/raid1/www/Hosts/bankrupt/TCR

/raid1/www/Hosts/bankrupt/TCR_Public/240129.mbx T R O U B L E D C O M P A N Y R E P O R T E R Monday, January 29, 2024, Vol. 28, No. 28 Headlines 1185 BAYSHORE: Voluntary Chapter 11 Case Summary 207 E 15TH ST: Seeks to Hire White and Co as Bankruptcy Counsel 2335 INVESTMENTS: Case Summary & One Unsecured Creditor 465 BOSTON: Hearing on Sale of Lynn Property Set for Feb. 13 4D LIVESTOCK: Joli Lofstedt Named Subchapter V Trustee 603 DOT AVE: Voluntary Chapter 11 Case Summary 76 M INC: Seeks to Tap Burns Law Firm as Bankruptcy Counsel ACCLIVITY ANCILLARY: U.S. Trustee Appoints Creditors' Committee ACCLIVITY ANCILLARY: Wins $2.3MM DIP Loan from Life Opportunity AEROCISION PARENT: Unsecureds' Recovery "Undetermined" in Plan AIR MAX: Seeks Approval to Hire David Locke CPA as Accountant ALR CONSTRUCTION: Voluntary Chapter 11 Case Summary AMC ENTERTAINMENT: Moody's Affirms 'Caa2' CFR, Outlook Stable AMERICAN LEGION: Case Summary & 20 Largest Unsecured Creditors ANNE HOLDING: Voluntary Chapter 11 Case Summary ASK FOR COOL: Unsecureds to Split $5K in Subchapter V Plan ASPIRA WOMEN'S: Inks $5.5 Million Securities Purchase Agreement BERLIN PACKAGING: Moody's Affirms 'B3' CFR, Outlook Remains Stable BLACK DIAMOND: Seeks March 12, 2024 Extension to File Plan BOWLING CENTER: Case Summary & Eight Unsecured Creditors C.W. KELLER: Public Auction of Assets Set for Feb. 13 CAESARS ENTERTAINMENT: Moody's Rates New $1.5BB Secured Notes 'Ba3' CBC SUBCO: Case Summary & One Unsecured Creditor CHAMPIONS FINANCING: Moody's Assigns 'B3' CFR, Outlook Stable CINEMARK HOLDINGS: S&P Raises ICR to 'BB-' on Improved Leverage CINEMARK USA: Moody's Hikes CFR to 'B1', Outlook Stable COGECO COMMUNICATIONS: Moody's Alters Outlook on 'B1' CFR to Neg. CORRELATE ENERGY: Alina Zagaytova Holds 250,000 Stock Options CRAFT BEVERAGE: Case Summary & Two Unsecured Creditors CREEKWOOD LEGACY: Behrooz Vida Named Subchapter V Trustee CREEKWOOD LEGACY: Seeks Cash Collateral Access CROOM PROPERTIES: Unsecureds to Get $500 per Month for 60 Months DIOCESE OF NORWICH: UST Still Opposes Releases, Exculpation ECP OWNER 1: Wins Interim Cash Collateral Access ELETSON HOLDINGS: New Value & Litigation Trust Assets to Fund Plan ELITE INVESTMENT: Property Sale Proceeds to Fund Plan ERO COPPER: Fitch Affirms 'B' LongTerm IDR, Outlook Stable ETTA SCOTTSDALE: Court OKs Interim Cash Collateral Access FARM LLC: Case Summary & 20 Largest Unsecured Creditors FREEDOM MORTGAGE: Moody's Rates New $450MM Sr. Unsecured Bond 'B2' FRINJ COFFEE: Seeks Cash Collateral Access G & G TOWERING: Unsecureds to Get $1K per Month for 60 Months GABHALTAIS TEAGHLAIGH: Judge Stays Motion to Sell Mass. Properties GEMINI HDPE: Moody's Lowers Rating on Sr. Secured Term Loan to Ba3 GLOBAL CONSULTING: Voluntary Chapter 11 Case Summary GOODRX INC: Moody's Affirms 'B1' CFR, Outlook Stable GOTO GROUP: Eaton Vance EFR Marks $1.82MM Loan at 37% Off GRIFFON CORP: Moody's Alters Outlook on 'B1' CFR to Positive HARRIS ENERGY: Updates Gambit Secured Claim Pay; Files Amended Plan HERETIC BREWING: Case Summary & 20 Largest Unsecured Creditors HOWARD INTERVENTION: Court OKs Cash Collateral Access Thru Feb 9 IGLESIAS DIOS: Church Wins Court's Confirmation of Plan IGRE Income Fund: Losses Raise Going Concern Doubt IGRE Income Fund: Reports $272,655 Net Loss in First Half of 2022 INTELIGLAS CORP: Amends Unsecured Claims Pay; Plan Hearing March 6 INVESTMENTS SWK: Maria Yip Named Subchapter V Trustee IPWE INC: David Klauder Named Subchapter V Trustee IRIS PARENT: Moody's Assigns 'Caa1' CFR, Outlook Negative IYS VENTURES: Unsecureds Owed $25.5M Get $1.2M or $240K Annually JLK CONSTRUCTION: Amends Unsecured Claims Pay Details KAI 786: Wins Cash Collateral Access on Final Basis KCW GROUP: Hearing on Sale of Houston Properties Set for Feb. 14 KESTREL ACQUISITION: S&P Alters Outlook to Stable, Affirms 'B' ICR KNS HOLCO: S&P Upgrades ICR to 'CCC+' After Distressed Exchange LAEEQ MOB: Files Emergency Bid to Use Cash Collateral LAEEQ MOB: Seeks to Hire Milledge Law Firm as Legal Counsel LEAH HOLDING: Voluntary Chapter 11 Case Summary LEBANON PLATINUM: Court OKs $750,000 DIP Loan from SummitBridge LOGANSPORT MACHINE: Case Summary & 20 Largest Unsecured Creditors LPI LLC: People's Bank of Commerce Says Disclosure Inadequate LUXURY AUTO: Unsecureds to Get Share of Income & Sale Proceeds MADISON TECHNOLOGIES: BF Borgers CPA Raises Going Concern Doubt MAGENTA BUYER: Eaton Vance EFR Marks $2.02MM Loan at 30% Off MAGENTA BUYER: Eaton Vance EFR Marks $575,000 Loan at 57% Off MATCON CONSTRUCTION: Defoor Says Disclosure Inadequate MOAB BREWERS: Case Summary & 20 Largest Unsecured Creditors NAI ENTERTAINMENT: Moody's Cuts CFR to Caa1 & Alters Outlook to Neg NANOSTRING TECHNOLOGIES: Execs Awarded Retention Bonuses NANOSTRING TECHNOLOGIES: Legal Challenges Raise Going Concern Doubt NEURAGENEX TREATMENT: Case Summary & 20 Top Unsecured Creditors NEW WAVE PROPERTY: Court OKs Cash Collateral Access on Final Basis NGL ENERGY: Fitch Assigns 'B' LongTerm IDR, Outlook Stable NID HOME SOLUTIONS: Court Approves Disclosure Statement NOBLE'S SONG: Voluntary Chapter 11 Case Summary NOGIN INC: Thread Collective Steps Down as Committee Member OCM SYSTEM: Moody's Affirms 'B2' CFR, Outlook Remains Stable OCWEN FINANCIAL: S&P Affirms 'B-' ICR on Improving Leverage OPENLANE INC: S&P Affirms 'B' Issuer Credit Rating, Outlook Stable P&L DEVELOPMENT: S&P Cuts ICR to 'CCC' on Heightened Default Risk PARTS iD: Court OKs $18.5MM DIP Loan from Fifth Star PARTS ID: Unsecureds to Get Nothing in Plan PASSERO LLC: Unsecureds Will Get 15% Dividend over 60 Months PEABODY ENERGY: Moody's Upgrades CFR to B1, Outlook Remains Stable PETER RINALDI: Seeks to Hire David E. Lynn as Legal Counsel PILL CLUB: Plan to Pay Sale Proceeds, Causes of Action to Unsec. PRESSURE BIOSCIENCES: Completes Acquisition of Uncle Bud's PROASSURANCE CORP: Moody's Withdraws (P)Ba1 Unsecured Shelf Rating PROJECT RUBY: Moody's Rates $555MM First Lien Loans 'B2' PURPLE PEONY: Unsecureds Will Get 8% of Claims over 5 Years QUEST SOFTWARE: Eaton Vance EFR Marks $1.77MM Loan at 20% Off REALPAGE INC: Moody's Affirms 'B3' CFR, Outlook Remains Stable RED APPLE: Hearing on Sale of Tara Woods Apartment Set for Jan. 30 REDSTONE HOLDCO 2: Eaton Vance EFR Marks $1.38MM Loan at 20% Off REMARK HOLDINGS: Gets Recommendation for School Contract Award RENAISSANCE HOLDING: Moody's Affirms 'B3' CFR, Outlook Stable RETROVISION LLC: To Seek Plan Confirmation on March 12 RICE OIL: Seeks Cash Collateral Access ROCKY MOUNTAIN: Court OKs Cash Collateral Access on Final Basis S&W BLUE JAY: Court Approves Disclosure Statement SALEM MEDIA: S&P Ups ICR to 'CCC' on New Revolving Credit Facility SAS AB: Files Amendment to Disclosure Statement SAS GROUP: Case Summary & 20 Largest Unsecured Creditors SOLIANT: Moody's Affirms 'B1' CFR, Outlook Remains Stable SOUTHERN VETERINARY: Moody's Affirms 'B3' CFR, Outlook Stable TACALA INVESTMENT: Moody's Affirms B3 CFR, Outlook Remains Stable TIFFANY HOLDING: Voluntary Chapter 11 Case Summary TOPSECRET RESORT: U.S. Trustee Unable to Appoint Committee UBO-TECHNOLOGIES: Unsecureds Owed $1.89M to Get 3.96% in Plan UPHEALTH INC: BNY Mellon Appointed as Successor Indenture Trustee UPHEALTH INC: NYSE CFR Hearing Set for April 17 UPHEALTH INC: Thrasys Completes Transition Deals With Customers V.B.H.R.E.S.B. TOGETHER: Voluntary Chapter 11 Case Summary VERITAS US: Eaton Vance EFR Marks $2.15MM Loan at 15% Off VIASAT INC: Fitch Affirms 'BB-' LongTerm IDR, Outlook Negative WEALTH MANIFESTED: Seeks Cash Collateral Access WESCO AIRCRAFT: Gen. Unsecureds Get Share of Settlement Equity Pool WHITESTONE UPTOWN: Wins Cash Collateral Access Thru Feb 8 XD INDUSTRIES: Has Deal on Cash Collateral Access ********* 1185 BAYSHORE: Voluntary Chapter 11 Case Summary ------------------------------------------------ Debtor: 1185 Bayshore Dr Inc. 8065 SW 107 Ave. #112 Miami, FL 33173 Business Description: The Debtor is primarily engaged in acting as lessors of buildings used as residences or dwellings, primarily engaged in renting and leasing real estate properties. Chapter 11 Petition Date: January 25, 2024 Court: United States Bankruptcy Court Southern District of Florida Case No.: 24-10692 Judge: Hon. Robert A Mark Debtor's Counsel: Peter Spindel, Esq. PETER SPINDEL, ESQ, P.A. 5775 Blue Lagoon Dr. #300 Miami, FL 33126-2071 Tel: 786-355-4631 E-mail: peterspindel@gmail.com Estimated Assets: $1 million to $10 million Estimated Liabilities: $1 million to $10 million The petition was signed by Lucrecia Delmonte as owner. The Debtor failed to include in the petition a list of its 20 largest unsecured creditors. A full-text copy of the petition is available for free at PacerMonitor.com at: https://www.pacermonitor.com/view/54XOJ3Y/1185_Bayshore_Dr_Inc__flsbke-24-10692__0001.0.pdf?mcid=tGE4TAMA 207 E 15TH ST: Seeks to Hire White and Co as Bankruptcy Counsel --------------------------------------------------------------- 207 E 15TH ST LLC seeks approval from the U.S. Bankruptcy Court for the District of New Jersey to hire White and Co LLC as its counsel. The firm will render these services: a. advise and consult with the debtor concerning questions arising in the conduct of the administration of the estate, including the debtors' rights and responsibilities with regard to their ongoing operations, assets and the claims of secured parties and unsecured creditors and other parties in interest; b. appear for, prosecute and represent your applicants in suits and claims arising in or related to this case; c. investigate and prosecute preferences and other actions arising under the Bankruptcy Code; d. assist in the preparation of such pleadings, Motions, Notices, and Orders as are required for the orderly administration of this estate; e. consult with and advise the debtor; f. prepare and prosecute a Disclosure Statement and Plan; g. assist the debtor in the disposition of estate assets, if any are to be disposed of; and h. render any and all other services requested by the debtors. The firm will be paid at these rates: Avram D. White, Esq. $575/hour Aaron Mizrahi, Esq. $575/hour White and Co shall receive a retainer in the amount of $7,500. As disclosed in the court filing, White and Co is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. The firm can be reached through: Avram D. White, Esq. WHITE and CO, LLC 523 Park Avenue, Suite 3 Orange, NJ 07050 Phone: (973) 669 0857 Fax: (888) 481 1709 E-mail: avram.randr@gmail.com About 207 E 15TH ST LLC 207 E 15TH ST LLC sought protection for relief under Chapter 11 of the Bankruptcy Code (Bankr. D.N.J. Case No. 23-20978) on Nov. 27, 2023, listing $100,001 - $500,000 in both assets and liabilities. Lenaure Foxworth signed the petition as managing member. Avram D. White, Esq. at White and Co. Attorneys and Counsellors represents the Debtors as counsel. 2335 INVESTMENTS: Case Summary & One Unsecured Creditor ------------------------------------------------------- Debtor: 2335 Investments, LLC 15700 Winchester Blvd. Los Gatos, CA 95030 Business Description: 2335 Investments is a Single Asset Real Estate debtor (as defined in 11 U.S.C. Section 101(51B)). The Debtor is the owner of the real property located at 795 Russell Lane Milpitas, CA 95035 valued at $1.8 million. Chapter 11 Petition Date: January 25, 2024 Court: United States Bankruptcy Court Northern District of California Case No.: 24-50088 Judge: Hon. Stephen L. Johnson Debtor's Counsel: Lars Fuller, Esq. THE FULLER LAW FIRM PC 60 N Keeble Avenue San Jose, CA 95126 Tel: lars@fullerlawfirm.net Total Assets: $1,819,744 Total Liabilities: $1,687,587 The petition was signed by Daniel Shaw as managing member. The Debtor listed Summit Funding located at 1840 41st Ave., Suite 102, Capitola, CA 95010 as its sole unsecured creditor holding a claim of $544,000. A full-text copy of the petition is available for free at PacerMonitor.com at: https://www.pacermonitor.com/view/FZDH6LQ/2335_Investments_LLC__canbke-24-50088__0001.0.pdf?mcid=tGE4TAMA 465 BOSTON: Hearing on Sale of Lynn Property Set for Feb. 13 ------------------------------------------------------------ The U.S. Bankruptcy Court for the District of Massachusetts is set to hold a hearing on Feb. 13 on the proposed private sale of real property owned by 465 Boston Street, LLC. The company is selling a four-family apartment building in Lynn, Mass., to Fidelina Garcia or to another buyer with a better offer. Ms. Garcia made an offer to acquire the property for $1.25 million, with a financing contingency in the amount of $937,500, which expires on Feb. 16. The bankruptcy court set a Feb. 8 deadline for other interested buyers to make a counteroffer. Any counteroffer must be at $1,312,500, which represents 5% over the purchase price, and must be accompanied by a $31,000 deposit. In the event there is one or more counteroffers, then the company may request that the bankruptcy court conduct the sale hearing by way of sealed bids. At the conclusion of the bidding, the bankruptcy court will determine and then announce the winning bid, subject only to a court order approving the winning bid and authorizing the company to consummate the sale. About 465 Boston Street 465 Boston Street, LLC filed Chapter 11 petition (Bankr. D. Mass. Case No. 23-12035) on Dec. 4, 2023, with up to $50,000 in assets and $500,001 to $1 million in liabilities. Judge Janet E. Bostwick oversees the case. George J. Nader, Esq., at Riley & Dever, P.C., represents the Debtor as bankruptcy counsel. 4D LIVESTOCK: Joli Lofstedt Named Subchapter V Trustee ------------------------------------------------------ The U.S. Trustee for Region 11 appointed Joli Lofstedt, Esq., as Subchapter V trustee for 4D Livestock LLC. Ms. Lofstedt, a practicing attorney in Louisville, Colo., will be paid an hourly fee of $375 for her services as Subchapter V trustee and will be reimbursed for work-related expenses incurred. Ms. Lofstedt declared that she is a disinterested person according to Section 101(14) of the Bankruptcy Code. The Subchapter V trustee can be reached at: Joli A. Lofstedt, Esq. P.O. Box 270561 Louisville, CO 80027 Phone: (303) 476-6915 Fax: (303) 604-2964 Email: joli@jaltrustee.com About 4D Livestock 4D Livestock LLC sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. D. Colo. Case No. 24-10272) on January 22, 2024, with $1 million to $10 million in both assets and liabilities. Daniel Brown, managing member, signed the petition. Judge Kimberley H. Tyson oversees the case. Aaron J. Conrardy, Esq., at Wadsworth Garber Warner Conrardy, P.C. represents the Debtor as legal counsel. 603 DOT AVE: Voluntary Chapter 11 Case Summary ---------------------------------------------- Debtor: 603 Dot Ave, LLC 84 State Street Boston, MA 02109 Business Description: 603 Dot Ave, LLC is a Single Asset Real Estate debtor (as defined in 11 U.S.C. Section 101(51B)). Chapter 11 Petition Date: January 25, 2024 Court: United States Bankruptcy Court District of Massachusetts Case No.: 24-10156 Judge: Hon. Janet E. Bostwick Debtor's Counsel: Michael Van Dam, Esq. VAN DAM LAW LLP 233 Needham Street Suite 540 Newton, MA 02464 Tel: 617-969-2900 E-mail: mvandam@vandamlawllp.com Estimated Assets: $1 million to $10 million Estimated Liabilities: $1 million to $10 million The petition was signed by Steven Meyer as manager. The Debtor indicated it has no unsecured creditors. A full-text copy of the petition is available for free at PacerMonitor.com at: https://www.pacermonitor.com/view/IKHCZUY/603_Dot_Ave_LLC__mabke-24-10156__0001.0.pdf?mcid=tGE4TAMA 76 M INC: Seeks to Tap Burns Law Firm as Bankruptcy Counsel ----------------------------------------------------------- 76 M Inc. seeks approval from the U.S. Bankruptcy Court for the District of Columbia to hire The Burns Law Firm, LLC as its counsel. The firm's services include: (a) providing the Debtor with legal advice concerning its powers and duties and assisting from a bankruptcy necessity any ancillary litigation ongoing with the Debtor; (b) preparing legal papers; (c) filing and prosecuting adversary proceedings against parties adverse to the Debtor or its estate; (d) preparing a disclosure statement or plan of reorganization; and (e) performing Chapter 11 services for the Debtor and the estate; and (f) providing other necessary legal services. The firm will be paid at these rates: Partners $595 per hour Associates $455 per hour Paralegals $295 per hour The firm received an initial retainer of $25,000. In addition, the firm will receive reimbursement for its out-of-pocket expenses. John Burns, Esq., a partner at The Burns Law Firm, 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: John D. Burns, Esq. THE BURNS LAW FIRM, LLC 6303 Ivy Lane, Suite 102 Greenbelt, MD 20770 Tel: (301) 441-8780 Email: info@burnsbankruptcyfirm.com About 76 M Inc. 76 M Inc. is primarily engaged in renting and leasing real estate properties. 76 M Inc. filed its voluntary petition for relief under Chapter 11 of the Bankruptcy Code (Bankr. D. C. Case No. 24-00003) on Jan. 3, 2023, listing up to $50,000 in assets and $1 million to $10 million in liabilities. The petition was signed by Peter Odagbodo as president. Judge Elizabeth L. Gunn presides over the case. John D. Burns, Esq. at The Burns Law Firm, LLC represents the Debtor as counsel. ACCLIVITY ANCILLARY: U.S. Trustee Appoints Creditors' Committee --------------------------------------------------------------- The U.S. Trustee for Region 6 appointed an official committee to represent unsecured creditors in the Chapter 11 cases of Acclivity Ancillary Services, LLC and its affiliates. The committee members are: 1. Dennis Blough 25761 Nellie Gail Road Laguna Hills, CA 92653 bloughd@aol.com 2. Kenneth Chuang 17 Silver Fern Irvine, CA 92603 Kcbean23@gmail.com 3. Michael R. Henry 11346 Drysdale Lane Los Alamitos, CA 90720 Henry2mail@aol.com 4. Robert J. Phelps 19282 Mclaren Lane Huntington beach, CA 92646 uscdrbob@gmail.com Official creditors' committees serve as fiduciaries to the general population of creditors they represent. They may investigate the debtor's business and financial affairs. Committees have the right to employ legal counsel, accountants and financial advisors at a debtor's expense. About Acclivity Acclivity Ancillary Services, LLC and Acclivity West, LLC filed voluntary Chapter 11 petitions (Bankr. S.D. Texas Lead Case No. 24-90001) on Jan. 5, 2024. At the time of the filing, both Debtors reported up to $50,000 in assets and $1 million to $10 million in liabilities. Judge Marvin Isgur oversees the cases. Lenard M. Parkins, Esq., at Parkins & Rubio, LLP and Schwartz Associates, LLC serve as the Debtors' legal counsel and financial advisor, respectively. W. Marc Schwartz, chairman of Schwartz Associates, is the Debtors' chief restructuring officer. ACCLIVITY ANCILLARY: Wins $2.3MM DIP Loan from Life Opportunity --------------------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of Texas, Houston Division, authorized Acclivity Ancillary Services LLC, a Texas limited liability company, and Acclivity West, LLC, a California limited liability company, to use cash collateral and obtain postpetition financing, on a final basis. Life Opportunity Fund I, L.P., and Life Opportunity I Feeder, L.P have agreed to provide debtor-in-possession financing to the Debtors under a multi-draw credit facility that provides funding availability up to an additional $735,000. Specifically, the Debtors are permitted to obtain a multi-draw term loan credit facility in an aggregate principal amount of up to $2.328 million, consisting of: (a) a new money term loan facility in the aggregate principal amount of $735,000 in commitments from Life Opportunity Fund I, LP. The loan will be available in multiple draws in accordance with the approved budget in minimum increments to be agreed upon and which will reduce availability under the DIP Facility on a dollar-for-dollar basis; and (b) a refinancing term loan facility in the aggregate principal amount of $1.593 million plus accrued and unpaid interest and fees thereon, pursuant to the terms of (x) the Final Order, (y) the Senior Secured Superpriority Debtor-n-Possession Loan and Security Agreement with the DIP Lender. The Debtors are required to comply with these milestones: (i) The Bankruptcy Court must have entered the Interim Order no later than five days after the Petition Date; (ii) The Bankruptcy Court must have entered the Final Order no later than 35 days after the Petition Date; (iii) The Bankruptcy Court must have entered a final order establishing a date by which parties asserting a claim against the Debtors must file a proof of claim or be forever barred from asserting a claim against the Debtors and their property and such date must be no later than 45 days after the Petition Date; (iv) The Debtors must file a chapter 11 plan in form and substance reasonably acceptable to the Lender and a disclosure statement for the Approved Plan of Reorganization in form and substance reasonably acceptable to the Lender, in each case, by a date that is no later than 21 days of the Petition Date; (v) The Disclosure Statement must be conditionally approved by the Bankruptcy Court by the date that is no later than 45 days after the Petition Date; (vi) The Bankruptcy Court must have entered an order confirming the Approved Plan of Reorganization by the date that is no later than 100 days after the Petition Date; and (vii) The Effective Date of the Approved Plan of Reorganization must have occurred by the date that is no later than 120 days after the Petition Date. Prepetition, the Debtors are party to (a) an Amended and Restated Loan and Security Agreement, dated as of August 11, 2020, by and among Acclivity West, LLC and Acclivity Ancillary Services LLC as Borrowers, and the DIP Lender, pursuant to which the Prepetition Lender agreed to provide term loans and other financial accommodations to the Debtors and pursuant to which the Debtors granted the Prepetition Lender a first-priority security interest in and liens upon the assets (and the proceeds thereof) of the Debtors. Pursuant to the Amendment to Loan and Security Agreement, dated as of August 15, 2023, the Prepetition Lender agreed to extend incremental financing with a principal amount totaling $1.593 million plus interest and fees accruing thereon. The Debtors require the DIP Loans to maintain offices, make payroll, to satisfy other working capital and general corporate purposes of the Debtors. Upon entry of the Final Order, Bridge Loans in an aggregate principal amount equal to $1.593 million plus accrued and unpaid interest and fees thereon will be immediately, automatically, and irrevocably deemed to have been converted into Refinancing DIP Obligations and will be entitled to all the priorities, privileges, rights and other benefits afforded to the other DIP Obligations under the Final Order and the DIP Loan Documents. As adequate protection, the Prepetition Lender is granted replacement Liens upon all of the DIP Collateral. To the extent of any diminution in value of the Prepetition Collateral from and after the Petition Date, the Prepetition Lender is further granted allowed superpriority administrative claims, pursuant to 11 U.S.C. section 507(b) of the Bankruptcy Code, with priority over all administrative expense claims and priority and other unsecured claims against the Debtors or their estates. A copy of the order is available at https://urlcurt.com/u?l=h943rt from PacerMonitor.com. About Acclivity Ancillary Services Acclivity West, LLC, was formed by Kenneth Frank and Timothy Murphy in 2009. It initially sold life settlement investment instruments throughout the United States and later made the decision to limit sales to California residents only. AW purchased life insurance policies from persons who no longer wanted to maintain their policies, identified and aggregated the FLS Investors, and then sold FLS Interests to the FLS Investors. In October 2020, AW gave AW(TM)s FLS Investors the opportunity to exchange their FLS Interests for limited liability company membership interests in AW and thereby become AW Investors. Acclivity Ancillary Services LLC and Acclivity West, LLC, filed voluntary petitions for relief under Chapter 11 of the Bankruptcy Code (Bankr. S.D. Tex. Lead Case No. 24-90001) on Jan. 5, 2024. Judge Marvin Isgur oversees the cases. Parkins & Rubio, LLP, led by Lenard M. Parkins, Esq., serves as the Debtors' counsel and Schwartz Associates, LLC serves as the Debtors' financial advisor. W. Marc Schwartz, chairman of Schwartz Associates, is the Debtors' chief restructuring officer. Life Opportunity Fund I, L.P., and Life Opportunity I Feeder, L.P serve as the Debtors' DIP lenders. AEROCISION PARENT: Unsecureds' Recovery "Undetermined" in Plan -------------------------------------------------------------- AeroCision Parent, LLC, and its Affiliated Debtors submitted an Amended Disclosure Statement and Joint Chapter 11 Plan of Liquidation dated January 23, 2024. This Plan constitutes a separate chapter 11 plan of liquidation for each Debtor. On December 21, 2023, LHCP Fund I filed an adversary proceeding against Citizens Bank, N.A., in its capacity as Senior Agent, and the Prepetition Secured Creditors, asserting certain breaches of the RSA. See Liberty Hall Capital Partners Fund I, L.P. v. Citizens Bank, N.A., Case No. 23-11032, Adv. Pro. 23-50772 (KBO) (Bankr. D. Del. Dec. 21, 2023). In its complaint, LHCP Fund I also asserts claims based on promissory estoppel, unjust enrichment, and breach of the implied covenant of good faith and fair dealing. Class 3 consists of First Lien Claims. In full and final satisfaction therefor, each Holder of an Allowed First Lien Claim has agreed to receive, and shall receive, from time to time following the Effective Date, their pro rata share of 100% of the Withheld Proceeds upon the Debtors' or Post-Effective Date Debtors' receipt of the Insurance Refund and 90% of their pro rata share of: (a) any available Litigation Proceeds from Preserved Causes of Action, and (b) any available Wind Down Reversionary Assets. Class 4 consists of General Unsecured Claims. In full and final satisfaction therefor, each Holder of an Allowed General Unsecured Claim, which, for the avoidance of doubt, includes the Holders of Second Lien Claims, shall receive, from time to time following the Effective Date, 10% of: their pro rata share of (a) any available Litigation Proceeds from Preserved Causes of Action, and (b) any available Wind Down Reversionary Assets; provided, however, that the aggregate recovery to all Holders of General Unsecured Claims in Class 4 shall not exceed $500,000. This Class is impaired. The allowed unsecured claims total $31,844,944.00. Holders of other general unsecured claims in Class 4 are impaired and their projected recovery is still "undetermined", according to the Disclosure Statement. Since the Sale Transaction closed, the Debtors have focused on transitioning their businesses to BG Acquisition, including completing the novation process for the assignment of government contracts in accordance with the TSA, and winding down their remaining affairs. This Combined Plan and Disclosure Statement provides for the continuation of that process and for the administration and distribution of the Wind Down Assets, including distributions to Holders of Allowed Claims in accordance with the terms of this Plan and the treatment of Allowed Claims. The Plan Administrator will effectuate such liquidation and Distributions. Pursuant to this Combined Disclosure Statement and Plan, and to comply with the Debtors' obligations under the TSA, Interests in AeroCision and Interests in Numet will vest in Reorganized AeroCision Parent. The Plan Administrator shall be the sole stockholder of Reorganized AeroCision Parent. Each of Reorganized AeroCision and Reorganized Numet will continue to operate to satisfy the obligations of the Debtors under the Sale Documents. Upon termination of the TSA, the Plan Administrator will (i) liquidate, wind down, and dissolve each of Reorganized AeroCision and Reorganized Numet under applicable law; (ii) request that each of AeroCision's and Numet's Chapter 11 Cases be closed; and (iii) file each of AeroCision's and Numet's final tax returns. After the termination of the TSA, the Plan Administrator will (i) liquidate, wind down, and dissolve Reorganized AeroCision Parent under applicable law; and (ii) file AeroCision Parent's final tax returns. All consideration necessary to make all monetary payments in accordance with this Plan shall be obtained from Cash on hand as of the Effective Date and the Wind Down Assets, including Litigation Proceeds from Preserved Causes of Action. The Confirmation Hearing has been scheduled for March 4, 2024 at 10:00 a.m. A full-text copy of the Amended Combined Disclosure Statement and Plan dated January 23, 2024 is available at https://urlcurt.com/u?l=7IyRm0 from Epiq Corporate Restructuring, LLC, claims agent. Counsel to the Debtors: Michael R. Nestor, Esq. Andrew L. Magaziner, Esq. Elizabeth S. Justison, Esq. Shella Borovinskaya, Esq. Joshua B. Brooks, Esq. Emily C.S. Jones, Esq. Young Conaway Stargatt & Taylor, LLP Rodney Square 1000 North King Street Wilmington, DE 19801 Tel: (302) 571-6600 Fax: (302) 571-1253 Email: mnestor@ycst.com amagaziner@ycst.com ejustison@ycst.com sborovinskaya@ycst.com jbrooks@ycst.com ejones@ycst.com About AeroCision Parent AeroCision Parent, LLC and affiliates are are part of an organization known as Bromford Group, a global manufacturing business in the aerospace, defense, and power generation industry that was founded in the United Kingdom in 1973. Bromford supplies turbine engine and related components to all major OEM's, including many of the industry's most prominent manufacturers, like General Electric Aviation, Pratt & Whitney, and Rolls Royce, among others. The manufacturers use Bromford's components to manufacture engines for aircraft and other vehicles. The Debtors sought protection under Chapter 11 of the Bankruptcy Code (Bankr. D. Del. Lead Case No. 23-11032) on July 31, 2023. In the petition signed by David Nolletti, chief restructuring officer, the Debtor disclosed up to $500 million in both assets and liabilities. Judge Karen B. Owens oversees the case. Young Conaway Stargatt & Taylor, LLP represents the Debtors as legal counsel, Riveron Consulting, LLC as restructuring advisor, Jefferies LLC as investment banker, and Epiq Corporate Restructuring, LLC as notice, claims, solicitation and balloting agent and administrative advisor. AIR MAX: Seeks Approval to Hire David Locke CPA as Accountant ------------------------------------------------------------- Air Max Heating & Cooling, LLC seeks approval from the U.S. Bankruptcy Court for the Southern District of Mississippi to hire David Locke, CPA and his accounting firm to perform all accounting services that are necessary or that may become necessary in this proceeding. The firm will charge these hourly rates: Certified Public Accountant $225 Senior Accountant $175 Mr. Locke assured the court that he and his firm represent no interests adverse to the Debtor , estate or matters upon which they are being engaged. The firm can be reached through: David Locke, CPA 2005 Devonbriar Cove Brandon, MI 39042 Phone: (601) 540-6219 About Air Max Heating Air Max Heating & Cooling, LLC sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. S.D. Miss. Case No. 23-02886) on December 13, 2023, with up to $50,000 in both assets and liabilities. Judge Jamie A. Wilson oversees the case. R. Michael Bolen of Hood & Bolen, PLLC represents the Debtor as legal counsel. ALR CONSTRUCTION: Voluntary Chapter 11 Case Summary --------------------------------------------------- Debtor: ALR Construction, Inc. 1228 Phillips Road White Pine, TN 37890 Chapter 11 Petition Date: January 25, 2024 Court: United States Bankruptcy Court Eastern District of Tennessee Case No.: 24-30127 Judge: Hon. Suzanne H Bauknight Debtor's Counsel: Brenda G. Brooks, Esq. MOORE & BROOKS 6223 Highland Place Way, Suite 102 Knoxville, TN 37919-4035 Tel: (865) 450-5455 Fax: (865) 622-8865 E-mail: bbrooks@moore-brooks.com Estimated Assets: $100,000 to $500,000 Estimated Liabilities: $1 million to $10 million The petition was signed by Raymond Graham IV 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/45FNCWA/ALR_Construction_Inc__tnebke-24-30127__0001.0.pdf?mcid=tGE4TAMA AMC ENTERTAINMENT: Moody's Affirms 'Caa2' CFR, Outlook Stable ------------------------------------------------------------- Moody's Investors Service affirmed AMC Entertainment Holdings, Inc.'s Caa2 Corporate Family Rating, Caa2-PD Probability of Default Rating, B3 rating on the $400 million 12.75% backed senior secured first-lien notes residing at Odeon Finco PLC, Caa1 ratings on the senior secured first lien debt (consisting of the $225 million revolving credit facility (RCF), $1.91 billion outstanding term loan and $950 million 7.5% notes), Caa3 rating on the 10%/12% cash/PIK toggle senior secured second-lien subordinated notes ($951.4 million outstanding, pro forma for the debt exchanges and repurchases in December 2023), and Ca ratings on the senior subordinated notes ($280.2 million outstanding across various tranches). The outlook is stable. RATINGS RATIONALE The affirmation of the Caa2 CFR reflects AMC's high pro forma financial leverage, currently around 8.1x total debt to EBITDA, and Moody's expectation that leverage will rise to the 9x-9.5x region over the near-term amid a weak movie slate in 2024 associated with the double Hollywood strikes (metrics are Moody's adjusted) last year. Moody's expects this year's wide releases to be lower, resulting in reduced box office receipts near $8 billion compared to $9 billion last year. Moody's also expects AMC to continue producing negative free cash flow (FCF) and rely on its sizable cash balances to offset operating losses, which Moody's project in the H1 2024. Despite the expectation for negative FCF, the company will likely continue using cash-on-hand to repurchase its high coupon debt in the open market. Last year, AMC repurchased or exchanged a total of $442.5 million of debt, which Moody's deemed distressed exchange defaults. Hence, the rating continues to reflect Moody's view that further distressed exchanges or a potential balance sheet restructuring could occur over the rating horizon given AMC's untenable debt capital structure. AMC's Caa2 CFR reflects the company's position as the world's largest movie exhibitor, but also considers the uneven recovery in operating and financial performance, which suffered from pandemic-induced revenue and operating losses in 2020 and 2021 when theatres were closed or not fully operational. Though Moody's expects additional debt repurchases and debt-to-equity conversions this year, which will lower the outstanding debt balance, Moody's also expect EBITDA will decline relative to 2023 due to comparatively lower wide release volumes, leading to higher leverage. The cinema industry's delayed recovery and structural challenges are also captured in AMC's ratings, which include: (i) excess screen capacity in North America; (ii) comparatively lower moviegoer demand as studios release some films online via streaming platforms (simultaneously or exclusively) or potentially release them downstream in a shortened theatrical window; (iii) lower theatrical release volumes relative to historical levels due to short-term production bottlenecks; (iv) reduced show times compared to pre-pandemic periods; and (v) the impact from some cost-conscious consumers reducing their out-of-home entertainment and number of trips to the cinema amid affordable subscription-based video-on-demand (VOD) movie viewing. Nevertheless, over the longer-term, Moody's expects AMC will experience profit improvement (albeit irregular) driven by growing moviegoer attendance, higher revenue per patron, an appealing number of theatrical releases and alternative content, and Moody's view that the big studios will adhere to the 45-day theatrical window for major film releases. Exhibitors like AMC also benefit from favorable ticket prices that on average remain relatively inexpensive compared to the cost of other forms of out-of-home entertainment. The stable outlook reflects Moody's view that AMC will at least maintain its revenue share in North America and continue to experience good moviegoer demand and above-average ticket prices and concessions revenue (higher margin) per patron. The outlook also considers Moody's expectation that the residual effect of the protracted writers' and actors' strikes will negatively impact revenue and EBITDA growth in H1 2024 as movie productions take time to restart and resume their normal cadence, which will pressure leverage metrics. However, with the recommencement of film production volumes to pre-strike levels combined with numerous anticipated blockbuster wide releases expected in H2 2024 and a growing number of alternatives in-theatre content, this should lead to organic revenue growth in the low-single digit percentage range in the second half. Moody's expects AMC will continue to effectively manage operating expenses to maintain EBITDA margins near current levels in the 20% to 25% range (Moody's adjusted). AMC's SGL-3 Speculative Grade Liquidity rating reflects adequate liquidity over the next 12-18 months supported chiefly by sizable unrestricted cash balances, which totaled $730 million at September 30, 2023, offset by Moody's expectation for continued negative FCF over the coming twelve months. At LTM September 30, 2023, FCF was -$403 million, equivalent to -4% of total debt (Moody's adjusted). In Q4 2023, AMC successfully raised $350 million in cash from an at-the-market equity sales program, which further boosted internal liquidity. Moody's expects cash burn to moderate somewhat in 2024, which should help maintain cash at high levels (barring usage for M&A, debt repurchases, shareholder distributions or other capital outlays). The $225 million RCF is undrawn and current (matures April 2024). The RCF has a springing maximum net senior secured leverage covenant of 6x that becomes applicable when more than 35% of the facility is drawn, however this covenant has been waived through the quarter ending March 31, 2024. ESG CONSIDERATIONS AMC's CIS-4 indicates that the rating is lower than it would have been if ESG risk exposures did not exist. This is chiefly driven by governance risks as denoted by the G-4 governance score resulting from AMC's high financial leverage, and demographic and societal trends as indicated by the S-4 social score. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS Ratings could be upgraded if AMC experiences positive growth in box office attendance, stable-to-improving market share, expanding EBITDA with margins approaching pre-pandemic levels and enhanced liquidity; and exhibits prudent financial policies that translate into an improved credit profile. An upgrade would also be considered if financial leverage as measured by total debt to EBITDA approaches 8x (Moody's adjusted) and free cash flow as a percentage of total debt improves to the -1% to +1% range (Moody's adjusted). Ratings could be downgraded if there was: (i) a deterioration of the company's liquidity or an inability to access additional sources of liquidity to cover cash outlays; (ii) poor execution on reducing or managing operating expenses; or (iii) Moody's expects total debt to EBITDA will remain above 10x (Moody's adjusted) or free cash flow will remain negative on a sustained basis. Ratings could also be downgraded if Moody's expects AMC will pursue a balance sheet restructuring. Headquartered in Leawood, Kansas, AMC Entertainment Holdings, Inc. is the largest movie exhibitor in the US and globally, operating 904 movie theatres with 10,078 screens in 11 countries across the US and Europe. Revenue totaled approximately $4.7 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. AMERICAN LEGION: Case Summary & 20 Largest Unsecured Creditors -------------------------------------------------------------- Debtor: American Legion Ambulance Association, Inc. 30 Broad Street Elmer, NJ 08318 Business Description: American Legion is a non-profit company that provides Emergency Medical Services in several Salem County, NJ municipalities along with non-emergency medical transportation. Chapter 11 Petition Date: January 26, 2024 Court: United States Bankruptcy Court District of New Jersey Case No.: 24-10714 Debtor's Counsel: Carol L. Knowlton, Esq. GORSKI & KNOWLTON PC 311 Whitehorse Ave Suite A Hamilton, NJ 08610 Tel: 609-964-4000 Fax: 609-528-0721 E-mail: cknowlton@gorskiknowlton.com Total Assets: $0 Total Liabilities: $1,323,086 The petition was signed by Charles McSweeney as President of EMS Consulting Services. 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/BPGMMJI/American_Legion_Ambulance_Association__njbke-24-10714__0001.0.pdf?mcid=tGE4TAMA ANNE HOLDING: Voluntary Chapter 11 Case Summary ----------------------------------------------- Debtor: Anne Holding LLC 587 Beck St. Bronx NY 10455 Business Description: Anne Holding is a Single Asset Real Estate debtor (as defined in 11 U.S.C. Section 101(51B)). Chapter 11 Petition Date: January 25, 2024 Court: United States Bankruptcy Court Southern District of New York Case No.: 24-10111 Judge: Hon. John P. Mastando III Debtor's Counsel: Mark Frankel, Esq. BACKENROTH FRANKEL & KRINSKY, LLP 488 Madison Avenue FL 23 New York NY 10022-7658 Tel: 212-593-1100 Email: mfrankel@bfklaw.com Total Assets: $1,881,215 Total Liabilities: $1,289,573 The petition was signed by Emmanuel Ku as managing member. The Debtor failed to include in the petition a list of its 20 largest unsecured creditors. A full-text copy of the petition is available for free at PacerMonitor.com at: https://www.pacermonitor.com/view/CAU7MUQ/Anne_Holding_LLC__nysbke-24-10111__0001.0.pdf?mcid=tGE4TAMA ASK FOR COOL: Unsecureds to Split $5K in Subchapter V Plan ---------------------------------------------------------- Ask For Cool Air Conditioning, Inc., filed with the U.S. Bankruptcy Court for the Southern District of Florida a Subchapter V Plan dated January 23, 2024. The Debtor owns and operates an air conditioning installation and service business. Nigel Findley is the principal of the Debtor. A few years ago, the Debtor attempted to expand its operations, but in doing so, acquired too much debt and when the sales and service did not provide sufficient income, the Debtor was not able to service all of its debts timely. The Debtor had accumulated a significant amount of debt, including the SBA and merchant cash advance loans, which necessitated a financial restructuring. The Debtor is basing its valuation of the personal property on the information provided by the creditors in the various filings, along with its own research into the value of the collateral. The gross liquidation value for the personal property belonging to the Debtor is approximately $150,500.00. These assets are all entirely encumbered by the liens of the Small Business Administration, First Citizens' Bank, ODK and MYNT totaling $486,175.92. In addition, if a chapter 7 trustee were to administer the estate assets, the estimated chapter 7 administrative costs would be $15,000.00. Further, the Chapter 11 administrative costs result in a liquidation test that would provide no distribution to the unsecured creditors. The Debtor asserts that it will have sufficient net disposable monthly income due to future earnings to make the payments required under the Plan. In order produce the income necessary to fund the Plan, the Debtor will continue to run its air conditioning business and the income generated from the sales and service will be sufficient to fund ongoing operating expenses and the Debtor's Plan distributions. Class 4 consists of non-priority unsecured claims. The Debtor shall pay to nonpriority unsecured creditors the sum of $5,000 pro rata on the Effective Date. Based upon the liquidation analysis provided for herein, there would be no distribution to Class 4 general unsecured claimants in the event of a liquidation. Accordingly, the payments to be made to Class 4 claimants under the Plan will exceed the amount to be paid to Class 4 claimants in the event of a liquidation. The Debtor shall continue to exist after the Effective Date with all assets re-vesting in the reorganized Debtor. The Debtor shall have all powers of a corporation under the laws of the State of Florida and without prejudice to any right to alter or terminate such existence (whether by merger or otherwise) under Florida law. Following the Effective Date, the reorganized Debtor shall be free to operate and perform any and all acts authorized by any controlling operative agreements and other governing documents without further order from the Court, subject only to the terms of the Plan and Confirmation Order. A full-text copy of the Subchapter V Plan dated January 23, 2024 is available at https://urlcurt.com/u?l=ZdzAyj from PacerMonitor.com at no charge. About Ask For Cool Ask For Cool Air Conditioning, Inc. owns and operates an air conditioning installation and service business. The Debtor filed a Chapter 11 bankruptcy petition (Bankr. S.D. Fla. Case No. 23-18752) on Oct. 25, 2023, with $500,001 to $1 million in both assets and liabilities. Judge Peter D. Russin oversees the case. Joe M. Grant, Esq., at Lorium Law, PLLC, is the Debtor's bankruptcy counsel. ASPIRA WOMEN'S: Inks $5.5 Million Securities Purchase Agreement --------------------------------------------------------------- Aspira Women's Health Inc. disclosed in a Form 8-K filed with the Securities and Exchange Commission that on Jan. 24, 2024, it entered into a placement agency agreement with A.G.P./Alliance Global Partners and a securities purchase agreement with a single healthcare focused institutional investor alongside participation from Nicole Sandford, CEO of Aspira, as well as certain existing shareholders of the Company, relating to the issuance and sale of 1,371,000 shares of the Company's common stock, par value $0.001 per share, and pre-funded warrants to purchase 200,000 shares of Common Stock, in a registered direct offering, together with accompanying warrants to purchase 1,571,000 shares of Common Stock in a concurrent private placement. Pursuant to the Securities Purchase Agreement, the Company will issue 1,368,600 shares of common stock to certain Purchasers at an offering price of $3.50 per share and accompanying Purchase Warrant, and 2,400 shares of common stock to Ms. Sandford at an offering price of $4.255 per share and accompanying Purchase Warrant, which was the consolidated closing bid price of the Company's common stock on The Nasdaq Capital Market on Jan. 24, 2024 of $4.13 per share plus $0.125 per Purchase Warrant. The purchase price of each Pre-Funded Warrant is equal to the combined purchase price at which a share of Common Stock and the accompanying Purchase Warrant is sold in this Offering, minus $0.00001. The gross proceeds to the Company from the Offering are expected to be approximately $5.5 million, before deducting placement agent fees and other estimated Offering expenses payable by the Company. The Offering was expected to close on Jan. 26, 2024, subject to satisfaction of customary closing conditions. The Pre-Funded Warrants will be exercisable at any time after the date of issuance and will have an exercise price of $0.00001 per share. A holder of Pre-Funded Warrants may not exercise the warrant if the holder, together with its affiliates, would beneficially own more than 9.99% of the number of shares of Common Stock outstanding immediately after giving effect to such exercise. A holder of Pre-Funded Warrants may increase or decrease this percentage to a percentage not in excess of 9.99% by providing at least 61 days' prior notice to the Company. The Purchase Warrants to the institutional investor and certain existing investors will have an exercise price of $4.00 per share and the Purchase Warrants to the officer of the Company will have an exercise price of $4.13 per share, and both Purchase Warrants to the existing shareholders and the officer of the Company will be exercisable beginning six months after issuance and will expire 5 years from the initial exercise date. The Agreements contain customary representations, warranties and agreements by Aspira, customary conditions to closing, and indemnification obligations of Aspira and the Purchasers and AGP. The representations, warranties and covenants contained in the Agreements were made only for purposes of the Agreements and as of a specific date, were solely for the benefit of the parties to the Placement Agency Agreement and the Purchase Agreement, as applicable, and may be subject to limitations agreed upon by the contracting parties. Aspira engaged AGP to act as sole placement agent in the Offering. Aspira will pay AGP a cash fee equal to 7.0% of the aggregate gross proceeds generated from the Offering, except that, with respect to proceeds raised in this Offering from certain designated persons, AGP's cash fee is reduced to 3.5% of such proceeds, and to reimburse certain fees and expenses of the placement agent in connection with the Offering. The Registered Direct Offering is being made pursuant to Aspira's registration statement on Form S-3 (No. 333-252267), as previously filed with the Securities and Exchange Commission on Jan. 20, 2021 and declared effective on Jan. 28, 2021, and a related base prospectus and prospectus supplement. The Company has also agreed that certain existing warrants to purchase up to an aggregate of 366,664 shares at an exercise price of $13.20 per share and a termination date of Aug. 25, 2027, will be amended, effective upon the closing of the Offering, so that the amended warrants will have a reduced exercise price of $4.00 per share and a new termination date of Jan. 26, 2029. The other terms of the amended warrants will remain unchanged. About Aspira Women's Health Formerly known as Vermillion, Inc., Aspira Women's Health Inc. -- http://www.aspirawh.com-- is transforming women's gynecological health with the discovery, development, and commercialization of innovative testing options for women of all races and ethnicities, starting with ovarian cancer. Its ovarian cancer risk assessment portfolio is marketed to healthcare providers as OvaSuite. OvaWatch is a non-invasive, blood-based test intended for use in the initial clinical assessment of ovarian cancer risk in women with benign or indeterminate adnexal masses for which surgical intervention may be either premature or unnecessary. "We have incurred significant net losses and negative cash flows from operations since inception, and as a result have an accumulated deficit of approximately $515,214,000 as of September 30, 2023. We also expect to incur a net loss and negative cash flows from operations for the remainder of 2023. Working capital levels may not be sufficient to fund operations as currently planned through the next twelve months, absent a significant increase in revenue over historic revenue or additional financing. Given the above conditions, there is substantial doubt about our ability to continue as a going concern," the Company said in its Quarterly Report for the period ended Sept. 30, 2023. BERLIN PACKAGING: Moody's Affirms 'B3' CFR, Outlook Remains Stable ------------------------------------------------------------------ Moody's Investors Service affirmed Berlin Packaging LLC's corporate family rating at B3, probability of default rating at B3-PD, and B2 rating on its senior secured first lien revolving credit facility and senior secured first lien term loans. The outlook is maintained at stable. The rating affirmation and stable outlook reflects Berlin's quality of cash flow, with funds from operations-to-debt above 4% in challenging market conditions over the last twelve months ended September 2023 and expected going forward. Moody's recognize that leverage is weaker, with debt-to-EBITDA expected to be in the mid-to high 7.0x's range. However, interest coverage is stronger than most peers, with EBITDA-to-interest at just below 2.0x, and Moody's expects overall volumes trending positively in the low single digits. The majority of the volume improvement will stem from US markets, since destocking in the US markets largely occurred in 2023, while in Europe, destocking is about six to nine months behind the US. "Global packaging market conditions have been challenged from a volume and working capital perspective, and rising rates have negatively impacted the cost of capital of floating rate capital structures. Moody's view Berlin's cash flow quality as strong and expect credit metric improvement with an overall positive volume trend. The cadence of overall market improvement will heavily influence Berlin's credit profile. In the meantime, Berlin's free cash flow generation, undrawn revolver, and lack of material near-term maturities are viewed favorably," said Scott Manduca, Vice President at Moody's. RATINGS RATIONALE Berlin's B3 CFR is constrained by high leverage, with debt-to-EBITDA expected to be in the mid-to high 7.0x's range over the next 12-18 months. Moody's expects interest coverage to be slightly below 2.0x over the next 12-18 months, despite hedges in place through 2025 on about 70% of its debt outstanding. Moody's are expecting Berlin to generate free cash flow in 2024 stemming mainly from funds from operations, as cash generation from working capital will be lower in the US market, due to the end of destocking and improving market conditions. Continued destocking in Europe will support positive cash from working capital, as inventory is reduced. Berlin benefits from it service of stable end markets, including food, beverage, personal care, and pharmaceutical and nutraceutical. The company also has geographic diversification with a global footprint. Around 60% of revenue is generated in the US and the remaining 40% in EMEA. Berlin is substrate agnostic and sells a broad range of packaging solutions that enhances its customer reach. Its product offering is made out of glass, plastic, metal, and other materials. The company actively pursues bolt-on acquisitions to expand and diversify its geographic footprint and end market reach, which raises integration risk, but there is a history and long track record of activity. Since capital expenditures equate to around 1% of revenue, the ability to generate free cash flow in normal market conditions is consistent. This provides flexibility to either fund bolt-on acquisitions or allocate capital to absolute debt repayment. Moody's expects Berlin's liquidity to be good over the next 12 months. Cash is expected to be just above $200 million and any limited borrowings under the $125 million revolver are expected to be repaid with free cash flow. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS Moody's could consider a downgrade to Berlin's ratings if funds from operations is compromised and free cash flow-to-debt is sustained below 1%, EBITDA-to-interest expense is well below 2.0x, there is increased risk of a debt restructuring, liquidity deteriorates, and pro forma leverage is sustained above 6.5x. Moody's could consider an upgrade to Berlin's ratings, although unlikely over the next 12 to 18 months, if there is significant improvement in credit metrics. Specifically, if debt leverage were to fall below 5.5x, EBITDA-to-interest exceeds 3.0x, free cash flow-to-debt is above 4.5%, and a more conservative financial policy were implemented. Based in Chicago, Illinois, Berlin Packaging LLC is a distributor of rigid packaging primarily for food, beverage, household, personal care, and health care end markets. Berlin's largest shareholders are Oak Hill Capital Partners and affiliates, with a significant minority interest by the Canada Pension Plan Investment Board. Last twelve months revenue ended September 2023 was $3 billion. The principal methodology used in these ratings was Packaging Manufacturers: Metal, Glass and Plastic Containers published in December 2021. BLACK DIAMOND: Seeks March 12, 2024 Extension to File Plan ---------------------------------------------------------- Black Diamond Energy of Delaware, Inc., asks the Bankruptcy Court to enter an order extending the deadline to file a chapter 11 plan and disclosure statement. This bankruptcy was filed to attempt to reorganize the Debtor's finances so that it can continue to successfully operate. The Debtor previously asked for an extension to file the plan and disclosure statement on September 29, 2023. The Court granted the Debtor's request, and an extension was given until November 28, 2023 to file the plan and Disclosure Statement. The debtor was given an additional extension to January 12, 2024 to file a plan. The Debtor is still contemplating the status of settlement discussions regarding WOGCC. However, no settlement has been reached as the time of filing this Motion. The Debtor is requesting an extension of 60 to March 12, 2024 to file a Chapter 11 Plan and Disclosure Statement. The Debtor maintains that sufficient cause exists for an extension of the deadline to file a Chapter 11 Plan and Disclosure Statement. The Debtor's oil and gas wells are still capped, stifling its ability to generate revenue. The Debtor may fully litigate or resolve the capping of its wells by the WOGCC prior to filing a Chapter 11 Plan so it can properly generate forecasts for the revenue it may produce from wells to fund its Plan. Finally, in light of the failed mediation with PRECorp, the Debtor is reassessing how to provide for PRECorp in its Plan. Attorney for the Debtor: Donald R. Calaiaro, Esq. CALAIARO VALENCIK 938 Penn Avenue, Suite 501 Pittsburgh, PA 15222-3708 Tel: (412) 232-0930 E-mail: dcalaiaro@c-vlaw.com About Black Diamond Energy of Delaware Black Diamond Energy of Delaware, Inc. -- https://www.blackdiamondenergy.com/ -- is a company based in Greensburg, Pa., which provides natural gas drilling programs for investor partners. It specializes in coalbed methane play in the Powder River Basin. Black Diamond sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. W.D. Pa. Case No. 22-21448) on July 26, 2022, with up to $50,000 in assets and $10 million to $50 million in liabilities. Eric Koval, president of Black Diamond, signed the petition. Donald R. Calaiaro, Esq., at Calaiaro Valencik and Eric Rossi CPA, LLC serve as the Debtor's legal counsel and accountant, respectively. BOWLING CENTER: Case Summary & Eight Unsecured Creditors -------------------------------------------------------- Debtor: Bowling Center, Inc. d/b/a Carolina Bowling Center Roberto Sanchez Vilella Ave. No. 8120 Sabana Abajo Ward Carolina, PR 00984 Chapter 11 Petition Date: January 25, 2024 Court: United States Bankruptcy Court District of Puerto Rico Case No.: 24-00215 Debtor's Counsel: Charles A. Cuprill Hernandez, Esq. CHARLES A. CUPRILL, PSC LAW OFFICES 356 Fortaleza St. (2nd Floor) San Juan, PR 00901 Tel: 787-977-0515 Email: cacpurill@cuprill.com Total Assets: $3,592,343 Total Liabilities: $2,581,376 The petition was signed by Roger Acosta Hernandez as president. A full-text copy of the petition containing, among other items, a list of the Debtor's eight unsecured creditors is available for free at PacerMonitor.com at: https://www.pacermonitor.com/view/CAO4SSA/Bowling_Center_Inc__prbke-24-00215__0001.0.pdf?mcid=tGE4TAMA C.W. KELLER: Public Auction of Assets Set for Feb. 13 ----------------------------------------------------- C.W. Keller & Associates, LLC and C.W. Keller Holding Company, Inc. are set to hold a public auction of their assets on Feb. 13 at 11:00 a.m. The assets up for sale include machinery, equipment and vehicles, some of which are stored at the companies' facility in Plaistow, N.H. The companies estimate that the assets have aggregate liquidation value of approximately $100,000. The U.S. Bankruptcy Court for the District of Massachusetts on Jan. 24 gave the companies the green light to sell their assets by public auction. The court also approved the companies' application to hire Paul E. Saperstein Co., Inc., an auction firm, in connection with the sale. The auctioneer will utilize the services of Bidspotter, an internet auction company, to allow bidders to participate in the auction live, on-line, from anywhere in the world. About C.W. Keller & Associates C.W. Keller & Associates, LLC is a fabrication and design engineering firm in Newburyport, Mass., specializing in custom millwork, composites and concrete form systems. C.W. Keller & Associates and C.W. Keller Holding Company, Inc. filed Chapter 11 petitions (Bankr. D. Mass. Lead Case No. 23-11357) on Aug. 24, 2023. At the time of the filing, C.W. Keller & Associates reported $1 million to $10 million in assets and $10 million to $50 million in liabilities while C.W. Keller Holding Company, Inc. reported as much as $50,000 in assets and $1 million to $10 million in liabilities. Judge Christopher J. Panos oversees the case. David B. Madoff, Esq., at Madoff & Khoury LLP, represents the Debtors as legal counsel. CAESARS ENTERTAINMENT: Moody's Rates New $1.5BB Secured Notes 'Ba3' ------------------------------------------------------------------- Moody's Investors Service assigned a Ba3 rating to Caesars Entertainment, Inc.'s proposed $1.5 billion senior secured notes. The company's ratings remain unchanged, including the B1 Corporate Family Rating and B1-PD Probability of Default Rating. The outlook remains stable. Caesars will use the proceeds from its proposed $1.5 billion senior secured notes, along with net proceeds from the company's previously announced Ba3 rated senior secured term loan B, to refinance the company's Ba3 rated senior secured notes due 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. CBC SUBCO: Case Summary & One Unsecured Creditor ------------------------------------------------ Debtor: CBC SubCo, Inc. 7150 E. Camelback Rd., Ste. 230 Scottsdale, AZ 85251 Chapter 11 Petition Date: January 26, 2024 Court: United States Bankruptcy Court District of Arizona Case No.: 24-00632 Debtor's Counsel: Christopher C. Simpson, Esq. OSBORN MALEDON, P.A. 2929 N. Central Avenue Suite 2100 Phoenix, AZ 85012 Tel: 602-640-9349 Fax: 602-640-9050 E-mail: csimpson@omlaw.com Estimated Assets: $0 to $50,000 Estimated Liabilities: $1 million to $10 million The petition was signed by George Cole Jackson as authorized signatory. The Debtor listed Western Alliance Bank located at 1 East Washington St #1400, Phoenix, AZ 85004 as its sole unsecured creditor holding a claim of $2,105,704. A full-text copy of the petition is available for free at PacerMonitor.com at: https://www.pacermonitor.com/view/OMU7ZZQ/CBC_SubCo_Inc__azbke-24-00632__0001.0.pdf?mcid=tGE4TAMA CHAMPIONS FINANCING: Moody's Assigns 'B3' CFR, Outlook Stable ------------------------------------------------------------- Moody's Investors Service has assigned Champions Financing, Inc. ("Crash Champions") a B3 corporate family rating and a B3-PD probability of default rating. Moody's has also assigned a B3 rating to Crash Champions' planned $650 million senior secured first lien term loan due 2029, a B3 rating to its planned $650 million senior secured first lien notes due 2029, and a B3 rating to its planned $250 million senior secured first lien revolving credit facility expiring 2029 (undrawn at close). The outlook is stable. Upon close of the refinancing and repayment transaction described below, Moody's is withdrawing the ratings of New SK Holdco Sub, LLC (dba "Service King," Caa2 stable), including its Caa2 CFR, Caa2-PD PDR, Caa2 senior secured first lien bank credit facility ratings and its stable outlook. Moody's ratings and outlook are subject to receipt and review of final terms and documentation. Proceeds from the senior secured debt issuance, together with proceeds from the expected issuance of $350 million of perpetual preferred securities by Crash Champions' direct parent, will be used to refinance and repay the existing credit facilities of New SK Holdco Sub, LLC and Crash Champions Intermediate and to pay related fees and expenses. Moody's expects the perpetual preferred securities to be issued primarily to affiliates of Clearlake Capital Group ("Clearlake"), which is the company's majority equity owner, and the preferred dividend to be payment in kind (PIK) rather than cash pay. The refinancing unifies the Clearlake collision businesses—legacy Service King and legacy Crash Champions—under a single debt capital structure, consistent with their integrated organizational structure, operations, and single go-to-market brand. The assignment of the B3 CFR to Crash Champions reflects governance considerations, including its majority ownership by Clearlake, a private equity firm. "The ratings assignment reflects the solid scale, improved credit metrics and adequate liquidity of Crash Champions and prospects for further improvement over the next 12-18 months as the company takes advantage of favorable industry demand dynamics, including growth in vehicle miles traveled and repair severity as well as growth opportunities in the high-margin scanning and calibration segment," said Moody's Vice President Stefan Kahandaliyanage. "Moody's expect operational improvements made by Clearlake at the legacy Service King business, including improved vehicle throughput and streamlined corporate-level and shop-level expenses, and investments in shop labor, equipment and technology to support Crash Champions' topline growth, earnings and positive free cash flow going forward," Kahandaliyanage added. RATINGS RATIONALE Crash Champions' B3 CFR is supported by its solid market position as the third largest multi-store operator (MSO) with over 600 stores across 37 states in the highly-fragmented collision repair industry. The rating is also supported by Crash Champions' relationships with leading national insurance carriers, 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 aggressive financial strategies under private equity ownership. Proforma for the refinancing, Moody's estimates year-end 2023 debt/EBITDA to be about 5.9x and EBITA/interest coverage to be about 1.1x. In light of Moody's expectation for positive operating performance driven by favorable industry demand dynamics, sustained operational improvements, ramping of new repair shops, and growth opportunities in the scanning and calibration segment, Moody's estimates debt/EBITDA to improve to the mid-to-low 5x range and EBITA/interest coverage to rise and approach the mid-1x level over the next 12-18 months. Further, Moody's expects Crash Champions to turn to generating positive free cash flow over the next 12-18 months. While the B3 corporate family rating reflects the integration of the legacy Service King and Crash Champions businesses, which is largely complete, the company's track record as a combined entity is limited. The rating also reflects the very tight labor market for body techs. Geographic concentration in Texas, California and Florida, which together account for about 43% of locations, is also reflected in the B3 corporate family rating. The stable outlook reflects Moody's expectation for adequate liquidity, including positive free cash flow, as well as the strong demand environment for collision services. 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 $250 million and 100% of Consolidated EBITDA plus unlimited amounts subject to First Lien Leverage remaining below 5.2x with an inside maturity sublimit up to the greater of $250 million and 100% of EBITDA. There are no "blocker" provisions which prohibit the transfer of specified assets to unrestricted subsidiaries. The credit agreement provides some limitations on up-tiering transactions, requiring affected lender consent for amendments that subordinate the debt and liens unless such lenders can ratably participate in such priming debt. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS The ratings could be upgraded if Crash Champions 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. Ratings could be downgraded should Crash Champions' liquidity weaken, if EBITA/interest coverage is sustained below 1.0x and/or if Crash Champions fails to maintain positive free cash flow to debt. Champions Financing, Inc. is a leading provider of vehicle body repair services with proforma annual revenue of approximately $2.6 billion as of year-end 2023. The company operates under the Crash Champions brand name and has 619 locations across 37 states. The company is majority-owned and controlled by affiliates of Clearlake Capital Group, a private equity firm. The principal methodology used in these ratings was Retail and Apparel published in November 2023. CINEMARK HOLDINGS: S&P Raises ICR to 'BB-' on Improved Leverage --------------------------------------------------------------- S&P Global Ratings raised its issuer credit rating on Cinemark Holdings Inc. to 'BB-' from 'B+'. At the same time, S&P raised its issue-level ratings on the company's secured and unsecured debt to 'BB+' and 'BB-', respectively, from 'BB' and 'B+'. The stable outlook reflects S&P's expectation that Cinemark will maintain S&P Global Ratings-adjusted leverage well below 4x, despite disruptions to the theatrical release schedule over the next 12 months. S&P said, "We expect Cinemark will maintain leverage well below 4x. As of Sept. 30, 2023, Cinemark had S&P Global Ratings-adjusted leverage of 2.9x. Adjusted EBITDA would need to decline about 30% for Cinemark to breach the 4x threshold, a substantially greater decline than our current expectation of about 8%. We forecast that Cinemark will generate over $250 million in free operating cash flow (FOCF) in 2024 and will continue to prioritize repayment of debt taken out during the COVID-19 pandemic, rather than shareholder-rewarding activities such as dividends. We do not expect the company to reinstitute its dividend policy until box office attendance normalizes in 2025 or later. We believe the company will continue to proactively address debt maturities as they arise, including the 8.75% senior notes and $460 million convertible notes due in 2025. "The impact of the actors' and writers' strikes will largely be limited to 2024. In the second and third quarters of 2023, the Writers Guild of America (WGA) and Screen Actors Guild–American Federation of Television and Radio Artists (SAG-AFTRA) engaged in strikes over labor and compensation disputes with major Hollywood studios. Each strike lasted well over 100 days, resulting in delays or cancellations of studio productions. As a result, we expect the theatrical release slate in 2024 will face material disruption. Cinemark and other movie exhibitors will be directly affected by reduced box office attendance. We expect domestic box office revenue of $8.0 billion-$8.25 billion, or a decline of about 10%, in 2024. While disruption to the release slate could spill into 2025, we expect films pushed into 2025 from 2024 will help negate substantial disruption. "Ongoing macroeconomic risks could limit revenue growth over the next 12 months. The uncertain economic outlook poses a potential risk to theatrical revenue. Historically, cinema attendance has been relatively resilient during economic downturns due to the relative affordability of this out-of-home entertainment option. While we expect this trend to hold in general, the current state of the industry represents a unique set of challenges: average ticket prices are at an all-time high, and consumers have never had more options for how to consume video content in the home. In the event of an economic recession, consumers are likely to be increasingly sensitive to spending their discretionary income and may choose lower-cost in-home viewing options. Consequently, it may prompt exhibitors to adjust their pricing tactics for tickets and concessions, such that total revenue is less than currently planned. "The stable outlook reflects our expectation that Cinemark will maintain S&P Global Ratings-adjusted leverage well below 4x, despite disruptions to the theatrical release schedule over the next 12 months." S&P could lower its rating on Cinemark if the disruption to the theatrical exhibition industry were greater than S&P expected such that Cinemark were not able to maintain leverage below 4x. This could occur if: -- The industry experienced challenges in scheduling for motion picture production, -- There were further disruptions to the theatrical release model, or -- Cinemark experienced lower-than-expected profitability on theatrical tickets or concessions. S&P could raise its rating on Cinemark if: -- S&P expected leverage would remain below 3x, and -- Box office attendance normalized due to a stable slate of theatrical releases. CINEMARK USA: Moody's Hikes CFR to 'B1', Outlook Stable ------------------------------------------------------- Moody's Investors Service upgraded Cinemark USA, Inc.'s Corporate Family Rating to B1 from B2 and Probability of Default Rating to B1-PD from B2-PD. Concurrently, Moody's upgraded Cinemark USA's backed senior secured debt (comprising the $125 million revolving credit facility (RCF) and $646.8 million outstanding term loan B) and the $150 million outstanding 8.75% senior secured notes to Ba1 from Ba2. Moody's also upgraded the senior unsecured notes to B2 from B3 (comprising the $405 million 5.875% notes and $765 million 5.25% notes). The Speculative Grade Liquidity rating was changed to SGL-1 from SGL-2. The outlook is stable. Cinemark USA is a wholly-owned subsidiary of parent, Cinemark Holdings, Inc. ("Cinemark" or the "company"), which is the financial reporting entity and guarantor of Cinemark USA's bank credit facilities. RATINGS RATIONALE The ratings upgrade reflects Cinemark's operating performance improvement and Moody's expectation that the company will produce solid EBITDA, generate positive free cash flow (FCF) and demonstrate debt protection measures appropriate for the B1 rating category. The upgrade also recognizes the company's relatively conservative debt capital structure, prudent financial policies and effective cost management, which will sustain leverage suitable for the rating despite Moody's expectation that new theatrical releases and box office receipts in North America will experience pressure in 2024 due to production/exhibition delays associated with last year's double Hollywood strikes. Moody's expects this year's wide releases to be lower, resulting in reduced box office receipts near $8 billion compared to $9 billion last year. Despite this, Cinemark will continue to experience favorable operating performance amid growing attendance and revenue per patron owing to its exhibition of mainstream releases and a growing number of alternative films that resonate with moviegoers. Cinemark USA's B1 CFR is supported by the parent's (Cinemark's) position as the third largest movie exhibitor in the US and meaningful presence in Latin America. The credit profile reflects Cinemark's progressive improvement in operating and financial performance over the past two years following pandemic-induced revenue and operating losses in 2020 and 2021 when theatres were closed or not fully operational. Over the rating horizon, Moody's expects continued profit improvement, positive FCF and very good liquidity driven by growing moviegoer attendance, higher revenue per patron, an appealing number of theatrical releases and Moody's view that the big studios will adhere to the 45-day theatrical window for major film releases. Exhibitors like Cinemark also benefit from favorable ticket prices that on average remain relatively inexpensive compared to the cost of other forms of out-of-home entertainment. The ratings consider Cinemark's moderately high financial leverage, currently at 4.2x total debt to EBITDA, and Moody's expectation that leverage will temporarily rise to the 4.5x-5x region over the near-term amid a weak movie slate in 2024, and subsequently revert to the 4x range (metrics are Moody's adjusted) in 2025. The cinema industry's delayed recovery and structural challenges are also captured in the company's ratings, which include: (i) excess screen capacity in North America; (ii) comparatively lower moviegoer demand as studios release some films online via streaming platforms (simultaneously or exclusively) or potentially release them downstream in a shortened theatrical window; (iii) lower theatrical release volumes relative to historical levels due to short-term production bottlenecks; (iv) reduced show times compared to pre-pandemic periods; and (v) the impact from some cost-conscious consumers reducing their out-of-home entertainment and number of trips to the cinema amid affordable subscription-based video-on-demand (VOD) movie viewing. The stable outlook reflects Moody's view that Cinemark will at least maintain its revenue share in North America and continue to experience good moviegoer demand and above-average ticket prices and concessions revenue (higher margin) per patron. The outlook also considers Moody's expectation that the residual effect of the protracted writers' and actors' strikes will negatively impact revenue and EBITDA growth in H1 2024 as movie productions take time to restart and resume their normal cadence, which will briefly pressure leverage metrics. However, with the recommencement of film production volumes to pre-strike levels combined with numerous anticipated blockbuster wide releases expected in H2 2024 and a growing number of alternative in-theatre content, this should lead to organic revenue growth in the low-single digit percentage range in the second half. Moody's expects Cinemark will continue to effectively manage operating expenses to maintain EBITDA margins near current levels in the 25% to 30% range (Moody's adjusted). Cinemark USA's SGL-1 Speculative Grade Liquidity rating reflects very good liquidity over the next 12-18 months supported by solid cash balances (cash at the parent totaled $806 million at September 30, 2023) and positive FCF. Assuming Cinemark refrains from paying dividends, Moody's projects FCF will moderate to the $100 - $150 million range in 2024 compared to approximately $295 million at LTM September 30, 2023 (Moody's adjusted). Though Moody's forecasts Cinemark's EBITDA will experience pressure in H1 2024 (due to the seasonally weak Q1 combined with strike-related residual production delays), Moody's expect higher EBITDA levels in H2 2024 as new release volumes return to pre-strike levels and moviegoer attendance ramps during the summer box office season. Interest expense will continue to be higher than pre-health crisis due to the leveraged balance sheet, however Moody's expects near-term borrowing costs will stay relatively flat arising from a mostly fixed rate debt capital structure and various interest rate swap agreements. Liquidity is further supported by an undrawn $125 million RCF maturing May 2028. The RCF is subject to springing maturity dates of January 2025, December 2025 and April 2028 if the 8.75% senior secured notes due May 2025, 5.875% senior notes due March 2026 and 5.25% senior notes due July 2028 have not been fully repaid prior to such dates, respectively. The $150 million outstanding 8.75% senior secured notes are callable at par in May 2024 and Moody's expects Cinemark will fully repay these notes at that time with cash-on-hand. The $460 million 4.5% convertible senior notes mature in August 2025. ESG CONSIDERATIONS Cinemark USA's CIS-4 indicates that the rating is lower than it would have been if ESG risk exposures did not exist. This is chiefly driven by governance risks as denoted by the G-4 governance score resulting from Cinemark's moderately high financial leverage and demographic and societal trends as indicated by the S-4 social score. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS Ratings could be upgraded if Cinemark experiences positive growth in box office attendance, stable-to-improving market share, positive and expanding EBITDA with margins approaching pre-pandemic levels and enhanced liquidity; and exhibits prudent financial policies that translate into an improved credit profile. An upgrade would also be considered if financial leverage as measured by total debt to EBITDA decreases below 3.5x and positive free cash flow as a percentage of total debt exceeds 6%. Ratings could be downgraded if Moody's expects total debt to EBITDA will remain above 5x or free cash flow to total debt decreases to the 3% area or lower on a sustained basis (all metrics are Moody's adjusted). Headquartered in Plano, Texas, Cinemark USA, Inc. is a wholly-owned subsidiary of Cinemark Holdings, Inc., a leading movie exhibitor that operates 507 theatres and 5,765 screens worldwide with 315 theatres and 4,375 screens in the US across 42 states and 192 theatres and 1,395 screens across 13 countries in Latin America. Revenue totaled approximately $3 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. COGECO COMMUNICATIONS: Moody's Alters Outlook on 'B1' CFR to Neg. ----------------------------------------------------------------- Moody's Investors Service affirmed Cogeco Communications (USA) Inc.'s (Cogeco or the Company) B1 Corporate Family Rating and B1-PD Probability of Default Rating. The outlook was changed to negative from stable. Moody's also affirmed the B1 senior secured bank credit facilities at Cogeco Communications Finance (USA), LP, Cogeco US Finance, LLC, and Cogeco Financing 2, LP and assigned a negative outlook to all three entities. The negative outlook reflects Cogeco's material subscriber declines across all service lines including the most important, high-speed data broadband which is falling at an annualized rate near 5% based on the last quarter results. Despite Moody's expectation that management will raise prices in broadband for enhanced services and pass along all video increases which Moody's believes could be in the mid to high single digit percent range, the lift will only partially offset material customer losses driven by more intense competition from providers of mostly fixed wireless access. As a result, and despite some incremental top-line contribution from wireless services which is expected to be launched in early 2024, Moody's projects a persistent revenue decline in the low to mid-single digit-range. The weakness is largely attributable to the 2021 acquisition of assets from WideOpenWest Finance, LLC (B2 stable) which were, and remain, weakly positioned as an overbuilder in a very competitive Ohio market. In addition, liquidity has deteriorated with a significant use of cash and revolving credit capacity to delever in connection with the refinancing of its secured credit facilities in Q1. Moody's expects management to manage the pressure on earnings and cash flow primarily by reducing capital intensity (despite strong competition) by a couple of hundred basis points over the next 12-18 months, and continuing to rationalize its cost structure when and where possible. With these operating adjustments, Moody's believes retained and free cash flows, as well as leverage and EBITDA margins will remain steady, if not improve marginally. Assuming most if not all free cash flow are used to repay outstanding revolving credit facilities, Moody's expects the company to maintain key credit ratios (leverage and retained cash flows to net debt) inside Moody's rating tolerances over the rating horizon. However, Moody's does not believe these tactics are a long-term solution. A return to a stable outlook would be conditional on stabilization and or sustained growth in the subscriber base. RATINGS RATIONALE Cogeco's B1 credit rating is constrained by governance risk (G-4), with a less than conservative financial policy that periodically tolerates elevated leverage up to approximately 5x (Moody's adjusted), typically due to debt-financed M&A activity. The Company is relatively small in scale (near $1 billion revenue) and capital intensive, with capital investments remaining over 20% of revenue. The business is also challenged by strong competitive market dynamics which is driving subscriber losses across all services, including HSD which is the most profitable and important. Despite the challenges, the Company has a very competitive, fiber-rich, high speed network across 13 markets. The subscription-based business model is very predictable, generating recurring monthly revenue from a diversified customer base providing strong visibility. The business is also very profitable with strong and relatively stable EBITDA margins in the mid-40% range, supported by a large mix of highly profitable high-speed data (HSD) customers. Implicit support from its larger parent and a cash-rich equity partner are also positive credit factors. Cogeco has good liquidity with positive internal sources of cash over the next four quarters. The Company's $250 million senior secured revolving credit facility (issued by Cogeco US Finance, LLC) is also about half drawn as a result of the recent refinancing and alternate sources of liquidity are limited with a fully secured capital structure. The Company's debt obligations are however, covenant-lite - subject to only a springing maintenance test when more than 30% of the facility is drawn, with very significant headroom projected. The instrument ratings reflect the probability of default of the Company, as reflected in the B1-PD Probability of Default Rating, an average expected family recovery rate of 50% at default given the covenant-lite nature of the secured debt (e.g. only springing maintenance covenant), and the particular instruments' ranking in the capital structure. The secured credit facilities are rated B1, the same as the CFR, with no significant junior debt to provide lift. The negative outlook incorporates Moody's view that over the next twelve months revenues will decline by 2%-4%, with EBITDA margins remaining strong and relatively steady, in the mid 40% range with some upside possible. Free cash flow will range between approximately $115-$130 million, net of borrowing costs averaging in the high 5% range, and lower capital intensity with capital expenditures falling to the low 20% range of revenue. Moody's projects leverage could range between 4.7x to 4.8x without further debt repayment (but could fall to mid 4x with all free cash flows used to repay outstanding revolving credit). Retained cash flow to net debt will be near 16%. Key assumptions are: broadband subscribers falling by mid-single digit percent and video subscribers losses accelerate to the mid to high teens percent range. Cogeco's ESG Credit Impact Score was changed to CIS-4 from CIS-3. The score indicates that the rating is lower than it would have been if ESG risk exposures did not exist. The scores reflects the Company's aggressive financial policy, elevated financial leverage, and potential breaches of customer's personal data. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS Moody's could consider a positive rating action if leverage (Moody's adjusted gross debt-to-EBITDA) is sustained below 3.5x times, and retained cash flow to net debt (Moody's adjusted) is sustained above 20% percent. A positive rating action could also be conditional with growth in the scale and or diversity of the business, strong sustained subscriber growth – including broadband - driving revenue and earnings growth, and or a more conservative financial policy driving leverage lower. Moody's could consider a negative rating action if leverage (Moody's adjusted gross debt-to-EBITDA) is sustained above 4.50x, or retained cash flow to net debt (Moody's adjusted) is sustained below 15%. A negative rating action could also be considered if liquidity deteriorated, company scale declined, financial policy turned more aggressive, or there was a material, unfavorable, and sustained changes in the operating trends or market position of the business. Headquartered in Quincy, Massachusetts, Cogeco Communications (USA) Inc., doing business as Breezline, is a private company with a footprint that passes about 1.75 million homes, and currently serves approximately 1.078 million primary service units (280 thousand basic video, 663 thousand high speed data and 134 thousand phone) across 500+ communities in 13 states including Western Pennsylvania, Maryland, Delaware, Florida, Eastern Connecticut, New York, West Virginia, South Carolina, Maine, New Hampshire, Ohio, and Virginia. The Company is an operating subsidiary of, and majority owned and controlled by, Cogeco Communications Inc., a public company in Canada. Caisse de dépôt et placement du Quebec (CDPQ) holds a 21% minority interest. Revenue for the last twelve months ended November 30, 2023 was approximately $1.1 billion. The principal methodology used in these ratings was Telecommunications Service Providers published in November 2023. CORRELATE ENERGY: Alina Zagaytova Holds 250,000 Stock Options ------------------------------------------------------------- Alina Zagaytova, Director of Correlate Energy Corp., filed a Form 3 Report with the U.S. Securities and Exchange Commission, disclosing direct beneficial ownership of stock options to purchase 250,000 shares of the Company's common stock. The stock options are exercisable until January 4, 2029, at a price of $1.95 per share. About Correlate Correlate Energy Corp. (OTCQB: CIPI), formerly Correlate Infrastructure Partners Inc., together with its subsidiaries, is a technology-enabled vertically integrated sales, development, and fulfillment platform focused on distributed clean and resilient energy solutions North America. The Company believes scaling distributed clean energy solutions is critical in mitigating the effects of climate change. Correlate reported a net loss of $7.16 million on $3.40 million of revenues for the year ended Dec. 31, 2022, compared to a net loss of $90,249 for the year ended Dec. 31, 2021. As of Sept. 30, 2023, the Company had $5.75 million in total assets, $8.09 million in total liabilities, and a total stockholders' deficit of $2.35 million. Dallas, Texas-based Turner, Stone & Company, L.L.P., the Company's auditor since 2006, issued a "going concern" qualification in its report dated March 31, 2023, citing that the Company has suffered recurring losses from operations and has not generated positive cash flows which raises substantial doubt about its ability to continue as a going concern. In its Form 10-Q Report filed with the U.S. Securities and Exchange Commission for the quarterly period ended September 30, 2023, Correlate Energy said there is substantial doubt about the Company's ability to continue as a going concern. The Company has incurred losses since inception and has not generated positive cash flows from operations. CRAFT BEVERAGE: Case Summary & Two Unsecured Creditors ------------------------------------------------------ Debtor: Craft Beverage Cooperative, LLC 7150 E Camelback Rd Ste 230 Scottsdale, AZ 85251 Business Description: Craft Beverage Cooperative was created to provide craft breweries and distilleries across the Western U.S. with the resources needed to support increased production capacity, infrastructure, and world-class sales and marketing, while preserving each producer's autonomy, authenticity and dedication to their local community. Chapter 11 Petition Date: January 26, 2024 Court: United States Bankruptcy Court District of Arizona Case No.: 24-00633 Debtor's Counsel: Christopher C. Simpson, Esq. OSBORN MALEDON, P.A. 2929 N. Central Avenue Suite 2100 Phoenix, AZ 85012 Tel: 602-640-9349 Fax: 602-640-9050 E-mail: csimpson@omlaw.com Estimated Assets: $0 to $50,000 Estimated Liabilities: $1 million to $10 million The petition was signed by George Cole Jackson as authorized signatory. A full-text copy of the petition containing, among other items, a list of the Debtor's two unsecured creditors is available for free at PacerMonitor.com at: https://www.pacermonitor.com/view/OVJCF2A/Craft_Beverage_Cooperative_LLC__azbke-24-00633__0001.0.pdf?mcid=tGE4TAMA CREEKWOOD LEGACY: Behrooz Vida Named Subchapter V Trustee --------------------------------------------------------- The U.S. Trustee for Region 6 appointed Behrooz Vida, Esq., at the Vida Law Firm, PLLC as Subchapter V trustee for Creekwood Legacy, Inc. Mr. Vida 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. Vida declared that he is a disinterested person according to Section 101(14) of the Bankruptcy Code. The Subchapter V trustee can be reached at: Behrooz P. Vida, Esq. The Vida Law Firm, PLLC 3000 Central Drive Bedford, TX 76021 817-358-9977-office 817-358-9988-fax Email: behrooz@vidalawfirm.com About Creekwood Legacy Creekwood Legacy, Inc. sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. E.D. Texas Case No. 24-40133) on January 19, 2024, with $389,209 in assets and $1,574,935 in liabilities. Steven Ball, president, signed the petition. Judge Brenda T. Rhoades oversees the case. Robert T. DeMarco, Esq., at DeMarco Mitchell, PLLC represents the Debtor as legal counsel. CREEKWOOD LEGACY: Seeks Cash Collateral Access ---------------------------------------------- Creekwood Legacy, Inc. asks the U.S. Bankruptcy Court for the Eastern District of Texas, Sherman Division, for authority to use cash collateral and provide adequate protection. The Debtor requires the use of cash collateral to fund payroll, materials, supplies, and other general operational needs. Celtic Bank asserts and interest in the Debtor's cash collateral as evidenced by the filing of a UCC-1 financing statement filed April 28, 2022. As adequate protection, the Secured Lender will be granted post-petition security interests equivalent to a lien granted under 11 U.S.C. Sections 364(c)(2) and (3), as applicable, in and upon the Debtor's personal property and the cash collateral, whether such property was acquired before or after the Petition Date. In addition to the Replacement Liens, Secured Lender is adequately protected from continued business operations. A copy of the motion is available at https://urlcurt.com/u?l=txczqc from PacerMonitor.com. About Creekwood Legacy, Inc Creekwood Legacy, Inc. sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. E.D. Tex. Case No. 24-40133) on January 19, 2024. In the petition signed by Steven Ball, president, the Debtor disclosed $389,209 in assets and $1,574,935 in liabilities. Judge Brenda T. Rhoades oversees the case. Robert T DeMarco, Esq., at DeMarco Mitchell, PLLC, represents the Debtor as legal counsel. CROOM PROPERTIES: Unsecureds to Get $500 per Month for 60 Months ---------------------------------------------------------------- Croom Properties, LLC, filed with the U.S. Bankruptcy Court for the Western District of Louisiana a Plan of Reorganization under Subchapter V dated January 22, 2024. The Debtor is engaged in the property management in the Alexandria Pineville, Louisiana area. The Debtor is solely owned by David and Alicia Croom, who are the sole members of the company. The Debtor was formed and registered with the Louisiana Secretary of State on August 28, 2014, and has been in operation since that time. At the time this case was filed (October 6, 2023) debtor owed approximately 60 rental houses, and some equipment used in connection with the rental repair and maintenance of them. The debts are primarily owed to 2 secured creditors, The Evangeline Bank & Trust Company and First Guaranty Bank. Both instituted foreclosure proceedings in state court with respect to a majority of the properties. An attempt was made to resolve the issues through negotiations, which failed. However, First Guaranty Bank sought and obtained a sale date for the sale of its collateral which prompted the filing of this case. This Plan of Reorganization proposes to pay creditors of Croom Properties, L.L.C., from current operating profits over time. This Plan provides for 6 classes of claims, as well as one class of equity security holders. This Plan also provides for the payment of administrative claims. Class 6 consists of the Claim of the Unsecured Creditors. The total amount of all unsecured claims is not known due to the failure of First Guaranty Bank to file a claim and the determination required to fix the value of the collateral being transferred to First Guaranty Bank and Evangeline Bank & Trust Company. After the payment of all administrative claims in this case including attorney's fees and Chapter 11 Subchapter V Trustee fees, General Unsecured Claims shall be paid $500.00 per month for 60 months. Class 7 consists of the Equity interests in the debtor. Unless otherwise provided herein, title to property of the estate, subjecting to existing liens found to be valid in bankruptcy, shall vest in the debtor upon confirmation of this Plan. Equity Security Holders will retain their ownership interest in the debtor. The funds necessary for the satisfaction of the creditors' claims shall be derived from net operating profits of the debtor as well accounts receivable collected after the filing of the case. A full-text copy of the Plan of Reorganization dated January 22, 2024 is available at https://urlcurt.com/u?l=VBkyFs from PacerMonitor.com at no charge. Debtor's Counsel: Thomas R. Willson, Esq. THOMAS R. WILLSON 1330 Jackson Street, Suite Alexandria LA 71301 Tel: (318) 442-8658 E-mail: rocky@rockywillsonlaw.com About Croom Properties Croom Properties, LLC, is engaged in the property management in the Alexandria-Pineville, Louisiana area. The Debtor filed a Chapter petition (Bankr. W.D. La. Case No. 23-80564) on Oct. 6, 2023, with $33,500 in assets and $1,062,377 in liabilities. David C. Croom, member, signed the petition. Judge Stephen D. Wheelis oversees the case. Thomas R. Willson, Esq., represents the Debtor as legal counsel. DIOCESE OF NORWICH: UST Still Opposes Releases, Exculpation ----------------------------------------------------------- William K. Harrington, the United States Trustee for Region 2, objects to the Fourth Amended Joint Disclosure Statement filed by chapter 11 debtor The Norwich Roman Catholic Diocesan Corporation and the Official Committee of Unsecured Creditors for the Fourth Amended Joint Plan of Reorganization. Consistent with the two prior objections of the United States Trustee to earlier iterations of the disclosure statements filed by the Plan Proponents, the United States Trustee continues to oppose the releases, exculpation provisions, indemnification provisions, and channeling injunction found in the Fourth Amended Plan and related documents which protect various non-debtor parties, persons, and entities. In recognition of the Court's Order, the United States Trustee will raise opposition to these items at confirmation, as well as other items deferred by the Court to confirmation. With respect to the Fourth Amended Disclosure Statement, there are two categories of items that need to be addressed: (a) previously raised issues that were not addressed, revised and/or corrected, and (b) new changes in the Fourth Amended Disclosure Statement, the Fourth Amended Plan, and certain documents in support thereof, that were not in prior iterations, some of which reference documents that have yet to be filed. The inescapable conclusion is that the Fourth Amended Disclosure Statement is not ready for approval. Like its three predecessors, Fourth Amended Disclosure Statement omits meaningful information and documents. For all of the reasons discussed herein, the Fourth Amended Disclosure Statement should not be approved, the U.S. Trustee asserts. Furthermore, the United States Trustee reserves his rights to supplement this objection and object at the hearing on the Fourth Amended Disclosure Statement to other deficiencies and/or amendments, including supplemental disclosures and documents. The United States Trustee further reserves his rights to object to confirmation of the Fourth Amended Plan or any future amendments or supplements thereto. Additionally, the United States Trustee reiterates his previously expressed concerns about the expense associated with continued efforts to pursue a plan with known confirmation challenges and the appropriateness of same should the United States Trustee prevail in his objection to confirmation. About The Norwich Roman Catholic Diocesan Corporation The Norwich Roman Catholic Diocesan Corporation is a nonprofit corporation that gives endowments to parishes, schools, and other organizations in the Diocese of Norwich, a Latin Church ecclesiastical territory or diocese of the Catholic Church in Connecticut and a small part of New York. The Norwich Roman Catholic Diocesan Corporation sought Chapter 11 protection (Bankr. D. Conn. Case No. 21-20687) on July 15, 2021. The Debtor estimated $10 million to $50 million in assets against liabilities of more than $50 million. Judge James J. Tancredi oversees the case. The Debtor tapped Ice Miller, LLP, Robinson & Cole, LLP and Gellert Scali Busenkell & Brown, LLC as bankruptcy counsel, Connecticut counsel and special counsel, respectively. Epiq Corporate Restructuring, LLC is the claims and noticing agent. On July 29, 2021, the U.S. Trustee for Region 2 appointed an official committee of unsecured creditors in the Chapter 11 case. The committee tapped Zeisler & Zeisler, PC, as its legal counsel. ECP OWNER 1: Wins Interim Cash Collateral Access ------------------------------------------------ The U.S. Bankruptcy Court for the District of Columbia authorized ECP Owner 1 LLC and affiliates to use cash collateral on an interim basis, in accordance with the budget. JPMorgan Chase Bank, N.A. holds a first priority perfected lien and security interest on cash collateral, and Local Initiatives Support Corporation holds a second priority perfected lien and security interest on cash collateral, pursuant to 11 U.S.C. Section 363. As of the Petition Date, the aggregate amount outstanding under the Chase Loan Portfolio A Facility was not less than $7.219 million. As of the Petition Date, the aggregate amount outstanding under the Chase Loan Portfolio B Facility was not less than $8.506 million. Pursuant to the Loan Agreement dated as of June 20, 2019, among (i) the Loan Portfolio A Borrowers as borrowers under the LISC Loan Portfolio A Documents and (ii) Local Initiatives Support Corporation, LISC provided a loan and other financial accommodations to the Loan Portfolio A Borrowers pursuant to the LISC Loan Portfolio A Credit Agreement Documents. As of the Petition Date, the aggregate principal amount outstanding under the LISC Loan Portfolio A Facility was not less than $3.9 million and under the LISC Loan Portfolio B Facility the aggregate principal amount outstanding was not less than $4.6 million. The Secured Creditors will be provided with the following adequate protection under the Interim Order: (i) a replacement lien on all the post-petition assets of the Debtors pursuant to 11 U.S.C. Section 361 to the extent of diminution in the value of the Secured Creditors' interest in cash collateral; and (ii) administrative priority expense claims pursuant to 11 U.S.C. Section 507(b), to the extent there is a diminution in the value of the Secured Creditors' interest in cash collateral. The lien and administrative claim provided to Chase under the Interim Order will be senior in priority to the lien and administrative claim provided to LISC. The replacement liens and administrative priority claims will not attach to any causes of action of the Debtors arising under Chapter 5 of the Bankruptcy Code. A final hearing on the matter is set for February 14, 2024 at 10 a.m. A copy of the order is available at https://urlcurt.com/u?l=J9gKxq from PacerMonitor.com. About ECP Owner 1 LLC ECP Owner 1 LLC is primarily engaged in renting and leasing real estate properties. The Debtor sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. D. DC Case No. 23-00326) on November 1, 2023. In the petition signed by Robert B. Margolis, manager, the Debtor disclosed up to $10 million in both assets and liabilities. Judge Elizabeth L. Gunn oversees the case. Kristen E. Burgers, Esq., at Hirschler Fleischer PC, represents the Debtor as legal counsel. ELETSON HOLDINGS: New Value & Litigation Trust Assets to Fund Plan ------------------------------------------------------------------ Eletson Holdings Inc., and its Debtor Affiliates filed with the U.S. Bankruptcy Court for the Southern District of New York a Disclosure Statement in support of First Joint Plan of Reorganization dated January 23, 2024. Eletson Holdings and its corporate family (collectively "Eletson") are world leaders in international seaborne transportation specializing in the transport of refined petroleum products, liquified petroleum gas and ammonia. Eletson owns and operates a fleet of medium and long-range double hull product tankers, consisting of Handymax and Aframax size vessels which are capable of carrying a wide range of refined petroleum products, such as fuel oil and vacuum gas oil and gas oil, gasoline, jet fuel, kerosene and naphtha, as well as crude oil. The scale and flexibility of Eletson's fleet, commercial expertise and long-standing industry relationships have allowed Eletson to sustain high utilization levels and maintain strong performance. The purpose of the Plan is to reorganize the Debtors' outstanding obligations through the liquidation and distribution of the proceeds of valuable Causes of Action belonging to the Debtors and distributing a new money contribution provided by the Eletson Holdings Members. The Plan provides for transfer of the Debtors' causes of action to a Litigation Trust that is established in accordance with the terms of the Plan and the Litigation Trust Agreement. The Litigation Trust will be managed by the Litigation Trust Trustee who, subject to the oversight of the Litigation Trust Oversight Committee, will initiate, pursue, and otherwise liquidate the value of the Litigation Trust Causes of Action for the benefit of Holders of Claims in Class 5A who elect to receive Litigation Trust Interests in lieu of the Exchange Note Recovery and Holders of Claims in Class 5B. After payment of Administrative Expenses and funding of the reserves called for in the Plan, the Debtors' remaining creditors entitled to recovery under the Plan will receive their applicable distribution from the Shareholder New Value Contribution, a $10 million contribution of Cash and/or assets provided by or caused to be provided by the Eletson Holdings Members. The Debtors believe that the Plan provides the best and most prompt possible recovery to Holders of Claims. For purposes of this Disclosure Statement, the term Holder refers to the holder of a Claim or Interest in a particular Class under the Plan. If the Plan is confirmed by the Bankruptcy Court and consummated, on the Effective Date or as soon as practicable thereafter, the Debtors will make distributions in respect of certain Classes of Claims as provided in the Plan. Class 5 consists of all Allowed Non-Petitioning Creditor Exchange Note Claims and Old Note Claims. Except to the extent that a Holder of an Allowed Non-Petitioning Creditor Note Claim agrees to less favorable treatment, each Holder of an Allowed Class 5A Claim shall elect to receive in full settlement, release, and satisfaction of, of such Allowed Class 5A Claim that is due and payable, on the Effective Date, or as soon as practicable thereafter: at the exclusive election of the Holder of an Allowed Class 5A Claim either (i) their Pro Rata portion of the Exchange Note Election Recovery or (ii) their Pro Rata portion of Litigation Trust Interests which shall be distributed to Holders of Class 5 Claims in accordance with the terms of the Plan. Class 5B consists of all Allowed Petitioning Creditor Exchange Note Claims. The Petitioning Creditor Exchange Note Claims are Disputed Claims and may only become Allowed by Final Order of the Bankruptcy Court. To the extent the Petitioning Creditor Exchange Note Claims are deemed Allowed Claims the Petitioning Creditor Exchange Note Claims are equitably subordinated pursuant to section 510(c) of the Bankruptcy Code and are only entitled to a recovery upon the satisfaction of all claims in Class 5A. In the event Petitioning Creditor Exchange Note Claims are found to be Allowed Claims and all Class 5A Non-Petitioning Creditor Exchange Note Claims are paid in full, and except to the extent that a Holder of an Allowed Petitioning Creditor Exchange Note Claim agrees to less favorable treatment, each Holder of an Allowed Class 5B Claim shall receive in full settlement, release, and satisfaction of, of such Allowed Class 5B Claim that is due and payable, on the Effective Date, or as soon as practicable thereafter, their Pro Rata portion of the Litigation Trust Interests which shall be distributed to Holders of Class 5 Claims in accordance with the terms of the Plan. Class 6 consists of all Interests. On the Effective Date, and in exchange for the Shareholder New Value Contribution, all Interests and Intercompany Interests shall be deemed reinstated and otherwise in full effect and force as on the Petition Date, provided that the Holder of the Interests and Intercompany Interests to be reinstated has provided Cash and/or assets to the aggregate value of the Shareholder New Value Contribution. The Debtors and Reorganized Debtor as applicable will fund distributions and other sources and uses contemplated by the Plan with (1) the Shareholder New Value Contribution, and (2) the transfer and assignment of the Litigation Trust Assets, which include the Litigation Trust Causes of Action and Distributable Cash, to the Litigation Trust. The Shareholder New Value Contribution will be utilized as follows: first, for the payment of Administrative Claims including the Professional Fee Claims and the Committee Professional Fee Claims including the funding any reserves on account of the Professional Fee Claims required by the terms of this Plan; second, to fund the Administrative Fund; third to fund the Azure Guaranty Recovery; fourth, to fund the Trade Creditor Recovery; and fifth, to fund the Exchange Note Election Recovery. A full-text copy of the Disclosure Statement dated January 23, 2024 is available at https://urlcurt.com/u?l=M9iHyc from PacerMonitor.com at no charge. Counsel to Debtors: REED SMITH LLP Derek J. Baker, Esq. Derek Osei-Bonsu, Esq. Three Logan Square 1717 Arch Street Philadelphia, PA 19103 Telephone: (215) 851-8100 Facsimile: (215) 851-1420 E-Mail: dbaker@reedsmith.com dosei-bonsu@reedsmith.com - and - Andrew L. Buck, Esq. Louis M. Solomon, Esq. 599 Lexington Avenue New York, NY 10022 Telephone: (212) 251-5400 Facsimile: (212) 521-5450 E-Mail: abuck@reedsmith.com lsolomon@reedsmith.com About Eletson Holdings Eletson Holdings Inc. is a family-owned international shipping company, which touts itself as having a global presence with headquarters in Piraeus, Greece as well as offices in Stamford, Connecticut, and London. At one time, Eletson claimed to own and operate one of the world's largest fleets of medium and long-range product tankers and boasted a fleet consisting of 17 double hull tankers with a combined capacity of 1,366,497 dwt, 5 LPG/NH3 carriers with a combined capacity of 174,730 cbm and 9 LEG carriers with capacity of 108,000 cbm. Eletson Holdings, a Liberian company, is Eletson's ultimate parent company and is the direct parent and owner of 100% of the equity interests in the two other debtors, Eletson Finance (US) LLC, and Agathonissos Finance LLC. Eletson and its two affiliates were subject to involuntary Chapter 7 bankruptcy petitions (Bankr. S.D.N.Y. Case No. 23-10322) filed on March 7, 2023 by creditors Pach Shemen LLC, VR Global Partners, L.P. and Alpine Partners (BVI), L.P. The petitioning creditors are represented by Kyle J. Ortiz, Esq., at Togut, Segal & Segal, LLP. On Sept. 25, 2023, the Chapter 7 cases were converted to Chapter 11 cases. The Honorable John P. Mastando, III is the case judge. Derek J. Baker, Esq., represents the Debtors as bankruptcy counsel. On Oct. 20, 2023, the U.S. Trustee for Region 2 appointed an official committee of unsecured creditors in these Chapter 11 cases. The committee tapped Dechert LLP as its counsel. ELITE INVESTMENT: Property Sale Proceeds to Fund Plan ----------------------------------------------------- Elite Investment Management Group, LLC, filed with the U.S. Bankruptcy Court for the Central District of California a Consolidated Disclosure Statement and Chapter 11 Plan of Liquidation dated January 23, 2024. The Debtor is a limited liability company formed under the laws of the state of California. Since its inception, the Debtor has had two members, Jonathan Menlo and Meir Siboni, each of whom holds 50% of the Debtor's membership interests. In 2012, Jonathan Menlo and Siboni teamed up to form the Debtor. Pursuant to the Operating Agreement, Frank Menlo (Jonathan Menlo's father) is the Debtor's President and has been granted certain powers with respect to the management of the Debtor's business. The Debtor's primary asset is a 66.667% interest in real property located at 10710 Chalon Road, Los Angeles, California (the "Property"). Generally, the Plan proposes to sell the Property free and clear of liens, claims and interests, satisfy claims secured by the Property, and distribute the Post-Confirmation Debtor's undisputed share of the net sales proceeds (1) to Holders of unpaid Administrative Claims to satisfy their Claims in full, and (2) to Holders of General Unsecured Claims on a pro rata basis to the extent of available funds. If and to the extent the Post-Confirmation Debtor receives funds on account of certain "Reimbursement Rights" that the Debtor has against 932 Irolo, LLC, the Plan proposes to pay the net recovery on account of such Reimbursement Rights (1) to the SBA to satisfy the balance of its Secured Claim, and (2) to Holders of General Unsecured Claims on a pro rata basis to the extent of available funds. If the sale of the Property does not close by May 1, 2024, the automatic stay will be terminated as of that date and the Creditor that instituted foreclosure proceedings prior to the Petition Date ("ARCPE") will be entitled to continue its foreclosure proceedings. If a foreclosure sale occurs before the Post-Confirmation Debtor sells the Property and the Post-Confirmation Debtor receives foreclosure sale proceeds, the proceeds will be distributed (1) to Holders of unpaid Administrative Claims on a pro rata basis to the extent of available funds, and (2) if Administrative Claims are paid in full, to Holders of General Unsecured Claims on a pro rata basis to the extent of available funds. Class 7 consists of General Unsecured Claims. In the aggregate, Class 7 Claims (1) for which Proofs of Claims were timely filed in accordance with the Bar Date Notice, and (2) listed in the Schedules as not contingent, not unliquidated, and not Disputed, total $5,805,452. Class 7 is Impaired. Upon the closing of the Post-Confirmation Debtor's sale of the Property, after payment of ordinary and customary costs of sale, the Class 1 Claim, the Class 2 Claim, the Class 3 Claim, the Class 4 Claim, the Class 5 Claim, the Class 6 Claim, and Claims entitled to priority in payment under this Plan, the