharmaceutical companies for their role in the opioid crisis in the U.S., which has contributed to the more than 700,000 drug overdose deaths in the U.S. since 1999. OxyContin, Purdue Pharma's most prominent pain medication, has been the target of over 2,600 civil actions pending in various state and federal courts and other fora across the United States and its territories. On Sept. 15 and 16, 2019, Purdue Pharma L.P. and 23 affiliated debtors each filed a voluntary petition for relief under Chapter 11 of the U.S. Bankruptcy Code (Bankr. S.D.N.Y. Lead Case No. 19-23649), after reaching terms of a preliminary agreement for settling the massive opioid litigation. The Debtors' consolidated balance sheet as of Aug. 31, 2019, showed $1.972 billion in assets and $562 million in liabilities. U.S. Bankruptcy Judge Robert Drain oversees the cases. The Debtors tapped Davis Polk & Wardwell, LLP and Dechert, LLP as legal counsel; PJT Partners as investment banker; AlixPartners as financial advisor; and Grant Thornton, LLP as tax structuring consultant. Prime Clerk LLC is the claims agent. Akin Gump Strauss Hauer & Feld LLP and Bayard, P.A., represent the official committee of unsecured creditors appointed in the Debtors' bankruptcy cases. David M. Klauder, Esq., is the fee examiner appointed in the Debtors' cases. The fee examiner is represented by Bielli & Klauder, LLC. * * * U.S. Bankruptcy Judge Robert Drain in early September 2021 approved a plan to turn Purdue into a new company (Knoa Pharma LLC) no longer owned by members of the Sackler family, with its profits going to fight the opioid epidemic. The Sackler family agreed to pay $4.3 billion over nine years to the states and private plaintiffs and in exchange for a lifetime legal immunity. The deal resolves some 3,000 lawsuits filed by state and local governments, Native American tribes, unions, hospitals and others who claimed the company's marketing of prescription opioids helped spark and continue an overdose epidemic. Separate appeals to approval of the Plan have already been filed by the U.S. Bankruptcy Trustee, California, Connecticut, the District of Columbia, Maryland, Rhode Island and Washington state, plus some Canadian local governments and other Canadian entities. Purdue filed its Chapter 11 Plan on March 15, 2021. A twelfth amended Chapter 11 plan was filed on September 2, 2021, which was confirmed on September 17. Purdue divides the claims against it into several categories, one of which it calls "PI Claims," consisting of claims "for alleged opioid-related personal injury." The Plan provides for the creation of the "PI Trust," which will administer all PI Claims. The trust will be funded with an initial distribution of $300 million on the effective date of the Chapter 11 plan, followed by a distribution of $200 million in 2024, and distributions of $100 million in 2025 and 2026. In sum, "[t]he PI Trust will receive at least $700 million in value, and may receive an additional $50 million depending on the amount of proceeds received on account of certain of Purdue's insurance policies." The plan further provides that Purdue's ability to recover from its insurers will be vested in a "Master Disbursement Trust." To the extent any proceeds are recovered from Purdue's insurers with respect to the PI Claims, up to $450 million of those proceeds will be channeled from the MDT to the PI Trust. However, the PI Trust will be funded regardless of whether anything is recovered from Purdue's insurers. Instead, "[d]istributions to the PI Trust are subject to prepayment on a rolling basis as insurance proceeds from certain of Purdue's insurance policies are received by the MDT and paid forward to the PI Trust." PURDUE PHARMA: Sacklers' Litigation Shield Extended to Feb. 17 -------------------------------------------------------------- Reuters reports that a federal judge on Tuesday extended a legal shield protecting the Sackler family owners of Purdue Pharma from lawsuits to Feb. 17, 2022 as they try to reach a deal with several states to settle sprawling litigation stemming from the U.S. opioid crisis. U.S. Bankruptcy Judge Robert Drain said allowing the legal shield to expire at the end of Tuesday, Feb. 1, 2022, would be "quite foolish," given the mediator's report of a possible deal. Purdue, maker of the highly addictive OxyContin opioid painkiller, filed for bankruptcy in 2019 in the face of thousands of lawsuits accusing it and the Sacklers of fueling an American opioid epidemic through deceptive marketing. The opioid abuse crisis has led to nearly 500,000 overdose deaths over two decades, according to U.S. data. Members of the Sackler family have denied the allegations. Purdue's bankruptcy judge has paused litigation against members of the Sackler family since 2019, seeking to buy time for the company to pursue a reorganization in bankruptcy court. On Monday, Jan. 31, 2022, the mediator reported that the Sacklers were nearing an agreement to boost their more than $4.3 billion cash contribution to resolve the litigation after negotiating with states that objected to the original terms. Judge Drain said on Tuesday that "all bets were open" as to whether the Sacklers would continue to receive legal protection from opioid lawsuits if the current round of mediation does not result in a new deal. If the Sacklers' legal protection were allowed to expire, the family and Purdue would be swept up in a "a firestorm of uncoordinated litigation" that would destroy any value the company has left, Purdue attorney Marshall Huebner told the judge on Tuesday, February 1, 2022. Legal protections for the Sacklers have been a point of controversy throughout Purdue's bankruptcy. The current round of mediation began in January 2022, after a U.S. district judge ruled that Purdue's bankruptcy reorganization plan improperly shielded Sackler family members, who had not filed for Chapter 11 themselves, from opioid litigation. Attorney Joe Rice, who represents plaintiffs who have sued Purdue and the Sackler family, said in court on Tuesday that the legal protections should be allowed to expire. Allowing lawsuits to proceed could break a holding pattern that "only benefits the Sackler family," Rice said. About Purdue Pharma LP Purdue Pharma L.P. and its subsidiaries -- http://www.purduepharma.com/-- develop and provide prescription medicines and consumer products that meet the evolving needs of healthcare professionals, patients, consumers and caregivers. Purdue's subsidiaries include Adlon Therapeutics L.P., focused on treatment for Attention-Deficit/Hyperactivity Disorder (ADHD) and related disorders; Avrio Health L.P., a consumer health products company that champions an improved quality of life for people in the United States through the reimagining of innovative product solutions; Imbrium Therapeutics L.P., established to further advance the emerging portfolio and develop the pipeline in the areas of CNS, non-opioid pain medicines, and select oncology through internal research, strategic collaborations and partnerships; and Greenfield Bioventures L.P., an investment vehicle focused on value-inflection in early stages of clinical development. Opioid makers in the U.S. are facing pressure from a crackdown on the addictive drug in the wake of the opioid crisis and as state attorneys general file lawsuits against manufacturers. More than 2,000 states, counties, municipalities and Native American governments have sued Purdue Pharma and other pharmaceutical companies for their role in the opioid crisis in the U.S., which has contributed to the more than 700,000 drug overdose deaths in the U.S. since 1999. OxyContin, Purdue Pharma's most prominent pain medication, has been the target of over 2,600 civil actions pending in various state and federal courts and other fora across the United States and its territories. On Sept. 15 and 16, 2019, Purdue Pharma L.P. and 23 affiliated debtors each filed a voluntary petition for relief under Chapter 11 of the U.S. Bankruptcy Code (Bankr. S.D.N.Y. Lead Case No. 19-23649), after reaching terms of a preliminary agreement for settling the massive opioid litigation. The Debtors' consolidated balance sheet as of Aug. 31, 2019, showed $1.972 billion in assets and $562 million in liabilities. U.S. Bankruptcy Judge Robert Drain oversees the cases. The Debtors tapped Davis Polk & Wardwell, LLP and Dechert, LLP as legal counsel; PJT Partners as investment banker; AlixPartners as financial advisor; and Grant Thornton, LLP as tax structuring consultant. Prime Clerk LLC is the claims agent. Akin Gump Strauss Hauer & Feld LLP and Bayard, P.A., represent the official committee of unsecured creditors appointed in the Debtors' bankruptcy cases. David M. Klauder, Esq., is the fee examiner appointed in the Debtors' cases. The fee examiner is represented by Bielli & Klauder, LLC. * * * U.S. Bankruptcy Judge Robert Drain in early September 2021 approved a plan to turn Purdue into a new company (Knoa Pharma LLC) no longer owned by members of the Sackler family, with its profits going to fight the opioid epidemic. The Sackler family agreed to pay $4.3 billion over nine years to the states and