/raid1/www/Hosts/bankrupt/TCR

/raid1/www/Hosts/bankrupt/TCR_Public/180516.mbx T R O U B L E D C O M P A N Y R E P O R T E R Wednesday, May 16, 2018, Vol. 22, No. 135 Headlines 24 HOUR FITNESS: $970,000,000 Loans Get Moody's Ba3 Rating 303 DEAN REALTY: Case Summary & 2 Unsecured Creditors 505 CONGRESS: Taps McDermott Quilty as Special Counsel 8281 MERRILL ROAD: Court Extends Exclusive Solicitation Period AKC ENTERPRISES: Taps GRS Appraisal as Auctioneer ALAMO TOWERS: Delays Plan to Finalize Sale of Alamo Towers ALCOA NEDERLAND: Fitch Rates $500M Sr. Unsec. Notes 'BB+'/'RR4' ALCOA NEDERLAND: Moody's Hikes Corp. Rating to 'Ba1' ALPHA MEDIA: Moody's Junks CFR to Caa1 Amid Covenant Breach AMERICAN BIO MEDICA: UHY LLP Raises Going Concern Doubt AMERICAN WEST: Reply in Support of OSC Bid Admissible, Court Says ANCHOR REEF: Adversary Proceeding on Turnover Bid Not Warranted ANTHONY BROOKS: Proposed Public Sale of Cattle Inventory Approved ANTHONY BROOKS: Proposes Public Sale of Cattle Inventory ARECONT VISION: Case Summary & 30 Largest Unsecured Creditors AVAYA INC: Court Estimates SAE Misappropriation Claim at $1.21MM AVEANNA HEALTHCARE: Moody's to Review B3 Rating Amid Premier Deal BEAR AND CUB: Taps Platinum as Real Estate Broker BENDCO INC: Taps Russell Craft as Accountant BERNSOHN & FETNER: Exclusive Plan Filing Period Moved to Nov. 6 BERRY GLOBAL: Moody's Assigns Ba2 Rating to $1.6-Bil. Term Loans BIOSCRIP INC: Reports First Quarter Net Loss of $13 Million BIOSTAGE INC: Reports 2018 First Quarter Financial Results BLACK MOUNTAIN: Plan Outline Okayed, Plan Hearing on June 15 BLACK RIDGE OIL: M&K CPAS, PLLC Raises Going Concern Doubt BLACKFOOT CONSTRUCTION: Taps Haffley Taylor as Accountant BRADLEY DISTRIBUTING: Wants to Move Exclusive Plan Period to June 6 BROADSTREET PARTNERS: $594-Mil. Term Loan Gets Moody's B2 Rating CELADON GROUP: Wellington Entities No Longer Own Any Shares COMSTOCK RESOURCES: Reports Q1 2018 Financial & Operating Results CONSOLIDATED MANUFACTURING: Taps Ken McCartney as Legal Counsel COREL CORP: Moody's Assigns B2 CFR on Dividend Recapitalization COTTER TOWER: Exclusive Plan Filing Period Extended Until June 29 DENT DEPOT: Taps Hobby Stevens as Accountant DOOR TO DOOR: Partial Rejection of LBJ Administrative Claim Upheld DUNECRAFT INC: U.S. Trustee Unable to Appoint Committee ENERGY FUTURE: Disputes with EAL, UMB Can't be Mediated ENVIRO TECHNOLOGIES: Liggett & Webb P.A. Raises Going Concern Doubt ET SOLAR: $86K Sale of Inventory to Umbrella Solar Approved FIBRANT LLC: Proposed Sale of Surplus Assets Approved FIELDPOINT PETROLEUM: Issues Statement in Response to 13D/A FIRSTENERGY SOLUTIONS: Taps Stark & Knoll as Local Counsel GETCHELL AGENCY: Court Junks MDHHS Bid for Leave to Appeal GIBSON BRANDS: Taps Prime Clerk as Claims Agent GOLF CARS: Taps Hobby Stevens as Accountant H MELTON VENTURES: Trustee's Sale of Memorabilia Collection Okayed H3C INC: Taps Alessandro & Associates as Accountant HGIM HOLDINGS: Taps Deloitte & Touche as Auditor HGIM HOLDINGS: Taps Deloitte Tax as Tax Services Provider HILLMAN GROUP: Moody's Junks Rating on $330MM Notes to 'Caa2' ICONIX BRAND: Files Form 10-Q for the Quarter Ended March 31, 2018 ISTAR INC: Fitch Affirms Issuer Debt Rating at 'BB-' JABEZ L INC: $550K Sale of Atlanta Property to Springbok Approved JEFFREY BERGER: $2.5M Sale of Valley/Wibaux Counties Property OK'd JERSEY CHARTER SCHOOL: Moody's Affirms Ba3 Rating, Cites Liquidity JOHN Q. HAMMONS: Sale of Springfield Property for $235K Approved JOHN Q. HAMMONS: Selling Springfield Property for $235K JOSEPH F. COATES: Court Confirms First Amended Chapter 11 Plan JOSEPH O'BERRY: MFLP Barred from Asserting Lack of Diligence Claim K&S UTILITY: Voluntary Chapter 11 Case Summary KEAST ENTERPRISES: U.S. Trustee Forms 3-Member Committee KRATON POLYMERS: Moody's Assigns B3 Rating on New EUR Sr. Notes KUM GANG: J.S. Yoo Violated Fraudulent Conveyance Sections of DCL LEHMAN BROTHERS (EUROPE): Chapter 15 Case Summary LIBERTY INDUSTRIES: Five Creditors Appointed to Committee MCCLATCHY COMPANY: Files Form 10-Q Reporting $38.9M Q1 Net Loss MESOBLAST LIMITED: Presents MSC-100-IV Trial Results at Meeting MIRAGE DENTAL: U.S. Trustee Unable to Appoint Committee MISSISSIPPI MINERALS: U.S. Trustee Unable to Appoint Committee MONEYONMOBILE INC: Further Amends Subscription Rights Offering MONTREAL MAINE: 1st Cir. Upholds Dismissal of Trustee Suit vs WLER MSCI INC: Moody's Assigns Ba2 Rating on Senior Unsecured Notes MULTI-SPECIALTY ENTERPRISES: Trustee Unable to Appoint Committee NATIONAL TRUCK: Yolo vs Normand, et al., Referred to Bankr. Ct. NEOVASC INC: Capital World Has 5.2% Stake as of April 30 NEOVASC INC: Neovasc Reports First Quarter 2018 Results NEOVASC INC: Regains Compliance with Nasdaq Min. Market Value Rule NIGHT OWL PARTNERS: Taps DeMarco-Mitchell as Legal Counsel NINE WEST: Surefield Limited Appointed as Committee Member NJOY INC: Court Nixes Hackney Bid for Dismissal from Red Hed Suit OAKLEY GRADING: U.S. Trustee Unable to Appoint Committee OTERO COUNTY: Court Certifies QHR Direct Appeal of Final Judgments PACIFIC THOMAS: Bankr. Ct. Judgment in Favor of Trustee Vacated PALM BEACH FINANCE: Trustee Fraudulent Transfer Claims vs NCF Nixed PANCHITA BELLO: $235K Sale of Washington DC Property Approved PANCHITA BELLO: S. Majidy Suit Remanded to D.C. Superior Court PENTHOUSE GLOBAL: Trustee Taps Akerman LLP as IP Counsel PESCRILLO NEW YORK: Taps Gleichenhaus Marchese as Legal Counsel PIER 1 IMPORTS: Moody's Cuts Rating to B3 on Increased Competition PLANTRONICS INC: Moody's Confirms Ba2 CFR After Polycom Deal PUGLIA ENGINEERING: District Court Stays Motor-Services Suit PUGLIA ENGINEERING: Pacific Welding Appointed to Committee PURADYN FILTER: Liggett & Webb, P.A. Raises Going Concern Doubt R&B RECEIVABLES: HHS Refusal to Award Grant Reasonable, Ct. Rules RCR WOODWAY: Taps Margaret Maxwell McClure as Legal Counsel RIVER HACIENDA: Owners Seek to Terminate Exclusive Periods ROBERT L. DAWSON: Case Summary & 20 Largest Unsecured Creditors SEADRILL LTD: Exclusive Plan Period Extended Through March 2019 SHARING ECONOMY: RBSM LLP Raises Going Concern Doubt SOUTHCROSS ENERGY: Incurs $16.8 Million Net Loss in First Quarter STILLWATER ASSET: 2nd Cir. Affirms Foreclosure Order Against SLL SURGE HOLDINGS: Paritz & Company Raises Going Concern Doubt TANGO TRANSPORT: Westchester Breached Duty to Defend, Court Rules TENET HEALTHCARE: Moody's Affirms B2 Corp Family Rating THORNTON & THORNTON: Plan Outline Okayed, Plan Hearing on May 22 TOPS HOLDING II: Schwebel Baking Appointed as New Committee Member TROJAN BATTERY: Moody's Keeps B2 CFR on Continuing Revenue Growth ULTRA RESOURCES: Fitch Affirms BB- IDR & Alters Outlook to Neg. VERMEIL LLC: $2.3M Sale of Brooklyn Condo Units to Schemo Approved VERNON PARK CHURCH: Wants to Move Plan Filing Period to Sept. 14 WAGGONER CATTLE: Taps Wilson Haag as Accountant WINDSTREAM SERVICES: Fitch Maintains 'B' IDR on Rating Watch Neg. WOODBRIDGE GROUP: $8.5M Sale of Los Angeles Property Approved WOODBRIDGE GROUP: $9.6M Sale of Snowmass Property Approved WOODBRIDGE GROUP: $9M Sale of Craven's Hidden Hills Property Okayed WYNDHAM DESTINATIONS: Fitch Rates IDR 'BB-(EXP)', Outlook Stable WYNDHAM WORLDWIDE: $1.3-Bil. Bank Facility Gets Moody's Ba2 Rating ZEKELMAN INDUSTRIES: Moodys Hikes CFR to B1, Cites Credit Metrics ********* 24 HOUR FITNESS: $970,000,000 Loans Get Moody's Ba3 Rating ---------------------------------------------------------- Moody's Investors Service assigned Ba3 ratings to 24 Hour Fitness Worldwide, Inc. proposed $120 million senior secured revolving credit facility due 2023 and $850 million senior secured term loan due 2025. At the same time, Moody's affirmed 24 Hour Fitness' B2 Corporate Family Rating ("CFR") and B2-PD Probability of Default Rating. The rating outlook is also changed to stable from negative. Proceeds from the new term loan will be used to refinance 24 Hour Fitness' existing $818 million term loan, pay related fees and expenses, and put cash on the balance sheet. The affirmation of the B2 CFR reflects that this a leverage neutral transaction which extends 24 Hour Fitness' maturity profile such that its nearest debt maturity is not until March 2022, the springing maturity of the new credit facilities should greater than $100 million of the senior unsecured notes remain outstanding at that time. The change in outlook to stable from negative reflects that 24 Hour Fitness is proactively seeking to refinance its revolver well ahead of its current maturity of May 2019. It also reflects that Moody's expects 24 Hour Fitness to grow EBITDA to a level that supports EBITA to interest expense improving to 1.25 times over the next eighteen months. The following ratings are assigned (subject to receipt and review of final documentation): Issuer: 24 Hour Fitness Worldwide, Inc. $120 million Senior Secured Revolving Credit Facility, Assigned Ba3 (LGD2) $850 million Senior Secured Term Loan, Assigned Ba3 (LGD2) Outlook Actions: Issuer: 24 Hour Fitness Worldwide, Inc. Outlook, To Stable from Negative Affirmations: Issuer: 24 Hour Fitness Worldwide, Inc. Corporate Family Rating, Affirmed B2 Probability of Default Rating, Affirmed B2-PD Senior Unsecured Notes, Affirmed Caa1 (LGD5) The following ratings remain unchanged and will be withdrawn upon their repayment in full and the closing of the transaction: Issuer: 24 Hour Fitness Worldwide, Inc. $150 million Senior Secured Revolving Credit Facility, at Ba3 (LGD2) $818 million (originally $850 million) Senior Secured Term Loan, at Ba3 (LGD2) RATINGS RATIONALE 24 Hour Fitness Worldwide, Inc.'s B2 Corporate Family Rating (CFR) broadly reflects the elevated financial risk associated with the company's high leverage, weak interest coverage, and financial sponsor ownership. At March 31, 2017, Moody's-adjusted Debt-to-EBITDA was 6.4 times, and EBITA-to-Interest Expense was 1.0 time. The rating is constrained by 24 Hour Fitness' high regional concentration, with more than 52% of its clubs located in California which results in it having lower EBITA margins than its competitive peers given its higher cost of labor. Moody's views the highly fragmented and competitive fitness club sector as having high business risk given its low barriers to entry, exposure to cyclical discretionary consumer spending, high attrition rates and trend towards budget gym memberships. The rating is supported by the company's good liquidity profile including sizable cash flow from operations and excess on balance sheet cash, which will allow it to fund new club openings without increasing debt levels. The rating also encompasses 24 Hour Fitness' modestly positive comparable club revenue growth, well-recognized brand name in its core markets, and its focus on targeting the healthcare industry to support its growth initiatives. In addition, while Moody's views the fitness club sector as having a high business risk, Moody's expects a moderate level of industry growth. The US economic expansion is a growth driver over the next twelve to eighteen months with longer term trends such as the aging of the US population and increased awareness of the importance of fitness providing additional support. The stable outlook acknowledges 24 Hour Fitness' good liquidity, including the lack of any near dated debt maturities. It also reflects that Moody's expect 24 Hour Fitness' will be able to manage rising wage costs through labor optimization and a higher reliance on technology while the implementation of the annual membership fee along with new club openings supports EBITDA growth. Ratings could be upgraded should 24 Hour Fitness continue to generate consistent positive comparable club sales growth while improving earnings such that Debt-to-EBITDA is sustained below 4.5 times. An upgrade would also require positive free cash flow and a good liquidity profile, both on a sustained basis. Ratings could be downgraded if 24 Hour Fitness is unable to grow its earnings such that EBITA-to-Interest Expense is expected to at least approach 1.25 times. Ratings could also be downgraded should the company experience negative comparable club sales growth, or if free cash flow weakens, or liquidity deteriorates. The principal methodology used in these ratings was Business and Consumer Service Industry published in October 2016. 24 Hour Fitness Worldwide, Inc. is a leading owner and operator of fitness centers in the US. As of March 31, 2018, the company operated 430 clubs serving approximately 3.5 million members across 13 states and 23 markets, predominantly in California, Texas and Colorado. For the 12 months ended March 31, 2018, the company generated total revenue of about $1.5 billion. In May 2014, 24 Hour Fitness was acquired by affiliates of AEA Investors LP, Fitness Capital Partners and Ontario Teachers' Pension Plan for a total purchase price of approximately $1.8 billion. 303 DEAN REALTY: Case Summary & 2 Unsecured Creditors ----------------------------------------------------- Debtor: 303 Dean Realty Inc. 303 Dean Street, Apt 5 Brooklyn, NY 11217-1800 Business Description: 303 Dean Realty Inc. is a real estate company that owns a property located in Brooklyn, New York valued by the company at $4 million. Chapter 11 Petition Date: May 14, 2018 Case No.: 18-42786 Court: United States Bankruptcy Court Eastern District of New York (Brooklyn) Judge: Hon. Elizabeth S. Stong Debtor's Counsel: Avrum J. Rosen, Esq. ROSEN, KANTROW & DILLON, PLLC 38 New Street Huntington, NY 11743 Tel: 631-423-8527 Fax: 631-423-4536 Email: arosen@rkdlawfirm.com Total Assets: $4 million Total Liabilities: $2.86 million The petition was signed by Dawn Foster, president. 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: http://bankrupt.com/misc/nyeb18-42786.pdf 505 CONGRESS: Taps McDermott Quilty as Special Counsel ------------------------------------------------------ 505 Congress Street, LLC, seeks approval from the U.S. Bankruptcy Court for the District of Massachusetts to hire McDermott, Quilty & Miller LLP as special counsel. The firm will represent the Debtor in connection with matters pertaining to the licenses issued to the Debtor by the City of Boston. Stephen Miller, Esq., managing partner of McDermott, is the attorney designated to provide the services. He and his firm have not received a retainer for services to be rendered after the petition date. Mr. Miller disclosed in a court filing that he is a "disinterested person" as defined in section 101(14) of the Bankruptcy Code. McDermott can be reached through: Stephen V. Miller, Esq. McDermott, Quilty & Miller LLP 28 State Street, Suite 802 Boston, MA 02109 Phone: 617.946.4600 (Ext. 4434) Email: smiller@mqmllp.com About 505 Congress Street 505 Congress Street, LLC, which conducts business under the name La Casa de Pedro, is a familial dining destination for Latin cuisine. Pedro Alarcon, owner and chef, serves dishes that highlight the traditions of his native Venezuela and broader Latin American heritage. The restaurant has locations in the Boston Seaport and Watertown Massachusetts. 505 Congress Street, LLC, sought protection under Chapter 11 of the Bankruptcy Code (Bankr. D. Mass. Case No. 18-11352) on April 15, 2018. In the petition signed by Pedro S. Alarcon, manager, the Debtor estimated assets of less than $1 million and liabilities of $1 million to $10 million. Judge Joan N. Feeney presides over the case. The Debtor tapped Parker & Associates as its legal counsel. 8281 MERRILL ROAD: Court Extends Exclusive Solicitation Period -------------------------------------------------------------- The Hon. Raymond B. Ray of the U.S. Bankruptcy Court for the Southern District of Florida, on May 7, 2018, has entered an Order extending the time prescribed for 8281 Merrill Road A, LLC's and 8281 Merrill Road C, LLC's exclusive right to solicit acceptance of the Chapter 11 Plan through and including May 8, 2018. As reported by the Troubled Company Reporter on April 16, 2018, asked the Court to extend the Exclusivity Period, contending these several factors support granting their requested extension, among others: (1) This case is both large and complex. The assets and liabilities of Debtor are in excess of millions of dollars. Moreover, issues in the real estate and capital market, which are known to the Court, have added complication to this case. (2) The Debtors required additional time to negotiate and prepare adequate information as they continue to negotiate with Roger to advance restructuring of its debt; (3) The Debtors have continued to progress toward reorganization in good faith and has already filed both the Plan and Disclosure Statement. No trustee has been appointed and no party has ever alleged that Debtor is not proceeding in good faith; (4) The Debtors have continued to manage and maintain the Merrill Property during this proceeding and are paying their post-petition debts; (5) The Debtors have continued to negotiate with creditors in good faith; (6) This case has only been pending a short time for Debtors to fully analyze possible plans and navigate the current, difficult real estate and credit markets; (7) The Debtor were not seeking the extension to pressure creditors; and (8) This bankruptcy case involves certain unresolved issues, including negotiations with Roger and analysis of the most prudent method of maximizing value of Debtors' assets. The Debtor has continued to advance a reorganization of its financial affairs through a confirmed plan. Consequently, on Dec. 15, 2017, the Debtors filed their Chapter 11 Plan and Disclosure Statement. Subsequently, on April 4, 2018, the Court entered an Order, approving disclosure statement, setting hearing on confirmation of plan, and deadline of May 8, 2018 to file ballots accepting or rejecting the Plan. About 8281 Merrill Road A 8281 Merrill Road A, LLC, is a manager-managed limited liability company with manager, Jacksonville Merrill Dealership, LLC, which is itself managed by Daniel Rusche. The Debtor filed a Chapter 11bankruptcy petition (Bankr. S.D. Fla. Case No. 17-17027) on June 2, 2017. In the petition signed by Tim O'Brien, manager, the Debtor estimated $100,000 to $500,000 in assets and $1 million to $10 million in liabilities. The Hon. Raymond B. Ray presides over the case. Messana, PA, is the Debtor's counsel. AKC ENTERPRISES: Taps GRS Appraisal as Auctioneer ------------------------------------------------- AKC Enterprises, Inc., seeks approval from the U.S. Bankruptcy Court for the Eastern District of Missouri to hire an auctioneer. The Debtor proposes to employ GRS Appraisal & Auction Services to assist in the marketing and auction of its personal property at its facility in St. Charles, Missouri. GRS will get a commission of 15% of the final hammer price of the goods sold and conditionally sold. The firm will collect a 15% buyer's premium from each successful buyer on goods purchased. All anticipated expenses of the sale such as advertising will be paid by the firm. Nancy Cripe, president and auctioneer of GRS, disclosed in a court filing that her firm is a "disinterested person" as defined in section 101(14) of the Bankruptcy Code. The firm can be reached through: Nancy Cripe GRS Appraisal & Auction Services 1727 Bluffview Drive Dupo, IL 62239 Phone: 618.286.4010 Fax: 618.286.4060 Email: info@grsauctions.com About AKC Enterprises AKC Enterprises, Inc., doing business as Little Hills Winery, doing business as Little Hills Restaurant, doing business as Little Hills Wine Shop, is a locally owned and operated wine producer in Saint Charles, Missouri. Its wines are made from French/American Hybrids, German/American Hybrids and Native Missouri Grapes. The company harvests grapes purchased from Missouri Grape Growers and some Illinois Grape Growers. It also produces its fruit wines from fruit purchased from local suppliers. The company -- https://www.littlehillswinery.com/ -- now produces 16 to 18 wines depending on the time of year, designated and paired with its menu served at its restaurant. The restaurant offers banquets, catering, and delivery (Grubgo.com) services. The restaurant accommodates 300 persons on its terraces and 100 inside its building. The company's Little Hills Wine Shop is located at 710 S. Main Street, just two blocks south of the restaurant. The shop features Little Hills Wines and many other Missouri Made Wines. AKC Enterprises filed a Chapter 11 petition (Bankr. E.D. Mo. Case No. 18-40472) on Jan. 29, 2018. In the petition signed by David Campbell, president, the Debtor disclosed $1.20 million in assets and $1.57 million in liabilities. The Debtor tapped Carmody MacDonald P.C. as its bankruptcy counsel, and B&B Accounting & Tax Services, LLC as its accountant. No official committee of unsecured creditors has been appointed in the Debtor's case. ALAMO TOWERS: Delays Plan to Finalize Sale of Alamo Towers ---------------------------------------------------------- Alamo Towers - Cotter, LLC, requests the U.S. Bankruptcy Court for the Western District of Texas to further extend the exclusivity deadlines for filing and obtaining acceptances of a Plan for approximately seventy-five days, being until July 31, 2018 and September 30, 2018, respectively. The Debtor's primary assets are the Alamo Towers properties. The only means available for the Debtor to pay the creditors in this case is by utilizing the proceeds from the sale of the Alamo Towers properties -- through a liquidating plan. The Court previously approved the employment of Cushman & Wakefield U.S., Inc. as Real Estate Broker to represent the Debtor in connection with the sale of the Alamo Towers properties. The Alamo Towers is a significant asset, and creditors cannot be paid until it is sold. Thus, the Debtor is seeking the extensions for the purpose of finalizing a purchase and sale agreement with the winning bidder, seeking Court approval of such sale, getting the sale through the feasibility and due diligence phase of the contract, and closing the sale. The Debtor anticipates that at a closing of the sale of the properties, creditors holding secured claims against the property would be paid in full at closing, and the tenant security deposit claimants (who comprise 56% of the total number of creditors in the case) would have their claims resolved at closing through the funding of a security deposit account to be transferred to the buyer. The Debtor tells the Court that it is making progress towards achieving its goal of selling the properties, paying off its debts, and preserving as much equity as possible for the heirs of the Cotter Estate. C&W marketed the properties utilizing methods designed to obtain the highest and best offer for the properties, and has secured bids from three buyers offering a price Debtor's representatives believe will be sufficient to pay off all of the creditors likely to hold allowed claims in this case. The Debtor's representatives are conducting buyer interviews this week and anticipate selecting the proposed winning bidder soon. A purchase money mortgage secured by the properties is currently held by the lender MF-CFC 2007-7 NE Loop 410, LLC c/o LNR Partners, LLC. The Debtor represents that this case was filed in good faith to prevent the foreclosure of LNR Partners's security interest and the loss of significant equity in the Alamo Towers properties. Moreover, the Debtor has been working with LNR Partners on the use of cash collateral to continue operating the building until the closing of a sale occurs. Further, the Debtor has commenced making monthly interest payments on its loan with and will continue to do so until the properties are sold. The Debtor represents that the ad valorem property taxes assessed against the properties are current and are escrowed as part of a Stipulation with the Lender concerning use of cash collateral. The deadline to file proofs of claim in this case has expired, and the Debtor's counsel has completed an analysis of claims in this case. The largest group of creditors in the case is comprised of the Debtor's tenants which have claims for their security deposits. The Debtor anticipates funding a tenant security deposit account at closing out of the proceeds from the sale of the properties, which would serve two purposes: (a) to enable the buyer to acquire the property with the security deposits intact; and (b) to facilitate payment of the tenants' security deposit claims without having to unnecessarily involve the tenants in a plan confirmation process. About Alamo Towers - Cotter Alamo Towers - Cotter, LLC, owns an eight-story low-rise building in San Antonio, Texas. Located in the heart of the north central office market, Alamo Towers is centrally accessible to all key activities in the city. The 198,452 sq. ft. facility features easy access to San Antonio's major highways, panoramic views and ample parking space. Alamo Towers - Cotter filed a Chapter 11 petition (Bankr. W.D. Tex. Case No. 17-52599) on Nov. 6, 2017. In the petition signed by Marcus P. Rogers, as Ind. Adm. Of the Est. of James F. Cotter, Dec'd, the Debtor estimated assets and liabilities at $10 million to $50 million each. The case is assigned to Judge Craig A. Gargotta. The Debtor is represented by Anthony H. Hervol, Esq., of the Law Office of Anthony H. Hervol. No trustee or examiner has been appointed in the Debtor's Chapter 11 case. ALCOA NEDERLAND: Fitch Rates $500M Sr. Unsec. Notes 'BB+'/'RR4' --------------------------------------------------------------- Fitch Ratings has assigned a 'BB+'/'RR4' rating to Alcoa Nederland Holding B.V.'s new $500 million senior unsecured notes due 2028. The notes rank pari passu with the $750 million, 6.75% notes due 2024 and the $500 million, 7.00% notes due 2026. Proceeds of the notes are to be used to repay debt and fund pension obligations. The ratings benefit from an Alcoa Corporation (Alcoa) guarantee and reflect Alcoa's modest leverage; leading positions in bauxite, alumina, and aluminum; strong control over costs and spending; and flexibility afforded by the scope of its operations. Alcoa was spun off from Alcoa Inc. (subsequently renamed Arconic Inc.) on Nov. 1, 2016. KEY RATING DRIVERS Low-Cost Position: Alcoa's bauxite and alumina costs are in the lowest quartile and aluminum costs are in the lowest half of global production costs. Alcoa's alumina facilities are located next to its bauxite mines, cutting transportation costs and allowing consistent feed and quality. Aluminum assets benefit from prior optimization and smelters co-located with cast houses to provide value-added products, including slab, billet and alloys. Modest Leverage: Pro forma for the new notes, at March 31, 2018, total debt of $2.0 billion was 1.1x operating EBITDA after dividends from associates and distributions to minority interests. Fitch projects annual operating EBITDA at about $2.0 billion and leverage to remain under 1.0x over the rating horizon assuming London Metals Exchange (LME) aluminum prices at $1,900/tonne (t). Fitch's forecasts include continued voluntary contributions to pension funds given available cash flows that result in FFO-adjusted gross leverage at about 2.8x. Sensitivity to Aluminum Prices: While bauxite and alumina are priced relative to the market fundamentals in those markets, over the long run, these products are sensitive to aluminum prices. Rolled products are more of a conversion model, but currently the North American market for Alcoa's products is fairly saturated. The company also sells excess energy. The company estimates that a $100/t change in the LME price of aluminum affects EBITDA by $203 million. Alcoa has some value-added and conversion income, but the company will remain reliant of the fortunes of the aluminum market. Alcoa recently updated its 2018 EBITDA guidance to between $3.5 billion and $3.7 billion assuming a $2,300/t LME aluminum price, $500/t alumina price index, and a U.S. mid-west premium of $0.21/lb. This was up from EBITDA guidance of between $2.6 billion and $2.8 billion provided in January. The company reports that nearly half of its aluminum is sold at the mid-west premium. Improved Aluminum Fundamentals: Fitch expects global aluminum demand growth to continue in the low- to mid-single-digit range, benefitting from consumer demand and substitution for other materials. The average LME aluminum price improved from about $1,660/t in 2015 and $1,620/t in 2016 to about $1,969/t in 2017 on supply rationalization. A combination of U.S. trade tariffs and sanctions, combined with supply restrictions at the world's largest alumina refinery, Alunorte, have resulted in price spikes for alumina and aluminum. The CRU Alumina Price Index was $565/t for the week ending May 10 up from about $354/t on average in 2017. LME aluminum prices peaked over $2,500/t before sanctions were relaxed and settled at about $2,273/t on May 11, 2018. The mid-west aluminum premium in the U.S. has more than doubled since the end of 2017 to about $0.22/lb. Tightness in the global alumina market linked to the Alunorte refinery in Brazil, which has been running at 50% of capacity since Feb. 28, has also contributed to the recent price rises. The timing of the re-start of curtailed capacity remains uncertain and dependent on negotiations with state and federal governmental agencies in Brazil. On April 10, the Albras smelter decided to curtail 50% of aluminum production as a result of Alunorte's supply cuts. Prolonged curtailment at Alunorte could result in further aluminum smelter curtailments. U.S. trade restrictions on top of short domestic supply (U.S. imports about 6 million t of aluminum per year) have been a key factor driving the mid-west premium higher. The U.S. imposed 10% aluminum import duties in March 2018 and this was followed by sanctions against United Company Rusal (Rusal) on April 6, 2018. The U.S. Treasury Department's Office of Foreign Assets Control (OFACT) imposed sanctions on Rusal prohibiting U.S. persons from dealing with the company from May 7 or June 5, initially. The deadline has been extended to Oct. 23, 2018, which has provided some relief to the initial price spike. In addition, OFACT related that the path for sanction relief is through divestment by Oleg Deripaska and change of control. Mr. Deripaska has indicated his willingness to reduce ownership of Rusal's holding company below 50%. Duties of 25% on aluminum products imported to the U.S. from China may follow from the investigation under Section 301 of the Trade Act of 1974 of China's technology transfer and other intellectual property practices according to a proposed list published in April 2018. AWAC Considerations: The company's alumina and bauxite operations are owned through Alcoa World Alumina and Chemicals (AWAC), an unincorporated joint venture 60% owned by Alcoa and 40% owned by Alumina Ltd. In 2017, AWAC generated $1.7 billion in operating EBITDA and paid, net of capital contributions, $583 million in dividends and return of capital to shareholders. Alcoa capitalizes AWAC's results and Fitch expects minority distributions net of contributions to range from about $350 million to $550 million per year. AWAC currently has scant debt and incurrence would fall under the subsidiary debt basket in the Alcoa's revolver equal to the greater of $150 million and 1% of Alcoa's consolidated tangible assets thereby limiting the risk of structural subordination. Pension Underfunding: At Dec. 31, 2017, minimum required pension funding through 2022 was estimated at $1.54 billion and the funded status of direct benefit plans was a $2.3 billion shortfall. Fitch expects Alcoa to manage its contributions through cash generation and cash on hand in addition to use of most of the proceeds from the new notes. Alcoa intends to freeze the defined pension plans for U.S. and Canadian salaried employees and eliminate retiree medical subsidies, effective Jan. 1, 2021. In addition, Alcoa expects to make roughly $300 million in combined discretionary contributions to the U.S. and Canadian defined benefit plans in 2018. In April, Alcoa signed annuity contracts with three insurance companies to cover approximately 2,100 retirees or beneficiaries of Canadian defined benefit pension plans. Alcoa contributed approximately $95 million to facilitate the transaction. DERIVATION SUMMARY Alcoa's low debt levels position it well against 'BB+' rated metals peers. While pension obligations are high, required contributions are expected to be manageable, the company is taking further action to reduce obligations, and the company is expected to be FCF neutral to positive on average. The notes and revolver are the primary obligation of Alcoa Nederland Holding B.V., an overseas borrower, (guaranteed by Alcoa) which is consistent with most earnings coming from outside of the U.S. Most metals peers are steel companies with a different cycle but similar operating risks and dynamics. KEY ASSUMPTIONS Fitch's key assumptions within its rating case for the issuer include: --Fitch commodity price assumptions for aluminum; --Estimated shipments at guidance; --Capex at guidance; --No change in capital allocation framework. RATING SENSITIVITIES Future Developments That May, Individually or Collectively, Lead to Positive Rating Action --EBITDAR Margins expected to be sustained above 15%; --FFO-adjusted leverage expected to be sustained below 2.5x; --Meaningful and sustainable reduction in unfunded pension status. Future Developments That May, Individually or Collectively, Lead to Negative Rating Action --EBITDAR margins sustained below 10%; --FFO-adjusted leverage expected to be sustained above 3x; --LME aluminum prices expected to be sustained below $1,600/t. LIQUIDITY Strong liquidity: At March 31, 2018, cash on hand was $1.2 billion. In addition, the company has an undrawn, $1.5 billion senior secured revolver due to mature on Nov. 14, 2022. Fitch expects the company to generate positive FCF on average. Scheduled maturities of debt are modest through 2022. FULL LIST OF RATING ACTIONS Fitch assigns the following rating: Alcoa Nederland Holding B.V. --$500 million senior unsecured notes due 2028 'BB+'/'RR4'. Fitch rates Alcoa as follows: Alcoa Corporation --IDR 'BB+'. Alcoa Nederland Holding B.V. --IDR 'BB+'; --Senior secured revolving credit facility 'BB+'/'RR4'; --Senior unsecured notes 'BB+''/RR4'. The Rating Outlook is Positive. ALCOA NEDERLAND: Moody's Hikes Corp. Rating to 'Ba1' ---------------------------------------------------- Moody's Investors Service upgraded Alcoa Nederland Holding B.V.'s (ANHBV) Corporate Family Rating (CFR) and Probability of Default Rating to Ba1 and Ba1-PD respectively from Ba2 and Ba2-PD respectively and upgraded the company's senior unsecured notes to Ba1 from Ba2. The notes are guaranteed by Alcoa Corporation (Alcoa). In addition, Moody's assigned a Ba1 rating to ANHBV's senior unsecured notes due in May 2028. The speculative grade liquidity rating remains unchanged at SGL-1. The outlook is stable. Proceeds from the new note issue will be used to make contributions to Alcoa's pension and other post retirement plans as well as for general corporate purposes. The upgrade of the CFR to Ba1 considers Alcoa's stronger operating platform following rationalization over the last several years of its alumina refining and aluminum smelting operations, expansion of its bauxite platform, enhanced productivity gains, improved value added mix as well as good performance at its cast houses. Additionally the costs that have been taken out of the system over the last several years has contributed to stronger margins and although cost creep is negating some of the cost reduction benefits. "The actions taken enable Alcoa to perform better in a down market and at lower price points than currently exist relative to past performance" said Carol Cowan, Senior Vice President and lead analyst for Alcoa. Further support for the Ba1 CFR is derived from the company's well-articulated capital allocation objectives, which includes maintaining cash balances in excess of $1 billion. Upgrades: Issuer: Alcoa Nederland Holding B.V. Probability of Default Rating, Upgraded to Ba1-PD from Ba2-PD Corporate Family Rating, Upgraded to Ba1 from Ba2 Gtd. Senior Unsecured Regular Bonds/Debentures, Upgraded to Ba1(LGD4) from Ba2(LGD4) Assignments: Issuer: Alcoa Nederland Holding B.V. Gtd. Senior Unsecured Notes, Assigned Ba1(LGD4) Outlook Actions: Issuer: Alcoa Nederland Holding B.V. Outlook, Remains Stable RATINGS RATIONALE The Ba1 CFR at ANHBV considers its parent's (Alcoa) position as a leading producer of bauxite, alumina and aluminum (including cast products), geographical and aluminum product diversity, and operational quality. From a business profile perspective, Alcoa Corp. is well positioned within its products and markets served. Additionally, the company has a solid cost production profile, driven by continued refocusing of its refining and smelting system and idling/closure of higher cost facilities. Moody's expects the company to generate EBITDA of at least $3 billion in 2018 on stronger prices and higher premiums despite an expected cost creep of around $400 million on higher caustic and carbon products. However, the CFR considers the company's exposure to essentially a single metal commodity, as the demand for bauxite and alumina is directly correlated to the demand for aluminum and the volatility in the alumina and aluminum markets driven by global growth expectations and industrial production levels. Further considerations include industry overcapacity, particularly given the increase in Chinese smelting capacity, which offsets the positive impact of supply curtailments and closures by other producers, supply/demand imbalances, and market sentiment. Although Chinese smelter capacity has been curtailed due to illegal operations as well as environmental concerns over the winter months, the potential exists for restarts, particularly given current price environment. Additionally, the imposition of tariffs in the US due to Section 232 findings, has contributed to smelter restarts by certain companies. This is not viewed as materially changing current market dynamics, given the time required, but could have longer term implications. Nonetheless, the stronger global economic growth levels and the supply deficit in the US, where Alcoa derives a material portion of its sales, provides underlying support to Alcoa's performance over the next several quarters. Given Moody's expectations for minimum EBITDA of at least $3 billion in 2018 and considering only the annuitization of the Canadian pension plan, and Alcoa's guidance for discretionary pension plan contributions, Moody's would expect leverage, as measured by the debt/EBITDA ratio to be no more than 1.5x in 2018. Moody's notes that the growth in EBITDA and cash flow generation is also driven by the stronger performance in the bauxite and alumina operations, all of which, as well as certain smelter facilities, are part of the AWAC joint venture with Alumina Ltd. If such were to be proportionately consolidated, 2017 segment EBITDA would be roughly $2 billion versus $2,7 billion on a fully consolidated basis while leverage would be around 2x versus the 1.8x The stable outlook expects that Alcoa will exhibit strong earnings growth and cash flow generation over the next several quarters due to unusual market conditions, but anticipates that the company will be able to maintain metrics appropriate for a Ba1 profle, particularly for interest coverage, profit margins and free cash flow generation once the uncertainty in the market is resolved. The stronger performance in an upmarket is expected to provide the company with a better cushion to protect it against varying price points for its key operating segments. The SGL-1 speculative grade liquidity rating acknowledges the company's excellent liquidity as evidenced by its cash position of $1.2 billion at March 31, 2018 and its $1.5 billion secured revolving credit facility (RCF -unrated) at Alcoa Nederland, guaranteed by Alcoa and maturing in November 2022. The facility is unused except for around $100 million in letters of credit. The RCF is secured by substantially all assets. The RCF contains two financial covenants; Consolidated EBITDA/interest of no less than 5x and consolidated debt/EBITDA of no more than 2.25x (Moody's leverage ratios include its standard adjustments for pensions and operating leases). Additionally, the company has no material debt maturities until September 2024. Alcoa is expected to be free cash flow generative in 2018 after maintenance and growth capital expenditures of $450 million. The Ba1 senior unsecured debt rating, at the same level as the CFR, reflects the preponderance of unsecured debt in the capital structure, given the level of unsecured notes and unfunded pension obligations relative to the $1.5 billion secured revolving credit facility. Given the volatility in the commodities in which Alcoa participates and potential for wide swings in performance, further upward rating movement could be limited. Additionally upward rating movement to investment grade is constrained by the secured nature of the bank revolving credit facility. However, ratings could be upgraded should Alcoa be able to sustain an EBIT margin of at least 17.5%, EBIT/interest of at least 7x, and debt/EBITDA of no more than 2x. Continued discipline in its capital allocation strategy and financial policy would also be a consideration. The ratings could be downgraded should EBIT/interest fall and be sustained below 4.5x EBIT margins be less than 8%, leverage exceed and be sustained above 2.75x. Negative free cash flow and liquidity contraction would also be a downgrade consideration. Alcoa Nederland is a wholly owned subsidiary of Alcoa Corporation. Alcoa holds the bauxite, alumina, aluminum, cast products and energy business as well as the rolling operations in Warrick, Indiana and Alcoa Inc's 25.1% interest in the Ma'aden Rolling Company. Revenues for the twelve months ended March 31, 2018 were $12.1 billion. The principal methodology used in these ratings was Mining Industry published in April 2018. ALPHA MEDIA: Moody's Junks CFR to Caa1 Amid Covenant Breach ----------------------------------------------------------- Moody's Investors Service downgraded Alpha Media LLC's (Alpha Media) corporate family rating (CFR) to Caa1 from B3 and the first lien credit facility, consisting of a $20 million revolver and first lien term loan, was downgraded to B3 from B1. The outlook was changed to negative from stable. The company's second lien note and holdco PIK note are not rated by Moody's. The downgrade of the CFR reflects continuing weak performance and a violation of its financial covenants and potential for a going concern opinion from its auditor which has kept the company from reporting its 2017 audited financial statements by April 30th, 2018 as required. Moody's expects the company will amend its covenants which will lead to the reporting of its 2017 audited financial statements in the near term. The company has been selling off stations to repay debt, but the holdco PIK note continues to increase which limits the ability to reduce leverage. Moody's projects results will continue to be challenged by the secular pressures in the radio industry and the need to turnaround operations. The following is a summary of Moody's actions: Issuer: Alpha Media LLC Corporate Family Rating, downgraded to Caa1 from B3 Probability of Default Rating, downgraded to Caa1-PD from B3-PD $20 million 1st lien sr secured revolver; downgraded to B3 (LGD3) from B1 (LGD3) $265 million 1st lien sr secured term loan, downgraded to B3 (LGD3) from B1 (LGD3) Outlook changed to Negative from Stable RATINGS RATIONALE Alpha Media's Caa1 CFR reflects the company's very high pro forma leverage of 6.9x as of Q3 2017 (excluding Moody's standard lease adjustments, but including holdco debt) and performance that was below expectations since the transaction was launched to fund the acquisition of Digity LLC. Ratings also incorporate the secular pressures facing the industry and cyclical nature of radio advertising demand. High leverage increases the challenge of managing a business that is vulnerable to advertising spending cycles with heightened competition for advertising dollars from advertising alternatives and additional competition for listeners from digital music services. Alpha operates a diverse portfolio of stations including good positions in the majority of its ranked markets with a significant portion of revenue generated by stations in small to medium sized markets. Efforts to delever the balance sheet will be challenged by the need to offset the accretion of its holdco PIK notes. The company pursued an aggressive acquisition strategy in prior years, but has been selling stations to repay debt in recent quarters. The need to turn around underperforming stations while reducing fixed costs due to the smaller size of the company is expected to remain a challenge going forward. The negative outlook reflects expectations for revenue declines going forward due to negative secular trends in the industry and the need to improve operations while cutting costs. High leverage levels elevate the risk of a restructuring of its balance sheet over time. Additional asset sales have the potential to reduce leverage and lead to a stabilization of the outlook if operating performance improves. Liquidity is expected to be weak due to the current covenant violation which prevents access to its $20 million revolver facility due February 2021 in addition to modest levels of cash on the balance sheet. Free cash flow-to-debt is expected to be in the low-single digit percent range (excluding PIK interest expense on the holdco note) over the next 12 months. The company is required to make a 1.25% quarterly amortization payment on its $265 million term loan B. Capex is expected to be under $5 million and tax payments are anticipated to be minimal. There are no near term maturities until 2021 when the revolver expires. Alpha is subject to a net total leverage maintenance covenant for the first lien credit facility that is set at 5.25x as of Q4 2017, but the covenant ratio steps down each quarter until it reaches 3.5x in December 2020. Moody's expects the company will eventually complete an amendment to its covenants. Debt ratings could be downgraded if the company's results continue to underperform and leverage rises above 8x or if the risk of a default increased due to concerns about its ability to service its debt. Inability to obtain an amendment to its existing covenants or file its audited financial statements in the near term could also lead to additional rating pressure. An upgrade could occur if the company was expected to operate under 6.5x (as calculated by Moody's) with positive organic revenue as well as a free cash flow to debt ratio in the mid-single digits. Liquidity would also need to be adequate with a sufficient cushion of compliance with its financial covenants factoring in the step down in covenant levels in the credit agreement. Following the acquisition of assets from Digity, LLC in February 2016, Alpha Media LLC owns and operates radio stations in 49 markets, including related websites and two live performance lounges. Headquartered in Portland, OR, the company represents an acquisition roll up of stations from operators including Triad Broadcasting, Border Media, Main Line Broadcasting, Morris Radio, and Digity. The company is privately held and the largest shareholders include Stephens Capital Partners, Endeavour Capital, and management. The principal methodology used in these ratings was Media Industry published in June 2017. AMERICAN BIO MEDICA: UHY LLP Raises Going Concern Doubt ------------------------------------------------------- American Bio Medica Corporation filed with the U.S. Securities and Exchange Commission its annual report on Form 10-K, disclosing a net loss of $545,000 on $4,914,000 of net sales for the fiscal year ended December 31, 2017, compared to a net loss of $345,000 on $5,609,000 of net sales for the year ended in 2016. UHY LLP in Albany, New York, states that the Company has incurred recurring operating losses and its current cash position and lack of access to capital raise substantial doubt about the Company's ability to continue as a going concern. The Company's balance sheet at December 31, 2017, showed total assets of $2,891,000, total liabilities of $2,268,000, and a total stockholders' equity of $623,000. A copy of the Form 10-K is available at: https://is.gd/JUfPpm About American Bio Medica Corp. American Bio Medica Corporation manufactures and sells lateral flow immunoassay tests, primarily for the immediate detection of certain drugs in urine and oral fluids at the point of collection. The Company's products are accurate, self-contained, cost-effective, user-friendly products that are capable of accurately identifying the presence or absence of drugs in a sample within minutes. Its products are used by pain management and drug treatment facilities, laboratory professionals, law enforcement and other government personnel, as well as by employers and education professionals. American Bio Medica Corporation was founded in 1986 and is based in Kinderhook, New York. AMERICAN WEST: Reply in Support of OSC Bid Admissible, Court Says ----------------------------------------------------------------- On March 21, 2018, the court heard the Reorganized Debtor's Motion (I) to Reopen Chapter 11 Case; and (II) for an Order to Show Cause Why Scott Lyle Graves Canarelli and His Counsel Should Not Be Held in Contempt for Violating Plan Discharge, Exculpation, Release and Injunctive Provisions ("OSC Motion"). Additionally, the court heard a Motion to Strike Portions of Reply to Opposition to Reorganized Debtor's Motion (I) to Reopen Chapter 11 Case; and (II) for an Order to Show Cause Why Scott Lyle Graves Canarelli and His Counsel Should Not Be Held in Contempt for Violating Plan Discharge, Exculpation, Release and Injunctive Provisions; or, in the Alternative, Motion for Leave to File Supplemental Declarations. Judge Mike K. Nakagawa of the U.S. Bankruptcy Court for the District of Nevada denies Canarelli and SDF's strike motion and the motion for leave. The Reply filed in support of the OSC Motion refers to communications amongst counsel leading to the creation of a proposed order to resolve the OSC Motion ("Proposed Order") after AWD received the Opposition. To the extent those communications embody settlement discussions inadmissible under FRE 408, Scott Canarelli and the SDF Firm seek to strike those references from the Reply, or, in the alternative, to admit the Carlyon Declaration and Second Dwiggins Declaration into evidence. The express purpose of admitting the Carlyon Declaration and Second Dwiggins Declaration is to overcome "the false impression that Debtor, and not Scott Canarelli, have attempted a 'pragmatic solution' with respect to the subject matter of the [OSC] Motion . . ." In arguing that the latter declarations should be considered to rebut the portions of the Reply, Scott Canarelli and the SDF Firm allege that "Counsel for Debtor (not Ms. Axelrod) engaged in an abusive and sexist tirade against Scott's counsel, including telling her to read the Plan again slowly' before speaking to him, and stating that she `might not be understanding how the term sheet is intended to work.'" AWD responded to the Strike Motion by denying that the Reply included references to inadmissible settlement communications. AWD then suggests that opposing counsel should be held responsible for what it characterizes as "baseless and offensive personal attacks" against Mr. Schultz. In support of the Strike Objection, the Second Schultz Declaration includes copies of a series of email messages between AWD's attorneys and Scott Canarelli's attorneys, occurring on Feb. 14, Feb. 19, and Feb. 20, 2018. Because the Feb. 20 emails between Mr. Nathan Schultz and Ms. Dana Dwiggins are gender-neutral on their face, the sometimes condescending and sometimes aggressive language used by both participants unfortunately may be representative of what occurs when humans communicate through keyboards rather than engage in face to face conversation. In their context, the emails do not appear to be "abusive" because both counsels appear to be only advocating the legal positions of their respective clients albeit through the occasional use of condescending or threatening language. On their face, the emails do not appear to be "sexist" because there are, for example, no pejorative terms used toward either participant and no outward indication that the condescending or threatening language is used because of the gender of the opposing party. Instead, the emails appear to be "gender neutral" because reversing the genders of the participants would not change the condescending or threatening nature of the language. Finally, the emails do not appear to conform at all to the dictionary definition of a "tirade," i.e., "a long, angry speech of criticism or accusation." Because the emails alone would not support a finding that an abusive and sexist tirade occurred and that such conduct somehow supports the admission of the Carlyon Declaration and Second Dwiggins Declaration12, the only path to such a finding would be to conduct an evidentiary hearing. Presumably, Mr. Schultz and Ms. Dwiggins would testify for the purpose of: (1) establishing the words actually used during the telephone conversation, and (2) determining whether the words (along with the emails) constituted something akin to an "abusive and sexist tirade." Because the outcome of the hearing would depend almost entirely on the credibility of each witness, the court likely would permit discovery and the introduction of impeachment evidence. Until such a hearing is conducted, if at all, the court concludes that the present record is insufficient to establish that Mr. Schultz directed an "abusive and sexist tirade" toward Ms. Dwiggins. But the court concludes that there is no need to conduct such a hearing. The outcome of the OSC Motion is not dependent upon nor materially affected by the content or submission of the Proposed Order. Whether the Proposed Order was the product of settlement negotiations or not, nothing would have prevented AWD from suggesting the content of the Proposed Order in its Reply. Moreover, the Reply refers only to the fact that counsel for the parties attempted to resolve the OSC Motion, but not to the content of any settlement discussions. Thus, that portion of the Reply does not violate FRE 408 and will not be stricken. The bankruptcy case is in re: AMERICAN WEST DEVELOPMENT, INC., Chapter 11, Debtor, Case No. 12-12349-MKN (Bankr. D. Nev.). A full-text copy of the Court's Order dated April 12, 2018 is available at https://bit.ly/2IbqQna Leagle.com. AMERICAN WEST DEVELOPMENT, INC., Debtor, represented by BRETT A. AXELROD -- baxelrod@foxrothschild.com -- FOX ROTHSCHILD LLP, CHARLES D. AXELROD -- caxelrod@foxrothschild.com -- FOX ROTHSCHILD LLP, MICAELA RUSTIA MOORE, CITY OF NORTH LAS VEGAS & NATHAN A. SCHULTZ. U.S. TRUSTEE – LV – 11, 11, U.S. Trustee, represented by ATHANASIOS E. AGELAKOPOULOS. About American West American West Development, Inc. -- fdba Castlebay 1, Inc., et al. -- is a homebuilder in Las Vegas, Nevada, founded on July 31, 1984. Initially, AWDI was known as CKC Corporation, but later changed its name. AWDI filed for Chapter 11 bankruptcy protection (Bankr. D. Nev. Case No. 12-12349) on March 1, 2012. Judge Mike K. Nakagawa presides over the case. Brett A. Axelrod, Esq., and Micaela Rustia Moore, Esq., at Fox Rothschild LLP, serve as AWDI's bankruptcy counsel. Nathan A. Schultz, P.C., is AWDI's conflicts counsel. AWDI hired Garden City Group as its claims and notice agent. American West disclosed $55.39 million in assets and $208.5 million in liabilities as of the Chapter 11 filing. James L. Moore, as future claims representative in the Chapter 11 case of American West Development, Inc., tapped the law firm of Field Law Ltd. as his counsel. ANCHOR REEF: Adversary Proceeding on Turnover Bid Not Warranted --------------------------------------------------------------- In his preliminary ruling on Debtor Anchor Reef Club at Branford, LLC's turnover motion, Bankruptcy Judge James J. Tancredi holds that an adversary proceeding as proposed by HRP Associates, Inc., the Debtor's previously retained environmental consulting engineers, is not warranted. Fed. R. Bankr. Pro. 7001(1) by its terms provides that "a proceeding to recover money or property" will be commenced by Adversary Proceeding. The turnover motion neither seeks to recover money nor damages, nor does it contemplate an adjudication of rights in property. The gravamen of the motion is the pursuit of discovery of recorded information from HRP. Such recorded information allegedly relates to the Debtor's property or financial affairs. Those cases cited by HRP in its brief allegedly holding that a Section 542 turnover action should be pursued through an Adversary Proceeding are inapposite and distinguishable as cases to recover money or property, and not to effectuate this form of discovery under Section 542(e) which may be maintained by motion, after notice and a hearing. The United States Court of Appeals for the Second Circuit has ruled that "notice and hearing" is satisfied when a party has notice of a proceeding, an opportunity to file memoranda, affidavits and other documents, and is given an opportunity to address the issue. Further, while the history of the parties may be long and complex as a factual matter, the arguments of counsel reflect that the factual history and relevant documents are not in material dispute so that the procedural protections of an Adversary Proceeding, including discovery, are not warranted. Requiring a Section 542 proceeding of this nature to be pursued by Adversary Proceeding would unduly delay and burden these parties, the bankruptcy process, and this Estate. Accordingly, this Court concludes that Fed. R. Bankr. Pro. 7001(1) is inapplicable here, and that the Court will proceed with a final hearing on the motion. The Court reserves judgment on whether this is a core, related proceeding, or otherwise. In connection with the final evidentiary hearing, the parties are directed to file and exchange supplemental memoranda and any additional affidavits in support of their respective positions at least five days prior to the hearing. The bankruptcy case is in re: Anchor Reef Club at Branford, LLC, Chapter 11, Debtor, Case No. 17-21080 (JJT) (Bankr. D. Conn.). A full-text copy of the Court's Preliminary Ruling dated April 18, 2018 is available at https://bit.ly/2K7Miqk from Leagle.com. Anchor Reef Club at Branford, LLC, Debtor, represented by Timothy D. Miltenberger -- tmiltenberg@coanlewendon.com -- Coan Lewendon Gulliver & Miltenberger. HRP Associates, Inc., Miscellaneous Proceeding Party, represented by Sarah Gruber -- sgruber@murthalaw.com -- Murtha Cullina LLP & Robert E. Kaelin -- rkaelin@murthalaw.com -- Murtha Cullina, Richter and Pinney. U. S. Trustee, U.S. Trustee, represented by Steven E. Mackey, Office of the U.S. Trustee. About Anchor Reef Club at Branford, LLC Anchor Reef Club at Branford, LLC, based in Westlake Village, CA, filed a Chapter 11 petition (Bankr. D. Conn. Case No. 17-21080) on July 19, 2017. The Hon. James J. Tancredi presides over the case. Timothy D. Miltenberger, Esq., at Coan Lewendon Gulliver & Miltenberger, LLC, serves as bankruptcy counsel. In its petition, the Debtor estimated $1 million to $10 million in assets and $10 million to $50 million in liabilities. The petition was signed by Albert Nassi, manager of the member. ANTHONY BROOKS: Proposed Public Sale of Cattle Inventory Approved ----------------------------------------------------------------- Judge Thomas L. Perkins of the U.S. Bankruptcy Court for the Central District of Illinois authorized Anthony D. Brooks and Amy J. Brooks to sell a substantial portion of their cattle inventory at the Fairview Sale Barn, including 31 cow-calf pairs, four bred cows, eight open yearling heifers to be sold as feeder calves, seven open cows to be sold as slaughter cows, and four bulls at public sale. The sale is free and clear of all liens, claims and encumbrances, with any liens attaching to the sale proceeds. The Debtors will file a report of sale with the Clerk of the Court within 14 days of the conclusion of the sale authorized. All proceeds from the sale will be held in the Debtor in Possession sale proceeds account pending further order of the Court. For cause shown, the Court waives the 14-day stay required pursuant to Fed. R. Bankr. P. 6004(c) and the Order is effective immediately upon entry. About Anthony and Amy Brooks Anthony D. Brooks and Amy J. Brooks sought protection under Chapter 11 of the Bankruptcy Code (Bankr. C.D. Ill. Case No. 18-80311) on March 9, 2018. Gordon Gouveia, Esq., at Shaw Fishman Glantz & Towbin LLC, serves as the Debtor's bankruptcy counsel. On March 28, 2018, the Office of the United States Trustee appointed an official committee of unsecured creditors, including AgPerspective, Riden Farms Supply, Inc. and Herr Petroleum Corp. ANTHONY BROOKS: Proposes Public Sale of Cattle Inventory -------------------------------------------------------- Anthony D. Brooks and Amy J. Brooks ask the U.S. Bankruptcy Court for the Central District of Illinois to authorize them to sell a substantial portion of their cattle inventory at the Fairview Sale Barn, including 31 cow-calf pairs, four bred cows, eight open yearling heifers to be sold as feeder calves, seven open cows to be sold as slaughter cows, and four bulls at public sale. In connection with the bankruptcy filing, the Debtors ceased managing their own farming business and are in the process of liquidating certain assets, including grain, equipment and cattle livestock in an orderly manner to pay down secured creditors and ultimately facilitate a reorganization of their financial affairs. By the Motion, the Debtors propose to Cattle. Following the Proposed Sale, the Debtors' remaining cattle inventory will be comprised of 15 cows and two bulls. The Debtors propose to conduct the Proposed Sale at the Fairview Sale Barn located at 1120 Carter Street, Fairview, Illinoi over the course of the next 7-14 days. Fairview Sale Barn regularly conducts public cattle sales through an open bidding process. The Debtors believe that the Proposed Sale represents the best opportunity to maximize the value of the cattle inventory while minimizing the costs associated with continued maintenance of the cattle. They are incurring daily expenses associated with the cattle, which are currently being housed on their pasture land. If the cattle are not promptly sold, the Debtors will continue to incur daily carrying costs and in the next 14 days the Debtors will have to pay for vaccinations at a significant additional cost to the estate. In addition, their land is not well-suited for the long-term maintenance of such a large amount of cattle, which were previously housed on rented land. The Debtors are still evaluating the claims of alleged secured creditors and verifying the validity of their alleged liens . However, their preliminary analysis reflects that the cattle are subject to first priority liens in favor of First Midwest Bank. They expect First Midwest Bank to consent to, or at least not object to, the Proposed Sale prior to the hearing on the Motion. Accordingly, the Debtors ask Court authority to sell the specified cattle in the Proposed Sale free and clear of any liens, claims and interests thereon, with all liens to attach to the sale proceeds in accordance with their respective priorities. The Debtors will file a report of sale with the Court at the conclusion of the Proposed Sale, and the Debtors will hold all of the sale proceeds in the debtor in possession sale proceeds account pending further order of the Court. The Debtors request that the Court schedule the Motion for an expedited hearing at the Court's earliest availability during the week of April 30, 2018. The Debtors ask an expedited hearing on the Motion to avoid incurring additional carrying costs and the anticipated costs associated with vaccinations that would have to be incurred by the end of next week. For the same reasons, the Debtors ask that the Court waives the 14-day stay pursuant to Fed. R. Bankr. P. 6004(h) to allow the order authorizing the Proposed Sale to be effective immediately upon entry. Based on the foregoing, the Debtors submit that good cause exists for an expedited hearing on the Motion and the requested Rule 6004(h) waiver. A copy of the list of Cattle Inventory to be sold attached to the Motion is available for free at: http://bankrupt.com/misc/Anthony_Brook_67_Sales.pdf About Anthony and Amy Brooks Anthony D. Brooks and Amy J. Brooks sought protection under Chapter 11 of the Bankruptcy Code (Bankr. C.D. Ill. Case No. 18-80311) on March 9, 2018. Gordon Gouveia, Esq., at Shaw Fishman Glantz & Towbin LLC, serves as the Debtor's bankruptcy counsel. On March 28, 2018, the Office of the United States Trustee appointed an official committee of unsecured creditors, including AgPerspective, Riden Farms Supply, Inc. and Herr Petroleum Corp. ARECONT VISION: Case Summary & 30 Largest Unsecured Creditors ------------------------------------------------------------- Affiliates that concurrently filed voluntary petitions for relief under Chapter 11 of the Bankruptcy Code: Debtor Case No. ------ -------- Arecont Vision Holdings, LLC (Lead Case) 18-11142 425 Colorado Blvd., Suite 700 Glendale, CA 91205 Arecont Vision, LLC 18-11143 Arecont Vision IC DISC 18-11144 Business Description: Arecont Vision -- https://www.arecontvision.com -- is in the business of designing, manufacturing, distributing and selling IP- based megapixel cameras for use in video surveillance applications globally, serving a broad range of industries including data centers, government, retail, financial, sports stadiums and healthcare. Arecont Vision offers seven megapixel product families ranging from MegaVideo, single- sensor cameras from 1 to 10 megapixels and SurroundVideo multi-sensor cameras from 8 to 40 megapixels at various price points. The Company differentiates itself from its competitors with in-house technology development capabilities, with 18 issued patents. Arecont Vision is headquartered in Glendale, California. Chapter 11 Petition Date: May 14, 2018 Court: United States Bankruptcy Court District of Delaware (Delaware) Debtors' Counsel: James E. O'Neill, Esq. Ira D. Kharasch, Esq. Maxim B. Litvak, Esq. PACHULSKI STANG ZIEHL & JONES LLP 919 North Market Street, 17th Floor P.O. Box 8705 Wilmington, DE 19899-8705 Tel: 302-652-4100 Fax: 302-652-4400 Email: jo'neill@pszjlaw.com ikharasch@pszjlaw.com mlitvak@pszjlaw.com Debtors' Investment Bankers: IMPERIAL CAPITAL, LLC Debtors' Financial Advisor: ARMORY STRATEGIC PARTNERS, LLC 1230 Rosecrans Avenue Manhattan Beach, CA 90266 Tel: (310) 220-6400 Debtors' Claims/Noticing Agent: RUST CONSULTING/OMNI BANKRUPTCY Web site: https://is.gd/AUbS2l Estimated Assets: $0 to $50,000 Estimated Liabilities: $50 million to $100 million The petition was signed by Scott T. Avila, chief restructuring officer. A full-text copy of Arecont Vision Holdings' petition is available for free at: http://bankrupt.com/misc/deb18-11142.pdf List of Debtors' 30 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Avnet Electronics Marketing Trade Debt $181,548 Email: sandra.tristan@avnet.com ACCU-Sembly Trade Debt $142,698 Email: igomez@accu-sembly.com Shurcon Manufacturing Co. Ltd. Trade Debt $122,326 Email: hui.yang@shurcon.com BSREP So Contract $103,542 California Office LA LLC Email: julissa.ramirez@cis.cushwake.com Greenbase Technology Corp. Trade Debt $90,104 Email: juliawang@nexcom.com.tw Arrow Electronics Trade Debt $67,522 Email: vfarello@arrow.com Leading Holdings Inc. Trade Debt $58,566 ON Semiconductor Ind. LLC Trade Debt $51,964 Email: arremit1@consemi.com Modotech Inc. Trade Debt $48,672 Email: modotechinc.com Sinbon Electronics Co. Ltd. Trade Debt $44,800 Email: maggiekao@sinbon.com Future Electronics Corp. Trade Debt $43,361 Email: tara.musial@futureelectronics.com Sager Electronics Trade Debt $33,600 Email: sagerelectronics@billtrust.com RELX Inc. Reed Exhibitions Trade Debt $32,151 Email: inquiry@reedxpo.com Fujian Forecam Optics co. Ltd. Trade Debt $31,710 Email: americassales_1@forecam.com TechTeam UG Contract $19,907 Email: accounting@techteam.tv Landsberg Trade Debt $17,355 Email: christian.c.conard@landsberg.com Halo Electronics Trade Debt $16,324 Email: mglenday@haloelectronics.com AEI Inc. Trade Debt $16,274 Email: ckaur@aornoldelectronics.com Notting Hill Media Trade Debt $14,167 Email: kinjal.shah@nottinghillmedia.com Automation Electronics Trade Debt $13,138 Division of RJA Industries Email: ae@automationelectronics.com Uline, Inc. Trade Debt $10,724 Email: accounts.receivable@uline.com Rays Optics, Inc. Trade Debt $10,100 Email: julia.chiang@youngoptics.com Citibusiness Card Contract $9,821 Asix Trade Debt $9,300 Email: jamay@asix.com.tw Citibank Contracts $8,457 EDA Direct Inc. Components $8,392 Email: dave@edadirect.com Coilcraft Trade Debt $7,585 Email: ksimmons@coilcraft.com Mouser Electronics Trade Debt $6,003 Email: beth.kole@mouser.com SouthComm Business Media Trade Debt $6,000 Email: info@southcomm.com Shanghai Guangshen Electronics Trade Debt $5,750 Co. Ltd. Email: jacklin@vip.163.com AVAYA INC: Court Estimates SAE Misappropriation Claim at $1.21MM ---------------------------------------------------------------- Debtors Avaya Inc. and affiliates and Creditor SAE Power Incorporated and SAE Power Company stipulated to a procedure to estimate SAE's claim based primarily on the misappropriation of trade secrets. The litigation pending between the parties in New Jersey state court was stayed by the filing of the chapter 11 petitions, but at some point, will continue and decide the question of liability and damages. Upon assessment, Judge Stuart M. Bernstein of the U.S. Bankruptcy Court for the Southern District of New York estimates SAE's pre-petition Misappropriation Claim in the amount of $1.21 million, its fraud claim at zero, and declines to estimate SAE's breach of contract claim, leaving it to be resolved through the usual claims allowance process. Both Avaya and SAE agree that the reasonable royalty should be measured based on the fifteen non-exhaustive factors identified in Georgia-Pac. Corp. v. U.S. Plywood Corp. Avaya based its estimates on established methodologies, supported by expert testimony on the relevant technical aspects of the trade secrets. In considering a reasonable royalty, the Court notes that several of the Georgia-Pacific factors are either not relevant, were not considered or there is no evidence offered. These include royalties received by SAE or any other power supply units ("PSU") manufacturer for the licensing of their trade secrets, the exclusive or non-exclusive nature of the hypothetical license, SAE's policies or efforts to preserve the trade secrets, or proof that the trade secrets promoted the sales of Avaya's or SAE's products. The relevant Georgia-Pacific factors put downward pressure on the hypothetical royalty. SAE and Avaya are not competitors, and the duration of the trade secrets was limited due to reverse engineering or development of a PSU from scratch by Avaya. Moreover, the trade secrets were neither technically unique nor critical to the PSU. There were alternatives for dealing with the problems they addressed, "[t]he input filtering, AC-DC conversion, DC-DC conversion, power-factor conversion, and output filtering are unrelated to the alleged trade secrets," and "[a] power supply that does not practice Trade Secret No. 1 or Trade Secret No. 2, or their equivalents, would have essentially the same abilities and uses." In other words, the PSU would have served its essential function with one of the alternatives or without the trade secrets at all. Furthermore, only 6.3% of the price difference between an SAE PSU and a Delta Products Corp PSU was attributable to the trade secrets. Furthermore, the value of the misappropriated trade secrets to Avaya cannot be the $482.49 per PSU which SAE's damages expert, Michael LoGiudice opined was a reasonable royalty. In addition to paying this royalty, Avaya would also have to pay Delta approximately $250 per PSU. The Court doubts that Avaya would have agreed in a hypothetical negotiation to pay a $482.49 royalty plus $250 to Delta for each PSU unit when it could buy the entire SAE PSU for $353, and or could have reverse engineered or designed a PSU from scratch, in each case, for less than $1 million. Finally, Avaya offered the expert testimony of Mark N. Horenstein and Jonathan I. Arnold to establish the availability of alternative PSUs, the time and expense required to reverse engineer or develop a PSU de novo, and the portion of the price difference between the SAE PSU and the Delta PSU attributable to the trade secrets. SAE did not offer a technical expert to refute Horenstein, and LoGiudice's damages estimates were based on several erroneous assumptions, including Avaya's inability to sell any Gateways without the SAE PSU, the absence of any basis to apportion sales or damages and the tie-in between sales of the Delta PSU and service contracts. Moreover, LoGiudice did not even consider the factors set out in Georgia-Pacific, which SAE acknowledges is the “seminal case” in this district and is widely cited in other jurisdictions, including New Jersey. Arnold estimated that Avaya's total, unapportioned cost savings obtained by switching to Delta PSUs was $18.4 million, based on his figure of 180,369 PSUs purchased from Delta pre-petition, at a savings of $101.82/PSU. Given the dispute relating to the actual number of sales, the Court will estimate that Avaya sold 190,000 Gateways pre-petition that incorporated a Delta PSU, yielding a total cost savings of $19.3 million. However, only 6.3% of the total savings, or $1.21 million, was attributable to SAE's trade secrets, based on the relative cost of all materials in the 655A compared to the cost of the trade secret components. This is the upper value of a royalty a hypothetical licensee would be willing to pay for use of the trade secret and still retain a profit. The hypothetical licensee could develop an alternative at a lower cost. For this reason, it would also likely be acceptable to the hypothetical licensor, knowing that the licensee could develop an alternative in-house or find another supplier. In either case, the hypothetical licensor would not sell any PSUs (beyond the development period). Accordingly, the Court concludes that a reasonable royalty is the appropriate measure of damages, and the parties would be willing to agree to a royalty of $6.41 for each Delta PSU sold containing SAE's trade secrets, and estimates the Misappropriation Claim in the sum of $1.21 million, exclusive of interest. While the Misappropriation Claim does not include post-petition sales, SAE is entitled to the same royalty on those sales, whatever that number may be. Avaya continues to benefit from the hypothetical license to use SAE's trade secrets, and SAE remains entitled to a royalty based on that use except to the extent that SAE may have waived a right to an administrative expense by failing to make a timely request. A full-text copy of the Court's Memorandum Decision dated April 23, 2018 is available at: http://bankrupt.com/misc/nysb17-10089-1956.pdf About Avaya Inc. Avaya Inc. is a multinational company that provides communications products and services, including, telephone communications, internet telephony, wireless data communications, real-time video collaboration, contact centers, and customer relationship software to companies of various sizes. The Avaya Enterprise serves over 200,000 customers, consisting of multinational enterprises, small- and medium-sized businesses, and 911 services as well as government organizations operating in a diverse range of industries. It has approximately 9,700 employees worldwide as of Dec. 31, 2016. Avaya Inc. and 17 of its affiliates sought protection under Chapter 11 of the Bankruptcy Code (Bankr. S.D.N.Y. Lead Case No. 17-10089) on Jan. 19, 2017. The petitions were signed by Eric S. Koza, CFA, chief restructuring officer. Judge Stuart M. Bernstein presides over the cases. The Debtors have hired Kirkland & Ellis LLP as legal counsel; Centerview Partners LLC as investment banker; Zolfo Cooper LLC as restructuring advisor; PricewaterhouseCoopers LLP as auditor; KPMG LLP as tax and accountancy advisor; and The Siegfried Group, LLP, as financial services consultant. Prime Clerk LLC is their claims and noticing agent. On Jan. 31, 2017, the U.S. Trustee for Region 2, appointed an official committee of unsecured creditors. Morrison & Foerster is the creditors committee's counsel. Stroock & Stroock & Lavan LLP and Rothschild, Inc., serve as advisors to an ad hoc group -- Ad Hoc Crossholder Group -- comprised of holders of the Company's (i) 33.98% of the $3.235 billion total amount outstanding under loans issued pursuant to a Third Amended and Restated Credit Agreement, amended and restated as of Dec. 12, 2012 (the "Prepetition Cash Flow Term Loans"); (ii) 28.38% of the $1.009 billion total principal amount outstanding under notes issued pursuant to an indenture for the 7.00% Senior Secured Notes Due 2019 (the "7.00% First Lien Notes"); (iii) 12.82% of the $290 million total principal amount outstanding under notes issued pursuant to an indenture for 9.00% Senior Secured Notes Due 2019 (the "9.00% First Lien Notes"); (iv) 83.70% of the $1.384 billion total amount outstanding under notes issued pursuant to an indenture for 10.5% Senior Secured Notes Due 2021 (the "Second Lien Notes"); and (v) 24% of the $725 million outstanding under loans issued under the Debtors' debtor-in-possession financing (the "DIP Facility") pursuant to a Superpriority Secured Debtor-In-Possession Credit Agreement, dated as of Jan. 24, 2017. AVEANNA HEALTHCARE: Moody's to Review B3 Rating Amid Premier Deal ----------------------------------------------------------------- Moody's Investors Service placed the ratings of Aveanna Healthcare LLC ("Aveanna") under review - direction uncertain. This follows the announcement that Aveanna has entered into an agreement to acquire a private duty nursing and behavioral health benefit administration provider, Premier Healthcare Services, LLC. Financial terms of the transaction and related financing have not been disclosed, and it is unclear whether the credit implications will be positive or negative. The rating review will focus on the credit profile and final capital structure of Aveanna post-closing. Further, the rating review will focus on the business profile implications of combining Aveanna and Premier Healthcare Services, LLC, including the impact of scale and diversity, offset by integration risks. The transaction is expected to close in June of 2018. Ratings placed under review with direction uncertain: Corporate Family Rating, B3 Probability of Default Rating, B3-PD $75 million Senior Secured First Lien Revolver expiring 2022, B2 (LGD3) $585 million Senior Secured First Lien Term Loan due 2024, B2 (LGD3) $240 million Senior Secured Second Lien Term Loan due 2025, Caa2 (LGD5) Outlook Actions: Changed To Rating Under Review From Negative RATINGS RATIONALE The B3 Corporate Family Rating (ratings under review) for Aveanna Healthcare LLC broadly reflects the company's very high financial leverage, a highly concentrated payor mix with significant Medicaid exposure, and relatively limited geographic diversity. Moody's assessment of the company's underlying credit profile also incorporates noteworthy industry pressures, which will make it difficult for Aveanna to meaningfully improve its earnings and cash generation, according to the rating agency. The company consists of the merger of two home healthcare companies: Epic Health Services and PSA Healthcare. Moody's estimates pro forma debt/EBITDA of more than 9.0 times, including synergies. Despite the critical nature of care provided to patients, including children who require private duty nursing at home, Aveanna has exposure to state budgetary pressures, which will continue to focus on healthcare spending. Moody's expects the state of Texas, which represents roughly 40% of pro forma revenue, to remain one of the most aggressive states with regard to cost reductions. The rating also reflects Moody's belief that the company will continue to pursue an aggressive growth strategy, including acquisitions that are likely to be at least partially funded with incremental debt, and which in turn will limit debt repayment. The rating benefits from Aveanna's leading niche position in the otherwise fragmented market of pediatric home health services, and favorable long-term industry growth prospects. The overall market has solid growth prospects due to population trends, and its service offerings will remain critical in nature. The principal methodology used in these ratings was Business and Consumer Service Industry published in October 2016. Headquartered in Atlanta, Georgia, Aveanna Healthcare LLC was formed through the merger of pediatric home healthcare companies Epic Health Services and PSA Healthcare. The company is a leading provider of pediatric skilled nursing and therapy services, as well as adult home health services, including skilled nursing, therapy, personal care, behavioral health and Autism. The company is majority-owned by the private equity firms Bain Capital and J. H. Whitney. The company generated approximately $1.1 billion of revenue in 2017 (on a proforma basis for the merger). BEAR AND CUB: Taps Platinum as Real Estate Broker ------------------------------------------------- Bear and Cub, Inc., seeks approval from the U.S. Bankruptcy Court for the Northern District of Ohio to hire a real estate broker. The Debtor proposes to employ Platinum Real Estate in connection with the sale of its real property located at 9104-9108 Tyler Boulevard, Mentor, Ohio. The firm will be paid a commission of 6% of the sale price. Platinum is a "disinterested person" as defined in Section 101(14) of the Bankruptcy Code, according to court filings. The firm maintains an office at: Platinum Real Estate 10 Public Square Willoughby, OH 44904 Phone: (440) 942-2100 Office About Bear and Cub Bear and Cub, Inc. sought protection under Chapter 11 of the Bankruptcy Code (Bankr. N.D. Ohio Case No. 18-12073) on April 8, 2018. In the petition signed by Brandon Selvaggio, president, the Debtor estimated assets of less than $500,000 and liabilities of less than $500,000. Judge Jessica E. Price Smith presides over the case. BENDCO INC: Taps Russell Craft as Accountant -------------------------------------------- Bendco, Inc., seeks approval from the U.S. Bankruptcy Court for the Southern District of Texas to hire Russell, Craft & Schulz as its accountant. The firm will assist the Debtor in the preparation of financial statements and tax returns, and will provide other accounting services required for its reorganization. The firm will charge at these hourly rates: Gary Schulz $175 Lori Harman $96 Carol Schulz $86 Russell has required the Debtor to provide a retainer in the sum of $5,000. Gary Schulz, a certified public accountant employed with Russell, disclosed in a court filing that he and his firm neither hold nor represent any interests adverse to the Debtor and its estate. The firm can be reached through: Gary Schulz Russell, Craft & Schulz 1002 Gemini Avenue, Suite 130 Houston, TX 77058 Phone: (281) 286-3400 Fax: (281) 286-3700 Email: garyscpa@sbcglobal.net About Bendco Inc. Bendco, Inc. -- http://www.bendco.com/-- is a family-owned business that provides heat induction bending, cold bending and coiling services. For more than 30 years, the company has offered custom bends and coils for a wide variety of industries including stadiums, roller coasters, bridges, pipeline and subsea structures. The company is headquartered in Pasadena, Texas. Bendco sought protection under Chapter 11 of the Bankruptcy Code (Bankr. S.D. Tex. Case No. 18-30849) on Feb. 28, 2018. In the petition signed by its president John Tharp, the Debtor estimated assets of less than $50,000 and liabilities of $1 million to $10 million. Judge David R. Jones presides over the case. No official committee of unsecured creditors has been appointed in the Debtor's case. BERNSOHN & FETNER: Exclusive Plan Filing Period Moved to Nov. 6 --------------------------------------------------------------- The Hon. Robert D. Drain of the U.S. Bankruptcy Court for the Southern District of New York, at the behest of Bernsohn & Fetner LLC, has extended (a) the Debtor's exclusive period to file a chapter 11 plan and disclosure statement through November 6, 2018, (b) the Debtor's time to file its chapter 11 plan and disclosure statement through November 6, 2018, and (c) the Debtor's time to confirm a chapter 11 plan is extended through and including December 22, 2018. As reported by the Troubled Company Reporter on April 20, 2018, the Debtor sought for exclusivity extension, asking the Court to consider the progress it has made to date in creating a more sizeable estate and to recognize that additional time will allow the Debtor to continue to (i) collect and resolve disputed accounts receivable, (ii) prosecute or settle its fraudulent conveyance claims, and (iii) object to those claims that are not meritorious and/or are overstated, which will provide a real benefit to the Debtor's actual and bona fide creditors. As the Court knows, the Debtor sought relief under chapter 11 of the Code because Randall Bernsohn -- a former partner of the Debtor -- served restraining notices on both the Debtor and the Debtor's primary bank which purported to restrain both the debtor and its primary bank from spending, transferring or alienating any of the Debtor's assets whatsoever. At that time, the Debtor was diligently attempting to collect disputed accounts receivable and was on the verge of reaching settlements with respect to several of these disputed accounts receivable. The Debtor wished to consummate several settlements of the disputed accounts receivable and had expected to pay the proceeds pro rata across all its creditors, but was unable to do so with the Restraining Orders in place. All of the proceeds of such settlements would go to Bernsohn at the expense of all other creditors. Further settlement negotiations with Bernsohn proved fruitless. The Debtor believed that chapter 11 offered the best forum for it to collect its disputed receivables and realize assets for its creditors. Since filing its chapter 11 case, the Debtor has settled two of its disputed accounts receivable and has brought in over $255,000 to the estate. The Debtor has been in the process of settling other disputed receivables and has had some preliminary discussions with its largest creditor, but the Debtor needed more time to accomplish its goals and pave the way for a successful plan. The Debtor has been continuing to attempt to resolve a number of disputed accounts receivable, and if not successful, will commence adversary proceedings before the Court. Additionally, the Debtor has been contemplating bringing certain fraudulent conveyance actions. The Debtor believed that settlement or litigation on these disputed accounts receivable and fraudulent conveyance claims will bring significant funds into the estate, which will provide for a meaningful distribution to creditors of this estate, and allow the Debtor to propose a confirmable plan. Within the next week, the Debtor will be filing a motion for a bar order with the Court, which will provide the Debtor with clarity as to the magnitude of the amount of its liability. Once the Debtor has an opportunity to review the purported claims against it, the Debtor will determine whether those claims are meritorious, and whether the amount of those claims is correct. The Debtor has already demonstrated significant progress toward these goals, and must retain exclusivity to complete them. The Debtor believed that with additional time to accomplish these goals, it will be able to create a significant estate, and will be able to confirm a viable chapter 11 plan and make a meaningful distribution to those creditors that hold meritorious claims. About Bernsohn & Fetner Bernsohn & Fetner, LLC -- http://www.bfbuilding.com/-- is a full-service construction management and general contracting firm dedicated to residential, corporate, and retail construction. Bernsohn also offers maintenance service for major New York buildings. The Company was founded in 2003 by Steven Fetner and Randall Bernsohn. Bernsohn & Fetner sought protection under Chapter 11 of the Bankruptcy Code (Bankr. S.D.N.Y. Case No. 17-23707) on Nov. 7, 2017. In the petition signed by Steven Fetner, managing member, the Debtor disclosed $1.735 million in assets and $920,000 in liabilities. The Debtor had no secured debt. Judge Robert D. Drain presides over the case. Bernsohn & Fetner LLC is the Debtor's counsel. Vernon Consulting, Inc., is the financial advisor and accountant to the Debtor. BERRY GLOBAL: Moody's Assigns Ba2 Rating to $1.6-Bil. Term Loans ---------------------------------------------------------------- Moody's Investors Service assigned a Ba2 rating to the $800 million First Lien Senior Secured Term Loan "S" and a Ba2 rating to the $814 million First Lien Senior Secured Term Loan "T" of Berry Global Inc., a subsidiary of Berry Global Group Inc. ("Berry"). The proceeds of the term loan "S" and "T" will be used to pay off the existing term loan "O" and "P", respectively. The Ba3 Corporate Family Rating, Ba3-PD Probability of Default rating, all other instrument ratings, the SGL-2 rating, and the stable outlook for Berry Global Group Inc. remain unchanged. The transaction is primarily credit neutral since total debt of approximately $6 billion will be reduced by only $100 million (term loan "S") and LTM EBITDA is approximately $1.3 billion. The transaction is primarily to reprice and redesignate of two existing term loans ("O" and "P"). The ratings are subject to the transaction closing as proposed and receipt and review of the final documentation. Ratings Assigned: Assignments: Issuer: Berry Global Inc. Senior Secured Bank Credit Facilities, Assigned Ba2 (LGD3) RATINGS RATIONALE Berry's Ba3 Corporate Family Rating reflects the company's exposure to more cyclical end markets, certain weaknesses in contract structures with customers and a high percentage of commodity products. The rating also reflects the fragmented and competitive industry structure. Strengths in Berry's competitive profile include its considerable scale, some concentration of sales in relatively more stable end markets and good liquidity. The company's strengths also include a strong competitive position in rigid plastic containers and continued focus on producing higher margin products and pruning lower margin business. The ratings outlook is stable. The stable outlook is predicated on an expectation of an improvement in operating results from various cost saving initiatives and acquisitions as well as management's intention to use free cash flow for accretive, strategic acquisitions or debt reduction. The ratings could be upgraded if the company sustainably improves credit metrics within the context of a stable operating and competitive environment while maintaining good liquidity. An upgrade would also be dependent upon less aggressive financial and acquisition policies as well as success in integrating the recent acquisition. Specifically, the ratings could be upgraded if funds from operations to debt increases above 15.5%, debt to EBITDA declines below 4.25 times, and/or EBITDA to interest expense rises above 5.25 times. The rating could be downgraded if there is deterioration in the credit metrics, liquidity or the operating and competitive environment. Additional debt financed acquisitions, excessive acquisitions (regardless of financing) and/or a move to a more aggressive financial profile could also prompt a downgrade. Specifically, the ratings could be downgraded if funds from operations to debt decreases below 13%, debt to EBITDA increases above 4.8 times, and/or EBITDA to interest expense decreases below 4.25 times. Berry reflects a good liquidity profile characterized by good free cash flow, depending upon resin prices, and good liquidity under the revolving credit facility. Moody's expects good free cash flow generation over the next year. The company has a $750 million asset based revolver which expires May 2020 (not rated by Moody's). Availability under the revolver is subject to borrowing base limitations. The revolving line of credit allows up to $130 million of letters of credit to be issued instead of borrowings. The principal methodology used in these ratings was Packaging Manufacturers: Metal, Glass, and Plastic Containers published in May 2018. Based in Evansville, Indiana, Berry Global Group is a manufacturer of plastic packaging products, serving customers in the food and beverage, healthcare, household chemicals, personal care, home improvement, and other industries. The company reports in three segments including Consumer Packaging, Health, Hygiene & Specialties, and Engineered Materials (approximately 33%, 33% and 33% of sales respectively in 2017). Berry has manufacturing and distribution centers in the United States, Canada, Mexico, Belgium, France, Spain, United Kingdom, Italy, Australia, Germany, Brazil, Argentina, Columbia, Malaysia, India, China and the Netherlands. In 2017, the North American operation generates approximately 82% of the company's net sales. Polypropylene and polyethylene account for the majority of plastic resin purchases. Net sales for the twelve months ended March 31, 2018 totaled approximately $7.5 billion. BIOSCRIP INC: Reports First Quarter Net Loss of $13 Million ----------------------------------------------------------- BioScrip, Inc., filed with the Securities and Exchange Commission its Quarterly Report on Form 10-Q reporting a loss of $13.01 million on $168.58 million of net revenue for the three months ended March 31, 2018, compared to a net loss of $19.71 million on $217.81 million of net revenue for the same period last year. Net loss attributable to common stockholders for the first quarter of 2018 was $15.67 million compared to a loss attributable to common stockholders of $22.10 million for the first quarter of 2017. Adjusted EBITDA of $5.6 million, 16% above the prior year quarter, driven by a 530 basis point improvement in gross profit margin and a $3.6 million reduction in operating expenses, compared to the prior year quarter reflecting ASC 606 pro forma adjustments Net cash used in operating activities of $5.2 million, reflecting $8.9 million of operational and working capital improvements over the prior year quarter, and $15.9 million of interest payments, including a bi-annual bond interest payment of $8.8 million. Liquidity of $40.4 million at March 31, 2018, consisting of $30.4 million of cash and equivalents and $10.0 million of senior credit facility availability, compared to $16.0 million at March 31, 2017 As of March 31, 2018, Bioscrip had $586.88 million in total assets, $602.35 million in total liabilities, $2.92 million in series A convertible preferred stock, $81.81 million in series C convertible preferred stock, and a total stockholders' deficit of $100.21 million. At March 31, 2018, the Company had working capital of $72.3 million, including $30.4 million of cash on hand, compared to working capital of $82.6 million at Dec. 31, 2017. The $10.3 million decrease in working capital resulted primarily from the decrease in the Company's cash and cash equivalents of $9.1 million. Additional liquidity of $10.0 million is provided by the delayed draw capacity in our Second Lien Note Facility. At March 31, 2018 and Dec. 31, 2017, the Company had outstanding letters of credit totaling $4.8 million, collateralized by restricted cash of $5.0 million. "BioScrip's first quarter adjusted EBITDA increased 16% year over year, as we continued to execute successfully on our turnaround strategy. Our teammates navigated significant weather-related branch closures and temporary product shortages, which resulted in lower revenue and increased cost of revenue during the quarter," said Daniel E. Greenleaf, president and chief executive officer. "We also made important investments in our field force, managed care team, and other strategic initiatives, as we continue to position our business for growth and further earnings expansion. We look forward to accelerating core revenue and gross profit margin expansion as we proceed into the seasonally stronger second half of the year. We remain as enthusiastic as ever about BioScrip's unique position as the only independent national home infusion pure play, and are reaffirming our 2018 adjusted EBITDA guidance of between $54 million and $58 million, and updating our 2018 revenue guidance to between $688 million and $698 million, which was only adjusted for the implementation of ASC 606*." * Implementation of ASC 606 during the first quarter of 2018 resulted in the recognition of amounts previously recorded as bad debt expense as a reduction to revenue. The impact of the change in accounting principle reduced both revenue and bad debt expense by $5.5 million during the quarter. The implementation of ASC 606 did not impact operating income or Adjusted EBITDA during the first quarter of 2018, and will not impact operating income or Adjusted EBITDA on a go-forward basis. The implementation of ASC 606 also resulted in a reduction of our 2018 revenue guidance by approximately $22 million, but did not impact 2018 Adjusted EBITDA guidance. A full-text copy of the Form 10-Q is available for free at: https://is.gd/bOe3Yd About BioScrip, Inc. Headquartered in Denver, Colo., BioScrip, Inc. -- http://www.bioscrip.com/-- is a national provider of infusion solutions that partners with physicians, hospital systems, skilled nursing facilities and healthcare payors to provide patients access to post-acute care services. The Company operates with a commitment to bring customer-focused infusion therapy services into the home or alternate-site setting. By collaborating with the full spectrum of healthcare professionals and the patient, the Company aims to provide cost-effective care that is driven by clinical excellence, customer service and values that promote positive outcomes and an enhanced quality of life for those whom it serves. BioScrip reported a net loss attributable to common stockholders of $74.27 million for the year ended Dec. 31, 2017, compared to a net loss attributable to common stockholders of $51.84 million for the year ended Dec. 31, 2016. As of Dec. 31, 2017, Bioscrip had $603.09 million in total assets, $605.76 million in total liabilities, $2.82 million in Series A convertible preferred stock, $79.25 million in Series C convertible preferred stock and a total stockholders' deficit of $84.75 million. * * * Moody's Investors Service affirmed BioScrip, Inc.'s 'Caa2' Corporate Family Rating. BioScrip's Caa2 CFR reflects the company's very high leverage and weak liquidity, as reported by the TCR on Aug. 3, 2017. As reported by the TCR on July 7, 2017, S&P Global Ratings affirmed its 'CCC' corporate credit rating on BioScrip Inc. and removed the rating from CreditWatch, where it was placed with negative implications on Dec. 16, 2016. The outlook is positive. "The rating affirmation reflects our view that, although BioScrip addressed its upcoming maturities by refinancing its senior secured credit facilities and improved its liquidity position, the company's credit measures will remain weak in 2017 with debt leverage of about 14x (including our treatment of preferred stock as debt) and funds from operations (FFO) to debt in the low single digits. We expect the company to use about $15 million - $20 million of cash in 2017, inclusive of cash charges associated with restructuring following the recently announced United Healthcare contract termination." BIOSTAGE INC: Reports 2018 First Quarter Financial Results ---------------------------------------------------------- On May 10, 2018, Biostage, Inc., issued a press release announcing financial results for the three months ended March 31, 2018. The Company also recapped a series of advances in raising additional capital, validating its technology, adding further expertise to its team, and planning its market expansion. Summary of First Quarter Financial Results For the three months ended March 31, 2018, the Company reported a net loss of approximately $1.5 million, or a net loss per diluted share of $0.56, compared to a net loss of approximately $3.8 million, or a net loss per diluted share of $2.83 for the three months ended March 31, 2017. The $2.3 million year-over-year decrease in net loss was attributable to a $1.5 million decrease in research and development costs, a $700,000 decrease in non-cash expense from change in the fair value of warrants, and a $100,000 decrease in selling general and administrative expenses. Also, the Company recognized grant income for qualified expenditures from a Fast-Track SBIR grant of approximately $59,000 for the three months ended March 31, 2018. There was no grant income recorded in the comparable period in 2017. Balance Sheet and Cash At March 31, 2018, Biostage had cash on hand of $2.8 million and had no debt. The Company used net cash of approximately $2.1 million for operations during the first quarter, approximately $700,000 of which represented payments of aged vendor payables incurred in 2017. The Company also generated approximately $800,000, net, from financing activities during the first quarter. On May 3, 2018, the Company reported that two private investors had signed binding agreements to purchase a total of 1 million common shares priced at $3.60 per share. The Company expects those private placement transactions to close by the end of May. First Quarter Operating Highlights During the first quarter of 2018, the Company continued to build on the momentum provided by its $4 million December 2017 private placement. The Company: * Published successful results of a pre-clinical study demonstrating esophageal regeneration in large animals * Announced preliminary findings related to the first successful in-human use of a Cellspan implant to regenerate a patient's esophagus * Expanded the Company's scientific expertise by appointing Dr. Christine Finck and Dr. Charles Cox, Jr. to its Scientific Advisory Board * Appointed Jason Chen as the Chairman of the Company's Board of Directors in connection with plans to expand into the Chinese market * Appointed distinguished children's hospital executive Dr. James Shmerling to the Company's Board of Directors * Completed an additional $1 million private placement * Received approval of a SBIR Fast-Track grant to develop its Cellspan Esophageal Implant (CEI) as a novel treatment for esophageal atresia in pediatric patients. An initial Phase I award of $225,000 was granted; assuming that this phase of the project is successful, Phase II would support pre- clinical testing of pediatric CEI development and could provide up to $1.5 million of additional nondilutive financial resources over two years. Jim McGorry, Company CEO, commented, "One of Biostage's strengths has been our development of connections and relationships with the right people which have allowed us to constantly push forward on key fronts; to focus on our plan while building converging plans with others. Our partnerships with researcher-clinicians like Drs. Finck and Cox; our collaboration with leading medical centers like Connecticut Children's and Mayo Clinic; and our relationships with market specialists like Mr. Chen, have led to the several key developments we announced during the first quarter. We made significant progress in further validating our technology and expanding our Scientific Advisory Board. We added operational and healthcare experts to our Board of Directors and raised additional capital. We added several key hires to our internal team and finalized our development plan for our pediatric esophageal product candidate in collaboration with Connecticut Children's Medical Center. We initiated proof of concept preclinical studies as part of that program. All of these things were made possible in the first quarter by the connections we've made with credible experts who share our vision and believe in our technology." Jason Chen, the Chairman of Biostage's Board of Directors, weighed in, "As Biostage pushes the frontier of regenerative medicine and works toward filing an IND to bring life-saving technology to patients, we're also diligently building a plan to expand that technology's reach to the hundreds of thousands suffering from esophageal cancer in the Chinese market. With progress every day behind the scenes along with scientific advances and expanding leadership expertise, I'm as confident as ever of Biostage's current direction, and proud to be a part of it." A full-text copy of the press release is available for free at: https://is.gd/RZFumN About Biostage Headquartered in Holliston, Massachusetts, Biostage, Inc., formerly Harvard Apparatus Regenerative Technology, Inc. -- http://www.biostage.com/-- is a biotechnology company developing bio-engineered organ implants based on the Company's new Cellframe technology which combines a proprietary biocompatible scaffold with a patient's own stem cells to create Cellspan organ implants. Cellspan implants are being developed to treat life-threatening conditions of the esophagus, bronchus or trachea with the hope of dramatically improving the treatment paradigm for patients. Based on its pre-clinical data, Biostage has selected life-threatening conditions of the esophagus as the initial clinical application of its technology. Biostage incurred a net loss of $11.91 million in 2017 and a net loss of $11.57 million in 2016. As of Dec. 31, 2017, Biostage had $5.04 million in total assets, $1.62 million in total liabilities and $3.42 million in total stockholders' equity. The report from the Company's independent accounting firm KPMG LLP, in Cambridge, Massachusetts, on the consolidated financial statements for the year ended Dec. 31, 2017, includes an explanatory paragraph stating that the Company has suffered recurring losses from operations and will require additional financing to fund future operations which raise substantial doubt about its ability to continue as a going concern. BLACK MOUNTAIN: Plan Outline Okayed, Plan Hearing on June 15 ------------------------------------------------------------ The U.S. Bankruptcy Court for the District of Nevada is set to hold a hearing on June 15 to consider approval of the Chapter 11 plan of reorganization for Black Mountain Golf & Country Club. The court had earlier approved the disclosure statement, allowing Black Mountain to start soliciting votes from creditors. The order, signed by Judge Bruce Beesley on April 19, set a June 1 deadline for creditors to file their objections and submit ballots of acceptance or rejection of the plan. About Black Mountain Golf & Country Club Based in Henderson, Nevada, Black Mountain Golf & Country Club is a member-owned golf facility open to the public. The Company is non-profit corporation and a tax-exempt entity. The Debtor sought protection under Chapter 11 of the Bankruptcy Code (Bankr. D. Nev. Case No. 17-11540) on March 30, 2017. In the petition signed by Larry Tindall, president, the Debtor estimated its assets at $10 million to $50 million and debts at $1 million to $10 million. The case is assigned to Judge Bruce T. Beesley. Morris Polich & Purdy LLP, now known as Clark Hill PLC, is the Debtor's legal counsel. The Debtor employed Coffey & Rader CPA as its accountant and Harper Appraisal, Inc., as appraiser. The Debtor hired Ray Fredericksen of Per4mance Engineering in connection with its efforts to rezone its property. No request has been made for the appointment of a trustee or examiner, and no official committees have been appointed in this Chapter 11 case. BLACK RIDGE OIL: M&K CPAS, PLLC Raises Going Concern Doubt ---------------------------------------------------------- Black Ridge Oil & Gas, Inc., filed with the U.S. Securities and Exchange Commission its annual report on Form 10-K, disclosing a net loss of $212,469 on $1,000,000 of total revenues for the fiscal year ended December 31, 2017, compared to a net income of $29,945,804 on $1,049,451 of total revenues for the year ended in 2016. The Company's independent accountants M&K CPAS, PLLC, states that the Company suffered a net loss from operations and negative cash flows from operations, which raises substantial doubt about its ability to continue as a going concern. The Company's balance sheet at December 31, 2017, showed total assets of $140,557,245, total liabilities of $186,677, redeemable non-controlling interest of 138,870,060, and a total stockholders' equity of $1,500,508. A copy of the Form 10-K is available at: https://is.gd/RrCK48 About Black Ridge Oil & Gas, Inc. Black Ridge Oil & Gas, Inc., focuses on acquiring oil and gas leases, and participating in the drilling of wells in the Bakken and Three Forks trends in North Dakota and Montana. The company was formerly known as Ante5, Inc. and changed its name to Black Ridge Oil & Gas, Inc. in April 2012. Black Ridge Oil & Gas, Inc. was founded in 2010 and is headquartered in Minnetonka, Minnesota. BLACKFOOT CONSTRUCTION: Taps Haffley Taylor as Accountant --------------------------------------------------------- Blackfoot Construction Company seeks approval from the U.S. Bankruptcy Court for the Southern District of Indiana to hire Haffley, Taylor & Company, LLC, as its accountant. The firm will assist the Debtor in the preparation of its 2016 and 2017 federal and Indiana business tax returns. The firm will be paid $1,575 for each yearly return for a total of $3,150. This is based on an hourly billing rate of $165 per hour. Any additional state returns will be billed at the rate of $200 per state return. Haffley is "disinterested" and does not have an adverse relationship to the Debtor's case, according to court filings. The firm maintains an office at: Haffley Taylor and Company LLC 8900 Keystone Crossing, Suite 660 Indianapolis, IN 46240 Phone: (317) 814-4767 Fax: (317) 569-9348 Email: ataylor@htcocpas.com About Blackfoot Construction Blackfoot Construction Company, d/b/a Blackfoot Solutions, owns and operates a construction company located in Noblesville, Indiana. It constructs and maintains cell phone towers and facilities as well as provides installation services to telecommunication providers. It was incorporated on Dec. 9, 2004, in Dyersburg, Tennessee, under different ownership. Its current owner acquired the Debtor in 2007 and started operating the business out of his residence in Fishers, Indiana. It has been located in Noblesville, Indiana since March of 2014. It has 15 employees. Blackfoot Construction Company filed for Chapter 11 bankruptcy protection (Bankr. S.D. Ind. Case No. 17-08448) on Nov. 8, 2017. David R. Krebs, Esq. and John J. Allman, Esq. of Hester Baker Krebs LLC, serve as the Debtor's counsel. No trustee, examiner or official committee of unsecured creditors has been appointed. BRADLEY DISTRIBUTING: Wants to Move Exclusive Plan Period to June 6 ------------------------------------------------------------------- Bradley Distributing, Inc., asks the United States Bankruptcy Court for the Western District of Pennsylvania to extend the time to file a Chapter 11 Plan and Disclosure Statement and to extend the exclusivity period to file a Chapter 11 Plan and Disclosure Statement in this case until June 6, 2018. The Debtor contends that no creditors or parties in interest will be prejudiced by extending the time. As a Small Business, the Debtor's exclusivity period to file a Chapter 11 Plan and Disclosure Statement expires on May 7, 2018, and the deadline for the Debtor to file a Chapter 11 Plan and Disclosure expires on May 7, 2018 pursuant to the Agreed Scheduling Order. The Debtor continues to operate as a Debtor-in-possession and continues to meet the operating requirements of a Chapter 11 Debtor. Likewise, the Debtor has filed monthly financial reports for each month of the Chapter 11 proceeding up through April 2018, and the Debtor has paid all US Trustee fees as they have come due since the filing of the Chapter 11 case. The Debtor and counsel formulated a Chapter 11 Plan to be proposed but have not yet completed the documents due to the claims bar deadline not yet being passed. The claims bar deadline falls on the same date as the due date for the Chapter 11 Plan and Disclosure Statement, May 7, 2018. Thus, the Debtor's counsel needs some additional time to prepare and file the Chapter 11 Plan and Disclosure Statement. About Bradley Distributing Bradley Distributing, Inc., doing business as Community Beverage Debtor filed a Chapter 11 petition (Bankr. W.D. Pa. Case No. 16-24513) on Nov. 8, 2017. In the petition signed by Thomas C. Bradley, Jr., president, the Debtor estimated $50,000 to $100,000 in assets and $100,000 to $500,000 in liabilities. BROADSTREET PARTNERS: $594-Mil. Term Loan Gets Moody's B2 Rating ---------------------------------------------------------------- Moody's Investors Service has assigned a B2 rating to a $594 million senior secured term loan being issued by BroadStreet Partners, Inc. (BroadStreet). The new loan will replace the company's existing term loan, while increasing the outstanding amount by $15 million and maintaining the existing maturity of November 2023. The company will use proceeds from the new loan to repay the existing term loan, repay revolving credit borrowings and pay related fees and expenses. The rating outlook for BroadStreet is negative. RATINGS RATIONALE BroadStreet's ratings reflect its growing presence in middle market insurance brokerage, especially in the Midwest, its good diversification across clients and carriers, and its good EBITDA margins and solid free cash flow metrics. BroadStreet acquires majority interests in large agencies and allows its partners to operate fairly autonomously, maintaining their local and regional brands, with the prior owners retaining minority stakes. These strengths are tempered by the company's elevated financial leverage, and by the execution and contingent risks associated with its high volume of acquisitions. The company's existing and acquired operations face potential liabilities arising from errors and omissions in the delivery of professional services. Giving effect to the proposed refinancing, BroadStreet will have a pro forma debt-to-EBITDA ratio of just below 7x, (EBITDA - capex) interest coverage in the low single digits, and a free-cash-flow-to-debt ratio in the mid-single digits, per Moody's calculations. These metrics incorporate Moody's accounting adjustments for operating leases, deferred earnout obligations and run-rate earnings from completed acquisitions. The rating agency expects BroadStreet to steadily reduce its financial leverage ratio over the next 12-18 months. The ratings could be downgraded should the leverage ratio remain above 6.5x. Given the negative outlook, a rating upgrade is unlikely. Factors that could return the outlook to stable include: (i) debt-to-EBITDA ratio below 6.5x, (ii) maintain (EBITDA - capex) coverage of interest above 1.5x, and (iii) maintain free-cash-flow-to-debt ratio above 3%. Factors that could lead to a rating downgrade include: (i) debt-to-EBITDA ratio remaining above 6.5x, (ii) (EBITDA - capex) coverage of interest below 1.5x, or (iii) free-cash-flow-to-debt ratio below 3%. Moody's maintains the following ratings (and loss given default (LGD) assessment) on BroadStreet: Corporate family rating at B2; Probability of default rating at B2-PD; $100 million senior secured revolving credit facility maturing in November 2021 at B2 (LGD3). Moody's has assigned the following rating (and LGD assessment) to BroadStreet: $594 million (including the pending $15 million increase) senior secured term loan maturing in November 2023 at B2 (LGD3). Moody's will withdraw the B2 rating from the existing $579 million senior secured term loan once it is repaid/terminated. The principal methodology used in this rating was Insurance Brokers and Service Companies published in September 2017. Headquartered in Columbus, Ohio, BroadStreet ranked as the 15th-largest US insurance broker based on 2016 revenues, according to Business Insurance. The company generated total revenue in excess of $468 million for the 12 months through March 2018. CELADON GROUP: Wellington Entities No Longer Own Any Shares ----------------------------------------------------------- Wellington Management Group LLP, Wellington Group Holdings LLP and Wellington Investment Advisors Holdings LLP disclosed in a Schedule 13G/A filed with the Securities and Exchange Commission that as of April 30, 2018, they have ceased to be the beneficial owners of shares of common stock of Celadon Group, Inc. A full-text copy of the regulatory filing is available for free at https://is.gd/5mVDNm About Celadon Celadon Group, Inc. -- http://www.celadongroup.com/-- provides long haul, regional, local, dedicated, intermodal, temperature-protect, and expedited freight service across the United States, Canada, and Mexico. The Company also owns Celadon Logistics Services, which provides freight brokerage services, freight management, as well as supply chain management solutions, including logistics, warehousing, and distribution. The Company is headquartered in Indianapolis, Indiana. In a press release dated April 2, 2018, Celadon stated that based on issues identified in connection with the Audit Committee investigation and management's review, financial statements for fiscal years ended June 30, 2014, 2015, 2016, and the quarters ended Sept. 30 and Dec. 31, 2016, will be restated. Celadon's new senior management team, led by the Company's new chief financial officer and new chief accounting officer, commenced a review of the Company's current and historical accounting policies and procedures. The internal investigation and management review have identified errors that will require adjustments to the previously issued 2014, 2015, 2016, and 2017 financial statements. On March 30, 2018, the Company entered into an Eighth Amendment to its Amended and Restated Credit Agreement. The Amendment extended the existing financial covenant relief through April 30, 2018, with the principal purpose of permitting the Company and the revolving lenders to evaluate the recently received refinancing proposal. On April 18, 2018, Peter Elkins, lead analyst at the New York Stock Exchange LLC, filed a Form 25 with the Securities and Exchange Commission notifying the removal from listing or registration of Celadon's common stock on the Exchange. COMSTOCK RESOURCES: Reports Q1 2018 Financial & Operating Results ----------------------------------------------------------------- Comstock Resources, Inc., reported financial and operating results for the three months ended March 31, 2018. Comstock produced 22 billion cubic feet of natural gas and 190,000 barrels of oil or 22.8 billion cubic feet of natural gas equivalent ("Bcfe") in the first quarter of 2018. Natural gas production averaged 241 million cubic feet ("MMcf") per day, an increase of 55% over natural gas production in the first quarter of 2017. The growth in natural gas production is attributable to the continuing successful results from Comstock's Haynesville shale drilling program. Oil production in the first quarter of 2018, which averaged 2,110 barrels of oil per day, declined by 28% from the 2,940 barrels per day produced in the first quarter of 2017. The decrease in oil production is the result of the lack of drilling in the Company's South Texas Eagle Ford shale producing properties, which previously announced sale was completed on April 27, 2018. Comstock's average realized natural gas price, including hedging gains, decreased 5% to $2.82 per Mcf in the first quarter of 2018 as compared to $2.96 per Mcf realized in the first quarter of 2017. The Company's average realized oil price increased by 41% to $68.71 per barrel in the first quarter of 2018 as compared to $48.60 per barrel in the first quarter of 2017. The higher natural gas production and higher oil prices resulted in oil and gas sales increasing by 36% to $74.0 million (including realized hedging gains) in the first quarter of 2018 as compared to 2017's first quarter sales of $54.3 million. EBITDAX, or earnings before interest, taxes, depreciation, depletion, amortization, exploration expense and other noncash expenses, was $53.7 million in the first quarter of 2018, or 57% higher than EBITDAX of $34.2 million generated in the first quarter of 2017. Operating cash flow generated in the first quarter of 2018 increased 125% to $35.7 million as compared to $15.9 million in the first quarter of 2017. Comstock reported a net loss of $41.9 million or $2.78 per share for the first quarter of 2018 as compared to a net loss of $22.9 million or $1.61 per share for the first quarter of 2017. The first quarter of 2018 results included a loss on sale of oil and gas properties of $28.6 million, an unrealized gain from derivative financial instruments of $1.2 million, and $11.0 million of non-cash interest expense associated with the discounts recognized and costs incurred on the debt exchange that occurred in 2016. Financial results for the first quarter of 2017 included an unrealized gain from derivative financial instruments of $7.4 million, and $5.4 million of non-cash interest expense associated with the discounts recognized and costs incurred on the debt exchange that occurred in 2016. Excluding these items from each year's results, the net loss for the first quarter of 2018 would have been $3.5 million or $0.23 per share as compared to a net loss of $24.9 million or $1.75 per share in the first quarter of 2017. 