Debtor shall pay 2/3 of the balance of the Sale Proceeds to Holders of Allowed Class 7 Claims on a Pro Rata basis. Assuming a sale at the mid-point of $23 million, the Debtor estimates that $1,080,694 will be distributed to Holders of Allowed Class 7 Claims, resulting in aggregate distributions of approximately 18.6% of Allowed Class 7 Claims. If and to the extent that the Post-Confirmation Debtor is entitled to retain additional net sales proceeds pursuant to the Reimbursement Rights, the Post-Confirmation Debtor shall pay such additional net sales proceeds to the Holders of the Allowed Class 7 Claims after deducting (1) payment of the Class 6 Claim and (2) all legal fees and costs incurred by the Post-Confirmation Debtor in connection with its assertion of the Reimbursement Rights. Assuming a sale at the mid-point of $23 million, the Debtor estimates that an additional $448,323 will be distributed to Holders of Allowed Class 7 Claims, resulting in aggregate distributions of approximately 26.3% of Allowed Class 7 Claims. Class 8 consists of Interests in the Debtor. If Class 7 votes to accept the Plan, Holders of Class 8 Interests shall retain their Interests. If Class 7 votes to reject the Plan, all outstanding Interests in the Debtor shall be canceled and extinguished as of the Effective Date. New Interests in the Debtor shall be issued to Jonathan Menlo in exchange for the Equity Contribution; provided, however, that if Siboni wishes to contribute up to 50% of the Equity Contribution, the new Interests in the Debtor shall be issued to Jonathan Menlo and Siboni in proportion to their respective funding of the Equity Contribution. Except as otherwise provided herein or the Confirmation Order, all Cash necessary for the Post-Confirmation Debtor to make payments pursuant to the Plan will be obtained from the Post-Confirmation Debtor's cash balance existing on the Effective Date (including the Equity Contribution) and the Sale Proceeds. After the Confirmation Date and on or before the Effective Date, Jonathan Menlo shall pay or cause to be paid the sum of $5,000 (the "Equity Contribution") to the Debtor. If Holders of the Class 8 Interests retain their Interests under the Plan, the Equity Contribution shall be governed by the terms and conditions of the Operating Agreement. After the Effective Date, the Post-Confirmation Debtor shall sell the Property free and clear and any and all Liens, claims and interests. Upon the closing of the sale, the Liens securing the Class 1 Claim, Class 2 Claim, Class 3 Claim, Class 4 Claim and Class 5 Claim shall attach to the net sales proceeds with the same validity, priority, force and effect as such Liens have against the Property as of the Effective Date. The Holders of Claims in such Classes shall receive payment in full, or in such lesser amounts that the Holders of such Claims agree, through escrow, upon the closing of the Post-Confirmation Debtor's sale of the Property. A full-text copy of the Consolidated Disclosure Statement and Plan dated January 23, 2024 is available at https://urlcurt.com/u?l=hAuzm7 from PacerMonitor.com at no charge. Attorneys for Debtor: John N. Tedford, IV, Esq. DANNING, GILL, ISRAEL & KRASNOFF, LLP 1901 Avenue of the Stars, Suite 450 Los Angeles, CA 90067-4402 Tel: (310) 277-0077 Fax: (310) 277-5735 Email: jyedford@DanningGill.com About Elite Investment Management Group Elite Investment Management Group is engaged in activities related to real estate. Its principal assets are located at 10710 Chalon Rd., in Los Angeles, California. Elite Investment Management Group sought relief under Chapter 11 of the U.S. Bankruptcy Code (Bankr. C.D. Cal. Case No. 23-15752) on Sept. 5, 2023. In the petition filed by Jonathan Menlo, authorized agent, the Debtor reported assets and liabilities between $10 million and $50 million. The Honorable Bankruptcy Judge Neil W. Bason handles the case. John N. Tedford, IV, at Danning, Gill, Israel & Krasnoff, LLP, is the Debtor's counsel. ERO COPPER: Fitch Affirms 'B' LongTerm IDR, Outlook Stable ---------------------------------------------------------- Fitch Ratings has affirmed Ero Copper Corp.'s (Ero) Long-Term Issuer Default Rating (IDR) at 'B'. Fitch has also affirmed Ero's senior unsecured notes at 'B'/'RR4'. The Rating Outlook is Stable. Ero's ratings are constrained by its relatively small size and concentration of operating production with one copper and one gold mine site in Brazil and the remaining degree of execution risk to ramp-up a second relevant copper mine. Ero's credit profile is supported by its average-cost copper mine, robust mine lives and relatively low leverage. KEY RATING DRIVERS Diversifying Concentrated Production: Ero is focused on its 1H24 commissioning efforts at the Tucuma copper project, where initial production is scheduled for 2H24. This will increase Ero's operational diversification away from its flagship copper mine Caraiba (about 80% of revenue in 2023) and into Tucuma (more than 25% of revenue expected in 2024 and 50% in 2025). A successful development without major costs overrun will be seen as a credit positive event. Moreover, Xavantina's relatively smaller gold mine delivered above expectations through 9M23 thanks to higher grades and the development of the Matinha vein. Cost Position Likely to Improve: High sustaining capex, royalties and other factors have been pushing the company's AISC to the mid-fourth quartile of the All in Sustaining Cost curve. Once Tucuma reaches full capacity in 2025, the average AISC profile is expected to be in the mid third quartile, as it has a more favorable second quartile cost position. Ero's Caraiba operations are placed in the third quartile of the global copper cash cost curve, according to CRU Group, at USD1.54/lb excluding royalties. Exploration Reliance Continues: Ero's preference for organic growth entails an annual budget of between USD30 million and USD40 million contingent on exploration success. Its solid track record includes increased mine life, the ratio of contained fines in reserves to production in 2023, in Caraiba (18 years) and Xavantina (six years). Once a definitive earn-in agreement is reached, Fitch estimates that Ero's exploration commitment to earn a 60% on Vale Base Metals' Furnas copper project will imply about USD7 million annual disbursements. Expansion Driving Negative FCF: Fitch projects that Ero will generate more than USD235 million of EBITDA in 2024. Fitch expects capex to be USD350 million in 2024, more than a 20% reduction from 2023. This includes the completion of construction and maintenance at Tucuma (USD120 million) and construction of the new external shaft and ongoing underground development at Caraiba (USD200 million). No dividends or share buybacks are assumed. Ero's FCF margin will be negative till the completion of its investment phase in 1H24. While Fitch expects the FCF margin of 2024 to be negative, that of 2025 is expected to be 3%. Relatively Low Leverage: Ero is expected to maintain a manageable leverage profile while it completes construction and ramps-up production of Tucuma. The average gross and net leverage ratios are expected to be 2.1x and 1.6x between 2023 and 2025, from 2.4x and 1.6x in 2023 with gross debt of approximately USD450 million. Fitch assumes that despite potential drawdowns of Ero's credit facility (currently fully available for up to USD150 million), during the ramp-up phase, its leverage will remain at or below the level of similarly rated peers. DERIVATION SUMMARY Ero's scale of production and degree of diversification with 44,800 MT of copper from a single site plus 54,000 oz of gold from a different operation LTM 3Q23 is larger and less concentrated than Taseko Mines (B-/Stable) of about 52,300 MT of attributable copper from one site in Canada and similar to Aris Mining's (B+/Stable) 218,000 oz of gold from two sites in Colombia but lower than Eldorado Gold's (B+/Stable) 470,000 oz of gold from a number of mines in Turkey, Greece and Canada; Hudbay Minerals' (BB-/Stable) 116,000 MT of copper, 252,000 oz of gold, 35,000 MT of zinc, 3.2 million of silver and 1,500 MT of molybdenum from two mining units in Canada and Peru; or IAMGOLD's (B-/Stable) production of 540,000 oz from two mining sites in Burkina Faso and Canada. Copper contributes with more than 80% of Ero's revenue. Most of Ero's peers have a degree of revenue concentration on either copper (Taseko at 90%, Hudbay at 55%) or gold (Aris, Eldorado, and IAMGOLD at 100%), but Hudbay shows a wider product diversification into gold (23%), zinc (15%), molybdenum (4%) and silver (3%). The mine life of Ero (18 years in Caraiba) is similar to Aris Mining's 18 years, and longer than IAMGOLD's five years and Hudbay's 16 years, Eldorado Gold's 16 years, but shorter than Taseko's 22 years.The third to fourth quartile cost position in the cost curve of Ero is worse than that of Hudbay Minerals (first), Eldorado Gold (second) and Aris Mining (third), but better than Taseko Mines (fourth), or IAMGOLD (fourth). The gross leverage expected for Ero of 1.8x over the rated horizon is lower than that of Taseko (3.6x), Aris Mining (2.3x), Eldorado Gold (2.8x), or IAMGOLD (2.9x), and similar to that of Hudbay (1.7x). Under Fitch's Country-Specific Treatment of Recovery Ratings Rating Criteria, recovery ratings are capped at the Brazil's soft cap of 'RR4' given concentration of operations in the country. KEY ASSUMPTIONS - Copper price at USD8,300/tonne, USD8,000/tonne, and USD7,500/tonne in 2024, 2025, and 2026; - Gold price at USD1,800/oz, USD1,600/oz, and USD1,500/oz in 2024, 2025, and 2026; - Copper sold from Caraiba at 45,700, 47,500 MT, and 47,500 MT in 2024, 2025, and 2026; - Copper sold from Tucuma at 22,500 MT, 57,500 MT, and 47,500 MT in 2024, 2025, and 2026; - Gold sold from Xavantina at 60,000 oz in 2024, 2025, and 2026; - Copper cash cost in Caraiba at USD2.00/lb, USD2.00/lb, and USD1.90/lb in 2024, 2025, and 2026; - Copper cash costs in Tucuma at USD0.90/lb, USD1.00/lb, and USD0.90/lb in 2024, 2025, and 2026; - Gold cash costs in Xavantina at USD580/oz, USD600/oz, and USD600/oz in 2024, 2025, and 2026; - Tucuma begins producing in 2H24; - No dividends or share-repurchases; - Drawdown from senior credit facility of USD60 million in 2024; - Capex (investing cash flow in additions to mineral PPE, exploration and evaluation assets) including exploration USD350 million, USD200 million, and USD170 million in 2024-2026. RECOVERY ANALYSIS Key Recovery Rating Assumptions The recovery analysis assumes Ero would be reorganized as a going-concern in bankruptcy rather than liquidated. Fitch assumed a 10% administrative claim and the $150 million revolver is fully drawn. Ero's going-concern EBITDA assumption is based on copper at USD8,000/ton in 2023-2024 when capital spending is high and additional funding or a project delay would be required. The going-concern EBITDA estimate reflects Fitch's view of a sustainable, post-reorganization EBITDA level upon which Fitch bases the enterprise valuation in a low copper price environment. An enterprise valuation multiple of 5x EBITDA is applied to the going-concern EBITDA to calculate a post-reorganization enterprise value (EV). The choice of this multiple considered the following factors: the historical bankruptcy case study exit multiples for peer companies were 4.0x-6.0x. Fitch applies a waterfall analysis to the post-default EV based on the relative claims of the debt in the capital structure. The debt waterfall assumptions consider the company's total debt. These assumptions result in a recovery rate for the unsecured debt within the 'RR1' range, but due to the soft cap of Brazil at 'RR4', Ero Copper's senior secured are rated at 'B'/'RR4'. RATING SENSITIVITIES Factors that could, individually or collectively, lead to positive rating action/upgrade: - On time and on budget completion of the Tucuma project; - Increasing size and diversification over the medium term; - Financial policies in place resulting in consolidated total debt/EBITDA after minority distributions anticipated to be sustained below 3.0x. Factors that could, individually or collectively, lead to negative rating action/downgrade: - Increased costs or material disruption at Caraiba; - Total debt/EBITDA after minority distributions anticipated to be sustained above 4.0x; - Large debt-funded acquisitions; - Negative FCF on a sustained basis and debt funding; - Material deterioration in liquidity and difficulties to access funding. LIQUIDITY AND DEBT STRUCTURE Pressured Liquidity on Ramp-up Phase: As of Sept. 30, 2023, Ero held approximately USD88 million of cash and cash equivalents, and USD150 million of undrawn availability under a revolving credit facility due in 2026. In November 2023 it closed a bought deal shareholder financing for net proceeds of USD105 million meant to boost resources to complete its heavy capex development phase ending in 2024. Ero's senior unsecured USD400 million bond is due in 2030. Maturities of equipment loans will be fairly minimal. ISSUER PROFILE Ero Copper Corp., headquartered in Vancouver, B.C., owns a 99.6% interest in the Caraiba copper operations in Bahia, Brazil and 97.6% in the Xavantina gold mine located in Mato Grosso, Brazil. Ero also owns the Tucuma Iron Oxide Copper Gold type development copper project located in Para, Brazil. ESG CONSIDERATIONS The highest level of ESG credit relevance is a score of '3', unless otherwise disclosed in this section. A score of '3' means ESG issues are credit-neutral or have only a minimal credit impact on the entity, either due to their nature or the way in which they are being managed by the entity. Fitch's ESG Relevance Scores are not inputs in the rating process; they are an observation on the relevance and materiality of ESG factors in the rating decision. Entity/Debt Rating Recovery Prior ----------- ------ -------- ----- Ero Copper Corp. LT IDR B Affirmed B senior unsecured LT B Affirmed RR4 B ETTA SCOTTSDALE: Court OKs Interim Cash Collateral Access --------------------------------------------------------- The U.S. Bankruptcy Court for the District of Delaware authorized Etta Scottsdale, LLC to use cash collateral, on an interim basis, in accordance with the budget, with a 15% variance. For any diminution in value of Senior Secured Lender's interest in the cash collateral from and after the Petition date, the Senior Secured Lender will receive an administrative expense claim with "super-priority" status, pursuant to 11 U.S.C. Section 507(b). To the extent of any diminution in value of the respective pre-petition cash collateral of Senior Secured Lender, the Senior Secured Lender is granted valid, binding, enforceable and perfected post-petition replacement liens on collateral which is created, acquired, or arises after the Petition Date. The Debtor must maintain and pay premiums for insurance to cover the Collateral from fire, theft and water damage, and the Senior Secured Lender consents to the payment of such premiums from its cash collateral. The Failure to maintain insurance coverage, and the failure to cure same within 10 business days after notice, will constitute an event of default. A final hearing on the matter is set for February 13, 2024 at 1 p.m. A copy of the order is available at https://urlcurt.com/u?l=18jQG1 from PacerMonitor.com. About Etta Scottsdale Etta Scottsdale, LLC sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. D. Del. Case No. 24-10063) on January 18, 2024, with $100,001 to $500,000 in assets and $1,000,001 to $10 million in liabilities. Judge Karen B. Owens oversees the case. Maria Aprile Sawczuk of Goldstein & Mcclintock, LLLP represents the Debtor as legal counsel. FARM LLC: Case Summary & 20 Largest Unsecured Creditors ------------------------------------------------------- Debtor: The Farm, LLC d/b/a Curated American Getaways, LLC 601 Sycamore Street Unit 6106 Kissimmee, FL 34747 Business Description: The Debtor offers luxury estate vacation rentals. Chapter 11 Petition Date: January 25, 2024 Court: United States Bankruptcy Court Middle District of Florida Case No.: 24-00362 Judge: Hon. Lori V. Vaughan Debtor's Counsel: Jeffrey S. Ainsworth, Esq. BRANSONLAW, PLLC 1501 E. Concord Street Orlando, FL 32803 Tel: 407-894-6834 E-mail: jeff@bransonlaw.com Total Assets: $624,659 Total Liabilities: $4,393,655 The petition was signed by Katie Martin Loane as CFO. 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/DZ6XK7Q/The_Farm_LLC__flmbke-24-00362__0001.0.pdf?mcid=tGE4TAMA FREEDOM MORTGAGE: Moody's Rates New $450MM Sr. Unsecured Bond 'B2' ------------------------------------------------------------------ Moody's Investors Service has assigned a B2 rating to Freedom Mortgage Holdings LLC's proposed $450 million senior unsecured bond due in 2029. The rating outlook is stable. RATINGS RATIONALE Moody's has rated the senior unsecured bond B2 based on Freedom's B1 corporate family rating and the unsecured bond's ranking. The B1 CFR assigned to Freedom reflects its strong capitalization, with tangible common equity to adjusted tangible managed assets of 33% as of September 30, 2023. In addition, the CFR reflects that profitability is currently somewhat weaker than the average of rated non-bank mortgage company peers. Like most rated peers, the company also largely relies on confidence-sensitive secured funding to finance loan originations, resulting in elevated refinancing risk. In Moody's view, with modest levels of unencumbered assets, the company's alternative financing options are limited, particularly during times of stress. Furthermore, the yield on the company's unsecured debt is somewhat high, both on an absolute basis as well as compared to peers; therefore, the company's access to the unsecured debt markets is slightly weaker than the average peer, a credit negative for the company's liquidity profile. The B2 senior unsecured bond rating is one notch below the company's B1 CFR and incorporates the priority of claim and strength of asset coverage and is based on Moody's expectation that the company's financial policy is to keep the ratio of secured debt associated with MSRs and secured corporate debt to total corporate debt ("Secured Debt Ratio") below 50%. As of September 30, 2023, the company's Secured Debt Ratio was around 55%. The stable outlook reflects Moody's expectation that over the next 12-18 months, the company's profitability will be modest, its capitalization strong, and its funding and liquidity profile largely unchanged. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATING The ratings could be upgraded if Freedom strengthens its profitability, such as by demonstrating a through-the-cycle net income to assets (ROA) ratio of above 3.0%. In addition, the company would need to maintain strong capital levels, such as tangible common equity to adjusted tangible assets of around 20.0%. An upgrade would also likely be contingent upon the company exhibiting strengthened access to the unsecured debt markets that results in improved funding costs in relation to earning asset yields. The ratings could be downgraded if financial performance deteriorates, for example if the company's tangible common equity to adjusted tangible managed assets falls below and is expected to remain below 15.0%, or profitability deteriorates with ROA falling below peer average profitability such that through-the-cycle average ROA is below 2.0%. The senior unsecured bonds could be downgraded if the Secured Debt Ratio increases and is expected to remain above 60% or remains above 50% as of December 31, 2024. The principal methodology used in this rating was Finance Companies Methodology published in November 2019. FRINJ COFFEE: Seeks Cash Collateral Access ------------------------------------------ Frinj Coffee, Inc. asks the U.S. Bankruptcy Court for the Central District of California, Northern Division, for authority to use the cash collateral of its secured creditor, the U.S. Small Business Administration, and provide adequate protection. The Debtor requires the use of cash collateral to pay reasonable, necessary and ordinary expenses of operating its business. The events precipitating the filing of the case include shortage of operating capital and the Debtor's unsuccessful efforts to restructure the obligations outside of bankruptcy. Two lawsuits from Paige Gesualdo (as a shareholder and in her individual capacity) and her father, Ralph Gesualdo, have limited the Debtor's managements' available time to work with potential investors, have increased the legal fees and depleted the cash reserve, leaving the company with a need for breathing room in order to reorganize its financial affairs. Pre-petition, on July 8, 2020, the Debtor executed a U.S. Small Business Administration Note, pursuant to which the Debtor obtained a loan in the amount of $150,000. The terms of the Note require the Debtor to pay principal and interest payments of $731 every month beginning 12 months from the date of the Note over the 30 year term of the SBA Loan. The SBA Loan has an annual rate of interest of 3.75% and may be prepaid at any time without notice or penalty. Pursuant to the issuance of SBA Procedure Notice 5000-830558 (March 15, 2022), the monthly payments on the SBA Loan were deferred to January 10, 2023, however interest continued to accrue during the deferment period. See SBA Proof of Claim No. 1 filed on January 17, 2024. As evidenced by a Security Agreement executed on July 8, 2020 and a valid UCC-l filing on July 20, 2020 as Filing Number U200002733521, the SBA Loan is secured by all tangible an intangible personal property. As adequate protection, retroactive to the Petition Date, SBA will receive a replacement lien(s) that is deemed valid, binding, enforceable, non-avoidable, and automatically perfected, effective as of the Petition Date, on all post-petition revenues of the Debtor to the same extent, priority and validity that its lien attached to the Personal Property Collateral. The Debtor will remit adequate protection payments to the SBA in the amounts and terms as set forth in the applicable SBA Loan documents, with the first payment to be paid on or before February 1, 2024 in the amount of $731, and continuing until further order of the Court regarding interim and/or final use of cash collateral, or the entry of an order confirming the Debtor's plan of reorganization, whichever occurs earlier. The SBA will be entitled to a priority claim over the life of the Debtor's bankruptcy case, pursuant to 1 1 U.S.C. Sections 3(b), 507(a)(2) and 507(b), which claim will be limited to any diminution in the value of SBA's collateral, pursuant to the SBA Loan, as a result of the Debtor's use of cash collateral on a post-petition basis. A copy of the motion is available at https://urlcurt.com/u?l=QNWxXM from PacerMonitor.com. About FRINJ Coffee FRINJ Coffee, Incorporated is a coffee production firm that offers coffee plant material, production consulting, post-harvest, and marketing services. The Company creates a transformative experience by connecting coffee drinkers to farmers, propelling the growth of a coffee industry in Southern California. FRINJ currently supports more than 65 farmers who are growing coffee in Santa Barbara, Ventura, and San Diego counties as well as many more property owners who are adding coffee to their crops. FRINJ Coffee filed a petition under Chapter 11, Subchapter V of the Bankruptcy Code (Bankr. C.D. Calif. Case No. 24-10044) on Jan. 16, 2024, with $100,000 to $500,000 in assets and $1 million to $10 million in liabilities. John A. Ruskey III, chief executive officer, signed the petition. Judge Ronald A. Clifford III oversees the case. Michael Jay Berger, Esq., at the Law Offices of Michael Jay Berger represents the Debtor as bankruptcy counsel. G & G TOWERING: Unsecureds to Get $1K per Month for 60 Months ------------------------------------------------------------- G & G Towering Investments Inc. filed with the U.S. Bankruptcy Court for the Southern District of Texas a Disclosure Statement in support of Plan of Reorganization dated January 23, 2024. G&G Towering Investments Inc., d/b/a Majestic Transportation & Shuttle Service (MTSS) is a Christian based Texas Corporation that provides chauffeured group transportation for clients in Houston and Metropolitan areas. On the Effective Date, all property of the Debtor's bankruptcy estate will vest in the Debtor, as the Reorganized Debtor, free and clear of all liens, claims and encumbrances, except as may be provided by the Plan. The Reorganized Debtor will thereupon be authorized to conduct the liquidation of their asset as set forth herein and to pay all Creditors the full amounts of their Allowed Claims. The Plan does not propose to modify or supplant any federal or state laws or regulations that may be applicable to the Reorganized Debtor. As of the Effective Date of the Plan, the Reorganized Debtor will be responsible for all payments and distributions to be made under the Plan to the holders of Allowed Claims, together with any payments that become due under any executory contract or unexpired lease assumed by the Debtor or the Reorganized Debtor. Each executory contract and unexpired lease to which the Debtor is determined to be a party shall be deemed rejected unless the Debtor expressly assumes a particular executory contract or lease before the Effective Date. Class 4 consists of Non-Priority General Unsecured Claims. These non-priority general unsecured creditors will be paid a total of $1,000 per month on a pro rata basis for 60 months, with the first monthly payment being due and payable on the 15th day of the first full month following 60 days after the confirmation hearing. All allowed unsecured claims will be paid in class 4. The remaining balance due these creditors at the end of the 60 months will be discharged. The Class 4 Claims are impaired. Evan and Harold Gentry are the 50-50 owners of G & G Towering Investments, Inc. If they are owed any money from G & G Towering Investments, Inc., they will wait and allow the creditors to get paid first before the owners get paid any money. Pursuant to the provisions of Sections 1141(b) and 1141(c) of the Bankruptcy Code, all assets of the Debtor that remain will vest in the Reorganized Debtor on the Effective Date free and clear of all Claims, Liens, encumbrances, charges and other interests of the holders of Claims and Equity Interests, except as otherwise provided in the Plan. Upon the Effective Date of the Plan, the Reorganized Debtor will be free to conduct their business, manage their affairs, and enter into transactions without restriction or limitation imposed under any provision of the Bankruptcy Code, except to the extent otherwise provided in the Plan. Except for provisions dealing with payments to holders of Claims, the Plan does not contain any limitations with respect to the Debtor's future operation of its business(es). The Debtor believes that they will have sufficient disposable income to fund the Plan. A full-text copy of the Disclosure Statement dated January 23, 2024 is available at https://urlcurt.com/u?l=ZBVSeM from PacerMonitor.com at no charge. Attorney for Debtor: Margaret McClure, Esq. 25420 Kuykendahl Road, Suite B300-1043 The Woodlands, Texas 77375 Tel: (713) 659-1333 Fax: (713) 658-0334 Email: margaret@mmmcclurelaw.com About G & G Towering Investments G & G Towering Investments Inc., a company in Pearland, Texas, sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. S.D. Texas Case No. 23-31458) on April 25, 2023, with $500,001 to $1 million in assets and $1 million to $10 million in liabilities. Evan D. Gentry, president, signed the petition. Judge Eduardo V. Rodriguez oversees the case. The Debtor tapped Margaret M. McClure, Esq., at the Law Office of Margaret M. McClure as legal counsel and John F. Coggin, CPA, PLLC as accountant. GABHALTAIS TEAGHLAIGH: Judge Stays Motion to Sell Mass. Properties ------------------------------------------------------------------ A U.S. bankruptcy judge has stayed the motion filed by Gabhaltais Teaghlaigh, LLC to sell four of its properties in Massachusetts. Judge Christopher Panos of the U.S. Bankruptcy Court for the District of Massachusetts has ordered to stay the motion pending resolution of the company's case against Synergy Funding, LLC (Adversary Case No. 22-01040). Prior to its Chapter 11 filing, Gabhaltais had tried to sell the properties but the transaction was not completed because Synergy foreclosed second mortgages on the properties. Avoidance of the foreclosure is the subject of the adversary case. The properties up for sale and the proposed purchase prices are: 47 Old Harbor St., South Boston $1,200,000 193 Randolph St., Weymouth $350,000 283 West 5th St., South Boston $900,000 15 Simms Court, Newton $600,000 Gabhaltais' motion seeks to sell the properties to realty trusts under four separate purchase agreements. However, to maximize value for the properties, the company will accept counteroffers, which must be at least 5% higher than the offered prices. About Gabhaltais Teaghlaigh Gabhaltais Teaghlaigh, LLC is a real estate rental company that immediately prior to the petition date, owned six residential or commercial properties. Gabhaltais Teaghlaigh filed Chapter 11 petition (Bankr. D. Mass. Case No. 22-10839) on June 15, 2022, with as much as $50,000 in both assets and liabilities. Virginia Hung, a member, signed the petition. Judge Christopher J. Panos oversees the case. David G. Baker, Esq., at Baker Law Offices, is the Debtor's bankruptcy counsel. GEMINI HDPE: Moody's Lowers Rating on Sr. Secured Term Loan to Ba3 ------------------------------------------------------------------ Moody's Investors Service has downgraded Gemini HDPE LLC's senior secured term loan rating to Ba3 from Ba2. The outlook is maintained negative. RATINGS RATIONALE The rating action reflects the degradation in the credit quality of Gemini's sole owner and offtaker, Ineos Group Holdings S.A. (INEOS: Ba3 negative) owing to INEOS being downgraded to Ba3 and a negative outlook earlier this week due to the company's weak performance amid a downturn in the global chemicals industry. The INEOS downgrade reflects weakening credit metrics as a result of debt-financed and acquisitions as well as uncertainty regarding the timing of the cyclical chemical industry's turnaround. INEOS' increasing leverage is driven by the global chemical markets softening from 2022's peaks and higher debt loads from related-party loans. Offtaker credit quality is the primary driver of Gemini's credit profile because INEOS wraps operational and market risk under its Tolling Agreement. Additionally, INEOS is deeply involved in the project as owner, operator, technology provider, and facility coordinator given Gemini's location within INEOS's manufacturing complex. INEOS provides guaranties under long-term Tolling Agreements that are structured to achieve a low but stable 1.0x debt service coverage ratio. The toll payment obligation is absolute, unconditional, and not subject to abatement or set-off. Moody's expect the plant will maintain its strong cost position and will produce solid operational results throughout 2024 and beyond. Other key credit considerations include Gemini's highly competitive cost position; weak project finance protections particularly the lack of reserves such as a debt service reserve; as well as refinancing risk with 70% of the debt scheduled to be outstanding at maturity. This refinancing risk is mitigated by the terms of the Tolling Agreements that extend well past the debt maturity and provide for sufficient cash flow to repay the expected refinancing amount by the maturity of the Tolling Agreements in December 2035. There is minimal liquidity retained at the asset and Gemini had $12.98 million in cash and equivalents as of September 30, 2023. RATING OUTLOOK The negative outlook considers the continued degradation in credit quality of Gemini's offtaker/owner owing to the continuing negative outlook for INEOS prompted in part by a challenging market conditions in the global chemicals industry. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATING FACTORS THAT COULD LEAD TO AN UPGRADE OF THE RATING -- Gemini HDPE's rating could be upgraded if there is an improvement in INEOS' credit quality as long as the project maintains solid operational performance. FACTORS THAT COULD LEAD TO A DOWNGRADE OF THE RATING -- Gemini HDPE's rating could be downgraded if there is deterioration of INEOS's credit quality, if the key underlying contracts are challenged or violated or if the project encounters extensive operating problems. PROFILE Gemini HDPE LLC (Gemini) is a high-density polyethylene (HDPE) manufacturing plant within INEOS's Battleground Manufacturing Complex (BMC)located in LaPorte, Texas. The project uses INEOS' licensed proprietary Innovene-S process and is operating above its nameplate capacity of 1 billion pounds of HDPE per year. METHODOLOGY The principal methodology used in this rating was Generic Project Finance Methodology published in January 2022. GLOBAL CONSULTING: Voluntary Chapter 11 Case Summary ---------------------------------------------------- Debtor: Global Consulting, LLC 13506 Summerport Village Pkwy Suite 409 Windermere FL 34786 Business Description: The Debtor is an independent advisory firm. Chapter 11 Petition Date: January 25, 2024 Court: United States Bankruptcy Court Middle District of Florida Case No.: 24-00353 Judge: Hon. Grace E Robson Debtor's Counsel: Kenneth D. Herron, Jr., Esq. HERRON HILL LAW GROUP, PLLC P.O. Box 2127 Orlando, FL 32802 Tel: 407-648-0058 E-mail: chip@herronlillaw.com Estimated Assets: $1 million to $10 million Estimated Liabilities: $500,000 to $1 million The petition was signed by Pedro Alfonsi as manager. 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/C2FBKSA/Global_Consulting_LLC__flmbke-24-00353__0001.0.pdf?mcid=tGE4TAMA GOODRX INC: Moody's Affirms 'B1' CFR, Outlook Stable ---------------------------------------------------- Moody's Investors Service affirmed the ratings of GoodRx, Inc., including the B1 Corporate Family Rating and B1-PD Probability of Default Rating. Concurrently, Moody's assigned a B1 rating to the new 7-year backed senior secured first lien term loan B and to the newly extended backed senior secured first lien revolving credit facility. There is no action on the ratings of the existing revolving credit facility and term loan. The SGL-1 Speculative Grade Liquidity rating is unchanged. The outlook remains stable. The rating affirmation reflects Moody's view that GoodRx will maintain its competitive position in the prescription drug price comparison business with modest gross financial leverage and very good liquidity. Moody's expects the company's debt-to-EBITDA to remain in the 2.5-3.0x range over the next 12 to 18 months. The proposed refinancing of the term loan and extension of the revolver to October 2029 are credit positive and supportive of GoodRx's liquidity while leverage neutral. Moody's plans to withdraw the ratings of the existing term loan and revolving credit facility upon completion of the refinancing transaction. Governance risk consideration is a driver of the rating action. Since its 2020 IPO, GoodRx has built a solid track record of profitable growth and conservative financial policies with moderate leverage while maintaining very good liquidity. RATINGS RATIONALE GoodRx's B1 Corporate Family Rating reflects its moderate financial leverage with Moody's projected debt/EBITDA in the 2.5-3.0x range. GoodRx's services align with consumer interest in reducing the cost of prescription drugs, which has aided in the company's rapid growth and is a positive social credit consideration. The B1 rating also reflects GoodRx's very good liquidity, highlighted by strong free cash flow along with a large cash balance still remaining from IPO proceeds. Conversely, GoodRx's rating is constrained by high operating risks related to its small absolute scale, and reliance on a small number of pharmacy benefit managers (PBMs), which continue to face scrutiny related to their role in high drug costs. In addition, GoodRx has exposure to regulatory risks aimed at drug pricing which could negatively impact profitability. The SGL-1 Speculative Grade Liquidity Rating reflects Moody's expectation that GoodRx's liquidity will remain very good over the next 12 to 18 months. GoodRx's liquidity will be supported by a sizable cash balance of approximately $795 million as of September 30, 2023. The company's asset-lite business model allows it to generate consistent free cash flow. Following the proposed extension of the revolving credit facility, GoodRx will have access to a $100 million revolving credit facility expiring in October 2029. There were no borrowings under the revolving facility as of September 30, 2023. Moody's does not expect the company will need to utilize the revolver for operating purposes because of their robust cash position and consistent free cash flow generation. The revolver is subject to a springing first lien leverage ratio of 8.2x (as defined in the facility agreement). The covenant will be in effect only when utilization exceeds 40% of the total commitment and if tested Moody's anticipates ample cushion. The stable outlook reflects Moody's expectation that GoodRx will continue to operate with moderate gross financial leverage going forward. ESG CONSIDERATIONS GoodRx's CIS-3 (previously CIS-4) indicates ESG considerations have limited impact on the current credit rating with potential for greater negative impact over time. The score reflects moderate exposure to governance consideration (G-3, previously G-4) including the company's ownership by a consortium of private equity investors and the company's founders, despite being a publicly traded company. The company has established a solid track record in operating with moderate financial leverage while maintaining very good liquidity. In addition, while the company had a previous material weakness in internal controls over financial reporting, there has been no material findings in the last couple of years. Social risk considerations include exposure to potential legislative actions on drug pricing that could affect the company's business model. The B1 rating for the senior secured debt is the same as the Corporate Family Rating as it is the only class of debt in the capital structure. The proposed first lien term loan is expected to have no financial maintenance covenants. 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 $228.0 million and 100.0% of Consolidated EBITDA, plus unlimited amounts subject to 5.20x First Lien Net Leverage . There is an inside maturity sublimit up to $228 million. There are no "blocker" provisions which prohibit the transfer of specified assets to unrestricted subsidiaries. There are no protective provisions restricting an up-tiering transaction. Amounts up to 100% of unused capacity from certain RP carve-outs may be reallocated to incur debt. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS The ratings could be upgraded if GoodRx increases its scale while maintaining good profitability, client diversity and conservative financial policies. Quantitatively, debt/EBITDA sustained below 3.5x could support an upgrade. The ratings could be downgraded if GoodRx experiences unexpected changes in the regulatory environment or push-back from customers or retailers, resulting in declining earnings or liquidity. A more aggressive financial policy including debt-financed acquisitions could also support a downgrade. Quantitatively, debt/EBITDA sustained above 4.5x could lead to a downgrade. Headquartered in Santa Monica, California, GoodRx, Inc. owns and operates a prescription drug price comparison platform. The platform uses pricing data from PBMs to compare prices at local and mail-order pharmacies. GoodRx completed an initial public offering in September 2020. However, a consortium of private equity investors and the company's founders still retain a meaningful ownership interest in the company. The company generated approximately $740 million of revenue in the last twelve months ended September 30, 2023. The principal methodology used in these ratings was Business and Consumer Services published in November 2021. GOTO GROUP: Eaton Vance EFR Marks $1.82MM Loan at 37% Off --------------------------------------------------------- Eaton Vance Senior Floating-Rate Trust (EFR) has marked its $1,823,000 loan extended to GoTo Group, Inc., to market at $1,154,464 or 63% of the outstanding amount, as of October 31, 2023, according to a disclosure contained in EFR's Form N-CSR for the fiscal year ended October 31, 2023, filed with the U.S. Securities and Exchange Commission. EFR is a participant in a Term Loan (SOFR + 4.75%) to GoTo Group. The loan accrues interest at a rate of 10.283% per annum. The loan matures on August 31, 2027. EFR is a Massachusetts business trust registered under the Investment Company Act of 1940, as amended, as a diversified, closed-end management investment company. The Trust's primary investment objective is to provide a high level of current income. The Trust may, as a secondary objective, also seek the preservation of capital to the extent consistent with its primary objective. EFR can be reached at: Deidre E. Walsh Eaton Vance Senior Floating-Rate Trust Two International Place Boston, MA 02110 About GoTo Group GoTo, formerly LogMeIn Inc., is a flexible-work provider of software as a service and cloud-based remote work tools for collaboration and IT management. * * * Bloomberg News reports GoTo Group Inc. has reached a framework for a debt exchange deal with a group of lenders. That plan would reduce the software maker's debt while tightening protections for creditors that participate in the deal, according to people familiar with the situation. The deal would also include roughly $100 million of new money and the debt exchange would be open to a broader group of lenders. Bloomberg previously reported in April 2023 that a lender group has engaged Paul Weiss Rifkind Wharton & Garrison for advice. In January 2024, S&P Global Ratings lowered all its ratings on GoTo, including its issuer credit rating to 'CCC+' from 'B-'. S&P also lowered its rating on its senior secured debt to 'CCC+' from 'B-'. The ratings firm said GoTo faces high business execution risk to stabilize the business amid an increasing challenging and competitive collaboration market. "While we expect GoTo will have sufficient liquidity over the next 12 months, it will incur cash flow deficits after debt service and maintain elevated leverage in 2023 and 2024. The company's adjusted debt to EBITDA spiked to 9.3x as of Sept. 30, 2023, compared to 6.2x at the end of 2021. This coincides with peak demand for collaboration technologies amid the COVID-19 pandemic. We forecast leverage to remain elevated at about 9.6x in 2023 and 9.2x in 2024. Given business challenges, we believe material deleveraging will be difficult and any improvements to its credit profile will likely be modest over the next year or two," S&P said. In December 2023, Fitch Ratings downgraded the Long-Term Issuer Default Ratings of LMI Parent, L.P. and its subsidiary, GoTo Group, Inc., fka LogMeIn, Inc., to 'CCC+' from 'B-'. The first lien debt was downgraded one notch to 'B-' from 'B'. The downgrade to 'CCC+' reflects concerns regarding the Company's limited liquidity, which has been diminishing. Fitch believes the Company's access to a $250 million revolver is restricted due to the Company pushing up against its financial covenant for leverage. In addition, the Company's revenues continue to show modest overall declines. Fitch explained GoTo's ability to draw on its $250 million revolver due August 2025 is dependent on having its first lien net leverage ratio below 7.9x. Due to declining EBITDA, there is very limited covenant headroom. As of the end of 3Q23, the bank defined first lien net leverage ratio was 7.73x, down slightly from 7.86x at the end of 2Q23. There were no revolver borrowings. GRIFFON CORP: Moody's Alters Outlook on 'B1' CFR to Positive ------------------------------------------------------------ Moody's Investors Service changed Griffon Corporation's (Griffon) outlook to positive from stable. At the same time Moody's affirmed Griffon's ratings, including its B1 Corporate Family Rating, B1-PD Probability of Default Rating, the Ba2 ratings on the company's senior secured first lien bank credit facilities, and the B3 rating on the $1,000 million original principal amount senior unsecured notes due 2028. The senior secured first lien bank credit facilities consist of a $500 million first lien revolving facility due 2028 and a $800 million original principal amount first lien term loan due 2029. Moody's also upgraded the speculative grade liquidity to SGL-1 from SGL-2. The ratings affirmation and outlook change to positive reflect Griffon's improved profitability, free cash flow, and credit metrics despite pressures affecting its Consumer and Professional Products (CPP) segment, and Moody's expectations that the company's financial policies will support credit metrics remaining in-line within its publicly stated target range. Griffon's profitability improved over the past few years with the EBITDA margin (all ratios Moody's adjusted unless otherwise stated) up 400 percentage basis points to 16.5% in fiscal 2023 ending September 30, 2023, versus 12.5% in fiscal 2021. The strong operating results in the high margin Home and Building Products (HBP) segment are more than offsetting weaker operating performance in the CPP segment since fiscal 2022. The company's CPP segment has undertaken a project to expand its global sourcing strategy to include certain product categories that are currently manufactured and sold in the U.S. market. By transitioning these product categories to an asset light structure, Griffon anticipates its CPP's operations will be better positioned to serve customers with a more flexible and cost-effective sourcing model that leverages supplier relationships around the world. The company also expects that these actions will enable CPP to achieve 15% EBITDA margins, while enhancing free cash flow through improved working capital and significantly lower capital expenditures. Driven by HBP, the company's financial leverage moderated with debt/EBITDA at 3.7x as of fiscal 2023, down from 5.7x as of fiscal 2019. Griffon's better profitability supports good free cash flow generation. The upgrade to SGL-1 reflects that the company's improved free cash flow and sizable cash balance of $103 million as of September 2023 provides very good coverage of cash needs over the next year. Griffon's financial outlook for fiscal 2024 includes revenue of $2.6 billion with a revenue decline of 3% to 5% in both the HBP and CPP segments, and a consolidated company-adjusted EBITDA decline of 6%. The company adds back charges for items such as restructuring and the strategic review in its EBITDA calculation. Moody's does not add back these charges but expects them to decline meaningfully in 2024. HBP's strong operating results over the past few years driven in part by strong demand from the commercial end markets creates tough comps over the next 12 months. There is uncertainty around the sustainability of strong volumes in the commercial end markets, particularly during a low macro-economic growth environment. Moody's Global Macroeconomic Outlook has US GDP growing by 1.0% in 2024. Griffon's initiative to transition its CPP segment to a global sourcing asset light business model should support a stable EBITDA margin, but adds execution risks. The ratings affirmation reflects the uncertainty related to the sustainability of strong demand and pricing levels for commercial and residential doors in a soft macroeconomic environment, and the execution risk related to the CPP's transition to a global sourcing asset light business model. Griffon's lower financial leverage provides some cushion within the credit metrics Moody's expects at the B1 CFR to absorb the potential for future modest earnings volatility if volumes are weaker than anticipated. Griffon concluded its review of strategic alternatives and Moody's also expects that the company's financial policy will remain in-line with its publicly stated net leverage target (as per company's calculation based on debt covenants) of 2.5x to 3.5x, and that the company will reduce future share repurchases if earnings are lower than anticipated. RATINGS RATIONALE Griffon's B1 CFR broadly reflects its good product diversification and well-established market position in each of the segments where it competes. Very strong revenue and earnings growth in the Home and Building Products (HBP) segment has more than offset meaningfully weaker organic operating results in the Consumer and Professional Products (CPP) segment since fiscal 2022. The company's good EBITDA margin in the high teens percentage supports good operating cash flow generation. Griffon's financial leverage moderated with Moody's-adjusted debt/EBITDA at 3.7x for the fiscal 2023 period. Griffon's very good liquidity is supported by $103 million of cash and $436.6 million available on its $500 million revolver due 2028, as of September 30, 2023, and Moody's projections for positive free cash flow of over $150 million over the next 12-18 months. The company has no meaningful debt maturities until the revolver expires. Demand for the company's consumer related products is exposed to cyclical discretionary consumer spending and weather variability, and its HBP Clopay unit is exposed to the cyclical US housing market. Moody's expects that persistently high inflation and weaker trends in the US housing market will continue to negatively affect demand for the company's consumer and home related products. Moody's also expects demand for the company's commercial products will moderate following strong volume growth over the past few years, negatively affected by low growth macro-economic conditions. Moody's nevertheless expects EBITDA to improve because of a sizable reduction in restructuring costs and that the company will continue to benefit from cost savings initiatives. As a result, Moody's projects Griffon's debt/EBITDA at around 3.5x (calculated on Moody's basis) over the next 12-18 months. The company's financial policy that targets a net leverage (company's calculation based on debt covenants) of 2.5x to 3.5x (2.6x as of fiscal 2023) creates some financial risk discipline. The moderate leverage provides some cushion within credit metrics to absorb the potential future modest earnings volatility. Griffon has foreign currency exposure and high customer concentration. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS The positive outlook reflects that good execution of the CPP global sourcing initiative and the company's strategies to sustain earnings in the HBP segment could position the company for an upgrade if it is able to maintain lower leverage and good free cash flow. The positive outlook also reflects Moody's expectation that the company will utilize cash to repay debt and maintain financial leverage within its targeted range if earnings deteriorate. The ratings could be upgraded if the company demonstrates consistent positive organic revenue growth, it successfully executes the CPP global sourcing initiative and maintains an EBIT margin in the low teens percentage. A ratings upgrade would also require debt/EBITDA sustained below 4.0x (excluding seasonal fluctuations), free cash flow/debt above 8.0%, at least good liquidity, and Moody's expectations of financial policies that maintain credit metric at the above levels. The ratings could be downgraded if revenue declines, market share losses or increased costs weaken earnings, if debt/EBITDA is sustained above 5.5x, or if EBIT/interest falls below 2.0x. The ratings could also be downgraded if free cash flow generation is modest, the company completes a large debt-funded acquisition or shareholder distribution, or the company's liquidity deteriorates such as increased reliance on the revolver facility. A meaningful change in the company's asset base that reduces its revenue diversification, or increases operational risk or its exposure to cyclicality could also lead to a downgrade. Headquartered in New York, New York, Griffon Corporation (NYSE: GFF) is a diversified management and holding company that operates through two reportable segments: Consumer and Professional Product (CPP) and Home and Building Products (HBP). -- Home and Building Products conducts its operations through Clopay Corporation ("Clopay"). Founded in 1964, Clopay is the largest manufacturer and marketer of garage doors and rolling steel doors in North America. Residential and commercial sectional garage doors are sold through professional dealers and leading home center retail chains throughout North America under the brands Clopay, Ideal, and Holmes. Rolling steel door and grille products designed for commercial, industrial, institutional, and retail use are sold under the Cornell and Cookson brands. -- Consumer and Professional Products ("CPP") is a leading global provider of branded consumer and professional tools; residential, industrial and commercial fans; home storage and organization products; and products that enhance indoor and outdoor lifestyles. CPP sells products globally through a portfolio of leading brands including AMES, since 1774, Hunter, since 1886, True Temper, and ClosetMaid. The principal methodology used in these ratings was Consumer Durables published in September 2021. HARRIS ENERGY: Updates Gambit Secured Claim Pay; Files Amended Plan ------------------------------------------------------------------- Harris Energy Group, Inc., et al., submitted a Second Amended Disclosure Statement describing Second Amended Joint Plan of Reorganization dated January 23, 2024. On January 23, 2024, the Debtors filed a second motion for approval to obtain post-petition financing. The Debtors sought approval to increase the initial post-petition credit facility from $500,000.00 to $900,000.00, and to obtain a $200,000.00 line of credit from Mr. Harris. The Bankruptcy Court set a preliminary hearing to consider interim approval on January 31, 2024. Class 4 consists of the Secured Claim of Gambit, LLC. On or as soon as practicable following the Effective Date, the Debtors shall pay Gambit any net proceeds from the sale of real estate and equipment owned by Marseilles Hydro Power, LLC, which is subject to a first position lien in favor of Gambit and which the Debtors estimate to be approximately $400,000.00. Any excess proceeds will be applied against Mr. Gohlke's post-petition line of credit, which is secured by second position lien. Pending the sale, the Class 4 Claim will accrue interest at the rate of 8.25% per annum. Starting ninety days after the Effective Date, the Debtors shall commence making monthly interest-only payments of $1,719.00. The Debtors shall remain jointly liable for the Class 4 Claim until the claim is paid in full. The Amended Disclosure Statement does not alter the proposed treatment for unsecured creditors and the equity holder: * Class 6 consists of Non-Insider General Unsecured Claims. Based on the claims registers in these Chapter 11 Cases, the Debtors estimate the value of all Class 6 Claims to be approximately $600,000.00. On the seventh anniversary of the Effective Date, the Debtors shall pay holders of Class 6 Claims 100% of their Allowed Unsecured Claims plus interest accruing at the rate of 2.50% per annum. The Debtors may prepay the Class 6 Claimants at any time without penalty and at the Debtors' discretion. * Class 7 consists of the Unsecured Claim of William D. Harris. Commencing on the Effective Date, the Class 7 Claim shall accrue interest at the rate of 2.50% per annum. On the thirtieth day after all Class 6 Claimants are paid in full, RWE shall commence payments to Harris on account of his Class 7 Claim in equal monthly installments of $10,000.00, with all principal and interest due and payable on the tenth anniversary of the date on which RWE commences payments to Harris. RWE may prepay the Class 7 Claim at any time without penalty and at the Debtors' discretion. * The Allowed Equity Interests shall retain their interest in the Debtors, subject to the terms of this Plan. The Debtors will make all payments contemplated under the Plan through a combination of: (a) net proceeds arising from the sale of land owned by Flambeau Hydro, UP Hydro, and Marseilles Hydro Power, LLC; (b) cash on hand; (c) cash generated from the regular business income of the Reorganized Debtors; and (d) any other sources including but not limited to recoveries from pending adversary proceedings and liquidation of other assets identified in the Schedules and recoveries on claims. The Debtors also anticipate receiving income through an operations and management agreement and from rental income. In addition, the Debtors believe that they will realize funds through their adversary proceedings against Mr. Berutti and Berutti Energy. Those proceeds are not included within the Debtors' projections. The Debtors have determined expenses by reviewing their historical records. Mr. Berutti and Berutti Energy have asked that the Debtors explain why "after a track record of increased capital expenses, they believe that expenses will remain stable for the next five years." The Debtors believe that expenses will remain stable over the next five years based on their review of the condition of the existing projects, the anticipated repairs and maintenance going forward, and a cushion for unexpected repairs and maintenance. Mr. Berutti and Berutti Energy have also asked that the projections "extend out to the date of distribution to the unsecured creditors so that those creditors can understand the likelihood of their distribution in the context of the Debtors' ability to operate postconfirmation." Ultimately, whether there is a reasonable probability that the Debtors can pay unsecured questions as proposed in the plan is a question of feasibility to which the Debtors will present evidence in support of confirmation. That said, in the sixth and seventh year of the plan, the Debtors will pay unsecured creditors (who have not elected their claims to be paid under the alternate treatment) through available cash from operations. To the extent any balance remains due and owing to unsecured creditors on the seventh anniversary of the Effective Date, the Debtors draw upon existing lines of credit or seek additional financing. A full-text copy of the Second Amended Disclosure Statement dated January 23, 2024 is available at https://urlcurt.com/u?l=ZA3IPA from PacerMonitor.com at no charge. Counsel for the Debtors: Paul G. Swanson, Esq. Peter T. Nowak, Esq. Davis W. Sullivan, Esq. SWANSON SWEET LLP 107 Church Ave. Oshkosh, WI 54901 Tel: 920-235-6690 Fax: 920-426-5530 E-mail: pswanson@swansonsweet.com pnowak@swansonsweet.com dsullivan@swansonsweet.com About Harris Energy Group Harris Energy Group, Inc. and affiliates own, operate, and develop hydroelectric power plants in Wisconsin, Michigan, Iowa, and Illinois, generating power for sale to public utilities, governmental agencies, and private power producers. The plants generate power when water from rivers or lakes flows through the blades of a turbine. The turbines are connected to a generator that makes electricity, which is then sold to either the Midcontinent Independent System Operation or other public entities or private companies through power purchase agreements. Harris Energy and its affiliates sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. E.D. Wis. Lead Case No. 23-21117) on March 16, 2023. In the petition signed by its chairman, William D. Harris, Harris Energy disclosed up to $50,000 in assets and up to $1 million in liabilities. Judge Katherine Maloney Perhach oversees the cases. The Debtors tapped Paul G. Swanson, Esq., at Steinhilber Swanson, LLP as legal counsel and MS Financial Services as financial advisor. HERETIC BREWING: Case Summary & 20 Largest Unsecured Creditors -------------------------------------------------------------- Debtor: Heretic Brewing Company 7150 E Camelback Rd Ste 230 Scottsdale, AZ 85251 Business Description: The Debtor is engaged in the beverage manufacturing business. Chapter 11 Petition Date: January 26, 2024 Court: United States Bankruptcy Court District of Arizona Case No.: 24-00634 Debtor's Counsel: Christopher C. Simpson, Esq. OSBORN MALEDON, P.A. 2929 N. Central Avenue Suite 2100 Phoenix, AZ 85012 Tel: 602-640-9349 Fax: 602-640-9050 E-mail: csimpson@omlaw.com Estimated Assets: $500,000 to $1 million Estimated Liabilities: $1 million to $10 million The petition was signed by George Cole Jackson as authorized signatory. 