private plaintiffs and in exchange for a lifetime legal immunity. The deal resolves some 3,000 lawsuits filed by state and local governments, Native American tribes, unions, hospitals and others who claimed the company's marketing of prescription opioids helped spark and continue an overdose epidemic. Separate appeals to approval of the Plan have already been filed by the U.S. Bankruptcy Trustee, California, Connecticut, the District of Columbia, Maryland, Rhode Island and Washington state, plus some Canadian local governments and other Canadian entities. Purdue filed its Chapter 11 Plan on March 15, 2021. A twelfth amended Chapter 11 plan was filed on September 2, 2021, which was confirmed on September 17. Purdue divides the claims against it into several categories, one of which it calls "PI Claims," consisting of claims "for alleged opioid-related personal injury." The plan provides for the creation of the "PI Trust," which will administer all PI Claims. The trust will be funded with an initial distribution of $300 million on the effective date of the Chapter 11 plan, followed by a distribution of $200 million in 2024, and distributions of $100 million in 2025 and 2026. In sum, "[t]he PI Trust will receive at least $700 million in value, and may receive an additional $50 million depending on the amount of proceeds received on account of certain of Purdue's insurance policies." The Plan further provides that Purdue's ability to recover from its insurers will be vested in a "Master Disbursement Trust." To the extent any proceeds are recovered from Purdue's insurers with respect to the PI Claims, up to $450 million of those proceeds will be channeled from the MDT to the PI Trust. However, the PI Trust will be funded regardless of whether anything is recovered from Purdue's insurers. Instead, "[d]istributions to the PI Trust are subject to prepayment on a rolling basis as insurance proceeds from certain of Purdue's insurance policies are received by the MDT and paid forward to the PI Trust." QHC FACILITIES: Court Okays Interim DIP Financing Order ------------------------------------------------------- Lauren Coleman-Lochner of Bloomberg News reports that U.S. Bankruptcy Judge Anita Shodeen approved an interim order to secure DIP funding for nursing-home chain QHC Facilities LLC after parties said they reached broad consensus on the terms of the proposed $2 million loan. The order can become final on Feb. 14, 2022 barring objections. Company attorney Jeffrey Goetz said negotiations for a stalking horse bidder are down to the "last round." Judge once again cautioned about costs for the case, telling parties to "be very careful when you're billing here." 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. RED PROPERTIES: Case Summary & Two Unsecured Creditors ------------------------------------------------------ Debtor: Red Properties LLC 147 Deepwood Drive Portland, ME 04103 Chapter 11 Petition Date: February 2, 2022 Court: United States Bankruptcy Court District of Maine Case No.: 22-20014 Debtor's Counsel: Andrew C. Helman, Esq. DENTONS BINGHAM GREENEBAUM, LLP 254 Commercial Street, Suite 245 Portland, ME 04101 Tel: (207) 619-0919 Email: andrew.helman@dentons.com Estimated Assets: $1 million to $10 million Estimated Liabilities: $1 million to $10 million The petition was signed by Edward Walsh as sole member. A copy of the Debtor's list of two unsecured creditors is available for free at PacerMonitor.com at: https://www.pacermonitor.com/view/55L4PFA/Red_Properties_LLC__mebke-22-20014__0002.0.pdf?mcid=tGE4TAMA A full-text copy of the petition is available for free at PacerMonitor.com at: https://www.pacermonitor.com/view/5TF2O3Y/Red_Properties_LLC__mebke-22-20014__0001.0.pdf?mcid=tGE4TAMA RIVERSTONE RESORT: Hires Sanjay R. Chadha Law as Special Counsel ---------------------------------------------------------------- Riverstone Resort, LLC seeks approval from the U.S. Bankruptcy Court for the Southern District of Texas to employ Sanjay R. Chadha Law, PLLC as its special counsel. The firm's services include: a) assisting the Debtor in any contested matters brought by or against Prosperity Bank arising in the Debtor's Chapter 11 case; b) assisting the Debtor in any adversary proceedings brought by or against Prosperity Bank arising from or relating to the bankruptcy case; c) assisting the Debtor in prosecuting the case styled Riverstone Resort, LLC et.al. v. Prosperity Bank et.al. (Cause No. 20-DCV-273747) in the 434th Judicial District Court of Fort Bend County, Texas; d) handling any appeals that may result from the Prosperity Bank litigation; and e) performing any other legal services. The firm will charge an hourly fee of $575 for Sanjay Chadha, Esq., and an hourly fee of $60 for paralegal services. As disclosed in court filings, Sanjay R. Chadha Law is a "disinterested person" within the meaning of Section 101(14) of the Bankruptcy Code. The firm can be reached through: Sanjay R. Chadha, Esq. Sanjay R. Chadha Law PLLC 440 Louisiana Street, Suite 900 Houston, TX 77002 Tel: 1-866-818-2328. Fax: 1-866-620-8194 Email: srchadha@reachalaw.com About Riverstone Resort Riverstone Resort, LLC is the fee simple owner of a real property located in Sugar Land, Texas, having an appraised value of $9.6 million. Riverstone Resort filed a petition for Chapter 11 protection (Bankr. S.D. Texas Case No. 21-33531) on Oct. 29, 2021, disclosing $9,620,007 in assets and $2,165,951 in liabilities. Judge Jeffrey P. Norman oversees the case. David L. Venable, Esq., a practicing attorney in Houston, Texas, serves as the Debtor's bankruptcy counsel. Sanjay R. Chadha Law, PLLC is the Debtor's special counsel ROCKDALE MARCELLUS: Chemstream Steps Down as Committee Member ------------------------------------------------------------- The U.S. Trustee for Regions 3 and 9 disclosed in a court filing that Chemstream Inc. resigned from the official committee of unsecured creditors in the Chapter 11 cases of Rockdale Marcellus, LLC and Rockdale Marcellus Holdings, LLC. As of Feb. 2, the remaining members of the committee are: 1. Aqua - ETC Water Solutions, LLC Attention: Philip Wright c/o John Mitchell, Esq. Katten Muchin Rosenman LLP 2121 North Pearl Street, Suite 1100 Dallas, TX 75201-2591 Tel: 469-627-7017 E-mail: john.mitchell@katten.com 2. Cudd Pressure Control Attention: Faron Dehart Vianey Garza, Esq. Dore Rothberg McKay 1717 Park Row, Ste. 160 Houston, TX 77084 Tel: 281-829-1555 E-mail: vgarza@dorelaw.com 3. Moore Trucking, LLC Attention: Christopher Moore 238 Sunset Rd. Canton, PA 17724 Tel: 570-916-8870 E-mail: mooretrucking08@yahoo.com 4. ProFrac Services, LLC Attention: Brian Von Hatten c/o Tiffany Strelow Cobb, Esq. Vorys, Sater, Seymour and Pease LLP 52 East Gay Street Columbus, OH 43215 Tel: 614-464-8322 E-mail: tscobb@vorys.com About Rockdale Marcellus Rockdale Marcellus is a northeast Pennsylvania natural gas driller. It owns and operates 66 producing wells on 42,897 net acres in three northeast Pennsylvania counties. On Sept. 21, 2021, Rockdale Marcellus, LLC and Rockdale Marcellus Holdings, LLC filed petitions for Chapter 11 protection (Bankr. W.D. Pa. Lead Case No. 21-22080). The Debtors' cases have been assigned to Judge Gregory L. Taddonio. Rockdale Marcellus, LLC listed $100 million to $500 million in assets and liabilities as of the bankruptcy filing. The Debtors tapped Reed Smith, LLP as bankruptcy counsel; Quinn Emanuel Urquhart & Sullivan, LLP as special litigation counsel; Houlihan Lokey Capital, Inc. as financial advisor and investment banker; and Huron Consulting Services, LLC as restructuring advisor. John C. DiDonato, managing director at Huron, serves as the Debtors' chief restructuring officer. Epiq is the claims and noticing agent and administrative agent. The U.S. Trustee for Regions 3 and 9 appointed an official committee of unsecured creditors in the Debtors' Chapter 11 cases on Oct. 1, 2021. The committee tapped Pachulski Stang Ziehl & Jones, LLP as lead bankruptcy counsel; Whiteford Taylor & Preston, LLP as local counsel; and Riveron RTS, LLC as financial advisor. ROMAN CATHOLIC: Feb. 4 Hearing on Santa Fe Asset Bid Procedures --------------------------------------------------------------- Judge David T. Thuma of the U.S. Bankruptcy Court for the District of New Mexico will convene a hearing on Feb. 4, 2022, at 1:30 p.m. (MT), to consider The Roman Catholic Church of the Archdiocese of Santa Fe's proposed overbid procedures in connection with the sale of the real property located at 50 Mt. Carmel Rd., in Santa Fe, New Mexico, which consists of land and several buildings, to Santa Fe RC 2, LLC, for $6.75 million, subject to overbid. At the Sale Hearing, the Debtor will present the Successful Bid to the Court and request the entry of an order approving sale to the Successful Bidder. If no auction is conducted, the Sale Hearing may be vacated without notice or further order of the Court. Parties in interest may participate in person or by telephone. Those wishing to appear by telephone must call the following toll-free number approximately five minutes prior to the start time: Call in Number: (888) 684-8852, Access Code: 3661269. About