2018 First Quarter Drilling Results Comstock reported the results to date of its 2018 drilling program. During the first three months of 2018, Comstock spent $46.5 million on its development and exploration activities and drilled seven horizontal natural gas wells (2.0 net) and had eight wells (1.6 net) drilling at March 31, 2018. Comstock also completed nine (3.5 net) operated wells that were drilled in 2017. Since the last operational update, Comstock has completed six operated Haynesville shale wells. The average initial production rate of these wells was 27 MMcf per day. The six operated wells had completed lateral lengths ranging from 8,599 feet to 9,474 feet and each well was tested at initial production rates of 27 to 28 MMcf per day. Comstock has four (1.0 net) operated Haynesville shale wells that are in the process of being completed. The Company also reported on two successful Bossier wells which were drilled in Sabine Parish, Louisiana. These wells had initial production rates of 17 and 20 MMcf per day. An additional Bossier shale well has been completed and is currently flowing to sales. In order to protect the returns that the Haynesville shale drilling program can generate, the Company has hedged, in the aggregate, 59 MMcf per day of its natural gas production in the last nine months of 2018 at a NYMEX equivalent of $3.00 per Mcf. A full-text copy of the press release is available for free at: https://is.gd/E53V2d About Comstock Comstock Resources, Inc., is an independent energy company based in Frisco, Texas and is engaged in oil and gas acquisitions, exploration and development primarily in Texas and Louisiana. The Company's stock is traded on the New York Stock Exchange under the symbol CRK. Comstock incurred a net loss of $111.4 million for the year ended Dec. 31, 2017, compared to a net loss of $135.1 million for the year ended Dec. 31, 2016. As of Dec. 31, 2017, Comstock Resources had $930.4 million in total assets, $1.29 billion in total liabilities and a total stockholders' deficit of $369.3 million. CONSOLIDATED MANUFACTURING: Taps Ken McCartney as Legal Counsel --------------------------------------------------------------- Consolidated Manufacturing Enterprises, Inc., seeks approval from the U.S. Bankruptcy Court for the District of Wyo. to hire The Law Offices of Ken McCartney, P.C. as its legal counsel. The firm will advise the Debtor regarding its duties under the Bankruptcy Code and will provide other legal services related to its Chapter 11 case. Ken McCartney, Esq., charges an hourly fee of $365 for his services. He does not normally bill for staff although for particularly labor-intensive activities, he charges $95 per hour for paralegal services. Mr. McCartney neither represents nor holds any interests adverse to the Debtor's estate, according to court filings. The firm can be reached through: Ken McCartney, Esq. The Law Offices of Ken McCartney, P.C. P.O. Box 1364 Cheyenne, WY 82001 82003 Tel: (307) 635-0555 Fax: (307) 635-0585 Email: bnkrpcyrep@aol.com About Consolidated Manufacturing Enterprises Founded in 2002, Consolidated Manufacturing Enterprises, Inc. -- http://www.cmewy.com/-- offers welding, fabrication, oilfield and pipeline services to a variety of industrial, commercial, small and large businesses and individuals. It is headquartered in Wheatland, Wyoming. Consolidated Manufacturing Enterprises sought protection under Chapter 11 of the Bankruptcy Code (Bankr. D. Wyo. Case No. 18-20347) on April 30, 2018. In the petition signed by Elias J. Stone, president, the Debtor disclosed $3.11 million in assets and $1.93 million in liabilities. Judge Cathleen D. Parker presides over the case. COREL CORP: Moody's Assigns B2 CFR on Dividend Recapitalization --------------------------------------------------------------- Moody's Investors Service assigned a B2 Corporate Family Rating (CFR) and B2-PD Probability of Default Rating (PDR) to Corel Corporation ("Corel") in connection with the company's proposed dividend recapitalization transaction. Concurrently, Moody's assigned a Ba2 rating to Corel's proposed $10 million first lien first-out senior secured revolving credit facility and a B2 rating to the proposed $300 million first lien senior secured term loan. The rating outlook is stable. The proceeds from the new first lien term loan will be used to refinance existing debt, fund a sizable distribution of approximately $238 million to its existing shareholders, and pay transaction-related fees and expenses. The proposed $10 million super-priority revolving credit facility is expected to remain undrawn at close. Corel was acquired by Vector Capital in a go-private transaction in January 2010. Vector currently holds Corel through a new December 2017 fund, primarily consisting of new limited partners. "Despite our expectation for solid cash flow and credit metrics over the next 12-18 months, we view Corel's business risk as high. Its small revenue size, weak organic growth prospects for its mature software products and reliance on acquisitions as a primary means of achieving growth is a major constraint on the company's rating, " said Moody's AVP-Analyst Oleg Markin. While Corel has improved the portfolio mix to more stable products with a higher proportion of recurring revenues and successfully optimized its cost structure over the past six years, "we believe the company will be challenged to sustain positive organic growth, given anticipated declines in its legacy products and weak defense position in the highly competitive market for digital content," added Markin. Moody's assigned the following ratings to Corel Corporation: Corporate Family Rating at B2 Probability of Default rating at B2-PD Proposed $10 million gtd first lien first-out senior secured revolving credit facility due 2023 at Ba2 (LGD1) Proposed $300 million gtd first lien senior secured term loan due 2024 at B2 (LGD4) Outlook at Stable The assigned ratings remain subject to Moody's review of the final terms and conditions of the proposed financing that is expected to close in May 2018. RATINGS RATIONALE The B2 CFR reflects the company's moderately high pro forma debt-to-EBITDA leverage, estimated at 4.0 times (Moody's adjusted and incorporating all actioned cost reduction initiatives) as of February 28, 2018, small size relative to its peers, high revenue concentration within its top five products and its acquisitive roll-up strategy. Given the highly competitive, mature and fragmented markets for Corel's products, some with declining revenues, along with its dependence on acquisitions for growth, Moody's assesses the company's overall business risk to be high. Within this backdrop, Moody's expects the company to generate very modest low single digit revenue and earnings growth over the next 12-18 months with debt-to-EBITDA leverage declining to the high 3.0 times, incorporating a $15 million annual mandatory debt repayment. The rating also reflects the risk of potentially aggressive financial policies under private equity ownership. Corel's credit profile benefits from its diverse and well-known product portfolio with a sizable active installed base of customers globally, a global multi-channel platform with expanding ecommerce capability, and a solid EBITDA margin. Following a six-year business transformation, the company is now less reliant on the OEM and retail channels and begun to invest heavily in growing sales through the corporate license and ecommerce channels (85% of pro forma 2/28/18 LTM revenue) focused around its core franchises (WinZip, Graphics and MindManager), and harvesting its legacy products and channels. While Corel's recurring maintenance and subscription revenue mix (approximately 40% of pro forma revenue and 68% re-occurring based on run-rate organic revenue business) is below many rated software companies, it nevertheless provides good revenue and operating cash flow stability. The rating is also supported by Moody's expectation that the company will maintain good liquidity over the next 12-15 months. The stable rating outlook reflects Moody's view that the company will achieve its cost savings goals while maintaining stable revenues, improved profitability and generate free cash flow of at least $40 million over the next 12-18 months. The Ba2 rating assigned to Corel's super priority senior secured revolving credit facility, three notches above the company's B2 CFR, reflects the first-out waterfall provision that provides a priority claim on asset sale proceeds in the event of default relative to the term loan. The first-out revolver benefits from the debt cushion provided by the $300 million term loan that does not have a first-out priority on collateral sale proceeds, and is secured by a first lien pledge on all assets and capital stock of the borrower and each guarantor. The B2 rating assigned to the proposed first lien term loan, on par with the CFR, reflects that the facility represents the preponderance of debt in the capital structure. The first lien term is secured by the same collateral securing the revolving credit facility. Moody's expects Corel to maintain good liquidity over the next 12-15 months. Sources of liquidity consist of a cash balance of $15 million at the close of the transaction, free cash flow, and access to funds under the new $10 million revolving credit facility (undrawn at closing). Liquidity also benefits from the covenant lite structure. Moody's expects balance sheet cash and cash flow from operations to be more than sufficient to cover working capital needs and capital requirements over the next 12 months with annual free cash flow of at least $40 million. The revolver is expected to have a springing new first lien leverage ratio (to be determined) if more than 30% of the revolver is drawn. The company is not expected to utilize the revolver during the next 12-15 months and is expected to remain well in compliance with the springing net first lien secured leverage covenant. An upgrade in the near term is unlikely given Corel's high business risk and private equity ownership. However, achievement of consistent high organic revenue growth and free cash flow levels, product diversification, credit metrics consistent with current solid levels and good liquidity, including balanced financial policies could result in a positive rating action. The ratings could be downgraded if: (1) revenue or profitability decline; (2) debt-to-EBITDA (Moody's adjusted) is expected to remain above 4.5 times; (3) liquidity deteriorates for any reason; or (4) Corel incurs additional debt to fund acquisitions or shareholder returns. Corel Corporation, founded in 1985 in Ottawa, Canada, is a global packaged software vendor that develops and markets consumer software covering graphics, compression, production, digital media, structured virtualization software and sales enablement solutions. The company's well-known brands include WinZip, Corel DRAW and MindManager which are marketed and sold mainly through a distribution platform comprising of global e-stores and network of resellers. Corel has been owned by Vector Capital since January 2010 following a go-private transaction. The principal methodology used in these ratings was Software Industry published in December 2015. COTTER TOWER: Exclusive Plan Filing Period Extended Until June 29 ----------------------------------------------------------------- The Hon. Craig A. Gargotta of the U.S. Bankruptcy Court for the Western District of Texas, at the behest of Cotter Tower-Oklahoma, L.P., has extended the exclusive period to file a plan up to and including June 29, 2018, along with the exclusive right to obtain acceptances for the plan through August 29, 2018. As reported by the Troubled Company Reporter on April 20, 2018, the Debtor asked the Court to extend the exclusivity deadlines for approximately 80 days. The Debtor asserts that cause exists to extend the exclusivity date in this case for the following reasons: A. The Debtor filed this case in good faith. At the time the case was filed, the Note secured by the Cotter Tower Ranch property had matured, significant amounts of ad valorem property taxes were coming due, and the Debtor required more than $300,000 in funds to initiate an essential capital improvement project involving the building's HVAC system. Since the filing of the case, the Debtor's representatives have been making essential repairs and improvements needed for the property, and have been working with Bank SNB on the use of cash collateral to continue operating the building until the closing of a sale occurs. Further, the Debtor has commenced making monthly interest payments on its loan with Bank SNB, and believes it can continue to do so until the property is sold; B. CBRE, Inc., the Debtor's Real Estate Broker, has commenced the marketing process and offers have begun to be made from various buyers. CBRE anticipates a brief marketing period where highest and best offers for the properties would be due this month. Once that process is completed, Debtor's representative and counsel will be in a better position to assess the amount of the net sales proceeds that would potentially be available to satisfy creditors in this case. This information is important in determining whether or not any creditors will be impaired by the Plan, and would greatly streamline the confirmation process; C. The extension is not sought for purposes of delay. The Debtor continues to pay its post-petition obligations as they become due; D. The Debtor has reasonable prospects for filing and obtaining confirmation of a viable plan in this case. Based upon the most recent appraisal, it is anticipated that there is sufficient equity in the property to pay off creditors who may hold allowed claims in this case with funds remaining to be administered for the benefit of the heirs of the Estate of James F. Cotter; E. The Debtor is not using an extension of the exclusivity period as a means to pressure creditors to submit to the Debtor's reorganization demands. To the contrary, Debtor is seeking the extension for the purpose of negotiating a sale of the property that maximizes the value to all parties-in-interest; and F. The Debtor has requested no prior extensions of the exclusivity deadlines in this case. About Cotter Tower-Oklahoma Cotter Tower - Oklahoma, L.P., owns the Cotter Ranch Tower located at 100 N. Broadway Ave., in Oklahoma City, Oklahoma. Cotter Ranch Tower, also known as Chase Tower, is a 36-story glass tower, located in the heart of the Central Business District. The Tower features an underground concourse system which connects to majority of Central Business District, private covered and adjoining public parking, card key access and elevator security codes, renovated lobby and newly updated common areas. Cotter Tower - Oklahoma, L.P., which is based in San Antonio, Texas, filed a Chapter 11 petition (Bankr. W.D. Tex. Case No. 17-52844) on Dec. 12, 2017. In its petition, the Debtor estimated $10 million to $50 million in both assets and liabilities. The petition was signed by Marcus P. Rogers, as independent administrator for the estate of James F. Cotter, acting as president on behalf of Cotter Ranch Tower, LLC, general partner, acting on behalf of and authorized representative for the Debtor. The Hon. Craig A. Gargotta presides over the case. The Law Office of H. Anthony Hervol serves as bankruptcy counsel to the Debtor. DENT DEPOT: Taps Hobby Stevens as Accountant -------------------------------------------- Dent Depot, LLC, seeks approval from the U.S. Bankruptcy Court for the Northern District of Texas to hire Hobby Stevens of Ray & Company, P.C. as its accountant. The firm will advise the Debtor regarding the tax liabilities of its estate; prepare tax returns; and provide other accounting services. Hobby Stevens is a "disinterested person" as defined in section 101(14) of the Bankruptcy Code, according to court filings. The firm maintains an office at: Hobby Stevens of Ray & Company, P.C. 402 Cypress Street, Suite 200 Abilene, TX 79601 Phone: (325) 673-6736 About Dent Depot LLC Dent Depot, LLC sought protection under Chapter 11 of the Bankruptcy Code (Bankr. N.D. Tex. Case No. 17-10311) on Dec. 4, 2017. The Debtor estimated assets of less than $50,000 and liabilities of less than $1 million. Judge Robert L. Jones presides over the case. The Debtor is represented by Max R. Tarbox, Esq., at Tarbox Law, P.C. DOOR TO DOOR: Partial Rejection of LBJ Administrative Claim Upheld ------------------------------------------------------------------ In the case captioned In re DOOR TO DOOR STORAGE, INC., Debtor, Case No. C17-1385RSM (W.D. Wash.), LBJ Creekside, LLC appeals from an order of the Bankruptcy Court for the Western District of Washington granting in part an administrative claim against debtor Door to Door Storage, Inc. Upon review of the case, Chief District Judge Ricardo S. Martinez affirms the Bankruptcy Court's order. On March 17, 2016, the Debtor and LBJ entered into a non-residential commercial lease for property located at Building 2, 20425 72nd Avenue, South Kent, Washington. The base rent was due on a monthly basis on the first day of each calendar month in the amount of $18,312. On Nov. 7, 2016, Debtor Door to Door filed a chapter 11 petition in the Bankruptcy Court. The parties agree that on May 17, 2017, the Bankruptcy Court entered an Order approving the sale of substantially all of Debtor's assets free and clear of liens and approved the assumption and/or rejection of certain contracts and leases. Pursuant to the terms of the Order, Debtor was to reject LBJ's unexpired lease and provide 10 days' written notice to LBJ before the rejection would be effective. LBJ made an administrative claim for the entire month of June 2017. The Debtor objected to this claim, and the Bankruptcy Court sustained that objection, but did allow administrative rent on a pro-rated basis for one day of rent in June. In doing so, the Bankruptcy Court specifically noted that the rejection date was June 1, 2017. The Court rejected the application of cases cited by the parties, found that there was no binding Ninth Circuit authority, and "follow[ed] the majority of Courts that have adopted the proration, or accrual method, which follows the pre-Bankruptcy Code practice of prorating a debtor's rent payments due under a lease, regardless of the billing date." The Court noted that this outcome "serves the legislative intent of providing landlords with a current payment for current services without producing results that are inconsistent with the Bankruptcy Code." LBJ appealed, arguing that it is entitled to an administrative claim for the entire month of June 2017 pursuant to section 365(d)(3) of the Bankruptcy Code. The Debtor cites to cases it cited before the Bankruptcy Court in support of its position that the Court should use the "accrual" or "proration" approach. Although the Bankruptcy Court ignored these cases, it properly followed the majority of courts in applying the accrual approach to the LBJ administrative expense claim, according to the Debtor. The Debtor points out that the Bankruptcy Court followed the Ninth Circuit rule that administrative expenses are to be construed narrowly. The Court finds that the Bankruptcy Court did not abuse its discretion in rejecting in part LBJ's administrative claim. The Bankruptcy Court correctly determined that none of the cases cited by the parties were directly on point or binding, and followed the majority of Courts that have adopted the proration, or accrual method. LBJ has failed to convince the Court that this was the wrong legal standard to apply, or that the conclusion that the Debtor owed one day of rent was "illogical, implausible or without support in the record." Accordingly, the Bankruptcy Court's Order is affirmed. A full-text copy of the Court's Order dated April 20, 2018 is available at https://bit.ly/2K9GwEs from Leagle.com. LBJ Creekside LLC, Appellant, represented by Charles R. Markley -- cmarkley@williamskastner.com -- GREENE & MARKLEY & Katherine A. Christofilis -- kchristofilis@williamskastner.com -- WILLIAMS KASTNER. Door to Door Storage Inc, Appellee, represented by Aimee Willig -- awillig@bskd.com -- BUSH KORNFELD LLP, Armand J. Kornfeld -- jkornfeld@bskd.com -- BUSH STROUT & KORNFELD & Christine M. Tobin-Presser – ctobin@bskd.com -- BUSH STROUT & KORNFELD. Bankruptcy Appeals, Interested Party, pro se. About Door to Door Storage Inc. Headquartered in Kent, Washington, Door to Door Storage, Inc., provides nationwide portable, containerized storage services in approximately 50 locations across the United States. Door to Door filed a chapter 11 petition (Bankr. W.D. Wash. Case No. 16-15618-CMA) on Nov. 7, 2016. The petition was signed by Tracey F. Kelly, president. The case is assigned to Judge Christopher M. Alston. At the time of filing, the Debtor had total assets of $4.08 million and total liabilities of $5.65 million. The Debtor hired Bush Kornfeld LLP and Schlemlein Goetz Fick & Scruggs, PLLC as counsel; Socius Law Group PLLC, David Carlos Kaslow, Esq., and Littler Mendelson PC, as special counsel; Clark Nuber P.S. as accountant; and Orse & Company, Inc. as financial advisor. On November 17, 2017, the U.S. Trustee appointed an official committee of unsecured creditors. Sheppard, Mullin, Richter & Hampton LLP serves as counsel to the committee while Province, Inc. serves as financial advisor. DUNECRAFT INC: U.S. Trustee Unable to Appoint Committee ------------------------------------------------------- The Office of the U.S. Trustee on May 9 disclosed in a court filing that no official committee of unsecured creditors has been appointed in the Chapter 11 case of DuneCraft, Inc. About DuneCraft Inc. Cleveland, Ohio-based Dunecraft Inc. is a producer of "fun and educational" growing kits such as carnivorous creations, the princess garden, the dinosaur plant, dragon's lair, and much more for children of all ages. It also introduced a line of micro-terrariums, space sand, super snow, smart tubes, and a brand new line of kits tailored to the classroom setting. DuneCraft was founded in January 2002 by Grant Cleveland. Dunecraft sought protection under Chapter 11 of the Bankruptcy Code (Bankr. N.D. Ohio Case No. 18-11901) on April 1, 2018. In the petition signed by Grant A. Cleveland, president, the Debtor estimated assets of less than $50,000 and liabilities of $1 million to $10 million. Judge Jessica E. Price Smith presides over the case. ENERGY FUTURE: Disputes with EAL, UMB Can't be Mediated ------------------------------------------------------- Chief Magistrate Judge Mary Pat Thynge recommends that the cases captioned ELLIOTT ASSOCIATES, L.P., ELLIOTT INTERNATIONAL, L.P., AND THE LIVERPOOL PARTNERSHIP, Appellants, v. ENERGY FUTURE HOLDINGS CORP., et al., Appellees. UMB BANK, N.A., Appellant, v. ENERGY FUTURE HOLDINGS CORP., et al., Appellees, C. A. Nos. 18-400-RGA, 18-456-RGA (D. Del.) be withdrawn from the mandatory referral for mediation and proceed through the appellate process of the Court. On April 6, 2018, Judge Andrews consolidated these matters, making 18-400-RGA the lead case and 18-456-RGA a member case consistent with an unopposed motion to consolidate. As a result of the discussion and screening process conducted, the Court holds that the issues involved in these cases are not amenable to mediation and mediation at this stage would not be a productive exercise, a worthwhile use of judicial resources nor warrant the expense of the process. Further, the parties advised in their letter of April 4, 2018 regarding the 18-400-RGA matter their request to withdraw this matter from mandatory mediation. The Court also enters the following brief schedule: Appellants' opening brief: no later than 30 days from entry of an order withdrawing the matters from mediation Appellees' answering brief: no later than 30 days after services of Appellants' opening brief. Appellants reply brief: no later than 14 days after service of Appellees' answering brief. A full-text copy of the Court's Recommendation dated April 17, 2018 is available at https://bit.ly/2I0GQZH from Leagle.com. UMB Bank, N.A., Appellant, represented by Scott D. Cousins -- scousins@bayardlaw.com -- Bayard, P.A., Erin R. Fay -- efay@bayardlaw.com -- Bayard, P.A. & Evan Thomas Miller -- emiller@bayardlaw.com -- Bayard, P.A. Energy Future Holdings Corp., Appellee, represented by Mark David Collins -- collins@rlf.com -- Richards, Layton & Finger, PA, Daniel J. DeFranceschi -- defranceschi@rlf.com -- Richards, Layton & Finger, PA & Jason Michael Madron -- madron@rlf.com -- Richards, Layton & Finger, PA. About Energy Future Energy Future Holdings Corp., formerly known as TXU Corp., is a privately held diversified energy holding company with a portfolio of competitive and regulated energy businesses in Texas. Oncor, an 80 percent-owned entity within the EFH group, is the largest regulated transmission and distribution utility in Texas. The Company delivers electricity to roughly three million delivery points in and around Dallas-Fort Worth. EFH Corp. was created in October 2007 in a $45 billion leverage buyout of Texas power company TXU in a deal led by private-equity companies Kohlberg Kravis Roberts & Co. and TPG Inc. On April 29, 2014, Energy Future Holdings and 70 affiliated companies sought Chapter 11 bankruptcy protection (Bankr. D. Del. Lead Case No. 14-10979) after reaching a deal with some key financial stakeholders to keep its businesses operating while reducing its roughly $40 billion in debt. The Debtors' cases have been assigned to Judge Christopher S. Sontchi (CSS). As of Dec. 31, 2013, EFH Corp. reported assets of $36.4 billion in book value and liabilities of $49.7 billion. The Debtors had $42 billion of funded indebtedness as of the bankruptcy filing. EFH's legal advisor for the Chapter 11 proceedings is Kirkland & Ellis LLP, its financial advisor is Evercore Partners and its restructuring advisor is Alvarez & Marsal. The TCEH first lien lenders supporting the restructuring agreement are represented by Paul, Weiss, Rifkind, Wharton & Garrison, LLP as legal advisor, and Millstein & Co., LLC, as financial advisor. The EFIH unsecured creditors supporting the restructuring Agreement are represented by Akin Gump Strauss Hauer & Feld LLP, as legal advisor, and Centerview Partners, as financial advisor. The EFH equity holders supporting the restructuring agreement are represented by Wachtell, Lipton, Rosen & Katz, as legal advisor, and Blackstone Advisory Partners LP, as financial advisor. Epiq Systems is the claims agent. Wilmington Savings Fund Society, FSB, the successor trustee for the second-lien noteholders owed about $1.6 billion, is represented by Ashby & Geddes, P.A.'s William P. Bowden, Esq., and Gregory A. Taylor, Esq., and Brown Rudnick LLP's Edward S. Weisfelner, Esq., Jeffrey L. Jonas, Esq., Andrew P. Strehle, Esq., Jeremy B. Coffey, Esq., and Howard L. Siegel, Esq. On May 13, 2014, the U.S. Trustee appointed the Official Committee of TCEH Unsecured Creditors in the Chapter 11 Cases. The TCEH Committee is composed of (a) the Pension Benefit Guaranty Corporation; (b) HCL America, Inc.; (c) BNY, as Indenture Trustee under the EFCH 2037 Notes due 2037 and the PCRBs; (d) LDTC, as Indenture Trustee under the TCEH Unsecured Notes; (e) Holt Texas LTD, d/b/a Holt Cat; (f) ADA Carbon Solutions (Red River); and (g) Wilmington Savings, as Indenture Trustee under the TCEH Second Lien Notes. The TCEH Committee retained Morrison & Foerster LLP as counsel; Polsinelli PC as co-counsel and conflicts counsel; Lazard Freres & Co. LLC as investment banker; FTI Consulting, Inc., as financial advisor; and Charles River Associates as an energy consultant. On Oct. 27, 2014, the U.S. Trustee appointed the Official Committee of Unsecured Creditors representing the interests of the unsecured creditors for EFH, EFIH, EFIH Finance, and EECI, Inc. The EFH/EFIH Committee is composed of (a) American Stock Transfer & Trust Company, LLC; (b) Brown & Zhou, LLC c/o Belleair Aviation, LLC; (c) Peter Tinkham; (d) Shirley Fenicle, as successor-in-interest to the Estate of George Fenicle; and (e) David William Fahy. The EFH/EFIH Committee retained Montgomery, McCracken, Walker & Rhodes, LLP, as co-counsel and conflicts counsel; AlixPartners, LLP, as restructuring advisor; Sullivan & Cromwell LLC as counsel; Guggenheim Securities as investment banker; and Kurtzman Carson Consultants LLC as noticing agent for both the TCEH Committee and the EFH/EFIH Committee. Given the size and complexity of the Chapter 11 Cases, the U.S. Trustee proposed, and the Debtors and the TCEH Committee agreed, to recommend that the Bankruptcy Court appoint a committee to, among other things, review and report as appropriate on fee applications and statements submitted by the professionals paid for by the Debtors' Estates. The Fee Committee is comprised of four members: (a) one member appointed by and representative of the Debtors (Cecily Gooch, Vice President and Special Counsel for Restructuring, Energy Future Holdings); (b) one member appointed by and representative of the TCEH Creditors' Committee (Peter Kravitz, Principal and General Counsel, Province Capital); (c) one member appointed by and representative of the U.S. Trustee (Richard L. Schepacarter, Trial Attorney, Office of the United States Trustee); and (d) one independent member (Richard Gitlin, of Gitlin and Company, LLC). The Fee Committee retained Godfrey & Kahn, S.C. as counsel; and Phillips, Goldman & Spence, P.A., as co-counsel. * * * On Aug. 29, 2016, Judge Sontchi confirmed the Chapter 11 exit Plans of two of Energy Future Holdings Corp.'s subsidiaries, power generator Luminant and retail electricity provider TXU Energy Inc. (the "T-Side Debtors"). The Plan became effective on Oct. 3, 2016. On Aug. 20, 2017, Sempra Energy (NYSE:SRE) announced an agreement to acquire Energy Future Holdings, the indirect owner of 80 percent of Oncor Electric Delivery Company, LLC, operator of the largest electric transmission and distribution system in Texas. Under the agreement, Sempra Energy will pay approximately $9.45 billion in cash to acquire Energy Future and its ownership in Oncor, while taking a major step forward in resolving Energy Future's long-running bankruptcy case. The enterprise value of the transaction is approximately $18.8 billion, including the assumption of Oncor's debt. On Nov. 3, 2017, the Bankruptcy Court entered an order closing the Chapter 11 cases of 40 affiliate debtors. The claims asserted against, and interests asserted in, the Closing Cases are transferred to the lead case of Texas Competitive Electric Holdings Company LLC, Case No. 14-10978. A list of the Closing Cases is available for free at: http://bankrupt.com/misc/EnergyFuture_decreeclosing40.pdf ENVIRO TECHNOLOGIES: Liggett & Webb P.A. Raises Going Concern Doubt ------------------------------------------------------------------- Enviro Technologies, Inc., filed with the U.S. Securities and Exchange Commission its annual report on Form 10-K, disclosing a net income of $2,070,670 on $265,160 of total revenue for the fiscal year ended December 31, 2017, compared to a net loss of $535,793 on $562,059 of total revenue for the year ended in 2016. Liggett & Webb, P.A., states that the Company has a working capital deficiency of approximately $166,000 and an accumulated deficit of approximately $14,989,000 as of December 31, 2017. These factors raise substantial doubt about the Company's ability to continue as a going concern. The Company's balance sheet at December 31, 2017, showed total assets of $1,801,714, total liabilities of $1,807,834, and a total stockholders' deficit of $6,120. A copy of the Form 10-K is available at: https://is.gd/POFYNA About Enviro Technologies Enviro Technologies, Inc., provides environmental and industrial separation technology. The company manufactures, sells, and rents its patented technology, the Voraxial Separator, which is a continuous flow turbo machine that separates liquid/liquid, liquid/solid, or liquid/liquid/solids fluid mixtures with distinct specific gravities. It serves oil exploration and production, oil refineries, oil spill, mining, manufacturing, waste-to-energy, and food processing industries. The company was formerly known as Enviro Voraxial Technology, Inc., and changed its name to Enviro Technologies, Inc., in November 2017. Enviro Technologies, Inc., was founded in 1964 and is based in Fort Lauderdale, Florida. ET SOLAR: $86K Sale of Inventory to Umbrella Solar Approved ----------------------------------------------------------- Judge Charles Novack of the U.S. Bankruptcy Court for the Northern District of California authorized ET Solar, Inc.' sale of inventory presently stored in the Warehouse Lessors bonded warehouses located at (i) 48900 Milmont Dr., Fremont California (Fulsource); and (ii) 2851 East Las Hermanas St., Rancho Dominguez, California (Boviet); and (iii) 2345 Vauxhall Road, Union, New Jersey (ACE), to Umbrella Solar, to Umbrella Solar $86,000. A hearing on the Motion was held on April 26, 2018 at 10:00 a.m. The sale is free and clear of all liens, claims, and encumbrances. The liens of Fulsource Logistics, Inc., Boviet Solar USA, Ltd. and American Cargo Express USA & Canada, to $5,895 for Fulsource, $2,440 for Boviet, and nothing for ACE ("Restricted Proceeds") are transferred to the proceeds of sale of the Inventory. The Debtor is authorized to hold the Restricted Proceeds pending the establishment of liens by Fulsource, Boviet and ACE and to release funds upon satisfactory proof of secured status. About ET Solar Based in Pleasanton, California, ET Solar, Inc., is a solar energy equipment supplier. ET Solar sought protection under Chapter 11 of the Bankruptcy Code (Bankr. N.D. Cal. Case No. 17-43031) on Dec. 4, 2017. In the petition signed by Steppe Hao, its president, the Debtor estimated assets of less than $50,000 and liabilities of $10 million to $50 million. Judge Charles Novack presides over the case. Binder & Malter, LLP, is the Debtor's legal counsel; and Sensiba San Filippo LLP is the accountant. FIBRANT LLC: Proposed Sale of Surplus Assets Approved ----------------------------------------------------- Judge Susan D. Barrett of the U.S. Bankruptcy Court for the Southern District of Georgia authorized Fibrant, LLC and affiliates to sell surplus assets with a value not to exceed an aggregate total of $250,000 per sale transaction. The Debtors will comply with these procedures for proposed sales of Surplus Assets: (a) The Debtors will give written notice of each proposed sale to the counsel for the Official Committee of Unsecured Creditors appointed in these cases and any known holder of a Lien on the property proposed to be sold. (b) The Sale Notices will be served on the Notice Parties by facsimile or electronic transmission, if available, or by overnight, courier, or U.S. mail if not, and will specify the Surplus Assets to be sold, the identity of the seller and the proposed purchaser, and the purchase price. (c) The Notice Parties will have 10 days from the date the Sale Notice is sent to provide the Debtors with a written objection to each proposed transaction. Any such objection will specify the basis for the objection and will be addressed to Jonathan W. Jordan at King & Spalding LLP, 1180 Peachtree Street Atlanta, Georgia 30309-3521. (d) If no written objection is received by the Debtors by 5:00 p.m. (ET) on the 10th day following the Sale Notice, the Debtors will be authorized to consummate the proposed sale transaction, and any entities having a Lien in the property sold will be deemed to have consented to the sale. (e) If a Notice Party provides a timely written objection to the proposed transaction, the Debtors and such objecting Notice Party will use good faith efforts to consensually resolve the objection. If the Debtors and the objecting Notice Party are unable to reach a consensual resolution, the Debtors will be required to seek Court approval of the proposed transaction after notice and a hearing before consummating the proposed transaction. The Surplus Assets will be sold and transferred free and clear of all Liens thereon, if any, with any such valid and perfected Liens to attach to the net sale proceeds, subject to the rights, claims, defenses, and objections, if any, of the Debtors and all interested parties to any asserted Liens. Notwithstanding Federal Rule of Bankruptcy Procedure 6004(h), any sale of Surplus Assets may be consummated immediately upon the expiration of the objection period described. The Counsel to the Debtors is directed to serve a copy of the Order on the parties listed on the Master Service List within three days of the entry of the Order and to file a certificate of service with the Clerk of the Court. About Fibrant, LLC Fibrant, LLC, headquartered in Augusta, Georgia, was previously a producer and global supplier of chemical products and local manufacturing services. At the end of September 2017, the Debtors completed the shutdown and decommissioning of their caprolactam manufacturing facility located at an industrial site at 1408 Columbia Nitrogen Drive, Augusta, Georgia 30901, other than the portion of the Facility that was (until recently) being used to manufacture ammonium sulfate. In late 2017, the Debtors ceased production of ammonium sulfate at the Facility, and the Debtors are now in the process of administering the sale of, and shipping, all of the remaining ammonium sulfate inventory. Once the inventory has been sold and removed from the Site, the Debtors intend to decommission the ammonium sulfate plant and all other operating assets and plant infrastructure that was not previously decommissioned. Fibrant, LLC and affiliates Fibrant South Center, LLC, Evergreen Nylon Recycling, LLC and Georgia Monomers Company, LLC sought Chapter 11 protection (Bankr. S.D. Ga. Case Nos. 18-10274-77) on Feb. 23, 2018. The case is assigned to Judge Susan D. Barrett. The cases are jointly administered. The Debtors tapped Paul K. Ferdinands, Esq., Jonathan W. Jordan, Esq., Sarah L. Primrose, Esq., at King & Spalding LLP; and James C. Overstreet Jr., Esq., at Klosinski Overstreet, LLP as counsel; and Kurtzman Carson Consultants, LLC as their claims, noticing and balloting agent. The Debtor estimated assets and liabilities in the range of $10 million to $50 million. The petitions were signed by David Leach, president and general manager. FIELDPOINT PETROLEUM: Issues Statement in Response to 13D/A ----------------------------------------------------------- Fieldpoint Petroleum Corporation said in a Form 8-K filed with the Securities and Exchange Commission that the 13D of 2390530 Ontario Inc. and Natale Rea (2013) Family Trust included numerous allegations concerning the Company's financial condition and results of operations, the majority of which the Company believes are either misstated or overstated. On April 20, 2018, 2390530 Ontario and Natale Rea filed an Amended Schedule 13D/A with the SEC which included as an exhibit correspondence addressed and delivered to the Board of Directors of Fieldpoint Petroleum. In addition, the 13D makes reference to a pending civil action captioned Trivista Oil Company, LLC v. Bass Petroleum, Inc. and Fieldpoint Petroleum Corporation, Cause No. 16,539 in the District Court of Lee County, Texas, 335 Judicial District. Trivista Oil Company, LLC is an affiliate of the Reporting Persons. According to Fieldpoint Petroleum, the Reporting Persons fail to disclose in the Schedule 13D/A certain material facts, including: * That the Company asserts in the Trivista Litigation that Trivista is not the owner of the claim being asserted; * That the Company asserts in the Trivista Litigation that Trivista has slandered the Company's title to property by filing a lien without any legal basis under Texas law; * That the Company asserts in the Trivista Litigation that the Reporting Persons have brought the Trivista Litigation in an effort to improperly coerce the Company to make concessions that favor the Reporting Persons that it otherwise would not make. "The Company intends to vigorously defend against the claims made by the Reporting Persons in the 13D and Trivista Litigation and seek such damages as may be appropriate," Fieldpoint Petroleum stated in the SEC filing. About FieldPoint Petroleum Based in Austin, Texas, FieldPoint Petroleum Corporation (NYSE:FFP) -- http://www.fppcorp.com/-- acquires, operates and develops oil and gas properties. As of Dec. 31, 2017, the Company had varying ownership interest in 390 gross wells (96.21 net) located in five states. The Company operates 15 of the 390 wells; the other wells are operated by independent operators under contracts that are standard in the industry. It is a primary objective of the Company to operate some of the oil and natural gas properties in which it has an economic interest, and the Company will also partner with larger oil and natural gas companies to operate certain oil and natural gas properties in which the Company has an economic interest. Fieldpoint Petroleum reported net income of $2.66 million in 2017 compared to a net loss of $2.47 million in 2016. As of Dec. 31, 2017, Fieldpoint Petroleum had $7.71 million in total assets, $5.91 million in total liabilities and $1.80 million in total stockholders' equity. Moss Adams LLP, in Dallas, Texas, the Company's auditor since 2017, issued a "going concern" qualification in its report on the consolidated financial statements for the year ended Dec. 31, 2017, stating that the Company has suffered recurring losses from operations and has a net capital deficiency that raise substantial doubt about its ability to continue as a going concern. FIRSTENERGY SOLUTIONS: Taps Stark & Knoll as Local Counsel ---------------------------------------------------------- FirstEnergy Solutions Corp. seeks approval from the U.S. Bankruptcy Court for the Northern District of Ohio to hire Stark & Knoll, LLC. The firm will be employed as local counsel to assist Willkie Farr & Gallagher LLP as special investigation counsel for the company and its affiliates. It will also provide legal services as requested by the Debtors related to Willkie Farr's role as conflicts counsel. The firm will charge these hourly rates: Orville Reed $345 David Hilkert $300 Julie Bickis $250 Orville Reed, III, Esq., a member of Stark & Knoll, disclosed in a court filing that the firm is a "disinterested person" as defined in Section 101(14) of the Bankruptcy Code. In accordance with Appendix B-Guidelines for reviewing fee applications filed by attorneys in larger Chapter 11 cases, Mr. Reed disclosed that his firm has not agreed to any variations from, or alternatives to, its standard or customary billing arrangements; and that no Stark & Knoll professional has varied his rate based on the geographic location of the Debtors' bankruptcy cases. The Debtors have already approved the firm's budget and staffing plan for the period April 1 to 30, 2018, according to court filings, according to Mr. Reed. The firm can be reached through: Orville L. Reed, III, Esq. Stark & Knoll, LLC 3475 Ridgewood Road Akron, OH 44333 Phone: 330-572-0328 Fax: 330-572-0329 Email: oreed@stark-knoll.com About FirstEnergy Solutions Akron, Ohio-based FirstEnergy Solutions, Corp. (FES) is a subsidiary of FirstEnergy Corp (NYSE:FE). FES -- http://www.firstenergycorp.com/-- provides energy-related products and services to retail and wholesale customers; and owns and operates 5,381 MWs of fossil generating capacity through its FirstEnergy Generation subsidiaries. FES also owns 4,048 MWs of nuclear generating capacity through its FirstEnergy Nuclear Generation subsidiary. Nuclear generating plants are operated by FirstEnergy Nuclear Operating Company (FENOC), which is a separate subsidiary of FirstEnergy Corp. On March 31, 2018, FirstEnergy Solutions and 6 affiliates, including FENOC, each filed a voluntary petition for relief under Chapter 11 of the United States Bankruptcy Code (Bankr. N.D. Ohio Lead Case No. 18-50757). The cases are pending before the Honorable Judge Alan M. Koschik and the Debtors have requested that their cases be jointly administered under Case No. 18-50757. Parent company, First Energy Corp. and its other subsidiaries, including its regulated subsidiaries, are not part of the filing and will not be subject to the Chapter 11 process. First Energy Corp. listed $42.2 billion in total assets against $4.07 billion in total current liabilities, $21.1 billion in long-term debt and other long-term obligations and $13.1 billion in non-current liabilities as of Dec. 31, 2017. The Debtors tapped Akin Gump Strauss Hauer & Feld LLP as bankruptcy counsel; Brouse McDowell LPA as co-counsel; Lazard Freres & Co. as investment banker; Alvarez & Marsal North America, LLC as restructuring advisor and Charles Moore as chief restructuring officer; and Prime Clerk as claims and noticing agent. The Debtors also tapped Willkie Farr & Gallagher LLP, Hogan Lovells US LLP and Quinn Emanuel Urquhart & Sullivan, LLP as special counsel. GETCHELL AGENCY: Court Junks MDHHS Bid for Leave to Appeal ---------------------------------------------------------- In the case captioned MAINE DEPARTMENT OF HEALTH AND HUMAN SERVICES, Plaintiff, v. THE GETCHELL AGENCY, et al., Defendant, Civil No. 1:17-cv-00252-JAW (D. Me.), the Maine Department of Health and Human Services, a creditor state governmental agency, seeks leave to appeal the Bankruptcy Judge's interlocutory order confirming that the automatic stay applies to the agency's effort to terminate debtor The Getchell Agency's Medicaid provider agreement. The Bankruptcy Judge addressed two issues: (1) whether the Bankruptcy Court has jurisdiction over any challenge to the termination of the provider agreements, and (2) whether the automatic stay applies because the provider agreements are not "property of the estate." District Judge John A. Woodcock, Jr. concludes that these issues do not warrant interlocutory appeal. MDHHS asserts that the Bankruptcy Judge erred regarding the jurisdictional question because it believes it has the discretion to terminate Medicaid provider agreements and such a decision constitutes non-final agency action beyond the reach of the Bankruptcy Court. MDHHS contends that termination actions are non-final because providers may appeal that decision through its administrative process. Id. MDHHS also claims the Bankruptcy Judge erred regarding the second question about "property of the estate" because it believes, "Getchell has no protectable property interest in the MaineCare Provider Agreements." MDHHS maintains that there is no property interest because "[a] state may discontinue its participation in Medicaid -- or any of the particular Medicaid services provided. . . ." MDHHS also argues the Court should grant immediate leave to appeal "given how integral those issues are to the Department's ongoing and future authority to administer Maine's Medicaid program." MDHHS points out that, if the stay does not apply and it can terminate the provider agreements, the future course of the bankruptcy case will be materially different than the current reorganization plan, which contemplates Getchell continuing to operate as a MaineCare provider. Getchell, on the other hand, emphasizes that MDHHS is "not satisfied to simply proceed as it previously agreed and now it wants to simultaneously and inexplicably pursue an interlocutory appeal thus driving up the litigation burden on all parties." Getchell denies that MDHHS has a unilateral right to terminate provider agreements at any time. Getchell insists that In re Corporacion de Servicios Medicos Hospitalarios de Fajardo, controls the "property of the estate" question. Getchell also points out that other courts have held that healthcare contracts, including Medicaid participation contracts, do create property rights for bankruptcy purposes. The major obstacle for this interlocutory appeal is the effect on the ultimate termination of the litigation, often referred to as "considerations of judicial economy." There are several burdensome inefficiencies in Getchell and MDHHS's litigation approach. First, the decision to bifurcate the issues before the Bankruptcy Judge and take an interlocutory appeal leaves a key issue undecided: whether MDHHS' efforts to terminate Getchell's further participation in MaineCare are exempt from the automatic stay under the regulatory and police powers exception of 11 U.S.C. section 362(b)(4). In a very similar case, Parkview Adventist Medical Center v. United States on behalf of Department of Health & Human Services, the First Circuit first addressed the (b)(4) exception, finding it unnecessary to address other questions, such as the scope of the automatic stay barring efforts to exert control over property of the estate under section 362(a)(3). Interlocutory appeal will entail further delay and require expending considerable judicial resources, all of which would be entirely unnecessary if MDHHS succeeds on the (b)(4) issue before the Bankruptcy Court. Second, even if the Court were to grant the motion for leave to appeal and even if it eventually agreed with MDHHS that the provider agreements are not "property of the estate" and section 362(a)(3) does not bar MDHHS' termination action, it does not appear that the decision would impact the ultimate termination of the litigation. MDHHS has not presented any reason or argument explaining why the agencies' termination action is not an "administrative . . . proceeding against the debtor" that section 362(a)(1) automatically stays. Accordingly, the Court wonders whether there is any practical significance to the (a)(3) "property of the estate" issue. Third, the questions presented to the Bankruptcy Judge only involved the applicability of the automatic stay because MDHHS did not seek relief from the automatic stay. MDHHS could obtain the ultimate relief it seeks from the Bankruptcy Judge even though it lost on these issues and even if it lost again on the (b)(4) issue. By presenting only the question of applicability, then bifurcating the issues before the bankruptcy judge, and pursuing interlocutory appeal, MDHHS multiplies litigation over a prolonged period, rather than presenting all arguments at once. The efficient termination of the litigation is not served by separating out questions on the many facets of each of the various aspects of the automatic stay provisions. The heightened bar for interlocutory appeals addresses the concerns raised by precisely this sort of piecemeal litigation, namely "the elimination of delays" and avoiding the 'harassment and cost of a succession of separate appeals. . . .'" Thus, the Court denies MDHHS' Motion for Leave to Appeal. A full-text copy of the Court's Order dated April 17, 2018 is available at https://bit.ly/2I8mPfZ from Leagle.com. MAINE DEPARTMENT OF HEALTH AND HUMAN SERVICES, Appellant, represented by HALLIDAY MONCURE, MAINE ATTORNEY GENERAL'S OFFICE. RENA GETCHELL, Appellee, represented by ANDREW J. KULL -- akull@mittelasen.com -- MITTEL ASEN LLC. GETCHELL AGENCY, Appellee, represented by ANDREW J. KULL, MITTEL ASEN LLC, ANDREW R. SARAPAS, STROUT & PAYSON -- sarapas@stroutpayson.com -- EDMOND J. BEAROR -- ebearor@rudmanwinchell.com -- RUDMAN & WINCHELL, JAMES F. MOLLEUR, LAW OFFICE OF JAMES F. MOLLEUR & RICHARD P. OLSON, CURTIS THAXTER, LLC. About The Getchell Agency Headquartered in Bangor, Maine, The Getchell Agency is a Residential Section 21 Funded Care Agency, licensed by the State of Maine to house and provide support services for approximately 65 adults living with physical, emotional and cognitive disabilities in residential care facilities of mobile or modular homes located in Bangor, Maine. Getchell Agency filed for Chapter 11 bankruptcy protection (Bankr. D. Maine Case No. 16-10172) on March 25, 2016. In the petition signed by Rena J. Getchell, its president, the Debtor estimated under $50,000 in assets and between $1 million and $10 million in liabilities. The Debtor hired Strout & Payson as bankruptcy counsel; Curtis Thaxter, LLC and Rudman Winchell as special counsel; and Purdy Powers & Co. as financial consultant. On Nov. 29, 2017, Nathaniel R. Hull was appointed the Debtor's Chapter 11 trustee. The Trustee hired Verrill Dana LLP as his legal counsel; Thompson Bowie & Hatch LLC, as special counsel. GIBSON BRANDS: Taps Prime Clerk as Claims Agent ----------------------------------------------- Gibson Brands, Inc., received approval from the U.S. Bankruptcy Court for the District of Delaware to hire Prime Clerk LLC as its claims and noticing agent. The firm will oversee the distribution of notices and the maintenance, processing and docketing of proofs of claim filed in the Chapter 11 cases of the company and its affiliates. Prime Clerk will charge these hourly rates: Claim and Noticing Rates: Analyst $30 to $50 Technology Consultant $35 to $95 Consultant/Senior Consultant $65 to $165 Director $175 to $195 COO/Executive VP No charge Solicitation, Balloting and Tabulation Rates: Solicitation Consultant $190 Director of Solicitation $210 Benjamin Steele, vice-president of Prime Clerk, disclosed in a court filing that his firm is a "disinterested person" as defined in Section 101(14) of the Bankruptcy Code. Prime Clerk can be reached through: Benjamin J. Steele Prime Clerk LLC 830 Third Avenue, 9th Floor New York, NY 10022 Direct: (212) 257-5490 Mobile: 646-240-7821 Email: bsteele@primeclerk.com About Gibson Brands Founded in 1894 and headquartered in Nashville, Tennessee, Gibson Brands, Inc. -- http://www.gibson.com/-- and its subsidiaries design and manufacture guitars and other fretted instruments. Gibson's brands include the Les Paul, SG, Flying V, Explorer, J-45, Hummingbird, and ES-335, among others. Gibson Brands, Inc. and 11 affiliates commenced Chapter 11 cases (Bankr. D. Del. Lead Case No. 18-11025) on May 1, 2018. In its petition, Gibson Brands estimated $100 million to $500 million in both assets and liabilities. The petition was signed by Henry E. Juszkiewicz, chief executive officer. The Hon. Christopher S. Sontchi presides over the cases. Michael H. Goldstein, Esq., Gregory W. Fox, Esq., and Barry Z. Bazian, Esq., at GOODWIN PROCTER LLP, serve as lead counsel to the Debtors. David M. Fournier, Esq., Michael J. Custer, Esq., and Marcy J. McLaughlin, Esq., at PEPPER HAMILTON LLP, serve as the Debtors' Delaware and conflicts counsel. Brian Fox and Steven R. Kotarba at Alvarez & Marsal North America, LLC, serve as the Debtors' restructuring advisors. Mr. Fox, managing director at Alvarez & Marsal, serves as Gibson's Chief Restructuring Officer. Jefferies LLC serves as the Debtors' investment banker. Prime