/raid1/www/Hosts/bankrupt/TCR

/raid1/www/Hosts/bankrupt/TCR_Public/240123.mbx T R O U B L E D C O M P A N Y R E P O R T E R Tuesday, January 23, 2024, Vol. 28, No. 22 Headlines 1651 SOUTH: Hires Transglobal Realty Advisors as Broker 1741 N. WESTERN: Hires Greenstone Partners as Real Estate Broker 292 DEKALB ASSOCIATES: Hits Chapter 11 Bankruptcy 3651 ALTA MESA: Files for Chapter 11 Bankruptcy 4452 BROADWAY: Seeks to Hire Hilco Real Estate as Broker 460 MITCHELL PLACE: Seeks to Hire Andre L. Kydala as Legal Counsel 4D LIVESTOCK: Voluntary Chapter 11 Case Summary 4E BRANDS: DOJ Says Jackson Walker Fees Can Go to Creditors 4E BRANDS: Plan Agent Should Weigh Jackson Walker Fee Dispute 500 SUMMIT AVENUE: Seeks to Hire Hilco Real Estate as Broker 66 BARY LANE: Seeks to Hire Meyer Law Group as Bankruptcy Counsel ACCESS CIG: Moody's Lowers First Lien Loans to B3, Outlook Stable ACE RESTORATION: Hires A & R Income Tax Service as Bookkeeper ACME HOSPITALITY: Case Summary & 18 Unsecured Creditors ADHERA THERAPEUTICS: Zahed Subhan Quits as CEO and Director AHEAD DB: Moody's Gives B1 Rating on New $600MM Term Loan AHEAD DB: S&P Alters Outlook to Negative, Affirms 'B' ICR ALL DAY ACQUISITIONCO: Moody's Cuts CFR to 'Ca', Outlook Stable AMBUHEALTH INC: Sylvia Mayer Named Subchapter V Trustee AMERICAN HARVEST: Ebrahim's Stock Sale Fraud Suit Partially Tossed AMERIFIRST: Supports Lender in $10.3-Mil. Clawback Bid of Creditors AMG EXPRESS: Brad Odell of Mullin Named Subchapter V Trustee AMYRIS INC: Fights Cannabis IP Row Claims by Defining Word 'Under' ARCIMOTO INC: Signs Deal With Ellectramobilys to Manufacture EUVs ATP TOWER: Moody's Affirms 'Ba3' CFR, Outlook Remains Stable AULT ALLIANCE: Declares Monthly Cash Dividend of $0.2708333 Apiece BEASLEY MEZZANINE: Moody's Cuts CFR to Caa2 & Alters Outlook to Neg BGS WORKS: Case Summary & One Unsecured Creditor BIRD RENTAL: Wants Injury Lawsuits in Chapter 11 Paused BLUE DOLPHIN: Named to 2024 OTCQX Best 50 BLUE STAR: ClearThink Capital Has 8% Stake as of Jan. 5 BROWN BIDCO: S&P Stays 'B+' ICR on New M&G Modifier Assessment CAESARS ENTERTAINMENT: Moody's Rates New $2BB Sec. Term Loan 'Ba3' CAESARS ENTERTAINMENT: S&P Rates Proposed $2BB Term Loan B 'B+' CHIEF FIRE: Seeks to Hire Bonds Ellis Eppich as Bankruptcy Counsel CHIEF FIRE: Taps Carrington Coleman as Special Counsel COMMERCIAL METALS: Moody's Affirms Ba1 CFR, Outlook Remains Stable CPI LUXURY: Has Deal on Cash Collateral Access CROCS INC: Moody's Affirms 'Ba3' CFR & Alters Outlook to Positive CTLC LLC: Hires TTR Sotheby's International Realty as Broker DIOCESE OF OAKLAND: Insurers, Creditors to Start Plan Talks DIXON HOLDINGS: Starts Chapter 11 Bankruptcy Protection DODGE CONSTRUCTION: Moody's Alters Outlook on 'B3' CFR to Negative DONELSON CORPORATE: Seeks to Hire Huber & Lamb as Appraiser ENDO INT'L: Okayed to Hold Opioid Settlements Poll on Creditors ENERGIZER HOLDINGS: Moody's Alters Outlook on 'B1' CFR to Stable EQUALTOX LLC: Seeks to Use Cash Collateral Thru May 18 ERESEARCH TECHNOLOGY: Moody's Affirms 'B3' CFR, Outlook Stable ESCAMBIA OPERATING: Trustee Taps Melissa Temple as Consultant FOUNDATION BUILDING: Moody's Rates New $1BB First Lien Loan 'B2' FOUNDATION BUILDING: S&P Rates New $1BB Term Loan B-2 'B' G&G EXPRESS: Melissa Haselden Named Subchapter V Trustee GALLUS DETOX: Court OKs Deal with FundKite on Cash Access GALLUS DETOX: Court OKs Deal With Lionheart on Cash Access GALLUS DETOX: Court OKs Deal With MYNT on Cash Collateral Access GAUCHO GROUP: Grosses $100K From Sale of Common Shares GCM GROSVENOR: Moody's Affirms Ba2 CFR & Alters Outlook to Positive GNSP CORP: Voluntary Chapter 11 Case Summary GREEN HYGIENICS: Hires Lee & Associates as Real Estate Broker GUARDIAN CV1: Seeks to Hire Harris Law Practice LLC as Counsel GUARDIAN CV2: Seeks to Hire Harris Law Practice LLC as Counsel HARTMAN SPE: Hires Hirsch & Westheimer as Special Finance Counsel HERITAGE LAB: Seeks to Hire Laxmi Sarathy as Bankruptcy Counsel IMAGINE LEARNING: Moody's Rates New First Lien Loans 'B2' INTEGRITY TIRE: William Homony Named Subchapter V Trustee LA TOOL: Lender Seeks to Prohibit Cash Collateral Access LAST CHANCE REALTY: Hires Bronson Law Offices as Counsel LEGENCE HOLDINGS: Moody's Affirms 'B2' CFR, Outlook Remains Stable LEXARIA BIOSCIENCE: May Issue 527,111 Shares Under Equity Plan LION STAR: Taps Donlin Recano as Claims and Noticing Agent MASONITE INTERNATIONAL: Moody's Confirms 'Ba1' CFR, Outlook Stable MASONITE INTERNATIONAL: S&P Affirms 'BB+' ICR, Off Watch Negative METHODIST HOSPITALS: S&P Lowers Revenue Bond LT Rating to 'BB+' MILK ROAD: Seeks Cash Collateral Access MIWD HOLDCO II: Moody's Puts 'B1' CFR Under Review for Downgrade MYOMO INC: Reports Preliminary Fourth Quarter Revenue, Backlog NATIONAL RIFLE ASSOC: Operated as 'Wayne's World', Says NYAG NEXII BUILDING SOLUTIONS: Seeks Chapter 15 Bankruptcy Protection NICMAR INDUSTRIES: Hires Caswell Advisory Group as Business Broker ONE PAY CLOUD: Soneet Kapila Named Subchapter V Trustee PATRICK INDUSTRIES: Moody's Affirms B1 CFR, Outlook Remains Stable PETER RINALDI DMD: Case Summary & 13 Unsecured Creditors PGT INNOVATIONS: Moody's Puts 'Ba3' CFR Under Review for Downgrade PLUSGRADE INC: Moody's Assigns 'B2' CFR, Outlook Stable PURPLE PEONY: Seeks to Hire Bluechip Asset Management as Appraiser QUALITY ASSURANCE: Hires Carl W. Hopkins as Bankruptcy Counsel RAI INC: Court OKs Cash Collateral Access on Final Basis RAI INC: Seeks Approval to Hire Power Financial as Accountant RED RIVER SUBS: Seeks Cash Collateral Access REMARK HOLDINGS: Inks First Amendment to Ionic Purchase Agreement RESHAPE LIFESCIENCES: Amends Bylaws to Modify Quorum Requirement RESHAPE LIFESCIENCES: Receives Noncompliance Notice From Nasdaq RESHAPE LIFESCIENCES: Yair Schneid Has 10.5% Stake as of Jan. 5 REYNOLDS CONSUMER: Moody's Affirms Ba1 CFR, Outlook Remains Stable RISKON INTERNATIONAL: Registers for Sale $25M Worth of Securities RLI SOLUTIONS: Seeks Approval to Hire Ritchie Bros. as Auctioneer ROBERTSHAW US: Moody's Cuts CFR to Ca & Alters Outlook to Negative RUSE AUTO: Case Summary & 20 Largest Unsecured Creditors RUSSELL SAGE: Moody's Alters Outlook on 'B3' Issuer Rating to Pos. S & J SERVICE: Seeks Chapter 11 Bankruptcy Protection SMILEDIRECTCLUB: UST Says Global Settlement a Sub Rosa Plan SOLARIS MARKETING: Seeks to Tap Neeleman Law as Legal Counsel SPARTAN GROUP: Seeks to Hire Munsch Hardt Kopf as Legal Counsel ST. MARGARET'S HEALTH: Seeks to Tap Malooley Dahm Realty as Broker SVB FINANCIAL: Reaches Deal With Creditors, Plans Asset Shuffle SYSTEM1 INC: Completes Repurchase of $63.7 Million Term Loans SYSTEM1 INC: S&P Downgraded ICR to 'SD' on Subpar Debt Repurchase TACALA LLC: S&P Rates New $780MM First-Lien Credit Facility 'B-' TEHUM CARE: Tort Claimants Tap Province LLC as Financial Advisor TEINE ENERGY: Moody's Raises CFR to B1 & Alters Outlook to Stable TERRAFORM LABS: Case Summary & 15 Unsecured Creditors TITAN PURCHASER: Moody's Assigns First Time B1 Corp. Family Rating TITAN PURCHASER: S&P Assigns 'B' ICR, Outlook Stable TRAVERSE MIDSTREAM: Moody's Affirms B2 CFR, Outlook Remains Stable TRUEVISION COMPLETE: Files Emergency Bid to Use Cash Collateral TRUEVISION COMPLETE: Seeks to Hire Joyce W. Lindauer as Counsel UNLIMITED DEVELOPMENT: Case Summary & Three Unsecured Creditors VERTEX ENERGY: S&P Alters Outlook to Negative, Affirms 'B' ICR VISTAGE INT'L: Moody's Lowers Rating on First Lien Loans to B2 WALL DECOR: Ryan Richmond Named Subchapter V Trustee WAND NEWCO 3: Moody's Rates New $1.25-Bil. First Lien Notes 'B3' WEBER LLC: S&P Affirms 'CCC+' Issuer Credit Rating, Outlook Neg. WESCO AIRCRAFT: Incora Cleared to Solicit Chapter Plan Votes WESTERN URANIUM: MMCAP International, MM Asset Hold 9.9% Stake WIDEOPENWEST FINANCE: Moody's Cuts CFR to 'B2', Outlook Stable WINDSOR HOLDINGS: S&P Affirms 'B+' ICR, Outlook Stable YELLOW CORP: Pension Fund Wants $4.8-Billion Claims Arbitration [*] John Strasburger Named to 2024 Lawdragon Leading Lawyers List [*] N.Y. Bankruptcy Judge Cecelia Morris to Retire in 2024 [*] Repeat Chapter 11s Dominate Bankruptcy Landscape in 2023 [*] Sklar Kirsh Partners Named to 2024 SoCal Super Lawyers List [*] US Supreme Court Justices Balk at $326M Fee Refund Demand [^] Large Companies with Insolvent Balance Sheet ********* 1651 SOUTH: Hires Transglobal Realty Advisors as Broker ------------------------------------------------------- 1651 South Stemmons, LLC seeks approval from the U.S. Bankruptcy Court for the Eastern District of Texas to employ Transglobal Realty Advisors as its real estate broker. The firm will market and sell the Debtor's property located at 1651 S. Stemmons Freeway, Lewisville, TX 75067. The broker's Services include: (a) representing the Debtor as its agent in all aspects of identifying and communicating with prospective purchasers of the property; (b) participating in meetings with the Debtor and potential purchasers; (c) providing necessary information to prospective purchasers; (d) negotiating the terms and conditions of sale with any prospective purchasers of the property; and (e) generally taking any reasonable actions and initiatives necessary to sell the property. The broker will receive a commission of 6 percent of the sale price of the property. John Aflatouni, broker at Transglobal, assured the court that his firm is a "disinterested person" within the meaning of 11 U.S.C. 101(14). The broker can be reached through: John Aflatouni TRANSGLOBAL REALTY ADVISORS P.O. Box 967 Colleyville, TX 76034 Phone: (469) 585-4991 Email: transglobalre@gmail.com About 1651 South Stemmons, LLC 1651 South Stemmons, LLC filed a petition under Chapter 11, Subchapter V of the Bankruptcy Code (Bankr. E.D. Tex. Case No. 23-41381) on July 31, 2023, listing up to $10 million in both assets and liabilities. Joyce W. Lindauer, Esq., at Joyce W. Lindauer Attorney, PLLC is the Debtor's counsel. 1741 N. WESTERN: Hires Greenstone Partners as Real Estate Broker ---------------------------------------------------------------- 1741 N. Western Ave Acquisitions, LLC seeks approval from the U.S. Bankruptcy Court for the Northern District of Illinois to employ Greenstone Partners, LLC as its real estate broker. The firm will market and sell the Debtor's property located at 1741 N. Western Ave. in Chicago, IL. Greenstone will receive a commission of 3 percent of the gross purchase price of the property, or 3.5 percent of the gross sale price if the purchaser is represented by a co-broker. Greenstone Partners is a "disinterested person" as that term is defined in section 101(14) of the Bankruptcy Code, according to court filings. The firm can be reached through: Daniel Spitz Greenstone Partners, LLC 1040 North Halsted Street, Suite A Chicago, IL 60642 Phone: (312) 234-0333 About 1741 N Western Ave Acquisitions 1741 N Western Ave Acquisitions LLC is a single asset real estate (as defined in 11 U.S.C. Sec. 101(51B)). 1741 N Western Ave Acquisitions filed Chapter 11 petition (Bankr. N.D. Ill. Case No. 23-12072) on Sept. 12, 2023, with $1 million to $10 million in both assets and liabilities. Michael L. Lerner, manager and member, signed the petition. Judge Timothy A Barnes oversees the case. Goldstein & McClintock, LLLP serves as the Debtor's legal counsel. 292 DEKALB ASSOCIATES: Hits Chapter 11 Bankruptcy ------------------------------------------------- 292 Dekalb Associates LLC filed for chapter 11 protection in the Eastern District of New York. The Debtor reports between $1 million and $10 million in debt owed to 1 and 49 creditors. The Debtor has filed a motion to set April 30, 2024, as the bar date for filing proofs of claim. About 292 Dekalb Associates 292 Dekalb Associates LLC is a limited liability company in New York. 292 Dekalb Associates LLC sought relief under Chapter 11 of the U.S. Bankruptcy Code (Bankr. E.D.N.Y. Case No. 24-40005) on Jan. 2, 2024. In the petition signed by Lloyd Babb, as president/owner, the Debtor reports estimated assets and liabilities between $1 million and $10 million each. The Debtor is represented by: Michael L Previto, Esq. 325 Washington Avenue Brooklyn, NY 11205 Tel: 631-379-0837 E-mail: mchprev@aol.com 3651 ALTA MESA: Files for Chapter 11 Bankruptcy ----------------------------------------------- 3651 Alta Mesa Drive Acquisitions LLC filed for chapter 11 protection in the Northern District of California. According to court filing, the Debtor reports between $1 million and $10 million in debt owed to 1 and 49 creditors. The petition states funds will be available to unsecured creditors. About 3651 Alta Mesa Drive Acquisitions 3651 Alta Mesa Drive Acquisitions LLC is a limited liability company in California. 3651 Alta Mesa Drive Acquisitions LLC sought relief under Chapter 11 of the U.S. Bankruptcy Code (Bankr. N.D. Cal. Case No. 24-50001 ) on Jan. 2, 2024. In the petition filed by Manly Danh the Debtor estimated assets and liabilities between $1 million and $10 million each. The Debtor is represented by: Arasto Farsad, Esq. Farsad Law Office, P.C. 5205 Prospect Road, #135/127 San Jose, CA 95129 Tel: 408-641-9966 E-mail: Farsadlaw1@gmail.com 4452 BROADWAY: Seeks to Hire Hilco Real Estate as Broker -------------------------------------------------------- 4452 Broadway Mazal LLC seeks approval from the U.S. Bankruptcy Court for the Southern District of New York to hire Hilco Real Estate, LLC, as its real estate broker. The firm will market for sale the Debtor's real property located at 4452 Broadway, New York, New York. The broker will receive a commission/fee of 2 percent of the gross purchase price plus reimbursement of reasonable expenses up to $20,000. As disclosed in the court filings, Hilco represents no interest adverse to the Debtor, its estates or creditors and is a disinterested person pursuant to Sec. 101(14) of the Code. The firm can be reached through: Eric W. Kaup Hilco Real Estate, LLC 5 Revere Dr, Suite 206 Northbrook, IL 60062 Email: ekaup@hilcoglobal.com About 4452 Broadway Mazal LLC 4452 Broadway Mazal LLC is engaged in activities related to real estate. 4452 Broadway Mazal LLC filed its voluntary petition for relief under Chapter 11 of the Bankruptcy Code (Bankr. S.D. N.Y. Case No. 23-11832) on Nov. 16, 2023. The petition was signed by Nir Amsel as authorized signatory. At the time of filing, the Debtor estimated $10 million to $50 million in both assets and liabilities. Judge Lisa G. Beckerman presides over the case. Fred B. Ringel, Esq. at LEECH TISHMAN ROBINSON BROG, PLLC represents the Debtor as counsel. 460 MITCHELL PLACE: Seeks to Hire Andre L. Kydala as Legal Counsel ------------------------------------------------------------------ 460 Mitchell Place LLC seeks approval from the U.S. Bankruptcy Court for the District of New Jersey to hire the Law Firm of Andre L. Kydala as its counsel. The firm's services include providing completion of the petition, assisting in retaining all necessary professionals, responding to all inquiries by the Court and the U.S. Trustee and preparing all needed pleadings. The Debtor has paid a $13,262 retainer and Andre L. Kydala, Esq. will bill against the retainer at a rate of $400 per hour. Mr. Kydala assured the court does not represent or hold any interest adverse to the debtor or the estate, and is a disinterested person under 11 U.S.C. Sec. 101(14). The firm can be reached through: Andre L. Kydala, Esq. LAW FIRM OF ANDRE L. KYDALA PO Box 5537 12 Lower Center St Clinton, NJ 08809 Phone: (908) 735-2616 About 460 Mitchell Place LLC 460 Mitchell Place LLC filed its voluntary petition for relief under Chapter11 of the Bankruptcy Code (Bankr. D.N.J. Case No. 24-10117) on Jan. 5, 2024, listing up to $50,000 in asset and $500,001 to $1 million in liabilities. Andre Kydala, Esq. at the Law Firm of Andre L. Kydala serves as the Debtor's counsel. 4D LIVESTOCK: Voluntary Chapter 11 Case Summary ----------------------------------------------- Debtor: 4D Livestock LLC 3395 E. Virginia Ave. Denver, CO 80209 Chapter 11 Petition Date: January 22, 2024 Court: United States Bankruptcy Court District of Colorado Case No.: 24-10272 Judge: Hon. Kimberley H. Tyson Debtor's Counsel: Aaron J. Conrardy, Esq. WADSWORTH GARBER WARNER CONRARDY, P.C. 2580 West Main Street Suite 200 Littleton, CO 80120 Tel: 303-296-1999 Email: aconrardy@wgwc-law.com Estimated Assets: $1 million to $10 million Estimated Liabilities: $1 million to $10 million The petition was signed by Daniel Brown as managing member. A copy of the Debtor's list of 20 largest unsecured creditors is now available for download at PacerMonitor.com. A full-text copy of the petition is available for free at PacerMonitor.com at: https://www.pacermonitor.com/view/JQUTNJI/4D_Livestock_LLC__cobke-24-10272__0001.0.pdf?mcid=tGE4TAMA 4E BRANDS: DOJ Says Jackson Walker Fees Can Go to Creditors ----------------------------------------------------------- James Nani of Bloomberg Law reports that the Justice Department's bankruptcy monitor said Jackson Walker LLP should be denied its request to stop creditors of a bankrupt hand sanitizer company from getting a cut of fees the law firm could be required to return over an ethics scandal. Texas-based Jackson Walker's push to deny creditors from seeking a new potential pot of hundreds of thousands of dollars in disgorgement fees from its client, 4E Brands Northamerica LLC, is "based on a false premise," the US Trustee told the US Bankruptcy Court for the Southern District of Texas in a court filing Tuesday, January 9, 2024. About 4E Brands North America 4e Brands North America, LLC, is a manufacturer of personal care and hygiene products based in San Antonio, Texas. Its brand name products include Blumen Hand Sanitizer, Assured Hand Sanitizer, and various other hand sanitizers and hand soaps. The Debtor is no longer operating. 4e Brands North America sought Chapter 11 bankruptcy protection (Bankr. S.D. Texas Case No. 22-50009) on Feb. 22, 2022, with up to $50,000 in assets and up to $50 million in liabilities. David Dunn, chief restructuring officer, signed the petition. The case is handled by Judge David R. Jones. Jackson Walker, LLP, led by Matthew D. Cavenaugh, was the Debtor's legal counsel. Stretto was the claims agent. The U.S. Trustee for Region 6 appointed an official committee of unsecured creditors on March 1, 2022. The committee tapped Tucker Ellis, LLP as bankruptcy counsel; Munsch Hardt Kopf & Harr, P.C., as Texas counsel; and Oxford Restructuring Advisors, LLC, as financial advisor. 4E BRANDS: Plan Agent Should Weigh Jackson Walker Fee Dispute ------------------------------------------------------------- James Nani of Bloomberg Law reports that the agent running what's left of a bankrupt hand sanitizer company must weigh in on a fee dispute surrounding Jackson Walker LLP following a former judge's ethics scandal. David Dunn, a Province LLC principal in charge of overseeing 4E Brands Northamerica LLC's Chapter 11 liquidation plan, has until Feb. 5 to tell key players in the bankruptcy whether he'll try to disgorge fees from the Texas law firm, US Bankruptcy Judge Marvin Isgur of the US Bankruptcy Court for the Southern District of Texas said at a hearing Wednesday,January 10, 2024. About 4E Brands North America 4e Brands North America, LLC, is a manufacturer of personal care and hygiene products based in San Antonio, Texas. Its brand name products include Blumen Hand Sanitizer, Assured Hand Sanitizer, and various other hand sanitizers and hand soaps. The Debtor is no longer operating. 4e Brands North America sought Chapter 11 bankruptcy protection (Bankr. S.D. Texas Case No. 22-50009) on Feb. 22, 2022, with up to $50,000 in assets and up to $50 million in liabilities. David Dunn, chief restructuring officer, signed the petition. The case is handled by Judge David R. Jones. Matthew D. Cavenaugh, Esq., at Jackson Walker, LLP is the Debtor's legal counsel. Stretto is the claims agent. The U.S. Trustee for Region 6 appointed an official committee of unsecured creditors on March 1, 2022. The committee tapped Tucker Ellis, LLP as bankruptcy counsel; Munsch Hardt Kopf & Harr, P.C., as Texas counsel; and Oxford Restructuring Advisors, LLC, as financial advisor. 500 SUMMIT AVENUE: Seeks to Hire Hilco Real Estate as Broker ------------------------------------------------------------ 500 Summit Avenue Mazal LLC seeks approval from the U.S. Bankruptcy Court for the Hilco Real Estate, LLC as its real estate broker. The firm will market for sale the Debtor's real property and improvements commonly known as 4, 8, and 10 West Street, Jersey City, New Jersey 07306 (Block 9604, Lots: 11, 12, and 13), 11 West Street, Jersey City, New Jersey 07306 (Block 9605, Lot 2.01; 9 West Street, Jersey City, New Jersey 07306 (Block 9605, Lot 3); 506 Summit Avenue, Jersey City, New Jersey 07306 (Block 9605, Lot 4); and 225 Baldwin Avenue, Jersey City, New Jersey 07306 (Block 10803, Lot 27.01). The broker will receive a commission/fee of 2 percent of the gross purchase price plus reimbursement of reasonable expenses up to $20,000. As disclosed in the court filings, Hilco represents no interest adverse to the Debtor, its estates or creditors and is a disinterested person pursuant to Sec. 101(14) of the Code. The firm can be reached through: Eric W. Kaup Hilco Real Estate, LLC 5 Revere Dr, Suite 206 Northbrook, IL 60062 Email: ekaup@hilcoglobal.com About 500 Summit Avenue Mazal LLC 500 Summit Avenue Mazal is engaged in activities related to real estate. 500 Summit Avenue Mazal LLC filed its voluntary petition for relief under Chapter 11 of the Bankruptcy Code (Bankr. 23-11831) on Nov. 16, 2023, listing $10 million to $50 million in both assets and liabilities. The petition was signed by Nir Amsel as authorized signatory. Judge Lisa G. Beckerman presides over the case. Fred B. Ringel, Esq. at LEECH TISHMAN ROBINSON BROG, PLLC represents the Debtor as counsel. 66 BARY LANE: Seeks to Hire Meyer Law Group as Bankruptcy Counsel ----------------------------------------------------------------- 66 Bary Lane, LLC seeks approval from the U.S. Bankruptcy Court for the Northern District of California to employ Meyer Law Group, LLP as its bankruptcy counsel. The Debtor requires legal counsel to assist with the formulation of a Chapter 11 plan; prepare schedules and statement of financial affairs; review monthly operating reports; respond to creditor inquiries; evaluate claims; and provide other necessary legal services. The hourly rates of the firm's attorneys and staff are as follows: Partner (Brent D. Meyer) $425 Paralegals $125 Brent Meyer, Esq., a partner at Meyer Law Group, 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: Brent D. Meyer, Esq. MEYER LAW GROUP, LLP 268 Bush Street #3639 San Francisco, CA 94104 Tel: (415) 765-1588 Fax: (415) 762-5277 Email: brent@meyerllp.com About 66 Bary Lane, LLC On Dec. 11, 2023, 66 Bary Lane, LLC filed a voluntary petition for relief under Title 11, Chapter 11 of the United States Code (Bankr. N.D. Ca. Case No. 23-51443). The petition was signed by Michael Ohayon as manager. At the time of filing, the Debtor estimated $10,000,001 to $50 million in both assets and liabilities. Judge Dennis Montali presides over the case. Brent D. Meyer, Esq. at Meyer Law Group, LLP represents the Debtor as counsel. ACCESS CIG: Moody's Lowers First Lien Loans to B3, Outlook Stable ----------------------------------------------------------------- Moody's Investors Service affirmed Access CIG, LLC's corporate family rating at B3, probability of default rating at B3-PD and the senior secured second lien credit facility rating at Caa2. Concurrently, Moody's downgraded the company's senior secured first lien credit facility rating to B3 from B2 following a $200 million incremental first lien term loan raise. The outlook is stable. The company is a Massachusetts-based provider of Records and Information Management services primarily to the SME segment in the U.S., Canada and Latin America controlled by Berkshire Partners, GI Partners and management. Proceeds from the $200 million incremental first lien term loan will be used to repay $153 million of the company's existing senior secured second lien term loan, add $43 million in balance sheet cash, and pay related transaction costs. The incremental cash is intended for general corporate purposes, including acquisitions. The affirmation of the B3 CFR reflects the company's high debt to EBITDA leverage, which increases to 8.5x from 8.3x for the twelve months ended September 30, 2023 pro forma for the transaction. Moody's views the transaction as a negative credit development given the increase in leverage, although the additional balance sheet cash is supportive of the company's adequate liquidity profile. Moody's expectation for interest expense in 2024 is unchanged as the incremental first lien debt offsets the reduction in second lien debt. The downgrade of the first lien credit facility rating reflects the reduction of loss absorption provided within the capital structure by the now-smaller second lien term loan. The first lien now represents the preponderance of the debt obligations in the capital structure. RATINGS RATIONALE Access' B3 CFR reflects its very high debt to EBITDA leverage that Moody's expects will improve to 7.5x by the end of 2024, a modest revenue base and the company's aggressive acquisition-driven growth strategy that relies on frequent debt issuances, as well as its narrow business focus. The ability of the company to sustain positive revenue growth excluding acquisitions from a combination of volume and pricing increases is a key support of the rating, particularly given long-term secular risks related to the shift away from paper records toward electronic media by its small business customers. New customer growth has come primarily from small, debt-funded, tuck-in acquisitions. These transactions result in substantial acquisition-related and relocation expenses that limit free cash flow generation. Moody's expects acquisition related integration costs will decline in 2024 as the current high interest rate environment will limit financial flexibility for transactions. Nonetheless, Access' governance risk will continue to weigh down on the rating given its debt-funded acquisition appetite over the long term and tolerance for high financial leverage. All financial metrics cited reflect Moody's standard adjustments. The rating benefits from the company's highly recurring records storage revenue that provides stability through various cycles, good profitability with EBITDA margins (Moody's adjusted) of 40% as of September 30, 2023, and Moody's expectation for low-to-mid single digit percentage organic revenue expansion in outsourcing of document storage in the small and medium-sized enterprises market segment, largely driven by pricing growth. Access' revenues have high geographic and customer diversity with historically strong client retention rates that exceed 95%. Moody's expects Access will maintain an adequate liquidity over the next 12 to 18 months. Pro forma for the January 2024 debt add-on, Access had $105 million of cash and full capacity under its $77 million revolving credit facility due 2028 as of November 30, 2023. Given the company's high interest expense burden, Moody's anticipates that free cash flow will be break-even in 2024 months and will turn positive by 2025. The company's current cash sources are sufficient to cover required annual debt amortization on the first lien term loan of around $13.25 million, paid quarterly and Moody's expects total cash and revolver availability will decline but remain above $150 million before improving in 2025. The B3 first lien credit facility rating ($77 million revolver and $1.325 billion term loan), is the same as the company's B3 CFR, and reflects the limited support provided by the remaining $122 million second lien term loan, which has a subordinate lien on the collateral package relative to the first lien debt. The first lien credit facility benefits from a first priority security interest in substantially all assets of the issuer and its material domestic subsidiaries (the company has a modest asset base in Canada, Panama, Costa Rica and Brazil). The Caa2 second lien term loan rating, two notches below the company's B3 CFR, reflects the significant amount of first lien debt in the capital structure. The second lien term loan has a second priority security interest in the same collateral that secures the first lien term loan. The stable outlook reflects Moody's view that the company's debt to EBITDA will improve to the mid-7x range in the next 12-18 months driven by organic revenue and earnings growth in a low-to-mid-single digit percentages range. Moody's also anticipates in the stable outlook that Access will maintain at least adequate liquidity. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS Profitable revenue growth that leads to a material reduction in leverage, free cash flow in excess of 5% of total debt and more balance financial policy is necessary for a rating upgrade. The ratings could be downgraded if operational challenges lead to material top-line and earnings pressure such that EBITA to interest expense falls below 1.0x, or liquidity deteriorates, including through increased revolver usage or an inability to sustain positive free cash flow generation. The principal methodology used in these ratings was Business and Consumer Services published in November 2021. Headquartered in Boston, MA, Access provides Records and Information Management services primarily to the SME segment in the U.S., Canada and Latin America. Access is owned by Berkshire Partners, GI Partners and management. The company generated revenue of $531 million for the twelve months ended September 30, 2023. ACE RESTORATION: Hires A & R Income Tax Service as Bookkeeper ------------------------------------------------------------- Ace Restoration & Construction Inc. seeks approval from the U.S. Bankruptcy Court for the Central District of California to hire A & R Income Tax Service as its bookkeeper. The firm's services include: a. providing oversight of the internal accounting systems employed by the Debtor; b. preparing the Debtor's Payroll as stated in the attached Payroll Service Agreement; c. assisting the Debtor in gathering information for the preparation of its federal and state tax returns; d. preparing the Debtor's income tax returns as required; e. assisting the Debtor and its professionals in preparing and reviewing financial projections; f. assisting the Debtor in complying with the Guidelines and Reporting Requirements promulgated by the Office of the United States Trustee; and g. providing such additional financial analysis, projections, and other accounting services as may be required. The firm will charge $500 per month for its services. As disclosed in the court filings, A & R Income Tax Service does not hold an interest adverse to the estate, the members of the firm are disinterested persons within the meaning of Sections 327(a) and 101 of the Bankruptcy Code. The firm can be reached through: Elrasheed Ali A & R Income Tax 6101 Ball Road, Suite 208 Cypress, CA 90630 Phone: (714) 527-3469 About Ace Restoration & Construction Ace Restoration & Construction Inc. sought protection for relief under Chapter 11 of the Bankruptcy Code (Bankr. C.D. Cal. Case No. 23-15170) on Nov. 3, 2023, listing under $1 million in both assets and liabilities. Judge Scott H Yun oversees the case. Marc C Forsythe, Esq. at Goe Forsythe & Hodges LLP represents the Debtor as counsel. ACME HOSPITALITY: Case Summary & 18 Unsecured Creditors ------------------------------------------------------- Debtor: ACME Hospitality, LLC 4641 Beat Road Litchfield, OH 44253 Business Description: ACME Hospitality, LLC owns and operates Moxies Grille, a family owned and operated restaurant founded in 2011 and known for scratch-made, homestyle meals. Chapter 11 Petition Date: January 22, 2024 Court: United States Bankruptcy Court Northern District of Ohio Case No.: 24-50077 Judge: Hon. Alan M. Koschik Debtor's Counsel: Steven J. Heimberger, Esq. RODERICK LINTON BELFANCE LLP 50 South Main Street, 10th Floor Akron, OH 44308 Tel: 330-434-3000 Fax: 330-434-9220 Email: sheimberger@rlbllp.com Estimated Assets: $0 to $50,000 Estimated Liabilities: $1 million to $10 million The petition was signed by Jerad Miller as sole member. 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/DFTOMCI/ACME_Hospitality_LLC__ohnbke-24-50077__0001.0.pdf?mcid=tGE4TAMA ADHERA THERAPEUTICS: Zahed Subhan Quits as CEO and Director ----------------------------------------------------------- Adhera Therapeutics, Inc. disclosed in a Form 8-K filed with the Securities and Exchange Commission that on Jan. 12, 2024, the Company received notice from Zahed Subhan that he was resigning as the Company's chief executive officer and as a member of the Company's Board of Directors. The Company said Mr. Subhan's decision to resign as chief executive officer and member of the Company's Board of Directors was not the result of any disagreement with the Company on any matter relating to the Company's operations, policies, or practices. In addition, Adhera, on Jan. 9, 2024, received notice from Trond K. Waerness that he was resigning from the Company's Board of Directors effective Jan. 12, 2024. The Company said Mr. Waerness' decision to resign as director was not the result of any disagreement with the Company on any matter relating to the Company's operations, policies, or practices. About Adhera Headquartered in Durham, NC, Adhera Therapeutics, Inc. (formerly known as Marina Biotech, Inc.) -- http://www.adherathera.com-- is an emerging specialty biotech company with a focus on drug development and commercialization of "small molecule" drugs to treat Parkinson's disease (PD) and Type 1 diabetes. Adhera Therapeutics reported a net loss of $2.11 million in 2022, compared to a net loss of $6.35 million in 2021. As of Dec. 31, 2022, the Company had $79,000 in total assets, $22.26 million in total liabilities, and a total stockholders' deficit of $22.18 million. Boca Raton, Florida-based Salberg & Company, P.A., the Company's auditor since 2021, issued a "going concern" qualification in its report dated March 31, 2023, citing that the Company has no revenues and has a net loss and net cash used in operations of approximately $2.1 million and $1.4 million respectively, in 2022 and a working capital deficit, stockholders' deficit and accumulated deficit of $22.2 million, $22.2 million and $55.8 million respectively, at Dec. 31, 2022. These matters raise substantial doubt about the Company's ability to continue as a going concern. AHEAD DB: Moody's Gives B1 Rating on New $600MM Term Loan --------------------------------------------------------- Moody's Investors Service affirmed Ahead DB Holdings, LLC's B2 Corporate Family Rating, B2-PD Probability of Default Rating, B1 debt instrument ratings for the existing backed senior secured first lien bank credit facility (including the revolver and $617 million outstanding term loan due October 2027), and Caa1 debt instrument rating for the existing $400 million senior unsecured notes due 2028. Concurrently, Moody's assigned a B1 rating to the proposed $600 million backed senior secured first lien term loan. The outlook remains stable. Net proceeds from the proposed $600 million first lien term loan, in combination with draw on the existing AR facility and equity, will be used to fund the acquisition of Computer Design and Integration, LLC (CDI). CDI is a domestic IT solutions provider with hybrid cloud, security, digital, and managed services capabilities. The affirmation of the B2 CFR reflects AHEAD's pro forma leverage of 6.5x debt/EBITDA (Moody's adjusted) excluding cost synergies (or 6.1x including the synergies), which is an increase from 5.4x prior to the transaction and 0.5x turns higher than the current potential downgrade factor. Moody's expects that AHEAD will reduce its leverage to around 5.6x debt/EBITDA within 12 months post close of the purchase based on projected mid-single digit revenue and earnings growth as well as realization of pro forma synergies. The acquisition will enhance AHEAD's scale, expand geographic and customer diversification, and facilitate opportunities for cross-selling. While AHEAD has a good track record in assimilating acquisitions, the CDI acquisition will be one the largest in the company's history, which heightens integration and execution risks. Supporting the outcome is the company's ability to generate solid free cash flow. Moody's projects free cash to debt of at least 5% in 2024. ESG risks are material to the assessment. Moody's expects AHEAD's financial policies to be aggressive under private equity ownership as illustrated by the proposed incremental debt for an acquisition. The aggressive financial policies expose the company to high event risk, reduce financial flexibility and increase vulnerability to customer spending reductions. RATINGS RATIONALE The B2 CFR reflects AHEAD's small scale compared to competing IT value-added resellers and managed services firms as well as the challenges of evolving requirements of IT deployments for enterprises including the ongoing transition to cloud platforms. Pro forma leverage of 6.5x debt/EBITDA (Moody's adjusted) excluding cost synergies (or 6.1x including the synergies) is high, although expected to improve in the next 12-18 months following mid-single digit growth and synergy realization. The company's private equity ownership and the expectation for the deployment of aggressive financial policies around M&A are credit negatives. AHEAD benefits from its position as a major U.S. channel partner for Dell EMC and other suppliers resulting in favorable vendor terms. In addition, more than 70% of AHEAD's revenues are generated from Fortune 1000 clients along with privately held businesses and non-profit organizations of similar size, which has supported consistent topline growth. Liquidity is viewed as good, supported by pro forma cash balance of $22 million. Moody's expects free cash flow of around $100 million in 2024. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS Ratings could be upgraded if AHEAD continues to grow its top line and expand its geographic reach. Ratings could also be upgraded if credit metrics improve such that adjusted free cash flow to debt remains above 10% and the company commits to sustain debt to EBITDA below 4x. Ratings could be downgraded if deleveraging below 6x is delayed as a result of a decline in revenue and earnings or new incremental debt. There would be downward pressure on ratings if liquidity were to weaken resulting in adjusted free cash flow to debt below 5% or reduced revolver availability. A deteriorating relationship with key suppliers, including Dell EMC, could also place downward pressure on ratings. AHEAD, headquartered in Chicago, IL, is a provider of information technology (IT) solutions focusing on digital infrastructure, enterprise software, data protection and security, and cloud services for enterprise customers throughout the United States. The majority of revenue is generated through its operations as a value added reseller (VAR), whereby the company bundles hardware products and software solutions from various original equipment manufacturers (OEMs) into integrated, multi-technology packages. AHEAD also provides professional and managed support services to help end users develop, implement, and maintain complex IT infrastructures. The majority of the company's clients are large enterprises (more than 70% of annual revenue from Fortune 1,000) within the financial services, health care, technology, and energy and utility end markets. AHEAD is owned by private equity firms Centerbridge Partners and Berkshire Partners (roughly 71%) and management (29%). Pro forma gross revenue for the twelve months ending December 31, 2023 is estimated to be near $3.7 billion. The principal methodology used in these ratings was Business and Consumer Services published in November 2021. AHEAD DB: S&P Alters Outlook to Negative, Affirms 'B' ICR --------------------------------------------------------- S&P Global Ratings revised the rating outlook on Ahead DB Holdings LLC to negative from stable and affirmed the 'B' issuer credit rating. S&P said, "We lowered our issue-level rating on the company's exiting first-lien debt to 'B' from 'B+' and revised the recovery rating to '3' from '2'. We assigned a 'B' issue-level rating and '3' recovery rating to the company's proposed $600 million incremental first-lien term loan. "The negative outlook reflects our expectation that its S&P Global Ratings'-adjusted leverage is very high and may not decline below our downgrade trigger of 6.5x for 12 months after the transaction closes. "Lastly, we assigned a new management & governance (M&G) assessment of moderately negative to Ahead. This assignment follows the Jan. 7 publication of S&P Global Ratings' revised criteria for evaluating the credit risks presented by an entity's M&G framework." Ahead's plan to fund the CDI acquisition primarily through debt financing is aggressive and will have an adverse impact on the already stretched credit metrics but it doesn't detract from the prospects of deleveraging (maintaining leverage below 6.5x). The rating action considers that Ahead would be entering an acquisition with CDI with S&P Global Ratings'-adjusted leverage for the 12-months-ending Sept. 30, 2023, of 6.2x, which is close to the maximum tolerance we would expect at the current rating. The rating action also considers the aggressive levels of debt financing being contemplated, which will push its S&P Global Ratings'-adjusted debt balances to roughly $1.73 billion from approximately $995 million. At these levels and with pro forma EBITDA for the trailing 12 months ended on September 30, 2023, estimated to be around $230 million, we expect that pro forma S&P Global Ratings'-adjusted leverage at the time of closing will be approximately 7.4x. S&P said, "Still, we recognize Ahead's pre-transaction credit metrics have been affected by depressed demand conditions. This has been the result of constrained IT budgets, which are industry-wide and appear to be subsiding and restructuring expenses associated with actions taken to reduce costs and improve utilization. We also consider the opportunities for roughly $23 million of cost and revenue synergies the company has identified in the transaction reasonable. In aggregate, we believe these all will support the company's deleveraging prospects post-transaction, provided it refrains from pursuing additional acquisitions. "The acquisition should be modestly accretive to our views of Ahead's business if successfully integrated, but not may not improve our assessment of overall business risk. We believe the ability to offer more services, opportunities to cross sell, improved expertise in practice areas, better utilization of sales and technical resources, and improved geographic diversity and opportunities to reduce delivery costs will likely contribute favorably to that assessment. That being said, at least initially, we would not expect these benefits to materially alter the key strengths and constraints or the company's market position relative to peers we currently consider in the business risk assessment. For instance, even with increased scale, we would still view its market share as modest in the highly competitive and fragmented industry of IT outsourced services. This includes much larger and more diverse competitors who, in some instances, operate broader product capabilities and retain greater financial resources. Revenue concentration tied to key original equipment manufacturers (OEM), namely Dell and Cisco, and customer concentration in the health care and financial services verticals would remain ongoing risks. "We believe financial policy actions will support our limited deleveraging expectations despite expectations for it to remain aggressive. The company employs an acquisitive growth strategy, limiting our expectations for significant deleveraging over the next 12-24 months. Ahead has track record of making acquisitions with both debt and equity, acquiring seven companies in the last four years. S&P Global Ratings considers the use of predominantly debt financing package to fund the transaction to be very aggressive, particularly considering Ahead's recent operating performance, which has been weaker than expected. We believe management has the ability restore credit metrics to appropriate levels by the end of fiscal 2024. This is based on both prospects for EBITDA improvement and an understanding that repaying the AR securitization facility with internal cash flow generation shortly after the acquisition closes would remain a high priority rather than pursuing additional acquisitions." The additional first-lien debt is limiting the recovery for first-lien debt holders. The downgrade of the existing and new issue-level and recovery ratings on the company's first-lien debt reflect the impacts of additional priority claims in the capital structure from this proposed incremental term loan and the AR securitization facility the company recently put in place, which results in weakened recovery prospects for existing first-lien lenders. The negative outlook reflects S&P's expectation that S&P Global Ratings-adjusted leverage is very high and may not decline below its downgrade trigger of 6.5x for 12 months after the closing of the transaction. ALL DAY ACQUISITIONCO: Moody's Cuts CFR to 'Ca', Outlook Stable --------------------------------------------------------------- Moody's Investors Service downgraded All Day AcquisitionCo, LLC's (dba "24 Hour Fitness") Corporate Family Rating to Ca from Caa3 and the Probability of Default Rating to Ca-PD from Caa3-PD. Concurrently, Moody's downgraded ratings on the company's senior secured term loans. Moody's also assigned a Ca rating to the senior secured delayed draw term loan that was completed in 2022. The outlook is stable. The downgrade of the CFR to Ca reflects Moody's concerns that the company's capital structure is unsustainable in its current form with a high and increasing debt load and negative free cash flow despite operating performance improvement over the last year. The company's total debt has increased over the last year due to high pay-in-kind (PIK) interest. Total debt outstanding at year end FY23 is estimated at about $515 million ($435 million debt with remaining amount being accrued PIK interest) vs $475 million at year end FY22. Year to date through September 30, 2023, the company generated reported EBITDA of roughly $13 million on a GAAP basis vs $55 million of total interest expense including PIK interest ($25 million cash interest expense). Moody's lease adjusted debt-to-EBITDA is in the low 7x for the LTM September 2023 period and Moody's does not expect much improvement in leverage from this level as the debt continues to increase with PIK interest. In addition, Moody's expect continued weak liquidity over the next year. YTD through September free cash flow was roughly negative $13 million, and the company had about $26 million of cash as of September 30, 2023 (excluding long term restricted cash held for workers compensation reserves). Roughly 40% of its membership dues are paid yearly upfront in exchange for a discount vs the monthly pay rate. This helped cash flow over the last year at the expense of revenue and margins. The company's roughly $76 million super-priority term loan is due in September 2025. The loan maturity was previously extended from August 2022 in an action that Moody's viewed as a distressed exchange. About $223 million of its term loan is due in December 2025. Moody's does not believe 24 Hour Fitness can meet these maturities and is dependent on refinancing of the debt. Moody's views the risk of a distressed exchange event (by Moody's definition) over the next 12 to 18 months is high due to the approaching maturities. The Ca rating for the senior secured term loans is at the same level as the Ca CFR reflecting a one notch downgrade override to the Caa3 loss given default model derived outcome. The override reflects Moody's view of recovery including that the sizable lease obligations would not provide meaningful loss absorption for the term loans in the event of a default. RATIONALE 24 Hour Fitness's Ca CFR broadly reflects Moody's view that the company has an unsustainable capital structure with a high and increasing debt load, negative free cash flow, and upcoming debt maturities in September and December 2025 that is creating high risk of distressed exchange event over the next 12 to 18 months. The rating also reflects the continued operating challenges in the competitive mid-tier segment of the fitness club industry. Moody's lease adjusted debt-to-EBITDA leverage is in the low 7x for the LTM period ended September 30, 2023, and Moody's does not expect improvement in leverage over the next year due to an increasing debt load through PIK interest. The rating also reflects 24 Hour Fitness's geographic concentration in California (about 60% of clubs), the highly fragmented and competitive nature of the fitness club industry with relatively low barrier to entry, high attrition rates, 24 Hour Fitness's positioning in the industry's more pressured mid-tier price point, as well as exposure to cyclical shifts in consumer discretionary spending. The rating is supported by the company's established brand name as well as the longer-term positive fundamentals for the fitness industry such as the increased awareness of the importance of health and wellness. The company's strategies have stabilized and begun to modestly grow the membership base, which combined with cost vigilance is favorably increasing EBITDA. The debt and equity holders are largely the same and have been supporting the company's liquidity through PIK interest and new loans, most recently $100 million of loans in early 2022 that the company is using to fund the cash burn. Moody's expects low single digit membership growth and mid single digit Moody's adjusted EBITDA growth over the next year. The company faces high governance risk reflecting an aggressive financial policy with high leverage and elevated risk of a distressed exchange. As a result, Moody's changed the financial strategy and risk management score to 5 from 4, the governance issuer profile score to G-5 from G-4 and the credit impact score to CIS-5 from CIS-4. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS The stable outlook reflects Moody's view that the high likelihood of default including a distressed exchange event over the next 12 to 18 months, as well as Moody's recovery expectations is incorporated in the Ca CFR. Ratings could be upgraded if improved operating performance and earnings result in material improvement in credit metrics, free cash flow and liquidity. Ratings could also be upgraded if the company successfully refinance its upcoming 2025 maturities at a manageable interest cost. The ratings could be downgraded if the potential for a distressed exchange or other default increases, or estimated recovery values weaken. The principal methodology used in these ratings was Business and Consumer Services published in November 2021. All Day AcquisitionCo, LLC (24 Hour Fitness) is an operator of fitness centers in the US. As of 3Q23, the company operates about 277 clubs in 11 states with a large concentration in California. LTM as of September 30, 2023 revenue was roughly $779 million. Following the December 31, 2020 emergence from chapter 11 reorganization, the company is owned by the lender group with Sculptor and Monarch collectively owning a slight 51% majority. AMBUHEALTH INC: Sylvia Mayer Named Subchapter V Trustee ------------------------------------------------------- The U.S. Trustee for Region 7 appointed Sylvia Mayer, Esq., at S. Mayer Law, PLLC as Subchapter V trustee for AmbuHealth, Inc. Ms. Mayer will be paid an hourly fee of $450 for her services as Subchapter V trustee and an hourly fee of $195 for paralegal services. In addition, the Subchapter V trustee will receive reimbursement for work-related expenses incurred. Ms. Mayer declared that she is a disinterested person according to Section 101(14) of the Bankruptcy Code. The Subchapter V trustee can be reached at: Sylvia Mayer, Esq. S. Mayer Law, PLLC P.O. Box 6542 Houston, TX 77265 Telephone: (713) 893-0339 Facsimile: (713) 661-3738 Email: smayer@smayerlaw.com About AmbuHealth Inc. AmbuHealth, Inc., a Houston-based company, filed a petition under Chapter 11, Subchapter V of the Bankruptcy Code ((Bankr. S.D. Texas Case No. 24-30113) on Jan. 10, 2024, with up to $50,000 in assets and $100,001 to $500,000 in liabilities. Jack Nicholas Fuerst, Esq., represents the Debtor as legal counsel. AMERICAN HARVEST: Ebrahim's Stock Sale Fraud Suit Partially Tossed ------------------------------------------------------------------ Ben Miller of Bloomberg Law reports that American Harvest Inc. co-founder Ali Ebrahim got partial approval for his bid to dismiss allegations he defrauded investors in a private stock offering, a federal judge's opinion says. Poetic License Capital Inc. sued Ebrahim in September 2022 for allegedly defrauding them of $750,000 intended to invest in the company, but the plaintiff didn't adequately show how certain statements were false, according to the opinion filed Tuesday in US District Court for the District of Montana. About American Harvest American Harvest, Inc. operates an oilseed and grain farming business. The company is based in Sidney, Mont. American Harvest filed a petition under Chapter 11, Subchapter V of the Bankruptcy Code (Bankr. D. Mont. Case No. 22-10031) on March 25, 2022, listing up to $10 million in assets and up to $500,000 in liabilities. Gary L. Rainsdon serves as Subchapter V trustee. Judge Benjamin P. Hursh oversees the case. Steven M. Johnson, Esq., at Church, Harris, Johnson and Williams, P.C., serves as the Debtor's legal counsel. AMERIFIRST: Supports Lender in $10.3-Mil. Clawback Bid of Creditors ------------------------------------------------------------------- Clara Geoghegan of Law360 reports that a Delaware bankruptcy judge was asked Wednesday, January 10, 2024, to decide if a proposed lawsuit against a lender for bankrupt mortgage servicer AmeriFirst Financial Inc. comes down to "buyer's remorse" or whether there's a plausible claim the lender took control of the company and steered it into Chapter 11 at the expense of unsecured creditors. About AmeriFirst Financial AmeriFirst Financial, Inc., is a mid-sized independent mortgage company in Mesa, Ariz. AmeriFirst and its affiliate Phoenix 1040, LLC, filed Chapter 11 petitions (Bankr. D. Del. Lead Case No. 23-11240) on Aug. 24, 2023. In the petitions signed by T. Scott Avila, chief restructuring officer, each Debtor disclosed between $50 million and $100 million in both assets and liabilities. Judge Thomas M. Horan oversees the cases. The Debtors tapped Laura Davis Jones, Esq., at Pachulski Stang Ziehl & Jones, LLP as bankruptcy counsel; and Paladin Management Group, LLC as restructuring advisor. Omni Agent Solutions, Inc., is the claims, noticing and administrative agent. On Sept. 15, 2023, the Office of the United States Trustee appointed an official committee of unsecured creditors. The committee tapped Morris, Nichols, Arsht & Tunnell LLP as its counsel. AMG EXPRESS: Brad Odell of Mullin Named Subchapter V Trustee ------------------------------------------------------------ The U.S. Trustee for Region 6 appointed Brad Odell, Esq., at Mullin Hoard & Brown, LLP, as Subchapter V trustee for AMG Express Trucking, LLC. Mr. Odell will be paid an hourly fee of $350 for his services as Subchapter V trustee and will be reimbursed for work-related expenses incurred. Mr. Odell declared that he is a disinterested person according to Section 101(14) of the Bankruptcy Code. The Subchapter V trustee can be reached at: Brad W. Odell Mullin Hoard & Brown, LLP P.O. Box 2585 Lubbock, TX 79408 Direct: 806-712-1238 Office: 806-765-7491 Mobile: 469-449-3690 Email: bodell@mhba.com About AMG Express Trucking AMG Express Trucking, LLC filed a petition under Chapter 11, Subchapter V of the Bankruptcy Code (Bankr. N.D. Texas Case No. 24-30070) on Jan. 5, 2024, with up to $50,000 in assets and $500,001 to $1 million in liabilities. Gebre Berhane, managing member, signed the petition. Eric A. Liepins, Esq., at Eric A. Liepins, P.C. represents the Debtor as legal counsel. AMYRIS INC: Fights Cannabis IP Row Claims by Defining Word 'Under' ------------------------------------------------------------------ Alex Wittenberg of Law360 reports that biotechnology company Amyris Inc. said the word "under" in a contract between it and cannabinoid manufacturer Lavvan supports its effort to quash two claims Lavvan has filed against the debtor, telling a Delaware bankruptcy judge the plain meaning of the preposition bars the claims from going forward. About Amyris Inc. Amyris (Nasdaq: AMRS) -- http://www.amyris.com/-- is a leading synthetic biotechnology company, transitioning the Clean Health & Beauty and Flavors & Fragrances markets to sustainable ingredients through fermentation and the company's proprietary Lab-to-Market(TM) technology platform. This Amyris platform leverages state-of-the-art machine learning, robotics and artificial intelligence, enabling the company to rapidly bring new innovation to market at commercial scale. Amyris ingredients are included in over 20,000 products from the worldps top brands, reaching more than 300 million consumers. Amyris also owns and operates a family of consumer brands that is constantly evolving to meet the growing demand for sustainable, effective and accessible products. Amyris, Inc, et al. sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. D. Del. Lead Case No. 23-11131) on Aug. 9, 2023. The petitions were signed by Han Kieftenbeld as interim chief executive officer & chief financial officer. In the petition, Amyris disclosed $679,679,000 in assets and $1,327,747,000 in liabilities. Pachulski Stang Ziehl & Jones LLP serves as the Debtors' bankruptcy counsel. Fenwick & West, LLP is the Debtorps corporate counsel. The Debtors tapped PricewaterhouseCoopers LLP as their financial advisor, while Intrepid Investment Bankers LLC serves as the Debtors' investment banker. Stretto, Inc., is the Debtors' claims, noticing, solicitation agent and administrative adviser. ARCIMOTO INC: Signs Deal With Ellectramobilys to Manufacture EUVs ----------------------------------------------------------------- Arcimoto, Inc. disclosed in a Form 8-K filed with the Securities and Exchange Commission that it entered into an Exclusive Contract Manufacturing Agreement with Ellectramobilys, a French corporation, to build Muses GEN1 300 light electric utility vehicles. Ellectramobilys will place orders with the Company from time to time and will provide a rolling, 52-week forecast to allow Arcimoto to obtain the necessary raw materials. Pricing for each vehicle is to be established. Payment terms are net 30 days. Ellectramobilys will indemnify Arcimoto from all claims for product liability and will be deemed the manufacturer for all regulatory-related purposes, such as certification, testing and labeling for Federal Motor Vehicle Safety Standards. A copy of the agreement is available for free at: https://www.sec.gov/Archives/edgar/data/1558583/000121390024004568/ea191758ex10-1_arcimoto.htm About Arcimoto Inc. Based in Eugene, Oregon, Arcimoto, Inc. -- http://arcimoto.com-- designs and manufactures electric vehicles. Built on the revolutionary three-wheel Arcimoto Platform, its vehicles are purpose-built for daily driving, local delivery, and emergency response, all at a fraction of the cost and environmental impact of traditional gas-powered vehicles. Arcimoto reported a net loss of $62.88 million in 2022 following a net loss of $47.56 million in 2021. Portland, Oregon-based Deloitte & Touche LLP, the Company's auditor since 2022, issued a "going concern" qualification in its report dated April 14, 2023, citing that the Company has incurred significant losses and does not have sufficient cash on hand to meet its obligations as they come due, which raises substantial doubt about its ability to continue as a going concern. ATP TOWER: Moody's Affirms 'Ba3' CFR, Outlook Remains Stable ------------------------------------------------------------ Moody's Investors Service has affirmed the Ba3 Corporate Family Rating and the Ba3 Backed Senior Secured Notes rating for ATP Tower Holdings, LLC (ATP). The outlook is maintained stable. RATINGS RATIONALE The Ba3 CFR considers ATP's business model that provides high cash flow visibility from long-term, non-cancelable, take-or-pay contracts containing escalators to compensate for inflation. The rating also considers ATP's geographic diversification in Chile (A2 stable), Colombia (Baa2 stable) and Peru (Baa1 negative). Operations in these countries provide sound long-term fundamentals for growth because of demand for wireless connectivity and the low penetration rates in the region. ATP also benefits from its experienced management and strong sponsors who have supported the company's growth through several equity injections since inception. The rating is constrained by the company's small scale compared with rated peers and reflected in its relatively low number of towers — 4,385 as of year-end 2023. The rating also takes into account the expectation that the company will continue to post negative free cash flow (FCF) over the next two years due to deployment of growth capex, estimated at around $100 million per year. ATP's liquidity is adequate and liquidity risk is low since a large portion of its capital spending is discretionary and deployment is tied to contracted revenue. As of September 2023, ATP had $6 million in cash plus $75 million available under the $120 million committed revolving credit facility (RCF) in place until January 2026. In 1Q24, Moody's expects ATP to raise additional debt to repay the outstanding amounts under the RCF, restoring the facility´s full availability. ATP has a comfortable maturity profile, with the $375 million senior secured notes due in 2026 and an additional $60 million loan from Colombian financial institutions due in April 2025. Furthermore, ATP´s notes are fully hedged with a cross currency swap. The stable outlook reflects Moody's expectation that ATP will continue to execute its growth plan in 2024 and 2025, expanding its fiber infrastructure to contribute to close to 40% of consolidated revenue by 2025 (from to 22% in 2022 and 35% in 2023) and continue to capitalize on the "build-to-suit" model as well, where tower facilities are built on behalf of tenants. Moody's also expects that the intense capex deployed over the past four years to continue fueling EBITDA growth. As a consequence, Moody's expects ATP´s Moody's adjusted debt/EBITDA ratio to decrease to 5.2x by the end of 2024. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS Upward rating pressure is limited over the near term. However, the rating could be upgraded over time if ATP is able to increase its operating scale while maintaining its market position as one of the top three neutral infrastructure providers in the markets in which it operates. Quantitatively, an upgrade would be considered if the company reduces its Moody's adjusted leverage to below 5.0x times on a sustained basis while maintaining adequate liquidity. ATP's ratings could be downgraded if the company choses to expand its operations into countries with weaker economic environments or higher political risk. A deterioration in the credit profile of its main tenants could also create negative pressure on the rating. A deterioration in ATP's liquidity profile or credit metrics, such that Moody's adjusted debt to EBITDA is sustained above 7.0x could also lead to a downgrade. The principal methodology used in these ratings was Communications Infrastructure published in February 2022. ATP is an independent tower company with operations in Chile, Colombia and Peru, countries in which the company is one of the three main independent tower operators. ATP started operations as Torres Unidas in 2012 and was acquired in 2017 by a group of investors, including Interconexion Electrica S.A. E.S.P. (Baa2 stable) and Digital Colony, among other private investors. The company has shown 30% growth in its revenues and EBITDA throughout the last two years. In the 12 months ended in September 2023, ATP presented $120 million net revenue and $78 million EBITDA. AULT ALLIANCE: Declares Monthly Cash Dividend of $0.2708333 Apiece ------------------------------------------------------------------ Ault Alliance, Inc. announced that its Board of Directors has declared a monthly cash dividend of $0.2708333 per share of the Company's outstanding 13.00% Series D Cumulative Redeemable Perpetual Preferred Stock. The record date for this dividend is Jan. 31, 2024, and the payment date is Monday, Feb. 12, 2024. Link to NYSE quote for the Company's 13.00% Series D Cumulative Redeemable Perpetual Preferred Stock: https://www.nyse.com/quote/XASE:AULTpD About Ault Alliance Inc. Ault Alliance, Inc. (formerly, BitNile Holdings, Inc.) is a diversified holding company pursuing growth by acquiring undervalued businesses and disruptive technologies with a global impact. Through its wholly- and majority-owned subsidiaries and strategic investments, the Company owns and operates a data center at which the Company mines Bitcoin, and provides mission-critical products that support a diverse range of industries, including crane services, oil exploration, defense/aerospace, industrial, automotive, medical/biopharma, consumer electronics, hotel operations and textiles. In addition, the Company extends credit to select entrepreneurial businesses through a licensed lending subsidiary. Ault Alliance reported a net loss of $189.83 million for the year ended Dec. 31, 2022, compared to a net loss of $23.04 million for the year ended Dec. 31, 2021. As of Sept. 30, 2023, the Company had $378.46 million in total assets, $257.22 million in total liabilities, $2.18 million in redeemable noncontrolling interests in equity of subsidiaries, and total stockholders' equity of $119.06 million. Ault Alliance said in its Quarterly Report on Form 10-Q for the period ended Sept. 30, 2023, that as of Sept. 30, 2023, the Company had cash and cash equivalents of $8.7 million, negative working capital of $45.1 million and a history of net operating losses. The Company has financed its operations principally through issuances of convertible debt, promissory notes and equity securities. These factors create substantial doubt about the Company's ability to continue as a going concern for at least one year after the date that these condensed consolidated financial statements are issued. BEASLEY MEZZANINE: Moody's Cuts CFR to Caa2 & Alters Outlook to Neg ------------------------------------------------------------------- Moody's Investors Service downgraded Beasley Mezzanine Holdings, LLC's Corporate Family Rating to Caa2 from Caa1, the Probability of Default Rating to Caa2-PD from Caa1-PD, and the senior secured first lien notes rating to Caa2 from Caa1. Beasley's Speculative Grade Liquidity (SGL) Rating is unchanged at SGL-3. The outlook was changed to negative from stable. The downgrade of the CFR to Caa2 and negative outlook reflect Beasley's operating performance amid continued pressures on radio advertising demand, very high leverage and negative free cash flow generation. Moody's expects adjusted debt to EBITDA to improve to high-7x in 2024 benefitting from political ad dollars and cost reduction efforts; however, leverage is projected to increase to mid-9x in 2025 due to lower political advertising revenue in a non-political year. The weak credit metrics create elevated risk of a balance sheet restructuring including a distressed debt exchange given refinancing risks related to the senior secured notes maturing in February 2026. Governance considerations, as reflected in the company's Credit Impact score of CIS-5 and governance issuer profile score (IPS) of G-5, were a key driver of the rating action. The company's financial policies have contributed to operating with elevated leverage, weak liquidity and potentially an unsustainable capital structure. RATINGS RATIONALE The Caa2 CFR reflects Beasley's small operating scale, very high leverage, negative free cash flow generation and the risk that the capital structure is unsustainable which raises the possibility of distressed debt exchanges, especially given Beasley's weak equity valuation (market capitalization of $27 million) and low debt trading levels. Moody's adjusted debt to EBITDA is expected to end 2023 at 11.3x resulting from continued recessionary pressures on radio advertising demand and lower political advertising revenue in a non-political year. The radio industry is also being negatively affected by the shift of advertising dollars to digital mobile and social media as well as heightened competition for listeners from a number of digital music providers. In 2024, Moody's projects revenue growth in the low-single digits and adjusted EBITDA margin to expand to high 12% driven by political ad dollars, growth in digital revenue and the termination of the loss incurring esports team. This will result in a leverage decline to 7.9x; however, leverage is expected to increase to mid-9x in 2025. The very high leverage will reduce Beasley's ability to withstand any additional disruptions to the economy or contend with an increase in industry secular pressures. At the same time, the rating takes into consideration the company's strong market position in most of the markets that it operates in, growing digital revenue and continued cost reduction efforts. Beasley has been investing in its digital platform and Moody's expect further growth in digital revenue over time aided by the recent acquisition of a small digital marketing agency, Guarantee Digital, in Q2 2022. The SGL-3 rating reflects Moody's expectation that Beasley will maintain an adequate liquidity position over the next 12 months. Beasley had approximately $30 million of cash on the balance sheet as of Q3 2023, but does not have access to a revolving credit facility. While Moody's expects free cash flow to turn positive in 2024 from political revenue and benefit from capital expenditures declining to more moderate levels of $5 million, free cash flow is expected to turn back to slightly negative in a non-political year. The timing of interest payments in both February and August each year will lead to negative free cash flow in the first and third quarters. Beasley suspended dividend payments ($5.5 million in 2019) in 2020. There are no financial maintenance covenants on the senior secured notes due February 2026. The Caa2 rating on the senior secured first lien notes are the same as the Caa2 CFR given the single-class, secured note capital structure, which is not subject to financial maintenance covenants. The notes are guaranteed by the company and its majority owned subsidiaries. Beasley's ESG Credit Impact Score is CIS-5 reflecting the company's significant exposure to social exposure related to secular societal trends in radio broadcasting and governance risks related to very high leverage levels, weak liquidity and elevated risk of an unsustainable capital structure. The negative outlook reflects very high financial leverage, negative free cash flow generation, secular headwinds facing the radio industry, and refinancing risks related to 2026 debt maturities. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS The ratings could be upgraded if Beasley is able to substantially grow profitability or reduce debt levels such that the liquidity position improves and the probability of default declines. The ratings could be downgraded further if Beasley's liquidity position and operating performance deteriorates or Moody's assessment of the probability of default were to increase. Beasley Mezzanine Holdings, LLC owns and operates 60 radio stations and related websites and mobile applications across 13 markets. The company's station portfolio is located mainly across the eastern seaboard of the United States, with major contributions to revenue from the Boston, Detroit and Philadelphia markets. The company is publicly traded but controlled by the Beasley family through a dual-class share structure. Beasley generated approximately $253 million for the last twelve months ending September 2023. The principal methodology used in these ratings was Media published in June 2021. BGS WORKS: Case Summary & One Unsecured Creditor ------------------------------------------------ Debtor: BGS Works, Inc. 20144 Ruston Rd Woodland Hills, CA 91364-5638 Business Description: BGS Works, Inc. is the owner of real property located at 5099 Llano Dr., Woodland Hills CA 91364 valued at $3.6 million. Chapter 11 Petition Date: January 22, 2024 Court: United States Bankruptcy Court Central District of California Case No.: 24-10104 Judge: Hon. Victoria S Kaufman Debtor's Counsel: Kevin Tang, Esq. TANG & ASSOCIATES 17011 Beach Blvd Suite 900 Huntington Beach, CA 92647 Tel: 714-594-7022 Fax: 714-421-4439 E-mail: kevin@tang-associates.com Total Assets: $3,601,200 Total Liabilities: $2,627,744 The petition was signed by Joseph Sternlib as president. The Debtor listed RHM Law LLP located at 17609 Ventura Blvd, Ste. 314, as its sole unsecured creditor holding a claim of $125,000. A full-text copy of the petition is available for free at PacerMonitor.com at: https://www.pacermonitor.com/view/S4REE2Q/BGS_Works_Inc__cacbke-24-10104__0001.0.pdf?mcid=tGE4TAMA BIRD RENTAL: Wants Injury Lawsuits in Chapter 11 Paused ------------------------------------------------------- A service that formerly operated scooter rental kiosks around Pittsburgh wants a trio of plaintiffs' injury suits paused as it goes through Chapter 11 bankruptcy in Florida, the company told a Pennsylvania state court Monday, January 8, 2024. About Bird Global, Inc. Bird Global, Inc., a micro-mobility operator, is an electric vehicle company dedicated to bringing affordable, environmentally friendly transportation solutions such as e-scooters and e-bikes to communities across the world. Bird Global, Inc. and its affiliates sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. S.D. Fla. Lead Case No. 23-20514) on December 20, 2023. In the petition signed by Christopher Rankin, chief restructuring officer, Bird Global disclosed up to $500 million in both assets and liabilities. Judge Laurel M. Isicoff oversees the case. Paul Steven Singerman, Esq., Jordi Guso, Esq., and Clay B. Roberts, Esq., at Berger Singerman LLP, represent the Debtor as legal counsel. Teneo Capital LLC is the Debtor's restructuring advisor. Epiq Corporate Restructuring, LLC serves as notice and claims agent. The Senior DIP Parties and Prepetition First Lien Parties, led by MidCap Financial Trust, are represented by Latham & Watkins LLP (James Ktsanes; John Lister; Hugh Murtagh). Covington & Burling LLP (Ronald A. Hewitt) represents the Junior DIP Agent, U.S. Bank. Venable LLP (Paul J. Battista) advises the Junior DIP Lenders and Participating Second Lien Parties. BLUE DOLPHIN: Named to 2024 OTCQX Best 50 ----------------------------------------- Blue Dolphin Energy Company announced it has been named to the 2024 OTCQX Best 50, a ranking of top performing companies traded on the OTCQX Best Market last year. The OTCQX Best 50 is an annual ranking of the top 50 U.S. and international companies traded on the OTCQX market. The ranking is calculated based on an equal weighting of one-year total return and average daily dollar volume growth in the previous calendar year. Companies in the 2024 OTCQX Best 50 were ranked based on their performance in 2023. "We are proud to have been named to the OTCQX Best 50 for the second year in a row," said Jonathan P. Carroll, chief executive officer, and president of Blue Dolphin Energy Company. "Blue Dolphin's Board of Directors, management, and staff have worked hard to increase shareholder value and improve liquidity. Achieving this distinction again is a testament to the continuing efforts of our entire team." For the complete 2024 OTCQX Best 50 ranking, visit https://www.otcmarkets.com/files/2024_OTCQX_Best_50.pdf The OTCQX Best Market offers transparent and efficient trading of established, investor-focused U.S. and global companies. To qualify for the OTCQX market, companies must meet high financial standards, follow best practice corporate governance, and demonstrate compliance with applicable securities laws. About Blue Dolphin Headquartered in Houston, Texas, Blue Dolphin Energy Company -- http://www.blue-dolphin-energy.com-- is an independent downstream energy company operating in the Gulf Coast region of the United States. The Company's subsidiaries operate a light sweet-crude, 15,000-bpd crude distillation tower with approximately 1.2 million bbls of petroleum storage tank capacity in Nixon, Texas. Blue Dolphin was formed in 1986 as a Delaware corporation and is traded on the OTCQX under the ticker symbol "BDCO." Sterling Heights, Michigan-based UHY LLP, the Company's auditor since 2002, issued a "going concern" qualification in its report dated April 3, 2023, citing that the Company is in default under secured and related party loan agreements and has a net working capital deficiency. These conditions raise substantial doubt about the Company's ability to continue as a going concern. Blue Dolphin stated in its Quarterly Report on Form 10-Q for the period ended Sept. 30, 2023, that management determined that certain factors may present substantial doubt about the Company's ability to continue as a going concern. These factors include significant current debt, which impacts its ability to meet debt covenants, and historical working capital deficits. The Company's ability to continue as a going concern depends on sustained positive operating margins and adequate working capital for, amongst other requirements, purchasing crude oil and condensate and making payments on long-term debt. If the Company is unable to process crude oil and condensate into sellable refined products or make required debt payments, the Company may consider other options, including selling assets, raising additional debt or equity capital, cutting costs, reducing cash requirements, restructuring debt obligations, filing bankruptcy, or ceasing operating. BLUE STAR: ClearThink Capital Has 8% Stake as of Jan. 5 ------------------------------------------------------- ClearThink Capital Partners, LLC disclosed in a Schedule 13G filed with the Securities and Exchange Commission that as of Jan. 5, 2024, it beneficially owned 1,393,085 shares of common stock of Blue Star Foods Corp., representing 8.0% (based on the total of 17,391,633 outstanding shares of Common Stock). A full-text copy of the regulatory filing is available for free at: https://www.sec.gov/Archives/edgar/data/1730773/000121390024004037/ea191682-13gclear_bluestar.htm About Blue Star Foods Based in Miami, Florida, Blue Star Foods Corp. -- https://bluestarfo ods.com -- is an international sustainable marine protein company based in Miami, Florida, that imports, packages and sells refrigerated pasteurized crab meat, and other premium seafood products. The Company's main operating business, John Keeler & Co., Inc. was incorporated in the State of Florida in May 1995. The swimming crab meat primarily from Indonesia, Philippines and China and distributing it in the United States and Canada under several brand names such as Blue Star, Oceanica, Pacifika, Crab & Go, First Choice, Good Stuff and Coastal Pride Fresh, and steelhead salmon and rainbow trout fingerlings produced under the brand name Little Cedar Farms for distribution in Canada. Blue Star reported a net loss of $13.19 million for the year ended Dec. 31, 2022, compared to a net loss of $2.61 million for the year ended Dec. 31, 2021. As of Dec. 31, 2022, the Company had $8.68 million in total assets, $9.92 million in total liabilities, and a total stockholders' deficit of $1.24 million. Houston, Texas-based MaloneBailey, LLP, the Company's auditor since 2014, issued a "going concern" qualification in its report dated April 17, 2023, 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. BROWN BIDCO: S&P Stays 'B+' ICR on New M&G Modifier Assessment -------------------------------------------------------------- S&P Global Ratings retained its ratings on U.S.-based private aviation services provider Brown Bidco Ltd. (d/b/a Signature Aviation.), including its 'B+' issuer credit rating, following the assignment of the new M&G assessment. S&P Global Ratings assigned a new M&G modifier assessment of moderately negative to U.S.-based private aviation services provider Signature Aviation. The action follows the revision to our criteria for evaluating the credit risks presented by an entity's management and governance framework. The terms management and governance encompass the broad range of oversight and direction conducted by an entity's owners, board representatives, and executive managers. These activities and practices can impact an entity's creditworthiness and, as such, the M&G modifier is an important component of our analysis. S&P's M&G assessment of moderately negative points to certain management and governance weaknesses that weigh down creditworthiness for Signature. Since its 2021 leveraged buyout by a consortium of infrastructure funds, Signature has maintained high leverage levels in pursuit of its debt-funded dividend and debt-funded acquisition financial policy. All other ratings on Signature are unchanged. S&P's 'B+' issuer credit rating reflects Signature's market leadership in global fixed based operators (FBO) markets, the strong competitive entry barriers provided by its long-dated leases at major airport locations, its scale economies, and high margin hangar rental growth opportunity. These factors are offset by its exposure to the cyclicality of private aviation volumes. In 2024, we forecast business and general aviation volume growth will slow amid macroeconomic uncertainty, limiting Signature's earnings growth and leverage reduction. Nevertheless, the company has increased EBITDA through acquisitions and strong execution against its commercial and cost-saving initiatives. Under its updated base-case forecast S&P expects Signature will maintain S&P Global Ratings-adjusted leverage in the mid-6x area providing solid cushion to our 7.5x rating downgrade threshold. The stable outlook reflects S&P's expectation that net leverage will remain in the mid-6x area over the next 12 months as Signature Aviation's significant interest rate hedges and flexible cost structure offset slowing growth in demand for private aviation services. CAESARS ENTERTAINMENT: Moody's Rates New $2BB Sec. Term Loan 'Ba3' ------------------------------------------------------------------ Moody's Investors Service assigned a Ba3 rating to Caesars Entertainment, Inc.'s proposed $2 billion senior secured term loan B. The company's ratings remain unchanged, including the B1 Corporate Family Rating and B1-PD Probability of Default Rating. The outlook remains stable. Net proceeds from Caesars' proposed $2 billion senior secured term loan B will be used to repay certain debt maturing in 2025, as well as pay related fees, expenses and related premiums and accrued interest. RATINGS RATIONALE Caesars Entertainment, Inc.'s B1 CFR reflects the size and diversification of the company's operations both on the Las Vegas Strip and regionally throughout the US. The company's brand strength and recognition, sizeable Caesars Rewards program and database, and very good liquidity are additional key credit strengths. The rating is constrained by the company's high, yet improved, leverage levels and the need to continue to grow and improve the profitability of Caesars Digital. Caesars remains exposed to cyclical discretionary consumer spending trends in its regional and Las Vegas markets. The stable outlook reflects the strong performance of the business and improved profitability of its digital business. The stable outlook also incorporates the company's very good liquidity and Moody's expectation for leverage to continue to come down from current levels as the business performs and debt is reduced from free cash flow. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATING Ratings could be upgraded if the company continues to grow revenue and earnings and generate strong positive free cash flow, with debt-to-EBITDA leverage sustained below 5x. Ratings could be downgraded if liquidity deteriorates or if Moody's anticipates Caesars' earnings will decline due to reduced visitation or reductions in discretionary consumer spending at the company's casinos and online operations. Ratings could also be downgraded if the company's debt-to-EBITDA leverage is sustained over 6.5x on a consolidated basis or if free cash flow is weak or negative excluding major development projects. The principal methodology used in this rating was Gaming published in June 2021. Caesars Entertainment, Inc. is a publicly-traded company that owns and operates 53 domestic gaming properties in 18 states with approximately 52,500 slot machines, video lottery terminals ("VLTs") and e-tables, approximately 2,700 table games and approximately 46,900 hotel rooms. Reported revenue for the last twelve months ended September 30, 2023 was over $11.5 billion. CAESARS ENTERTAINMENT: S&P Rates Proposed $2BB Term Loan B 'B+' --------------------------------------------------------------- S&P Global Ratings assigned its 'B+' issue-level rating and '3' recovery rating to parent Caesars Entertainment Inc.'s proposed $2 billion term loan B due 2031 and placed the issue-level rating on CreditWatch with positive implications. The '3' recovery rating indicates its expectation for meaningful (50%-70%; rounded estimate: 60%) recovery for the secured lenders in the event of a payment default. The company plans to use proceeds from the new term loan B, along with additional secured debt to be issued at the parent, to repay $3.4 billion of parent secured notes due 2025 and pay fees and expenses. Caesars' secured debt ratings remain on CreditWatch with positive implications because assets at subsidiary Caesars Resort Collection LLC (CRC) will become available to satisfy parent secured debt claims once CRC's remaining $1 billion of secured debt is repaid and the assets at the subsidiary are unencumbered. S&P said, "We expect to resolve the CreditWatch listing on the secured debt when management refinances CRC's secured debt at parent Caesars, likely in 2024. At this point, we would expect CRC to guarantee Caesars' debt and to provide collateral to Caesars' secured debt, implying improved recovery prospects for secured lenders. We believe an upgrade for the secured debt would likely be limited to one notch. At the same time, the repayment of the remaining outstanding CRC debt would likely impair recovery prospects for unsecured lenders, who currently share CRC's residual value pro rata with secured lenders. As a result, we expect to lower Caesars' unsecured ratings once CRC's debt is repaid, but we expect a downgrade would be limited to one notch. "The proposed refinancing transaction is largely debt for debt and therefore leverage neutral. As a result, it does not affect our 'B+' issuer credit rating on Caesars. However, the transaction will extend the company's maturity profile." ISSUE RATINGS--RECOVERY ANALYSIS Key analytical factors -- S&P assigned its 'B+' issue-level rating and '3' recovery rating to Caesars' proposed term loan B and placed the issue-level rating on CreditWatch with positive implications. The '3' recovery rating indicates its expectation for meaningful (50%-70%; rounded estimate: 60%) recovery for secured lenders in the event of a payment default. -- S&P's 'B+' issue-level ratings on Caesars' existing secured credit facility and senior secured notes remain on CreditWatch with positive implications. The recovery rating on these debts remain '3'. -- The CreditWatch reflects the likelihood that S&P could raise the rating on Caesars' secured debt if it refinances the remaining outstanding secured debt at CRC at Caesars. The company indicated it intends to pursue a refinancing in the near term. S&P expects an upgrade would likely be limited to one notch. -- CRC is currently an excluded subsidiary under Caesars' debt agreements and therefore does not provide security or a guaranty on Caesars' debt. As a result, Caesars' secured and unsecured lenders have a pro rata claim to any residual CRC value. Under the terms of Caesars' secured debt issued in 2023, this exclusion ceases to apply when the CRC secured indenture is no longer in effect. As a result, if Caesars refinances the remaining $1 billion of outstanding CRC secured debt at Caesars, S&P expects CRC would guarantee Caesars' debt and secure Caesars' secured debt. As a result, Caesars' secured lenders would have a priority claim to CRC's enterprise value. This would improve recovery prospects for secured lenders but impair recovery prospects for unsecured lenders. -- As a result, S&P's 'B' issue-level rating on Caesars' unsecured notes remains on CreditWatch with negative implications. Caesars' unsecured notes are composed of $1.6 billion senior notes due 2027 and $1.2 billion senior notes due 2029. S&P expects a downgrade would likely be limited to one notch. -- S&P's 'BB' issue-level rating and '1' recovery rating on CRC's secured debt indicates our expectation for very high (90%-100%; rounded estimate: 95%) recovery for lenders in the event of a payment default. Simulated default assumptions -- S&P's simulated default scenario assumes a default by 2028, in line with its typical time to default for issuers rated 'B+', due to prolonged economic weakness or significantly greater competitive pressures in the company's various markets and in the online gaming segment, or both. -- In S&P's simulated default scenario, it does not expect Caesars to reject its leases and anticipate it will continue to pay rent to its lessors because of the importance of the leased assets to its operations. -- S&P said, "We assume a gross enterprise value at emergence of $9.5 billion, calculated by applying a 7x multiple to our estimated EBITDA at emergence. (Our emergence EBITDA is calculated after rent payments.) We use a multiple that is at the high end of our range for leisure companies to reflect the combined company's good scale and geographic diversity in the U.S. and its favorable competitive position given it has the largest player loyalty program in the country." -- S&P assumes about 77% of the gross enterprise value at default is attributable to CRC's properties and about 23% to Caesars' legacy Eldorado properties and its Forum convention center based on our forecast for combined EBITDAR. -- CRC does not currently guarantee Caesars' debt and therefore Caesars' debt at default will primarily be satisfied by value at Caesars. S&P assumes that as long as CRC's secured notes remain outstanding, residual value from CRC would be available to satisfy Caesars' unsecured claims and pari passu secured deficiency claims on a pro rata basis. -- S&P assumes Caesars' $2.3 billion revolver is 85% drawn at default. -- The simplified waterfall presented below represents the company's current capital structure and does not assume a refinancing of CRC's secured notes. Simplified waterfall -- Emergence EBITDA: About $1.4 billion -- EBITDA multiple: 7x -- Gross enterprise value: $9.5 billion -- Net enterprise value after administrative expenses (5%): $9.0 billion -- Value attributable to CRC: About $7.0 billion -- Estimated CRC secured debt claims at default: $1.0 billion --Recovery range: 90%-100% (rounded estimate: 95%) -- Residual value from CRC available to satisfy Caesars' unsecured debt claims and pari passu secured deficiency claims: $6.0 billion -- Value attributable to Caesars' secured debt claims: $2.0 billion -- Pro rata share of CRC's residual value: $4.5 billion -- Total value available to Caesars' secured debt claims: $6.5 billion -- Estimated Caesars' secured debt claims at default: $10.6 billion --Recovery range: 50%-70% (rounded estimate: 60%) -- Pro rata share of CRC's residual value available to Caesars' unsecured debt claims: $1.5 billion -- Estimated Caesars unsecured debt claims: $2.9 billion --Recovery range: 30%-50% (rounded estimate: 45%) Note: All debt amounts include six months of prepetition interest. CHIEF FIRE: Seeks to Hire Bonds Ellis Eppich as Bankruptcy Counsel ------------------------------------------------------------------ Chief Fire Prevention Holdings, LLC, and its affiliates seek approval from the U.S. Bankruptcy Court for the Northern District of Texas to employ Bonds Ellis Eppich Schafer Jones LLP as counsel. The firm will render these services: (a) give bankruptcy-related legal advice to the Debtor; (b) assist the Debtor in preparing legal papers; (c) assist the Debtor in negotiating and formulating sale and/or plan documents; (d) assist the Debtor in preserving and protecting the value of the Debtor's estates; and (e) perform all other legal services for the Debtor that may be necessary or appropriate in administering this Chapter 11 case. The hourly rates of the firm's counsel and staff are as follows: Bryan C. Assink (Senior Associate) $350 Harrison Pavlasek (Associate) $275 Linda Paquette-Gordon (Paralegal) $175 Attorneys $250 to $600 per hour Paralegals $125 to $195 per hour In addition, the firm will seek reimbursement for expenses incurred. Prior to the petition date, the firm received $30,000 from the Debtor for pre-petition services. Bryan Assink, Esq., a senior associate at Bonds Ellis Eppich Schafer Jones, 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: Bryan C. Assink, Esq. Harrison A. Pavlasek, Esq. BONDS ELLIS EPPICH SCHAFER JONES LLP 420 Throckmorton Street, Suite 1000 Fort Worth, TX 76102 Telephone: (817) 405-6900 Facsimile: (817) 405-6902 Email: bryan.assink@bondsellis.com Email: harrison.pavlasek@bondsellis.com About Chief Fire Chief Fire is a fire prevention company that offers restaurant owners a suite of services to accommodate every need associated with fire prevention. It offers fire suppression services, range hood cleaning services, and fire extinguisher maintenance. The Debtors sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. N.D. Tex. Case No. 23-43849) on December 17, 2023, with $0 to $50,000 in assets and $1 million to $10 million in liabilities. Dan Meader, manager, and Chris Boyce, chief executive officer, signed the petitions. Bryan C. Assink, Esq. of BONDS ELLIS EPPICH SHAFER JONES LLP represents the Debtors as legal counsel. CHIEF FIRE: Taps Carrington Coleman as Special Counsel ------------------------------------------------------ Chief Fire Prevention Holdings, LLC, and its affiliates seek approval from the U.S. Bankruptcy Court for the Northern District of Texas to employ Carrington, Coleman, Sloman & Blumenthal, L.L.P. as their special counsel. The firm's services include: a) advising the Debtors concerning complex debtor-in-possession (DIP) financing and other financing matters, including exit financing; b) without duplication of work, assisting and providing support to Debtors' counsel in preparing Debtors' bankruptcy schedules, statements of financial affairs, and first-day pleadings; c) advising and assisting the Debtors concerning litigation and contested matters involving or relating to Frank Mitarotonda, the former owner of Debtor and currently a minority shareholder of Debtor; d) advising the Debtors on corporate and litigation matters impacting the Debtors and their estates and preparing any complex corporate or transactional documents and litigation pleadings in connection with the Debtors' chapter 11 cases, including providing support, advice, and assistance related to the provisions of the Debtors' proposed plan of reorganization as it relates to corporate matters such as financing and corporate governance, and litigation, particularly as it relates to the Debtors' prepetition litigation with Frank Mitarotonda and the issues raised in the litigation; and e) performing such other corporate or litigation legal services for the Debtors in connection with the Restructuring Case that Debtors determine are necessary and appropriate. The firm has agreed to an initial prepetition retainer of $100,0000, which was replenished with an additional $200,000. Mark Castillo, Esq., partner of Carrington Coleman Sloman & Blumenthal, L.L.P., assured the Court that the firm is "disinterested" as such term is defined in Section 101(14) of the Bankruptcy Code. The firm can be reached through: Mark A. Castillo, Esq. Robert C. Rowe, Esq. CARRINGTON, COLEMAN, SLOMAN & BLUMENTHAL, L.L.P. 901 Main Street, Suite 5500 Dallas, TX 75202 Telephone: (214) 855-3000 Facsimile: (214) 580-2641 Email: markcastillo@ccsb.com rrowe@ccsb.com About Chief Fire Chief Fire is a fire prevention company that offers restaurant owners a suite of services to accommodate every need associated with fire prevention. It offers fire suppression services, range hood cleaning services, and fire extinguisher maintenance. The Debtors sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. N.D. Tex. Case No. 23-43849) on December 17, 2023, with $0 to $50,000 in assets and $1 million to $10 million in liabilities. Dan Meader, manager, and Chris Boyce, chief executive officer, signed the petitions. Bryan C. Assink, Esq. of BONDS ELLIS EPPICH SHAFER JONES LLP represents the Debtors as legal counsel. COMMERCIAL METALS: Moody's Affirms Ba1 CFR, Outlook Remains Stable ------------------------------------------------------------------ Moody's Investors Service affirmed Commercial Metals Company's ("CMC") ratings including its Ba1 Corporate Family Rating, Ba1-PD Probability of Default Rating, and the Ba2 rating on its senior unsecured notes and senior unsecured revenue bonds (issued by Maricopa County Industrial Development Authority, AZ). At the same time, Moody's upgraded its Speculative Grade Liquidity Rating to SGL-1 from SGL-2. The ratings outlook remains stable. RATINGS RATIONALE CMC's Ba1 Corporate Family Rating reflects its strong position in the rebar and merchant bar markets in the US, as well as its exposure to the steel market in Eastern Europe through its operations in Poland. Although, this operation will continue to have very weak profitability in the near term. It also incorporates Moody's expectation for the company to maintain relatively low financial leverage, ample interest coverage and very good liquidity as its operating performance weakens, but remains historically strong in fiscal 2024 (ends August 2024). CMC's rating is constrained by its reliance on two steel product categories, its dependence on cyclical construction activity, its exposure to volatile steel and scrap prices and its focus on acquisitive and organic growth investments. Although, the company has a track record of prudently funding its growth initiatives without materially impacting its credit profile. Moody's anticipate that CMC's operating earnings will remain historically strong in fiscal 2024, but will decline from the very robust level of the past two fiscal years as higher interest rates and weaker economic growth weigh on construction activity and lead to increased competitive intensity in the US and Europe. This will result in steel product margins contracting from unsustainably strong record levels. Nevertheless, the North America Steel Group should benefit from increased spending related to the Infrastructure Investment and Jobs Act, the CHIPS and Science Act and the Inflation Reduction Act. These investments could enable the company to maintain historically high steel product prices and metal spreads despite significant new rebar capacity being added by the company and some of its competitors. The company's Europe Steel Group is likely to generate little EBITDA in fiscal 2024, but energy cost rebates could lead to moderately positive reported EBITDA. CMC's operating results surged to a record high level in fiscal 2022 (ended August 2022) and remained near record levels in fiscal 2023 supported by higher prices, wider steel product metal margins, stronger volumes in both its North America and Europe Steel Group segments and several acquisitions. Its North America Steel Group also benefitted from an improved cost profile and higher margin contract work in its downstream fabrication business. As a result, it generated Moody's adjusted EBITDA of $1.4 billion - $1.5 billion in fiscal years 2022 and 2023 versus $835 million in fiscal year 2021. CMC's credit metrics should continue to be robust for the rating in the near term. If the company generates around $1.15 billion of adjusted EBITDA in fiscal 2024 and utilizes all free cash on organic growth initiatives, acquisitions and shareholder returns, then its leverage ratio (debt/EBITDA) will be about 1.0x and its interest coverage (EBIT/Interest) around 10.0x. While these metrics will be very strong for the company's Ba1 Corporate Family Rating, they are expected to weaken when steel prices and metal spreads return to a more sustainable level as demand eventually ebbs and additional domestic capacity comes online. Also, CMC's upside ratings potential is constrained by the volatility of steel and scrap prices, its reliance on cyclical construction end markets and its limited scale and product diversity versus higher rated domestic steel producers. CMC's free cash flow has been volatile historically due to its variable earnings, countercyclical investments in working capital and periodic investments in new capacity such as the new West Virginia micro mill, which will result in elevated spending in fiscal 2024 and 2025. This should be tempered by historically robust earnings and additional working capital reductions and enable the company to generate free cash flow in fiscal 2024. The company generated around $660 million of free cash flow in fiscal 2023 due to its very robust operating earnings and as working capital became a source of cash. This more than offset elevated capital expenditures of about $600 million driven by the construction of its new Arizona micro mill. The company used its free cash flow to fund about $176 million of dividends and share repurchases and to redeem $330 million of notes due in May 2023 and reduced other borrowings by about $19 million. CMC has a Speculative Grade Liquidity rating of SGL-1 reflecting its very good liquidity profile including $705 million of cash and availability of about $599 million under its unrated $600 million revolving credit facility (secured by US inventory and US fabrication receivables) which had no borrowings outstanding and $0.9 million of letters of credit issued. The company also has about $150 million of revolving credit facilities (unrated) in Poland that have an expiration date in April 2026 and these facilities are mostly undrawn except for letters of credit. It also has a $72 million USD equivalent factoring accounts receivable program in Poland. The Ba2 rating on the senior unsecured notes (one notch below the Ba1 CFR) reflects the effective subordination to the revolving credit facility, which is secured by US inventory and US fabrication receivables, as well as to priority accounts payable. The stable ratings outlook incorporates Moody's expectation the company will produce historically strong operating results in fiscal 2024 which will result in credit metrics that are robust for its Ba1 CFR rating, but will return to a level that is more commensurate with the rating when steel prices and metal spreads trend towards historical levels. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS CMC's ratings could be upgraded should it enhance its product and end market diversity and sustain an EBIT margin above 8%, a leverage ratio (debt/EBITDA) below 2.75x, interest coverage (EBIT/Interest) above 4.0x and operating cash flow less dividends above 25% of outstanding debt through various steel price points and metal spread environments. The ratings could be downgraded if economic weakness or increased competition leads to a material deterioration in its operating performance and credit metrics. Quantitatively, the ratings could be downgraded if its EBIT margin is sustained below 4%, its leverage ratio above 4.0x and interest coverage below 2.5x. Headquartered in Irving, Texas, CMC manufactures finished long steel products including rebar, merchant bar, light structural and other special sections and wire rod. Its North America Steel Group has six electric arc furnace mini mills, three micro mills, one rerolling mill with total rolling capacity of about 6.1 million tons, and operates steel fabrication facilities and ferrous and nonferrous scrap metal recycling facilities. The Europe Steel Group has a vertically integrated network of recycling facilities, an EAF mini mill with about 1.6 million tons of rolling capacity and fabrication operations in Poland. Its Emerging Business Group includes its Tensar(R) geogrids and Geopier(R) foundation systems and its EDSCO Fasteners business which provides anchoring solutions for the electrical transmission market. Revenues for the twelve months ended November 30, 2023 were $8.6 billion. The principal methodology used in these ratings was Steel published in November 2021. CPI LUXURY: Has Deal on Cash Collateral Access ---------------------------------------------- East West Bank and CPI Luxury Group advised the U.S. Bankruptcy Court for the Central District of California, San Fernando Valley Division, that they have reached an agreement regarding the Debtor's use of cash collateral and now desire to memorialize the terms of this agreement into an agreed order. On June 30, 2016, the Lender and the Debtor executed a Loan and Security Agreement pursuant to which the Lender provided Debtor a secured revolving credit facility. To secure repayment and performance by Debtor of its obligations under the Loan Agreement, the Debtor granted to Lender a security interest in certain described personal property assets. Lender perfected its security interest in the Prepetition Collateral by filing a UCC Financing Statement with the California Secretary of State on June 30, 2016, filing number 167533695580. Events of Default occurred under the terms of the Loan Documents and, as a result, the Debtor executed a Forbearance Agreement dated September 9, 2021, which was amended from time to time, culminating in the execution of an Amended and Restated Forbearance Agreement dated as of May 31, 2022. Continuing Events of Default occurred and on July 3, 2023, the Lender sent and delivered to the Debtor a Notice of Continuation of Events of Default, Day to Day Forbearance and Reservation of Rights letter. On July 24, 2023, the Lender notified the Debtor that the Day to Day Forbearance was terminated, the Indebtedness owed to the Lender was accelerated and immediately due and payable, and Lender would exercise its rights and remedies under the Loan Documents. The Debtor is obligated to Lender for the amounts owing under the Loan Documents. As of the Petition Date, Debtor is indebted to Lender under the Loan Documents for the sum of no less than $14 million plus all additional interest, fees, costs and charges, including attorney's fees, recoverable under the Loan Documents or by law. The parties agreed that the Debtor may use cash collateral during the period commencing on January 27, 2024 and terminating on the earlier of any of the following dates: (i) April 26, 2024, or such further date as agreed to by Lender in writing, or (ii) the filing of a Default Declaration. As adequate protection, the Lender will be granted a replacement lien in all assets in which and to the extent the Debtor holds an interest. The Postpetition Lien in favor of Lender will be senior in priority to any and all prepetition and postpetition claims, rights, liens and interests, but subject and immediately junior only to any lien or security interest in the Prepetition Collateral that is valid, perfected and senior to the interest of Lender effective as of the Petition Date and not otherwise avoided or subordinated. The Lender will have an allowed super priority administrative claim of the kind and priority, to the extent applicable, under 11 U.S.C. Sections 503(b) and 507(b). The Debtor will make monthly cash payments to the Lender in the amount of $35,000 as set forth in the budget. A hearing on the matter is set for January 25, 2024 at 1:30 p.m. A copy of the stipulation is available at https://urlcurt.com/u?l=XT0ZVr from PacerMonitor.com. About CPI Luxury Group CPI Luxury Group is a producer of cultured pearls. The Debtor sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. C.D. Cal. Case No. 23-11059) on July 30, 2023. In the petition signed by Harold Jabarian, chief executive officer, the Debtor disclosed up to $50 million in both assets and liabilities. Judge Victoria S. Kaufman oversees the case. M. Douglas Flahaut, Esq., at Arentfox Schiff LLP, represents the Debtor as legal counsel. CROCS INC: Moody's Affirms 'Ba3' CFR & Alters Outlook to Positive ----------------------------------------------------------------- Moody's Investors Service changed the outlook for Crocs, Inc. to positive from stable. Concurrently, Moody's affirmed all of the company's ratings, including the Ba3 corporate family rating, Ba3-PD probability of default rating, Ba2 rating on the senior secured first lien term loan and B2 senior unsecured global notes rating. The speculative grade liquidity rating (SGL) was upgraded to SGL-1 from SGL-2. The change in outlook to positive from stable reflects the company's resilient operating performance amid the challenging footwear environment, progress in integrating HEYDUDE and diversifying the business from a product perspective, and deleveraging through debt repayment. Although HEYDUDE has been pressured by grey market sales and weak wholesale orders, leading to second half 2023 revenue and margin declines, Moody's projects that over the next 12-18 months HEYDUDE revenue will stabilize and margins will improve, helping diversify the company's earnings base. Moody's expects the Crocs brand, which had over 13% revenue growth in 2023, to remain resilient to weakening consumer discretionary spending and a highly promotional retail environment. Moody's projects consolidated earnings to be modestly lower in 2024 as the company increases marketing and infrastructure investment to support long-term growth, offsetting gross profit improvement. Crocs' Q4 2023 debt repayment lowered Moody's-adjusted debt/EBITDA to 1.7x from 1.9x, and Moody's expects credit metrics to remain solid in 2024, including debt/EBITDA of 1.7x and EBITA/interest expense of 6.7x, assuming modest additional debt paydown. The affirmation reflects Crocs' brand position, strong cash flow generation and credit metrics. The affirmation also reflects the short track record of HEYDUDE ownership and the need to improve its current challenging operating trends. The SGL upgrade to SGL-1 from SGL-2 reflects Moody's projection for very good liquidity over the next 12-18 months, including continued strong free cash flow generation, good excess revolver capacity at all times, lack of near-term maturities and a springing covenant-only capital structure. RATINGS RATIONALE Crocs' Ba3 CFR reflects its ownership of the well-recognized Crocs brand, which has a leading market position in the niche clog category. Crocs' strong operating margin, which is among the highest in the footwear, apparel and accessories market, and its high free cash flow generation provide key support to the credit. The rating also reflects the company's diversified sales channels with a good mix of wholesale, retail and digital, and successful digital marketing strategies. In addition, the credit profile is supported by governance considerations, including Crocs' commitment to a long-term net leverage target of 1-1.5x (approximately 1.3-1.8x Moody's-adjusted debt/EBITDA). The company reached the upper end of its leverage range in Q4 2023, after paying down more than half of the total roughly $2.1 billion debt incurred for the February 2022 HEYDUDE acquisition. The credit profile is constrained by Crocs' high fashion risk, which is elevated by the company's significant exposure to the clog style representing an estimated 57% of sales, and overall narrow product focus in casual footwear. Although the HEYDUDE acquisition added another brand to the portfolio, the Crocs brand still accounts for 75% of sales. Business risk is also elevated by the company's operations in the highly competitive and discretionary footwear sector. In addition, the company's history of operating at its current scale and margins is relatively short, as revenue has roughly tripled since 2019, and non-GAAP operating income has increased roughly 7 times. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS The ratings could be upgraded if the company demonstrates improved HEYDUDE performance, including increased profit margins and stable revenue performance, as well as gross profit growth in the Crocs business. Quantitatively, an upgrade would require continued solid credit metrics, including Moody's-adjusted debt/EBITDA below 2.25x or 2.75x following acquisitions and EBITA/interest expense above 3.5x. An upgrade would also require maintaining very good liquidity, including continued strong free cash flow generation and ample revolver availability. The ratings could be downgraded if there is a shift to more aggressive financial strategies or if there is a deterioration in the company's overall operating performance, brand relevance or liquidity profile. Quantitatively, the ratings could be downgraded if debt/EBITDA rises above 3.5x or EBITA/interest expense declines below 2.75x. Headquartered in Broomfield, Colorado, Crocs, Inc. is engaged in the design, development, marketing, distribution and sale of casual footwear under the Crocs and HEYDUDE brands. The company's products are sold through digital and wholesale channels as well as over 350 company-operated retail stores. Revenue for the twelve months ended September 30, 2023 was approximately $3.9 billion. The principal methodology used in these ratings was Retail and Apparel published in November 2023. CTLC LLC: Hires TTR Sotheby's International Realty as Broker ------------------------------------------------------------ CTLC, LLC seeks approval from the U.S. Bankruptcy Court for the District of Maryland to hire TTR Sotheby's International Realty as its broker. The broker will market and sell the Debtor's property located at 15125 Devlin Drive, Glenelg, MD 21737 in Howard County. The Debtor desires to retain the broker at a commission rate of 6 percent of the gross sales price. TTR Sotheby's International Realty is a disinterested person as that term is defined in Section 101(14) of the Bankruptcy Code, as disclosed in the court filings. The broker can be reached through: Lydia Travelstead TTR Sotheby's International Realty 209 Main Street Annapolis, MD 21401 Mobile: (410) 869-2133 Office: (410) 280-5600 Email: ltravelstead@ttrsir.com About CTLC, LLC CTLC, LLC is part of the residential building construction industry. CTLC, LLC filed is voluntary petition for relief under Chapter 11 of the Bankruptcy Code (Bankr. D. Md. Case No. 23-15444) on August 2, 2023. The petition was signed by Sandra Grier as member. At the time of filing, the Debtor estimated $1 million to $10 million in both assets and liabilities. Richard L. Costella, Esq. at Tydings & Rosenberg LLP represents the Debtor as counsel. DIOCESE OF OAKLAND: Insurers, Creditors to Start Plan Talks ----------------------------------------------------------- Rick Archer of Law360 reports that the Roman Catholic Diocese of Oakland, its unsecured creditors and a number of its insurers told a California bankruptcy judge Tuesday that they will begin mediation on the diocese's Chapter 11 plan once they come to an agreement on the mediators. At the hearing on January 9, 2024, the Debtor and the Committee agreed to include insurers in mediation. The Committee has agreed to a single mediation with two mediators selected by the Debtor and the Committee (not the Committee alone as asserted) to assist them in resolving their disputes, two mediators selected by the Insurers to assist the Debtor, the Committee and the Insurers in resolving their disputes and joint and separate meetings of the parties to the Committee Mediation Matters and the Insurance Mediation Matters. Pursuant to the Committee's proposed order filed Jan. 16, 2024, the parties have agreed to the appointment of Hon. Christopher Sontchi (Ret.) and Jeff Krivis for the purpose of mediating the Committee Mediation Matters (defined below). Meanwhile, Hon. Randall Newsome (Ret.) and Timothy Gallagher will serve as mediators for the purpose of mediating the Insurance Mediation Matters. About Roman Catholic Bishop Of Oakland The Roman Catholic Bishop of Oakland, a tax-exempt religious organization, sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. N.D. Cal. Case No. 23-40523) on May 8, 2023. In the petition signed by Bishop Michael Charles Barber, the Debtor disclosed $100 million to $500 million in both assets and liabilities. Judge William J. Lafferty oversees the case. The Debtor tapped Foley & Lardner LLP as legal counsel and Alvarez & Marsal North America, LLC as restructuring advisor. Kurtzman Carson Consultants LLC is the Debtors' claims and noticing agent and administrative advisor. The U.S. Trustee for Region 17 appointed an official committee to represent unsecured creditors in the Debtor's Chapter 11 case. The committee tapped Lowenstein Sandler, LLP as bankruptcy counsel; Burns Bair LLP as special insurance counsel; and Berkeley Research Group, LLC as financial advisor. DIXON HOLDINGS: Starts Chapter 11 Bankruptcy Protection ------------------------------------------------------- Dixon Holdings LLC filed for chapter 11 protection in the Middle District of Florida. According to court filing, the Debtor reports between $500,000 and $1 million in debt owed to 1 and 49 creditors. The Petition states funds will be available to unsecured creditors. About Dixon Holdings Dixon Holdings, LLC is a Single Asset Real Estate debtor (as defined in 11 U.S.C. Section 101(51B)). The Debtor sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. M.D. Fla. Case No. 24-00011) on January 2, 2024. In the petition signed by Roberta Masnyj, manager, the Debtor disclosed up to $10 million in assets and up to $1 million in liabilities. Judge Roberta A. Colton oversees the case. The Debtor is represented by: Steven M Berman, Esq. Shumaker, Loop & Kendrick, LLP 436 Calbira Ave North Port, FL 34287 DODGE CONSTRUCTION: Moody's Alters Outlook on 'B3' CFR to Negative ------------------------------------------------------------------ Moody's Investors Service affirmed Dodge Construction Network LLC's (DCN) existing ratings, including the B3 Corporate Family Rating, B3-PD Probability of Default Rating, B2 ratings on the company's backed senior secured first lien credit facilities, and Caa2 rating on the backed senior secured second lien term loan. The outlook is revised to negative from stable. The change in outlook to negative reflects Moody's expectations of a constrained liquidity profile over the next 12 months. This is largely driven by weaker than expected operating performance in fiscal year 2023 that resulted in a $19.4 million free cash flow deficit. The decline in free cash flow was caused by a material decrease in customer retention, significant working capital outflows, and delays in invoicing and cash collections. DCN funded this cash flow deficit by drawing $20 million under its revolving credit facility, which expires in 2027. Further reliance on the revolving credit facility to fund cash flow deficits and an eroding liquidity profile could lead to a ratings downgrade. RATINGS RATIONALE DCN's B3 CFR reflects the company's small scale, high debt/EBITDA leverage, and weak liquidity. As of September 30, 2023, the company's leverage was over 7x (on a Moody's adjusted basis after expensing software development costs), limiting its financial flexibility. Over the next twelve months, Moody's projects DCN's revenue to grow at low single digit and leverage to remain flat at over 7x. At the same time, the rating takes into consideration the company's strong market position as a provider of data, analytics, digital workflow solutions and targeted marketing services to professionals in the U.S. commercial construction industry. The company has a largely recurring revenue base and a wide-ranging product suite focused on providing leads and market data to its customers. Going forward, Moody's expects DCN to improve its top line stability as a result of a 41% increase in new customer bookings in Q3 2023 over the prior year. Moody's views DCN's strategic attempt to convert customers to auto renewing contracts as credit positive as it will enhance the company's revenue visibility and bolster its revenue stability over the longer term. For fiscal 2024, Moody's projects DCN will grow revenue in the low single digit and achieve stable adjusted EBITDA margin. Moody's expects DCN to have weak liquidity over the next twelve months, supported by $3.3 million in cash as of September 30, 2023 and $20 million in revolver availability ($20 million drawn). In the near term, Moody's expects DCN's free cash flow to remain constrained due to high interest rates and unhedged exposure to floating rate debt. For fiscal year 2024, Moody's projects free cash flow will be breakeven and anticipates that the company may need to utilize its revolving credit facility to meet seasonal cash requirements. DCN does not have meaningful debt maturities until 2027 with its senior secured first lien term loan due in February 2029 and senior secured revolving credit facility due in February 2027. The revolving credit facility contains a total net first lien leverage covenant test of 9.02x triggered when 40% or more is outstanding. Moody's expects DCN to be compliant with its financial covenants over the next 12 months. The negative outlook reflects DCN's weak liquidity as free cash flows are expected to remain constrained over the next 12 months. Moody's expects leverage to remain at over 7x (on a Moody's adjusted basis) over the outlook period. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS The ratings could be upgraded if revenue growth and EBITDA expansion lead to total debt to EBITDA sustained around 6x (Moody's adjusted) with free cash flow to adjusted debt over 5%. The ratings could be downgraded if DCN does not grow revenue organically or if EBITDA growth is insufficient to maintain positive free cash flow generation. DCN could also be downgraded if market share erodes, or the company maintains aggressive financial policies that prevent meaningful deleveraging. The ratings could also be downgraded if DCN's liquidity weakens further particularly if the company continues to draw on its revolver. Headquartered in Hamilton, NJ, Dodge Construction Network LLC is a provider of commercial construction project data, market forecasting and analytics services, advertising and marketing solutions, and workflow integration solutions for the North American pre-construction industry. The company is owned by Symphony Technology Group and Clearlake Capital Group, L.P. The principal methodology used in these ratings was Business and Consumer Services published in November 2021. DONELSON CORPORATE: Seeks to Hire Huber & Lamb as Appraiser ----------------------------------------------------------- Donelson Corporate Centre, Limited Partnership seeks approval from the U.S. Bankruptcy Court for the Middle District of Tennessee to employ Huber & Lamb Appraisal Group to provide professional appraisal services. The firm will appraise the Debtor's property, a 3-building, 233,393 square foot office park situated on a 21.77-acre parcel located at 3055 Lebanon Pike, Nashville, Tennessee. Huber & Lamb will charge a flat fee of $6,000 to perform the appraisal and prepare an appraisal report. Consultation and expert witness time will be billed at the hourly rates of $250 and $350, respectively. Huber & Lamb is a "disinterested person" under Bankruptcy Code Secs. 101(14) and 327, according to court filings. The firm can be reached through: James E. Lamb Huber & Lamb Appraisal Group, Inc. 5556 Franklin Pike # 100 Nashville, TN 37220 Phone: (615) 371-8575 About Donelson Corporate Centre Donelson Corporate Centre, Limited Partnership, owns real property located at 3055 Lebanon Pike, Nashville, TN 37214 having an appraised value of $36 million. Donelson Corporate Centre, Limited Partnership, filed its voluntary petition for relief under Chapter 11 of the Bankruptcy Code (Bankr. M.D. Tenn. Case No. 23-04512) on Dec. 8, 2023. The petition was signed by Floyd Shechter as chief manager of JS Development, LLC (General Partner). At the time of filing, the Debtor estimated $42,311,296 in assets and $16,472,593 in liabilities. Judge Marian F. Harrison presides over the case. Robert J. Gonzales, Esq. at EMERGELAW, PLC represents the Debtor as counsel. ENDO INT'L: Okayed to Hold Opioid Settlements Poll on Creditors --------------------------------------------------------------- Jonathan Randles of Bloomberg Law reports that drug manufacturer Endo International Plc won bankruptcy court permission to poll its creditors on a plan that would hand control of the business to lenders and settle opioid liabilities in deals valued at more than $600 million. Judge James L. Garrity Jr. said during a Tuesday court hearing in New York he'll allow Endo creditors to vote on its restructuring plan weeks after the company announced opioid-related settlements. The judge's approval keeps Endo on pace to emerge from Chapter 11 protection in the second quarter of 2024. About Endo International Endo International plc (OTC: ENDPQ) is a generics and branded pharmaceutical company. It develops, manufactures, and sells branded and generic products to customers in a wide range of medical fields, including endocrinology, orthopedics, urology, oncology, neurology, and other specialty areas. On the Web: http://www.endo.com/ On Aug. 16, 2022, Endo International and certain of its subsidiaries initiated voluntary prearranged Chapter 11 proceedings (Bankr. S.D.N.Y. Lead Case No. 22-22549). On May 25, 2023, Operand Pharmaceuticals Holdco II Limited and Operand Pharmaceuticals Holdco III Limited each filed a voluntary Chapter 11 petition also in the U.S. Bankruptcy Court for the Southern District of New York. On May 31, 2023, Operand Pharmaceuticals II Limited and Operand Pharmaceuticals III Limited each filed a voluntary Chapter 11 petition also in the Southern District of New York. The cases are jointly administered before the Honorable James L. Garrity, Jr. Endo initiated the financial restructuring process after reaching an agreement with a group of its senior debtholders on a transaction that would substantially reduce outstanding debt, address remaining opioid and other litigation-related claims, and best position Endo for the future. This would allow the Company to advance its ongoing business transformation from a strengthened financial position to create compelling value for its stakeholders over the long term. Endo's India-based entities are not part of the Chapter 11 proceedings. The Company has filed recognition proceedings in Canada and expects to file similar proceedings in the United Kingdom and Australia. The Debtors tapped Skadden, Arps, Slate, Meagher & Flom, LLP as legal counsel; PJT Partners, LP as investment banker; and Alvarez & Marsal North America, LLC as financial advisor. Kroll Restructuring Administration, LLC, is the claims agent and administrative advisor. A Website dedicated to the restructuring is at http://www.endotomorrow.com/ Roger Frankel, the legal representative for future claimants in the Chapter 11 cases, tapped Frankel Wyron LLP and Young Conaway Stargatt & Taylor, LLP, as legal counsels, and Ducera Partners, LLC, as investment banker. ENERGIZER HOLDINGS: Moody's Alters Outlook on 'B1' CFR to Stable ---------------------------------------------------------------- Moody's Investors Service affirmed Energizer Holdings, Inc.'s ("Energizer") B1 Corporate Family Rating and B1-PD Probability of Default Rating. At the same time, Moody's affirmed the Ba1 ratings on the company's senior secured first lien term loan due 2027 and senior secured first lien revolving credit facility due 2025 and affirmed the B2 rating on Energizer's senior unsecured notes. Moody's also affirmed the B2 rating on the backed senior unsecured notes issued by Energizer Gamma Acquisition B.V. and guaranteed by Energizer Holdings, Inc. Energizer's SGL-1 speculative grade liquidity ("SGL") rating is unchanged. The outlooks were changed to stable from negative. The ratings affirmation and outlook change to stable from negative reflects Moody's expectations that Energizer's credit metrics will continue to improve over the next 12 months including from debt reduction. Cost savings from efficiency and restructuring initiatives ("Project Momentum") and moderating input costs are driving expansion of the EBITDA margin and offsetting declining revenues. Volumes are under pressure due to consumers economizing spending. An expected increase in promotional activity will create some pressure on margins. Strong free cash flow of around $200 million after dividends (Moody's estimates) positions the company to continue to reduce debt. Management expects net debt-to-EBITDA to decline below 5.0x in fiscal 2024 from 5.2x for the twelve months ended September 30, 2023. The company's forecast includes $150 - $200 million of debt repayment and Moody's expects a similar range of debt repayment. Downside risks to Moody's view remain especially if consumer spending deteriorates more than expected and is not mitigated through additional cost reductions and moderation of input costs. The absence of a formal leverage target and a historically aggressive financial policy creates uncertainty around long-term financial strategy. Energizer has previously turned to large-scale debt-funded acquisitions to improve product diversification and has a history of sizable shareholder distributions. Nonetheless, Moody's views the business as stable and believes that management will remain committed to improving the balance sheet aided by the sizable free cash flow. Moody's predicts a decrease in gross debt-to-EBITDA leverage to approximately 5.5x in 2024 (5.8x Moody's adjusted for the 12 months ended September 30, 2023) and to 5.0x and below by fiscal year-end 2025. Energizer's very good liquidity, as reflected in the SGL-1 speculative grade liquidity rating, provides ample cushion to manage quarterly cash needs and provides flexibility to execute on operational and deleveraging strategies. Liquidity is supported by $223 million of cash and the company's $500 million undrawn revolving credit facility. The revolver expires in December 2025 and there are no near-term maturities until the term loans mature in December 2027. Moody's anticipates the company will extend the revolver ahead of its expiration though liquidity will weaken if the company does not proactively address the maturity. The revolver and term loan are subject to a maximum total senior secured leverage ratio of 3.25x and minimum interest coverage ratio of 2.50x. Moody's expects Energizer to maintain good covenant cushion. RATINGS RATIONALE Energizer's B1 CFR reflects the company's very high leverage following large debt funded acquisitions and earnings weakness in recent years. Acquisitions result from Energizer's strategy to diversify away from its slow growing and mature disposable battery business. Secondary rechargeable batteries continue take market share from primary batteries in various device categories. These pressures are modestly outweighed by the broader expansion of electronic devices that benefit from key advantages found in disposable batteries. Primary batteries, compared to secondary batteries, offer a lower upfront cost, longer shelf life, lower self-discharge, and the ability to provide a constant voltage supply with no need to charge. This makes primary batteries ideal for low-drain, long-duration applications or where portability and upfront costs are key factors. The high leverage is also a function of a lower EBITDA margin due to elevated input costs and due to inefficiencies in the company's supply chains. However, raw material and freight costs are moderating, and Energizer has worked hard to address cost and supply chain challenges through multiple restructuring and efficiency initiatives. The company is seeing substantial improvement in profitability. Energizer's credit profile is supported by its leading market position in the single use and specialized battery market, its portfolio of well-known brands in the battery and consumer car maintenance segments, historically solid operating cash flow and EBITDA margin, and very good liquidity. Moody's anticipates gross debt-to-EBITDA to decline to 5.5x by fiscal year-end 2024 and to 5.0x and below by fiscal 2025 from 5.8x for the 12 months ended September 30, 2023. Investments into supply chain improvement, analytics and cost reductions, and moderation of input costs are driving improvement in the EBITDA margin and are helping offset near-term pressures to revenue from consumer economizing spending. However, the company's financial policy remains a risk despite management's current focus on reducing debt. Failure to reduce debt levels, especially if earnings and cash flows do not recover as expected, could slow deleveraging. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS The stable outlook reflects Moody's expectation for continued improvement in operating performance and the EBITDA margin as well as solid free cash flow generation of at least $200 million after dividends. Debt repayment is facilitating meaningful debt-to-EBITDA leverage improvement to around to 5.5x by fiscal year-end 2024 and below thereafter. The stable outlook also reflects that the company's very good liquidity provides capacity to repay debt while maintaining good business reinvestment. An upgrade would require consistent operational performance including stable organic revenue growth, and a higher EBITDA margin that leads to sustained debt to EBITDA below 4.5x and consistently strong free cash flow. The ratings could be downgraded if Energizer does not continue to see improvement in the EBITDA margin in the next 12-18 months. The ratings could also be downgraded if free cash flow deteriorates for any reason or if the company does not repay debt such that debt-to-EBITDA is likely to remain elevated above 5.5x. A deterioration of liquidity, or if the company engages in acquisitions or share repurchases prior to reducing leverage could also lead to a downgrade. ENVIRONMENTAL, SOCIAL, AND GOVERNANCE FACTORS Energizer's CIS-4 credit impact score indicates the rating is lower than it would have been if ESG risk exposures did not exist. Aggressive financial strategy is a key factor driving this view, though environmental and social components are also contributing factors. Energizer's efforts to diversify beyond its traditional battery business is leading to products with less environmental exposure, though thus far this has led to aggressive financial actions including leveraging acquisitions. The principal methodology used in these ratings was Consumer Packaged Goods published in June 2022. Energizer Holdings, Inc. manufactures and markets batteries, lighting products, car fragrance and appearance, and engine additives around the world. The product portfolio includes household batteries, specialty batteries, portable lighting equipment and various car fragrance dispensing systems. Some key brands include Energizer, Eveready, Rayovac, STP, and ArmorAll. Headquartered in St. Louis, MO, the publicly-traded company generates roughly $3.0 billion in annual revenues. EQUALTOX LLC: Seeks to Use Cash Collateral Thru May 18 ------------------------------------------------------ Equaltox, LLC asks the U.S. Bankruptcy Court for the Central District of California, Santa Ana Division, for authority to use cash collateral and provide adequate protection, on a final basis, from February 24, 2024 through May 18, 2024. The Debtor requires the use of cash collateral for operating expenses and professional fees. In the first nine weeks of the case (ending December 30, 2023), the Debtor exceeded its revenue projections, generated net cash flow of $533,542, and increased its cash on hand to $901,490. The entities that assert, or may assert, an interest in all or a portion of the Debtor's cash collateral are: (a) Blue Cross of California d.b.a. Anthem Blue Cross and Anthem Blue Cross Life and Health Insurance Company; (b) Sunwest Bank; (c) California Statewide Certified Development Corporation; and (d) First Citizens Bank & Trust. For February 2024 through May 2024, the Debtor will make monthly payments to Sunwest, CSCDC (one payment on each loan), and First Citizens comprised of the full monthly payment of principal and interest as set forth in their respective loan documents. If and to the extent that, as of the petition date, Anthem, Sunwest, CSCDC, and/or First Citizens hold a duly perfected, unavoidable, and valid lien in all, or a portion of, the Debtor's cash, and such cash, as opposed to unencumbered cash, is actually used by the Debtor post-petition, then such entity will receive a replacement lien in the Debtor's post-petition cash, in the same extent, validity, and priority up to the amount of the cash collateral existing as of the petition date. A hearing on the matter is set for February 7, 2024 at 1:30 p.m. A copy of the motion is available at https://urlcurt.com/u?l=TbtMdi from PacerMonitor.com. About Equaltox, LLC Equaltox, LLC is a full service reference laboratory that can provide almost any type of blood testing. The Debtor sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. C.D. Cal. Case No. 8:23-bk-12243) on October 27, 2023. In the petition signed by Sulaiman Masood, member and manager, the Debtor disclosed up to $10 million in both assets and liabilities. Robert S. Marticello, Esq., at Smiley Wang-Ekvall, LLP, represents the Debtor as legal counsel. ERESEARCH TECHNOLOGY: Moody's Affirms 'B3' CFR, Outlook Stable -------------------------------------------------------------- Moody's Investors Service affirmed the ratings of eResearch Technology, Inc. ("ERT" or "Clario"), including the B3 Corporate Family Rating and B3-PD Probability of Default Rating. Moody's also affirmed the B2 rating on the company's backed senior secured first lien bank credit facility, consisting of a $200 million revolving credit facility expiring in 2025 and $2,025 million term loan due in 2027. ERT's ratings outlook remains stable. The rating affirmation reflects Moody's view that ERT will maintain its leading position in the electronic clinical outcomes assessment ("eCOA") market supported by favorable long-term industry tailwinds that will drive both top and bottom-line growth. Despite ERT's high financial leverage, Moody's expects the company's debt-to-EBITDA to decline to the low-to-mid 7 times range over the next 12 to 18 months, absent any material debt-funded acquisitions. RATINGS RATIONALE ERT's B3 CFR is constrained by the company's high financial leverage with Moody's adjusted debt-to-EBITDA of approximately 8 times for the last twelve month period ended September 30, 2023. Moody's expects that earnings growth will result in ERT's debt-to-EBITDA improving to the low-to-mid 7 times range over the next 12 to 18 months, assuming no significant debt-funded acquisitions. The rating is also constrained by the risk that larger better capitalized companies could choose to pursue developing their own eCOA software. The B3 rating is supported by the company's strong market position in the niche eCOA and clinical imaging markets, solid EBITDA margins in the low 30 percent range, and high revenue visibility provided by contract backlog. The rating also benefits from the company's solid growth prospects driven by favorable long-term industry fundamentals and growth in the number of clinical trials continuing over the next few years. Moody's views ERT's liquidity as weak, but successful extension of the revolving credit facility expiring in February 2025 will improve liquidity. The company's weak liquidity stems from negative free cash flow prior to mandatory term loan amortization and the likelihood that additional revolver borrowings will be required to fund the combination of cash flow deficits plus term loan amortization. As of September 30, 2023, the company had approximately $30 million of cash on hand and access to a $200 million revolving credit facility. In Q4 2023, ERT raised $120 million of incremental term loan and primarily used proceeds to pay down the revolver balance from $120 million to $5 million. For the last twelve month period ending September 30, 2023, ERT generated negative $17 million in free cash flow prior to any mandatory term loan repayments. Moody's expects ERT to generate negative free cash flow over the next 12 to 18 months, in part due to rising interest costs. In addition, mandatory first lien term loan amortization will total approximately $20 million over the next 12 months. Moody's expects ERT to maintain sufficient cushion under the springing first lien net leverage covenant on the revolving credit facility, if triggered. ERT's senior secured first lien credit facility, comprised of a $200 million revolving credit facility expiring in February 2025 and $2,025 million first lien term loan maturing in February 2027, is rated B2, one notch above the B3 CFR. This reflects the benefit of a layer of loss absorption provided by the $490 million second lien term loan (not rated). The senior secured facilities are guaranteed by all current and future material domestic and foreign subsidiaries of the borrower, subject to certain exceptions. The outlook is stable. Despite ERT's high financial leverage, Moody's expects that favorable dynamics in the sector will drive further growth for the company, aiding in deleveraging to the low-to-mid 7 times range over the next 12 to 18 months. ESG CONSIDERATIONS ERT's ESG credit impact score is CIS-4 indicating that the rating is lower than it would have been if ESG risk exposures did not exist. ERT has high exposure to governance risk considerations, most notably with aggressive financial policies under private equity ownership (G-4). The company has a track record of incurring additional debt to fund acquisitions to supplement organic growth, resulting in high levels of debt and financial leverage. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS The ratings could be upgraded if ERT exhibits sustained revenue and earnings growth. Ratings could also be upgraded if the company demonstrates less aggressive financial policies with increased stability in profit margins. Ratings could be upgraded if the company demonstrates a track record of strong positive free cash flow generation. Quantitatively, ratings could be upgraded if debt/EBITDA approaches 6 times on Moody's basis. The ratings could be downgraded if ERT's operating performance deteriorates. Ratings could also be downgraded if ERT experiences a material reduction to its profitability. Ratings could be downgraded if a weakening of liquidity occurs, such as free cash flow remaining negative on a sustained basis, a notable increase in revolver usage or failure to extend the revolver maturity. Quantitatively, ratings could be downgraded if EBITA-to-interest expense was sustained below 1.0 times. Headquartered in Philadelphia, Pennsylvania, ERT is a provider of digital endpoint solutions for clinical trial conduct, spanning imaging solutions, centralized cardiac safety, respiratory efficacy services, and electronic clinical outcome assessment solutions to biopharmaceutical sponsors and contract research organizations (CROs). ERT is owned by private equity funds managed by Nordic Capital, Astorg Partners, Novo Holdings and Cinven. ERT generated revenues of nearly $1 billion for the twelve months ended September 30, 2023. The principal methodology used in these ratings was Business and Consumer Services published in November 2021. ESCAMBIA OPERATING: Trustee Taps Melissa Temple as Consultant ------------------------------------------------------------- Drew McManigle, the Chapter 11 Trustee appointed in the bankruptcy cases of Escambia Operating Company, LLC and Escambia Asset Company, LLC, seeks approval from the U.S. Bankruptcy Court for the Southern District of Mississippi to employ Melissa Temple as his consultant. Ms. Temple will render these services: a. calculate and verify revenue/production amounts due to the Debtors; b. identify unpaid or underpaid revenue due to the Debtors; c. identify royalty owners; d. determine how much interest each royalty owner is entitled to and amounts owed (for creditor future payouts); e. calculate the joint interest billing related to production; f. provide data and calculations on severance taxes owed to prevent the maximum rate from being charged as a default, which is penalizing the Escambia Estates; and g. prepare the severance tax reports that are typically due monthly. Ms. Temple's hourly rate is $125 for up to 15 hours in each calendar week. The hourly rate for any additional hours exceeding the first 15 hours will increase to $160. Ms. Temple assured the court that she does not represent, and does not hold, any interest adverse to the Debtors or their estates. About Escambia Operating Company Escambia Operating Company, LLC and Escambia Asset Company, LLC filed Chapter 11 petitions (Bankr. S.D. Miss. Lead Case No. 23-50491) on April 2, 2023, with $10 million to $50 million in both assets and liabilities. Judge Jamie A. Wilson oversees the cases. Drew McManigle, the Chapter 11 trustee appointed in the Debtors' cases, tapped Jones Walker, LLP as bankruptcy counsel; MACCO Restructuring Group, LLC as financial advisor; and M P Boots Petroleum Engineering Services, LLC as valuation advisor. FOUNDATION BUILDING: Moody's Rates New $1BB First Lien Loan 'B2' ---------------------------------------------------------------- Moody's Investors Service assigned a B2 rating to Foundation Building Materials, Inc.'s (FBM) proposed $1 billion backed senior secured first lien incremental term loan B-2 due 2031. Moody's also affirmed the existing ratings, including the B2 corporate family rating, the B2-PD probability of default rating, the B2 backed senior secured first lien term loan ratings, and the Caa1 senior unsecured notes rating. The outlook is maintained at stable. Proceeds from the incremental first lien term loan will be used to fund a $912 million dividend, repay $48 million of the PIK Seller Note due 2030 (issued at ASP Flag Parent Holdings, Inc., a parent holding company of FBM) and pay fees and expenses associated with the transaction. The affirmation reflects FBM's strong operating performance despite a challenging macroeconomic environment and good liquidity and cash flow generation. Prior to the transaction, credit metrics were very strong with Moody's adjusted debt/EBITDA of about 3.7x for the last twelve month (LTM) period ending September 30, 2023. The debt-financed dividend significantly increases debt and leverage but credit metrics remain appropriate for the rating category. Pro forma for the transaction, Moody's adjusted debt/EBITDA is about 5.1x while Moody's adjusted EBITA/interest expense is about 2.4x. The B2 rating assignment on the proposed senior secured first lien incremental term loan is in line with the B2 CFR. This reflects subordination to company's asset based revolving credit facility with support from the junior ranking senior unsecured notes. Moody's expects the covenant terms to be largely the same as the existing credit agreement. RATINGS RATIONALE FBM's B2 CFR reflects moderately high pro forma leverage of about 5.1x for the LTM period ending September 30, 2023. The company has had success in growing through acquisitions but this strategy adds operational and integration risk. The company faces intense competition and its product mix is reliant on commodity-like products, making it difficult to maintain pricing power. Also, the continued deployment of capital for debt financed dividends remains an ongoing credit risk. Good operating performance provides a major offset to the company's leveraged debt capital structure and other credit challenges. Moody's project adjusted EBITDA margin in the run-rate range of 11% - 12% over the next two years, which is the company's greatest credit strength. The company also has good liquidity and no material debt maturities until 2028. FBM is expected to maintain good liquidity. The company keeps minimal cash on hand but has access to a $850 million asset based revolving credit facility due 2028, which is governed by a borrowing base calculation that fluctuates with business seasonality. Revolver availability totaled about $536 million on September 30, 2023. The company uses the revolver for working capital, bolt-on acquisitions and discretionary dividends. Excluding dividends, Moody's expects solid free cash flow generation over the next 12-18 months. FBM usually has negative cash from operations in its first quarter due to seasonality but generates most of its cash flow in the second half of the year. Excess cash will be used to reduce revolver borrowings. FBM's asset based revolving credit facility's principal financial covenant is based on revolver availability. If revolver availability is less than the greater of i) 10% of the line cap, defined as the lesser of the aggregate commitment and borrowing base, and ii) $50.625 million, FBM then must maintain a minimum fixed-charge coverage ratio of 1.0x or until revolver availability is restored to levels in excess of the previously stated triggers. Moody's project FBM will maintain more than sufficient revolver availability, so it does not trigger its fixed-charge covenant over the next twelve months. FBM's senior secured term loan does not have financial maintenance covenants. The company's assets secure its bank borrowings, limiting alternate sources of liquidity. The stable outlook reflects Moody's expectation that FBM will continue to perform well despite moderating end markets. Good liquidity and no material maturities until 2028 further support the stable outlook. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS The ratings could be upgraded if adjusted debt-to-EBITDA is sustained below 4.5x and adjusted EBITA-to-interest expense is sustained above 3x. An upgrade would also require maintenance of good liquidity and more predictable financial policies regarding capital deployment. The ratings could be downgraded if adjusted debt-to-EBITDA is sustained above 6x or if EBITA-to-interest expense is sustained below 2x. The ratings could also be downgraded if there is a deterioration of the company's profit margins or a deterioration of its liquidity profile including cash flow or revolver availability. A downgrade could also result if the company undertakes aggressive acquisitions or shareholder return initiatives. Foundation Building Materials, Inc., headquartered in Santa Ana, California, is a national distributor of wallboard, suspended ceilings systems, metal framing, insulation and other material. American Securities, through its affiliates, is the owner of FBM. The principal methodology used in these ratings was Distribution and Supply Chain Services published in February 2023. FOUNDATION BUILDING: S&P Rates New $1BB Term Loan B-2 'B' --------------------------------------------------------- S&P Global Ratings assigned its 'B' issue-level rating and '4' recovery rating to Foundation Building Materials Inc.'s (FBM) proposed $1 billion incremental term loan B-2 due 2031. The '4' recovery rating indicates S&P's expectation for average (30%-50%; rounded estimate: 40%) recovery in the event of a payment default. The company will use the term loan proceeds to partially pay down a holding company seller note and pay a shareholder dividend. S&P said, "We believe the company's leverage will rise as a result of the incremental debt raised to pay down the seller note and shareholder dividend. As of Sept. 30, 2023, FBM's S&P Global Ratings-adjusted debt to EBITDA was 3.5x. We expect FBM's S&P Global Ratings-adjusted debt leverage to be at 5.1x through 2024, below our downside trigger of 7x. FBM maintains a cushion in its credit metrics at the current rating, along with adequate liquidity and our expectation that commercial demand for wallboard and suspended ceiling systems will remain steady. "All our ratings on the company, including our 'B' issuer credit rating, are unchanged. The outlook is stable." G&G EXPRESS: Melissa Haselden Named Subchapter V Trustee -------------------------------------------------------- The U.S. Trustee for Region 7 appointed Melissa Haselden, Esq., at Haselden Farrow, PLLC as Subchapter V trustee for G&G Express, Inc. Ms. Haselden will be paid an hourly fee of $550 for her services as Subchapter V trustee and will be reimbursed for work-related expenses incurred. Ms. Haselden declared that she is a disinterested person according to Section 101(14) of the Bankruptcy Code. The Subchapter V trustee can be reached at: Melissa A. Haselden, Esq. Haselden Farrow, PLLC 700 Milam, Suite 1300 Pennzoil Place Houston, TX 77002 Telephone: (832) 819-1149 Facsimile: (866) 405-6038 Email: mhaselden@haseldenfarrow.com About G&G Express G&G Express, Inc., a company in Laredo, Texas, filed a petition under Chapter 11, Subchapter V of the Bankruptcy Code (Bankr. S.D. Texas Case No. 24-50003) on Jan. 9, 2024, with $2,255,500 in assets and $184,076 in liabilities. Jamie Gomez, owner, signed the petition. Robert Newark, Esq., at A Newark Firm represents the Debtor as legal counsel. GALLUS DETOX: Court OKs Deal with FundKite on Cash Access --------------------------------------------------------- The U.S. Bankruptcy Court for the District of Colorado authorized Gallus Detox Services, Inc. and affiliates to use cash collateral in accordance with their agreement with AKF, Inc., dba FundKite. On August 1, 2023, Scottsdale and Dallas entered into respective "Revenue Purchase Agreements" with FundKite. On August 2, 2023, Denver entered into a "Revenue Purchase Agreement" with FundKite. On November 15, 2023, the Debtors filed their Motion for Authority to Use Cash Collateral, seeking to use funds in which FundKite and other parties asserted an interest. FundKite filed their Objection to the Debtors' Motion for Authority to Use Cash Collateral on November 20, 2023. The Court entered an Interim Order Authorizing Use of Cash Collateral on November 22, 2023, setting a final hearing on the Debtors' use of cash collateral and ordering the Debtors to escrow funds that may be subject to FundKite's interest pending a determination as to the issues between the Parties. The parties agreed that Fundkite will have an allowed secured claim in the amount of $498,000, secured by accounts and the proceeds thereof to the extent of the pre-petition FundKite Agreements and any applicable security interests granted therein and perfected by virtue of a subsequent prepetition UCC-1 Financing Statement. The Debtors will remit payments as follows: a. $120,000 from January 1, 2024 comprised of one monthly payment on January 1, 2024 in the amount of $10,000 and 48 weekly payments in the amount of $2,292 beginning on February 1, 2024 and continuing weekly thereafter; b. 52 weekly payments in the amount of $3,462 beginning on January 1, 2025; c. 26 weekly payments in the amount of $5,000 beginning on January 1, 2026; and d. One payment due on or about July 1, 2026 in the amount of $67,994. If the Debtor fails to make any payment, FundKite will provide written notice by mail and electronic mail to the Debtors and undersigned counsel. The Debtors will have a 10 day period in which to cure any alleged defaults and if the Debtors fail to cure the asserted default, FundKite may proceed to exercise any applicable rights at that time, including, but not limited to seeking entry of an Order from the Bankruptcy Court revoking the use of cash collateral. A copy of the stipulation is available at https://urlcurt.com/u?l=k3LN0l from PacerMonitor.com. A copy of the order is available at https://urlcurt.com/u?l=vc7HBy from PacerMonitor.com. About Gallus Detox Services, Inc. Gallus Detox Services, Inc. offers safe, effective, evidence-based, and highly personalized treatment for individuals struggling with substance abuse and substance use disorders. The Debtors sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. D. Colo. Lead Case No. 23-15280) on November 14, 2023. In the petition signed by Warren Olsen, chief executive officer, the Debtor disclosed up to $500,000 in assets and up to $10 million in liabilities. Joseph G Rosania Jr. and Thomas B Mcnamara oversee the cases. Keri L. Riley, Esq., at KUTNER BRINEN DICKEY RILEY PC, represents the Debtor as legal counsel. GALLUS DETOX: Court OKs Deal With Lionheart on Cash Access ---------------------------------------------------------- The U.S. Bankruptcy Court for the District of Colorado authorized Gallus Detox Services, Inc. and affiliates to use cash collateral in accordance with their agreement with Lionheart Funding, LLC. On November 1, 2023, the Debtors entered into a Standard Merchant Cash Advance Agreement with Lionheart. On November 15, 2023, the Debtors filed their Motion for Authority to Use Cash Collateral, seeking to use funds in which Lionheart and other parties asserted an interest. Lionheart filed its Objection to the Debtors' Motion for Authority to Use Cash Collateral on November 20, 2023. The Court entered an Interim Order Authorizing Use of Cash Collateral on November 22, 2023, setting a final hearing on the Debtors' use of cash collateral and ordering the Debtors to escrow funds that may be subject to Lionheart's interest pending a determination as to the issues between the Parties. The parties agreed that Lionheart will have an allowed secured claim in the amount of $136,000, secured by receivables of the Debtors to the extent of the pre-petition Lionheart Agreements and any applicable security interests granted therein and perfected by virtue of a subsequent UCC-1 Financing Statement. As adequate protection of Lionheart's interest and payment of its claim, the Debtors will pay Lionheart's claim in full over twenty-four months beginning on January 1, 2024 comprised of weekly payments in the amount of $1,308. In the event of a default, Lionheart will provide written notice by mail and electronic mail to the Debtors and undersigned counsel. The Debtors will have a 10 day period in which to cure any alleged defaults and if the Debtors fail to cure the asserted default, Lionheart may proceed to exercise any applicable rights, including seeking entry of an Order from the Bankruptcy Court revoking the use of cash collateral. A copy of the stipulation is available at https://urlcurt.com/u?l=25HEgm from PacerMonitor.com. A copy of the order is available at https://urlcurt.com/u?l=sJai89 from PacerMonitor.com. About Gallus Detox Services, Inc. Gallus Detox Services, Inc. offers safe, effective, evidence-based, and highly personalized treatment for individuals struggling with substance abuse and substance use disorders. The Debtors sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. D. Colo. Lead Case No. 23-15280) on November 14, 2023. In the petition signed by Warren Olsen, chief executive officer, the Debtor disclosed up to $500,000 in assets and up to $10 million in liabilities. Joseph G Rosania Jr. and Thomas B Mcnamara oversee the cases. Keri L. Riley, Esq., at KUTNER BRINEN DICKEY RILEY PC, represents the Debtor as legal counsel. GALLUS DETOX: Court OKs Deal With MYNT on Cash Collateral Access ---------------------------------------------------------------- The U.S. Bankruptcy Court for the District of Colorado authorized Gallus Detox Services, Inc. and affiliates to use cash collateral in accordance with their agreement with MYNT Advance. On August 22, 2023, the Debtors entered into a Standard Merchant Cash Advance Agreement with MYNT. On November 15, 2023, the Debtors filed their Motion for Authority to Use Cash Collateral, seeking to use funds in which MYNT and other parties asserted an interest. MYNT filed their Objection to the Debtors’ Motion for Authority to Use Cash Collateral on November 20, 2023. The Court entered an Interim Order Authorizing Use of Cash Collateral on November 22, 2023, setting a final hearing on the Debtors' use of cash collateral and ordering the Debtors to escrow funds that may be subject to MYNT's interest pending a determination as to the issues between the Parties. The parties agreed that MYNT will have an allowed secured claim in the amount of $292,000, secured by receivables of the Debtors to the extent of the pre-petition MYNT Agreements and any applicable security interests granted therein and perfected by virtue of a subsequent UCC-1 Financing Statement. As adequate protection of MYNT's interest and payment of its claim, the Debtors will pay MYNT's claim in full over sixty months beginning on January 1, 2024 comprised of weekly payments in the amount of $1,123. In the event of a default, MYNT will provide written notice by mail and electronic mail to the Debtors and undersigned counsel. The Debtors will have a 10 day period in which to cure any alleged defaults and if the Debtors fail to cure the asserted default, MYNT may proceed to exercise any applicable rights, including seeking entry of an Order from the Bankruptcy Court revoking the use of cash collateral. A copy of the stipulation is available at https://urlcurt.com/u?l=1Nas3Z from PacerMonitor.com. A copy of the order is available at https://urlcurt.com/u?l=hmNoGD from PacerMonitor.com. About Gallus Detox Services, Inc. Gallus Detox Services, Inc. offers safe, effective, evidence-based, and highly personalized treatment for individuals struggling with substance abuse and substance use disorders. The Debtors sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. D. Colo. Lead Case No. 23-15280) on November 14, 2023. In the petition signed by Warren Olsen, chief executive officer, the Debtor disclosed up to $500,000 in assets and up to $10 million in liabilities. Joseph G Rosania Jr. and Thomas B Mcnamara oversee the cases. Keri L. Riley, Esq., at KUTNER BRINEN DICKEY RILEY PC, represents the Debtor as legal counsel. GAUCHO GROUP: Grosses $100K From Sale of Common Shares ------------------------------------------------------ Gaucho Group Holdings, Inc. disclosed in a Form 8-K filed with the Securities and Exchange Commission that pursuant to the private placement previously disclosed by the Company, the Company issued a total of 166,667 shares of common stock for gross proceeds of $100,000 at $0.60 per share on Jan. 15, 2024. The Private Placement is conducted pursuant to Section 4(a)(2) of the Securities Act and/or Rule 506(b) of Regulation D promulgated under the Securities Act. The shares are only offered to a small select group of accredited investors, as defined in Rule 501 of Regulation D, all of whom have a substantial pre-existing relationship with the Company. The Company filed a Form D on Dec. 15, 2023 and an amended Form D on Jan. 11, 2024. As previously reported on its Current Report on Form 8-K filed on Nov. 27, 2023, Gaucho Group commenced a private placement of shares of common stock for gross proceeds of up to $4,000,000 at a price per share which equals the Nasdaq Rule 5653(d) Minimum Price definition, but in no event at a price per share lower than $0.60. About Gaucho Group Headquartered in New York, NY, Gaucho Group Holdings, Inc.'s (gauchoholdings.com) mission has been to source and develop opportunities in Argentina's undervalued luxury real estate and consumer marketplace. The Company has positioned itself to take advantage of the continued and fast growth of global e-commerce across multiple market sectors, with the goal of becoming a leader in diversified luxury goods and experiences in sought after lifestyle industries and retail landscapes. Gaucho reported a net loss of $21.83 million for the year ended Dec. 31, 2022, compared to a net loss of $2.39 million for the year ended Dec. 31, 2021. As of Sept. 30, 2023, the Company had $18.91 million in total assets, $11.02 million in total liabilities, and $7.89 million in total stockholders' equity. In its Quarterly Report for the three months ended Sept. 30, 2023, Gaucho disclosed that based upon projected revenues and expenses, the Company may not have sufficient funds to operate for the next twelve months from the date of the report. Since its inception, the Company's operations have primarily been funded through proceeds received from equity and debt financings. The Company believes it has access to capital resources and continues to evaluate additional financing opportunities. There is no assurance that the Company will be able to obtain funds on commercially acceptable terms, if at all. There is also no assurance that the amount of funds the Company might raise will enable the Company to complete its development initiatives or attain profitable operations. These factors raise substantial doubt about the Company's ability to continue as a going concern. GCM GROSVENOR: Moody's Affirms Ba2 CFR & Alters Outlook to Positive ------------------------------------------------------------------- Moody's Investors Service has affirmed GCM Grosvenor Inc.'s (Grosvenor) Corporate Family Rating of Ba2 and Probability of Default rating of Ba2-PD and also the senior secured bank credit facility ratings (issued by Grosvenor Capital Management Holdings, LLLP) of Ba2. The outlook is changed to positive from stable. RATINGS RATIONALE The change in outlook to positive from stable to reflects improvement in Grosvenor's credit metrics driven by organic AUM growth, increasing AUM mix diversification, lower financial leverage and an expanding fee related earnings margin. The company has continued to grow private markets management fees despite a difficult fundraising environment for private market managers due the lack of realizations from M&A and IPO activity. During the outlook period, Moody's will be monitoring to see whether Grosvenor's operational momentum will be sustained, including whether recent positive trends in net client flows and leverage are sustained. Moody's will also look to see whether the company's Pre-Tax Income margins and general capital markets conditions improve. Improvements in the overall fundraising environment and an easing of liquidity constraints faced by LPs will likely to lead more organic AUM growth in the company's private markets platform. The affirmation in the Ba2 CFR is supported by a number of strengths, including steady and more diversified organic growth in AUM, improvements in leverage trends and organizational stability. AUM as of Q3 2023 was at $76 bn, up from $74 bn in YE 2022 and $72 bn in YE 2021. Grosvenor's business continues to diversify, predominantly in Private Market products as its share of AUM increased from 55% of total FPAUM in Q3 2021 to 65% of FPAUM in Q3 2023. Within privates, they have expanded their product range beyond private equity to include infrastructure, impact investing, strategic credit and real estate. Fees in private markets have increased by 10%, while public markets were lower by 5%, however, Moody's remain mindful of the unique risks posed by private illiquid, opaque investments as this segment continues to grow. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS Moody's said factors that could lead to an upgrade include: 1) Annualized organic AUM growth of 2% or higher; 2) Improvement in AUM mix diversification; 3) Pre-tax income margins above 30%; 4) Leverage (Debt/EBITDA) sustained below 3.5x (as measured by Moody's). Moody's said factors that could lead to a return to a stable outlook, or less likely, a downgrade include: 1) AUM replacement rate below 85%; 2) Leverage (Debt/EBITDA) sustained above 5.0x; 3) Pre-tax income margins below 15%; 4) Loss of brand name/reputation due to tainted investments or firm behavior. The principal methodology used in these ratings was Asset Managers Methodology published in November 2019. Headquartered in Chicago, IL, Grosvenor Capital Management Holdings, LLLP is a global alternative asset manager and one of the largest and oldest players in the solutions provider industry. The firm helps clients gain exposure to alternative investments by designing, implementing and managing customized portfolios in both public and private markets. As of September 30, 2023, Grosvenor had approximately $76 billion in assets under management with a predominantly institutional client base. GNSP CORP: Voluntary Chapter 11 Case Summary -------------------------------------------- Debtor: GNSP Corp d/b/a RX Oasis 9304 Balm Riverview Rd. Riverview, FL 33569 Case No.: 24-00300 Chapter 11 Petition Date: January 22, 2024 Court: United States Bankruptcy Court Middle District of Florida Judge: Hon. Catherine Peek Mcewen Debtor's Counsel: Amy Denton Mayer, Esq. STICHTER, RIEDEL, BLAIN & POSTLER, P.A. 110 E. Madison St., Suite 200 Tampa, FL 33602 Tel: 813-229-0144 Email: amayer@srbp.com Estimated Assets: $1 million to $10 million Estimated Liabilities: $1 million to $10 million The petition was signed by Todd Tortoretti as president. A copy of the Debtor's list of 20 largest unsecured creditors is now available for download at PacerMonitor.com. A full-text copy of the petition is available for free at PacerMonitor.com at: https://www.pacermonitor.com/view/LNVC7FQ/GNSP_Corp__flmbke-24-00300__0001.0.pdf?mcid=tGE4TAMA GREEN HYGIENICS: Hires Lee & Associates as Real Estate Broker ------------------------------------------------------------- Green Hygienics Holdings, Inc. seeks approval from the U.S. Bankruptcy Court for the Southern District of California to employ Lee & Associates Commercial Real Estate Services, Inc. as its real estate broker. The broker will market and sell the Debtor's property located at 1876 Round Potrero, Potrero, CA 91963. The broker will receive a commission in the amount of 4 percent of the purchase price. Matt Weaver, principal at Lee & Associates, disclosed in a court filing that his firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. The firm can be reached at: Matt Weaver Lee & Associates Commercial Real Estate Services, Inc. 1902 Wright Place, Suite 180 Carlsbad, CA 92008 Telephone: (760) 448-2458 Email: mweaver@lee-associates.com About Green Hygienics Holdings Green Hygienics Holdings, Inc., formerly known as Takedown Entertainment Inc., focuses on the cultivation and processing of industrial hemp for extracting cannabidiol. It was founded in 2008 and is based in Poway, Calif. Green Hygienics Holdings filed its voluntary petition for relief under Chapter 11 of the Bankruptcy Code (Bankr. S.D. Calif. Case No. 23-01998) on July 11, 2023, with $20,250,600 in assets and $10,291,084 in liabilities. Todd Mueller, chief executive officer, signed the petition. Judge Margaret M. Mann oversees the case. Andrew S. Bisom, Esq., at The Bisom Law Group represents the Debtor as counsel. GUARDIAN CV1: Seeks to Hire Harris Law Practice LLC as Counsel -------------------------------------------------------------- Guardian CV1, LLC seeks approval from the U.S. Bankruptcy Court for the District of Nevada to hire Harris Law Practice LLC as its bankruptcy counsel. The firm's services include: a. examining and preparing records and reports as required by the Bankruptcy Code, Federal Rules of Bankruptcy Procedure and Local Bankruptcy Rules; b. preparing of applications and proposed orders to be submitted to the Court; c. identifying and prosecuting of claims and causes of action 8 assertable by Debtor on behalf of the estate; d. examining proofs of claims anticipated to be filed and the possible prosecution of objections to certain claims; e. advising the Debtor and preparing documents in connection with the contemplated operation of the Debtor's business; f. assisting and advising the Debtor in performing other official functions as set forth in Section 521 of the Bankruptcy Code; and g. advising and preparing a plan of reorganization, and related documents, and confirmation of said plan, as provided in Section 1189, et se. of the Bankruptcy Code. The firm will be paid at these rates: Stephen R. Harris, Esq. $635 per hour Norma Guariglia, Esq. $475 per hour Paraprofessional services, Esq. $175 per hour The firm received a retainer in the amount of $1,738. The firm will also be reimbursed for reasonable out-of-pocket expenses incurred. Stephen Harris, a partner at Harris Law Practice LLC, disclosed in a court filing that the firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. The firm can be reached at: Stephen R. Harris, Esq. HARRIS LAW PRACTICE LLC 850 E. Patriot Blvd., Suite F Reno, NV 89511 Telephone: (775) 786-7600 Email: steve@harrislawreno.com Abour Guardian CV1, LLC Guardian CV1, LLC is a holding company for approximately sixty-seven rental properties located primarily in Ohio, Missouri, and Alabama. Guardian CV1, LLC filed is voluntary petition for relief under Chapter 11 of the Bankruptcy Code (Bankr. D. Nev. Case No. 23-509501) on Dec 14, 2023, listing $1 million to $10 million in both assets and liabilities. The petition was signed by Aaron M. Noe, president, El Monte Capital, Inc., Manager. Judge Hilary L. Barnes presides over the case. Norma Guariglia, Esq. and Stephen R. Harris, Esq. at HARRIS LAW PRACTICE LLC represents the Debtor as counsel. GUARDIAN CV2: Seeks to Hire Harris Law Practice LLC as Counsel -------------------------------------------------------------- Guardian CV2, LLC seeks approval from the U.S. Bankruptcy Court for the District of Nevada to hire Harris Law Practice LLC as its bankruptcy counsel. The firm's services include: a. examining and preparing records and reports as required by the Bankruptcy Code, Federal Rules of Bankruptcy Procedure and Local Bankruptcy Rules; b. preparing of applications and proposed orders to be submitted to the Court; c. identifying and prosecuting of claims and causes of action assertable by Debtor on behalf of the estate; d. examining proofs of claims anticipated to be filed and the possible prosecution of objections to certain claims; e. advising the Debtor and preparing documents in connection with the contemplated operation of the Debtor's business; f. assisting and advising the Debtor in performing other official functions as set forth in Section 521 of the Bankruptcy Code; and g. advising and preparing a plan of reorganization, and related documents, and confirmation of said plan, as provided in Section 1189, et se. of the Bankruptcy Code. The firm will be paid at these rates: Stephen R. Harris, Esq. $635 per hour Norma Guariglia, Esq. $475 per hour Paraprofessional services, Esq. $175 per hour The firm received a retainer in the amount of $1,738. The firm will also be reimbursed for reasonable out-of-pocket expenses incurred. Stephen Harris, a partner at Harris Law Practice LLC, disclosed in a court filing that the firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. The firm can be reached at: Stephen R. Harris, Esq. HARRIS LAW PRACTICE LLC 850 E. Patriot Blvd., Suite F Reno, NV 89511 Telephone: (775) 786-7600 Email: steve@harrislawreno.com Abour Guardian CV2, LLC Guardian CV2, LLC is a holding company for approximately sixty-four rental properties located primarily in Ohio, Missouri, and Alabama. Guardian CV2, LLC filed is voluntary petition for relief under Chapter 11 of the Bankruptcy Code (Bankr. D. Nev. Case No. 23-50952) on Dec 14, 2023, listing $1 million to $10 million in both assets and liabilities. The petition was signed by Aaron M. Noe, president, El Monte Capital, Inc., Manager. Judge Hilary L. Barnes presides over the case. Norma Guariglia, Esq. and Stephen R. Harris, Esq. at HARRIS LAW PRACTICE LLC represents the Debtor as counsel. HARTMAN SPE: Hires Hirsch & Westheimer as Special Finance Counsel ----------------------------------------------------------------- Hartman SPE, LLC seeks approval from the U.S. Bankruptcy Court for the District of Delaware to employ Hirsch & Westheimer, P.C. as its special finance counsel. Prepetition, the Debtor began the process of transitioning its business model from office, industrial, and retail space into self-storage and began liquidating its portfolio of properties to facilitate the transition. The Debtor's efforts have led to a substantial pay down of that certain secured term loan agreement between the Debtor and Goldman Sachs Mortgage, as lender, in the original principal amount of $259 million and opened the door for refinancing. Due to the improper cloud on title caused by the actions of Hartman vREIT XXI, Inc., the holder of 2.47% of the Debtor's interests, the Debtor was unable to consummate the loan prepetition. However, and as more fully described in the Combined Disclosure Statement and Plan, following the resolution of the Debtor's declaratory judgment action against the Hartman Minority Member initiated on September 28, 2023 by way of an adversary complaint, the Debtor and certain of its affiliates and the exit lender and certain of its affiliates continued in discussions regarding the terms of one or more loans, referred here as the "Exit Facility," to be used to refinance the Prepetition Loan, pay allowed claims in full under the Combined Disclosure Statement and Plan, and provide funds to permit the Debtor to continue to transition its business model into self-storage properties. The firm will assist the Debtor with finalizing and consummating the Exit Facility. The firm will be paid at these rates: Partners $500 - $700 per hour Associates $250 - $425 per hour Para-Professionals $150 - $265 per hour The firm will also be reimbursed for reasonable out-of-pocket expenses incurred. Bradley Rauch, Esq., a partner at Hirsch & Westheimer, P.C., disclosed in a court filing that the firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. The firm can be reached at: Bradley Rauch, Esq. HIRSCH & WESTHEIMER, P.C. 1415 Louisiana Street 36th Floor Wedge International Tower Houston, TX 77002 Tel: (713) 223-5181 Email: info@hirschwest.com About Hartman SPE, LLC Hartman SPE, LLC is a lessor of nonresidential buildings based in Houston, Texas. Hartman SPE filed a voluntary Chapter 11 petition (Bankr. D. Del. Lead Case No. 23-11452) on Sept. 13, 2023, with $100 million to $500 million in both assets and liabilities. David Wheeler, president, signed the petition. Judge Mary F. Walrath oversees the case. The Debtor tapped Katten Muchin Rosenman, LLP as bankruptcy counsel; Chipman Brown Cicero & Cole, LLP as Delaware counsel; and Epiq Corporate Restructuring, LLC as administrative advisor. HERITAGE LAB: Seeks to Hire Laxmi Sarathy as Bankruptcy Counsel --------------------------------------------------------------- Heritage Lab Express, Inc. filed an emergency application seeking approval from the U.S. Bankruptcy Court for the Northern District of Illinois to employ Laxmi Sarathy, Esq., an attorney practicing in Chicago, Ill., to handle its Chapter 11 case. Ms. Sarathy will render these services: (a) advise the Debtor with respect to its powers and duties; (b) negotiate, draft, and pursue all documentation necessary in this case; (c) prepare legal papers; (d) perform necessary legal work regarding approval of the disclosure statement(s) (if required) and plan; (e) appear in court and in protect the interests of the Debtor before the court; (f) assist with any disposition of the Debtor's assets, by sale or otherwise; (g) attend all meetings and negotiate with representatives of creditors, the United States Trustee, and other parties-in-interest; (h) advise the Debtor regarding bankruptcy law, corporate law, corporate governance, transactional, tax, labor, litigation, and other issues in connection with its ongoing business operations; and (i) perform other necessary legal work as required for this case. Ms. Sarathy will be paid at her hourly rate of $375. Paralegals will be paid an hourly fee of $100. Laxmi P. Sarathy has received a total of $5,000 for attorney's fees from the Debtor. In court filings, Ms. Sarathy disclosed that she is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. The attorney can be reached at: Laxmi P. Sarathy, Esq. WHITESTONE P.C. 17W775 Butterfield Rd, Suite 114 Chicago, IL 60181 Telephone: (312) 674-7965 Facsimile: (312) 873-4774 Email: Lsarathy@whitestonelawgroup.com About Heritage Lab Express Heritage Lab Express, Inc. filed a petition under Chapter 11, Subchapter V of the Bankruptcy Code (Bankr. N.D. Ill. Case No. 24-00206) on Jan. 8, 2024, with $100,001 to $500,000 in assets and $500,001 to $1 million in liabilities. Judge Timothy A. Barnes oversees the case. Laxmi P. Sarathy, Esq., at Whitestone, P.C. represents the Debtor as legal counsel. IMAGINE LEARNING: Moody's Rates New First Lien Loans 'B2' --------------------------------------------------------- Moody's Investors Service assigned a B2 rating to Imagine Learning LLC's proposed new first lien credit facility consists of a new $125 million senior secured revolving credit facility due September 2029 and a new $922 million senior secured term loan due December 2029. Proceeds from the new first lien term loan will be used to refinance the existing term loan. The company's existing ratings including the B2 Corporate Family Rating and B2-PD Probability of Default Rating are not affected. The outlook is stable. The leverage neutral transaction is credit positive as it results in modest interest expense savings from a proposed 25 basis point reduction in the interest rate spread as well as pushing out the maturity of the term loan by two years. Pro forma for this transaction, Moody's adjusted debt-to-EBITDA is in the mid 4x range for the 12 month period ended September 30, 2023 (leverage would be in the high 4x after deducting content development cost). Moody's expects leverage to decline modestly to the low 4x range over the next year through earnings growth in the mid-single digit percentage range. Moody's expects good liquidity for the next year with estimated cash of $160 million at year end 2023, an undrawn revolver, expectation of positive free cash flow generation as well as no near term refinancing needs. RATINGS RATIONALE Imagine Learning's B2 CFR reflects its moderately high leverage with Moody's adjusted debt-to-EBITDA in the mid 4x for the LTM period ended September 30, 2023 (leverage would be in the high 4x after deducting content development cost). Moody's EBITDA does not include change in deferred revenue. The rating also reflects the company's modest scale as measured by revenue, as well as the fragmented and competitive market in which it operates. Imagine Learning has to continuously invest in content creation and software platforms to maintain competitive product offerings. The company significantly increased its capital spending over the last couple of years, which led to weaker free cash flow generation. Additionally, aggressive financial policies are a credit risk as evidenced by the December 2020 debt funded dividend transaction as well as a history of debt-financed tuck-in acquisitions. However, the rating is supported by Imagine Learning's established position as a provider of digital and print curriculum, intervention and supplemental learning tools for the K-12 market. In addition, the rating benefits from longer term favorable industry fundamentals with school districts adopting digital education tools. Good liquidity with no near term refinancing needs also support the rating. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS The stable outlook reflects Moody's expectation that Imagine Learning's Moody's adjusted debt-to-EBITDA leverage will decline very modestly to the low 4x range over the next year. The stable outlook also reflects Moody's expectation that the company will maintain good liquidity over the next year including positive free cash flow. The ratings could be upgraded if Imagine Learning delivers sustained revenue and earnings growth, with Moody's adjusted debt-to-EBITDA sustained below 4.5x (after deducting content development cost) and free cash flow as a percentage of debt sustained in the high single digit percentage. The ratings could be downgraded if there is deterioration in operating performance or if the company does not maintain sufficient investment levels to sustain competitive product offerings and the revenue base. EBITA-to-interest expense less than 1.5x or weakening of liquidity including weak free cash flow generation could also prompt a downgrade. The principal methodology used in these ratings was Business and Consumer Services published in November 2021. Imagine Learning LLC, headquartered in Scottsdale, Arizona, is a provider of digital online educational curriculum content and services primarily to K-12 schools in the United States. The company was acquired by Silver Lake Partners in a 2018 leveraged buyout with a subsequent equity purchase by Onex Partners. The company generated revenue of roughly $683 million for the trailing twelve months ended September 30, 2023. INTEGRITY TIRE: William Homony Named Subchapter V Trustee --------------------------------------------------------- The U.S. Trustee for Regions 3 and 9 appointed William Homony of Miller Coffey Tate, LLP as Subchapter V trustee for Integrity Tire, LLC. Mr. Homony will be paid an hourly fee of $400 for his services as Subchapter V trustee and will be reimbursed for work-related expenses incurred. Mr. Homony declared that he is a disinterested person according to Section 101(14) of the Bankruptcy Code. The Subchapter V trustee can be reached at: William A. Homony, CIRA Miller Coffey Tate, LLP 1628 John F. Kennedy Boulevard, Suite 950 Philadelphia, PA 19103 Telephone: (215) 561-0950 ext. 26 Fax: (215) 561-0330 Email: bhomony@mctllp.com About Integrity Tire Integrity Tire, LLC offers name brand tires, wheels and tire repair services to customers. The company is based in Camden Wyoming, Del. The Debtor filed Chapter 11 petition (Bankr. D. Del. Case No. 24-10038) on Jan. 12, 2024, with up to $100,000 in assets and up to $10 million in liabilities. Jesse Zimmerman, president, signed the petition. Judge Laurie Selber Silverstein oversees the case. Adam Hiller, Esq., at Hiller Law, LLC represents the Debtor as bankruptcy counsel. LA TOOL: Lender Seeks to Prohibit Cash Collateral Access -------------------------------------------------------- First National Bank of Pennsylvania asks the U.S. Bankruptcy Court for the Western District of Pennsylvania to prohibit LA Tool, Inc. from using cash collateral. The Debtor is indebted to FNB pursuant to the terms of the following loan documents: (a) A Promissory Note, in favor of Movant, in the amount of $200,000, dated November 22, 2019, and executed by the Debtor; (b) A Commercial Security Agreement dated November 22, 2019, pursuant to which the Debtor granted the Bank a security interest in the Debtor's inventory, accounts, equipment, chattel paper, documents and general intangibles. FNB obtained a judgment against the Debtor via Complaint in Confession on August 1, 2023, in the amount of $200,565 and at Westmoreland County Case Number 2978 of 2023. As of the Petition Date, the balance owing under the Note was $193,457. To the extent that the Debtor is authorized to use cash collateral, the use should be conditioned upon granting adequate protection to Movant, which must, at a minimum, include the following: a. adherence by the Debtor to an operating budget acceptable to Movant; b. adequate protection payments to Movant in the amount of $2,560, requisite payment to amortize the principal balance over five years at the current contractual rate; c. replacement liens on the Collateral, which liens will be first and prior liens; d. additional liens on other assets of the Debtor, junior to liens properly perfected as of the Petition Date, to compensate Movant for Cash Collateral improperly by the Debtor since the Petition Date. e. maintenance of adequate insurance on the Collateral; f. a requirement that the Debtor keep all of the Collateral maintained and in good condition and repair; g. immediate redress in the event of a default under its obligations upon which cash collateral use is conditioned; and h. the granting of Movant of a super-priority administrative claim to the extent FNB suffers a failure of adequate protection due to the Debtor's use of Collateral and cash collateral. A copy of the motion is available at https://urlcurt.com/u?l=RQmiyU from PacerMonitor.com. About LA Tool, Inc. LA Tool is engaged in the business of plastic product manufacturing. LA Tool, Inc. filed its voluntary petition for relief under Chapter 11 of the Bankruptcy Code (Bankr. W.D. Pa. Case No. 23-22653) on Dec. 10, 2023. The petition was signed by Matthew Redmond as chief financial officer. At the time of filing, the firm estimated $500,000 to $1 million in assets and $1 million to $10 million in liabilities. Judge Jeffery A. Deller oversees the case. Gregory C. Michaels, Esq. at DICKIE MCCAMEY & CHILCOTE, P.C. represents the Debtor as counsel. LAST CHANCE REALTY: Hires Bronson Law Offices as Counsel -------------------------------------------------------- Last Chance Realty Corp. seeks approval from the U.S. Bankruptcy Court for the Southern District of New York to employ Bronson Law Offices, P.C. as counsel. The firm will provide these services: (a) assist in the administration of the Debtor's Chapter 11 case; (b) prepare or review operating reports; (c) set a deadline for filing proofs of claim; (d) seek court approval to use cash collateral; (e) review claims and resolve claims, which should be disallowed; and (f) assist in reorganizing and confirming a Chapter 11 plan. The firm will be paid at these rates: H. Bruce Bronson, Esq. $495 per hour Paralegal or Legal Assistant $150 to $250 per hour The firm received a retainer in the amount of $7,000. As disclosed in court filings, Bronson Law Offices does not represent any interest adverse to the Debtor and its estate. The firm can be reached at: H. Bruce Bronson, Esq. BRONSON LAW OFFICES, P.C. 480 Mamaroneck Ave. Harrison, NY 10528 Tel: (914) 269-2530 Fax: (888) 908-6906 Email: hbbronson@bronsonlaw.net About Last Chance Realty Corp. Last Chance Realty Corp., filed a Chapter 11 bankruptcy petition (Bankr. S.D.N.Y. Case No. 23-22829) on November 8, 2023, disclosing under $1 million in both assets and liabilities. The Debtor is represented by BRONSON LAW OFFICES PC. LEGENCE HOLDINGS: Moody's Affirms 'B2' CFR, Outlook Remains Stable ------------------------------------------------------------------ Moody's Investors Service affirmed Legence Holdings, LLC's B2 corporate family rating, B2-PD probability of default rating, and B2 ratings on the senior secured bank credit facilities. The outlook is maintained at stable. "The ratings affirmation and stable outlook reflect Moody's expectation for EBITDA and free cash flow to grow in 2024," says Justin Remsen, Moody's Assistant Vice President. "While Moody's anticipate Legence's double digit revenue growth to moderate, the company's backlog underpins healthy demand for its broad service offerings. Solid operating performance and incremental profitability from acquisitions in early 2024 will result in leverage declining to low 6x by the end of 2024," added Remsen. RATINGS RATIONALE Legence's B2 CFR reflects its acquisitive growth strategy, frequently funded through incremental debt. The ongoing M&A not only elevates event and integration risk, but also maintains leverage at relatively high levels. The rating is also constrained by a limited track record of free cash flow generation, although Moody's expects this to continue to improve in the forward view absent material M&A activity. The rating also considers Legence's broad service offering and diversified customer base in improving energy efficiency in existing buildings. Legence's end markets, including education, healthcare, and technology companies, exhibit stable growth, and the company will continue to benefit from secular change related to energy efficiency and sustainability. Significant backlog levels also support organic growth and provide near-term revenue visibility. The stable outlook reflects Moody's expectation that Legence will grow organically and through acquisitions. Moody's expect the company to reduce financial leverage through EBITDA growth to below its downgrade trigger of 6.5x within the next 12-18 months. Legence has good liquidity, which Moody's expects to be maintained over the next 12 to 18 months. Pro forma for the incremental term loan, the company will have over $200 million cash on the balance sheet. Moody's expects Legence to generate about $40 million free cash flow in 2024, which supports minimal reliance on its $90 million revolving credit facility over the next 12 to 18 months. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS The ratings could be upgraded if financial leverage is sustained below 5.5x and adjusted EBITA to interest expense is sustained above 3.0x. In addition, the company would need to maintain conservative financial policies and and maintain good liquidity. The ratings could be downgraded if financial leverage is sustained above 6.5x, adjusted EBITA to interest expense is sustained below 2.0x, or the company's liquidity weakens. Moody's could also downgrade the ratings if there is an acceleration of debt-funded acquisition activity or a significant shareholder return. Headquartered in San Jose, California, Legence Holdings LLC provides design and build (mechanical, electrical, plumbing) for facilities, consulting engineering with a focus on energy efficiency, performance contracting, and ESG advisory services. The principal methodology used in these ratings was Business and Consumer Services published in November 2021. LEXARIA BIOSCIENCE: May Issue 527,111 Shares Under Equity Plan -------------------------------------------------------------- Lexaria Bioscience Corp. filed with the Securities and Exchange Commission a Form S-8 registration statement to register an additional 527,111 shares of common stock, par value $0.001 per share of the Company, which are issuable pursuant to awards that may be granted under the Company's Equity Incentive Plan, as amended. The additional shares have become reserved for issuance as a result of the operation of the "evergreen" provision in the Plan. Under the Plan, a total of 1,037,544 shares of common stock have been reserved for issuance upon the grant of awards and exercise of options to directors, officers, employees and consultants of the Company and of the Company's affiliates, of which 510,433 shares have been registered pursuant to the Company's previously filed Registration Statement on Form S-8 (File No. 333-258308), filed with the SEC on July 30, 2021, and Form S-8 (File No. 333-231585), filed with the SEC on May 17, 2019. A full-text copy of the Registration Statement is available for free at: https://www.sec.gov/Archives/edgar/data/1348362/000164033424000086/lxrp_s8.htm About Lexaria Lexaria Bioscience Corp. -- http://www.lexariabioscience.com-- is a biotechnology company developing the enhancement of the bioavailability of a broad range of fat-soluble active molecules and active pharmaceutical ingredients using its patented DehydraTECH drug delivery technology. DehydraTECH combines lipophilic molecules or APIs with specific long-chain fatty acids and carrier compounds that improve the way they enter the bloodstream, increasing their effectiveness and allowing for lower overall dosing while promoting healthier oral ingestion methods. Lexaria Bioscience incurred a net loss of $6.71 million for the year ended Aug. 31, 2023, a net loss of $7.38 million for the year ended Aug. 31, 2022, a net loss and comprehensive loss of $4.19 million for the year ended Aug. 31, 2021, a net loss and comprehensive loss of $4.08 million for the year ended Aug. 31, 2020, and a net loss and comprehensive loss of $4.16 million for the year ended Aug. 31, 2019. As of Nov. 30, 2023, the Company had $3.63 million in total assets, $254,040 in total liabilities, and $3.37 million in total stockholders' equity. In its Quarterly Report for the period ended Nov. 30, 2023, Lexaria said that since inception, the Company has incurred significant operating and net losses. Net losses attributable to shareholders were $1.2 million and $1.8 million for the quarters ended November 30, 2023 and 2022, respectively. As of November 30, 2023, the Company had an accumulated deficit of $46.9 million. The Company expects to continue to incur significant operational expenses and net losses in the upcoming 12 months. The Company's net losses may fluctuate significantly from quarter to quarter and year to year, depending on the stage and complexity of its R&D studies and corporate expenditures, additional revenues received from the licensing of its technology, if any, and the receipt of payments under any current or future collaborations it may enter into. The recurring losses and negative cash flows from operations raise substantial doubt as to the Company's ability to continue as a going concern. LION STAR: Taps Donlin Recano as Claims and Noticing Agent ---------------------------------------------------------- Lion Star Nacogdoches Hospital, LLC, doing business as Nacogdoches Memorial Hospital, seeks approval from the U.S. Bankruptcy Court for the Northern District of Texas to employ Donlin, Recano & Company, Inc. as claims and noticing agent. The firm will oversee the distribution of notices and will assist in the maintenance, processing and docketing of proofs of claim filed in the Debtor's Chapter 11 case. The firm will bill these hourly fees: Senior Bankruptcy Consultant $167 - $203 Case Manager $153 - $167 Consultant/Analyst $126 - $149 Technology/Programming Consultant $86 - $122 Clerical $40 - $50 The firm has requested a post-petition retainer in the amount of $30,000. Lisa Terry, senior legal director at Donlin, disclosed in a court filing that the firm is a "disinterested person" pursuant to Section 101(14) of the Bankruptcy Code. The firm can be reached through: Lisa C. Terry, Esq. DONLIN, RECANO & COMPANY, INC. 48 Wall Street New York, NY 10016 Telephone: (646) 872-8743 Email: Lterry@donlinrecano.com About Lion Star Nacogdoches Hospital Lion Star Nacogdoches Hospital, LLC is a provider of healthcare services based in Nacogdoches, Texas. The Debtor filed Chapter 11 petition (Bankr. N.D. Texas Case No. 23-43535) on Nov. 17, 2023, with $10 million to $50 million in both assets and liabilities. Sean Fowler, chief executive officer, signed the petition. Judge Mark X. Mullin oversees the case. The Debtor tapped Jeff P. Prostok, Esq., at Forshey & Prostok, LLP as legal counsel and Curtis W. Fenley, III, Esq., at Fenley & Bate, LLP as special counsel. MASONITE INTERNATIONAL: Moody's Confirms 'Ba1' CFR, Outlook Stable ------------------------------------------------------------------ Moody's Investors Service has confirmed all of Masonite International Corporation's ratings, including its Ba1 corporate family rating, Ba1-PD probability of default rating, and the Ba2 backed senior unsecured notes ratings, with a stable outlook. The company's SGL-1 Speculative Grade Liquidity Rating remains unchanged. Previously, the ratings were on review for downgrade. This rating action concludes the review for downgrade initiated on December 19, 2023. The rating review was prompted by Masonite's December 18, 2023 announcement that the company had entered into an agreement to acquire PGT Innovations, Inc. (PGT), a manufacturer and supplier of impact-resistant windows and doors in the US. Following PGT's receipt of another external offer, on January 16, 2024, Masonite terminated its agreement to acquire the company as the board of directors decided not to submit another offer in order to maintain financial discipline. Moody's view this action as a positive governance consideration and a conservative approach to balance sheet management given the leveraging nature of the original structure of the transaction with the potential for another offer to result in even higher leverage. Masonite also received $84 million in the termination fees related to the dissolution of the acquisition plan. RATINGS RATIONALE Masonite's Ba1 CFR is supported by its: 1) strong market position as one of only two vertically integrated interior molded door manufacturers in North America and geographically diversified sales; 2) strong competitive position that benefits from technology innovation and trendsetting products; 3) conservative financial policy, a strong balance sheet, and Moody's expectation of deleveraging following acquisitions; 4) exposure to the repair and remodeling end market for over half (54%) of total revenue, which is less volatile than new construction in the long term; and 5) solid operating margins, a track record of margin improvement and positive free cash flow supported by productivity initiatives such as automation, facility redesigns, and economies of scale. At the same time, the company's credit profile is constrained by: 1) the cyclicality of residential and commercial end markets and current affordability pressures affecting activity in residential construction and repair and remodeling sectors; 2) the company's shareholder-friendly activities in the form of share repurchases; 3) its acquisition growth strategy, including the appetite for acquisitions transformative in nature, which results in leverage increases, requires good execution to realize expected synergies, and presents integration challenges; and 4) exposure to volatility in raw material input costs including steel, wood and chemicals and inflationary pressures faced by the sector. The stable outlook reflects Moody's expectations that in the next 12-18 months Masonite will maintain its strong market position and conservative financial policies, integrate its acquisitions competed in 2023, while modestly de-levering and generating solid free cash flow. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS The ratings could be upgraded if the company meaningfully expands scale, improves product diversity and customer mix, achieves sustained EBITA margin above 14% and maintains conservative financial policies with respect to leverage, acquisitions and shareholder returns. Debt to EBITDA approaching 2.0x, EBITA to interest coverage above 7.0x and consistently strong free cash flow accompanied by stable end market conditions, and an all unsecured capital structure would be important considerations for an upgrade. The ratings could be downgraded if Masonite's debt to EBITDA is sustained above 3.0x, EBITA to interest expense falls below 5.0x, EBITA margin declines below 10%, or liquidity deteriorates. Additionally if the company engages in substantial debt funded acquisitions and/or shareholder friendly transactions, financial and operating strategies become more aggressive, liquidity deteriorates, or end markets weaken, the ratings could be downgraded. The principal methodology used in these ratings was Manufacturing published in September 2021. Masonite International Corporation is one of the largest vertically integrated manufacturers of doors in the world, offering interior and exterior doors for both residential and commercial end uses in the US, the UK, and Canada. In the last twelve months ended October 1, 2023, Masonite generated $2.8 billion in revenue. MASONITE INTERNATIONAL: S&P Affirms 'BB+' ICR, Off Watch Negative ----------------------------------------------------------------- S&P Global Ratings affirmed its 'BB+' issuer credit rating (ICR) on Masonite International Corp. (Masonite) and its 'BB+' issue-level rating on its senior unsecured debt. The '3' recovery rating on the debt is unchanged, reflecting its expectation of meaningful (50%-70%: rounded estimate 55%) recovery. The stable outlook reflects S&P's expectation that Masonite will generate adjusted debt to EBITDA below 3x and solid free operating cash flow (FOCF). Masonite recently announced that it had terminated its merger agreement to acquire Florida-based impact-resistant windows and doors manufacturer, PGTI, after PGTI's board accepted a competing acquisition proposal from Miter Brands. S&P said, "Had Masonite completed the $3 billion planned acquisition of PGTI, we estimate leverage would have materially increased well above our downside threshold of 3x and was the basis for our CreditWatch placement at the time of the acquisition announcement. With the agreement now terminated, we expect credit measures will remain commensurate with the rating and with what we had expected before the acquisition was announced. These credit measures include adjusted debt to EBITDA below 3x, approaching the mid-2x area in a couple of years, and adjusted FOCF to debt of 15%-20%. As a result, we removed our ratings on Masonite from CreditWatch, and assigned a stable outlook to the company." S&P said, "We do not anticipate a material change to the company's financial policies including any escalation in capital spending and distributions as a result of the cancelled acquisition. While we acknowledge that Masonite's attempt to acquire PGTI would have been the largest in the company's history and would have significantly increased Masonite's leverage, we believe it was a unique scenario and that the company will instead turn its attention to smaller tuck-in acquisitions. "In addition, we believe the company's decision to terminate the deal and waive its right to propose a higher revised offer to acquire PGTI reflects Masonite's commitment to maintaining its conservative financial policy and leverage below its 3x debt-to-EBITDA target. We continue to expect Masonite will generate robust FOCF, with leverage approaching the mid-2x area by 2025 stemming from our expectation of relatively stable earnings over the next few years as adjusted EBITDA from recent acquisitions partially offsets the lower organic growth in earnings from slowing U.S. housing starts. "The stable outlook reflects our expectation that adjusted debt to EBITDA will decline to the mid-2x area over the next couple of years. We assume weaker macroeconomic conditions in the U.S. will lead to lower housing starts and door demand this year. Still, Masonite should be able to maintain leverage below 3x and generate solid FOCF. We believe the company will continue to benefit from incremental earnings from recently completed acquisitions as well as higher average unit prices that help mitigate the effect of lower shipment volumes and inflationary pressures on earnings and cash flows. In addition, we assume Masonite will maintain flexibility to adjust discretionary spending, notable for share repurchases, to limit further increases in leverage. "We could downgrade the company over the next 12 months if we expect Masonite to generate adjusted debt to EBITDA above 3x and funds from operations (FFO) to debt below 30% on a sustained basis. We believe this could occur if U.S. housing starts trend lower than our assumptions, or if the company completes a large debt-financed acquisition. "We believe an upgrade is highly unlikely within the next 12 months given Masonite's narrow operating breadth due to the company's focus on door production. However, we could upgrade Masonite if it completes acquisitions that expand its product base and enhance earnings stability while it maintains adjusted debt to EBITDA in the low-2x area. In the absence of material expansion, we could upgrade the company if we expect its adjusted debt-to-EBITDA ratio will remain below 2x and FFO-to-debt ratio above 45% on a sustained basis, which would likely require more conservative financial policies." METHODIST HOSPITALS: S&P Lowers Revenue Bond LT Rating to 'BB+' --------------------------------------------------------------- S&P Global Ratings lowered its long-term rating to 'BB+' from 'BBB-' on Methodist Hospitals Inc. (Methodist), Ind.'s series 2021 taxable revenue bonds and the Indiana Finance Authority's series 2014 hospital revenue refunding bonds, issued for Methodist. The outlook is stable. "The rating action reflects our view of continued losses in the hospital's financial profile that have contributed to steadily declining days' cash on hand, which leaves the hospital with limited cushion to offset ongoing operating losses," said S&P Global Ratings credit analyst Concy Richards. The stable outlook reflects S&P's view of Methodist's solid unrestricted reserves to long-term debt and light leverage and debt burden, coupled with a management team that is focused on improving operating performance and market position. MILK ROAD: Seeks Cash Collateral Access --------------------------------------- The Milk Road, LLC asks the U.S. Bankruptcy Court for the Eastern District of North Carolina, New Bern Division, for authority to use cash collateral and provide adequate protection. The Debtor requires the use of cash collateral to pay operating expenses, including inventory purchases, payroll, payroll taxes and certain other expenses, including utilities, and insurance. In 2018, Dannell Clark became part-owner and manager of the Debtor, ensuring compliance with regulations and tax obligations. The Debtor failed to file payroll, withholding, and sales taxes. In 2020, the Debtor expanded operations but missed the summer 2021 season. In late 2023, the Debtor filed a Chapter 11 case to repay tax obligations, pay secured claims, and maintain employment for its employees. Prior to the Petition Date, certain UCC-1 filings were on record as related to the Debtor. In order of priority, the purported UCC liens against the cash collateral of the Debtor are: a. File no. 20200092141B; filed on June 28, 2020 in favor of the U.S. Small Business Administration; b. File no. 20210062965E; filed on May 12, 2021 in favor of Amur Equipment Finance; c. File no. 20210081436J; filed on June 17, 2021 in favor of North Star Leasing. The Debtor proposes that those creditors whose cash collateral is utilized will have a continuing post-petition replacement lien and security interest in all property and categories of property of the same extent, validity, and priority as said creditor held prepetition. The validity, enforceability, and perfection of the post-petition replacement liens (provided these liens were valid and enforceable pre-petition) will be immediately deemed perfected, without the need for any further action on the part of any of the creditors. A hearing on the matter is set for January 24, 2024 at 2 p.m. A copy of the motion is available at https://urlcurt.com/u?l=CWosM1 from PacerMonitor.com. About The Milk Road The Milk Road is a limited liability company founded in 2016 in the barracks of Camp Lejeune as a vision of two Navy Corpsmen who wanted to bring quality "fair trade" coffee beans and Liege waffles to North Carolina. The Debtor operates a high-end coffee roastery and cafe in two locations in Jacksonville and Emerald Isle, North Carolina. It employs nearly twodozen employees during the summer months, and about half that number during the off-season. The Debtor sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. E.D. N.C. Case No. 24-00152-5-JNC) on January 17, 2024. In the petition signed by Dannell Suzanne Clark, managing member, the Debtor disclosed up to $100,000 in assets and up to $500,000 in liabilities. Richard P Cook, Esq., at Richard P. Cook. PLLC, represents the Debtor as legal counsel. MIWD HOLDCO II: Moody's Puts 'B1' CFR Under Review for Downgrade ---------------------------------------------------------------- Moody's Investors Service placed the ratings of MIWD Holdco II LLC (dba MITER Brands) under review for downgrade, including the company's B1 corporate family rating, the B1-PD probability of default rating, Ba3 senior secured first lien term loan rating and B3 senior unsecured notes rating. Previously, the outlook was stable. The review for downgrade reflects governance considerations given MITER's pending acquisition of PGT Innovations, Inc. (PGT), which Moody's views as transformative and leveraging. On January 16, 2024, PGT and MITER Brands entered into a definitive merger agreement for MITER to acquire all outstanding shares of PGTI at a price of $42.00 per share in cash, or an enterprise value of approximately $3.1 billion. The company intends to fund the transaction with a combination of new debt, equity and cash on hand. The company received commitments for a $1.8 billion term loan, a $325 million asset-based revolving credit facility and $979 million of an equity investment from Koch Equity Development LLC, the principal investment and acquisition arm of Koch Industries, Inc., and a current investor in MITER. Assuming that the equity interest contributed is in the form of common equity, Moody's expects pro forma leverage to rise above 5x. The transaction is expected to close in the middle of 2024 and is subject to customary closing conditions including applicable regulatory approvals. RATINGS RATIONALE / FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS Moody's review will focus on the strategic operating rationale and the trajectory and opportunities of the combined business over the next 12-18 months, MITER's final capital structure, terms of the securities, and the company's ability and willingness to de-leverage, as well as its free cash flow generation capabilities and uses. Lastly, the review for downgrade will also assess MITER's financial performance and the maintenance of solid credit metrics. Excluding the ratings review, MITER's ratings could be upgraded if the company exercises conservative financial strategies, simplifies its capital structure, maintains debt leverage comfortably below 4.0x and EBITA to interest coverage above 4.0x, maintains strong liquidity, and generates strong operating margins on a sustainable basis as it continues to expand its size and scale. Favorable end market trends would also be an important consideration. Excluding the ratings review, MITER's ratings could be downgraded if the company's financial policies grew more aggressive in terms of capital structure and shareholder friendly returns, if debt leverage was sustained above 5.0x and EBITA to interest coverage declined materially below 3.0x, if operating margins and free cash flow generation were to deteriorate, including due to a weakening in the company's end markets, or if acquisition integration difficulties were experienced. MIWD Holdco II LLC is a manufacturer of vinyl and aluminum windows and patio doors in the US, serving the residential end markets of new construction and repair and remodeling. The company also extrudes the majority of its vinyl needs in house. The company is privately held, family and management owned, with a minority investor being an affiliate of Koch Equity Development LLC. In the last twelve month period ended September 30, 2023, MIWD generated about $1.7 billion in revenue. PGT Innovations, Inc., headquartered in North Venice, Florida, is a leading manufacturer and supplier of impact-resistant windows and doors in the US. In the last twelve months ended September 30, 2023, PGT generated $1.5 billion in revenue. The principal methodology used in these ratings was Manufacturing published in September 2021. MYOMO INC: Reports Preliminary Fourth Quarter Revenue, Backlog -------------------------------------------------------------- Myomo, Inc. announced preliminary revenue and operating metrics for the fourth quarter of 2023. Revenue for the fourth quarter of 2023 is expected to be in the range of $4.6 million to $4.8 million, an increase of 14% to 19%, compared with the same period a year ago. The Company's cash balance was approximately $8.7M as of Dec. 31, 2023. As of Jan. 1, 2024, the Centers for Medicare and Medicaid Services has formally classified the MyoPro as a brace, which is reimbursed on a lump sum basis. During the fourth quarter, the Company accelerated its efforts to identify and evaluate qualified Medicare Part B patients. As a result, backlog as of Dec. 31, 2023, including Medicare Part B beneficiaries, was approximately 230 patients, an increase of approximately 40% compared with Dec. 31, 2022. "We've begun deliveries of our MyoPro device to Medicare Part B beneficiaries, a patient population we expect to be a significant driver of revenue growth in 2024," stated Paul R. Gudonis, Myomo's Chairman and CEO. With this anticipated major increase in our addressable market, our aspiration is to achieve at least $100 million in annual revenues within the next five years." MyoPro deliveries to Medicare Part B beneficiaries in the near term are being made under the process of individual consideration, whereby medical records for each patient are expected to be reviewed to determine medical necessity prior to reimbursement. As a result, near-term revenues for Medicare Part B beneficiaries are expected to be recognized upon receipt of payment. The Company plans to report financial results for the fourth quarter and year ended Dec. 31, 2023 before March 15, 2024. About Myomo Headquartered in Cambridge, Massachusetts, Myomo, Inc. -- http://www.myomo.com-- is a wearable medical robotics company that offers expanded mobility for those suffering from neurologicaldisorders and upper limb paralysis. Myomo develops and markets the MyoPro product line. MyoPro is a powered upper limb orthosis designed to support the arm and restore function to the weakened or paralyzed arms of patients suffering from CVA stroke, brachial plexus injury, traumatic brain or spinal cord injury, ALS or other neuromuscular disease or injury. Myomo reported a net loss of $10.72 million for the year ended Dec. 31, 2022, compared to a net loss of $10.37 million for the year ended Dec. 31, 2021. As of Sept. 30, 2023, the Company had $17.05 million in total assets, $6.03 million in total liabilities, and $11.02 million in total stockholders' equity. New York, NY-based Marcum LLP, the Company's auditor since 2016, issued a "going concern" qualification in its report dated March 13, 2023, citing that the Company has incurred significant losses and needs to raise additional funds to meet its obligations and sustain its operations. These conditions raise substantial doubt about the Company's ability to continue as a going concern. In its Quarterly Report for the period ended Sept. 30, 2023, Myomo said there is substantial doubt that its cash, cash equivalents and short-term investments at September 30, 2023 will be sufficient to fund its operations and cash requirements for the 12 months from the date of the report, particularly a result of continued uncertainty regarding coverage and reimbursement by CMS. Because the financial statements raise substantial doubt about the Company's ability to continue as a going concern, they do not reflect any adjustments that might result if the Company is unable to continue its business. If the Company cannot continue as a viable entity, stockholders may lose some or all of their investment in the Company. NATIONAL RIFLE ASSOC: Operated as 'Wayne's World', Says NYAG ------------------------------------------------------------ Trial began Jan. 8, 2024 in Attorney General Letitia James' lawsuit accusing the National Rifle Association and its leaders of widespread civil corruption. James' lawsuit, initially filed in 2020, accuses the NRA's leadership of widespread corruption, alleging longtime leader Wayne LaPierre, with help from other NRA leadership, used NRA resources and funds on personal expenses. ABC reported that during opening statements at the NRA's civil corruption trial, James said the NRA operated as "Wayne's World," allowing LaPierre and a group of insiders to squander tens of millions of dollars donated to the nonprofit group. "You will hear that the NRA allowed Wayne LaPierre and his group of insiders to operate the NRA as 'Wayne's World' for decades," Assistant Attorney General Monica Connell told the jury. "This case is about corruption of a charity. It's about breaches of trust, and it's about power." "He didn't have the NRA's best interest in mind," Connell said. "We believe that Mr. LaPierre's voluntary resignation does not mean you shouldn't return a verdict against him." LaPierre filled executive positions at the NRA with unqualified loyalists in order to maintain control and conceal self-dealing, including co-defendants John Frazer, general counsel, and Woody Phillips, the former chief financial officer, the attorney general's lawsuit said. The three of them stand accused of breaching the trust of donors by using charitable money for luxury travel, private planes and five-star hotels, along with entering into multi-million dollar contracts with favored vendors willing to pay. The three have all pleaded not guilty. Connell showed the jury photos of two superyachts LaPierre was given use of and listed Greece, Dubai and other places LaPierre and his wife traveled on what she said was someone else's dime. A fourth defendant, Josh Powell, admitted wrongdoing and agreed to settle the allegations with a $100,000 payment in restitution and to testify against the others. Powell also agreed Connell asked the jury to hold the NRA and the three individual defendants liable for breach of fiduciary duty. The lawsuit also seeks to recoup lost assets and ban LaPierre and the others from serving on any charitable boards in New York. Powell accepted that ban as part of his settlement agreement. The judge said the attorney general's office could not seek to entirely shut down the NRA. During the trial, which is expected to last six weeks, the jury will hear from Lt. Col. Oliver North, who LaPierre forced out as NRA president, along with other insiders. About National Rifle Association Founded in 1871 in New York, the National Rifle Association of America is a gun rights advocacy group. The NRA claims to be the longest-standing civil rights organization and has more than five million members. Seeking to move its domicile and principal place of business to Texas amid lawsuits in New York, the National Rifle Association of America sought Chapter 11 protection (Bankr. N.D. Tex. Case No. 21-30085) on Jan. 15, 2021. Affiliate Sea Girt LLC simultaneously sought Chapter 11 protection (Case No. 21-30080). The NRA was estimated to have assets and liabilities of $100 million to $500 million as of the bankruptcy filing. Judge Harlin Dewayne Hale oversaw the cases. The Debtors tapped Neligan LLP and Garman Turner Gordon LLP as their bankruptcy counsel, and Brewer, Attorneys & Counselors as their special counsel. The official committee of unsecured creditors Tapped Norton Rose Fulbright US, LLP and AlixPartners, LLP as legal counsel and financial advisor, respectively. * * * Following a 12-day trial, Judge Harlin D. Hale dismissed the NRA's Chapter 11 case in May 2021, after finding the group filed its petition in bad faith in order to gain advantage in litigation brought by New York's attorney general. New York Attorney General Letitia James sought the dismissal of the case. The judge condemned the NRA's attempts to avoid accountability, making clear that the organization's actions were "not an appropriate use of bankruptcy." NEXII BUILDING SOLUTIONS: Seeks Chapter 15 Bankruptcy Protection ---------------------------------------------------------------- Jonathan Randles of Bloomberg Law reports that Nexii Building Solutions Inc., a Canadian construction company that designs and builds low-emission buildings, has sought a form of US bankruptcy less than three years after becoming the country's fastest startup to reach "unicorn" status. Nexii and affiliates filed for Chapter 15 protection Thursday, January 12, 2024, in Delaware after seeking a form of bankruptcy protection in Vancouver, British Columbia, according to court documents. Chapter 15 is used by foreign companies to pause lawsuits and shield corporate assets housed in the US from creditors. About Nexii Building Solutions Nexii Building Solutions Inc. is a Canadian contsruction company that builds and designs low-emission buildings. Nexii Building Soltuions sought relief under Chapter 15 of the U.S. Bankruptcy Code to pause lawsuits and to shield its corporate assets from creditors in the U.S. NICMAR INDUSTRIES: Hires Caswell Advisory Group as Business Broker ------------------------------------------------------------------ Nicmar Industries d/b/a George R. Roberts Company seeks approval from the U.S. Bankruptcy Court for the District of Maine to employ Caswell Advisory Group, LLC as its business broker. The firm's services include: (a) analyzing and evaluating the business, operations, and financial condition of the Debtor and preparing appropriate materials for distribution to potential purchasers, subject to a confidentiality agreement; (b) identifying potential purchasers; (c) engaging in discussions and negotiations with potential purchasers; (d) consulting with the Debtor and its other advisors on matters pertaining to the sale of the Debtor's assets; (e) furnishing the Debtor with information related to the sale of the Debtor's business from time to time as reasonably requested by the Debtor; and (f) maintaining a data room for prospective buyers and communicating with buyers throughout the sale process. Caswell will be entitled to a commission of 10 percent of any sale price up to $2,000,000, plus 8 percent of the sale price is in excess of $2,000,000, with a minimum commission of $150,000. As disclosed in the court filings, Caswell is a "disinterested person" as that phrase is defined in Bankruptcy Code Sec. 101(14), as modified by Sec. 1107(b). The firm can be reached through: Greg Caswell Caswell Advisory Group, LLC P. O. Box 7102 63 Federal Street Portland, ME 04112-7102 Cell: (207) 831-8487 Email: gcaswell@caswelladvisorygroup.com About Nicmar Industries Nicmar Industries d/b/a George R. Roberts Company filed its voluntary petition for relief under Chapter 11 of the Bankruptcy Code (Bankr. D. Maine Case No. 24-20006) on Jan. 12, 2024. The petition was signed by Stephen J. Ray as president/trustee. As of Sept. 30, 2023, the Debtor estimated $5,386,007 in assets and $4,705,439 in liabilities. Judge Michael A. Fagone presides over the case. Adam Prescott, Esq. at BERNSTEIN SHUR SAWYER & NELSON, P.A. represents the Debtor as counsel. ONE PAY CLOUD: Soneet Kapila Named Subchapter V Trustee ------------------------------------------------------- The U.S. Trustee for Region 21 appointed Soneet Kapila of Kapila Mukamal as Subchapter V trustee for One Pay Cloud, LLC. Mr. Kapila will be paid an hourly fee of $450 for his services as Subchapter V trustee and will be reimbursed for work-related expenses incurred. Mr. Kapila declared that he is a disinterested person according to Section 101(14) of the Bankruptcy Code. The Subchapter V trustee can be reached at: Soneet R. Kapila Kapila Mukamal 1000 South Federal Highway, Suite 200 Fort Lauderdale, FL 33316 Tel: (954) 761-1011 Email: skapila@kapilamukamal.com About One Pay Cloud One Pay Cloud, LLC, a Miami-based company, filed a petition under Chapter 11, Subchapter V of the Bankruptcy Code (Bankr. S.D. Fla. Case No. 24-10349) on Jan. 15, 2024, listing zero asset and $1,800,545 in liabilities. Oksana Moore, director of operations, signed the petition. Judge Laurel M. Isicoff oversees the case. Diego G. Mendez, Esq., at Mendez Law Offices represents the Debtor as bankruptcy counsel. PATRICK INDUSTRIES: Moody's Affirms B1 CFR, Outlook Remains Stable ------------------------------------------------------------------ Moody's Investors Service affirmed Patrick Industries, Inc.'s B1 corporate family rating, B1-PD probability of default rating, and B3 senior unsecured notes rating. The company's speculative grade liquidity rating ("SGL") is unchanged at SGL-2. The outlook is maintained stable. "The ratings affirmation reflects Patrick Industries' strong balance sheet, good coverage metrics and heathy liquidity. Patrick's solid credit metrics provide ample financial flexibility and will allow the company to absorb earnings pressures that may result from its outsized exposure to highly cyclical end markets," said Eoin Roche, Moody's Vice President Senior Credit Officer. RATINGS RATIONALE The B1 CFR reflects Patrick's good size and scale in the recreational vehicle (RV), marine, manufactured housing (MH), and industrial markets. The company maintains a conservative balance sheet and Moody's expects debt-to-EBITDA to remain at or below 3x over the next 12-18 months. Moody's recognizes the diversity of Patrick's end markets and the company's successful track record of generating healthy free cash flow. These considerations are tempered by the company's exposure to highly cyclical end markets that are susceptible to economic downturns and vulnerable to significant earnings volatility. Patrick's RV business has historically accounted for around 60% of company sales and is an important driver of earnings. Patrick's RV segment experienced an almost 50% drop in year-to-date sales through September 2023 in the face of lower wholesale shipments, dealer inventory destocking and reduced consumer demand. Moody's expects the RV market to stabilize in 2024 as RV dealer inventory levels reach equilibrium. That said, the demand outlook for RVs remains unclear and there continues to be risks to the downside in the face of economic uncertainty. More broadly, over the near-term, the high interest rate environment will continue to weigh on consumer spending and dealer inventory stocking. Patrick's recently announced acquisition of Sportech for $315 million has no impact on the rating. Moody's expects the transaction to be funded through a combination of revolver borrowings and cash on hand. Moody's expects pro forma adjusted debt-to-EBITDA to increase to around 3.1x before declining during 2024 as the company directs free cash flow towards debt reduction. Sportech is a manufacturer of components and assemblies used on motorcycles, ATVs, and other powersport vehicles. The acquisition is in keeping with Patrick's long-standing active acquisitive strategy and will reduce the company's overall reliance on the highly cyclical RV market and further diversify its outdoor end markets, which will represent more than 70% of pro forma sales. The stable outlook reflects Patrick's robust credit metrics and strong liquidity, which will allow the company to absorb any earnings pressures that may arise from its cyclical end markets. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS Patrick Industries' ratings could be upgraded if the company is expected to maintain debt-to-EBITDA below 2.5x in combination with a more diversified product portfolio that is less susceptible to cyclical downturns. A ratings upgrade would also require the company to maintain good liquidity with a prudent capital structure and financial policies that support aforementioned leverage levels. The ratings could be downgraded if end-market demand weakens beyond Moody's current expectations due to macroeconomic headwinds. A more aggressive financial policy involving large debt-financed acquisitions could also result in a downgrade. A ratings downgrade could be prompted if adjusted debt-to-EBITDA is sustained above 3.5x and free cash flow-to-debt falls below 10%. Patrick Industries, Inc., headquartered in Elkhart, Indiana, is a leading manufacturer and distributor of components parts in the RV, marine, manufactured housing and adjacent industrial markets primarily serving large OEMs. Revenues for the twelve months ended September 2023 were $3.6 billion. The principal methodology used in these ratings was Manufacturing published in September 2021. PETER RINALDI DMD: Case Summary & 13 Unsecured Creditors -------------------------------------------------------- Debtor: Peter Rinaldi DMD LLC d/b/a Rinaldi Dental Arts 5481 Wisconsin Ave, Suite 221 Chevy Chase, MD 20815 Business Description: The Debtor specializes in cosmetic dentistry. Chapter 11 Petition Date: January 21, 2024 Court: United States Bankruptcy Court District of Maryland Case No.: 24-10504 Judge: Hon. Lori S. Simpson Debtor's Counsel: David E. Lynn, Esq. DAVID E. LYNN, P.C. 15245 Shady Grove Road, Suite 465 N Rockville, MD 20850 Tel: 301-255-0100 Email: davidlynn@verizon.netavidlynn@verizon.net Estimated Assets: $100,000 to $500,000 Estimated Liabilities: $1 million to $10 million The petition was signed by Peter Rinaldi as owner. A full-text copy of the petition containing, among other items, a list of the Debtor's 13 unsecured creditors is available for free at PacerMonitor.com at: https://www.pacermonitor.com/view/SWVV6KY/Peter_Rinaldi_DMD_LLC__mdbke-24-10504__0001.0.pdf?mcid=tGE4TAMA PGT INNOVATIONS: Moody's Puts 'Ba3' CFR Under Review for Downgrade ------------------------------------------------------------------ Moody's Investors Service placed the ratings of PGT Innovations, Inc. under review for downgrade, including the company's Ba3 corporate family rating, the Ba3-PD probability of default rating, and the B1 senior unsecured notes ratings. These ratings were previously under review for upgrade. PGT's SGL-1 speculative grade liquidity remains unchanged. The outlook remains under review. On January 16, 2024, PGT and MIWD Holdco II LLC (dba MITER Brands) entered into a definitive merger agreement for MITER to acquire all outstanding shares of PGTI at a price of $42.00 per share in cash, or an enterprise value of approximately $3.1 billion. While the funding details and future capital structure is uncertain at this time, the transaction is expected to be financed in part by an equity investment from Koch Equity Development LLC, the principal investment and acquisition arm of Koch Industries, Inc., and a current investor in MITER. The transaction is expected to close in the middle of 2024 and is subject to customary closing conditions including applicable regulatory approvals. The review for downgrade reflects governance considerations related to the change in ownership that will occur given the pending acquisition by MITER Brands including the change from public ownership to private ownership and the potential for more aggressive financial policies. Moody's expects the transaction to be leveraging. The outstanding rated PGT debt is expected to be repaid upon closing. Following the repayment of PGT's debt, Moody's will withdraw the existing PGT ratings. RATINGS RATIONALE / FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS The review for downgrade reflects Moody's expectation that, should the acquisition be completed, PGT's debt will be repaid in full. The review also considers the fact that PGT will go from a public company to a privately owned company with concentrated decision making and the potential for more aggressive financial strategies. The review will also focus on the completion of the transaction and the final capital structure, particularly the expected repayment of PGT's debt. Lastly, the review for downgrade will also assess PGT's financial performance through the closing. In the unlikely event that PGT's notes remain outstanding, Moody's would consider any guarantees provided by MITER and in the event the notes are not guaranteed, the adequacy of financial information provided in order to maintain the rating. Excluding the ratings review, PGT's ratings could be upgraded if the company significantly expands its size and scale and improves its geographic diversification, increases its operating margins toward historical levels, sustains adjusted debt to EBITDA below 3.0x and EBITA to interest coverage above 5.0x, while generating strong free cash flow with FCF to debt metrics in the mid teens. Favorable end market conditions would also be important for a higher rating. Excluding the ratings review, PGT's ratings could be downgraded if end markets demonstrate materially weakening trends, the company loses significant market share, operating margins decline, adjusted debt to EBITDA is sustained above 4.0x and EBITA to interest coverage below 4.0x, or if its liquidity profile deteriorates. PGT Innovations, Inc., headquartered in North Venice, Florida, is a leading manufacturer and supplier of impact-resistant windows and doors in the US. In the last twelve months ended September 30, 2023, PGT generated $1.5 billion in revenue. MIWD Holdco II LLC is a manufacturer of vinyl and aluminum windows and patio doors in the US, serving the residential end markets of new construction and repair and remodeling. The company also extrudes the majority of its vinyl needs in house. The company is privately held, family and management owned, with a minority investor being an affiliate of Koch Equity Development LLC. In the last twelve month period ended September 30, 2023, MIWD generated about $1.7 billion in revenue. The principal methodology used in these ratings was Manufacturing published in September 2021. PLUSGRADE INC: Moody's Assigns 'B2' CFR, Outlook Stable ------------------------------------------------------- Moody's Investors Service assigned a B2 corporate family rating and a B2-PD probability of default rating to Plusgrade Inc., a leading provider of ancillary revenue solutions for the global travel industry. Moody's also assigned B2 ratings to the proposed senior secured first lien bank credit facilities issued by Plusgrade's parent company, 1000732905 Ontario Inc., which consists of a $420 million senior secured first lien term loan B maturing 2031 and an $80 million senior secured first lien revolver expiring 2029. Plusgrade Inc. and Points.com Inc. are co-borrowers of the credit facilities. The outlook for both entities is stable. Proceeds from the term loan along with new cash equity from General Atlantic and rollover equity from Caisse de depot et placement du Québec ("CDPQ") will be used to invest in Plusgrade, refinance existing debt and pay fees and expenses related to the transaction. Governance considerations were a driver of the rating assignments and reflect controlled ownership by the financial sponsor without an independent board. The assigned ratings are subject to review of final documentation and no material change to the size, terms and conditions of the transaction as advised to Moody's. RATINGS RATIONALE The B2 CFR reflects Plusgrade's small scale, high pro forma debt to EBITDA leverage Moody's estimates will be in the low 5.0x range on a Moody's adjusted basis. and its customer concentration reflective of the credit rating. The company's reliance on the global travel industry leaves it vulnerable to economic shocks, though its partners are typically more reliant on Plusgrade's products during downturns to maximize their revenue and cash flows. Moody's also believes Plusgrade's product set is narrow with the majority of LTM September 30, 2023 net revenue generated from its loyalty currency retailing and premium upgrade products. However, the company will continue to develop and invest in additional ancillary products which should lead to improved product diversification over time. Further constraints include the potential for aggressive financial strategies under financial sponsor ownership. Plusgrade's B2 CFR benefits from its market-leading position as a provider of ancillary revenue solutions to the global travel industry offering strong value propositions to its partners and travelers, strong gross logo retention and net revenue retention rates and long tenure across its partner base. The favorable growth outlook for the global travel industry and associated ancillary revenue support Moody's expectation for at least high-single-digit percentage revenue growth for at least the next three years. Similar to many of its travel sector peers, Plusgrade's performance was severely affected by the coronavirus pandemic, but its revenue sharing model and focus on ancillary revenues proved somewhat resilient as demonstrated by the company's positive EBITDA performance throughout 2020 and 2021. Also, the company's asset-lite business model requires limited capital intensity and produces good free cash flow and profitability. All financial metrics cited reflect Moody's standard adjustments. Marketing terms for the new credit facilities (final terms may differ materially) include the following: (1) Incremental pari passu debt capacity up to the greater of $82.5 million and 100% of TTM EBITDA, plus unlimited amounts subject to either 5.5x first lien secured leverage ratio or leverage neutral. There is an inside maturity sublimit up to the greater of $82.5 million and 100% of TTM EBITDA. (2) There are no "blocker" provisions which prohibit the transfer of specified assets to unrestricted subsidiaries. (3) There are no protective provisions restricting an up-tiering transaction. (4) Amounts up to 100% of unused capacity from the builder basket, the general investment basket, the general RP basket and the general RDP basket may be reallocated to incur debt. Management expects debt capital to be comprised of an $80 million revolving credit facility expiring in 2029 and a $420 million term loan B due 2031. The B2 bank credit facility ratings, the same as the B2 CFR, reflect the preponderance of debt represented by the term loan and revolver. The term loan and revolver are issued by the parent of Plusgrade Inc., 1000732905 Ontario Inc., and are guaranteed by the borrower's direct and indirect, existing and future, wholly-owned U.S. and Canadian subsidiaries (except unrestricted and immaterial subsidiaries) as defined by the credit agreement. The term loan and revolver also have a first priority security interest in substantially all assets of the borrower and guarantors. Moody's views Plusgrade's liquidity as good supported by Moody's expectations of over $100 million of liquidity, which includes an undrawn $80 million revolver expiring 2029, and solid free cash flow generation. Cash needs over the next 12 months includes minimal working capital usage and low capital spending below 3% of net revenue. Given the solid free cash flow generation, Moody's expects Plusgrade's revolver will likely remain undrawn. While the term loan is not subject to financial covenants, the revolver is likely to contain a springing maximum first lien secured leverage ratio of 9.1x (with no step downs) when utilization is greater than 40% ($32 million). Although Moody's does not expect the covenant to spring over the next 12 months, Moody's expects Plusgrade would maintain ample covenant cushion if it were triggered. The stable outlooks reflect Moody's expectations of at least high-single-digit percentage revenue growth and stable EBITDA margins over the next 12 months while Plusgrade maintains at least good liquidity. Moody's expects that debt to EBITDA leverage will approach 5x over the outlook period reflecting debt balances reduced only by mandatory amortization payments. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS Plusgrade's ratings could be upgraded if revenue scale increases meaningfully and the company maintains a balanced financial policy, which includes sustaining debt to EBITDA leverage below 4x and maintaining free cash flow to debt above 10%. The ratings could be downgraded if revenues or EBITDA margins decline, debt to EBITDA leverage is sustained above 5.5x, liquidity deteriorates, or Plusgrade pursues aggressive shareholder-friendly financial policies, including sizable debt-funded acquisitions or shareholder returns. The principal methodology used in these ratings was Business and Consumer Services published in November 2021. Plusgrade, domiciled in Montreal, Canada, is a provider of ancillary revenue solutions for the global travel industry including airline, hospitality, cruise, passenger rail and financial services companies. After transaction close, the company will be owned by General Atlantic, CDPQ and management. PURPLE PEONY: Seeks to Hire Bluechip Asset Management as Appraiser ------------------------------------------------------------------ Purple Peony Inc. seeks approval from the U.S. Bankruptcy Court for the District of Colorado to employ Bluechip Asset Management, LLC, as a commercial equipment and real estate appraiser. Bluechip will provide an opinion as to the fair market and orderly liquidation value of the Debtor's equipment and inventory, the commercial property, and the residential property. The firm's fee for the appraisal, inclusive of all expenses, is $8,250. Bluechip does not hold or represent any interest adverse to the Debtor and the Debtor's estate and is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code, according to court filings. The firm can be reached through: Christopher P. Nugent Blue Chip Asset Management 11811 E Maplewood Ave, Greenwood Village, CO 80111 Phone: (415) 515-1110 Email: chris.nugent@bcamasset.com About Purple Peony Inc. Purple Peony is the owner of real property located at 309 S Summit View Dr Unit 9 & 14, Fort Collins, CO 80524, having an appraised value of $490,000. Purple Peony, Inc. in Fort Collins, CO, filed its voluntary petition for Chapter 11 protection (Bankr. D. Colo. Case No. 23-14886) on October 24, 2023, listing $877,127 in assets and $2,755,289 in liabilities. Stefanie Mecklenburg as president, signed the petition. BUECHLER LAW OFFICE, L.L.C. serve as the Debtor's legal counsel. QUALITY ASSURANCE: Hires Carl W. Hopkins as Bankruptcy Counsel -------------------------------------------------------------- Quality Assurance Roofing Company of Texas, LLC seeks approval from the U.S. Bankruptcy Court for the Western District of Arkansas to employ Carl W Hopkins PA as its bankruptcy counsel. The firm's services include: (a) advising the Debtor of his rights, powers and duties as Debtor-in-Possession, including those with respect to the continued operation and management of his business and property; (b) advising the Debtor concerning and assisting in the negotiation and documentation of financing agreements, cash collateral orders and related transactions; (c) investigating into the nature and validity of liens asserted against the property of the Debtor and advising the Debtor concerning the enforceability of said liens; (d) investigating into, advising the Debtor concerning and taking such actions as may be necessary to collect and, in accordance with applicable law, recover property for the benefit of the Debtor's estate; (e) preparing on behalf of the Debtor such applications, motions, pleadings, orders, notices, schedules and other documents as may be necessary and appropriate, and reviewing financial and other reports to be filed; (f) advising the Debtor concerning and preparing responses to applications, motions, pleadings, notices and other documents which may be filed and served; (g) counseling the Debtor in connection with the formulation, negotiation and promulgation of a plan or plans of reorganization and related documents; and (h) performing such other legal services for and on behalf of the Debtor as may be necessary or appropriate in the administration of the case. The firm will be paid at these hourly rates: Attorney $300 Paralegals $95 Donald A. Brady, Jr, on behalf of Carl. W. Hopkins, PA, has received a $6,000 retainer. As disclosed in the court filings, Carl W Hopkins is a disinterested person as that term is defined in 11 U.S.C. Sec. 101(14). The firm can be reached through: Donald A. Brady, Jr., Esq. CARL W. HOPKINS, PA P. O. Box 7359 Van Buren, AR 72956 Phone: (479) 922-2175 Email: dbrady@hopkinslawoffices.com About Quality Assurance Roofing Company of Texas Quality Assurance Roofing Company of Texas, LLC filed its voluntary relief under Chapter 11 of the Bankruptcy Code (Bankr. W.D. Ark. Case No. 23-71848) on Dec. 12, 2023. The petition was signed by Erica Bray, member. At the time of filing, the Debtor estimated $50,001-$100,000 in assets and $500,001-$1 million in liabilities. Carl W. Hopkins, Esq. at Carl W Hopkins PA represents the Debtor as counsel. RAI INC: Court OKs Cash Collateral Access on Final Basis -------------------------------------------------------- The U.S. Bankruptcy Court for the District of Colorado, authorized RAI Inc. to use cash collateral on a final basis, in accordance with the budget, with a 10% variance. In consideration of its consent to the Debtor's continued use of cash collateral in the ordinary course of the Debtor's business, the Debtor agrees to make adequate protection payments to Mountain Valley Bank in the amount of$4,000 per month, with the first payment due February 1, 2024 and continuing on the first day of each month for so long as the Debtor is authorized to use cash collateral. As adequate protection, MountainValley Bank is granted an automatically perfected, first priority lien and security interest in cash collateral including, but not limited to, all accounts, contract rights and accounts receivable generated by the Debtor post-petition. Mountain Valley Bank will have a superpriorityadministrative claim pursuant to 11 U.S.C. Sections 361(2), 363(c)(2), 364(d)(1), 503(b)(1), and 507(b) to the extent the Debtor's use of cash collateral results in a decrease in the value of Mountain Valley Bank's interest in cash collateral. These events constitute an "Event of Default": i. Failure to timely pay any of the Adequate Protection Payments; ii. Failure to comply with the reporting of information provided under the Order; iii. The conversion of the bankruptcy case to a case under Chapter 7; iv. The appointment of a Trustee (other than the Subchapter V Trustee)in the bankruptcy case; v. The failure of the Debtor to maintain in good condition any equipment in which Mountain Valley Bank has a security interest; vi. The failure of the Debtor to stay current on post-petition taxes; and vii. The failure of the Debtor to maintain insurance on the Mountain Valley Bank collateral, as required by the underlying loan documents. A copy of the court's order and the Debtor's budget is available at https://urlcurt.com/u?l=Km0p20 from PacerMonitor.com. The Debtor projects $271,064 in total cash in and $162,426 in total cash out for January 2024. About RAI Inc. RAI Inc. sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. D. Colo. Case No. 23-16014-JGR) on December 28, 2023. In the petition signed by Scott Owens, general manager, the Debtor disclosed up to $1 million in both assets and liabilities. Judge Joseph G. Rosania, Jr. oversees the case. Aaron A. Garber, Esq., at Wadsworth Garber Warner Conrardy, P.C., represents the Debtor as legal counsel. RAI INC: Seeks Approval to Hire Power Financial as Accountant ------------------------------------------------------------- RAI Inc. seeks approval from the U.S. Bankruptcy Court for the District of Colorado to employ Power Financial Management LLC to provide professional tax and accounting services. The firm will render these services: a. assist with the preparation of monthly operating reports; b. prepare and file any tax returns; c. provide accounting services related to bankruptcy; and d. perform any additional tax and accounting services. Dorris Morrow, CPA will be in charge of the Debtor's account. Her rate is $125 per hour. The accountant does not hold or represent any interest materially adverse to the estate, according to court filings. The firm can be reached through: Dorris Morrow, CPA Power Financial Management LLC 1041 Lincoln Ave Ste 210 Steamboat Springs, CO 80487 Phone: (970) 846-7419 About RAI Inc. RAI Inc.'s primary areas of business are excavation, street construction, and general construction. RAI Inc. filed its voluntary petition for relief under Chapter 11 of the Bankruptcy Code (Bankr. D. Colo. Case No. 23-16014) on Dec. 28, 2023, listing $500,001 to $1 million in both assets and liabilities. Judge Joseph G Rosania Jr. presides over the case. Aaron A Garber, Esq. at Wadsworth Garber Warner Conrardy, P.C. represents the Debtor as counsel. RED RIVER SUBS: Seeks Cash Collateral Access -------------------------------------------- Red River Subs, Inc. asks the U.S. Bankruptcy Court for the District of North Dakota, for authority to use cash collateral and provide adequate protection. Red River Subs finds itself needing to reorganize as the dining business is notoriously difficult and, between rising food costs and generalized shifts in consumers' dining habits. A lot will go into this process - starting with the shuttering of the aforementioned Bismarck store and continuing through negotiations with landlords, cleareyed reassessments of staffing priorities, and earnest conversations with a franchisor. But for the process to get underway, the Debtor needs to open its shops for business; and for the Debtor to open for business, the Debtor will need to use cash collateral. There is only one UCC lien against Red River Subs' assets, being in favor of First Community Credit Union, the financial institution the Debtor uses for depository and borrowing purposes. The lien secures a loan with an estimated current balance of $368,822. By virtue of the notoriously-depreciated value of restaurant equipment, coupled with the Debtor's meager cash on hand and receivables, the Loan is largely unsecured. Resultantly, the Debtor does not dispute that FCCU's interest in cash collateral merits adequate protection for the duration of the case. The Debtor asserts its locations in Moorhead and on 25th Street in Fargo can both operate at a profitable pace. These locations are not what occasioned Red River Subs' bankruptcy and these locations' ability to produce gross revenues in excess of gross expenses is well established. Permitting the use of cash collateral, for the operation of these two restaurants, is wholly sensible in nature. The Debtor's location on Broadway in Fargo is, candidly, a closer call. While this store has encountered some excellent revenue days as of late, the location also struggles on weekends and sits at the heart of a downtown area with seasonally-waning foot traffic. Recent construction in the area caused the store to lose easy access for a protracted period of time, hampering the Debtor's revenues. And while access has now been restored, Red River Subs still must confront the dining habits of customers that were altered during this difficult period. The Debtor believes this store will ultimately prove a success, and the Debtor equally recognizes the intrinsic value – and goodwill amplification – attendant to having such a marquee location. But the Debtor also enters bankruptcy knowing this particular experiment needs to be closely monitored, with Red River Subs being prepared to pull the proverbial plug on its Broadway outpost should week-over-week numbers dip into the red during the Chapter 11 process. From a cash collateral perspective, however, operation of the Broadway store will not cause any palpable financial harm to the position of FCCU. While Red River Subs wishes to use cash collateral to operate this store (alongside the other two locations), such investment will necessarily yield sales revenues that, per the proposal set forth herein, can serve as replacement liens. If an operating loss begins to accrue, the Debtor will shut down the site expediently, stanching any loss before it could rise to a level of materiality. And any de minimis loss would be comfortably offset by the gains to be realized on 25th Street and across the river in Moorhead. The Debtor scheduled cash assets of $26,656 and short term receivables of $13,141, for a total of $39,803. This number is, however, more-than-somewhat deceptive. As noted in the Debtor's Motion for Leave to Pay Certain Pre-Petition Employee Wages (DE #5), the Debtor processed its regular payroll, for the period ending January 8, 2024, pre-petition. This created the pre-petition accrual of a $24,950 expense that is not readily reverseble post-petition, essentially leaving the Debtor with $14,853 in actual, usable cash collateral. The Debtor proposes to use all of the subject cash collateral. The Debtor proposes furnishing FCCU with replacement liens sufficient to ensure the credit union's position remains as robust as it was when the Debtor sought bankruptcy relief. A copy of the motion is available at https://urlcurt.com/u?l=j3QbvY from PacerMonitor.com. About Red River Subs, Inc. Red River Subs, Inc. sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. D. N.D. Case No. 24-30010) on January 13, 2024. In the petition signed by Todd Beedy, president, the Debtor disclosed up to $100,000 in assets and up to $1 million in liabilities. Maurice Verstandig, Esq., at Dakota Bankruptcy Firm, represents the Debtor as legal counsel. REMARK HOLDINGS: Inks First Amendment to Ionic Purchase Agreement ----------------------------------------------------------------- Remark Holdings, Inc. disclosed in a Form 8-K filed with the Securities and Exchange Commission that the Company and Ionic Ventures, LLC entered into an amendment to the Purchase Agreement, dated as of Oct. 6, 2022. Under the First Amendment, the parties agreed, among other things, (i) to clarify that the Floor Price per the agreement is $0.25, (ii) to amend the per share purchase price for purchases under a Regular Purchase Notice to 80% of the average of the two lowest daily volume-weighted average prices over a specified measurement period, (iii) to increase the frequency at which the Company can submit purchase notices, within limits, and (iv) to amend section 11(c) of the ELOC Purchase Agreement