the Archdiocese of Santa Fe The Roman Catholic Church of the Archdiocese of Santa Fe -- https://www.archdiosf.org/ -- is an ecclesiastical territory or diocese of the southwestern region of the United States in the state of New Mexico. At present, the Archdiocese of Santa Fe covers an area of 61,142 square miles. There are 93 parish seats and 226 active missions throughout this area. The Archdiocese of Santa Fe sought Chapter 11 protection (Bankr. D.N.M. Case No. 18-13027) on Dec. 3, 2018, to deal with child abuse claims. It reported total assets of $49,184,579 and total liabilities of $3,700,000 as of the bankruptcy filing. Judge David T. Thuma oversees the case. The archdiocese tapped Elsaesser Anderson, Chtd. and Walker & Associates, P.C., as bankruptcy counsel, Stelzner, Winter, Warburton, Flores, Sanchez & Dawes, P.A as special counsel, and REDW LLC as accountant. SHEKINAH OILFIELD: Unsecureds to Get $2K per Year for 5 Years ------------------------------------------------------------- Shekinah Oilfield Services, Inc., filed with the U.S. Bankruptcy Court for the Northern District of Texas a Subchapter V Plan of Reorganization dated Jan. 31, 2022. Shekinah began operations in 2007 and was incorporated on January 1, 2010. Shekinah primarily engages in the business of the repair of pumps and related oilfield equipment. The founders and owners of Shekinah are James L. Knight and Shawna L. Knight. The Debtor commenced this case to address the indebtedness owed to First National Bank of Albany/Breckenridge that has long burdened the Debtor since the origination of such debt in 2014 (or before) and the steady decline in the size and income of the Debtor, punctuated by the overall downturns in the hydrocarbons market in 2014, 2018, and 2020. This Plan of Reorganization proposes to pay creditors of Shekinah Oilfield from cash flow from future operations. The Plan generally provides for the repayment of allowed secured claims and otherwise provides for a total distribution of $10,000 to general unsecured creditors. Class 7 consists of General Unsecured Claims. The Class 7 general unsecured creditors consist of general unsecured claims in aggregate minimum amount of approximately $413,466; however, after further investigation, the Debtor disputes the scheduled claim of CP International, Inc. in the amount of $321,209 and thus shall amend the schedules and/or file an objection to claim with respect to such claim and amount. If this objection is sustained, then the total of Class 7 will be approximately $92,257. The Class 7 creditors will receive a pro rata distribution of $2,000 per year for each of the 5 years following the Effective Date, with a distribution occurring at the end of each calendar quarter commencing with the first full calendar order following the Effective Date. Class 8 consists of Class of Equity Interest Holders. James L. Knight and Shawna L. Knight shall continue to own all shares of Shekinah after the Effective Date. Each equity interest holder shall retain its interest following confirmation of the Plan. Class 8 is unimpaired and is deemed to accept the Plan. Payments and distributions under the Plan will be funded by the continued operations of the Debtor. A full-text copy of the Subchapter V Plan of Reorganization dated Jan. 31, 2022, is available at https://bit.ly/3sfZv8f from PacerMonitor.com at no charge. Counsel to the Debtor: Jeff Carruth, Esq. Weycer, Kaplan, Pulaski, & Zuber, P.C. 3030 Matlock Road, Suite 201 Arlington, TX 76105 Tel: (713) 341-1158 Fax: (866) 666-5322 Email: jcarruth@wkpz.com About Shekinah Oilfield Services Albany, Texas-based Shekinah Oilfield Services, Inc. filed a petition for Chapter 11 protection (Bankr. N.D. Tex. Case No. 21-10152) on Nov. 2, 2021, listing up to $1 million in assets and up to $10 million in liabilities. James L. Knight, president of Shekinah, signed the petition. Judge Robert L. Jones oversees the case. Weycer, Kaplan, Pulaski, & Zuber, P.C. and Lee Law Firm, PLLC serve as the Debtor's bankruptcy counsel. SQUIRRELS RESEARCH: Seeks to Hire CliftonLarsonAllen as Accountant ------------------------------------------------------------------ Squirrels Research Labs LLC and the Midwest Data Company LLC seek approval from the U.S. Bankruptcy Court for the Northern District of Ohio to employ CliftonLarsonAllen LLP as their accountant. CliftonLarsonAllen will render these services: (a) prepare tax returns; (b) communicate with various taxing authorities; and (c) perform all other necessary and general tax services required throughout these Chapter 11 cases. During the 12-month period ending December 31, 2021, the Debtors paid fees to CliftonLarsonAllen in an amount totaling $26,360.78 for its accounting and tax services. The hourly rates of the firm's professionals are as follows: Tax Staff $135 Tax Seniors $175 Tax Managers $270 In addition, the firm will seek reimbursement for expenses incurred. Daniel Riemenschneider, a principal at CliftonLarsonAllen, 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: Daniel Riemenschneider CliftonLarsonAllen LLP 388 South Main Street, Suite 420 Akron, OH 44311-4407 Telephone: (330) 376-0100 Facsimile: (330) 376-0658 About Squirrels Research Labs Squirrels Research Labs, LLC is a manufacturer of semiconductor and other electronic components based in North Canton, Ohio. Squirrels Research Labs and its affiliate, The Midwest Data Company, LLC, filed their voluntary petitions for relief under Chapter 11 of the Bankruptcy Code (Bankr. N.D. Ohio Lead Case No. 21-61491) on Nov. 23, 2021. At the time of the filing, Squirrels Research Labs listed as much as $10 million in both assets and liabilities while Midwest Data Company listed up to $100,000 in assets and up to $50,000 in liabilities. Judge Russ Kendig oversees the cases. The Debtors tapped Marc B. Merklin, Esq., at Brouse McDowell, LPA as legal counsel and CliftonLarsonAllen LLP as accountant. SUSGLOBAL ENERGY: Signs One Year Consulting Agreement With CFO -------------------------------------------------------------- SusGlobal Energy Corp. entered into a CFO Consulting Agreement with Ike Makrimichalos, chief financial officer of the Company, effective Jan. 1, 2022. Pursuant to the terms of the Makrimichalos Consulting Agreement, Makrimichalos will be entitled to fees of C$10,000 per month, plus the applicable Harmonized Sales Tax, for his services as chief financial officer of the Company. The Company has also agreed to reimburse Makrimichalos for certain out-of-pocket expenses incurred by Makrimichalos. In addition to the monthly fees, Makrimichalos was awarded 50,000 Restricted Common Shares of the Company. The Makrimichalos Consulting Agreement will replace the consulting agreement currently in effect by and between the Company and Makrimichalos. The Makrimichalos Consulting Agreement is for a term of 12 months. Upon a Constructive Discharge (as defined in the Makrimichalos Consulting Agreements) and subject to certain notification requirements and the Company's opportunity to cure the Constructive Discharge, Makrimichalos will be entitled to a compensation of two months' fees, as well as any bonus compensation owing. About SusGlobal Headquartered in Toronto, Ontario, Canada, SusGlobal Energy Corp. -- www.susglobalenergy.com -- is a renewables company focused on acquiring, developing and monetizing a global portfolio of proprietary technologies in the waste to energy and regenerative products application. SusGlobal Energy reported a net loss of $2.01 million for the year ended Dec. 31, 2020, compared to a net loss of $2.89 million for the year ended Dec. 31, 2019. As of Sept. 30, 2021, the Company had $8.96 million in total assets, $13.57 million in total liabilities, and a total stockholders' deficit of $4.61 million. Toronto, Canada-based MNP LLP, the Company's auditor since 2020, issued a "going concern" qualification in its report dated April 15, 2021, citing that the Company has experienced operating losses since inception and expects to incur further losses in the development of its business. These conditions, along with other matters, raise substantial doubt about Company's ability to continue as a going concern. TCP INVESTMENT: Non-Insider Unsecureds to Get 100% in 2 Years ------------------------------------------------------------- TCP Investment Properties, LLC, filed with the U.S. Bankruptcy Court for the Eastern District of Kentucky a Disclosure Statement for Plan of Reorganization dated Jan. 31, 2022. The Debtor is a single asset real estate debtor that owns 18 townhomes in 4-plexes and a clubhouse on Regency Circle in Richmond, Kentucky (the "Property"). Paul W. Baker and Thurman Parsons were the initial members. Mr. Baker has been the sole member since 2014. The Plan contemplates the continued business operations of the Debtor as the Reorganized Debtor following confirmation. The Plan provides for the sale of the Debtors' properties or the refinancing of Debtor's obligations to its sole secured creditor, Whitaker Bank, and payment in full of all Non-Insider Unsecured Creditors from ongoing income from its rental operations. Class 1 consists of the Allowed Secured