/raid1/www/Hosts/bankrupt/TCR

/raid1/www/Hosts/bankrupt/TCR_Public/180608.mbx T R O U B L E D C O M P A N Y R E P O R T E R Friday, June 8, 2018, Vol. 22, No. 158 Headlines 4 STAR LIBERTY: Case Trustee Proposes $1,500 Fee to Auctioneer 8341 BEECHCRAFT: Seeks July 31 Plan Exclusivity Periods Extension ABSOLUTE CONCRETE: Taps De Leo Law Firm as Legal Counsel ANCHOR REEF: Unsecured Creditors to Get 34.66% Under Plan AP EXHAUST: S&P Cuts Corp. Credit Rating to 'B-', Outlook Negative ARECONT VISION: Arecont Technologies Buying All Assets for $10M ATD CAPITOL: Exclusive Plan Filing Deadline Extended to July 5 ATLANTIC FABRICATION: July 12 Hearing on Plan Confirmation AUSTIN MLK: Voluntary Chapter 11 Case Summary BARCELONA APARTMENTS: Voluntary Chapter 11 Case Summary BDF ACQUISITION: Moody's Rate Proposed $257MM Term Loan 'B2' BELLATRIX EXPLORATION: Moody's Cuts CFR to Caa2, Outlook Negative BICOM NY: Exclusive Plan Filing Period Extended Through August 3 BLUE COLLAR: Santillo Opposes OK of Proposed Amended Disclosures BOWMAN DAIRY: July 9 Plan Confirmation Hearing BREITBURN ENERGY: Court Dismisses Felicia Pierce Suit C-N-T REDI MIX: Ongoing Business Income to Fund Proposed Plan CAPITOL SUPPLY: Exclusive Filing Period Extended to June 4 CAPITOL SUPPLY: Seeks July 5 Exclusive Plan Filing Period Extension CAREVIEW COMMUNICATIONS: Signs Amendment to PDL Modification Pact CARRIE ANN MORRIS: Davis Buying Two McKinney Properties for $850K CHATEAU CREOLE: Aug. 1 Disclosure Statement Hearing CHINA FISHERY: Wants to Sell 1024 HK Golf Club Memberships CINEVIA CORPORATION: Unsecureds to Receive .73% with No Interest CLASSIC DEVELOPMENTS: Aug. 2 Hearing on Final Approval of Plan CM LAB: Case Summary & 20 Largest Unsecured Creditors D & D SITE CONSTRUCTION: U.S. Trustee Unable to Appoint Committee DARRELL CALHOUN, SR: Selling Clarksville Property for $335K DELICIAS DE MINAS: July 24 Disclosure Statement Hearing DEMERX INC: Taps Alexander Capital as Placement Agent DIAGNOSTIC CENTER: Exclusive Plan Filing Period Extended to Aug. 12 DIAMOND CONTRACT: Unsecureds to Get 100% at 3% Over 102 Months DOUBLE D. FITNESS: TCF Equipment to be Paid $9,730 at 6% Interest ELEMENTS BEHAVIORAL: Gets Access to $4.7M Interim Financing ENERGY ACQUISITION: Moody's Gives B2 CFR & B1 1st Lien Loan Rating EXTREME ADVENTURES: Intellectual Property Up for Auction June 11 FIDELITY AMERICAN: Case Summary & 4 Unsecured Creditors FIELDWOOD ENERGY: Fitch Assigns First-Time 'B-' IDR, Outlook Stable FINTUBE LLC: Taps RSM US to Prepare 2017 Tax Returns FIRESTAR DIAMOND: Court Approves Examiner Work Plan FIRESTAR DIAMOND: US Trustee Seeks Chapter 11 Trustee Appointment FIRSTENERGY SOLUTIONS: Certificate Holders Disclose Stake FIRSTENERGY SOLUTIONS: Vanguard Out of Noteholder Group FRANCHISE SERVICES: 5th Cir. Affirms Dismissing Bankruptcy Petition FREEDOM MORTGAGE: Moody's Affirms B1 CFR & Alters Outlook to Neg. FREEMAN GRADING: Key Auction of Vehicles/Eqpt to Include Excavator GARCES RESTAURANT: Committee Taps Fox Rothschild as Legal Counsel GARCES RESTAURANT: Taps EisnerAmper as Financial Advisor GARCES RESTAURANT: Taps Porzio Bromberg as Legal Counsel GLOBAL LEADERSHIP: S&P Alters 2010 School Bonds Outlook to Negative GRAND VIEW FINANCIAL: Court Narrows Claims in Suit vs JP Morgan GREEN VALLEY HOSPITAL: SQN to Conduct Foreclosure Sale on June 12 GUY AMERICA: Secured Creditor Asks Court to Approve Plan Outline HARTFORD LIFE: Moody's Confirms Ba3 Sr. Unsecured Debt Rating HOLLYWOOD ONE: Taps Genovese Joblove as New Legal Counsel HORIZON GLOBAL: Moody's Cuts CFR to B3 & Alters Outlook to Negative HOVNANIAN ENTERPRISES: Fitch Ups IDR to CCC on Default Resolution HOWARD HUGHES: S&P Ups CCR to to B+ on Improved Earnings Stability IMPERIAL PALMS: Voluntary Chapter 11 Case Summary INFINITE HOLDINGS: Taps Infinity Investments as Real Estate Broker JHL INDUSTRIAL: New Plan Discloses Settlement Agreement with KFLP JOHN MEAGLEY, JR: Selling DC Property to Reid for $680K JOY TAYLOR: Court Dismisses Lawsuit vs BONY, Bayview K & D HOSPITALITY: Selling Greensburg Property for $1.4 Million KARIA Y WM: Needs Additional 7 Days to Finalize Plan Negotiations KHALIA'S KITCHEN: Taps Jones & Walden as Legal Counsel L BRANDS: Fitch Rates $700MM Guaranteed Notes Due 2027 'BB+'/'RR4' L BRANDS: Moody's Rates Proposed Sr. Unsec. Guaranteed Note 'Ba1' L BRANDS: S&P Assigns Proposed $700MM Unsecured Notes 'BB+' LADDCO LLC: Full Payment for Unsecured Creditors Over Five Years LC LIQUIDATIONS: BWFS Buying Gantry Crane for $400K MAC ACQUISITION: Romano's Macaroni Grill Mulls Deals MARK HANNA: Selling Nine Mile Falls Commercial Property for $257K MASS PRIVATE: Taps LedgerPlus as Accountant MATTY AND PATTY'S: Taps Brian W. Hofmeister as Legal Counsel MAVERICK ONE: Case Summary & 3 Unsecured Creditors MAY ARTS: July 18 Plan Confirmation Hearing MEHRI AKHLAGHPOUR: Trustee Selling Woodland Property for $1.23M MHT 1202: Case Summary & 7 Unsecured Creditors MILLAR WESTERN: Moody's Rates New C$150MM Secured Notes 'B2' MILLAR WESTERN: S&P Assigns 'B' Corp. Credit Rating, Outlook Stable MIRAGE DENTAL: Taps Avison Young Northern California as Broker MIRAGE DENTAL: Taps Avison Young NY as Appraiser MOHDSAMEER ALJANEDI: Seeks Court OK of Proposed Plan Outline MOOD MEDIA: Moody's Lowers Corp. Family Rating to Caa3, Outlook Neg NATIONS FIRST: Court Extends Exclusive Periods for 60 Days Only NICHOLAS PEZZA: Shaikhs Buying Sadle Brook Property for $375K NORTH CAROLINA FURNITURE: Taps Martinec Winn as Legal Counsel NRC US: Moody's Hikes Corp. Family Rating to B2, Outlook Stable OFF THE GRID: Centrally Grown Taps Margulies Faith as Counsel OREXIGEN THERAPEUTICS: Court OKs Stipulation with Cardinal Health PALMER PARK: U.S. Trustee Unable to Appoint Committee PARKER BUILDING: Washington Federal to Auction Property on July 17 PENTHOUSE GLOBAL: Intellectual Property Rights Sold for $1.075M PREMIER PCS: July 26 Plan Confirmation Hearing QSL PORTAGE: Proposes an Online Auction of All Tangible Property RAPHAEL METZGER: Bid to Vacate Stipulation with Ex-Wife Rejected RELATIVITY MEDIA: UltraV Buying All Assets for $4.4 Million RICHARD SOLBERG: Trustee Selling Farm Equipment at Auction RIVERA FAMILY: Taps Pittman & Pittman as Legal Counsel RMH FRANCHISE: Noblesville Buying Mishawaka Property for $600K ROBLES COMPANIES: BNC Bank to Hold Foreclosure Auction on July 11 ROCKPORT COMPANY: Taps HYPERAMS as Liquidation Consultant RONNIE WHITEFIELD: Cook Buying 2013 BMW 535 for $22K S & S MARKETING: Hires David Merrill of The Associates as Attorney SALLE FAMILY: Hires Pitts, Hay & Hugenschmidt as Attorney SAM MEYERS: Taps Kaplan Johnson as Legal Counsel SAMARITAN COMMUNITY: Chicago's Secured Claim Removed in New Plan SAMSONITE INT'L: Moody's Reviews Ba2 CFR for Downgrade SANCILIO PHARMACEUTICALS: Files for Chapter 11 to Sell Assets SHIRAZ HOLDINGS: Wants to Maintain Exclusivity for at Least 30 Days SHIRLEY MCCLURE: Trustee Selling La Mirada Property for $580K SPINE ORTHOPEDIC: Wells Fargo to Hold Foreclosure Sale on July 10 ST. PETER UNIVERSITY: Moody's Affirms Ba1 Rating on $144M Bonds STANDARD MEDIA: Fitch Assigns First-Time 'B' IDR, Outlook Stable STAR PERFORMANCE: Taps Hamilton & Phillips as Accountant STERLING ENTERTAINMENT: Aristotle Objects to Disclosure Statement SWD LLC: Seeks to Hire Kutner Brinen PC as Attorney TENNECO INC: Moody's Cuts CFR to Ba3 & Unsec. Notes Rating to B2 TERNAL JEWELERS: Taps Gregory K. Stern as Legal Counsel TINSELTOWN PARTNERS: July 19 Plan Confirmation Hearing TJ ACQUIRERS: Involuntary Chapter 11 Case Summary TOYS R US: Propco I Debtors Tap Goldin as Financial Advisor TOYS R US: Supplemental Order Issued on Transition Services TOYS R US: Wayne Debtor Taps Goldin as Financial Advisor TRANSALTA CORP: Moody's Alters Outlook to Pos. & Affirms Ba1 CFR TRANSWORLD SYSTEMS: Moody's Cuts CFR & 2nd Lien Notes Rating to C TREATMENT CENTER: Hires GlassRatner as Restructuring Advisor UNIFIED GRAPHICS: Lonestar Buying 2000 Hyster S50Ft for $5K VIRTUAL COMMUNICATIONS: Taps Kolesar & Leatham as Legal Counsel VISUAL COMFORT: Moody's Affirms B2 CFR Amid Postponed Transaction WALL STREET LANGUAGES: Taps DelBello Donnellan as Legal Counsel WALL STREET THEATER: Taps Hinckley Allen as Special Counsel WELLNESS ANALYSIS: Taps Eric A. Liepins as Counsel WEST POINT MARKET: Taps Zurn Law as Legal Counsel WET SEAL: ASK Needs To Recover Proceeds; EY To Pursue Tax Refunds WYNDHAM DESTINATIONS: Moody's Assigns 'Ba2' Corp. Family Rating WYNDHAM WORLDWIDE: S&P Lowers CCR to 'BB-', Off Watch Negative [*] Beard Group 25th Annual Distressed Investing Conference Nov. 26 [] BOOK REVIEW: The First Junk Bond A Story of Corporate Boom ********* 4 STAR LIBERTY: Case Trustee Proposes $1,500 Fee to Auctioneer -------------------------------------------------------------- W. Lance Owens, the Chapter 7 bankruptcy trustee for 4 Star Liberty Glass, LLC, is seeking permission from the United States Bankruptcy Court for the Eastern District of Arkansas, Jonesboro Division, for authority to pay an auctioneer. J.R. Hendrix held a sale per Court Order and the Report of Sale was duly filed with the bankruptcy court, outlining the gross proceeds in the amount of $8,850. Owens says J.R. Hendrix's commission is in the amount of $1,500. The chapter 7 case is, IN RE: 4 Star Liberty Glass, LLC, Debtor, No. 3:17-bk-15742 (Bankr. E.D. Ark.). 8341 BEECHCRAFT: Seeks July 31 Plan Exclusivity Periods Extension ----------------------------------------------------------------- 8341 Beechcraft, L.L.C., asks the U.S. Bankruptcy Court for the District of Maryland to extend for 60 days the exclusive periods during which the Debtor may file a plan and solicit acceptances thereon through July 31, 2018. The Debtor owns real property located at 8341 Beechcraft Avenue, Gaithersburg, Maryland, which it leases to Mite, LLC d/b/a Potomac 18 Caterers -- which is an affiliate of the Debtor. The Real Property is encumbered by a first-priority Purchase Money Deed of Trust in favor of WashingtonFirst Bank, now known as Sandy Spring Bank. The Real Property is also encumbered by a second-priority Indemnity Deed of Trust in favor of WashingtonFirst Bank. The IDOT secures Debtor's guaranty of a promissory note made by Mite to WashingtonFirst Bank. The Debtor relates that in 2017, Mite became embroiled in disputes with its general contractor HBW Properties, Inc. d/b/a HBW Group regarding the build-out of the Real Property. Mite had issues with the quality and completeness of HBW's work on the Real Property, and HBW failed to complete its work in a good workmanlike manner, including, without limitation, punchlist items and warranty work. HBW demobilized from the jobsite and has failed to return to do any further work, and the outstanding contract issues remain. Additionally, HBW failed to obtain lien releases from all of its subcontractors and suppliers, which prevented Mite from obtaining further draws from the Bank on the Construction Note. On September 7, 2017, one of HBW's subcontractors, Tyler Service Solutions, LLC, obtained a final order establishing and enforcing a mechanics' lien in the amount of $178,534.50 in the Circuit Court for Montgomery County, Maryland, Case No. 0434180-V, against Debtor's fee simple interest in the Real Property. The Debtor filed a motion to reconsider and strike the Tyler Lien, which was denied by the Circuit Court. The Debtor timely appealed that decision to the Maryland Court of Special Appeals on January 25, 2018 -- which is pending and is now stayed. As of the Petition Date, two additional subcontractors or suppliers of HBW have served a notice of intent to claim a lien against Debtor's fee simple interest in the Real Property, but neither had filed a mechanics' lien action as of the Petition Date. After the Circuit Court for Montgomery County denied the Debtor's Motion to Reconsider the entry of the Tyler Lien, Tyler began efforts to enforce the lien by hiring an auctioneer and making arrangements to obtain a bond so it could sell the Real Property imminently. Mite's counsel, Robert W. Moses, has been engaged in significant settlement discussions with HBW to resolve the HBW Suit and in turn the Tyler Lien. Up until 2 weeks prior to the filing of this Motion, it appeared an agreement was imminent. While counsel stated at the Debtor's meeting of creditors that he anticipated having a plan filed within the Plan Period, the true prospect of settlement lead to the realistic conclusion that the preparation of a plan and disclosure statement might not be necessary. The Debtor tells the Court that the only Proof of Claim filed to date is by the Internal Revenue Service in the amended amount of $0.00. The Debtor further hopes to get a better view of all the claims asserted against it as the bar date approaches -- which will help in proposing a confirmable plan and complete disclosure statement. Thus, the Debtor argues that allowing the Plan Period to expire on June 1, 2018, could give rise to the threat of multiple plans and a contentious confirmation process resulting in increased and unnecessary administrative expenses. About 8341 Beechcraft Based in Gaithersburg, Maryland, 8341 Beechcraft, L.L.C., listed itself as a single asset real estate as defined in 11 U.S.C. Section 101(51B). 8341 Beechcraft, L.L.C., based in Gaithersburg, MD, filed a Chapter 11 petition (Bankr. D. Md. Case No. 18-11393) on Feb. 1, 2018. In the petition signed by David I. Bacharach, managing member, the Debtor estimated $1 million to $10 million in both assets and liabilities. The Hon. Thomas J. Catliota presides over the case. Marc E. Shach, Esq., at Coon & Cole, LLC, serves as bankruptcy counsel to the Debtor. No official committee of unsecured creditors has been appointed in the Chapter 11 case. ABSOLUTE CONCRETE: Taps De Leo Law Firm as Legal Counsel -------------------------------------------------------- Absolute Concrete Services, LLC, seeks approval from the U.S. Bankruptcy Court for the Eastern District of Louisiana to hire The De Leo Law Firm LLC 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. Robin De Leo, Esq., managing member and the attorney who will be handling the case, charges an hourly fee of $300. Paralegals charge $85 per hour. The Debtor paid De Leo Law Firm $3,948 for pre-bankruptcy services it provided. Moreover, the Debtor remitted a retainer of $27,779 to the firm prior to the petition date. Of this amount, $1,717 was used to pay the filing fee. Mr. De Leo disclosed in a court filing that he and his firm do not represent and will not represent any other entity having an interest adverse to the Debtor. The firm can be reached through: Robin R. De Leo, Esq. The De Leo Law Firm LLC 800 Ramon St. Mandeville, LA 70448 Telephone: (985)727-1664 Facsimile: (985)727-4388 Email: lisa@northshoreattorney.com About Absolute Concrete Services Absolute Concrete Services LLC sought protection under Chapter 11 of the Bankruptcy Code (Bankr. E.D. La. Case No. 18-11235) on May 14, 2018. In the petition signed by Linda Backes, managing member and owner, the Debtor disclosed that it had estimated assets of less than $50,000 and liabilities of less than $500,000. Judge Jerry A. Brown presides over the case. ANCHOR REEF: Unsecured Creditors to Get 34.66% Under Plan --------------------------------------------------------- Anchor Reef Club at Branford, LLC, filed with the U.S. Bankruptcy Court for the District of Connecticut a Disclosure Statement, on June 4, 2018. The Plan proposes to pay the Claims of general unsecured creditors from a Carve-Out made available by a secured creditor and for payment of all costs of administration from the sale of the Debtor's Property in Branford, Connecticut. Class 2 unsecured claims is approximately $215,000. Class 2 consists of the General Unsecured Claims. General Unsecured Claims will be paid 34.66% of their Allowed Claims in full and final satisfaction of Unsecured Claims from the Class 2 Carve-Out. Class 2 General Unsecured Creditors will receive the Class 2 Carve-Out if, and only if, they will elect to receive the Class 2 Carve-Out. The Class will elect to receive the Class 2 Carve-Out if at least two-thirds in amount and more than one-half in number of the Allowed Class 2 General Unsecured Creditors vote to receive the Carve-Out. If the Unsecured Creditors elect to receive the Class 2 Carve- Out, the Class 2 General Unsecured Creditors are deemed to release the principals of the Debtor. Under the terms of the Plan, the Debtor will market and sell its property at one or more Sale Closings pursuant to (i) the terms of the Plan, and/or (ii) sale orders entered by the Bankruptcy Court pursuant to 11 U.S.C. Section 363. Pursuant to an order of the Bankruptcy Court, the Debtor has retained a licensed real estate broker to list and market the Property for sale. The Debtor has proposed a private sale of the Property to Sachem Building and Development, LLC, for $2,600,000. In the event that the sale to Sachem results in a Sale Closing, the distributions under this Plan will be made on the Sale Closing Date. A full-text copy of the disclosure statement is available for free at: http://bankrupt.com/misc/ctb17-21080-115.pdf 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. AP EXHAUST: S&P Cuts Corp. Credit Rating to 'B-', Outlook Negative ------------------------------------------------------------------ S&P Global Ratings lowered its corporate credit rating on auto supplier AP Exhaust Intermediate Holdings LLC (APC) to 'B-' from 'B'. The outlook is negative.o S&P said, "We also lowered our issue-level rating on the company's first-lien term loan to 'B-' from 'B'. The recovery rating remains '3', indicating our expectation for meaningful (50%-70%; rounded estimate: 50%) recovery in the event of a payment default. "The downgrade reflects our view that APC's credit metrics have worsened and will likely remain weak. The company's leverage is expected to remain above 7x and free operating cash flow (FOCF) to debt less than 2% for 2018. "The negative outlook on APC reflects our expectation of an increased risk that margins in the exhaust division will remain weak, which could cause continued negative cash flow for multiple quarters such that it adversely affects liquidity. "We could lower our ratings on APC in the next 12 months if the company's margins remain weak or deteriorate further, causing leverage to worsen. This could occur if the company's top-line sales continue to decline or if it cannot offset its higher raw material costs. This would lead us to question the new management's strategy and its attempts to integrate AP Exhaust with Centric. We could also consider downgrading the company if it cannot consistently generate positive free cash flow for multiple quarters such that it adversely affects its liquidity and leads us to believe the capital structure is unsustainable. "We could revise the outlook to stable if margins improve and sales stabilize, allowing the company to sustainably generate free cash flow annually. This could occur if the company successfully increases prices in its exhaust division and stabilizes sales in the company as a whole." ARECONT VISION: Arecont Technologies Buying All Assets for $10M --------------------------------------------------------------- Arecont Vision Holdings, LLC, and its debtor-affiliates, Arecont Vision, LLC and Arecont Vision IC DISC, ask the U.S. Bankruptcy Court for the District of Delaware to authorize their bidding procedures and their Asset Purchase Agreement with Arecont Technologies, LLC in connection with the sale of substantially all assets and properties for $10 million, subject to a working capital adjustment plus the assumption of certain liabilities, subject to overbid at an auction. A hearing on the Motion is set for June 8, 2018 at 2:00 p.m. (ET). The objection deadline was June 1, 2018 The Debtors' sale efforts initially commenced in November 2015 with the hiring of Imperial Capital as investment bankers. An extensive marketing process followed and ultimately culminated, on March 3, 2017, in the execution of a share purchase agreement for the interests in Arecont Vision with NetPosa Technologies, Ltd., a publicly traded Chinese company. Following execution of the purchase agreement, a regulatory review process began with U.S. authorities. During such review process, the Debtors' performance began to decline due to increased competition from Chinese competitors. This decline ultimately led to NetPosa terminating the purchase agreement in early September 2017, which it was not permitted to do under the terms of its agreement with the Debtors, thereby forcing the Debtors to urgently explore strategic alternatives and commence litigation against NetPosa. Beginning on Apri14, 2018, Imperial commenced a further marketing process by contacting a broad universe of potential strategic and financial buyers. Following multiple discussions among the Debtors, the Prepetition Lenders, and their respective professionals, and following the clarification by Imperial of certain questions regarding the IoIs, Turnspire Capital, LLC submitted a Letter of Intent and was selected as the lead bidder, based upon the valuation and terms proposed in its Letter of Intent, the level of diligence and work that Turnspire had conducted in preparing its Letter of Intent, and Imperial's assessment of the Turnspire's ability to reach a fully negotiated asset purchase agreement. Following the Petition Date, the Debtors entered into the APA with the Stalking Horse Purchaser, which is an affiliate of Turnspire. The Purchase Agreement contemplates the sale of substantially all of the Debtors' assets in exchange for cash consideration in the amount of $10 million, subject to a working capital adjustment plus the assumption of certain liabilities. The Debtors ask Court approval to consummate the transaction, subject to overbid at an auction pursuant to certain proposed overbid procedures and protections. Following entry by the Court of the Bidding Procedures Order providing for the Break-Up Fee and the Expense Reimbursement for the Stalking Horse Purchaser, Imperial will continue its marketing efforts with potential bidders, which will include "blast" electronic communications informing potentially interested parties of the Debtors' chapter 11 filing and their ongoing sales effort. They believe that this marketing and sale process will preserve going concern value and maximize recoveries for all stakeholders. The Debtors now propose to sell their assets, which generally consist of their IP megapixel camera technology for video surveillance applications and substantially all of their other business assets and property associated with that technology. The material terms of the proposed APA are: a. Purchase Price: $10 million in cash, subject to a working capital adjustment plus the assumption of the Assumed Liabilities, the cash portion of the Purchase Price will be payable as follows: (a) the Stalking Horse Purchaser will deposit into escrow within 48 hours following the execution of the APA the sum of $1 million; and (b) the balance to be paid by the Stalking Horse Purchaser at closing. b. Purchased Assets: The Debtors' right, title and interest in substantially all of the assets used exclusively in connection with or arising out of the operation of their business, including certain personal property, intangible property, governmental permits and licenses to the extent transferrable, inventory, vendor related items and claims, including a certain promissory note dated May 2, 2014, executed by Raul Calderon, the Debtors' COO, in favor of Holdings (which note was assigned to Arecont Vision) in the current principal amount of $390,000, which note will be sold to the Stalking Horse Purchaser and then waived. c. Assumed Liabilities: The liabilities and cure costs under assumed contracts and various other specified obligations as further set forth in section 1.3 of the APA. d. Breakup Fee: $500,000 e. Expense Reimbursement: $400,000 f. Closing Deadline: The closing will be held upon the third business day following satisfaction of the conditions set forth in sections 5 and 6 of the APA, and in any event no later than July 13, 2018, subject to the parties' mutual agreement to extend. The deadline for entry of the Bid Procedures Order is June 8, 2018, and the deadline for the Sale Hearing to take place is July 6, 2018. g. Representations and Warranties: The customary for transactions of this kind. Except as specifically set forth in the APA, the Stalking Horse Purchaser will accept the Property at the Closing "as-is," "where-is," and "with all faults." The salient terms of the Bidding Procedures are: a. Bid Deadline: June 29, 2018 at 4:00 p.m. (PET) b. Good Faith Deposit: No less than 10% of the Bidder's offer c. Purchase Price: The consideration proposed by the Bid may include only cash and/or other consideration acceptable to the Debtors (in consultation with the Committee and AIG) (the cash component must be no less than an amount necessary to satisfy the Breakup Fee and Expense Reimbursement). The Bid must clearly set forth the purchase price and identify any non-cash components including, without limitation, which liabilities of the Debtors the bidder is agreeing to assume. The aggregate consideration must exceed the value of the consideration under the Purchase Agreement by an incremental amount that is not less than $250,000 (after taking into account the Breakup Fee and Expense Reimbursement) ("Initial Minimum Overbid"). d. Auction: The Auction will commence no later than July 5, 2018 at 10:00 a.m (PET) at the offices of Pachulski Stang Ziehl & Jones LLP, 919 N. Market St., 17th Floor, Wilmington, DE 19899, or such other place determined by the Debtors and in no event later than July 5, 2018. e. Minimum Overbid Increment: $100,000 f. The sale of the Assets will be on an "as is, where is" basis and without representations or warranties of any kind, nature, or description; and free and clear of any Liens, Claims and Encumbrances, and other interests. g. Sale Hearing: July 6, 2018 h. Closing: The closing will take place in accordance with the terms of the Successful Bidder APA, approved by the Bankruptcy Court at the Sale Hearing. A copy of the APA and the Bidding procedures attached to the Motion is available for free at: http://bankrupt.com/misc/Arecont_Vision_62_Sales.pdf The Debtors will ask to assume and assign the Assumed Executory Contracts to be identified on schedules to the Purchase Agreement, or alternatively, identified pursuant the Successful Bidder's asset purchase agreement. The Assumed Executory Contracts will be those Contracts and Leases pursuant to which the Debtors serve a Cure Notice. The Assumption Objection Deadline is no later than 4:00 p.m. (PET) on the date that is seven days prior to the Sale Hearing. The Debtors ask that the Court waives the 14-day stay periods under Bankruptcy Rules 6004(h) and 6006(d) or, in the alternative, if an objection to the Sale is filed, reduce the stay period to the minimum amount of time needed by the objecting party to file its appeal. The Purchaser: ARECONT TECHNOLOGIES, LLC c/o Turnspiie Capital Partners Attn: Ilya Koffman 575 Madison Avenue Suite 1006 New York, NY 10022 E-mail: ikoffinan@turnspirecap.com The Purchaser is represented by: Larry Halperin, Esq. Michael Friedman, Esq. CHAPMAN & CUTLER LLP 1270 Avenue of the Americas 30th Floor New York, NY 10020 E-mail: halperin@chapman.com friedman@chapman.com About Arecont Vision Holdings Based in Glendale, California, Arecont Vision Holdings, LLC -- 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. The company 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. Arecont Vision Holdings sought protection under Chapter 11 of the Bankruptcy Code (Bankr. D. Del. Case Nos. 18-11142 to 18-11144) on May 14, 2018. In the petitions signed by Scott T. Avila, chief restructuring officer, the Debtors estimated assets of less than $50,000 and liabilities of $50 million to $100 million. The Debtors tapped Pachulski Stang Ziehl & Jones LLP as their legal counsel; Imperial Capital LLC as investment banker; and Armory Strategic Partners, LLC, as financial advisor. ATD CAPITOL: Exclusive Plan Filing Deadline Extended to July 5 -------------------------------------------------------------- The Hon. Erik P. Kimball of the U.S. Bankruptcy Court for the Southern District of Florida has granted ATD Capitol, LLC, an extension of its exclusive periods to file and to solicit acceptances of a plan of reorganization through July 5, 2018 and Sept. 3, 2018, respectively. The Troubled Company Reporter has previously reported that ATD Capitol asked the Court to extend the exclusive periods claiming that it requires additional time to permit Capitol Supply to pursue settlement discussions with the U.S. and its secured lender prior to the Debtor formulating and proposing its plan of reorganization and disclosure statement. Since the Petition Date, ATD Capitol has devoted a significant amount of time to complying with the requirements of operating as a debtor-in-possession during a Chapter 11 case. ATD Capitol is a wholly-owned subsidiary of Capitol Supply, Inc., who is also a debtor in a bankruptcy case pending before the Court at In re Capitol Supply, Inc., Case No. 17-21544-EPK. ATD Capitol's proposed reorganization will be impacted by the outcome of the appeal of the Court's decision with respect to a contested matter in Capitol Supply's bankruptcy case. Specifically, Capitol Supply obtained an order from the Court enforcing the stay against an action by the U.S., one of its largest unsecured creditors, and Louis Scutellaro pending before the District Court for the District of Columbia. The U.S. appealed the Court's decision to the U.S. District Court for the Southern District of Florida, and the matter has been fully briefed. ATD Capitol asserted that its proposed reorganization will also be impacted by the outcome of Capitol Supply's negotiations with its primary secured lender. Capitol Supply has been engaged in settlement discussions regarding the DC Case, consensual plan terms and other related issues with the U.S. and its primary secured creditor. In addition, Bradley S. Shraiberg, counsel for Capitol Supply and ATD Capitol, who has been primarily engaged in the foregoing negotiations, will be out of the country for personal travel beginning June 6, 2018, through June 20, 2018. Further, Capitol Supply recently filed a motion to extend its exclusive filing period to through and including June 4, 2018, and its exclusive solicitation period to through and including Aug. 3, 2018, and its deadline for filing its plan to June 4, 2018, and it is anticipated that Capitol Supply will seek another extension of its exclusive filing period to through and including July 5, 2018. About ATD Capitol ATD Capitol, LLC, was incorporated on Aug. 12 2015, and is in the office and public building furniture business. ATD is an affiliate of Capitol Supply, Inc., which sought bankruptcy protection (Bankr. S.D. Fla. Case No. 17-21544) on Sept. 20, 2017. ATD Capitol, LLC, based in Boca Raton, FL, filed a Chapter 11 petition (Bankr. S.D. Fla. Case No. 17-22257) on Oct. 9, 2017. In the petition signed by Robert J. Steinman, president, the Debtor estimated $100,000 to $500,000 in assets and $1 million to $10 million in liabilities. The Hon. Paul G. Hyman, Jr. presides over the case. Bradley Shraiberg, Esq., at Shraiberg Landau & Page, P.A., serves as bankruptcy counsel to the Debtor. An official committee of unsecured creditors has not yet been appointed in the Chapter 11 case. ATLANTIC FABRICATION: July 12 Hearing on Plan Confirmation ---------------------------------------------------------- Judge Janice D. Loyd of the U.S. Bankruptcy Court for the Western District of Oklahoma issued an order conditionally approving the disclosure statement explaining Atlantic Fabrication & Design LLC's Chapter 11 plan. July 5, 2018 is fixed as the last day for filing and serving written objection to the disclosure statement and plan, and July 12, 2018 at 9:30 A.M., is fixed as the date of hearing for the final approval of the disclosure statement and confirmation of the plan. About Atlantic Fabrication Based in Oklahoma City, Oklahoma, and founded in 2007, Atlantic Fabrication & Design LLC provides mechanical and welding fabrication services that range from small equipment change out to the installation of large systems. Atlantic Fabrication is an ASME "U" Stamp certified pressure vessel manufacturer. The Company also carries an NBIC "R" Stamp which covers the repair of pressure vessels, boilers, and steam piping systems. Atlantic Fabrication & Design LLC filed a Chapter 11 petition (Bankr. W.D. Okla. Case No. 17-14891) on Dec. 4, 2017. In the petition signed by Paul D. Stitt, its member manager, the Debtor disclosed $2.02 million in assets and $1.98 million in liabilities. The Hon. Janice D. Loyd presides over the case. The Debtor hired Sansone Howell PLLC as its bankruptcy counsel, and D. R. Payne & Associates, Inc., as its accountant. AUSTIN MLK: Voluntary Chapter 11 Case Summary --------------------------------------------- Debtor: Austin MLK Development, Inc. 1811 Kirby Drive Houston, TX 77019 Business Description: Austin MLK Development, Inc. is a privately owned company in Houston, Texas founded in 2015. Chapter 11 Petition Date: June 5, 2018 Court: United States Bankruptcy Court Southern District of Texas (Houston) Case No.: 18-33132 Judge: Hon. Marvin Isgur Debtor's Counsel: Robert Chamless Lane, Esq. THE LANE LAW FIRM 6200 Savoy Drive, Ste 1150 Houston, TX 77036 Tel: 713-595-8200 Email: chip.lane@lanelaw.com Estimated Assets: $1 million to $10 million Estimated Liabilities: $1 million to $10 million The petition was signed by Alfred Jackson, authorized representative. 