to increase the Additional Commitment Fee from $500,000 to $3,750,000. A full-text copy of the Amended Purchase Agreement is available for free at: https://www.sec.gov/Archives/edgar/data/1368365/000136836524000005/ex101-firstamendmenttopurc.htm About Remark Holdings Remark Holdings, Inc. (NASDAQ: MARK) -- http://www.remarkholdings.com-- delivers an integrated suite of AI solutions that help organizations monitor, understand, and act on threats in real-time. Remark consists of an international team of sector-experienced professionals that have created video analytics. The Company's GDPR-compliant and CCPA-compliant solutions focus on market sectors including retail, federal and state governmental entities, public safety, hospitality, and transportation. The company's headquarters are in Las Vegas, Nevada, with operational offices in New York and international offices in London, England. Remark Holdings reported a net loss of $55.48 million for the year ended Dec. 31, 2022, compared to net income of $27.47 million for the year ended Dec. 31, 2021. As of March 31, 2023, the Company had $14.17 million in total assets, $39.95 million in total liabilities, and a total stockholders' deficit of $25.78 million. In its Form 10-Q Report for the quarterly period ended September 30, 2023, Remark Holdings disclosed that its history of recurring operating losses, working capital deficiencies, and negative cash flows from operating activities give rise to substantial doubt regarding its ability to continue as a going concern. During the nine months ended September 30, 2023, and in each fiscal year since its inception, the Company has incurred operating losses which have resulted in a stockholders' deficit of $32.9 million as of September 30, 2023. Additionally, the Company's operations have historically used more cash than they have provided. Net cash used in operating activities was $9.1 million during the nine months ended September 30, 2023. As of September 30, 2023, the Company's cash balance was $0.3 million. RESHAPE LIFESCIENCES: Amends Bylaws to Modify Quorum Requirement ---------------------------------------------------------------- ReShape Lifesciences Inc. disclosed in a Form 8-K filed with the Securities and Exchange Commission that the Board of Directors of the Company approved and adopted amended and restated bylaws, which became effective on Jan. 16, 2024. Article I, Section 1.5 of the Bylaws was amended to modify the quorum required for the transaction of business at a meeting of stockholders of the Company to provide that the presence, in person or by proxy, of holders of one-third of the voting power of the shares of stock issued and outstanding and entitled to vote at the meeting will constitute a quorum for the transaction of business at such meeting, except as otherwise provided by applicable law, the Company's certificate of incorporation or the Bylaws. Prior to this amendment, the presence, in person or by proxy, of holders of a majority of the voting power of the shares of stock issued and outstanding and entitled to vote at the meeting would constitute a quorum for the transaction of business at such meeting. About ReShape Lifesciences ReShape Lifesciences Inc. (Obalon Therapeurtics, Inc.) is a weight loss and metabolic health-solutions company, offering an integrated portfolio of proven products and services that manage and treat obesity and metabolic disease. Reshape Lifesciences reported a net loss of $46.21 million for the year ended Dec. 31, 2022, compared to a net loss of $63.15 million for the year ended Dec. 31, 2021. As of March 31, 2023, the Company had $16.35 million in total assets, $8.59 million in total liabilities, and $7.76 million in total stockholders' equity. Irvine, California-based RSM US LLP, the Company's auditor since 2022, issued a "going concern" qualification in its report dated April 17, 2023, citing that the Company has suffered recurring losses and negative cash flows. The Company currently does not generate revenue sufficient to offset operating costs and anticipates such shortfalls to continue. This raises substantial doubt about the Company's ability to continue as a going concern. RESHAPE LIFESCIENCES: Receives Noncompliance Notice From Nasdaq --------------------------------------------------------------- ReShape Lifesciences Inc. disclosed in a Form 8-K filed with the Securities and Exchange Commission that it received a written notice from the Listing Qualifications department of The Nasdaq Stock Market stating that because the Company has not yet held an annual meeting of shareholders within 12 months of the end of the Company's 2022 fiscal year end, it no longer complies with Nasdaq Listing Rule 5620 (a) for continued listing on The Nasdaq Capital Market. The Company has until Feb. 26, 2024, which is 45 days from the date of the notice, to submit a plan to regain compliance and, if Nasdaq accepts the plan, it may grant an exception of up to 180 calendar days from the fiscal year end, or until June 28, 2024, to regain compliance. The Company intends to hold an annual meeting of shareholders no later than Feb. 26, 2024 in order to regain compliance with Nasdaq Listing Rule 5620 (a) and filed a preliminary proxy statement for such meeting with the Securities and Exchange Commission on Jan. 5, 2024. About ReShape Lifesciences ReShape Lifesciences Inc. (Obalon Therapeurtics, Inc.) is a weight loss and metabolic health-solutions company, offering an integrated portfolio of proven products and services that manage and treat obesity and metabolic disease. Reshape Lifesciences reported a net loss of $46.21 million for the year ended Dec. 31, 2022, compared to a net loss of $63.15 million for the year ended Dec. 31, 2021. As of March 31, 2023, the Company had $16.35 million in total assets, $8.59 million in total liabilities, and $7.76 million in total stockholders' equity. Irvine, California-based RSM US LLP, the Company's auditor since 2022, issued a "going concern" qualification in its report dated April 17, 2023, citing that the Company has suffered recurring losses and negative cash flows. The Company currently does not generate revenue sufficient to offset operating costs and anticipates such shortfalls to continue. This raises substantial doubt about the Company's ability to continue as a going concern. RESHAPE LIFESCIENCES: Yair Schneid Has 10.5% Stake as of Jan. 5 --------------------------------------------------------------- Yair Schneid disclosed in a Schedule 13G filed with the Securities and Exchange Commission that as of Jan. 5, 2024, he beneficially owned 2,461,000 shares of common stock of Reshape Lifesciences Inc., representing 10.525% based on 23,382,047 shares outstanding as of Dec. 15, 2023 as reported in Form Pre-14A filed with the SEC on Jan. 5, 2024. A full-text copy of the regulatory filing is available for free at: https://www.sec.gov/Archives/edgar/data/1427570/000121390024003832/ea191693-13gschneid_reshape.htm About ReShape Lifesciences ReShape Lifesciences Inc. (Obalon Therapeurtics, Inc.) is a weight loss and metabolic health-solutions company, offering an integrated portfolio of proven products and services that manage and treat obesity and metabolic disease. Reshape Lifesciences reported a net loss of $46.21 million for the year ended Dec. 31, 2022, compared to a net loss of $63.15 million for the year ended Dec. 31, 2021. As of March 31, 2023, the Company had $16.35 million in total assets, $8.59 million in total liabilities, and $7.76 million in total stockholders' equity. Irvine, California-based RSM US LLP, the Company's auditor since 2022, issued a "going concern" qualification in its report dated April 17, 2023, citing that the Company has suffered recurring losses and negative cash flows. The Company currently does not generate revenue sufficient to offset operating costs and anticipates such shortfalls to continue. This raises substantial doubt about the Company's ability to continue as a going concern. REYNOLDS CONSUMER: Moody's Affirms Ba1 CFR, Outlook Remains Stable ------------------------------------------------------------------ Moody's Investors Service affirmed the ratings of Reynolds Consumer Products LLC including the company's Ba1 Corporate Family Rating and Ba1-PD Probability of Default Rating. Moody's also affirmed the Ba1 ratings on Reynolds's backed $250 million senior secured first lien revolving credit facility and backed $2.475 billion original principal first lien senior secured term loan. The company's SGL-1 speculative-grade liquidity rating is unchanged. The outlook is maintained stable. The rating affirmation reflects Moody's expectation that Reynolds will maintain its leading market position across relatively stable cooking products, waste & storage products and tableware product categories. EBITDA margin improvement and debt repayment will support credit metrics. Reynolds has recovered from the commodity cost increases and manufacturing disruptions that impacted profitability in 2022 and continues to benefit from improving operations. Cost savings from recent operational initiatives and moderating input costs will continue to drive improvement in the EBITDA margin and offset softer sales volumes. Challenging economic conditions and consumers prioritizing and economizing spending are driving modest volume declines year-to-date in 2023 with management expecting FY 2023 sales to be down 2%. Moody's expects sales to remain relatively flat over the next 12 months, but targeted promotional activity, product innovation, and continued focus on cost management will support EBITDA margin improvement. Reynold's long-term 2.0x-2.5x net debt-to-EBITDA leverage target (company calculation) is below the 3.1x level as of September 2023, indicating the company will remain focused on reducing leverage. Moody's anticipates that further debt repayment will be supported by annual free cash flow generation of at least $100 million in 2024. Overall, Moody's adjusted gross debt-to-EBITDA is expected to decline to 3.0x or below over the next 12-18 months. Liquidity is very good as denoted by Moody's SGL-1 speculative grade liquidity rating. Liquidity is strengthened by $124 million of cash as of September 2023, Moody's expectation for at least $100 million of positive free cash flow, an undrawn $250 million revolving credit facility expiring in February 2026, and absence of meaningful debt maturities over the next two years. The cash sources are comfortably sufficient to address seasonal working capital needs. The revolver is subjected to a springing maximum first lien net leverage ratio of 5.75x, tested if 35% or more of the revolving credit facility is utilized. Moody's expects ample cushion under the covenant requirement but does not expect the covenant will be tested. RATINGS RATIONALE Reynolds' Ba1 CFR reflects its leading market position, strong brand name, and established product categories with stable demand. The company also benefits from its historically good operating performance, strong free cash flow, and very good liquidity. These strengths are partially offset by Reynolds' sensitivity to raw material prices, particularly aluminum and resin, which exposure creates volatility in the EBITDA margin and free cash flow. Operating performance in 2023 has improved due to product price increases, investment into operational efficiencies, and moderating freight and raw material costs. Pressure from social trends such as reducing waste from resin-derived products and corporate governance factors relating to the company's majority ownership by a private investor are also credit negatives. Reynolds' products operate in a mature market and has strong penetration into 95% of US consumer households through branded and private label products. The company is actively expanding its eco-friendly products to strengthen its competitive position in response to the above-mentioned societal trends though these actions require significant capital investment and research & development. Other concerns include the company's limited geographic diversity with less than 2% of sales outside the US, high customer concentration, and fully secured capital structure, which Moody's believes limits financial flexibility. The company's aggressive dividend policy is somewhat balanced by a reasonably conservative net leverage target of 2.0x to 2.5x (3.1x for the 12 months ending September 30, 2023 based on the company's definition). Moody's adjusted debt-to-EBITDA has come down significantly from 4.0x at the end of fiscal year ended December 31, 2022 to 3.4x as of September 2023 due to improved operating performance and meaningful debt repayment. Moody's expects that debt-to-EBITDA will decline to around 3.0x or below over the next 12 months as further costs savings and moderating input costs improve earnings. Reynolds remains focused on debt repayment while debt-to-EBITDA is above its leverage target and its deleveraging plans are supported by stable earnings and solid free cash flow generation. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS The stable outlook captures Moody's view that Reynolds' market position remains formidable and that the company will continue to generate solid free cash flow and stable earnings. The outlook also reflects Moody's expectation that debt to EBITDA will decline to 3.0x or below, supported by management plans to pay down debt and earnings growth albeit at a low single digit percentage rate. An upgrade is possible if the company demonstrates material improvement in profitability and free cash flow, and sustains debt to EBITDA below 3.0x. An upgrade would also require improvement in the financial flexibility of the capital structure including having minimal or no secured debt. Ratings could be downgraded if revenue or the EBITDA weakens due to volume declines, market share losses or cost increases. Debt to EBITDA above 4.0x or free cash flow below $100 million could lead to a downgrade. Share repurchases, an increase in the dividend, debt-financed acquisition or a deterioration in liquidity could also lead to a downgrade. ESG CONSIDERATIONS Reynold's ESG CIS-3 Credit Impact Score indicates that ESG considerations have a limited impact on the current credit rating with potential for greater negative impact over time. ESG concerns are relatively balanced across all of the ESG categories. There is some increased risk relating to governance due to controlling shareholder ownership (Graeme Hart has a 74% stake through an intermediary) and a historically aggressive financial strategy, which includes a history of debt-financed dividends. Governance risks are partially balanced by a relatively conservative net debt-to-EBITDA leverage target of 2.0 – 2.5x. The principal methodology used in these ratings was Consumer Packaged Goods published in June 2022. Reynolds Consumer Products LLC, headquartered in Lake Forest Illinois, produces and sells products across three broad categories including cooking products, waste & storage products and tableware. Reynolds' brands include Reynolds(R), Hefty(R), Presto(R), Diamond(R), and Alcan(R). The company also sells its products under private label store brands. Reynolds completed an initial public offering in January 2020 and remains approximately 74% owned by Graeme Hart through his ownership of Rank Group Limited. Reynolds' reported revenue was $3.84 billion for the last 12 months ended September 30, 2023. RISKON INTERNATIONAL: Registers for Sale $25M Worth of Securities ----------------------------------------------------------------- RiskOn International, Inc. filed a Form S-3 registration statement with the Securities and Exchange Commission in connection with the offer and sale, from time to time in one or more offerings, any combination of common stock, preferred stock, warrants, rights or units having an aggregate initial offering price not exceeding $25,000,000. The preferred stock, warrants, rights and units may be convertible, exercisable or exchangeable for common stock or preferred stock or other securities of the Company. Each time the Company sells a particular class or series of securities, the Company will provide specific terms of the securities offered in a supplement to this prospectus. The prospectus supplement may also add, update or change information in this prospectus. The Company's common stock is presently listed on the Nasdaq Capital Market under the symbol "ROI." On Jan. 16, 2024, the last reported sale price of the Company's common stock was $0.1487. A full-text copy of the Registration Statement is available for free at: https://www.sec.gov/ix?doc=/Archives/edgar/data/1437491/000121465924000832/e117240s3.htm About RiskOn International Founded in 2011, RiskOn International, Inc. (formerly known as BitNile Metaverse, Inc.) owns 100% of BNC, including the BitNile.com metaverse platform. The Platform, which went live to the public on March 1, 2023, allows users to engage with a new social networking community and purchase both digital and physical products while playing 3D immersive games. In addition to BNC, the Company also owns two non-core subsidiaries: approximately 66% of Wolf Energy Services Inc. (OTCQB: WOEN) indirectly and approximately 89% of Agora Digital Holdings, Inc. directly. RiskOn also owns approximately 70% of White River Energy Corp (OTCQB: WTRV). RiskOn reported a net loss of $87.36 million on zero revenue for the year ended March 31, 2023, compared to a net loss of $10.55 million on $27,182 of revenues for the year ended March 31, 2022. As of Sept. 30, 2023, the Company had $16.80 million in total assets, $35.86 million in total liabilities, and a total shareholders' deficit of $19.05 million. New York-based RBSM LLP, the Company's auditor since 2019, issued a "going concern" qualification in its report dated July 14, 2023, citing that the Company has suffered recurring losses from operations and had an accumulated deficit that raises substantial doubt about its ability to continue as a going concern. In its Quarterly Report for the three months ended Sept. 30, 2023, RiskOn said there is substantial doubt about its ability to continue as a going concern. The Company believes that the current cash on hand is not sufficient to conduct planned operations for one year from the issuance of the condensed consolidated financial statements, and it needs to raise capital to support its operations. RLI SOLUTIONS: Seeks Approval to Hire Ritchie Bros. as Auctioneer ----------------------------------------------------------------- RLI Solutions Company seeks approval from the U.S. Bankruptcy Court for the Western District of Pennsylvania to employ Ritchie Bros. Auctioneers (America) Inc. as its auctioneer. Among the assets of this bankruptcy estate is a 2017 Peterbilt 567. Ritchie Bros. will advertise and market the equipment through their auction website and hold a public and on-line auction and to represent the estate as seller in connection with the sale of the Debtor's equipment. Ritchie Bros. Auctioneers will receive a commission of 9 percent from auction proceeds. As disclosed in court filings, Ritchie Bros. is "disinterested" pursuant to Section 101(14) of the Bankruptcy Code. The firms can be reached through: Todd Meadows Ritchie Bros. Auctioneers (America) Inc. IronPlanet, Inc. 4000 Pine Lake Road Lincoln, NE 68516 Telephone: (615) 453-4589 Facsimile: (615) 453-4589 Email: tmeadows@ritchiebros.com About RLI Solutions Company RLI Solutions Company, doing business as Ronald Lane Inc., sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. W.D. Pa. Case No. 22-21375) on July 17, 2022, listing as much as $10 million in both assets and liabilities. Christopher Lane, president of RLI Solutions Company, signed the petition. Judge Thomas P. Agresti oversees the case. Donald R. Calaiaro, Esq., at Calaiaro Valencik is the Debtor's legal counsel. ROBERTSHAW US: Moody's Cuts CFR to Ca & Alters Outlook to Negative ------------------------------------------------------------------ Moody's Investors Service downgraded Robertshaw US Holding Corp.'s corporate family rating to Ca from Caa3 and probability of default rating to Ca-PD from Caa3-PD. Concurrently, Moody's downgraded the ratings on Robertshaw's first-out and second-out senior secured bank credit facilities under its "super priority" credit agreement, to Caa1 from B2 and to Ca from Caa3, respectively. Moody's affirmed the Ca ratings on the super priority third-out, fourth-out and fifth-out senior bank credit facilities, and also affirmed the C ratings on Robertshaw's first lien and second lien term loans ("backed senior secured term loans"). Finally, Moody's changed the outlook to negative from stable. The company's amendment to its super priority credit agreement in December 2023 resulted in an upsize of the first-out and second-out credit facilities, of which approximately $218 million and about $382 million remained outstanding, respectively, on a pro forma basis. Proceeds from the transaction were partially used to pay off $30 million drawn on the ABL facility (unrated) and retire that facility, as well as to add about $44 million of cash and pay transaction expenses. The downgrades of the CFR and PDR reflect Moody's view that the current capital structure is untenable. The company's aggressive financial policies, including its acceptance of higher leverage, have increased the risk of further restructuring and deeper creditor losses. Leverage will remain very high given Robertshaw's higher debt load and increased interest burden following the December 2023 transaction. Moody's notes the entire debt structure comes due in January 2025 if Robertshaw's first lien term loan, which had approximately $79 million outstanding, has more than $12.5 million outstanding at that time. Moody's anticipates Robertshaw will need to continue debt restructuring activity, and expects that adjusted debt-to-EBITDA will remain above 10x for some time. Moody's expects the company's operating performance to improve modestly over the next 12-18 months, in line with GDP growth expectations and from pricing initiatives and cost measures. However, Robertshaw operates in the cyclical durable goods manufacturing industry with appliance end markets representing about 65% of revenue. The debt instrument ratings reflect their priority rankings in the capital structure and Moody's expectation of recovery. The C rating on the first lien and second lien term loans reflects their deeply subordinated position in the capital structure. The change in outlook to negative from stable reflects the company's untenable capital structure and lack of external sources of funding to meet emergency cash needs, considering the high interest burden and broad economic slowdown. The outlook also reflects the likelihood of additional debt restructuring. RATINGS RATIONALE The ratings reflect Robertshaw's very high leverage, modest revenue scale with a niche focus, weak coverage metrics and exposure to cyclical consumer spending on appliances. The company is also vulnerable to customer price concessions. Continued focus on cost reduction initiatives, productivity improvements and pricing actions, including price increases and renegotiated pricing with large appliance customers, will be key to tempering top line pressures as demand remains subdued in the near term. Moody's expects these actions to stabilize margins, along with easing supply chain issues and reduction in transportation costs and commodity cost inflation. The ratings also reflect governance risk considerations of aggressive financial policies, including a tolerance for high leverage, debt restructuring activity and distressed exchange transactions. Robertshaw maintains leading positions in its niche appliance control markets, longstanding relationships with blue chip customers, and serves end markets that have traditionally grown in-line with US GDP. An aging installed base of residential appliances and commercial HVAC systems, contributing to pent up demand, support longer-term growth prospects. However, home renovation spending has moderated amid headwinds from high interest rates and cost inflation for contractor labor and building materials. The company is making efforts to diversify its product applications beyond its core appliance markets to a variety of flow control end markets, which are nonetheless fragmented and competitive. Moody's expects Robertshaw's liquidity to be weak over the next 12 months. Despite the improved cash position following the recent transaction, Moody's expects free cash flow to remain negative for some time with the added constraints of a higher interest rate burden. Additionally, the company has no access to external credit facilities to meet emergency cash needs following the recent termination of its ABL credit facility. Unrestricted cash was about $61 million pro forma for the December 2023 transaction, up from $12 million at September 30, 2023. The company's 6-year equipment loan secured by assets in Mexico is used to fund working capital and to support inventory turns. The super priority credit facilities and first and second lien term loans do not have financial maintenance covenants. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS Although not anticipated in the near term, the ratings could be upgraded if the company improved its liquidity with sustained positive free cash flow and access to a revolving facility, and if leverage improves progressively and materially. A sustained improvement in margins on the backdrop of improving demand and business conditions would also be needed for an upgrade. The ratings could be downgraded if there is an increased risk of further debt restructuring that Moody's would consider a distressed exchange, or if Moody's recovery expectations on the outstanding rated debt decline. The ratings could also be downgraded if the company is unable to improve liquidity through operating performance or if liquidity weakens such that Robertshaw cannot meet its debt service obligations. The principal methodology used in these ratings was Manufacturing published in September 2021. Robertshaw US Holding Corp. designs and manufactures electro-mechanical solutions, mechanical combustion systems, and electrical controls primarily for use in residential and commercial appliances, HVAC and transportation applications. Revenue for the twelve month period ended September 30, 2023 was approximately $496 million. RUSE AUTO: Case Summary & 20 Largest Unsecured Creditors -------------------------------------------------------- Debtor: Ruse Auto Transport, Inc. 401 Counts Estates Drive Dripping Springs, TX 78620 Business Description: The Debtor provides auto transportation industry. Chapter 11 Petition Date: January 21, 2024 Court: United States Bankruptcy Court Western District of Texas Case No.: 24-10050 Judge: Hon. Shad Robinson Debtor's Counsel: Amy Wilburn, Esq. LAW OFFICE OF AMY WILBURN 5900 Balcones Drive #17023 Austin TX 78731 Tel: (419) 482-8694 Email: amy@amywilburnlaw.com Estimated Assets: $1 million to $10 million Estimated Liabilities: $1 million to $10 million The petition was signed by Plamen Varbanov as owner. A full-text copy of the petition containing, among other items, a list of the Debtor's 20 largest unsecured creditors is available for free at PacerMonitor.com at: https://www.pacermonitor.com/view/R64R4QY/Ruse_Auto_Transport_Inc__txwbke-24-10050__0001.0.pdf?mcid=tGE4TAMA RUSSELL SAGE: Moody's Alters Outlook on 'B3' Issuer Rating to Pos. ------------------------------------------------------------------ Moody's Investors Service has changed Russell Sage College's (NY) outlook to positive from stable and affirmed its B3 issuer and revenue bond ratings. The college had total debt outstanding of $8 million at fiscal year-end 2023. The revision of the outlook to positive is largely driven by the college's improved wealth and ongoing measures to align expenses with fluctuating revenue. Management's credibility has strengthened with a track record of generally improving operating performance even with pressures from a highly competitive student market and inflation. This is a governance consideration under Moody's ESG methodology and a key driver of this rating action. RATINGS RATIONALE The B3 issuer rating incorporates the college's modest but growing reserves and liquidity. Fiscal 2023 cash and investments of $50 million covered expenses and adjusted debt by 1.1x and 6.0x, respectively. The college's operating performance will remain thin, due to declining enrollment combined with inflationary pressures. Its debt levels are extremely low, however, which provides operating flexibility. A relatively small scale of operations, with operating revenue of $47 million in fiscal 2023 and still modest wealth and liquidity, expose the college to potential operating performance volatility. Weak regional demographics and elevated competition will continue to depress pricing flexibility and student-related revenue growth. At the same time, deferred maintenance is increasing as the college has held back on capital spending due to its financial difficulties, a longer-term competitive and financial challenge. The affirmation of the B3 revenue bond ratings incorporate the issuer rating and general obligation characteristics of the bonds. RATING OUTLOOK The positive outlook reflects the expectation of sustained momentum in improving wealth and liquidity. FACTORS THAT COULD LEAD TO AN UPGRADE OF THE RATINGS -- Substantial increase in liquidity and reduction of reliance on external liquidity for operations -- Notable strengthening of brand and strategic positioning, reflecting stronger student generated and donor revenue and successful execution of strategic initiatives -- Diversification of revenue sources, particularly through increased gift revenue FACTORS THAT COULD LEAD TO A DOWNGRADE OF THE RATINGS -- Acceleration of bank debt or lack of access to external liquidity given thin cash and investments; reduction of liquid cash and investments -- Failure to make measurable progress towards strengthening student demand with a reduced discount rate -- Inability to sustain recent improvement in financial performance, including above 1x debt service coverage LEGAL SECURITY The Series 1999A and 2002A revenue bonds are unsecured general obligations of the college. However, the bonds are effectively subordinated to various other debt instruments, including bank loans and lines of credit, which have a security interest in portions of the campus or cash and investments. The Series 2002A bonds are variable rate demand debt and the Series 1999A bonds are fixed rate, and regularly amortizing. The outstanding bonds introduce liquidity risk due to multiple financial covenants, which could result in acceleration of debt if tripped, absent forbearance or a waiver. The college is required to meet financial covenants of maintaining a minimum debt service coverage ratio of 1.0x for the Series 2002A bonds. The college's reported annual debt coverage ratio for June 30, 2023, was 1.46x (excluding the operating line of credit), providing some headroom above covenanted levels. PROFILE Russell Sage College previously consisted of Russell Sage College and the Sage College of Albany but is now considered as one college with two campuses located in Albany and Troy, New York. The college generated operating revenue of $47 million and enrolled 1,810 full-time equivalent (FTE) students as of fall 2023. METHODOLOGY The principal methodology used in these ratings was Higher Education Methodology published in August 2021. S & J SERVICE: Seeks Chapter 11 Bankruptcy Protection ----------------------------------------------------- S & J Service Inc. filed for chapter 11 protection in the District of Maryland. The Debtor is a reliable construction service company throughout Washington, DC, Maryland, and Virginia. The Debtor specializes in heavy highway, site and underground utilities, and electrical construction work. The Debtor on the Petition Date filed motions to pay prepetition wages and continue operating their cash management system. The Debtor reports between $1 million and $10 million in debt owed to 1 and 49 creditors. The petition states that funds will be available to unsecured creditors. A meeting of creditors under 11 U.S.C. Section 341(a) is slated for Feb. 1, 2024, at 1:00 PM at UST-LA3, TELEPHONIC MEETING. CONFERENCE LINE: 1-866-917-2025, PARTICIPANT CODE:2926743. About S & J Service Inc. S & J Service is a construction service company specializing in heavy highway, site and underground utilities, and electrical construction work. The Company provides a multitude of full-scale utilities and infrastructure services including: storm drain, sanitary sewer, water mainline, structural services, electrical conduit installation, electrical structural repairs, surface restoration, manhole rehabilitation, plumbing, and other electrical work. S & J Service, Inc. filed its voluntary petition for relief under Subchapter V of Chapter 11 of the Bankruptcy Code (Bankr. D. Md. Case No. 24-10018) on Jan. 2, 2024. The petition was signed by Jose Gregorio as president. At the time of filing, the Debtor estimated up to $50,000 in assets and $1 million to $10 million in liabilities. The Debtor is represented by: Daniel Alan Staeven, Esq. Frost & Associates, LLC 5133 Frolich Ln Suite D Hyattsville, MD 20781 SMILEDIRECTCLUB: UST Says Global Settlement a Sub Rosa Plan ----------------------------------------------------------- The Office of the United States Trustee objected Wednesday, Jan. 10, 2024, to a global settlement proposed by bankrupt teledentistry company SmileDirectClub Inc., saying it amounts to an impermissible sub rosa plan and is contrary to Fifth Circuit precedent. Kevin M. Epstein, the United States Trustee for Region 7, filed objections to (i) the motion of the Debtors to sell their assets pursuant to an Asset Purchase Agreement, and (ii) motion of the Debtors dismissing their Chapter 11 cases, and approving procedures for the distribution of the Debtors' remaining assets. On Dec. 8, 2023, the Debtors announced that a going-concern restructuring transaction as described in the Disclosure Statement was not possible and that they were going to commence a wind-down of their businesses. On Dec. 20, 2022, the Debtors filed the motions seeking approval of the Asset Sale, the Proposed Settlement, and the Structured Dismissal. The motions seek the Court's approval key terms of the Proposed Settlement including without limitation, the following: a. Approval of an Asset Sale by which the Debtors will sell substantially all their assets to one or more purchasers identified by the DIP Lenders, free and clear of all liens, claims, encumbrances, and other interests for the consideration of (i) a credit bid by DIP Lenders of approximately $28 million in DIP claims, in full and final satisfaction thereof (the "Credit Bid"); (ii) an additional $4.65 to $7.65 million in cash consideration (the "Initial Cash Consideration"), to be funded to a Creditor Trust and (ii) $650,000 to be funded to pay the investment banker's transaction fee. b. The establishment of a trust (the "Creditor Trust") funded initially by the Initial Cash Consideration, to investigate and potentially prosecute fiduciary duties claims and causes of action against the Debtors' current Chief Executive Officer, David Katzman, the Debtors' current Chief Financial Officer, Troy Crawford, the Debtors' former Chief Financial Officer, Kyle Wailes, and the Debtors' Chief Clinical Officer, Dr. Jeff Sulitzer (subject to certain limitations set forth in the Motions, the "Specified Claims"); c. Appointment of a trustee for the Creditor Trust by the Creditors' Committee, which is also something normally done as a part of a plan; d. Approval of pro rata distributions by the Creditor Trust to certain holders of administrative claims to the Dismissal Motion (the "Administrative Claims") are to be made; e. Broad releases (the "Releases") in favor of the DIP Lenders, the DIP Agent, the Prepetition Revolving Lender, the Purchaser, and the Debtors' current and former directors, managers, officers, special committee members, equity holders (regardless of whether such interests are held directly or indirectly), affiliated investment funds or investment vehicles, managed accounts or funds, predecessors, participants, successors, assigns, subsidiaries, affiliates, partners, limited partners, general partners, principals, members, management companies, fund advisors or managers, employees, agents, trustees, advisory board members, financial advisors, attorneys, accountants, investment bankers, consultants, representatives, and other professionals and advisors (collectively, the "Released Parties") under the Sale Motion for claims far beyond those relating to the Asset Sale including, by way of example, claims arising under the HPS Credit Facility, the HPS Credit Agreement, the HPS Credit Facility Documents, and the Proposed Settlement itself; f. Broad exculpations of the (i) the Debtors; (ii) the independent directors or managers of any Debtor; and (iii) the Creditors' Committee and each member of the Creditors' Committee; g. Timing and procedures for the filing of professional fee applications; and h. Entry of an order dismissing these cases following the filing of a notice by the Debtors. "The Debtors admit their cases are administratively insolvent and have no hope of reorganization. In such situations, the Bankruptcy Code prescribes dismissal or conversion to chapter 7 as alternatives pursuant to 11 U.S.C. Sec. 1112. Instead, Debtors seek approval from this Court for a credit bid sale of substantially all of their assets to the DIP Lenders that does not provide enough consideration to pay administrative claims in full (the "Asset Sale") immediately followed by a structured dismissal (the "Structured Dismissal"). The Asset Sale and Structured Dismissal are each codependent and interconnected as a part of a settlement construct that amounts to an impermissible sub rosa plan circumventing the Bankruptcy Code's procedural safeguards. The so called "Global Settlement" sought by the Dismissal Motion (the "Proposed Settlement") is not global but merely an agreement among (i) Debtors, (ii) the Official Committee of Unsecured Creditors (the "Creditors' Committee"), and (iii) the DIP Lenders that attempts to avoid the Bankruptcy Code's protections and requirements and otherwise provides no benefit to holders of unsecured claims. Moreover, the Proposed Settlement fails to fully pay administrative claims and makes no distribution to general unsecured creditors. Finally, despite being heralded as a "Global Settlement," no other creditors or parties in interest are parties to the Proposed Settlement," the U.S. Trustee said in court filings. About SmileDirectClub Inc. SmileDirectClub, Inc. (Nasdaq: SDC) -- http://www.SmileDirectClub.com/-- is an oral care company and creator of the first medtech platform for teeth straightening. Through its cutting-edge telehealth technology and vertically integrated model, SmileDirectClub is revolutionizing the oral care industry. Its mission is to democratize access to a smile each and every person loves by making it affordable and convenient for everyone. SmileDirectClub is headquartered in Nashville, Tennessee. SmileDirectClub and its affiliates sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. S.D. Tex. Lead Case No. 23-90786) on Sept. 29, 2023. In the petition signed by its chief financial officer, Troy Crawford, SmileDirectClub disclosed $498,712,000 in assets and $1,051,823,000 in liabilities. Judge Christopher M. Lopez oversees the cases. The Debtors tapped Kirkland & Ellis LLP and Kirkland & Ellis International, LLP as general bankruptcy counsel; Jackson Walker, LLP, as local bankruptcy counsel; Centerview Partners, LLC, as financial advisor and investment banker; FTI Consulting, Inc., as restructuring advisor; and Kroll Restructuring Administration, LLC, as notice and claims agent. SOLARIS MARKETING: Seeks to Tap Neeleman Law as Legal Counsel ------------------------------------------------------------- Solaris Marketing NW, LLC, d/b/a Solaris Attachments, seeks approval from the U.S. Bankruptcy Court for the Western District of Washington to employ Neeleman Law Group as its legal counsel. The firm's services include: a. assisting the Debtor in the investigation of the financial affairs of the estate; b. providing legal advice and assistance to the Debtor with respect to matters relating to this case and creditor distribution; c. preparing all pleadings necessary for proceedings arising under this case; and d. performing all necessary legal services for the estate in relation to this case. The hourly rates charged by the firm are as follows: Principals $550 per hour Associates $450 per hour Paralegals $200 per hour In addition, the firm will seek reimbursement for work-related expenses incurred. Neeleman received a retainer of $11,738 from an owner contribution. Jennifer Neeleman, Esq., at Neeleman, disclosed in a court filing that her firm does not have any interest materially adverse to the interest of the Debtor's estate, creditors or equity security holders. The firm can be reached at: Jennifer L. Neeleman, Esq. NEELEMAN LAW GROUP, P.C. 1403 8th Street Marysville, WA 98270 Neeleman Law Group, P.C. Telephone: (425) 212-4800 Facsimile: (425) 212-4802 About Solaris Marketing NW, LLC Solaris Marketing NW, LLC d/b/a Solaris Attachments offers construction equipment attachments and parts, including machining and manufacturing services. The Debtor sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. W.D. Wash. Case No. 23-12368) on December 6, 2023. In the petition signed by Dariush Shafagh, owner, the Debtor disclosed $30,218 in assets and $1,301,989 in liabilities. Judge Timothy W. Dore oversees the case. Thomas D. Neeleman, Esq., at Neeleman Law Group, PC, represents the Debtor as legal counsel. SPARTAN GROUP: Seeks to Hire Munsch Hardt Kopf as Legal Counsel --------------------------------------------------------------- Spartan Group Holdings, LLC and its affiliates seek approval from the U.S. Bankruptcy Court for the Eastern District of Texas to employ Munsch Hardt Kopf & Harr, P.C. as their attorneys. The firm will render these services: a. serve as attorneys of record for the Debtors in all aspects, to include any adversary proceedings commenced in connection with the Bankruptcy Case and to provide representation and legal advice to the Debtors throughout the Bankruptcy Case; b. assist the Debtors in carrying out their duties under the Bankruptcy Code, including advising the Debtors of such duties, their obligations, and their legal rights; c. consult with the United States Trustee, any statutory committee that may be formed, and all other creditors and parties-in-interest concerning administration of the Bankruptcy Case; d. assist in potential sales of the Debtors' assets; e. prepare on behalf of the Debtors all motions, applications, answers, orders, reports, and other legal papers and documents to further the Estates' interests and objectives, and to assist the Debtors in the preparation of schedules, statements, and reports, and to represent the Debtors and the Estates at all related hearings and at all related meetings of creditors, US Trustee interviews, and the like; f. assist the Debtors in connection with formulating and confirming a Chapter 11 plan; g. assist the Debtors in analyzing and appropriately treating the claims of creditors; h. appear before this Court and any appellate courts or other courts having jurisdiction over any matter associated with the Bankruptcy Case; and i. perform all other legal services and provide all other legal advice to the Debtors. Munsch Hardt's hourly rates range from $750 for shareholders with the highest billing rates, to $180 for paralegals with the lowest billing rates. Munsch Hardt's hourly rates for the attorneys working on the Bankruptcy Case are: Davor Rukavina, Shareholder $650 per hour Julian Vasek, Shareholder $495 per hour On Dec. 8, 2023, the Debtor funded a security retainer to Munsch Hardt in the amount of $100,000. As disclosed in court filings, Munsch is a "disinterested person" within the meaning of Section 101(14) of the Bankruptcy Code. The firm can be reached through: Davor Rukavina, Esq. Julian P. Vasek, Esq. MUNSCH HARDT KOPF & HARR, P.C. 4000 Lincoln Plaza 500 N. Akard Street Dallas, TX 75201-6659 Telephone: (214) 855-7500 Facsimile: (214) 855-7584 About Spartan Group Holdings Spartan Group is a family of companies that provide dependable turnkey engineering, construction, and supply chain service solutions. Spartan Group Holdings, LLC and its affiliates filed their voluntary petition for relief under Chapter 11 of the Bankruptcy Code (Bankr. E.D. Tex. Lead Case No. 23-42384) on Dec. 13, 2023. The petitions were signed by Adrian J. Cano as chief executive officer. At the time of filing, Spartan estimated $50 million to $100 million in assets and $100 million to $500 million in liabilities. Judge Brenda T. Rhoades presides over the case. Davor Rukavina, Esq. at MUNSCH HARDT KOPF & HARR, P.C. represents the Debtor as counsel. ST. MARGARET'S HEALTH: Seeks to Tap Malooley Dahm Realty as Broker ------------------------------------------------------------------ St. Margaret's Health - Spring Valley seeks approval from the U.S. Bankruptcy Court for the Northern District of Illinois to employ Malooley Dahm Realty as its broker. The firm will market for sales the Debtor's properties located at: (a) 409 E. Second Street, Spring Valley, Illinois (Prairieland Home Care Property); (b) 405 E. 2nd Street, Spring Valley, Illinois (2nd Street Rental Home); and (c) the vacant lots located at 402 E. 1st Street, 406 E. 1st Street, and 518 N. Cornelia St., Spring Valley, Illinois. The firm's services include: a. meeting with Debtor to ascertain the Debtor's goals, objectives and financial parameters in selling the properties; b. preparing a marketing plan and budget for Debtor's review and approval; c. soliciting interested parties for the sale of the properties, and marketing the properties for sale through an accelerated process; d. solely at Debtor's direction and on Debtor's behalf, negotiating the business terms of the sales of the Properties; and e. performing all other broker-related services for Debtor which may be necessary and proper in order to effectuate sales of the properties. Malooley shall earn a fee equal to 6 percent of the gross sale price. Malooley is a "disinterested person" as such term is defined in section 101(14) of the Bankruptcy Code, according to court filings. The firm can be reached through: Beverly Malooley Malooley Dahm Realty 3030 4th St. Peru, IL 61354 Phone: (815) 224-9400 Email: bmalooley@comcast.net About St. Margaret's Health -- Peru St. Margaret's Health-Peru and St. Margaret's Health-Spring Valley are providers of healthcare services. The Debtors filed Chapter 11 petitions (Bankr. N.D. Ill. Lead Case No. 23-11641) on Aug. 31, 2023. At the time of the filing, the Debtors reported $10 million to $50 million in both assets and liabilities. Judge David D. Cleary oversees the cases. Howard L. Adelman, Esq., at Adelman & Gettleman, Ltd. serves as the Debtors' legal counsel. Hinshaw & Culbertson LLP as special counsel. Huron Consulting Services LLC as financial advisor. Epiq Corporate Restructuring, LLC as its noticing, claims, and balloting agent. SVB FINANCIAL: Reaches Deal With Creditors, Plans Asset Shuffle --------------------------------------------------------------- Amelia Pollard and Steven Church of Bloomberg News reports that SVB Financial Group, the former parent company of Silicon Valley Bank, has struck a deal with key creditors in a step toward resolving its bankruptcy case. SVB Financial and a crucial bloc of senior bondholders agreed to a deal centered on forming a new company that would hold valuable assets like the firm's venture capital arm -- SVB Capital -- and tax attributes potentially worth billions of dollars, according to court papers. The proposal is tentative and still needs court approval. About Silicon Valley Bank Silicon Valley Bank was the nation's 16th largest bank and the biggest to fail since the 2008 financial meltdown. During the week of March 6, 2023, Silicon Valley Bank, Santa Clara, CA, experienced a severe "run-on-the-bank." On the morning of March 10, 2023, the California Department of Financial Protection and Innovation seized SVB and placed it under the receivership of the Federal Deposit Insurance Corporation (FDIC). The FDIC on March 13, 2023, disclosed that it transferred all deposits -- both insured and uninsured -- and substantially all assets of the former Silicon Valley Bank of Santa Clara, California, to a newly created, full-service FDIC-operated "bridge bank" in an action designed to protect all depositors of Silicon Valley Bank. SVB Financial Group is a financial services company focusing on the innovation economy, offering financial products and services to clients across the United States and in key international markets. Prior to March 10, 2023, SVB Financial Group owned and operated Silicon Valley Bank, a state-chartered bank. On March 17, 2023, SVB Financial Group sought Chapter 11 bankruptcy protection (Bankr. S.D.N.Y. Case No. 23-10367). The Hon. Martin Glenn is the bankruptcy judge. The Debtor had assets of $19,679,000,000 and liabilities of $3,675,000,000 as of Dec. 31, 2022. Centerview Partners LLC is proposed financial advisor, Sullivan & Cromwell LLP proposed legal counsel and Alvarez & Marsal proposed restructuring advisor to SVB Financial Group as debtor-in-possession. Kroll is the claims agent. SYSTEM1 INC: Completes Repurchase of $63.7 Million Term Loans ------------------------------------------------------------- System1, Inc. disclosed in a Form 8-K filed with the Securities and Exchange Commission that the Company, together with its subsidiaries Orchid Merger Sub II, LLC and S1 Holdco, LLC, completed the repurchase of $63.7 million in principal amount of its outstanding senior secured term loan for an aggregate purchase price of $40.9 million pursuant to its previously announced modified "Dutch auction" tender offer under its Credit and Guaranty Agreement, dated Jan. 27, 2022, with RBC Capital Markets LLC, which served as the Auction Agent. The Tender Offer was conducted pursuant to and in accordance with the terms and conditions provided for in the Credit Agreement. Following the repurchase, the outstanding principal amount of the Term Loan was $301.3 million. The Company used available cash to fund the repurchase. The Company's estimated gain on the repurchase was approximately $22.8 million before fees and expenses incurred by the Company in connection with conducting the Tender Offer. About System1 Headquartered in Marina Del Rey, CA, System1, Inc. operates an omnichannel customer acquisition platform, delivering high-intent customers to advertisers and marketing antivirus software packages to end user customers. Los Angeles, California-based PricewaterhouseCoopers LLP, the Company's auditor since 2020, issued a "going concern" qualification in its report dated June 5, 2023, citing that the Company has violated a covenant which resulted in the outstanding principal balances under the Company's Term Loan and Revolving Facility with Bank of America being callable at the request of, or with the consent of, the required majority lenders and has insufficient liquidity to settle the outstanding principal balances of the Term Loan and Revolving Facility that raise substantial doubt about its ability to continue as a going concern. SYSTEM1 INC: S&P Downgraded ICR to 'SD' on Subpar Debt Repurchase ----------------------------------------------------------------- S&P Global Ratings lowered its issuer credit ratings on U.S.