Claim of Whitaker Bank, in the total amount of $2,195,560.37. The Debtor may seek to sell the parcel known as 593 Regency Circle (the "Clubhouse") to a third-party free and clear of all liens, claims and interests, with such liens, claims and interests to attach to the sale proceeds. All proceeds paid to Whitaker Bank from the Clubhouse sale shall be used to reduce the principal balance of the promissory notes in favor of Whitaker Bank, and Whitaker Bank shall release its mortgage against the Clubhouse property upon receipt of the net sale proceeds. Class 2 shall consist of all ad valorem tax Secured Claims as of the Petition Date. Pursuant to the Agreed Order for Interim Use of Cash Collateral, funds held by a receiver were used to pay all Class 2 Claims in full, except for Claims of the City of Richmond and Madison County, Kentucky. The Class 2 Claims are not Impaired. Class 3 shall consist of the Allowed Non-Insider Unsecured Claims (other than Priority Claims). Class 3 consists of four claims, each for less than $1,000.00. After payment of all Allowed Administrative and Priority Claims each holder of an Allowed Claim in Class 3 shall receive payment in full of their Allowed Claim within 24 months after the Effective Date. The Class 3 Claims are Impaired. Class 4 shall consist of Allowed Insider Unsecured Claims. After payment of all Allowed Administrative Claims, Priority Claims and Class 3 Claims, each holder of an Allowed Claim in Class 4 shall receive a distribution equal to its pro rata share of the Reorganized Debtor's Net Profits from its operations for a period of 3 years post-Confirmation. Class 4 Creditors will receive distributions based on actual Net Profits and not projections so distributions may be higher or lower than projected. The Class 4 Claims are impaired. Class 5 consists of those Persons or entities holding equity or membership Interests in the Debtor – Paul W. Baker (100%). The Plan provides that on the Effective Date, the equity interests in the Debtor will be retained by the existing member. Mr. Baker agrees he will take no wages, salary or draw from the Reorganized Debtor for a period of 36 months after the Confirmation Date; provided, however, that Mr. Baker shall be reimbursed for any actual expenses incurred in managing and operating the Reorganized Debtor. The Class 5 Interest is not Impaired. Upon Confirmation, the Reorganized Debtor will be charged with administration of the Bankruptcy Case. The Reorganized Debtor will be authorized and empowered to take such actions as are required to effectuate the Plan, including the prosecution and enforcement of Causes of Action. The Reorganized Debtor will pay all United States Trustee fees from sources ongoing rental income and will file all post-Confirmation reports required by the United States Trustee's Office. The Debtor will continue to operate postconfirmation as Reorganized Debtor in the ordinary course of business and expects to receive ongoing income from its business operations. The Debtor may continue efforts to sell the Clubhouse and pay the net proceeds to Whitaker Bank to reduce its Claim, while continuing efforts to refinance the balance of the Whitaker Bank Claim. The Debtor anticipates subsequent years following Plan confirmation to be similar in expense and income as Exhibit C with market increases in rent. Based on the projections, Debtor will be able to make monthly interest payments to Whitaker and the Class 3 Allowed Non-Insider Unsecured Creditors are expected to be paid in full no later than two years after the Effective Date. Insider Unsecured Creditors will be paid pro rata to the greatest extent possible from Net Profits for 36 months after the Effective Date. A full-text copy of the Disclosure Statement dated Jan. 31, 2022, is available at https://bit.ly/3geRbzU from PacerMonitor.com at no charge. Counsel for the Debtor: DELCOTTO LAW GROUP PLLC Dean A. Langdon, Esq. KY Bar No. 40104 200 North Upper Street Lexington, Kentucky 40507 Telephone: (859) 231-5800 Facsimile: (859) 281-1179 dlangdon@dlgfirm.com About TCP Investment Properties TCP Investment Properties, LLC, was organized in March 2012 for the purpose of acquiring a multi-unit residential development in Richmond, Ky. It owns 18 townhomes in 4-plexes and a clubhouse, with a combined current value of $3.67 million. TCP Investment filed a Chapter 11 petition (Bankr. E.D. Ky. Case No. 21-50906) on Aug. 4, 2021, disclosed $3,667,501 in total assets and $2,971,137 in total liabilities. Paul W. Baker, a member of TCP Investment, signed the petition. Judge Tracey N. Wise oversees the case. Delcotto Law Group PLLC represents the Debtor as counsel. TEMERITY TRUST: Seeks to Tap Douglas Elliman as Real Estate Broker ------------------------------------------------------------------ Temerity Trust Management, LLC seeks authority from the U.S. Bankruptcy Court for the Central District of California to employ Douglas Elliman of California, Inc. to market and sell its property located at 9153 Hazen Drive, Beverly Hills, Calif. Douglas Elliman will receive 4 percent of the sale price as a commission but if the Debtor consummates its pending purchase agreement with the owners of the property or it enters into a purchase agreement with either Sam Esmail or Emmy Rossum, the total commission will be 3.75 percent of the sale price. The commission will be split and paid at closing as follows: 0.75 percent to Douglas Elliman; 2.25 percent to the buyer's agent; and 0.75 percent to Rodeo Realty. As disclosed in court filings, Douglas Elliman is a "disinterested person" within the meaning of Section 101(14) of the Bankruptcy Code. The firm can be reached through: Josh Altman Matthew Altman Douglas Elliman of California, Inc. 150 El S Camino Dr., Suite 150 Beverly Hills, CA 90212 Phone: 310-819-3250 Email: josh@thealtmanbrothers.com About Temerity Trust Management Temerity Trust Management, LLC, a company in Beverly Hills, Calif., filed a Chapter 11 petition (Bankr. C.D. Calif. Case No. 20-15015) on June 1, 2020, listing as much as $50 million in both assets and liabilities. William K. Sadleir, manager, signed the petition. Judge Barry Russell oversees the case. Kurt Ramlo, Esq., at Levene Neale Bender Yoo & Brill, LLP serves as the Debtor's bankruptcy counsel. TLA TIMBER: March 9 Plan Confirmation Hearing Set ------------------------------------------------- On Jan. 27, 2022, debtor TLA Timber, LLC, filed with the U.S. Bankruptcy Court for the Middle District of Georgia a Chapter 11 Plan of Reorganization. On Jan. 31, 2022, Judge James P. Smith ordered that: * Match 9, 2022, at 11 a.m. in the United States Bankruptcy Court, 433 Cherry Street, Courtroom A, Macon, GA 31201. * March 2, 2022, is fixed as the last day for filing written acceptances or rejections of the Plan. * March 2, 2022, is fixed as the last day for filing and serving written objections to the confirmation of the Plan. A full-text copy of the order dated Jan. 31, 2022, is available at https://bit.ly/3HoEYEH from PacerMonitor.com at no charge. Attorney for the Plan Proponent: Wesley J. Boyer, Esq. Boyer Terry LLC 348 Cotton Avenue, Suite 200 Macon, GA 31201 Telephone: (478) 742-6481 Email: Wes@BoyerTerry.com About TLA Timber TLA Timber, LLC, a Eaton, Ga.-based company that owns and operates a logging business, filed a voluntary petition for Chapter 11 protection (Bankr. M.D. Ga. Case No. 21-51009) on Oct. 29, 2021. In the petition signed by Ross Elmer Davis, managing member, the Debtor disclosed up to $1 million in asset and up to $10 million in liabilities. Judge James P. Smith oversees the case. Wesley J. Boyer, Esq., at Boyer Terry LLC, is the Debtor's bankruptcy counsel. TLA TIMBER: Unsecureds to Get Share of Income for 3 Years --------------------------------------------------------- TLA Timber, LLC, filed with the U.S. Bankruptcy Court for the Middle District of Georgia a Plan of Reorganization for Small Business dated Jan. 27, 2022. The Debtor is a limited liability corporation. Debtor is in the business of logging. The final Plan payment is expected to be paid on January 31, 2025. Class 2a consists of the claim of Carolina Bank. The claim secured by a 2001 D5 bulldozer and a 2004 Cowboy trailer, to the extent allowed, shall be paid in 72 equally amortized monthly payments with interest calculated at 6% per annum commencing on the first day of the month following the effective date of the plan. Class 2b consists of the claim of Commercial Credit Group. The claim secured by a 2019 Deere loader, a 2019 Big John, a Deere grapple, a delimber, a 2020 Tigercat skidder, a Tigercat log grapple, a 2016 Fellenbuncher, and a Caterpillar post saw head, to the extent allowed, shall be paid in 72 equally amortized monthly payments with interest calculated at 6% per annum commencing on the first day of the month following the effective date of the plan. Class 2c consists of the claim of Exchange Bank. The claim secured by a 2010 Caterpillar skidder, a 2003 Prentis log sander, a 2007 Mack semi truck, a 2018 Kaufman log trailer, and a 2004 hydroaxe, to the extent allowed, shall be paid in 72 equally amortized monthly payments with interest