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/txsb18-33132.pdf BARCELONA APARTMENTS: Voluntary Chapter 11 Case Summary ------------------------------------------------------- Debtor: Barcelona Apartments, LLC 538 Westover Road Big Spring, Texas, 79720 Business Description: Barcelona Apartments, LLC is a privately held apartment complex owner based in Big Spring, Texas. Chapter 11 Petition Date: June 5, 2018 Court: United States Bankruptcy Court Northern District of Texas (Dallas) Case No.: 18-31925 Judge: Hon. Barbara J. Houser Debtor's Counsel: Charles Brackett Hendricks, Esq. CAVAZOS HENDRICKS POIROT, P.C. 900 Jackson St., Suite 570 Dallas, TX 75202 Tel: (214) 573-7302 Fax: (214) 573-7399 E-mail: chuckh@chfirm.com Estimated Assets: $1 million to $10 million Estimated Liabilities: $1 million to $10 million The petition was signed by Alan Kuatt, managing member, FSG Holdings, LLC, managing member of Barcelona Apartments, LLC. 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/txnb18-31925.pdf BDF ACQUISITION: Moody's Rate Proposed $257MM Term Loan 'B2' ------------------------------------------------------------ Moody's Investors Service assigned a B2 rating to BDF Acquisition Corp.'s ("Bob's") proposed $257 million senior secured term loan. There is no change to Bob's B2 Corporate Family Rating ("CFR"), B2-PD Probability of Default Rating and stable ratings outlook. Proceeds from the new term loan will be used to refinance Bob's existing term loan, which matures in February 2021. Additionally, Bob's will extend its existing asset-based revolving credit facility maturity to June 2023 and upsize it by $15 million to $55 million. Moody's took the following rating action for BDF Acquisition Corp.: Proposed $257 million senior secured term loan due 2023, assigned B2 (LGD 3) The ratings are subject to receipt and review of final documentation. The following ratings for BDF Acquisition Corp. remain unchanged and will be withdrawn upon their repayment in full and the closing of the transaction: $265 million ($257 million outstanding amount) senior secured term loan due 2021, B2 (LGD 3) RATINGS RATIONALE BDF Acquisition Corp.'s B2 CFR reflects the company's high financial risk, with lease-adjusted leverage (Moody's-adjusted debt/EBITDA) in the mid-5 times range and modest interest coverage (EBIT/interest expense) in the mid-1 times range as of April 1, 2018. Moreover, based on Moody's expectations for a modest earnings decline and higher interest costs given higher LIBOR rates and the current refinancing at higher spreads as anticipated, interest coverage will decline to 1.25 times in 2018, before improving back to the mid-1 times range in 2019 as earnings growth resumes. The rating also reflects Bob's relatively small size, limited geographic presence and narrow product focus on the furniture category, which in Moody's view is facing increased competition. The B2 CFR also incorporates the risks associated with the company's growth strategy, particularly as it continues its expansion into new markets that can create operational challenges, while driving costs and capital spending higher. The rating favorably reflects the strength of the company's "Bob's Discount Furniture" brand in the regions where it operates, and its value product positioning. Moody's believes that Bob's everyday low price offering provides a differentiating value proposition that would allow the company to grow through store expansion. The company's relatively low funded debt/EBITDA of around mid-3 times (based on EBITDA excluding items Moody's considers non-recurring but before a meaningful amount of lease adjustments), along with its good liquidity profile, provide key underlying support for the rating. Moody's expects the company to continue generating solid positive free cash flow, excluding growth capital expenditures, and to have good backstop liquidity available under its ABL. The stable rating outlook reflects Moody's expectation that earnings will decline modestly in 2018 before returning to growth in 2019 as the company leverages its West Coast distribution center investment. A rating upgrade would require sustained growth in revenue and earnings resulting in debt/EBITDA of 4.5 times or lower, and EBIT/interest expense in excess of 2.0 times. An upgrade would also require greater regional diversification and scale, and a willingness on the part of the company to maintain more conservative financial policies. The ratings could be downgraded if the company does not return to earnings growth, or if liquidity deteriorates. Debt/EBITDA sustained above 6.0 times, or interest coverage below 1.25 times, could pressure the ratings lower. The principal methodology used in this rating was Retail Industry published in May 2018. BDF Acquisition Corp., based in Manchester, Connecticut, was created to acquire a majority stake in Bob's Discount Furniture, a retailer of value-priced furniture with 98 stores located primarily in the Northeast, Mid-Atlantic, and Midwest states as of April 1, 2018. Revenue for the most recent twelve-month period was approximately $1.3 billion. The company has been majority-owned by private equity firm Bain Capital since 2014. BELLATRIX EXPLORATION: Moody's Cuts CFR to Caa2, Outlook Negative ----------------------------------------------------------------- Moody's Investors Service downgraded Bellatrix Exploration Ltd.'s Corporate Family Rating (CFR) to Caa2 from B3, the Probability of Default Rating to Caa2-PD from B3-PD and senior unsecured notes rating to Caa3 from Caa1. The Speculative Grade Liquidity Rating was downgraded to SGL-4 from SGL-3. The rating outlook remains negative. "Bellatrix's downgrade reflects weak liquidity with the reduced extension and decrease of its revolving credit facilities to C$100 million from C$120 million," said Paresh Chari, Moody's VP-Senior Analyst. "In addition, the company's ability to refinance its senior notes due 2020 appears questionable." Downgrades: Issuer: Bellatrix Exploration Ltd. Probability of Default Rating, Downgraded to Caa2-PD from B3-PD Speculative Grade Liquidity Rating, Downgraded to SGL-4 from SGL-3 Corporate Family Rating, Downgraded to Caa2 from B3 Senior Unsecured Regular Bond/Debenture, Downgraded to Caa3 (LGD4) from Caa1 (LGD4) Outlook Actions: Issuer: Bellatrix Exploration Ltd. Outlook, Remains Negative RATINGS RATIONALE Bellatrix's Caa2 CFR reflects its weak expected retained cash flow to debt (about 4%), interest coverage (about 1.5x) and leveraged full-cycle ratio (LFCR) of about 0.5x in 2019; exposure to weak AECO-based natural gas prices in 2018 and 2019 with a lack of hedges in 2019; expectation of negative free cash flow driven by a capex program to maintain production in 2018 and 2019 that will increase debt; concentration in the Alberta Deep Basin; and weak liquidity. The CFR is supported by solid hedges in 2018; a marketing strategy that moves almost half of the company's natural gas production out of the AECO market through 2020; and ownership in midstream facilities that reduces operating costs and provides a source of alternate liquidity if sold. Bellatrix's liquidity is weak (SGL-4). At March 31, 2018, Bellatrix had no cash and pro forma for the June 4, 2018 borrowing base reduction to C$100 million from C$120 million, about C$30 million of availability (after letters of credit) under the borrowing base revolving credit facilities. The credit facilities are available on a revolving basis with the next renewal due on or before May 2019 and if not renewed then the facilities would mature and be due November 30, 2019. Moody's expects C$25 million of negative free cash flow through Q1 2019. Bellatrix is expected to remain in compliance with its sole financial covenant (Senior Debt to EBITDA less than 3.0x) through this period. Bellatrix also has the flexibility to raise funds by selling its remaining midstream assets. In accordance with Moody's Loss Given Default (LGD) Methodology, the suggested rating for the US$240 million senior unsecured notes is Caa2, reflecting the amount of priority ranking secured debt in the form of the C$100 million revolving credit facility and very modest loss absorption cushion provided by the C$50 million subordinated debentures. However, Moody's views the Caa3 rating on the senior unsecured notes as more appropriate due to the very modest cushion the subordinated debentures provide. The negative outlook reflects Moody's expectation that Bellatrix's liquidity may weaken more than expected in 2019 and the company will not be able to repay its 2020 notes when it comes due. The ratings could be upgraded if liquidity improves and the senior unsecured notes due 2020 are successfully refinanced with the maturity date significantly moved into the future, and if interest coverage is above 1.5x (12/31/2017 2.5x). The ratings could be downgraded if EBITDA to interest falls below 1x (12/31/2017 2.5x) or if the likelihood increases that Bellatrix will be unable to repay its debt as it comes due. Bellatrix is a Calgary, Alberta-based independent exploration and production (E&P) company with operations in the Deep Basin play of west central Alberta producing about 34,000 boe/d net of royalties (barrel of oil equivalent) in Q1 2018, about 74% of which is natural gas. BICOM NY: Exclusive Plan Filing Period Extended Through August 3 ---------------------------------------------------------------- The Hon. Michael E. Wiles of the U.S. Bankruptcy Court for the Southern District of New York, at the behest of BICOM NY, LLC, ISCOM NY, LLC, and Bay Ridge Automotive Company, LLC ("BRAC") d/b/a Bay Ridge Ford, has extended the Exclusive Filing Period through and including August 3, 2018, and the Exclusive Solicitation Period through and including October 3, 2018. The Troubled Company Reporter has previously reported that the Debtors asked the Court to extend the exclusive periods to file a chapter 11 plan and solicit acceptances of a plan, telling the Court that prior to the filing their Motion, the Debtors began drafting a plan of liquidation to be jointly proposed by the Debtors and the Creditors' Committee. The Debtors represented that the central components of the plan will be the establishment of a post-confirmation liquidation trust that will pursue the estates' causes of action and a comprehensive settlement agreement (the "Global Settlement") between JPMorgan Chase Bank, N.A. (DIP Lender), the Debtors, and the Creditors' Committee that will, inter alia: (i) resolve the parties claims against each other, including the outstanding secured and super-priority claims of the DIP Lender, (ii) provide for the sharing between the DIP Lender and the Debtors' estate of estate and non-estate assets, and (iii) require the DIP Lender's support and funding of the plan process and establishment of the trust. However, the parties are still in the midst of negotiating the Global Settlement, which could not have been finalized until the resolution of the BRAC Sale, and expect that the terms of the settlement will be finalized prior to the hearing on the Exclusivity Motion. The Debtors said that once the Settlement Agreement is finalized the process of proposing and obtaining approval of a chapter 11 liquidation plan will not be a protracted or controversial. Thus, the Debtors may not be able to confirm a plan without obtaining the DIP Lender's support. In addition, as the Debtors have ceased operating as going concerns and the Creditors' Committee believed that the Debtors' estates hold potentially valuable causes of action, the centerpiece of any plan will be the establishment of a post-confirmation trust. In addition, the Debtors needed additional time to prepare a plan and disclosure statement that provide adequate information. The Debtors needed to complete their review and assessment of many of the 486 claims that have been filed against the Debtors, including over $5.8 in administrative expenses claims and $30 million in other priority claims that need to be addressed before the estate can confirm a chapter 11 plan. The Debtors contended that it cannot provide adequate information in a disclosure statement as required by the Bankruptcy Code without understanding the number, nature, and amount of valid claims against the estate. Moreover, the Debtors mentioned that they have made substantial progress in negotiations with creditors and towards a presenting a confirmable plan. The Debtors' negotiations with creditors and interested parties have yielded consensual resolutions that have proven indispensable to allowing the Debtors to pursue and complete their sales process. The outcomes of some of these negotiations include: (a) Securing access to the DIP Facility, including subsequent extensions of the maturity date; (b) Negotiating the Bidding Procedures Order with Jaguar Land Rover North America, LLC and Maserati North America, Inc., the DIP Lender, and other interested parties which narrowed the grounds on which the Manufacturers could object to the assumption and assignment of the franchise agreements and which reduced uncertainty to the Debtors, the Manufactures, and buyers during the sale process; (c) Entering into a stipulation with BICOM's landlord, Georgetown Eleventh Avenue Owners, LLC, whereby Georgetown agreed to defer rent in the approximate monthly amount of $800,000, BICOM's largest administrative expense, through September 30, 2017, which rent deferral was later extended to November 17, 2017. The parties have also compromised Georgetown's cure claim and have reached a global settlement; (d) Resolving the motions of Nissan North America, Inc. and Nissan Motor Acceptance Corporation for relief from the automatic stay to permit continuation of an action pending with the District Court for the Southern District Court of New York; (e) Obtaining agreement from ISCOM's landlord to permit ISCOM to continue using its space during the case despite the termination of the lease prior to the Petition Date; (f) Avoiding costly and protracted litigation with Plante Consulting, LLC concerning the results of the first auction by, inter alia, conducting a second auction at which Plante's Successful Bid was higher and/or better than its bid at the first auction and which required Plante to provide a non-refundable deposit to mitigate the risk that Ford would not approve Plante as dealer; and (g) Spearheading negotiations between Mr. Charles Chalom, Plante, the Creditors Committee, the DIP Lender, and TD Bank to salvage the BRAC Sale and avoid administrative insolvency. Pursuant to the Second Reconstitution of Equity of Plante Consulting, LLC, 100% of the equity interests in Plante would be assigned to Charles Chalom upon the closing of the BRAC Assets to Plante. About Bicom NY LLC BICOM NY, LLC dba Jaguar Land Rover Manhattan -- http://www.landrovermanhattan.com/-- is a dealer of Jaguar and Land Rover cars in New York City. ISCOM NY, LLC dba Maserati of Manhattan -- http://www.maseratiofmanhattan.com/-- is a retailer of Maserati cars in New York City. BICOM NY, and ISCOM NY and related entity Bay Ridge Automotive Company, LLC, sought Chapter 11 protection (Bankr. S.D.N.Y. Case Nos. 17-11906 to 17-11908) on July 10, 2017. In the petitions signed by Gary B. Flom, manager, BICOM NY disclosed $37.37 million in total assets and $12.17 million in total liabilities as of the bankruptcy filing, and ISCOM NY disclosed $4.85 million in total assets and $5.33 million in total liabilities. Judge Michael E. Wiles presides over the cases. Eric J. Snyder, Esq., at Wilk Auslander LLP, is the Debtors' bankruptcy counsel. The Debtors hired Aboyoun & Heller, LLC, as special counsel; and JND Corporate Restructuring as administrative agent. On July 31, 2017, the U.S. Trustee for Region 2 appointed an official committee of unsecured creditors. Moses & Singer, LLP, is the Committee's legal counsel. BLUE COLLAR: Santillo Opposes OK of Proposed Amended Disclosures ---------------------------------------------------------------- Suzanne Savoy Santillo, L.L.C., filed an objection to Blue Collar Enterprises' disclosure statement and plan of reorganization as amended. Santillo LLC objects to the summary of claims or equity interest and treatment of Blue Collar's Equity Interest Holders in Class 7 and in Section 4.7 of the Plan as of the proposed closing date and the cancellation and discharge of all Blue Collar pre-petition equity interest value without any assessment, consideration or payment of these equity interest holders of Blue Collar’s goodwill and business reputation property rights, developed from 1999 to present, which is a recognized ownership right with value to Blue Collar under applicable Louisiana law. Santillo LLC also objects to Debtor's plan which only gives brief reference to "goodwill" as an asset of the Debtor and its current equity members. Debtor should be charged with the responsibility to assess this value as an obligation owed to the pre-petition equity members and set forth a plan to pay them for this value as part of Debtor’s plan of reorganization if the equity interest of each LLC member is to be discharged and cancelled by the Plan. If the asset to be valued is an interest in a partnership or corporation, Louisiana courts have stated such interests should be valued, not just the physical assets of the business entity. Further, Santillo LLC objects to Section 3 of the First Amended Disclosure Statement, which misrepresents Santillo LLC's "compensation within 2 years" as $72,225.00. In fact, Santillo LLC's received distributions from Blue Collar in the total amount of $10,425 in this two-year period, consisting of $10,425 for calendar year 2016, and $0 for calendar year 2017, and $0 for calendar year 2018. In addition, Santillo LLC objects to the listing in any and all itemizations of Blue Collar's alleged debt or liabilities to the alleged debt owed to George Rodrigue or the Estate of George Rodrigue in the amount of $140,000. All such debt, to the extent that it even existed was on promissory notes and guarantee agreements which have prescribed and are unenforceable and uncollectable from Blue Collar under Louisiana law. A full-text copy of Santillo's Objection is available at: http://bankrupt.com/misc/lawb18-50447-145.pdf The Troubled Company Reporter previously reported that each holder of an Allowed Class 6 Claim will receive such holder's Pro Rata share of $15,000. If Class 6 votes to confirm the Plan, on the Plan Effective Date, and as part of the New Equity Consideration: (i) the Rodrigue Succession will subordinate the Rodrigue Succession Unsecured Claim to all unsubordinated Claims in Class 6; (ii) GR Restaurants will subordinate the GR Restaurants Pre-Petition Unsecured Claim to all unsubordinated Claims in Class 6; and (iii) Andrew Rodrigue will subordinate the Andrew Rodrigue Unsecured Claim to all unsubordinated Claims in Class 6. Percentage recovery if Class 6 votes to accept the Plan (with no distribution to holders of the subordinated claims) is approximately 4.2%. A full-text copy of the First Amended Disclosure Statement is available at: http://bankrupt.com/misc/lawb18-50447-126.pdf Attorneys for Suzanne Savoy Santillo and Suzanne Savoy Santillo, L.L.C.: Carmen T. Hebert, Esq. CARLETON HEBERT WITTENBRINK & SHOENFELT, LLC 445 North Boulevard, Suite 625 Baton Rouge, Louisiana 70802 Telephone: (225) 282-0602 Facsimile: (877) 443-9889 About Blue Collar Enterprises Blue Collar Enterprises, LLC, which conducts business under the name Blue Dog Cafe -- http://www.bluedogcafe.com/-- is a restaurant serving Cajun cuisine, Louisiana fusion, steaks and seafood amidst a private collection of artworks by renowned artist George Rodrigue (the creator of the iconic Blue Dog). It has two locations in Lafayette and Lake Charles, Louisiana. Blue Collar Enterprises sought protection under Chapter 11 of the Bankruptcy Code (Bankr. W.D. La. Case No. 18-50447) on April 11, 2018. In the petition signed by Stephen Santillo and Andrew Rodrigue, members, the Debtor disclosed $37,700 in assets and $1.15 million in liabilities. Judge Robert Summerhays presides over the case. BOWMAN DAIRY: July 9 Plan Confirmation Hearing ---------------------------------------------- Judge James M. Carr of the U.S. Bankruptcy Court for the Southern District of Indiana, Indianapolis Division, issued an order approving the amended disclosure statement explaining that Bowman Dairy Farms LLC's plan as containing adequate information. July 2, 2018 is fixed as the last day to file and serve objection to the Amended Plan, and July 9, 2018 at 10:00 A.M., is fixed as the date of hearing to consider confirmation of the Amended Plan. The Debtor's second amended disclosure statement provides that the Plan will be funded and implemented by the ongoing operations of the Debtor according to the business plan including the sale of certain real property and equipment not necessary for the reorganization, both before and after confirmation. Under the Plan, The Bowman Dairy Farms will continue to be managed by Trent Bowman. Mr. Bowman will receive a monthly draw of $5,000.00. Bennie Bowman will not be involved in the operations of the Debtor and the brothers are discussing Bennie Bowman's resigning as a member. Holders of Class 9 General Unsecured Claims will be paid in full by delivering of pro rata share of $100,000 annually beginning in 2019 until paid in full. Interest at 2% APR from the Effective Date. A full-text copy of the Second Amended Disclosure Statement is available for free at: http://bankrupt.com/misc/insb17-06475-204.pdf About Bowman Dairy Farms Bowman Dairy Farms LLC, which owns a dairy farm in Hagerstown, Indiana, filed a Chapter 11 petition (Bankr. S.D. Ind. Case No. 17-06475) on Aug. 27, 2017. In the petition signed by Trent N. Bowman, its member, the Debtor estimated assets and liabilities at $10 million to $50 million. The Debtor is represented by Terry E. Hall, Esq., at Faegre Baker Daniels LLP. BREITBURN ENERGY: Court Dismisses Felicia Pierce Suit ----------------------------------------------------- Felicia Pierce filed the adversary proceeding captioned FELICIA PIERCE, Plaintiff, v. BREITBURN ENERGY LP., ENTITIES, Defendants, Adv. Proc. No. 16-01198 (SMB) (Bankr. S.D.N.Y.) to obtain declaratory, monetary and injunctive relief to stop Breitburn Energy Partners LLP and affiliates from drilling on certain property in Texas that Pierce claimed to own or have an interest in. The Court concluded that her claims were barred by res judicata based on a decision by the County Court at Law of Gregg County, Texas and entered judgment dismissing the complaint. Pierce has moved to vacate the Judgment and also seeks to assert a new claim. Bankruptcy Judge Stuart M. Bernstein denied Pierce's motion. Pierce seeks to vacate the Judgment on the ground that the Texas Court lacked subject matter jurisdiction to render the judgment which formed the basis of this Court's dismissal on res judicata grounds and Breitburn's attorneys committed a fraud on this Court and on the Texas Court. Pierce also asserts a new claim for money damages under 18 U.S.C. section 242. Breitburn contends, among other things, that section 242 is part of the U.S. criminal code, and does not give rise to a private right of action. Pierce claims that Breitburn committed a fraud on the Court by misrepresenting that she filed her Thirteenth Amended Petition in the Texas Court on Sept. 12, 2016 rather than Sept. 2, 2016. This argument requires some amplification. The Texas defendants had moved to dismiss the Twelfth Amended Petition, and their motion was heard on Sept. 2, 2016. On that same day, Pierce filed her Thirteenth Amended Petition. She argues that the Thirteenth Amended Petition superseded the Twelfth Amended Petition, and by implication, Breitburn misrepresented the filing date as Sept. 12 in order to argue that the only outstanding pleading on the hearing date was the Twelfth Amended Petition. The Debtors did represent to the Court that the Thirteenth Amended Petition was filed on Sept. 12, 2016, and the Court mentioned the erroneous filing date in the Memorandum Decision. The error, however, was immaterial to this Court's disposition of the adversary proceeding, and did not involve conduct that affected the integrity of the judicial process. The Texas Court had previously ruled that Pierce had to join "those persons or entities that would be adversely affected by ruling in favor of Plaintiff." These included parties, like Breitburn, that had acquired their interests in the Property from King or his successors in interest. The Texas Court had entered an Order on Plea of Abatement, giving Pierce ninety days to join the necessary parties, and thereafter granted Pierce an additional 90 days to join the necessary parties. The Texas Court acknowledged the filing of the Thirteenth Amended Petition on Sept. 2, 2016. The Thirteenth Amended Petition asserted claims for Trespass to Try Title and Slander of Title, and according to the Texas Court, Pierce dropped all of the unserved defendants and involuntary plaintiffs because, she argued, the relevant Texas rule "only requires the addition of those persons or entities in possession of the real property made the subject of the Trespass to Try Title suit." The Texas Court disagreed; the Thirteenth Amended Petition did not cure the fundamental defect of non-joinder. It ruled that the joinder provisions of Rule 39 of the Texas Rules of Civil Procedure applied to her action for trespass to try title