Clerk LLC serves as their claims and noticing agent. Paul, Weiss, Rifkind, Wharton & Garrison LLP is providing legal counsel, and PJT Partners is the financial advisor, to the ad hoc group of unaffiliated noteholders that is supporting the Company's restructuring. GOLF CARS: Taps Hobby Stevens as Accountant ------------------------------------------- Golf Cars of West Texas, LLC, seeks approval from the U.S. Bankruptcy Court for the Northern District of Texas to hire Hobby Stevens of Ray & Company, P.C. as its accountant. The firm will advise the Debtor regarding the tax liabilities of its estate; prepare tax returns; and provide other accounting services. Hobby Stevens is a "disinterested person" as defined in section 101(14) of the Bankruptcy Code, according to court filings. The firm maintains an office at: Hobby Stevens of Ray & Company, P.C. 402 Cypress Street, Suite 200 Abilene, TX 79601 Phone: (325) 673-6736 About Golf Cars of West Texas Golf Cars of West Texas, LLC, sought protection under Chapter 11 of the Bankruptcy Code (Bankr. N.D. Tex. Case No. 17-10312) on Dec. 4, 2017. At the time of the filing, the Debtor estimated assets of less than $50,000 and liabilities of less than $500,000. Judge Robert L. Jones presides over the case. Tarbox Law P.C. is the Debtor's legal counsel. H MELTON VENTURES: Trustee's Sale of Memorabilia Collection Okayed ------------------------------------------------------------------ The U.S. Bankruptcy Court for the Northern District of Texas authorized Scott Seidel, the Chapter 11 Trustee for H Melton Ventures, LLC, to sell the Debtor's sports memorabilia collection at an online auction to be conducted by Rosen Systems, Inc. The Trustee and Rosen Systems be and are authorized to sell on May 1, 2018 or anytime thereafter via an online auction the Debtor's memorabilia collection to the highest bidders. The proceeds are to be paid to the bankruptcy estate after the court approved 10% buyer's premium to be held by the auctioneer. The proceeds from the sale will be paid to the bankruptcy estate to pay claims, including but not limited to: Trustee's fees/commission, expenses and professionals; auctioneer's expenses; and creditor claims as provided by the United States Bankruptcy Code, all pursuant to further Application and Order of the Court. The sale will be "as is, where is" without warranty or representations whatsoever, with no recourse to the Estate, via the online auction conducted by Rosen Systems. The Order will not be stayed by any provisions of the Federal Rules of Bankruptcy Procedure or otherwise, including any stay pursuant to Bankruptcy Rule 6004(h), and the Order will be immediately effective upon entry. About H Melton Ventures H Melton Ventures LLC, based in Arlington, Texas, filed a Chapter 11 petition (Bankr. N.D. Tex. Case No. 17-43922) on Sept. 28, 2017, estimating $1 million to $10 million in both assets and liabilities, with the petitions signed by Michael Warden, its manager. Chapter 11 cases were also commenced by Michael G. Warden (Case No. 17-33888) and Henry J. Melton, II (Case No. 17-44206). A related case, H. Melton Ventures RD, LLC, Case No. 17-44521, was also filed on No. 6, 2017. Mr. Melton, a resident of Dallas County, is the 90% owner, president and CEO of HMV. Mr. Warden, the manager, is the 10% owner. The Hon. Russell F. Nelms presides over the cases. David D. Ritter, Esq., at Ritter Spencer PLLC, serves as bankruptcy counsel to HMV. Wiley Law Group, PLLC, is counsel to Mr. Melton, and Melton Ventures RD. A Chapter 11 Trustee was appointed for both HMV and Melton in December 2017. Marilyn Garner was appointed as the Chapter 11 Trustee for HMV. She tapped Cavazos, Hendricks, Poirot & Smitham, P.C., in Dallas, Texas, as counsel. Scott M. Seidel is the Chapter 11 Trustee for Mr. Melton's estate. Mr. Seidel retained his own firm, Seidel Law Firm, in Plano, Texas, as his general counsel in the case. On March 9, 2018, the Court appointed Rosen Systems, Inc., as auctioneer. H3C INC: Taps Alessandro & Associates as Accountant --------------------------------------------------- H3C, Inc., received approval from the U.S. Bankruptcy Court for the Eastern District of New York to hire Alessandro & Associates, CPA, PLLC, as its accountant. The firm will prepare 2017 tax returns for the Debtor and will be paid on an hourly fee basis, plus reimbursement of expenses up to a cap of $8,000. Alessandro's hourly rates are: Certified Public Accountants $350 Linda Steinberg, Exec. Account Manager $150 Staff Accountant $105 Bookkeepers $58 to 95 Alessandro neither holds nor represents any interests adverse to creditors or "parties-in-interest" in the Debtor's Chapter 11 case, according to court filings. The firm can be reached through: Guy Alessandro Alessandro & Associates, CPA, PLLC 1601 Veterans Memorial Highway, Suite 520 One Suffolk Square Islandia, NY 11749 Phone: 631-232-4888 Fax 631-731-4800 Email: info@aaacpas.com About H3C Inc. Based in Merrick, New York, H3C, Inc., which conducts business under the name Left Coast Kitchen & Cocktails, filed a voluntary Chapter 11 petition (Bankr. E.D.N.Y. Case No. 17-77027) on Nov. 14, 2017, listing under $1 million both in assets and liabilities. Neil H. Ackerman, Esq., at Ackerman Fox, LLP, is the Debtor's counsel. HGIM HOLDINGS: Taps Deloitte & Touche as Auditor ------------------------------------------------ HGIM Holdings, LLC, seeks approval from the U.S. Bankruptcy Court for the Southern District of Texas to hire Deloitte & Touche LLP. The firm will provide an independent audit services for the company and its affiliates, and will be required to issue an opinion on whether their financial statements for the period ended December 31, 2017, are presented fairly. Deloitte & Touche provided pre-bankruptcy services to the Debtors. In the 90 days prior to the petition date, the Debtors paid the firm $135,000. The remaining payment to be made in accordance with the payment schedule is $78,500. For "out-of-scope" audit services related to acquisitions, divestitures, debt and equity restructurings, the formation of joint ventures, fresh start accounting, the impairment of long-lived assets, the application of the going concern accounting standard, and accounting consultations related to transactions or agreements, Deloitte & Touche will charge these hourly rates: Partner $610 Principal $610 Managing Director $610 Senior Manager $440 Manager $385 Senior Accountant $325 Staff Accountant $255 Patrick Brandau, a partner at Deloitte & Touche, disclosed in a court filing that his firm is a "disinterested person" as defined in Section 101(14) of the Bankruptcy Code. Deloitte & Touche can be reached through: Patrick Brandau Deloitte & Touche LLP 701 Poydras Street, Suite 4200 New Orleans, LA 70139 Phone: +1 504-581-2727 Fax: +1 504-561-7293 About HGIM Holdings Based in New Orleans, Louisiana, HGIM Holdings LLC -- http://www.harveygulf.com/-- is a marine transportation company that specializes in providing offshore supply and multi-purpose support vessels for deepwater operations in the U.S. Gulf of Mexico. Harvey Gulf exclusively operates vessels qualified under the U.S. cabotage laws known as the Shipping Act of 1916 and the Merchant Marine Act of 1920, as amended. Harvey Gulf currently employs 580 people. Harvey Gulf is headquartered in New Orleans, Louisiana and maintains two corporate leases in Houston, Texas. The Company and 90 of its affiliates filed for Chapter 11 protection (Bankr. S.D. Tex. Lead Case No. 18-31080) on March 7, 2018. The Debtors estimated assets and liabilities between $1 billion and $10 billion. The Debtors hired Vinson & Elkins LLP as their counsel; Stephens, Inc., as investment banker; Blank Rome LLP as special maritime counsel; Postlethwaite & Netterville, APAC as accounting service provider; and Prime Clerk LLC as the notice and claims agent. HGIM HOLDINGS: Taps Deloitte Tax as Tax Services Provider --------------------------------------------------------- HGIM Holdings, LLC, seeks approval from the U.S. Bankruptcy Court for the Southern District of Texas to hire Deloitte Tax LLP. The firm will provide tax-related services, which include advising the company and its affiliates regarding the restructuring and bankruptcy emergence process from a tax perspective, and the tax effects of restructuring. The firm will charge these hourly rates: Rates for National Tax and Tax Hourly Rates Restructuring Specialists ------------ ------------------------- Partner $565 $800 - $875 Principal $565 $800 - $875 Managing Director $565 $800 - $875 Senior Manager $505 $700 Manager $425 $555 Senior $355 $460 Staff $285 $360 The Debtors paid Deloitte Tax a retainer in the sum of $50,000. Peter Vernaci, managing director of Deloitte Tax, disclosed in a court filing that his firm is a "disinterested person" as defined in Section 101(14) of the Bankruptcy Code. The firm can be reached through: Peter Vernaci Deloitte Tax LLP 701 Poydras Street, Suite 4200 New Orleans, LA 70139 Phone: +1 504-581-2727 Fax: +1 504-561-7293 About HGIM Holdings Based in New Orleans, Louisiana, HGIM Holdings LLC -- http://www.harveygulf.com/-- is a marine transportation company that specializes in providing offshore supply and multi-purpose support vessels for deepwater operations in the U.S. Gulf of Mexico. Harvey Gulf exclusively operates vessels qualified under the U.S. cabotage laws known as the Shipping Act of 1916 and the Merchant Marine Act of 1920, as amended. Harvey Gulf currently employs 580 people. Harvey Gulf is headquartered in New Orleans, Louisiana and maintains two corporate leases in Houston, Texas. The Company and 90 of its affiliates filed for Chapter 11 protection (Bankr. S.D. Tex. Lead Case No. 18-31080) on March 7, 2018. The Debtors estimated assets and liabilities between $1 billion and $10 billion. The Debtors hired Vinson & Elkins LLP as their counsel; Stephens, Inc. as investment banker; Blank Rome LLP as special maritime counsel; Postlethwaite & Netterville, APAC as accounting service provider; and Prime Clerk LLC as the notice and claims agent. HILLMAN GROUP: Moody's Junks Rating on $330MM Notes to 'Caa2' ------------------------------------------------------------- Moody's Investors Service assigned a B2 rating to The Hillman Group, Inc.'s ("Hillman") proposed senior secured credit facilities, including a $530 million senior secured first lien term loan due 2025, and a $165 million senior secured delayed draw term loan (DDTL). At the same time, Moody's downgraded Hillman's $330 million of senior unsecured notes to Caa2 from Caa1, and affirmed Hillman's B3 Corporate Family Rating (CFR) and B3-PD Probability of Default Rating. Moody's also upgraded the speculative grade liquidity rating to SGL-2 from SGL-3. The rating outlook is stable. The proceeds from the new term loan and a draw on the new $150 million ABL revolver will be used to refinance outstanding amounts under the company's existing credit facilities and pay related transaction fees and expenses. Moody's expects Hillman to utilize the delayed draw term loan to fund acquisitions. "While the increase in debt, which we expect to be utilized for tuck-in acquisitions, is a negative credit development, it will not immediately affect the Corporate Family Rating or the rating outlook, as we expect Hillman's leverage to decline over the next 12-18 months," said Vladimir Ronin, Moody's lead analyst for the company. "Furthermore, the ratings are supported by improvement in the liquidity profile because the new larger five-year ABL revolving facility also addresses the June 2019 expiration of the existing $70 million revolver," added Ronin. Moody's took the following rating actions on The Hillman Group, Inc. Ratings assigned: $530 million Gtd first lien senior secured term loan due 2025, at B2 (LGD3) $165 million Gtd first lien senior secured delayed draw term loan due 2025, at B2 (LGD3) Ratings affirmed: Corporate Family Rating, at B3 Probability of Default Rating, at B3-PD Ratings downgraded: $330 million of senior unsecured notes due 2022, to Caa2 (LGD5) from Caa1 (LGD5) Ratings upgraded: Speculative Grade Liquidity Rating, to SGL-2 from SGL-3; Outlook Actions: Outlook, remains stable Moody's is taking no action on and expects to withdraw the following ratings upon close of the transaction: $70 million first lien senior secured revolving credit facility due 2019, at B1 (LGD2) $550 million first lien senior secured term loan due 2021, at B1 (LGD2) All ratings are subject to review of final documentation. The downgrade of Hillman's senior unsecured notes to Caa2 from Caa1 reflects the higher expected loss given default following the addition of $165 million first lien senior secured delayed draw term loan, along with the upsized $150 million ABL revolving credit facility (unrated by Moody's), both of which have priority over claims of senior unsecured note holders that weaken recovery on the notes in a default. The B2 rating on the proposed term loan and DDTL is one notch below the B1 ratings on the existing credit facility because Hillman is transitioning the revolver from a pari-passu instrument to an ABL that has a priority lien on receivables, inventory and intangibles related to receivables and inventory. ICONIX BRAND: Files Form 10-Q for the Quarter Ended March 31, 2018 ------------------------------------------------------------------ Iconix Brand Group, Inc., filed with the Securities and Exchange Commission its Quarterly Report on Form 10-Q reporting net income from continuing operations of $35.57 million on $48.54 million of licensing revenue for the three months ended March 31, 2018, compared to net income from continuing operations of $6.89 million on $58.72 million of licensing revenue for the same period last year. As of March 31, 2018, Iconix Brand had $852.4 million in total assets, $832.5 million in total liabilities, $29.79 million in redeemable non-controlling interest and a $9.86 million total stockholders' deficit. Assessment of Going Concern Due to certain developments during the year ended Dec. 31, 2017, including the decision by Target Corporation not to renew the existing Mossimo license agreement following its expiration in October 2018 and by Walmart, Inc. not to renew the existing Danskin Now license agreement following its expiration in January 2019, and the Company's revised projected future earnings, the Company had initially forecasted that it would unlikely be in compliance with certain of its financial debt covenants in 2018 and beyond and that it may otherwise face possible liquidity challenges in 2018 and beyond. As a result, the Company amended its Senior Secured Term Loan to provide relief under certain covenants and implemented a cost savings plan to improve liquidity. Following the completion of an exchange whereby the Company exchanged an aggregate principal amount of approximately $125 million of its 1.50% convertible senior subordinated notes due March 2018 with the same aggregate principal value of its new 5.75% convertible senior subordinated notes due August 2023, the Company received proceeds of the Second Delayed Draw Term Loan of $110 million, and used these proceeds, as well as cash on hand, to extinguish the remaining 1.50% Convertible Notes outstanding as of their maturity date, March 15, 2018. "While conditions and events do exist that may raise substantial doubt about the Company's ability to continue as a going concern for the next twelve months, management believes that (i) as a result of the aforementioned amendments to the Senior Secured Term Loan, (ii) the Exchange, (iii) the extinguishment of the 1.50% Convertible Notes at maturity, as well as (iv) implemented and planned cost savings, that its plans alleviate this substantial doubt, and therefore the management believes that it will continue as a going concern for the next twelve months." Discontinued Operations On May 9, 2017, the Company signed definitive agreements to sell its Entertainment segment for $349.1 million in cash, which included a customary working capital adjustment. The sale was completed on June 30, 2017. As a result of the sale, the Company has classified the results of its Entertainment segment as discontinued operations in its condensed consolidated statement of operations for the three months ended March 31, 2017. A full-text copy of the Form 10-Q is available for free at: https://is.gd/nlggqn About Iconix Brand Broadway, New York-based Iconix Brand Group, Inc. -- http://www.iconixbrand.com/-- is a brand management company and owner of a diversified portfolio of over 30 global consumer brands across the women's, men's, entertainment, home and international segments. The Company's business strategy is to maximize the value of its brands primarily through strategic licenses and joint venture partnerships around the world, as well as to grow the portfolio of brands through strategic acquisitions. Iconix Brand owns, licenses and markets a portfolio of consumer brands including: Candie's, Bongo, Joe Boxer, Rampage, Mudd, London Fog, Mossimo, Ocean Pacific/OP, Danskin/Danskin Now, Rocawear/Roc Nation, Cannon, Royal Velvet, Fieldcrest, Charisma, Starter, Waverly, Ecko Unltd/Mark Ecko Cut & Sew, Zoo York, Umbro, Lee Cooper, and Artful Dodger; and interests in Material Girl, Ed Hardy, Truth or Dare, Modern Amusement, Buffalo, Hydraulic, and PONY. Iconix Brand incurred a net loss attributable to the Company of $489.3 million in 2017, a net loss attributable to the Company of $252.1 million in 2016 and a net loss attributable to the Company of $186.5 million in 2015. As of Dec. 31, 2017, Iconix Brand had $870.5 million in total assets, $891.2 million in total liabilities, $30.28 million in redeemable non-controlling interests, and a total stockholders' deficit of $50.97 million. The Company stated in its 2017 Annual Report that due to certain developments, including the decision by Target Corporation not to renew the existing Mossimo license agreement following its expiration in October 2018 and by Walmart, Inc. not to renew the existing Danskin Now license agreement following its expiration in January 2019, and the Company's revised forecasted future earnings, the Company forecasted that it would unlikely be in compliance with certain of its financial debt covenants in 2018 and that it may otherwise face possible liquidity challenges in 2018. The Company said these factors raised substantial doubt about its ability to continue as a going concern. The Company's ability to continue as a going concern is dependent on its ability to raise additional capital and implement its business plan. ISTAR INC: Fitch Affirms Issuer Debt Rating at 'BB-' ---------------------------------------------------- Fitch Ratings has affirmed iStar Inc.'s Long-Term Issuer Default Rating (IDR) at 'BB-'. Fitch has also affirmed iStar's senior secured debt rating at 'BB+', unsecured debt rating at 'BB' and preferred stock rating at 'B-'. The Rating Outlook is Stable. KEY RATING DRIVERS IDRS, SENIOR DEBT AND HYBRID SECURITIES The rating affirmations reflect iStar's unique platform as an integrated commercial real estate (CRE) finance and investment company, strong funding profile with a meaningful portion of unsecured debt, appropriate leverage levels for the rating and solid liquidity profile. Rating constraints include execution risk associated with the strategy to monetize land assets in the near term while developing its longer-term legacy asset portfolio, as well as exposure to certain CRE products that Fitch considers non-core; a material non-performing legacy loan in the real estate finance segment; increased performance pressures on certain CRE sub-sectors; and a high proportion of wholesale funding. As of March 31, 2018, the company's $4.2 billion portfolio consisted of real estate finance (33.4% of gross carrying value), net lease properties (32.8%, of which 3.5% is the firm's equity method investment in Safety, Income and Growth, Inc. [SAFE]), land and development properties (18.1%), operating properties (15.4%), and other assets (0.3%). Although no losses have been incurred on loans originated since 2008, legacy loans originated prior to 2008 continue to weigh on asset quality in the real estate finance segment. The carrying value of non-performing loans (NPLs) represented 12.6% of total net loans in this segment as of March 31, 2018, primarily driven by the Hammons loan. More than 70 affiliates owned by the Hammons Trust filed for bankruptcy protection in June 2016. The rest of the loan portfolio continues to perform relatively well, so Fitch expects the ratio of NPLs will decline significantly over time. However, the timing of any resolution to the Hammons bankruptcy is uncertain. Fitch views the net lease real estate portfolio as a benefit to overall asset quality, since it provides cash flow stability, yielding 8.9% in 1Q18 and 8.8% in 2017 (excluding SAFE), compared to a weighted average yield of 9.4% and 9.8% for performing loans in the real estate finance segment in 1Q18 and 2017, respectively. The company owned 39.9% of SAFE at the end of 1Q18, up from 37.6% in 2017. The land portfolio, which was primarily acquired through foreclosure or deed in lieu of foreclosure, adversely influences overall asset quality given the illiquidity of these assets and the inconsistent cash flow generation. However, iStar has been focused on opportunistically selling land assets, reducing the book by 10% in 2017 and an additional 18% in 1Q18. This was largely driven by the sales of Highpark and Great Oaks. iStar expects to monetize an additional $700 million to $1 billion of legacy assets over the next two years, with the goal of having legacy assets represent no more than 15% of total portfolio value over the medium term. After realizing a net loss in each year from 2010-2016, the land and development segment generated a net profit of $64.7 million in 2017 and $34.4 million 1Q18. Fitch expects the land segment's earnings to continue to improve as development projects progress. In 2018, iStar conducted a review of strategic options for the longer-term legacy asset portfolio, which was comprised of a $171 million of NPLs, $651 million of operating properties and $765 million of land at March 31, 2018. The company has concluded that it will focus on monetizing shorter-duration assets over the next two years, while longer-duration assets will be subject to accelerated development and/or placement into joint ventures. The opportunistic sales of legacy assets provides the potential for additional gains over time and any proceeds are expected to be invested into asset classes that provide more stable cash flows. In recent years, iStar's earnings and profitability has been improving, as the company's operating property and land segments have each begun to generate higher segment profits and cash flows from the continued monetization of these portfolios. iStar's pre-tax return on average assets (ROAA) was 1.9% in 2017, compared to 1.7% in 2016 and a four-year average of 1.0%. Profitability is expected to continue to improve as the portfolio rotates away from land assets into more consistent earning investments. In March 2018, iStar hired Andrew Richardson, most recently CFO of The Howard Hughes Corporation, as president of the land portfolio to lead a focused portfolio of longer-term land and development assets. He is also serving as interim CFO following Geoffrey Jervis's departure. While the departure of Jervis was unexpected, Fitch believes Richardson's prior experience at iStar and at other companies in the real estate finance and land development sectors should help minimize potential disruptions during the transition to a new CFO. However, Richardson's additional role as interim CFO could limit the time that he is able to dedicate to his responsibilities as president of the land portfolio. In February 2018, iStar named Marcos Alvarado as Chief Investment Officer. Alvarado was previously Head of Acquisitions & Business Operations for Cadre, a technology-enabled real estate investment platform, and a Managing Director at Starwood Capital. Fitch does not expect that iStar's investment and funding strategies will change materially as a result of these appointments. As of March 31, 2018, 83.1% of iStar's debt (including 50% of the preferred securities) was unsecured, which is well above levels of many other diversified real estate investment trusts (REITs) and balance sheet-intensive finance and leasing companies. Fitch believes that unsecured debt enhances the company's operational and financial flexibility and expects unsecured debt to continue to represent more than 75% of total debt over the Outlook horizon. Fitch's benchmark leverage ratio is debt-to-tangible shareholders' equity, affording the firm's $505 million of preferred securities 50% equity credit, per Fitch's 'Corporates Hybrids Treatment and Notching Criteria'. On this basis, leverage was 4.8x as of March 31, 2018, which is within Fitch's 'bbb' quantitative benchmark range (3.0x to 5.0x) for balance sheet intensive finance and leasing companies. Fitch expects leverage to remain within a 4.0x to 5.0x range over the near-to-medium term. Fitch views iStar's liquidity as adequate for the rating category. At March 31, 2018, iStar had $366.7 million of cash and cash equivalents and approximately $325.0 million available under its revolving credit facilities. The company extended its debt maturity profile through a series of capital markets transactions in 3Q17, which Fitch viewed favorably. The company does not have any debt maturities until July 2019, when $770 million of senior unsecured notes come due. REITs must generally distribute at least 90% of their net taxable income, excluding capital gains, to shareholders each year. However, iStar's liquidity position is further enhanced by its ability to retain earnings, as it holds net operating loss (NOL) carryforwards that can generally be used to offset ordinary taxable income in future years. These NOLs begin to expire in 2029 and will fully expire in 2036 if unused. In addition, the company adheres to a 1.2x unencumbered assets-to-unsecured debt covenant, which provides protection to bondholders during periods of market stress. The Stable Outlook reflects Fitch's expectations for continued improvements in iStar's earnings and asset quality over the outlook horizon; however, legacy asset sales are likely to be lumpy and broader performance of certain CRE sub-sectors is likely to be mixed, which could be a headwind. The Outlook also reflects expectations for the maintenance of sufficient liquidity, a heavily unsecured funding profile and leverage commensurate with the risk profile of the portfolio. The secured debt rating is two notches above iStar's Long-Term IDR and reflects the collateral backing these obligations, indicating superior recovery prospects for secured debtholders under a stressed scenario. The unsecured debt rating is one notch above iStar's Long-Term IDR and reflects the availability of sufficient unencumbered assets, which provide support to unsecured creditors, and relatively low levels of secured debt. This profile indicates good recovery prospects for unsecured debtholders under a stressed scenario. The preferred stock rating is three notches below iStar's Long-Term IDR, reflecting that these securities are deeply subordinated and have loss absorption elements that would likely result in poor recovery prospects. RATING SENSITIVITIES IDRS, SENIOR DEBT AND HYBRID SECURITIES Negative rating pressure could arise from deterioration in the quality of iStar's loan portfolio, an inability for the company to generate consistent earnings, and/or an inability to execute on the planned sales of land segment assets. A material reduction in long-term unsecured funding, such that unsecured debt to total debt decreases below 50%; an inability to proactively address debt maturities over the Outlook horizon; and/or a sustained increase in Fitch-calculated leverage above 5.0x could also lead to negative rating momentum. Upward rating momentum is viewed as limited in the near term. However, longer term, positive rating momentum could be driven by further monetization of land assets to a range of 10%-15% of total assets and/or sustained profitability of the land and development segment. An upgrade would also be conditioned upon the maintenance of sufficient liquidity and current leverage levels, the firm's ability to continue managing its debt maturity profile, and further improvements of unencumbered asset coverage of unsecured debt. Absent a material decline in the land portfolio's size in the near term, positive rating momentum could also be considered if Fitch-calculated leverage approaches or declines below 4.0x. The secured debt rating, unsecured debt rating and preferred stock ratings are sensitive to changes in iStar's Long-Term IDR as well as changes in the firm's secured and unsecured funding mix and collateral coverage for each class of debt. In the event of further upward rating momentum for the IDR, it is possible that the upward notching for the secured debt and unsecured debt, relative to the IDR, could begin to compress. Fitch has affirmed the following ratings: iStar Inc. --Long-term IDR at 'BB-'; --Senior secured debt at 'BB+'; --Senior unsecured debt at 'BB'; --Preferred stock at 'B-'. The Rating Outlook is Stable. JABEZ L INC: $550K Sale of Atlanta Property to Springbok Approved ----------------------------------------------------------------- Judge Barbara Ellis-Monro of the U.S. Bankruptcy Court for the Northern District of Georgia authorized Jabez L, Inc.'s sale of the real property located at 3904 Buford Highway NE, Atlanta, Georgia to Springbok Investment Holdings, LLC and/or its assigns for $550,000. The closing is to be held on May 31, 2018. The sale is free and clear of all Interests of any kind or nature whatsoever, with all such Interests of any kind or nature whatsoever to attach to the net proceeds of the Sale. From the Sale Proceeds, the Debtor is authorized to pay at closing as follows: (i) all usual and customary closing costs and prorations at Closing as reflected in the Sales Contract; (ii) a real estate commission in the amount of $25,000 to the Broker; (iii) pay off the secured lien and mortgage to Nancy Susan Wood in the approximate amount of $461,661; and (iv) the 2018 property tax proration is estimated to be $1,717 (based on 2017 property taxes paid in the amount of $5,150). The remaining net sales proceeds in the estimated escrow account where they will remain pending further Court Order. The stay of orders authorizing the use, sale, or lease of property as provided for in Bankruptcy Rule 6004(h) will not apply to the Sale Order, and this Sale Order is immediately effective and enforceable. As provided by Bankruptcy Rule 7062, the Order will be effective and enforceable immediately upon entry. Time is of the essence in closing the Transactions. The Debtor's counsel will serve the Order upon the United States Trustee, all creditors and interested parties, and any party having filed a Notice of Appearance requesting service of notices, and will file a Certificate of Service. About Jabez L, Inc. Jabez L, Inc. filed a chapter 11 bankruptcy petition (Bankr. N.D. Ga. Case No. 17-57835) on May 1, 2017, listing under $1 million in both assets and liabilities. Paul Reece Marr, P.C. is the Debtor's bankruptcy counsel. On June 14, 2017, the Court appointed Interstate Auction Management Corp., doing business as SVN Interstate Brokers, as broker. JEFFREY BERGER: $2.5M Sale of Valley/Wibaux Counties Property OK'd ------------------------------------------------------------------ Judge Benjamin P. Hursh of the U.S. Bankruptcy Court for the District of Montana authorized Jeffrey W. Berger and Tami M. Berger to sell the real property in Golden Valley County, North Dakota, and Wibaux County, Montana to Chad and Jennifer Denowh for $2.5 million. The sale is free and clear of liens in accordance with the terms of the Motion. The sales proceeds will be used to satisfy (i) costs of closing, (ii) property taxes, (iii) real estate commission owed to Bill Bahny and Bill Bahny and Associates, and (iv) the remaining balance to Bank of Colorado. Jeffrey W. Berger and Tami M. Berger sought Chapter 11 protection (Bankr. D. Mont. Case No. 18-60032) on Jan. 16, 2018. The Debtor tapped PATTEN, PETERMAN, BEKKEDAHL & GREEN P.L.L.C., as counsel. JERSEY CHARTER SCHOOL: Moody's Affirms Ba3 Rating, Cites Liquidity ------------------------------------------------------------------ Moody's Investors Service affirms Jersey City Community Charter School's (NJ) Ba3 rating. The outlook is negative. RATINGS RATIONALE The Ba3 rating incorporates stagnant student enrollment growth combined with very narrow liquidity and weak debt service coverage levels. Additional credit considerations incorporate satisfactory market demand with a long-standing history of charter renewal, satisfactory legal protections including a mortgage on facilities, a debt service reserve funded at MADS and a 1.1 times rate covenant. RATING OUTLOOK The negative outlook reflects Moody's view that JCCCS will be challenged to improve currently very low available liquidity and coverage levels given stagnant enrollment trends and limited opportunities for revenue growth. FACTORS THAT COULD LEAD TO AN UPGRADE Significantly improved liquidity and coverage of debt service by net revenues Substantial increase in the school's scale of operations FACTORS THAT COULD LEAD TO A DOWNGRADE Trend of declining student enrollment Fiscal 2018 audited results below management's current year-end estimates Further weakening of school's available cash and coverage of debt service by net revenues Increased borrowing resulting in further leveraging of per-pupil revenue LEGAL SECURITY The bonds are secured by a revenue pledge of per-pupil revenues. Additional security is provide by a first lien mortgage on both school facilities appraised at $9.27 million and a Debt Service Reserve Fund funded at MADS. Additionally under the bond documents the school covenants a minimum debt service coverage of 1.10 times (event of default below 1.00 times) and a liquidity minimum of 30 days cash on hand (including restricted cash). USE OF PROCEEDS N/A PROFILE Jersey City Community Charter School (JCCCS) is one of the state's first charters founded and authorized in 1997. JCCCS serves a K-8 population in 2 school facilities with a total student enrollment of 571 in 2017. METHODOLOGY The principal methodology used in this rating was US Charter Schools published in September 2016. JOHN Q. HAMMONS: Sale of Springfield Property for $235K Approved ---------------------------------------------------------------- Judge Robert D. Berger of the U.S. Bankruptcy Court for the District of Kansas authorized John Q. Hammons Fall 2006, LLC and affiliates to sell the residential lot at the Highland Springs residential development located in Springfield, Missouri, described as Lot 4, Dunrobin Addition of Highland Springs Phase 2, in Greene County, Missouri, commonly known as 3957 E. Dunrobin, Springfield, Missouri, to Steven Raphael and Shawna Raphael for $235,000. The sale is free and clear of all liens, claims, encumbrances, and other interests. At the time of closing, and from the proceeds of the sale, the Trust is authorized and directed to pay its share of the closing costs and all past due and outstanding taxes with respect to the Real Estate. The Trust is further directed, if and only to the extent that Great Southern Bank has a lien on the Real Estate, to pay to Great Southern Bank in satisfaction of its lien on the Real Estate the greater of (1) 80% of the sale proceeds, less standard closing costs, or (2) $50,000, up to the amount owing to Great Southern Bank that is secured by the Deed of Trust. About John Q. Hammons Fall 2006 Springfield, Missouri-based John Q. Hammons Hotels & Resorts (JQH) -- http://www.jqhhotels.com/-- is a private, independent owner and manager of hotels in the United States, representing brands such as: Marriott, Hilton, Embassy Suites by Hilton, Sheraton, IHG, Chateau on the Lake Resort / Spa & Convention Center, and Plaza Hotels Collection. It has portfolio of 35 hotels representing approximately 8,500 guest rooms/suites in 16 states. John Q. Hammons Fall 2006, LLC, and its affiliated debtors filed chapter 11 petitions (Bankr. D. Kan. Case Nos. 16-21139 to 16-21208) on June 26, 2016. The petitions were signed by Greggory D. Groves, vice president. The Debtors are represented by Mark A. Shaiken, Esq., Mark S. Carder, Esq., and Nicholas Zluticky, Esq., at Stinson Leonard Street LLP. The Debtors' conflict counsel is Victor F. Weber, Esq., at Merrick Baker and Strauss PC. At the time of filing, the Debtors estimated assets at $100 million to $500 million and liabilities at $100 million to $500 million. JOHN Q. HAMMONS: Selling Springfield Property for $235K ------------------------------------------------------- John Q. Hammons Fall 2006, LLC and affiliates ask the U.S. Bankruptcy Court for the District of Kansas to authorize them to sell the residential lot at the Highland Springs residential development located in Springfield, Missouri, described as Lot 4, Dunrobin Addition of Highland Springs Phase 2, in Greene County, Missouri, commonly known as 3957 E. Dunrobin, Springfield, Missouri, to Steven Raphael and Shawna Raphael for $235,000. The Debtors in these chapter 11 cases consist of the Revocable Trust of John Q. Hammons, Dated Dec. 28, 1989 as Amended and Restated and 75 of its directly or indirectly wholly owned subsidiaries and affiliates. One of the assets owned by the Trust is Real Estate. Great Southern Bank may claim a lien on the Real Estate by virtue of its Deed of Trust dated Aug. 21, 1995, recorded Aug. 22, 1995 in the Green County, Missouri Recorder of Deeds Office as Document Number 028071-95 in Book 2397 at Page 73. The Debtors believe that the debt secured by the Deed of Trust was satisfied at the closing of a prior sale approved by the Court and completed on Feb. 22, 2018. By order entered Dec. 13, 2016, the Court granted the Debtors' motion to reject a "Sponsor Entity Right of First Refusal Agreement, Dated Sept. 16, 2005, and Agreement and Amendment, Dated Dec. 10, 2008" executed by and among JD Holdings, LLC and Debtors. JDH agrees that the ROFR is not an interest in the Real Estate. Other than the Deed of Trust and any real estate taxes currently owing to Greene County, Missouri, there are no liens or other encumbrances on the Real Estate. The Real estate taxes have historically ranged from $1,500 to $1,600 per year. The Trust previously engaged Murney Associates to solicit offers for the Real Estate. Based on its knowledge of the market and the area, the Broker recommended that the Trust list the Real Estate for sale at a list price of $235,000. On Feb. 2, 2018, the Trust received an offer to purchase the Real Estate from the Purchasers for list price. After negotiating with the Purchasers, the Trust and the Purchasers entered into a Real Estate Contract. Under the terms of the Purchase Agreement, the Purchasers agreed to pay $235,000 in cash for the Real Estate. The Purchase Agreement provides that the sale is conditioned upon Court approval is set to close by April 30, 2018. Based on the Broker's opinion of the Real Estate's value and the offers received, the Debtors believe that the Purchase Price is equal to the fair market value of the Real Estate and represents the highest and best offer for the Real Estate. One possible lien against the Real Estate is to secure current real estate taxes owed. As set forth, those taxes are significantly less than the sale price. Moreover, the taxes will be paid at closing, thus extinguishing any such lien. The Deed of Trust grants Great Southern Bank a lien on the Real Estate. The Debtors believe that the debt secured by the Deed of Trust has been satisfied and, accordingly, Great Southern Bank lien no longer has a lien on the Real Estate. However, to the extent that any debt remains owing to Great Southern Bank that is secured by the Deed of Trust, the Debtors will pay Great Southern Bank from the sale of the Real Estate the greater of 80% of the sale proceeds, less standard closing costs or $50,000. JDH has agreed that the ROFR is not an interest in or lien on the Real Estate; therefore, the Real Estate may be sold free and clear of the ROFR. The Trust has determined that the proposed sale of the Real Estate to the Purchasers is the best way to maximize the value of the Real Estate for these bankruptcy cases. Maximization of asset value is a sound business purpose, warranting authorization of the sale. The Debtors ask that in the order approving the sale, that the Court waives the 14-day waiting requirement of Rule 6004 so that, in reliance on the order approving the Motion, the Debtors and the Purchaser can immediately close the sale transaction. A copy of the Agreement attached to the Motion is available for free at: http://bankrupt.com/misc/John_Q_Hammons_2087_Sales.pdf About John Q. Hammons Fall 2006 Springfield, Missouri-based John Q. Hammons Hotels & Resorts (JQH) -- http://www.jqhhotels.com/-- is a private, independent owner and manager of hotels in the United States, representing brands such as: Marriott, Hilton, Embassy Suites by Hilton, Sheraton, IHG, Chateau on the Lake Resort / Spa & Convention Center, and Plaza Hotels Collection. It has portfolio of 35 hotels representing approximately 8,500 guest rooms/suites in 16 states. John Q. Hammons Fall 2006, LLC, and its affiliated debtors filed chapter 11 petitions (Bankr. D. Kan. Case Nos. 16-21139 to 16-21208) on June 26, 2016. The petitions were signed by Greggory D. Groves, vice president. The Debtors are represented by Mark A. Shaiken, Esq., Mark S. Carder, Esq., and Nicholas Zluticky, Esq., at Stinson Leonard Street LLP. The Debtors' conflict counsel is Victor F. Weber, Esq., at Merrick Baker and Strauss PC. At the time of filing, the Debtors estimated assets at $100 million to $500 million and liabilities at $100 million to $500 million. JOSEPH F. COATES: Court Confirms First Amended Chapter 11 Plan -------------------------------------------------------------- Judge Frederick P. Corbit of the U.S. Bankruptcy Court for the Eastern District of Washington confirmed Debtor Joseph F. Coates' first amended plan of reorganization filed on Jan. 23, 2018, as amended pursuant to the amendment to the first amended plan filed on Feb. 13, 2018. The Court finds that the provisions of Chapter 11 of the United States Code have been complied with and the Plan has been proposed in good faith and not by any means forbidden by law. Each holder of a claim or interest has accepted the Plan or will receive or retain under the Plan property of a value, as of the effective date of the Plan, that is not less than the amount that such holder would receive or retain if the Debtor was liquidated under Chapter 7 of the Code on such date, or the Plan does not discriminate unfairly, and is fair and equitable with respect to each class of claims or interests that is impaired under, and has not accepted the Plan. The Court also states that confirmation of the plan is not likely to be followed by the liquidation, or the need for further financial reorganization of the Debtor, or if the Plan is a plan of liquidation, the Plan sets a time period in which liquidation will be accomplished, and provides for the eventuality that the liquidation is not accomplished in that time period. The Court, thus, overrules Navy Federal Credit Union's objection to the confirmation of the Debtor's chapter 11 plan. The bankruptcy case is in re: JOSEPH F. COATES, Chapter 11, Debtor, No. 17-02386-FPC11 (Bankr. E.D. Wash.). A copy of the Court's Findings of Fact dated April 17, 2018 is available at https://bit.ly/2ws29y5 from Leagle.com. Joseph F. Coates, Debtor, represented by Dan ORourke -- dorourke@southwellorourke.com -- Southwell & ORourke & Kevin ORourke -- korourke@,southwellorourke.com -- Southwell and O'Rourke. US Trustee, U.S. Trustee, represented by James D. Perkins, US Dept of Justice/US Trustee Office. Joseph F. Coates filed for chapter 11 protection (Bankr. E.D. Wash. Case No. 17-02386) on August 8, 2017, and is represented by Dan O'Rourke, Esq. of Southwell & ORourke. JOSEPH O'BERRY: MFLP Barred from Asserting Lack of Diligence Claim ------------------------------------------------------------------ In the case captioned STEWART TITLE GUARANTY COMPANY, Plaintiff, v. MACHADO FAMILY LIMITED PARTNERSHIP NO. 1, Defendant, Case No. 6:17-cv-562-Orl-31DCI (M.D.Fla.), District Judge Gregory A. Presnell entered an order granting Plaintiff's motion for summary judgment and denying defendant's motion for summary judgment. In 2007, CenterState Bank Central Florida, N.A., made a loan to Joseph O'Berry and Marsha O'Berry secured by a mortgage on approximately 1,300 acres they owned in Osceola County. In connection with the transaction, Stewart Title issued a lenders title insurance policy (the "Policy") to CSB. Both the Mortgage and the Policy contained errors in the legal description of the O'Berry Property. The effect of the errors was that one parcel did not "close". Stewart Title filed the instant action, seeking a declaration that it was not liable for any additional payments pursuant to the Policy. By way of the instant motion, Stewart Title contends that it is entitled to summary judgment because (1) the title defect has been cured and (2) it fully paid for the litigation needed to do so. In its motion for partial summary judgment, Machado argues that Stewart Title breached the Policy by failing to act diligently to cure the errors in the legal description. Stewart Title argues that because the Bankruptcy Court's determination cured any title problem, Machado has no claim, as a matter of law, for any alleged failure to act diligently. In support, Stewart Title points to the case of Kahama VI, LLC v. HJH, LLC, 2016 WL 7104175. The plaintiff -- "Kahama"-- had sued in federal court to recover unpaid proceeds from a note secured by property. Kahama's state-court foreclosure suit stalled when the county asserted an ownership interest in the underlying property. This resulted in a separate state court suit to quiet title, prosecuted by Kahama's title insurer, Old Republic National Title Insurance Company. Kahama asserted claims against Old Republic in the federal court suit, arguing that Old Republic breached the title policy by failing to conduct a diligent title search (so as to discover the county's asserted interest) and by failing to diligently prosecute the quiet-title action. Kahama's claims against Old Republic were stayed while the quiet-title litigation was completed. Old Republic -- representing Kahama's interests -- prevailed in the quiet-title action before the Fifth District Court of Appeal, and Kahama was able to foreclose on the property. The federal court then reinstated Kahama's breach claims against Old Republic. The policy required that if Old Republic initiated an action to establish title, it had to do so "diligently." Judge Moody noted that the question of whether a title insurer unreasonably delayed or failed to diligently pursue litigation in defense of its insured is ordinarily a question for the fact finder. However, he concluded that because Old Republic was successful in the quiet-title action, Kahama could not assert a lack-of-diligence claim against it. Although the title policy at issue in Kahama is not before the Court, Machado does not argue that the "final determination" language of that policy differs in any material way from the Policy language quoted supra. And Machado does not dispute that the Bankruptcy Court's final determination was favorable and cured any defects. Machado attempts to distinguish Kahama on the grounds that the title insurer there took action on behalf of its insured and established title, while in the instant case "there is no evidence that Stewart directly or indirectly established title on behalf of Machado, exercised any of its options under Paragraph 66 of the Policy and left Machado with a cured title." But the relevant Policy provision does not require that Stewart Title itself conduct the litigation. It also allows for litigation conducted with the title insurer's "consent." Stewart Title had no opportunity to express its consent (or lack thereof) at the outset of this litigation, which had been underway for several years before Stewart Title was notified. But the fact that Stewart Title promptly paid for that litigation is sufficient, for present purposes, to show (at least) implicit consent. Certainly, Machado points to nothing in the record suggesting that Stewart Title refused to go along with the litigation, or even second-guessed it, once it had notice of its existence. Under these circumstances, the Court concludes that the limitation of liability provisions of the Policy apply, and Machado is barred from asserting a lack-of-diligence claim. A full-text copy of the Court's Order dated April 19, 2018 is available at https://bit.ly/2IwRbvS from Leagle.com. Stewart Title Guaranty Company, a Texas Corporation, Plaintiff, represented by Marty J. Solomon -- msolomon@carltonfields.com -- Carlton Fields Jorden Burt, PA & Scott D. Feather -- sfeather@carltonfields.com -- Carlton Fields Jorden Burt, PA. Machado Family Limited Partnership No. 1, a Florida Limited Partnership, Defendant, represented by Joseph Peter Jones -- jjones@bergersingerman.com -- Berger Singerman, LLP. Machado Family Limited Partnership No. 1, a Florida Limited Partnership, Counter Claimant, represented by Joseph Peter Jones, Berger Singerman, LLP. Stewart Title Guaranty Company, a Texas Corporation, Counter-Defendant, represented by Marty J. Solomon, Carlton Fields Jorden Burt, PA & Scott D. Feather, Carlton Fields Jorden Burt, PA. K&S UTILITY: Voluntary Chapter 11 Case Summary ---------------------------------------------- Debtor: K&S Utility Contractors, Inc. 1710 Ballard Road Seagoville, TX 75159 Business Description: K&S Utility Contractors, Inc. is a water main contractor based in Seagoville, Texas. Chapter 11 Petition Date: May 14, 2018 Case No.: 18-31636 Court: United States Bankruptcy Court Northern District of Texas (Dallas) Judge: Hon. Harlin DeWayne Hale Debtor's Counsel: Thomas Craig Sheils, Esq. SHEILS WINNUBST P.C. 1100 Atrium II 1701 N. Collins Blvd. Richardson, TX 75080-1339 Tel: 972-644-8181 Email: craig@sheilswinnubst.com Estimated Assets: $500,000 to $1 million Estimated Liabilities: $1 million to $10 million The petition was signed by Glenda Koller, president. The Debtor failed to incorporate in the petition a list of its 20 largest unsecured creditors. A full-text copy of the petition is available for free at: http://bankrupt.com/misc/txnb18-31636.pdf KEAST ENTERPRISES: U.S. Trustee Forms 3-Member Committee -------------------------------------------------------- The U.S. Trustee for Region 12 on May 11 appointed three creditors to serve on the official committee of unsecured creditors in the Chapter 11 case of Keast Enterprises, Inc. The committee members are: (1) Agriland FS Attn: Keith Becker 421 N. 10th St. Winterset, IA 50273 Phone: (515) 462-5368 Email: Kbecker@agrilandFS.com (2) CFI Tire Service Inc. Attn: Scott Glenn 1520 E. So. Omaha Bridge Rd. Council Bluffs, IA 51503 Phone: (712) 388-9744 Fax: (712) 309-0019 Email: Scott@cfitirecb.com (3) REM INC and REM BATCO Attn: Darcy Reimer P.O. Box 1750 Swift Current, SK S9H 4J8 Phone: (204) 594-2412 Fax: (204) 488-6929 Darcy.reimer@aggrowth.com Official creditors' committees have the right to employ legal and accounting professionals and financial advisors, at a debtor's expense. They may investigate the debtor's business and financial affairs. Importantly, official committees serve as fiduciaries to the general population of creditors they represent. About Keast Enterprises Keast Enterprises Inc., is an Iowa corporation engaged in farming operations including corn and soybeans farming. Keast Enterprises Inc., filed a Chapter 11 petition (Bankr. S.D. Iowa Case No. 18-00856) on April 17, 2018. The Debtor is represented by Jeffrey D. Goetz, Esq. at Bradshaw Fowler Proctor & Fairgrave P.C. JT Korkow, d/b/a Northwest Financial Consulting, is its financial advisor. At the time of filing, the debtor estimates $1,000,001 to $10 million in both assets and liabilities. KRATON POLYMERS: Moody's Assigns B3 Rating on New EUR Sr. Notes --------------------------------------------------------------- Moody's Investors Service has assigned a B3 rating to the new EUR senior notes due 2026 to be issued by Kraton Polymers LLC., guaranteed by Kraton Corporation (B1 stable), and a Ba3 rating to the upsized and amended USD first lien senior secured term loan. On May 14th, Kraton announced its plan to refinance its existing $440 million 10.5% senior notes due 2023, together with fees, with a combination of new EUR290 senior notes due 2026, a $90 million add-on to its existing USD term loan, $56 million borrowings under its existing ABL facility and cash on hand. The ratings are subject to the transaction closing as proposed and receipt and review of the final documentation. Ratings Assigned: Assignments: Issuer: Kraton Polymers LLC Senior Secured Bank Credit Facility, Assigned Ba3 (LGD3) Senior Unsecured Regular Bond/Debenture, Assigned B3 (LGD5) RATINGS RATIONALE Kraton's proposed transaction will slightly increase the company's net debt leverage (approximately $50 million increase in net debt due to the ABL borrowings used to fund the breakage costs and associated expenses), but will not meaningfully change the company's solid position in the B1 rating category thanks to improved earnings and debt reduction over the last 12 to 18 months. The refinancing of its 10.5% notes will reduce the company's annual interest expense given anticipated lower coupon Euro notes and therefore will offset the $55 million in upfront breakage costs and associated expenses in the next three to four years. Also, the profits generated by its business in Europe will provide a natural hedge to the increased Euro debt. Kraton's B1 Corporate Family Rating is currently well positioned given its adjusted debt/EBITDA of 4.7x for the last twelve months ending March 2018, an improvement compared to 5.7x at the end of 2016. The company substantially improved its earnings after the 2016 acquisition of Arizona Chemical Holdings Corporation and reduced its debt in 2017. Based on its improved earnings and free cash flows, Moody's expects Kraton to reduce its adjusted debt/EBITDA to low 4 times by the end of 2018. The improvement in Kraton's credit metrics, partly driven by the recently improved market fundamentals, will provide some headroom to its rating, which is important considering the continuous volatility in commodity prices that affect corporate earnings. Kraton improved its earnings during the first quarter of 2018 compared to a year ago, despite increasing raw material costs, thanks to the higher prices of pine-based chemicals, such as TOFA, TOR and TOR derivatives, and by shifting its sales mix to specialty polymers in the polymer segment. Kraton's credit profile is supported by its leading market positions in high-margin HSBC and Cariflex products, its diversification in non-hydrocarbon (CTO/CST) based products with advantaged feedstock position, as well as diverse end-markets and customers. Credit challenges include its performance volatility due to large movements in raw material prices, small risk of product substitution, as well as continued business restructuring to improve its competitiveness and the execution risk in ramping up its production at its joint venture with Formosa. The stable outlook reflects Moody's expectation that Kraton will continue to generate free cash flow in the next 12-18 months and maintain conservative financial policies. The rating could be upgraded once leverage is sustainably below 4.5x. The rating could be downgraded if EBITDA margins deteriorate, leverage exceeds 6.0x or there is a lack of free cash flow generation. The principal methodology used in these ratings was Chemical Industry published in January 2018. Kraton Corporation, headquartered in Houston, Texas, is a major global producer of styrenic block copolymers (SBCs), which are synthetic elastomers used in industrial and consumer applications. In early 2016, through its acquisition of Arizona Chemical Holdings Corporation, Kraton added capabilities in the production and sales of pine based specialty chemicals. The company generated revenues of $2 billion in LTM March 2018. KUM GANG: J.S. Yoo Violated Fraudulent Conveyance Sections of DCL ----------------------------------------------------------------- Plaintiffs in the case captioned TAE H. KIM, YOUNG M. CHOI, DONG M. JU, HONG S. KIM, YOON C. KIM, CHUL G. PARK, JIN H. PARK, EUTEMIO MORALES, ZHE Y. SHEN, JONG H. SONG, and R. JULIAN VENTURA, Plaintiffs, v. JI SUNG YOO a/k/a JISUNG YOO a/k/a JI S. YOO a/k/a JAY YOO, SANDRA YOO a/k/a SANDRA YEAR KUM YOO a/k/a YEAR KUM YOO, SAMUEL D. YOO, and CAROLYN YOO, Defendants, No. 15 Civ. 3110 (S.D.N.Y.) are judgment creditors from a previously adjudicated Fair Labor Standards Act litigation, Kim v. Kum Gang, Inc., No. 12 Civ. 6344 (MHD) (S.D.N.Y.) . Plaintiffs have alleged that one of the FLSA Action judgment debtors, Defendant Ji Sung Yoo violated fraudulent conveyance sections of the New York Debtor and Creditor Laws ("DCL") when he transferred real property interests to members of his family, Defendants Sandra Yoo, Samuel Yoo and Carolyn Yoo in an attempt to avoid paying debts. A bench trial in this action was held before the Court between Jan. 22 and Jan. 30, 2018. Based upon the prior proceedings, the findings of fact, and conclusions of law set, District Judge Robert W. Sweet finds that Plaintiffs have proven that each property interest Ji Sung transferred was fraudulent conveyed and entitled to be set aside. Plaintiffs are further entitled to a money judgment to satisfy mortgages taken out on two of the properties from the transferees of those properties, in addition to certain attorneys' fees as against Ji Sung and Sandra. The first property conveyance contested by the Plaintiffs is Ji Sung's transfer of one-third of his interest in the Condo to Sandra on March 10, 2010. Plaintiffs contend that this conveyance was fraudulently made under DCL Sections 273, 275, and 276. There is no dispute that there was a conveyance. Analyzing the Condo conveyance under DCL Section 275 is similar to the Section 273 analysis, but different in a critical and dispositive manner: Ji Sung's subjective intent as to whether he "believe[d] that he . . . will incur debts behind his. . . ability to pay them as they mature." The Condo was not conveyed for fair consideration. Moreover, Plaintiffs have established that Ji Sung was aware of his unpaid wage violations, for which he believed he would be liable for some amount of