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/W7W56OI/Heretic_Brewing_Company__azbke-24-00634__0001.0.pdf?mcid=tGE4TAMA HOWARD INTERVENTION: Court OKs Cash Collateral Access Thru Feb 9 ---------------------------------------------------------------- The U.S. Bankruptcy Court for the Northern District of Illinois, Eastern Division, authorized Howard Intervention Center, Inc. to use cash collateral on an interim basis, in accordance with the budget, with a 10% variance, through February 9, 2024. As adequate protection to the U.S. Small Business Administration, Headway Capital, LLC, Kapitus, LLC, The Fundworks, LLC, Emerald Group Holdings LLC dba Vitalcap and The Avanza Group, LLC and any other lien claimants, for the use of its Collateral or cash collateral, the Lien Claimants are granted post-petition replacement liens, to the extent and with the same priority as the Lien Claimants held pre-petition, in and to any presently existing or hereafter acquired cash collateral. A continued hearing on the matter is set for February 5, 2024 at 10 a.m. A copy of the order is available at https://urlcurt.com/u?l=VJifYV from PacerMonitor.com. About Howard Intervention Center, Inc. Howard Intervention Center, Inc. sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. N.D. Ill. Case No. 23-16312) on December 5, 2023. In the petition signed by Cara K. Wilson, president, the Debtor disclosed $369,399 in assets and $1,085,759 in liabilities. Judge Benjamin Goldgar oversees the case. Gregory K. Stern, Esq., at GREGORY K. STERN, P.C., represents the Debtor as legal counsel. IGLESIAS DIOS: Church Wins Court's Confirmation of Plan ------------------------------------------------------- Judge Edward A. Godoy entered an order that the Plan filed by Iglesias Dios Es Amor Inc. dated Feb. 1, 2023 is confirmed. According to the minutes of the Jan. 10 hearing, based on what was proffered by the counsels for the debtor and CRIM in open court, which the court accepts, and after having reviewed the debtor's chapter 11 plan of reorganization filed on Feb. 1, 2023, and also having reviewed the debtors Sec. 1129 statement, the court finds that the chapter 11 plan of reorganization meets all of the requirements of Sec. 1129(b) of the Bankruptcy Code. The court finds that, under Sec. 1129(b)(1), the plan does not discriminate unfairly, and is fair and equitable with respect to each class of claims or interest that is impaired under, and has not accepted, the plan. As a result, the chapter 11 plan of reorganization is confirmed. As previously reported, the Debtor seeks to accomplish payment under the Plan by using the funds receive from tithe and activities in the church. Also, the Debtor is proposing to sell two plots of lands: a piece of land located at Lomas de Trujillo Alto, VBC-57, Lot 3, Trujillo Alto, Puerto Rico; and another piece of land located at Lomas de Trujillo Alto, VBC-57, Lot 40-A, Bloq 1, Trujillo Alto. A copy of the Amended Disclosure Statement dated Feb. 3, 2023, is available at https://bit.ly/3HDveaY from PacerMonitor.com. About Iglesias Dios Es Amor Iglesias Dios Es Amor, Inc., is a corporation that administers a church in the municipality of Trujillo Alto in Puerto Rico. It has been in this business since June 29, 1977. Mr. Elias Reyes Ortiz is the president of the corporation. Since Hurricane Maria, the members of the assembly has been significantly reduced, causing the debtor to default on a mortgage loan with Cooperativa de Ahorro (COOPACA). Coopaca filed a mortgage foreclosure case against the debtor corporation and a judgment was entered. Due to the advanced stage of the foreclosure, Iglesias Dios Es Amor, Inc., filed its voluntary petition for relief under Chapter 11 of the U.S. Bankruptcy Code (Bankr. D.P.R. Case No. 21-03508) on Nov. 29, 2021, with as much as $1 million in both assets and liabilities. Elias Reyes Ortiz, president, signed the petition. Judge Edward A. Godoy oversees the case. The Debtor tapped Gerardo L. Santiago Puig, Esq., at Santiago Puig Law Offices as legal counsel and Juan C. Pomales Torres as accountant. IGRE Income Fund: Losses Raise Going Concern Doubt -------------------------------------------------- Investment Grade R.E. Income Fund, L.P. disclosed in a Form 1-SA Report filed with the U.S. Securities and Exchange Commission for the fiscal semiannual period ended June 30, 2021, that substantial doubt exists about its ability to continue as a going concern. The Fund sustained a net loss of $790,828 for the period ended June 30, 2021 and had an accumulated deficit of $989,017 as of June 30, 2021. These factors raised substantial doubt about the Company's ability to continue as a going concern. As of June 30, 2021, the Company had $10,033,224 in total assets, $7,487,221 in total liabilities and $2,546,003 in total partners' equity. Management's Plans The Fund's ability to continue as a going concern until it reaches profitability is dependent upon its ability to generate cash from operating activities and to raise additional capital to fund operations. In January 2021, the Fund commenced operations upon raising its initial $2.5 million in gross equity proceeds. Through June 30, 2023, the Fund raised a total of approximately $12.6 million from the sale of LP units. In May 2021, the Fund closed on the acquisition of its first investment property to generate commercial lease income, whose current and projected cash flow is sufficient to cover its debt service, primarily due to the debt being interest only for the first seven years, and necessary reserves. In September 2022, the Fund purchased an additional property which has increased the commercial lease income of the Fund. The debt service continues to be covered by this additional cash flow. Note that both properties are occupied under a triple-net lease and thus the tenant is responsible for all operating expenses. Subsequent to June 30, 2021, the Fund has raised gross proceeds of approximately $9,537,000. Additionally, the Fund is implementing cost cutting measures. There are no assurances that management's plans will be successful. A full-text copy of the Form 1-SA Report is available at http://tinyurl.com/cejatrbp About Investment Grade R.E. Income Fund Santa Barbara, CA-based Investment Grade R.E. Income Fund, LP is a Delaware limited partnership formed to originate, invest in, and manage a diversified portfolio of institutional quality single-tenant and multi-tenant net leased commercial real estate properties. The Fund's General Partner is IGRE Capital Holdings, LLC, a California limited liability company. IGRE Income Fund: Reports $272,655 Net Loss in First Half of 2022 ----------------------------------------------------------------- Investment Grade R.E. Income Fund, L.P. filed with the Securities and Exchange Commission its Fiscal Semiannual Report on Form 1-SA disclosing a net loss of $272,655 for the six months ended June 30, 2022, compared to a net loss of $790,882 for the same period in 2021. The Company has evaluated whether there are certain conditions and events, considered in the aggregate, that raise substantial doubt about the Company's ability to continue as a going concern within one year after the date that the consolidated financial statements are issued. The Fund sustained a net loss of $272,655 for the period ended June 30, 2022, and had an accumulated deficit of $1,491,943 as of June 30, 2022. These factors raised substantial doubt about the Company's ability to continue as a going concern. As of June 30, 2022, the Company had $13,094,377 in total assets, $5,879,456 in total liabilities and $7,214,912 in total partners' equity. Management's Plans The Fund's ability to continue as a going concern until it reaches profitability is dependent upon its ability to generate cash from operating activities and to raise additional capital to fund operations. In January 2021, the Fund commenced operations upon raising its initial $2.5 million in gross equity proceeds. Through June 30, 2023, the Fund raised a total of approximately $12.6 million from the sale of LP units. In May 2021, the Fund closed on the acquisition of its first investment property to generate commercial lease income, whose current and projected cash flow is sufficient to cover its debt service, primarily due to the debt being interest only for the first seven years, and necessary reserves. In September 2022, the Fund purchased an additional property which has increased the commercial lease income of the Fund. The debt service continues to be covered by this additional cash flow. Note that both properties are occupied under a triple-net lease and thus the tenant is responsible for all operating expenses. Subsequent to June 30, 2022, the Fund has raised gross proceeds of approximately $4,380,000. Additionally, the Fund is implementing cost cutting measures. There are no assurances that management's plans will be successful. A full-text copy of the Form 1-SA Report is available at http://tinyurl.com/545z787u About Investment Grade R.E. Income Fund Santa Barbara, CA-based Investment Grade R.E. Income Fund, LP is a Delaware limited partnership formed to originate, invest in, and manage a diversified portfolio of institutional quality single-tenant and multi-tenant net leased commercial real estate properties. The Fund's General Partner is IGRE Capital Holdings, LLC, a California limited liability company. INTELIGLAS CORP: Amends Unsecured Claims Pay; Plan Hearing March 6 ------------------------------------------------------------------ Inteliglas Corporation submitted a Second Amended Plan of Reorganization under Subchapter V dated January 23, 2024. This Small Business Debtor's Plan of Reorganization contemplates the payment of Allowed Administrative Claims, as well to the creation of two classes of Unsecured Creditors and the extinguishment of all existing and outstanding Equity Interests. This Plan anticipates the payment of all Allowed Administrative Expense Claims on the later of the Effective Date or the date when such Claim becomes an Allowed Claim, unless the Reorganized Debtor reaches an agreement for different treatment with the holder of any such Administrative Expense Claim. Moreover, this Plan contemplates that Allowed Priority Tax Claims will be paid in full over 60 months following the later of the Effective Date or the date when such Claim becomes an Allowed Claim. The Plan contemplates Unsecured Creditors with allowed claims to be paid in full no later than 42 months following the Effective Date. The Debtor contends that the Plan provides adequate disclosures in accordance with Section 1190(a)(1) of the Bankruptcy Code, and no separate disclosure statement is required. This Plan provides for payment in full of all Allowed Administrative Expense Claims, all Allowed Priority Tax Claims and General Unsecured Creditor Claims; the Debtor recommends that all Creditors entitled to vote, vote to accept this Plan on or before the Voting Deadline of February 26, 2024. Classes 1 and 2 consists of General Unsecured Claims. The Debtor estimates that it has 50 Unsecured Creditors holding 51 claims, all but six of which are listed as undisputed, and which claims the Debtor believes will be allowed as of the Effective Date. Unsecured Creditor Claims are currently estimated to be $3,779,336, based on the amount known as of the Petition Date, increased by the amount set forth in the Proofs of Claim filed postpetition. The undisputed claims have an aggregate estimated face value of $2,879,920. The Debtor has six disputed claims with an aggregate estimated face value of $899,417. Class 1 consists of the SAFE Note Holders With Conversion Rights representing unsecured debt in the amount of $1,575,000. Other than as set forth herein, the rights and obligations of the SAFEs shall remain unchanged as a consequence of this Plan. Of the existing SAFE Note Holders, 17 will have a vested right as of the anticipated hearing on the confirmation of this Plan to convert to equity in the Reorganized Debtor. The Debtor plans to deliver a proposed ballot to each holder of an Impaired Claim. Included in the proposed Ballot is an option for any Class 1 Claim Holder, or SAFE Note Holder with Conversion Rights, to indicate an intention to convert the amount of said party's claim to New Common Stock of the Reorganized Debtor at a level defined by the rights set forth in said SAFE Note Holder with Conversion Rights' SAFE. The Debtor has received informal indication of interest from the SAFE Note Holders with Conversion Rights such that it is currently believed that 14 of such holders intend to exercise their respective conversion right with a resulting reduction in overall unsecured debt of the Reorganized Debtor by the amount of $1,075,000.00, from $3,779,336.09 to $2,704,336.09, as of the Effective Date. Assuming the three SAFE Note Holders with Conversion Rights that have indicated an intention not to covert vote consistent with this expressed intention, they will become Class 2 Claim Holders (with collective Class 2 claims in the amount of $500,000.00). Accordingly, Class 1 Claims are currently estimated to be between $1,575,000 and $1,075,00.00. According to their respective SAFEs, all but one of the SAFE Note Holders With Conversion Rights has a right to convert to a number of shares calculated by dividing the agreed valuation of the Debtor in the SAFEs, $9,500,000, by the face value of the SAFE Note Holder's particular SAFE. The rights of any SAFE Note Holders with Conversion Rights that decides not to exercise a right of conversion as set forth herein shall remain unchanged and shall be paid in accordance with their respective SAFE. Class 2 consists of Other Unsecured Creditors. Based on the amount known as of the Petition Date, increased by the amount set forth in the Proofs of Claim filed post-petition, the Debtor is aware of Class 2 Claims currently totaling between approximately $2,704,336 and $2,204,336 (depending in part on whether SAFE Note Holders with Conversion Rights fail to exercise an option to convert). The Debtor anticipates making quarterly payments to Allowed Class 2 Claim holders. The amount of the payment will be based on such Unsecured Claimant's pro rata share of the Debtor's projected disposable income to be received in the 3-year period beginning on the date that the first payment is due under the Plan will be applied to make payments under the Plan. The SAFE Note Holders Without Conversion Rights will not need repayment unless and until a Liquidity Event as such term is used in a SAFE, meaning the Class 2 Claims entitled to payment as of the Effective Date are estimated to be $404,920. This number could increase to as much as $1,304,336 if all scheduled disputed claims become Allowed Claims. The Debtor anticipates sufficient cash on hand on the Effective Date to pay the Administrative Expense Claims, other than those which have agreed to accept different treatment. The Debtor anticipates having sufficient cash on hand to pay the Administrative Expense Claims of the Trustee on the Effective Date, the Administrative Claim of Saul Ewing LLP during the second month following the Effective Date and the Administrative Claim of Lazare Potter Giacovas & Moyle LLP during the third month following the Effective Date. The Debtor anticipates that payments of allowed Priority Tax Claims and allowed General Unsecured Claims will be made from operations. A hearing on the confirmation of the Plan is scheduled for March 6, 2024 at 10:00 a.m. A full-text copy of the Second Amended Plan dated January 23, 2024 is available at https://urlcurt.com/u?l=gWQyLx from PacerMonitor.com at no charge. Counsel to the Debtor: Michael T. Conway, Esq. Lazare Potter Giacovas & Moyle, LLP 747 Third Avenue New York, NY 10017 Telephone: (212) 758-9300 Facsimile: (212) 888-0919 Email: mconway@lpgmlaw.com Evan T. Miller, Esq. Saul Ewing LLP 1201 N. Market Street, Suite 2300 Wilmington, DE 19801 Tel: (302) 421-6800 Facsimile: (302) 421-6813 Email: evan.miller@saul.com About Inteliglas Corporation InteliGlas Corporation is a secure AI cloud platform that fully integrates all building systems, provides sensory-capabilities, and puts all the data into the artificial intelligence system inteliGlas AI. The Debtor filed Chapter 11 petition (Bankr. D. Del. Case No. 23-11124) on Aug. 9, 2023, with $243,273 in assets and $3,177,648 in liabilities. Jami Nimeroff, Esq., at Brown McGarry Nimeroff, LLC has been appointed as Subchapter V trustee. Judge J. Kate Stickles oversees the case. The Debtor tapped Evan T. Miller, Esq., at Bayard, PA and Michael T. Conway, Esq., at Lazare Potter Giacovas & Moyle LLP as legal counsel. INVESTMENTS SWK: Maria Yip Named Subchapter V Trustee ----------------------------------------------------- The U.S. Trustee for Region 21 appointed Maria Yip, a certified public accountant and managing partner at Yip Associates, as Subchapter V trustee for Investments SWK, LLC. Ms. Yip will be paid an hourly fee of $450 for her services as Subchapter V trustee and will be reimbursed for work-related expenses incurred. Ms. Yip declared that she is a disinterested person according to Section 101(14) of the Bankruptcy Code. The Subchapter V trustee can be reached at: Maria M. Yip 2 S. Biscayne Blvd., Suite 2690 Miami, FL 33131 Tel: (305) 569-0550 Email: myip@yipcpa.com About Investments SWK Investments SWK, 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. S.D. Fla. Case No. 24-10630) on January 24, 2024, with $1 million to $10 million in both assets and liabilities. Lorne A. Wray, authorized member, signed the petition. Judge Peter D. Russin oversees the case. Sherri B. Simpson, Esq., at Simpson Law Group represents the Debtor as bankruptcy counsel. IPWE INC: David Klauder Named Subchapter V Trustee -------------------------------------------------- The U.S. Trustee for Regions 3 and 9 appointed David Klauder, Esq., at Bielli & Klauder, LLC as Subchapter V trustee for IPwe, Inc. Mr. Klauder 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. Klauder declared that he is a disinterested person according to Section 101(14) of the Bankruptcy Code. The Subchapter V trustee can be reached at: David M. Klauder, Esq. Bielli & Klauder, LLC 1204 N. King Street Wilmington, DE 19801 Phone: (302) 803-4600 Fax: (302) 397-2557 Email: dklauder@bk-legal.com About IPwe Inc. IPwe, Inc. has been at the forefront of developing blockchain solutions for IP strategy, collaborating with leading blockchain providers such as IBM, Hyperledger, and CasperLabs since 2018. The Debtor's cutting-edge IP strategy solution, Smart Intangible Asset Management, utilizes dynamic patent NFTs and its proprietary AI algorithm to consolidate IP data and generate data-driven metrics, including valuations, ratings, and benchmarks for every patent. The Debtor sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. D. Del. Case No. 24-10078) on January 24, 2024, with $156,169 in assets and $7,292,376 in liabilities. Leann M. Pinto, chief executive officer, signed the petition. Judge Craig T. Goldblatt oversees the case. Ronald S. Gellert, Esq., at Gellert Scali Busenkell & Brown, LLC represents the Debtor as legal counsel. IRIS PARENT: Moody's Assigns 'Caa1' CFR, Outlook Negative --------------------------------------------------------- Moody's Investors Service assigned Caa1 corporate family rating to Iris Parent Holdco, L.P. (Iris Parent) with negative outlook. Moody's has also assigned Caa1-PD probability of default rating. At the same time, Moody's has downgraded Iris Holding, Inc.'s (Iris, a wholly owned operating subsidiary of Iris Parent) backed senior secured revolving ABL facility rating to B1 from Ba3, backed senior secured first lien term loan rating to B3 from B2, and senior unsecured notes rating to Caa3 from Caa2. Iris's negative outlook was maintained. Moody's has withdrawn Iris' B3 corporate family rating, and B3-PD probability of default rating. Iris, the borrower of the rated debt, is the main operating company but does not file financial statements so Moody's analyzes the company using Iris Parent's financial statements. Hence the reassignment of the CFR and PDR at Iris Parent. "The Caa1 CFR reflects Moody's expectation that Iris Parent's financial leverage will remain high and its interest coverage will remain weak through 2024. Moody's also estimate the company's cash flows will not be sufficient to drive deleveraging below 7x in 2024". said Aziz Al Sammarai, Moody's AVP – Analyst. Moody's believes financial leverage will be around 9x in 2024. Modest EBITDA growth combined with high debt levels will limit meaningful improvement in the company's financial leverage. Moody's expects Iris Parent will generate 9% EBITDA growth in 2024 compared to prior year. EBITDA growth will be driven by mid-single digit revenue growth, supported by improvements in ecommerce and consumers end markets, operational efficiencies and a portion of the company's announced new business wins. Moody's also expects Iris Parent's adjusted debt will remain relatively flat above $2 billion as mandatory term loan amortization will be mostly offset by capitalized interest expense on sponsor-subordinated notes. Meanwhile, Moody's expects high interest rates will consume a most of Iris Parent's EBITDA and limit a meaningful recovery in cash flow. RATINGS RATIONALE Iris Parent's Caa1 CFR is constrained by Moody's expectation of very high leverage and weak interest coverage; exposure to macro risks through relatively more cyclical manufacturing, construction, and retail end markets, limiting meaningful recovery in sales volumes; presence in a fragmented, competitive landscape with replicable products mitigated by bundling; and heightened financial policy risks under private equity ownership. The rating benefits from adequate liquidity; a strong position in the North American tape market with a broad, product offering including an array of industrial and specialty products and packaging systems; good end market diversification with a solid position in the e-commerce segment; and a track record of successfully integrating acquisitions and increasing business through strategic organic investments. Iris Parent has good liquidity. Sources total about $375 million compared to about $30 million of liquidity consumption. Sources consist of cash on hand of about $131 million at September 2023, and about $244 million available under its $250 million revolving credit facility (net of LCs and subject to borrowing base) expiring in June 2027. Uses include annual mandatory debt amortizations totaling $15 million and Moody's forecast for about $15 million in free cash flow consumption through Q4 2024. Moody's expects the company to utilize the revolver to manage seasonal swings in working capital and potentially fund tuck-in M&A transactions. The revolver is subject to springing covenants with which Moody's expects Iris Parent to remain in compliance. The company has limited sources of alternate liquidity since its assets are encumbered by the secured credit facilities; however, there is a permitted reinvestment period of 24 months. The $250 million ABL revolver is rated B1, three notches above the Caa1 CFR, reflecting its priority security in working capital assets. The B3 $1.5 billion senior secured first lien term loan is rated one notch above the CFR, reflecting its first lien status and position behind the ABL. Both secured facilities benefit from loss absorption provided by the company's senior unsecured notes and $105 million subordinated holdco PIK notes held by Clearlake due March 2029. The Caa3 rating on the $400 million notes (two notches below the CFR) reflects their contractual subordination to the first lien facilities. The negative outlook reflects Moody's expectation that Iris Parent's interest coverage will remain weak which, combined with weak operating environment, reduces the company's ability to generate meaningful free cash flow to deleverage. The outlook also reflects increased risk of restructuring given the company's high financial leverage. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS The ratings could be upgraded if Iris Parent maintains Interest coverage above 1.5x, adjusted debt/EBITDA below 7x and sustains positive free cash flow. The ratings could be downgraded if the company's liquidity weakens or it fails to improve operational and financial metrics. Specifically, Moody's could downgrade the rating if EBITDA/interest is sustained below 1x, or a likelihood of a restructuring increases, resulting in a default or reduced recovery prospect for creditors. Iris Holding, Inc., headquartered in Sarasota, Florida and a wholly owned operating subsidiary of Iris Parent Holdco, L.P., manufactures and sells carton sealing and industrial and specialty tapes, stretch and shrink films, protective packaging, woven coated fabrics, and packaging systems. The company's financials are private and are issued at Iris Parent Holdco, L.P. The principal methodology used in these ratings was Packaging Manufacturers: Metal, Glass and Plastic Containers published in December 2021. IYS VENTURES: Unsecureds Owed $25.5M Get $1.2M or $240K Annually ---------------------------------------------------------------- IYS Ventures, LLC, submitted a Plan of Reorganization and a Disclosure Statement. The Debtor's Plan of Reorganization provides for distribution to the holders of allowed claims and interests from cash, cash equivalents and other funds and income derived from (i) a combination of the sale or sale and leaseback of the Owned Stations or monetization of the value of the Owned Stations through new financing, (ii) the sale and, or monetization of the value of its Leased Stations through new financing, or some combination thereof, or the continued operations of its Leased and Owned Stations, and iii) the Net Proceeds of Litigation Claims including the PMPA Adversary (see the description of the PMPA Adversary hereafter). The Debtor's Plan of Reorganization (the "Plan" or "Plan of Reorganization") provides for distribution to the holders of allowed claims and interests from cash, cash equivalents and other funds and income derived from i) a combination of the sale or sale and leaseback of the Owned Stations or monetization of the value of the Owned Stations through new financing, ii) the sale and, or monetization of the value of its Leased Stations through new financing, or some combination thereof, or the continued operations of its Leased and Owned Stations, and iii) the Net Proceeds of Litigation Claims including the PMPA Adversary (see the description of the PMPA Adversary hereafter). Under the Plan, Class 5 consists of General Non-Priority Unsecured Claims. Class 5 Claims, aggregating approximately $25,531,823.18 including the allowed unsecured claims of Class 1(b), 1(c), 1(d), 1(e) and 2 Claims, Priority Claims and Priority Tax Claims will be paid pro rata distributions of deferred cash payments aggregating $1,200,000 from the General Unsecured Creditors Fund ("GUCF") payable on the Effective Date or $240,000 annually commencing on December 31, 2024, and each 31st of the year thereafter through December 31, 2028. Additionally, the Class 5 Claims will be paid pro rata distributions annually of all Net Litigation Proceeds resulting from recovery of Litigation Claims including the PMPA Adversary. Class 5 Claims are impaired under the Plan. Except as otherwise provided in the Plan or the Confirmation Order, all cash necessary for the Debtor to make payments pursuant to the Plan to Allowed Administrative Claims, Priority Claims, Priority Tax Claims, Secured Claims and General Unsecured Non-Priority Claims will be from i) a combination of the sale or sale and leaseback of the Owned Stations or monetization of the value of the Owned Stations through new secured financing, ii) the sale and, or monetization of the value of its Leased Stations through new secured financing, or some combination thereof, or the continued operations of its Leased and Owned Stations, and iii) the Net Proceeds of Litigation Claims including the PMPA Adversary. Attorneys for the Debtor and Debtor in Possession: Gregory K. Stern, Esq. Monica C. O'Brien, Esq. Dennis E. Quaid, Esq. Rachel S. Sandler, Esq. GREGORY K. STERN, P.C. 53 West Jackson Blvd., Suite 1442 Chicago, IL 60604 E-mail: (312) 427-1558 A copy of the Disclosure Statement dated Jan. 12, 2024, is available at https://tinyurl.ph/HxvnF from PacerMonitor.com. About IYS Ventures IYS Ventures LLC leases, owns and operates gas stations located in Illinois, Minnesota, Michigan, Indiana, Ohio, South Dakota, Virginia, Wisconsin, and Louisiana. The Debtor filed a petition for relief under Chapter 11 of the Bankruptcy Code (Bankr. N.D. Ill. Case No. 23-06782) on May 23, 2023. In the petition filed by Muwafak Rizek, as manager and member, the Debtor reported assets between $1 million and $10 million and liabilities between $10 million and $50 million. Honorable Bankruptcy Judge David D. Cleary oversees the case. The Debtor is represented by Gregory K Stern, Esq. at Gregory K. Stern, P.C., represents the Debtor as legal counsel. JLK CONSTRUCTION: Amends Unsecured Claims Pay Details ----------------------------------------------------- JLK Construction, LLC submitted a Third Amended Disclosure Statement describing Third Amended Plan dated January 23, 2024. The Debtor intends to remain in business and to pay monies to creditors. General unsecured creditors are placed in Class 7 and will receive a distribution of 5% of their allowed claim, to be distributed in monthly payments, over 10 years plus a percentage of recoveries from avoidance actions. Class 6 consists of General Unsecured Claims. Total unsecured claims filed to date amount to $5,534,790.03. Assuming no recovery from the lawsuits, then the claims are paid at 5% over the 10-year plan. No payments are scheduled in Jan and Feb of each year, to account for cash flow dips resulting from seasonality due to weather. Monthly payments begin in month 7, and in years 1-3 are $1287, years 4-5 are $2058, and years 6-10 are $4117. Total unsecured payments are $277,884. JLK will pay to this class from recoveries from avoidance actions 50% of net monies recovered after (1) after payment of legal fees and (2) satisfaction of Newtek's lien against avoidance recoveries. The other 50% net monies will be used by JLK for its business operations. For creditors whose payments in a given month would be less than $25.00, they shall be paid quarterly in the 3rd month of each quarter. Any creditor in this class asserting a right to attorneys' fees and costs must, within 21 days following entry of the order confirming the Plan, either file a motion for allowance of fees and costs or must file a stipulation with the Debtor as to the amount of fees and costs. The failure to timely do so will result in the disallowance of any claim for attorneys' fees and costs. The Debtor will not distribute any monies to defendants on account of any claims they may hold pending conclusion of adversary actions against them. Class 9 consists of Equity Interests in the Debtor. To obtain the equity in the Reorganized Debtor Mr. Jesse Kagarice proposes to infuse $25,000 at the Effective Date and thereafter contribute $25,000 of his funds at month 18, $25,000 at month 28, $25,000 at month 38, $25,000 at month 48 and $25,000 at month 60. In exchange for obtaining the Reorganized Debtor's equity, Mr. Kagarice intends to contribute $150,000 over time. Mr. Kagarice's offer to contribute the $150,000 relies on both (1) obtaining the equity in the Reorganized Debtor and (2) the imposition of postEffective Date injunction. Also as a means to provide additional value to the Debtor and to assist it in its plan payments, Mr. Kagarice shall transfer title from himself of the Reorganized Debtor of the three work vehicles he purchased prepetition (using his credit as the Debtor's credit was not as good as his credit) (1) once the loans have been paid off, (2) Mr. Kagarice has obtained the equity in the Reorganized Debtor though vesting may not occur until later and (3) the Court has issued the temporary injunction. To ensure that the $25,000 payments are made, the equity interest in the Reorganized Debtor shall not vest in Mr. Kagarice until after he has made each of the payments. Until the equity interest vests in Mr. Kagarice, the Reorganized Debtor shall hold the interest in trust for Mr. Kagarice and he will operate the company with full authority to operate the company as its managing member. If the general unsecured class rejects the Plan and the Court finds that Mr. Kagarice's offer of new value money is insufficient, then the Debtor will either market the equity in the Reorganized Debtor via an auction or the Debtor will request that the Court confirm the Plan, vesting the equity in the Reorganized Debtor in the general unsecured creditor class. Payments and distributions under the Plan will be funded by the following: * Funding on the Effective Date will be funded from the cash on hand from operations and by new value monies contributed. * Funding after the Effective Date. These funds will be obtained from: (a) any and all remaining cash retained by the Reorganized Debtor after the Effective Date; (b) Cash generated from the post-Effective Date operations of the reorganized Debtor; and (c) contributions which the Reorganized Debtor obtains from its equity holder. A full-text copy of the Third Amended Disclosure Statement dated January 23, 2024 is available at https://urlcurt.com/u?l=PXxM9p from PacerMonitor.com at no charge. Counsel for the Debtor: Steven R. Fox, Esq. THE FOX LAW CORPORATION, INC. 17835 Ventura Blvd., Suite 306 Encino, CA 91316 Tel: (818)774-3545 E-mail: srfox@foxlaw.com - and - Colin N. Gotham, Esq. EVANS & MULLINIX, P.A. 7225 Renner Rd., Suite 200 Shawnee, KS 66217 Tel: (913) 962-8700 Fax: (913) 962-8701 E-mail: cgotham@emlawkc.com About JLK Construction JLK Construction, LLC, moves dirt, excavates dirt and does basic concrete flatwork. It is a union shop. The Debtor sought protection under Chapter 11 of the Bankruptcy Code (Bankr. W.D. Mo. Case No. 23-50034) on Feb. 13, 2023. In the petition signed by Jesse L. Kagarice, managing member, the Debtor disclosed up to $10 million in both assets and liabilities. Judge Brian T. Fenimore oversees the case. Colin N. Gotham, Esq., at Evans and Mullinix, P.A., and Steven R. Fox, Esq., at The Fox Law Corp., Inc., represent the Debtor as legal counsel. Newtek Small Business Finance, LLC, as lender, is represented by Jonathan A. Margolies, Esq. KAI 786: Wins Cash Collateral Access on Final Basis --------------------------------------------------- The U.S. Bankruptcy Court for the Western District of Texas, San Antonio Division, authorized KAI 786, LLC to use cash collateral on a final basis in accordance with the budget. The Debtor requires the immediate use of the cash collateral to fund operational and administrative expenses. Federal Home Loan Mortgage Corporation and San Antonio Water System assert an interest in the Debtor's cash collateral. The Congress chartered the Secured Lender to facilitate the nationwide secondary residential mortgage market. It also chartered the Secured Lender to facilitate the nationwide secondary residential mortgage market. The Debtor's Properties are encumbered by a Mortgage Deed of Trust, Assignment of Rents and Security Agreement and Fixture Filing to secure repayment of a Multifamily Note dated February 13, 2019, in the amount of $2.4 million by the Debtor in favor of the Secured Lender. Prior to the Petition Date, the Note and Deed of Trust, together with all other accompanying loan documents, was assigned to the Secured Lender. On June 12, 2023, the Secured Lender sent the Debtor a letter notifying the Debtor that the maturity date of the Note had been accelerated making all sums secured by the security instrument immediately due and payable as a consequence of the Debtor's default on the Note. The Debtor is directed to deposit all rent collections or any other funds received in connection with the Properties in the Segregated Account. The Debtor will continue to make monthly, regular payments to the Secured Lender in the amount of $24,050, or such other amount approved by the Secured Lender, on the first day of each month with funds from the Segregated Account; provided, however, that the Debtor may use proceeds from any draws authorized under the Interim DIP Order or any subsequent related order in the event funds in the Segregated Account are insufficient to make the monthly, regular payment to the Secured Lender. As adequate protection, the Secured Lender is granted valid, binding, enforceable, and unavoidable post-petition security interests co-extensive with the Secured Lender's prepetition liens, in all currently owned or hereafter acquired property and assets of the Debtor. As further partial adequate protection for the use by the Debtor of the Secured Lender's cash collateral, the Secured Lender is granted an allowed administrative expense under 11 U.S.C. Section 507(b) to the extent to any diminution in the value of the Secured Lender's interest in the cash collateral. The Debtor's right to use cash collateral will expire on the earlier of: (a) the occurrence of an Event of Default; (b) the effective date of a confirmed Chapter 11 plan; (c) the Court's entry of a subsequent order terminating the Debtor's rights to use the Secured Lender's cash collateral; or (d) dismissal of the Chapter 11 case. A copy of the court's order is available at https://urlcurt.com/u?l=X6n5WT from PacerMonitor.com. About Kai 786, LLC Kai 786, LLC owns three apartment complexes in San Antonio, TX valued at $3.76 million. The Debtor sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. W.D. Tex. Case No. 23-51004) on July 31, 2023. In the petition signed by Saajedul Kaiyom, managing member, the Debtor disclosed $3,787,730 up to total assets and $2,375,156 in total liabilities. Judge Michael M. Parker oversees the case. Paul Steven Hacker, Esq., at Hacker Law Firm, PLLC, represents the Debtor as legal counsel. KCW GROUP: Hearing on Sale of Houston Properties Set for Feb. 14 ---------------------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of Texas is set to hold a hearing on Feb. 14 on the proposed sale of KCW Group, LLC's properties. KCW is selling its real properties located at 6303 and 6305 Beverly Hill St., Houston, Texas; and personal properties, which the company used to operate its business. Altaf Ali, the buyer, offered $2.95 million for the properties. The properties are being sold "free and clear" of liens, claims and encumbrances, according to the company's attorney, Julie Koenig, Esq., at Cooper & Scully, PC. "This sale will provide funds to the estate, which will be used to pay administrative expenses, the secured and priority creditors and a distribution to unsecured creditors," Ms. Koenig said in a motion filed in court. Texas Capital Loans, LLC and Resolution Finance hold a $2.2 million secured claim and $68,559.45 secured claim, respectively. Both creditors will be paid in full at closing. About KCW Group KCW Group, LLC owns and operates a large facility for weddings, quincineras and other events for residents in Houston and the surrounding areas. KCW Group sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. S.D. Texas Case No. 23-30988) on March 22, 2023, with up to $10 million in both assets and liabilities. Judge Jeffrey P. Norman oversees the case. Julie M. Koenig, Esq., at Cooper & Scully, P.C. represents the Debtor as legal counsel. KESTREL ACQUISITION: S&P Alters Outlook to Stable, Affirms 'B' ICR ------------------------------------------------------------------ S&P Global Ratings revised its outlook on Kestrel Acquisition LLC's debt to stable from negative and affirmed its 'B' rating. The '2' recovery rating (70%-90%) is unchanged, though S&P revised its rounded recovery estimate to 80% from 70%. S&P said, "The stable outlook reflects our expectation for improved spark spreads and energy margins in the near term, as well as some additional debt paydown via cash flow sweeps. We expect the project's debt service coverage ratios (DSCRs) will exceed 1.25x through the asset's life (including the refinancing period) and anticipate there will be about $350 million of debt outstanding on its term loan at maturity in mid-2025." Kestrel Acquisition LLC's Hunterstown Generating Station is an 810-megawatt (MW) combined cycle gas-fired power plant located in the MetEd region of the Western Mid-Atlantic Area Council (MAAC) zone of the PJM Interconnection. Kestrel is primarily owned by Platinum Equity Capital Partners IV L.P. The project is owned by a private-equity sponsor with a more-aggressive financial policy than most strategic owners. Both the project's operational and financial performance have been strong in 2023. S&P's forecast robust cash flow available for debt service (CFADs) over the next two years supported by strong forward energy prices. Kestrel was able to outperform financially because its generation-weighted spark spread averaged about $17 per megawatt hour (/MWh) through the first three quarters of 2023. This is on top of a low average heat rate of 7,145Btu/kWh and availability of greater than 99%. The Pennsylvania Commonwealth Court's ruling preventing the state from participating in the Regional Greenhouse Gas Initiative (RGGI) was also credit supportive. S&P said, "While we anticipate strong market spark spreads in the PJM MetEd region over the near term due to weather conditions and gas-supply dynamics (average sparks of about $22/MWh in 2024 and 2025), we forecast Kestrel will generate spark spreads of about $13/MWh (on average) after 2025, when we expect energy prices will normalize. This stronger-than-expected level of cash flow will enable the project to reduce its debt balance at maturity, which has increased our DSCR expectations. Under our base-case forecast, we expect Kestrel will have a minimum annual DSCR of 1.25x following the refinancing period. We anticipate the project's DSCRs will average above 2.0x through the term loan's maturity and be about 1.51x over the life of the asset." The sweep of $48 million in 2023 exceeded S&P's expectations and reduced the project's refinancing risk as its approaches the maturity of its debt in June 2025. S&P said, "We view the cash sweep of $48 million in 2023 as credit positive because Kestrel's deleveraging has previously been limited to the mandatory 1% amortization due to its financial underperformance. In the context of relatively strong forward power prices, we expect the project will sweep about $20 million more cash before the term loan B (TLB) matures. This will reduce our expectation for Kestrel's debt at maturity to $350 million (down from our prior expectation of $375 million), which compared with its balance of $379.6 million as of Sept. 30, 2023." Kestrel is exposed to merchant power market forces but has some protection from capacity payments. The project also has sizable cash and reserves to weather negative operational events. S&P said, "The project is fully exposed to merchant prices given its lack of offtake contracts or a robust hedging program. Our downside stress shows a low level of resiliency under increased market volatility, under which we expect the project would likely deplete its liquidity reserves in three years. In our view, this increases the project's business risk and cash flow volatility. However, Kestrel's participation in PJM's capacity market provides some protection, given that it represents about a quarter of its gross margin. We also view the project's build up of its cash and reserves in past years as somewhat mitigating the risk from unexpected negative operational events, such as unexpected major repair work and forced outages." Kestrel's sponsor, Platinum Equity, signed a definitive agreement to sell the Hunterstown power generation facility to LS Power on Jan. 16, 2024. S&P expects the transaction will close in the second quarter of 2024. S&P said, "Kestrel remains a project finance transaction that we evaluate on a stand-alone basis because it is ring-fenced from it sponsors. It also received a non-consolidation opinion when we implemented the rating. We expect no changes to the senior secured credit facilities's financing documents (TLB due June 2025 and revolving credit facility due May 2025). We will evaluate the new parent linkage when we receive more information, such as the presence of independent directors or a non-consolidation opinion, which are some of the conditions required to rate a project without any impact from its parent's creditworthiness. "The stable outlook reflects our expectation for improved spark spreads and energy margins in the next few years and $20 million of additional debt paydown via cash flow sweeps. We expect Kestrel's DSCRs will exceed 1.25x through the asset's life (including the refinancing period) and estimate it will have about $350 million of debt outstanding on the term loan at its maturity in mid-2025. "We could lower our rating if our view of the project's ability to refinance its debt due in 2025 deteriorates. "We could also lower the rating if our expectation for the project's financial performance over the life of the asset worsens. This would likely occur if the project sweeps less cash than we expect against the term loan. This failure to sweep could stem from a deterioration in its forecast energy margins, higher-than-expected capital expenditure (capex), or unexpected operational issues that lead to extended plant shutdowns. "We could consider raising our rating if we believe the project will achieve a minimum DSCR of at least 1.40x throughout the life of the debt, including the post-refinancing period (2025-2042). We would expect this to occur via significant improvements in its debt paydowns, which could occur if its spark spreads increase or the project enters into hedges that we think materially support its creditworthiness, among other conditions. This would lead to higher cash flows, an increased ability to sweep cash, and--eventually--a lower-than-anticipated TLB balance at maturity." KNS HOLCO: S&P Upgrades ICR to 'CCC+' After Distressed Exchange --------------------------------------------------------------- S&P Global Ratings raised its issuer credit rating to 'CCC+' from 'SD' on U.S.-based KNS Holdco LLC (KNS). S&P said, "Concurrently, we lowered our rating on the company's first-lien senior secured term loan to 'CCC+' from 'B-' and removed the rating from CreditWatch, where we placed it on Dec. 22, 2023, with negative implications. The recovery rating is '3', indicating our expectation for meaningful (50%-70%; rounded estimate: 60%) recovery in the event of a payment default. "The negative outlook reflects the potential for a lower rating over the next 12 months if the company does not improve EBITDA in line with our expectations, or if liquidity tightens further and we believe a default scenario—such as a debt restructuring that we view as distressed or missed debt service payment—is likely within the subsequent 12 months. "We expect minimal operating performance improvement from KNS in 2024, driven by continued weakness at Nutrisystem, offset by modest contribution from a full year of Jenny Craig sales and EBITDA. "We expect low-single-digit percentage sales growth for the overall consolidated business driven by flat vitamin, minerals, and supplements (VMS) sales, a mid-single-digit contraction at Nutrisystem, and a roughly nine-point benefit from Jenny Craig sales. While we expect some base business margin degradation from decreased operating leverage, we assume contributions from the higher margin Jenny Craig business will offset this slightly. Overall, we expect S&P Global Ratings'-adjusted EBITDA will grow about 2% from our 2023 forecast. "While the recent transaction provides near-term benefits for KNS' cash flow and liquidity, we nevertheless expect EBITDA cash interest coverage to remain weak." Over the course of the next six quarters, KNS will realize about $27 million free operating cash flow (FOCF) benefit from PIK interest that lowers overall cash interest burden. In 2024, the company will realize about $18 million in cash interest savings, leading to FOCF of about $25 million. S&P estimates EBITDA cash interest coverage will increase to about 1.8x in 2024 due to the lower cash interest expense, declining to about 1.5x in 2025 when the company will only have one quarter of PIK interest benefit before all instruments resume cash interest payments. The company also has high contractual term loan amortization of $14.7 million annually. Despite near-term cash interest relief, the company's high debt service requirements—which will return to pre-transaction levels after the first quarter of 2025--and subdued EBITDA generation underpin S&P's conclusion that its capital structure is potentially unsustainable over the long term. The negative outlook reflects the potential for a lower rating over the next 12 months if the company does not improve EBITDA in line with S&P's expectations, or if liquidity tightens further and it believes a default scenario—such as a debt restructuring that S&P views as distressed or a missed debt service payment—is likely within the subsequent 12 months. S&P could lower the rating if: -- Weak demand for weight loss products persists; -- Nutrisystem's core customer remains under pressure, resulting in a continued barrier to conversion; -- Potential incremental investments in marketing and advertising do not stimulate top-line growth; or -- Jenny Craig does not drive incremental top-line and EBITDA to offset declines in the base business. S&P could take a positive rating action if KNS can organically grow revenue and EBITDA over the next 12 months such that EBITDA interest coverage is sustained well above 1.5x. It would also be predicated on its confidence that the company will meet its debt service requirements. This could occur if: -- Marketing and advertising investments drive meaningful top-line growth; -- Demand for weight loss products improves; -- The company begins to convert more economically sensitive consumers for its core Nutrisystem meal plans; and -- The company scales Jenny Craig sales and earnings faster than S&P expects. LAEEQ MOB: Files Emergency Bid to Use Cash Collateral ----------------------------------------------------- LAEEQ MOB, LP asks the U.S. Bankruptcy Court for the Southern District of Texas, Houston Division, for authority to use $47,515 of cash collateral and provide adequate protection. The Debtor requires the use of cash collateral to meet payroll and other expenses in the operation of its business. Texas Bank assert an interest in the Debtor's cash collateral. The Debtor proposes to protect the interest of Texas Bank by providing those creditors with replacement liens on the account owed to the debtor by its remaining accounts receivables. A copy of the Debtor's motion and budget is available at https://urlcurt.com/u?l=DGHy1Z from PacerMonitor.com. The Debtor projects $203,656 in gross income and $47,056 in monthly expenses. About Laeeq MOB LP Laeeq MOB LP is a Single Asset Real Estate debtor (as defined in 11 U.S.C. Section 101(51B)). The Debtor is the fee simple owner of a real property located at 509 W. Tidwell Road, Houston, Texas 77091 valued at $9 million. Laeeq MOB LP sought relief under Chapter 11 of the Bankruptcy Code (Bankr. S.D. Tex. Case No. 24-30005) on Jan. 1, 2024. In the petition filed by Syed G. Mohiuddin, as manager, the Debtor reports total assets of $9,000,000 and total liabilities of $6,099,126. The Debtor is represented by Samuel L Milledge, Esq. LAEEQ MOB: Seeks to Hire Milledge Law Firm as Legal Counsel ----------------------------------------------------------- Laeeq MOB LP seeks approval from the U.S. Bankruptcy Court for the Southern District of Texas to hire The Milledge Law Firm, PLLC as its counsel. The firm will render these services: (a) advise the Debtor concerning its powers and duties in the continued operation of its business, and management of its property; (b) prepare all pleadings on behalf of the Debtor which may be necessary; (c) negotiate and submit a potential plan of arrangement satisfactory to the Debtor, its estate, and the creditors at large; and (d) perform all other legal services for the Debtor which may become necessary to these proceedings. The hourly rates of the firm's counsel and staff are as follows: Samuel L. Milledge, Sr., Attorney-in-Charge $400 Associates $150 - $200 Law Clerks & Legal Assistants $60 - $75 In addition, the firm will seek reimbursement for out-of-pocket expenses incurred. Samuel Milledge, Sr., Esq., an attorney at The Milledge Law Firm, 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: Samuel L. Milledge, Sr. The Milledge Law Firm, PLLC 2500 East T.C. Jester Blvd. Suite 510 Houston, TX 77092 Telephone: (713) 812-1409 Facsimile: (713) 812-1418 Email: milledge@milledgelawfirm.com About Laeeq MOB LP Laeeq MOB LP is a Single Asset Real Estate debtor (as defined in 11 U.S.C. Section 101(51B)). The Debtor is the fee simple owner of a real property located at 509 W. Tidwell Road, Houston, Texas 77091 valued at $9 million. Laeeq MOB LP sought relief under Chapter 11 of the Bankruptcy Code (Bankr. S.D. Tex. Case No. 24-30005) on Jan. 1, 2024. In the petition filed by Syed G. Mohiuddin, as manager, the Debtor reports total assets of $9,000,000 and total liabilities of $6,099,126. Samuel L. Milledge, Sr. Esq., at The Milledge Law Firm, PLLC, represents the Debtor as counsel. LEAH HOLDING: Voluntary Chapter 11 Case Summary ----------------------------------------------- Debtor: Leah Holding LLC 587 Beck St Bronx NY 10455 Business Description: Leah Holding is a Single Asset Real Estate debtor (as defined in 11 U.S.C. Section 101(51B)). Chapter 11 Petition Date: January 25, 2024 Court: United States Bankruptcy Court Southern District of New York Case No.: 24-10112 Judge: Hon. John P. Mastando III Debtor's Counsel: Mark Frankel, Esq. BACKENROTH FRANKEL & KRINSKY, LLP 488 Madison Avenue FL 23 New York NY 10022-7658 Tel: 212-593-1100 Email: mfrankel@bfklaw.com Total Assets: $3,776,674 Total Liabilities: $2,038,569 The petition was signed by Emmanuel Ku as managing member. The Debtor failed to include in the petition a list of its 20 largest unsecured creditors. A full-text copy of the petition is available for free at PacerMonitor.com at: https://www.pacermonitor.com/view/CPLWWHI/Leah_Holding_LLC__nysbke-24-10112__0001.0.pdf?mcid=tGE4TAMA LEBANON PLATINUM: Court OKs $750,000 DIP Loan from SummitBridge --------------------------------------------------------------- The U.S. Bankruptcy Court for the Middle District of Tennessee authorized Lebanon Platinum, LLC and affiliates to use cash collateral and obtain postpetition financing, on a final basis. The Debtors are permitted to obtain a senior secured superpriority postpetition debtor-in-possession financing facility in the maximum principal amount of $750,000 from SummitBridge National Investments VIII LLC. The Debtors will repay the DIP Obligations in full upon the earlier of May 31, 2024 or the Lender's acceleration upon an event of default under the DIP Loan Documents. As of the Petition Date, the Debtors were indebted to SummitBridge in an amount not less than those specified in these claims: (a) Claim No. 9 filed by SummitBridge against Lebanon Platinum, LLC (Case No. 3:23-bk03592); (b) Claim No. 2 filed by SummitBridge against VMV, LLC (Case No. 3:23-bk-03598); (c) Claim No. 2 filed by SummitBridge against Platinum Gateway II, LLC (Case No. 3:23-bk03597); (d) Claim No. 2 filed by SummitBridge against Murfreesboro Platinum, LLC (Case No.3:23-bk-03599); (e) Claim No. 3 filed by SummitBridge against Destin Platinum, LLC (Case No. 3:23-bk-03596); and (f) Claim No. 2 filed by SummitBridge against Cookeville Platinum, LLC (Case No. 3:23-bk-03589). The Prepetition Obligations are secured by perfected prepetition liens on and security interests in substantially all of the Debtors' property pursuant to those security agreements, mortgages, and/or other security documents executed prior to the Petition Date by the Debtors in favor of SummitBridge. The Debtors require postpetition financing to continue their hotel operations, to maintain business relationships, to satisfy payroll, to pay the costs of administration of their estates, and to satisfy other working capital and operational needs. The Court said the Prepetition Obligations are deemed cross-collateralized on a final basis with all of SummitBridge's prepetition collateral. The events that constitute an "Event of Default" include: (a) For any line-item expense, any Debtor exceeding a 10% variance over the budgeted amount; (b) Any Debtor's failure to timely provide any required financial reporting, including, without limitation, the weekly reconciliation of DIP account transfer deposits from the legacy UCB Debtor accounts to the DIP accounts; (c) By COB Friday every week, any Debtor's failure to timely transmit the weekly wire required to reconcile the Debtor's legacy UCB accounts with the current DIP accounts; (d) Any Debtor's failure to submit a plan of reorganization before January 25, 2024, and to confirm that plan on or before February 29, 2024; (e) By April 30, 2024, the Debtors' failure to provide Lender with a signed and verifiable refinancing or payoff commitment, in form and substance satisfactory to the Lender and approved by the Lender in its sole and absolute discretion, by a third-party lender/investor/purchaser, to pay all amounts owed to the Lender by the Debtors, including, without limitation, those amounts owed under the DIP Facility and Prepetition Loan Documents; and (f) A motion to dismiss a Debtor's bankruptcy case is filed against any of the Debtors. As adequate protection of SummitBridge's interest in the cash collateral, SummitBridge is granted continuing replacement like-kind liens in all of the Debtors' cash collateral securing the indebtedness owing to SummitBridge in the same priority and in the same nature, extent, and validity as such liens existed pre-petition. The Replacement Liens will be supplemental to the existing security interests and liens of SummitBridge on the cash collateral. To the extent the Replacement Liens prove inadequate to protect SummitBridge's interest in the cash collateral from a demonstrated diminution in the value of the cash collateral from the Petition Date, then SummitBridge is granted an administrative expense claim under 11 U.S.C. Section 503(b) with priority in payment under 11 U.S.C. Section 507(b). A copy of the Court's order is available at https://urlcurt.com/u?l=SEfVay from PacerMonitor.com. About Lebanon Platinum Lebanon Platinum, LLC filed its voluntary petition for relief under Chapter 11 of the Bankruptcy Code (Bankr. M.D. Tenn. Case No. 23-03592) on Sept. 29, 2023, with up to $50,000 in assets and up to $10 million in liabilities. Mitch Patel, manager, signed the petition. Judge Charles M. Walker oversees the case. Steven L. Lefkovitz, Esq., at Lefkovitz & Lefkovitz, PLLC serves as the Debtor's legal counsel. LOGANSPORT MACHINE: Case Summary & 20 Largest Unsecured Creditors ----------------------------------------------------------------- Debtor: Logansport Machine Company, Inc. LMC Workholding 1200 W Linden Ave Logansport, IN 46947 Business Description: Logansport Machine provides products, services and solutions to the workholding industry. Chapter 11 Petition Date: January 26, 2024 Court: United States Bankruptcy Court Northern District of Indiana Case No.: 24-30079 Judge: Hon. Paul E. Singleton Debtor's Counsel: Scot T. Skekloff, Esq. HALLERCOLVIN PC 444 East Main Street Fort Wayne, IN 46802 Tel: (260) 426-0444 Fax: (260) 422-0274 E-mail: sskekloff@hallercolvin.com Total Assets: $6,281,311 Total Liabilities: $7,919,388 The petition was signed by Gordon J. Duerr III as president. 