as well as her declaratory judgment claims and Rule 39, required the joinder of everyone whose interest in the Property might be affected. Accordingly, it dismissed the Texas Action with prejudice in the exercise of its discretion, and the Texas Court of Appeals affirmed. Furthermore, as explained in the Memorandum Decision, although the Texas Court did not reach the merits of Pierce's claim, the dismissal with prejudice constituted a final adjudication on the merits for purposes of res judicata under Texas law. A full-text copy of the Court's Memorandum Decision dated May 7, 2018 is available at https://bit.ly/2JCoMoL from Leagle.com. Felicia Pierce, Plaintiff, pro se. Breitburn Operating LP., Entities, Defendant, represented by Weil, Gotshal & Manges. QRE Operating, LLC, Defendant, pro se. Prime Clerk, LLC, Claims and Noticing Agent, represented by Adam M. Adler , Prime Clerk LLC. About Breitburn Energy Breitburn Energy Partners LP is engaged in the acquisition, exploitation and development of oil and natural gas properties, Midstream Assets, and a combination of ethane, propane, butane and natural gasoline that when removed from natural gas become liquid under various levels of higher pressure and lower temperature, in the United States. Operations are conducted through Breitburn Parent's wholly-owned subsidiary, Breitburn Operating LP, and BOLP's general partner, Breitburn Operating GP LLC. Breitburn Energy Partners LP and 21 of its affiliates filed voluntary petitions for relief under Chapter 11 of the Bankruptcy Code (Bankr. S.D.N.Y. Lead Case No. 16-11390) on May 15, 2016. In the petitions signed by James G. Jackson, executive vice president and CFO, Breitburn disclosed assets of $4.71 billion and liabilities of $3.41 billion. The Debtors tapped Ray C Schrock, Esq., and Stephen Karotkin, Esq., at Weil Gotshal & Manges LLP, as bankruptcy counsel. The Debtors hired Steven J. Reisman, Esq., and Cindi M. Giglio, Esq., at Curtis, Mallet-Prevost, Colt & Mosle LLP as their conflicts counsel. The Debtors tapped Alvarez & Marsal North America, LLC, as financial advisor; Lazard Freres & Co. LLC as investment banker; and Prime Clerk LLC as claims and noticing agent. An Official Committee of Unsecured Creditors been formed in the case. The Creditors Committee retained Milbank, Tweed, Hadley & McCloy LLP as counsel. The committee members are: (1) Transpecto Transport Co.; (2) Wilmington Trust Company; and (3) Ronald Jay Lichtman. The U.S. Trustee originally appointed Ares Special Situations Fund IV, L.P. C/O Ares Management LLC; BPC UKI LP c/o Beach Point Capital Management; and Wexford Spectrum Investors, LLC, as members of the Creditors' Committee. The U.S. Trustee then also appointed Transpecto Transport Co. and Wilmington Trust Company as Committee members. A Statutory Committee of Equity Security Holders was also formed in the case. The Equity Committee is currently composed of seven individual holders. The Equity Committee retained Proskauer Rose LLP as counsel. C-N-T REDI MIX: Ongoing Business Income to Fund Proposed Plan ------------------------------------------------------------- The U.S. Bankruptcy Court for the Northern District of Texas conditionally approved the Disclosure Statement explaining C-N-T Redi Mix, LLC's plan of reorganization dated June 1, 2018. July 2, 2018 is fixed as the last day for filing and serving written acceptances or rejections of the Plan in the form of a ballot and for filing written objections to confirmation of the Plan or the Disclosure Statement. July 5, 2018 at 1:30 p .m. is fixed for the hearing on Confirmation of the Plan and Final Approval of the Disclosure Statement in the Court room of the Honorable Harlin Hale, 1100 Commerce Street, 14 Floor, Dallas, Texas. The Debtor purposes to restructure its current indebtedness and continue its operations to provide a dividend to the unsecured creditors of Debtor. Class 10 Claimants consists of the Allowed General Unsecured Creditors owed $5,000 or less, which will receive 100% of their Allowed Claims in two payments. The first payment will be 30 days after the Effective Date and the second payment will be 90 days after the first payment. The Class 10 creditors are impaired under the Plan. Class 11 Claimants consists of the Allowed General Unsecured Creditors owed $5,000 or more. The Allowed Claims of Unsecured Creditors will share pro-rata in the Unsecured Creditor's Pool. The Debtor will pay $5,000 per month for a period of 60 months into the Unsecured Creditors Pool. The Unsecured Creditors will be paid quarterly on the last day of each calender quarter. Payments to the Unsecured Creditors will commence on the last day of the first full calender quarter after the Effective Date. The Class 11 creditors are impaired under the Plan. Debtor anticipates using the on-going business income of the Debtor to fund the Plan. The Debtor has not projected any significant increases in income over the life of the Plan. Based upon the projections, the Debtor believes the Plan to be feasible. A full-text copy of the Disclosure Statement is available at: http://bankrupt.com/misc/txnb17-34580-11-95.pdf About C-N-T Redi Mix Based in Dallas, Texas, C-N-T Redi Mix, LLC is a company that sells concrete and concrete supplies. The Debtor first filed a voluntary Chapter 11 petition (Bankr. N.D. Tex. Case No. 16-30274) on Jan. 20, 2016. The Debtor sought protection under Chapter 11 of the Bankruptcy Code (Bankr. N.D. Tex. Case No. 17-34580) on Dec. 5, 2017. Apryl Daniel, its sole member, signed the petition. At the time of the filing, the Debtor estimated less than $500,000 in assets and $1 million to $10 million in debt. Judge Harlin DeWayne Hale presides over the case. CAPITOL SUPPLY: Exclusive Filing Period Extended to June 4 ---------------------------------------------------------- The Hon. Erik P. Kimball of the U.S. Bankruptcy Court for the Southern District of Florida, on May 31, 2018, at the behest of Capitol Supply, Inc., has extended the Exclusive Periods to file a plan of reorganization is extended to through June 4, 2018, and to solicit acceptances for a plan of reorganization through Aug. 3, 2018. The Procedures Order Deadline set forth in the Order Shortening Time for Filing Proofs of Claim, Establishing Plan and Disclosure Statement Filing Deadlines, and Addressing Related Matters has also been extended to through and including June 4, 2018. As reported by the Troubled Company Reporter on May 11, 2018, the Debtor sought for 31-day extension of the Procedures Deadline Order, Exclusive Filing Period and Exclusive Solicitation Period in order to have additional time to formulate its plan of reorganization and pursue settlement negotiations with the United States and Bank of America. The Debtor also asked the Court that the Procedures Order Deadline be extended to through and including June 4, 2018. Since the Petition Date, the Debtor has devoted a significant amount of time: (a) complying with the requirements of operating as a debtor-in-possession during a Chapter 11 case, (b) defending the appeal of the Court's order granting in part the Debtor's motion to enforce the automatic stay against an action by the United States and Louis Scutellaro pending before the District Court for the District of Columbia, (c) negotiating the sale of the Debtor's interest in certain agreements and related business divisions with proposed sellers and the Debtor's secured lender, (d) obtaining court approval of such sales and related contract assignments, and (e) preparing cash budgets for continued use of cash collateral and projections for a plan of reorganization. Additionally, the Debtor has been in settlement discussions with one of its largest unsecured creditors, the United States, with respect to the claims asserted in the DC Case, and with its secured lender, Bank of America, with respect to potential consensual plan terms. As a result, the Debtor required additional time pursue such settlement discussions with the United States and Bank of America and to formulate its plan of reorganization. About Capitol Supply Since 1983, Capitol Supply, Inc., has provided the United States Government, the U.S. Military, State and local government agencies and consumer and commercial customers worldwide various products needed to operate their businesses. Capitol Supply offers office supply, office furniture, hardware, tools, auto parts, cleaning supplies, dorms and quarters, package room, and GSA schedule needs. Capitol Supply was formerly known as Capitol Furniture Distributing Company and changed its name to Capitol Supply, Inc., in March 2005. Capitol Supply, based in Boca Raton, Florida, filed a Chapter 11 petition (Bankr. S.D. Fla. Case No. 17-21544) on Sept. 20, 2017. In the petition signed by CEO Robert J. Steinman, the Debtor estimated $1 million to $10 million in both assets and liabilities. The Hon. Erik P. Kimball presides over the case. Bradley S. Shraiberg, Esq., at Shraiberg Landaue & Page, P.A., serves as bankruptcy counsel to the Debtor. CAPITOL SUPPLY: Seeks July 5 Exclusive Plan Filing Period Extension ------------------------------------------------------------------- Capitol Supply, Inc., asks the U.S. Bankruptcy Court for the Southern District of Florida for an extension of the exclusive filing period for a period of 31 days to through and including July 5, 2018, and an extension of the exclusive solicitation period for a period of 31 days to through and including Sept. 3, 2018. The Debtor further requests that the Procedures Order Deadline be extended to through and including July 5, 2018. Since the Petition Date, the Debtor has devoted a significant amount of time to (a) complying with the requirements of operating as a debtor-in-possession during a Chapter 11 case, (b) defending the appeal of the Court's order granting in part the Debtor's motion to enforce the automatic stay against an action by the United States and Louis Scutellaro pending before the District Court for the District of Columbia, (c) negotiating the sale of the Debtor's interest in certain agreements and related business divisions with proposed sellers and the Debtor's secured lender, (d) obtaining court approval of such sales and related contract assignments, and (e) preparing cash budgets for continued use of cash collateral and projections for a plan. Additionally, the Debtor is in settlement discussions with one of its largest unsecured creditors, the United States, with respect to the claims asserted in the DC Case, and with its secured lender, Bank of America, with respect to potential consensual plan terms. As a result, the Debtor requires additional time pursue such settlement discussions with the United States and Bank of America and to formulate its plan of reorganization. Further, Bradley S. Shraiberg, counsel for the Debtor who has been primarily engaged in the foregoing negotiations, will be out of the country for personal travel beginning June 6, 2018 through June 20, 2018. The Debtor further seeks extension of the Procedures Deadline Order and the Exclusivity Periods in order to place the deadlines on the same track as the deadlines for its subsidiary, ATD Capitol, LLC, which is also a debtor-in-possession, as set forth in the Order Granting Debtor's Motion to Extend Exclusivity and Solicitation Periods and Related Plan Deadline. About Capitol Supply Since 1983, Capitol Supply, Inc., has provided the United States Government, the U.S. Military, State and local government agencies and consumer and commercial customers worldwide various products needed to operate their businesses. Capitol Supply offers office supply, office furniture, hardware, tools, auto parts, cleaning supplies, dorms and quarters, package room, and GSA schedule needs. Capitol Supply was formerly known as Capitol Furniture Distributing Company and changed its name to Capitol Supply, Inc., in March 2005. Capitol Supply, based in Boca Raton, Florida, filed a Chapter 11 petition (Bankr. S.D. Fla. Case No. 17-21544) on Sept. 20, 2017. In the petition signed by CEO Robert J. Steinman, the Debtor estimated $1 million to $10 million in both assets and liabilities. The Hon. Erik P. Kimball presides over the case. Bradley S. Shraiberg, Esq., at Shraiberg Landaue & Page, P.A., serves as bankruptcy counsel to the Debtor. CAREVIEW COMMUNICATIONS: Signs Amendment to PDL Modification Pact ----------------------------------------------------------------- As previously reported by CareView Communications, Inc. in its Current Report on Form 8-K filed with the Securities and Exchange Commission on Feb. 5, 2018, the Company, CareView Communications, Inc., a wholly owned subsidiary of the Company ("Borrower"), CareView Operations, L.L.C., a wholly owned subsidiary of the Borrower, and PDL Investment Holdings, LLC (as assignee of PDL BioPharma, Inc.), in its capacity as administrative agent and lender (the "Lender") under the Credit Agreement dated as of June 26, 2015, as amended, by and among the Company, the Borrower and the Lender, entered into a Modification Agreement on Feb. 2, 2018, effective as of Dec. 28, 2017, with respect to the Credit Agreement in order to modify certain provisions of the Credit Agreement and Loan Documents to prevent an Event of Default (as defined in the Credit Agreement) from occurring. Under the Modification Agreement, the parties agreed that (i) the Borrower would not make the principal payment due under the Credit Agreement on Dec. 31, 2017 until the end of the Modification Period, (ii) the Borrower would not pay the principal installments due at the end of each calendar quarter during the Modification Period and (iii) because the Borrower's Liquidity (as defined in the Credit Agreement) was anticipated to fall below $3,250,000, the Liquidity required during the Modification Period would be lowered to $2,500,000. The Lender agreed that the occurrence and continuance of any of the Covered Events will not constitute Events of Default for a period from Dec. 28, 2017 through the earliest to occur of (a) any Event of Default under any Loan Documents that does not constitute a Covered Event, (b) any event of default under the Modification Agreement, (c) the Lender's election, in its sole discretion, to terminate the Modification Period on May 31, 2018 or Sept. 30, 2018 (with each such date permitted to be extended by the Lender in its sole discretion) by delivering a written notice to the Borrower on or prior to such date, or (d) Dec. 31, 2018. In consideration of the Lender's entry into the Modification Agreement, the Company and the Borrower agreed, among other things, that the Borrower would obtain (i) at least $2,250,000 in net cash proceeds from the issuance of Capital Stock (other than Disqualified Capital Stock) or Debt (each that term as defined in the Credit Agreement) on or prior to Feb. 23, 2018 and (ii) an additional $3,000,000 in net cash proceeds from the issuance of Capital Stock (other than Disqualified Capital Stock) or Debt on or prior to May 31, 2018 (resulting in aggregate net cash proceeds of at least $5,250,000). As previously reported in the Company's Current Report on Form 8-K filed with the SEC on Feb. 26, 2018, the Company, the Borrower and the Lender entered into a Second Amendment to Credit Agreement on Feb. 23, 2018, pursuant to which, among other things, the parties agreed to amend the Modification Agreement to provide that the Borrower could satisfy its obligations under the Modification Agreement to obtain financing by obtaining (i) at least $2,050,000 in net cash proceeds from the issuance of Capital Stock (other than Disqualified Capital Stock) or Debt on or prior to Feb. 23, 2018 and (ii) an additional $3,000,000 in net cash proceeds from the issuance of Capital Stock (other than Disqualified Capital Stock) or Debt on or prior to May 31, 2018 (resulting in aggregate net cash proceeds of at least $5,050,000). On May 31, 2018, the Company, the Borrower, the Subsidiary Guarantor and the Lender entered into an Amendment to Modification Agreement, pursuant to which the parties agreed to amend the Modification Agreement to provide that the dates on which the Lender may elect, in the Lender's sole discretion, to terminate the Modification Period would be July 31, 2018 and Sept. 30, 2018 (with each such date permitted to be extended by the Lender in its sole discretion); and that the Borrower could satisfy its obligations under the Modification Agreement to obtain financing by obtaining (i) at least $2,050,000 in net cash proceeds from the issuance of Capital Stock (other than Disqualified Capital Stock) or Debt on or prior to Feb. 23, 2018 and (ii) an additional (A) $750,000 in net cash proceeds from the issuance of Capital Stock (other than Disqualified Capital Stock) or Debt on or prior to June 15, 2018 and (B) $750,000 in net cash proceeds from the issuance of Capital Stock (other than Disqualified Capital Stock) or Debt on or prior to Aug. 31, 2018 (resulting in aggregate net cash proceeds of at least $3,550,000). About CareView Communications Headquartered in Lewisville, Texas, CareView Communications, Inc. -- http://www.care-view.com/-- is a provider of products and on-demand application services for the healthcare industry, specializing in bedside video monitoring, software tools to improve hospital communications and operations, and patient education and entertainment packages. Its proprietary, high-speed data network system is the next generation of patient care monitoring that allows real-time bedside and point-of-care video monitoring designed to improve patient safety and overall hospital costs. The entertainment packages and patient education enhance the patient's quality of stay. Careview Communications incurred a net loss of $20.07 million in 2017 following a net loss of $18.66 million for the year ended Dec. 31, 2016. As of Dec. 31, 2017, Careview had $12.11 million in total assets, $74.26 million in total liabilities and a $62.15 million total stockholders' deficit. As of March 31, 2018, Careview Communications had $12.51 million in total assets, $79.33 million in total liabilities and a total stockholders' deficit of $66.81 million. BDO USA, LLP, in Dallas, Texas, issued a "going concern" opinion in its report on the consolidated financial statements for the year ended Dec. 31, 2017, citing that the Company has suffered recurring losses from operations and has accumulated losses since inception that raise substantial doubt about its ability to continue as a going concern. CARRIE ANN MORRIS: Davis Buying Two McKinney Properties for $850K ----------------------------------------------------------------- Carrie Ann Morris asks the U.S. Bankruptcy Court for the Eastern District of Texas to authorize the sale of the real properties located at (i) 2901 Provine Road, McKinney, Texas ("Property") and (ii) 2905 Provine Road, McKinney, Texas ("Homestead"), to Paul E. Davis for $850,000. Objections, if any, must be filed within 21 days from the date of service of Notice. The Debtor filed its Sale Motion on April 13, 2018 asking authorization to sell the properties. The Court entered the Sale Order authorizing said sale on May 15, 2018. The Debtor filed contemporaneously with the Motion a "Motion to Vacate Agreed Order Authorizing the Sale of Real Property Located at 2901 Provine Road, McKinney, Texas, and 2905 Provine Road, McKinney, Texas, Free and Clear of All Liens, Claims and Encumbrances" for reasons more particularly set forth therein. The Debtor desires to sell all of the Homestead and the Property. She is asking that she'd be authorized to sell the Homestead and the Property free and clear of all liens claims and encumbrances. The parties asserting a lien, claim, interest or encumbrance in the Homestead and the Property are: a. Collin County Tax Assessor/Collector has filed a secured proof of claim for Ad Valorem Taxes in the amount of $15,831. b. Ocwen Loan Servicing, LLC asserts it has a first lien on the Property and has filed a proof of claim in the amount of $294,957. c. Bayview asserts it has a first lien on the Homestead and has filed a proof of claim in the amount of $122,407. d. Internal Revenue Service IRS asserts it has multiple liens on both the Homestead and the Property. It has filed a secured proof of claim in the case for $310,755. e. The IRS has also recorded tax liens against the Debtor's former husband, Gary R. Morris ("GRM") in the aggregate amount of $415,216. GRM executed three different Secured Promissory Notes with Eric Bringhurst, Michael Cronin, and William White without the knowledge of the Debtor. The Debtor amended Schedule D on Nov. 13, 2017 to add those creditors as the Debtor did not learn of the Secured Promissory Notes until after the case was filed. Those Secured Promissory Notes are: a. Eric Bringhurst and GRM were parties to a Secured Promissory Note in the original principal sum of $230,000 dated Dec. 28, 2016, and recorded on Jan. 30, 2017. This Secured Promissory Note was secured against the Property. b. Michael F. Cronin and GRM were parties to a Secured Promissory Note in the original principal sum of $50,000 dated March 22, 2017, and recorded on May 16, 2017. This Secured Promissory Note was secured against the Property. c. William B. White and GRM were parties to a Secured Promissory Note in the original principal sum of $50,000 dated March 22, 2017, and recorded on May 16, 2017. This Secured Promissory Note was secured against the Property. None of these referenced Secured Promissory Notes contained the addresses of the purported creditors. GRM executed two Indemnity Deeds of Trust with the David N. and Christine C. Neal Trust and Neal Management, LLC, without the knowledge of the Debtor. The Debtor learned of these Indemnity Deeds of Trust on May 16, 2018. a. The David N. and Christine C. Neal Trust and GRM were parties to an Indemnity Deed of Trust in the original principal sum of $100,000 dated Sept. 1, 2016, and recorded on Sept. 2, 2016. This Indemnity Deed of Trust was secured against the Homestead. b. Neal Management, LLC, and GRM were parties to an Indemnity Deed of Trust in the original principal sum of $100,000 dated Sept. 1, 2016, and recorded on Sept. 2, 2016. This Indemnity Deed of Trust was secured against the Homestead. The Debtor and GRM were divorced Dec. 30, 2016. The Divorce Decree conveyed both the Property and the Homestead to the Debtor. The Quitclaim Deeds were recorded on Jan. 17, 2017, to effectuate those conveyances. Within only a couple of months of the entry of the Divorce Decree GRM "borrowed" $230,000 from Eric Bringhurst and $200,000 from the David N. and Christine C. Neal Trust and Neal Management, LLC. Within a few months after the entry of the Divorce Decree and the recording of the Quitclaim Deeds, GRM "borrowed" $100,000 from Michael Cronin, and William White. The Debtor and GRM are estranged and communication between the two is difficult at best. The Collin County Tax Assessor/Collector, Ocwen, Bayview, and the IRS will be paid the full the full amount of their claim at closing. The IRS consents to the sale of the Homestead and the Property free and clear of al liens claims and interests. Eric Bringhurst, Michael Cronin, and William White will receive no distributions from the sales proceeds. The Secured Promissory Notes executed by GRM and the foregoing persons are the subject of a bona fide dispute. The Debtor is making efforts to obtain contact information for Eric Bringhurst, Michael Cronin, and William White. However, as of the filing of the Motion, the Debtor's efforts were not successful. If and when contact information is obtained, the Debtor will file a supplemental certificate of service. The David N. and Christine C. Neal Trust and Neal Management, LLC, will receive no distributions from the sales proceeds. The Indemnity Deeds of Trust executed by GRM and the foregoing persons are the subject of a bona fide dispute. They are represented by Gary Campbell and are receiving notice through his office. The Office of the United States Trustee will be allowed a carve‐out of $4,875 for its fees to be paid in full upon the closing. The IRS has specifically agreed to this carve‐out. The counsel for the Debtor will be allowed a carve‐out of $10,000 for its legal fees to be paid in full at closing, which sum will be held in trust pending a final fee application. To the extent the counsel's allowed fees are less than the sum of the current amount held in trust plus the additional $10,000 referenced, that difference will be tendered to the IRS. The IRS has specifically agreed to this carve‐out. After payment of all closing costs and the following liens: (a) Collin County Tax Assessor/Collector; (b) Ocwen: and (c) Bayview, the IRS will first apply the remaining sales proceeds towards satisfaction of the Debtor's tax obligations due and owing to the IRS. Thereafter, the IRS will allow the referenced carve‐outs. The remainder will then be applied to the tax obligations of GRM. The Debtor asks authority to sell free and clear of all liens, claims and encumbrances for a purchase price of $850,000. The Debtor and the Buyer entered into One to Four Family Residential Contract (Resale). There is no real estate broker involved in the transaction. The salient terms of the Contract are: a. Earnest money deposit of $8,500 b. Total purchase price is $850,000 c. No contingencies d. The Buyer accepts the Homestead and the Property in "as is" condition. e. No commission f. Contingent upon Court approval g. sale must be free and clear of all liens, claims and encumbrances A copy of the Contract attached to the Motion is available for free at: http://bankrupt.com/misc/Carrie_Morris_49_Sales.pdf The proposed sale of the Homestead and the Property will maximize the proceeds to be received by the Bankruptcy estate. Time is of the essence to effectuate the proposed sale. The Debtor asks the Court to waive the 14‐day stay of order set forth in Bankruptcy Rule 6004(h) and to order that the final relief requested in the Motion may be immediately available upon the entry of an order approving the sale of the Homestead and the Property to a final purchaser. Carrie Ann Morris sought Chapter 11 protection (Bankr. E.D. Tex. Case No. 17-41879) on Aug. 31, 2017. The Debtor tapped Robert T. DeMarco, Esq., at DeMarco-Mitchell, PLLC, as counsel. CHATEAU CREOLE: Aug. 1 Disclosure Statement Hearing --------------------------------------------------- Judge Elizabeth W. Magner of the U.S. Bankruptcy Court for the Eastern District of Louisiana issued an order fixing hearing on approval of disclosure statement explaining Chateau Creole Apartments, LLC's plan. July 25, 2018 is fixed as the last day for filing objections to the disclosure statement, and August 1, 2018 at 10:00 A.M., is fixed as the date of hearing to consider the approval of the disclosure statement. About Chateau Creole Apartments Chateau Creole Apartments, LLC, is privately-held real estate company that owns 208 residential rental units located at 273 Monarch Drive, Houma, Louisiana, valued at $6.25 million, based on revenue. Chateau Creole sought protection under Chapter 11 of the Bankruptcy Code (Bankr. E.D. La. Case No. 18-10148) on Jan. 25, 2018. In the petition, Damon J. Baldone, managing member, the Debtor disclosed $6.27 million in assets and $9.89 million in liabilities. Judge Elizabeth W. Magner presides over the case. The Derbes Law Firm, LLC, is the Debtor's legal counsel. CHINA FISHERY: Wants to Sell 1024 HK Golf Club Memberships ---------------------------------------------------------- BankruptcyData.com reported that China Fishery Group filed with the U.S. Bankruptcy Court a motion to sell property free and clear of liens and for an order establishing procedures to sell golf club memberships. The sale motion explains, "The Debtors are in the process of marketing a corporate membership at the Hong Kong Golf Club, memorialized by Certificate No. 1024 (the '1024 Membership'), and may market for sale another corporate membership at the Hong Kong Golf Club, memorialized by Certificate No. 1031 (the '1031 Membership' and, together with the 1024 Membership, the 'Golf Club Memberships,' and the proceeds arising from the sale of either Golf Club Membership, the 'Golf Club Proceeds'). There are no liens, mortgages, or encumbrances on the Golf Club Memberships. The Debtors intend to use the Golf Club Proceeds for payment of administrative expenses for the PAIH estate. There is a monthly subscription fee of approximately US$400 (HK$3,150) associated with each of the Golf Club Memberships. As is customary in Hong Kong, the Debtors do not retain a broker until the Debtors identify a buyer through the broker, at which time the Debtors officially retain the broker pursuant to a sale confirmation agreement between the Debtors and the broker (the 'Confirmation Agreement'). With the broker's assistance, the Debtors will then execute a sale and purchase agreement with the buyer (the 'Purchase Agreement'). Together, the Purchase Agreement and Confirmation Agreement would lay out the terms of a proposed Sale Transaction and the retention terms for the broker, including the commission fee, which typically constitutes 1% of the gross sale price for the Sale Transaction (the 'Purchase Price'). In addition, the Hong Kong Golf Club's approval is required to sell a membership at that club, and the Hong Kong Golf Club charges a transfer fee equal to the greater of 20% of the Purchase Price and the transfer fee for the last consummated transaction of a golf club membership at the Hong Kong Golf Club. Together with market information provided by the Hong Kong Golf Club, the