liabilities. However, the amount of the 2010 KK Investigation, by itself, is just as likely to have been able to be talked down below the value of Ji Sung's assets as not, given how close the two values were to one another. Furthermore, while the debt as to Ji Sung's workers' unpaid wages had accrued, the record established does not show sufficient reason for Ji Sung himself to believe that he would be liable either for additional DOL investigations or an FLSA law lawsuit and any consequent penalties or judgment. As such, the conveyance of the Condo has not been established as fraudulent under Section 275. For similar reasons, Plaintiffs have not established that the Condo conveyance was intentionally fraudulent and in violation of DCL Section 276. Looking to the badges of fraud implicated by the Condo's conveyance, certain are clearly established: the conveyance was between family members; there was a lack of fair consideration; and Ji Sung was insolvent at the time. While Ji Sung retained access to the Condo, he also retained partial ownership, so that badges is equivocal. Moreover, while the Condo conveyance was made shortly after the commencement of the DOL's investigation into Kum Kang, the transfer was made not made in secret and no evidence adduced indicated that the transfer was performed in a hasty or otherwise unusual way. Taken together, while not without suspicion, the evidence does not establish by the higher standard of clear and convincing evidence that the conveyance was made with fraudulent intent. Accordingly, the conveyance of the Condo must be set aside as a violation of DCL Section 273. In comparison to the analysis performed with regard to the Condo's alleged fraudulent conveyance, the analysis necessary to determine whether the Nov. 16, 2011, conveyances of the Home and Brooklyn Property were fraudulent is straightforward. Like as to the Condo, there is no dispute that there were conveyances of these two properties. Similarly, Plaintiffs have alleged that each conveyance was fraudulent under the same DCL sections as the Condo. Each DCL section will be considered in turn. Under DCL Section 273, both conveyances were fraudulent. No evidence established that either of these conveyances was made for fair consideration. The conveyance documentation does not list anything more than "disproportionately small" consideration for the properties, and the many checks passed amongst the Yoos does not establish that money obtained from subsequent mortgages was given as payment to Ji Sung or his restaurants. That the conveyances were given for free is reinforced by the fact that Ji Sung filed tax paperwork in 2011 that labelled the conveyances as gifts. Accordingly, the conveyances of the Home and the Brooklyn Property must be set aside as violations of DCL Sections 273, 275, and 276. A full-text copy of the Court's Opinion and Order dated April 18, 2018 is available at https://bit.ly/2It4wW7 from Leagle.com. Tae H. Kim, Young M. Choi, Dong M. Ju, Hong S. Kim, Yoon C. Kim, Chul G. Park, Jin H. Park, Eutemio Morales, Zhe Y. Shen, Jong H. Song & R. Julian Ventura, Plaintiffs, represented by Jackson Chin, Puerto Rican Legal Defense and Education Fund, Inc. & Kenneth Kimerling, Asian American Legal Defense. Ji Sung Yoo, also known as Jisung Yoo, Sandra Yoo, also known as Sandra Year Kum Yoo, also known as Year Kum Yoo, Samuel D. Yoo & Carolyn Yoo, Defendants, represented by Kristian Karl Larsen, Larsen Advocates. Sue H Yoo, Interested Party, represented by Kristian Karl Larsen, Larsen Advocates. McCallion & Associates LLP, Interested Party, represented by Kenneth Foard McCallion, McCallion & Associates, LLP. Kum Gang, Inc., based in Flushing, N.Y., filed a Chapter 11 petition (Bankr. E.D.N.Y. Case No. 15-42018) on April 30, 2015. Hon. Carla E. Craig presides over the case. In its petition, the Debtor estimated $1 million to $10 million in both assets and liabilities. The petition was signed by Ji Sung Yoo, president. LEHMAN BROTHERS (EUROPE): Chapter 15 Case Summary ------------------------------------------------- Chapter 15 Debtor: Lehman Brothers International (Europe) (in administration) c/o Robert H. Trust Linklaters LLP 1345 Avenue of the Americas New York, NY 10105 United States Tel: 212 903-9000 Business Description: Lehman Brothers International (Europe) is the UK subsidiary of Lehman Brothers Holdings Inc, a financial services group that had gone in Chapter 11 bankruptcy proceedings. The Debtor entered administration in the UK on Sept. 15, 2008. The Debtor is now the subject of proceedings currently pending before the Chancery Division (Companies Court) of the High Court of Justice of England and Wales concerning a scheme of arrangement under part 26 of the Companies Act 2006 of England and Wales. As of May 14, 2018, 100% of the outstanding equity interests in the Debtor are owned by LB Holdings Intermediate 2 Limited (in administration), a company incorporated in England and Wales. LBHI2 is an indirect wholly-owned subsidiary of Lehman Brothers Holdings Inc. Visit https://is.gd/cCQU0e for more information. Chapter 15 Petition Date: May 14, 2018 Chapter 15 Case No.: 18-11470 Court: United States Bankruptcy Court Southern District of New York (Manhattan) Judge: Hon. Shelley C. Chapman Chapter 15 Petitioner: Russell Downs 7 More London Riverside London SE1 2RT United Kingdom Chapter 15 Petitioner's Counsel: Robert H. Trust, Esq. Amy Edgy, Esq. Christopher J. Hunker, Esq. LINKLATERS LLP 1345 Avenue of the Americas New York, NY 10105 Tel: 212-903-9000 Fax: 212-903-9100 Email: robert.trust@linklaters.com amy.edgy@linklaters.com christopher.hunker@linklaters.com Foreign Proceeding in Which Appointment of the Foreign Representative Occurred: High Court of Justice of England and Wales (Part 26 of Companies Act 2006) Estimated Assets: Unknown Estimated Debts: Unknown A full-text copy of the Chapter 15 petition is available for free at: http://bankrupt.com/misc/nysb18-11470.pdf LIBERTY INDUSTRIES: Five Creditors Appointed to Committee --------------------------------------------------------- The U.S. Trustee for Region 21 filed an amended notice announcing that as of May 9, 2018, the official committee of unsecured creditors in the Chapter 11 cases of Liberty Industries, L.C. and Liberty Properties at Newburgh, L.C. is composed of these creditors: (1) Hodge Design Associates, P.C. Attn: W. Gray Hodge 22 Chestnut Street Evansville, IN 47713 Tel: 812-422-2558 Email: ghodge@hodgestructural.com (2) O'Neal Steel, LLC Attn: Darrell Johnson 841 N. Michigan Road Shelbyville, IN 46176 Tel: 317-421-1252 Fax: 205-599-8392 Email: djohnson13@onealsteel.com (3) Bairstow Lifting Products Co. Attn: Robert Bairstow 1785 Ellsworth Industrial Blvd. Atlanta, GA 30318-3747 Tel: 404-351-2600 Fax: 404-355-2046 Email: robert@bairstow.com (4) GGG Partners, LLC Attn: Richard Kazmier 3155 Roswell Road, N.E., Suite 120 Atlanta, GA 30305 Tel: 678-438-7553 Fax: 509-561-3535 Email: rkazmier@gggmgt.com (5) JMS Russel Metal Corp. Attn: Justin Brown 25 College Park Cove Jackson, TN 38301 Tel: 731-984-8157 Fax: 731-984-8126 Email: jubrown@jmsmetal.com About Liberty Industries Liberty Industries, L.C. d/b/a Tower Innovations -- http://towerinnovations.net-- is a manufacturer of communication towers, specializing in broadcast and wireless structures. Tower Innovations is a privately held company and a unit of Liberty Industries. It was founded in Newburgh, Indiana in 2006 after acquiring Kline Towers, established in 1953, and Central Tower, established in 1984. Tower Innovations is a multi-functional provider of communication systems and has thousands of quality structures in service around the world. These include towers for DTV/NTSC, AM and FM broadcasting, two-way, WiFi, cellular and PCS communications. The Company offers complete innovative engineering solutions, design and fabrication services. Liberty Properties operates a commercial manufacturing facility in Newburgh, Indiana. On Sept. 9, 2016, a voluntary petition under Chapter 11 was filed by Liberty Industries under Case No. 16-22332. On Sept. 7, 2016, a voluntary petition under Chapter 11 was filed by Liberty Properties under Case No. 16-22333. On Sept. 12, 2012, Liberty Industries sought bankruptcy protection (Bankr. S.D. Fla. Case No. 12-32843). Liberty Properties filed a Chapter 11 petition on Sept. 25, 2012 (Bankr. S.D. Fla. Case No. 12-32882). Liberty Industries, L.C., d/b/a Tower Innovations and Liberty Properties At Newburgh, L.C., filed Chapter 11 petitions (Bankr. S.D. Fla. Case Nos. 18-14231 and 18-14232) on April 11, 2018. The case is assigned to Judge Erik P. Kimball. The Debtor is represented by Robert C. Furr, Esq. at Furr & Cohen. In the petition signed by William Gates, manager, Liberty Industries had total assets and liabilities at $4,480,000 each, and Liberty Prop At Newburgh had $3,710,000 in total assets and $3,330,000 in total liabilities. MCCLATCHY COMPANY: Files Form 10-Q Reporting $38.9M Q1 Net Loss --------------------------------------------------------------- The McClatchy Company filed with the Securities and Exchange Commission its Quarterly Report on Form 10-Q reporting a net loss of $38.94 million on $198.85 million of revenues for the three months ended April 1, 2018, compared to a net loss of $95.57 million on $221.21 million of revenues for the three months ended March 26, 2017. As of April 1, 2018, McClatchy had $1.38 billion in total assets, $1.62 billion in total liabilities and a stockholders' deficit of $239.95 million. McClatchy's cash and cash equivalents were $20.0 million as of April 1, 2018, compared to $23.8 million and $99.4 million as of March 26, 2017, and Dec. 31, 2017, respectively. "We expect that most of our cash and cash equivalents, and our cash generated from operations, for the foreseeable future will be used to repay debt, pay income taxes, fund our capital expenditures, invest in new revenue initiatives, digital investments and enterprise-wide operating systems, make required contributions to the Pension Plan, and for other corporate uses as determined by management and our Board of Directors. As of April 1, 2018, we had approximately $710.0 million in total aggregate principal amount of debt outstanding, consisting of $344.6 million of our 9.00% Notes and $365.4 million of our notes maturing in 2027 and 2029. We expect to continue to opportunistically repurchase or restructure our debt from time to time if market conditions are favorable, whether through privately negotiated repurchases of debt using cash from operations, or other types of tender offers or exchange offers or other means. We also expect that we will refinance or restructure a significant portion of this debt prior to the scheduled maturity of such debt. However, we may not be able to do so on terms favorable to us or at all. We believe that our cash from operations is sufficient to satisfy our liquidity needs over the next 12 months, while maintaining adequate cash and cash equivalents to fund our operations," the Company stated in the SEC filing. The Company generated $18.2 million of cash from operating activities in the three months ended April 1, 2018, compared to $20.5 million in the three months ended March 26, 2017. The decrease in operating cash flows primarily reflects a $1.8 million change in its inventory balances in the first three months of 2018 compared to the same period in 2017. The remaining changes in operating activities related to miscellaneous timing differences in various payments and receipts. McClatchy made no cash contributions to the Pension Plan during the first three months of 2018 or 2017. After applying credits, which resulted from contributing more than the Pension Plan's minimum required contribution amounts in prior years, the Company did not have a required cash contribution for 2017 and the Company does not expect to have a required pension contribution under the Employee Retirement Income Security Act in fiscal year 2018. However, the Company expects to have material contributions in the future. The Company generated $1.1 million of cash from investing activities in the three months ended April 1, 2018. The Company received proceeds from the sale of property, plant and equipment of $3.7 million. These amounts were partially offset by the purchase of PP&E for $2.1 million and contributions to equity investments of $0.5 million. The Company expects total capital expenditures for the full year of 2018 to be approximately $12.0 million. The Company used $3.1 million of cash from investing activities in the three months ended March 26, 2017, which was primarily due to the purchase of PP&E of $1.7 million and contributions to equity investments of $1.8 million. The Company used $98.7 million of cash for financing activities in the three months ended April 1, 2018, compared to generating $0.1 million in the three months ended March 26, 2017. During the three months ended April 1, 2018, the Company repurchased or redeemed $95.0 million principal amount of its 9.00% Notes, for $99.3 million in cash. A full-text copy of the Form 10-Q is available for free at: https://is.gd/RJtTbT About McClatchy The McClatchy Company operates 30 media companies in 14 states, providing each of its communities with news and advertising services in a wide array of digital and print formats. McClatchy is a publisher of iconic brands such as the Miami Herald, The Kansas City Star, The Sacramento Bee, The Charlotte Observer, The (Raleigh) News & Observer, and the (Fort Worth) Star-Telegram. McClatchy is headquartered in Sacramento, Calif., and listed on the New York Stock Exchange American under the symbol MNI. McClatchy incurred a net loss of $332.4 million for the year ended Dec. 31, 2017, following a net loss of $34.19 for the year ended Dec. 25, 2016. As of Dec. 31, 2017, McClatchy had $1.50 billion in total assets, $1.71 billion in total liabilities and a stockholders' deficit of $204.33 million. * * * As reported by the TCR on March 30, 2018, S&P Global Ratings lowered its corporate credit rating on Sacramento, Calif.-based The McClatchy Co. to 'CCC+' from 'B-'. The rating outlook is stable. "The downgrade reflects our view that McClatchy's capital structure is unsustainable at current leverage and discretionary cash flow (DCF) levels. Still, we don't expect a default to occur during the next 12 months. McClatchy has no imminent liquidity concerns, full availability on its $65 million revolving credit facility due 2019, low capital expenditures, and it generates positive DCF. McClatchy continues to hold Moody's Investors Service's "Caa1" corporate family rating. In December 2015, Moody's affirmed the "Caa1" corporate family rating rating and changed the rating outlook to stable from positive due to continued weakness in the print advertising market and the ongoing pressure on the company's operating cash-flow. McClatchy's "Caa1" Corporate Family Rating reflects persistent revenue pressure on the company's newspaper and print operations, reliance on cyclical advertising spending, and its high leverage including a large underfunded pension. MESOBLAST LIMITED: Presents MSC-100-IV Trial Results at Meeting --------------------------------------------------------------- Mesoblast Limited announced that results of the Phase 3 trial evaluating its product candidate MSC-100-IV (remestemcel-L) in children with steroid-refractory acute Graft versus Host Disease (aGVHD) were presented at the 2018 International Society for Cell and Gene Therapy (ISCT) plenary breakout session held in Boston last week. These results were presented by the trial's lead investigator Dr Joanne Kurtzberg, Jerome Harris Distinguished Professor of Pediatrics and Director of the Pediatric Blood and Marrow Transplant Program at Duke University Medical Center. Dr Kurtzberg described the properties of remestemcel-L that are relevant to understanding proposed mechanisms of action (MOA) in aGVHD, including sensing of damaging inflammatory mediators and consequent reduction in activation of immune cells. These proposed MOAs provide the rationale for the potency assays developed for this product candidate. During the presentation, Dr Kurtzberg stressed the importance of Mesoblast's proprietary manufacturing processes for remestemcel-L, which have been shown to deliver a product with consistent batch-to-batch characterization and activity, critical to providing a reproducible clinical outcome. As previously reported, the open label, single arm Phase 3 trial successfully met its pre-specified primary endpoint of Day 28 overall response rate, which is significantly increased (69%, p=0.0003) in children treated with remestemcel-L compared to the protocol's defined hypothesized control rate of 45%. Remestemcel-L was well tolerated in the Phase 3 trial with a safety profile consistent with prior controlled studies in greater than 1,000 patient exposures. This Phase 3 trial is being conducted under a United States Food and Drug Administration (FDA) Investigational New Drug Application (NCT#02336230). Key secondary endpoints include survival at 100 days, the results of which are expected to be read out shortly, and safety and survival through 180 days. There are currently no products approved in the United States for treatment of steroid-refractory aGVHD. Given the serious nature of this condition, in 2017 the United States Food and Drug Administration (FDA) granted Mesoblast Fast Track designation for the use of remestemcel-L to achieve improved overall response rate in children with aGVHD. If successful, remestemcel-L will be the first approved therapy for this devastating condition in the United States. Japan is the only jurisdiction where this therapy is available, through Mesoblast's licensee JCR Pharmaceuticals Co. Ltd. About Mesoblast Australia-based Mesoblast Limited (ASX:MSB; Nasdaq:MESO) -- http://www.mesoblast.com/-- is a global developer of innovative cell-based medicines. The Company has leveraged its proprietary technology platform, which is based on specialized cells known as mesenchymal lineage adult stem cells, to establish a broad portfolio of late-stage product candidates. Mesoblast's allogeneic, 'off-the-shelf' cell product candidates target advanced stages of diseases with high, unmet medical needs including cardiovascular conditions, orthopedic disorders, immunologic and inflammatory disorders and oncologic/hematologic conditions. The Company is headquartered in Melbourne, Australia. Mesoblast Limited reported a net loss before income tax of US$90.21 million for the year ended June 30, 2017, a net loss before income tax of US$90.82 million for the year ended June 30, 2016, and a net loss before income tax of US$96.24 million for the year ended June 30, 2015. As of Dec. 31, 2017, Mesoblast had US$664.81 million in total assets, US$89.20 million in total liabilities and US$575.60 million in total equity. PricewaterhouseCoopers, in Melbourne, Australia, issued a "going concern" opinion in its report on the consolidated financial statements for the year ended June 30, 2017, noting that Company has suffered recurring losses from operations that raise substantial doubt about its ability to continue as a going concern. MIRAGE DENTAL: U.S. Trustee Unable to Appoint Committee ------------------------------------------------------- No official committee of unsecured creditors has been appointed in the Chapter 11 case of Mirage Dental Associates, Professional L.L.C. as of May 9, 2018, according to a court docket. About Mirage Dental Associates Professional LLC Mirage Dental Associates, Professional LLC is a privately-held company in Castle Rock, Colorado, that owns a dental clinic. Mirage Dental Associates sought protection under Chapter 11 of the Bankruptcy Code (Bankr. D. Colo. Case No. 18-12496) on March 30, 2018. In the petition signed by Michael J. Moroni, Jr., managing member, the Debtor disclosed $5.41 million in assets and $8.72 million in liabilities. Judge Joseph G. Rosania Jr. presides over the case. The Debtor tapped Buechler & Garber, LLC, as its legal counsel. MISSISSIPPI MINERALS: U.S. Trustee Unable to Appoint Committee -------------------------------------------------------------- No official committee of unsecured creditors has been appointed in the Chapter 11 cases of Mississippi Minerals, Inc. and its affiliates as of May 9, according to a court docket. About Mississippi Minerals Inc. Mississippi Minerals Inc. -- http://www.mmicoal.com/-- is a wholly-owned subsidiary of Haldia Coke and Chemicals Pvt. Ltd. India. It is a producer of metallurgical grade coal having its administrative office at Pittsburgh, Pennsylvania, USA. The company owns coking coal mining assets in Central Appalachian Region and Arkoma Basin. It is the owner, operator and developer of mines controlling vast bituminous coal reserves in two of the United States' historically top-shelf metallurgical product producing areas. Mississippi Minerals and its affiliates Sebastian Mining, LLC, Sebastian Management, LLC and Sebastian Leasing, LLC sought protection under Chapter 11 of the Bankruptcy Code (Bankr. W.D. Ark. Case Nos. 17-72861 to 17-72864) on November 15, 2017. The petitions were signed by Krishna Santhanam, president of Mississippi Minerals. At the time of the filing, Mississippi Minerals disclosed that it had estimated assets of $100,000,001 to $500 million and liabilities of $50,000,001 to $100 million. Sebastian Mining disclosed $1 million to $10 million in assets and liabilities of $10 million to $50 million. Judge Ben T. Barry presides over the cases. The Debtors are represented by Geoffrey B. Treece, Esq., at Quattlebaum, Grooms & Tull, PLLC. MONEYONMOBILE INC: Further Amends Subscription Rights Offering -------------------------------------------------------------- MoneyOnMobile, Inc., filed an amendment no.2 to its Form S-1 registration statement relating to the distribution to holders of the Company's common stock, $0.001 par value, and holders of its preferred stock, on an as converted basis, at no charge, non-transferable subscription rights to purchase up to the lesser of $10.0 million or 1,750,000 of the Company's common stock. In the rights offering, holders will receive, on May 11, 2018, the record date of the rights offering, one subscription right for every share of common stock owned and one subscription right for every share of common stock they would own upon full conversion of the shares of preferred stock owned and settled by 4:00 p.m., Eastern Time, on May 11, 2018. The subscription rights will not be tradeable. Each subscription right consists of a basic subscription privilege and an over-subscription privilege. The Company must receive minimum gross proceeds of $4.0 million from the exercise of the basic subscription privilege and over-subscription privilege in order to complete the offering. The Company has engaged Advisory Group Equity Services, Ltd., d/b/a RHK Capital as dealer-manager for this rights offering. "We are conducting the rights offering to raise capital that we intend to use to expand growth in our operations in India and for general corporate purposes. Our independent registered public accounting firm in its report on the March 31, 2017 financial statements has raised substantial doubt about our ability to continue as a going concern. We had cash and cash equivalents in the amount of $4,673,805 as of December 31, 2017. We estimate that the current funds on hand and funds raised through this rights offering will be sufficient to continue operations through June 2019." A full-text copy of the Form S-1/A is available for free at: https://is.gd/6d3vgP About MoneyOnMobile MoneyOnMobile, Inc., headquartered in Dallas, Texas -- http://www.money-on-mobile.com/-- is a global mobile payments technology and processing company offering mobile payment services through its Indian subsidiary. MoneyOnMobile enables Indian consumers to use mobile phones to pay for goods and services or transfer funds from one cell phone to another. It can be used as simple SMS text functionality or through the MoneyOnMobile application or internet site. Its technology also allows consumers to deposit funds into a mobile wallet or to perform a financial transaction through its robust agent network which includes over 330,000 retail locations as of March 31, 2017. MoneyOnMobile reported a net loss of $13.09 million for the year ended March 31, 2017, following a net loss of $19.72 million for the year ended March 31, 2016. The Company's balance sheet at Dec. 31, 2017, showed $27.67 million in total assets, $30.02 million in total liabilities, $1.22 million in preferred stock Series D, $5.70 million in preferred stock Series F, and a total stockholders' deficit of $9.27 million. Liggett & Webb, P.A., in New York, issued a "going concern" opinion in its report on the consolidated financial statements for the year ended March 31, 2017, noting that the Company has experienced recurring operating losses and negative cash flows from operating activities. These conditions raise substantial doubt about the Company's ability to continue as a going concern. MONTREAL MAINE: 1st Cir. Upholds Dismissal of Trustee Suit vs WLER ------------------------------------------------------------------ In the appeals case captioned ROBERT J. KEACH, solely in his capacity as the Chapter 11 trustee for MONTREAL, MAINE & ATLANTIC RAILWAY, LTD., Appellant, v. WHEELING & LAKE ERIE RAILWAY COMPANY, Appellee, No. 17-1912 (1st Cir.), the U.S. Court of Appeals, First Circuit affirmed the bankruptcy court's decision dismissing the chapter 11 Trustee's complaint. On May 26, 2015, the Trustee instituted an adversary proceeding against Wheeling, seeking to avoid the waterfall disbursement made to it as constructively fraudulent under section 5(b) of Maine's Uniform Fraudulent Transfer Act (UFTA), which proscribes certain conveyances by an insolvent debtor to an "insider." Wheeling moved to dismiss the Trustee's complaint pursuant to Rule 7012 of the Federal Rules of Bankruptcy Procedure. It argued that the waterfall disbursements did not consist of "assets" belonging to the debtor and, in the alternative, that the Trustee had failed plausibly to allege that Wheeling was an "insider" vis-a-vis the debtor. Accepting Wheeling's first argument, the bankruptcy court dismissed the complaint with prejudice for failure to state an actionable claim. It reasoned that because the waterfall disbursements were part of a single transaction, all aspects of which should be deemed to have occurred simultaneously, they remained encumbered by the FRA's lien up to and until the time of disbursement (and, therefore, did not comprise property belonging to the debtor). The bankruptcy court did not reach Wheeling's alternative ground for dismissal. The Trustee appealed to the federal district court, which affirmed on substantially similar reasoning. The Trustee alleges that Maine's version of the UFTA renders the waterfall disbursement to Wheeling voidable. Under that statute, a "transfer" of an asset by a debtor "is fraudulent as to a creditor whose claim arose before the transfer" if the debtor, while insolvent, made the conveyance "to an insider for an antecedent debt" and "the insider had reasonable cause to believe that the debtor was insolvent." Wheeling denies not only that it was chargeable with "insider" status but also that the waterfall disbursement to it involved any "assets" of the bankruptcy estate. The parties argue at length about when the Federal Railroad Administration's release of its lien on the 233 miles of track located in northern Maine (the Lines) took effect. The Trustee says that this occurred prior to the making of the waterfall disbursement to Wheeling. In Wheeling's view, though, the lien remained in effect until the debtor fully complied with the Second Amendment's waterfall provision. Like the bankruptcy court, the district court agreed with Wheeling, concluding that all of the waterfall disbursements dealt with property that was encumbered at the time of the transfer and, for that reason, did not involve "assets" of the debtor. The Court need not resolve the knotty questions concerning the temporal relationship between the FRA's release of its lien and the waterfall disbursements. Even if the Court assumes for argument's sake that the Lines were no longer encumbered by the FRA's lien at the time the waterfall disbursement to Wheeling was made, the debtor did not hold an interest in that property that is voidable under section 544(b). Here, the FRA initially held title to the Lines as mortgagee. As such, it controlled the proposed sale of the Lines (which were to be sold for an amount that was less than the amount of debt secured by its lien). Through the Second Amendment, the FRA approved the sale of the Lines and waived its lien. With respect to consideration, the FRA required, among other things, that the proceeds from the sale be paid to an "escrow agent"5 for the special purpose of distributing those funds to the parties enumerated in Section 3.b.ii. of the Second Amendment upon perfection of the FRA's replacement lien. Whatever the proper label for this type of transaction, the bottom line is that the debtor could not have put the proceeds to any use that was not authorized by the FRA under the terms of the Second Amendment. Pertinently for present purposes, the Second Amendment had the effect of forbidding the debtor from using the proceeds to pay general creditors save for the approximately $1,000,000 that was earmarked for accounts payable. The Trustee also relies heavily on the use of the disbursements to pay down the debtor's indebtedness. He attempts to draw an analogy to preferential transfer cases under section 547(b) in which third parties pay off general creditors as part of the purchase price of a debtor's assets. The Trustee says that this case is of the same genre because the Lines were sold to a third party and some (but not all) of the debtor's creditors received portions of the sale proceeds to satisfy existing debts. The Court finds this proffered analogy unpersuasive. The preferential transfer cases hawked by the Trustee rest on the notion that "[if] the funds the third party used to pay the creditor were consideration for the debtor's sale of its assets," then those funds are considered "property" of the estate because they "would have been available for distribution" to the general pool of creditors "had they not been transferred." In a last ditch attempt to salvage his complaint, the Trustee points to other allegations in the complaint that, in his view, make his claim plausible. In this instance, the conclusory statements and rhetorical flourishes contained in the complaint are belied by the cold, hard facts. Under the plausibility standard, fairly applied, the complaint does not state a claim upon which relief can be granted. A full-text copy of the First Circuit's Decision dated April 18, 2018 is available at https://bit.ly/2K7QI0a from Leagle.com. Robert J. Keach -- rkeach@bernsteinshur.com -- with whom Lindsay K.Z. Milne, Roma N. Desai, and Bernstein, Shur, Sawyer & Nelson, P.A. were on brief, for appellant. George J. Marcus -- with whom David C. Johnson, Andrew C. Helman, and Marcus, Clegg & Mistretta, P.A. were on brief, for appellee. About Montreal Maine Montreal, Maine & Atlantic Railway Ltd., operated the train that derailed and exploded in July 2013, killing 47 people and destroying part of Lac-Megantic, Quebec. The Company sought bankruptcy protection (Bankr. D. Maine Case No.13-10670) on Aug. 7, 2013, with the aim of selling its business. Its Canadian counterpart, Montreal, Maine & Atlantic Canada Co., meanwhile, filed for protection from creditors in Superior Court of Quebec in Montreal. Montreal, Maine & Atlantic Canada Co. ("MMA Canada"), the Canadian unit of Chapter 11 debtor Montreal, Maine & Atlantic Railway Ltd. ("MMA"), on July 20, 2015, filed a Chapter 15 bankruptcy petition (Bankr. D. Maine Case No. 15-20518) in Portland, Maine, to seek recognition and enforcement in the U.S. of the order by the Quebec Court approving MMA Canada's plan to pay off victims of the July 2013 derailment. The law firm of Verrill Dana serves as counsel to the Debtor. Robert J. Keach, Esq., at Bernstein, Shur, Sawyer, and Nelson, P.A., is the Chapter 11 trustee. Lindsay K. Zahradka and and D. Sam Anderson, Esq. serves as his counsel. Development Specialists, Inc., serves as his financial advisor; and Gordian Group, LLC, serves as his investment banker. Justice Martin Castonguay oversees the case in Canada. Andrew Adessky at Richter Consulting was named CCAA monitor. The CCAA Monitor is represented by Sylvain Vauclair at Woods LLP. MM&A Canada is represented by Patrice Benoit, Esq., at Gowling LaFleur Henderson LLP. The U.S. Trustee appointed a four-member official committee of derailment victims. The Official Committee is represented by Richard P. Olson, Esq., at Perkins Olson; and Luc A. Despins, Esq., at Paul Hastings LLP. The unofficial committee of wrongful death claimants is Represented by George W. Kurr, Jr., Esq., at Gross, Minsky & Mogul, P.A.; Daniel C. Cohn, Esq., at Murtha Cullina LLP; Peter J. Flowers, Esq., at Meyers & Flowers, LLC; Jason C. Webster, Esq., at The Webster Law Firm; and Mitchell A. Toups, Esq., at Weller, Green Toups & Terrell LLP. The Debtor's Revised First Amended Plan of Liquidation, which created a C$446 million settlement fund for the benefit of all victims of the train derailment in 2013 that killed 47 people, became effective Dec. 22, 2015. MSCI INC: Moody's Assigns Ba2 Rating on Senior Unsecured Notes -------------------------------------------------------------- Moody's Investors Service assigned a Ba2 rating to MSCI Inc.'s ("MSCI") proposed senior unsecured notes. The net proceeds from the debt issuance are expected to be used for general corporate purposes, including share repurchases and potential acquisitions. RATINGS RATIONALE "While the increase in debt is a negative credit development, Moody's views the transaction as consistent with MSCI's publicly-stated financial strategy to maintain financial leverage in a mid 3 times range, so the ratings and outlook remain unchanged at this time," said Edmond DeForest, Moody's Senior Credit Officer. The Ba2 Corporate Family Rating ("CFR") is supported by a stable, recurring subscription base of investment risk management and decision support tools and equity index products. Pro-forma for the proposed debt issuance, MSCI's debt to EBITDA will increase to around 4 times from about 3.2 times as of March 31, 2018. Moody's expects debt to EBITDA will decline to the mid 3 times range over the next twelve to eighteen months. Revenue size is small, but high EBITA margins of around 50% and solid free cash flow to debt anticipated to be around 10%, provide ratings support. Moody's expects EBITDA of over $700 million and EBITA to interest expense around 5 times, driven by growth in revenue and EBITDA through the continued adoption of equity exchange traded funds ("ETF") and international equity indices and steady subscriber retention rates above 90%. However, Moody's notes index revenues could be volatile as they are correlated to the popularity of passive investment strategies and the value of assets under management ("AUM") in exchanged-traded funds linked to its indexes. Moody's also anticipates MSCI may incur additional debt to maintain cash return levels in excess of internally generated free cash flow, temporarily driving debt to EBITDA above 4 times. MSCI has some customer concentration; Moody's expects its largest customer will account for over 10% of total revenues and over 50% of AUM-based ETF fees, while the top 10 customers will be about 25% of revenue. Debt-funded acquisitions are also a risk, although the pace of M&A has been moderate historically. All financial metrics cited reflect Moody's standard adjustments and the reclassification of capitalized software cost as an operating expense. The SGL-1 Speculative Grade Liquidity Rating reflects Moody's assessment of MSCI's liquidity profile as very good. Moody's expects MSCI will maintain over $250 million of cash and cash equivalents, free cash flow of about $275 million and full availability of the $220 million unsecured revolving credit facility (unrated). The stable outlook reflects Moody's expectations for 8% revenue growth, high and increasing rates of profitability and debt to EBITDA to remain above 3.5 times. The ratings could be upgraded if financial policies are revised to emphasize lower debt levels such that Moody's comes to expect debt to EBITDA will remain around 3 times and free cash flow to debt will stay above 10%. The ratings could be downgraded if Moody's notes a meaningful increase in competition, MSCI's client retention rates deteriorate or a more difficult pricing environment evolves. The ratings could also be downgraded if Moody's anticipates low revenue growth, an erosion in rates of profitability, debt to EBITDA sustained above 4.5 times, or free cash flow to debt under 5%. Rating assigned: Issuer: MSCI Inc. Senior unsecured notes, at Ba2 (LGD4) The principal methodology used in this rating was Business and Consumer Service Industry published in October 2016. MSCI is a global provider of investment risk and decision support tools, including indices and portfolio risk and performance analytics products and services. Moody's expects revenues of around $1.4 billion over the next twelve months. MULTI-SPECIALTY ENTERPRISES: Trustee Unable to Appoint Committee ---------------------------------------------------------------- No official committee of unsecured creditors has been appointed in the Chapter 11 case of Multi-Speciality Enteprises, LLC as of May 9, according to a court docket. About Multi-Specialty Enterprises Multi-Specialty Enterprises, LLC, sought protection under Chapter 11 of the Bankruptcy Code (Bankr. M.D. Fla. Case No. 18-02738) on April 5, 2018. In the petition signed by Victor D. Cruz, manager, the Debtor estimated assets of less than $50,000 and liabilities of less than $100,000. The Debtor tapped Buddy D. Ford, P.A. as its legal counsel. NATIONAL TRUCK: Yolo vs Normand, et al., Referred to Bankr. Ct. --------------------------------------------------------------- District Judge Halil Suleyman Ozerden entered an order granting the Defendants' motion to refer the civil action captioned YOLO CAPITAL, INC., Plaintiff, v. LOUIS J. NORMAND, JR., Individually, LOUIS J. NORMAND, JR., TRUSTEE OF AMERICAN SUCCESS IRREVOCABLE TRUST, TRUCK CAPITAL, LLC, COAST MANAGEMENT SYSTEMS, LLC, GLOBAL TRANSPORTATION REINSURANCE CO., LTD., Defendants, Case No. 1:18-cv-00062-HSO-JCG (S.D. Miss.) to the bankruptcy court. Plaintiff, Yolo Capital, Inc. originally filed the action against Defendants as Case No. 1:17-cv-00180 in the U.S. District Court for the Western District of North Carolina alleging that Defendants breached a Guaranty Agreement, guaranteeing non-party National Truck Funding, LLC's performance under a Note Agreement and related Promissory Note, and sought to recover amounts due under the Promissory Note from the date of National Truck's alleged default. Prior to the commencement of this action, on June 25, 2017, National Truck filed a voluntary petition under Chapter 11 of the Bankruptcy Code in the United States Bankruptcy Court for the Southern District of Mississippi, Case No. 17-51243-KMS and, subsequently listed Plaintiff as a creditor who has claims secured by National Truck's property and identified Defendants as co-debtors on the debt to Plaintiff. Here, the Court holds that referral is appropriate as the action is a proceeding "arising in or related to" the Chapter 11 Case given that adjudication of this action will have a direct impact on the assets and liabilities of National Truck in the Chapter 11 Case and the administration of the Chapter 11 Case as a whole, by among other things, potentially decreasing the amount of claims against the bankruptcy estate and freeing potential assets to be paid to other creditors. The Court, thus, finds that the civil action must be referred to the U.S. Bankruptcy Court for the Southern District of Mississippi, Southern Division. A copy of the Court's Order dated April 16, 2018 is available at https://bit.ly/2KNCsLd from Leagle.com. Yolo Capital, Inc., Plaintiff, represented by David A. Wheeler, WHEELER & WHEELER. Louis J. Normand, Jr., Individually and as, Truck Capital, LLC., Coast Management Systems, LLC, Global Transportation Reinsurance Co., Ltd. & American Success Irrevocable Trust, Defendants, represented by Jason R. Watkins, O'HARA WATKINS, LLC. About National Truck Funding Headquartered in Gulfport, Mississippi, National Truck Funding, LLC -- http://nationaltruckfunding.com/-- retails and rents trucks. It operates as a subsidiary of American Truck Group, LLC -- http://americantruckgroup.com/-- which is a heavy duty truck dealer that specializes in aftermarket placement of Freightliner, Peterbilt, Kenworth and Volvo. American Truck Group's truck sales & showrooms are located in Gulfport, MS, Atlanta, GA and Phoenix, AZ. National Truck and American Truck sought Chapter 11 protection (Bankr. S.D. Miss. Case Nos. 17-51243 and 17-51244) on June 25, 2017. In the petition signed by Louis J. Normand, Jr., their manager, National Truck estimated its assets and liabilities at $10 million to $50 million, and American Truck estimated its assets and liabilities at $1 million to $10 million. Judge Katharine M. Samson presides over the cases. The Debtors hired Lugenbuhl, Wheaton, Peck, Rankin & Hubbard as bankruptcy counsel; Wessler Law Firm as local counsel; Haworth Rossman & Gerstman, LLC, as special counsel, Lefoldt & Company PA as accountant; and Chaffe & Associates as restructuring advisor and investment banker. An official committee of unsecured creditors was appointed in the Chapter 11 case of National Truck. The Committee is composed of Yolo Capital, Inc., Hannah Baby, LLC, Kevin C Farber, Gear & Axle of Mobile, and The Bollier Family Trust. NEOVASC INC: Capital World Has 5.2% Stake as of April 30 -------------------------------------------------------- In a Schedule 13G/A filed with the Securities and Exchange Commission, Capital World Investors disclosed that as of April 30, 2018, it beneficially owns 87,697,866 common shares of Neovasc Inc. Capital World Investors divisions of Capital Research and Management Company and Capital International Limited collectively provide investment management services under the name Capital World Investors. Capital World Investors is deemed to be the beneficial owner of 87,697,866 shares or 5.2% of the 1,681,060,910 shares believed to be outstanding. A full-text copy of the regulatory filing is available for free at: https://is.gd/yEoUrd About Neovasc Inc. Based in Richmond, British Columbia, Neovasc Inc. -- http://www.neovasc.com/-- is a specialty medical device company that develops, manufactures and markets products for the rapidly growing cardiovascular marketplace. Its products include the Neovasc Reducer, for the treatment of refractory angina, which is not currently available in the United States and has been available in Europe since 2015, and the Tiara, for the transcatheter treatment of mitral valve disease, which is currently under clinical investigation in the United States, Canada and Europe. Neovasc reported a net loss of US$22.91 million on US$5.38 million of revenue for the year ended Dec. 31, 2017, compared to a net loss of US$86.49 million on US$9.51 million of revenue for the year ended Dec. 31, 2016. As of Dec. 31, 2017, the Company had US$22.20 million in total assets, US$58.66 million in total liabilities and a total deficit of US$36.47 million. Grant Thornton issued a "going concern" opinion in its report on the consolidated financial statements for the year ended Dec. 31, 2017, stating that the Company incurred a consolidated net loss of US$24,859,117 during the year ended December 31, 2017, and, as of that date, the Company's consolidated current liabilities exceeded its current assets by US$6,060,895. The auditors said these conditions, along with other matters, indicate the existence of a material uncertainty that casts substantial doubt about the Company's ability to continue as a going concern. NEOVASC INC: Neovasc Reports First Quarter 2018 Results ------------------------------------------------------- Neovasc Inc. announced financial results for the quarter ended March 31, 2018. "Despite a challenging period for our shareholders, we are encouraged by our improved financial position through the receipt of $12.3 million in proceeds from investor-initiated exercises of Series C warrants that were issued during our November 2017 public offering," commented Fred Colen, Neovasc's chief executive officer. "This additional capital provides us with increased runway to support our clinical and operating activities into early 2019 at our current cash burn rate, including achieving further clinical milestones for Tiara and increasing commercial sales of Reducer in Europe." "We continue to see steady enrollment progress in our Tiara I and II studies, with 34 patients implanted with Tiara to-date in these trials, compared to 21 patients at the end of 2017," continued Colen. "The initial development of the transfemoral, trans-septal version of Tiara is on track, and we are pleased to report that we completed our first, small animal feasibility study with a first set of prototypes and that for the first time in the history of Tiara, we have been able to access the heart trans-septally, to pass through the mitral valve annulus from the right side of the heart and deploy a Tiara mitral valve." "We are pleased to have had several scientific articles published which presented data on Reducer, including an editorial in the Journal of the American College of Cardiology (JACC) publication, Vol. 11, No. 8, 2018 by Dr. Wijns and Dr. Behan: "New Treatment Options for the "No Option" Patient with Refractory Angina." We are excited to have additional Reducer data included in these peer-reviewed publications, including U.S. publications, to help drive greater industry awareness of the Reducer," concluded Colen. The Tiara Mitral Valve The Tiara mitral valve has demonstrated its potential in a total patient population of 56 patients as a viable clinical treatment in the early results of the Company's clinical trials, as well as in compassionate use cases for patients with severe Mitral Regurgitation and enlarged left ventricles and in patients at high risk for surgery. Enrollment of patients in the European Tiara II CE Mark clinical study continues to scale, in part due to implementation of an easy-to-use, local pre-screening process and tool for physicians and clinical sites. Neovasc also increased its field clinical engineering support in Europe, which will allow it to support additional sites, as well as reduce the time from when a site identifies a patient to when they are enrolled and scheduled to have the procedure. These efforts complement the Company's initiative to recruit and qualify additional clinical study sites in Germany, the UK, Spain, the Netherlands and Israel. Currently, the Company has ten clinical sites: five in Germany, three in Italy and two in the UK. Its goal is to add clinical sites in Germany, the UK, Spain, Israel and the Netherlands. As a result, the Company believes the TIARA II study is on track for the application for CE Mark approval submitted in 2020. Year-to-date, there have been 13 implants of Tiara, with 8 for TIARA-II and 5 for the TIARA-I study. The apical in/out procedure time for the most recent 4 TIARA-II implants were 9 minutes, 9 minutes, 10 and 12 minutes, respectively. For the 2 recent TIARA-I implants, they were 11 minutes and 45 minutes (mainly due to challenging echo imaging quality). There have been 16 patients enrolled in the TIARA-II study out of the total 115 required under the trial design. The 30-day survival rate of the Tiara remains at 90% overall and is at 93% for the TIARA-II study. The Reducer The Company is encouraged by the ramping of market interest in the Neovasc Reducer (the "Reducer"), which includes five new, independent articles in scientific publications. The clinical results discussed in these articles include data from 96 Reducer patients in two separate single center studies, which is encouraging. The studies each highlight the data that demonstrate real world clinical results and are very consistent with the randomized COSIRA trial outcomes. The TCTMD publication and the Editorial in JACC point to a new option for the treatment of these Refractory Angina patients. The Company believes, the case report for the first time powerfully demonstrates increased perfusion of the ischemic regions of the heart in a human in these published PET pictures. Implant rates for the Reducer are gaining traction in Europe and the Middle East, with a 29% increase in Reducer implants and a 30% increase in revenue for the first quarter of 2018 compared to the first quarter of 2017. This puts the commercial efforts on-track to achieve the Company's goal of achieving a doubling of implants for the Reducer in Europe in 2018 over 2017. One of the drivers behind this success is the NUB 1 status for new therapies in Germany, which the Reducer received at the end of January 2018. The Company continues to enroll in the Reducer I clinical study and is exploring options for initiating of the COSIRA-II IDE study, a 385-patient study to be conducted at up to 35 centers in the United States, which was approved by the FDA in late 2017. Results for the three months ended March 31, 2018 Revenues Revenues decreased 77% to $339,922 for the three months ended March 31, 2018, compared to revenues of $1,481,360 for the same period in 2017. In December 2017, the Company closed its contract manufacturing and consulting services business and is now focused on the commercialization of its own product, the Reducer. Sales of the Reducer for the three months ended March 31, 2018 were $339,922 compared to $260,765 for the same period in 2017, representing an increase of 30%. The Company is encouraged by the progress this year, but recognizes that future revenues may be unstable before the Reducer becomes widely adopted. The continued success of the commercialization of the Reducer will be dependent on the amount of internal resources allocated to the product, obtaining appropriate reimbursement codes in various territories and correctly managing the referrals process. Cost of Goods Sold The cost of goods sold for the three months ended March 31, 2018 was $87,393 compared to $808,628 for the same period in 2017. The overall gross margin for the three months ended March 31, 2018 was 74%, compared to 45% gross margin for the same period in 2017. The gross margin now reflects the gross margin on the Reducer product only. Expenses Total expenses for the three months ended March 31, 2018 were $6,755,420, compared to $8,489,404 for the same period in 2017, representing a decrease of $1,733,984 or 20%. The decrease in total expenses for the three months ended March 31, 2018 compared to the same period in 2017 reflects a $779,622 reduction in general and administrative expenses due to restructuring of the Company and a $1,054,132 decrease in product development and clinical trial expenses to preserve cash resources. Selling expenses for the three months ended March 31, 2018 were $286,938, compared to $187,168 for the same period in 2017, representing an increase of $99,770, or 53%. The increase in selling expenses for the three months ended March 31, 2018 compared to the same period in 2017 reflects an increase in costs incurred for commercialization activities related to the Reducer. The Company continues to minimize its selling expenses as the cash resources of the Company are still limited. General and administrative expenses for the three months ended March 31, 2018 were $2,469,091, compared to $3,248,713 for the same period in 2017, representing a decrease of $779,622 or 24%. The decrease in general and administrative expenses for the three months ended March 31, 2018 compared to the same period in 2017 can be substantially explained by a $812,580 decrease in litigation expenses (as there are fewer ongoing litigation matters) and a $586,159 decrease in share-based payments (as the option awards in 2018 were lower in value than in 2017) offset by a $576,364 charge for employee termination expenses due to restructuring of the Company. Product development and clinical trial expenses for the three months ended March 31, 2018 were $3,999,391 compared to $5,053,523 for the same period in 2017, representing a decrease of $1,054,132 or 21%. The decrease in product development and clinical trial expenses for the three months ended March 31, 2018 was the result of a $653,973 decrease in share-based payments (as the option awards in 2018 were lower in value than in 2017) and a $366,227 decrease in other expenses, as the cash resources of the Company are still limited. Other Income and Loss The other loss for the three months ended March 31, 2018 was $48,324,003 compared to income of $28,299 for the same period in 2017, an increase in other loss of $48,352,302. The increase in the other loss can be substantially explained by the accounting treatment of the November 2017 financings, which resulted in a $49,277,477 increase in net loss between the periods. Losses The operating losses and comprehensive losses for the three months ended March 31, 2018 were $6,502,891 and $55,466,915, respectively, or $0.38 basic and diluted loss per share, as compared with losses of $7,816,672 and $7,927,304, or $0.10 basic and diluted loss per share, for the same period in 2017. The $47,539,611 increase in the comprehensive loss incurred for the three months ended March 31, 2018 compared to the same period in 2017 can be substantially explained by the accounting treatment of the November 2017 financings, resulting in an unrealized loss on derivative liability and convertible note of $4,337,049, a realized loss of $17,557,693 on the exercise of warrants and $27,382,735 amortization of deferred loss. This was offset by a $779,622 reduction in general and administrative expense and a decrease in product development and clinical trial expenses of $1,054,132. Discussion of Liquidity and Capital Resources Neovasc finances its operations and capital expenditures with cash generated from operations and equity and debt financings. As at March 31, 2018, the Company had cash and cash equivalents of $12,261,559 compared to cash and cash equivalents of $17,507,157 as at Dec. 31, 2017. The Company said it will require significant additional financing in order to continue to operate its business. Given the current nature of the Company's capital structure, there can be no assurance that such financing will be available on favorable terms, or at all. The Company is in a negative working capital position of $1,275,879, with current assets of $14,036,460 and current liabilities of $15,312,339. However, of the current liabilities, only $2,231,090 are cash liabilities, as the liability for the senior secured convertible notes (the "Notes") and the derivative liability from the November 2017 underwritten public offering (the "Public Transaction") and private placement (the "Private Placement" and together with the "Public Transaction" the "2017 Financings") are accounting entries to account for the value of the instruments issued in the 2017 Financings. Cash used in operating activities for the three months ended March 31, 2018, was $5,245,425, compared to $6,308,755 for the same period in 2017. For the three months ended March 31, 2018, operating expenses were $5,909,597, compared to $6,193,498 for the same period in 2017, a decrease of $283,091 that can be explained by decrease in product development and clinical trial expenses to preserve cash resources. Net cash provided from the net change in non-cash working capital items for the three months ended March 31, 2018 was $691,591, compared to a net cash outflow of $285,226 in the same period in 2017. The net cash inflow can be attributed to a change in the balance sheet structure as the Company closed its consulting services and contract manufacturing businesses. Net cash applied to investing activities for the three months ended March 31, 2018 was $17,162 compared to $351,260 for the same period in 2017, primarily due to a $245,227 decrease in purchase of property, plant and equipment, as there is still a requirement to preserve cash resources in 2018. Subsequent Events As of May 10, 2018, the Company has received cash proceeds of $12,338,854 from the investor-initiated exercise of 7,642,781 series C warrants, issued pursuant to the Public Transaction at an exercise price of $1.46 per Series C Warrant as further described below. The cash proceeds represent an increase in cash of approximately 106% compared to the $12,261,559 cash and cash equivalents as at March 31, 2018. As announced, the Nasdaq has confirmed that the Company has maintained its market capitalization above $35 million for 20 consecutive trading days and has regained compliance with the Nasdaq's market value listing rule. As described in the Company's Annual Report on Form 20-F, the Company must still regain compliance with the Nasdaq $1.00 minimum bid price listing rule. Warrant Exercises None of the 25,676,368 series A warrants or 22,431,506 series E warrants issued pursuant to the 2017 Financings have been exercised and all such warrants remain outstanding. As of May 10, 2018, all of the 25,676,368 series B warrantsinitially issued pursuant to the 2017 Financings, have been exercised using the cashless alternative net number mechanism for 846,072,506 common shares and all of the 22,431,506 series F warrants initially issued pursuant to the 2017 Financings have been exercised using the cashless alternate net number mechanism for 295,739,698 common shares. As of May 10, 2018, of the 10,273,972 Series C Warrants initially granted, 8,451,270 have been exercised for 8,451,270 shares, 8,451,270 Series A Warrants and 8,451,270 Series B Warrants. None of the 8,451,270 underlying Series A Warrants have been exercised and 8,417,292 of the 8,451,270 underlying Series B Warrants have been exercised using the cashless alternate net number mechanism for 395,930,429 common shares. As of May 10, 2018, cumulatively there were 34,127,638 Series A Warrants, 33,978 Series B Warrants, 1,822,702 Series C Warrants and 22,431,507 Series E Warrants outstanding. 