-based online digital marketing services provider System1 Inc. and financing subsidiary Orchid Merger Sub II LLC to 'SD' (selective default) from 'CCC', and removed the ratings from CreditWatch, where S&P placed them with developing implications on Dec. 1, 2023. S&P also lowered its rating on Orchid Merger Sub's senior secured term loan to 'D' from 'CCC'. S&P said, "We view the debt repurchase as distressed and tantamount to a default. The downgrade follows System1's announcement that it has completed a below-par cash repurchase of $63.7 million in aggregate principal amount of its $365 million (previously outstanding) senior secured term loan due in 2027 through a Dutch auction tender offer. The company repurchased the debt at an average price of approximately 64 cents on the dollar. Following the transaction, the company has $301.3 million outstanding on its term loan. We view the transaction as distressed because lenders received substantially less than originally promised, and we also viewed the company's capital structure as unsustainable and subject to default risk prior to the sale of its Total Security business and the subsequent debt repayment. This was due to the company's elevated leverage and our expectations for negative free operating cash flow over the next 12 months with limited visibility into a recovery in performance given the ongoing advertising recession. Absent the transactions, we believe the company may have had trouble meeting its $20 million of annual debt amortization and approximately $40 million of interest payments on an ongoing basis and would likely have had difficulty refinancing its term loan before the maturity in July 2027. "We plan to reassess our rating in the coming days after we have reviewed the full impact of the company's sale of its Total Security business and recent debt repurchases. Following the sale of its Total Security business and the subsequent debt repurchases, we estimate the company has around $90 million to $100 million of cash on the balance sheet and full availability under its $50 million revolving credit facility. This provides it ample liquidity to meet its next 12 months of amortization payments ($20 million), and interest payments ($25 million). However, performance will likely remain challenged in the current macroeconomic environment and there is little visibility into the company's recovery from the ongoing advertising recession. In addition, the sale of the Total Security business reduced product and customer diversity, and further increased its exposure to cyclical digital advertising revenue. We will also evaluate the company's ability to reduce leverage as well as refinance its July 2027 maturity and generate sustainably positive free cash flow. We will also consider the potential for additional subpar debt repurchases." TACALA LLC: S&P Rates New $780MM First-Lien Credit Facility 'B-' ---------------------------------------------------------------- S&P Global Ratings assigned its 'B-' issue-level rating and '3' recovery rating to Tacala LLC's proposed $55 million revolving credit facility due in 2029 and $725 million first-lien term loan due in 2031. The '3' recovery rating indicates its expectation for meaningful recovery to lenders (50%-70%; rounded estimate: 50%). S&P said, "Our 'B-' issuer credit rating and stable outlook on the company are unchanged. We expect Tacala will use the proceeds to refinance its existing first-lien and second-lien term loans and view the refinancing as leverage neutral." Tacala's earnings for the third quarter (ended Sept. 5, 2023) reflected 11% sales growth with more than 7% same-store sales growth. EBITDA also fell due to one-time costs related to its third-quarter dividend. S&P said, "We expect Tacala to close fiscal 2023 with leverage of 6.3x and fiscal 2024 with leverage of 6.5x in 2024. We believe the company will maintain a highly leveraged capital structure for the foreseeable future." ISSUE RATINGS--RECOVERY ANALYSIS Key analytical factors -- The 'B-' issue level rating and '3' recovery rating on the company's proposed first-lien credit facilities consisting of a $55 million cash flow revolver due in 2029 and $725 million term loan due in 2031 reflects S&P's expectation for meaningful (50%-70%; rounded estimate: 50%) recovery in the event of default. -- S&P's recovery analysis considers a hypothetical bankruptcy in 2026 as a slowdown in consumer spending and volatile economic activity leads to steep revenue and earnings declines. -- The simulated default scenario assumes Tacala would reorganize as a going concern to maximize lenders' recovery prospects given its market position as the largest Taco Bell franchisee. Therefore, S&P values the company on a going-concern basis using a 5x multiple applied to its projected emergence-level EBITDA, in line with the multiple for other restaurant operators such as MIC Glen LLC. Simulated default assumptions -- Simulated year of default: 2026 -- EBITDA at emergence: $85 million -- Implied enterprise value multiple: 5x -- Gross enterprise value at emergence: $425 million Simplified waterfall -- Net enterprise value at default (after 5% administrative costs): $400 million -- Valuation split (obligors/nonobligors): 100%/0% -- First-lien credit facility claims*: $770 million --Recovery expectations: 50%-70% (rounded estimate: 50%) *All debt amounts include six months of prepetition interest. TEHUM CARE: Tort Claimants Tap Province LLC as Financial Advisor ---------------------------------------------------------------- The official tort claimants' committee of Tehum Care Services Inc. seeks approval from the U.S. Bankruptcy Court for the Southern District of Texas to employ Province LLC as its financial advisor. The firm's services include: a. becoming familiar with and analyzing the Debtors' assets and liabilities, and overall financial condition and liquidity during the Chapter 11 Cases; b. reviewing financial and operational information furnished by the Debtors; c. review of other operational data and agreements related to the interaction of the Debtors; d. scrutinizing the economic terms of various agreements, including, but not limited to, various professional retentions; e. analyzing the Debtors' proposed business plans and developing alternative scenarios, if necessary; f. analyzing the various types of claims against the Debtors; g. assessing the Debtors' various pleadings and proposed treatment of creditor claims therefrom; h. preparing, or reviewing as applicable, avoidance action and claim analyses; i. assisting the TCC in reviewing the Debtors' financial reports, including, but not limited to, SOFAs, Schedules, budgets, and Monthly Operating Reports; j. advising the TCC on the current state of the Chapter 11 Cases; k. advising the TCC in negotiations with the Debtors and third parties as necessary; l. if necessary, participating as a witness in hearings before the bankruptcy court with respect to matters upon which Province has provided advice; and m. providing other activities as are approved by the TCC, the TCC's counsel, and as agreed to by Province. The firm will be paid at these rates: Managing Directors and Principals $870 to $1,450 per hour Vice Presidents, Directors and Senior Directors $690 to $950 per hour Analysts, Associates and Senior Associates $370 to $700 per hour Other / Para-Professional $270 to $410 per hour Michael Atkinson, a principal of Province, 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 Atkinson Province, LLC 2360 Corporate Circle, Suite 340 Henderson, NV 89074 Tel: (702) 685-5555 Email: pnavid@provincefirm.com About Tehum Care Services Tehum Care Services Inc., doing business as Corizon Health Services Inc., is a privately held prison healthcare contractor in the United States. It is based in Brentwood, Tenn. Tehum Care Services filed a petition for relief under Chapter 11 of the Bankruptcy Code (Bankr. S.D. Tex. Case No. 23-90086) on Feb. 13, 2023. In the petition filed by Russell A. Perry, as chief restructuring officer, the Debtor reported assets between $1 million and $10 million and liabilities between $10 million and $50 million. Judge Christopher M. Lopez oversees the case. The Debtor tapped Gray Reed & McGraw, LLP as bankruptcy counsel; Bradley Arant Boult Cummings, LLP, as special litigation counsel; and Ankura Consulting Group, LLC, as financial advisor. Russell A. Perry, senior managing director at Ankura, serves as the Debtor's chief restructuring officer. Kurtzman Carson Consultants, LLC, is the claims, noticing and solicitation agent. The U.S. Trustee for Region 7 appointed an official committee to represent unsecured creditors in the Debtor's Chapter 11 case. Stinson, LLP and Dundon Advisers, LLC, serve as the committee's legal counsel and financial advisor, respectively. TEINE ENERGY: Moody's Raises CFR to B1 & Alters Outlook to Stable ----------------------------------------------------------------- Moody's Investors Service upgraded Teine Energy Ltd.'s corporate family rating to B1 from B2, the probability of default rating to B1-PD from B2-PD and affirmed the B3 rating on the senior unsecured notes. The outlook was changed to stable from positive. "The upgrade reflects Teine's consistent operational track record and Moody's expectation for steady production growth and the maintenance of adequate liquidity," said Whitney Leavens, Moody's analyst. The affirmation of the B3 senior unsecured rating positions the notes two notches below the company's CFR, reflecting the priority ranking of the C$650 million first lien revolver. Moody's did not upgrade the notes along with the CFR because the company recently upsized its revolver, increasing the subordination of the notes. Moody's did not change the senior unsecured rating at that time given the previous positive outlook. RATINGS RATIONALE Teine's B1 CFR is supported by: (1) strong credit metrics and production profile with good durability; (2) high exposure to light oil production supporting strong cash margins with the leveraged full-cycle ratio remaining comfortably above 1.5x; (3) a leading position among producers in the Viking Formation in southwestern Saskatchewan; and (4) a stable track record and cash flow supporting liquidity. The rating is constrained by: (1) modest production volumes, rising to around 40,000 boe/d in 2024; (2) geographic concentration, with over half of production coming from the Viking in Saskatchewan; (3) a high corporate decline rate (about 30%); and (4) private equity ownership underpinning financial policy risks. Teine has adequate liquidity. Moody's estimates that sources at year end 2023 total about C$370 million, consisting of around $20 million cash on hand and about C$350 million available under the C$650 million borrowing base revolver expiring May 2025. Under Moody's medium-term price assumptions and assuming shareholder distributions, free cash flow will be constrained during 2024. The company does not have any debt maturities in 2024. Teine does not have any financial maintenance covenants, but the revolver borrowing base is subject to a liability management ratio. The stable outlook reflects Moody's expectation that Teine will maintain solid credit metrics and adequate liquidity while sustaining modest production growth through 2024. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS The ratings could be upgraded if Teine materially increased production, maintains positive free cash flow and demonstrates a more conservative financial policy, with RCF/debt above 50% at mid-cycle prices and LFCR above 1.5x. The ratings could be downgraded if production or reserves decline, RCF/debt falls below 35%, if the LFCR is below 1x, or if Teine generates sustained negative free cash flow or the company's liquidity profile deteriorates. Teine Energy Ltd. is a private Calgary, Alberta-based independent exploration and production company with a focus on quick cycle light oil and low decline heavy oil plays in Saskatchewan and Alberta. The company is majority owned by the Canadian Pension Plan Investment Board (CPPIB). The principal methodology used in these ratings was Independent Exploration and Production published in December 2022. TERRAFORM LABS: Case Summary & 15 Unsecured Creditors ----------------------------------------------------- Debtor: Terraform Labs Pte. Ltd. 1 Wallich Street #37-01 Guoco Tower Singapore 078881 Business Description: Terraform is a Singapore-based company that develops, markets, and sells crypto-assets. Chapter 11 Petition Date: January 21, 2024 Court: United States Bankruptcy Court District of Delaware Case No.: 24-10070 Debtor's Local Counsel: Zachary I. Shapiro, Esq. RICHARDS, LAYTON & FINGER, P.A. One Rodney Square, 920 North King Street Wilmington, Delaware 19801 Tel: (302) 651-7700 Email: shapiro@rlf.com Debtor's Attorneys: Ronit Berkovich, Esq. WEIL, GOTSHAL & MANGES LLP 767 Fifth Avenue New York, New York 10153 Tel: (212) 310-8000 Email: ronit.berkovich@weil.com Debtor's Special Litigation Counsel: DENTONS US LLP 1221 Sixth Ave New York, NY 10020 Debtor's Special Foreign Counsel: WONGPARTNERSHIP LLP 12 Marina Boulevard Level 28 Marina Bay Financial Centre Tower 3 Singapore 018982 Debtor's Financial Advisor: ALVAREZ & MARSAL NORTH AMERICA, LLC 600 Madison Ave New York, NY 10022 Debtor's Claims Agent: EPIQ CORPORATE RESTRUCTURING, LLC 777 Third Avenue New York, New York 10017 Estimated Assets (on a consolidated basis): $100 million to $500 million Estimated Liabilities (on a consolidated basis): $100 million to $500 million The petition was signed by Chris Amani as chief executive officer. A full-text copy of the petition is available for free at PacerMonitor.com at: https://www.pacermonitor.com/view/MLZAJXA/Terraform_Labs_Pte_Ltd__debke-24-10070__0001.0.pdf?mcid=tGE4TAMA List of Debtor's 15 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount 1. K&L Gates LLP Trade Payable $3,474.50 Attn: Drew Hinkes 210 Sixth Avenue K& Gates Center Pittsburgh, PA 15221 United States Drew Hinkes Tel: 302-416-7000 Fax: 617-261-3100 Email: drew.hinkes@klgates.com 2. Cheang & Lee Sanitary Trade Payable $1,812.39 Plumbing Pte Ltd Attn: Eric Chee Manager 21 Toh Guan Rd. E #06-13 Toh Guan Centre Singapore 608609 Eric Chee Tel: +65 68966488 Email: main@clspc.com.sg 3. ACA Energ Pte Ltd Trade Payable $757.58 Attn: Pohyee Song 27 Mandai Estate #07-07 Innovation Place Tower 2 Singapore, 722931 Email: pohyee.song@acaengrg.com 4. Pagerduty, Inc. Trade Payable $747.00 Attn: Jennifer Tejada CEO Dreamplus 1219 311 Gangnam-Daero Seocho-Gu Seoul, 16628 Korea, Republic Of Tel: 415-805-7070 Email: jennifer.tejada@pagerduty.com 5. SingTel Trade Payable $100.96 Attn: Boon Koh CFO 31 Execter Road Comcentre Singapore, 239732 Tel: +65 68383888 Fax: +65 67328428 6. Archer Marketing & Trade Payable $81.58 Development (S) Pte Ltd Attn: Vincent Chiua Managing Director 4 Penjuru Place #01-23 2.8 Penjuru Tech Hub Singapore, 608782 Tel: +65 67772272 Fax: +65 67771179 Email: accounts@archer.com.sg 7. SUBMC1 Trade Payable $7.76 1 Wallich Street #31-01 Guoco Tower Singapore, 078881 Email: aliceleaw@guocoland.com 8. CloudFlare, Inc. Trade Payable Undetermined Attn: Michelle Zatlyn Co-Founder and President 101 Towersend St San Francisco, CA 94107 United States Tel: 650-319-8930 Email: mzatlyn@cloudflare.com 9. Ethan Lee Employee Undetermined Address on File Reimbursement 10. Nansen Pte. Ltd. Trade Payable Undetermined Attn: Alexander Svanevik 111 Somerset Rd, #03-09 Singapore 238164 Email: alex@nansen.ai 11. Securities and Exchange Litigation Undetermined Commission Attn: Devon Staren 100 F Street N.E. Washington, DC 20549-5985 Email: starend@sec.gov 12. Standard Crypto Venture Fund Investment Undetermined Attn: Ashley Sweren Head of Operations 1225 4th Street #525 San Francisco, CA 94158 United States Email: ashley@standardcrypto.vc 13. Token Terminal Oy Trade Payable Undetermined Piene Roobertinkatu 9 00130 Helsinkski Finland Email: rasmus@tokenterminal.xyz 14. TPC Commercial Pte Ltd. Lease Termination Undetermined Attn: Cheng Hsing Yao Principal 1 Wallich Street #31-01 Guco Tower Singapore 078881 Tel: +65 65334312 Email: hcheng@guocoland.com 15. TQ Ventures Investment Undetermined Attn: Andrew Marks Partner 408 West 14th Street 4th Floor New York, NY 10014 United States c/o: Eshares, Inc. DBA Carta, Inc. 333 Bush Street, Suite 2300 San Francisco, CA 94104 Tel:917-887-5574 / 650-669-8381 Email: andrew@tqventues.com TITAN PURCHASER: Moody's Assigns First Time B1 Corp. Family Rating ------------------------------------------------------------------ Moody's Investors Service assigned first-time ratings to Titan Purchaser, Inc., including a B1 corporate family rating and a B1-PD probability of default rating. Moody's also assigned a B2 rating to the company's proposed senior secured term loan B. The outlook is stable. The rating assignments follow the company's plan to raise new senior secured debt, comprised of an unrated $150 million asset-based lending (ABL) facility and a $330 million first-lien term loan. Proceeds from the offerings will be used to fund Monomoy Capital Partners' (Monomoy) acquisition of Titan Purchaser, parent company of operating subsidiary Waupaca Foundry, Inc. (Waupaca). The remaining financing is comprised of cash equity from Monomoy. RATINGS RATIONALE Titan Purchaser's ratings reflect Waupaca's strong competitive position as a manufacturer of iron casting components in North America and significant progress in reducing reliance on the low margin light vehicle automotive market. Modest leverage and expectations for sharply higher margins boosted by closures of two loss-generating plants, a revamped surcharge mechanism and renewed focus on pricing also support the ratings. Waupaca is one of the largest suppliers of iron castings in North America with longstanding, blue chip customer relationships within the transportation and industrial end markets. A high percentage of booked business through the next couple of fiscal years (Waupaca's fiscal year ends March 31st), much of it being sole-sourced, provides good revenue visibility. Further, there is a shortage of iron casting industry capacity and a number underperforming plants in North America that underpins demand expectations. Diversification away from the highly competitive, lower margin automotive/light truck markets into higher margin end markets such as agriculture, construction and industrials should boost margins despite periods of cyclicality. Waupaca has a difficult to replicate business model with five well maintained, technologically advanced plants located in close proximity to many of its customers in the Midwestern US. A largely variable cost structure, pass-through cost mechanisms for raw material inputs and moderate capital investment requirements results in solid free cash flow capabilities. The ratings are constrained by a recent history of weak margins and cash flow, exposure to end markets that can be volatile and the transition to standalone status under private equity ownership. Demand looks to be largely stable, however significantly improved operating efficiency and good execution will be necessary to return margins toward pre-pandemic levels. Moody's anticipates an EBITA margin in the low-single digits over the next couple of years which should generate annual free cash flow in excess of $20 million. Debt-to-EBITDA is expected to be relatively low at between 2x – 3x. The stable outlook reflects Moody's expectation for flat-to-modestly higher revenue for fiscal 2024 but with significant margin expansion and solidly positive free cash flow resulting from improving pricing power and higher plant utilization. End market diversity should help reduce periods of cyclicality in certain sectors. Moody's expects Titan Purchaser to maintain adequate liquidity, supported by Moody's expectation for annual free cash flow of at least $20 million and near full availability under the proposed $150 million asset-based lending (ABL) facility set to expire in 2029. The facility is subject to a springing fixed charge covenant tested when availability is less than the greater of $13 million and 10% of the borrowing base at any point in time. The initial cash position is minimal but should build over time with expectations for positive free cash flow. Marketing terms for the new credit facilities (final terms may differ materially) include the following: Incremental pari passu debt capacity up to the greater of 0.75x of EBITDA and $142.5 million, plus any amount subject to the closing date net first lien leverage ratio. There is no inside maturity sublimit. A blocker provision restricts the transfer of material intellectual property to unrestricted subsidiaries and to non-guarantors, subject to exceptions. Investments in unrestricted subsidiaries are only permitted up to the unrestricted subsidiary investment cap. The credit agreement provides some limitations on up-tiering transactions, requiring affected lender consent for amendments that have the effect of subordinating the debt and/or liens. The ESG Credit Impact Score of CIS-4 indicates the rating is lower than it would have been if ESG risk exposures did not exist. Governance risk (G-4) stems from private equity ownership, lack of a majority of independent board members and limited track record operating as a standalone entity. Environmental risk (E-3) is largely aligned with the broader manufacturing sector, and includes the company's heavy reliance on the transportation markets where stricter environmental regulations on carbon transition could impact demand and the cost for the vehicles and equipment for which Waupaca provides parts. Titan Purchaser's social risks (S-3) are in-line with the manufacturing sector, reflective of risks related to medium-to-heavy duty manufacturing activities that include stringent compliance and safety standards. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS The ratings could be upgraded with demonstration of sharply higher returns that evidence management's successful execution of its ambitious margin enhancements. More specifically, an EBITA margin approaching the high-single digits and EBITA-to-interest sustained above 4x could also result in a rating upgrade. Stronger liquidity, including annual free cash flow in excess of $50 million and an increasing cash position would also be required for a rating upgrade given the significant term loan amortization requirements. The ratings could be downgraded due to the inability to meaningfully improve margins, if free cash flow falls below the annual term loan amortization requirement or debt-to-EBITDA rises above 4x. Indications of a more aggressive financial policy or deteriorating liquidity, including reliance on the ABL facility for working capital needs could also result in a negative rating action. The principal methodology used in these ratings was Manufacturing published in September 2021. Waupaca Foundry Inc. is a manufacturer of engineered cast iron components for use in the automotive vehicle, off-highway vehicle, industrial, rail and oil & gas markets. The company supplies gray and ductile iron castings to light trucks (Class 1-3), heavy trucks (Class 4-8) and passenger vehicles as well as the agriculture and construction markets. Products include brackets, rotors, cases, housings, automotive brake discs and larger heavy truck/off-highway castings and commercial vehicle brake drums. Revenue for the twelve months ended October 2023 was nearly $2 billion. TITAN PURCHASER: S&P Assigns 'B' ICR, Outlook Stable ---------------------------------------------------- S&P Global Ratings assigned its 'B' issuer credit rating to Titan Purchaser Inc. (d/b/a Waupaca Foundry). S&P said, "At the same time, we assigned our 'B' issue-level rating and '3' recovery rating to the company's proposed senior-secured term loan. The recovery rating reflects our expectation for meaningful (50%-70%; rounded estimate: 55%) recovery in the event of payment default. "The stable outlook reflects our expectation that Waupaca will maintain its recent improvement in EBITDA margins, but that they will remain low relative to peers. We believe the improved profitability will allow the company to maintain debt to EBITDA in the 3x area or lower, enabling positive free operating cash flow (FOCF) generation over the next 12 months. "The 'B' issuer credit rating on Waupaca reflects our view of its improving but still weak and volatile profitability and high customer concentration. Partially offsetting these factors is the company's low leverage relative to similarly related peers, its solid manufacturing capacity relative to competitors, and its sizeable operations. "We view Waupaca's profitability as below average in the capital goods space. We forecast S&P Global Ratings-adjusted EBITDA margins will be in the high-single-digit percent area in fiscal 2023 (ending March 31, 2024) and that the company will modestly improve its margins going forward. Still, we view its EBITDA margins as below average compared with other capital goods companies we rate. "Over the last few years, the elimination of manufacturing plants that operated with significant losses has significantly improved margins. Going forward, we expect Waupaca to continue increasing pricing to offset labor inflation, reset its surcharge mechanisms to monthly from quarterly, and flex down its costs base to further improve profitability. "Moreover, we believe Waupaca's increased focus on higher-margin products and applications within nonautomotive end markets and capacity constraints in the ductile market, which have enabled it to increase prices, will allow the company to maintain credit metrics that are strong for the current rating. Still, we believe the company's end markets are cyclical and that its profits continue to be volatile. "Although Waupaca has reduced its exposure to the automotive end market, we still view its end market exposure as volatile. With roughly $2 billion of fiscal 2022 revenue (ended March 31, 2023), Waupaca has a leading market position as a manufacturer of gray and ductile iron castings for the automotive, agriculture, construction, and general industrial end markets. While its sales to the automotive end market (which the company defines as light truck, passenger car, and power train) is now 36% of overall 2022 revenue, down from 62% of fiscal 2016 revenue, the company still sells into cyclical end markets, in our view." The company has increased exposure to nonautomotive end markets over the past few years, such as construction, agricultural, and heavy-duty truck, to enhance profitability, as products that support these end markets are custom-built equipment and have higher engineering capabilities. This leads to a higher average selling price and therefore drives a higher margin profile. S&P said, "Still, we believe that the company's credit metrics could weaken significantly in a market slowdown. In fiscal 2024, we forecast a slight decline in revenue, driven by our expectation for U.S. residential construction to be down slightly, U.S. real equipment investment and U.S. nonresidential construction growth to remain relatively flat, and the potential for customer backlogs to decline. "In our view, Waupaca has a high degree of customer concentration. The company has high customer concentration, which we view as a risk. Its largest customer accounts for 13% of its sales, and its top five customers make up roughly 43% of its revenue. Further, Waupaca's customer base comprises blue-chip customers, which we believe impedes some of its pricing power." Partially offsetting this is the high switching costs customers would endure due to equipment casting and validation testing, specifically if the equipment is more customized. Waupaca also maintains long-standing customer relationships, with an average tenure of 25 years for its top 20 customers. S&P said, "We expect Waupaca to maintain low leverage relative to similarly rated issuers, though its financial-sponsor ownership remains a factor. With our forecast for S&P Global Ratings-adjusted EBITDA margins in the high-single-digit percent area, we believe Waupaca's S&P Global Ratings-adjusted leverage will be in the low-3x area in fiscal 2023 and fiscal 2024, which is lower than the leverage levels of similar capital goods companies that we rate in the 'B' category. "We believe that over a cycle, the company's profitability could swing significantly, leading to higher leverage levels as evidenced by pressure on profitability in fiscal 2021. Our rating also incorporates Waupaca's equity sponsor ownership by Monomoy Capital Partners and our belief that financial sponsors often extract cash or otherwise increase the leverage of the companies they own over time, either through acquisitions or dividends to shareholders. "We forecast Waupaca will maintain adequate liquidity, supported by its $150 million ABL and positive FOCF generation. With full availability under the ABL, we believe the company will have adequate sources of liquidity and covenant headroom to manage its operating needs over the next 12 months. We forecast higher earnings, a modest working capital outflow, and capital expenditures (capex) of about $40 million will result in positive reported FOCF of $70 million-$80 million in fiscals 2023 and 2024. "The stable outlook on Waupaca reflects our expectation that its operating performance will remain steady over the next 12 months, with variability in demand across its segments and end markets, and that it will maintain S&P Global Ratings-adjusted leverage in the 3x-4x area and generate positive FOCF." S&P could lower the rating on Waupaca if: -- Its operating performance weakens materially such that its S&P Global Ratings-adjusted leverage increases above 5x; -- FOCF turns negligible or negative; or -- It pursues a more aggressive financial policy, including debt-funded acquisitions or shareholder returns, resulting in similar leverage levels. S&P could raise the rating on Waupaca if: -- The company demonstrates a track record of sustaining S&P Global Ratings-adjusted leverage below 3x in favorable market conditions, and we believe management will commit to this level of leverage; and -- It sustains positive FOCF generation. S&P said, "Governance factors are a moderately negative consideration in our credit rating analysis of Waupaca, as is the case for most rated entities owned by private-equity sponsors. We believe the company's highly leveraged financial risk profile assessment points to corporate decision-making that prioritizes the interests of the controlling owners. This also reflects the generally finite holding periods and focus on maximizing shareholder returns. "We believe environmental and social risks are a neutral consideration in our rating analysis." TRAVERSE MIDSTREAM: Moody's Affirms B2 CFR, Outlook Remains Stable ------------------------------------------------------------------ Moody's Investors Service affirmed Traverse Midstream Partners LLC's B2 corporate family rating, its B2 senior secured term loan B rating, and its B2-PD probability of default rating and maintained the stable outlook. RATINGS RATIONALE Traverse Midstream's B2 CFR is supported by the stable cash flow generated by its 35% non-operating ownership interest in Rover Pipeline LLC (Rover) and by its 25% non-operating interest in the Ohio River System LLC (ORS) natural gas trunk pipeline. Rover and ORS serve as important transportation outlets for natural gas production in the Appalachian basin and benefit from meaningful long-term contract coverage. Rover serves as the principal source of cash flow influencing Traverse Midstream's ratings and contributes a significantly larger portion of Traverse Midstream's EBITDA generation than does ORS. The rating is constrained by the company's high but improving debt leverage and counterparty credit quality. Traverse Midstream's leverage remains elevated at 5.9x as of September 30, 2023, but has improved from over 6.5x at December 31, 2022 owing to the impact of a cash flow sweep of 75% of available cash as long as leverage is above 4.5x. The company was able to modestly accelerate its deleveraging in 2023 with proceeds from a legal settlement, however, its pace of deleveraging is likely to slow in 2024 with Moody's expecting leverage to remain above 5.5x at the end of the year. Rover and ORS are unlevered and Rover's joint venture agreement requires the distribution of all free cash flow to its partners. Rover has contracted firm transportation volumes covering over 85% of its 3.425 billion cubic feet per day (Bcfd) of authorized capacity backed by take-or-pay shipper contracts with an average remaining life in the range of 11 years. Traverse Midstream's ratings are implicitly constrained by the Ba2 weighted average rating of Rover's contracted shippers, with several customers having improved their credit profiles in the past year. The credit profile of ORS is also considered in Traverse's ratings, to a lesser extent since it provides roughly 25% of Traverse's cash flow. Traverse Midstream's ratings also take into account the Minority Holding Companies Methodology as a secondary methodology into the analysis of the company. The methodology describes the general principles for assessing entities such as Traverse Midstream whose activities are limited to owning non-controlling interests in non-financial corporate entities. Considerations discussed in the methodology include subordination risk between the non-controlling owner and the underlying operating company, the stability of the operating company's distributions and coverage, and the extent of the non-controlling owner's influence on the governance of the operating company. Traverse Midstream's ratings are notched from Rover's credit profile, which incorporates the credit quality of its shipper counterparties. The ratings also consider Traverse Midstream's strong ability to influence the joint ventures. Traverse Midstream has blocking rights that prohibit key changes at the Rover level including debt incurrence, asset sales, changes in project scope, and any modification of distribution policies. Rover and ORS do not carry debt and therefore there is no notching for structural subordination. The stable outlook reflects Moody's expectation for a continued gradual improvement in the company's leverage and the predictable nature of the company's cash flow. Traverse Midstream is expected to maintain adequate liquidity through at least mid-2025. The company has a $50 million super priority secured revolving credit facility for additional short-term liquidity, which was undrawn as of September 30, 2023. The company's minimal maintenance capital spending requirements and stable cash flow generation provide sufficient liquidity for Traverse Midstream to meet its ongoing needs. The Term Loan has an excess cash flow sweep of 75% when debt/EBITDA exceeds 4.5x, stepping down to 50% once leverage is 4.5x or lower, which allows Traverse Midstream to modestly build cash on its balance sheet. The Term Loan and revolver contain a 1.4x minimum debt service coverage ratio coverage covenant, which Moody's expects the company to continue to meet. The Revolver and Term Loan are scheduled to mature in 2028. Traverse's $1.245 billion Term Loan maturing in February 2028 is rated B2, the same as the CFR. The $50 million Revolver expiring in February 2028 has a super priority preference over the Term Loan, but the Term Loan is rated the same as the CFR because of the small size of the Revolver compared to the Term Loan. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS Sustained debt/EBITDA below 5.5x or FFO/debt above 10% could be supportive of an upgrade of Traverse Midstram's ratings, as could a meaningful improvement in the credit quality of Rover's contracted shippers. The company's ratings could be downgraded if leverage increases above 7x or if the credit quality of Rover's contracted shippers deteriorates markedly. Traverse Midstream Partners LLC is wholly-owned by The Energy and Minerals Group (EMG). Founded in 2006, EMG is a private equity firm based in Houston, Texas which invests in companies operating in the natural resources, energy, infrastructure, mining and minerals sectors. The principal methodology used in these ratings was Natural Gas Pipelines published in July 2018. TRUEVISION COMPLETE: Files Emergency Bid to Use Cash Collateral --------------------------------------------------------------- Truevision Complete Eye Care, PA asks the U.S. Bankruptcy Court for the Northern District of Texas, Dallas Division, for authority to use cash collateral and provide adequate protection. This is an emergency matter since the Debtor has no outside sources of funding available to it and must rely on the use of cash collateral to continue its operations. Comerica Bank is the Debtor's secured creditor claiming liens on Debtor’s personal property including accounts. As adequate protection, the secured creditor will be granted valid, binding, enforceable, and perfected liens co-extensive with the Secured Lender's pre-petition liens in all currently owned or hereafter acquired property and assets of the Debtor. The replacement liens granted to the Secured Lender 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 motion is available at https://urlcurt.com/u?l=0HIKoD from PacerMonitor.com. About Truevision Complete Eye Care, PA Truevision Complete Eye Care, PA sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. N.D. Tex. Case No. 24-30108-mvl11 ) on January 12, 2024. In the petition signed by Iredia Joe Ekukpe, owner, the Debtor disclosed up to $500,000 in assets and up to $1 million in liabilities. Joyce W. Lindauer, Esq., at Joyce W. Lindauer Attorney, PLLC, represents the Debtor as legal counsel. TRUEVISION COMPLETE: Seeks to Hire Joyce W. Lindauer as Counsel --------------------------------------------------------------- Truevision Complete Eye Care, PA seeks approval from the U.S. Bankruptcy Court for the Northern District of Texas to employ Joyce W. Lindauer Attorney, PLLC as counsel. The Debtor requires legal counsel to effectuate a reorganization, propose a Chapter 11 plan of reorganization, and effectively move forward in its bankruptcy proceeding. The firm will be paid at these rates: Joyce W. Lindauer, Esq. $495 per hour Sydney Ollar, Associate Attorney $295 per hour Laurance Boyd, Associate Attorney $250 per hour Dian Gwinnup, Paralegal $225 per hour Legal Assistants $75 to $225 per hour In addition, the firm will seek reimbursement for out-of-pocket expenses incurred. The firm received a retainer of $3,785 from the Debtor. Joyce Lindauer, Esq., the owner of the firm, 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: Joyce W. Lindauer, Esq. JOYCE W. LINDAUER ATTORNEY, PLLC 1412 Main Street, Suite 500 Dallas, TX 75202 Tel: (972) 503-4033 Fax: (972) 503-4034 Email: joyce@joycelindauer.com About Truevision Complete Eye Care Truevision Complete Eye Care, PA filed a voluntary petition under Chapter 11 of the Bankruptcy Code (Bankr. N.D. Tex. Case No. 24-30108) on Jan 16, 2024, listing $100,001 to $500,000 in assets and $500,001 to $1 million in liabilities. Judge Michelle V Larson presides over the case. Joyce W. Lindauer, Esq. at Joyce W. Lindauer Attorney, PLLC represents the Debtor as counsel. UNLIMITED DEVELOPMENT: Case Summary & Three Unsecured Creditors --------------------------------------------------------------- Debtor: Unlimited Development Corp Cond Capitolio Plaza At 11009 San Juan, PR 00901 Business Description: Unlimited Development is a Single Asset Real Estate debtor (as defined in 11 U.S.C. Section 101(51B)). The Debtor owns a residential apartment located at Capitolio Plaza, San Juan, PR valued at $500,000. Chapter 11 Petition Date: January 22, 2024 Court: United States Bankruptcy Court District of Puerto Rico Case No.: 24-00168 Debtor's Counsel: Wanda Luna-Martinez, Esq. LUNA MAW OFFICES PMB 389 PO Box 194000 San Juan, PR 00919 Tel: (787) 998-2356 Email: quiebra@gmail.com Total Assets: $500,200 Total Liabilities: $1,201,609 The petition was signed by Ismael Crespo as president. A full-text copy of the petition containing, among other items, a list of the Debtor's three unsecured creditors is available for free at PacerMonitor.com at: https://www.pacermonitor.com/view/OFSGDPA/UNLIMITED_DEVELOPMENT_CORP__prbke-24-00168__0001.0.pdf?mcid=tGE4TAMA VERTEX ENERGY: S&P Alters Outlook to Negative, Affirms 'B' ICR -------------------------------------------------------------- S&P Global Ratings revised the outlook to negative from stable and affirmed its 'B' issuer credit rating on Vertex Energy Inc. (Vertex) and its 'B+' issue-level rating on the company's term loan. The recovery rating of '2' on the company's term loan is unchanged. S&P said, "The negative outlook reflects our expectation that the company could experience reduced liquidity given the term loan maturing in April 2025. The negative outlook also reflects our expectation that leverage will be above 2.0x for about a year before deleveraging in 2024." On Dec. 28, 2023, Vertex upsized its term loan balance by $50 million, which together with other factors, increased S&P Global Ratings-adjusted leverage to 2.8x as of year-end 2023. S&P said, "We expect consolidated S&P Global Ratings-adjusted leverage will be above 2.0x in 2024. "The elevated leverage is primarily spurred by the $50 million term loan upsizing, together with an approximately $60 million increase in reported lease liabilities and about $50 million less unamortized discount and deferred financing costs during the first three quarters of 2023, which we adjust to long-term debt as per our criteria. We expect leverage as of year-end 2023 will be about 2.8x, declining to about 1.6x as of year-end 2024. We expect the lower leverage will be spurred by increased renewable diesel (RD) production, as the company's phase II expansion project will ramp up production capacity to about 14,000 barrels per day (/bpd) by midyear 2024. However, we recognize the volatile nature of the company's business and have factored the volatility into our financial risk profile assessment." The company's liquidity could deteriorate given the near-term maturity of its term loan. S&P said, "Under our base-case scenario, we expect the company will not generate sufficient free cash flow in full-year 2024 and the first quarter of 2025 to fully retire the term loan when it is due in April 2025. We expect the company will not be able to use organic cash flow generation alone to fully repay the term loan without relying on refinancing or other external sources of funds. We view this near-term maturity to be associated with greater liquidity risk, given the term loan is maturing within two years. In addition, the weighted-average maturity of the company's debt is less than two years, which we believe incrementally increases refinancing risk. Therefore, we revised the capital structure modifier to negative. "The negative outlook reflects our expectation that the company's liquidity could deteriorate as the April 2025 maturity becomes current absent increased cash flow generation. It also reflects our expectation that S&P Global Ratings-adjusted leverage will be above 2.0x before deleveraging once the company's RD unit ramps up production and capacity in 2024." S&P could lower the rating on Vertex if: -- S&P believes there are liquidity risks for the company as the term loan becomes current; or -- S&P anticipates leverage will be maintained above 2.0x in 2024, which could occur if the company faces delays or other obstacles in phase II of the RD project, resulting in lower-than-expected volumes or unfavorable commodity price movements weaken margin. S&P could revise the outlook to stable if: -- S&P has a clear line of sight into the company's ability to repay the term loan due in April 2025; and -- S&P believes the company can de-leverage comfortably below 2.0x. VISTAGE INT'L: Moody's Lowers Rating on First Lien Loans to B2 -------------------------------------------------------------- Moody's Investors Service downgraded Vistage International, Inc. backed senior secured first lien bank credit facilities, including the revolving credit facility and the term loan ratings to B2 from B1. At the same time, Moody's affirmed Vistage's B2 corporate family rating and B2-PD Probability of Default Rating. The outlook is maintained at stable. The proceeds from the new incremental first lien term loan along with $13.9 million of balance sheet cash will be used to repay $135 million of the company's senior secured second lien credit facility (unrated) and pay transaction-related fees and expenses. The downgrade of Vistage's senior secured first lien credit facilities to B2 is due to the proposed change in the capital structure offering less protection to these creditors. Based on the proposed add-on to the first lien term loan and full repayment of second lien term loan (unrated), senior secured debt will reflect the preponderance of Vistage's total debt, which aligns the ratings of the senior secured debts to the B2 CFR. RATINGS RATIONALE Vistage's B2 CFR is constrained by high financial leverage, as expressed by pro forma debt-to-EBITDA of 6.1x for the 12-month period ended 30 September 2023 (based on proposed transaction), its small scale and narrow business profile that limit its growth. The company's discretionary nature of services within a high fragmented industry with many smaller competitors adds to credit risk. Additionally, Vistage has a history of aggressive financial policies as evidenced by debt-funded distributions and acquisitions. The company's credit profile benefits from a solid market position as a leading provider of peer advisory services with a base of over 45,000 highly-recurring subscribing members in 35 countries and strong customer retention rates. The rating is also supported by double-digit EBITA margins, highly variable cost structure and a good liquidity profile, supported by Moody's expectation of positive free cash flow generation over the next 12 months and full access to its $50 million revolving credit facility, which further enhances its credit profile. The stable outlook reflects Moody's expectations for low single-digit organic revenue growth from new member wins and price increases, and solid double-digit EBITA margins. The stable outlook also encompasses Moody's expectations that Vistage will maintain debt-to-EBITDA leverage below 6.5x over the next 12 months. Vistage's good liquidity is supported by Moody's expectation of positive free cash flow generation and full availability under $50 million revolving credit facility for the next 12 months. Free cash flow benefits from minimal capital expenditures and negative working capital dynamics. Moody's believes that all available sources of liquidity provide good coverage for its $6.25 million (including proposed $125 million add-on) of required annual first lien term loan amortization payments. The company has no near term maturities. The next debt maturity is the revolving credit facility, which expires in July 2027, followed by the first lien term loan expiring July 2029. There are no financial maintenance covenants under the first lien term loan, while the revolver is subject to a springing maximum first-lien net leverage ratio of 8x that is tested when utilization is greater than 35% ($17.5 million). Moody's does not expect the covenant to be triggered over the near term. Moody's believes Vistage will maintain substantial headroom under the financial covenant. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS The ratings could be upgraded if Vistage increases scale and service offerings while maintaining solid margins and good liquidity, sustains debt-to-EBITDA financial leverage below 4.5x and free cash flow-to-total debt above 10%. The ratings could be downgraded if Vistage experiences a contraction in revenue base such as from a significant decrease in member count. The ratings could also be downgrade if Vistage exhibits financial policies that include debt-financed acquisitions or dividends increasing debt-to-EBITDA financial leverage to be sustained above 6.5x or free cash flow-to-total debt below 5%. A deterioration in liquidity could also pressure the ratings. The principal methodology used in these ratings was Business and Consumer Services published in November 2021. Vistage, headquartered in San Diego, California, provides CEOs, other senior executives and business owners with peer advisory board membership and coaching services. The company is owned by an investor group led by private equity sponsor Gridiron Capital. WALL DECOR: Ryan Richmond Named Subchapter V Trustee ---------------------------------------------------- The Acting U.S. Trustee for Region 5 appointed Ryan Richmond as Subchapter V trustee for Wall Decor & More, LLC. Mr. Richmond will be paid an hourly fee of $390 for his services as Subchapter V trustee and will be reimbursed for work-related expenses incurred. Mr. Richmond declared that he is a disinterested person according to Section 101(14) of the Bankruptcy Code. The Subchapter V trustee can be reached at: Ryan J. Richmond 450 Laurel Street, Suite 1450 Baton Rouge, LA 70801 Telephone: 225-412-3667 Facsimile: 225-286-3046 Email: ryan@snw.law About Wall Decor & More Wall Decor & More, LLC is engaged in the business of marine cargo handling. The company is based in Baton Rouge, La. Wall Decor & More filed a petition under Chapter 11, Subchapter V of the Bankruptcy Code (Bankr. M.D. La. Case No. 24-10021) on Jan. 12, 2024, with $50,000 to $100,000 in assets and $1 million to $10 million in liabilities. Mia M. Townsed, member, signed the petition. Judge Michael A. Crawford oversees the case. Patrick S. Garrity, Esq., at The Derbes Law Firm, LLC represents the Debtor as bankruptcy counsel. WAND NEWCO 3: Moody's Rates New $1.25-Bil. First Lien Notes 'B3' ---------------------------------------------------------------- Moody's Investors Service assigned a B3 rating to Wand NewCo 3, Inc.'s (dba "Caliber") proposed $1.25 billion senior secured first lien notes offering due 2032. All other ratings remain unchanged including Caliber's B3 corporate family rating and B3-PD probability of default rating. The outlook remains stable. Proceeds from this offering, together with proceeds from Caliber's new senior secured first lien term loan due 2031, are expected to be used to fund a $1.2 billion dividend to shareholders. While debt levels are increasing to fund a larger dividend, Moody's leverage and coverage metrics remain within tolarances for the B3 rating. Moody's continues to expect positive free cash flow generation and good liquidity. The rating action reflects governance considerations, particularly Caliber's increase in leverage to support shareholder returns. RATINGS RATIONALE Caliber's B3 CFR is supported by its growing and market-leading position in the highly-fragmented collision repair industry. Caliber has approximately twice the body shop locations of the second largest industry competitor with nearly full national coverage. The rating is also supported by Caliber's relationships with nearly every major national insurance carrier, which represent the vast majority of the company's revenues and earnings. In addition, demand fundamentals are strong as vehicle miles traveled grow and repair severity, driven by the complexity of vehicle technology, continues to rise. The B3 CFR also reflects Caliber's aggressive financial strategies under private equity ownership. Following close of the leveraged recapitalization, Moody's estimates that debt/EBITDA will rise to about 7.0x in 2024 and EBITA/interest coverage will weaken to about 1.1x. In light of Moody's expectation for continued positive operating performance driven by new center openings and same store sales growth given increased technician staffing, the ramping up of new centers as well as increasing repair complexity, Moody's estimates that that debt/EBITDA will improve to about 6.4x in 2025 and EBITA/interest coverage will improve to about 1.2x from 2024 levels. Excluding the dividend payment, Moody's expects positive free cash flow in 2024 and expects positive free cash flow in 2025. While the B3 corporate family rating reflects progress being made on the labor front, the rating continues to reflect the very tight labor market for body techs. Geographic concentration in California and Texas, which together account for about a third of locations, is also reflected in the B3 corporate family rating. The stable outlook reflects Moody's expectation for good liquidity, including positive free cash flow, as well as the strong demand environment for collision services. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATING The rating could be upgraded if Caliber demonstrates continued solid operating performance and demonstrates that its financial policies can support EBITA/interest coverage sustained above 1.5x and debt/EBITDA sustained below 6.0x as well as robust free cash flow generation and good liquidity. Rating could be downgraded should Caliber's liquidity weaken, if EBITA/interest coverage is sustained below 1.0x and/or if Caliber fails to maintain positive free cash flow to debt. Wand NewCo 3, Inc. is a leading collision repair provider currently operating over 1,700 locations in the United States under the Caliber Collision banner, generating annual revenue of about $7 billion. The company is majority owned by Hellman & Freidman LLC. The principal methodology used in this rating was Retail and Apparel published in November 2023. WEBER LLC: S&P Affirms 'CCC+' Issuer Credit Rating, Outlook Neg. ---------------------------------------------------------------- S&P Global Ratings revised its liquidity assessment on U.S. based grill seller Weber LLC to less than adequate from weak. S&P also affirmed all of its ratings on the company, including its 'CCC+' issuer credit rating. S&P said, "We assigned a new management and governance (M&G) assessment of moderately negative to Weber. This assignment follows the January 7 publication of S&P Global Ratings' revised criteria for evaluating the credit risks presented by an entity's M&G framework. "The negative outlook reflects the possibility that we could lower our ratings on Weber over the next 12 months if we envision a default scenario either because we believe it cannot restore profitability and cash flow, leading to a liquidity crunch, or it cannot address its 2025 revolver maturity before it becomes current in October 2024. "Although we view the closing of the $200 million accounts receivable positively, we continue to believe the operating environment for Weber will be challenging for the next 12 months. Given the company's constrained borrowing capacity on its revolving credit facility, the new accounts receivable facility is adding a necessary source of liquidity for it to fund its working capital investment need. This will likely peak in the second quarter ending March 31, 2024, in preparation for the key summer selling season. "We believe the company's year-over-year revenue declines decreasing on a quarterly sequential basis and may return to growth next year as retailer inventories normalize following the severe destocking that began in late 2022. "We expect consumer demand for durables will remain weak in 2024. We believe Weber's revenue growth in 2024 will be primarily driven by better retailer replenish patterns and a stabilization in consumer demand, but we do not expect a material rebound. Still, we do not anticipate revenues will return to pre-COVID-19 levels in 2024. Weaker-than-expected consumer demand could further pressure the company's already distressed credit metrics, as reflected by our negative outlook. "We assigned a new M&G assessment of moderately negative to Weber. The action follows the revision to our criteria for evaluating the credit risks presented by an entity's management and governance framework. The terms management and governance encompass the broad range of oversight and direction conducted by an entity's owners, board representatives, and executive managers. These activities and practices can impact an entity's creditworthiness and, as such, the M&G modifier is an important component of our analysis. "Our M&G assessment of moderately negative points to the company's ownership structure as it is now owned by private-equity sponsor BDT Capital after the take-private transaction in early 2023. "The negative outlook reflects the possibility that we could lower our ratings on Weber over the next 12 months if we envision a default scenario either because of the company's inability to restore profitability and cash flow, leading to a liquidity crunch, or because it cannot address its 2025 revolver maturity before it becomes current in October 2024." S&P could lower its ratings if it envisions a specific default scenario, such as a distressed exchange, near-term liquidity crisis, or violation of financial covenants in the next 12 months. This could occur if: -- S&P believes a liquidity crunch or distressed exchange of its debt will become more likely if operating performance further weakens; -- A recession takes hold that hampers consumers' ability to spend on large-ticket discretionary items, resulting in a build-up of unsold inventory; or -- The company cannot effectively address its revolver maturity before it becomes current in October 2024. S&P could take a positive action if Weber's operations stabilize and it sees a path to positive annual free operating cash flow (FOCF), with funds from operations (FFO) cash interest coverage improving closer to 1.5x. This could occur if: -- The company continues to reduce costs and restores profitability; -- Weber-branded products remain relevant with consumers such that revenue decline stabilizes; and -- Its liquidity position improves from FOCF generation and an extension of its revolving credit facility maturity date beyond 2025. WESCO AIRCRAFT: Incora Cleared to Solicit Chapter Plan Votes ------------------------------------------------------------ Emily Lever of Law360 reports that a Texas bankruptcy judge on Thursday, January 11, 2023, signed off on the disclosure statement of Incora's Chapter 11 plan, setting aside an objection from noteholders that argued the aerospace component distributor should not seek creditors' votes on the plan before a lawsuit they brought against it is resolved. About Incora Incora -- http://www.incora.com/-- is the trade name for the group of companies formed by Wesco Aircraft and Pattonair, a provider of comprehensive supply chain management services to the global aerospace and other industries. Beginning with a strong foundation in aerospace and defense, Incora also utilizes its supply chain expertise to serve industrial manufacturing, marine, pharmaceutical and beyond. Incora incorporates itself into customers' businesses, managing all aspects of supply chain from procurement and inventory management to logistics and on-site customer services. The company is headquartered in Fort Worth, Texas, with a global footprint that includes 68 locations in 17 countries and more than 3,800 employees. Wesco Aircraft Holdings, Inc., doing business as Incora, and 43 affiliates sought Chapter 11 protection (Bankr. S.D. Texas Lead Case No. 23-90611) on June 1, 2023. Wesco Aircraft estimated assets and debt of $1 billion to $10 billion as of the bankruptcy filing. The Debtors tapped Milbank, LLP and Haynes and Boone, LLP as bankruptcy counsels; PJT Partners, Inc. as investment banker; Alvarez & Marsal North America, LLC as restructuring advisor; and Quinn Emanuel Urquhart & Sullivan, LLP as special litigation and conflicts counsel. Kurtzman Carson Consultants, LLC is the claims agent. The U.S. Trustee for Region 7 appointed an official committee to represent unsecured creditors in the Debtors' Chapter 11 cases. The committee tapped McDermott Will & Emery, LLP and Morrison Foerster, LLP as its counsel; Piper Sandler & Co. as investment banker; and Province, LLC as financial advisor. WESTERN URANIUM: MMCAP International, MM Asset Hold 9.9% Stake -------------------------------------------------------------- MMCAP International Inc. SPC and MM Asset Management Inc. disclosed in a Schedule 13D/A filed with the Securities and Exchange Commission that as of Dec. 31, 2023, they beneficially owned 4,977,472 shares of common stock of Western Uranium & Vanadium Corp., representing 9.99 percent of the Shares outstanding. The percentage of beneficial ownership is based on: (x) 44,276,811 Common Shares outstanding as of Nov. 17, 2023, as reported in the Issuer's Form 10-Q filed with the SEC on Nov. 20, 2023; (y) an additional 5,215,828 Common Shares issued by the Issuer on Dec. 12, 2023 as reported in the Issuer's press release of the same date; and (z) 331,906 Common Shares issuable upon exercise of the warrants. MMCAP is a private investment vehicle. It directly beneficially owns the Common Shares reported in this Statement. MM Asset is the investment manager of the Fund. MM Asset may be deemed to beneficially own the Common Shares directly beneficially owned by MMCAP. Each Reporting Person disclaims beneficial ownership with respect to any Common Shares other than the Common Shares directly beneficially owned by such Reporting Person. A full-text copy of the regulatory filing is available for free at: https://www.sec.gov/Archives/edgar/data/1304857/000110465924004472/tm243547d1_sc13ga.htm About Western Uranium & Vanadium Western Uranium & Vanadium Corp. is ramping-uphigh-grade uranium and vanadiumproduction at its Sunday Mine Complex. In addition to the flagship property located in the prolific Uravan Mineral Belt, the production pipeline also includes conventional projects in Colorado and Utah. The Maverick Minerals Processing Plant is being licensed in Utah and will include the kinetic separation process. Mississauga, Canada-based MNP LLP, the Company's auditor since 2015, issued a "going concern" qualification in its report dated April 17, 2023, citing that the Company has incurred continuing losses and negative cash flows from operations and is dependent upon future sources of equity or debt financing in order to fund its operations. These conditions raise substantial doubt about the Company's ability to continue as a going concern. WIDEOPENWEST FINANCE: Moody's Cuts CFR to 'B2', Outlook Stable -------------------------------------------------------------- Moody's Investors Service downgraded WideOpenWest Finance, LLC's (WOW or the Company) ratings including its Corporate Family Rating to B2 from B1, its Probability of Default Rating to B2-PD from B1-PD, and its senior secured revolving credit facility and senior secured term loan B ratings to B2 from B1. Moody's also downgraded WOW's Speculative Grade Liquidity Rating (SGL) to SGL-3 from SGL-2. WOW's outlook is stable. The downgrade of the ratings is due to negative competitive headwinds for the Company's most important product, high speed data (HSD). Included in WOW's Q3 2023 earnings results the Company reported a net HSD subscriber loss of about 4,400 and stated that subscriber losses could be three times as much for Q4. More aggressive competitive pressures in the lower-price sensitive tier of subscribers, the Company's sweet spot, particularly from fixed wireless inroads in legacy markets coupled with rate increases and macroeconomic environmental issues are the main factors behind the recent uptick in churn. Additionally, the Company's pace of expansion into new markets is behind schedule with lower than expected take up which has led to fewer than expected gross connects. The ratings reflect the risk that continuing pressure will: 1) impact the Company's ability to grow and generate free cash flows; 2) increase leverage and cause other credit metrics to deteriorate; 3) cause greater pressure to continue expansion efforts and the revolver draws to fund them will also increase debt and leverage; and 4) diminish revolver capacity by 2024 year end. Refinancing and expanding the revolver will likely result in higher interest costs as well. RATINGS RATIONALE WOW's B2 CFR is constrained by its small scale with annual revenue of $698 million as of LTM September 30, 2023, low penetration rate, and exposure to unfavorable secular trends in voice and video. The Company operates in 15 markets across 6 states with a high degree of regional concentration in just one state (about 38% of homes passed). In nearly all of its markets, it is an overbuilder of the two largest US cable companies Comcast Corporation (A3, stable) and Charter Communications, Inc. (Ba2 CFR, stable) with a challenger brand evidenced by low penetration rates which are one of the lowest among rated issuers, and above average capital intensity (mid 30% of revenue) which absorbs a high percentage of operating cash flow. The Company also faces strong competition, with the lower price point fixed wireless HSD product particularly competitive for WOW and secular challenges in voice and video with customers turning to cheaper streaming video options and using their wireless services in place of wireline voice. As a result, the Company is experiencing a high loss of video and voice subscribers in the mid-teens percent range, and more recently, losses in the high margin HSD segment. Certain measures of profitability are also relatively weak, including revenue and EBITDA to homes passed. The stable outlook reflects Moody's expectation that WOW will continue to face heightened competition but that the Company will remain committed to maintaining moderate debt leverage which was about 3.5x (with Moody's adjustments) as of September 30, 2023, and which is consistent with management's stated maximum desired target. The SGL-3 Speculative Grade Liquidity Rating reflects adequate liquidity through 2024 supported by internal sources of cash and cash flows, a partially drawn $250 million revolving credit facility with $86.4 million in remaining capacity as of September 30, 2023, and a maximum leverage covenant of 3.7x (with a calculated ratio of 3.0x as of September 30, 2023). Alternate liquidity is limited due to the fully secured capital structure. The senior secured bank credit facilities, including the revolver and the term loan are each rated B2 (LGD3), aligned with the B2 CFR. The instrument ratings reflect the B2-PD Probability of Default Rating of the Company and an average expected family recovery rate of 50% at default given the lack of maintenance covenants in the term loan facility. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS Moody's could consider an upgrade if the Company demonstrates a sustained track record of conservative financial policies and returns to sustainable revenue growth, increases diversification, with debt/EBITDA (Moody's adjusted) sustained around 3.0x or less, and free cash flow to debt (Moody's adjusted) is sustained above 6.0%. Moody's could consider a downgrade if debt/EBITDA (Moody's adjusted) is sustained above 4.5x or free cash flow to debt (Moody's adjusted) is sustained in the low single digits. Moody's could also consider a negative rating action if the liquidity deteriorated, scale or diversity decreased, financial policy turned more aggressive, or operating trends declined materially and on a sustained basis. The principal methodology used in these ratings was Telecommunications Service Providers published in November 2023. WINDSOR HOLDINGS: S&P Affirms 'B+' ICR, Outlook Stable ------------------------------------------------------ S&P Global Ratings affirmed its 'B+' issuer credit rating and all other ratings on Windsor Holdings III LLC and its debt issues. S&P revised its rounded estimate on the 'B+' issue-level ratings and '3' recovery ratings to 60% from 65%. S&P said, "The stable outlook indicates our view that credit measures will remain appropriate for the ratings despite the incremental borrowing, with solid operational execution supporting a weighted-average adjusted debt to EBITDA of below 6.5x. It also reflects our assumption that there will be no further re-leveraging events or transactions this year that would take debt leverage beyond that level." Windsor Holdings III LLC, the debt-issuing parent entity of global chemicals and ingredients distributor Univar Solutions Inc., is issuing incremental debt to fund a dividend distribution to its owners. The debt-funded dividend weakens credit measures slightly, but S&P expects credit quality to remain sufficient. Univar is issuing an incremental $450 million of fungible add-ons to its senior secured term loans B due 2030. S&P said, "We expect the U.S. dollar-denominated loan to upsize by $325 million and the Euro-denominated loan to increase by the equivalent of $125 million. Univar will use proceeds to fund a $440 million distribution to shareholders and to pay for transaction expenses. We estimate that the incremental debt will result in a 0.5x increase in debt leverage to Univar's adjusted debt to EBITDA at Sept. 30, 2023, to 6.1x from 5.6x. Through good operational execution, Univar may realize $100 million of cost savings this year, which will allow for debt leverage to decline to 5.6x by Dec. 31, 2024, restoring some cushion against our 6.5x threshold that we view as appropriate for the rating and stable outlook." S&P expects operational execution to drive Univar's performance this year more than volume growth. Many of Univar's chemical-producing customers have expressed that the pronounced industrywide destocking that started fourth-quarter 2022 and persisted through much of last year has ceased. However, S&P does not anticipate a meaningful level of restocking in 2024. Management indicated that volumes contracted a mid-single-digit percentage in the third quarter, with lower demand from consumer-led sectors. The automotive and home builder segments were generally weaker than expected throughout last year. S&P said, "While volumes may improve in 2024, perhaps later in the year, we are not factoring in volume growth for the full year in our base-case scenario. Rather, we see Univar's ability to maintain appropriate credit measures as more likely driven by improved operational execution and cost savings. Management is now targeting cost savings near the high end $66 million-$157 million, as it indicated last year, which we believe is achievable. The areas in which Univar expects to see traction on cost savings include warehousing and administrative costs, fleet and logistics, and procurement, among others." Financial policies remain a key risk factor. Univar is owned by funds managed by affiliates of Apollo Global Management, a financial sponsor. There is also a minority equity investment from a wholly owned subsidiary of the Abu Dhabi Investment Authority. S&P said, "As we indicated in our rating assignment in June 2023, we view Apollo's financial policies as aggressive for most of its portfolio companies that we rate and we remarked that the company's initial level of debt capitalization may have been temporary. The take-private transaction was completed during a period of high interest rates and material uncertainty regarding the depth and duration of inventory destocking. We believe conditions are somewhat more favorable, as our economists forecast rate cuts this year while many chemicals industry participants have started to signal that inventory destocking has ended. It remains to be seen whether this dividend transaction will be followed by additional aggressive uses of debt leverage over the intermediate term. In our base-case, we do not expect another leveraging transaction during the next 12 months that would raise the leverage ratio above 6.5x." S&P expects tuck-in acquisitions in adjacent geographies or product lines to continue to contribute to Univar's growth. S&P's forecast incorporates some outlays for these. S&P said, "The stable outlook reflects our expectation that despite the incremental debt and interest expense associated with the dividend distribution, Univar's credit measures and liquidity will remain appropriate for the current rating, including weighted-average adjusted debt to EBITDA of less than 6.5x. We expect the company's revenues to increase 6% in 2024 as the absence of inventory destocking, disciplined pricing, and a good sales mix assist growth. We expect profit margins to stabilize and remain at good levels for a distributor, via cost savings opportunities (administrative, logistics, procurement) that will help buoy earnings and cash flow. "S&P Global Ratings-adjusted EBITDA margins may average at 8.5%-9.5% over the next two years. Our base case assumes the company generates annual adjusted free operating cash flow (FOCF) of $250 million-$300 million over the next two years as the interest burden rises. We expect the company will use free cash flow for debt reduction and bolt-on acquisitions. We also assume that the company will not further incur material amounts of debt during the next 12 months." S&P could consider lowering the rating within the next 12 months if: -- The global economy enters a recession that compresses Univar's adjusted EBITDA margins by more than 250 basis points (bps), resulting in its weighted-average adjusted debt to EBITDA exceeding 6.5x and approaching 7.0x for a sustained period; or -- Unexpected cash outlays or more-aggressive financial policies significantly reduce the company's liquidity or strain its financial profile. S&P believes raising the ratings during the next year is unlikely, given the debt-funded dividend's modestly deleterious effect on credit measures, along with uncertainty as to whether Apollo will be willing to abide by more conservative financial policies on a sustained basis. S&P could consider raising the rating within the next 12 months if: -- Univar continues increasing its EBITDA and FOCF generation further than S&P's base-case expectation, likely by growing volume and expanding its margin amid the backdrop of chemicals buyers outsourcing to distributors; and -- The company's financial policies strengthen enough to support weighted-average adjusted debt to EBITDA of less than 5.0x, even after factoring in growth initiatives and shareholder rewards. YELLOW CORP: Pension Fund Wants $4.8-Billion Claims Arbitration --------------------------------------------------------------- Pursuant to Section 362 of Title 11 of the United States Code and Rules 4001(a) and 9014 of the Federal Rules of Bankruptcy Procedure, Central States, Southeast and Southwest Areas Pension Fund asks the Bankruptcy Court for an order compelling Debtors to initiate arbitration with respect to debtors Yellow Corp., et al's objections to Central States Pension Fund's proofs of claim for withdrawal liability, Claims 4312 through 4335. Alternatively, Central States Pension Fund asks the Court to grant it relief from the automatic stay to initiate arbitration with respect to the Withdrawal Liability Objections. Pre-petition, Central States Pension Fund provided pension credit to thousands of union employees of Debtors YRC Inc. and USF Holland LLC ("USFH"). Under collective bargaining agreements and participation agreements applicable to Debtors YRC and USFH, Debtors YRC and USFH's obligations to Central States Pension Fund and its union members included regular contributions payable to Central States Pension Fund. On December 8, 2023, Debtors filed an omnibus objection to the proofs of claim filed by Central States Pension Fund in these cases, including Central States Pension Fund's claims against all Debtors, jointly and severally, for withdrawal liability in the approximate amount of $4.8 billion based on Debtors' complete withdrawal from Central States Pension Fund (Claims Nos. 4312-4335). "Based upon Congress' determination that withdrawal liability disputes must be resolved in arbitration (i.e., 29 U.S.C. Sec. 1401(a)(1)), the Supreme Court's and the various courts of appeals' pronouncements in support of arbitration (including the Third Circuit), and the reasoning of the BFW Liquidation court regarding how resolution of withdrawal liability disputes in arbitration furthers the goals of the bankruptcy claim dispute resolution process, this Court should grant Central States Pension Fund's motion, and either order Debtors to initiate arbitration to dispute the withdrawal liability claims or grant Central States Pension Fund relief from the automatic stay to initiate arbitration. The disputes Debtors have asserted raise significant issues of statutory and regulatory interpretation under MPPAA and its underlying regulations and should therefore be resolved by an arbitrator with expertise in MPPAA," Central States said. About Yellow Corporation Yellow Corporation -- http://www.myyellow.com/-- operates logistics and less-than-truckload (LTL) networks in North America, providing customers with regional, national, and international shipping services throughout. Yellow's principal office is in Nashville, Tenn., and is the holding company for a portfolio of LTL brands including Holland, New Penn, Reddaway, and YRC Freight, as well as the logistics company Yellow Logistics. Yellow Corporation and 23 affiliates concurrently filed voluntary petitions for relief under Chapter 11 of the Bankruptcy Code (Bankr. D. Del. Lead Case No. 23-11069) on August 6, 2023, before the Hon. Craig T. Goldblatt. As of March 31, 2023, Yellow Corporation had $2,152,200,000 in total assets against $2,588,800,000 in total liabilities. The petitions were signed by Matthew A. Doheny as chief restructuring officer. The Debtors tapped Kirkland & Ellis, LLP as restructuring counsel; Pachulski Stang Ziehl & Jones, LLP as Delaware local counsel; Kasowitz, Benson and Torres, LLP as special litigation counsel; Goodmans, LLP as special Canadian counsel; Ducera Partners, LLC, as investment banker; and Alvarez and Marsal as financial advisor. Epiq Bankruptcy Solutions is the claims and noticing agent. Milbank LLP serves as counsel to certain investment funds and accounts managed by affiliates of Apollo Capital Management, L.P. while White & Case, LLP and Arnold & Porter Kaye Scholer, LLP serve as counsels to Beal Bank USA and the U.S. Department of the Treasury, respectively. On Aug. 16, 2023, the U.S. Trustee for Region 3 appointed an official committee of unsecured creditors in the Chapter 11 cases. The committee tapped Akin Gump Strauss Hauer & Feld, LLP and Benesch, Friedlander, Coplan & Aronoff, LLP as counsels; Miller Buckfire as investment banker; and Huron Consulting Services, LLC, as financial advisor. [*] John Strasburger Named to 2024 Lawdragon Leading Lawyers List ----------------------------------------------------------------- Texas trial attorney John Strasburger has earned selection to the 2024 edition of Lawdragon 500 Leading Lawyers in America. A name partner in the Houston-based law firm Bissinger, Oshman, Williams & Strasburger LLP (BOWS), Mr. Strasburger was selected to the elite legal guide to the nation's top attorneys based upon his record of success in the prosecution and defense of numerous bet-the-company commercial litigation cases. He has served as lead counsel in jury and non-jury cases in state and federal courts across the nation on behalf of some of the world's largest companies, mid-market companies and high net worth individuals. As a result of this success, he has garnered an impressive list of professional accolades from Benchmark Litigation, Chambers USA, The Best Lawyers in America and Texas Super Lawyers, as well as Lawdragon. His work regularly involves commercial litigation, product liability defense, bankruptcy litigation, trade secret and restrictive covenant litigation, energy-related litigation, physical and financial trading disputes, complex insurance disputes, environmental and mass tort litigation, and sensitive internal investigations. His practice also includes corporate-governance matters. Lawdragon Leading Lawyers selection is based on peer nominations, third-party research and extensive editorial evaluation to determine the top 500 attorneys nationwide across all practices. More information, including the full list of 2024 honorees, can be found at https://www.lawdragon.com/guides/2024-01-12-the-2024-lawdragon-500-leading-lawyers-in-america. About Bissinger, Oshman, Williams & Strasburger Bissinger, Oshman, Williams & Strasburger LLP is a Houston-based business trial and transaction firm focused on providing impactful, cost-effective solutions to complex disputes and transactions requiring careful attention, extensive experience and a high level of sophistication. [*] N.Y. Bankruptcy Judge Cecelia Morris to Retire in 2024 ---------------------------------------------------------- James Nani of Bloomberg Law reports that Cecelia G. Morris, the Southern District of New York bankruptcy judge who planned to retire at the end of January, will instead serve until the end of the year. The Judicial Council of the Second Circuit approved Morris to remain on the bench from February to the end of 2024, according to a Wednesday order from Debra Ann Livingston, chief judge of the US Court of Appeals for the Second Circuit. [*] Repeat Chapter 11s Dominate Bankruptcy Landscape in 2023 ------------------------------------------------------------ James Nani of Bloomberg Law reports that struggling companies seeking bankruptcy turned 2023 into one of the biggest years for repeat Chapter 11 filers, suggesting many didn't make the necessary cuts or business changes to successfully revive themselves the first time around. With at least 19 businesses with more than $10 million in debt filing Chapter 11 for at least a second time, 2023 had the most so-called Chapter 22 filings since 2020 during the Covid-19 pandemic, which pushed many already-struggling companies over the edge. The past year was among the top for repeat bankruptcies since the turn of the century, according to BankruptcyData. Whether Chapter 22s are bad is debated. Some bankruptcy attorneys and professors see them as another opportunity for a company that made poor business projections or faced unexpected headwinds to maximize value and save jobs, while still giving creditors a better chance of a recovery than liquidation. Others see repeat filings as leading to worse outcomes for creditors. If shareholders didn't lose all of their holdings during the first case, they're usually wiped out the second time. Skeptics also say a Chapter 22 is an example of the bankruptcy system failing to do its job -- either by allowing businesses to emerge without enough strength to continue, or by letting companies that probably should have been shut down continue to exist. "Chapter 22, in general, is somewhat of a blemish on our system, which I still think is the best system in the world in terms of restructuring companies," said Edward Altman, a professor emeritus at New York University's Stern Business School who studies bankruptcies. Some of the increase in repeat Chapter 11 filings is likely related to a broader uptick in bankruptcies. But lingering debts, operational troubles, failure to keep up with industry trends, and overly optimistic financial outlooks largely accounted for the high number of Chapter 11 rebounds in 2023, according to bankruptcy and economic professionals. Other factors are industry-specific, especially for retailers like David's Bridal LLC and Tuesday Morning Corp. that saw consumer habits continue to change. Operations and Feasibility Often, companies that emerge from bankruptcy don't sufficiently restructure their assets to turn their businesses around, said Edith Hotchkiss, a professor of corporate finance and restructuring at Boston College. "Some of the very quick, first bankruptcies address the capital structure primarily and the operating problems less so," Hotchkiss said. Operational issues that weren't addressed during the first case are one of the most significant reasons a company would file a second bankruptcy, said Andrew Hede, head of turnaround and restructuring at consulting firm Accordion Partners. Problems can include labor issues, too many plants or underperforming retail stores, unaddressed supply chain issues, or manufacturing costs, he said. "If you don't address the operational issues, either during the bankruptcy, or shortly after post-emergence, the likelihood of a second filing is significantly increased," Hede said. Reorganization plans sometimes bake in overly optimistic sales and market dynamics. Additionally, businesses occasionally fail to navigate or even see sharper shifts in the economy, markets, or technology. Corporate debtors must provide feasibility analyses to support their plans and convince a judge they're unlikely to liquidate or require another restructuring after they emerge from bankruptcy, but judges rarely reject plans on feasibility grounds. Despite the feasibility analyses, the bankruptcy code doesn't require a debtor to prove its reorganization will be a guaranteed success. Judges who have doubts about a plan's feasibility may still confirm it if there are no objections and it's a better alternative to liquidation. Courts are sometimes inclined to approve a deal that has the support of key stakeholders even if there are concerns about the feasibility of the plan, Altman said. Drugmaker Mallinckrodt Plc returned to bankruptcy in August, despite obtaining a green light on its feasibility analysis during its first Chapter 11 about a year prior. The company determined it wouldn't be able to fund the $1.7 billion opioid settlement it had agreed to during the first case and used its second Chapter 11 to knock $1 billion from the deal. Retail Apocalypse Brick-and-mortar retail operators have been particularly susceptible to landing in Chapter 22 in recent years. Retailers have often fallen back into bankruptcy due to a combination of increasing online competition and rapid changes in consumer preferences and behavior. "For the recent Chapter 22s, the strongest industry trend is the continued struggles of retailers," Hotchkiss said. "This is different than industry factors causing Chapter 22s in the past, where some were cyclical industries leading the same firms to enter bankruptcy more than once." The Covid-19 pandemic shifted buying patterns and disrupted supply chains. And while there's been some recovery in retail, fully bouncing back has been difficult. There's often little time, money, or personnel to address and fix underlying operating or competitive issues within a Chapter 11, said John Yozzo, managing director at FTI Consulting. Primarily, Chapter 11 expunges debt, right-sizes capital structures, and gets rid of unfavorable contracts, he said. "Fair to say that chapter 11 doesn't usually fix operating problems or make an uncompetitive company competitive," Yozzo said in an email. "Companies that emerge from chapter 11 live to fight another day and jobs are saved but rarely is the debtor suddenly competitive with industry leaders upon emergence." After discount retailer Tuesday Morning emerged from bankruptcy in December 2020, it faced industrywide challenges including higher supply chain costs and disruptions and reduced foot traffic, according to court papers. The company ultimately filed again in February 2023 and liquidated. Shoemaker Rockport Co. blamed similar factors as Tuesday Morning when it filed for bankruptcy in 2023, almost five years after selling its business in its first Chapter 11. David's Bridal's first Chapter 11 plan in 2018 predicted shopping and supply patterns that proved to be inaccurate, creating problems for its capital structure. The bridal company struggled to maintain enough cash, according to court papers. It also took big sales hits from the pandemic and larger macroeconomic shifts in the retail industry, and saw less demand because of longer wedding planning cycles, more casual wedding events, and fewer overall marriages, court papers said. The timing of emergence is also critical, especially for cyclical businesses, Yozzo said. Those issues are exemplified by David's Bridal, which said the timing of its first bankruptcy during its 2019 peak season negatively impacted its brand to customers. That resulted in a lack of confidence that led to a significant downturn in traffic, appointments, and sales, it said. "I'm especially skeptical of chapter 11 filings for retailers -- can't recall a failed retailer that became exemplary after a reorg," Yozzo said in his email. "But retailers seem to hang on forever before they finally hit the wall." Bad Faith Other second-time filers don't fit into the traditional Chapter 22 mold of a firm that files again following a court-approved Chapter 11 plan. LTL Management LLC, a Johnson & Johnson unit saddled with massive talc liabilities, in 2023 filed for Chapter 11 again after the Third Circuit kicked it out of its first bankruptcy. LTL couldn't show its first Chapter 11 petition served a valid bankruptcy purpose because the company wasn't in financial distress, the appeals court found. LTL filed its second case after making changes to its funding agreement with J&J—only to see the second bankruptcy tossed out again under the Third Circuit's previous reasoning. The latest ruling is under appeal. Stream TV Networks Inc., a 3D technology developer, also took another try at Chapter 11 in 2023 after the Eastern District of Pennsylvania bankruptcy court dismissed its 2021 bankruptcy on the grounds that it was filed in bad faith. Lingering Debt Sometimes, the simplest explanation for a repeat bankruptcy is that the company didn't cut enough debt during the first case. Data center and cloud computer business Internap Holding LLC, also known as Inap, again went into Chapter 11 in April after it sold off most of its data centers in late 2022. The company first filed for Chapter 11 in March 2020, but said it still had "significant secured debt" when it emerged. While it divested from both core and noncore businesses and cut its debt further, Inap said the debt was unsustainable as compared to the value of its remaining cloud business. Inap's second Chapter 11 showcases how important a company's remaining debt stack is to its ongoing business when it emerges from bankruptcy. "No one wants to sort of cut too deep, when probably the right thing for the organization is to have a smaller, more profitable footprint," Hede said. [*] Sklar Kirsh Partners Named to 2024 SoCal Super Lawyers List --------------------------------------------------------------- California law firm Sklar Kirsh LLP on Jan. 22 disclosed that seven of its Partners have been selected by their peers for inclusion in the 2024 Southern California Super Lawyers list. Annually, Super Lawyers recognizes no more than five percent of attorneys in each state. This honor highlights lawyers from over 70 practice areas who have demonstrated exceptional professional achievements and garnered substantial peer recognition. The selection process is rigorous and patented, involving a comprehensive statewide lawyer survey, an independent candidate evaluation, and specialized peer reviews within various practice areas. The following Sklar Kirsh Partners have been named to the 2024 Southern California Super Lawyers list: Jennifer Borow: Business & Corporate Scott R. Ehrlich: Mergers & Acquisitions Justin Goldstein: Business Litigation Robbin Itkin: Bankruptcy; also named to the Top 100 Super Lawyers list Andrew Kirsh: Real Estate Ian Landsberg: Bankruptcy Jeffrey Sklar: Business & Corporate Sklar Kirsh LLP -- http://www.SklarKirsh.com-- is a California law firm that provides sophisticated and expert advice in the areas of corporate, real estate, bankruptcy, and entertainment law as well as commercial, real estate and entertainment litigation. [*] US Supreme Court Justices Balk at $326M Fee Refund Demand ------------------------------------------------------------- Reuters reports that the U.S. Supreme Court on Jan. 9, 2024, heard arguments in a case over an inconsistently applied increase in bankruptcy fees, with at least three justices appearing hesitant to force U.S. taxpayers to foot a $326 million refund to debtors who paid higher rates. The dispute stems from a 2017 law that increased the quarterly fees that large companies pay to fund the U.S. Trustee, the U.S. Department of Justice's bankruptcy watchdog. After the law went into effect, however, North Carolina and Alabama, the only two states that have opted out of the U.S. Trustee program, declined to impose a matching fee increase in their bankruptcy courts, causing a disparity that the Supreme Court ruled unconstitutional in 2022. The Supreme Court's earlier ruling did not decide whether any fees should be refunded as a result of the disparity, but several courts of appeals have since ruled that debtors are entitled to refunds, leading the Justice Department to seek Supreme Court review of a $2.5 million refund awarded to John Q. Hammons Hotels & Resorts. Hammons, a bankrupt hotel company, filed for Chapter 11 protection in 2016 in Kansas and paid the higher bankruptcy fees after 2017. At Tuesday's arguments, Justices Sonia Sotomayor, Brett Kavanaugh and Ketanji Brown Jackson appeared skeptical of Hammons' refund demand. Jackson and Kavanaugh said that Congress meant to apply the fees uniformly, and it chose not to offer a refund to companies that had paid the higher rates when it addressed the disparity in a 2020 law that mandated equal treatment going forward. Sotomayor said Hammons didn't seem to be harmed by the fact that debtors in two states managed to temporarily avoid the 2017 fee increase. "Why do you care?" Sotomayor asked. "You cared about being treated unequally, and now you're being treated equally. If someone else gets a pass, why is that hurting you?" Hammons' attorney, Daniel Geyser, argued the government must allow refunds for fees that were unevenly and unfairly imposed. "It cannot simply keep the unconstitutional fees and promise not to do it again," Geyser said. The Justice Department's lawyer Masha Hansford said giving refunds to every debtor that paid a higher fee in 48 states would cost taxpayers $326 million, a result that would completely undo the 2017 law, which was meant to protect taxpayers. The purpose of the fee increase was to ensure that the bankruptcy oversight program was self-funded, without additional cost to taxpayers, Hansford said. Hammons and others debtors that have sought a refund "paid exactly what Congress intended," and they were not harmed by a "tiny sliver" of debtors in two states that paid lower fees until Congress corrected the problem, Hansford said. The case is Office of the United States Trustee v. John Q. Hammons Fall 2006 LLC, U.S. Supreme Court, No. 22-1238 For the U.S. Trustee: Masha Hansford of the U.S. Department of Justice For Hammons: Daniel Geyser of Haynes and Boone [^] Large Companies with Insolvent Balance Sheet ------------------------------------------------ Total Share- Total Total Holders' Working Assets Equity Capital Company Ticker ($MM) ($MM) ($MM) 99 ACQUISITION G NNAGU US 77.1 (2.2) 0.4 AEMETIS INC AMTX US 277.4 (200.0) (35.9) AEON BIOPHARMA I AEON US 17.6 (121.7) 2.7 AGRINAM ACQUISIT AGRI/U C 31.5 (15.3) (15.3) ALNYLAM PHARMACE ALNY US 3,839.1 (165.9) 2,035.7 ALPHATEC HOLDING ATEC US 670.2 (20.6) 185.5 ALTRIA GROUP INC MO US 36,469.0 (3,357.0) (6,991.0) AMC ENTERTAINMEN AMC US 8,793.1 (2,138.0) (548.7) AMC ENTERTAINMEN AMCE AV 8,793.1 (2,138.0) (548.7) AMERICAN AIRLINE AAL US 65,711.0 (5,136.0) (7,672.0) AON PLC-CLASS A AON US 33,112.0 (486.0) 403.0 ARMATA PHARMACEU ARMP US 112.8 (12.4) 14.7 AULT DISRUPTIVE ADRT/U U 2.5 (3.0) (1.8) AUTOZONE INC AZO US 16,292.6 (5,213.7) (1,828.8) AVIS BUDGET GROU CAR US 32,304.0 (28.0) (537.0) BATH & BODY WORK BBWI US 5,243.0 (2,124.0) 550.0 BAUSCH HEALTH CO BHC US 27,064.0 (235.0) 824.0 BAUSCH HEALTH CO BHC CN 27,064.0 (235.0) 824.0 BELLRING BRANDS BRBR US 691.6 (323.5) 274.0 BEYOND MEAT INC BYND US 929.2 (362.9) 392.8 BIOCRYST PHARM BCRX US 522.9 (411.0) 411.7 BIOTE CORP-A BTMD US 149.7 (51.3) 92.7 BOEING CO/THE BA US 134,281.0 (16,717.0) 13,873.0 BOMBARDIER INC-A BBD/A CN 12,524.0 (2,470.0) (1.0) BOMBARDIER INC-A BDRAF US 12,524.0 (2,470.0) (1.0) BOMBARDIER INC-B BBD/B CN 12,524.0 (2,470.0) (1.0) BOMBARDIER INC-B BDRBF US 12,524.0 (2,470.0) (1.0) BOOKING HOLDINGS BKNG US 25,635.0 (625.0) 5,647.0 BOSTON PIZZA R-U BPZZF US 146.6 (241.3) 2.7 BOSTON PIZZA R-U BPF-U CN 146.6 (241.3) 2.7 BOX INC- CLASS A BOX US 1,033.8 (48.9) 113.7 BRIDGEBIO PHARMA BBIO US 655.0 (1,193.7) 481.6 BRIDGEMARQ REAL BRE CN 68.2 (52.9) 8.3 BRINKER INTL EAT US 2,474.8 (156.3) (364.5) BROOKFIELD INF-A BIPC CN 10,973.0 (764.0) (3,410.0) BROOKFIELD INF-A BIPC US 10,973.0 (764.0) (3,410.0) CALUMET SPECIALT CLMT US 2,804.8 (197.6) (456.8) CAPRICOR THERAPE CAPR US 37.2 (1.8) (3.4) CARDINAL HEALTH CAH US 43,710.0 (3,490.0) (377.0) CARGO THERAPEUTI CRGX US - - - CARVANA CO CVNA US 7,025.0 (202.0) 1,791.0 CEDAR FAIR LP FUN US 2,318.6 (565.8) (141.1) CENTRUS ENERGY-A LEU US 644.7 (24.0) 194.6 CHENIERE ENERGY CQP US 18,072.0 (973.0) (195.0) CINEPLEX INC CGX CN 2,225.6 (30.2) (252.1) CINEPLEX INC CPXGF US 2,225.6 (30.2) (252.1) COMMUNITY HEALTH CYH US 14,674.0 (893.0) 1,099.0 COMPOSECURE INC CMPO US 195.0 (238.8) 75.4 CONSENSUS CLOUD CCSI US 706.5 (199.3) 107.5 COOPER-STANDARD CPS US 2,029.0 (57.4) 258.8 CORNER GROWTH AC COOLU US 4.7 (4.6) (3.5) CORNER GROWTH AC COOL US 4.7 (4.6) (3.5) CPI CARD GROUP I PMTS US 292.1 (56.7) 115.2 CYTOKINETICS INC CYTK US 740.6 (438.8) 483.7 DELEK LOGISTICS DKL US 1,709.5 (139.2) 32.3 DELL TECHN-C DELL US 83,264.0 (2,570.0) (11,890.0) DENNY'S CORP DENN US 479.8 (35.8) (56.0) DIGITALOCEAN HOL DOCN US 1,425.1 (358.8) 287.2 DINE BRANDS GLOB DIN US 1,659.6 (273.7) (120.5) DOMINO'S PIZZA DPZ US 1,619.5 (4,141.5) 232.7 DOMO INC- CL B DOMO US 208.2 (150.8) (80.6) DROPBOX INC-A DBX US 3,010.6 (350.3) 270.3 EMBECTA CORP EMBC US 1,214.4 (821.7) 395.6 ENGENE HOLDINGS ENGN US 0.0 (0.1) (0.1) ETSY INC ETSY US 2,449.2 (622.5) 795.0 EVOLUS INC EOLS US 168.0 (19.4) 43.5 FAIR ISAAC CORP FICO US 1,575.3 (688.0) 188.8 FAT BRANDS I-CLB FATBB US 1,275.5 (228.7) (102.3) FAT BRANDS-CL A FAT US 1,275.5 (228.7) (102.3) FENNEC PHARMACEU FRX CN 19.0 (10.5) 15.0 FENNEC PHARMACEU FENC US 19.0 (10.5) 15.0 FERRELLGAS PAR-B FGPRB US 1,472.1 (291.2) 133.9 FERRELLGAS-LP FGPR US 1,472.1 (291.2) 133.9 FG ACQUISITION-A FGAA/U C 3.6 (17.0) (5.1) FOGHORN THERAPEU FHTX US 313.4 (57.4) 213.4 GCM GROSVENOR-A GCMG US 504.7 (93.7) 108.9 GEN RESTAURANT G GENK US 175.6 36.5 10.9 GODADDY INC-A GDDY US 6,499.2 (973.4) (1,448.3) GREEN PLAINS PAR GPP US 120.3 (1.1) 4.9 GROUPON INC GRPN US 523.9 (49.3) (158.1) H&R BLOCK INC HRB US 2,511.1 (344.9) (160.9) HCM ACQUISITI-A HCMA US 295.2 276.9 1.0 HCM ACQUISITION HCMAU US 295.2 276.9 1.0 HERBALIFE LTD HLF US 2,724.7 (1,103.5) 180.7 HILTON WORLDWIDE HLT US 15,200.0 (1,753.0) (1,077.0) HP INC HPQ US 37,004.0 (1,069.0) (6,511.0) IMMUNITYBIO INC IBRX US 432.4 (410.6) 124.8 INSMED INC INSM US 1,324.9 (289.4) 729.8 INSPIRED ENTERTA INSE US 353.5 (50.3) 64.4 IRONWOOD PHARMAC IRWD US 524.1 (325.7) (27.0) JACK IN THE BOX JACK US 3,001.1 (718.3) (233.6) LESLIE'S INC LESL US 1,034.4 (161.4) 194.5 LIFEMD INC LFMD US 40.7 (11.1) (7.6) LINDBLAD EXPEDIT LIND US 851.6 (91.7) (59.9) LOWE'S COS INC LOW US 42,519.0 (15,147.0) 3,472.0 MADISON SQUARE G MSGS US 1,366.1 (358.5) (352.9) MADISON SQUARE G MSGE US 1,348.5 (235.2) (321.1) MANNKIND CORP MNKD US 320.3 (251.8) 129.2 MARBLEGATE ACQ-A GATE US 8.2 (12.3) (0.3) MARBLEGATE ACQUI GATEU US 8.2 (12.3) (0.3) MARRIOTT INTL-A MAR US 25,267.0 (661.0) (3,995.0) MATCH GROUP INC MTCH US 4,248.9 (299.0) 548.1 MBIA INC MBI US 2,990.0 (1,228.0) - MCDONALDS CORP MCD US 52,089.3 (4,854.8) 2,847.3 MCKESSON CORP MCK US 66,091.0 (1,464.0) (3,616.0) MEDIAALPHA INC-A MAX US 133.0 (99.7) (9.2) METTLER-TOLEDO MTD US 3,288.7 (105.9) 126.5 MSCI INC MSCI US 4,865.5 (1,049.1) 434.7 NATHANS FAMOUS NATH US 65.6 (35.4) 40.0 NEW ENG RLTY-LP NEN US 386.2 (64.7) - NIOCORP DEVELOPM NB CN 26.1 (6.7) (14.2) NIOCORP DEVELOPM NB US 26.1 (6.7) (14.2) NORTHERN STAR -A NSTB US 16.9 (0.4) (2.6) NORTHERN STAR IN NSTB/U U 16.9 (0.4) (2.6) NOVAVAX INC NVAX US 1,657.2 (678.4) (461.8) NUTANIX INC - A NTNX US 2,570.6 (642.2) 818.4 O'REILLY AUTOMOT ORLY US 13,551.8 (1,760.5) (2,453.4) OMEROS CORP OMER US 493.1 (14.0) 204.2 ORGANON & CO OGN US 11,012.0 (589.0) 1,559.0 OTIS WORLDWI OTIS US 10,390.0 (4,610.0) - PAPA JOHN'S INTL PZZA US 877.6 (459.0) (54.8) PELOTON INTERA-A PTON US 2,672.8 (371.0) 837.5 PETRO USA INC PBAJ US 0.0 (0.1) (0.1) PHATHOM PHARMACE PHAT US 237.0 (17.8) 202.7 PHILIP MORRIS IN PM US 62,927.0 (7,706.0) (2,354.0) PITNEY BOWES INC PBI US 4,422.7 (125.1) (23.0) PLANET FITNESS-A PLNT US 2,944.8 (164.9) 267.3 PROS HOLDINGS IN PRO US 431.9 (54.9) 42.5 PTC THERAPEUTICS PTCT US 1,259.9 (670.8) 48.2 RAPID7 INC RPD US 1,399.3 (161.6) 28.3 RE/MAX HOLDINGS RMAX US 597.9 (63.3) 21.3 RED ROBIN GOURME RRGB US 777.3 (8.7) (91.4) REVANCE THERAPEU RVNC US 532.5 (106.2) 306.4 REVIVA PHARMACEU RVPH US 5.4 (8.5) (7.6) RH RH US 4,240.6 (333.2) 351.9 RIMINI STREET IN RMNI US 335.0 (53.1) (56.7) RINGCENTRAL IN-A RNG US 2,182.5 (285.0) 447.0 RMG ACQUISITION RMGCU US 7.0 (11.0) (7.5) RMG ACQUISITION RMGC US 7.0 (11.0) (7.5) SABRE CORP SABR US 4,741.7 (1,267.9) 288.1 SBA COMM CORP SBAC US 10,334.2 (5,131.4) (203.2) SCOTTS MIRACLE SMG US 3,413.7 (267.3) 624.1 SEAGATE TECHNOLO STX US 7,196.0 (1,702.0) 163.0 SEAWORLD ENTERTA SEAS US 2,575.5 (252.4) (30.6) SIRIUS XM HOLDIN SIRI US 10,129.0 (2,893.0) (2,117.0) SIX FLAGS ENTERT SIX US 2,717.1 (335.3) (280.1) SLEEP NUMBER COR SNBR US 961.0 (420.7) (721.3) SOCIAL LEVERA-A SLAC US 16.5 8.3 (6.1) SOCIAL LEVERAGE SLACU US 16.5 8.3 (6.1) SPARK I ACQUISIT SPKLU US 1.2 (3.0) (4.0) SPARK I ACQUISIT SPKL US 1.2 (3.0) (4.0) SPIRIT AEROSYS-A SPR US 6,538.1 (855.7) 971.2 SQUARESPACE IN-A SQSP US 904.9 (288.0) (204.6) STARBUCKS CORP SBUX US 29,445.5 (7,987.8) (2,041.9) SYMBOTIC INC SYM US 1,050.7 (2.7) (33.7) TORRID HOLDINGS CURV US 509.5 (209.2) (36.1) TRANSAT A.T. TRZ CN 2,569.4 (779.0) (57.7) TRANSDIGM GROUP TDG US 19,970.0 (1,978.0) 5,159.0 TRAVEL + LEISURE TNL US 6,655.0 (997.0) 648.0 TRINSEO PLC TSE US 3,271.2 (21.4) 614.8 TRIUMPH GROUP TGI US 1,673.1 (668.2) 582.6 TRULEUM INC TRLM US 2.0 (2.3) (2.9) UBIQUITI INC UI US 1,388.1 (63.1) 815.6 UNITI GROUP INC UNIT US 4,981.3 (2,444.4) - UROGEN PHARMA LT URGN US 193.6 (42.0) 156.3 VECTOR GROUP LTD VGR US 1,101.0 (773.4) 356.4 VERISIGN INC VRSN US 1,695.9 (1,633.4) (166.6) WAVE LIFE SCIENC WVE US 199.9 (32.6) 58.6 WAYFAIR INC- A W US 3,360.0 (2,708.0) (212.0) WINGSTOP INC WING US 351.7 (475.4) 65.5 WINMARK CORP WINA US 55.5 (34.6) 32.2 WORKIVA INC WK US 1,149.1 (113.7) 509.1 WPF HOLDINGS INC WPFH US 0.0 (0.3) (0.3) WW INTERNATIONAL WW US 1,032.3 (675.2) 24.8 WYNN RESORTS LTD WYNN US 13,336.3 (1,709.0) 2,517.1 YELLOW CORP YELLQ US 2,147.6 (447.8) (1,098.0) YUM! BRANDS INC YUM US 6,071.0 (8,190.0) 201.0 ********* 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 2024. 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 ***