Debtors have determined that an amount of not less than approximately US$2 million (HK$17 million) is a fair and reasonable Purchase Price for the 1024 Membership." The Court scheduled a June 19, 2018 hearing to consider the sale motion with objections due by June 12, 2018. About China Fishery Group Limited (Cayman) China Fishery Group Limited (Cayman) and its affiliates sought protection under Chapter 11 of the Bankruptcy Code (Bankr. S.D.N.Y. Lead Case No. 16-11895) on June 30, 2016. In the petition signed by CEO Ng Puay Yee, China Fishery Group estimated its assets at $500 million to $1 billion and debt at $10 million to $50 million. The cases are assigned to Judge James L. Garrity Jr. Weil, Gotshal & Manges LLP has been tapped to serve as lead bankruptcy counsel for China Fishery and its affiliates other than CFG Peru Investments Pte. Limited (Singapore). Weil Gotshal replaces Meyer, Suozzi, English & Klein, P.C., the law firm initially hired by the Debtors. The Debtors have also tapped Klestadt Winters Jureller Southard & Stevens, LLP, as conflict counsel; Goldin Associates, LLC, as financial advisor; RSR Consulting LLC as restructuring consultant; and Epiq Bankruptcy Solutions, LLC, as administrative agent. Kwok Yih & Chan serves as special counsel. On Nov. 10, 2016, William Brandt, Jr., was appointed as Chapter 11 trustee for CFG Peru Investments Pte. Limited (Singapore), one of the Debtors. Skadden, Arps, Slate, Meagher & Flom LLP serves as the trustee's bankruptcy counsel; Hogan Lovells US LLP serves as special counsel; and Quinn Emanuel Urquhart & Sullivan, LLP, serves as special litigation counsel. CINEVIA CORPORATION: Unsecureds to Receive .73% with No Interest ---------------------------------------------------------------- A hearing on approval of disclosure statement explaining Cinevia Corporation's plan of reorganization is scheduled for July 18, 2018 at 9:00 A.M. to consider and rule upon the adequacy of the disclosure statement and the information contained therein, to consider objections to the disclosure statement, and such other matters as may properly come before the U.S. Bankruptcy Court for the District of Puerto Rico. Objections to the form and content of the disclosure statement should be in writing and filed with the court and served upon parties in interest at their address of record not less than 14 days prior to the hearing. Objections not timely filed and served will be deemed waived. Cinevia Corporation is a corporation authorized to do business within the Commonwealth of Puerto Rico, incorporated in 2010. Prior from 2010 to 2013 the core business of the Debtor was the production of commercial movies. On 2013 Debtor acquired a mixed use (commercial and residential) building at 103 Calle Cristo, Old San Juan, Puerto Rico. Since then Debtor's only line of business is the leasing of the units and the management of the real estate. The Debtor’s sole stockholder and president is Miguel A. Pagan Rivera. Class 2 under the plan consists of the general unsecured creditors. Within 30 days after the Effective Date of the Plan, Class 2 claimants will receive a total repayment of 0.73% of their claimed or listed debt which equals a total of $4,500 with no interest to be paid pro-rata to all allowed claimants under this class. The source of payments under the proposed Plan will come from the rents received by the Debtor except for the $525,000 payment to Scotiabank de Puerto Rico which will be paid as follows: Payment of $525,000 to be made in two payments as follows: a) $262,500 to be paid to Scotiabank on the effective date of the plan; and b) $262,500 to be paid to Scotiabank 12 months after the effective date of the plan. Payment of $525,000 to Scotiabank will constitute full payment of Scotiabank's secured claim over the real property and Scotiabank will deliver to Debtor all promissory notes and security instruments in its possession upon full payment of the $525,000. Funds for payment of lump sum in the amount of $525,000 will come from capital investment to be made by stockholder and president of the corporation. On the effective date of the Plan, the distribution, administration, management of Debtor's affairs, collection of money, sale of property and distribution to creditors will be under the control of the Debtor, Cinevia Corporation, and its official Miguel Pagán. The funding of the Plan is contingent to the continued Debtor's operation of his business. A full-text copy of the Disclosure Statement is available at: http://bankrupt.com/misc/prb18-00135-11-56.pdf Counsel for Debtor: Noemí Landrau Rivera, Esq. LANDRAU RIVERA & ASSOC. PO Box 270219 San Juan, PR 00928 Tel.: (787) 774-0224 Fax: (787) 793-1004 E–mail: nlandrau@landraulaw.com About Cinevia Corporation Cinevia Corporation, filed a Chapter 11 bankruptcy petition (Bankr. D.P.R. Case No. 18-00135) on January 12, 2018, disclosing under $1 million in both assets and liabilities. The Debtor is represented by Noemi Landrau Rivera, Esq., at Landrau Rivera & Associates. CLASSIC DEVELOPMENTS: Aug. 2 Hearing on Final Approval of Plan -------------------------------------------------------------- Judge Jerry A. Brown of the U.S. Bankruptcy Court for the Eastern District of Louisiana issued an order continuing hearings on the final approval of the disclosure statement and the confirmation of Classic Developments By JMG, LLC's plan. July 26, 2018 is fixed as the last day to file and serve objections to both the disclosure statement and confirmation of the plan, and August 2, 2018 at 2:00 P.M., is fixed as the date of hearing to consider final approval of the disclosure statement and plan. About Classic Developments by JMG LLC Classic Developments by JMG LLC filed a Chapter 11 bankruptcy petition (Bankr. E.D. La. Case No. 17-11538) on June 14, 2017. In the petition signed by Jason Galatas, member, the Debtor estimated $500,000 to $1 million in assets and $100,000 to $500,000 in liabilities. Darryl T. Landwehr, Esq., at Landwehr Law Firm, serves as bankruptcy counsel. CM LAB: Case Summary & 20 Largest Unsecured Creditors ----------------------------------------------------- Debtor: CM Lab, Inc. 20861 Johnson St # 117 - 118 Pembroke Pines, FL 33029 Business Description: CM Lab, Inc. owns a clinical laboratory in Pembroke Pines, Florida. Chapter 11 Petition Date: June 5, 2018 Case No.: 18-16804 Court: United States Bankruptcy Court Southern District of Florida (Fort Lauderdale) Judge: Hon. Raymond B. Ray Debtor's Counsel: Zach B Shelomith, Esq. LEIDERMAN SHELOMITH ALEXANDER + SOMODEVILLA, PLLC 2699 Stirling Rd # C401 Ft Lauderdale, FL 33312 Tel: (954) 920-5355 Fax: (954) 920-5371 Email: zbs@lsaslaw.com Total Assets: $952,058 Total Liabilities: $3.75 million The petition was signed by Michael Bogdan, manager. A full-text copy of the petition containing, among other items, a list of the Debtor's 20 largest unsecured creditors is available for free at: http://bankrupt.com/misc/flsb18-16804.pdf D & D SITE CONSTRUCTION: U.S. Trustee Unable to Appoint Committee ----------------------------------------------------------------- No official committee of unsecured creditors has been appointed in the Chapter 11 case of D & D Site Construction Inc. as of June 4, according to a court docket. About D & D Site Construction D & D Site Construction Inc., filed a Chapter 11 bankruptcy petition (Bankr. M.D. Fla. Case No. 18-02124) on April 13, 2018, disclosing under $1 million in both assets and liabilities. The Debtor is represented by Jeffrey S. Ainsworth, Esq., at BransonLaw, PLLC. DARRELL CALHOUN, SR: Selling Clarksville Property for $335K ----------------------------------------------------------- Darrell Paul Calhoun, Sr., and Sylvia H. Calhoun ask the U.S. Bankruptcy Court for the Northern District of Florida to authorize the sale of the real property located at 13527 SR 73 SW, Clarksville, Florida, for $355,000. Objections, if any, must be filed within 21 days from the service of Notice. The Debtor has received a cash offer of $355,000 for the Property. A copy of the Purchase and Sale Agreement is available to all parties via email upon request. The mortgage holder, Whitney Bank, has not filed a claim in the case. However, the creditor is listed in the schedules amount of $585,926 for the two parcels subject to the mortgage. The Debtors desire to sell only this parcel of property and apply the proceeds of the sale to the mortgage with Whitney Bank. The closing Statement is subject to approval of the mortgage holders. The Debtors desire to proceed to sell the following described real property for $335,000, in the manner and form noticed by the Debtors to all parties in interest. From the proceeds, the Debtors ask approval to pay all (i) closing costs and realtor commissions, and (ii) all remaining proceeds to Whitney Bank toward the mortgage on 13527 SR 73 SW, Clarksville, FL and 1800 Massachusetts Ave, Lynn Haven, Florida. Counsel for the Debtors: Michael A. Wynn, Esq. Andrew Gause, Esq. 4436 Clinton Street P.O. Box 146 Marianna, FL 32447 Telephone: (850) 526-3520 Facsimile: (850) 526-5210 E-mail: Charles@Wynnlaw-fl.com Court@Wynnlaw-fl.com Darrell Paul Calhoun, Sr., and Sylvia H. Calhoun sought Chapter 11 protection (Bankr. N.D. Fla. Case No. 18-50126) on April 19, 2018. The Debtors tapped Charles M. Wynn, Esq., at Charles M. Wynn Law Offices, P.A., as counsel. DELICIAS DE MINAS: July 24 Disclosure Statement Hearing ------------------------------------------------------- Judge Stacey L. Meisel of the U.S. Bankruptcy Court for the District of New Jersey will convene a hearing to consider approval of the disclosure statement explaining Delicias De Minas Restaurant LLC's Chapter 11 Plan on July 24, 2018 at 2:30 P.M. About Delicias De Minas Restaurant Delicias De Minas Restaurant LLC, a small business debtor as defined in 11 U.S.C. Section 101(51D), operates a buffet restaurant in Newark, New Jersey, offering Brazilian cuisine. The Debtor sought protection under Chapter 11 of the Bankruptcy Code (Bankr. D.N.J. Case No. 17-31101) on October 18, 2017. Wendel Correa, its partner and owner, signed the petition. At the time of the filing, the Debtor disclosed that it had estimated assets of less than $50,000 and liabilities of $1 million to $10 million. Judge Stacey L. Meisel presides over the case. Raymond & Raymond, Esqs. is the Debtor's bankruptcy counsel. DEMERX INC: Taps Alexander Capital as Placement Agent ----------------------------------------------------- DemeRx, Inc., seeks approval from the U.S. Bankruptcy Court for the Southern District of Florida to hire Alexander Capital L.P. The firm will serve as the Debtor's placement agent in connection with raising funds in its debtor-in-possession loan facility. Alexander Capital will be paid a fee, payable upon the closing of each placement in the DIP loan facility. The placement fee is equal to 8% of the gross proceeds. Jonathan Gazdak, managing director of Alexander Capital, disclosed in a court filing that he and his firm neither hold nor represent any interest adverse to the Debtor and its estate. Alexander Capital can be reached through: Jonathan Gazdak Alexander Capital L.P. 17 State Street New York, NY 10004 Phone: 1-212-687-5650/ 1-646-787-8998 Fax: 1-212-687-5649 Email: jgazdak@alexandercapitallp.com Email: info@alexandercapitallp.com About DemeRx Inc. DemeRx, Inc., is a pharmaceutical research and development company headquartered in Miami, Florida. DemeRx sought protection under Chapter 11 of the Bankruptcy Code (Bankr. S.D. Fla. Case No. 18-14149) on April 9, 2018. In the petition signed by CEO Deborah C. Mash, Ph.D, the Debtor disclosed $24.88 million in assets and $2.06 million in liabilities. Judge Robert A. Mark presides over the case. The Debtor hired Aaronson Schantz Beiley P.A. as its legal counsel, and Halloran Farkas & Kittila, LLP, as its special counsel. DIAGNOSTIC CENTER: Exclusive Plan Filing Period Extended to Aug. 12 ------------------------------------------------------------------- The Hon. Laurel E. Babero of the U.S. Bankruptcy Court for the District of Nevada granted debtor Diagnostic Center of Medicine (Allen) LLP an extension of its exclusive filing period through and including Aug. 12, 2018, and its exclusive solicitation period through and including Oct. 12, 2018. The Troubled Company Reporter has previously reported that the Debtor asked the Court to extend the Exclusivity Periods for an additional 90 days: (a) to avoid premature formulation of a chapter 11 plan, and (b) to ensure the plan that is eventually formulated will take into account all the interest of the Debtor and their creditors. To successfully resolve this Chapter 11 Case, the Debtor asserted that the true scope of its losses in the current market must be determined and the payment of valid debts must be provided on a basis that preserves the Debtor's strong core business operations. Although great strides have been made since the Petition Date, the Debtor said that there's so much more that remains to be done. The Debtor contended that the key components of its progress since the Petition Date include, among others: (a) preparing schedules and statements of financial affairs; (b) beginning to document and negotiate with the creditors; (c) prosecuting and obtaining orders to use case collateral, pay employees, assume and reject leases, and sell equipment; (d) providing financial documents to key creditors; and (e) developing an overall reorganization strategy litigation for the business. About Diagnostic Center of Medicine Diagnostic Center of Medicine (Allen) LLP, in practice since 1977, is an internal medicine and family medicine group in Southern Nevada with locations in Henderson and Durango. Diagnostic Center of Medicine Allen) LLP filed a Chapter 11 petition (Bankr. D. Nev. Case No.: 18-10152) on Jan. 12, 2017. In the petition signed by CEO Lawrence M. Allen, M.D., the Debtor disclosed $1.70 million in total assets and $6.08 million total debt. The case is assigned to Judge Laurel E. Davis. The Debtor is represented by Samuel A. Schwartz, Esq., at Schwartz Flansburg PLLC, as counsel; and McNair & Associates, Chtd. as its accountant. DIAMOND CONTRACT: Unsecureds to Get 100% at 3% Over 102 Months -------------------------------------------------------------- Diamond Contract Flooring, LLC, filed a motion asking the U.S. Bankruptcy Court for the Eastern District of Pennsylvania for conditional approval of the disclosure statement explaining its Chapter 11 plan and fixing of dates for filing of acceptances, rejection or objection to the plan. Under the Plan, the General Unsecured Allowed Claims could be high as $804,103. These claims will 100% of their respective claims at 3% interest over time. The Debtor will pay $13,000 quarterly for the first 52 months of the Plan. Then, the Debtor will pay the General Unsecured Claims $45,000 quarterly for the remaining 50 months of the Plan. The total plan is 100% payment over 8-1/2 years. The Debtor will pay the claims provided for in the Plan with a combination of cash on hand on the Effective Date and its future earnings. In addition, the Debtor may pursue certain third party claims. Any net recovery to the Debtor will be applied to the Plan to accelerate the repayment of all creditors' claims. A full-text copy of the disclosure statement is available for free at: http://bankrupt.com/misc/paeb17-16672-93-1.pdf About Diamond Contract Flooring Diamond Contract Flooring, LLC, is a privately held company in Bensalem, Pennsylvania, and has been in the business of wholesale-floor coverings since 2000. The company sells and installs carpeting, tile, hardwoods and other types of flooring for residential and commercial establishments in both Pennsylvania and New Jersey. Diamond Contract Flooring filed a Chapter 11 petition (Bankr. E.D. Pa. Case No. 17-16672) on Sept. 29, 2017. In the petition signed by Christopher Diamond, president, the Debtor disclosed $142,481 in assets and $1.32 million in liabilities. The Hon. Eric L. Frank presides over the case. McDowell Posternock Apell & Detrick, P.C., serves as bankruptcy counsel to the Debtor, and later substituted by Boyle & Valenti Law, P.C., as bankruptcy counsel. DOUBLE D. FITNESS: TCF Equipment to be Paid $9,730 at 6% Interest ----------------------------------------------------------------- Double D Fitness Company filed with the U.S. Bankruptcy Court for the Northern District of Florida a small business disclosure statement describing its proposed plan of reorganization dated May 25, 2018. The Debtor is a corporation registered in the State of Georgia and has operated as a health and fitness club in Panama City, Florida since 2006. The Debtor's location of operations is 1598 N. Balboa Ave, Panama City, Florida 32405. Class 3 under the plan is the secured claim of TCF Equipment Finance. The remaining amount of $9,730 will be paid at 6% fixed interest commencing on the 1st of the month following the effective date of the plan in the amount of $500 per month until paid in full. The Debtor has no general unsecured claimants. Payments and distributions under the Plan will be funded by income generated from the operation of Debtor's business. A copy of the Disclosure Statement is available at: http://bankrupt.com/misc/flnb17-50242-58.pdf About Double D. Fitness Company Double D. Fitness Company filed a Chapter 11 bankruptcy petition (Bankr. N.D. Fla. Case No. 17-40242) on July 26, 2017. The Debtor hired Robert C. Bruner, Esq., at Robert C. Bruner, Attorney at Law. ELEMENTS BEHAVIORAL: Gets Access to $4.7M Interim Financing ----------------------------------------------------------- BankruptcyData.com reported that the U.S. Bankruptcy Court issued an interim order approving Elements Behavioral Health's motion for entry of interim and final orders (i) authorizing the Debtors to obtain secured postpetition D.I.P. financing, (ii) authorizing the use of cash collateral, (iii) granting adequate protection, (iv) modifying the automatic stay and (v) setting a final hearing. As previously reported, "Madison Capital Funding is the agent, sole lead arranger, and sole bookrunner and Bank of Montreal ("BMO") is the syndication agent, and CapitalSource Bank is the documentation agent. The D.I.P. Loan consists of a senior secured superpriority loan up to an aggregate amount of $14.2 million with $4.7 million available on an interim basis. The First Lien Credit Agreement provided the Company with an initial term loan of $76.0 million, a revolving line of credit with initial availability up to $7.0 million, and a delayed draw loan commitment of up to $10.0 million for capital expenditures and permitted acquisitions. The Prepetition First Lien Obligations (as defined in the DIP Credit Agreement) have a final maturity date of February 11, 2019. The principal amount outstanding under the Prepetition First Lien Loan Documents to the Prepetition First Lien Lender as of the Petition Date was approximately $128.7 million (the 'Senior Secured Claim'). The principal amount outstanding under the Prepetition Second Lien Loan Documents to the Prepetition Second Lien Lender as of the Petition Date was approximately $44.2 million (the 'Junior Secured Claim')." The Court scheduled a final hearing on June 26, 2018, with objections due by June 19, 2018. About Elements Behavioral Health/EBH Topco Long Beach, California-based EBH Topco, LLC along with its subsidiaries -- http://www.elementsbehavioralhealth.com/-- are providers of behavioral health services and residential drug and alcohol addiction treatment. The Elements Behavioral Health(R) family of programs offers comprehensive, innovative treatment for substance abuse, sexual addiction, trauma, eating disorders, and other mental health disorders. EBH Topco, LLC (Lead Case), Elements Behavioral Health, Inc., and certain of its affiliates sought Chapter 11 bankruptcy protection on May 23, 2018 (Bankr. D. Del., Case No. 18-11214). The petition was signed by Martin McGahan, chief restructuring officer. The Debtors listed $50 million to $100,000 million in assets and under $100 million to $500 million in liabilities. Hon. Brendan Linehan Shannon presides over the Debtors' cases. Christopher A. Ward, Esq., Shanti M. Katona, Esq., Stephen J. Astringer, Esq., and Jeremy R. Johnson of Polsinelli PC serve as counsel to the Debtors. Alvarez & Marsal LLC acts as restructuring advisor to the Debtors, Houlihan Lokey Capital, Inc. as investment banker, and Donlin, Recano & Company, Inc. as notice and claims agent. ENERGY ACQUISITION: Moody's Gives B2 CFR & B1 1st Lien Loan Rating ------------------------------------------------------------------ Moody's Investors Service assigned new ratings for Energy Acquisition Company, Inc. (dba Electrical Components International or ECI), including a B2 Corporate Family Rating (CFR) and a B2-PD Probability of Default Rating. Concurrently, Moody's assigned a B1 rating to the company's proposed $100 million senior secured first-lien revolver and $570 million senior secured first-lien term loan. Moody's also assigned a Caa1 rating to the proposed $125 million senior secured second-lien term loan. The rating outlook is stable. Net proceeds from the credit facilities and approximately $240 million of equity will be used to fund the leveraged buyout of the company by an affiliate of Cerberus Capital Management, L.P., repay existing debt, and cover associated fees and expenses. Following the consummation of the buyout, all former ratings for Electrical Components International, Inc. will be withdrawn concurrent with the associated repayment of its debt obligations. According to Moody's Analyst Andrew MacDonald, "ECI's new capital structure leaves the company weakly positioned within the B2 rating level given the very high leverage through 2019 and the potential for future debt funded dividends and acquisitions under private equity ownership. However, the company has improved its size, capabilities, and operating margins in recent years that help offset the leveraging nature of the transaction and back Moody's expectation of positive free cash flow generation supportive of a good liquidity profile and an ability to deleverage - key underpinnings of the credit." Pro-forma for the proposed transaction, the company's debt-to-EBITDA and EBITA-to-interest for the twelve months ended March 31, 2018 was approximately 6.2 times and 1.9 times, respectively (all ratios are Moody's-adjusted unless otherwise stated), according to the rating agency. Moody's expects leverage to improve to below 6.0 times over the next 12-18 months from a combination of earnings growth and debt repayment from internally generated free cash flow. Moody's assigned the following ratings for Energy Acquisition Company, Inc.: Corporate Family Rating, B2 Probability of Default Rating, B2-PD $100 million Senior Secured First-Lien Revolving Credit Facility due 2023, B1 (LGD3) $570 million Senior Secured First-Lien Term Loan due 2025, B1 (LGD3) $125 million Senior Secured Second-Lien Term Loan due 2026, Caa1 (LGD5) Outlook, Stable The following ratings for Electrical Components International, Inc. will be withdrawn upon closing of the transaction and the concurrent repayment of debt outstanding: Corporate Family Rating, B2 Probability of Default Rating, B3-PD $50 million Senior Secured Revolving Credit Facility due 2019, B1 (LGD3) $585 million Senior Secured Term Loan B due 2021, B1 (LGD3) Outlook, Stable RATINGS RATIONALE ECI's B2 CFR broadly reflects the company's very high leverage, relatively small size within the rated manufacturer universe, and high, albeit improving, customer concentration within the North American and European white goods appliance sectors. The rating incorporates the likely continuation of aggressive financial policies under new private equity owners as the company has a long history of financial sponsor ownership that has included sizable debt-financed acquisitions and dividends. Potential volatility of the company's earnings and cash flow generation from foreign exchange exposure, raw material costs, and cyclicality within its end markets in certain business lines also serve to constrain the rating. The rating benefits from the company's leading market position as a wire harness manufacturer in North America and Europe as well as its low-cost manufacturing capabilities, which Moody's views as a key competitive advantage. The rating incorporates Moody's expectation that ECI will generate positive free cash flow that will be used for deleveraging over the next few years and that the company will maintain at least a good liquidity profile over the next twelve months augmented by the proposed $100 million revolving credit facility. The stable outlook reflects Moody's expectation that ECI will grow its top-line in the low-to-mid single digit range and gradually deleverage via both EBITDA growth and debt repayment over time. It further assumes the company will maintain at least a good liquidity profile over the next 12 months. Ratings could be downgraded if Moody's expects debt-to-EBITDA to be sustained above 6.0 times beyond 2019, end market demand weakens, operations are materially disrupted by relocation efforts, or a major customer is lost. Also, the ratings could be downgraded if liquidity weakens and the company increases reliance on its revolver. A sizable debt-financed acquisition or dividend could also result in the ratings being downgraded. Ratings could be upgraded if ECI is able to deleverage such that Moody's adjusted debt-to-EBITDA is sustained around 4.0 times and interest coverage approaches 3.0 times. Also, the company will have to maintain at least a good liquidity profile prior to an upgrade. The principal methodology used in these ratings was Global Manufacturing Companies published in June 2017. Energy Acquisition Company, Inc. (dba Electrical Components International or ECI) is a leading manufacturer of wire harnesses and a provider of value-added assembly services to companies primarily located in North America and Europe. The company also generates sales in South America and Asia. ECI operates in two core segments; appliances and specialty industrials. ECI is understood to be the leading wire harness supplier for consumer appliance companies in both North America and Europe, and also produces specialty harnesses for several industries including automotive, specialty transportation HVAC, construction, and agricultural equipment among others. Recent acquisitions include the January 2017 acquisition of Fargo Assembly Company, a North American manufacturer of wire harnesses. Sales for the twelve month period ended March 31, 2018 - pro forma for Fargo Assembly acquisition - were approximately $947 million. Following the proposed acquisition, ECI will be owned by the private equity firm Cerberus Capital Management. EXTREME ADVENTURES: Intellectual Property Up for Auction June 11 ---------------------------------------------------------------- J T S Capital 2 LLC, the assignee of First Community National Bank, has declared Extreme Adventures, L.L.C., Jason McCormick and Matthew Olejarcyk in default under the terms and provisions of the Security Agreements executed October 15, 2010, by Extreme Adventures, L.L.C., Jason McCormick, and Extreme Adventures, L.L.C. and Matthew Olejarcyk, Debtors, to First Community National Bank. The Bank assigned its interest in the Security Agreements to JTS Capital 2 LLC on August 23, 2017. As a result of the default, JTS will conduct a public auction the property of Extreme Adventures et al. that serves as collateral under the Agreements. The collateral includes patents and applications for patents, copy rights, trademarks, trade secrets, goodwill, trade names of Extreme Adventures and Birdsnest Lodge. The sale will be held on June 11, 2018, at 10:00 a.m. at the office of: R. Brooks Kenagy, Attorney at Law 107 South Third Street Steelville, MO 65565 JTS may be reached at: Jim W. Moore, Executive Vice President JTS CAPITAL 2 LLC Tel: 254-313-1003 x107 FIDELITY AMERICAN: Case Summary & 4 Unsecured Creditors ------------------------------------------------------- Debtor: Fidelity American Holdings Corp. 3123 Via Serena N. Unit D Laguna Woods, CA 92637 Business Description: Fidelity American Holdings Corp. is engaged in activities related to real estate. The company owns seven real estate properties in LeRay Township, New York, having an aggregate value of $1.72 million. Chapter 11 Petition Date: June 6, 2018 Case No.: 18-30821 Court: United States Bankruptcy Court Northern District of New York (Syracuse) Judge: Hon. Margaret M. Cangilos-Ruiz Debtor's Counsel: Charles Higgs, Esq. LAW OFFICE OF CHARLES A. HIGGS 115 E. 23rd Street, 3rd FL New York, NY 10010 Tel: 917-673-3768 E-mail: Charles@FreshStartEsq.com Total Assets: $2.52 million Total Liabilities: $1.88 million The petition was signed by Linda Luther, CEO. A full-text copy of the petition containing, among other items, a list of the Debtor's four unsecured creditors is available for free at: http://bankrupt.com/misc/nynb18-30821.pdf FIELDWOOD ENERGY: Fitch Assigns First-Time 'B-' IDR, Outlook Stable ------------------------------------------------------------------- Fitch Ratings has assigned a first-time long-term Issuer Default Rating of 'B-' with a Stable Outlook to Fieldwood Energy LLC following the company's emergence from voluntary chapter 11 bankruptcy. Fitch has also assigned a 'BB-'/'RR1' to the company's First Lien Secured Term Loan and a 'B+'/'RR2' to the company's Second Lien Secured Term Loan. Fieldwood's ratings reflect its improved capital structure following its emergence from pre-packaged Chapter 11 bankruptcy