calculated at 6% per annum commencing on the first day of the month following the effective date of the plan. Class 2d consists of the claim of Deere Financial. The claim secured by Maxiload scales, and a CSI slasher, to the extent allowed, shall be paid in 72 equally amortized monthly payments with interest calculated at 6% per annum commencing on the first day of the month following the effective date of the plan. Class 2e consists of the claim of Magnolia State Bank. The claim secured by 197 Oak Lane, Eatonton, Georgia, to the extent allowed, shall be paid in 72 equally amortized monthly payments with interest calculated at 6% per annum commencing on the first day of the month following the effective date of the plan Class 3 consists of all non-priority unsecured claims. Class 3 creditors will receive a pro-rata share of disposable income for three years following the effective date. Payments shall be on the basis of annual calendar-year disposable income, payable on January 31st of each year commencing on January 31, 2023. Class 4 consists of Equity interests of the Debtor. Equity interest will be retained. All liquidation contemplated by this plan shall be through court approved sales after notice to creditors. Any shortfall in income payment will be made through Debtor's liquidation of assets. Debtor anticipates, in a hypothetical chapter 7 case, chapter 7 trustee fees and expenses would consume any equity. After discounts for time value of money, capital gains, and miscellaneous expenses, Debtor anticipates no funds being distributed to unsecured creditors. A full-text copy of the Plan of Reorganization dated Jan. 27, 2022, is available at https://bit.ly/3ITpIjC from PacerMonitor.com at no charge. Attorney for the Plan Proponent: Wesley J. Boyer, Esq. Boyer Terry LLC 348 Cotton Avenue, Suite 200 Macon, GA 31201 Telephone: (478) 742-6481 E-mail: Wes@BoyerTerry.com About TLA Timber TLA Timber, LLC, a Eaton, Ga.-based company that owns and operates a logging business, filed a voluntary petition for Chapter 11 protection (Bankr. M.D. Ga. Case No. 21-51009) on Oct. 29, 2021. In the petition signed by Ross Elmer Davis, managing member, the Debtor disclosed up to $1 million in asset and up to $10 million in liabilities. Judge James P. Smith oversees the case. Wesley J. Boyer, Esq., at Boyer Terry LLC is the Debtor's bankruptcy counsel. TRACER ROOFING: Voluntary Chapter 11 Case Summary ------------------------------------------------- Debtor: Tracer Roofing LLC 1714 Rotary Drive Humble, TX 77338 Chapter 11 Petition Date: February 3, 2022 Court: United States Bankruptcy Court Southern District of Texas Case No.: 22-30314 Debtor's Counsel: James C. Vandermark, Esq. WHITE AND WILLIAMS LLP 1650 Market Street Suite 1800 Philadelphia, PA 19103 Tel: 215-864-7000 Email: vandermarkj@whiteandwilliams.com - and - Heidi J. Sorvino, Esq. WHITE AND WILLIAMS LLP 7 Times Sq., Suite 2900 New York, NY 100036 Tel: 212-244-9500 Fax: 212-244-6200 E-mail: sorvinoh@whiteandwilliams.com Estimated Assets: $500,000 to $1 million Estimated Liabilities: $10 million to $50 million The petition was signed by Nicole Carpenter as managing member. The Debtor failed to include in the petition a list of its 20 largest unsecured creditors. A full-text copy of the petition is available for free at PacerMonitor.com at: https://www.pacermonitor.com/view/OOF33ZY/Tracer_Roofing_LLC__txsbke-22-30314__0001.0.pdf?mcid=tGE4TAMA TRANQUILITY GROUP: $8M Branson Cedars Resort Sale to Big Cedar OK'd ------------------------------------------------------------------- Judge Cynthia A. Norton of the U.S. Bankruptcy Court for the Western District of Missouri authorized Tranquility Group, LLC, and its affiliates to sell the property known as Branson Cedars Resort, located in Ridgedale, Missouri, to Big Cedar, LLC, for $8 million. The Sale Hearing was held on Jan. 26, 2022. The sale procedures as set forth in the Sale Motion and the Addendum to the Sale Contract are approved. The Debtors' Sale Contract with Big Cedar, including the Addendum attached thereto and all ancillary documents, and all of the terms and conditions thereof is approved in its entirety and the sale of the property pursuant to the terms of the Sale Order and the Sale Contract is authorized and directed under 11 U.S.C. Section 363(b). The Debtors' agreement for Authorization to Show Property with Silliman Realty & Associates is approved and at closing of the sale, the Debtors are authorized to pay real estate sales commission as set forth in the agreement. Any liens, claims, or other encumbrances on the property to be sold pursuant to the Sale Contract will be transferred to the proceeds of such sale. The U.S. Trustee's Office as a party in interest is to be paid as required under 28 U.S.C. Section 1930. Such fees will be paid at the time of closing and will be reflected on the final Closing Statement. At closing Guaranty Bank and Simmons Bank will receive net sale proceeds from the sale of the property that is subject to their respective liens and credit the amount on the Debtors' obligations of principal and any non-default accrued interest due to Banks and without prejudice to any future review and objection of the amounts and manner of application. Any other amounts the Banks claim that may be due pursuant to their loan documents will be subject to review by the Debtors' and paid following the Debtors' consent or will be determined by the Court upon proper application, notice, and hearing. The Sale Order will not prejudice the Banks or the Debtors' nor does it waive their respective rights to make application for other amounts due pursuant to its loan documents post-closing. Upon closing of the sale, the Debtors will file with the Court a final report as required but not later than 14 business days after the date the sale closes. The Order will be final for all purposes immediately upon entry of the docket therein and the 14-day period prescribed by Bankruptcy Rule 8002 is waived. About Tranquility Group Tranquility Group, LLC is a Ridgedale, Mo.-based company that owns a vacation destination offering tree houses, log cabins, and bungalows. Tranquility Group filed a voluntary petition for relief under Chapter 11 of the Bankruptcy Code (Bankr. W.D. Mo. Case No. 21-60120) on Feb. 26, 2021. Michael R. Hyams, chief operating officer and partner, signed the petition. At the time of the filing, the Debtor had between $1 million and $10 million in both assets and liabilities. Judge Cynthia A. Norton oversees the case. The Debtor tapped Berman, DeLeve, Kuchan & Chapman, LLC as bankruptcy counsel; G & H Tax & Accounting as accountant; and Judson Poppen, Esq., a practicing attorney in Springfield, Mo., as special counsel. USA GYMNASTICS: Gets Approval to Start Chapter 11 Claims Processing ------------------------------------------------------------------- Vince Sullivan of Law360 reports that USA Gymnastics, the national governing body of competitive gymnastics, received approval Wednesday, February 2, 2022, from an Indiana bankruptcy judge to commence the processing of sex abuse claims under its confirmed Chapter 11 plan, allowing it to begin the administration of a $380 million trust fund created for those claimants. William L. Bettinelli, the settlement trustee, is authorized to begin the process of allocating the expected funds to be paid to the trust to abuse claimants as contemplated by the Plan and Trust Agreement, including by sending to complete the allocation pending the occurrence of the Effective Date. The Court scheduled a status hearing on the Plan for Feb. 23, 2022, at 2:30 p.m. (prevailing Eastern time) via Zoom for Government. About USA Gymnastics USA Gymnastics -- https://www.usagym.org/ -- is a not-for-profit organization incorporated in Texas. Based in Indianapolis, Indiana, USAG's organization encompasses six disciplines: women's gymnastics, men's gymnastics, trampoline and tumbling, rhythmic gymnastics, acrobatic gymnastics, and group gymnastics. USAG provides educational opportunities for coaches and judges, as well as gymnastics club owners and administrators, and sanctions approximately 4,000 competitions and events throughout the United States annually. More than 200,000 athletes, professionals, and clubs are members of USAG. USAG sets the rules and policies that govern the sport of gymnastics in the United States, including selecting and training the United States gymnastics teams for the Olympics and World Championships. As of the Petition Date, USAG employs 53 individuals, nearly all of whom work for USAG full time. USA Gymnastics sought Chapter 11 protection (Bankr. S.D. Ind. Case No. 18-09108) on Dec. 5, 2018. USAG estimated $50 million to $100 million in assets and the same range of liabilities as of the bankruptcy filing. The Hon. Robyn L. Moberly is the case judge. USAG tapped JENNER & BLOCK LLP as counsel; ALFERS GC CONSULTING, LLC and SCRAMBLE SYSTEMS, LLC, as business consulting services providers; and OMNI Management Group, Inc., as claims agent. VERANO RECOVERY: Seeks to Hire O'Neil LLP as Special Counsel ------------------------------------------------------------ Verano Recovery, LLC seeks approval from the U.S. Bankruptcy Court for the Central District of California to employ O'Neil LLP as its special counsel. O'Neil will render these legal services: (a) assist the Debtor to expeditiously formulate and implement a strategy for restructuring the City of Cathedral City's claim on delinquent special taxes; (b) assist the Debtor to evaluate the City's claim and position, and assist in negotiations with the City regarding the subject matter; and (c) participate in hearings before the bankruptcy court with respect to the matters upon which O'Neil has provided services or advice. O'Neil requires an advance payment against legal fees of $10,000. John Yeager, a partner at O'Neil, 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 Yeager, Esq. O'Neil LLP 19900 MacArthur Blvd., Ste. 1050 Irvine, CA 92612 Telephone: (949) 798-0500 Facsimile: (949) 798-0511 Email: jyeager@oneil-llp.com About Verano Recovery Pasadena, Cal.