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/6ASC26A/Logansport_Machine_Company_Inc__innbke-24-30079__0001.0.pdf?mcid=tGE4TAMA LPI LLC: People's Bank of Commerce Says Disclosure Inadequate ------------------------------------------------------------- People's Bank of Commerce objects to LPI LLC's Disclosure Statement. People's Bank asserts, among other things, that: * The Debtor should be required to disclose at least the last five years of past gross rents received, which should include a detailed breakdown for each of Debtor's properties. * The Debtor should also be required to provide at least the last five years of profit and loss statements, which should include a detailed breakdown for each of Debtor's properties. * Five years of rent rolls and profit and loss statements is necessary, because Debtor states that the business was negatively impacted by COVID. Therefore, the years prior to COVID provide important baseline information to guide future projections. * If Debtor's financial disclosures have not been prepared or reviewed by an accountant, that fact should also be disclosed. * The Debtor should disclose that it has not filed tax returns since 2016. Attorneys for People's Bank of Commerce: Melisa A. Button, OSB No. 116113 Hornecker Cowling LLP 14 N. Central Ave., Ste. 104 Medford, OR 97501 E-mail: mab@roguelaw.com About LPI LLC LPI, LLC a company in Albany, Ore., filed its voluntary petition for Chapter 11 protection (Bankr. D. Ore. Case No. 23-60789) on May 10, 2023, with $2,064,118 in assets and $974,196 in liabilities. Mahmood Almayah, a member of LPI, LLC, signed the petition. Judge Thomas M. Renn oversees the case. The Debtor tapped Michael D. O'Brien & Associates, PC, as counsel and Jane L. Giles, CPA, at Advanced Business Logistics LLC as accountant. LUXURY AUTO: Unsecureds to Get Share of Income & Sale Proceeds -------------------------------------------------------------- Luxury Auto Carriers, Inc., submitted a Final Subchapter V Plan of Reorganization dated January 22, 2024. Luxury was originally organized in 2012 by Roberto J. Soto Serrano, the Debtor's President and sole driver currently on staff. Debtor provides automobile transport throughout the United States for auction houses and private individuals seeking to relocate their vehicles. Luxury conducts its business from the single-family home owned by Mr. Serrano located at: 130 Samuel Street, Davenport, Florida 33897, and the Debtor's trucks and equipment are stored at 11355 Rocket Blvd., Orlando, Florida 32824. In the current economic climate, Luxury is experiencing an increase in operating expenses (namely fuel and insurance costs) which are leading to a reduction in income available for hiring and growth of the Debtor's operation. Luxury was also blindsided by J.P. Morgan Chase Bank which froze an account held by the Debtor without explanation causing an interruption to the Debtor's business and accessibility to its cash funds. Prior to filing, Luxury also received a demand notice from National Funding in connection with a small business loan in the amount of approximately $40,000.00. Class 4 consists of all Allowed General Unsecured Claims against the Debtor. In full satisfaction of the Allowed Class 4 General Unsecured Claims shall receive a pro rata share of the sale proceeds received by the Debtor from the sale of the Trailer Equipment after the Class 1, 2, and 3 Claims, and Administrative Expense Claims have been satisfied in full. In addition, Holders of Class 4 Claims shall receive a pro rata share of Distributions paid pursuant to the following payment schedule: * Payment #1: $1,000.00 of the Effective Date of the Plan. * Payment #2: $5,000.00 on the last day of the 12th month following the Effective Date * Payment #3: $5,000.00 on the last day of the 24th month following the Effective Date * Payment #4: $5,000.00 on the last day of the 36th month following the Effective Date. However, Debtor shall devote its Disposable Income over a 3-year period commencing on the Effective Date to be paid pro rata on an annual basis pursuant to the payment dates established for Payments 2, 3, and 4 above to the extent that its Disposable Income exceeds the value of Payment #2, Payment #3, and Payment #4. For purposes of clarity, the Debtor is devoting its Disposable Income over a 3-year period commencing on the Effective Date for distribution to Holders of Allowed Class 4 Claims but establishing a mandatory minimum payment of $5,000.00 per year to the extent that its Disposable Income does not exceed $5,000.00 in any given year of the Plan term. In addition to the annual Distributions outlined herein, Class 4 Claimholders shall also receive a pro rata share of the net proceeds recovered from all Causes of Action after payment of professional fees and costs associated with such collection efforts, and after Administrative Claims and Priority Claims are paid in full. The maximum Distribution to Class 4 Claimholders shall be equal to the total amount of all Allowed Class 4 General Unsecured Claims. Class 4 is Impaired. Class 5 consists of all equity interests in Luxury Auto Carriers, Inc. Class 5 Interest Holder shall retain his respective Interest in Luxury Auto Carriers, Inc. in the same proportion such Interest were held as of the Petition Date (i.e., 100.00% Interest retained by Roberto J. Soto Serrano). Class 5 is Unimpaired. The Plan contemplates the Debtor will continue to manage and operate its business in the ordinary course, but with restructured debt obligations. It is anticipated the Debtor's postconfirmation business will mainly involve continued operation of its auto carrier business throughout the United States, the income from which will be committed to make the Plan Payments to the extent necessary. In addition and as outlined in the Plan, Debtor anticipates selling its Trailer Equipment and expects to receive approximately $60,000.00 (gross sale proceeds) from such sales, which proceeds the Debtor will utilize for distributions to the Class 1, 2, 3, and 4 Claimholders and Administrative Claimants. Funds generated from the Debtor's operations through the Effective Date will be used for Plan Payments; however, the Debtor's cash on hand as of Confirmation will be available for payment of Administrative Expenses. A full-text copy of the Final Subchapter V Plan dated January 22, 2024 is available at https://urlcurt.com/u?l=Kusrbx from PacerMonitor.com at no charge. Counsel for Debtor: Daniel A. Velasquez, Esq. Latham, Luna, Eden & Beaudine, LLP 201 S. Orange Ave., Suite 1400 Orlando, FL 32801 Telephone: (407) 481-5800 Facsimile: (407) 481-5801 Email: dvelasquez@lathamluna.com About Luxury Auto Carriers Luxury Auto Carriers, Inc. provides automobile transport throughout the United States for auction houses and private individuals seeking to relocate their vehicles. The Debtor filed a petition under Chapter 11, Subchapter V of the Bankruptcy Code (Bankr. M.D. Fla. Case No. 23-03803) on Sept. 14, 2023, with up to $1 million in both assets and liabilities. Roberto J. Soto Serrano, shareholder, signed the petition. Judge Tiffany P. Geyer oversees the case. Daniel A, Velasquez, Esq., at Latham Luna Eden & Beaudine, LLP, represents the Debtor as legal counsel. MADISON TECHNOLOGIES: BF Borgers CPA Raises Going Concern Doubt --------------------------------------------------------------- Madison Technologies Inc. disclosed in a Form 10-K Report filed with the U.S. Securities and Exchange Commission for the fiscal year ended December 31, 2022, that BF Borgers CPA PC, the Company's independent auditor, expressed substantial doubt about the Company's ability to continue as a going concern. In the Report of Independent Registered Public Accounting Firm, BF Borgers CPA PC, said, "We have audited the accompanying consolidated balance sheets of Madison Technologies Inc. as of December 31, 2022 and 2021, the related statement of operations, stockholders' equity (deficit), and cash flows for the year then ended, and the related notes. In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2022 and 2021, and the results of its operations and its cash flows for the year then ended, in conformity with accounting principles generally accepted in the United States. The Company's significant operating losses raise substantial doubt about its ability to continue as a going concern." The Company reported a net loss decrease of $13.1 million for the year ended December 31, 2022, from $14.3 million for the year ended December 31, 2021. It had an accumulated deficit of $28.9 million as of December 31, 2022. As of December 31, 2022, the Company had $11.7 million in assets, $28.5 million in liabilities and $16.7 million in total stockholders' deficit. "Our recurring losses from operations and negative cash flows raise substantial doubt about our ability to continue as a going concern without additional capital-raising activities," the Company explained. "As a result, we have concluded that there is substantial doubt about our ability to continue as a going concern. Failure to secure additional funding may require us to modify, delay, or abandon some of our planned future expansion or development, or to otherwise enact operating cost reductions available to management, which could have a material adverse effect on our business, operating results, financial condition, and ability to achieve our intended business objectives." A full-text copy of the Form 10-K is available at http://tinyurl.com/mrsb4svf About Madison Technologies Purchase, NY-based Madison Technologies Inc. seeks to create, develop, and launch BlockchainTV, the first-to-market 24/7 television broadcast and streaming communications network designed to bring the most up-to-date cryptocurrency information and entertainment to the masses in the U.S. and around the world. MAGENTA BUYER: Eaton Vance EFR Marks $2.02MM Loan at 30% Off ------------------------------------------------------------ Eaton Vance Senior Floating-Rate Trust (EFR) has marked its $2,024,000 loan extended to Magenta Buyer, LLC., to market at $1,416,635 or 70% of the outstanding amount, as of October 31, 2023, according to a disclosure contained in EFR's Form N-CSR for the fiscal year ended October 31, 2023, filed with the U.S. Securities and Exchange Commission. EFR is a participant in a Term Loan (SOFR + 5.00%) to Magenta Buyer. The loan accrues interest at a rate of 10.645% per annum. The loan matures on July 27, 2028. EFR is a Massachusetts business trust registered under the Investment Company Act of 1940, as amended, as a diversified, closed-end management investment company. The Trust's primary investment objective is to provide a high level of current income. The Trust may, as a secondary objective, also seek the preservation of capital to the extent consistent with its primary objective. EFR can be reached at: Deidre E. Walsh Eaton Vance Senior Floating-Rate Trust Two International Place Boston, MA 02110 Magenta Buyer LLC is a provider of cybersecurity software that derives revenue from the sale of security products, subscriptions, SaaS, support and maintenance, and professional services. MAGENTA BUYER: Eaton Vance EFR Marks $575,000 Loan at 57% Off ------------------------------------------------------------- Eaton Vance Senior Floating-Rate Trust (EFR) has marked its $575,000 loan extended to Magenta Buyer, LLC., to market at $248,975 or 43% of the outstanding amount, as of October 31, 2023, according to a disclosure contained in EFR's Form N-CSR for the fiscal year ended October 31, 2023, filed with the U.S. Securities and Exchange Commission. EFR is a participant in a Second Lien Term Loan (SOFR + 8.25%) to Magenta Buyer. The loan accrues interest at a rate of 13.895% per annum. The loan matures on July 27, 2029. EFR is a Massachusetts business trust registered under the Investment Company Act of 1940, as amended, as a diversified, closed-end management investment company. The Trust's primary investment objective is to provide a high level of current income. The Trust may, as a secondary objective, also seek the preservation of capital to the extent consistent with its primary objective. EFR can be reached at: Deidre E. Walsh Eaton Vance Senior Floating-Rate Trust Two International Place Boston, MA 02110 Magenta Buyer LLC is a provider of cybersecurity software that derives revenue from the sale of security products, subscriptions, SaaS, support and maintenance, and professional services. MATCON CONSTRUCTION: Defoor Says Disclosure Inadequate ------------------------------------------------------ Defoor Front Beach, LLC, objects to Matcon Construction Services, Inc's, First Amended Disclosure Statement filed by Matcon Construction Services, Inc. and confirmation of Matcon Construction Services, Inc's, Derek Mateos and Marynes Mateos First Amended Joint Plan of Reorganization filed by Matcon and Derek Mateos and Marynes Mateos (together the "Mateos") (Matcon and Mateos together are the "Debtors"). On Dec. 6, 2023, the Court entered its Order conditionally approved the Joint Disclosure Statement and scheduled a non-evidentiary hearing to consider confirmation of the Joint Plan and final approval of the Disclosure Statement. The Disclosure Statement Order also established various dates and deadlines for parties in interest to file ballots for accepting or rejecting the Plan, objections to confirmation, objections to final approval of the Disclosure Statement, and applications for allowance of administrative expenses. On Dec. 20, 2023, Debtor filed the Amended Motion For Prospective Relief from Stay detailing defaults under the AIA Contract that give Defoor grounds to terminate and for other relief, and seeking relief from the automatic stay to do so. On January 11, 2024, the Debtor filed its Motion to Assume Contract With Defoor Front Beach, LLC. Defoor Front Beach points out that the Joint Plan and Disclosure Statement do not contain adequate information with respect to the assumption and potential rejection of executory contacts, including how Matcon intends to assume the contract and/or cure any default and fails to account for claims of Defoor and various subcontractors. Specifically, the Assumption Motion contends there is no cure amount and does not provide adequate assurances of cure despite the defaults detailed in the Termination Motion. Further, Defoor notes that the Debtor's plan makes unrealistic assumptions about the Debtor's projected post-confirmation income, specifically with money earned on the Defoor Project as the numerous defaults, delays, and refusal to continue work will significantly reduce the amount Defoor may owe the Debtor and could be significant enough that Defoor has claims against the Debtor. Counsel of Defoor Front Beach, LLC: David S. Jennis, Esq. Michael A. Stavros, Esq. JENNIS MORSE 606 East Madison St. Tampa, FL 33602 Tel: (813) 229-2800 E-mail: djennis@jennislaw.com mstavros@jennislaw.com ecf@jennislaw.com About Matcon Construction Services Matcon Construction Services, Inc., provides general contracting, solar solutions and development Services. The Debtor sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. M.D. Fla. Case No. 23-00215) on Jan. 20, 2023. In the petition signed by Derek Mateos, president, the Debtor disclosed up to $10 million in assets and up to $50 million in liabilities. Judge Roberta A. Colton oversees the case. Scott Underwood, Esq., at Underwood Murray, P.A., is the Debtor's counsel. MOAB BREWERS: Case Summary & 20 Largest Unsecured Creditors ----------------------------------------------------------- Debtor: Moab Brewers, LLC 7150 E Camelback Rd Ste 230 Scottsdale, AZ 85251 Business Description: The Debtor operates a beverage manufacturing business. Chapter 11 Petition Date: January 26, 2024 Court: United States Bankruptcy Court District of Arizona Case No.: 24-00635 Debtor's Counsel: Christopher C. Simpson, Esq. OSBORN MALEDON, P.A. 2929 N. Central Avenue Suite 2100 Phoenix, AZ 85012 Tel: 602-640-9349 Fax: 602-640-9050 E-mail: csimpson@omlaw.com Estimated Assets: $500,000 to $1 million Estimated Liabilities: $1 million to $10 million The petition was signed by George Cole Jackson as authorized signatory. 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/XFDJL7A/Moab_Brewers_LLC__azbke-24-00635__0001.0.pdf?mcid=tGE4TAMA NAI ENTERTAINMENT: Moody's Cuts CFR to Caa1 & Alters Outlook to Neg ------------------------------------------------------------------- Moody's Investors Service downgraded NAI Entertainment Holdings LLC's ("NAIEH" or the "company") Corporate Family Rating to Caa1 from B3, Probability of Default Rating to Caa2-PD from B3-PD and $231.4 million outstanding senior secured term loan B facility (maturing May 2025) rating to Caa1 from B3. The two-notch downgrade on the PDR reflects a heightened risk of default on the term loan whereas the one-notch downgrade for the CFR reflects the term loan's collateralization. The outlook was revised to negative from stable. RATINGS RATIONALE The ratings downgrade reflects governance risk associated with NAIEH's elevated financial leverage, estimated around 10x total debt to EBITDA at FYE 2023, and Moody's expectation that leverage will rise to the 10x-13x region over the near-term amid a weak movie slate in 2024 associated with the double Hollywood strikes last year. Moody's expects this year's wide releases to be lower, resulting in reduced box office receipts near $8 billion compared to $9 billion last year. Leverage will likely revert close to the 11x area by year end 2025 in connection with a return to higher wide release volumes and rising EBITDA (all metrics are Moody's adjusted, including Paramount dividend income). Moody's also expects NAIEH will continue generating negative free cash flow (FCF) this year, an additional factor in the downgrade. The company will likely rely on continued asset sales and additional equity sales of redeemable preferred stock at the parent, National Amusements, Inc. ("NAI") to offset operating losses and make principal payments on the term loan B. Through September of last year, NAI privately sold redeemable preferred stock plus warrants giving holders the right to purchase roughly 4.2 million shares of Paramount Global ("Paramount") stock in exchange for net cash proceeds totaling $145.8 million, which were used to pay off NAIEH's incremental term loan, pay down NAI's revolver and enhance liquidity. The negative outlook reflects the risk of a balance sheet restructuring, going concern qualification as well as an event of default under NAIEH's amended credit agreement, associated with: (i) uncertainty surrounding NAIEH's ability to satisfy the financial covenant requiring the value of its owned Paramount shares relative to the term loan's outstanding principal less cash to be at least 1.5x, calculated on the preceding 20-day average (i.e., Minimum Collateral Coverage ratio) as of February 23, 2024, given the stock price's recent declines and increased volatility; however NAI has the ability to cure a breach of the Minimum Collateral Coverage ratio test by March 1, 2024 via an infusion of cash into NAIEH or Paramount stock as additional collateral for the term loan; and (ii) a likely change of control at NAI. Last September, NAIEH restructured the term loan via an amendment and waiver to the credit agreement, which effectively reduced the debt quantum to $231.4 million from $257.5 million. The amendment also resulted in a higher total annual interest rate (paid monthly), which included a payment-in-kind (PIK) structure at a 2.5% rate on the term loan's outstanding principal (approximately $5.8 million/annum). The PIK accrual will decline once NAIEH makes a mandatory amortization payment of approximately $40.5 million on March 1, 2024, a new requirement imposed by the amendment. Even with the expected principal reduction following the March payment, higher leverage will result from diminished EBITDA because of lower wide release volumes, as well as the reduction in NAIEH's annual dividend income to $4.6 million from $22.3 million earned on its 23.2 million owned Paramount shares. In May 2023, Paramount cut its quarterly dividend per share to 5 cents from 24 cents. As the term loan's May 2025 maturity approaches, there is growing risk of a further restructuring in view of the company's untenable debt capital structure underscored by 2024's softer movie release schedule and Moody's expectation that NAIEH's leverage will increase, FCF will remain negative and liquidity will be weak. NAIEH's Caa1 CFR reflects the company's small scale, elevated leverage and weak liquidity. The rating also considers the company's sluggish rebound in operating and financial performance, which suffered from pandemic-induced revenue and operating losses in 2020 and 2021 when theatres were closed or not fully operational. The cinema industry's delayed recovery and structural challenges are also captured in NAIEH's ratings, which include: (i) excess screen capacity in North America; (ii) comparatively lower moviegoer demand as studios release some films online via streaming platforms (simultaneously or exclusively) or potentially release them downstream in a shortened theatrical window; (iii) lower theatrical release volumes relative to historical levels due to short-term production bottlenecks; (iv) reduced show times compared to pre-pandemic periods; and (v) the impact from some cost-conscious consumers reducing their out-of-home entertainment and number of trips to the cinema amid affordable subscription-based video-on-demand (VOD) movie viewing. The rating considers NAIEH's collateralization of the term loan provided by its owned Paramount stock (i.e., 16 million pledged shares and 7.2 million unpledged shares held as collateral in a special purpose vehicle (SPV)). However, the shares have experienced significant market declines in recent periods due to Paramount's operating challenges and dividend cut, reducing the collateral cushion. Longer-term, Moody's expects NAIEH will experience modest profit improvement (albeit irregular) driven by growing moviegoer attendance, higher revenue per patron, an appealing number of theatrical releases and alternative content, and Moody's view that the big studios will adhere to the 45-day theatrical window for major film releases. Exhibitors like NAIEH also benefit from favorable ticket prices that on average remain relatively inexpensive compared to the cost of other forms of out-of-home entertainment. Moody's expects NAIEH will maintain weak liquidity over the coming 12-18 months, driven principally by negative FCF and modest cash balances (at September 28, 2023 unrestricted cash totaled $41.3 million at NAI, of which $26.3 million was at NAIEH). At LTM September 28, 2023, FCF was -$20.2 million, equivalent to -4.8% of total debt (Moody's adjusted). Moody's forecasts negative FCF in the range of -$30 million to -$40 million in 2024 and expects further non-core asset sales and equity issuances to boost liquidity. Following the term loan's restructuring, the credit agreement amendment and waiver imposed new terms and covenants, including an amortization payment on March 1, 2024 (equivalent to 17.5% of the outstanding principal as of that date, estimated to be around $40.5 million). Additional major terms/covenants include: (i) more collateral in the form of unpledged equity in foreign subsidiaries and 7.2 million unpledged Paramount shares that were placed in a newly-formed SPV; (ii) a 2% interest rate step-up if NAIEH fails to maintain the required Minimum Collateral Coverage of 1.5x (tested monthly); (iii) a Minimum Collateral Value covenant whereby if the collateral coverage ratio on March 1, 2024 is less than 1.5x, calculated on the preceding 20-day average, the company must contribute the lesser of cash or Paramount stock to meet the 1.5x test on the remaining outstanding commitments under the credit agreement. The collateral calculation takes into account the pledged shares plus the SPV shares (totaling 23.2 million shares) and is based on a net debt computation; and (iv) 100% of asset sales proceeds must be applied to reduce the term loan's principal balance within five business days of receipt. Principal payments from asset sales occurring on or after March 1, 2024 will be reduced dollar-for-dollar by the 17.5% principal payment made on March 1, 2024. ESG CONSIDERATIONS NAIEH's ESG Credit Impact Score is CIS-5, chiefly driven by governance risks. CIS-5 indicates that the rating is lower than it would have been if ESG risk exposures did not exist and that the negative impact is more pronounced than for issuers scored CIS-4. Governance risks, as denoted by the G-5 governance score, include the aggressive financial strategy that has resulted in a highly leveraged balance sheet, negative free cash flows, weak liquidity, a going concern qualification and the recent debt restructuring. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS Ratings could be upgraded if NAIEH experiences positive growth in box office attendance, stable-to-improving market share, expanding EBITDA with margins approaching pre-pandemic levels and enhanced liquidity; and exhibits prudent financial policies that translate into an improved credit profile. An upgrade would also be considered if financial leverage as measured by total debt to EBITDA approaches 8x (Moody's adjusted, including Paramount dividend income) and free cash flow as a percentage of total debt improves to the -1% to +1% range (Moody's adjusted). Ratings could be downgraded if there was: (i) a deterioration of the company's liquidity or an inability to access additional sources of liquidity to cover cash outlays; (ii) poor execution on reducing or managing operating expenses; or (iii) Moody's expects total debt to EBITDA will remain above 10x (Moody's adjusted, including Paramount dividend income) or free cash flow will remain negative on a sustained basis. Ratings could also be downgraded if the term loan's collateral coverage ratio from pledged and SPV Paramount shares falls below 1.0x or Moody's expects NAIEH will pursue a balance sheet restructuring. Headquartered in Norwood, Massachusetts, NAI Entertainment Holdings LLC is a wholly-owned subsidiary of National Amusements, Inc., a private media holding company 100% owned and controlled by the Redstone family, and operates a significant proportion of NAI's cinema assets through its 71 theatres and 770 screens across a global footprint with 18 theatres in the US and 53 theatres overseas (17 in the UK and 36 in Latin America). Revenue totaled approximately $338 million for the twelve months ended September 28, 2023. The principal methodology used in these ratings was Business and Consumer Services published in November 2021. NANOSTRING TECHNOLOGIES: Execs Awarded Retention Bonuses -------------------------------------------------------- NanoString Technologies, Inc. disclosed in a Form 8-K Report filed with the U.S. Securities and Exchange Commission that the Compensation and Human Capital Committee of the Company, awarded retention bonuses, payable on or prior to February 2, 2024, to each of R. Bradley Gray (Chief Executive Officer, $2,565,000 retention bonus), K. Thomas Bailey (Chief Financial Officer, $1,250,000 retention bonus), and Joseph M. Beechem (Chief Scientific Officer and Senior Vice President, Research and Development, $835,000 retention bonus) pursuant to the terms and conditions of retention bonus letters. Under the Retention Bonus Agreement, each executive will be required to repay the after-tax amount of the retention bonus to the Company in the event that such executive's employment terminates for any reason other than a "qualifying termination" (as defined in the Retention Bonus Agreement) prior to the earlier of (x) December 31, 2024 and (y) a "change in control" of the Company (as defined in the Retention Bonus Agreement). On January 25, 2024, the Committee approved the payment of a 2023 annual bonus to Joseph M. Beechem (Chief Scientific Officer and Senior Vice President, Research and Development), in the amount of $136,600. This bonus will be paid on or before February 2, 2024. R. Bradley Gray (Chief Executive Officer) and K. Thomas Bailey (Chief Financial Officer) voluntarily forfeited their participation in the 2023 annual bonus program and will not receive 2023 bonuses. Additionally, the Company adopted changes to its Outside Director Compensation Policy with effect for the 2024 calendar year to eliminate annual equity awards and to instead pay each non-employee director an annual cash retainer in the amount of $225,000, which is equal to the annual value of the eliminated equity awards. Fifty percent (50%) of this cash retainer will be paid on or before February 2, 2024 and 50% will be paid in March 2024. Regular board and committee retainer fee amounts remain unchanged and will be paid quarterly in advance. About NanoString Seattle, WA-based NanoString Technologies, Inc. offers an ecosystem of innovative discovery and translational research solutions and empowers its customers to map the universe of biology. As of September 30, 2023, the Company has $274,713,000 in total assets and $325,279,000 in total liabilities. In its recent report on Form 8-K dated January 19, 2024, the Company expressed that there is substantial doubt about its ability to continue as a going concern due to its lack of profitable operations or positive cash flows from operations, and difficulties in estimating future liquidity requirements due to uncertainty regarding final rulings related to the November 17, 2023 jury verdict entered in favor of plaintiffs in the case styled 10x Genomics, Inc. et al v. NanoString Technologies, Inc., No. 21-CV-653-MFK. NANOSTRING TECHNOLOGIES: Legal Challenges Raise Going Concern Doubt ------------------------------------------------------------------- NanoString Technologies, Inc. disclosed in a Form 8-K Report filed with the U.S. Securities and Exchange Commission that, among other things, there is substantial doubt about its ability to continue as a going concern, due to a lack of profitable operations or positive cash flows from operations, and difficulties in estimating future liquidity requirements, due to uncertainty regarding final rulings related to the November 2023 verdict. The Company, on November 17, 2023, after a trial in the U.S. District Court for the District of Delaware in the matter of 10x Genomics, Inc. et al v. NanoString Technologies, Inc., No. 21-CV-653-MFK, a jury verdict was entered in favor of plaintiffs, 10x Genomics, Inc. and Prognosys Biosciences, Inc. (the "Plaintiffs"). "This verdict has created uncertainty regarding our financial condition and prospects and negatively impacted our ability to raise additional capital. We are continuing to evaluate the impact of the verdict on our business, results of operations, and financial condition," the Company said. Subsequent to the November 2023 verdict, the Company began actively exploring strategic, financial, and restructuring alternatives together with its financial and legal advisors. The Company currently has no commitments to undertake any specific transaction, and there can be no assurance that it will be able to complete additional or alternative financings or execute any business development or restructuring transactions or other strategic alternatives, and some of these initiatives may be more successfully implemented and achieved through a court-supervised reorganization process. "We are engaged in discussions with the holders of our 6.95% Senior Secured Notes due 2026 regarding the prospect of additional debt financing as well as possible modifications to, and relief from, certain covenants in the indenture governing the 2026 Notes. We received from the holders of the 2026 Notes notices of Events of Default (as such term is defined in the 2026 Notes Indenture) and reservations of rights under the 2026 Notes Indenture. These notices state that one or more Events of Default have occurred and are continuing, including with respect to a failure to enter into control agreements with respect to our Controlled Accounts (as such term is defined in the 2026 Notes Indenture). Under the terms of the 2026 Notes Indenture, at any time that an Event of Default has occurred and is continuing certain holders of the Notes or the Trustee may (i) cause the debt owed thereunder to become immediately due or payable and/or (ii) acting through a trustee, exercise remedies with respect to the collateral securing our obligations under the 2026 Notes Indenture, which collateral consists of substantially all of the property and assets of the Company and its subsidiaries. To date, no notice of acceleration has been given and no remedies have been taken" the Company said. "Since inception, we have not achieved profitable operations or positive cash flows from operations. It is currently difficult to estimate future liquidity requirements, due to uncertainty regarding final rulings related to the November 2023 verdict, including potential damages that may be awarded to the Plaintiffs, and additional pending intellectual property litigation. As a result, substantial doubt exists about our ability to continue as a going concern. While the November 2023 verdict does not currently prevent us from continuing to sell GeoMx products anywhere in the world, the verdict or any future attempts by the Plaintiffs to obtain injunctive relief may negatively impact future product sales. As a result of the verdict and pending litigation and the impact or potential impact on our revenue trajectory and cash resources, we may be unable to generate sufficient cash flows to meet our capital needs and financial obligations, including debt service, liquidity covenants and other obligations due to third parties. Our ability to raise additional capital is also constrained given the uncertainty about our financial condition and prospects" the Company further said. About NanoString Seattle, WA-based NanoString Technologies, Inc. offers an ecosystem of innovative discovery and translational research solutions and empowers its customers to map the universe of biology. As of September 30, 2023, the Company had $274,713,000 in total assets and $325,279,000 in total liabilities. NEURAGENEX TREATMENT: Case Summary & 20 Top Unsecured Creditors --------------------------------------------------------------- Debtor: Neuragenex Treatment Centers, LLC 4140 E. Baseline Rd, Ste 101 Mesa, AZ 85206 Business Description: Neuragenex was founded as a next generation chronic pain management program, offering a better way to manage chronic pain that not only relieves pain, but improves health and results in an enhanced and magnified quality of life. Neuragenex is a non- pharmaceutical, non-surgical, non-invasive, and non-chiropractic pain treatment program. Chapter 11 Petition Date: January 26, 2024 Court: United States Bankruptcy Court District of Arizona Case No.: 24-00631 Debtor's Counsel: Christopher R. Kaup, Esq. TIFFANY & BOSCO, P.A. 2525 E. Camelback Road, Suite 700 Phoenix, AZ 85016 Tel: (602) 255-6000 Fax: (602) 255-0103 Email: crk@tblaw.com Total Assets: $18,097,382 Total Liabilities: $50,799,562 The petition was signed by William Bozeman as manager. A full-text copy of the petition is available for free at PacerMonitor.com at: https://www.pacermonitor.com/view/FQLOELQ/NEURAGENEX_TREATMENT_CENTERS_LLC__azbke-24-00631__0001.0.pdf?mcid=tGE4TAMA List of Debtor's 20 Largest Unsecured Creditors: 1. American Solutions $31,253 For Business 31 E Minnesota Ave Glenwood, MN 56334 2. BDO $103,046 PO Box 642743 Pittsburgh, PA 15264-2743 3. Blueprint Naturopathic Wellness $44,630 2434 Caminito Ocean Cove Encinitas, CA 92007 4. Capital One Spark Business $127,209 PO Box 60519 City of Industry, CA 91716-0519 5. CureMD $51,530 80 Pine Street FL 21 New York, NY 10005-1742 6. Executive Cleaning Services $42,633 460 New York Avenue Huntington, NY 11743 7. First Insurance Funding $81,998 450 Skokie Blvd, Ste 100 Northbrook, IL 60062 8. Merritt Hawkins $405,000 12400 High Bluff Drive San Diego, CA 92130 9. i3 Ignite $28,500 1135 South Saint Paul Street Denver, CO 80210 10. Lab Corp $29,751 PO Box 12140 Burlington, NC 27216-2140 11. McGuff Company Inc $40,930 3524 West Lake Center Drive #B Santa Ana, CA 92704 12. McKesson Medical Surgical $2,105,013 PO Box 51020 Los Angeles, CA 90051-5320 13. Medix Staffing $47,890 Solutions LLC 222 S. Riverside Plaza Suite 2120 Chicago, IL 60606 14. Michael Best & Friedrich LLP $25,968 Box 88462 Milwaukee, WI 53288-0462 15. Novo Health Technolgoy $501,063 691 South Green Bay Road #168 Neenah, WI 54956 16. Paradox Marketing $37,350 7603 Southern Brook Bend Apt 202 Tampa, FL 33635 17. Quintessence Health $114,479 16192 Coastal Highway Lewes, DE 19958 18. RWDI Maplewood $35,576 32932 Pacific Coast Highway Dana Point, CA 92629 19. Staples $70,288 PO Box 660409 Dallas, TX 75266-0409 20. Vital Signs Physician Resources $30,830 PO Box 1114 Joshua, TX 76058 NEW WAVE PROPERTY: Court OKs Cash Collateral Access on Final Basis ------------------------------------------------------------------ The U.S. Bankruptcy Court for the Southern District of Indiana, Indianapolis Division, authorized New Wave Property Service, LLC to use cash collateral on a final basis, in accordance with its agreement with Huntington National Bank and the budget, with a 10% variance, through confirmation of a plan in the case. The Huntington National Bank is the only secured creditor that may have a valid and enforceable lien on cash collateral. The Debtor is obligated to Huntington pursuant to four secured loans which currently have outstanding balances of approximately $731,462, $349,500, $170,371, and $352,678; however, it is worth noting these balances are likely slightly higher, as the Debtor does not have updated payoffs through the Petition Date. The Huntington Loans appeared to be validly secured and appear to be prior to any other security interest in any cash collateral. As adequate protection, Huntington will receive monthly payments in the amount of $24,112. The first adequate protection payment will be made on or before January 26, 2024 and each adequate protection payment thereafter will be due and payable on or before the fifth day of each successive month. Huntington is also granted firs and prior replacement liens on cash collateral to the same extent and priority as Huntington enjoyed prior to the Petition Date and operating under the budget. The use of cash collateral will be terminated by the: (i) conversion or dismissal of the case; (ii) removal of the debtor-in-possession pursuant to 11 U.S.C. Section 1185; (iii) granting of relief from stay to Huntington; or (iv) the entry of an order restricting or prohibiting further use of cash collateral. A copy of the order is available at https://urlcurt.com/u?l=iO0TKH from PacerMonitor.com. About New Wave Property Service, LLC New Wave Property Service, LLC is a family-owned-and-operated lawn care company offering lawn care, tree, and irrigation services. The Debtor sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. S.D. Ind. Case No. 23-05800) on December 29, 2023. In the petition signed by Jeremy Ryan, authorized representative, the Debtor disclosed $1,277,607 in assets and $3,781,668 in liabilities. Judge James M. Carr oversees the case. Jeffrey Hester, Esq., at HESTER BAKER KREBS LLC, represents the Debtor as legal counsel. NGL ENERGY: Fitch Assigns 'B' LongTerm IDR, Outlook Stable ---------------------------------------------------------- Fitch Ratings has assigned NGL Energy Partners LP (NGL) and NGL Energy Operating LLC (Operating) 'B' Long-Term Issuer Default Ratings (IDR). The Rating Outlook is Stable. In addition, Fitch has assigned a 'BB-'/'RR2' rating to Operating's proposed senior secured term loan B, and 'BB'/'RR1' rating for the senior secured ABL facility. Additionally, Fitch has assigned the senior secured notes, which are co-issued by Operating and NGL Energy Finance Corp (Finance), a 'BB-'/'RR2' rating, and the senior unsecured notes co-issued by NGL and Finance a 'CCC+'/'RR6' rating. The ratings are based on NGL's focus on debt reduction and the liquidity improvement that will occur upon the closing of the senior secured term loan. The rating also reflects NGL's plan to end the arrearage on the preferred units with cash payments. Fitch has reviewed preliminary terms for the proposed term loan and assumed debt issuance in the near term to refinance the outstanding secured and unsecured notes. The assigned ratings assume no material variations in the final terms. KEY RATING DRIVERS Capital Structure: NGL's capital structure is comprised of sizeable cumulative high-coupon preferred units, including class D, which features an investor put option effective in FY 2028. Fitch views the complex capital structure as a credit negative due to its potential impact on the partnership's financial health and investment strategies. Fitch expects the proposed term loan B to lower the financial burden by allowing NGL to address the preferreds arrearages currently accruing at high interest rates, and to accelerate NGL's efforts in addressing the potential liquidity overhang caused by the class D preferred units in the medium term. Sustained Focus on Delevering: Management employed credit supportive measures in recent years, including operating costs control, capex reduction and dividends suspension. In addition, NGL continues to sell non-core assets and use the proceeds to accelerate debt reduction. The company has achieved positive cash flow since FY 2022, and Fitch anticipates sustained positive FCF over the forecast period. Fitch anticipates that NGL remains dedicated in improving the balance sheet. Fitch calculates leverage of around 6.0x as of FYE March 31, 2023, and forecasts a decline to approximately 5.8x post the refinancing transaction by FYE March 31, 2024. Fitch anticipates leverage to further drop below 5.5x in the medium term. Management expects the leverage to be at approximately 4.5x by FYE 2024. Fitch's leverage calculation differs from management's, as Fitch includes the following in its calculation: i) 50% of class B and class C preferred units (including accumulated unpaid distribution); ii) the entirety of class D preferred units; and iii) (including accumulated unpaid distributions of the class D preferred units) in the debt balance. The different treatment of the preferred units resulted in an approximately $935 million higher debt balance at FYE 2023 compared to management calculations. Volumetric Risks and Customer Profile: Approximately 70% of NGL's businesses are fee-based with over 33% pipeline contracts containing minimum volume commitments (MVCs). Over 90% of NGL's water pipeline volumes are contracted with acreage dedication and a weighted average remaining tenor of approximately nine years. The partnership's businesses are largely tied to the crude oil production activities and subject to volumetric risk. NGL benefits from its strategic location in the highly economic Permian Basin, where the partnership derives close to 90% of its water volumes. Fitch anticipates the growth in Permian will sustain in the near to mid-term, albeit at a slower pace. Another mitigating factor to the volumetric risk is NGL's diversified customer base, which includes a high percentage of public and investment grade companies. Approximately 77% of NGL's Water Solutions revenues are generated by investment grade counterparties. Additionally, compared to the private producers, the partnership's publicly traded producer customers tend to remain more disciplined in production when facing headwinds of declining commodity prices. Commodity Price Exposure: NGL sells the skim oil recovered from the water volumes, and the margin is directly exposed to the commodity price volatility. Skim oil contributes approximately 20% of revenues to the Water Solutions segment in FYE 2023. The Crude Logistics and Liquids segments contributed over 20% of NGL's FYE 2023 EBITDA, and was mainly from activities that vary on the relationships between two prices for a commodity or commodities. The spreads can relate to location or time. The partnership leverages back-to-back contracts and financial derivatives to fully hedge the exposure in these two segments. Size and Scale: With EBITDA generation of over $500 million, NGL is larger than many single B midstream issuers rated by Fitch and with footprints in multiple basins. Fitch views size and geographic diversification credit positive factors, as they mitigate the cash flow volatilities typical for gathering and processing focused pipeline companies. Fitch expects an increased stability in NGL's cash flow as the partnership continues to grow its predominantly fee-based Water Solutions business and adding MVCs to the contracts. DERIVATION SUMMARY WaterBridge Midstream Operating LLC (WATOPE; B/Stable) is a midstream company solely focused on water solutions and operates predominantly in the Southern Delaware region of Permian Basin. It is much smaller in size (around $200 million of EBITDA generated at the end of 2022) and less diversified in terms of footprints and business lines. WATOPE has higher volumetric risk with an immaterial MVCs compared to NGL which has over one third of its contracts supported by MVCs. However, WATOPE has limited commodity price exposure whereas NGL's exposure is approximately 30%. WATOPE's leverage is forecast to decline below into the lower 6x range by YE 2023. Fitch anticipates that NGL's leverage will be approximately 2-3 ticks lower during the same period after the proposed term loan B offering. NGL has the same IDR as WATOPE, as they have similar business and financial risks. NGL's larger size and lower volumetric risks are offset by its higher commodity price exposure and execution risk in the Crude and Liquids segments. NGL's slightly lower leverage is offset by the potentially higher medium-term liquidity overhang posed by the class D preferred units. KEY ASSUMPTIONS - Fitch Oil and Gas Price Deck: WTI (USD/bbl) - $75 in calendar year 2024, $65 in 2025, and $60 in 2026; - Base interest rates reflect Fitch Global Economic Outlook, e.g., 4.75% for calendar year 2024, and 3.50% for 2025; - Mid-single digit growth for Water Solutions business in FY 2024; - Capital spending largely in line with management expectations; - Asset sales of $150 million in FY 2024; - Proactive financing to repay $280 million 2025 unsecured notes, $2.05 billion 2026 secured notes and $320 million 2026 unsecured notes. RECOVERY ANALYSIS The recovery analysis assumes that NGL would be considered a going-concern in bankruptcy and that the partnership would be reorganized rather than liquidated. Fitch has assumed a 10% administrative claim (standard). The going-concern EBITDA estimate of approximately $500 million represents a ~24% discount to FY 2023 EBITDA. It reflects Fitch's view of a mid-cycle estimate of sustainable EBITDA level post default and bankruptcy emergence. This level assumes an EBITDA run rate of approximately $500 million, slightly higher than the post pandemic EBITDA when the last significant oil price decline happened, reflecting the increasing contribution from fee-based revenues since then. Fitch used a 6x EBITDA multiple to arrive at NGL's going-concern enterprise value. The multiple reflects the recent reorganization multiples of 6x in the energy sector. There have been a limited number of bankruptcies and reorganizations within the midstream space but in the limited sample such as bankruptcies of Azure Midstream and Southcross Holdco, the reorganization multiples were between 5x and 7x by Fitch's best estimates. In Fitch's recent bankruptcy case study report "Energy, Power and Commodities Bankruptcies Enterprise Value and Creditor Recoveries," published in September 2023, the median enterprise valuation exit multiplies for 51 energy cases for which this was available was 5.3x, with a wide range of multiples observed. RATING SENSITIVITIES Factors that could, individually or collectively, lead to positive rating action/upgrade - EBITDA leverage sustained below 5.5x; Factors that could, individually or collectively, lead to negative rating action/downgrade - Inability to proactively improve liquidity profile; - EBITDA Leverage is expected to sustain above 6.5x; - EBITDA interest coverage is expected to sustain below 2.0x. LIQUIDITY AND DEBT STRUCTURE Liquidity Satisfactory: As of Sept. 30, 2023, NGL had approximately $446.7 million of liquidity consisting of $2.7 million cash on the balance sheet and approximately $444 million undrawn capacity in the ABL. The ABL is subject to a borrowing base. The commitments under the ABL totaled $600 million and the sub-limit for letter of credit was $250 million. NGL is currently extending the ABL for another five years. The cash flow in NGL's Liquids Logistics segment is highly seasonal. The cash needs are high when the partnership builds inventory for its marketing businesses in the non-winter seasons. Fitch believes NGL will be able to fund its operation needs through cash in hand and capacity of the ABL through the forecast period. Fitch believes the partnership will be able to comply with the ABL financial covenants in the forecast period. Upon the occurrence and during the continuance of a Cash Dominion Event (as defined in the ABL agreement), the company shall not permit the Fixed Charge Coverage Ratio to be less than 1.0x. At Sept. 30, 2023, no Cash Dominion Event had occurred. The ABL features a springing maturity of 91 days prior to the earliest maturity date in respect to any of NGL's indebtedness in an aggregate principal amount of $50 million or greater, if such indebtedness is outstanding at such time. The ABL can mature as early as Nov. 31, 2024 (based on 2025 unsecured notes maturity) or Nov. 2, 2025 (based on 2026 secured notes maturity). The partnership's next maturity is approximately $280 million 2025 unsecured notes due on March 1, 2025. The subsequent maturity after 2025 notes is the $2.05 billion senior secured notes due on Feb. 1, 2026 and approximately $320 million unsecured notes due on April 15, 2026. Fitch assumes prompt debt issuance (which may be supplemented by application of FCF or asset divestiture proceeds to fully repay the 2026 secured notes, 2025 unsecured notes and the 2026 unsecured notes. In the medium term, the company faces potential liquidity overhang triggered by the put option embedded in the series D preferreds units on and after July 2, 2027. ISSUER PROFILE NGL Energy Partners LP (NGL) is a publicly traded MLP headquartered in Tulsa, Oklahoma. The partnership provides services in waste water disposal, crude oil storage and transportation, as well as marketing of crude oil, natural gas liquids and refined product. Its assets are primarily located in Northern Delaware basin and DJ Basin. ESG CONSIDERATIONS NGL has an ESG Relevance Score of '4' for the Governance component of ESG, and the score is '4' because of the board seat by Class D preferred units investors. This has a negative impact on the credit profile and is relevant to the rating in conjunction with other factors. The highest level of ESG credit relevance is a score of '3', unless otherwise disclosed in this section. A score of '3' means ESG issues are credit-neutral or have only a minimal credit impact on the entity, either due to their nature or the way in which they are being managed by the entity. Fitch's ESG Relevance Scores are not inputs in the rating process; they are an observation on the relevance and materiality of ESG factors in the rating decision. Entity/Debt Rating Recovery Prior ----------- ------ -------- ----- NGL Energy Partners LP LT IDR B New Rating WD senior unsecured LT CCC+ New Rating RR6 NGL Energy Finance Corp. senior unsecured LT CCC+ New Rating RR6 senior secured LT BB- New Rating RR2 NGL Energy Operating LLC LT IDR B New Rating senior secured LT BB- New Rating RR2 senior secured LT BB New Rating RR1 senior secured LT BB- New Rating RR2 NID HOME SOLUTIONS: Court Approves Disclosure Statement ------------------------------------------------------- Judge Barbara Ellis-Monro has entered an order approving the Disclosure Statement of NID Home Solutions, LLC. Feb. 19, 2024, is fixed as the last day for holders of claims and interest to file written Ballots with acceptances or rejections of the Plan. Feb. 19, 2024, is fixed as the last day for filing and serving written objections to confirmation of the Plan pursuant to Federal Rule of Bankruptcy Procedure 3020(b)(1). The Court will hold a hearing on Confirmation of the Plan, as may be amended, at 11:00 a.m. on Tuesday, Mar. 5, 2024 in Courtroom 1402, 75 Ted Turner Drive, SW, Atlanta, GA 30303, which may be attended in person or via the Court's Virtual Hearing Room. About NID Home Solutions NID Home Solutions, LLC, is a Georgia limited liability company formed in 2016 and is a hundred percent owned by Craig Dixon. The Debtor filed its voluntary petition for relief under Chapter 11 of the U.S. Bankruptcy Code (Bankr. N.D. Ga. Case No. 22-55915) on Aug. 1, 2022, with as much as $1 million in both assets and liabilities. Craig Dixon, manager, signed the petition. Judge Barbara Ellis-Monro oversees the case. Rountree Leitman Klein & Geer, LLC and Abundant Tax Returns serve as the Debtor's legal counsel and accountant, respectively. NOBLE'S SONG: Voluntary Chapter 11 Case Summary ----------------------------------------------- Debtor: Noble's Song, LLC 14532 S. Solomons Island Rd Solomons MD 20688 Business Description: The Debtor is primarily engaged in acting as lessors of buildings used as residences or dwellings, primarily engaged in renting and leasing real estate properties. Chapter 11 Petition Date: January 26, 2024 Court: United States Bankruptcy Court District of Maryland Case No.: 24-10692 Debtor's Counsel: John D. Burns, Esq. THE BURNS LAW FIRM, LLC 6305 Ivy Lane, Ste. 340 Greenbelt, MD 20770 Tel: 301-441-8780 Email: jburns@burnsbankruptcyfirm.com Estimated Assets: $1 million to $10 million Estimated Liabilities: $500,000 to $1 million The petition was signed by Deborah A. Steffen 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/Q3ZU2FA/Nobles_Song_LLC__mdbke-24-10692__0001.0.pdf?mcid=tGE4TAMA NOGIN INC: Thread Collective Steps Down as Committee Member ----------------------------------------------------------- The U.S. Trustee for Region 3 disclosed in a court filing that Thread Collective, Inc. resigned from the official committee of unsecured creditors in the Chapter 11 cases of Nogin, Inc. and its affiliates. The remaining members of the committee are: 1. Justice Brand Holdings, LLC c/o BlueStar Alliance LLC Attn: Joseph S. Sutton, Esq. 240 Madison Ave., 15th Floor New York, NY 10016 Phone: 212-290-1370 Email: jsutton@bluestarall.com 2. Cordial Experience, Inc. Attn: Terry Schmid 701 B ST., Suite 1000 San Diego, CA 92101 Phone: 408-348-8742 Email: tschmid@cordial.com About Nogin Inc. Nogin, Inc., provides enterprise-class ecommerce technology and services for consumer products through its Intelligent Commerce technology, a cloud-based ecommerce environment purpose-built for brands selling direct-to-consumer (D2C) and business-to-business (B2B). Nogin and its affiliates filed Chapter 11 petitions (Bankr. D. Del. Lead Case No. 23-11945) on Dec. 5, 2023. In the petition signed by its chief restructuring officer, Vladimir Kasparov, Nogin reported $47,263,000 in assets and $142,815,000 in liabilities. Judge Craig T. Goldblatt oversees the cases. The Debtors tapped Daniel J. DeFransceschi, Esq., at Richards, Layton & Finger, P.A. as legal counsel; Livingstone Partners, LLC as investment banker; and Triple P RTS, LLC as restructuring advisor. Vladimir A. Kasparov and Robin Chiu of Triple P RTS serve as the Debtors' chief restructuring officer and deputy chief restructuring officer, respectively. Donlin, Recano & Company, Inc. is the claims and noticing agent and administrative advisor. The U.S. Trustee for Region 3 appointed an official committee to represent unsecured creditors in the Debtors' Chapter 11 cases. The committee tapped Lowenstein Sandler, LLP and Morris James, LLP as legal counsels, and Dundon Advisers, LLC as financial advisor. OCM SYSTEM: Moody's Affirms 'B2' CFR, Outlook Remains Stable ------------------------------------------------------------ Moody's Investors Service affirmed OCM System One Buyer, CTB, LLC's ("System One"), a professional staffing services and solutions company, B2 corporate family rating, and B2-PD probability of default rating. Moody's also affirmed the B2 ratings on the senior secured debt (including first lien term loan and revolving credit facility). The outlook is maintained at stable. The ratings affirmation reflects Moody's expectation that System One will maintain a stable revenue base and profitability margins, such that the company generates good free cash flow in 2024 that will be used to repay debt such that debt to EBITDA improves to 4.2x in the next 12 to 18 months. RATINGS RATIONALE The B2 CFR reflects System One's elevated debt to EBITDA leverage profile of 4.8x for the twelve months ended October 1, 2023, and modest EBITDA margins compared to similarly rated outsourced staffing and service providers. Revenue growth is likely to slow slightly but remain around the mid-single digits in 2024 given Moody's expectation for the US unemployment to increase to 4.3% in 2024 from 3.7% in 2023. The staffing and services industry is highly competitive and subject to cyclical spending declines during periods of macroeconomic weakness. The company has an aggressive financial policy evidenced by an acquisitive growth strategy that relies on the use of debt and concentrated ownership by private equity with the potential for future shareholder dividends. The rating is supported by System One's diverse and resilient end markets, specifically the government, utilities, life sciences and technology sectors, with recurring services that are embedded into its clients' day-to-day operations. Moody's expects the company will benefit from broad secular trends towards outsourcing across its end markets that should allow it to win new business and grow wallet share with its existing customers. The company has good revenue and earnings visibility supported by the recurring nature of services provided and high customer retention. Moody's expectation for revenue growth in the mid-single digit percentages at stable margins will allow the company to reduce leverage and generate good free cash flow. All financial metrics cited reflect Moody's standard adjustments. Good liquidity is supported by Moody's expectation of free cash flow to debt of around 7% aided by low capital expenditures requirements and access to a $55 million revolving credit facility expiring in March 2026. Given that the October 1, 2023 cash balance of $15.7 million is modest, it is possible the company may fund near term working capital needs using its revolver. The company's first lien term loan has $4.15 million of annual mandatory debt repayment that Moody's expects to be sufficiently covered by internally generated free cash flow of approximately $30 million on an annual basis. The B2 rating on System One's senior secured first lien credit facilities reflects both the Probability of Default rating of B2-PD and the application of Moody's Loss Given Default for Speculative-Grade Companies methodology. The senior secured first lien credit facilities benefit from the secured guarantees from all existing and subsequently acquired domestic subsidiaries. As there is no other meaningful debt in the capital structure, the facilities are rated in line with the B2 CFR. The stable outlook reflects Moody's expectation that debt to EBITDA leverage will improve towards 4.0x during the next 12 to 18 months and for approximately $30 million of free cash flow on an annual basis that will be used to repay debt and build liquidity. The outlook also considers the company will maintain steady, albeit modest, organic revenue growth in the mid- single digit percentages supported by high client retention rates and its current backlog. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS Ratings could be upgraded through consistent earnings growth and margin improvement along with financial policy supportive of debt to EBITDA remaining below 4x and free cash flow-to-debt above 10%, while maintaining good liquidity. Ratings could be downgraded should System One experience declines in customer retention rates, revenue or profitability. An expectation that leverage will be sustained above 5.5x or should liquidity deteriorate including free cash flow to debt below 5% could also lead to a ratings downgrade. Financial policies featuring shareholder returns or aggressive acquisitions would also negatively pressure ratings. System One, based in Pittsburgh, PA, is a provider of outsourced services and workforce solutions specializing in the engineering, energy, technology, legal, scientific and digital & creative sectors. The company operates out of over 50 field offices across the US and serves a broad range of government, industrial and commercial clients across multiple end markets. The company is majority owned by funds managed by Oaktree Capital Management, L.P. Moody's expects revenue of $1.3 billion in 2024. The principal methodology used in these ratings was Business and Consumer Services published in November 2021. OCWEN FINANCIAL: S&P Affirms 'B-' ICR on Improving Leverage ----------------------------------------------------------- S&P Global Ratings affirmed its 'B-' issuer credit rating and its 'B' senior secured rating on Ocwen Financial Corp. The recovery rating remains '2', indicating its expectation of a substantial recovery (70%-90%) in a simulated default scenario. The stable outlook reflects S&P's expectation that Ocwen will maintain S&P Global Ratings-adjusted debt to EBITDA of 4x-5x and EBITDA interest coverage above 2.0x while continuing to grow and diversify its servicing portfolio. Ocwen's leverage, as measured by S&P Global Ratings-adjusted debt to EBITDA, declined to about 4.1x on a trailing-12-month basis as of Sept. 30, 2023, from 5.8x as of year-end 2022.The decrease owed primarily to an improving margin of about 53% over the 12 months ended Sept. 30, 2023, up from 39% in 2022, as well as low-single-digit growth in revenue. Furthermore, the company is growing its less capital-intensive subservicing business, which reduces its need for mortgage servicing right (MSR) financing facilities (which we include as debt in our credit metric calculations). Ocwen's margins have increased sequentially over the past several quarters. The margin expansion has come through technology and process improvements, greater float income due to higher interest rates, and growth in higher-margin products (such as Ginnie Mae and reverse servicing). Although originations make up a small portion of revenue to begin with, the company was also able to right-size origination expenses quickly as interest rates increased and industry volume fell. S&P said, "We expect subservicing to continue to grow as a portion of Ocwen's portfolio and earnings, given the company's pursuit of a more capital-light strategy. High interest rates have increased MSR valuations and reduced mortgage origination volume across the industry, making it challenging for servicers to replenish their owned unpaid principal balance (UPB) as MSRs run off. We expect Ocwen to maintain owned MSR UPB of $115 billion to $135 billion to support debt service coverage, while prioritizing growth of its subservicing portfolio." While subservicing typically yields lower margins than MSR owned servicing, Ocwen's special servicing expertise may offer opportunities to subservice in this niche and drive growth in higher-margin products. The company's total servicing UPB was $296 billion as of Sept. 30, 2023, up from $290 billion as of year-end 2022. Subservicing UPB increased to $167 billion as of Sept. 30, 2023, from $155 billion as of year-end 2022, while MSR owned UPB declined to $129 billion from $135 billion over the same period. The stable outlook reflects S&P Global Ratings' view that Ocwen will maintain S&P Global Ratings-adjusted debt to EBITDA of 4x-5x and EBITDA interest coverage above 2x while continuing to grow and diversify its servicing portfolio. S&P could lower the rating in the next 12 months if: -- The company's interest coverage approaches 1.5x, -- Debt to tangible equity erodes significantly, -- The company approaches its debt covenants, or -- Regulatory actions impede the company's operations. S&P could raise the rating if Ocwen sustains debt to EBITDA comfortably below 4x, EBITDA interest coverage above 3x, and debt to tangible equity below 2x, while growing its servicing portfolio without material regulatory issues. OPENLANE INC: S&P Affirms 'B' Issuer Credit Rating, Outlook Stable ------------------------------------------------------------------ S&P Global Ratings affirmed its 'B' issuer credit rating on OPENLANE Inc. along with its 'B' issue-level rating and '3' recovery rating on its $210 million senior unsecured notes due June 2025. The company recently entered into an amendment governing its U.S. $325 million senior secured cash flow revolver to allow for the establishment of a new Canadian C$175 million revolving facility to partially finance the acquisition of Manheim Canada and use this facility post-close for local liquidity. The acquisition of Manheim Canada results in a modest increase in OPENLANE's leverage, which we expect to be around 7x for 2023 before improving toward the mid-6x area by the end of 2024. S&P views this level of leverage as consistent with the current 'B' rating and stable outlook, and it also expect free operating cash flow to debt to remain in the 3%-5% range in 2023 and 2024. S&P said, "Our simulated default scenario assumes a payment default occurring in 2027 and could be caused by one or more of the following adverse factors: sustained economic downturn that reduces consumer and commercial demand for new and used vehicles; operational setbacks in the digital auction marketplace that results in continued net losses; or competitive disruptions from new digital marketplace entrants. "We use a combined discrete asset value (DAV) and enterprise value (EV) EBITDA multiple approach to estimate recovery value on the company's rated debt facilities. We use the EBITDA multiple approach for OPENLANE's marketplace business and the DAV approach for its finance segment, which utilizes floor plan financing. "In our default scenario, we assume floor plan assets decrease by 15%-25% as transaction activity slows in OPENLANE's finance segment. We then apply realization rates to the assets (similar to borrowing base advance rates) to estimate the gross recovery value. For floor plan receivables, we applied a 75% realization rate." P&L DEVELOPMENT: S&P Cuts ICR to 'CCC' on Heightened Default Risk ----------------------------------------------------------------- S&P Global Ratings lowered our issuer credit rating on U.S.-based P&L Development Holdings LLC (PLD) to 'CCC' from 'CCC+'. At the same time, S&P lowered its issue-level rating on the company's $465 million senior secured notes to 'CCC' from 'CCC+'. The '4' recovery rating is unchanged, indicating its expectation for average (30%-50%; rounded estimate: 30%) recovery in the event of a payment default. The negative outlook reflects the potential for a lower rating on PLD if S&P believes a default event--such as a debt restructuring or missed debt service payment--is inevitable in the subsequent six months. The downgrade reflects PLD's heightened risk of a default. S&P believes the company's capital structure is unsustainable and will remain that way absent favorable business, financial and economic conditions over the next 12 months. PLD maintains negligible cash balances and the availability under its ABL, its primary source of liquidity, declined to about $45 million as of the end of the third quarter, which compares with about $90 million as of the same period in 2022. The company has made efforts to source incremental liquidity by entering into an off balance sheet purchase agreement for the sale of Abbott trade receivables through a new $30 million facility, as well as by executing the sale of its Miami facility. S&P believes these transactions reflect PLD's inability to generate sustainable FOCF, its declining liquidity, and the likelihood that it will undertake a distressed exchange or experience a liquidity shortfall over the next 12 months. S&P said, "We believe it is unlikely the company will be able to refinance its existing capital structure at higher market rates because its business consistently generates cash flow deficits. Therefore, we view a distressed exchange as probable unless PLD materially improves its performance such that it can sustain adequate debt service coverage. Based on these expectations, we think there is a high probability its lenders will receive less value than they were promised under the original securities, which would constitute a default under our criteria. Additionally, we expect the company will attempt to exhaust all of its available liquidity funding mechanisms, e.g. additional receivables factoring or property sales, over the next 12 months." PLD is focused on improving its EBITDA and FOCF by optimizing its manufacturing, cutting its capex, and shifting its sales mix toward its higher-margin products. S&P said, "The company believes it can achieve an EBITDA margin of 15% and generate positive FOCF by 2025. However, we assume the improvement in PLD's EBITDA margin will be limited to about 300 basis points (bps), given its track record, and expect its FOCF will remain negative in 2024 despite its lower capital spending. Subdued input-cost inflation and the pricing actions management implemented over the past 18 months led to a modest recovery in the company's profitability in 2023. However, we expect its earnings growth will likely be pressured in 2024 because of competitive pricing conditions among branded and private-label players, decreased demand for Abbott oral electrolyte solutions (OES), and continued declines in its base business due to stock-keeping unit (SKU) rationalization. We expect PLD will focus on its higher-margin products like Mouthwash, Gummies, and Omeprazole. We anticipate the company will launch its Gummies product in 2024 and note it is still waiting on FDA approval for Omeprazole. We also anticipate there will be costs associated with management's efficiency and growth initiatives. Additionally, while we expect some improvement in PLD's FOCF in 2023, because of its inventory reduction and receivables factoring, we forecast it will generate negative FOCF in 2024. "The negative outlook reflects the potential for a lower rating on PLD if we believe a default--such as a debt restructuring or missed debt service payment--is likely within the subsequent six months." S&P could lower the rating if: -- S&P expected the company will pursue a distressed debt exchange or other form of restructuring that we would consider a default under our criteria over the subsequent six months; or -- PLD's EBITDA and liquidity decline further, leading to a near-term expectation for a missed debt service payment. While unlikely, S&P could take a positive rating action on PLD if it no longer envisions a default scenario over the next 12 months, although it would continue to view its capital structure as unsustainable. This could occur if: -- The company successfully refinanced its near-term debt maturities on terms that S&P views as constituting a selective default; and -- Its EBITDA interest coverage approaches 1.5x. PARTS iD: Court OKs $18.5MM DIP Loan from Fifth Star ---------------------------------------------------- The U.S. Bankruptcy Court for the District of Delaware authorized Parts iD, Inc. and Parts iD, LLC to use cash collateral and obtain postpetition financing, on a final basis. The Debtors obtained secured debtor-in-possession financing, consisting of (A) new money term loans in an aggregate principal amount of up to $12 million, and (B) term loans in the aggregate amount of approximately $6.3 million, which DIP Roll-Up Loans consist of certain prepetition bridge financing loans that shall be exchanged for and converted into loans under the DIP Facility on the terms set forth therein and in the DIP Credit Agreement. Fifth Star, Inc. is the administrative agent under the DIP Facility and the lender with respect to the DIP New Money Loans and the Tranche 1 DIP Roll-Up Loans. The DIP facility is due and payable through the earliest to occur of: (a) the date of consummation of a sale of all or substantially all of the Company's assets or equity; (b) the acceleration of the Obligations or termination by the Administrative Agent and/or the New Term Lenders of the New Term Loan Commitments; (c) the Scheduled Maturity Date; and (d) following the Petition Date: (i) the effective date of a plan of reorganization or liquidation filed in the Bankruptcy Cases that is confirmed pursuant to an order of the Bankruptcy Court, (ii) the date that is 28 days after the Petition Date if a Final DIP Order has not been entered by the Bankruptcy Court by such date, unless such date has been extended with the written consent of Fifth Star in its sole discretion, (iii) the Interim DIP Order or the Final DIP Order, as applicable, ceasing to be in full force and effect for any reason after being entered, (iv) the date of conversion or dismissal of any of the Bankruptcy Cases, and (v) any financing incurred by the Borrowers under 11 U.S.C. Section 364 other than the Loans and New Term Loan Commitments thereunder that does not provide for the immediate payment in full in cash of the Prepetition Senior Secured Obligations and all Obligations thereunder. The Debtors are required to comply with these milestones: (a) By no later than 11:59 p.m. New York City time on December 19, 2023, commence solicitation of the Prepackaged Plan; (b) By no later than 11:59 p.m. New York City time on December 26, 2023, commence the Bankruptcy Cases in the Bankruptcy Court; (c) By no later than three days following the Petition Date, the Bankruptcy Court will have entered the Interim DIP Order and will have scheduled a confirmation hearing to consider the entry of the Confirmation Order on a date that is not later than 40 days following the Petition Date; (e) By no later than 21 days following the Petition Date, solicitation of the Prepackaged Plan will have ended; (f) By no later than 28 days following the Petition Date, the Bankruptcy Court must have (i) entered Final DIP Order and (ii) entered an order approving the Sponsor Protections, which order will be in form and substance acceptable to the Plan Sponsor; (g) By no later than 40 days following the Petition Date, the Bankruptcy Court must have entered the Confirmation Order; and (h) By no later than 14 days following entry of the Confirmation Order, the Prepackaged Plan must become effective in accordance with its terms, provided, however that the Borrowers agree to use reasonable efforts to seek an order shortening that 14-day period. Upon entry of the Interim Order, (A) the Bridge New Money Loans were exchanged for and converted into Tranche 1 DIP Roll-Up Loans, and (B) the November Note and the December Tranche A Loan under the December Note were exchanged for and converted into Tranche 2 DIP Roll-Up Loans, and (C) the December Tranche B Loan under the December Note were exchanged for and converted into Tranche 3 DIP Roll-Up Loans, in each case in accordance with the terms and conditions of the Interim Order and the other DIP Loan Documents. The DIP Roll-Up is ratified and approved on a final basis in all respects. In order to enable them to continue to operate their businesses, the Debtors are hereby authorized under the DIP Facility to borrow DIP New Money Loans in an aggregate principal amount not to exceed $6 million under the DIP Facility. Parts iD, Inc. and Lind Global Fund II LP are party to a Securities Purchase Agreement, dated as of July 14, 2023, and the obligations of the Company under the Lind Agreement are guaranteed by Parts iD, LLC pursuant to the Guaranty, dated as of July 14, 2023. As of the Petition Date, the outstanding amount owed under the Lind Documents was $4.879 million. The Debtors, Wave Advance Inc. and other parties are party to a Standard Merchant Cash Advance Agreement, dated as of November 30, 2023, and a Merchant Cash Advance Agreement, dated as of September 6, 2023. Parts LLC, Riverside Capital NY and others are party to a Purchase and Sale of Future Receivables, dated as of November 29, 2023 and a Purchase and Sale of Future Receivables, dated as of August 29, 2023. Under the RCNY Documents, the Debtors agreed to sell $1.5 million of future receivables for a purchase price of $1.065 million. Additionally, the Debtors agreed to pay RCNY $15,400 each day until RCNY has been repaid. Similarly, pursuant to the terms of the Wave Documents, the Debtors agreed to sell $1.518 million of future receivables for a purchase price of $1.1 million and agreed to pay Wave $15,400 each day until Wave has been repaid. As of the Petition Date, the combined outstanding balance due under the Wave/RCNY Documents is $2.618 million. On December 19, 2023, seven days prior to the Petition Date, Fifth Star as New Bridge Lender made new money term loans to Parts iD, Inc. and Parts iD, LLC in an aggregate principal amount of $3 million. As adequate protection for the use of cash collateral, the Prepetition Senior Secured Lenders are granted additional and replacement valid, binding, enforceable, non-avoidable, effective and automatically perfected liens on, and security interest in on the DIP Collateral. To the extent of any aggregate Diminution in Value of the Prepetition Collateral, the Prepetition Senior Secured Lenders will have allowed superpriority administrative expense claims as provided for in 11 U.S.C. section 507(b), which Adequate Protection Superpriority Claims will be (i) subject and subordinate to the Carve-Out, and (ii) senior to any other administrative expense claims and all other claims against each of the Debtors and their estates, now existing or hereafter arising, of any kind, including without limitation, administrative expense claims of the kinds specified in or ordered pursuant to sections 503(b) or 507(b), and any DIP Superpriority Claims; provided, that the Adequate Protection Superpriority Claims granted to Lind will be senior to the Adequate Protection Superpriority Claims granted to Wave and RCNY. A copy of the final order is available at https://urlcurt.com/u?l=v0K7mX from PacerMonitor.com. About PARTS iD Inc. Headquartered in Cranbury, New Jersey, Parts iD Inc. -- https://www.partsidinc.com/ -- is a technology-driven, digital commerce company focused on creating custom infrastructure and unique user experiences within niche markets. The Company was founded in 2008 with a vision of creating a one-stop digital commerce destination for the automotive parts and accessories market. Parts ID went public via a merger with a blank-check firm in 2020. The company operates websites including CARiD.com, TRUCKiD.com and CAMPERiD.com. Parts ID Inc. and subsidiary Parts iD, LLC, sought relief under Chapter 11 of the U.S. Bankruptcy Code (Bankr. D. Del. Lead Case No. 23-12098) on Dec. 26, 2023. In the petition filed by CEO Lev Peker, Parts ID Inc. disclosed $18.7 million in assets against $55.02 million in debt as of Sept. 30, 2023. Judge Laurie Selber Silverstein oversees the cases. DLA Piper LLP (US) is the Debtors' bankruptcy counsel. Kroll Restructuring Administration LLC is the claims agent. PARTS ID: Unsecureds to Get Nothing in Plan ------------------------------------------- Parts iD, Inc., et al., submitted a First Amended Joint Prepackaged Chapter 11 Plan of Reorganization. All DIP Claims shall be deemed Allowed as of the Effective Date in an amount equal to (1) the principal amount outstanding under the DIP Facility on such date, (2) all interest accrued and unpaid thereon to the date of payment, and (3) all accrued and unpaid fees, expenses, and non-contingent indemnification obligations payable under the DIP Facility Documents and the DIP Orders. Except to the extent that a Holder of an Allowed DIP Claim agrees to less favorable treatment, in full and final satisfaction, settlement, release, and discharge of, and in exchange for, each Allowed DIP Claim, on the Effective Date each such Holder will receive the following treatment, as applicable: (i) the Holder of an Allowed New Money DIP Claim will receive its Pro Rata share of the New Preferred Stock; (ii) each Holder of an Allowed Tranche 1 Roll-Up DIP Claim or Tranche 2 Roll-Up DIP Claim shall receive its Pro Rata share of New Common Stock; and (iii) the Holder of an Allowed Tranche 3 Roll-Up DIP Claim shall receive Cash equal to the amount of such Allowed Tranche 3 Roll-Up DIP Claim. On the Effective Date, the DIP Facility and all DIP Facility Documents shall be deemed cancelled, all Liens on property of the Debtors and the Reorganized Debtors arising out of or related to the DIP Facility shall automatically terminate, and all collateral subject to such Liens shall be automatically released, in each case without further action by the DIP Lenders and all guarantees of the Debtors and Reorganized Debtors arising out of or related to the DIP Claims shall be automatically discharged and released, in each case without further action by the DIP Lenders. The DIP Lenders shall take all actions to effectuate and confirm such termination, release, and discharge as reasonably requested by the Debtors or the Reorganized Debtors, as applicable, and the Debtors shall be permitted to file any applicable releases or terminations. Under the Plan, Class 9 consists of General Unsecured Claims. Each Allowed General Unsecured Claim will be cancelled, released, and extinguished without any distribution on account of such General Unsecured Claim. Class 9 is impaired. Class 13 consists of all Customer Programs Claims. Each Allowed Customer Programs Claim will be Reinstated on the Effective Date. Class 13 is unimpaired. Subject to satisfaction of all Direct Investment Commitment Conditions (unless waived by the Plan Sponsor in its sole discretion), the Debtors and Reorganized Debtors, as applicable, shall fund Plan Distributions, as applicable, with (1) the New Preferred Stock, (2) the New Common Stock, and (3) a portion of the proceeds of the Direct Investment Preferred Equity Raise in an amount equal to the Plan Distribution Amount. Each distribution and issuance referred to in Article VI of the Plan shall be governed by the terms and conditions set forth in the Plan applicable to such distribution or issuance and by the terms and conditions of the instruments or other documents evidencing or relating to such distribution or issuance, which terms and conditions shall bind each Entity receiving such distribution or issuance. The issuance, distribution, or authorization, as applicable, of certain securities in connection with the Plan, including the New Common Stock and the New Preferred Stock will be exempt from SEC registration, as described more fully in Article IV. G. Article IV. G: Except as otherwise provided in the Plan or any agreement, instrument, or other document incorporated in the Plan or the Plan Supplement, each Debtor shall continue to exist after the Effective Date as a separate corporate entity or limited liability company, as the case may be, with all the powers of a corporation or limited liability company, as the case may be, pursuant to the applicable law in the jurisdiction in which each applicable Debtor is incorporated or formed and pursuant to the respective certificate of incorporation and bylaws (or other formation documents) in effect prior to the Effective Date, except to the extent such certificate of incorporation and bylaws (or other formation documents) are amended under the Plan or otherwise, and to the extent such documents are amended in accordance therewith, such documents are deemed to be amended pursuant to the Plan and require no further action or approval (other than any requisite filings required under applicable state or federal law). After the Effective Date, the respective certificate of incorporation and bylaws (or other formation documents) of the Reorganized Debtors may be amended or modified on the terms therein without supervision or approval by the Bankruptcy Court and free of any restrictions of the Bankruptcy Code or Bankruptcy Rules. After the Effective Date, one or more of the Reorganized Debtors may be disposed of, dissolved, wound down, or liquidated without supervision or approval by the Bankruptcy Court and free of any restrictions of the Bankruptcy Code or Bankruptcy Rules. Proposed Counsel to the Debtors: R. Craig Martin, Esq. 1201 N. Market Street, Suite 2100 DLA PIPER LLP (US) Wilmington, DE 19801 Tel: (302) 468-5700 Fax: (302) 394-2341 E-mail: craig.martin@us.dlapiper.com - and - Erik F. Stier, Esq. DLA PIPER LLP (US) 500 8th St., NW Washington, D.C. 20004 Tel: (202) 799-4258 Fax: (202) 799-5000 E-mail: erik.stier@us.dlapiper.com A copy of the Plan of Reorganization dated Jan. 12, 2024, is available at https://tinyurl.ph/lhPGW from PacerMonitor.com. About PARTS iD Inc. PARTS iD Inc. -- https://www.partsidinc.com/ -- headquartered in Cranbury, New Jersey, the company is a technology-driven, digital commerce company focused on creating custom infrastructure and unique user experiences within niche markets. The Company was founded in 2008 with a vision of creating a one-stop digital commerce destination for the automotive parts and accessories market. The Company has since become a market leader and proven brand-builder, fueled by its commitment to delivering an engaging shopping experience; comprehensive, accurate and varied product offerings; and continued digital commerce innovation. Parts ID went public via a merger with a blank-check firm in 2020. The company operates websites including CARiD.com, TRUCKiD.com and CAMPERiD.com. Parts ID Inc. and subsidiary PARTS iD, LLC sought relief under Chapter 11 of the U.S. Bankruptcy Code (Bankr. D. Del. Lead Case No. 23-12098) on Dec. 26, 2023. In the petition filed by CEO Lev Peker, Parts ID Inc. disclosed $18.7 million in assets against $55.02 million in debt as of Sept. 30, 2023. The Debtors tapped DLA Piper, LLP (US) as bankruptcy counsel and Kroll Restructuring Administration, LLC as claims agent. PASSERO LLC: Unsecureds Will Get 15% Dividend over 60 Months ------------------------------------------------------------ Passero, LLC, filed with the U.S. Bankruptcy Court for the Northern District of Illinois a Plan of Reorganization for Small Business dated January 22, 2024. The Debtor is an Illinois Limited Liability Company which operates a full service restaurant located at 3 South Evergreen Avenue, Arlington Heights, IL. The Debtor was formed in 2017 and its current members/managers are Rikki Peota and Matt Peota. The Debtor needed to file the Chapter 11 case in order to stay pending litigation in the Supreme Court of the State of New York, Nassau County, commenced by Pearl Delta Funding, LLC, Case No. 606203/2023 and to restrain certain merchant cash advance lenders from auto debiting the Debtor's bank account. The Debtor's Plan proposes to continue its business operations and generate income with which to pay the creditors holding allowed secured claims in full and a dividend to general unsecured creditors. The financial projections show that the Debtor will have projected disposable income of $676,000. The final Plan payment is expected to be paid on the 60th month following the effective date of the Plan. The Plan proposes to pay creditors of the Debtor from cash on hand, cash flow projections and future income. Class 10 consists of allowed, general unsecured claims including the unsecured claims of SBA, IRS and IDR. According to the Debtor's schedules and the proofs of claim filed herein, the Debtor believes that the total amount of unsecured claims in this Class is $418,411. These claims, along with the claims of Classes 5-9, will be paid, pro rata, without interest, a dividend in the amount of 15% of the allowed claims in monthly payments over a period of 60 months commencing 30 days after the effective date of the Plan. Rikki Peota and Matt Peota are the members of the Debtor. Upon confirmation of the Plan, Peota will continue to be vested with the membership of the Debtor and will manage the Debtor's affairs. Management of the Debtor will remain in Rikki and Matt Peota. The Debtor will retain all of its assets subject to applicable liens of secured creditors, and will continue operating its business affairs to generate the disposable income necessary to fund the Plan. The Plan will be implemented and funded by existing cash on hand at the effective date of the Plan and by future income generated by the operation of the Debtor. A full-text copy of the Plan of Reorganization dated January 22, 2024 is available at https://urlcurt.com/u?l=CdkITE from PacerMonitor.com at no charge. Attorney for Debtor: Joel A. Schechter, Esq. Law Offices of Joel A. Schechter 53 W. Jackson Blvd., Suite 1522 Chicago, IL 60604 Telephone: (312) 332-0267 Email: joel@jasbklaw.com About Passero LLC Passero, LLC, is an Illinois Limited Liability Company which operates a full service restaurant located at 3 South Evergreen Avenue, Arlington Heights, IL. The Debtor filed a petition under Chapter 11, Subchapter V of the Bankruptcy Code (Bankr. N.D. Ill. Case No. 23-09011) on July 11, 2023, with $100,001 to $500,000 in assets and $500,001 to $1 million in liabilities. Matthew Brash of Newpoint Advisors Corporation has been appointed as Subchapter V trustee. Judge A. Benjamin Goldgar oversees the case. Joel A Schechter, Esq., at the Law Offices of Joel Schechter is the Debtor's bankruptcy counsel. PEABODY ENERGY: Moody's Upgrades CFR to B1, Outlook Remains Stable ------------------------------------------------------------------ Moody's Investors Service upgraded Peabody Energy Corporation's corporate family rating to B1 from B2, its probability of default rating to B1-PD from B2-PD, and affirmed the B2 rating on its convertible senior notes. The speculative grade liquidity rating ("SGL") of SGL-2 remains unchanged. The ratings outlook remains stable. ESG was a key driver of the rating action, specifically governance considerations related to financial strategy and track record. RATINGS RATIONALE The upgrade of Peabody's CFR reflects (1) a track record of operating with limited debt, since paying down a significant amount of debt and simplifying the capital structure using strong free cash flow generated in 2022, (2) addressing its significant asset retirement obligation by setting aside cash, (3) demonstration of access to capital by securing a new $320 million revolving credit facility (unrated). Additionally, the company is looking to shift its portfolio exposure more towards metallurgical coal, which has better demand prospects compared to thermal coal, by pursuing an organic development of the Centurion reserves in Australia. However, the affirmation of the B2 rating on the convertible senior notes reflects their relative position in the capital structure, behind the new senior secured revolving credit facility (unrated). Peabody's B1 CFR is supported by a diverse portfolio of thermal and metallurgical coal assets located in Australia and the United States, and an improved credit profile following substantial debt reduction achieved in 2021 and 2022. Most of the company's US thermal coal is sold to domestic utilities and all the US-produced metallurgical coal is sold into the seaborne market. Most of the company's coal produced in Australia is sold into the seaborne thermal and metallurgical coal markets in Asia. The rating is constrained by substantial non-debt liabilities (although the company has set aside cash to address its asset retirement obligation), and access to capital and other ESG-related issues facing the coal mining sector. Peabody's SGL-2 reflects good liquidity to support operations over the next 12-18 months. Peabody had $989 million of cash at September 30, 2023. Based on Moody's coal price assumptions, free cash flow is expected to be near breakeven over the next 12-18 months, as a result of elevated capital spending needs resulting from the ongoing development of the Centurion mine, and increased cash tax payments. Additionally, Peabody recently got a new $320 million senior secured revolving credit facility (unrated), with a January 2028 maturity, which further enhances its liquidity. The revolver is subject to a maximum total net leverage ratio of 2.25x, a minimum interest coverage ratio of 3x, and a maximum priority lien leverage ratio of 1.25x. Moody's expects Peabody to remain in compliance with these covenants over the next 12-18 months. Peabody also has access to a $225 million accounts receivable securitization facility, which matures in January 2025, which it mainly utilizes for LCs. Environmental, social, and governance considerations are important factors influencing Peabody's credit quality. Moody's believes that investor concerns about the coal industry's ESG profile are intensifying and coal producers will be increasingly challenged by access to capital issues in the current decade. An increasing portion of the global investment community is reducing or eliminating exposure to the coal industry with greater emphasis on moving away from thermal coal. The aggregate impact on the credit quality of the coal industry is that debt capital will become more expensive over this horizon, particularly in the public bond markets, and other business requirements, such as surety bonds, which together will lead to much more focus on individual coal producers' ability to fund their operations and articulate clearly their approach to addressing environmental, social, and governance considerations. Moody's has made a few changes to Peabody's ESG scores, although there is no change to the Credit Impact Score of CIS-5. Under Governance, the scores for 'financial strategy & risk management', 'management credibility & track record', and 'board structure policies & procedures' were all revised to a 3 from 4 – to reflect the prioritization of balance sheet repair and changes in board composition over the past few years – and 'Compliance & Reporting' to a 2 from 3 – due to better reporting accuracy in recent years. This resulted in the G-IPS improving to a G-3 from G-4. Under Environmental, the score for 'natural capital' was revised to a 5 from 4, to align with the recent change to the sector heatmap. Under Social, the score for 'responsible production' was revised to a 4 from 5 – as re-development has now commenced at the company's Centurion mine (formerly North Goonyella) which previously faced challenges. The stable outlook assumes stable operating performance, with near breakeven free cash flow over the next 12-18 months, while maintaining good liquidity to support operations. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS Further ratings upside remains constrained by secular issues facing the coal industry, including expected decline in demand for thermal coal (as renewable energy sources replace coal fired power generation) and metallurgical coal (due to a shift from blast furnaces to EAFs for steel production), and access to capital issues in the long-run. However, Moody's could consider an upgrade if portfolio diversification were to improve materially, with improved visibility into the long-term sustainable earnings power of the company. Moody's could downgrade the rating with expectations for adjusted financial leverage above 2.0x, negative free cash flow, substantive deterioration in liquidity, a significant adverse operating event at a key mine, or further intensification of ESG concerns that call into question the company's ability to handle upcoming financing requirements or access capital markets on economic terms. Peabody Energy Corporation is a leading global pure-play thermal and metallurgical coal producer with coal mining operations in the US and Australia and about 2.4 billion tons of proven and probable reserves as of December 31, 2022. The company generated $5.3 billion in revenues during the LTM period ending September 30, 2023. The principal methodology used in these ratings was Mining published in October 2021. PETER RINALDI: Seeks to Hire David E. Lynn as Legal Counsel ----------------------------------------------------------- Peter Rinaldi DMD LLC d/b/a Rinaldi Dental Arts seeks approval from the U.S. Bankruptcy Court for the District of Maryland to hire David E. Lynn, P.C. as its counsel. The Debtor requires legal counsel to: a. give advice with respect to the powers and duties of the Debtor in the continued management of its property and operation of its business; b. prepare legal papers; c. take the necessary steps to stay any action by creditors seeking liens, attachments or other advantages by legal process or non-judicial process. d. negotiate and prepare a Chapter 11 plan of reorganization; and e. perform other legal services for the Debtor in connection with its Chapter 11 case. The firm will charge an hourly fee of $495. David Lynn, Esq., disclosed in a court filing that his firm has no connection with the Debtor, creditors or any other party involved in the case. Mr. Lynn can be reached at: David E. Lynn, Esq. DAVID E. LYNN, P.C. 15245 Shady Grove Road, Suite 465 North Rockville, MD 20850 Phone: (301) 255-0100 Email: davidlynn@verizon.net About Peter Rinaldi DMD LLC Peter Rinaldi DMD LLC d/b/a Rinaldi Dental Arts specializes in cosmetic dentistry. Peter Rinaldi DMD LLC filed its voluntary petition for relief under Chapter 11 of the Bankruptcy Code (Bankr. D Md. Case No. 24-10504) on Jan. 21, 2024, listing $100,000 to $500,000 in assets and $1 million to $10 million in liabilities. The petition was signed by Peter Rinaldi as owner. Judge Lori S. Simpson presides over the case. David E. Lynn, Esq. at District of Maryland, P.C. represents the Debtor as counsel. PILL CLUB: Plan to Pay Sale Proceeds, Causes of Action to Unsec. ---------------------------------------------------------------- The Pill Club Pharmacy Holdings, LLC, and its affiliates submitted a Revised Disclosure Statement in support of Revised Joint Chapter 11 Plan of Liquidation dated January 23, 2024. The Plan is designed to accomplish the orderly liquidation of the Debtors' Estates and Distribution of the proceeds of such liquidation to the beneficiaries of the Estates. Substantially all of the Debtors' assets, with the exception of certain Causes of Action, have been sold, primarily through the two Sale Transactions approved by the Bankruptcy Court. At this point in time, the Debtors face the choice between conversion of their cases to chapter 7 or confirmation of a liquidating chapter 11 plan. The Debtors believe that their estates will be better served by confirmation of a liquidating chapter 11 plan, as represented by the Plan. Accordingly, the Debtors are soliciting votes on the Plan to achieve that result. Because the proceeds generated by the Sale Transactions were largely used to repay the Debtors' Prepetition Lenders, the Debtors have very little cash on hand. The Debtors' ability to confirm the Plan and generate proceeds to make distributions to holders of Administrative Claims, will depend on the agreement holders of two large asserted Administrative Claims, specifically the Asserted Caremark Admin Claim and the Asserted WARN Admin Claims, to agree to seek recovery on any Allowed Claim they may ultimately hold from the proceeds of the Causes of Action held by the Debtors, or the Bankruptcy Court's disallowance of their asserted Administrative Claims. Likewise, cash will only be available for distribution to holders of General Unsecured Claims if the Liquidating Trustee generates cash from those same Causes of Action. The Liquidating Trustee will be selected by the Debtors and the Committee and identified in the Plan Supplement. Because of the uncertainty surrounding the success of the Liquidating Trustee in pursuing the Causes of Action, the allocation of recoveries from Causes of Action among the Debtors and the scope of Claims that will ultimately be Allowed Claims, the Debtors cannot in good faith provide an estimate of the recoveries for holders of Claims. Despite this uncertainty, the Debtors believe confirmation of the Plan is in the best interests of their estates. The Debtors believe (i) the Plan provides for a more efficient means to seek recovery on the Causes of Action necessary to fund the Plan, and, (ii) that, while there can be no guaranty, ultimately confirmation of the Plan will lead to distributions to creditors sooner and in a greater amount than would be achieved through conversion to chapter 7. In effect, the Debtors are asking the creditors to vote on a preferred means for liquidation of the Debtors' remaining assets and making distributions, not on a proposed range of recovery. If the Plan fails to achieve confirmation, the Chapter 11 Cases will very likely convert to chapter 7. Like in the prior iteration of the Plan, each holder of an Allowed General Unsecured Claim in Classes 3A, 3B, 3C, 3D, 3E, 3F, 3G, and 3H will receive a distribution, on a Debtor by Debtor basis, equal to its Pro Rata share of Available Cash of such Debtor remaining after payment in full of the Allowed Class 2 Claims. The Plan provides for the distribution of all Cash held by or for the benefit of the Debtors on and after the Effective Date. In addition to Cash on hand, the Debtors' property consists primarily of the Debtors' rights with respect to the Insurance Policies, including the D&O Policies, and the proceeds of the NOL Sale, once received. Finally, the proceeds of all Causes of Action shall vest in a trust for the benefit of the Debtors' Estates. A full-text copy of the Revised Disclosure Statement dated January 23, 2024 is available at from https://urlcurt.com/u?l=fMopjw from BMC Group, Inc., claims agent. Counsel to the Debtors: Katherine A. Preston, Esq. WINSTON & STRAWN LLP 800 Capitol Street, Suite 2400 Houston, Texas 77002 Tel: (713) 651-2600 Email: kpreston@winston.com Daniel J. McGuire, Esq. WINSTON & STRAWN LLP 35 W. Wacker Drive Chicago, Illinois 60601-9703 Tel: (312) 558-5600 Email: dmcguire@winston.com Timothy W. Walsh, Esq. WINSTON & STRAWN LLP 200 Park Avenue New York, New York 10166-4193 Tel: (212) 294-6700 E-mail: twwalsh@winston.com About The Pill Club Pharmacy The Pill Club Pharmacy Holdings, LLC, is a digital healthcare platform. The company says it is "on a mission to empower women and people who menstruate to lead their healthiest lives." It combines telemedicine and direct-to-consumer pharmacy. Pill Club Pharmacy Holdings and its affiliates sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. N.D. Texas Lead Case No. 23-41090) on April 18, 2023. In the petition signed by Elizabeth Meyerdirk, chief executive officer, the Debtors disclosed up to $50,000 in assets and up to $50 million in liabilities. Judge Edward L. Morris oversees the cases. The Debtors tapped Katherine A. Preston, Esq., at Winston and Strawn, LLP as general bankruptcy counsel; Accordion Partners, LLC as financial advisor; and BMC Group, Inc., as claims, noticing, solicitation and administrative agent. The U.S. Trustee for Region 6 appointed an official committee to represent unsecured creditors in the Debtors' Chapter 11 cases. The committee is represented by Akerman, LLP and Buchalter, A Professional Corporation. PRESSURE BIOSCIENCES: Completes Acquisition of Uncle Bud's ---------------------------------------------------------- Pressure BioSciences, Inc. announced the closing of its acquisition of natural health and wellness leader Uncle Bud's ("UB") in an all-stock transaction. Incorporating UB's 70+ already popular products, 865K member on-line community, existing sales channels online and with leading large retailers, enviable celebrity spokesperson relationships, and invaluable experience building successful consumer products businesses, PBIO will leverage and integrate the Company's revolutionary UltraShearTM technology (UltraShear or UST) platform for further improved nanoemulsified products that deliver industry-leading speed of action, effective dosing payload delivery, and long-term stability. With these unique product improvement and differentiation capabilities, PBIO intends to redefine the basis of competition in multiple major market sectors, and to become a leading provider of topicals and other consumer products. Transaction Terms Under the terms of the transaction, PBIO acquired all assets and assumed selected liabilities of UB. In addition, the parties agreed to an earnout for additional shares of PBIO Common Stock based on the achievement of revenue and pre-tax income results in 2024. Upon closing, all employees of UB became employees of PBIO and UB became the Consumer Products Business Unit of PBIO. More definitive transaction terms will be included in the Company's upcoming SEC filings. Significance of the Transaction * The transaction is expected to be immediately accretive and a major accelerator to PBIO's top line revenue growth. * The combined companies will be ideally positioned to attract new growth investment, rapidly strengthen their balance sheet, accelerate PBIO's path to profitability in 2024, and catalyze the Company's drive to uplist to NASDAQ/NYSE. * The co-founders/senior management of UB are experts in branding, celebrity spokesperson management, and online and retail multimedia marketing. * UB will rapidly incorporate PBIO's best-in-class Nano-CBD into their already highly renowned and successful CBD products, for new market breakaway potential! * Senior management of UB and PBIO are already planning a dozen new products that they believe could be formulated and released in 2024, just using PBIO's existing UltraShear processed Nano CBD. * UB markets and sells many products in the health & wellness area that are unrelated to Hemp and CBD. * UB has an ongoing partnership with multi-Grammy award-winning Toni Braxton as a highly successful marketing ambassador –- and Toni has announced that she is excited to continue as a PBIO/UB spokesperson going forward. * UB has been featured, as well as their hemp and CBD products, in an extensive variety of high profile news outlets and magazines online over the past several years: https://www.unclebudshemp.com/press/. Expected Financial Impact PBIO's President and CEO, Richard T. Schumacher, summarized: "This transaction combines the existing momentum and ready market execution power of Uncle Bud's with the pivotal scientific and product breakthrough of the UltraShear nanoemulsions processing platform for record-setting product performance and long-term stability. In 2024 alone, we are forecasting a 5-fold leap forward in PBIO revenues to over $10 million, but this is only a steppingstone towards revolutionary impact and sales growth that we expect to achieve across the nutraceuticals, cosmeceuticals, skincare, food/beverage, agrochemical, and other major markets in the following years." Jeffrey N. Peterson, PBIO's Chairman, added: "Our Board and leadership team have carefully sought out this strategic combination of Uncle Bud's marketing skill and power to combine with PBIO's world class scientific innovation team. Specifically, this positions PBIO with a fast forward integration capability that will allow us to selectively set the timing and drive the pace of revolutionary change across multiple major markets. This rapid growth engine provides a central platform to leverage new growth capital, restructure and strengthen our balance sheet, and complete our drive to uplist to a national stock exchange in 2024." About Pressure Biosciences South Easton, Mass.