earlier this year; its increased size and scale following the Noble asset acquisition (total proved reserves of 268 million boe, and a PV-10 of approximately $2.6 billion); and its relatively high exposure to liquids, including Louisiana Light Sweet(LLS)-linked oil realizations. Ratings concerns include the company's substantial environmental obligations, which are high relative to its capital and asset base; and the lack of a committed revolver, which is unusual for an E&P credit. However, Fitch believes management has demonstrated an ability to manage its decommissioning obligations efficiently, while liquidity risk is moderated by the company's good expected FCF. Fitch views Fieldwood's asset coverage as strong relative to its capital structure, leading to expectations of 100% recovery (RR1) for the first lien senior secured term loan and 71%-90% recovery (RR2) for the second lien senior secured term loan. A total of just under $1.7 billion in debt is affected by this rating action. KEY RATING DRIVERS Improved Post-Bankruptcy Capital Structure: Following its exit from a pre-packaged Chapter 11 bankruptcy in April of this year, Fieldwood emerged with lower debt and a substantially simplified capital structure. The approved plan cut Fieldwood's total debt in half, to just under $1.7 billion from approximately $3.3 billion, reduced the number of term loans outstanding to two from four, while cash interest declined to $153 million from $262. Following the transaction, the company's capital structure consists of a $148 million super-priority letter of credit (LC) facility used to support decommissioning obligations (due April 2021), a first lien senior secured term loan (due April 2022), and a second lien senior secured term loan (due April 2023). The company's exposure to liquids is relatively high. On a pro-forma basis following the Noble Deepwater asset acquisition, Fitch expects the company will produce approximately 68% liquids (63% oil, 5% NGLs), with relatively robust LLS-linked oil price realizations. Track Record of Acquisitions: Fieldwood was created as a growth vehicle to consolidate Gulf of Mexico (GoM) offshore assets. Since its creation, it has made more than $5.0 billion in acquisitions, including the Apache offshore assets in 2013 ($3.75 billion), Sandridge Energy offshore and onshore assets in 2014 ($750 million), Noble Energy GoM assets ($480 million, excluding contingent payments) and a number of smaller bolt-ons. Given the weakness in the offshore market, and a focus by larger companies on higher return and higher growth projects in their portfolios (often onshore shale), Fieldwood has been able to obtain favorable valuations in many of these transactions. On a pro-forma basis following the Noble Deepwater asset acquisition, the company's total proved (1p) reserve base will increase to 268 million boe, while its PV-10 has increased to approximately $2.6 billion. Liquids production remains high on a pro-forma basis at approximately 68% liquids (63% oil, 5% NGLs), with relatively robust LLS-linked oil price realizations. Substantial Decommissioning Obligations: Because of its focus on acquiring mature offshore assets, Fieldwood has inherited substantial environmental liabilities (Asset Retirement Obligations, AROs, and related plugging and abandonment, or P&A spending) that are high relative to peers. As calculated by Fitch, on a pro-forma basis at year-end 2017, Fieldwood's ARO per barrel of 1p reserve stood at approximately $4.88/barrel of oil equivalent (boe), several times the size seen at diversified E&Ps with offshore operations such as Hess ($0.65/boe), Murphy ($1.02/boe), Anadarko ($1.94/boe) and ConocoPhillips ($1.86/boe). Fieldwood's ARO per flowing barrel of production at year-end 2017 was similarly high at $43.73/bbl, versus Hess ($6.75/boe), Murphy ($11.96/boe), Anadarko ($11.39) and ConocoPhillips ($18.99). Fieldwood views its ability to efficiently complete decommissioning activities as a core competence and competitive advantage, driven by its in-house expertise and extensive database of remediation work. In recent years, the company has plugged and abandoned the majority of decommissioned facilities on the GoM shelf, giving it experience in remediation that many other E&Ps lack. At the same time, Fitch would note that there is considerable variation around estimates for remediation costs, which poses a risk to company cash flows in the event of unfavorable fluctuations. Fitch recognizes that the company's decommissioning reserves will help offset some of these costs. This includes $498 million in LCs pledged to remediate the Apache properties, as well as a separate decommissioning Trust A fund. This trust has a cash trap feature whereby 10% of net profits associated with the Apache assets are diverted until it reaches a minimum of $800 million or 125% of the stated liability. Challenging Asset Sale Market: The limited number of parties interested in buying mature offshore assets means that a potential re-sale of properties by Fieldwood in a downturn could be challenging. Because of joint and several liability for environmental remediation in the GoM (anyone in the title chain for a property can be held accountable for paying off 100% of an environmental claim if the other entities are unable to do so) sales are carefully vetted, and sellers often seek out extra protection from buyers to protect against this contingency, which adds to costs. Regulatory Environment Improved: Fitch would note that the regulatory environment for offshore operators has improved under the Trump administration, and Fieldwood has not been required to post material additional bonds to the Bureau of Ocean Energy Management following its 2016 notice to lessees regarding potential supplemental bond requirements for decommissioning activities on leases in the gulf. However, the company's overall exposure to this issue is large, and the risk exists that this treatment could be reversed if there is a future change in administrations. Lack of Revolver: Fieldwood does not currently have a revolving committed credit facility. The levers the company expects to use in a downturn to maintain financial flexibility include cutting back on capex (Fieldwood is operator on 90%-95% of its properties; with modest maintenance capex). The company also has decent hedge coverage and extensive insurance policies, which should help somewhat in a downcycle. However, Fitch views the lack of a committed facility as unusual for a corporate credit and a constraint on the rating given the underlying volatility of the E&P industry, particularly in the context of the company's decommissioning commitments. Robust Projected Credit Metrics: In its base case, Fitch expects the company will have leverage of 2.3x in 2018 and 2019, 2.0x in 2020 and 1.9x in 2021, which is robust for the 'B-' rating level. Forecast FCF generation across Fitch's base case is also good. While projected leverage is relatively strong, the main limiting factors on the rating are related to the inherent risk of the company's business model, which stands out versus single 'B' onshore E&P peers, the large amount of environmental liabilities relative to the company's size and the lack of committed liquidity. DERIVATION SUMMARY Fieldwood's positioning against high-yield peers in the independent E&P space is mixed. Its pro-forma size following the Noble acquisition (93,420 boepd) is considerably larger than high-yield onshore and offshore peers such as Jones Energy (CCC-/Stable), Resolute Energy (B-/Stable), and W&T Offshore (NR). Fieldwood's leverage following its emergence from voluntary bankruptcy proceedings is better than peer average, and it has a good projected FCF generation profile in Fitch's base case. However, the asset profile is materially different with higher operational and P&A cost risks than most single 'B' E&P comps, which tend to have smaller, onshore shale focused profiles. By contrast Fieldwood's strategy to grow aggressively by rolling up the offshore assets of larger E&Ps has resulted in the accumulation of decommissioning liabilities that are disproportionately large when compared with onshore focused single 'B' E&P peers. While Fieldwood's current liquidity is adequate when matched to its forecast FCF and light maturity schedule, its lack of a committed revolver also stands out as unusual. Both the heightened decommissioning obligations and lack of a committed revolver act as constraints on the rating despite its other favorable characteristics. KEY ASSUMPTIONS Fitch's Key Assumptions within Its Rating Case for the Issuer - West Texas Intermediate oil prices of $55/bbl across the forecast period; - Henry Hub natural gas prices of $2.75/mcf in 2018 and $3.00/mcf for the rest of the forecast period; - Total production of approximately 93mboepd in 2018, rising to 123mboepd by 2021; - Capex which averages approximately $361 million across the forecasts period; - P&A costs that average approximately $148 million across the forecast; - Total debt with equity credit remains flat across the forecast following the initial 2018 bankruptcy linked recapitalization; - $250 million in additional acquisitions across the forecast. RATING SENSITIVITIES Developments That May, Individually or Collectively, Lead to Positive Rating Action -- Reduction in business risk through increased diversification, lower exposure to environmental liabilities, or enhanced size; -- Increased levels of structural liquidity, including third party committed liquidity; -- Continued maintenance of a conservative financial policy. Developments That May, Individually or Collectively, Lead to Negative Rating Action -- An impaired liquidity profile; -- Unfavorable regulatory changes (e.g. increased bonding requirements or requirements to accelerate P&A spending); -- Major operational issue at a key platform (stoppage, spill, etc); -- Leveraging transactions resulting in a sustained decrease in interest coverage at or below 2.0x. LIQUIDITY Current Liquidity Adequate: Fieldwood's current liquidity is adequate and includes a moderate cash balance. However, as stated earlier, the company lacks a committed revolver, which is a material issue given the underlying volatility of E&Ps, the company's large decommissioning obligations, and the lack of alternative liquidity outside of sponsor support. Following the 2018 restructuring, Fieldwood's near-term maturity schedule is manageable, and includes the $148 million super-priority LC facility due 2021; the company's $1.143 billion first lien senior secured term loan due 2022; and its $518 million second lien senior secured term loan due 2023. Covenants are manageable in Fitch's base case, and include a consolidated total net leverage covenant (maximum of 4.00x); a consolidated first lien indebtedness covenant (maximum of 2.50x, stepping down to 2.25x); and an asset coverage ratio test (minimum 1.75x, tested twice per year). Strong Recovery for Secured Notes: Fitch's recovery analysis for Fieldwood was based on the maximum of going concern value and liquidation value, in line with its corporate recovery criteria. While Fitch has the flexibility to apply a traded asset valuation methodology for E&P businesses ($/boe, $/1p, $/acre etc), in the case of Fieldwood, the lack of an actively traded market in offshore GoM asset markets (as well as the fact that Fieldwood was involved in several of these deals), limited the value of comparables in the recovery analysis. Fitch's going concern valuation for the company exceeded liquidation value and was approximately $1.9 billion, and was comprised of a projected going concern EBITDA of $614 million and a 3.1x multiple. The $614 million EBITDA represents Fitch's conservative expectations for the company's exit EBITDA generation in a stressed ($45/barrel WTI, $2.50/mcf gas) environment. The 3.1x multiple is well below the historical 6.7x median multiple seen across Fitch's most recent bankruptcy case studies for energy names, and reflects the limited number of potential buyers for end-of-life offshore assets, as well as the considerable P&A costs associated with the assets. The initial going concern value of approximately $1.9 billion was approximately 74% of the company's post emergence PV-10 value. After determining the maximum value of the going concern versus liquidation value, a standard waterfall approach was applied. After subtracting 10% for administrative claims, the remaining value was applied to the waterfall analysis. The company's super senior exit LC facility ($148 million) was assumed to have first priority. Following that, the company's first lien senior secured term loan recovered at the 100% level, followed by the second lien senior secured term loan, which recovered at the 'RR2' level (71%-90%). FULL LIST OF RATING ACTIONS Fitch has assigned the following first-time ratings to Fieldwood Energy LLC: -- Long-Term IDR 'B-'; -- First Lien Senior Secured Term Loan: 'BB-'/'RR1-'; -- Second Lien Senior Secured Term Loan 'B+'/'RR2-'. The Rating Outlook is Stable. FINTUBE LLC: Taps RSM US to Prepare 2017 Tax Returns ---------------------------------------------------- Fintube, LLC, seeks approval from the U.S. Bankruptcy Court for the Northern District of Oklahoma to hire RSM US, LLP. The firm will assist the Debtor in the preparation of its annual federal income tax and resident state income tax returns for the year ending December 31, 2017. RSM US will be paid a fixed fee of $30,000 for its services. The firm neither holds nor represents any interest adverse to the Debtor's estate, according to court filings. RSM US can be reached through: Jim Denny RSM US, LLP 210 Park Avenue, Suite 1725 Oklahoma City, OK 73102 Phone: 405.239.7961 About Fintube LLC Fintube, LLC, is a Delaware limited liability company engaged in the business of engineering and manufacturing welded, extended surface tubing and designing and fabricating heat recovery systems for a worldwide market. The Company has been in business for over 50 years. Its primary facilities are located in Tulsa, Oklahoma. Fintube filed a Chapter 11 petition (Bankr. N.D. Okla. Case No. 17-11274) on June 27, 2017. The Debtor hired Doerner, Saunders, Daniel & Anderson, L.L.P., as legal counsel; ClearRidge LLC as financial advisor; Bruce Jones, managing director of ClearRidge, as chief restructuring officer; and ClearRidge, LLC as marketing agent. On July 10, 2017, the Office of the U.S. Trustee appointed an official committee of unsecured creditors. The Committee retained Crowe & Dunlevy, PC, as counsel. No trustee or examiner has been appointed in the case. FIRESTAR DIAMOND: Court Approves Examiner Work Plan --------------------------------------------------- BankruptcyData.com reported that the U.S. Bankruptcy Court issued an order approving the preliminary work plan and budget of John J. Carney, Firestar Diamond's examiner. As previously reported, "The Examiner Order broadly sets forth the scope of the Examiner's investigation. The Examiner is directed to: investigate the circumstances surrounding the alleged fraud involving the individual known as Nirav Modi, certain persons or entities affiliated with Nirav Modi (the 'Modi Entities') and certain employees of Punjab National Bank (the 'Alleged Fraud Circumstances') for the purpose and to the extent necessary to determine (1) whether and to what extent, if any, the Modi Entities have the ability to direct and/or influence the conduct, decisions or actions taken by the Debtors in these Cases; (2) whether any current officer or director of the Debtors actively and knowingly participated in fraud or dishonesty in the management of the affairs of the Debtors; (3) whether any claims or causes of action in favor of the Debtors may arise from the Alleged Fraud Circumstances; (items (1) through (3) referred to as the 'Determinations') and (4) otherwise perform the duties of an examiner as contained within the scope of 11 U.S.C 1106(a)(3)&(4) of the Bankruptcy Code solely to the extent required or necessary to the foregoing Determinations. (collectively, the 'Investigation'). The Examiner plans to divide the Investigation into several categories: a. Conduct initial interviews to understand the Debtors' operations and the Debtors' respective roles in the diamond/jewelry industry; b. Interview key witnesses in the United States, and if necessary in India, who are or were employed in functions relevant to the Investigation, i.e. sales, finance and accounting, operations, and contracting; c. Identify and review documents and communications relevant to the subject matter of the Investigation; d. Conduct a forensic financial analysis of the books and records of the Debtors, bank records, vendor records, and any and all relevant information of other entities consistent with the Investigation, and trace the movement of monies obtained under the Alleged Fraud Circumstances against Punjab National Bank to the Debtors, and related entities and individuals; and e. Engage with the Indian Ministry of Corporate Affairs (and other agencies within the Government of India if needed) for information and documents relevant to this Investigation." About Firestar Diamond Firestar Diamond Inc. procures, designs, manufactures, and distributes diamond-studded jewelry. Firestar Diamond's operations span the USA, Europe, the Middle East, the Far East and India. The Company employs over 1200 people. Firestar Diamond has offices in Mumbai, Surat, New York, Chicago, Johannesburg, Antwerp, Yerevan, Dubai, and Hong Kong. A. Jaffe, Inc., a subsidiary of Firestar Diamond, designs and manufacturers wedding rings and wedding bands. In January, India's state-owned Punjab National Bank alleged that Modi orchestrated almost $2 billion in fraudulent transactions. Modi is the subject of a probe by India's Central Bureau of Investigations. Firestar Diamond, Inc., A. Jaffe, Inc., and Fantasy, Inc., sought Chapter 11 protection (Bankr. S.D.N.Y. Lead Case No. 18-10509) on Feb. 26, 2018. Firestar Diamond estimated assets and debt of $50 million to $100 million. The Hon. Sean H. Lane is the case judge. The Debtors tapped Ian R. Winters, Esq., at Klestadt Winters Jureller Southard & Stevens, LLP, as their bankruptcy counsel; Forchelli Deegan Terrana LLP as conflicts counsel; Lackenbach Siegel, LLP as special counsel; Getzler Henrich & Associates LLC and its managing director Mark Samson as chief restructuring officer; and Omni Management as claims and noticing agent. Marks Paneth LLP serves as financial advisor. Judge Sean Lane issued an order directing the U.S. Trustee to appoint a Chapter 11 examiner for Firestar Diamond. John J. Carney, the court-appointed Examiner, hired Baker & Hostetler LLP, as counsel. FIRESTAR DIAMOND: US Trustee Seeks Chapter 11 Trustee Appointment ----------------------------------------------------------------- BankruptcyData.com reported that Firestar Diamond's U.S. Trustee filed with the U.S. Bankruptcy Court a motion to appoint a Chapter 11 Trustee Pursuant to Section 1104 of the Bankruptcy Code or, alternatively, for conversion of these cases to Chapter 7 under liquidation. The motion explains, "the United States Trustee . . . will move this Court . . . for: (a) an order shortening time and scheduling a hearing to consider the U.S. Trustee's motion for the appointment of a Chapter 11 trustee pursuant to section 1104 of the Bankruptcy Code, or (b) for the conversion of these cases to Chapter 7, and for such other and further relief as this Court may deem just and proper." The attached memorandum of law explains, "In the instant case, there is cause for the Court to appoint a Chapter 11 trustee under subsection (a)(1) of Section 1104 of the Bankruptcy Code. If a trustee is not appointed to administer these cases, and the Debtors are to remain in control of their cases, the Court and parties-in-interest would have to rely on the director installed by Bhansali and, perhaps, on Modi and the Modi Entities whose alleged actions brought about the Criminal Investigation. Accordingly, "cause" exists under 11 U.S.C. section 1104(a)(1) for the appointment of a Chapter 11 Trustee as an independent fiduciary necessary to restore confidence of the creditors in the liquidation of the estate for the ultimate benefit of all parties in interest." In respect of a conversion to Chapter 7, the motion continues, "Here, at least two grounds exist under Section 1112(b)(4) to convert the case to chapter 7. First, conversion is appropriate where there has been "substantial or continuing loss to or diminution of the estate and the absence of a reasonable likelihood of rehabilitation. Second, cause for conversion to chapter 7 exists in these cases in the form of gross mismanagement of the estate. The Debtors' ability to rehabilitate its business was made especially difficult because of the events leading up to the filing of the chapter 11 petitions. Not only was there a shadow cast over the Debtors' operations by the scandal in India, but also, as a result of the investigation in India, the companies that supplied the Debtors with inventory were shuttered. That action forced the Debtors to sell their assets in a relatively short time frame. Consequently, the success of these chapter 11 cases depended entirely on the success of the sale process. That process, as it turned out, has resulted not in success, but rather in failure. Under these circumstances, it is highly unlikely that the Debtors will be able to rehabilitate themselves. Given the fraud allegations in India, the Debtors' management was under an unusually high level of scrutiny in these cases from the beginning of these chapter 11 cases. Current management, fresh off the collapse of the sale process, cannot be expected to see these cases through to confirmation." About Firestar Diamond Firestar Diamond Inc. procures, designs, manufactures, and distributes diamond-studded jewelry. Firestar Diamond's operations span the USA, Europe, the Middle East, the Far East and India. The Company employs over 1200 people. Firestar Diamond has offices in Mumbai, Surat, New York, Chicago, Johannesburg, Antwerp, Yerevan, Dubai, and Hong Kong. A. Jaffe, Inc., a subsidiary of Firestar Diamond, designs and manufacturers wedding rings and wedding bands. In January, India's state-owned Punjab National Bank alleged that Modi orchestrated almost $2 billion in fraudulent transactions. Modi is the subject of a probe by India's Central Bureau of Investigations. Firestar Diamond, Inc., A. Jaffe, Inc., and Fantasy, Inc., sought Chapter 11 protection (Bankr. S.D.N.Y. Lead Case No. 18-10509) on Feb. 26, 2018. Firestar Diamond estimated assets and debt of $50 million to $100 million. The Hon. Sean H. Lane is the case judge. The Debtors tapped Ian R. Winters, Esq., at Klestadt Winters Jureller Southard & Stevens, LLP, as their bankruptcy counsel; Forchelli Deegan Terrana LLP as conflicts counsel; Lackenbach Siegel, LLP as special counsel; Getzler Henrich & Associates LLC and its managing director Mark Samson as chief restructuring officer; and Omni Management as claims and noticing agent. Marks Paneth LLP serves as financial advisor. Judge Sean Lane issued an order directing the U.S. Trustee to appoint a Chapter 11 examiner for Firestar Diamond. John J. Carney, the court-appointed Examiner, hired Baker & Hostetler LLP, as counsel. FIRSTENERGY SOLUTIONS: Certificate Holders Disclose Stake --------------------------------------------------------- In the chapter 11 cases of FirstEnergy Solutions Corp., et al., O'Melveny & Myers LLP, Latham & Watkins LLP, and McDonald Hopkins LLC submitted a joint verified statement pursuant to Rule 2019 of the Federal Rules of Bankruptcy Procedure with respect to their representation of an ad hoc group of holders of 6.85% pass through certificates due 2034 and issued in connection with certain leveraged lease transactions. The Ad Hoc Group, through certain pass-through and lease indenture trustees that take direction (directly or indirectly) from the holders of Certificated Interests, have asserted or will assert claims against the Debtors. O'Melveny is a law firm that maintains offices at Times Square Tower, Seven Times Square, New York, New York 10036, and has additional offices in the United States and abroad. Latham is a law firm that maintains offices at 885 Third Avenue, New York, New York 10022, and has additional offices in the United States and abroad. McDonald Hopkins is a law firm that maintains offices at 600 Superior Avenue, Suite 2100, Cleveland, Ohio 44114, and has additional offices in the United States. The Ad Hoc Group was first formed in or around January 2017, when certain members of the Ad Hoc Group engaged O'Melveny to represent them in connection with their Certificated Interests. At various times thereafter and prior to the Debtors' chapter 11 filing, the other members of the Ad Hoc Group also joined the Ad Hoc Group and retained O'Melveny in the same capacity. In or around March 2018, the Ad Hoc Group engaged Latham as co-counsel with O'Melveny to represent them in connection with their Certificated Interests. The Ad Hoc Group retained McDonald Hopkins as local counsel shortly before the Debtors' chapter 11 filing in the United States Bankruptcy Court for the Northern District of Ohio. The Trustees also retained McDonald Hopkins as local counsel in the Chapter 11 cases. As of April 25, 2018, the names and addresses of each member of the Ad Hoc Group and "the nature and amount of each disclosable economic interest" held or managed in relation to the Debtors are: 1. Loomis, Sayles & Company, L.P. One Financial Center Boston, MA 02111 Attn: Colin Murphy * $150,597,344 of 6.85% pass through certificates due 2034 and issued in connection with certain leveraged lease transactions ("Certificated Interests"); * $0 of pollution control revenue bonds supported by notes issued by FirstEnergy Generation, LLC, and FirstEnergy Nuclear Generation, LLC ("PCN Claims"); * $0 of 6.05% unsecured notes due 2021 issued by FirstEnergy Solutions Corp. ("6.05% Notes"); and * $0 of 6.80% unsecured notes due 2039 issued by FES ("6.80% Notes"). 2. Legal & General Investment Management America, Inc. 71 S. Wacker Drive, Suite 800 Chicago, IL 60606 Attn: Legal Department * $126,284,851 of Certificated Interests. 3. P. Schoenfeld Asset Management LP 1350 Avenue of the Americas, 21st Floor New York, NY 10019 Attn: Legal Department * $64,946,068 of Certificated Interests; * $15,285,000 of PCN Claims; * $9,761,000 of 6.05% Notes; and * $16,766,000 of 6.80% Notes. 4. Citadel Equity Fund Ltd. c/o Citadel Americas LLC 131 South Dearborn Street Chicago, IL 60603 Attn: Legal Department * $45,984,000 of Certificated Interests; 5. Serengeti Asset Management 632 Broadway, 12th Floor New York, NY 10012 Attn: Leslie Biddle; Jim Johnston * $37,264,161 of Certificated Interests; * $4,900,000 of PCN Claims; and * $7,000,000 of 6.80% Notes. 6. The Northwestern Mutual Life Insurance Company 720 East Wisconsin Avenue Milwaukee, WI 53202 Attn: Ramona Rogers-Windsor * $31,196,877 of Certificated Interests. The Ad Hoc Group's attorneys: Scott N. Opincar, Esq. Michael J. Kaczka, Esq. Maria G. Carr, Esq. McDONALD HOPKINS LLC 600 Superior Ave. E., Suite 2100 Cleveland, OH 44114-2653 Telephone: (216) 348-5400 Facsimile: (216) 348-5474 E-mail: sopincar@mcdonaldhopkins.com mkaczka@mcdonaldhopkins.com mcarr@mcdonaldhopkins.com - and - George A. Davis, Esq. Adam S. Ravin, Esq. LATHAM & WATKINS LLP 885 Third Avenue New York, New York 10022 Telephone: (212) 906-1200 Facsimile: (212) 751-4864 E-mail: george.davis@lw.com adam.ravin@lw.com - and - Andrew Parlen, Esq. Andrew Sorkin, Esq. O'MELVENY & MYERS LLP Times Square Tower Seven Times Square New York, New York 10036 Telephone: (212) 326-2000 Facsimile: (212) 326-2061 E-mail: aparlen@omm.com asorkin@omm.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 U.S. 