97% of the warrants with an alternate net number mechanism have been exercised. Outstanding Share Data As at May 10, 2018, the Company had 1,777,789,654 Common Shares issued and outstanding. Further, the following securities are convertible into Common Shares: 10,190,591 stock options with a weighted average price of $2.14, 58,415,824 warrants and the Notes, which could convert into 22,431,507 Common Shares (not taking into account the alternate conversion price mechanism). The Company's fully diluted share capital as of the same date is 1,868,968,102. Its fully diluted share capital, adjusted on the assumption that all the remaining Series B Warrants are exercised using the cashless alternative net number mechanism and the outstanding Notes are exercised using the alternate conversion price at the closing price on May 10, 2018 is 2,691,587,744. Neovasc's 2017 Annual Report on Form 20-F, Management's Discussion and Analysis and Consolidated Financial Statements and related notes are posted on the Company's website at www.neovasc.com and were filed on SEDAR and with the SEC. A full-text copy of the Form 6-K is available for free at: https://is.gd/xyTc8u About Neovasc Inc. Based in Richmond, British Columbia, Neovasc Inc. -- http://www.neovasc.com/-- is a specialty medical device company that develops, manufactures and markets products for the rapidly growing cardiovascular marketplace. Its products include the Neovasc Reducer, for the treatment of refractory angina, which is not currently available in the United States and has been available in Europe since 2015, and the Tiara, for the transcatheter treatment of mitral valve disease, which is currently under clinical investigation in the United States, Canada and Europe. Neovasc reported a net loss of US$22.91 million on US$5.38 million of revenue for the year ended Dec. 31, 2017, compared to a net loss of US$86.49 million on US$9.51 million of revenue for the year ended Dec. 31, 2016. As of March 31, 2018, Neovasc had US$16.12 million in total assets, US$47.98 million in total liabilities and a total deficit of US$31.85 million. Grant Thornton issued a "going concern" opinion in its report on the consolidated financial statements for the year ended Dec. 31, 2017, stating that the Company incurred a consolidated net loss of US$24,859,117 during the year ended December 31, 2017, and, as of that date, the Company's consolidated current liabilities exceeded its current assets by US$6,060,895. The auditors said these conditions, along with other matters, indicate the existence of a material uncertainty that casts substantial doubt about the Company's ability to continue as a going concern. NEOVASC INC: Regains Compliance with Nasdaq Min. Market Value Rule ------------------------------------------------------------------ Neovasc Inc. has received written notification from The Nasdaq Stock Market LLC notifying the Company that it has regained compliance with the minimum market value requirement set forth in the rules for continued listing on the Nasdaq Capital Market. The Company received a letter from the Nasdaq in March 2018 notifying it that it was not in compliance with the minimum market value requirement set forth in Listing Rule 5550(b)(2). The Nasdaq Notice confirms that the Company has regained compliance with Listing Rule 5550(b)(2) pursuant to Listing Rules (c)(3)(C) and 5810(c)(3)(F), as the Company's market value exceeded US$35 million for 20 consecutive business days between April 11, 2018 through May 8, 2018. The Company must still regain compliance with the minimum bid price requirement under Listing Rule 5550(a)(2) before July 2, 2018. In the event the Company does not regain compliance by July 2, 2018, the Company may be eligible for additional time to regain compliance. To regain compliance, the closing bid price of the common shares of the Company will need to be at least US$1.00 per share for a minimum of 10 consecutive business days. As previously disclosed, the Company will be seeking shareholder approval at its next Annual and Special General Meeting, scheduled for June 4, 2018, to carry out a share consolidation at an appropriate time to re-establish compliance with the US$1.00 minimum bid price requirement for listing on the Nasdaq Capital Market. Further information will be contained in the Company's Management Information Circular for its Annual and Special General Meeting. The Company is also listed on the Toronto Stock Exchange and the Company's noncompliance with the Nasdaq minimum bid price requirement does not affect the Company's compliance status with the TSX. About Neovasc Inc. Based in Richmond, British Columbia, Neovasc Inc. -- http://www.neovasc.com/-- is a specialty medical device company that develops, manufactures and markets products for the rapidly growing cardiovascular marketplace. Its products include the Neovasc Reducer, for the treatment of refractory angina, which is not currently available in the United States and has been available in Europe since 2015, and the Tiara, for the transcatheter treatment of mitral valve disease, which is currently under clinical investigation in the United States, Canada and Europe. Neovasc reported a net loss of US$22.91 million on US$5.38 million of revenue for the year ended Dec. 31, 2017, compared to a net loss of US$86.49 million on US$9.51 million of revenue for the year ended Dec. 31, 2016. As of Dec. 31, 2017, the Company had US$22.20 million in total assets, US$58.66 million in total liabilities and a total deficit of US$36.47 million. Grant Thornton issued a "going concern" opinion in its report on the consolidated financial statements for the year ended Dec. 31, 2017, stating that the Company incurred a consolidated net loss of US$24.86 million during the year ended December 31, 2017, and, as of that date, the Company's consolidated current liabilities exceeded its current assets by US$6.061 million. The auditors said these conditions, along with other matters, indicate the existence of a material uncertainty that casts substantial doubt about the Company's ability to continue as a going concern. NIGHT OWL PARTNERS: Taps DeMarco-Mitchell as Legal Counsel ---------------------------------------------------------- Night Owl Partners, LP, seeks approval from the U.S. Bankruptcy Court for the Eastern District of Texas to hire DeMarco-Mitchell, PLLC as its legal counsel. The firm will assist the Debtor in the preparation of a plan of reorganization and will provide other legal services related to its Chapter 11 case. The firm will charge these hourly rates: Robert DeMarco Attorney $350 Michael Mitchell Attorney $285 Barbara Drake Paralegal $125 DeMarco-Mitchell received a retainer of $6,717 from the Debtor. Robert DeMarco, Esq., a member of DeMarco-Mitchell, disclosed in a court filing that his firm is a "disinterested person" as defined in Section 101(14) of the Bankruptcy Code. The firm can be reached through: Robert T. DeMarco, Esq. Michael S. Mitchell, Esq. DeMarco-Mitchell, PLLC 1255 W. 15th Street, 805 Plano, TX 75075 Tel: 972‐578‐1400 Fax: 972‐346‐6791 E-mail: robert@demarcomitchell.com E-mail mike@demarcomitchell.com About Night Owl Partners LP Night Owl Partners LP sought protection under Chapter 11 of the Bankruptcy Code (Bankr. E.D. Tex. Case No. 18-40669) on April 1, 2018. In the petition signed by Rajesh Srivastava, authorized representative, the Debtor disclosed that it had estimated assets of less than $50,000 and liabilities of less than $500,000. Judge Brenda T. Rhoades presides over the case. NINE WEST: Surefield Limited Appointed as Committee Member ---------------------------------------------------------- The U.S. Trustee for Region 2 on May 9, 2018, appointed Surefield Limited as new member of the official committee of unsecured creditors in the Chapter 11 cases of Nine West Holdings, Inc. and its affiliates. Surefield, a company based in Kowloon, Hong Kong, will replace Hongkong Hing Wing Development Limited. The company can be reached through: Cheng Chi Fai Chief Financial Officer Surefield Limited Room D, 8th Floor King Palace Plaza 55 King Yip Street Kwun Tong Kowloon, Hong Kong Telephone: +852-2546-0408 The bankruptcy watchdog had earlier appointed Aurelius Capital Master, Ltd., GLAS Trust Company LLC, Pension Benefit Guaranty Corporation, Simon Property Group, Stella International Trading, and U.S. Bank National Association, court filings show. About Nine West Holdings Nine West Holdings is a footwear, accessories, women's apparel, and jeans wear company with a portfolio of brands that includes Nine West, Anne Klein, and Gloria Vanderbilt. The company is a wholesale partner to major U.S. retailers and has international licensing arrangements covering more than 1,200 points of sale around the world. On April 6, 2018, Nine West Holdings, Inc., and 10 affiliates sought Chapter 11 protection (Bankr. S.D.N.Y. Lead Case No. 18-10947). Nine West estimated $500 million to $1 billion in assets and $1 billion to $10 billion in liabilities as of the bankruptcy filing. The Hon. Shelley C. Chapman is the case judge. Nine West Holdings' legal advisors are Kirkland & Ellis LLP. The Company's financial advisor is Lazard Freres & Co., and its restructuring advisor is Alvarez & Marsal North America LLC. Prime Clerk LLC is the claims and noticing agent. The Independent Directors tapped Munger, Tolles & Olson LLP as counsel and Berkeley Research Group as financial advisor. William K. Harrington, the U.S. Trustee for Region 2, appointed an official committee of unsecured creditors. NJOY INC: Court Nixes Hackney Bid for Dismissal from Red Hed Suit ----------------------------------------------------------------- Senior District Judge Joseph M. Hood entered an order denying The H.T. Hackney Company's motion for judgment on the pleadings in the case captioned RED HED OIL, INC., doing business as REDI MART NO. 9, et al., Plaintiffs, v. THE H.T. HACKNEY CO., et al., Defendants, Civil Case No. 5:17-cv-180-JMH (E.D. Ky.). Plaintiffs filed the lawsuit in Madison County Circuit Court in March 2017, alleging breach of warranty, failure to warn, defective manufacture and design, and negligence. Plaintiffs made claims against the supplier of the e-cigarettes (Hackney) and six e-cigarette manufacturers. One of the "manufacturing defendants," Logic Technology Development LLC, removed the case to federal court in April 2017. Several other defendants filed answers, but defendant Swisher International, Inc. filed a Motion to Dismiss for Failure to State a Claim. Logic, along with three other manufacturing defendants, joined Swisher's motion. Manufacturing defendant NJoy did not join the motion as it filed for Chapter 11 bankruptcy, and the Court stayed this matter as to NJoy only. Thus, five manufacturing defendants submitted the joint motion to dismiss or judgment on the pleadings. The Court granted the manufacturing defendants' motion in November 2017. The thrust of the Court's reasoning was that Plaintiffs failed to meet the threshold requirement linking any particular manufacturing defendant to a defective e-cigarette that caused the fire. Instead, Plaintiffs sued every manufacturing defendant that could have conceivably been responsible for the fire. But Plaintiffs never said whose e-cigarettes were in the store at the time, whose e-cigarette had the defect and what that defect was, or whose defective e-cigarette caused the fire. And because Kentucky has not accepted "alternative liability" and Plaintiffs failed to plead a "concert of action" among defendants, Plaintiffs failed to state a claim against the manufacturing defendants. In short, because Plaintiffs sued six manufacturing defendants when only one could be responsible, Plaintiffs merely pled a "possible" cause of action. Now Hackney wants the benefit of the Court's Order. So Hackney filed its own Motion for Judgment on the Pleadings making the same argument that the manufacturing defendants previously made. Hackney does not expand on the Court's prior ruling, but instead points to it and asks the Court to apply the ruling to Hackney. Here, Hackney's lone argument is that this reasoning in the Court's prior Order should apply equally to it. Hackney cites several portions of the Court's Order and argues that the language "serves as the basis for dismissal of Hackney." Hackney also cites the Court's statement that Red Hed failed "to provide factual allegations that these e-cigarettes did, in fact, cause this fire." From these statements, Hackney concludes that "[i]f the Manufacturing Defendants' products did not cause the harm, then the distributor of those products is also relieved from liability." Taking the Court's statements in isolation, one might read them as supporting dismissal of Hackney. But when placed in context of the motion before the Court and the larger Memorandum Opinion and Order, the Court's reasoning applies to the manufacturing defendants and not to Hackney. Unlike the manufacturing defendants, Hackney admits it sold "all of the e-cigarettes in question" and were in privity with Red Hed. There is no question that the e-cigarettes--regardless of who manufactured them--were in Hackney's possession at the time of the fire. As such, Plaintiffs have adequately stated that this defendant is responsible. And even if the causal connection to Hackney is tenuous, "causal weaknesses will more often be fodder for a summary-judgment motion under Rule 56 than a motion to dismiss under Rule 12(b)(6)." In sum, the Court's prior Opinion and Order do not extend as far Hackney would like. And the reasoning contained within it does not require dismissal of Hackney. A full-text copy of the Court's Memorandum Opinion and Order dated April 18, 2018 is available at https://bit.ly/2K3qw79 from Leagle.com. Red Hed Oil, Inc., doing business as Redi Mart No. 9 & Federated Mutual Insurance Company, Plaintiffs, represented by James Joseph Englert -- JEnglert@Rendigs.com -- Rendigs, Fry, Kiely & Dennis, LLP, Jonathan Phelps Saxton, Rendigs, Fry, Kiely & Dennis, LLP & W. Jonathan Sweeten -- JSweeten@Rendigs.com -- Rendigs, Fry, Kiely & Dennis, LLP. The H.T. Hackney Co., Defendant, represented by Daniel E. Murner -- dmurner@landrumshouse.com -- Landrum & Shouse LLP, Elizabeth Johnson Winchell -- ewinchell@landrumshouse.com -- Landrum & Shouse LLP & Michael E. Hammond -- mhammond@landrumshouse.com -- Landrum & Shouse LLP. NJoy Inc., Defendant, represented by Michael G. Busenkell -- mbusenkell@gsbblaw.com -- Gellert Scali Busenkell and Brown LLC. About Njoy, Inc. Headquartered in Scottsdale, Arizona, NJOY sold e-cigarettes and vaping products to wholesalers, distributors and retailers. NJOY filed a voluntary petition under Chapter 11 of the Bankruptcy Code (Bankr. D. Del. Case No. 16-12076) on Sept. 16, 2016. The petition was signed by Jeffrey Weiss, general counsel and interim president. The case is assigned to the Hon. Christopher S. Sontchi. NJOY hired Gellert Scali Busenkell & Brown, LLC, as counsel, Sierraconstellation Partners, LLC, as financial advisor, and Cohnreznick Capital Markets Securities Investment LLC as investment banker. The official committee of unsecured creditors tapped Fox Rothschild LLP as counsel. Jeoffrey L. Burtch, the Chapter 11 Trustee for Njoy, Inc., hired Cozen O'Connor, as counsel. The Court in July 2017 agreed to convert the Chapter 11 bankruptcy of NJOY Inc. to a Chapter 7, following a $30 million asset sale and the departure of its last remaining executive. OAKLEY GRADING: U.S. Trustee Unable to Appoint Committee -------------------------------------------------------- No official committee of unsecured creditors has been appointed in the Chapter 11 case of Oakley Grading and Pipeline, LLC as of May 9, according to a court docket. About Oakley Grading and Pipeline Oakley Grading and Pipeline LLC is a privately-held grading contractor in Newnan, Georgia. Oakley Grading and Pipeline, through its receiver, filed a Chapter 11 petition (Bankr. N.D. Ga. Case No. 18-10743) on April 9, 2018. In the petition signed by Vic Hartman, receiver, the Debtor disclosed $305,729 in total assets and $2.56 million in total liabilities. Kathleen G. Furr, Esq. and Kevin A. Stine, Esq., at Baker, Donelson, Bearman, Caldwell & Berkowitz, P.C., serve as the Debtor's counsel. On April 3, 2018, the U.S. Trustee filed a notice appointing Theo D. Mann, as the Chapter 11 Trustee of Oakley Grading and Pipeline, LLC. The Trustee hired Mann & Wooldridge, P.C., as counsel, and Morris Manning & Martin, LLP, as special counsel. OTERO COUNTY: Court Certifies QHR Direct Appeal of Final Judgments ------------------------------------------------------------------ Quorum Health Resources, LLC filed a motion asking the Court to certify its appeal of the Court's final judgments directly to the Tenth Circuit Court of Appeals. The United Tort Claimants oppose the motion. Upon deliberation, Bankruptcy Judge Robert H. Jacobvitz certifies the final judgments for direct appeal to the Tenth Circuit consistent with 28 U.S.C. section 158(d)(2). Whether a hospital management company such as QHR owes a duty of care to patients of the hospital and if so, the scope of the duty is a question of law, and is a matter of first impression involving a matter of public importance. On that basis, certification for direct appeal is required. QHR requests certification for direct appeal of the following issues: 1. Whether QHR owed a duty to the UTC and if so the scope of the duty. 2. Whether the Court applied the appropriate standard in determining that QHR's breach of duty proximately caused the UTC harm. 3. Whether the Court was required to apply an offset of the amounts paid by or on behalf of QHR to the final judgments. QHR asserts that certification satisfies the third basis for certification of direct appeal: material advancement of "the progress of the case or proceeding in which the appeal is taken." QHR points out that many remaining Adversary Proceedings require damages trials. A Tenth Circuit decision regarding duty may very well obviate the need for further damages trials. However, material advancement of the other related Adversary Proceedings as a whole is insufficient grounds for certification. The Court need not certify the question of duty on this alternative ground. QHR frames the question of proximate cause for certification as whether the Court applied the correct legal standard to conclude that QHR's breach caused the UTC harm. However, the Court clarified in its Reconsideration Memorandum Opinion, that it would have found proximate cause regardless of whether it applied a subjective or objective standard. Issues primarily involving questions of fact are not appropriate for direct appeal. Finally, QHR requests certification of the question of whether the Court was required to apply an offset or credit of the amounts previously paid by or on behalf of QHR to reduce the damages amounts quantified in the judgments. QHR asserts that certifying this question for direct appeal satisfies 28 U.S.C. section 158(d)(2)(A)(iii) because it would materially advance the litigation. Under a settlement agreement between UTC and QHR any judgments on UTC's negligence claims entered against QHR in the Adversary Proceedings are collectible only from monies payable by Lexington under two insurance policies it issued to its insured, QHR. The Court found that under the settlement agreement QHR paid monies to settle both claims covered and claims not covered by the Lexington policies. Construing the settlement agreement, the Court determined that QHR's settlement payments are to be allocated to covered claims or uncovered claims in the manner that will maximize UTC's recovery from the Lexington policies. Further construing the settlement agreement, the Court concluded that QHR is entitled to an offset against judgments the Court enters on UTC's negligence claims only to the extent QHR's settlement payments to UTC are applied toward satisfaction of a self-insured retention under a Lexington policy, and the self-insured retention can only be satisfied by allocating the payment to claims covered by the policy. Under the Court's ruling, to determine whether or in what amount QHR is entitled to an offset requires interpretation of the two Lexington insurance policies. Although QHR has asked this Court to certify the Offset Issue for direct appeal to the Tenth Circuit, QHR's counsel-- without waiving any right to appeal this Court's decisions--agreed in open Court that applying offsets to the judgments is best handled in the Insurance Coverage Litigation, where Lexington is a party. Under these circumstances, none of the alternative grounds exists for certification of the Offset Issue for direct appeal. The question of whether QHR owes a duty to the UTC and if so the scope of the duty is a legal question involving a matter of public importance requiring certification for direct appeal to the Tenth Circuit. The Court is aware that the appeal raises many other issues, including issues that do not form the basis for QHR's requested certification for direct appeal, and many issues for which factual questions predominate. However, the question of duty is a threshold legal question, resolution of which could have a broader effect on hospital management practices in New Mexico and throughout the country. The bankruptcy case is in re: OTERO COUNTY HOSPITAL ASSOCIATION, INC., Debtor, Case No. 11-11-13686 JL (Bankr. D.N.M.). The adversary proceedings are UNITED TORT CLAIMANTS, as individuals, Plaintiffs, v. QUORUM HEALTH RESOURCES, LLC, Adversary Nos: 12-1204j through 12-1207j, 12-1209j, 12-1210, 12-1212 through 12-1215j, 12-1221j, 12-1235j, 12-1238j through 12-1241j, 12-1243j, 12-1244j, 12-1246j, 12-1248j, 12-1249j, 12-1251j through 12-1261j, 12-1271j, 12-1276j and 12-1278j (Bankr. D.N.M.). A full-text copy of the Court's Memorandum Opinion dated April 19, 2018 is available at https://bit.ly/2jKKLLE from Leagle.com. Gilbert C. Marquez, Marie Marquez, Annabelle Lindley, Jearl Lindley, M.D., Cecil Lunceford, Gayle Lunceford, Tony S. Chavez, Rita Chavez, Maria Nora Coyazo, Shirley Hubert, James Cross, Wanda Cross, Laurie K Baker, Ronald Baker, Phillis Barnett, James R Boren, David L Burton, Helen Burton, Melissa Mackechnie, John F O'Byrne, Laverne O'Byrne, Edna O Chavez, John I Chavez, Darrell Gilmore, Susan Gilmore, Kent Gwynne, Marjorie Curtis, Dale Fox, Phyllis Fox, Frank M. Guerrero, Lavine M. Durden, Nancy L. Jonsson, Ivan S. Jackson, Paul A Houston, Susan Schwarzenegger, Kathy J Swope, Jimmy L Swope, Mela Herrera, Jake Herrera, David Warden, James Silva, Ronald Whiteley, Marilyn Whiteley, Chrystal L Sauls, Mark A. Stewart, William J Rogers, Alice Thompkins, Barbara A Pace, Val L Turnbull, Jr., Desiree A Smith, Phillip R Simmons, Patricia E Rue, Wiley Munsey, Mary M Quappe, Manuel Martinez, Darlene Martinez, Thomas T Sullivan, Pat Sullivan, James Fender, Cynthia Fender, Linda Hoefler, Victor Wilkerson, Vivian Crossno, Joel Crossno, Karen McCullough, Michael McCullough, Kelly Robbins, Herbert Robbins, Jerome Ward, Rodney Bunsen, Martha Bunsen, Edna Morton, Royce Morton, Thomas Olive, Shirley Walls, Clarence Crawford, Theresa Crawford, Arthur McKinney, Linda McKinney, Barbara Olson, Paul Strunk, Janice Bergeron, Otis Ferguson, Judy Ann Ferguson & Mickie Francis, Plaintiffs, represented by Lisa K. Curtis , Curtis and Lucero, Bernard R. Given, II -- bgiven@loeb.com -- Loeb & Loeb LLP, Victor F. Poulos & Felicia C. Weingartner , Law Offices of Felicia C. Weingartner PC. Ann Berry, Plaintiff, represented by Lisa K. Curtis, Curtis and Lucero, Bernard R. Given, II, Loeb & Loeb LLP, Kinzer A. Jackson, Curtis and Lucero Law Firm, Victor F. Poulos & Felicia C. Weingartner, Law Offices of Felicia C. Weingartner PC. Christian R. Schlicht, D.O., Defendant, represented by Paul Bishop -- prbishop@btblaw.com -- & Neil R. Blake -- nrblake@btblaw.com -- Butt, Thornton & Baehr, P.C. Otero County Hospital Association, Inc., dba, Defendant, represented by John A. Klecan, Renaud Cook Drury Mesaros, P.A. Frank Bryant, M.D., Defendant, pro se. Quorum Health Resources,LLC, Defendant, represented by Adam Jason Bobkin , Mauro Lilling Naparty LLP, John Leslie Corbett -- john.corbett@btlaw.com -- Barnes & Thornburg LLP, William W. Drury , Paul M. Fish , John A. Klecan , Renaud Cook Drury Mesaros, P.A., Joe L. McClaugherty , McClaugherty & Silver PC, Richard James Montes , Mauro Lilling Naparty LLP, Tamara Safarik & David E. Wood , Anderson Kill & Olick PC. About Otero County Hospital Otero County Hospital Association Inc. filed for Chapter 11 protection (Bankr. D. N.M. Case No. 11-13686) in Albuquerque, New Mexico, on Aug. 16, 2011. The Alamogordo, New Mexico-based nonprofit developed and operates the Gerald Champion Regional Medical Center. GCRMC serves a total population of approximately 70,000 people. Otero County Hospital Association also does business as Mountain View Catering. Judge Robert H. Jacobvitz presides over the case. Craig H. Averch, Esq., and Roberto J. Kampfner, Esq., at White & Case, LLP, in Los Angeles; and John D. Wheeler, Esq., at John D. Wheeler & Associates, PC, in Alamogordo, New Mexico, serve as bankruptcy counsel. Kurtzman Carson Consultants, LLC, serves as claims agent. The Debtor disclosed $124,186,104 in assets and $40,506,759 in liabilities as of the Chapter 11 filing. Alice Nystel Page, U.S. Trustee for Region 20, appointed five creditors to serve on the Official Committee of Unsecured Creditors of the Debtor. Gardere Wynne Sewell LLP serves as the Committee's counsel. The Committee tapped James Morell of JCM Advisors, LLC, as healthcare management consultant. The U. S. Trustee appointed E. Marissa Lane PLLC as patient care ombudsman on Sept. 13, 2011. No trustee or examiner has been requested or appointed in the Chapter 11 Case. The Debtor's Third Amended Plan of Reorganization dated June 20, 2012, provides that the Plan will resolve the Trust Personal Injury Claims on a consensual basis; resolve all issues between the Debtor and Quorum Health Resources, LLC well as the Debtor and Nautilus Insurance Company on a consensual basis; satisfy the claims of Bank of America in full; provide for the payment of trade and other unsecured creditors in full; and allow the Debtor to emerge from chapter 11 in a strong position and with the ability to satisfy the medical needs of Otero County. The Plan contemplates that the Debtor will obtain exit financing to the extent necessary to satisfy the claims of its primary secured creditor, Bank of America, and provide the Debtor with sufficient capital to meet its other obligations under the Plan and continue its normal operations. On June 21, 2012, the Court entered an order approving the disclosure statement and establishing procedures relating to confirmation of the plan. Following a confirmation hearing held Aug. 3, 2012, the Court entered an order confirming a fourth amended plan, which contained non-material modifications to the third amended plan. PACIFIC THOMAS: Bankr. Ct. Judgment in Favor of Trustee Vacated --------------------------------------------------------------- As directed by the Ninth Circuit, District Judge Maxine M. Chesney vacates the judgment of the bankruptcy court entered Nov. 4, 2014, in favor of Kyle Everett, the Chapter 11 trustee for the estate of the debtor, Pacific Thomas Corporation. The case captioned KYLE EVERETT, Chapter 11 Trustee, Plaintiff and Appellee, v. RANDALL WHITNEY, et al., Defendants and Appellants, Case No. 14-cv-03465-MMC (N.D. Cal.) is remanded to the bankruptcy court to determine whether the parties' lease agreements are void under principles of California contract law. A copy of the Court's Order dated April 20, 2018 is available at https://bit.ly/2IcwIcn from Leagle.com. Kyle Everett, Plaintiff, represented by Craig C. Chiang -- cchiang@buchalter.com -- Buchalter Nemer, Mia S. Blackler -- mblackler@buchalter.com -- Buchalter Nemer, Ivo Keller -- ikeller@buchaleter.com -- Buchalter Nemer & Robert E. Izmirian -- rizmirian@buchalter.com -- Buchalter Nemer. Randall Curtis Martin Whitney, Defendant represented by Paul Gilruth McCarthy. Pacific Trading Ventures, a California Corporation, Pacific Trading Ventures, Ltd., a Nevada corporation & Jill V. Worsley, also known as, Defendants, represented by Charles Alex Naegele , C. Alex Naegele, A Professional Law Corporation. About Pacific Thomas Corporation Walnut Creek, California, Pacific Thomas Corporation filed a Chapter 11 petition (Bankr. N.D. Cal. Case No. 12-46534) in Oakland on Aug. 6, 2012, estimating in excess of $10 million in assets and liabilities. Pacific Thomas Corporation is related to Pacific Thomas Capital, which specializes in real estate services, focusing on the investment, ownership and development of commercial real estate properties, according to http://www.pacificthomas.com/ Real estate activities has spanned throughout the Hawaiian Islands as well as U.S. West Coast locations in California, Nevada, Arizona and Utah. Hawaii-based activities are managed under the name Thomas Capital Investments. Bankruptcy Judge M. Elaine Hammond presides over the case. Anne-Leith Matlock, Esq., at Matlock Law Group, P.C., serves as general counsel. The petition was signed by Jill V. Worsley, its COO and secretary. In its schedules, the Debtor disclosed $19,960,679 in assets and $16,482,475 in liabilities as of the petition date. Kyle Everett has been named as Chapter 11 trustee of the Debtor. Craig C. Chiang, Esq., at Buchalter Nemer, P.C., in San Francisco, Calif., represents the Chapter 11 trustee as counsel. In January 2014, Judge Hammond entered an order holding that Pacific Thomas Corp.'s Fourth Amended Disclosure Statement, filed on Dec. 31, 2013, is not approved for the reasons stated on the record at the Jan. 16 hearing. Pursuant to the Plan, the Debtor proposed to avail of a loan from Thorofare Capital to pay off some secured claims. The new loan would be refinanced by the reorganized company before the loan terms expires. If the reorganized company fails to do so, the safe storage parcels of the Pacific Thomas properties will be sold. PALM BEACH FINANCE: Trustee Fraudulent Transfer Claims vs NCF Nixed ------------------------------------------------------------------- In the adversary proceeding captioned Barry E. Mukamal, as Liquidating Trustee, Plaintiff, v. The National Christian Charitable Foundation, Inc., d/b/a The National Christian Foundation, Inc., Defendant, Adv. Proc. No. 11-02940-EPK (Bankr. S.D. Fla.), the liquidating trustee for the Palm Beach Finance Liquidating Trust and the Palm Beach Finance II Liquidating Trust sues The National Christian Foundation, Inc., seeking a money judgment for claims arising in state law fraudulent transfer and unjust enrichment. Both the plaintiff and the defendant filed motions for summary judgment. Upon review, Bankruptcy Judge Erik P. Kimball granted the defendant's request for summary judgment on count 2 of the complaint. The plaintiff's request for summary judgment as to defendant's affirmative defenses 8 (in pari delicto) and 9 (unclean hands) is granted. The defendant's request for summary judgment with regard to its affirmative defense 11 (multiple recovery) is granted in part. All other relief requested in the cross-motions for summary judgment is denied. The bankruptcy case, and the present adversary proceeding, stem from one of the largest Ponzi schemes in US history. More than 20 years ago, Thomas Petters began soliciting investments to facilitate his purchase of overstock consumer products from manufacturers or suppliers and the sale of those products to major retailers. Palm Beach Finance Partners, L.P. and Palm Beach Finance II, L.P., the debtors in this case, were formed in 2002 and 2004, respectively, to facilitate investment with the Petters enterprise. Nearly all of the money raised by the debtors was used to purchase notes issued by Petters. Unfortunately, the entire Petters financing scheme was a fiction. Instead, Mr. Petters and his conspirators ran a multi-billion dollar Ponzi scheme, taking in money from new investors, using some of it to pay prior investors, and absconding with the rest. The scheme came to an end in 2008 when the Federal Bureau of Investigation arrested Mr. Petters, who was later convicted of several federal crimes and sentenced to 50 years in prison. The principals of the debtors were originally introduced to Petters by Frank Vennes. Mr. Vennes and his company, Metro Gem, Inc., had invested in Petters transactions for several years. The plaintiff alleges that the debtors are creditors of MGI because MGI and Mr. Vennes made material misrepresentations and omitted materially important facts relating to the Petters investments, and because MGI and Mr. Vennes breached their fiduciary duties to the debtors, thus causing damage to the debtors. The plaintiff claims that, as creditors of MGI, the bankruptcy estates may avoid fraudulent transfers made by MGI to the defendant. In counts 1 and 2 of the complaint, the plaintiff seeks avoidance of fraudulent transfers and a money judgment under provisions of Georgia law. These claims are based on four payments made by MGI to the defendant between January and December 2006, aggregating $9,010,000. In count 3 of the complaint, the plaintiff seeks judgment in connection with the same transfers based in unjust enrichment. The plaintiff also seeks prejudgment interest and an award of attorneys' fees and costs. The plaintiff filed a motion seeking partial summary judgment that the debtors were at the time of the transfers and are now creditors of Metro Gem, Inc., that MGI was insolvent at all relevant times, and that certain affirmative defenses raised by the defendant fail as a matter of law. The defendant filed a motion seeking summary judgment in its favor on all claims presented. The defendant argues that the debtors were not creditors of MGI at the time of the transfers and therefore the plaintiff does not have the authority to pursue fraudulent transfer claims under O.C.G.A. section 18-2-752 (count 2). In response to the defendant's motion for summary judgment, the plaintiff should have presented affidavits, transcripts or other admissible evidence to support each factual element of the debtors' negligent misrepresentation claims against MGI. Instead, the plaintiff presented only its substantially unsupported separate complaint against MGI. Amazingly, in a reply brief the plaintiff states that the allegations in the separate complaint against MGI "as Defendant well knows, are based on (among other things) the uncontroverted testimony of Bruce Prevost and the investment summary MGI gave to [the debtors]," yet the plaintiff did not point the Court to any testimony of Mr. Prevost in connection with these motions. The plaintiff failed to adequately respond to the defendant's motion for summary judgment on whether the debtors have pre-transfer claims against MGI. The defendant is entitled to summary judgment on this issue. As a result, the plaintiff may not obtain any relief in this action under section 18-2-75 (count 2). All of the claims pursued by the plaintiff, in this case, are state law claims that became property of the debtors' bankruptcy estates under 11 U.S.C. section 541. With regard to such claims, the plaintiff, as trustee for the debtors' estates, is subject only to the defenses that were available against the debtors at the time this bankruptcy case was filed. Because the wrongdoers were removed from control of the debtors long before this bankruptcy case was filed, on the petition date the debtors would not have been subject to the in pari delicto defense and so neither is the plaintiff. Scholes v Lehmann, 56 F.3d 750 (7th Cir. 1995) ("the defense of in pari delicto loses its sting when the person who is in pari delicto is eliminated"). The defense of in pari delicto does not bar the debtors' claims against MGI and thus does not bar recovery in this case. For the same reasons, affirmative defense number 9 (unclean hands) must fail. The plaintiff did not come to the Court with unclean hands. Affirmative defenses 8 and 9 will not be considered at trial. The Court orders that the adversary proceeding will proceed to trial on counts 1 and 3. A full-text copy of the Court's order dated April 20, 2018 is available at https://bit.ly/2rzCJsE from Leagle.com. Barry Mukamal, Plaintiff, represented by Michael S. Budwick, Esq. -- mbudwick@melandrussin.com -- James C. Moon, Esq. -- jmoon@melandrussin.com -- Peter D. Russin, Esq. & Jessica L. Wasserstrom -- jwasserstrom@melandrussin.com The National Christian Foundation, Inc., Defendant, represented by David J. Myers -- david.myers@fisherbroyles.com -- FisherBroyles, LLP, Leanne McKnight Prendergast, Esq. -- Leanne.Prendergast@fisherbroyles.com -- FisherBroyles & Bradley S. Shraiberg. About Palm Beach Finance Partners Palm Beach Gardens, Florida-based hedge fund Palm Beach Finance Partners, L.P., solicited capital contributions from third-party limited partners, and proceeded to invest substantial amounts of the capital with the Petters Company, Inc. PBFP filed for Chapter 11 protection (Bankr. S.D. Fla. Case No. 09-36379) on Nov. 30, 2009. Its affiliate, Palm Beach Finance II, L.P., also filed for bankruptcy (Bankr. S.D. Fla. Case No. 09-36396). PBF II estimated $500 million to $1 billion in assets and liabilities in its petition. Paul A. Avron, Esq., and Paul Steven Singerman, Esq., at Berger Singerman LLP, assisted the Debtors in their restructuring efforts. On January 29, 2010, the Office of the U.S. Trustee appointed Barry Mukamal as Chapter 11 trustee in both of the Debtors' estates. On October 19, 2010, the court confirmed the joint Chapter 11 plan of liquidation proposed by Mr. Mukamal and Geoffrey Varga, official liquidator for Palm Beach Offshore, Ltd., and Palm Beach Offshore II, Ltd. Mr. Mukamal is the liquidating trustee by virtue of the court's order confirming the liquidating plan. He is represented by Michael S. Budwick, Esq., at Meland Russin & Budwick, P.A. The trustee employed Koyzak Tropin & Throckmorton, LLP as special co-counsel and Jerome M. Hesch as expert consultant. PANCHITA BELLO: $235K Sale of Washington DC Property Approved ------------------------------------------------------------- Judge S. Martin Teel, Jr. of the U.S. Bankruptcy Court for the District of Columbia authorized Panchita Bello's sale of the real property known as 1529 A Street, SE, Washington, DC to District Home Buyers, LLC, for $235,000. The sale is free and clear of any and all liens, claims and encumbrances, with such liens, claims and encumbrances to attach to the proceeds from the sale of the Property (if not paid at closing). The Debtor is authorized to pay at closing of the sale under the Contract routine, standard, ordinary and necessary expenses of closing, and to pay at closing any lien, claim or encumbrance as to which the Debtor has no objection or reservation with respect to payment (but not in derogation of any disputed lien having superior priority if valid, i.e., sufficient funds should be reserved to pay such disputed lien plus one year of later accruals thereon). Following the closing of said sale under the Contract, the Debtor will promptly file with the Court a Report of Sale, indicating the amounts the Debtor received, caused to be disbursed at closing, and retained for further administration (as to which a standard, completed form known as a "HUD-1" would be acceptable if completed in the normal and standard manner) Panchita Bello sought Chapter 11 protection (Bankr. D.D.C. Case No. 16-00130) on March 20, 2016. The Debtor tapped Jeffrey M. Sherman, Esq., at Law Offices of Jeffrey M. Sherman, as counsel. PANCHITA BELLO: S. Majidy Suit Remanded to D.C. Superior Court -------------------------------------------------------------- Bankruptcy Judge S. Martin Teel, Jr. granted the plaintiff's motion to remand the case captioned SASHA MAJIDY, Plaintiff, v. PANCHITO BELLO, Defendant, Adversary Proceeding No. 17-10035 (Bankr. D.C.) to the Superior Court. Under 28 U.S.C. section 1447(a), a party may remove a case from state court to the bankruptcy court if the bankruptcy court has jurisdiction under 28 U.S.C. section 1334. Under section 1334, bankruptcy courts have original and exclusive jurisdiction over cases under title 11, and original and concurrent jurisdiction over cases "arising under title 11, or arising in or related to cases under title 11." Under 28 U.S.C. section 1447(b), the bankruptcy court may remand any case removed under section 1447(a) on any equitable ground. However: Upon timely motion of a party in a proceeding based upon a State law claim or State law cause of action, related to a case under title 11 but not arising under title 11 or arising in a case under title 11, with respect to which an action could not have been commenced in a court of the United States absent jurisdiction under this section, the district court shall abstain from hearing such proceeding if an action is commenced, and can be timely adjudicated, in a State forum of appropriate jurisdiction. The removing party has the burden to prove that there is federal jurisdiction. Section 1334(c)(2) requires courts to abstain from hearing cases that are based on a state law claim, for which the court only has related to jurisdiction, there is no other federal jurisdiction, that is commenced in state court, and can be timely adjudicated in that state court. The Court holds that this is a state law claim. The plaintiff is seeking damages for the debtor's neglect of the property under a lease. This is a cause of action under the D.C. landlord/tenant laws. The court only has related to jurisdiction over this case. Section 1334(b) provides that the court has jurisdiction over "all civil proceedings arising under title 11, or arising in or related to cases under title 11." Cases arise under title 11 when "a claim is made under a provision of title 11." This case does not arise under title 11. The case is a landlord/tenant dispute regarding maintenance of the property. Title 11 does not create the cause of action here. Nor does the case arise in title 11, as this matter has nothing to do with the administration of the bankruptcy case, and would easily exist outside the bankruptcy case. The debtor contends that this case arises from the debtor's business operations and therefore may constitute an administrative claim. However, that does not give it the status of "arising under" or "arising in" title 11. The case certainly does relate to the bankruptcy case as the case may result in administrative expenses and is an action against the debtor. In determining whether a case can be timely adjudicated, courts have looked at several factors. These factors include: (1) the backlog of the state court's calendar relative to the federal court's calendar; (2) the complexity of the issues presented and the respective expertise of each forum; (3) the status of the title 11 bankruptcy proceeding to which the state law claims are related; and (4) whether the state court proceeding would prolong the administration or liquidation of the estate. The debtor contends that there is a "well-known" backlog in D.C. Superior Court; however, the debtor provides no evidence of such backlog, or how this courts calendar is any less backlogged than the D.C. Superior Court's calendar. The burden is on the debtor to show that the case is properly before this court. The mere alluding to a known fact does not provide the evidence necessary to carry such burden. The debtor also contends that the case has not proceeded in the D.C. Superior Court, but that is because the case was only in the D.C. Superior Court for a period of 28 days before it was removed to the bankruptcy court. Moreover, if the case had remained in D.C. Superior Court, it may have already been resolved or would be closer to resolution than it currently sits. The other factors do not help the debtor here. While this is a fairly simple case, the D.C. Superior Court would still have greater expertise in landlord/tenant law. There is no proceeding under the bankruptcy case that is related to the state law claim. The debtor notes that the case may lead to administrative claims, but as of now, there are no proceedings dealing with such administrative claims The debtor has not shown that adjudication by the D.C. Superior Court would impact the bankruptcy proceedings. Therefore, this case falls under the mandatory abstention provision of section 1334(c)(2). The debtor also contends that it would be more efficient for the court to hear this case and would better protect creditors. However, Congress does not provide for the court to retain these types of cases for administrative efficiency or for greater protection to creditors. Therefore, the court must abstain from hearing this matter and remand it back to the D.C. Superior Court. A full-text copy of the Court's Memorandum Decision and Order dated April 17, 2018 is available at https://bit.ly/2IoYDsZ from Leagle.com. Sasha Majidy, Plaintiff, pro se. Panchita Bello, Defendant, represented by Jeffrey M. Sherman, Law Offices of Jeffrey M. Sherman & Aaron G. Sokolow -- Aaron@SokolowLaw.com -- Battino & Sokolow PLLC. Panchita Bello sought Chapter 11 protection (Bankr. D.D.C. Case No. 16-00130) on March 20, 2016. The Debtor tapped Jeffrey M. Sherman, Esq., at Law Offices of Jeffrey M. Sherman, as counsel. PENTHOUSE GLOBAL: Trustee Taps Akerman LLP as IP Counsel -------------------------------------------------------- David Gottlieb, the Chapter 11 trustee for Penthouse Global Media, Inc., seeks approval from the U.S. Bankruptcy Court for the Central District of California to hire Akerman LLP as special counsel. The firm will advise the trustee concerning the licensing and sale of the intellectual property of Penthouse and its affiliates, and to address contested use, transfer and ownership issues. Akerman's hourly rates range from $320 to $495. Caroline Mankey, Esq., a partner at Akerman and the attorney who will be representing the trustee, has agreed to reduce her hourly rate to $495 from $550. Patricia Flanagan, Esq., and Amy Price, Esq., the other attorneys who may also provide services, will charge $425 per hour and $320 per hour, respectively. Akerman neither represents nor holds any interests adverse to the trustee and the Debtors, according to court filings. The firm can be reached through: Caroline Mankey, Esq. Akerman LLP 601 West Fifth Street, Suite 300 Lus Angeles, CA 90071 Telephone: 213.688.9500 Facsimile: 213.627.6342 Email: caroline.mankey@akerman.com About Penthouse Global Headquartered in Chatsworth, California, Penthouse Global Media, Inc. -- http://www.penthouseglobalmedia.com/-- was launched in February 2016 as an acquisition by veteran entertainment executive, Kelly Holland. The Company continues the 50+ year Penthouse brand legacy. The focal point of the business includes four main branches: broadcast, publishing, licensing and digital. Various Penthouse TV channels are available in over 100 countries. Penthouse Magazine was founded in the U.K. in 1965 by Bob Guccione and brought to the U.S. in 1969. Penthouse Global Media, Inc. and its affiliates filed Chapter 11 petitions (Bankr. C.D. Cal. Lead Case No. 18-10098) on Jan. 11, 2018. In the petitions signed by Kelly Holland, CEO, Penthouse Media estimated its assets at up to $50,000 and its liabilities at between $10 million and $50 million. Penthouse Broadcasting estimated its assets at between $1 million and $10 million and liabilities at between $500,000 and $1 million. Penthouse Licensing estimated its assets and liabilities at between $1 million and $10 million each. Judge Martin R. Barash presides over the case. Michael H. Weiss, Esq., and Laura J. Meltzer, Esq., at Weiss & Spees, LLP, serve as the Debtors' bankruptcy counsel. The Debtors hired Akerman LLP, the Law Offices of Allan B. Gelbard and the Law Offices of Dermer Behrendt as litigation counsel. The Office of the U.S. Trustee appointed an official committee of unsecured creditors on Jan. 30, 2018. The Committee retained Raines Feldman LLP as its legal counsel. On March 6, 2018, the court approved the appointment of David K. Gottlieb as Chapter 11 trustee. The Trustee tapped Pachulski Stang Ziehl & Jones LLP as bankruptcy counsel and Province, Inc., as financial advisor. PESCRILLO NEW YORK: Taps Gleichenhaus Marchese as Legal Counsel --------------------------------------------------------------- Pescrillo New York, LLC, received approval from the U.S. Bankruptcy Court for the Western District of New York to hire Gleichenhaus, Marchese & Weishaar, PC, as its legal counsel. The firm will advise the Debtor regarding its duties under the Bankruptcy Code and will provide other legal services related to its Chapter 11 case. Michael Weishaar, Esq., the attorney who will be handling the case, charges an hourly fee of $350. Other Gleichenhaus attorneys charge $300 per hour while paralegals and legal secretaries charge $80 per hour. The Debtor paid the firm $5,000 prior to the petition date, and has agreed to fund an initial retainer of $10,000. Gleichenhaus is a "disinterested person" as defined in section 101(14) of the Bankruptcy Code, according to court filings. The firm can be reached through: Michael A. Weishaar, Esq. Gleichenhaus, Marchese & Weishaar, PC 930 Convention Tower 43 Court Street Buffalo, NY 14202 Tel: (716) 845-6446 Fax: 716-845-6475 Email: mweishaar@gmwlawyers.com About Pescrillo New York Pescrillo New York, LLC, a real estate lessor, is the fee simple owner of 113 real properties in Niagara Falls and Buffalo New York, having an aggregate value of $1.71 million. Pescrillo New York sought protection under Chapter 11 of the Bankruptcy Code (Bankr. W.D.N.Y. Case No. 18-10656) on April 9, 2018. The Debtor first sought bankruptcy protection (Bankr. W.D.N.Y. Case No. 15-74305) on Oct. 8, 2015. In the petition signed by Ralph T. Pescrillo, managing member, the Debtor disclosed $1.72 million in assets and $1.84 million in liabilities. Judge Michael J. Kaplan presides over the case. PIER 1 IMPORTS: Moody's Cuts Rating to B3 on Increased Competition ------------------------------------------------------------------ Moody's Investors Service downgraded its ratings for Pier 1 Imports, Inc., including the company's Corporate Family Rating ("CFR") to B3 from B1, Probability of Default Rating to B3-PD from B1-PD, and the senior secured term loan rating to B3 from B1. The ratings outlook is stable. The rating actions conclude Moody's review for downgrade initiated April 19, 2018, following the company's announcement of its fourth quarter 2018 results and "Pier 1 2021: A New Day" strategic initiatives plan. "The downgrades reflect growing competition in the home decor retail sector, and the risk that Pier 1's strategic plan may not yield sufficient sales growth needed for strong earnings recovery," said Raya Sokolyanska, Moody's Vice President and lead analyst for the company. "While Pier 1's pricing, marketing, assortment, technology and sourcing initiatives are important and necessary, execution risk is high and we expect that credit metrics will weaken significantly over the next 2 years," added Sokolyanska. Moody's took the following ratings actions for Pier 1 Imports (U.S.), Inc.: Corporate Family Rating, downgraded to B3 from B1 Probability of Default Rating, downgraded to B3-PD from B1-PD Senior Secured Bank Credit Facility, downgraded to B3 (LGD4) from B1 (LGD4) Speculative Grade Liquidity Rating, affirmed SGL-2 Outlook, changed to Stable from Rating Under Review RATINGS RATIONALE Pier 1's B3 CFR incorporates Moody's expectations that Pier 1's strategic plan will yield material earnings improvement from the 2019 heavy investment year, but that the benefits will be partly offset by profit pressure from growing competition. Moody's projects that the company's significant investments will lead to debt/EBITDA (Moody's-adjusted) peaking at 5 times and, more notably, EBIT/interest expense (Moody's-adjusted) declining to just 0.6 times in FY 2019, before recovering towards the low-4 times and low-1 times levels, respectively, in FY 2021. The rating also reflects Pier 1's narrow product focus in the highly cyclical home furnishings sector. Nevertheless, the rating incorporates the company's well-known brand and geographic reach across North America. In addition, Pier 1's relatively low level of funded debt and good liquidity -- including significant year-end cash balances, a lack of near-term maturities and ample ABL availability -- provide key support to the rating. The stable outlook reflects Moody's expectations for good near-term liquidity and earnings recovery starting in fiscal year 2020. The ratings could be upgraded if the company effectively executes on its strategic plan and achieves solid revenue and earnings growth following the 2019 heavy investment year. Quantitatively, the ratings could be upgraded if debt/EBITDA is sustained below 5 times in conjunction with EBIT/interest expense sustained above 1.5 times. An upgrade would also require maintenance of good liquidity. The ratings could be downgraded if liquidity erodes, or if revenues and earnings significantly lag the targets outlined in the company's strategic plan. Quantitatively, the ratings could be downgraded if Moody's expects debt/EBITDA (Moody's-adjusted) to be sustained above 6.0 times or EBIT/interest remains below 1.0 time for a prolonged period beyond fiscal 2019. The principal methodology used in these ratings was Retail Industry published in May 2018. Pier 1 Imports (U.S.), Inc. is an indirect operating subsidiary of Pier 1 Imports, Inc., a specialty retailer of imported decorative home furnishings and gifts. The company operates through 1,003 stores throughout the U.S. and Canada, its Pier1.com e-commerce website, and licensing arrangements with stores in Mexico and El Salvador. Revenue for the year ended March 3, 2018 was $1.8 billion. PLANTRONICS INC: Moody's Confirms Ba2 CFR After Polycom Deal ------------------------------------------------------------ Moody's Investors Service confirmed Plantronics, Inc.'s Ba2 Corporate Family Rating, assigned a Ba1 rating to its proposed senior secured debt facilities and downgraded its existing senior unsecured notes rating to B1 from Ba2. The proposed facilities will be used along with cash on hand to finance the acquisition of Polycom , Inc. This action concludes the review for downgrade initiated on March 28, 2018 when Plantronics announced its plans to acquire Polycom. The ratings outlook is negative. Ratings Rationale Plantronics, Inc.'s Ba2 CFR reflects its leading position across several audio, voice and video enterprise communications device markets post its acquisition of Polycom, Inc. Although leverage is estimated around 5x at closing of the acquisition, Moody's expects the company will focus on reducing debt and returning leverage to mid-3's (on a Moody's adjusted basis) over the next two years. While Moody's expects growth in several of the company's key product lines including UC headsets, open SIP desktop and conference room phones, the company will need to continue to address declines in Polycom's video product lines as well as declines in Plantronics consumer business which have contributed to overall revenue declines. Enterprise communications architectures continue to evolve and endpoint devices increasingly need to work in any environment with any communications system provider. Though both Plantronics and Polycom have adapted to these trends, numerous new and long established players have adapted as well and the markets are extremely competitive and both companies have likely lost some market share. Nonetheless, Moody's believes the combination of Plantronics and Polycom makes strategic sense and results in the largest independent provider (i.e. not part of a larger unified communications infrastructure player such as Cisco or Avaya) of audio and video endpoint devices. The negative outlook reflects the challenges in addressing declines in both companies, integrating the companies and potential that deleveraging could take longer than expected. The ratings could be downgraded if the company is unable to stabilize revenues or leverage is expected to be above 3.5x or free cash flow below 10% on other than a temporary basis. The ratings could be upgraded if performance stabilizes and leverage is expected to remain below 2x and free cash flow to debt greater than 20%. Liquidity is very good based on an expected $300 million of cash at closing, an undrawn $100 million revolver and solid levels of free cash flow over the next year. The following ratings were affected: Downgrades: Issuer: Plantronics, Inc. Senior Unsecured Regular Bond/Debenture, Downgraded to B1 (LGD5) from Ba2 (LGD4) Assignments: Issuer: Plantronics, Inc. Senior Secured Revolving Credit Facility, Assigned Ba1 (LGD3) Senior Secured Term Loan B, Assigned Ba1 (LGD3) Outlook Actions: Issuer: Plantronics, Inc. Outlook, Changed To Negative From Rating Under Review Confirmations: Issuer: Plantronics, Inc. Corporate Family Rating, Confirmed at Ba2 Probability of Default Rating, Confirmed at Ba2-PD Affirmations: Issuer: Plantronics, Inc. Speculative Grade Liquidity Rating, Affirmed SGL-1 The principal methodology used in these ratings was Diversified Technology Rating Methodology published in December 2015. Plantronics, Inc., headquartered in Santa Cruz, California, is a provider of audio communications headsets and accessories used by businesses and consumers. Polycom, headquartered in San Jose, California is a provider of voice endpoints (i.e. desktop phones and conference room phones), video endpoints (equipment for video rooms and desktops), and platform solutions for enterprise customers to manage their systems. The two companies had combined revenue of approximately $2 billion for the period ended December 31, 2017. PUGLIA ENGINEERING: District Court Stays Motor-Services Suit ------------------------------------------------------------ District Judge Robert S. Lasnik entered an order staying the case captioned MOTOR-SERVICES HUGO STAMP, INC., Plaintiff, v. PUGLIA ENGINEERING, INC., Defendant, v. BUSH KORNFELD, LLP, Garnishee, Case No. MC18-0040RSL (W.D. Wash.). Defendant/judgment debtor Puglia Engineering, Inc., has filed a Chapter 11 bankruptcy petition, thus the case is stayed. The parties are directed to notify the Court within 14 days of the resolution of the underlying bankruptcy action or the lifting of the bankruptcy stay, whichever comes first. A copy of the Court's Order dated April 19, 2018 is available at https://bit.ly/2Ke3Ilb from Leagle.com. Motor-Services Hugo Stamp, Inc., a Florida corporation, Plaintiff, represented by John T. Bender -- John.Bender@lewisbrisbois.com -- LEWIS BRISBOIS BISGAARD & SMITH LLP. About Puglia Engineering Puglia Engineering Inc. -- http://pugliaengineering.com/-- is a shipbuilder and repairer based in Tacoma, Washington. It is a privately-held company founded in 1991. The company has locations in Tacoma, Washington; Fairhaven, Massachusetts; and Oakland, California. Puglia Engineering sought protection under Chapter 11 of the Bankruptcy Code (Bankr. W.D. Wash. Case No. 18-41324) on April 14, 2018. In the petition signed by Neil Turney, president, the Debtor disclosed $14.26 million in assets and $21.13 million in liabilities. Judge Brian D. Lynch presides over the case. PUGLIA ENGINEERING: Pacific Welding Appointed to Committee ---------------------------------------------------------- The Office of the U.S. Trustee for Region 18 on May 11 appointed Pacific Welding Supplies LLC as new member of the official committee of unsecured creditors in the Chapter 11 case of Puglia Engineering Inc. The bankruptcy watchdog had earlier appointed Blastone, Fredrick Brandt and Princes Cruise Lines, Ltd., court filings show. Pacific Welding can be reached through: Bob W. Hankel Vice-President - Sales Pacific Welding Supplies LLC 3640 C Street NE Auburn, WA 98002 Phone: 206-396-6203 Fax: 253-887-8657 Email: bhankel@pacificwelding.com About Puglia Engineering Puglia Engineering Inc. -- http://pugliaengineering.com/-- is a ship builder and repairer based in Tacoma, Washington. It is a privately-held company founded in 1991. The company has locations in Tacoma, Washington; Fairhaven, Massachusetts; and Oakland, California. Puglia Engineering sought protection under Chapter 11 of the Bankruptcy Code (Bankr. W.D. Wash. Case No. 18-41324) on April 14, 2018. In the petition signed by Neil Turney, president, the Debtor disclosed $14.26 million in assets and $21.13 million in liabilities. James L. Day, Esq., at Bush Kornfeld LLP serves as the Debtor's bankruptcy counsel. Judge Brian D. Lynch presides over the case. PURADYN FILTER: Liggett & Webb, P.A. Raises Going Concern Doubt --------------------------------------------------------------- Puradyn Filter Technologies Incorporated filed with the U.S. Securities and Exchange Commission its annual report on Form 10-K, disclosing a net loss of $1.23 million on $2.25 million of net sales for the fiscal year ended December 31, 2017, compared to a net loss of $1.44 million on $1.95 million of net sales for the year ended in 2016. Liggett & Webb, P.A., states that the Company has experienced net losses since inception and negative cash flows from operations and has relied on loans from related parties to fund its operations. These factors raise substantial doubt about the Company's ability to continue as a going concern. The Company's balance sheet at December 31, 2017, showed total assets of $1.37 million, total liabilities of $10.27 million, and a total stockholders' deficit of $8.89 million. A copy of the Form 10-K is available at: https://is.gd/9B01gw About Puradyn Filter Technologies Boynton Beach, Fla.