-based Verano Recovery, LLC, filed its voluntary petition for relief under Chapter 11 of the Bankruptcy Code (Bankr. C.D. Cal. Case No. 21-14127) on May 19, 2021. At the time of the filing, the Debtor had between $10 million and $50 million in both assets and liabilities. Judge Sheri Bluebond presides over the case. The Debtor tapped Goe Forsythe & Hodges, LLP as bankruptcy counsel; Corbett Steelman & Spector and O'Neil LLP as special counsel; Armory Consulting Co. as financial advisor; and Cline Carroll & Bartell, LLP as accountant. VIPER PRODUCTS: Vaughn Buying Gooseneck Flatbed Trailers for $7.5K ------------------------------------------------------------------ Viper Products & Services, LLC, asks the U.S. Bankruptcy Court for the Northern District of Texas to authorize the sale of 2012 Gooseneck Flatbed Trailer (VIN 4ZEGH3035C1014223) and a 2001 Elite Gooseneck Flatbed Trailer (VIN 1E9BF30232$230390) to Justin Vaughn for the sum of $7,500, subject to overbid. Since the Petition Date, the Debtor has continued to operate its business and is working to reorganize its bankruptcy estate. As part of its reorganization efforts, the Debtor is currently working to identify buyers for some of its vehicles, trailers and equipment that it no longer needs. At this time, the Debtor seeks to sell the Trailers to Vaughn for the sum of $7,500. The proposed bid for the Trailers is in line with other bids received by the Debtor to date for trailers of similar makes and models. By the Motion, the Debtor seeks to sell the Trailers to Vaughn free and clear of all liens, claims, encumbrances, and interests, with all valid liens, claims, encumbrances, and interests, if any, attaching to the proceeds of the sale. The Debtor gives notice of its intent to sell the Trailers described for the purchase price reflected on the bid submitted by Vaughn unless a higher bid is submitted prior to the deadline for objections set by the Court. Accordingly, if the Debtor receives a higher bid for the Trailers prior to the objection deadline or Vaughn withdraws his bid, the party with the highest bid submitted to the Debtor will be awarded the property. The Debtor believes the sale is in the best interest of all creditors of the Estate and should be approved. As Vista Bank is the first and prior lien holder as to all the assets of the Debtor's estate, the Debtor will immediately pay the proceeds of the sale to Vista Bank upon their receipt. The Debtor is advised that there may be certain ad valorem tax liens which will also need to be paid from the proceeds of the Trailers. The Objection Deadline is Feb. 17, 2022. A copy of the Signed Offer is available at https://tinyurl.com/48bwu6th from PacerMonitor.com free of charge. About Viper Products & Services Viper Products & Services, LLC provides environmentally sound solutions for the oil and gas industry. Based in Lubbock, Texas, Viper Products & Services offers oil spill management, testing, reporting, remediation, reclamation, excavation, and bore and core drilling services. Viper Products & Services filed its voluntary petition for relief under Chapter 11 of the Bankruptcy Code (Bankr. N.D. Texas Case No. 21-50187) on Dec. 13, 2021, listing $1 million to $10 million in both assets and liabilities. Zack Tuttle, manager, signed the petition. The Debtor tapped McWhorter, Cobb & Johnson, LLP as legal counsel and Charles W. Darter, Jr. as accountant. VISIUM TECHNOLOGIES: Suit vs Petitioning Creditors' Owners Junked ----------------------------------------------------------------- After the Court dismissed an involuntary Chapter 7 petition filed by Tarpon Bay Partners, LLC, J.P. Carey Enterprises, Inc., and Anvil Financial Management, LLC, against Visium Technologies, Inc., the alleged debtor filed an adversary proceeding seeking damages and other relief under 11 U.S.C. Sections 105 and 303(i) against the Petitioning Creditors and their owners or principals, Stephen Hicks, Joseph C. Canouse, and Jeffrey M. Canouse. The Individual Defendants moved to dismiss the counts directed to each of them for failure to state a claim upon which relief may be granted, arguing that under section 303(i) they are not "petitioners" against whom judgment may be entered. Visium responded that as the individuals who signed the involuntary petition on behalf of the Petitioning Creditors, the Individual Defendants are "petitioners" against whom judgment may be entered. Judge Scott M. Grossman of the United States Bankruptcy Court for the Southern District of Florida, Lauderdale Division, agrees with the Individual Defendants and will grant their motion to dismiss. According to Judge Grossman, the text of the Bankruptcy Code is clear the term "petitioners" includes only the "entities" that signed the petition, and not their principals, agents, or owners. Although the terms "petitioner" and "petitioning creditor" are not defined in the Bankruptcy Code, other defined terms inform their meanings. The term "creditor" is defined in the Bankruptcy Code to mean an "entity that has a claim against the debtor that arose at the time of or before the order for relief concerning a debtor." Importantly, in a voluntary case, the commencement of the case constitutes the order for relief. But in an involuntary case, an order for relief is not entered until either the petition is not timely controverted, or if it is contested, after a trial. So if an order for relief is not entered, then the entities filing the petition are not "creditors" as that term is defined in the Bankruptcy Code. Hence use of the term "petitioner" in section 303(i), rather than "petitioning creditor." Moreover, if it turns out -- as Visium has argued -- that one or more of the Petitioning Creditors did not hold valid "claims" against Visium under applicable law, then by definition they could not be "creditors" and therefore could not be "petitioning creditors," Judge Grossman says. Indeed, Visium has argued Carey's and Anvil's claims were gerrymandered to create three petitioning creditors. If Visium is correct that the purported assignments of some portion of Tarpon Bay's claim to Carey and Anvil were invalid, then neither Carey nor Anvil would hold claims against Visium. But, having (allegedly) wrongfully participated in the gerrymandering of Tarpon Bay's claims in an attempt to create three petitioning creditors, the Petitioning Creditors should not be able to escape liability under section 303(i) if their claims prove to be invalid, the judge adds. Thus, by using the term "petitioners," instead of "petitioning creditors," Congress ensured that entities could not escape liability under section 303(i) upon a determination that their claims were invalid, Judge Grossman concludes. Finally, at least as to section 303(i)(1), a familiar canon of statutory construction dictates that it must be strictly construed, Judge Grossman points out. The Eleventh Circuit has described section 303(i)(1) as a fee-shifting statute. As a fee-shifting statute, it must be strictly construed because it is in derogation of the common law rule that each party must pay its own fees. Interpreting the term "petitioners" as broadly as Visium advocates is contrary to this well-establish canon of statutory construction, Judge Grossman holds. "Only the 'entities' that filed the involuntary petition are 'petitioners' that may be liable for fees, costs, and damages under 11 U.S.C. Sections 303(i). The individuals who signed the involuntary petition on behalf of those entities are not 'petitioners,' as that term is used in section 303," Judge Grossman concludes. Judge Grossman therefore orders that: 1. The Individual Defendants' motion to dismiss is granted. 2. Counts II, III, IV, VI, VII, and VIII of Visium's Amended Complaint for Damages and Other Relief are all dismissed. 