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. The Official Committee of Unsecured Creditors formed in the case tapped Milbank, Tweed, Hadley & McCloy LLP as counsel; Hahn Loeser & Parks LLP as co-counsel; FTI Consulting, Inc., as financial advisor; and PJT Partners LP as the committee's investment banker. FIRSTENERGY SOLUTIONS: Vanguard Out of Noteholder Group ------------------------------------------------------- Kramer Levin Naftalis & Frankel LLP and Baker & Hostetler LLP, in connection with the chapter 11 cases of FirstEnergy Solutions Corp., and its affiliated debtors, submitted on May 11, 2018, a supplemental verified statement pursuant to Rule 2019 of the Federal Rules of Bankruptcy Procedure showing that The Vanguard Group, Inc., is no longer part of an ad hoc group of noteholders. In the original verified statement dated April 25, 2018, Kramer Levin disclosed that the Ad Hoc Noteholder Group consisted of Alliance Bernstein, L.P., Allstate Insurance Company, Avenue Capital Management II L.P., BlackRock Financial Management Inc. - Municipal Group, Capital Research and Management Company, FIAM, LLC, Fidelity Institutional Asset Management Trust Company, Fidelity Investments Money Management, Inc., Nuveen Asset Management, LLC, USAA Asset Management and The Vanguard Group, Inc. According to the Supplemental Verified Statement, as of May 11, 2018, the members of the Ad Hoc Noteholder Group and their disclosable economic interests are: 1. Alliance Bernstein, L.P. 1345 Avenue of the Americas New York, NY 10105 * $8,290,000 of the 5.625% FG Secured Notes Due 2018 * $22,565,000 of the 4.25% FG Secured Notes Due 2029 * $37,245,000 of the 4.375% NG Secured Notes Due 2033 * $3,780,000 of the 4.375% NG Secured Notes Due 2035 2. Allstate Insurance Company 3075 Sanders Rd., STE G5 Northbrook, IL 60062 * $13,000,000 of the 6.05% FES Unsecured Notes Due 2021 * $13,750,000 of the 6.8% FES Unsecured Notes Due 2039 * $2,000,000 of the 6.85% Mansfield Notes Due 2034 3. Avenue Capital Management II, L.P. solely on behalf of certain funds it advises 399 Park Avenue New York, NY 10024 * $35,054,000 of the 6.05% FES Unsecured Notes Due 2021 * $90,750,000 of the 6.80% FES Unsecured Notes Due 2039 * $34,500,000 of the 3.75% Unsecured Notes Due 2023 * $18,095,000 of the 3.1% FG Unsecured Notes Due 2023 * $5,000,000 of the 3.0% FG Unsecured Notes Due 2019 * $1,000,000 of the 3.75% FG Unsecured Notes Due 2040 * $4,750,000 of the 5.7% FG Unsecured Notes Due 2020 * $10,800,000 of the 2.7% NG Unsecured Notes Due 2035 * $4,000,000 of the 4.0% NG Unsecured Notes Due June 2033 * $25,555,000 of the 4.0% NG Unsec. Notes Due December 2033 * $30,000,000 of the 3.5% NG Unsecured Notes Due 2035 * $58,555,000 of the 3.75% NG Unsecured Notes Due 2033 * $2,190,000 of the 4.0% NG Unsecured Notes Due 2034 * $93,728,000 of the 6.85% Mansfield Notes Due 2034 4. BlackRock Financial Management Inc. – Municipal Group, on behalf of funds and accounts under management 345 Park Ave New York, NY 10154 * $3,915,000 of the 3.75% FG Unsecured Notes Due 2040 * $1,500,000 of the 3.95% NG Unsecured Notes Due 2032 * $2,735,000 of the 3.5% NG Unsecured Notes Due 2035 * $9,765,000 of the 4.0% NG Unsecured Notes Due 2035 5. Capital Research and Management Company 333 South Hope Street 55th Floor Los Angeles, CA 90071 * $20,265,000 of the 5.625% FG Secured Notes Due 2018 6. FIAM, LLC, solely in its capacity as Investment Advisor, Sub-Advisor, Attorney-in-Fact or as otherwise authorized 900 Salem Street Smithfield, RI 02917 * $6,416,000 of the 6.05% FES Unsecured Notes Due 2021 7. Fidelity Institutional Asset Management Trust Company, solely in its capacity as Trustee, Investment Advisor, Sub- Advisor, Attorney-in-Fact or as otherwise authorized 900 Salem Street Smithfield, RI 02917 * $7,151,000 of the 6.05% FES Unsecured Notes Due 2021 8. Fidelity Investments Money Management, Inc., solely in its capacity as Investment Advisor, Sub-Advisor or as otherwise authorized 1 Spartan Way, TS2T Merrimack, NH 03054 * $120,562,000 of the 6.05% FES Unsecured Notes Due 2021 9. Nuveen Asset Management, LLC, as investment advisor on behalf of certain funds it manages 333 W Wacker Dr. Chicago, IL 60606 * $55,230,000 of the 5.625% FG Secured Notes Due in 2018 * $26,960,000 of the 4.25% FG Secured Notes Due 2047 * $60,465,000 of the 4.25% FG Secured Notes Due 2029 * $149,850,000 of the 3.75% FG Unsecured Notes Due 2023 * $15,405,000 of the 2.55% FG Unsecured Notes Due 2041 * $6,920,000 of the 3.10% FG Unsecured Notes Due 2023 * $15,765,000 of the 3.0% FG Unsecured Notes Due 2019 * $52,495,000 of the 3.50% FG Unsecured Notes Due 2041 * $38,085,000 of the 3.75% FG Unsecured Notes Due 2040 * $83,860,000 of the 5.7% FG Unsecured Notes Due 2020 * $166,465,000 of the 4.375% NG Secured Notes Due 2033 * $43,910,000 of the 4.375% NG Secured Notes Due 2035 * $46,650,000 of the 2.7% NG Unsecured Notes Due 2035 * $7,585,000 of the 3.125% NG Unsecured Notes Due 2033 * $7,125,000 of the 3.125% NG Unsecured Notes Due 2034 * $21,150,000 of the 4.0% NG Unsecured Notes Due June 2033 * $65,220,000 of the 4.0% NG Unsec. Notes Due December 2033 * $24,425,000 of the 3.625% NG Unsecured Notes Due 2033 * $52,490,000 of the 3.95% NG Unsecured Notes Due 2032 * $18,120,000 of the 3.75% Unsecured Notes Due 2033 * $15,000,000 of the 3.625% Unsecured Notes Due 2033 * $105,275,000 of the 3.50% NG Unsecured Notes Due 2035 * $21,955,000 of the 3.75% NG Unsecured Notes Due 2033 * $56,100,000 of the 4.0% NG Unsecured Notes Due 2034 * $49,355,000 of the 4.0% Unsecured Notes Due 2035 10. USAA Asset Management 9800 Fredericksburg Rd San Antonio, TX 78288 * $20,000,000 of the 3.75% FG Unsecured Notes Due 2023 * $8,750,000 of the 2.55% FG Unsecured Notes Due 2041 * $15,000,000 of the 5.7% FG Unsecured Notes Due 2020 * $3,100,000 of the 2.7% NG Unsecured Notes Due 2035 * $10,000,000 of the 4.0% NG Unsecured Notes Due June 2033 * $30,000,000 of the 4.0% NG Unsec. Notes Due December 2033 * $21,674,000 of the 6.85% Mansfield Notes Due 2034 Ad Hoc Noteholder Group's attorneys: Joseph F. Hutchinson, Jr., Esq. Eric R. Goodman, Esq. BAKER & HOSTETLER LLP Key Tower 127 Public Square, Suite 2000 Cleveland, OH 44114-1214 Telephone: 216.621.0200 Facsimile: 216.696.0740 E-mail: jhutchinson@bakerlaw.com egoodman@bakerlaw.com Joshua K. Brody - and - P. Bradley O'Neill, Esq. Joseph A. Shifer, Esq. KRAMER LEVIN NAFTALIS & FRANKEL LLP 1177 Avenue of the Americas New York, New York 10036 Telephone: 212.715.9100 E-mail: jbrody@kramerlevin.com boneill@kramerlevin.com jshifer@kramerlevin.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. The Official Committee of Unsecured Creditors formed in the case tapped Milbank, Tweed, Hadley & McCloy LLP as counsel; Hahn Loeser & Parks LLP as co-counsel; FTI Consulting, Inc., as financial advisor; and PJT Partners LP as the committee's investment banker. FRANCHISE SERVICES: 5th Cir. Affirms Dismissing Bankruptcy Petition ------------------------------------------------------------------- In the appeals case captioned FRANCHISE SERVICES OF NORTH AMERICA, INCORPORATED, Appellant, v. UNITED STATES TRUSTEE; MACQUARIE CAPITAL (USA), INCORPORATED; MICHAEL JOHN SILVERTON; DANIEL RAYMOND BOLAND; BOKETO, L.L.C., Appellees, No. 18-60093 (5th Cir.), the United States Court of Appeals, Fifth Circuit, affirmed the bankruptcy court's ruling dismissing debtor Franchise Services of North America's chapter 11 bankruptcy petition. In this case, shareholder Boketo, LLC, made a $15 million investment in exchange for 100% of the debtor's preferred stock. At the same time, the debtor reincorporated in Delaware and amended its certificate of incorporation. As a prerequisite to filing a voluntary bankruptcy petition, the amended certificate requires the consent of a majority of each class of the debtor's common and preferred shareholders. Following the ill-fated acquisition of a new subsidiary, the debtor filed for bankruptcy. Fearing that its shareholders might nix the filing, it never put the matter to a vote. The sole preferred shareholder filed a motion to dismiss the bankruptcy petition as unauthorized. But the debtor argued that the shareholder had no right to prevent the filing. The debtor explained that Macquarie Capital (U.S.A.), Inc., the shareholder's parent company, was an unsecured creditor by virtue of a $3 million bill the debtor refused to pay. The bankruptcy court disagreed and dismissed the petition. On appeal, the debtor asks the 5th Circuit to reverse and to allow it to proceed with the bankruptcy. The 5th Circuit declines to do so, holding that federal law does not prevent a bona fide shareholder from exercising its right to vote against a bankruptcy petition just because it is also an unsecured creditor. Under these circumstances, the issue of corporate authority to file a bankruptcy petition is left to state law. The debtor is a Delaware corporation, governed by that state's General Corporation Law. Finding nothing there that would nullify the shareholder's right to vote against the bankruptcy petition, the 5th Circuit affirms. A full-text copy of the 5th Circuit's Decision dated May 22, 2018 is available at https://bit.ly/2M9vxwH from Leagle.com. Brooks Eason -- beason@bakerdonelson.com -- for Appellee. John C. Henegan -- john.henegan@butlersnow.com -- for Appellant. Luther T. Munford -- luther.munford@butlersnow.com -- for Appellant. Stephen W. Rosenblatt -- Stephen.rosenblatt@butlersnow.com -- for Appellant. Ronald H. McAlpin, for Appellee. Alan Lee Smith -- asmith@bakerdonelson.com -- for Appellee. Christopher Raymond Maddux, for Appellant. Erin Marie Schmidt, for Appellee. Kevin H. Marino, for Appellee. Adam Michael Langley, for Appellant. About Franchise Services Franchise Services of North America Inc. -- http://www.fsna-inc.com/-- is a publicly traded company listed on the TSX Venture Exchange. The Company and its subsidiaries own these brands: U-Save Car & Truck Rental, U-Save Car Sales, Auto Rental Resource Center, Xpress Rent A Car, Sonoran National Insurance Group and Peakstone Financial Services. U-Save, together with its subsidiary ARRC, has over 650 locations throughout the United States and is one of North America's largest franchise car rental companies. U-Save currently services 21 airport markets in 9 different states and 12 countries. Although primarily based in the United States, U-Save has 16 international locations in Mexico, Greece, Central America and the Caribbean. With more than 150 years of combined insurance experience, Sonoran National Insurance Group is licensed in all 50 states and serves customers in every part of the country. Sonoran provides an entire range of business and personal insurance solutions customized to the needs of its clients. Franchise Services of North America Inc., based in Ridgeland, Miss., filed a Chapter 11 petition (Bankr. S.D. Miss. Case No. 17-02316) on June 26, 2017. In the petition signed by CEO Thomas P. McDonnell, III, the Debtor estimated $10 million to $50 million in assets and $1 million to $10 million in liabilities. The Hon. Edward Ellington presides over the case. Stephen W. Rosenblatt, Esq., at Butler Snow LLP, serves as bankruptcy counsel to the Debtor. Equity Partners HG LLC, serves as restructuring advisor to the Debtor. FREEDOM MORTGAGE: Moody's Affirms B1 CFR & Alters Outlook to Neg. ----------------------------------------------------------------- Moody's Investors Service has affirmed Freedom Mortgage Corporation's ratings and revised the outlook to negative from positive as follows: Freedom Mortgage Corporation - Corporate Family Rating affirmed at B1; outlook changed to negative from positive - Senior Secured Bank Credit Facility affirmed at B1; outlook changed to negative from positive - Senior Unsecured debt affirmed at B2; outlook changed to negative from positive - Outlook changed to negative from positive RATINGS RATIONALE The rating action follows the June 1, 2018 Ginnie Mae announcement that it has restricted Freedom from contributing VA single-family loans to Ginnie Mae I and Ginnie Mae II multi-issuer securities, only allowing the company to sell VA loans into Ginnie Mae II custom pools. Freedom remains an approved Ginnie Mae issuer to pool FHA and RHS single-family insured mortgages in all eligible Ginnie Mae pool types. VA loans comprise approximately 25% of Freedom's aggregate originations. Ginnie Mae's restriction concludes January 1, 2019 providing Freedom has demonstrated to Ginnie Mae's satisfaction that its prepayment speeds are "substantially more in-line with those of equivalent multi-issuer cohorts and such improved performance is sustainable". The change in outlook reflects the expected negative impact on the company's profitability and franchise. While the company will be able to sell VA loans into Ginnie Mae II custom pools, custom pool profitability is typically between 0.50% to 1% less than Ginnie Mae I and Ginnie Mae II multi-issuer pool execution. Assuming the company continues to originate VA loans at roughly the same pace, a 1% reduction on $7.5 billion of VA originations or six months of estimated VA origination volume, would result in a decrease in pre-tax profitability of $75 million; 2017 pre-tax income was slightly more than $200 million. The company's capital base, tangible common equity (TCE) to tangible managed assets (TMA) of 18.8% as of March 31, 2018, is sufficient to withstand a moderate level of financial stress should the decline in profitability be materially more than $75 million, which Moody's does not expect. Ginnie Mae had formally notified the company in January of the need to bring its prepayment speeds in line with market peers. Ginnie Mae is concerned about preserving liquidity of its securities to keep mortgage rates affordable for home buyers. Freedom believed that it had taken sufficient action to address Ginnie Mae's concerns. The outlook may return to stable once the company is able to demonstrate that the restriction has only a modest negative impact on its profitability, franchise, and liquidity. The removal of the Ginnie Mae issuance restrictions accompanied by sustained profitability with net income to assets above 2.5%, net income to assets was 3.26% in 2017, along with minimal changes in the terms of its repurchase, warehouse facilities could result in the outlook returning to stable. Given the negative credit impact of the announcement, it is unlikely that positive ratings pressure will occur over the next 12 to 18 months. Positive ratings pressure could occur if the company is able to maintain its strong profitability and solid capital levels. Additionally, a reduction in the company's reliance on secured corporate debt to less than 35% of total corporate debt would be viewed favorably. The ratings could be downgraded if the company's tangible common equity to tangible managed assets falls below 15%, profitability deteriorates with net income to assets expected to remain below 2.0% for more than a quarter or two, the company's liquidity position weakens, or the company continues to be restricted with respect to Ginnie Mae issuance beyond 1 January 2019. Further material negative regulatory actions or disclosure of a material operating weakness would also be viewed unfavorably. FREEMAN GRADING: Key Auction of Vehicles/Eqpt to Include Excavator ------------------------------------------------------------------ Freeman Grading & Excavating, LLC, filed with the U.S. Bankruptcy Court for the Southern District of Indiana its supplemental bid to sell 2004 John Deere Model 330LC Excavator, Serial Number FF330CX082882, with its vehicles and equipment at auction on June 12, 2018, at 2916 Bluff Road, Indianapolis, Indiana. On May 11, 2018, the Debtor filed its Sale Motion whereby it asked authority to sell Vehicles and Equipment at public auction. On the sale date, it also filed Application to hire Key Auctions, LLC to assist it in marketing for sale and conducting an auction of the Vehicles and Equipment on June 12, 2018 at 2916 Bluff Road, Indianapolis, Indiana. A hearing was set for May 29, 2018, at 11:00 a.m. on the Sale Motion and the Application. Subsequent to filing the Sale Motion and the Application, the Debtor determined its Excavator is subject only to the valid perfect first lien interest of MainSource. Although the purchase of the Excavator was financed by Capital Funding, Capital Funding failed to perfect its security interest in the Excavator. By its Supplemental Sale Motion, the Debtor asks authority to sell the Excavator in the Auction with the Vehicles and Equipment. The Debtor intends to sell the Excavator free and clear of any liens and claims of any and every kind or nature whatsoever. The sale of the Excavator will be subject to the same marketing bid procedures, and sale costs outlined in the Sale Motion. In addition to the sale costs described in the Sale Motion, the Debtor may incur costs to transport the Excavator from its current location to the Auction site. The Debtor and MainSource are exploring with the Auctioneer the possibility of auctioning the Excavator without moving it to the Auction site. The final determination of whether to incur the costs to transport the Excavator to the auction site or to auction it from its current location will be left to MainSource's sole discretion. As more particularly described in the First Interim Order, prior to the Petition Date the Debtor granted MainSource a security interest in substantially all of its tangible and intangible personal property including the Vehicles and Equipment. MainSource perfected its prepetition security interest in the Equipment by filing a UCC Financing Statement dated Aug. 4, 2016, with the Indiana Secretary of State as document no. 201600006072357. In the First Interim Order the Debtor stipulated that MainSource's valid perfected security interest in the Collateral extends to the proceeds from all such collateral and personal property which the Debtor acquires postpetition. As adequate protection for the Debtor's use of Cash Collateral, MainSource was granted a valid, binding, enforceable, and perfected security interest and lien against Cash Collateral to the same extent, validity, and priority as MainSource's prepetition liens. Pursuant to the Third Interim Order, MainSource was granted a perfected postpetition lien on the Vehicles as additional adequate protection for the Debtor's continued use of Cash Collateral. The Third Interim Order also provides that MainSource has an allowed superpriority administrative expense to the extent that the Replacement Liens and Postpetition Liens do not adequately protect MainSource against the diminution in value of the Cash Collateral. As of Dec. 28, 2017, MainSource was owed approximately $900,834, plus accrued interest on the Debtor's prepetition obligations secured by the Vehicles and Equipment. Between the Petition Date and the Third Interim Order there was a depletion of Cash Collateral in the total sum of $109,515. The Debtor anticipates the auction netting less than $200,000. Capital Funding asserts an interest in the Excavator by virtue of a certain Vehicle Lease the Debtor entered into on July 25, 2016. Pursuant to the Agreement's terms, the Debtor was required to make 36 monthly payments of $1,316 with an option to purchase at the end of the term for $101. In order to perfect its security agreement in the Excavator, Capital Funding was required to file a UCC financing statement. It did not file a UCC financing statement. Accordingly, Capital Funding does not hold a perfected security interest in the Excavator. Because MainSource has a perfected blanket security interest in all of the Debtor's assets, including personal property, MainSource has a first position secured lien on the Excavator. In accordance with the Third Interim Order, the net proceeds from the sale of the Excavator should be paid to MainSource. The Debtor believes the sale of the Excavator is in the best interest of the estate and creditors. Accordingly, it asks the Court to approve the sale of the Vehicles and Equipment including the Excavator at public auction, with valid liens to attach to the proceeds of the sale; authorize and direct the Auctioneer to remit to MainSource the net proceeds of the Auction, less the $5,000 fee to be paid to the Debtor's counsel; and waive the 14-day stay imposed by Rule 6004(h) of the Federal Rules of Bankruptcy Procedure if no objections are filed or pending at the time of the hearing on the Motion. About Freeman Grading Freeman Grading & Excavating, LLC, is an excavating contractor based in Trafalgar, Indiana. The company is a small business debtor as defined in 11 U.S.C. Section 101(51D). Freeman Grading & Excavating filed a Chapter 11 petition (Bankr. S.D. Ind. Case No. 18-00037) on Jan. 3, 2018. In the petition signed by Michael D. Freeman, member and 100% owner, the Debtor estimated $500,000 to $1 million in assets and $1 million to $10 million in liabilities. The case is assigned to Judge Jeffrey J. Graham. John Joseph Allman, Esq. and David R. Krebs, Esq., at Hester Baker Krebs LLC, serve as the Debtor's counsel. GARCES RESTAURANT: Committee Taps Fox Rothschild as Legal Counsel ----------------------------------------------------------------- The official committee of unsecured creditors of Garces Restaurant Group, Inc., received approval from the U.S. Bankruptcy Court for the District of New Jersey to hire Fox Rothschild LLP as its legal counsel. The firm will advise the committee regarding its duties under the Bankruptcy Code; investigate the business operations and financial condition of Garces Restaurant and its affiliates; assist in the preparation of a bankruptcy plan; and provide other legal services related to the Debtors' Chapter 11 case. The firm's hourly rates range from $205 to $895 for lawyers and from $135 to $385 for paralegals. Fox Rothschild has agreed to cap the hourly rate for attorneys at $585 per hour. The principal attorneys and paralegals designated to represent the committee and their standard hourly rates are: Michael Viscount, Jr. Partner $675 Paul Labov Partner $655 Martha Chovanes Counsel $625 Robin Solomon Paralegal $375 Kathleen Senese Paralegal $255 Paul Labov, Esq., at Fox Rothschild, disclosed in a court filing that he and his firm are "disinterested" as defined in section 101(14) of the Bankruptcy Code. Fox Rothschild can be reached through: Michael J. Viscount, Jr., Esq. Paul J. Labov, Esq. Martha B. Chovanes, Esq. Fox Rothschild LLP 1301 Atlantic Avenue, Suite 400 Atlantic City, NJ 08401 Phone: (609) 348-4515 Fax: (609) 348-6834 E-mail: mviscount@foxrothschild.com E-mail: plabov@foxrothschild.com E-mail: mchovanes@foxrothschild.com About Garces Restaurant Group Garces Restaurant Group, Inc., which conducts business under the name Garces Group, is a Philadelphia-based hospitality group operating more than a dozen restaurants from Philadelphia to New York City, including Amada, Distrito, Tinto, Village Whiskey, Garces Trading Company, JG Domestic, Volver, The Olde Bar, Buena Onda, Ortzi, a Spanish Basque-inspired restaurant, at the new LUMA Hotel Times Square and three restaurants, Okatshe, Olon and Bar Olon at Tropicana Atlantic City. Garces Events is a full-service catering and event division with exclusive venues such as Kimmel Center for the Performing Arts, Cira Centre and CHUBB Hotel & Conference Center, among others. The group also offers additional services through the Garces Foundation, a philanthropic organization dedicated to Philadelphia's underserved immigrant community; and Luna Farm, Chef Garces' 40-acre farm in Bucks County, Pennsylvania. Garces Restaurant Group and its affiliates sought protection under Chapter 11 of the Bankruptcy Code (Bankr. D. New Jersey Lead Case No. 18-19054) on May 2, 2018. In the petitions signed by John Fioretti, interim chief executive officer, Garces Restaurant disclosed that it had estimated assets of $100,000 to $500,000 and liabilities of $1 million to $10 million. Judge Jerrold N. Poslusny Jr. presides over the cases. The Debtors tapped Porzio, Bromberg & Newman, P.C. as their legal counsel; Eisneramper LLP as financial advisor; and Cohnreznick Capital Market Securities, LLC as investment banker and placement agent. GARCES RESTAURANT: Taps EisnerAmper as Financial Advisor -------------------------------------------------------- Garces Restaurant Group, Inc., received approval from the U.S. Bankruptcy Court for the District of New Jersey to hire EisnerAmper LLP as its financial advisor and accountant. The firm will assist the company and its affiliates with their liquidity, financial, operational and strategic planning; negotiate with their stakeholders; assist them in any sale process they undertake; and provide other services related to their Chapter 11 cases. The firm's hourly rates range from $480 to $620 for partners, principals, managing directors and directors; $330 to $410 for managers and senior managers; and $125 to $290 for paraprofessionals and staff. EisnerAmper received retainers totaling $75,000. Edward Phillips, a certified public accountant and partner at EisnerAmper, disclosed in a court filing that he and his firm are "disinterested" as defined in section 101(14) of the Bankruptcy Code. The firm can be reached through: Edward A. Phillips EisnerAmper LLP One Logan Square 130 North 18th Street, Suite 3000 Philadelphia, PA 19103 Phone: 215.881.8168 About Garces Restaurant Group Garces Restaurant Group, Inc., which conducts business under the name Garces Group, is a Philadelphia-based hospitality group operating more than a dozen restaurants from Philadelphia to New York City, including Amada, Distrito, Tinto, Village Whiskey, Garces Trading Company, JG Domestic, Volver, The Olde Bar, Buena Onda, Ortzi, a Spanish Basque-inspired restaurant, at the new LUMA Hotel Times Square and three restaurants, Okatshe, Olon and Bar Olon at Tropicana Atlantic City. Garces Events is a full-service catering and event division with exclusive venues such as Kimmel Center for the Performing Arts, Cira Centre and CHUBB Hotel & Conference Center, among others. The group also offers additional services through the Garces Foundation, a philanthropic organization dedicated to Philadelphia's underserved immigrant community; and Luna Farm, Chef Garces' 40-acre farm in Bucks County, Pennsylvania. Garces Restaurant Group and its affiliates sought protection under Chapter 11 of the Bankruptcy Code (Bankr. D. New Jersey Lead Case No. 18-19054) on May 2, 2018. In the petitions signed by John Fioretti, interim chief executive officer, Garces Restaurant disclosed that it had estimated assets of $100,000 to $500,000 and liabilities of $1 million to $10 million. Judge Jerrold N. Poslusny Jr. presides over the cases. The Debtors tapped Porzio, Bromberg & Newman, P.C. as their legal counsel; Eisneramper LLP as financial advisor; and Cohnreznick Capital Market Securities, LLC as investment banker and placement agent. GARCES RESTAURANT: Taps Porzio Bromberg as Legal Counsel -------------------------------------------------------- Garces Restaurant Group, Inc., seeks approval from the U.S. Bankruptcy Court for the District of New Jersey to hire Porzio, Bromberg & Newman, P.C. as its legal counsel. The firm will advise the company and its affiliates regarding their duties under the Bankruptcy Code; assist them in the negotiation of post-petition financing, debt restructuring and related transactions; prepare a plan of reorganization; and provide other legal services related to their Chapter 11 cases. The firm's hourly rates range from $340 to $815 for attorneys and from $180 to $240 for paraprofessionals. Warren Martin Jr., Esq., a principal of Porzio Bromberg, disclosed in a court filing that he and his firm are "disinterested" as defined in section 101(14) of the Bankruptcy Code. Porzio Bromberg can be reached through: Warren J. Martin Jr., Esq. Kelly D. Curtin, Esq. Rachel A. Parisi, Esq. Porzio, Bromberg & Newman, P.C. 100 Southgate Parkway P.O. Box 1997 Morristown, NJ 07962 Phone: (973) 538-4006 Facsimile: (973) 538-5146 Email: wjmartin@pbnlaw.com Email: kdcurtin@pbnlaw.com Email: raparisi@pbnlaw.com About Garces Restaurant Group Garces Restaurant Group, Inc., which conducts business under the name Garces Group, is a Philadelphia-based hospitality group operating more than a dozen restaurants from Philadelphia to New York City, including Amada, Distrito, Tinto, Village Whiskey, Garces Trading Company, JG Domestic, Volver, The Olde Bar, Buena Onda, Ortzi, a Spanish Basque-inspired restaurant, at the new LUMA Hotel Times Square and three restaurants, Okatshe, Olon and Bar Olon at Tropicana Atlantic City. Garces Events is a full-service catering and event division with exclusive venues such as Kimmel Center for the Performing Arts, Cira Centre and CHUBB Hotel & Conference Center, among others. The group also offers additional services through the Garces Foundation, a philanthropic organization dedicated to Philadelphia's underserved immigrant community; and Luna Farm, Chef Garces' 40-acre farm in Bucks County, Pennsylvania. Garces Restaurant Group and its affiliates sought protection under Chapter 11 of the Bankruptcy Code (Bankr. D.N.J. Lead Case No. 18-19054) on May 2, 2018. In the petitions signed by John Fioretti, interim chief executive officer, Garces Restaurant disclosed that it had estimated assets of $100,000 to $500,000 and liabilities of $1 million to $10 million. Judge Jerrold N. Poslusny Jr. presides over the cases. The Debtors tapped Porzio, Bromberg & Newman, P.C. as their legal counsel; Eisneramper LLP as financial advisor; and Cohnreznick Capital Market Securities, LLC as investment banker and placement agent. GLOBAL LEADERSHIP: S&P Alters 2010 School Bonds Outlook to Negative ------------------------------------------------------------------- S&P Global Ratings revised its outlook to negative from stable and affirmed its 'BB' rating on Philadelphia Authority for Industrial Development, Pa.'s series 2010 revenue bonds, issued for the Global Leadership Academy Charter School (GLA). "The negative outlook reflects our view that the school's operating deficits, very weak coverage, and continued decline in liquidity will likely continue to pressure the school's financial profile over the one year-outlook period," said S&P Global Ratings credit analyst James Gallardo. S&P said, "We assessed Global Leadership Academy's financial profile as vulnerable, with negative operating margins, very weak maximum annual debt service (MADS) coverage, a significant decline in its liquidity position, and a moderately high debt burden. We assessed Global Leadership Academy's enterprise profile as adequate, characterized by stable demand with an excellent waiting list, solid academics, and a good charter standing with the authorizer. Combined, we believe these credit factors lead to an indicative stand-alone credit profile of 'bb' and a final long-term rating of 'BB'. "We understand from management that GLA used liquidity to meet debt service in fiscal 2017. In our opinion, senior management will be able to improve the school's very weak debt service coverage and implement a strategy to meet the covenant without the use of liquidity in the future. However, if management is unable to stabilize operations or violates any of the school's covenants, the rating could be pressured. In addition, we would view negatively a significant