-based Puradyn Filter Technologies Incorporated (OTC BB: PFTI) designs, manufactures, markets and distributes worldwide the Puradyn bypass oil filtration system for use with substantially all internal combustion engines and hydraulic equipment that use lubricating oil. R&B RECEIVABLES: HHS Refusal to Award Grant Reasonable, Ct. Rules ----------------------------------------------------------------- In the case captioned R&B RECEIVABLES MANAGEMENT CORP. d/b/a R&B SOLUTIONS, Plaintiff, v. UNITED STATES DEPARTMENT OF HEALTH AND HUMAN SERVICES, Defendant, Case No. 15 C 8109 (N.D. Ill.), R&B Receivables Management Corp., which operates under the name R&B Solutions, has sued the U.S. Department of Health and Human Services, alleging that it violated the Administrative Procedure Act (APA) in declining to award R&B a 2014-2015 health insurance marketplace Navigator grant after issuing a press release naming R&B as an awardee. R&B alleges that HHS's last-minute decision not to award it a 2014-2015 grant was improperly influenced by negative press coverage and that the decision was arbitrary and capricious, contrary to law, and in excess of the agency's statutory authority. Both parties have moved for summary judgment. Upon analysis, District Judge Matthew F. Kennelly denies R&B's motion for summary judgment and grants HHS' motion. R&B has moved for summary judgment on its remaining APA claim. In a three-paragraph motion, R&B argues that it did not violate the terms of the 2013-2014 grant, which required grantees to notify HHS's Centers for Medicare and Medicaid Services (CMS) only upon "entering into" bankruptcy proceedings, because R&B filed for bankruptcy in 2012, before it became a Navigator grantee. R&B also appears to contend that CMS failed to follow the additional regulatory requirements pertaining to the imposition of special conditions on grantees. Without further legal or factual development, R&B contends that HHS's "withdrawal" of R&B's 2014-2015 Navigator grant must be set aside because the agency acted arbitrarily and capriciously and exceeded its statutory authority in effectively singling R&B out for additional selection requirements after it and CMS became the subject of critical news coverage in North Carolina. HHS has cross-moved for summary judgment. HHS argues that R&B has provided no factual or legal support for its own motion for summary judgment and that it has failed to meet its burden to show that CMS's decision not to award the company a 2014-2015 Navigator grant was arbitrary or capricious or otherwise contrary to law. In reviewing R&B's motion for summary judgment, the Court concludes that R&B merely cites the relevant standards under the APA, 5 U.S.C. section 706, and requests (1) "[a] declaratory judgment that the defendants' [sic] withdrawal of the grant was without statutory authority, and compelling defendants to award the navigator grant to which plaintiff is entitled"; (2) "[a] permanent injunction preventing CMS from using the reasons of the prior bankruptcy to deny the plaintiff's future applications;" (3) attorney's fees and costs, and; (4) any other legal or equitable relief. This perfunctory motion for summary judgment, which is devoid of any references to the administrative record or legal argument beyond citation to the basic APA standard and a single regulatory provision, falls far short of establishing that "there is no genuine dispute as to any material fact and [R&B] is entitled to judgment as a matter of law." Even if CMS's determination that R&B violated the terms of the 2013-2014 Navigator grant by failing to notify CMS in writing within five days of filing its amended plan of reorganization with the bankruptcy court was incorrect, R&B fails to challenge CMS's additional reason for denying it a 2014-2015 award: concerns about the company's financial and organizational stability in light of the ongoing bankruptcy proceedings. HHS argues in its cross-motion for summary judgment that the decision not to award R&B a 2014-2015 Navigator grant was based not only on CMS's belief that R&B had violated the terms of its 2013-2014 grant, but also on concerns regarding the company's financial stability. E-mails between Dreier and other CMS officials confirm that they became uneasy about R&B's financial and organizational stability after learning of the company's bankruptcy status. After reviewing the bankruptcy court's approval of R&B's plan of reorganization, these officials remained concerned that the order did not establish that R&B had actually completed the reorganization and been discharged from bankruptcy. It was reasonable and entirely permissible for CMS to consider R&B's bankruptcy status as it related to the company's financial stability as part of the pre-award business review, which, as previously noted, involves a determination of "the adequacy of the applicant's financial and business management capabilities that will support the expenditure of and accountability for CMS funds." This is the case even if the grant application itself did not include a question regarding prior bankruptcy filings and even if some CMS officials were aware of R&B's bankruptcy prior to September 2014, as R&B alleges. Because CMS was entitled to consider R&B's bankruptcy status as part of its pre-award business review, which was a standard component of the 2014-2015 application review process, it was not required to comply with 45 C.F.R. section 74.14; that regulation dealt only with the discretionary imposition of "additional requirements" on certain applicants and grantees. Even when the facts are viewed in the light most favorable to R&B and reasonable inferences are drawn in its favor, the Court concludes that CMS's decision not to award the company a 2014-2015 Navigator grant was not arbitrary, capricious, in excess of its statutory authority, or otherwise contrary to law. To the contrary, the record shows that CMS's decision not to award R&B the grant was both reasonable and permissible under the law. A full-text copy of the Court's Memorandum Opinion and Order dated April 16, 2018 is available at https://bit.ly/2InuWZb from Leagle.com. R&B Receivables Management, Corp., an Illinois corporation, Plaintiff, represented by Roderick Andrew Drobinski , The Law Offices Of Roderick A. Drobinski, A Professional Cor. United States Department of Health and Human Services & Julia Dreier, Centers for Medicare & Medicaid Services Director, Defendants, represented by Susan Willoughby Anderson - Willoughby@usdoj.gov -- Office of the United States Attorney. United States Department of Health and Human Services, Defendant, represented by AUSA - Chicago, United States Attorney's Office. Julia Dreier, Centers for Medicare & Medicaid Services Director, Defendant, represented by AUSA - Chicago, United States Attorney's Office. Consumer Services Division, Defendant, represented by AUSA - Chicago, United States Attorney's Office. Consumer Support Group, Defendant, represented by AUSA - Chicago, United States Attorney's Office. R&B Receivables Management Corporation filed for Chapter 11 bankruptcy protection (Bankr. N.D. Ill. Case No. 17-02946) on Feb. 1, 2017, and is represented by Dennis A. Brebner, Esq. of Dennis Brebner & Associates. RCR WOODWAY: Taps Margaret Maxwell McClure as Legal Counsel ----------------------------------------------------------- RCR Woodway Investments, Inc., seeks approval from the U.S. Bankruptcy Court for the Southern District of Texas to hire the Law Office of Margaret Maxwell McClure as its legal counsel. The firm will advise the Debtor regarding its duties under the Bankruptcy Code and will provide other legal services related to its Chapter 11 case. The firm charges $400 per hour for the services of its attorney and $150 per hour for paralegal services. McClure received a retainer of $10,000 from Texas Belting & Mill Supply Co., Inc. prior to the petition date, and will be paid an additional $10,000 by the Debtor. Margaret McClure, Esq., the attorney who will be handling the case, disclosed in a court filing that she does not represent any interests adverse to the Debtor or its estate. The firm can be reached through: Margaret M. McClure, Esq. Law Office of Margaret Maxwell McClure 909 Fannin Street, Suite 3810 Houston, TX 77010 Phone: 713-574-5426 Fax: 713-658-0334 About RCR Woodway Investments RCR Woodway Investments, Inc., sought protection under Chapter 11 of the Bankruptcy Code (Bankr. S.D. Tex. Case No. 18-32239) on April 30, 2018. At the time of the filing, the Debtor estimated assets of less than $1 million and liabilities of less than $500,000. RIVER HACIENDA: Owners Seek to Terminate Exclusive Periods ---------------------------------------------------------- Objectors River Road Properties, LLC; Carroll Properties, LLC; Villas at Hacienda Del Sol Condominium Association, Inc.; Foothills Legacy, LLC; Maxwell Real Estate Holdings, L.L.C.; JJ 2498, LLC; and Gambel's Oak, LLC ask the U.S. Bankruptcy Court for the District of Arizona to terminate River Hacienda Holdings, LLC's exclusive periods to file and seek confirmation of Debtor's Plan of Reorganization in furtherance of a fair and equitable reorganization via an alternative plan. Objectors are largely owners of Office parcels subject to certain declarations and restrictions. The Debtor manages the Offices common areas for the Office Owners and disputes have arisen over both the management and the charges. Additionally, the Debtor asserts it is the Declarant and manager of the Villas entry drive although the Superior Court has determined that Debtor's claim as to the entry drive is based upon a void document, David Mason seeks to litigate that conclusion in Superior Court and on appeal, and has caused Debtor to file adversary proceeding No. 4:18-ap00177-SHG against a host of non-debtors, Hacienda Del Sol Partners, LLC, VHDS, LLC, The Villas of Hacienda Del Sol, Inc., Watermark Hacienda Tucson, LLC, and The Villas at Hacienda Del Sol Condominium Association, asserting a variety of state law causes of action. Objectors assert a Judgment claim against Debtor for $45,158 in C20163400 for Villas at Hacienda Del Sol Condominium Association. The Office Owners paid about $214,800 in the 10 years ending December 1, 2017 in reserves, the bulk of which were apparently used to pay Debtor's legal fees -- not monies necessary for the operation of the Common Areas and for the maintenance thereof in order to keep the Common Areas in good repair and clean condition. The reserves were entirely dissipated upon the bankruptcy filing. Likewise, the stakeholders on the Entry drive paid $120,465 in reserves during the same period. The core of the disputes among David Mason and the Owners and beneficiaries of the Villas entry drive and the Offices are essentially: (a) Mr. Mason controls the management of the Offices common areas as if funds paid by the Office Owners are sums he can demand at will, and pay as he sees fit, whether to third parties or to himself. (b) Mr. Mason controlled the management of the Villas entry drive in a similar manner until the Superior Court judgment. (c) After the Superior Court judgment, the Villas HOA replaced Debtor as the manager for the drive, thereby achieving a significant cost reduction, and now receives regular, transparent financial reporting. (d) Mr. Mason historically collected reserves from Office owners and for the entry drive. He has since spent all of the reserves, without reporting, primarily on legal fees. (e) Mr. Mason has allowed and directed overcharges for numerous expense items in managing the Offices common areas and Villas entry drive. (f) The Debtor's bankruptcy filing was in response to entry of the Superior Court judgment, and is a naked effort to use the bankruptcy court as a new forum. (g) The new adversary proceeding asserts state law claims against non-debtors in order to horizontally appeal and otherwise vitiate the Superior Court judgment. (h) The Debtor filed a plan and disclosure in response to the Court's directive, which Plan asserts that Debtor owes only $5,267.93 in unsecured claims, which are stretched out for full payment in Class 3 in a naked attempt to gerrymander an accepting, impaired non-insider class of claims. (i) As to Objectors, the Debtor's Plan offers only litigation, Plan Treatment provides: "The Debtor has pending a motion for new trial which if successful will resolve such judgment. If such motion for new trial is unsuccessful, the Debtor shall appeal such judgment. In the event that such appeal is unsuccessful in setting aside the judgment, Debtors shall modify this Plan to set forth terms of payment of the Disputed Claimants' claims. The Debtor shall pay nothing on the Class 4 claim unless and until this Plan is modified as set forth above." (j) As to David Mason, Debtor's sole owner, his ownership interest is classified in Class 4 of the Plan, and retained, without modification or contribution. Although Debtor remains debtor in possession, and thus Mr. Mason must act as a fiduciary to his creditors, nevertheless. (k) The Debtor failed to schedule any of the Office owners (other than parties to the judgment) as creditors in this case. (l) The Debtor failed to provide notice of this bankruptcy case to any of the other Office owners or other stakeholders to the Villas entry drive. (m) Mr. Mason drained all of the Debtor's bank accounts, including reserve accounts, to fund a $53,500 retainer for Debtor's bankruptcy counsel. (n) The Debtor disclosed payments of $81,600 to Mr. Mason in the year before bankruptcy described as "Advances on Distributions." (o) The Debtor did not disclose any pre-bankruptcy payments to Neff & Boyer, the lawyers defending Debtor and Mr. Mason in the Superior Court action. About River Hacienda River Hacienda Holdings, LLC, filed a Chapter 11 petition (Bankr. D. Ariz. Case No. 18-00136) on Jan. 5, 2018. In its petition signed by its managing member, David H. Mason, the Debtor disclosed $100,000 to $500,000 in estimated assets and $500,000 to $1 million estimated debts. The Debtor is represented by Alan R. Solot, Esq. ROBERT L. DAWSON: Case Summary & 20 Largest Unsecured Creditors --------------------------------------------------------------- Debtor: Robert L. Dawson Farms, LLC dba William Earl Dawson Farms, L.L.C. 5902 Highway 58 North Stantonsburg, NC 27883 Business Description: Robert L. Dawson Farms, LLC is a privately held company in Stantonsburg, North Carolina engaged in the business of crop farming. Case No.: 18-02433 Chapter 11 Petition Date: May 14, 2018 Court: United States Bankruptcy Court Eastern District of North Carolina (Greenville Division) Judge: Hon. David M. Warren Debtor's Counsel: Joseph Zachary Frost, Esq. STUBBS & PERDUE, P.A. 9208 Falls of Neuse Road Raleigh, NC 27615 Tel: 919-870-6258 Fax: 919-870-6259 Email: efile@stubbsperdue.com - and - Trawick H. Stubbs, Jr., Esq. STUBBS & PERDUE, P.A. P. O. Drawer 1654 New Bern, NC 28563 Tel: 252 633-2700 Fax: 252 633-9600 Email: efile@stubbsperdue.com tstubbs@stubbsperdue.com Total Assets: $2.93 million Total Liabilities: $5.77 million The petition was signed by Robert L. Dawson, managing member. 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: http://bankrupt.com/misc/nceb18-02433.pdf SEADRILL LTD: Exclusive Plan Period Extended Through March 2019 --------------------------------------------------------------- The Hon. David R. Jones of the U.S. Bankruptcy Court for the Southern District of Texas, at the behest of Seadrill Limited and its debtor-affiliates, has extended the Debtors' exclusivity period to file a chapter 11 plan through and including the earlier of the Effective Date and March 12, 2019, along with the Debtors' exclusivity period to solicit acceptances of a chapter 11 plan through and including the earlier of the Effective Date and May 10, 2019. The Troubled Company Reporter has previously reported that the Debtors has sought an extension of exclusivity not only to continue to press forward with confirmation of the Plan, but also to ensure that the Plan is implemented effectively and that the Debtors efficiently emerge from these Chapter 11 Cases. On February 26, 2018, the Debtors filed the Disclosure Statement Relating to the Second Amended Joint Chapter 11 Plan of Reorganization. That same day, the Court entered the Order approving the adequacy of the disclosure statement, among others. On April 12, 2018, the Debtors filed the Plan, the Voting Report, the Memorandum of Law in Support of Confirmation of the Second Amended Joint Plan of Reorganization and the Proposed Confirmation Order. The Debtors believed it is prudent to seek an extension of the Exclusivity Periods to preserve their exclusive right to both prosecute the Plan currently on file, and file and solicit a new plan of reorganization should unforeseen issues arise with respect to and after confirmation. Owing in large part to the consensual nature of these chapter 11 cases and relief granted by the Court at the first and second day hearings, the Debtors' businesses have operated largely without interruption. Now, the Debtors are poised for a nearly fully consensual confirmation hearing and swift emergence from chapter 11. The hearing to confirm the Plan that embodies this globally-supported restructuring is scheduled to commence on April 17, 2018, approximately one month before the expiration of the Debtors' exclusive right to file a chapter 11 plan on May 10, 2018. Further, the expiration of the Debtors' exclusivity period will occur prior to the conclusion of the implementation of the Debtors' complex corporate restructuring and going effective under the Plan. Out of an abundance of caution, the Debtors sought for an extension of the exclusivity period in which the Debtors may file and solicit acceptances of a chapter 11 plan of reorganization. The Debtors believe that maintaining the exclusive right to file and solicit votes on a plan of reorganization is critical to realizing the value-maximizing restructuring contemplated by the Plan. The Debtors needed a clear runway through emergence. The Debtors intended to and are on track to proceed with the confirmation hearing. Extending exclusivity will afford the Debtors and their stakeholders time to finalize the transactions contemplated by the Plan and proceed towards the Effective Date uninterrupted for the benefit of all stakeholders, and will help the Debtors avoid future unnecessary motion practice, and in no way prejudices any parties in interest. About Seadrill Ltd Seadrill Limited is a deepwater drilling contractor providing drilling services to the oil and gas industry. It is incorporated in Bermuda and managed from London. Seadrill and its affiliates own or lease 51 drilling rigs, which represents more than 6% of the world fleet. As of Sept. 12, 2017, Seadrill employed 3,760 highly-skilled individuals across 22 countries and five continents to operate their drilling rigs and perform various other corporate functions. As of June 30, 2017, Seadrill had $20.71 billion in total assets, $10.77 billion in total liabilities and $9.94 billion in total equity. Seadrill reported a net loss of US$155 million on US$3.17 billion of total operating revenues for the year ended Dec. 31, 2016, following a net loss of US$635 million onUS$4.33 billion of total operating revenues for the year ended in 2015. After reaching terms of a reorganization plan that would restructure $8 billion of funded debt, Seadrill Limited and 85 affiliated debtors each filed a voluntary petition for relief under Chapter 11 of the United States Bankruptcy Code (Bankr. S.D. Tex. Lead Case No. 17-60079) on Sept. 12, 2017. Together with the chapter 11 proceedings, Seadrill, North Atlantic Drilling Limited ("NADL") and Sevan Drilling Limited ("Sevan") commenced liquidation proceedings in Bermuda to appoint joint provisional liquidators and facilitate recognition and implementation of the transactions contemplated by the RSA and Investment Agreement, and Simon Edel, Alan Bloom and Roy Bailey of Ernst & Young are to act as the joint and several provisional liquidators. In the Chapter 11 cases, the Company has engaged Kirkland & Ellis LLP as legal counsel, Houlihan Lokey, Inc. as financial advisor, and Alvarez & Marsal as restructuring advisor. Slaughter and May has been engaged as corporate counsel, and Morgan Stanley served as co-financial advisor during the negotiation of the restructuring agreement. Advokatfirmaet Thommessen AS is serving as Norwegian counsel. Conyers Dill & Pearman is serving as Bermuda counsel. Prime Clerk serves as claims agent. The United States Trustee for Region 7 formed an official committee of unsecured creditors with seven members: (i) Computershare Trust Company, N.A.; (ii) Daewoo Shipbuilding & Marine Engineering Co., Ltd.; (iii) Deutsche Bank Trust Company Americas; (iv) Louisiana Machinery Co., LLC; (v) Nordic Trustee AS; (vi) Pentagon Freight Services, Inc.; and (vii) Samsung Heavy Industries Co., Ltd. Kramer Levin Naftalis & Frankel LLP is serving as lead counsel to the Committee. Cole Schotz P.C. is local and conflicts counsel to the Committee. Zuill & Co (in exclusive association with Harney Westwood & Riegels) is serving as Bermuda counsel. London based Quinn Emanuel Urquhart & Sullivan, UK LLP, is serving as English counsel. Parella Weinberg Partners LLP is the investment banker to the Committee. FTI Consulting Inc. is the financial advisor. SHARING ECONOMY: RBSM LLP Raises Going Concern Doubt ---------------------------------------------------- Sharing Economy International Inc. filed with the U.S. Securities and Exchange Commission its annual report on Form 10-K, disclosing a net loss of $12.93 million on $13.52 million of revenues for the fiscal year ended December 31, 2017, compared to a net loss of $11.68 million on $17.36 million of revenues for the year ended in 2016. RBSM LLP in New York, NY, states that the Company had a loss from continuing operations for the year ended December 31, 2017 and expects continuing future losses, and has stated that substantial doubt exists about the Company's ability to continue as a going concern. The Company's balance sheet at December 31, 2017, showed total assets of $70.55 million, total liabilities of $9.39 million, and a total stockholders' equity of $61.17 million. A copy of the Form 10-K is available at: https://is.gd/WOUo0q About Sharing Economy International Sharing Economy International Inc. manufactures textile machinery. The Jiangsu, China-based Company designs, manufactures, and distributes proprietary high and low temperature dyeing and finishing machinery to the textile industry. SOUTHCROSS ENERGY: Incurs $16.8 Million Net Loss in First Quarter ----------------------------------------------------------------- Southcross Energy Partners, L.P. filed with the Securities and Exchange Commission its Quarterly Report on Form 10-Q reporting a net loss of $16.83 million on $156.63 million of total revenues for the three months ended March 31, 2018, compared to a net loss of $15.38 million on $155.2 million of total revenues for the same period last year. As of March 31, 2018, Southcross had $1.08 billion in total assets, $603.4 million in total liabilities and $482.78 million in total partners' capital. "We continue to face a challenging corporate capital structure with substantial financial leverage and we remain focused on our overall profitability, including managing Partnership-wide, cost-savings initiatives. "During management's ongoing assessment of the Partnership's financial forecast, the board of directors of Southcross Holdings GP, LLC (the "Holdings GP Board") and the board of directors of our General Partner (the "SXE GP Board"), together with our management, determined that in our current corporate capital structure and absent continued access to equity cures from our Sponsors or a significant equity infusion from a third party, which the Partnership may not be able to obtain, or absent additional amendments to its Third A&R Revolving Credit Agreement or waivers of the March 31, 2019 requirement to comply with the Consolidated Total Leverage Ratio (as defined in the Fifth Amendment), the Partnership will not be able to comply with such financial covenant, which will trigger an event of default under the Senior Credit Facilities...As a result of the Partnership's expected inability to comply with its financial covenants twelve months from the issuance of this Form 10-Q, management has determined that there are conditions and events that raise substantial doubt about the Partnership's ability to continue as a going concern," the Company stated in the SEC filing. A full-text copy of the Form 10-Q is available for free at: https://is.gd/72i3Tv About Southcross Energy Southcross Energy Partners, L.P. -- http://www.southcrossenergy.com/-- is a master limited partnership that provides natural gas gathering, processing, treating, compression and transportation services and NGL fractionation and transportation services. It also sources, purchases, transports and sells natural gas and NGL. Its assets are located in South Texas, Mississippi and Alabama and include two gas processing plants, one fractionation plant and approximately 3,100 miles of pipeline. The South Texas assets are located in or near the Eagle Ford shale region. Southcross is headquartered in Dallas, Texas. As of Dec. 31, 2017, Southcross Energy had $1.10 billion in total assets, $604.6 million in total liabilities and $499.6 million in total partners' capital. Southcross Energy incurred a net loss attributable to partners of $67.65 million in 2017 following a net loss attributable to partners of $94.99 million in 2016. * * * In February 2017, S&P Global Ratings said that it affirmed its 'CCC+' corporate credit and senior secured issue-level ratings on Southcross Energy Partners L.P. The outlook is stable. The rating action reflects S&P's view that the recent credit agreement amendment limits the likelihood of a default in the next two years as the partnership will have an improved liquidity position and need no longer adhere to its leverage covenants. Moody's Investors Service downgraded Southcross Energy's Corporate Family Rating to 'Caa1' from 'B2'. Southcross' Caa1 CFR reflects its high financial leverage, limited scale, concentration in the Eagle Ford Shale and Moody's expectation of continued high leverage and challenging industry conditions into 2017, as reported by the TCR on Jan. 13, 2016. STILLWATER ASSET: 2nd Cir. Affirms Foreclosure Order Against SLL ---------------------------------------------------------------- Plaintiff-appellant Stillwater Liquidating LLC in the case captioned STILLWATER LIQUIDATING LLC, Plaintiff-Appellant, v. SFN DEKALB HOLDINGS and CL-RP STONECREST LLC, Defendants-Appellees, No. 17-463-bk (2nd Cir.) is a court-approved entity charged with pursuing recoveries on behalf of creditors of Stillwater Asset Backed Offshore Fund Ltd. and its related investment funds. Stillwater appeals from a Jan. 18, 2017 judgment of the district court affirming an order of the Bankruptcy Court holding that a Georgia state foreclosure action (the "Foreclosure Order")and subsequent transfers of real property did not violate an automatic stay imposed pursuant to 11 U.S.C. section 362(a) in the Debtor's Chapter 11 bankruptcy proceeding. Upon review of the case, the U.S. Court of Appeals, Second Circuit affirmed the district court's judgment. Stillwater argued that the Bankruptcy Court erred because the Foreclosure Order and subsequent transfers of property: (1) constituted an "act to obtain the property of the estate"; (2) involved the enforcement of a "claim against the Debtor"; and (3) were "legally certain" to impact the Debtor's property. First, the Second Circuit holds that the Foreclosure Order was not an "act to obtain . . . property of the estate," within the meaning of 11 U.S.C. section 362(a)(3). The Second Circuit agrees with the bankruptcy court and district court that the Debtor's property interests -- including any of the Debtor's legal and equitable interests in the Hillandale Property -- had been conveyed prior to the 2012 bankruptcy stay as part of the Debtor's 2010 asset purchase agreement with Asia Special Situations Acquisitions Company, which became Gerova Financial Group, Ltd. in conjunction with the transfer of assets. Second, the Foreclosure Order and subsequent transfers of the Hillandale Property did not involve an action to enforce "a claim against the debtor" within the meaning of 11 U.S.C. section 362(a)(1). The Hillandale Property foreclosure was premised on outstanding real property taxes owed by the non-Debtor, Top Flight, to a non-creditor, the Tax Commissioner of DeKalb County, and the Foreclosure Order involved defendant-appellee SFN DeKalb Holdings, a Top Flight creditor with a first priority lien interest in the property. At the time of foreclosure, not only had the Debtor sold its "participation interests" in the Onshore Fund's loan -- for which the Hillandale Property served as collateral -- but the Debtor also did not have a recorded interest in the real property nor was it a party to the foreclosure proceedings. Accordingly, the Foreclosure Order and the subsequent sales of the property occurred independently of any interest the Debtor now claims to have, and thus did not involve the enforcement of a "claim against the Debtor." Finally, the Foreclosure Order and subsequent transfers were not "legally certain[] to impact estate property." The Court disagrees with Stillwater's contention that the Court's decision in In re 48th Street Steakhouse, Inc. is legally indistinguishable. There, the Court held that a debtor's interest in property could cause a bankruptcy stay to affect a relationship with a non-debtor where an action was legally certain to impact estate property. Unlike here, the debtor in that case had a legal interest in a property that was subject to termination, i.e., the termination of a prime lease that would automatically terminate the Debtor's sublease. The Court agrees with the district court, however, that Stillwater's theory "for [Debtor's] purported property interest is far more attenuated" than that in 48th Street Steakhouse. Here, Debtor did not hold a recorded interest in the actual Hillandale Property. A full-text copy of the Second Circuit's Summary Order dated April 18, 2018 is available at https://bit.ly/2G03Kuf from Leagle.com. DAVID B. GOROFF -- dgoroff@foley.com -- (Douglas E. Spelfogel, Katherine R. Catanese, on the brief), Foley & Lardner LLP, New York, NY For Plaintiff-Appellant. DAVID KENT FIVESON -- dfiveson@bffmlaw.com -- Butler, Fitzgerald, Fiveson & McCarthy, P.C., New York, NY For Defendant-Appellee, SFN Dekalb Holdings. RICHARD F. HARRISON -- rharrison@westermanllp.com -- (Thomas A. Draghi, on the brief), Westerman Ball Ederer Miller Zucker & Sharfstein, LLP, Uniondale, NY., For Defendant-Appellee, CL-RP Stonecrest LLC. About Stillwater Asset Investment funds allegedly owed roughly $35.8 million, filed an involuntary Chapter 11 petition against Brooklyn-based Stillwater Asset Backed Offshore Fund Ltd. (Bankr. S.D.N.Y. Case No. 12-14140) on Oct. 3, 2012. Bankruptcy Judge Allan L. Gropper oversees the case. The petitioning creditors are represented by Douglas E. Spelfogel, Esq., Richard Bernard, Esq., Mark Wolfson, Esq., and Katherine R. Catanese, Esq., at Foley & Lardner LLP An affiliated entity, Gerova Financial Group, Ltd., a Bermuda-based financial-services company, is the subject of Chapter 15 bankruptcy proceedings (Bankr. S.D.N.Y. Case No. 12-13641) commenced on Aug. 24, 2012. Liquidators of Gerova -- Michael Morrison and Charles Thresh, both of KPMG Advisory Limited, and John McKenna of Finance and Risk Service Ltd, Bermuda -- filed the Chapter 15 petition, estimating up to $100 million in assets and as much as $500 million in liabilities. A Chapter 15 petition was also filed for Gerova Holdings Ltd. (Case No. 12-13642), which is estimated to have under $100,000 in assets and liabilities. Hamilton-based Gerova Financial, formerly known as Asia Special Situations Acquisition Corp., was primarily involved, from 2010 on, in the business of investing in and managing certain types of illiquid financial assets. Gerova planned to then use such assets as regulatory capital for insurance companies, though this strategy was not fully implemented. After lengthy proceedings and over the objections of Gerova's then-current management, on July 20, 2012, the Bermuda Court entered an order appointing Morrison, et al., as joint provisional liquidators of GFG. Morrison, et al., were also appointed provisional liquidators of GHL on Aug. 20. Judge Gropper also oversees the Gerova Chapter 15 case. Peter A. Ivanick, Esq., and lawyers at Hogan Lovells US LLP represent the Liquidators as counsel. On Jan. 31, 2013, the Bankruptcy Court has denied a motion filed by Stillwater Asset Backed Offshore Fund Ltd. to dismiss the involuntary Chapter 11 petition. Instead, the judge entered an order for relief under chapter 11 of the Bankruptcy Code (11 U.S.C. Sec. 101 et seq.) against the Debtor effective Jan. 17, 2013. Jack Doueck and Richard I. Rudy are designated as responsible persons for the Debtor. ASK LLP serves as counsel for the Debtor, and Foley & Lardner LLP serves as counsel to the unsecured creditors committee of the Debtor. SURGE HOLDINGS: Paritz & Company Raises Going Concern Doubt ----------------------------------------------------------- Surge Holdings, Inc., filed with the U.S. Securities and Exchange Commission its annual report on Form 10-K, disclosing a net loss of $1.98 million on $1.43 million of revenue for the fiscal year ended December 31, 2017, compared to a net loss of $4.60 million on $3.30 million of revenue for the year ended in 2016. Paritz & Company, P.A., states that the Company has a working capital deficiency of $2,166,906 as of December 31, 2017, incurred losses and did not generate cash from its operations for the past two years. These factors, among others, raise substantial doubt about our ability to continue as a going concern. The Company's balance sheet at December 31, 2017, showed total assets of $3,145,707, total liabilities of $2,538,654, and a total stockholders' equity of $607,053. A copy of the Form 10-K is available at: https://is.gd/RvfBmz About Surge Holdings, Inc. Surge Holdings, Inc., is a company focused on Telecom, Media, Blockchain, FinTech and Cryptocurrency applications serving customers worldwide online and across social media, gaming and mobile platforms. The Company operates three wholly-owned subsidiaries: (i) DigitizeIQ, LLC ("DIQ"), a digital advertising company which is a full service digital advertising agency specializing in survey generation and landing page optimization specifically designed for mass tort class action lawsuits; (ii) Surge Cryptocurrency Mining, Inc. (formerly North American Energy Resources, Inc.) ("Surge Crypto"), which operates the Company's cryptocurrency operations and (iii) KSIX Media, Inc., ("KSIX Media") which is a holding company for (a) Surge Blockchain, LLC (previously Surge Payment Systems, LLC and Blvd Media Group, LLC) ("Surge Blockchain") which operates the Company's Blockchain operations and (b) KSIX, LLC ("KSIXLLC"). TANGO TRANSPORT: Westchester Breached Duty to Defend, Court Rules ----------------------------------------------------------------- Defendant Westchester Surplus Lines Insurance Company in the case captioned AMERICAN TRUCKING AND TRANSPORTATION INSURANCE COMPANY, a Risk Retention Group, Plaintiff, v. RALPH NELSON, ROBERT GORMAN, SR., BOBBY J. GORMAN, DAN DOOLEY, and WESTCHESTER SURPLUS LINES INSURANCE COMPANY, Defendants, CV No. 16-160-M-DLC (D. Mont.) filed a Motion to Compel Arbitration and to Stay Plaintiff's Claims against Westchester. Defendant Dan Dooley also filed a Motion to File Amended Answer with Cross-Claims. Upon analysis, Chief District Judge Dana L. Christensen denies Westchester's motion and grants Defendant Dooley's motion. Westchester moves the Court to compel arbitration and stay proceedings, asserting that the Westchester Policy mandates arbitration when either party has requested it. ATTIC asserts that Westchester breached its obligations under the Westchester Policy and waived any right to enforce the arbitration provision. Westchester argues that because the arbitration clause is valid, the right to arbitrate under the Federal Arbitration Act ("FAA") is not abrogated by Montana law. ATTIC counters that due to Westchester's refusal to offer the Westchester Insureds a defense, Montana law renders the arbitration provision unenforceable. For support, both Westchester and ATTIC rely on the Montana Supreme Court's holding in Tidyman's Mgmt. Servs. v. Davis. In Tidyman's I, the Court found that an insurer's "duty to defend arises when a complaint against an insured alleges facts which, if proved, would result in coverage." The duty to defend is "independent from and broader than the duty to indemnify created by the same insurance contract." Thus, "[w]here a complaint alleges facts which represent a risk outside the coverage of the policy but also avers facts which, if proved, represent a risk covered, the insurer is under a duty to defend."And, "[u]nless there exists an unequivocal demonstration that the claim against an insured does not fall within the insurance policy's coverage, an insurer has a duty to defend." ATTIC argues that Tidyman's I controls and Westchester's reading of the case is incorrect. Thus, when Westchester disclaimed coverage for the Westchester Insureds and took no steps to discern its duties to defend or indemnify--by filing a declaratory judgment action--Westchester forfeited its rights to rely on the insurance contract itself and any defenses therein. ATTIC argues that the facts here are analogous to those in Tidyman's I and that when an insurer believes a policy exclusion precludes coverage, it should defend its insureds under a reservation of rights and file a declaratory action. ATTIC also counters that Westchester's reliance on Beaverhead County and Huckins is misplaced because the Montana Supreme Court upheld Tidyman's I in those cases and, specifically in Huckins, found that as to the renter's policy, in that case, the insurer breached its duty to defend because coverage did exist. ATTIC contends that because the Complaint includes claims against Westchester's insureds that are not excluded by the Creditor's Exclusion, such as fraud, misrepresentation, and negligence, that there is still arguably coverage under the Westchester Policy for a majority of the claims and, consequently, Westchester breached its duty to defend by precluding coverage as a whole. After reviewing ATTIC's Complaint against the Insureds, the Court finds that Westchester cannot unequivocally demonstrate that ATTIC's claims against the Westchester Insureds were completely precluded from coverage. The Complaint alleges breach of contract, breach of fiduciary duties, negligent misrepresentation, fraud, constructive fraud, negligence, negligence per se, acts in concert, civil conspiracy, and piercing the corporate veil. The parties do not dispute that some of these claims are covered as occurrences under the Westchester Policy. What is mandated by Tidyman's I under the facts of this case is that Westchester should have initially offered a defense to its Insureds under a reservation of rights and then filed a declaratory judgment action regarding coverage. Because Westchester failed to provide a defense, Montana law is clear that Westchester has lost its right to invoke insurance contract defenses, including the right to arbitrate. Therefore, Westchester cannot now claim that the arbitration clause is mandatory under the terms the Westchester Policy after it breached its duty to defend. The Court need not analyze the parties' additional arguments and concludes that the arbitration clause is unenforceable. Because the Court has found that Westchester breached its duty to defend and that the arbitration clause is unenforceable, the Court will also allow Defendant Dooley to amend his answer. Under Rule 15(a)(2), the Court concludes that Defendant Dooley's proposed amendment to his answer is not prejudicial, futile, nor does it create undue delay. Judicial economy is best served by ATTIC and Defendant Dooley litigating this issue before the Court at the same time. Therefore, Defendant Dooley's Motion to File Amended Answer is granted. A full-text copy of the Court's Order dated April 20, 2018 is available at https://bit.ly/2IyUzGy from Leagle.com. American Trucking and Transportation Insurance Company, a Risk Retention Group, Plaintiff, represented by Philip B. Condra, MILODRAGOVICH DALE STEINBRENNER & Rachel H. Parkin, MILODRAGOVICH DALE STEINBRENNER. Ralph Nelson, Robert Gorman, Sr. & Bobby J. Gorman, Defendants, represented by Brian J. Smith, GARLINGTON LOHN & ROBINSON, PLLP. Dan Dooley, Defendant, represented by Kenneth S. Ulrich, GOLDBERG KOHN LTD., pro hac vice, Meredith S. Kirshenbaum -- meredith.kirshenbaum@goldbergkohn.com -- GOLDBERG KOHN LTD., pro hac vice & Reid Perkins, WORDEN THANE. Westchester Surplus Lines Insurance Company, Defendant, represented by Bryan R. Campbell -- bcampbell@cozen.com -- COZEN O'CONNOR & Richard C. Mason -- rmazon@cozen.com -- COZEN O'CONNOR, pro hac vice. About Tango Transport LLC Tango Transport, LLC provides dry van and flatbed services. It offers over-the-road truckload services; and dedicated/private fleet conversion, expedited, third party logistics, heavy hauling, and brokerage services. The company also provides logistic services, including warehouse and distribution, warehouse management, inventory control, freight payment and audit, and transportation control services; and reverse logistics solutions. It serves Fortune 500 companies in the United States. The company was founded in 1991 and is based in Shreveport, Louisiana. It operates a terminal in Shreveport, Louisiana; and facilities in Sibley, Louisiana; West Memphis, Arkansas; and Madisonville, Kentucky. Tango Transport, LLC sought protection under Chapter 11 of the Bankruptcy Code (Bankr. E.D. Tex. Case No. 16-40642) on April 6, 2016. The petition was signed by B.J. Gorman, president of Gorman Group, Inc., sole member of the Debtor. The Debtor is represented by Keith William Harvey, Esq., at The Harvey Law Firm, P.C. The Debtor estimated assets of less than $50,000 and debts of $10 million to $50 million. On April 26, 2016, the Office of the U.S. Trustee appointed an official committee of unsecured creditors. Heller Draper Patrick Horn & Dabney, LLC, serves as counsel while Stillwater Advisory Group, LLC, serves as financial advisor. On Dec. 21, 2016, the court confirmed the Debtor's joint plan of liquidation and the plan trust agreement, which called for the appointment of Christopher J. Moser as plan trustee. TENET HEALTHCARE: Moody's Affirms B2 Corp Family Rating ------------------------------------------------------- Moody's Investors Service affirmed the ratings of Tenet Healthcare Corporation, including the B2 Corporate Family Rating and B2-PD Probability of Default Rating, senior secured rating of Ba3 and unsecured rating of Caa1. Moody's also affirmed the Speculative Grade Liquidity Rating of SGL-2 and changed the outlook to stable from negative. The change in the rating outlook reflects improving operating performance driven by early benefits of the company's recently implemented $250 million cost reduction plan. It also reflects a modest recovery in patient volumes, and favorable pricing driven by a mix shift towards higher acuity procedures. Moody's believes that adjusted debt/EBITDA will decline from about 6.8x (pro forma for divestitures) at March 31, 2018 to around 6.5x by the end of 2018 and towards 6.0x by the end of 2019. The affirmation of the B2 CFR reflects Tenet's scale, as well as the business diversity provided by the ambulatory surgery and revenue cycle management businesses. The B2 is also supported by Tenet's good liquidity (reflected in the SGL-2 rating) and favorable maturity profile, giving the company plenty of financial flexibility. Liquidity is also supported by Moody's forecast for improving cash flow and availability under Tenet's $1 billion asset-based lending facility. Following is a summary of Moody's rating actions: Ratings affirmed: Corporate Family Rating at B2 Probability of Default Rating at B2-PD Senior secured first lien notes at Ba3 (LGD3) Senior secured second lien notes at Ba3 (LGD3) Unsecured notes at Caa1 (LGD5) Speculative Grade Liquidity Rating at SGL-2 The rating outlook was changed to stable from negative. RATINGS RATIONALE Tenet's B2 rating is primarily constrained by the company's very high financial leverage, with adjusted debt/EBITDA of around 6.8x. Tenet's free cash flow after minority interest payments is modest relative to debt. The rating is also constrained by several industry-wide headwinds including weak volume trends and cost inflation. Further, there is event risk tied to the presence of an activist investor. The rating is supported by Tenet's significant scale and diversity. The company is well diversified by state and payor. Tenet's ambulatory surgery and revenue cycle management businesses add business diversity and will benefit from longer-term trends that favor services being done on an outpatient basis. Tenet is currently reviewing whether to divest the revenue cycle management business, Conifer. The credit impact will depend on the amount and use of proceeds. The stable outlook reflects Moody's view that Tenet will delever throughout 2018 and 2019 and will be able to reduce debt/EBITDA to around 6.0x by the end of 2019. Tenet's ratings could be downgraded if the company faces operational challenges or fails to achieve its targeted $250 million of annual cost savings. Further, the divestiture of Conifer without debt repayment, or the pursuit of share repurchases or shareholder distributions could result in a downgrade. More specifically, the ratings could be downgraded if debt/EBITDA does not decline closer to 6.0 times over the next 18 months. Finally, the ratings could also be downgraded if the company's liquidity weakens. The ratings could be upgraded if Tenet can realize the benefits of its cost and operating initiatives and repay debt, thus improving cash flow and interest coverage metrics. If Moody's expects debt/EBITDA to decline towards the 5.0 times, the ratings could be upgraded. Tenet, headquartered in Dallas, Texas, is one of the largest healthcare providers in the US. The company operates 68 hospitals, 21 surgical hospitals and over 460 outpatient surgical centers in the US as well as several facilities in the UK. Tenet also owns a revenue-cycle management business, called Conifer. Revenues in 2017 were more than $19 billion. The principal methodology used in these ratings was Business and Consumer Service Industry published in October 2016. THORNTON & THORNTON: Plan Outline Okayed, Plan Hearing on May 22 ---------------------------------------------------------------- The U.S. Bankruptcy Court for the Eastern District of Texas will consider approval of the Chapter 11 plan of reorganization for Thornton & Thornton Ent., Inc. at a hearing on May 22. The hearing will be held at 10:00 a.m., at the Plano Bankruptcy Courtroom. The court will also consider at the hearing final approval of the company's disclosure statement, which it conditionally approved on April 19. The order set a May 11 deadline for creditors to file their objections and a May 16 deadline to submit ballots of acceptance or rejection of the plan. About Thornton & Thornton Thornton & Thornton Enterprises, Inc., doing business as, Twin Oaks Private School, is a small business debtor. It owns Twin Oaks Private School in the City of Allen, Collin County, State of Texas, valued at $712,009. It also owns a fee simple interest in a property located at 109 Fountaingate, Allen, Texas, 109 Fountaingate Blk A, Lot 2 with a valuation of $215,360. Thornton & Thornton Enterprises sought Chapter 11 protection (Bankr. E.D. Tex. Case No. 17-40759) on April 7, 2017. Misty Thornton, president, signed the petition. The Debtor disclosed assets at $1.22 million and liabilities at $2.10 million. The Debtor tapped Gary G. Lyon, Esq., at Bailey and Lyon, Attorneys at Law, as counsel. On April 17, 2018, the Debtor filed its proposed Chapter 11 plan of reorganization and disclosure statement. TOPS HOLDING II: Schwebel Baking Appointed as New Committee Member ------------------------------------------------------------------ The U.S. Trustee for Region 2 on May 9, 2018, appointed Schwebel Baking Company as new member of the official committee of unsecured creditors in the Chapter 11 cases of Tops Holding II Corporation and its affiliates. Schwebel, a company based in Youngstown, Ohio, will replace PepsiCo, Inc. The company can be reached through: Douglas Stahl Chief Financial Officer Schwebel Baking Company 965 E. Midlothian Blvd. P.O. Box 6018 Youngstown, Ohio 44501-6018 Telephone: (330) 783-2860 The bankruptcy watchdog had earlier appointed Valassis Direct Mail, Inc., Osterweis Strategic Income Fund, U.S. Bank N.A., UFCW Local One Pension Fund, International Brotherhood of Teamsters Local 264, and Benderson Development Company, LLC, court filings show. About Tops Holding II Corporation Tops Markets, LLC -- http://www.topsmarkets.com/-- is headquartered in Williamsville, NY and operates 169 full-service supermarkets with five additional by franchisees under the Tops Markets banner. Tops employs over 14,000 associates and is a full-service grocery retailer in Upstate New York, Northern Pennsylvania, and Vermont. Tops Management, led by Frank Curci, its chairman and chief executive officer, acquired Tops in December 2013 through a leveraged buyout from Morgan Stanley's private equity arm. Morgan Stanley bought the company in 2007 from the Dutch retailer now known as Koninklijke Ahold Delhaize NV. In 2010, Tops acquired The Penn Traffic Company, a local chain with 64 stores. In 2012, it purchased 21 Grand Union Family Markets stores. Tops Holding II Corporation, and its subsidiaries, including Tops Markets, LLC, sought Chapter 11 protection (Bankr. S.D.N.Y. Lead Case No. 18-22279) on Feb. 21, 2018, to pursue a financial restructuring that would eliminate a substantial portion of debt from the Company's balance sheet and position Tops for long-term success. The Company listed total assets of $977 million and total liabilities at $1.17 billion as of Dec. 30, 2017. The Debtors hired Weil, Gotshal & Manges LLP as their legal counsel; Hilco Real Estate, LLC as real estate advisor; Evercore Group L.L.C. as investment banker; FTI Consulting, Inc. and Michael Buenzow as chief restructuring officer; and Epiq Bankruptcy Solutions, LLC, as their claims and noticing agent. The U.S. Trustee for Region 2 appointed an official committee of unsecured creditors on March 6, 2018. The committee tapped Morrison & Foerster LLP as its legal counsel, and Zolfo Cooper, LLC, as its financial advisor and bankruptcy consultant. TROJAN BATTERY: Moody's Keeps B2 CFR on Continuing Revenue Growth ----------------------------------------------------------------- Moody's Investors Service affirmed the ratings of Trojan Battery Company, LLC ("Trojan Battery"), with the Corporate Family Rating (CFR) at B2, Probability of Default Rating (PDR) at B3-PD and senior secured rating at B2. The rating outlook is stable. RATINGS RATIONALE The affirmation of Trojan Battery's ratings reflects the company's continuing revenue growth, consistent credit metrics and diverse end-markets and geographic regions. In FY2017 ending August 31, the company grew revenue by 17%, attributable to new contract with a large US battery distributor and growth in international sales. Trojan Battery benefits from the consumable and replacement nature of batteries, which provides revenue stability as more revenue becomes recurring. Trojan Battery's margins have been under pressure in recent periods, largely attributable to increase in lead prices, unfavorable product mix and discounts given to large wholesalers. However, as lead prices are expected to stabilize in the near term and its factories are running at high utilization rates, Moody's anticipates Trojan Battery to improve and sustain margins at least through FY2018, with debt to EBITDA to be under 5 times and EBITDA to interest expense to be over 3 times (both after Moody's standard adjustments). Trojan Battery has completed most of its capital investment requirements and its capital expenditures have been flat in recent years. As a result, Moody's anticipates improving cash flow generation in the future. The stable rating outlook considers Trojan Battery's good order and revenue growth, the expectation of margin improvement in the second half of FY2018 and maintenance of its adequate liquidity profile. Moody's anticipates gradual improvement in Trojan Battery's debt to EBITDA metric to mid 4x by FY2019 (on a Moody's adjusted basis). The ratings are unlikely to be upgraded over the next 18 months given Moody's expectations for slow improvement in leverage, the company's small size, and the cyclical nature of the market. Sustained debt to EBITDA below 4x and free cash flow to debt above 5% could precede an eventual upgrade. The ratings could be downgraded if the company's debt to EBITDA was expected to exceed 5.5x and was expected to remain elevated. A weakening in the company's liquidity profile could also pressure the ratings. Deterioration in the competitive climate or weakening in demand for one of the company's core end-markets could pressure the rating outlook. The principal methodology used in these ratings was Global Manufacturing Companies published in June 2017. Trojan Battery Company, LLC, headquartered in Santa Fe Springs, CA, is a leading designer and manufacturer of deep-cycle lead-acid batteries for a wide range of applications including golf cart, utility electric vehicle (EV), aerial work platform (AWP) and floor cleaning. Charlesbank Capital Partners, LLC, a Boston-based middle-market private equity firm, is the majority owner of the company. Trojan Battery generated $538 million in revenue for the last twelve months ended February 28, 2018. The following summarizes Moody's rating action: Outlook Actions: Issuer: Trojan Battery Company, LLC Outlook, Remains Stable Affirmations: Issuer: Trojan Battery Company, LLC Probability of Default Rating, Affirmed B3-PD Corporate Family Rating, Affirmed B2 Senior Secured Bank Credit Facility, Affirmed B2 (LGD3) ULTRA RESOURCES: Fitch Affirms BB- IDR & Alters Outlook to Neg. --------------------------------------------------------------- Fitch Ratings has affirmed the ratings of Ultra Resources, Inc. and Ultra Petroleum Corp (collectively Ultra), including the Long-term Issuer Default Ratings at 'BB-'. The Rating Outlook is revised to Negative from Stable. The Negative Outlook reflects risk of cash netback compression if improved unit economics from the horizontal program fail to materialize and/or basis differentials in the Rocky Mountain region fail to improve from the Fitch-assumed $0.70 per Mcf. Early results from Ultra's horizontal drilling program are mixed with successive wells pointing to significantly improved economics but execution risk remains, in Fitch's view, given the very limited sample size and short history to date of the horizontal development program. KEY RATING DRIVERS Transition to Horizontal Wells: Ultra has a contiguous position in the Pinedale Field with about 78,000 net acres. The transition to horizontal drilling, from the previous exclusive focus on vertical wells, adds about 1,600 locations for a total of 6,200 gross drilling locations. The strategy shift presents significant upside to unit economics and reserves, but also elevates the execution risk as only a handful of horizontal wells have been completed to date versus the largely delineated and de-risked vertical inventory. Initial results from horizontal wells support management's target of initial production (IP) rate of 32.2 MMcfe/day and cumulative production of 6 Bcfe over two years. In contrast, vertical wells averaged IP rate of 7.5 MMcfe/day during first-quarter 2018 and exhibit a production curve of slightly above 1 Bcfe over the first two years. Fitch estimates the transition will improve full-cycle costs, excluding differentials, close to $1.75 per Mcf from about $2.30 per Mcf in 2017 (assuming normalized interest expenses) helping improve well returns and alleviate the cash flow impact of weak