3. Stephen Hicks, Joseph C. Canouse, and Jeffrey M. Canouse are dismissed as defendants in the Adversary Proceeding captioned VISIUM TECHNOLOGIES, INC., Plaintiff, v. TARPON BAY PARTNERS, LLC, J.P. CAREY ENTERPRISES, INC., ANVIL FINANCIAL MANAGEMENT, LLC, STEPHEN HICKS, JOSEPH C. CANOUSE, and JEFFREY M. CANOUSE, Defendants, Case No. 20-24221-SMG, Adv. No. 21-01114-SMG (Bankr. S.D. Fla.). A full-text copy of Judge Grossman's Order dated January 24, 2022, is available at https://tinyurl.com/4nasy5j4 from Leagle.com. About Visium Technologies, Inc. Visium Technologies, Inc. (OTC PINK:VISM) is a Florida corporation based in Fairfax, Virginia, focused on global cybersecurity clarity, machine learning, and advancing technology and automation services to support enterprises in protecting their most valuable assets -- their data, business applications, and IoT on their networks and in the cloud. WITCHEY ENTERPRISES: Bid Procedures for Personal Property Denied ---------------------------------------------------------------- Judge Henry W. Van Eck of the U.S. Bankruptcy Court for the Middle District of Pennsylvania denied without prejudice Witchey Enterprises, Inc.'s proposed bidding procedures in connection with the sale of a portion of its personal property. The Debtor proposed to sell the personal property free and clear of all liens, claims, encumbrances, and other interests. About Witchey Enterprises Witchey Enterprises, Inc., a Wilkes-Barre, Pa.-based provider of courier and express delivery services, filed a Chapter 11 petition (Bankr. M.D. Pa. Case No. 19-00645) on Feb. 14, 2019. Louis Witchey, president, signed the petition. At the time of filing, the Debtor had between $1 million and $10 million in both assets and liabilities. Judge Patricia M. Mayer oversees the case. The Debtor tapped Andrew Joseph Katsock, III, Esq., as legal counsel, and David L. Haldeman as accountant. X-TREME BULLETS: Appeal in Suit vs Capital Cartridge May Proceed ---------------------------------------------------------------- Judge Miranda M. Du, Chief District Judge of the United States District Court for the District of Nevada, denied Capital Cartridge, LLC's motion to dismiss the appellate case captioned J. MICHAEL ISSA, as Trustee of the HMT Liquidating Trust, Appellant, v. CAPITAL CARTRIDGE, LLC, Appellee, Case No. 3:21-cv-00060-MMD (D. Nev.), finding that that Issa has standing to bring this appeal. The appeal arises from an adversary proceeding related to a Chapter 11 bankruptcy case. On June 8, 2018, eight companies in the business of manufacturing, assembling, and selling small arms ammunition filed Chapter 11 bankruptcy petitions. Although the Debtors are separate companies, one individual -- David C. Howell -- was the principal of each Debtor. While the bankruptcy proceedings were not consolidated, the Debtors coordinated extensively throughout their cases. Aspects of that coordination gave rise to the issues underlying this appeal. Approximately three weeks after the Debtors' petitions were filed, the Debtors filed a motion to engage Issa as their Chief Restructuring Officer, which the Bankruptcy Court later approved. As CRO, Issa would be "responsible for overseeing the operations of the Debtors and for supervising the administration of the Debtors' Chapter 11 cases." In 2020, Issa entered into a stipulated agreement with the Official Committee of Unsecured Creditors which purported to grant the Committee derivative standing to commence, prosecute, and resolve certain claims and causes of action on behalf of the Debtors. The Stipulation granted the Committee the authority to pursue claims relating to certain pre-petition transactions between certain Debtors and third parties. One such third-party was Capital Cartridge. The Bankruptcy Court approved the Stipulation the following day and entered an order granting the Committee derivative standing according to the Stipulation's terms. On June 5, 2020, two days after the Stipulation Order was entered, the Committee commenced the Adversary against Capital Cartridge. The Adversary sought to avoid transfers and recover previously transferred property pursuant to 11 U.S.C. Sections 544, 548, and 550, and further sought to disallow claims pursuant to 11 U.S.C. Section 502(d). The Committee sought avoidance and turnover of more than $300,000 in fraudulent transfers from Debtor Howell Munitions & Technology to Capital Cartridge. The Court finds the Debtors did not "assign" their claims to the Committee in the Stipulation thus the Debtors retained ownership of the claims even during the pendency of the Adversary. When the Plan was confirmed on October 26, 2020, those claims vested in the Liquidating Trust and Issa became the sole person authorized to prosecute and pursue claims belonging to the Trust. Despite the confusing statements made in the Committee's response brief, the Committee clearly was pursuing the Adversary claims on behalf of the Debtors' estate, the Court holds. Issa is therefore the proper party to bring this appeal, the Court concludes. Capital Cartridge's arguments that Issa has somehow waived or forfeited his right to appeal are inapposite. Issa was not a named party to the Adversary because he was not the Trustee during the pendency of the Adversary, as there was no Liquidating Trust until the Plan became effective, Judge Du points out. Moreover, the waiver and forfeiture doctrine that Capital Cartridge relies upon is inapplicable to Issa as he has direct standing to pursue claims on behalf of the Debtors' estates and need not rely on a theory of "person aggrieved" prudential standing, the judge says, citing In re Sisk, 962 F.3d at 1141. Even if the Court were to consider Issa a new participant or a "remote" party who must satisfy the "person aggrieved" test, the Court says it still would not find that the Debtors (or their representative) had waived their appearance in the Adversary. "The Debtors clearly demonstrated their interest and investment in the outcome of the Adversary by attempting to appear and argue at both hearings and attempting to join the motion for reconsideration. The fact that the Bankruptcy Court denied their attempts to join does not convince this Court that the Debtors waived or forfeited their right to bring this appeal, even if their representative did not have direct standing as the successor to the party below," Judge Du holds. A full-text copy of the Order dated January 24, 2022, is available at https://tinyurl.com/mrdkhf2m from Leagle.com. About X-Treme Bullets X-Treme Bullets, Inc., and its subsidiaries are in the business of manufacturing and selling small arms ammunition components, assembling ammunition, custom building ammunition manufacturing equipment, and repairing and refurbishing existing ammunition manufacturing equipment. They sell ammunition from company-owned brands, which they manufacture in-house, as well as ammunition from third-party brands, which they source as finished goods. They operate a production facility in Carson City, Nevada and operate four facilities in Idaho, including three production facilities and one distribution center. X-Treme Bullets and certain affiliates filed sought protection under Chapter 11 of the Bankruptcy Code (Bankr. D. Nev. Case No. 18-50609) on June 8, 2018. In the petition signed by David Howell, president, the Debtor was estimated to have assets and liabilities at $10 million to $50 million. The case is assigned to Judge Bruce T. Beesley. The Debtor tapped Harris Law Practice LLC as counsel, and Winthrop Couchot Golubow Hollander, LLP, as co-counsel. J. Michael Issa of GlassRatner Advisory & Capital Group, LLC, serves as chief restructuring officer. On July 23, 2018, the U.S. Trustee for Region 17 appointed an official committee of unsecured creditors in the case. The Committee retained Goldstein & McClintock LLLP as its counsel. X-TREME BULLETS: Royal Metal Loses Bid to Dismiss Trustee's Appeal ------------------------------------------------------------------ Judge Miranda M. Du, Chief District Judge of the United States District Court for the District of Nevada, denied Appellee Royal Metal Industries, Inc.'s motion to dismiss the appeals case captioned J. MICHAEL ISSA, as Trustee of the HMT Liquidating Trust, Appellant, v. ROYAL METAL INDUSTRIES, INC., Appellee, Case No. 3:21-cv-00062-MMD, (D. Nev.), finding that Issa has standing to bring this appeal. The appeal arises from an adversary proceeding related to a Chapter 11 bankruptcy case. On June 8, 2018, eight companies in the business of manufacturing, assembling, and selling small arms ammunition filed Chapter 11 bankruptcy petitions. Although the Debtors are separate companies, one individual -- David C. Howell -- was the principal of each Debtor. While the bankruptcy proceedings were not consolidated, the Debtors coordinated extensively throughout their cases. Aspects of that coordination gave rise to the issues underlying this appeal. Approximately three weeks after the Debtors' petitions were filed, the Debtors filed a motion to engage Issa as their Chief Restructuring Officer, which the Bankruptcy Court later approved. As CRO, Issa would be "responsible for overseeing the operations of the Debtors and for supervising the administration of the Debtors' Chapter 11 cases." In 2020, Issa entered into a stipulated agreement with the Official Committee of Unsecured Creditors which purported to grant the Committee derivative standing to commence, prosecute, and resolve certain claims and causes of action on behalf of the Debtors. The Stipulation granted the Committee