decline in enrollment that would further pressure financial operations. "We do not expect to take a positive rating action during the outlook period. However, we could consider a positive rating outside of the outlook period if the school demonstrates a track record of positive operations on a full-accrual basis, significantly improves its MADS coverage, and grows its cash position to a level commensurate with a higher rating." GRAND VIEW FINANCIAL: Court Narrows Claims in Suit vs JP Morgan --------------------------------------------------------------- Bankruptcy Judge Robert N. Kwan granted in part and denied in part defendant JPMorgan Chase Bank, N.A.'s motion to dismiss Grand View Financial, LLC's adversary complaint captioned GRAND VIEW FINANCIAL, LLC, Plaintiff, v. JPMORGAN CHASE BANK, N.A. and QUALITY LOAN SERVICE CORPORATION, Defendants, Adv. Case No. 2:17-ap-01570-RK (Bankr. C.D. Cal.). Prior to the hearing, the Court issued a tentative ruling granting in part and denying in part Chase's motion. Based on the pleadings and papers on file with the Court, the arguments of counsel, the Court adopts the tentative ruling as final. The tentative ruling provided that the Court granted the motion to dismiss the 6th claim for relief for disallowance of claims because the claim is premature since the bank has not filed any proof of claim and dismiss without prejudice. The Court also granted the motion to dismiss the 1st and 2nd causes of action for failure to state a claim upon which relief can be granted because the claims do not allege sufficient facts to allege plausible claims. Like in In re Mullin, 2014 WL 5840364 (9th Cir. BAP 2014), plaintiff seeks declaratory relief that property was wrongfully foreclosed upon without sufficiently alleging claims of wrongful foreclosure which are state law claims. The first amended complaint alleges three theories of wrongful foreclosure: (1) mortgage insurance has paid off the underlying loan; (2) the foreclosure was not authorized by the securitization trust holding the beneficial interest in the note; (3) the assignment of the deed of trust to defendants was not signed by the original lender. There are no specific facts alleged to support any of these theories, only speculation on behalf of plaintiff under the guise of information and belief. However, the court will grant leave to amend within 30 days of entry of the order granting the motion to assert plausible wrongful foreclosure claims. As to defendants' argument that the court lacks subject matter jurisdiction over these noncore state law claims, the court has "related to" jurisdiction over these claims which if the state law wrongful foreclosure claims are successful would result in recovery of estate property. However, the court as a non-Article III tribunal may not have constitutional authority to enter a final judgment on the noncore state law claims against defendants under Stern v. Marshall, 564 U.S. 462 (2011). Absent consent to bankruptcy court jurisdiction, this court may try the case and issue proposed findings of fact and conclusions of law on plaintiff's noncore claims to be reviewed de novo by the district court with Article III authority, except if any of the claims are to be tried before a jury, the claims would have to be tried in the district court. As to defendants' request for mandatory or permissive abstention, the court cannot abstain from hearing the claims here without a parallel state court proceeding, either under mandatory or permissive abstention. Security Farms v. International Brotherhood of Teamsters, 124 F.3d 999, 1009-1010 (9th Cir. 1997). There are no parallel proceedings in state court at this time. A full-text copy of the Court's Order date May 7, 2018 is available at https://bit.ly/2LwS0D0 from Leagle.com. GRAND VIEW FINANCIAL, LLC, Plaintiff, represented by Todd M. Arnold -- tma@lnbyb.com -- Levene, Neale, Bender, Yoo & Brill L.L.P. JPMORGAN CHASE BANK, N.A., Defendant, represented by Matthew S. Henderson, Parker Ibrahim & Berg LLC. QUALITY LOAN SERVICE CORPORATION, Defendant, represented by Merdaud Jafarnia, McCarthy & Holthus LLP. About Grand View Financial Grand View Financial LLC is a Wyoming limited liability company, which is in the business of acquiring distressed real property. Grand View Financial was formed in 2015. The Debtor sought protection under Chapter 11 of the Bankruptcy Code (Bankr. C.D. Cal. Case No. 17-20125) on Aug. 17, 2017. In the petition signed by Steve Rogers, its managing member, the Debtor disclosed $29.88 million in assets and $39.71 million in liabilities. Judge Julia W. Brand presides over the case. Levene, Neale, Bender, Yoo & Brill LLP serves as the Debtor's legal counsel. GREEN VALLEY HOSPITAL: SQN to Conduct Foreclosure Sale on June 12 ----------------------------------------------------------------- SQN Asset Finance (Guernsey) Limited will conduct a foreclosure sale via public auction with reserve at One South Church Avenue, Suite 2000, Tucson, AZ 85701 on or after June 12, 2018 at 11:15 a.m. of the property of Green Valley Hospital, LLC, including 100% of the limited liability company membership interests in GV II Holdings, LLC. The Sale is for the purpose of satisfying the unpaid balance of (i) the Amended & Restated Promissory Note dated June 12, 2015 for the ME Loan in the principal amount of $11,779,086.84, and (ii) Amended & Restated Promissory Note dated June 12, 2015 for the FF&E Loan in the principal amount of $915,871.60, both made by Green Valley Hospital, LLC. SQN is the owner and holder of the indebtedness. In a Forbearance Agreement dated September 29, 2016, GVH acknowledged that as of Sept. 26, 2016, (i) the outstanding principal of the ME Loan under the Loan Agreement was $11,779,086.84, plus accrued interest and other charges of $299,868.64; and (ii) the outstanding principal balance of the FF&E Loan under the Loan Agreement was $915,871.60, plus accrued interest and other charges of $24,012.47, excluding additional outstanding and accruing interest, fees, expenses, and other amounts chargeable to the borrowers. SQN is represented by: Robert M. Charles, Jr., Esq. LEWIS ROCA ROTHGERBER CHRISTIE LLP One S. Church Avenue, Suite 2000 Tucson, AZ 85701-1611 Telephone: (520) 629-4427 E-mail: RCharles@LRRC.com GUY AMERICA: Secured Creditor Asks Court to Approve Plan Outline ---------------------------------------------------------------- MLF3 Pitkin LLC, as a secured creditor and mortgagee of Guy America Development Enterprises, Corp., will move the U.S. Bankruptcy Court for the Eastern District of New York on June 8, 2018 at 10:30 a.m., to approve the disclosure statement explaining the amended Chapter 11 plan of reorganization it proposed for the Debtor. Under the Secured Creditor's Plan, each holder of an Allowed Class 5 General Unsecured Claim will receive a pro rata distribution of Available Cash after all payments to Class 1 Claims, the Class 2 Claim, the Class 3 Claims, the Class 4 Claims, Statutory Fees and Administrative Claims, with simple interest at the Federal Judgment Rate per annum from the Petition Date, with principal being paid in full prior to any payments being made on account of such interest. The Secured Creditor will appoint a broker who will conduct the Auction of the Debtor's Properties, and, thereafter, will consummate the sale of the Properties to the Successful Bidder consistent with the Bid Procedures and the Sale Approval Order. Proceeds from the sale will be used to fund Plan payments. A redlined version of the Amended Disclosure Statement is available at: http://bankrupt.com/misc/nyeb17-43984-83-1.pdf A redlined version of the Amended Chapter 11 Plan is available at: http://bankrupt.com/misc/nyeb17-43984-82-1.pdf Attorneys for MLF3 Pitkin LLC: Jerold C. Feuerstein, Esq. Jason S. Leibowitz, Esq. Daniel N. Zinman, Esq. KRISS & FEUERSTEIN LLP 360 Lexington Avenue, Suite 1200 New York, NY 10017 Tel: (212) 661-2900 About Guy America Development Based in Brooklyn, New York, Guy America Development Enterprises Corp. filed for Chapter 11 bankruptcy protection (Bankr. E.D.N.Y. Case No. 17-43984) on July 31, 2017, with estimated assets at $1 million to $10 million and estimated liabilities at $1 million to $10 million. The petition was signed by Vishnu Bandhu, president. The Debtor is represented by Nnenna Okike Onua, Esq. of McKinley Onua & Associates, PPLC. HARTFORD LIFE: Moody's Confirms Ba3 Sr. Unsecured Debt Rating ------------------------------------------------------------- Moody's Investors Service has confirmed the Baa3 insurance financial strength (IFS) ratings of Hartford Life Insurance Company (HLIC) and Hartford Life & Annuity Insurance Company (ILA) as well as the Ba3 senior unsecured debt rating of Hartford Life, Inc. (HLI). The ratings for these entities were previously on review for downgrade. These entities, collectively referred to as "Talcott Resolution," have been purchased by an investor group from The Hartford Financial Services Group, Inc. The outlook of the Talcott entities is stable. The transaction, which closed on May 31, 2018, was first announced in December. The acquiring investor group - led by Cornell Capital LLC, Atlas Merchant Capital LLC, TRB Advisors LP, Global Atlantic Financial Group, Pine Brook and J. Safra Group - which includes participants with considerable experience in the insurance sector, will operate the Talcott franchise as an independent company. RATINGS RATIONALE According to Moody's, the confirmation of HLIC and ILA's Baa3 IFS ratings reflects expectations of continuity of management of the entities and continued strong capitalization and financial flexibility. As part of the transaction, certain fixed annuities and structured settlements have been reinsured to Commonwealth Annuity and Life Insurance Co. (IFS A3 stable), a subsidiary of Global Atlantic Financial Life Limited (issuer rating Baa3 stable), which will mitigate some of the interest rate risk on the spread business. Talcott has strong asset quality, prudent risk management, and good recent earnings. However, it has significant exposure to earnings and capital volatility and must manage capital requirements that are sensitive to policyholder behavior, equity market returns, and interest rates. HLI's Ba3 senior debt rating is three notches below the Baa3 IFS ratings of HLIC and ILA and reflects Moody's typical notching for an insurance holding company relative to its insurance operating subsidiaries. RATING DRIVERS Given the companies' runoff status and the volatility of the VA business, an upgrade of HLIC and ILA is unlikely. However, the following factors could place upward pressure on the credit profile of HLIC and ILA: Further minimizing the volatility associated with stress scenarios for the legacy block of variable annuities; and stable runoff of business with consistent capital generation. Factors that could lead to a downgrade include: material increase in volatility of total statutory capital, or unanticipated decline in total statutory capital by 20% over a short period of time; unanticipated regulatory capital volatility and/or RBC ratio levels (company action level) fall below 275%; financial leverage above 15%. The following ratings have been confirmed with stable outlooks: Hartford Life Insurance Company - insurance financial strength at Baa3; short-term insurance financial strength at P-3; Hartford Life & Annuity Insurance Company - insurance financial strength at Baa3; Hartford Life, Inc. - senior unsecured debt at Ba3; Hartford Life Institutional Funding - senior secured debt at Baa3. HOLLYWOOD ONE: Taps Genovese Joblove as New Legal Counsel --------------------------------------------------------- Hollywood One, LLC, received approval from the U.S. Bankruptcy Court for the Southern District of Florida to hire Genovese, Joblove & Battista. P.A. as its new legal counsel. Genovese will replace Hoffman, Larin & Agnetti, P.A., the firm initially tapped by the Debtor to be its legal counsel in connection with its Chapter 11 case. The firm's hourly rates range from $195 to $625 for attorneys and from $75 to $195 for legal assistants. Paul Battista, Esq., and Allison Day, Esq., the attorneys who will be handling the case, will charge $625 per hour and $525 per hour, respectively. Mr. Battista 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: Paul J. Battista, Esq. Allison R. Day, Esq. 100 Southeast Second Street, Suite 4400 Miami, FL 33131 Telephone: (305) 349-2300 Facsimile: (305) 349-2310 Email: pbattista@gjb-law.com Email: aday@gjb-law.com About Hollywood One Hollywood One LLC is the owner of multiple parcels of undeveloped land and two residential condominium units in Harford County, Maryland. Hollywood One filed a Chapter 11 bankruptcy petition (Bankr. S.D. Fla. Case No. 17-13739) on March 28, 2017, estimating less than $1 million in both assets and liabilities. The Debtor tapped Newpoint Advisors Corporation as its accountant; and The Regional Team of Keller Williams American Premier Realty as its real estate broker. HORIZON GLOBAL: Moody's Cuts CFR to B3 & Alters Outlook to Negative ------------------------------------------------------------------- Moody's Investors Service downgraded Horizon Global Corporation's Corporate Family Rating (CFR) to B3 from B2, its Probability of Default Rating to B3-PD from B2-PD and the senior secured first lien term loans' rating to B2 from B1. The outlook is changed to negative from stable. The downgrade reflects that Horizon significantly underperformed Moody's expectations in the last quarter including a substantial deterioration in liquidity. Earlier this year, Moody's anticipated that Horizon will generate approximately $20 million free cash flow in 2018. However, since the company has encountered issues in the Kansas City distribution center as well as in its Europe-Africa segment, Moody's now estimates that free cash flow will be greatly reduced such that it is likely to be negative in 2018. As a result, Moody's expects the company to further dip into the revolver increasing its borrowings to over $50 million (one-year average availability of $89 million). This will be the first time that the company has used over 55% of the revolver availability since its spin-off from TriMas Corporation in July 2015. The change in outlook to negative reflects uncertainty around the timing of the resolution of the issues at the Kansas City distribution facility and the degree of the impact of the issues in Europe. It also reflects Moody's belief that the company's lack of near-dated debt maturities provides it with some time to resolve the recent challenges. Moody's took the following rating actions on Horizon Global Corporation: Ratings downgraded: Corporate Family Rating, downgraded to B3 from B2; Probability of Default Rating, downgraded to B3-PD from B2-PD; Speculative grade liquidity, to SGL-4 from SGL-3 $147.7 million (remaining amount) senior secured first lien term loan due 2021, downgraded to B2 (LGD3) from B1 (LGD3)* $385 million senior secured first lien term loan due 2024, downgraded to B2 (LGD3) from B1 (LGD3) Outlook actions: Outlook, Changed to Negative from Stable * To be withdrawn upon closing of the Brink Group acquisition and its repayment in full RATINGS RATIONALE The B3 CFR reflects Horizon's weak liquidity, exposure to cyclical end markets, modest scale, high leverage relative to peers and focus on growth through acquisitions. These considerations are partially mitigated by the company's good portfolio of brands in addition to diversification across sales channels. Horizon also has good aftermarket presence (approximately 40% of revenue). Moody's now expects that Horizon's leverage will increase as the revolver usage spikes in the second quarter of 2018 and then begins to slightly decline the following quarter as the company slowly works through the resolution of its operational and integration issues in its two main regions. Horizon's liquidity is under pressure given Moody's projected break-even to negative projected free cash flow generation and limited availability under a $99 million ABL revolving credit facility expiring in July 2020 (not rated). Ratings could be downgraded if the company is unable to address its operational issues in the next three to six months, if the company is unable to meet its obligations under the loan agreements or if liquidity deteriorates further. Moody's would also consider a downgrade if the company's debt/EBITDA leverage is sustained above 6.5x and EBITA / Interest is worse than 1.25x. Factors that could support a higher rating include a sustained improvement in operating performance as a result of a resolution of the operational issues and a significant improvement in liquidity. An upgrade would require the company to maintain debt / EBITDA leverage under 5.0x, EBITA / interest above 1.75x, and free cash flow to debt at approximately 7%. The principal methodology used in these ratings was Global Automotive Supplier Industry published in June 2016. Horizon, headquartered in Troy, Michigan, is a manufacturer and distributor of towing, trailer, cargo management and other products primarily for the automotive market. In December 2017, Horizon announced the acquisition of Netherlands-based Brink Group. Pro-forma for the acquisition, revenue for the 12 months ended March 2018 was approximately $1.0 billion. HOVNANIAN ENTERPRISES: Fitch Ups IDR to CCC on Default Resolution ----------------------------------------------------------------- Fitch Ratings has upgraded Hovnanian Enterprises, Inc.'s (NYSE: HOV) Issuer Default Rating (IDR) to 'CCC' from 'C' and also upgraded the ratings on the company's $440 million 10% senior secured notes due 2022 and $400 million 10.5% senior secured notes due 2024 to 'CCC'/'RR4' from 'CC'/'RR3'. These rating actions follows the company's announcement that it has cured the default associated with the non-payment of interest that was due on May 1, 2018 on $26 million of 8% notes due 2019 held by K. Hovnanian at Sunrise Trail III, LLC and the withdrawal of the exchange offer of the 10% and 10.5% notes for new 3% unsecured notes. On April 10, 2018, Fitch downgraded the company's IDR to 'C' and the ratings on the 2022 and 2024 notes to 'CC'/'RR3' following HOV's announcement that it has offered to exchange any and all of these senior secured notes for new 3% senior unsecured notes due 2047. Fitch viewed this offer as a distressed debt exchange (DDE). On May 14, 2018, HOV withdrew the exchange offer as the company did not get the minimum required amount to consummate the exchange. Fitch maintained the company's IDR at 'C' as HOV missed the interest payment due on May 1, 2018 on the $26 million of 8% notes due 2019 held by K. Hovnanian at Sunrise Trail III, LLC, a wholly-owned subsidiary of HOV (affiliate-held notes). Covenants under the indenture governing HOV's 13.5% senior unsecured notes due 2026 and 5% senior unsecured notes due 2040 prohibited the company from making interest payments to these affiliate-held notes. On May 30, 2018, HOV announced that it had amended the indenture governing the 13.5% and 5% senior unsecured notes, eliminating the covenant restricting certain actions with respect to the affiliate-held notes, including the non-payment of interest on these notes. On May 30, 2018, HOV paid the overdue interest on the affiliate-held, and, as a result, the default under the indenture governing the 8% notes has been cured. KEY RATING DRIVERS Recent Refinancing Pushes Out Debt Maturities: In February 2018, HOV exchanged $170.2 million of its $236 million 8% senior unsecured notes due Nov. 1, 2019 for $26.5 million of cash, $90.6 million of newly issued 13.5% senior unsecured notes due 2026 and $90.1 million of 5% senior unsecured notes due 2040. HOV also completed the following financing arrangements with GSO Capital Partners L.P. (GSO): -- A new $125 million senior secured first lien (super senior) revolving credit facility maturing on Dec. 28, 2022. HOV intends to use this facility to refinance its current $75 million first priority secured term loan that matures on Aug. 1, 2019. -- A new senior unsecured term loan in an aggregate principal amount not to exceed $212.5 million (including an $80 million delayed draw term loan) maturing on Feb. 1, 2027. HOV initially drew $132.5 million on Feb. 1, 2018 and used the proceeds to redeem all of its $132.5 million 7% senior unsecured notes maturing on Jan. 15, 2019. HOV drew approximately $70 million on the delayed draw term loan on May 29, 2018 to redeem the remaining $65.7 million of the 8% notes that were not tendered in the exchange offer completed in February 2018. -- $25 million additional financing via tack on to existing 10.5% senior secured notes due 2024 in January 2019 to provide incremental liquidity. The refinancing transactions and debt exchange completed in February 2018 further pushed out HOV's debt maturities. HOV will not have any major debt maturities until November 2020, when $75 million of senior secured notes become due. The next major maturity is in November 2021, when $195 million of senior secured notes mature. HOV plans to use cash on hand to pay off its unsecured revolving credit facility ($52 million outstanding) that matures in June 2018. Litigation Resolved: On Jan. 11, 2018, Solus Alternative Asset Management LP filed a complaint with the U.S. District Court for the Southern District of New York against GSO and HOV relating to the exchange offer and related refinancing transactions announced on Dec. 28, 2017. The complaint alleged, among other things, improper and fraudulent structuring of transactions to impact the credit default swap market. On May 30, 2018, the parties signed a stipulation of dismissal with prejudice that ends the case as to all parties. As part of the case resolution, the only obligation on the Hovnanian-related parties is to have HOV pay the interest due on the affiliate-owned notes, which it did on May 30, 2018. High Debt Load and Leverage: HOV had debt of about $1.67 billion, debt/EBITDA of 11x and debt/capitalization above 100% as of Jan. 31, 2018. Since year-end fiscal 2015, HOV repaid about $375 million of debt that became due from cash flow. The company's capital structure is untenable unless the improvement in housing extends for several more years and HOV meaningfully improves liquidity and favorably refinances, or further extends, its debt maturities. Debt Burden Constrains Growth: The company reduced land and development spending during fiscal 2016 and 2017 to focus on debt reduction. During fiscal 2016, HOV's wholly-owned active communities decreased by 52 communities from 219 at Oct. 31, 2015 to 167 at Oct. 31, 2016 as a result of lower spending, contribution of communities to joint ventures (JVs) and the exit of certain of its markets. The company's active communities continued to decline throughout fiscal 2017, situating at 130 wholly owned communities as of Oct. 31, 2017. HOV's community count grew sequentially to 140 wholly-owned communities at Jan. 31, 2018. Geographic and Product Diversity: HOV has active operations in 32 markets across 14 states. The company ranks among the top 10 builders in a number of its metro markets. HOV has some concentration in Houston, with about 15% of TTM revenues generated from this metro market. About 14% of the company's inventory as of Jan. 31, 2018 is in the Houston market. Management estimates that about 26% of its 2017 product designs were directed to first-time homebuyers, 38% to the move-up segment, 19% to luxury buyers and 17% to the active lifestyle segment. Land Strategy: HOV maintains a 5.4-year supply of lots, 40.9% of which are owned, and the balance controlled through options and JVs. HOV has one of the lowest owned-lot supply (2.4 years) among the homebuilders in Fitch's coverage (behind only NVR, Inc.). This strategy reduces the risk of downside volatility and impairment charges in a contracting housing environment. During fiscal 2017, HOV spent $555 million on land and development activities, down from the $567 million spent in fiscal 2016 and $657 million spent in fiscal 2015. The reduced land and development spending, combined with controlling more of its lots through options, land banking and JV activities, meaningfully enhanced cash flow during fiscal 2016 and 2017. HOV generated $297.6 million of CFFO during fiscal 2017 and $387.7 million of CFFO during fiscal 2016. Fitch expects the company will have modestly negative CFFO in fiscal 2018 as it increases its land and development spending. RECOVERY ANALYSIS The recovery analysis assumes that HOV would be considered a going concern in bankruptcy and that the company would be reorganized rather than liquidated. Fitch has assumed a 10% administrative claim. Going Concern Approach -- HOV's going concern EBITDA of $150 million is based on the Fitch's projected EBITDA for FY2018. This amount is about 16.7% below the company's FY2017 EBITDA of $180 million and incorporates Fitch's projection of lower revenues and EBITDA margins for HOV this year. -- An EV multiple of 6x is used to calculate a post-reorganization valuation. The blended EV/EBITDA multiple for the peer group average for public homebuilders is about 8.5x. HOV's various secured debt is collateralized by a first lien on specific assets (inventory, cash, and investments in JVs). In its recovery analysis, Fitch used the percentage of cash, inventory and PP&E (out of total) securing the specific secured debt issues and applied that percentage to the enterprise value to come up with an implied collateral value for each of the secured debt issues, including about 61% of the enterprise value allocated to the super priority term loan and 10% and 10.5% senior secured notes and 18.8% of the enterprise value allocated to the 9.5% first lien notes due 2020 and 2% and 5% first lien notes due 2021. Fitch also assumed that the unencumbered assets and the excess value from property specifically pledged to certain lenders are distributed to unsecured claims on a pro rata basis, including the senior unsecured noteholders and the deficiency claim portion held by other secured lenders. The waterfall results in a 100% recovery corresponding to an 'RR1' rating for the first lien super priority term loan and a 49% recovery corresponding to an 'RR4' rating for the 10% and 10.5% senior secured notes due 2022 and 2024, respectively. The recovery for the 10% and 10.5% notes is lower than the previous RR3 rating as Fitch had previously assumed that about $125 million of these notes will be exchanged for $187.5 million of new unsecured notes. The waterfall also indicates a 60% recovery corresponding to an 'RR3' rating for the company's 5% and 2% senior secured notes due 2021 and the 9.5% senior secured notes due 2020, an 8% recovery corresponding to an 'RR6' rating for the company's senior unsecured notes, and the company's preferred stock is assigned an 'RR6' based on zero recovery. DERIVATION SUMMARY HOV's rating is influenced by the company's execution of its business model, land policies, and geographic, price point and product line diversity. Risk factors include the cyclical nature of the homebuilding industry, the company's high debt load, high leverage and relatively weak liquidity position. HOV was the tenth largest homebuilder in the U.S. during 2017 (based on home deliveries) and, similar to other public homebuilders in Fitch's coverage, has good geographic and price diversity and top 10 market positions in several of the large metropolitan markets where it operates. HOV's leverage (debt to capitalization above 100%) is meaningfully higher than its peers, including Beazer Homes USA, Inc. (B-/Positive). The company's high leverage and difficulty in refinancing debt maturities has limited HOV's ability to invest in new land holdings (and instead lowered inventory levels to generate cash and pay down debt), resulting in lower community count and declining home deliveries and new orders. The company expects community count growth in the early part of 2019. Fitch expects the company's high debt load and leverage will continue to constrain growth. KEY ASSUMPTIONS Fitch's Key Assumptions Within Its Rating Case for the Issuer -- Total housing starts increase 5% in 2018 (single-family starts grow 7.5%), while new and existing home sales advance 8% and 1.5%, respectively; -- HOV's revenues decline 13%-15% during FY2018; -- EBITDA margins decline slightly during FY2018; -- The company maintains liquidity of about $250 million by the end of FY2018; -- HOV generates negative CFFO as it increases land and development spending in FY2018 compared with FY2017. RATING SENSITIVITIES Developments That May, Individually or Collectively, Lead to Positive Rating Action -- Fitch may consider a positive rating action if the housing recovery is meaningfully better than its current outlook and is maintained over a multi-year period, allowing HOV to reduce debt, improve its liquidity and strengthen its credit metrics, including FFO interest coverage and EBITDA/interest coverage at or above 1.25x. Developments That May, Individually or Collectively, Lead to Negative Rating Action -- HOV's liquidity position falls below $150 million and the company does not provide a credible plan to address its 2020 and 2021 maturities. LIQUIDITY Adequate Near-Term Liquidity: As of Jan. 31, 2018, HOV had $278.2 million of unrestricted cash and $11 million of borrowing availability under its $75 million revolver that matures in June 2018. HOV plans to use cash on hand to pay off the $52 million outstanding under this credit facility upon maturity. HOV's $125 million 1st lien secured revolver, of which $75 million will be used to repay its 1st lien term loan, will provide incremental liquidity for the company. HOV has a target liquidity range of $170 million-$245 million, although HOV's liquidity has been above the upper range during the past four quarters. Fitch expects HOV will have liquidity of at least $250 million through the next 12 months. FULL LIST OF RATING ACTIONS Fitch has upgraded Hovnanian Enterprises, Inc. as follows: -- Long-Term IDR to 'CCC' from 'C'; -- $440 million 10.0% senior secured notes due July 15, 2022 to 'CCC'/'RR4' from 'CC'/'RR3'; -- $400 million 10.5% senior secured notes due July 15, 2024 to 'CCC'/'RR4' from 'CC'/'RR3'. Fitch has affirmed the following issue ratings: -- First lien term loan due 2019 at 'B'/'RR1'; -- Senior secured first lien revolving credit facility at 'B'/'RR1'; -- Senior secured notes due 2020 and 2021 at 'CCC+'/'RR3'; -- Senior unsecured term loan at 'CC'/'RR6'; -- 13.5% senior unsecured notes due 2026 at 'CC'/'RR6'; -- 5.0% senior unsecured notes due 2040 at 'CC'/'RR6'; -- Series A perpetual preferred stock at 'C'/'RR6'. Fitch has also withdrawn the expected rating of 'CC'/RR6' on the 3% senior unsecured notes due 2047 as the debt exchange offered in April 2018 was not consummated and these notes were not issued. HOWARD HUGHES: S&P Ups CCR to to B+ on Improved Earnings Stability ------------------------------------------------------------------ S&P Global Ratings raised its corporate credit rating on The Howard Hughes Corp. to 'B+' from 'B' and revised its outlook to positive. S&P said, "At the same time, we raised the issue-level rating on the company's $1 billion senior unsecured notes due 2025 to 'BB-' (one notch above the 'B+' corporate credit rating) from 'B+'. The recovery rating remains unchanged at '2', indicating our expectation of substantial (70%-90%; rounded estimate: 85%) recovery in the event of a payment default.