differentials. Flexibility to reallocate drilling resources back to the vertical program, if warranted, alleviates some of the risk of the drilling strategy change, in Fitch's view. Ultra's acreage is essentially 100% held by production, providing the company significant flexibility in the timing of capital deployment and drilling activity. Widening Differentials: Ultra's production base is in the Rocky Mountain region. Basis differentials, approximately 10% of Henry Hub in 2015-2017, have widened in recent months from a combination of weaker demand in California and increasing competition from the Permian, the Marcellus and Canada. Fitch expects differentials to remain under pressure at least through 2019, when incremental pipeline capacity is expected to diversify gas flows away from California, and applies a $0.70 per Mcf differential. Presence of some natural gas liquids (NGLs) in Ultra's production provides roughly 7% uplift to realized prices, helping to offset some of the pressure on netbacks. Low Cost F&D Relative to Shale Peers: Ultra has been able to reduce drilling and completion costs in its vertical program through operating efficiencies, including reducing days-to-drill and improved completion methods. This has resulted in significant reduction in F&D costs to roughly $0.70 per Mcf for its vertical well program. Preliminary results from Ultra's new horizontal drilling program point to further reduction in F&D costs closer to $0.45-$0.60 per Mcf (assuming $9 million/well and EUR of 12-15Bcfe). Hedging Policy Reduces Risk: In accordance with the terms of its amended credit agreement, Ultra aims to maintain a rolling hedge program of at least 65% of the next 18 months of production, helping to protect a minimum level of cash flow needed to maintain drilling activity levels. As of Feb. 26, 2018, the company had entered into NYMEX natural gas swaps for approximately 66% of its expected natural gas production at an average price of $2.88 per Mcf. Fitch expects Ultra to opportunistically expand the size and length of its hedging program. Ultra has also hedged the basis differential on a significant portion of the expected production at around $0.65 per Mcf. The hedges provide modest margin uplift to Fitch's base case but significant protection under Fitch's stressed scenario (where current year prices drop to $2.25 per Mcf). Metrics Consistent with Ratings: Fitch anticipates EBITDA and operating cash flow to decline in 2018, driven primarily by increased differential, but resume their growth in 2019-2020, supported by increased production volumes and operating efficiencies. Fitch expects credit metrics to weaken modestly in 2018 but return to levels consistent with the ratings in the following years and approach management's target of 3.0x by the end of the forecast horizon. Fitch expects modest cash flow outspend in 2018 to be offset by proceeds from divestment of the Uinta acreage. The revised development strategy, combined with a desire to achieve FCF neutrality, results in reduced capex guidance to $400 million for 2018. Fitch assumes drilling activities will gradually ramp up over the following years in line with cash flows from operations, allowing for growing production levels. Above Average Recovery Estimates: Fitch views Ultra's asset coverage as strong relative to its capital structure, leading to expectations of 100% recoveries for the secured debt, and recoveries of between 71%-90% for the unsecured debt. The recovery valuation for Ultra incorporates a reserve based valuation approach, focusing on the Dec. 31, 2017 PV-10 that stood at $2,384 million. Fitch has the flexibility to apply a traded asset valuation method in line with the corporate notching and recovery criteria for businesses with owned or operated assets that are actively traded through acquisitions or dispositions. Fitch reviewed current pricing multiples commonly used in the E&P sector for acquisitions and dispositions ($/acre for example) or production based ($/flowing barrel). These multiples yielded a value close to the Dec. 31, 2017 PV-10 value. Other Fitch related standard adjustments were made to the valuation analysis. Fitch highlights that the horizontal program expands the Wyoming acreage's economic potential, since the horizontal flank, representing roughly two-thirds of the company's position, was not part of the vertical program. DERIVATION SUMMARY Ultra's ratings reflect the company's dry-gas production profile and focus on one play, the Pinedale region. While Fitch views some execution risk to the revised development strategy, continued production growth and competitive operating expenses should provide Ultra with profitable natural gas opportunities despite wider differentials and the prevailing low natural gas price environment. Ultra's ratings reflects smaller production size (127 mboe/d in 2017) than natural gas peers Southwestern Energy (BB/Stable) at 409 mboe/d, EQT Corp (BBB-/Stable) at 403 mboe/d and Antero Resources (BBB-/Stable) at 375 mboe/d. Peers' ratings also reflect greater resource diversification across regions and slightly higher associated liquids production (EQT and Southwestern at lows 10s% and Antero at about 30%). Fitch expects Ultra's above-peer average cash netback margin of roughly 50% (assuming normalized interest expenses) in 2017, compared with peers ranging from 28% to 38%, to come under pressure in 2018-2019. Ultra had similar debt/EBITDA leverage than peers at 3.6x at Dec. 31, 2017 while upstream metrics, including debt/1P at 4.2x and debt/flowing barrel at $17,000, were weaker than peers' at the same period. Fitch expects Ultra's debt metrics to strengthen slightly over the medium-term as the company grows production while maintaining relatively flat debt levels. KEY ASSUMPTIONS Fitch's Key Assumptions Within the Rating Case for the Issuer -- Base case Henry Hub natural gas improving from US$2.75/mcf in 2018 to US$3.00/mcf in 2019 and beyond; -- Base case WTI oil price flat at US$55/barrel and -- Basis differential of $0.70 per Mcf and 7% uplift from NGLs through the forecast period; -- Capex of $400 million in 2018, increasing moderately in out years; -- Cash costs of $1.05 per Mcfe in 2018 with modest efficiency improvement in subsequent years; -- Production of approximately 285 Bcfe/d (130 mboe/d) in 2018, increasing at approximately a 10% CAGR through 2020. RATING SENSITIVITIES Developments That May, Individually or Collectively, Lead to Positive Rating Action -- Successful horizontal drilling program and/or contraction of the basis differential supporting modest production volume growth and FCF neutrality would lead to a Stable Rating Outlook. -- Increased diversification into different production regions and/or increased exposure to high-margin liquids production; -- Mid-cycle debt/EBITDA below 3.0x. Developments That May, Individually or Collectively, Lead to Negative Rating Action -- Weak execution of the horizontal drilling program, including failure to reduce the full-cycle cost profile and prove incremental reserves; -- Continued weakness in regional differentials. -- Mid-cycle debt/EBITDA above 3.5x; LIQUIDITY Adequate Liquidity: Ultra held cash balances of $16.6 million at year-end 2017 in addition to full availability under its $425 million revolving credit facility. Liquidity position was bolstered in September 2017 with a $175 million increase to the secured term loan followed by $115 million net proceeds from the sale of Marcellus acreage in December 2017. Borrowing base of $1.4 billion (re-evaluated semi-annually on April 1 and Oct. 1) limits amount of first lien debt under the revolving credit facility (up to $425 million) and the term loan facility ($975 million outstanding a year-end 2017). The revolver is small compared to similarly sized peers, but Fitch draws comfort from management's intention and ability to live within cash flow in the near term and divest non-core acreage in the Uinta. While material revolver draws are not anticipated, Fitch notes that ability to draw under the revolver could be constrained in the near term by maximum leverage covenant, absent improved unit economics and/or production growth. Fitch views upward potential to the borrowing base as reserves linked to the horizontal drilling program are gradually booked in 2018-2019. Mandatory debt repayments are minimal until the maturity of the revolver in January 2022 and $700 million of senior notes in April 2022. Fitch expects potential additional settlements to claims from several counterparties in relation to its chapter 11 filing to be manageable. FULL LIST OF RATING ACTIONS Fitch has affirmed the following ratings: Ultra Petroleum, Corp -- Long-Term IDR at 'BB-'; Ultra Resources, Inc. -- Long-Term IDR at 'BB-'; -- Senior secured debt 'BB+/RR1'; -- Senior unsecured debt 'BB/RR2'. The Rating Outlook is revised to Negative from Stable. VERMEIL LLC: $2.3M Sale of Brooklyn Condo Units to Schemo Approved ------------------------------------------------------------------ Judge Elizabeth S. Stong of the U.S. Bankruptcy Court for the Eastern District of New York authorized The Vermeil, LLC and Sterling & Seventh, LLC, to sell the real property known as (i) 133 Sterling Place, Unit 1D, Brooklyn, New York for $1,110,000; and (ii) 133 Sterling Place, Unit 1E, Brooklyn, New York for $1,220,00, to Jesse E. Schemo. A hearing on the Motion was held on April 26, 2018 at 10:00 a.m. The sale is free and clear of all liens, claims and encumbrances. The Transfer of title will be exempt from any taxes, transfer taxes, recording fees, or other charges which may be exempted under Section 1146 of the Bankruptcy Code. The 14-day stay provided for in Bankruptcy Rules 6004(h) and 6006(d) will not be in effect and, pursuant to Bankruptcy Rule 7062, the Order will be effective and enforceable immediately upon entry. The Debtor's Counsel, Barry D. Haberman, Esq., is authorized and empowered to disburse proceeds from the Sale to satisfy Administrative Expenses, Real Property Tax Liens, Real Property Taxes, Priority Tax Claims, and all other obligations necessary to close and transfer title to the Purchaser. The balance of the monies received at the Closing will be held in escrow by Barry D. Haberman, Esq., pending the expiration date of the Bar Date for filing claims in the case and then to be distributed in accordance with the Plan unless claims have been filed which modify or affect the present priority of claims, in which case the Court will make determinations on the distribution with respect to the property involved in the claims that are subject to a dispute. About The Vermeil LLC Headquartered in Brooklyn, New York, The Vermeil LLC filed for chapter 11 bankruptcy protection (Bankr. E.D.N.Y. Case No. 15-44136) on Sept. 8, 2015. In the petition signed by Jacob Pinson, managing member, the Debtor estimated assets at $1 million to $10 million and estimated liabilities at $1 million to $10 million. By Order dated Nov. 28, 2017 and entered on Nov. 29, 2017, the Court conditionally approved the Debtor's Third Amended Disclosure Statement. By Order dated March 15, 2018 and entered on March 15, 2018, the Court approved the retention of Maltz Auctions, Inc., doing business as Maltz Auctions, as auctioneer. VERNON PARK CHURCH: Wants to Move Plan Filing Period to Sept. 14 ---------------------------------------------------------------- Vernon Park Church of God asks the U.S. Bankruptcy Court for the Northern District of Illinois for an extension of the period to file a plan of reorganization and disclosure statement, as well as the exclusivity period to until September 14, 2018. A hearing on the Debtor's Exclusivity Motion will be held on May 22, 2018 at 9:30 a.m. The Debtor owns a church facility in Lynwood, Illinois. The church facility is located on a 13 acre site. The Debtor also owns another 52 acres of excess land that was acquired for development. The Debtor's church building and the landscaping of the land surrounding the church building was 80% completed when this chapter 11 case was filed. The unfinished work on the church's building includes the completion of the main sanctuary. The Debtor's liabilities include $3,800,000 in mechanics lien claims. Before the chapter 11 case was filed, the Debtor intended to develop the 52 acres of excess land and satisfy the mechanic's lien holders as part of the development process, which was dependent upon the Debtor securing Tax Increment Financing from the Village of Lynwood. However, securing the TIF approval was delayed, in part, due to a delay in recording the plat of survey for the TIF. On April 9, 2018, Debtor was able to record the plat of survey. The Debtor has determined that it should finance the completion of the church building and the landscaping over time with funds from its revenues. Thus, the Debtor tells the Court that it needs additional time: (a) to develop its reorganization plan and to file a plan of reorganization and disclosure statement; (b) to select a new developer for the excess land; (c) to pursue the TIF funds from the Village of Lynwood; (d) to select a general contractor to assist it with planning the construction work that is necessary to finish the church premises and landscaping; and (e) to resolve objections to claims and the priority of the mechanic's lien claims -- the Debtor believes that the Court is the best forum to determine the validity and priority of the $3,800,000 in lien claims, and that multiple adversary proceedings will be required to determine the validity and priority of the lien claims. About Vernon Park Church of God Based in Lynwood, Illinois, Vernon Park Church of God -- http://www.vpcog.org/-- is a religious organization. The Church's Sunday service is at 10:00 a.m., and Children's Church is held during Sunday service. Vernon Park Church of God filed a Chapter 11 petition (Bankr. N.D. Ill. Case No. 17-35316) on Nov. 28, 2017. Jerald January Sr., pastor, signed the petition. The Debtor estimated both assets and liabilities between $1 million to $10 million. The case is assigned to Judge Donald R Cassling. The Debtor is represented by Karen J Porter, Esq., at Porter Law Network. WAGGONER CATTLE: Taps Wilson Haag as Accountant ----------------------------------------------- Waggoner Cattle, LLC, seeks approval from the U.S. Bankruptcy Court for the Northern District of Texas to hire Wilson, Haag and Co., P.C., as its accountant. The firm will assist the company and its affiliates in the preparation of their monthly operating reports. Truitt Hayes, a certified public accountant employed with Wilson, disclosed in a court filing that he has no connection with creditors or any party that holds interests adverse to the Debtors. Wilson can be reached through: Truitt Hayes Wilson, Haag and Co., P.C. 418 S. Polk Street P.O. Box 590 Amarillo, TX 79105 Phone: (806)372-3331 Fax: (806)372-3355 About Waggoner Cattle Waggoner Cattle, et al., are privately held companies in Dimmitt, Texas engaged in the business of cattle ranching and farming. Circle W of Dimmitt, Inc. ("Circle W"), is the operating arm for Waggoner Cattle, LLC, Bugtusslel Cattle, LLC and Cliff Hanger Cattle, LLC, and it is managing the financial affairs of the above-mentioned companies. Waggoner Cattle, Circle W of Dimmitt, Inc., Bugtussle Cattle, LLC and Cliff Hanger Cattle, LLC (Bankr. N.D. Tex. Case No. 18-20126 to 18-20129) simultaneously filed voluntary petitions for relief under Chapter 11 of the Bankruptcy Code on April 9, 2018. In the petitions signed by Michael Quint Waggoner, managing member, the Debtors estimated $1 million to $10 million in assets and $10 million to $50 million in liabilities. WINDSTREAM SERVICES: Fitch Maintains 'B' IDR on Rating Watch Neg. ----------------------------------------------------------------- Fitch Ratings has maintained Windstream Services, LLC.'s (Windstream) Long-Term Issuer Default Rating (IDR) of 'B' on Rating Watch Negative. Fitch has also maintained the senior secured debt ratings of 'BB'/'RR1' and senior unsecured notes ratings of 'B'/'RR4' on Rating Watch Negative pending conclusion of the litigation surrounding the company's alleged notice of default. Fitch had placed Windstream and issue ratings on a Negative Watch in September 2017 following the receipt of notice of default from one of the noteholders, Aurelius Capital Master, Ltd. (Aurelius), on the company's 6 3/8% senior notes, alleging a breach of covenants. Fitch had further maintained the Negative Watch in November 2017 when Windstream's IDR was downgraded to 'B' from 'BB-'. The downgrade was reflective of continued weakness in Windstream's operating trends, while the Watch was maintained due to uncertainty regarding the outcome of Aurelius case. The matter is under litigation and the trial is expected to begin on July 23, 2018. Fitch expects to resolve the Rating Watch once it can be sufficiently determined that the allegations under the existing notice of default will not negatively affect Windstream's credit profile. KEY RATING DRIVERS Revenue Pressures Continue: Windstream continues to experience pressure across all segments due to declining legacy-products-related revenue and effects of competition in a challenging operating environment for wireline operators. The enterprise segment remains weak due to effects of legacy revenue although the strategic revenues continue to climb and constituted 45% of the enterprise segment revenue in March 2018. Fitch's base case assumes revenues continue to decline over the forecast horizon, albeit at a slowing pace. Revenue Mix Changes: Windstream derives approximately two-thirds of its revenue from enterprise services, consumer high-speed internet services and its carrier customers (core and wholesale), providing the best prospects for stable revenues in the long term. Certain legacy revenues remain pressured, but Fitch anticipates that Windstream's revenues should stabilize gradually as legacy revenues dwindle in the mix. Leverage Metrics: Fitch estimates total adjusted debt/EBITDAR will be approximately 5.9x in 2018. In the absence of material debt reduction using asset sale proceeds, Fitch expects total adjusted debt/EBITDAR will remain in 5.7x-5.9x range over the rating horizon supported by cost reductions and synergy realization. In calculating total adjusted debt, Fitch applies an 8x multiple to the sum of the annual rental payment to Uniti plus other rental expenses. Cost Synergies Support EBITDA Stabilization: Windstream is on track to realize the total stated synergies of $180 million, $155 million in operating cost savings and $25 million in capital spending savings from the EarthLink merger and Broadview acquisition. The company achieved the targeted $75 million in opex and $25 million in capex synergies by the end of 2017. Fitch believes realization of full run-rate of synergies is manageable and expects EBITDAR margin improvement in the range of 100bps-200bps by the end of 2019. Beyond 2019, Fitch will carefully monitor the pace and execution of cost cuttings that help support EBITDA levels in the future. Potential Asset Sales: Windstream has publicly stated its intention to sell non-core fiber assets and the CLEC consumer segment. Fitch notes that any debt reduction using proceeds from asset sales will be credit positive and may result in leverage declining to mid-5x range. Fitch has not assumed material asset sales in its forecast assumptions, given the potential execution risks. DERIVATION SUMMARY Windstream has a weaker competitive position based on scale and size of its operations in the higher-margin enterprise market. Larger companies, including AT&T Inc. (A-/Rating Watch Negative), Verizon Communications Inc. (A-/Stable), and CenturyLink, Inc. (BB/Stable), have an advantage with national or multinational companies given their extensive footprints in the U.S. and abroad. In comparison to Windstream, AT&T and Verizon maintain lower financial leverage, generate higher EBITDA margins and FCF, and have wireless offerings that provide more service diversification. Fitch also believes Windstream has a weaker FCF profile than CenturyLink following the LVLT acquisition, as CenturyLink's FCF will benefit from enhanced scale and LVLT's net operating loss carryforwards. Although Windstream has less exposure to the more volatile residential market compared to its wireline peer, Frontier Communications Corp. (B/Stable), it has higher leverage than Frontier. Within the residential market, incumbent wireline providers face wireless substitution and competition from cable operators with facilities-based triple play offerings, including Comcast Corp. (A-/Stable) and Charter Communications Inc. (Fitch rates Charter's indirect subsidiary, CCO Holdings, LLC, BB+/Stable). Cheaper alternative offerings such as Voice over Internet Protocol (VoIP) and over-the-top (OTT) video services provide additional challenges. Incumbent wireline providers have had modest success with bundling broadband and satellite video service offerings in response to these threats. No country-ceiling, parent/subsidiary or operating environment aspects impact the rating. KEY ASSUMPTIONS Fitch's Key Assumptions Within Its Rating Case for the Issuer --Revenue and EBITDA include the EarthLink merger as of Feb. 27, 2017 and the acquisition of Broadview on July 28, 2017. --Revenues total approximately $5.8 billion for 2018. Fitch expects organic revenue to continue to decline over the forecast horizon, albeit at a slowing pace. --2018 EBITDA is expected to benefit from continued realization of cost synergies achieved from acquisitions and other cost savings. Fitch expects EBITDA margins to expand by roughly 70bps in 2018 as additional cost synergies are realized. --Fitch expects total adjusted debt/EBITDAR to remain in 5.7x-5.9x range over the rating horizon. Debt reduction from asset sales could further benefit leverage as EBITDA is expected to hold steady with the help of realization of cost synergies from acquisitions and other cost savings. RATING SENSITIVITIES Developments That May, Individually or Collectively, Lead to Positive Rating Action --The company sustains total adjusted debt/EBITDAR below 5.0x-5.2x. --Revenues and EBITDA would need to stabilize on a sustained basis. --Continued execution on the integration of its recent transactions. --Material reduction in leverage on a sustained basis following any asset sales related repayment of debt could also benefit the rating. Developments That May, Individually or Collectively, Lead to Negative Rating Action --A negative rating action could occur if total adjusted debt/EBITDAR is 6.0x-6.2x or higher for a sustained period. --The company no longer makes progress toward revenue and EBITDA stability due to competitive and business conditions. Any concerns or execution risks around realization of synergies will negatively impact the ratings. --Evidence of deterioration in liquidity, including lack of positive run-rate FCFs and declining FCF margin. --Any negative developments related to the outcome of the receipt of notice of default. Fitch intends to resolve the Rating Watch once it can be sufficiently determined that the allegations under the notice will not affect Windstream's credit profile. --Additionally, refinancing unsecured debt with additional secured debt will likely result in a negative action on the remaining unsecured due to its lower recovery prospects. LIQUIDITY The rating is supported by the liquidity provided by Windstream's $1.25 billion revolving credit facility (RCF). At March 31, 2018, approximately $198.7 million was available for borrowing under the revolving facility. The revolver availability was supplemented with $60.5 million in cash at the end of 1Q18. The $1.25 billion senior secured RCF is in place until April 2020. Principal financial covenants in Windstream's secured credit facilities require a minimum interest coverage ratio of 2.75x and a maximum leverage ratio of 4.5x. Outside of annual term loan amortization payments, Windstream does not have any material maturities until 2020. The recent debt exchanges helped Windstream extend the maturities, improving the liquidity profile in the interim. Fitch estimates post-dividend FCF in 2018 will range from zero to negative $100 million. Fitch expects capital spending to return to normal levels in the 13%-15% and for the company to return to positive FCF in 2019, with FCF margins in the low single digits over the forecast. FULL LIST OF RATING ACTIONS The following ratings remain on Rating Watch Negative. Windstream Services, LLC --Issuer Default Rating (IDR) of 'B'; --$1.25 billion senior secured revolving credit facility due 2020 of 'BB'/'RR1'; --Senior secured term loans of 'BB'/'RR1'; --Senior secured notes due 2025 of 'BB'/'RR1'; --Senior unsecured notes of 'B'/'RR4'. WOODBRIDGE GROUP: $8.5M Sale of Los Angeles Property Approved ------------------------------------------------------------- Judge Kevin J. Carey of the U.S. Bankruptcy Court for the District of Delaware authorized the Contract to Buy and Sell Real Estate, dated as of Jan. 23, 2018, of Woodbridge Group of Companies, LLC and its affiliated debtors with Ardie Tavangarian, in connection with the sale of Silver Maple Investments, LLC's real property located at 810 Sarbonne Road, Los Angeles, California, together with Seller's right, title, and interest in and to the buildings located thereon and any other improvements and fixtures located thereon, and any and all of the Seller's right, title, and interest in and to the tangible personal property and equipment remaining on the real property as of the date of the closing of the sale, for $8.5 million. The sale is free and clear of all liens, claims, interests, and encumbrances. All proceeds of the Sale (net of the Broker Fee and Other Closing Costs) will be paid to the Debtors into the general account of Debtor Woodbridge Group of Companies, LLC, and such net proceeds will be disbursed and otherwise treated by the Debtors in accordance with the Final DIP Order. The Debtors are authorized and empowered to pay the Broker Fees to the Brokers in an amount up to 4% of the gross sale proceeds. Filing of a copy of the Order in the county in which the Property is situated may be relied upon by all title insurers in order to issue title insurance policies on the Property. The terms and conditions of the Order will be immediately effective and enforceable upon its entry notwithstanding any applicability of Bankruptcy Rule 6004(h). Notice of the Motion as provided therein will be deemed good and sufficient notice of such motion and to have satisfied Bankruptcy Rule 6004(a). About Woodbridge Group Headquartered in Sherman Oaks, California, The Woodbridge Group Enterprise -- http://www.woodbridgecompanies.com/-- is a comprehensive real estate finance and development company. Its principal business is buying, improving, and selling high-end luxury homes. The Woodbridge Group Enterprise also owns and operates full-service real estate brokerages, a private investment company, and real estate lending operations. The Woodbridge Group Enterprise and its management team have been in the business of providing a variety of financial products for more than 35 years, and have been primarily focused on the luxury home business for the past five years. Since its inception, the Woodbridge Group Enterprise has completed more than $1 billion in financial transactions. These transactions involve real estate, note buying and selling, hard money lending, and alternative financial transactions involving thousands of investors. Woodbridge Group of Companies and certain of its affiliates filed Chapter 11 bankruptcy petitions (Bankr. D. Del. Lead Case No. 17-12560) on Dec. 4, 2017. Woodbridge estimated assets and liabilities at between $500 million and $1 billion. The Chapter 11 cases are being jointly administered. Judge Kevin J. Carey presides over the case. Samuel A. Newman, Esq., Oscar Garza, Esq., Daniel B. Denny, Esq., Jennifer L. Conn, Esq., Eric J. Wise, Esq., Matthew K. Kelsey, Esq., and Matthew P. Porcelli, Esq., at Gibson, Dunn & Crutcher, LLP, and Sean M. Beach, Esq., Edmon L. Morton, Esq., Ian J. Bambrick, Esq., and Allison S. Mielke, Esq., at Young Conaway Stargatt & Taylor, LLP, serve as the Debtors' bankruptcy counsel. Homer Bonner Jacobs, PA, as special counsel, Province, Inc., as expert consultant, Moelis & Company LLC, as investment banker. The Debtors' financial advisors are Larry Perkins, John Farrace, Robert Shenfeld, Reece Fulgham, Miles Staglik, and Lissa Weissman at SierraConstellation Partners, LLC. Beilinson Advisory Group is serving as independent management to the Debtors. Garden City Group, LLC, is the Debtors' claims and noticing agent. Pachulski Stang Ziehl & Jones is counsel to the Official Committee of Unsecured Creditors; and FTI Consulting, Inc., serves as its financial advisor. An official committee of unsecured creditors was appointed in the Chapter 11 cases on Dec. 14, 2017. On Jan. 23, 2018, the Court approved a settlement providing for the formation of an ad hoc noteholder group and an ad hoc unitholder group. WOODBRIDGE GROUP: $9.6M Sale of Snowmass Property Approved ---------------------------------------------------------- Judge Kevin J. Carey of the U.S. Bankruptcy Court for the District of Delaware authorized the Contract to Buy and Sell Real Estate, dated as of Feb. 13, 2018, of Woodbridge Group of Companies, LLC and its affiliated debtors with John P. Woodruff and Samantha G. Woodruff, in connection with the sale of Clover Basin Investments, LLC's real property located at 1061 Two Creeks Drive, Snowmass Village, Colorado, together with Seller's right, title, and interest in and to the buildings located thereon and any other improvements and fixtures located thereon, and any and all of the Seller's right, title, and interest in and to the tangible personal property and equipment remaining on the real property as of the date of the closing of the sale, for $9.6 million. The sale is free and clear of all liens, claims, interests, and encumbrances. All proceeds of the Sale (net of the Broker Fee and Other Closing Costs) will be paid to the Debtors into the general account of Debtor Woodbridge Group of Companies, LLC, and such net proceeds will be disbursed and otherwise treated by the Debtors in accordance with the Final DIP Order. The Debtors are authorized and empowered to (i) pay the Purchasers' Broker Fee to the Purchasers's Broker in an amount up to 3% of the gross sale proceeds, and (ii) pay the Seller's Broker Fee to Sotheby's in an amount up to 3% of the gross sale proceeds. Filing of a copy of the Order in the county in which the Property is situated may be relied upon by all title insurers in order to issue title insurance policies on the Property. The terms and conditions of the Order will be immediately effective and enforceable upon its entry notwithstanding any applicability of Bankruptcy Rule 6004(h). Notice of the Motion as provided therein will be deemed good and sufficient notice of such motion and to have satisfied Bankruptcy Rule 6004(a). About Woodbridge Group Headquartered in Sherman Oaks, California, The Woodbridge Group Enterprise -- http://www.woodbridgecompanies.com/-- is a comprehensive real estate finance and development company. Its principal business is buying, improving, and selling high-end luxury homes. The Woodbridge Group Enterprise also owns and operates full-service real estate brokerages, a private investment company, and real estate lending operations. The Woodbridge Group Enterprise and its management team have been in the business of providing a variety of financial products for more than 35 years, and have been primarily focused on the luxury home business for the past five years. Since its inception, the Woodbridge Group Enterprise has completed more than $1 billion in financial transactions. These transactions involve real estate, note buying and selling, hard money lending, and alternative financial transactions involving thousands of investors. Woodbridge Group of Companies and certain of its affiliates filed Chapter 11 bankruptcy petitions (Bankr. D. Del. Lead Case No. 17-12560) on Dec. 4, 2017. Woodbridge estimated assets and liabilities at between $500 million and $1 billion. The Chapter 11 cases are being jointly administered. Judge Kevin J. Carey presides over the case. Samuel A. Newman, Esq., Oscar Garza, Esq., Daniel B. Denny, Esq., Jennifer L. Conn, Esq., Eric J. Wise, Esq., Matthew K. Kelsey, Esq., and Matthew P. Porcelli, Esq., at Gibson, Dunn & Crutcher, LLP, and Sean M. Beach, Esq., Edmon L. Morton, Esq., Ian J. Bambrick, Esq., and Allison S. Mielke, Esq., at Young Conaway Stargatt & Taylor, LLP, serve as the Debtors' bankruptcy counsel. Homer Bonner Jacobs, PA, as special counsel, Province, Inc., as expert consultant, Moelis & Company LLC, as investment banker. The Debtors' financial advisors are Larry Perkins, John Farrace, Robert Shenfeld, Reece Fulgham, Miles Staglik, and Lissa Weissman at SierraConstellation Partners, LLC. Beilinson Advisory Group is serving as independent management to the Debtors. Garden City Group, LLC, is the Debtors' claims and noticing agent. Pachulski Stang Ziehl & Jones is counsel to the Official Committee of Unsecured Creditors; and FTI Consulting, Inc., serves as its financial advisor. An official committee of unsecured creditors was appointed in the Chapter 11 cases on Dec. 14, 2017. On Jan. 23, 2018, the Court approved a settlement providing for the formation of an ad hoc noteholder group and an ad hoc unitholder group. WOODBRIDGE GROUP: $9M Sale of Craven's Hidden Hills Property Okayed ------------------------------------------------------------------- Judge Kevin J. Carey of the U.S. Bankruptcy Court for the District of Delaware authorized the Contract to Buy and Sell Real Estate, dated as of Feb. 10, 2018, of Woodbridge Group of Companies, LLC and its affiliated debtors with ELBS Calabasas, LLC, in connection with the sale of Craven Investments, LLC's real property located at 25085 Ashley Ridge Road, Hidden Hills, California, together with Seller's right, title, and interest in and to the buildings located thereon and any other improvements and fixtures located thereon, and any and all of the Seller's right, title, and interest in and to the tangible personal property and equipment remaining on the real property as of the date of the closing of the sale, for $9 million. The sale is free and clear of all liens, claims, interests, and encumbrances. All proceeds of the Sale (net of the Broker Fee and Other Closing Costs) will be paid to the Debtors into the general account of Debtor Woodbridge Group of Companies, LLC, and such net proceeds will be disbursed and otherwise treated by the Debtors in accordance with the Final DIP Order. The Debtors are authorized and empowered to (i) hold, but not pay, the Seller's Broker Fee payable to Kyle Giese and Adam Rosenfeld in an amount up to 2% of the gross sale proceeds pending further order of this Court and (ii) pay the Purchaser's Broker Fee to the Purchaser's Broker in an amount up to 2% of the gross sale proceeds. Filing of a copy of the Order in the county in which the Property is situated may be relied upon by all title insurers in order to issue title insurance policies on the Property. The terms and conditions of the Order will be immediately effective and enforceable upon its entry notwithstanding any applicability of Bankruptcy Rule 6004(h). Notice of the Motion as provided therein will be deemed good and sufficient notice of such motion and to have satisfied Bankruptcy Rule 6004(a). About Woodbridge Group Headquartered in Sherman Oaks, California, The Woodbridge Group Enterprise -- http://www.woodbridgecompanies.com/-- is a comprehensive real estate finance and development company. Its principal business is buying, improving, and selling high-end luxury homes. The Woodbridge Group Enterprise also owns and operates full-service real estate brokerages, a private investment company, and real estate lending operations. The Woodbridge Group Enterprise and its management team have been in the business of providing a variety of financial products for more than 35 years, and have been primarily focused on the luxury home business for the past five years. Since its inception, the Woodbridge Group Enterprise has completed more than $1 billion in financial transactions. These transactions involve real estate, note buying and selling, hard money lending, and alternative financial transactions involving thousands of investors. Woodbridge Group of Companies and certain of its affiliates filed Chapter 11 bankruptcy petitions (Bankr. D. Del. Lead Case No. 17-12560) on Dec. 4, 2017. Woodbridge estimated assets and liabilities at between $500 million and $1 billion. The Chapter 11 cases are being jointly administered. Judge Kevin J. Carey presides over the case. Samuel A. Newman, Esq., Oscar Garza, Esq., Daniel B. Denny, Esq., Jennifer L. Conn, Esq., Eric J. Wise, Esq., Matthew K. Kelsey, Esq., and Matthew P. Porcelli, Esq., at Gibson, Dunn & Crutcher, LLP, and Sean M. Beach, Esq., Edmon L. Morton, Esq., Ian J. Bambrick, Esq., and Allison S. Mielke, Esq., at Young Conaway Stargatt & Taylor, LLP, serve as the Debtors' bankruptcy counsel. Homer Bonner Jacobs, PA, as special counsel, Province, Inc., as expert consultant, Moelis & Company LLC, as investment banker. The Debtors' financial advisors are Larry Perkins, John Farrace, Robert Shenfeld, Reece Fulgham, Miles Staglik, and Lissa Weissman at SierraConstellation Partners, LLC. Beilinson Advisory Group is serving as independent management to the Debtors. Garden City Group, LLC, is the Debtors' claims and noticing agent. Pachulski Stang Ziehl & Jones is counsel to the Official Committee of Unsecured Creditors; and FTI Consulting, Inc., serves as its financial advisor. An official committee of unsecured creditors was appointed in the Chapter 11 cases on Dec. 14, 2017. On Jan. 23, 2018, the Court approved a settlement providing for the formation of an ad hoc noteholder group and an ad hoc unitholder group. WYNDHAM DESTINATIONS: Fitch Rates IDR 'BB-(EXP)', Outlook Stable ---------------------------------------------------------------- Fitch Ratings has assigned a first-time 'BB-(EXP)' Issuer Default Rating (IDR) to Wyndham Destinations, Inc. (WYND) subject to Wyndham Worldwide Corporation's (WYN) spin-off of its wholly-owned subsidiary Wyndham Hotels & Resorts, Inc. and legal name change to Wyndham Destinations, Inc. KEY RATING DRIVERS WYND's 'BB-(EXP)' IDR reflects the company's strong competitive position as the largest timeshare industry operator, as well as the diversification benefits of its less capital intensive exchange and rentals business. The discretionary nature of timeshare sales and WYND's high financial leverage are factors that balance the ratings. The latter is partially offset by strong profitability and cash flows from WYND's timeshare financing activities. High Core, Adjusted Leverage: Fitch expects WYND to operate with core adjusted leverage in the low-to-mid 4.0x range through the cycle, which is appropriate for the 'BB-' rating. WYND's core adjusted leverage will increase to the high 4x range during 2019, the first full year after restructuring, before declining to the low 4.0x range by the end of Fitch's four-year projection period. Core, adjusted leverage excludes WYND's net interest margin from timeshare financing, as well as the related non-recourse debt. According to Fitch's "Corporate Rating Criteria," when analyzing a corporate issuer with a captive finance subsidiary, Fitch calculates an appropriate target debt-to-equity ratio for the finance subsidiary based on its asset quality, funding and liquidity. If the finance subsidiary's target debt-to-equity ratio, based on Fitch's calculations, is lower than the actual ratio, Fitch assumes that the parent injects additional equity into the finance subsidiary to bring the debt-to-equity ratio down to the appropriate target level. Fitch then considers the effect of this equity injection in its analysis of the parent's credit profile. For WYND, Fitch calculates an appropriate target debt-to-equity ratio of 2.0x, slightly below the actual ratio of 2.6x. As a result of its analysis, Fitch has retained $246 million of non-recourse timeshare receivable debt in its core, adjusted leverage calculation for WYND, which represents the equity needed to bring its FinCo subsidary's debt-to-equity ratio down to 2.0x. Less Stable Cash Flows: Fitch expects WYND's through-the-cycle cash flow volatility to increase due to the restructuring. The spin-off will narrow the company's operational focus on the less stable, more capital intensive timeshare business. WYND generates the majority of its timeshare cash flows from unit/interval sales and to a lesser extent from the financing spread from timeshare loans and recurring fees from long-term resort management contracts. WYND's less capital intensive, fee-based RCI timeshare exchange business will compose roughly a quarter of WYND's revenues. The company has limited geographic revenue diversification. WYND has modified its timeshare business since 2009 in an effort to reduce cash flow volatility. Examples include emphasizing recurring management fees and the company's transition of a portion of its business to the Wyndham Asset Affiliation Model (WAAM). WYND created WAAM to improve the capital efficiency of its timeshare business. The company has cycled through several iterations based on changing market conditions and opportunity sets in the industry. Fitch expects the company will continue to seek timeshare inventory sourcing opportunities under its asset-light WAAM business model, in addition to modest timeshare inventory spending of roughly $250 million annually. Strong Position in Competitive Industry: WYND has a strong market position in the timeshare industry. The company is the largest timeshare operator based on owner families, which provides some scale economies and facilitates third-party marketing relationships. WYND also operates the larger of two timeshare exchange networks through its RCI subsidiary. Fitch expects the company to generate returns on invested capital at or above its peers through the cycle. The domestic timeshare market is mature, with above average economic cyclical sensitivity owing to the consumer discretionary nature of the product. Entry barriers are limited, and there are a variety of competitive alternatives, including rapid growth and adoption of alternative lodging accommodation companies, such as Airbnb, Inc. Growing Contingent Liabilities: WYND's off-balance-sheet liabilities, including contractual and contingent obligations, have increased in recent years, partly due to the company's less capital-intensive timeshare inventory sourcing strategy. Fitch incorporates these items into the ratings by analyzing the company's liquidity position and the potential impact to increased leverage under various liability funding scenarios. Inventory purchase commitments under its WAAM business model have increased WYND's off-balance-sheet contractual obligations. Fitch recognizes the financing elements associated with these transactions, but does not consider them akin to debt. Along with the company's other financial obligations, Fitch is monitoring WYND's total and maximum annual funding requirements related to its timeshare inventory purchase commitments, emphasizing the impact to leverage under weaker economic and industry conditions. WYND has adequate flexibility to redirect discretionary capital expenditures (i.e. share repurchases) to pay down debt and reduce leverage in an economic downturn. DERIVATION SUMMARY WYND's ratings reflect the company's dominant position in the timeshare industry, as well as the diversification benefits of its less capital intensive exchange and rentals business. The discretionary nature of timeshare sales and WYND's high financial leverage balance the ratings. WYND is the largest timeshare operator with almost 900,000 owners in it system. Marriott Vacations will be the company's closest peer upon completion of its announced acquisition of ILG given the combined size (roughly 650,000 owner families), followed by Hilton Grand Vacations at 288,000 and Bluegreen Corp. WYND's revenues are more diversified than Hilton Grand Vacations due to the inclusion of its timeshare exchange network RCI. However, peer Marriott Vacations will gain access to Interval's network through its ILG acquisition. Marriott Vacations also will have greater brand diversification via its relationship with Marriott International (BBB/Positive) and ILG's exclusive licenses to use the Starwood and Hyatt timeshare brands. Fitch expects WYND's core, lease adjusted leverage to sustain in the low 4.0x range through the cycle, which is well above Marriott Vacations (roughly 3.0x, pro forma for the ILG acquisition) and Hilton Grand Vacations (roughly 1.5x). KEY ASSUMPTIONS Fitch's Key Assumptions Within its Rating Case for the Issuer --Flat to slightly positive results in WYND's vacation exchange and rentals business, primarily through low single-digit pricing gains; --Healthy low-to-mid single-digit tour flow growth and low single-digit value per guest growth in WYND's vacation ownership segment through the forecast period; --Stable financing net interest margin through the forecast period. RATING SENSITIVITIES Developments That May, Individually or Collectively, Lead to Positive Rating Action --Leverage sustaining below 4.0x; --Greater cash flow diversification by brand and/or business line. Developments That May, Individually or Collectively, Lead to Negative Rating Action --Leverage sustaining above 5.0x; --A deterioration in the company's liquidity position, possibly due to greater off-balance sheet timeshare inventory purchase commitments. LIQUIDITY Adequate Liquidity: WYND's liquidity position is adequate; however, the company has some intermediate-term concentration in its debt maturity ladder, as well as reliance upon the ABS market to help fund its timeshare customer lending activities. A significant economic downturn accompanied by tightened credit markets could pressure WYND's securitization market access and require the company to support to its finance subsidiary. WYND's financial flexibility is generally consistent with high speculative grade ratings. The company has financial policies in place, but Fitch expects the company to show some flexibility around implementation that could lead it to temporarily exceed downward rating sensitivities. FULL LIST OF RATING ACTIONS Fitch has assigned the following ratings: Wyndham Destinations, Inc. --Long-term IDR 'BB-(EXP)'; --$1 billion senior secured credit facility 'BB+'/'RR1(EXP)'; --$300 million senior secured term loan B 'BB+'/'RR1(EXP)'; --$2.4 billion senior secured notes 'BB+'/'RR1(EXP)'. The Rating Outlook is Stable. For ratings at the higher end of the speculative-grade scale, notching of debt issue ratings from the IDR is determined by a broad consideration of relative recoveries. The specific notching in either direction from the IDR depends upon an assessment of the adequacy of secured debt collateral, total leverage, and the proportion of secured, unsecured and subordinated debt in the capital structure. WYND's secured debt rating is rated 'BB+'/'RR1', two notches above the IDR, illustrating Fitch's expectation of superior recovery prospects in the event of default. Fitch maintains the following ratings on Rating Watch Negative: Wyndham Worldwide Corp. --Long-term IDR 'BBB-'; --Short-term IDR 'F3'; --Senior unsecured credit facilities 'BBB-'; --Senior unsecured notes 'BBB-'; --Senior unsecured CP 'F3'. Wyndham Global Finance PLC --Senior unsecured CP 'F3'. Fitch expects to withdraw its ratings for Wyndham Worldwide Corp. and Wyndham Global Finance PLC upon completion of the spin-off of its lodging business, Wyndham Hotels & Resorts, Inc. WYNDHAM WORLDWIDE: $1.3-Bil. Bank Facility Gets Moody's Ba2 Rating ------------------------------------------------------------------ Moody's Investors Service assigned a Ba2 rating to Wyndham Worldwide Corporation's (Wyndham Worldwide Corporation will become Wyndham Destinations post-spin) proposed bank facility, including a $1.0 billion senior secured revolving credit facility and $300 million senior secured term loan. There is no change to the company's Baa3 unsecured rating which is under review for downgrade. Assignments: Issuer: Wyndham Worldwide Corporation Senior Secured Bank Credit Facility, Assigned Ba2(LGD3) RATINGS RATIONALE The assignment of a Ba2 assumes that the spinoff of the company's hotel franchise and management business (Wyndham Hotels & Resorts, Ba1 stable) closes as expected and the ratings of the remaining business (Wyndham Destinations) are downgraded two notches to Ba2. The ratings will remain under review until the spin off closes, which is expected to happen by the end of May. At that time Moody's would expect to assign Wyndham Destinations a Ba2 Corporate Family Rating and downgrade its existing notes to Ba2. The company's senior unsecured rating and commercial paper ratings would be withdrawn at that time. The company announced on May 9 that it closed the sale of its European vacation rentals business. The proceeds of that sale, along with proceeds from the proposed $300 million term loan, will be used to reduce outstanding debt at Wyndham Worldwide, including revolver outstandings, commercial paper and its existing term loan. Assuming the transaction closes as expected, Wyndham Destinations' credit profile will benefit from its large scale -- it is the largest vacation ownership company (by revenue) and operates the largest timeshare exchange network (in terms of number of members). The company also benefits from its licensing agreement with Wyndham Hotels & Resorts, its brand and geographic diversification and the stability of the timeshare exchange business. The company is constrained by the company's high leverage, which Moody's estimates will be about 5.0x pro forma for the spinoff, elevated loan loss reserves, and the general risks associated with its focus on the timeshare industry. Following the spinoff of its hotel franchise and management business, Wyndham Destiantions will be the largest vacation ownership company in the industry and operate the largest timeshare exchange business. Wyndham Destinations develops and sells vacation ownership (timeshare) intervals to individual consumers and provides consumer financing in connection with these sales. It also provides management services to hotels, rental properties, and vacation ownership resorts. Pro forma annual revenues are expected to be about $4 billion. The principal methodology used in these ratings was Business and Consumer Service Industry published in October 2016. ZEKELMAN INDUSTRIES: Moodys Hikes CFR to B1, Cites Credit Metrics ----------------------------------------------------------------- Moody's Investors Service upgraded Zekelman Industries, Inc.'s corporate family rating (CFR) to B1 from B2, its probability of default rating (PDR) to B1-PD from B2-PD, its senior secured term loan rating to B1 from B2 and the rating on its senior secured notes to B3 from Caa1. The ratings outlook is stable. "The ratings upgrade reflects the recent significant improvement in the company's operating performance and credit metrics and the expectation they will improve further in the near term. It also reflects the improved competitive position of the company after the recent consolidation in the tubular products sector," said Michael Corelli, Moody's Vice President -- Senior Credit Officer and lead analyst for Zekelman Industries. Upgrades: Issuer: Zekelman Industries, Inc. Corporate family rating, Upgraded to B1 from B2; Probability of default rating, Upgraded to B1-PD from B2-PD; Senior secured term loan due 2021, Upgraded to B1(LGD3) from B2(LGD3); Senior secured notes due 2023, Upgraded to B3(LGD5) from Caa1(LGD5); Outlook Actions: Issuer: Zekelman Industries, Inc. Outlook, Stable RATINGS RATIONALE Zekelman Industries B1 corporate family rating reflects the company's moderate size and somewhat limited diversity versus higher rated companies in the steel products sector, as well as its sensitivity to fluctuating steel prices and reliance on nonresidential construction activity, which drives demand for most of its tubular products. The rating also considers the competitive market in which the company operates and its limited product differentiation. The company's rating favorably considers its moderate leverage, ample interest coverage, good liquidity profile and its leading market position for a number of structural tubing, standard pipe and electrical conduit products. It also reflects Moody's expectation that its operating performance will remain strong in the near term supported by rational competitive dynamics due to recent sector consolidation and gradually improving nonresidential construction activity. Zekelman Industries operating performance and credit metrics have strengthened considerably over the past few years as the company has benefitted from moderately improved end market demand, wider spreads between steel purchases for inventory and final product prices as well as cost cuts and productivity improvements. Zekelman has been able to widen its material spreads as the company and its competitors have focused on improved pricing discipline and benefitted from consolidation in the industrial pipe and tube sector. The steel tubular products sector has undergone significant consolidation in the past two years with Nucor acquiring Independence Tube, Southland Tube and Republic Conduit and Zekelman acquiring Western Tube & Conduit and American Tube Manufacturing. As a result, Zekelman's operating results have improved dramatically with LTM adjusted EBITDA of $415 million for the period ended March 2018 and $378 million in fiscal 2017 (ended September 2017) versus a range of $155 million - $196 million in fiscal years 2013-2015. The substantially improved operating performance along with moderate capital spending has enabled Zekelman to generate substantial free cash flow. The company used a portion of that free cash along with term loan borrowings to fund acquisitions and to pay shareholder dividends. As a result, its overall debt level has remained elevated and in a range of $1.2 billion - $1.4 billion over the past five fiscal years and was about $1.3 billion in March 2018. However, its credit metrics have strengthened along with its operating performance, with its adjusted leverage ratio (Debt/EBITDA) declining to 3.5x in March 2018 from 4.5x in September 2016 and its interest coverage ratio (EBIT/Interest Expense) rising to 3.5x from 2.2x. These ratios are strong for the B1 corporate family rating and should improve further in 2018 as demand and pricing improve and it benefits from owning both Western Tube and American Tube for a full fiscal year. However, the company's ratio of free cash flow to debt ((CFO-dividends)/debt) remains somewhat weak for its rating due to investments in working capital and the payment of dividends. This metric declined to 10.8% in March 2018 from 11.9% in September 2016. Zekelman Industries has a good liquidity profile with a cash balance of $42 million and borrowing availability of $276 million as of March 31, 2018. The company had $45 million of outstanding borrowings on its $350 million revolver and $29 million of letters of credit issued. The senior secured revolving credit facility matures in November 2019 or 90 days prior to Zekelman's nearest debt maturity. The company currently has no outstanding debt that matures prior to November 2019. The stable outlook incorporates Moody's expectation that Zekelman's operating results will improve and its credit metrics will remain strong for its rating over the next 12 to 18 months. Zekelman's rating could be upgraded if the company provides more clarity around its financial policies, materially pays down debt, maintains a good liquidity position and sustains a leverage ratio below 3.5x, an interest coverage ratio above 3.5x and free cash flow to debt (CFO-dividends/debt) above 15%. A downgrade is unlikely in the near term, but could be considered should Zekelman's operating results and credit metrics weaken or its liquidity position deteriorate. Downside triggers would include the leverage ratio above 4.5x, interest coverage ratio below 2.0x and free cash flow to debt sustained below 12%. Headquartered in Chicago, Illinois, Zekelman Industries, Inc. manufactures steel pipe, hollow structural steel (HSS), electrical conduit and tubular products at fifteen manufacturing facilities in the US and Canada. The company includes the operating divisions of Atlas Tube, Wheatland Tube, Western Tube & Conduit, Sharon Tube and Picoma and has leading market positions in key product areas including hollow structural steel, standard pipe, electrical conduit and galvanized mechanical tubing. Its products are sold principally to steel service centers and plumbing and electrical distributors. Revenues for the twelve months ended March 31, 2018 were approximately $2.4 billion. The principal methodology used in these ratings was Steel Industry published in September 2017. ********* Monday's edition of the TCR delivers a list of indicative prices for bond issues that reportedly trade well below par. Prices are obtained by TCR editors from a variety of outside sources during the prior week we think are reliable. Those sources may not, however, be complete or accurate. The Monday Bond Pricing table is compiled on the Friday prior to publication. Prices reported are not intended to reflect actual trades. Prices for actual trades are probably different. Our objective is to share information, not make markets in publicly traded securities. Nothing in the TCR constitutes an offer or solicitation to buy or sell any security of any kind. It is likely that some entity affiliated with a TCR editor holds some position in the issuers public debt and equity securities about which we report. 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Villacampa, Sheryl Joy P. Olano, Psyche A. Castillon, Ivy B. Magdadaro, Carlo Fernandez, Christopher G. Patalinghug, and Peter A. Chapman, Editors. Copyright 2018. All rights reserved. ISSN: 1520-9474. This material is copyrighted and any commercial use, resale or publication in any form (including e-mail forwarding, electronic re-mailing and photocopying) is strictly prohibited without prior written permission of the publishers. Information contained herein is obtained from sources believed to be reliable, but is not guaranteed. The TCR subscription rate is $975 for 6 months delivered via e-mail. Additional e-mail subscriptions for members of the same firm for the term of the initial subscription or balance thereof are $25 each. For subscription information, contact Peter A. Chapman at 215-945-7000. *** End of Transmission ***