the authority to pursue claims relating to certain pre-petition transactions between certain Debtors and third parties. One such third-party was Capital Cartridge. The Bankruptcy Court approved the Stipulation the following day and entered an order granting the Committee derivative standing according to the Stipulation's terms. On June 5, 2020, two days after the Stipulation Order was entered, the Committee commenced the Adversary against Royal. The Adversary sought to avoid transfers and recover previously transferred property pursuant to 11 U.S.C. Sections 544, 548, and 550, and further sought to disallow claims pursuant to 11 U.S.C. Section 502(d). The Committee sought avoidance and turnover of more than $600,000 in fraudulent transfers from Debtor Howell Munitions & Technology to Royal. Reaching the same conclusion in the appeals case captioned J. MICHAEL ISSA, as Trustee of the HMT Liquidating Trust, Appellant, v. CAPITAL CARTRIDGE, LLC, Appellee, Case No. 3:21-cv-00060-MMD (D. Nev.), Judge Du finds that the Debtors did not "assign" their claims to the Committee in the Stipulation thus the Debtors retained ownership of the claims even during the pendency of the Adversary. When the Plan was confirmed, those claims vested in the Liquidating Trust and Issa became the sole person authorized to prosecute and pursue claims belonging to the Trust. As to Royal's arguments that Issa has somehow waived or forfeited his right to appeal, Judge Du also holds that these arguments are inapposite. The Debtors clearly demonstrated their interest and investment in the outcome of the Adversary by attempting to appear and argue at both hearings and attempting to join the motion for reconsideration, Judge Du says. "The fact that the Bankruptcy Court denied their attempts to join does not convince this Court that the Debtors waived or forfeited their right to bring this appeal, even if their representative did not have direct standing as the successor to the party below," Judge Du concludes. A full-text copy of the Order dated January 24, 2022, is available at https://tinyurl.com/4hz6tjpj from Leagle.com. About X-Treme Bullets X-Treme Bullets, Inc., and its subsidiaries are in the business of manufacturing and selling small arms ammunition components, assembling ammunition, custom building ammunition manufacturing equipment, and repairing and refurbishing existing ammunition manufacturing equipment. They sell ammunition from company-owned brands, which they manufacture in-house, as well as ammunition from third-party brands, which they source as finished goods. They operate a production facility in Carson City, Nevada and operate four facilities in Idaho, including three production facilities and one distribution center. X-Treme Bullets and certain affiliates filed sought protection under Chapter 11 of the Bankruptcy Code (Bankr. D. Nev. Case No. 18-50609) on June 8, 2018. In the petition signed by David Howell, president, the Debtor was estimated to have assets and liabilities at $10 million to $50 million. The case is assigned to Judge Bruce T. Beesley. The Debtor tapped Harris Law Practice LLC as counsel, and Winthrop Couchot Golubow Hollander, LLP, as co-counsel. J. Michael Issa of GlassRatner Advisory & Capital Group, LLC, was appointed as chief restructuring officer. On July 23, 2018, the U.S. Trustee for Region 17 appointed an official committee of unsecured creditors in the case. The Committee retained Goldstein & McClintock LLLP as its counsel. ZAPPELLI BODY SHOP: Seeks OK to Hire Tamara Figlar as Accountant ---------------------------------------------------------------- Zappelli Body Shop, Inc. seeks approval from the U.S. Bankruptcy Court for the Northern District of California to hire Tamara Figlar, a certified public accountant and an IRS registered tax preparer in Santa Rosa, Calif. Ms. Figlar will provide assistance with financial records reconciliation, financial data collection and maintenance, bookkeeping, and tax planning and tax return preparation. The accountant will charge $250 per hour for her services and $65 per hour for her office staff. In court papers, Ms. Figlar disclosed that she is a disinterested person within the meaning of Section 101(14) of the Bankruptcy Code. Ms. Figlar can be reached at: Tamara Figlar, CPA 1049 4th St, Ste F Santa Rosa, CA 95404 Phone: (707) 922-4850 About Zappelli Body Shop Zappelli Body Shop, Inc., a company based in Santa Rosa, Calif., filed its voluntary petition for relief under Chapter 11 of the Bankruptcy Code (Bankr. N.D. Calif. Case No. 21-10510) on Dec. 16, 2021, listing up to $500,000 in assets and up to $10 million in liabilities. Samantha Zappelli, chief executive officer, signed the petition. Judge Charles Novack oversees the case. Brian A. Barboza, Esq., at the Law Offices of Brian A. Barboza serves as the Debtor's legal counsel. [*] January Starts With Low Bankruptcy Filings in New Hampshire --------------------------------------------------------------- Bob Sanders of NH Business Review reports that 2022 began where the last year left off: a new modern record for fewest bankruptcy filings in a month. Only 41 New Hampshire individuals filed for protection in January 2022, beating the previous record by four, and that was set in December 2021. January 2022 filings were 24 percent lower than in January 2021, 33 percent below last 2021's average monthly total, and a third of what they were in in January 2020, before the pandemic disrupted the economy. This January 2022's filings totaled a little more than a tenth of the 381 that were recorded in January 2010, during the Great Recession. You would have to go back to 1987, before Congress made it harder to file for bankruptcy, to find any month with fewer filings. In January 2022 of that year, 39 bankruptcies were recorded, and in November there were 37. [^] BOOK REVIEW: AS WE FORGIVE OUR DEBTORS ------------------------------------------ Authors: Teresa A. Sullivan, Elizabeth Warren, & Jay Westbrook Publisher: Beard Books Softcover: 370 Pages List Price: $34.95 Review by: Susan Pannell Order your personal copy today at http://www.beardbooks.com/beardbooks/as_we_forgive_our_debtors.html So you think you know the profile of the average consumer debtor: either deadbeat slouched on a sagging sofa with a three- day growth on his chin or a crafty lower-middle class type opting for bankruptcy to avoid both poverty and responsible debt repayment. Except that it might be a single or divorced female who's the one most likely to file for personal bankruptcy protection, and her petition might be the last stage of a continuum of crises that began with her job loss or divorce. Moreover, the dilemma might be attributable in part to consumer credit industry that has increased its profitability by relaxing its standards and extending credit to almost anyone who can scribble his or her name on an application. Such are among the unexpected findings in this painstaking study of 2,400 bankruptcy filings in Illinois, Pennsylvania, and Texas during the seven-year period from 1981 to 1987. Rather than relying on case counts or gross data collected for a court's administrative records, as has been done elsewhere, the authors use data contained in the actual petitions. In so doing, they offer a unique window into debtors' lives. The authors conclude that people who file for bankruptcy are, as a rule, neither impoverished families nor wily manipulators of the system. Instead, debtors are a cross-section of America. If one demographic segment can be isolated as particularly debt- prone, it would be women householders, whom the authors found often live on the edge of financial disaster. Very few debtors (3.7 percent in the study) were repeat filers who might be viewed as abusing the system, and most (70 percent in the study) of Chapter 13 cases fail and become Chapter 7s. Accordingly, the authors conclude that the economic model of behavior--which assumes a petitioner is a "calculating maximizer" in his in his decision to seek bankruptcy protection and his selection of chapter to file under, a profile routinely used to justify changes in the law--is at variance with the actual debtor profile derived from this study. A few stereotypes about debtors are, however, borne out. It is less than surprising to learn, for example, that most debtors are simply not as well-off as the average American or that while bankrupt's mortgage debts are about average, their consumer debts are off the charts. Petitioners seem particularly susceptible to the siren song of credit card companies. In the study sample, creditors were found to have made between 27 percent and 36 percent of their loans to debtors with incomes below $12,500 (although the loans might have been made before the debtors' income dropped so low). Of course, the vigor with which consumer credit lenders pursue their goal of maximizing profits has a corresponding impact on the number of bankruptcy filings. The book won the ABA's 1990 Silver Gavel Award. A special 1999 update by the authors is included exclusively in the Beard Book reprint edition. ********* 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 ***