-based, Pressure Biosciences Inc. -- http://www.pressurebiosciences.com-- develops and sells innovative, broadly enabling, high pressure-based platform technologies and related consumables for the worldwide life sciences, agriculture, food and beverage, and other keyindustries. Pressure Biosciences reported a net loss of $16.08 million for the year ended Dec. 31, 2022, compared to a net loss of $20.15 million for the year ended Dec. 31, 2021. As of June 30, 2023, the Company had $1.67 million in total assets, $26.79 million in total liabilities, and a total stockholders' deficit of $25.11 million. Houston, Texas-based MaloneBailey, LLP, the Company's auditor since 2015, issued a "going concern" qualification in its report dated April 12, 2023, citing that the Company has suffered recurring negative cash flows from operations and has a working capital deficit that raises substantial doubt about its ability to continue as a going concern. PROASSURANCE CORP: Moody's Withdraws (P)Ba1 Unsecured Shelf Rating ------------------------------------------------------------------ Moody's Investors Service has withdrawn ProAssurance Corporation's ratings, including the Baa1 insurance financial strength (IFS) ratings of its principal property & casualty (P&C) insurance subsidiaries. Moody's has also withdrawn its (P)Ba1 senior unsecured shelf rating and (P)Ba3 preferred shelf rating. Prior to withdrawal, the outlook was stable. RATINGS RATIONALE Moody's has decided to withdraw the ratings for its own business reasons. LIST OF AFFECTED RATINGS Issuer: ProAssurance Corporation Withdrawals: Senior unsecured shelf, withdrawn, previously rated (P)Ba1 Preferred shelf, withdrawn, previously rated (P)Ba3 Outlook Action: Outlook changed to Rating Withdrawn from Stable Issuer: Allied Eastern Indemnity Company Withdrawal: Insurance financial strength, withdrawn, previously rated Baa1 Outlook Action: Outlook changed to Rating Withdrawn from Stable Issuer: Eastern Alliance Insurance Company Withdrawal: Insurance financial strength, withdrawn, previously rated Baa1 Outlook Action: Outlook changed to Rating Withdrawn from Stable Issuer: ProAssurance Insurance Company of America Withdrawal: Insurance financial strength, withdrawn, previously rated Baa1 Outlook Action: Outlook changed to Rating Withdrawn from Stable Issuer: NORCAL Insurance Company Withdrawal: Insurance financial strength, withdrawn, previously rated Baa1 Outlook Action: Outlook changed to Rating Withdrawn from Stable Issuer: ProAssurance Casualty Company Withdrawal: Insurance financial strength, withdrawn, previously rated Baa1 Outlook Action: Outlook changed to Rating Withdrawn from Stable Issuer: ProAssurance Indemnity Company, Inc. Withdrawal: Insurance financial strength, withdrawn, previously rated Baa1 Outlook Action: Outlook changed to Rating Withdrawn from Stable ProAssurance Corporation, based in Birmingham, Alabama, offers professional liability insurance products in the US, primarily to physicians, dentists and other health care providers, but also to health care facilities, through its various subsidiaries. For the first nine months of 2023, ProAssurance reported net earned premiums of $730 million and a net loss of $45 million. As of September 30, 2023, shareholders' equity was $1.0 billion. PROJECT RUBY: Moody's Rates $555MM First Lien Loans 'B2' -------------------------------------------------------- Moody's Investors Service assigned a B2 rating to Project Ruby Ultimate Parent Corp.'s (WellSky) proposed $405 million senior secured first lien term loan due March 2028 and $110 million senior secured first lien revolving credit facility due December 2027. All other ratings, including the Corporate Family Rating, Probability of Default Rating, and existing instrument ratings, remain unchanged. The outlook also remains unchanged at stable. The proposed $405 million term loan will be used to repay the existing $400 million senior secured first lien term loan due March 2028 (with $396 million outstanding), including transaction fees. The proposed revolver will replace the existing $110 million revolver, which expires March 2026. Moody's views these developments as positive given expectations that the new term loan will be priced at a lower spread, compared to the existing one by about 200 basis points, and that the new revolver will have a later expiration date. The ratings on the existing $400 million term loan and $110 million revolver will be withdrawn once the transaction closes. RATINGS RATIONALE The existing ratings, including the B3 CFR, reflect elevated leverage, modest free cash flows relative to debt, and an acquisitive appetite, balanced by high growth dynamics with revenue expected to expand about 10% in FY 2024 (ending June 30, 2024) and solid EBITDA margins close to 40% (Moody's adjusted). Moody's expects debt-to-EBITDA will decrease to about 7x at fiscal-year-end, vs. close to 7.8x at FY 2023. WellSky benefits from its strong position as an electronic health record (EHR) software provider in the niche non-acute care end market. The critical nature of the electronic health record systems and related products results in net retention rates of about 100% and a highly recurring revenue base of about 88%. Liquidity is good and is supported by a $30 million cash balance at September 30, 2023, and an undrawn $110 million revolver. Moody's estimates free cash flow of close to $15 million in FY 2024. WellSky's revolver has a springing first lien net leverage covenant of 7.5x (as defined by the credit agreement) which is triggered at 35% revolver utilization. Moody's expects that WellSky will maintain good cushion under this covenant over at least the next year. The stable outlook reflects Moody's expectation that WellSky will grow its topline about 10%, maintain leverage below 8x debt/EBITDA and generate modestly positive free cash flow in the next 12 months. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS The ratings could be upgraded if WellSky's leverage is sustained below 6.5x debt/EBITDA and free cash flow to debt is maintained above 6%. The ratings could be downgraded if weaker than projected operating performance or debt-funded acquisitions prevent WellSky from maintaining its leverage below 8x. Weaker liquidity and/or negative free cash flow could also result in a downgrade. The principal methodology used in these ratings was Software published in June 2022. Headquartered in Overland Park, Kansas, WellSky is a provider of healthcare enterprise software and related services, primarily for the post-acute settings. Solutions focus on systems of record for customers and are used to manage care delivery, billing, scheduling, and financial and administrative workflows. The company generated pro forma revenue of approximately $727 million in fiscal 2023 (ending June 30). WellSky is controlled by private equity firms TPG Capital and Leonard Green & Partners. PURPLE PEONY: Unsecureds Will Get 8% of Claims over 5 Years ----------------------------------------------------------- Purple Peony, Inc., d/b/a Jackie's Java, filed with the U.S. Bankruptcy Court for the District of Colorado a Plan of Reorganization for Small Business under Subchapter V dated January 22, 2024. The Debtor was originally organized as a Colorado limited liability company on October 8, 2018. On June 12, 2020, The Debtor converted from a limited liability company to a for-profit corporation. Stefanie Mecklenburg is the Debtor's President, while Christopher Mecklenburg (Mr. and Mrs. Mecklenburg collectively referred to as the "Mecklenburgs") is the vice president. The Mecklenburgs are the Debtor's sole officers and shareholders. On July 31, 2020, the Mecklenburgs organized Summit View Commercial, LLC. Jackie's Java, LLC was the predecessor-in interest to Purple Peony. On or about September 14, 2020, the Debtor and Jackie's Java, LLC closed on the sale of Jackie's Java, LLC. Per the terms of the purchase agreement, the Debtor acquired all of Jackie's Java, LLC's assets, inventory, equipment, customer contracts, and goodwill. Through the same transaction, Summit View purchased the Commercial Property. In late 2022, the Debtor lost its largest corporate account, which resulted in a significant reduction in the Debtor's monthly revenue. The reduction in revenue left the Debtor unable to service the debt owed to the Bank or continue to pay rent to Summit View. The Mecklenburgs, therefore, contemplated filing bankruptcy for both the Debtor and Summit View. On October 24, 2023, the Debtor filed for relief under Subchapter V of Chapter 11 of the Bankruptcy Code. Class 5 consists of those unsecured creditors of the Debtor who hold Allowed Claims. Class 5 shall receive a pro-rata distribution from the Creditor Fund over a 5-year period commencing on the earlier of: a) the first day of the first full month after all Professional Fee Claims are paid in full; or b) the first day of the sixth month following the Effective Date ("Repayment Term"). The Debtor shall make distributions from the Creditor Fund to Class 5 creditors on a pro-rata basis every 6 months thereafter during the Repayment Term. No interest will be paid on account of Class 5 claims. In addition, Class 5 shall receive a pro-rata distribution of all of the net proceeds of any Avoidance Action brought by the Debtor, less reasonable costs and attorneys' fees incurred by the Debtor to pursue the claim through litigation, settlement, and/or collection. The Debtor, however, does not believe any such claims exist. Based on the estimated distributions, Class 5 Claimants are anticipated to receive approximately 8% of their allowed claims based on the total Class 5 Claims in the aggregate amount of $1,286,040.08. Upon request by any party in interest, the Debtor shall provide a quarterly financial statement, including amounts disbursed to creditors in accordance with the Plan. On the Effective Date, if the Plan is confirmed by consent, Mr. Christopher Mecklenburg and Ms. Stefanie Mecklenburg shall be appointed for the purpose of carrying out the terms of the Plan and taking all actions deemed necessary or convenient to consummating the terms of the Plan. Mr. Mecklenburg and Ms. Mecklenburg will continue to receive their annual salaries in the amount of $80,000.00 and $70,000.00, respectively, subject to adjustment as the Debtor deems reasonable and appropriate. On the Effective Date, the Disbursing Agent will open a separate interest-bearing bank account (the "Creditor Fund") for receiving payments from the Debtor as set forth herein and making distributions to Class 5 creditors. The Debtor shall make monthly deposits into the Creditor Fund on a monthly basis equal to 50% of its Net Income during the Repayment Term. A full-text copy of the Plan of Reorganization dated January 22, 2024 is available at https://urlcurt.com/u?l=sQQsCX from PacerMonitor.com at no charge. Counsel to the Debtor: K. Jamie Buechler, Esq. Buechler Law Office, LLC 999 18th St., Suite 1230-S Denver, CO 80202 Tel: (720) 381-0045 Fax: (720) 381-0382 Email: jamie@kjblawoffice.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., serves as the Debtor's legal counsel. QUEST SOFTWARE: Eaton Vance EFR Marks $1.77MM Loan at 20% Off ------------------------------------------------------------- Eaton Vance Senior Floating-Rate Trust (EFR) has marked its $1,766,000 loan extended to Quest Software US Holdings, Inc., to market at $1,405,907 or 80% of the outstanding amount, as of October 31, 2023, according to a disclosure contained in EFR's Form N-CSR for the fiscal year ended October 31, 2023, filed with the U.S. Securities and Exchange Commission. EFR is a participant in a Term Loan (SOFR + 4.25%) to Quest Software US Holdings. The loan accrues interest at a rate of 9.783% per annum. The loan matures on February 1, 2029. EFR is a Massachusetts business trust registered under the Investment Company Act of 1940, as amended, as a diversified, closed-end management investment company. The Trust's primary investment objective is to provide a high level of current income. The Trust may, as a secondary objective, also seek the preservation of capital to the extent consistent with its primary objective. EFR can be reached at: Deidre E. Walsh Eaton Vance Senior Floating-Rate Trust Two International Place Boston, MA 02110 Quest Software provides software solutions. The Company offers enterprise software that identities, users and data, streamlines IT operations, and hardens cyber security from the inside out. Quest Software serves customers in the United States. REALPAGE INC: Moody's Affirms 'B3' CFR, Outlook Remains Stable -------------------------------------------------------------- Moody's Investors Service affirmed RealPage, Inc.'s B3 Corporate Family Rating and the B2 ratings assigned to its senior secured first lien term loan and senior secured first lien revolving credit facility. In the same rating action, Moody's has also affirmed the company's B3-PD Probability of Default Rating. The rating affirmations reflect RealPage's continued revenue growth, margin improvement and highly leveraged capital structure. The outlook for the company remains stable. RATINGS RATIONALE RealPage is a leader in the niche segment of software solutions for the rental housing segment. The company's B3 Corporate Family Rating reflects its predictable and growing revenues, high leverage metrics and propensity for debt funded acquisitions. Exposure to variable rate debt that led to a significant increase in fixed charges over the last few quarters, the impact of ongoing litigations on its expense base and reputation, and its concentrated ownership are other important credit considerations. Over the last 25 years, RealPage has built a large platform of cloud-based software solutions and services for rental housing properties. The company generates a substantial portion of its revenue from its SaaS products including subscription services such as renter engagement and property management, and transaction services like payments and insurance. High tenant retention rates and cross-selling of new products to its clientele has helped the company maintain good revenue growth, improve margins, and increase the value of its client relationships. RealPage's leverage ratios, debt to EBITDA and free cash flow (FCF) to debt, are weak in large part due to its leveraged acquisitions in 2021 and 2022. The company's Moody's adjusted fixed charge coverage ratio has declined to 1.2x at the end of Q3 2023 on a trailing twelve-month basis from 1.6x for FY 2022 because of its variable rate debt. Moody's expects RealPage's leverage and coverage ratios to improve modestly over the next few quarters because of continued growth in operating earnings and modest decline in fixed charges. The company is contending with a class action lawsuit alleging that one of its revenue management products helps landlords collude to inflate rental rates. The US DOJ has also launched an antitrust investigation to analyze the product. RealPage's revenue management products do not account for a sizable portion of the company's income. Nevertheless, the reputational impact of being subject to lawsuits and investigations could weaken customer retention rate and reduce new business potential while the cost of prolonged litigation would reduce income. RealPage's liquidity is good, supported by its stable operating cash flows, average cash balance of almost $150 million in the last four quarters, and $130 million of remaining capacity on its $250 million revolving first lien credit facility at the end of Q3 2023. Moody's expects the company to generate positive FCF over the next 4-6 quarters which would be sufficient to cover the amortization of its first lien term loan. The stable outlook reflects the expectation that operating income will continue grow at a good pace, because of sustained demand for RealPage's products and services, and that liquidity will remain at about current levels. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS The ratings could be upgraded if debt to EBITDA is consistently below 7.0x, FCF/ Debt remains comfortably above 5% and the company exhibits a more conservative financial strategy. The ratings could be downgraded if RealPage's revenue contracts materially from current levels or if the company's FCF turns negative. Adoption of a more aggressive financial policy or material adverse litigation outcomes could also result in a downgrade. RealPage, Inc., headquartered in Richardson, Texas is a software and data analytics company that provides solutions and services to the multifamily real estate industry. The company was acquired by the private equity firm Thoma Bravo in an LBO transaction in 2021. The principal methodology used in these ratings was Software published in June 2022. RED APPLE: Hearing on Sale of Tara Woods Apartment Set for Jan. 30 ------------------------------------------------------------------ The U.S. Bankruptcy Court for the Northern District of Georgia is set to hold a hearing on Jan. 30 on the proposed sale of real property owned by Red Apple Investments, LLC. The company is selling the 94-unit Tara Woods Apartment in Clayton County, Ga., to Phillip Brooks for $9.9 million. The apartment complex is being sold "free and clear" of liens, claims, encumbrances and interests. The closing date of the sale is Feb. 2. Red Apple will use the proceeds of the sale to, among other things, pay the claim of Forbix Capital Corp. and the repair costs in the amount of $800,000. Forbix holds a deed to secure debt on the property, with an asserted claim amount of $7.2 million. This amount is yet to be verified by appropriate payoff letter from Forbix. About Red Apple Investments Red Apple Investments, LLC, a company in Jonesboro, Ga., filed Chapter 11 petition (Bankr. N.D. Ga. Case No. 23-59726) on Oct. 3, 2023, with $1 million to $10 million in both assets and liabilities. Jouval Zive, manager, signed the petition. Judge Paul W. Bonapfel oversees the case. Paul Reece Marr, Esq., at Paul Reece Marr, PC is the Debtor's legal counsel. REDSTONE HOLDCO 2: Eaton Vance EFR Marks $1.38MM Loan at 20% Off ---------------------------------------------------------------- Eaton Vance Senior Floating-Rate Trust (EFR) has marked its $1,376,000 loan extended to Redstone Holdco 2, L.P., to market at $1,105,918 or 80% of the outstanding amount, as of October 31, 2023, according to a disclosure contained in EFR's Form N-CSR for the fiscal year ended October 31, 2023, filed with the U.S. Securities and Exchange Commission. EFR is a participant in a Term Loan (SOFR + 4.75%) to Redstone Holdco 2. The loan accrues interest at a rate of 10.189% per annum. The loan matures on April 27, 2028. EFR is a Massachusetts business trust registered under the Investment Company Act of 1940, as amended, as a diversified, closed-end management investment company. The Trust's primary investment objective is to provide a high level of current income. The Trust may, as a secondary objective, also seek the preservation of capital to the extent consistent with its primary objective. EFR can be reached at: Deidre E. Walsh Eaton Vance Senior Floating-Rate Trust Two International Place Boston, MA 02110 Redstone Holdco 2 LP and Redstone Buyer LLC were formed as part of the buyout of the RSA Security business from Dell Inc. REMARK HOLDINGS: Gets Recommendation for School Contract Award -------------------------------------------------------------- Remark Holdings, Inc. disclosed in a Form 8-K filed with the Securities and Exchange Commission that on Jan. 22, 2024, the Company was notified by the Clark County School District in Las Vegas, Nevada that its staff is recommending to the Clark County Board of School Trustees at the Feb. 22, 2024, meeting that a contract be awarded to Remark and two other vendors. The contract, if approved by the Clark County Board of School Trustees, will be annual with nine one-year options to extend, and has an estimated annual amount of $5,000,000.00. 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 Sept. 30, 2023, the Company had $12.40 million in total assets, $45.32 million in total liabilities, and a total stockholders' deficit of $32.92 million. "Our history of recurring operating losses, working capital deficiencies and negative cash flows from operating activities give rise to, and management has concluded that there is, substantial doubt regarding our ability to continue as a going concern. Our independent registered public accounting firm, in its report on our consolidated financial statements for the year ended December 31, 2022, has also expressed substantial doubt about our ability to continue as a going concern," the Company said in its Quarterly Report for the period ended Sept. 30, 2023. RENAISSANCE HOLDING: Moody's Affirms 'B3' CFR, Outlook Stable ------------------------------------------------------------- Moody's Investors Service affirmed Renaissance Holding Corp.'s (dba Renaissance Learning) B3 Corporate Family Rating and B3-PD Probability of Default Rating. Concurrently, Moody's downgraded the rating for Renaissance Learnings' senior secured first lien credit facility ($145 million revolver due 2028 and upsized $2.02 billion term loans due 2030) to B3 from B2 as a result of the company fully repaying the second lien term loan in late 2023. Renaissance Learning completed $445 million of privately placed first lien term loans in 3Q and 4Q FY23 and used proceeds to fully pay off the $445 million second lien term loan. The downgrade of the first lien credit facilities reflects the updated capital structure that is comprised entirely of first lien debt. The outlook remains stable. The affirmation of the B3 CFR reflects Moody's expectation that the company will maintain good customer retention and pricing power, and that the company will generate modest revenue and earnings growth in the low to mid-single digit percentage range over the next year. The affirmation also reflects that the refinancing improves liquidity by lowering the company's run-rate cash interest expense through replacement of the second lien term loan with lower-cost first lien debt, and by proactively addressing the 2026 term loan maturity. Pro forma for the GL Education acquisition that closed at the end of 1Q23, Moody's adjusted debt-to-EBITDA leverage is in the low 8x for the 12 month period ended September 30, 2023. Moody's expects leverage will decline to just below 8x by the end of FY24 through very modest earnings growth. The affirmation also reflects Renaissance Learning's track record of successfully integrating acquisitions as the company has been very acquisitive since its LBO transaction in 2018. The affirmation of the B3 CFR also reflects Moody's view that Renaissance Learning will have adequate liquidity over the next year with an estimated $145 million of cash at year end 2023 and access to an undrawn $145 million revolver due 2028. Renaissance Learning's negative free cash flow weakly positions the company within the B3 CFR. Free cash flow was negative $87 million due in part to the large working capital usage of $75 million as well as higher interest rates and business reinvestment needs. For FY24, Moody's expects the high interest expense to continue to weigh on its cash flow generating ability, and expects free cash flow to be in the range of negative $10 million based on an expectation for a much smaller working capital usage in FY24. The reduction in interest expense as a result of the refinancing will also contribute to a smaller cash usage and help to offset with modestly higher capital spending including capitalized software development cost. The affirmation is based on Moody's assumption that continued earnings growth will lead to positive free cash flow in 2025. There is a required $20 million amortization for its first lien term loan. Overall, Moody's expects the company will end the fiscal 2024 with cash on balance sheet of approximately $100 million. Due to seasonality, Renaissance Learning is expected to need to draw on its revolver in 2Q to cover its working capital swing and fully pay off the balance in 3Q due to the timing of contract renewals around the start of the school year. The company benefits from having no near term maturities and refinancing needs as its $145 million revolver matures in 2028 and its $2.02 billion first lien term loan is due in 2030. Ratings Rationale Renaissance Learning's B3 CFR broadly reflects its persistently high leverage as the result of an aggressive financial policy. Pro forma for the GL Education acquisition that closed in Q1FY23, Moody's adjusted debt-to-EBITDA is the low 8x for the LTM period ended September 30, 2023. Moody's projects debt-to-EBITDA leverage will decline to just below 8x level over the next year through modest earnings growth. The rating is also constrained by the competitive nature of the industry with other participants in the relatively fragmented K12 digital learning and assessment market. High investment needs will consume cash as the company continues to enhance content and product features to maintain competitiveness. High interest costs will also continue to be a drag on free cash flow. The ratings are based on Moody's assumption that the company will have sufficient liquidity to fund a modest free cash flow burn and required term loan amortization in 2024, and that free cash flow will be positive in 2025. The B3 CFR is supported by Renaissance Learning's established brand name with a portfolio of well-recognized product offerings in the digital education market, and solid long term growth prospects driven by favorable industry fundamentals such as the transition of educational services to more digital-oriented delivery. The rating also benefits from the company's high level of recurring revenue (roughly 95% are subscription based) and good margins. Furthermore, the company benefits from having no near term refinancing needs with the revolver maturing in 2028 and the first lien term loan due in 2030. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS The stable outlook reflects Moody's view that debt-to-EBITDA leverage will decline to just below 8x over the next year through modest earnings growth. The stable outlook also reflects Moody's expectation that the company will maintain adequate liquidity with a cash balance of approximately $100 million by the end of FY24. The ratings could be upgraded if the company delivers sustained organic revenue and earnings growth, with Moody's adjusted debt-to-EBITDA maintained below 6.5x and free cash flow as a percentage of debt sustained above 5%. The ratings could be downgraded if operating performance does not improve due to lower customer retention, weak orders, or higher costs. EBITA-to-interest less than 1x, free cash flow to debt below 1%, or a deterioration of liquidity could also lead to a downgrade. The principal methodology used in these ratings was Business and Consumer Services published in November 2021. Renaissance Learning is a provider of subscription-based educational practice and assessment software and school improvement programs for kindergarten through senior high (K-12) schools. The company was acquired by private equity firm Francisco Partners in 2018 with Blackstone acquiring a minority ownership interest in 2022. The company reported approximately $637 million of revenue for the LTM period ended September 30, 2023. RETROVISION LLC: To Seek Plan Confirmation on March 12 ------------------------------------------------------ Judge Beth E. Hanan has entered an order approving the Disclosure Statement of Retrovision, LLC. The Court will hold a hearing on confirmation of the Plan on March 12, 2024, at 1:30 PM at the United States Courthouse, 517 East Wisconsin Avenue, Room 150, Milwaukee, Wisconsin. No later than Jan. 16, 2024, the debtors must mail a copy of this order, the plan, the disclosure statement, and a ballot conforming to Ballot for Accepting or Rejecting Plan of Reorganization (Official Form 314) to all creditors, equity security holders, the United States Trustee, and other parties in interest, Feb. 13, 2024, is fixed as the last day for filing written acceptances or rejections of the plan. The Debtors must file a written report summarizing the ballots on or before Feb. 16, 2024. Feb. 16, 2024, is fixed as the last day for filing and serving written objections to confirmation of the plan. The Debtors must file any response to an objection on or before Feb. 23, 2024. By no later than March 7, 2024, the debtors and any party objecting to confirmation must file on the docket: (1) numbered copies of exhibits that they contemplate using at the hearing; exhibits should be numbered as described in the procedures posted on the court's website at https://www.wieb.uscourts.gov/content/judge-beth-e-hanan. (2) a list of the witnesses that they intend to call at the evidentiary hearing with a brief summary of the testimony each witness will provide (including for any expert witness the expected subject matter of the testimony and a summary of the facts and opinions to which the witness is expected to testify). Disclosure Statement Retrovision, LLC and 2580RootRiverParkway, LLC submitted a Plan and a Disclosure Statement. Retro is a Wisconsin limited liability company formed in January 2013. It is a single asset real estate company holding title to real property located at 3424 W. Wisconsin Avenue, Milwaukee, WI 53208 known as the Harnischfeger House. It is a German Renaissance Revival style mansion completed in 1905. The home was built for Wisconsin industrialist Henry Harnischfeger. In 1991 the City of Milwaukee gave the building a historical designation. RootRiver is a Wisconsin limited liability company formed in January 2017. It is a single asset real estate company holding title to real property located at 2580 Root River Pkwy, West Allis, WI 53227, a four bedroom residential home located in a the City of West Allis within Milwaukee County. Under the Plan, Class 2 Allowed General Unsecured Creditors. Allowed Claims of creditors in Class 2 consist of Allowed Unsecured Claims without priority. The Debtors estimates that the total amount for all Class 2 Creditors will be $3,024.88. Of which, the Debtors estimate $1,482.89 for Retro and $1,541.99_ for RootRiver. Claimants shall receive their pro rata share of the sale proceeds after administrative claims, and Allowed Claims in Class 1 are paid in full from their respective collateral. It is projected that Class 2 Claimants shall be paid in full. The Debtor will implement and fund this Plan through the sale of the Collateral. Unless otherwise extended, the Debtors will have 180 days from the entry of the Confirmation Order to control the sale process as set forth in Section 7.01 of the Plan. During that time, the Debtors are responsible for marketing the real properties. The Plan provides for initial listing prices along with timelines for reducing the listing prices to a minimum sale price for each property. If the Debtors do not sell the properties within the 180 day time period, unless extended by terms of the Plan, then Summit Credit Union will be given control over the sale of the real estate. If the Root River Property has an accepted offer within 60 days after the Confirmation Order there is a carve-out of $30,000 from the sale proceeds to be deposited into Retrovision's bank account and used exclusively to complete any repairs or improvements to the Wisconsin Avenue Property. Attorneys for the Debtors: Evan P. Schmit, Esq. KERKMAN & DUNN 839 N. Jefferson St., Suite 400 Milwaukee, WI 53202-3744 Tel: (414) 277-8200 Facsimile: (414) 277-0100 E-mail: eschmit@kerkmandunn.com A copy of the Order dated Jan. 10, 2024, is available at from https://tinyurl.ph/XhAIx PacerMonitor.com. A copy of the Disclosure Statement dated Jan. 10, 2024, is available at https://tinyurl.ph/BmGXd from PacerMonitor.com. About Retrovision and 2580RootRiverParkway Retrovision, LLC, and 2580RootRiverParkway, LLC, filed petitions under Chapter 11, Subchapter V of the Bankruptcy Code (Bankr. E.D. Wis. Lead Case No. 23-23769) on Aug. 21, 2023. At the time of the filing, Retrovision reported $1 million to $10 million in assets and $100,000 to $500,000 in liabilities while 2580RootRiverParkway reported $100,001 to $500,000 in both assets and liabilities. Judge Beth E. Hanan oversees the cases. Evan P. Schmit, Esq., at Kerkman & Dunn, is the Debtors' legal counsel. RICE OIL: Seeks Cash Collateral Access -------------------------------------- Rice Oil Company, LLC, d/b/a Rice Oil & Environmental, asks the U.S. Bankruptcy Court for the Northern District of Ohio for authority to use cash collateral and provide adequate protection. The Debtor requires the use of cash collateral to pay for all necessary post-petition operating expenses including lease obligations, payroll, taxes, insurance obligations, utilities, and other normal and necessary operating expenses. The Debtor's primary secured lender is Peoples Bank. Peoples Bank is believed to have a priority security interest in "all inventory, chattel paper, accounts, equipment and general intangibles now owned or hereafter acquired." The Debtor's gross revenue was $2.359 million in 2022 and $2.6 million in 2023. The Debtor offers to adequately protect the interests of People Bank by granting it post-petition liens on, and security interest in, the property of the estate in favor of Peoples Bank that will have the same validity, priority, and extent (if any) that existed at the time of the commencement of the above-captioned cases as adequate protection for their secured claim. A copy of the motion is available at https://urlcurt.com/u?l=BcGzFX from PacerMonitor.com. About Rice Oil Company, LLC Rice Oil Company, LLC offers products and services that span the following: oils & lubricants delivery; used oil & oily water collection; and vacuum cleaning services for oil-water separators. The Debtor sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. N.D. Ohio Case No. 24-50084) on January 22, 2024. In the petition signed by David K. Charlton, president, the Debtor disclosed up to $1 million in assets and up to $10 million in liabilities. Judge Alan M. Koschik oversees the case. Michael A. Steel, Esq. represents the Debtor as legal counsel. ROCKY MOUNTAIN: Court OKs Cash Collateral Access on Final Basis --------------------------------------------------------------- The U.S. Bankruptcy Court for the District of Colorado authorized Rocky Mountain Fine Wines, LLC to use cash collateral on a final basis, in accordance with the budget. The U.S Small Business Administration may have or assert a lien encumbering the Debtor’s cash collateral. The SBA filed on April 2, 2021 a UCC-1 financing statement asserting a lien encumbering substantially all of the Debtor's assets on account of an EDIL loan. Based on the foregoing, the SBA may have a secured lien position on the Debtor’s funds and revenues that constitute cash collateral as the term is defined in the Bankruptcy Code. To the extent that any party possesses a properly perfected security interest in the Debtor's cash collateral, as adequate protection for the Debtor's use of cash collateral: a. The Debtor will provide such party with a replacement lien on all postpetition accounts receivable to the extent that the use of cash collateral results in a decrease in the value of such party's interest in the cash collateral pursuant to 11 U.S.C. Section 361(2); b. The Debtor will maintain adequate insurance coverage on all personal property assets and adequately insure against any potential loss; c. The Debtor will provide to such secured party all periodic reports and information filed with the Bankruptcy Court, including debtor-in-possession reports; d. The Debtor will only expend cash collateral pursuant to the Budget subject to reasonable fluctuation by no more than 15% for each expense line item per month; e. The Debtor will pay all post-petition taxes; and f. The Debtor will retain in good repair all collateral in which such party has an interest. A copy of the order is available at https://urlcurt.com/u?l=0iOyki from PacerMonitor.com. About Rocky Mountain Fine Wines, LLC Rocky Mountain Fine Wines, LLC is a Colorado limited liability company based in Thorton, Colorado and was formed in 2014. The Debtor is generally involved in the wine distribution industry. The Debtor sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. D. Colo. Case No. 23-15883-MER) on December 20, 2023. In the petition signed by Cory Brown, managing member, the Debtor disclosed up to $100,000 in assets and up to $1 million in liabilities. Judge Michael E. Romero oversees the case. Aaron A. Garber, Esq., at Wadsworth Garber Warner Conrardy, P.C., represents the Debtor as legal counsel. S&W BLUE JAY: Court Approves Disclosure Statement ------------------------------------------------- Judge Ronald A. Clifford III has entered an order approving the First Amended Disclosure Statement of S&W Blue Jay Way, LLC. The schedule in connection with confirmation of the Debtor's First Amended Chapter 11 Liquidating Plan (the "Plan") is as follows: * Jan. 12, 2024 - deadline for the Debtor to serve on creditors and parties-in-interest the First Amended Disclosure Statement, the Plan, ballots, and notice of the deadlines set forth in this Order. * Feb. 21, 2024 - deadline for parties to return ballots. * Feb. 21, 2024 - deadline for parties-in-interest to file objections to confirmation of the Plan. * Feb. 28, 2024 - deadline for the Debtor to file tally of ballots. * Feb. 28, 2024 - deadline for the Debtor to file confirmation brief and replies to any objections to confirmation of the Plan. * Mar. 4, 2024 - deadline for any party that timely objected to confirmation of the Plan to file response to the Debtor's reply to such party's objection. * Mar. 6, 2024, at 2:00 p.m. - in-person auction for the sale of the Debtor's real property and in-person hearing on confirmation of the Plan, which will take place in Courtroom 201 of the above-captioned Court, located at 1415 State St., Santa Barbara, CA 93101. About S&W Blue Jay Way S&W Blue Jay Way is a Single Asset Real Estate (as defined in 11 U.S.C. Section 101(51B)). S&W Blue Jay Way, LLC filed its voluntary petition for relief under Chapter 11 of the Bankruptcy Code (Bankr. C.D. Cal. Case No. 23-10672) on Aug. 4, 2023. The petition was signed by Lisa Strickland as authorized signatory on behalf of 1966 BJW, LLC, as managing member of S&W Blue Jay Way, LLC. At the time of filing, the Debtor estimated $10 million to $50 million in assets and $1 million to $10 million in liabilities. Judge Ronald A. Clifford III presides over the case. Roye Zur, Esq., at Elkins Kalt Weintraub Reuben Gartside LLP, represents the Debtor as counsel. SALEM MEDIA: S&P Ups ICR to 'CCC' on New Revolving Credit Facility ------------------------------------------------------------------ S&P Global Ratings raised the issuer credit rating on Salem Media Group Inc. to 'CCC' from 'CCC-' since the extended maturity date reduces near-term default risk. S&P said, "At the same time, we placed all of our ratings on CreditWatch with positive implications pending the completion of the sale of its Church Products business, which will bolster the company's liquidity. "We expect to resolve the CreditWatch placement upon the sale close of its Church Products business. We could raise the rating by one notch if we have liquidity visibility beyond 12 months. If the asset sale does not close in the first half of 2024, we could affirm the 'CCC' rating." The rating upgrade reflects the extended maturity of its ABL revolver maturing in 2026, reducing near-term default risk. In December 2023, Salem issued a new, $26.0 million, three-year ABL revolver with Siena Lending Group. It then borrowed on the facility to refinance its prior ABL revolver (approximately $20 million outstanding as of Sept. 30, 2023) with Wells Fargo, which had a maturity date of March 2024. The extension of its ABL revolver reduces the company's near-term default risk. S&P now expects Salem will have sufficient liquidity to meet its cash uses for at least the next six months. The CreditWatch positive placement reflects the potential for a higher rating if asset sale proceeds provide a prolonged liquidity runway. S&P said, "We estimate that the company's availability on the new ABL facility is limited to about $6 million. The company is waiting on the close of the sale of its Salem Church Products business which would provide it with $22.5 million of cash at closing. Salem initially expected the Church Products asset sale to close on Nov. 1, 2023, but the close is still pending. We expect the company would use asset sale proceeds to repay borrowings on its ABL revolver. "We expect operating and financial performance will remain challenged. "As of Sept. 30, 2023, Salem's S&P Global Ratings-adjusted gross leverage was 8.3x. While we believe leverage could potentially decline to around 6.0x in 2024 on increased political revenue in a U.S. presidential election year, we expect the company will generate negative FOCF through at least the first half of the year as advertising trends remain depressed. We have very little visibility into the timing and magnitude of the potential recovery because radio advertising has some of the shortest lead times in media. In 2025, we expect leverage to increase to mid-6x due to the loss of high-margin political revenue. "We expect to resolve the CreditWatch placement upon closing the sale of its Church Products business. We could raise the rating by one notch if we have liquidity visibility beyond 12 months. "If the asset sale does not close in the first half of 2024, we could affirm the 'CCC' rating." SAS AB: Files Amendment to Disclosure Statement ----------------------------------------------- SAS AB and its Subsidiary Debtors submitted an Amended Disclosure Statement for Amended Joint Chapter 11 Plan of Reorganization dated January 23, 2024. The Debtors commenced the Chapter 11 Cases to pursue and implement a comprehensive financial restructuring to deleverage the Debtors' balance sheet to ensure the Debtors' long-term viability. Following the completion of the Debtors' equity solicitation process in these Chapter 11 Cases, the Debtors selected a group of bidders comprised of Castlelake, L.P., on behalf of certain of its funds or affiliates ("Castlelake"), Air France-KLM S.A. ("AFKLM"), and Lind Invest ApS ("Lind Invest" and, collectively with Castlelake and AFKLM, the "Bidder Consortium"), together with the Kingdom of Denmark (in its capacity as a new investor, the "Danish State Investor" and, together with the Bidder Consortium, the "Investors"), as the winning bidders with respect to a transaction involving an investment in, and issuance of new equity interests and secured convertible debt by, reorganized SAS AB ("Reorganized SAS AB" and, such transaction, the "Transaction"). The Transaction is memorialized in the Investment Agreement, the terms of which are incorporated into the Plan. As a result, the Plan provides for a comprehensive restructuring of the Debtors' balance sheet and a significant investment of new capital from the Investors, which will provide the Debtors with liquidity to support operations as a going concern. More specifically, the Plan incorporates the Transaction and provides for (among other things): * a total investment in Reorganized SAS AB of $1.2 billion, comprised of $475 million in new unlisted equity and $725 million in secured convertible debt; * the allocation of up to $325 million to fund distributions to general unsecured creditors through a combination of cash and the remaining approximately 13.6% of new unlisted equity in Reorganized SAS AB, subject to the terms of the Investment Agreement and the Plan, subject to cash to be funded to the GUC Trust as set forth in the Plan; * the post-confirmation implementation of the Plan, with respect to SAS AB, in Sweden through a Swedish company reorganization (Sw. foretagsrekonstruktion) (the "Swedish Reorganization" and, such plan, the "Swedish Reorganization Plan") pursuant to the Swedish Company Reorganization Act (Sw. lag (2022:964) om foretagsrekonstruktion) (the "Swedish Reorganization Act"), likely to be filed by SAS AB in 2024; * the establishment of the GUC Trust (to be funded with a portion of the Reserved Funds), which will be used by the Reorganized Debtors to (i) (a) defend themselves against any State non-tax claims attributable to the period from 2020 to 2023 that may be raised against the Debtors in national courts (each such claim, a "State Non-Tax Claim") and (b) satisfy any costs or expenses that may arise or have arisen from a third party agreeing to pay in full and without recourse to the Reorganized Debtors any State Non-Tax Claim, (ii) in the event of (a) a final decision from a competent court requiring the Reorganized Debtors to pay or (b) a State under applicable Law being required to ex officio demand payment of any State Non-Tax Claim, pay that State Non-Tax Claim, to the extent a third party has not already paid, or agreed to pay, such State Non-Tax Claim, and (iii) in the event that the funds in the GUC Trust exceed any amounts paid pursuant to the preceding clauses (i) and (ii), make distributions to holders of GUC Trust Interests in accordance with the Plan and the Swedish Reorganization Plan; * the cancellation of Debtor SAS AB's existing common shares and other securities; * a reduction in the Debtors' prepetition debt by approximately $2 billion; and * approximately $1.1 billion of unrestricted cash on the Reorganized Debtors' go forward balance sheet. The Plan provides for the substantive consolidation only of the Consolidated Debtors exclusively for the purposes set forth in the Plan, and otherwise shall be implemented without any substantive consolidation. Subject to the satisfaction of the conditions set forth in Article VIII of the Investment Agreement or the waiver thereof by the party entitled to waive that condition, on the Effective Date Reorganized SAS AB shall issue New Shares and New Convertible Notes to the Investors for an aggregate purchase price equal to the Total Share Subscription Amount and the New Convertible Notes Amount, respectively, subject to and in accordance with the terms and conditions of the Plan, the Investment Agreement, the New Convertible Notes Indenture, the Governance Term Sheet, the Shareholders' Agreement, the Minority Shareholders' Agreement, the Articles, and any consents or approvals required under each of the foregoing. Accordingly, the Restructuring shall include: * a total investment in Reorganized SAS AB corresponding to $1.2 billion (SEK12.249 billion), comprised of $475 million (SEK4.849 billion) in New Shares and $725 million (SEK7.401 billion) in New Convertible Notes; * the allocation of up to $325 million (SEK3.318 billion) in value to holders of Allowed General Unsecured Claims as set forth in the Plan, subject to the establishment of a GUC Trust with respect to the GUC Trust Amount, through a combination of the Available Cash, the GUC Trust Interests (including, for the avoidance of doubt, any value distributed on account thereof), and the New Shares Distribution Pool. On the Effective Date, (i) the GUC Trust shall be established and, as soon as practically possible thereafter in order to allow for the SCRO Registration, shall be funded by the Debtors or the Reorganized Debtors, as applicable, with a portion of the GUC Cash and (ii) the Contribution Fee Escrow Account shall be established and shall be funded by the Convertible Notes Purchasers with the Escrow Contribution Fees, in each case in accordance with the Investment Agreement, this Plan, and the Swedish Reorganization Plan. The GUC Trust and the Contribution Fee Escrow Account shall be funded with Cash in the aggregate amount of the Reserved Funds, with a portion of the GUC Cash and the Escrow Contribution Fees used to constitute the Reserved Funds to be allocated in amounts relatively proportionate to the amount of the Total Distributable Value as compared to the amount of the Contribution Fees. The Available Cash shall be increased, with a corresponding reduction to the GUC Cash funded to the GUC Trust, up to an amount as agreed with the consent of the Required Investors, in the event that the Consolidated Debtors Available Cash and the SAS AB Available Cash, as applicable, to be allocated to holders of Allowed Other General Unsecured Claims against the Consolidated Debtors, SAS AB on account of its Allowed Intercompany Claim against the Consolidated Debtors, and Allowed Commercial Hybrid Bond Claims, Allowed Other General Unsecured Claims, and Allowed Intercompany Claims against SAS AB, respectively, would provide such holders of Allowed Claims, as applicable, with a percentage recovery less than the percentage recovery provided to holders of Allowed Aircraft Lease Claims, Allowed Trade Claims, Allowed Union Claims, Allowed Danish Term Loan Claims, Allowed Swedish Term Loan Claims, and Allowed Norwegian Term Loan Claims against the Consolidated Debtors and Allowed Aircraft Lease Claims, Allowed Trade Claims, and Allowed Norwegian Term Loan Claims against SAS AB, respectively. Based upon such Financial Projections, the Debtors conclude they will have sufficient resources to make all payments required pursuant to the Plan and that confirmation of the Plan is not likely to be followed by liquidation or the need for further reorganization. A full-text copy of the Amended Disclosure Statement dated January 23, 2024 is available at https://urlcurt.com/u?l=sEFlG0 from Kroll Restructuring Administration, LLC, claims agent. Attorneys for Debtors: Gary T. Holtzer, Esq. Kelly DiBlasi, Esq. David Griffiths, Esq. Lauren Tauro, Esq. Weil Gotshal & Manges, LLP 767 Fifth Avenue New York, NY 10153 Tel: (212) 310-8000 Fax: (212) 310-8007 Email: Gary.Holtzer@weil.com kelly.diblasi@weil.com david.griffiths@weil.com lauren.tauro@weil.com About Scandinavian Airlines SAS SAB -- https://www.sasgroup.net/ -- Scandinavia's leading airline, with main hubs in Copenhagen, Oslo and Stockholm, is flying to destinations in Europe, USA and Asia. In addition to flight operations, SAS offers ground handling services, technical maintenance, and air cargo services. SAS is a founder member of the Star Alliance, and together with its partner airlines offers a wide network worlxdwide. SAS AB and its subsidiaries, including Scandinavian Airlines Systems Denmark-Norway-Sweden and Scandinavian Airlines of North America Inc., sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. S.D.N.Y. Lead Case No. 22-10925) on July 5, 2022. In the petition filed by Erno Hilden, authorized representative, SAS AB estimated assets between $10 billion and $50 billion and liabilities between $1 billion and $10 billion. Judge Michael E. Wiles oversees the cases. The Debtors tapped Weil, Gotshal & Manges, LLP as global legal counsel; Mannheimer Swartling Advokatbyra AB as special counsel; FTI Consulting, Inc. as financial advisor; Ernst & Young AB as tax advisor; and Seabury Securities, LLC and Skandinaviska Enskilda Banken AB as investment bankers. Seabury is also serving as restructuring advisor. Kroll Restructuring Administration, LLC is the claims agent and administrative advisor. The U.S. Trustee for Region 2 appointed an official committee to represent unsecured creditors in the Debtors' Chapter 11 cases. The committee is represented by Willkie Farr & Gallagher, LLP. SAS GROUP: Case Summary & 20 Largest Unsecured Creditors -------------------------------------------------------- Debtor: SAS Group Inc. 220 White Plains Road Tarrytown, NY 10591-5806 Business Description: The Debtor is a merchant wholesaler of furniture and home furnishing. Chapter 11 Petition Date: January 26, 2024 Court: United States Bankruptcy Court Southern District of New York Case No.: 24-22066 Judge: Hon. Sean H. Lane Debtor's Counsel: Dawn Kirby, Esq. KIRBY AISNER & CURLEY LLP 700 Post Road Suite 237 Scarsdale, NY 10583 Tel: (914) 401-9500 E-mail: dkirby@kacllp.com Estimated Assets: $100,000 to $500,000 Estimated Liabilities: $1 million to $10 million The petition was signed by Scott Sobo as president. 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/XVF76PQ/SAS_Group_Inc__nysbke-24-22066__0001.0.pdf?mcid=tGE4TAMA SOLIANT: Moody's Affirms 'B1' CFR, Outlook Remains Stable --------------------------------------------------------- Moody's Investors Service affirmed Georgia-based staffing and outsourcing services provider TTF Holdings, LLC's (dba "Soliant", the company) B1 corporate family rating and B1-PD probability of default rating. Moody's also affirmed the B1 backed senior secured first-lien instrument ratings, including a $30 million revolving credit facility and a $500 million term loan. The outlook is maintained stable. The affirmation of the B1 CFR reflects Soliant's strong operational performance in the education segment, which has more than offset weakness in its healthcare practice amid a weak macroeconomic backdrop. The rating affirmation also reflects Moody's expectation that Soliant's financial policies could result in increased debt/EBITDA leverage as debt capital markets conditions improve. RATINGS RATIONALE Soliant's B1 CFR reflects its ability to identify and invest in fast-growing staffing services segments that command high margins and have limited exposure to cyclical macroeconomic swings. The company has more than doubled its revenue scale organically since its 2019 separation from Adecco (Adecco Group AG, Baa1 stable). Moody's expects the company will generate over $1 billion of revenue in 2024 (pro forma with the recent divestiture of the life sciences segment), compared to $392 million in 2020, reflecting a very strong competitive position. Soliant is a leader within the niche special education and healthcare markets it serves. Improving EBITDA margins (around 21% as of the 12 months ending September 30, 2023, Moody's adjusted) and Moody's expectation for sustained growth and financial policies that keep debt-to-EBITDA leverage below 4.5x also support the credit profile. Established customer relationships and an extensive database of candidates create barriers to entry. Soliant's consistent ability to pass on labor costs to its clients supports its good profitability, which combined with minimal capex requirements results in healthy cash flow generation. Soliant's ratings are constrained by its smaller scale compared to higher-rated services providers, limited operating history as a standalone company, and Moody's expectation for opportunistic financial strategies. Moody's expects the private equity owner could increase debt/EBITDA from the current 2.1x (as of September 30, 2023), which is low for B1 rating category peers, to approximately 4.5x (Moody's adjusted) when financial conditions improve. Moody's also anticipates excess cash flow will continue to be mostly distributed to shareholders. Growth and profitability could be pressured if larger staffing companies with deep pockets entered the niche markets that Soliant serves. The company is exposed to economic cycles, especially in the healthcare segment, and could face sudden drops in demand for its services. However, Soliant's focus on highly specialized (less volatile) positions limits the impact of macroeconomic swings. The education segment has continued to grow at a remarkable double-digit rate over the last 12 months despite an uncertain macroeconomic backdrop. A highly variable cost structure also mitigates cyclical concerns. The stable outlook reflects the expectation for revenue growth rates in the high single-digit range or above over the next 12-18 months, with declines in the healthcare segment offset by strong double-digit growth in education. Moody's anticipates healthcare bill rates will continue to trend down modestly and flatten towards the second half of 2024, as demand for nursing positions normalizes from the peak caused by the coronavirus pandemic in 2022. The education segment will continue to benefit from more stable bill rates, new client wins and additional positions across existing school clients. Moody's expects profitability rates to expand modestly as the revenue mix shifts to a larger contribution from the higher margin education segment, with EBITDA margins in the 21.5% - 22.5% range and debt/EBITDA sustained around 2.0x over the next 12-18 months, in the absence of leveraging transactions (all metrics Moody's adjusted). Soliant's very good liquidity position is supported by Moody´s expectation for very strong operating cash flow generation, over $175 million in 2024E, along with a $30 million revolving facility (undrawn and fully available) and modest cash on hand. Internal liquidity sources are well in excess of capex needs and term loan amortization payments are not required as a result of previous voluntary prepayments. The first-lien revolver includes a 6.5x springing covenant when the drawn amount exceeds 35%. Moody's expects Soliant will maintain an ample cushion against the covenant test. The $30 million revolver will cover any seasonal cash flow needs stemming from the nine-month education calendar and associated volatility in working capital. The B1 rating on Soliant's senior secured first-lien credit facilities reflect both the probability of default rating of B1-PD and the Loss Given Default for Speculative-Grade Companies Methodology (LGD Methodology). The senior secured first-lien credit facilities benefit from secured guarantees from all existing and subsequently acquired wholly-owned domestic subsidiaries. Given the lack of other meaningful debt in the capital structure, the facilities are rated in line with the B1 CFR. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS The ratings could be upgraded if scale increases, enhancing Soliant's competitive position and further diversifying its revenue profile, and the company improves its governance characteristics, including lower ownership and board concentration, and a track record of moderate financial policies. A ratings upgrade would require Moody's to expect that debt-to-EBITDA will remain under 3.5x, and that the company will sustain very good liquidity. The ratings could be downgraded if revenue growth or profitability diminish materially compared to historical levels, due to increased competition, saturation in the niche segments Soliant serves, or other factors impacting the business model. The ratings could also be downgraded if the company pursues more aggressive financial policies, such that Moody's expects debt-to-EBITDA will be sustained around 4.5x or higher. Diminished liquidity could also lead to a ratings downgrade (all metrics Moody's adjusted). The principal methodology used in these ratings was Business and Consumer Services published in November 2021. Soliant, based in Atlanta, GA, is a specialized staffing and outsourcing services provider. The company sources and deploys skilled contractors, such as speech therapists or nurses, to public schools and healthcare providers. Soliant operates solely in the US and is owned by affiliates of private equity sponsor Olympus Partners. Moody's expects the company will generate roughly $975 million of revenue in fiscal year 2023. SOUTHERN VETERINARY: Moody's Affirms 'B3' CFR, Outlook Stable ------------------------------------------------------------- Moody's Investors Service affirmed Southern Veterinary Partners, LLC ("SVP") B3 Corporate Family Rating, and B3-PD Probability of Default Rating. Moody's also affirmed the B2 rating on the backed 1st lien senior secured bank credit facilities, and Caa2 rating on the backed 2nd lien senior secured debt. The outlook remains stable. The rating affirmation reflects SVP's good liquidity with a consistent track record of strong operating performance and free cash flow generation, notwithstanding the company's high financial leverage (over 7x debt to EBITDA on Moody's adjusted basis as of September 30, 2023). SVP has managed pricing initiatives and operating costs successfully over the last 18 months, driving continued margin expansion and organic earnings growth at its general practice veterinary clinics. Moody's notes that SVP's strong performance has persisted despite a normalization in the animal health end-market since 2023 (the aftermath of the covid-19 pandemic), and ongoing labor inflation and availability headwinds for veterinary services companies. RATINGS RATIONALE SVP's B3 CFR broadly reflects its high financial leverage, with Moody's-adjusted debt-to-EBITDA above 7 times as of September 30, 2023. Moody's expects SVP's high leverage to persist as the company continues to use incremental debt to fund acquisitions. In addition, the rating reflects risks to the company's rapid growth strategy under private equity ownership, including an inability to integrate and manage growth, and a high level of recurring expenses which can limit cash flow generation. SVP's rating benefits from favorable long term trends in the pet care sector that underpin Moody's expectation for healthy same-store sales growth in the mid-single-digits. The rating is also supported by the company's good track record of integrating acquisitions, as well as its successful pricing and cost management initiatives that have allowed the company to successfully manage through a challenging labor environment over the past 12-18 months. Liquidity is good, supported by approximately $259 million of cash as of September 30, 2023, though Moody's expects the majority of the cash balance to be used towards future acquisitions and growth investments. SVP's liquidity is also supported by Moody's projection of free cash flow of over $30 million annually over the next 12-18 months. SVP's $30 million revolving credit facility expiring in 2025 (undrawn as of September 30, 2023) provides additional liquidity. SVP's CIS-4 indicates the rating is lower than it would have been if ESG risk exposures did not exist. The score reflects governance considerations (G-4) driven by SVP's aggressive financial policies under private equity ownership, including its historical rapid pace of debt-funded acquisitions. That said, governance risk is partially mitigated by SVP's consistent management credibility and track record of generating positive free cash flow through periods of high acquisition activity. The score also reflects SVP's exposure to social risks (S-4), primarily due to human capital, as SVP is reliant upon a highly specialized workforce that exposes the company to elevated risks from labor supply and/or inflationary pressures. The stable outlook reflects Moody's expectation that leverage will remain high as SVP continues to use debt to fund acquisitions, but that the company's stable business profile will result in sustained mid-single digit top line growth, along with substantial positive free cash flow. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS The ratings could be upgraded if the company delivers sustained revenue and earnings growth and is successful in integrating acquisitions. Moderation of financial policies, partially evidenced by debt/EBITDA sustained below 6.5 times, along with good liquidity supported by sustained positive free cash flow could also support an upgrade. The ratings could be downgraded if operational performance deteriorates or liquidity weakens, or the company fails to generate positive free cash flow. Inability to manage its rapid growth, or if EBITA-to-interest falls below one times, could also put downward pressure on the company's ratings. Headquartered in Birmingham, Alabama, Southern Veterinary Partners, LLC ("SVP") is a national veterinary hospital consolidator, offering a full range of medical products and services, and operating 380 general practice locations across 22 states. The company generated revenues of approximately $1.2 billion for the twelve months ended September 30, 2023. SVP is a portfolio company of private equity firm Shore Capital Partners. The principal methodology used in these ratings was Business and Consumer Services published in November 2021. TACALA INVESTMENT: Moody's Affirms B3 CFR, Outlook Remains Stable ----------------------------------------------------------------- Moody's Investors Service affirmed Tacala Investment Corp.'s B3 corporate family rating and B3-PD probability of default rating. Moody's also assigned a B3 ratings to both Tacala's proposed $725 million senior secured first lien term loan due 2031 and its proposed $55 million senior secured first lien revolving credit facility due 2029. The outlook is maintained at stable. Upon close of the refinancing, ratings on its B2 rated senior secured revolving credit facility due 2025, its B2 rated first lien term loan due 2027, and its Caa2 rated senior secured second lien term loan due 2028 will be withdrawn. Moody's ratings are subject to receipt and review of final terms and documentation. The outlook is maintained at stable. Net proceeds from the proposed $725 million senior secured first lien term loan maturing February 2031 will be used to repay the company's existing $553.7 million senior secured first lien term loan and $160 million senior secured second lien term loan. The company will also replace its $55 million senior secured first lien credit facility due 2025 with a $55 million senior secured first lien revolving credit facility due February 2029 (rated B3). The proposed refinancing will increase debt balances by approximately $10 million and is expected to reduce interest expense as the company repays its high cost second lien notes. The affirmation reflects Tacala's brand strength as a Taco Bell franchisee and Moody's expectation that EBITDA will continue to grow both organically and through new restaurant developments resulting in leverage improving to approxiamtely 6.25x in the next twelve months. Tacala's leverage remains high with Moody's adjusted debt to EBITDA for the twelve-month period ending December 31, 2023 at approximately 7.2x proforma for the proposed refinancing. Nonetheless, Tacala has a history of refraining from any further dividends before leverage has been reduced such that it is in-line with the B3 CFR. Supporting growth is the company's stable traffic patterns and measured menu price increases, as well as margin improvement from invesetments in operational efficiencies and labor productivity. The stable outlook reflects Moody's expectation for operating performance to drive EBITDA improvement and the maintenance of credit metrics reflective on its B3 rating. Moody's also expects the company will maintain at least its current adequate liquidity and will fund its growth capital expenditures through cash flow. RATINGS RATIONALE Tacala's B3 CFR is constrained by the company's modest scale in terms of revenue and restaurant count, geographic concentration in Texas and the Southern US, and lingering tail risk from a higher labor and commodity cost environment, as well as aggressive financial policies related to private equity ownership. As of December 31, 2023, Tacala had 360 restaurants and about $680 million in annual revenue. Positive credit consideration is given to the company's strong brand awareness as a franchisee of Taco Bells driving a history of positive same store sales and EBITDA growth while continuing to grow its restaurant base through development and acquisition. Tacala also benefits from a large proportion of off-premise / drive-thru revenue and good operational efficiencies that support the company's strong margins. Tacala's liquidity is adequate and includes $30 million of cash on hand, positive free cash flow before the shareholder distribution, but only minimal availability of $7 million on its $55 million revolver after $48 million in outstanding letters of credit. In total, liquidity is sufficient for the company's 12 month cash needs and the company has no near maturities after the proposed refinancing. Moody's expects the company to prioritize growth initiatives over absolute debt repayment. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS The ratings could be downgraded if operating performance weakens or credit metrics fail to meet the ratings threshold, including debt/EBITDA sustained above 6.75x or EBIT/interest sustained below 1.25x. A downgrade could also occur should liquidity not be maintained at least at current levels. The ratings could be upgraded if the company pursues a more balanced financial policy and sustainably improves credit metrics. Quantitative metrics would include debt/EBITDA sustained below 5.5x, EBIT/interest near 1.75x, as well as good liquidity. STRUCTURAL CONSIDERATIONS The B3 ratings on the senior secured first lien term loan and revolving credit facility are the same level as the B3 CFR reflecting the preponderance of first lien debt in Tacala's proposed capital structure. Headquartered in Vestavia Hills, Alabama, Tacala Investment Corp. owns and operates about 360 franchised restaurants in Texas and the Southeastern US. Revenue for 2023 was approximately $680 million. Tacala is majority owned by Altamont Capital Partners. The principal methodology used in these ratings was Restaurants published in August 2021. TIFFANY HOLDING: Voluntary Chapter 11 Case Summary -------------------------------------------------- Debtor: Tiffany Holding LLC 587 Beck St. Bronx, NY 10455 Business Description: Tiffany Holding is a Single Asset Real Estate debtor (as defined in 11 U.S.C. Section 101(51B)). Chapter 11 Petition Date: January 25, 2024 Court: United States Bankruptcy Court Southern District of New York Case No.: 24-10110 Judge: Hon. John P Mastando III Debtor's Counsel: Mark Frankel, Esq. BACKENROTH FRANKEL & KRINSKY, LLP 488 Madison Avenue FL 23 New York, NY 10022-7658 Tel: 212-593-1100 E-mail: mfrankel@bfklaw.com Total Assets: $1,562,013 Total Liabilities: $1,298,440 The petition was signed by Emmanuel Ku as managing member. The Debtor failed to include in the petition a list of its 20 largest unsecured creditors. A full-text copy of the petition is available for free at PacerMonitor.com at: https://www.pacermonitor.com/view/ET35YLI/Tiffany_Holding_LLC__nysbke-24-10110__0001.0.pdf?mcid=tGE4TAMA TOPSECRET RESORT: U.S. Trustee Unable to Appoint Committee ---------------------------------------------------------- The U.S. Trustee for Region 21, until further notice, will not appoint an official committee of unsecured creditors in the Chapter 11 case of TopSecret Resort of Orlando, LLC, according to court dockets. About Topsecret Resort of Orlando TopSecret Resort of Orlando, LLC, a company in Orlando, Fla., filed its voluntary petition for Chapter 11 protection (Bankr. M.D. Fla. Case No. 23-04773) on November 13, 2023, with $10 million to $50 million in both assets and liabilities. Michael R. Spielvogel, manager, signed the petition. Judge Tiffany P Geyer oversees the case. Shuker & Dorris, P.A. serves as the Debtor's legal counsel. UBO-TECHNOLOGIES: Unsecureds Owed $1.89M to Get 3.96% in Plan ------------------------------------------------------------- Ubo-Technologies, LLC, filed a Chapter 11 Small Business Plan and a Disclosure Statement dated January 12, 2024. General unsecured creditors are classified in Class 4 and will receive a distribution of 3.96% of their allowed claims. The Debtor will pay allowed General Unsecured Claims (currently 42 claims have been allowed in the aggregate amount of $1,896,476.62) the total amount of $75,100.47 or 3.96% of their claims. The allowed claims shall be paid in twenty quarterly payments totaling $3,750.00. This class is impaired. In July 2023, as a result of a Stop Sale, Use or Removal Order (SSURO) issued to the Debtor by the (U.S.) Environmental Protection Agency (EPA), the Debtor placed a temporary hold on the manufacture and sale of its products until product packaging and labeling are revised to ensure compliance with the branding and labeling requirements under the Federal Insecticide, Fungicide, and Rodenticide Act (FIFRA) and regulations promulgated thereunder. Under the Plan, BBHI has agreed, as part of its funding commitment for the PLAN, to advance $25,000 to the Debtor as post-petition financing to enable the Debtor to repackage and relabel products currently in inventory and to resume marketing its products in compliance with FIFRA. On or about October 12, 2023, the Debtor and its owner, Rakesh Guduru, entered into an Agreement Governing Acquisition of LLC Membership Interests with Blended BioHealth Inc. ("BBHI"), a copy of which is attached as Exhibit "B" (the "Acquisition Agreement"). On December 12, 2023, the Acquisition Agreement was amended by Amendment No.1, a copy of which is attached as Exhibit B-1". Under the terms of the Acquisition Agreement, as amended, Guduru has agreed to sell 100% of his ownership/membership interest in the Debtor to BBHI. BBHI has agreed to provide funding for the Plan of Reorganization in an amount up to and not exceeding Five Hundred and Fifty Thousand Dollars ($550,000), the purchase price under the Acquisition Agreement. BBHI is a corporation organized and existing under the laws of the State of Nevada, having offices at 860 E. Plum Circle, Plantation, Florida 33324. BBHI is a privatelyheld company engaged in the business of developing and marketing consumer products. The sale and purchase of the 100% ownership interest in the Debtor is subject to, and conditioned upon, the approval of the Acquisition Agreement as incorporated into this Disclosure Statement and the Plan. The closing under the Acquisition Agreement shall occur on or before the Plan Effective Date and no later than June 30, 2024 (unless extended by agreement of the parties). As part of the Plan and to demonstrate the feasibility of BBHI's commitment to fund the proposed payments to creditors under the Plan, attached hereto as Exhibit "C" is a copy of a letter dated January 8, 2024, from Truist Bank, showing available funds on deposit totaling $350,304.42, which attests to BBHI's financial stability and its ability to make the initial payments to fund the Plan commencing thirty (30) days after the Plan Effective Date (and following the closing of BBHI's purchase of the Debtor under the Acquisition Agreement) as well as future plan payments. Upon the Plan Effective Date, and the closing of the transaction under the Acquisition Agreement, BBHI shall undertake the infusion of funds necessary to pay both the initial payment obligation as required in the Plan and all subsequent plan payments required over the five-year term. Debtor asserts that the certification by BBHI of $325,000.00 of funds on deposit (as of 11/1/23), attached as Exhibit "C", reflects BBHI's financial stability and ability to fund the proposed plan without any additional income from Debtor in the first several years of the plan. The Projections of Debtor's income for five years, attached hereto as Exhibit "H", shows the additional contribution of BBHI in each year of the Plan, totaling up to $550,000.00 over the Plan term. Accordingly, the Debtor asserts that it is able to perform all of its obligations under the Plan and that the Plan satisfies the requirements or conditions set forth in Sec. 1129(a)(11) of the Code. Counsel for the Debtor: Chad Van Horn, Esq. VAN HORN LAW GROUP, P.A. 500 N.E. 4th Street, Suite 200 Fort Lauderdale, FL 33301 Telephone: (954) 765-3166 Facsimile: (954) 756-7103 E-mail: Chad@cvhlawgroup.com A copy of the Disclosure Statement dated Jan. 12, 2024, is available at https://tinyurl.ph/OKUKK from PacerMonitor.com. About Ubo-Technologies Ubo-Technologies, LLC, manufactures water bottles. The Debtor sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. S.D. Fla. Case No. 23-12848) on April 13, 2023. In the petition signed by Rakesh Guduru, founder and CEO, the Debtor disclosed $327,181 in assets and $2,521,279 in liabilities. The Hon. Bankruptcy Judge Laurel M. Isicoff oversees the case. Chad Van Horn, Esq., at Van Horn Law Group, P.A., is the Debtor's legal counsel. UPHEALTH INC: BNY Mellon Appointed as Successor Indenture Trustee ----------------------------------------------------------------- UpHealth Inc. disclosed in a Form 8-K Report filed with the U.S. Securities and Exchange Commission that the Company entered into an agreement of resignation, appointment and acceptance, dated as of January 11, 2024 (the "Tripartite Agreement"), with Wilmington Trust, National Association (the "Resigning Trustee"), and The Bank of New York Mellon Trust Company, N.A. (the "Successor Trustee"), with respect to the indenture, dated as of June 9, 2021, by and among UpHealth and the Resigning Trustee, in its capacity as trustee thereunder, governing the Company's 6.25% Unsecured Convertible Notes due 2026 (as the same may be amended, restated, supplemented or otherwise modified from time to time, the "Unsecured Notes Indenture"), pursuant to which the Resigning Trustee has resigned, and the Successor Trustee has been appointed its successor, in its capacities as trustee, note registrar, custodian, conversion agent and paying agent under the Unsecured Notes Indenture. The Tripartite Agreement provides that, effective as of the date thereof: (a) the Resigning Trustee assigns, transfers, delivers and confirms to the Successor Trustee all of its rights, title and interest under the Unsecured Notes Indenture and all of the rights, trusts and powers as trustee, note registrar, custodian, conversion agent and paying agent under the Unsecured Notes Indenture, and (b) the Successor Trustee accepts its appointment as successor trustee, note registrar, custodian, conversion agent and paying agent under the Unsecured Notes Indenture, and accepts and shall assume the rights, powers, duties and obligations of the Resigning Trustee as trustee under the Unsecured Notes Indenture; provided, however, that the Resigning Trustee's resignation as note registrar, custodian, conversion agent and paying agent, and the Successor Trustee's appointment as successor in those capacities, will become effective ten business days following the date of the Tripartite Agreement. A full-text copy of the Tripartite Agreement is available at http://tinyurl.com/bwhm5wcf About UpHealth UpHealth -- https://uphealthinc.com/ -- is a global digital health company that delivers digital-first technology, infrastructure, and services to dramatically improve how healthcare is delivered and managed. The UpHealth platform creates digitally enabled "care communities" that improve access and achieve better patient outcomes at lower cost, through digital health solutions and interoperability tools that serve patients wherever they are, in their native language. UpHealth's clients include health plans, healthcare providers and community-based organizations. UPHEALTH INC: NYSE CFR Hearing Set for April 17 ----------------------------------------------- UpHealth Inc. disclosed in a Form 8-K Report filed with the U.S. Securities and Exchange Commission that the Company timely filed an appeal with the New York Stock Exchange that the Common Stock remain listed on the NYSE and requested a hearing before the NYSE Regulatory Oversight Committee's Committee for Review. On January 12, 2024, the NYSE granted the Company's request for a hearing before the CFR. At the CFR hearing, which is expected to take place on April 17, 2024, the Company will submit its plan to regain, and to sustain long-term, compliance with all applicable requirements for continued listing on the NYSE, including compliance with the Market Capitalization Rule. As previously disclosed in the Company's Current Report on Form 8-K dated December 13, 2023, on December 11, the Company received written notice from the staff of NYSE Regulation that, because the Company was no longer in compliance with the continued listing standard under Section 802.01B of the NYSE Listed Company Manual requiring listed companies to maintain an average global market capitalization over a consecutive 30 trading day period of at least $15,000,000 (the "Market Capitalization Rule"), the Staff has commenced proceedings to delist the common stock, par value $0.0001 per share, of the Company, from the NYSE, and suspended trading in the Common Stock pending the completion of such proceedings. As a result, the Common Stock commenced trading in the over-the-counter market on December 12, 2023 under the trading symbol "UPHL." The delisting action by the Staff will be stayed pending the CFR hearing and the expiration of any additional extension period granted by the CFR following the hearing. The Company intends to continue to take definitive steps in an effort to evidence compliance with the Market Capitalization Rule and other NYSE continued listing requirements; however, there can be no assurance that the CFR will grant the Company's request for continued listing or that the Company will be able to evidence compliance with the Market Capitalization Rule and other NYSE continued listing requirements at the time of the hearing or within any extension period that may be granted by the CFR. About UpHealth UpHealth -- https://uphealthinc.com/ -- is a global digital health company that delivers digital-first technology, infrastructure, and services to dramatically improve how healthcare is delivered and managed. The UpHealth platform creates digitally enabled "care communities" that improve access and achieve better patient outcomes at lower cost, through digital health solutions and interoperability tools that serve patients wherever they are, in their native language. UpHealth's clients include health plans, healthcare providers and community-based organizations. UPHEALTH INC: Thrasys Completes Transition Deals With Customers --------------------------------------------------------------- UpHealth Inc. disclosed in a Form 8-K Report filed with the U.S. Securities and Exchange Commission that on December 28, 2023, Thrasys, Inc., a wholly-owned subsidiary of UpHealth Holdings, Inc. consummated the closing of the transactions contemplated by the Transition Agreements. Following the closing, Thrasys no longer has any operations. Except as otherwise provided in the Transition Agreements, Thrasys will continue to own all intellectual property, subject to the non-exclusive licenses granted pursuant to the Transition Agreements. As previously disclosed by the Company in its Current Report on Form 8-K on September 19, 2023, UpHealth Holdings, Inc., a wholly-owned subsidiary of the Company, filed a voluntary petition for relief under Chapter 11 of the U.S. Bankruptcy Code in the United States Bankruptcy Court for the District of Delaware. In addition, on October 20, 2023, two of UpHealth Holdings' wholly-owned subsidiaries, Thrasys, Inc. and Behavioral Health Services, LLC, and each of the subsidiaries of Thrasys and BHS (such subsidiaries, collectively with UpHealth Holdings, Thrasys and BHS, being referred to individually herein and collectively as the "Debtors"), filed voluntary petitions for relief under Chapter 11 of the U.S. Bankruptcy Code in the Bankruptcy Court. The Chapter 11 cases of the Debtors are being jointly administered under the caption In re UpHealth Holdings, Inc., Case No. 23-11476 (U.S. Bankr. D. Del.), for procedural purposes only. Furthermore, the Company disclosed in its Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2023, Thrasys entered into three transition agreements, dated as of November 15, November 16 and November 17, 2023, respectively, with its customers (i) Local Initiative Health Authority for Los Angeles County, a local public entity operating and doing business as L.A. Care Health Plan, (ii) EmpiRx Health LLC, a Delaware corporation and (iii) the County of Alameda, California, USA (each, a "Transition Agreement"), providing for, among other things, the grant to each customer of a perpetual, non-exclusive license of the applicable source code and related SyntraNetTM platform and the provision by Thrasys of certain transition services during the transition term provided under the applicable Transition Agreement, with the consummation of the transactions contemplated by each Transition Agreement subject to the entry by the Bankruptcy Court of an order authorizing and approving the Transition Agreements, which order was subsequently entered by the Bankruptcy Court. About UpHealth UpHealth -- https://uphealthinc.com/ -- is a global digital health company that delivers digital-first technology, infrastructure, and services to dramatically improve how healthcare is delivered and managed. The UpHealth platform creates digitally enabled "care communities" that improve access and achieve better patient outcomes at lower cost, through digital health solutions and interoperability tools that serve patients wherever they are, in their native language. UpHealth's clients include health plans, healthcare providers and community-based organizations. V.B.H.R.E.S.B. TOGETHER: Voluntary Chapter 11 Case Summary ---------------------------------------------------------- Debtor: V.B.H.R.E.S.B. Together, LLC 5624 Brentwood Drive Jackson, MS 39211 Chapter 11 Petition Date: January 25, 2024 Court: United States Bankruptcy Court Southern District of Mississippi Case No.: 24-00194 Judge: Hon. Jamie A. Wilson Debtor's Counsel: Craig M. Geno, Esq. LAW OFFICES OF CRAIG M. GENO, PLLC 587 Highland Colony Parkway Ridgeland, MS 39257 Tel: 601-427-0048 Estimated Assets: $1 million to $10 million Estimated Liabilities: $1 million to $10 million The petition was signed by Veronica Hunter as manager. The Debtor failed to include in the petition a list of its 20 largest unsecured creditors. A full-text copy of the petition is available for free at PacerMonitor.com at: https://www.pacermonitor.com/view/RFUQ4II/VBHRESB_Together_LLC__mssbke-24-00194__0001.0.pdf?mcid=tGE4TAMA VERITAS US: Eaton Vance EFR Marks $2.15MM Loan at 15% Off --------------------------------------------------------- Eaton Vance Senior Floating-Rate Trust (EFR) has marked its $2,152,000 loan extended to Veritas US, Inc., to market at $1,827,391 or 85% of the outstanding amount, as of October 31, 2023, according to a disclosure contained in EFR's Form N-CSR for the fiscal year ended October 31, 2023, filed with the U.S. Securities and Exchange Commission. EFR is a participant in a Term Loan (SOFR + 5.11%) to Veritas US. The loan accrues interest at a rate of 10.439% per annum. The loan matures on September 1, 2025. EFR is a Massachusetts business trust registered under the Investment Company Act of 1940, as amended, as a diversified, closed-end management investment company. The Trust's primary investment objective is to provide a high level of current income. The Trust may, as a secondary objective, also seek the preservation of capital to the extent consistent with its primary objective. EFR can be reached at: Deidre E. Walsh Eaton Vance Senior Floating-Rate Trust Two International Place Boston, MA 02110 Veritas US, Inc. designs and develops enterprise software solutions. VIASAT INC: Fitch Affirms 'BB-' LongTerm IDR, Outlook Negative -------------------------------------------------------------- Fitch Ratings has affirmed Viasat Inc.'s and its subsidiaries' Long-Term Issuer Default Ratings (IDRs) at 'BB-' and removed all ratings from Rating Watch Negative (RWN). In addition, Fitch has assigned the IDRs a Negative Outlook and has affirmed Viasat's existing senior secured debt at 'BB+'/'RR1' and unsecured debt at 'BB-'/'RR4'. Fitch has resolved the RWN as it expects Viasat's debt leverage to decline and sustain within the current EBITDA leverage sensitivities range of 4x-5x within the agency's rating horizon. The Negative Outlook reflects Fitch's expectation that the company will be FCF negative until FY 2026, although the agency expects an improving FCF trajectory. Fitch expects FCF deficits over the next 18-24 months, as the company funds its satellite build program. Viasat's rating reflects stable revenue growth, increasing EBITDA margins from the Inmarsat acquisition and related synergies, and declining EBITDA leverage. KEY RATING DRIVERS Leverage Expectations: Fitch estimates Viasat's gross EBITDA leverage will approximate 5.8x at FYE 2024 (net leverage 4.7x, reflecting a high cash balance from the proceeds of the tactical data link business -- TDL or Link 16 -- sale in early 2023 and $420 million of assumed insurance proceeds in FY24). Fitch expects leverage to gradually decline to near mid-4x by FY 2026 (ending in March 2026), well within the agency's current 5x leverage sensitivity. Fitch expects the company to carry high cash balances at least until 2025 when it expects Viasat will use a portion of the cash to repay $700 million of unsecured notes at maturity. FCF Deficits from High Capex: Viasat is in the midst of a high capex period as it builds three third-generation, high-throughput satellites at a total cost of $2 billion or more. The company is also constructing seven other Ka-band satellites acquired from Inmarsat. The first, ViaSat-3 (Americas), was launched in April 2023, but was impaired due to a problem with reflector deployment. Fitch expects capex to remain high but decrease from current levels, as ViaSat-3 (EMEA) and ViaSat-3 (APAC) are launched. Viasat expects ViaSat-3 (APAC) to launch in the fourth quarter of CY 2024, while the launch of Viasat-3 (EMEA) is uncertain as it awaits corrective action to the antenna. ViaSat-3 (APAC) has a reflector from a different antenna manufacturer and therefore the timing of its launch is not expected to be affected by the anomaly. Fitch expects the company to be FCF negative until FY 2026, which is a driver of the Negative Outlook. Inmarsat Merger: Viasat completed its merger with Inmarsat in a cash and stock transaction on May 30, 2023. The merger provides scale and growth opportunities in mobility and government end-markets, diversifies Viasat's revenue geographically, and increases recurring revenues. Viasat's merger with Inmarsat is neutral to its credit profile. Fitch estimates the transaction will cause gross leverage to rise temporarily to over 5x (excluding any satellite losses). However, increased scale, revenue growth opportunities with the capacity boost from subsequent satellite launches, and increased EBITDA margins due to inclusion of Inmarsat's higher margin business, combined with synergies, provides opportunities to rapidly deleverage over the rating horizon. Execution Risk: Viasat is in the construction phase of a three-satellite constellation (two remaining) that will require the company to execute on the construction phase of the remaining satellites and Inmarsat's in-construction satellites. In addition, the company will need to execute on growth strategies once the satellites are in service to sustain EBITDA and cash flow growth. Fitch expects the company will benefit from a strong revenue backlog, as well as from the additional global markets opened up by the ViaSat-3 satellites and Inmarsat acquisition. Solid EBITDA Growth: Viasat posted strong first half FY 2024 (April-Sept. 2023) results, including a double-digit revenue growth in Inmarsat and approximately 6% growth in legacy standalone Viasat (excluding the one-time impact of litigation proceeds received in 2Q'24). The satellite services segment growth has tempered to low single digits in 1H'24 and FY 2023, compared with the 37% growth in fiscal 2022. This is due to the company's focus on mobility and shifting capacity away from fixed broadband to the inflight connectivity (IFC) service as it continues to add aircraft using its service. The Inmarsat combination also provides a boost to EBITDA margins from the near 20s to low 30s, as Inmarsat's EBITDA margins are significantly higher than standalone Viasat's EBITDA margins. This is because Inmarsat was less vertically integrated and did not have high development costs like Viasat, and due to the absence of lower margin fixed broadband business. The integration remains on track and realization of synergies is expected to be ahead of plan as the company announced labor actions in 3Q'24 resulting in approximately $100 million of expected savings beginning FY 2025. Revenue Backlog: Viasat had a $3.6 billion backlog at Sept. 30, 2023. The company does not include amounts in its backlog if the company does not have purchase orders. As of Sept. 30, 2023, Viasat provides in-flight internet services to over 3,350 active commercial aircraft, with 1,600 aircraft in its backlog. A majority of the company's IFC contracts are for a period of five to 10 years, with varying levels of penalties associated with a termination for convenience. High Industry Competition: Fitch expects Viasat to face significant competition in satellite services from low-earth orbit (LEO) satellite networks in development. Fitch expects Viasat will have a material advantage in cost/bit capacity and leveraging its existing business platform, while being disadvantaged by latency. Viasat benefits from vertical integration, which drives cost efficiencies. The company operates from a strong competitive position within certain business segments, primarily the satellite services segment where existing competitors may have weaker financial profiles or technology positions. Its share in the North American narrow-body market has grown significantly over the past several years. With the Inmarsat acquisition, Fitch expects the company will significantly increase its share in mobility (IFC and maritime) and reduce highly competitive fixed broadband revenue share in the total mix. In the government systems and commercial networks segments, Viasat has a relatively strong competitive position with its product portfolio, but faces competition from higher rated companies with stronger and more diversified businesses. Parent Subsidiary Linkage: Fitch equalizes the ratings of Viasat and Inmarsat based on high strategic and operational incentives but low legal incentives. There are high strategic and operational incentives given the substantial size and scale of Inmarsat such that avoidance costs will be substantial. Both companies operate in Ka-band, providing for integrated network opportunities. However, the absence of guarantees results in moderately weaker legal incentives. Fitch also equalizes ratings of Viasat, Inc. and Viasat Technologies Limited based on high legal, strategic and operational linkages. DERIVATION SUMMARY In the Government Systems and Commercial Systems segments, Viasat competes against higher rated companies that have access to much greater resources. In the Government Systems segment, Viasat's major competitors in the manufacture of defense electronics include BAE Systems plc (BBB+/Stable) and Collins Aerospace. In the Commercial Networks segment, the company competes against much larger companies, including Airbus SE (A-/Stable), General Dynamics, L3Harris Technologies (BBB+/Negative) and MAXAR Technologies. In the satellite services business, as a provider of communications infrastructure, comparable businesses include Intelsat Jackson Holdings S.A. (B+/Positive) and several companies unrated by Fitch, such as Telesat Canada and SBA Communications. Unlike some of these companies, Viasat provides services directly to consumers in its satellite services segment. SpaceX is also providing services directly to consumers. Given Viasat's vertically integrated strategy, which not only includes satellite services, but the development and manufacture of equipment, its EBITDA margins are lower than the pure service providers. The company's vertical integration provides a competitive advantage over pure services providers. In the in-flight connectivity segment, Viasat competes against Intelsat, which acquired GoGo Inc., Anuvu (formerly Global Eagle Entertainment), Panasonic Avionic Corporation, SpaceX and others. KEY ASSUMPTIONS - Revenue just over $4 billion for FY 2024 following Inmarsat acquisition close on May 30, 2023 and sale of Link 16 business in January 2023. - Adjusted EBITDA margins for the combined business are assumed in near 32% for FY 2024 and expected to increase to 33%-34% range over the forecast as acquisition synergies are realized; - Capex in FY24 is expected in $1.6 billion-$1.7 billion range, and expected to decline in FY 2025 to approximately $1.3 billion -$1.4 billion; - Fitch has assumed $770 million of proceeds from insurance claims on loss of ViaSat-3 Americas and I6-F2 satellite. RATING SENSITIVITIES Factors that could, individually or collectively, lead to positive rating action/upgrade: - Sustained positive FCF generation such that (CFO-capex)/debt approaches 7.5%; - EBITDA leverage sustained below 4.0x; Factors that could, individually or collectively, lead to negative rating action/downgrade: - (CFO-capex)/debt sustained below 4%, combined with an inability to fund capex in the capital markets on economic terms; - EBITDA leverage sustained above 5.0x; - Material delays or issues with respect to anticipated satellite launches, or delays in achieving revenue and EBITDA growth from future satellites due to business or competitive reasons. LIQUIDITY AND DEBT STRUCTURE Liquidity: Viasat's liquidity is relatively strong given its cash balances and availability on its revolver, and is partly offset by FCF deficits. At Sept. 30, 2023, cash and cash equivalents amounted to approximately $1.96 billion, including the receipt of $1.8 billion in net proceeds from the January 2023 sale of the Link 16 business. At Sept. 30, 2023, Viasat had approximately $1.36 billion of combined availability under Viasat's and Inmarsat's undrawn revolving facilities of $647.5 million and $700 million, respectively. The company used a portion of the proceeds from the sale of the Link 16 business to repay all-then outstanding borrowings on the $700 million Viasat revolver (before reduction). Fitch expects Viasat to maintain cash and utilize liquidity to meet the 2025 maturity of $700 million of unsecured notes. In addition, Fitch expects capex to peak in FY 2024 and gradually decline as the company completes the construction of the remaining two ViaSat-2 satellites. Fitch expects Viasat to start generating positive FCF in FY 2026. Viasat completed the acquisition of Inmarsat using the $1.6 billion of financing commitments it had in place in connection with the pending acquisition. The company used the proceeds from the new term loan B due 2030 and the bridge unsecured notes facility for the Inmarsat transaction, including related fees and expenses, and for general corporate purposes. Viasat replaced the bridge financing with a permanent financing comprising of unsecured notes in the same amount. Viasat assumed approximately $3.8 billion of Inmarsat's debt. Inmarsat debt was entirely senior secured, comprising of a $700 million revolver due 2024, $1.7 billion term loan due 2026 and $2.1 billion of senior secured notes due 2026. Viasat does not guarantee Inmarsat's debt. Fitch expects Viasat will maintain, at least for the time being, two separate debt silos: Viasat credit group and Inmarsat credit group. There are no cross guarantees between the two debt silos. Viasat also has $49 million outstanding under an Ex-Im credit facility, a senior secured direct loan facility put in place primarily to fund the construction, launch and insurance of the ViaSat-2 satellite. The company is required by the terms of its senior secured credit facilities to have insurance on 75% of the net book value of certain covered satellites. The company has in-orbit insurance on the ViaSat-2, ViaSat-1, WildBlue-1 and the Anik F2 satellites. ISSUER PROFILE Viasat, Inc. is a vertically integrated technology provider, with an end-to-end platform of high-capacity satellites, ground infrastructure and user terminals to enterprise, government and consumer users. On May 30, 2023, Viasat completed the acquisition of Connect Top Co Limited (Inmarsat), becoming one of the largest satellite companies globally. ESG CONSIDERATIONS The highest level of ESG credit relevance is a score of '3', unless otherwise disclosed in this section. A score of '3' means ESG issues are credit-neutral or have only a minimal credit impact on the entity, either due to their nature or the way in which they are being managed by the entity. Fitch's ESG Relevance Scores are not inputs in the rating process; they are an observation on the relevance and materiality of ESG factors in the rating decision. Entity/Debt Rating Recovery Prior ----------- ------ -------- ----- Viasat, Inc. LT IDR BB- Affirmed BB- senior unsecured LT BB- Affirmed RR4 BB- senior secured LT BB+ Affirmed RR1 BB+ Connect Bidco Limited LT IDR BB- Affirmed BB- Connect Finco SARL LT IDR BB- Affirmed BB- senior secured LT BB+ Affirmed RR1 BB+ Connect U.S. FinCo LLC LT IDR BB- Affirmed BB- senior secured LT BB+ Affirmed RR1 BB+ Viasat Technologies Limited LT IDR BB- Affirmed BB- senior secured LT BB+ Affirmed RR1 BB+ WEALTH MANIFESTED: Seeks Cash Collateral Access ----------------------------------------------- Wealth Manifested, LLC dba Senior Helpers of Lee's Summit, asks the U.S. Bankruptcy Court for the Western District of Missouri, Kansas City, for authority to use cash collateral and provide adequate protection. The Debtor has been profitable, but the debt structure of the company was limiting its ability to maximize its services. The Debtor is seeking to restructure its existing debt to allow it to continue to grow and provide additional services. The Debtor has a Promissory Note with Wells Fargo. The Note is numbered 94373351280000000018 and has an origination date of September 22, 2022. The original balance of the Note was $1.632 million and it has a maturity date of September 22, 2032. The Note is secured by a Security Agreement executed by the parties which secures the Notes in various assets of the Debtor including cash, deposit accounts and accounts receivables. On October 24, 2022, the Lender perfected the Notes filing its security documents with the Nebraska Secretary of State's Office. The current principal balance of the First Note is believed to be $1.551 million. The Lender is oversecured on the Note. The total assets pledged to Lender have a total value of approximately $115,000. Wells Fargo received a payment on January 16, 2024 in the amount of $20,938. The Debtor is proposing to make a monthly adequate assurance payment to the Lender for the period of time from filing up to confirmation of the Plan. The Debtor is proposing a payment of $10,000 per month to Lender to be made no later than February 28, 2024. The Debtor also has a Business Loan with Fora Financial Business Loans, LLC. The Note was obtained in October 2023. The original balance of the Note was $80,000 and it has a maturity date of November 2026. The Note is secured by a Security Agreement executed by the parties which secures the Notes in various assets of the Debtor including cash, deposit accounts and accounts receivables. On October 26, 2023 Fora attempted to perfect its security interest through a filing in the Missouri Secretary of State's Office. The current principal balance of the First Note is believed to be $80,000. The Debtor is proposing to not make any monthly payments to Fora due to the priority and size of the Wells Fargo loan. The Fora Financial loan will be paid through the proposed Chapter 11 Plan. In exchange for the use of cash collateral in the ordinary course of business, the Debtor proposes that the Lender be allowed replacement liens on all of Debtor's right, title and interest in, to and under the collateral, notwithstanding the limits on pre-petition liens provided under 11 U.S.C. Section 552(a). A copy of the motion is available at https://urlcurt.com/u?l=q96GDA from PacerMonitor.com. About Wealth Manifested, LLC Wealth Manifested, LLC is a provider of in-home health care services. The Debtor sought protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. W.D. Mo. Case No. 24-40076-can11) on January 22, 2024. In the petition signed by William A. Egan, president/owner, the Debtor disclosed up to $500,000 in assets and up to $10 million in liabilities. Bradley McCormack, Esq., at Bradley McCormack, represents the Debtor as legal counsel. WESCO AIRCRAFT: Gen. Unsecureds Get Share of Settlement Equity Pool ------------------------------------------------------------------- Judge Marvin Isgur has entered an order approving Wesco Aircraft Holdings, Inc., et al.'s Disclosure Statement as containing adequate information within the meaning of Section 1125 of the Bankruptcy Code. The Disclosure Statement (including its exhibits) provides holders of Claims, holders of Interests, and other parties in interest with sufficient notice of the injunction, exculpation, and release provisions contained in Article VIII of the Plan, in satisfaction of the requirements of Bankruptcy Rules 2002(c)(3) and 3016(b) and (c). The following dates and times are established: * The Deadline for Filing of Objection to Disclosure Statement was on Jan. 4, 2024. * The Voting Record Date was on Jan. 9, 2024. * The Disclosure Statement Hearing was on Jan. 11, 2024, at 1:30 p.m. (CST). * The Deadline for Solicitation will be on Jan. 18, 2024. * The Deadline for Publication of Notice of Confirmation Hearing is within 10 business days after entry of the Disclosure Statement Order, or as soon as reasonably practicable thereafter. * The Filing of the Initial Plan Supplement is 7 days prior to Voting Deadline. * The Voting Deadline will be on Feb. 15, 2024 at 5:00 p.m. (CST). * The Confirmation Objection Deadline will be on Feb. 15, 2024 at 5:00 p.m. (CST). * The Deadline to File Voting Report is within 2 business days after Voting Deadline. * The Preliminary Status Conference will be on Feb. 22, 2024 at 4:00 p.m. (CST) (by video conference only). * The Confirmation Hearing will be on Feb. 27, 2024 at 9:00 a.m. (CST). Modified First Amended Joint Chapter 11 Plan Wesco Aircraft Holdings, Inc., et al., submitted a Modified First Amended Joint Chapter 11 Plan. Class 7a General Unsecured Claims are impaired: i. The 2024 Unsecured Notes Claims will be Allowed (against all Debtors that are obligors in respect of, including guarantors of, the 2024 Unsecured Notes) in the amount of $184,984,336.09 (the aggregate principal amount and accrued but unpaid interest thereon through the Petition Date), plus fees through the Petition Date, and will not include any amount on account of "Applicable Premium," make-whole premium, call protection, or other similar amounts or premiums. ii. The 2026 Unsecured Notes Claims will be Allowed (against all Debtors that are obligors in respect of, including guarantors of, the 2026 Unsecured Notes) in the amount of $353,557,970.20 (the aggregate principal amount and accrued but unpaid interest thereon through the Petition Date), plus fees through the Petition Date, and will not include any amount on account of "Applicable Premium," make-whole premium, call protection, or other similar amounts or premiums. iii. The 2027 Unsecured Notes Claims will be Allowed (against all Debtors that are obligors in respect of, including guarantors of, the 2027 Unsecured Notes) in the amount of $111,608,496.29 (the aggregate principal amount and accrued but unpaid interest thereon through the Petition Date), plus fees through the Petition Date, and will not include any amount on account of "Applicable Premium," make-whole premium, call protection, or other similar amounts or premiums. iv. Other General Unsecured Claims will be Allowed or Disallowed in accordance with Article VI. On the Effective Date (or as soon thereafter as reasonably practicable in accordance with the resolution and distribution provisions set forth herein), each holder of an Allowed General Unsecured Claim will receive its Pro Rata share of the Settlement Equity Pool. The receipt of the foregoing consideration will be in full and final satisfaction, settlement, release, and discharge of, and in exchange for, each General Unsecured Claim against each Debtor. "Settlement Equity Pool" means 3.5% of the New Common Equity, subject to dilution by any New Common Equity issued in respect of the Management Incentive Plan. Class 7b - General Unsecured Convenience Claims are impaired. Each holder of an Allowed General Unsecured Convenience Claim will receive such holder's Pro Rata share of Cash in the amount of the Settlement Cash Pool; provided that in no event will any holder of General Unsecured Convenience Claims receive more than 10.00% of the Allowed amount of its General Unsecured Convenience Claim. The receipt of the foregoing consideration will be in full and final satisfaction, settlement, release, and discharge of, and in exchange for, each General Unsecured Convenience Claim against each Debtor. "Settlement Cash Pool" means Cash in the amount of $7,500,000 to fund distributions as provided herein on account of General Unsecured Convenience Claims. Sources of Consideration for Distributions: * Cash: -- The Reorganized Debtors shall fund distributions under the Plan required to be paid in Cash, if any, with Cash on hand (including Cash from operations and Cash received under the DIP Financing in accordance with the DIP Documents and Cash received on the Effective Date). * New Financing -- On the Effective Date, the Reorganized Debtors shall be authorized to execute, deliver, and enter into the New Debt Documents, subject to the requisite approvals, without further (a) notice to or order of the Bankruptcy Court; (b) vote, consent, authorization, or approval of any Person; or (c) action by the holders of Claims or Interests. Confirmation of the Plan shall be deemed approval of the New Financing and the New Debt Documents, all transactions contemplated thereby, and all actions to be taken, undertakings to be made, and obligations to be incurred by the Reorganized Debtors in connection therewith, and authorization of the Reorganized Debtors to enter into, execute, and deliver the New Debt Documents and such other documents as may be required to effectuate the treatment afforded by the New Financing. * New Common Equity -- On the Effective Date, Reorganized Incora is authorized to issue or cause to be issued, and shall issue, the New Common Equity pursuant to and in accordance with the Plan, without further notice to or order of the Bankruptcy Court; act or action under applicable law, regulation, order, or rule; or the vote, consent, authorization, or approval of any Person. Counsel to the Debtors: Charles A. Beckham, Jr., Esq. Patrick L. Hughes, Esq. Kelli S. Norfleet, Esq. HAYNES AND BOONE, LLP 1221 McKinney Street, Suite 4000 Houston, TX 77010 Telephone: 1 (713) 745-2000 E-mail: Charles.Beckham@HaynesBoone.com Patrick.Hughes@HaynesBoone.com Kelli.Norfleet@HaynesBoone.com - and - Dennis F. Dunne, Esq. Samuel A. Khalil, Esq. Benjamin M. Schak, Esq. MILBANK LLP 55 Hudson Yards New York, NY 10001 Telephone: 1 (212) 530-5000 E-mail: DDunne@Milbank.com SKhalil@Milbank.com BSchak@Milbank.com A copy of the Order dated Jan. 12, 2024, is available at https://tinyurl.ph/lQHuj from Kccllc, the claims agent. A copy of the Modified First Amended Joint Chapter 11 Plan dated Jan. 12, 2024, is available at https://tinyurl.ph/JkzzH from Kccllc, the claims agent. 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. WHITESTONE UPTOWN: Wins Cash Collateral Access Thru Feb 8 --------------------------------------------------------- The U.S. Bankruptcy Court for the Northern District of Texas, Dallas Division, authorized Whitestone Uptown Tower, LLC, a/k/a Pillarstone Capital REIT Operating Partnership to use cash collateral, on an interim basis, in accordance with the budget. The Debtor's right to use cash collateral will terminate on the earlier to occur of the following: (a) an order of the Court terminating the use of cash collateral; or (b) February 8, 2024 at 11:59 p.m., unless otherwise extended by consent of the parties or order of the Court, in which case a budget for the extended period will be provided to Lender and filed with the Court. As adequate protection, RSS MSBAM2013-C13-TX WUT, LLC is granted replacement security interests and liens of the same extent, validity, and priority as the Pre-Petition Liens in the Collateral and on any other of the Debtor's assets and property. The Replacement Liens include, without limitation, liens on all cash, including Cash Collateral generated or received by the Debtor after the Petition Date. The Replacement Liens are deemed valid, binding, enforceable and perfected upon entry of the Order and no further notice, filing, recording or order will be required to validate or perfect the Replacement Liens. The Replacement Liens are subordinated to fees payable pursuant to 28 U.S.C. Section 1930(a)(6). To the extent of the aggregate Diminution of Value, if any, of their respective interests in the Collateral, Lender is granted, in addition to claims under 11 U.S.C. Section 503(b), an allowed superpriority administrative expense claim pursuant to 11 U.S.C. Section 507(b) in the Debtor's chapter 11 case. A final hearing on the matter is set for February 1 at 4 p.m. A copy of the order is available at https://urlcurt.com/u?l=2NP50V from PacerMonitor.com. About Whitestone Uptown Tower, LLC Whitestone Uptown Tower, 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. N.D. Tex. Case No. 23-32832) on December 1, 2023. In the petition signed by Bradford Johnson, authorized representative, the Debtor disclosed up to $50 million in both assets and liabilities. Judge Michelle V Larson oversees the case. Joyce Lindauer, Esq., at Joyce W. Lindauer Attorney, PLLC, represents the Debtor as legal counsel. XD INDUSTRIES: Has Deal on Cash Collateral Access ------------------------------------------------- XD Industries, Inc. asks the U.S. Bankruptcy Court for the Central District of California, Santa Ana Division, for authority to use cash collateral in accordance with its agreement with the U.S. Small Business Administration. On June 12, 2020, the Debtor executed a U.S. Small Business Administration Note, pursuant to which the Debtor obtained a COVID Economic Injury Disaster Loan in the amount of $150,000. On December 29, 2021, the outstanding principal was increased by $45,000 to $195,000. On February 17, 2022, the principal was increased by an additional $205,000, for a total, current outstanding principal obligation of $400,000. The SBA Loan has an annual rate of interest of 3.75% and may be prepaid at any time without notice or penalty. The contractual monthly payments under the Loan are $1,943. The Debtor defaulted on the monthly payments before the Petition Date, and the SBA accelerated the balance. As part of the SBA Loan, the Debtor and the SBA executed a Security Agreement, dated June 12, 2020, and subsequent Amended Security Agreements, and a valid UCC-1 filing on June 28, 2020, recorded as Filing Number 207797986954. The parties agreed that the Debtor may use cash collateral for the period commencing nunc pro tunc from the Petition Date through and including March 31, 2024. As adequate protection, retroactive to the Petition Date, the SBA will receive a replacement lien(s) that is deemed valid, binding, enforceable, non-avoidable, and automatically perfected, effective as of the Petition Date, on all post-petition revenues of the Debtor with the same extent, priority and validity as the SBA's lien on the SBA Collateral, including cash collateral. The Debtor will remit adequate protection payments to the SBA of $1,943 per month, with the first payment to be paid on or before February 1, 2024, and continuing until the end of the term of the Stipulation, further order of the Court regarding interim and/or final use of cash collateral, or the entry of an order confirming the Debtor's plan of reorganization, whichever occurs earlier. The SBA will be entitled to a super-priority claim over the life of the Debtor's bankruptcy case, pursuant to 11 U.S.C. Sections 503(b) and 507(b), which claim will be limited to any diminution in the value of SBA Collateral, as a result of the Debtor's use of cash collateral on a post-petition basis. A hearing on the matter is set for February 14, 2024 at 10 a.m. A copy of the motion is available at https://urlcurt.com/u?l=GZiRTB from PacerMonitor.com. About XD Industries XD Industries, Inc., a company in Lake Forest, Calif., filed a petition under Chapter 11, Subchapter V of the Bankruptcy Code (Bankr. C.D. Calif. Case No. 23-12656) on December 14, 2023, with $129,260 in assets and $1,685,898 in liabilities. Alexander Mutuc, president, signed the petition. Judge Theodor Albert oversees the case. Jeremy Rothstein, Esq., at G&BE Law, LLP represents the Debtor as bankruptcy counsel. ********* 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. 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