*" The raised rating on Howard Hughes reflects the increased EBITDA and net operating income (NOI) derived from the company's less cyclical and risk-prone operating assets segment as a percentage of overall earnings. The company's operating assets segment, whose revenue is primarily generated through rental and hospitality services and is directly impacted by trends in rental and occupancy rates and operating costs. S&P imputes a lower degree of volatility to the segment due to its recurring nature and the level of diversity within its 57 assets, including 13 retail, 25 office, six multi-family, and three hospitality properties. The positive outlook reflects S&P's view that the rating on Howard Hughes could be raised to 'BB-' within the next 12 months if the company's operating assets segment continues to grow as a percentage of the company's total earnings. IMPERIAL PALMS: Voluntary Chapter 11 Case Summary ------------------------------------------------- Debtor: Imperial Palms Resort, LLC 2275 Huntington Drive, Ste. 534 San Marino, CA 91108 Business Description: Imperial Palms Resort, LLC owns the Imperial Palms Hotel & Resort located at 2050 Country Club Drive, Holtville, CA 92550. Situated on the 18 hole Barbara Worth Golf Course, Imperial Palms Hotel & Resort is a family- friendly non-smoking hotel. Featuring a terrace overlooking the golf course or valley, each room provides free Wi-Fi, cable TV, and a seating area. It has a Ballroom with the capability up to 650 guests perfect for reception. The company previously sought protection from creditors on July 31, 2017 (Bankr. S.D.N.Y. Case No. 17-04553) and May 30, 2018 (Bankr. S.D.N.Y. Case No. 18-03170). https://www.imperialpalmsresort.com/ Chapter 11 Petition Date: June 5, 2018 Court: United States Bankruptcy Court Southern District of California (San Diego) Case No.: 18-03442 Judge: Hon. Margaret M. Mann Debtor's Counsel: Francisco J. Aldana, Esq. LAW OFFICES OF FRANCISCO JAVIER ALDANA 3033 5th Avenue, Suite 201 San Diego, CA 92103 Tel: 619-236-8355 Email: francisco@aldanalawoffice.com efile@aldanalawoffice.com Estimated Assets: $1 million to $10 million Estimated Liabilities: $1 million to $10 million The petition was signed by Eduardo Mejorado, LLC manager. 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/casb18-03422.pdf INFINITE HOLDINGS: Taps Infinity Investments as Real Estate Broker ------------------------------------------------------------------ Infinite Holdings, Inc., received approval from the U.S. Bankruptcy Court for the Northern District of California to hire Steven Peterson and his firm Infinity Investments as its real estate broker. Mr. Peterson will assist the Debtor in the marketing of the Debtor's commercial real property located at 2421 Telegraph Avenue, Oakland, California. The Debtor has agreed not to pay the broker a sales commission upon his procurement of a buyer. However, at the conclusion of the sale, the broker will ask the court to allow him to barter the value of his customary 1/2 of the sales commission for representing the seller (3%) in exchange for the elimination of his firm's outstanding unpaid rent to the Debtor in the amount of $37,750. Mr. Peterson disclosed in a court filing that he does not hold any interest adverse to the Debtor's estate, creditors and equity security holders. About Infinite Holdings Infinite Holdings, Inc., owns condominium units located at 2421 Telegraph Avenue, Oakland, California, valued at $1.34 million. The Telegraph Retail Condos total 3,370 square feet and are comprised of three individual commercial condominiums, each unit is currently occupied. Its gross revenue amounted to $95,612 in 2016 and $78,668 in 2015. Infinite Holdings sought protection under Chapter 11 of the Bankruptcy Code (Bankr. N.D. Cal. Case No. 17-42625) on Oct. 18, 2017. Steven K. Peterson, its president and CEO, signed the petition. At the time of the filing, the Debtor disclosed $1.35 million in assets and $1.14 million in liabilities. Judge Charles Novack presides over the case. The Debtor tapped The Law Offices of Selwyn D. Whitehead as its legal counsel and Wilner Ash as its accountant. JHL INDUSTRIAL: New Plan Discloses Settlement Agreement with KFLP ----------------------------------------------------------------- JHL Industrial Services, LLC, d/b/a Platt Rogers Construction, filed with the U.S. Bankruptcy Court for the District of Colorado a disclosure statement describing its second amended plan of reorganization dated May 25, 2018. The hearing at which the Court will determine whether to confirm the Plan will take place on July 17, 2018, at 1:30 p.m., in Courtroom B, Fifth Floor, U.S. Custom House, 721 19th Street, Denver, Colorado 80202. This latest filing discloses that the Debtor has obtained approval to sell certain personal property on May 4, 2018 and the proceeds from such sale will be distributed to secured and undersecured creditors pursuant to the specific treatment of such Claims. The Debtor has also resolved the pending adversary proceeding and dispute with Komatsu Financial Limited Partnership and will soon seek Bankruptcy Court approval of a settlement agreement. If the settlement is approved, the Debtor will also seek to dismiss the adversary proceeding. In the event the Court does not approve the settlement for any reason, Komatsu reserves any and all rights, arguments, and objections relating to the Plan and confirmation of the Plan. Any remaining unsecured portion of Komatsu's Claim will be treated as a rejected lease under Class 6. The Internal Revenue Service has also objected to confirmation of the Debtor's Plan. Among other things, the IRS alleges that the Debtor has accrued post-petition tax debt as follows: * Employment tax, Form 941, third quarter 2017, return filed, owes $26,786.97; * Employment tax, Form 941, fourth quarter 2017, return filed, owes $6,472.66; * Employment tax, Form 941, first quarter 2018, return not yet filed, unknown debt; * Employment tax, Form 941, second quarter 2018, return not yet due but no federal tax deposits made and the quarter is one-half over already; * Employment tax, Form 940, 2017, return not yet filed, unknown debt; and * Income tax return 2017, return not yet filed, unknown debt. The IRS also alleges that JHL has not filed its 2014, 2015, or 2016 corporate income tax returns and that the IRS's Proof of Claim includes estimates for three tax years for which it alleges that filings are deficient. Finally, the IRS asserts that the Debtor's Plan is not feasible because it alleges, JHL has not remained current on post-petition tax liabilities; has misappropriated federal income tax withholding trust funds; and has failed to resolve pre-petition tax debts and/or filed prepetition returns. The Debtor disputes at least some of the allegations contained in the IRS's objection. A copy of the Latest Disclosure Statement is available at: http://bankrupt.com/misc/cob17-14141-204.pdf A copy of the Second Amended Plan is available at: http://bankrupt.com/misc/cob17-14141-203.pdf About JHL Industrial Services JHL Industrial Services, LLC, which conducts business under the name Platt Rogers Company -- http://www.plattrogers.com/-- provides niche services including custom fuel system installation, civil construction, integrated agricultural feed and water solutions, piping process, new construction and renovation of facilities and plant, demolition, environmental construction, fuel distribution, fuel management and energy economizing and alternative energies distribution system installation. JHL Industrial Services, based in Lakewood, Colorado, filed a Chapter 11 petition (Bankr. D. Colo. Case No. 17-14141) on May 5, 2017. In its petition, the Debtor estimated $505,500 in total assets and $1.02 million in total liabilities. The petition was signed by Jason Grubb, managing member. The Hon. Joseph G. Rosania Jr. presides over the case. David Warner, Esq., at Sender Wasserman Wadsworth, P.C., serves as bankruptcy counsel to the Debtor. JOHN MEAGLEY, JR: Selling DC Property to Reid for $680K ------------------------------------------------------- John Rogers Meagley, Jr., asks the U.S. Bankruptcy Court for the District of Maryland to authorize the private sale of the real property located at 1217 Missouri Avenue, NW, Washington, DC, together with all improvements thereon and fixtures attached thereto, to Marcus Reid for $680,000. A hearing on the Motion is set for June 11, 2018 at 3:00 p.m. The objection deadline is June 5, 2018. At the time of the filing of the petition, the Debtor was the owner of the Property. The Property consists of a four-unit residential property. The Property is subject to a first deed of trust which is currently serviced by Wells Fargo Bank, N.A. with a payoff balance of approximately $620,000. Prior to the commencement of the case, the Debtor had procured a fully ratified contract for the sale of the Property for $680,000. The sale is not subject to any broker's commissions and the Debtor anticipates that the proceeds of the sale will be more than sufficient to satisfy the entire allowed claim of the Debtor. The Debtor estimates that he will incur costs associated with the closing of the sale in the approximate $20,000. He has not claimed any portion of the value of the Property as exempt. He estimates that the net proceeds from the sale will be approximately $45,000, and he'll retain such funds pending further Order of the Court. Based on the Debtor's basis in the Property and the loss carry-forwards held by him, the Debtor does not believe that the estate will suffer any negative tax consequences as a result of the sale of the Property. It is in the best interest of the estate and the parties hereto to authorize the Debtor to proceed to sell the Property as proposed. The Debtor has served Notice of the proposed sale to the all creditors and parties in interest. John Rogers Meagley, Jr., sought Chapter 11 protection (Bankr. D. Md. Case No. 18-15478) on April 24, 2018. The Debtor tapped Steven H. Greenfeld, Esq., at Cohen, Baldinger & Greenfeld, LLC, as counsel. JOY TAYLOR: Court Dismisses Lawsuit vs BONY, Bayview ---------------------------------------------------- The Defendants in the case captioned JOY TAYLOR AKA JOY TAYLOR-SIMMONS, Plaintiff, v. THE BANK OF NEW YORK MELLON FKA BANK OF NEW YORK AS TRUSTEE FOR THE CERTIFICATEHOLDERS CWALT, INC. ALTERNATIVE LOAN TRUST 2005-J12 MORTGAGE PASS-THROUGH CERTIFICATES, SERIES 2005-J12 AND BAYVIEW LOAN SERVICING, LLC Defendants, Adv. Proc. No. 1-17-01098-cec (Bankr. E.D.N.Y.) filed a motion to dismiss Plaintiff's complaint as amended. Plaintiff seeks declaratory judgment that the mortgage held by BONY CEWALT and serviced by Bayview is unenforceable against Plaintiff because the Defendants failed to foreclose on the mortgage within the six-year statute of limitations period after they elected to accelerate the Loan in February, 2010. Defendants filed the motion to dismiss, arguing that the facts pleaded in the complaint show that the Defendants revoked the acceleration of the Loan prior to the expiration of the limitations period. Upon review, Bankruptcy Judge Carla E. Craig granted the motion to dismiss. The complaint alleges that the acceleration of the Loan was not revoked by the Defendants. The Plaintiff argues that because the Foreclosure Action was not discontinued within the statute of limitations period, the Defendants "failed to perform a clear, unequivocal affirmative act of revocation that gave the Plaintiff actual notice comparable to the notice given to accelerate." Plaintiff further argues that even though the Defendants gave notice of their intent to revoke the acceleration of the Loan by sending the De-Acceleration Letter, the only "clear, unequivocal" method by which the acceleration could have been revoked would have been by discontinuing the Foreclosure Action. In support of this assertion, the Plaintiff cites Hutchinson, 2017 N.Y. Misc. LEXIS 3597, Bank of N.Y. Mellon v. Slavin, 41 N.Y.S.3d 408, 411 and Burke, 943 N.Y.S.2d 540, 542-543. Plaintiff also provided the decision read into the record in Caneva v. Wilmington Trust National Association, et.al. However, none of these cases stand for the proposition that discontinuing a foreclosure action, though an affirmative act of revocation, is the only clear and unequivocal manner by which acceleration of a loan may be revoked. In Hutchinson, the plaintiff-mortgagee voluntarily discontinued its first foreclosure action prior to the expiration of the statutory period, after entering into a loan modification agreement with the defendant-mortgagor. The court recognized the loan modification as the "first affirmative act" and the subsequent discontinuance as the "final affirmative act". However, the court held that upon the execution of the loan modification, under which the parties entered into a new agreement to pay the debt pursuant to new terms and conditions, the acceleration of the loan had been revoked and the statute of limitations was immediately tolled. In Slavin, the court found that there was no clear, unequivocal act of revocation at all on the part of the lender because "'the prior foreclosure action was never withdrawn by the lender, but rather dismissed sua sponte by the court . . . (and) rather than seeking to revoke its election to accelerate, the [lender] made a failed attempt . . . to revive the prior foreclosure action.'" In addition, the court in Slavin found that the lender's acceptance of payments under a trial modification plan, unlike in Hutchinson, never resulted in a final modification agreement. Burke is silent on the issue of what constitutes an affirmative act of revocation because that issue was not before the court; it instead discusses what constitutes an affirmative act of acceleration, and ultimately found that the defendant-mortgagee failed to show that the plaintiff-assignee had exercised the option to accelerate the debt. The facts in Caneva are distinguishable from the facts alleged here, in that Defendants, after sending the De-Acceleration Letter, took no action inconsistent with revocation of acceleration. Even though the Foreclosure Action was not discontinued until July 2016, five months after the statute of limitations period expired, there was no activity in the Foreclosure Action after the De-Acceleration Letter was sent which would indicate that the Defendants still intended to pursue the action; indeed, there was no activity at all. The De-Acceleration Letter was sufficient to place the Plaintiff on notice that the Defendants intended to revoke the election to accelerate, and Defendants took no action which created ambiguity as to their intent to revoke. Plaintiff does not dispute that the De-Acceleration Letter was sent before the statute of limitations expired. It is well established that such a letter constitutes an affirmative act of revocation if sent before the expiration of the statutory period. Plaintiff also does not allege any change in position in reliance upon the acceleration of the loan which would weigh against allowing the Defendants to revoke the acceleration at that point in time. Therefore, accepting all the factual allegations in the complaint as true, and drawing all reasonable inferences in favor of Plaintiff, the Court finds that Plaintiff has failed to state a claim upon which relief may be granted. A full-text copy of the Court's Decision dated May 7, 2018 is available at https://bit.ly/2HqUbFL from Leagle.com. Joy Taylor, Plaintiff, represented by James J. Rufo, Cushner & Associates, P.C. The Bank of New York Mellon, fka Bank of New York as Trustee for the Certificateholders CWALT, Inc. Alternative Loan Trust 2005-J12 Mortgage Pass-Through Certificates, Series 2005-J12 & Bayview Loan Servicing, LLC, Defendants, represented by Casey B. Howard -- choward@lockelord.com -- Locke Lord LLP & Robert Harold King -- robert.king@lockelord.com -- Locke Lord LLP. Joy Taylor filed for chapter 11 bankruptcy protection (Bankr. E.D.N.Y. Case No. 17-41643) on April 5, 2017. K & D HOSPITALITY: Selling Greensburg Property for $1.4 Million --------------------------------------------------------------- K & D Development filed with the U.S. Bankruptcy Court for the Western District of Pennsylvania a notice of its sale of the real estate used for Super 8 brand hotel, located at 111 Sheraton Drive, Greensburg, Pennsylvania, 15601, Tax Map No. 50-16-00-0-325-00-000, for $1.4 million, subject to higher and better offers. The initial offer provided for the Property was from Vadtal, LLC for $1.35 million. However, the current highest and best offer for the property to be sold is $1.4 million. A hearing on the sale is set for May 22, 2018, at 1:30 p.m. The objection deadline is May 14, 2018. Higher and better offers will be considered at the time of hearing. Only qualified bidders will be entitled to bid on the property to be sold. An escrowed $10,000 deposit will be required to bid, and all qualified bidders must be present at the time of the hearing. About K & D Hospitality Founded in 2006, K & D Hospitality, LLC, is a small business debtor as defined in 11 U.S.C. Section 101(51D) that operates under the rooming and boarding houses industry. K & D Hospitality filed for Chapter 11 bankruptcy protection (Bankr. W.D. Pa. Case No. 17-24167) on Oct. 18, 2017. In the petition signed by Parmod Patel, president, the Debtor estimated its assets and liabilities between $1 million and $10 million. Judge Carlota M. Bohm presides over the case. Justin P. Schantz, Esq., at the Law Care of David A. Colecchia And Associates, serves as the Debtor's bankruptcy counsel. KARIA Y WM: Needs Additional 7 Days to Finalize Plan Negotiations ----------------------------------------------------------------- Karia Y WM Houston, Ltd., asks the U.S. Bankruptcy Court for the Southern District of Texas to further extend the current Exclusivity Period to file a plan for approximately 7 additional days, from June 5, 2018 to June 12, 2018, and for an additional 60 days thereafter in which to confirm a plan. The Property was previously leased to a Brazilian Steakhouse that ceased operations and vacated the Property in July 2017. At the time, the tenant was delinquent in rental of more than $150,000, plus unpaid property taxes exceeding $233,000. Karia subsequently initiated litigation against the principal of this tenant on his guarantee which is currently pending. However, the Property remained vacant for several months. These factors caused Karia to become delinquent in its mortgage obligations owed to AFNB. In November 2017, Bayou Social Club, LLC ("Tenant"), a non-affiliated third party, leased the Property pursuant to a five year written lease agreement, with several options for renewal. Tenant operates as a "members only" poker club, including an upscale lounge and gourmet dining. The current monthly rent is $37,000. This Tenant also purchased certain equipment and personal property from Karia in connection with the Lease for a purchase price of $300,000. AFNB agreed to this sale and $150,000 of the purchase price was paid directly to AFNB toward the AFNB Loan. The remaining $150,000 was paid to the Debtor subsequent to the Petition Date and is currently held in Debtor's DIP account, along with postpetition rent that has been collected. Although some payments were made to AFNB during the last part of 2017, the Debtor became delinquent. The bank subsequently accelerated the AFNB Loan and posted the Property for foreclosure in February 2018, thereby prompting the filing of this bankruptcy case. Karia is in the process of putting together a consensual plan with the largest unsecured creditor, Irtanki Trading, LLC, and the secured lender, American First National Bank, but a final agreement has not been reached. Karia does not expect to have the agreement finalized in time to file a Chapter 11 plan prior to June 5, 2018, which is the expiration of its exclusive period to file a plan. Karia does not expect to have the agreement finalized in time to file a Chapter 11 plan prior to June 5, 2018, which is the expiration of its exclusive period to file a plan. Accordingly, Karia requests a one week extension to June 12, 2018, in which it may file a plan, and an additional 60 days thereafter to confirm the Chapter 11 Plan. Emergency consideration is requested because Debtor's exclusivity period expires on June 5, 2018, and if an extension is not granted, the Debtor needs sufficient time to pursue alternative strategies. About Karia Y WM Houston Karia Y WM Houston, Ltd., managed by general partner Tony Z WM Houston LLC, owns a 65,165 sq. ft parcel of nonresidential real property and related improvements located at 7801 Westheimer Road, Houston, Texas. The company filed a Chapter 11 petition (Bankr. S.D. Tex. Case No. 18-30521) on Feb. 5, 2018. Melissa A. Haselden, Esq., at Hoover Slovacek LLP, serves as counsel to the Debtor. No official committee of unsecured creditors has been appointed in the Chapter 11 case. KHALIA'S KITCHEN: Taps Jones & Walden as Legal Counsel ------------------------------------------------------ Khalia's Kitchen, LLC, seeks approval from the U.S. Bankruptcy Court for the Northern District of Georgia to hire Jones & Walden, LLC as its legal counsel. The firm will advise the Debtor regarding its duties under the Bankruptcy Code; conduct examination; advise the Debtor regarding any proposed bankruptcy plan; and provide other legal services related to its Chapter 11 case. The firm's hourly rates range from $200 to $350 for attorneys. Legal assistants charge $90 per hour. Jones & Walden holds a $16,000 retainer as of the Petition Date. Leslie Pineyro, Esq., a partner at Jones & Walden, disclosed in a court filing that the firm neither holds nor represents any interest adverse to the Debtor and its estate. Jones & Walden can be reached through: Leslie M. Pineyro, Esq. Jones & Walden, LLC 21 Eighth Street, NE Atlanta, GA 30309 Phone: (404) 564-9300 Email: lpineyro@joneswalden.com About Khalia's Kitchen LLC Khalia's Kitchen, LLC sought protection under Chapter 11 of the Bankruptcy Code (Bankr. N.D. Ga. Case No. 18-58566) on May 23, 2018. At the time of the filing, the Debtor disclosed that it had estimated assets of less than $50,000 and liabilities of less than $50,000. L BRANDS: Fitch Rates $700MM Guaranteed Notes Due 2027 'BB+'/'RR4' ------------------------------------------------------------------ Fitch Ratings has assigned a 'BB+'/'RR4' rating to L Brands, Inc.'s $700 million issue of senior guaranteed notes due 2027. Proceeds from the issue will be used to conduct an exchange for a portion of the aggregate $1.4 billion senior unsecured notes due 2020, 2021 and 2022. The 'BB+' rating reflects L Brands' long-term track record as a strong operator of two leading brands, driving growth despite challenges in the broader retail space balanced with a shareholder-friendly posture. L Brands has historically achieved strong customer loyalty and an ability to introduce compelling, unique merchandise in the lackluster mid-tier mall retail space. The Negative Outlook reflects Fitch's reduced confidence in the company's ability to stabilize negative store traffic trends and increased promotional activity at Victoria's Secret post recent strategic changes. EBITDA declines associated with Victoria's Secret's weakness have caused projected 2018 adjusted leverage to rise above 4.0x, which is Fitch's ratings downgrade sensitivity for L Brands. Fitch could stabilize L Brands' Outlook with increased confidence in the company's ability to stabilize operations such that leverage improves to under 4.0x. The company would need to show almost 20% EBITDA improvement (absent any debt reduction) from projected 2018 levels of about $2.2 billion to sustain leverage below 4.0x. KEY RATING DRIVERS Continued Operating Weakness at Victoria's Secret and PINK: In early 2016, Victoria's Secret announced plans to eliminate certain apparel categories (including swimwear), eliminated its catalog, and made significant changes to its promotional strategy. These actions, which are aimed at positioning the company for longer-term growth, have weakened near-term results due to negative store traffic trends. Weakness in the top-line has necessitated increased markdown activity, which has led to a gross margin decline of around 180 bps in each of 2016 and 2017. Comps (stores and direct) were positive 2% in 2016 and turned to negative 3% in 2017, compared with an average of about 5% over the five years through 2015. The 2017 comps decline was driven entirely by Victoria's Secret (comps down 8%) as Bath & Body Works produced positive 5% comps during the same period. Significant margin erosion driven by increased promotional activity as well as a push to grow the bralette, sport and beauty categories have resulted in Victoria's Secret's segment operating income declining by 33% to $932 million in 2017 from $1.4 billion in 2015. At the time of the strategic announcements in early 2016, Fitch expected temporary dislocation in Victoria's Secret comps as the company worked through the category eliminations and promotional strategy changes. However, the prolonged weakness in comps suggests that there could be some longer-term issues with the brand that need to be addressed in order to stabilize operations. Besides execution issues, what appears to be hurting Victoria Secret on the margin is the entrance of new players in the intimate apparel category with a different brand messaging and value proposition. Fitch expects total comps to be in the low-single digits annually, assuming negative low-single digit comps at Victoria's Secret offset by low-to-mid-single digit positive comps at Bath & Body Works. Stabilization of the Outlook would require Victoria's Secret comps to stabilize. The growth of PINK in the U.S., which generated more than $3 billion in sales in 2017, and the inclusion of the full lingerie lines in expanded Victoria's Secret stores have led to increased productivity per square foot over the past few years. PINK, a collegiate-focused brand which offers intimate apparel, loungewear and related products in vibrant colors and patterns, has expanded Victoria Secret's demographic base by appealing to younger consumers. Recent performance at PINK has been weak due to some product misses in the apparel category. Given the strong brand positioning and track record, Fitch expects PINK comps to stabilize on improved apparel assortment. Growth Opportunities Remain: While Victoria's Secret restrains L Brands' current operating trajectory, the company's other businesses have been generally more stable and provide long-term growth opportunities. Bath & Body Works, which represented 33% of sales and 55% of reported operating income in 2017, has shown strong growth including 5% comps in 2017 and 8% in 1Q18, despite ever-increasing competition in the beauty category. International expansion also provides a strong top-line and profit opportunity by allowing the company to diversify outside of mall-based locations and reduce operational and execution risks through its substantially franchised model (outside of the China, UK, Ireland and Canadian markets). L Brands' strong omnichannel platform is expected to be a continued driver of growth. The company had consolidated online penetration of 16.4% of 2017 sales. Victoria's Secret online penetration is higher at 20% compared to 13.5% at Bath & Body Works. While Bath & Body Works' lower online sales penetration is somewhat protected by the "touch and feel" nature of personal care products, Victoria's Secret should benefit from expected growth in online apparel sales. Further EBITDA Decline Expected: Fitch expects L Brands' EBITDA to decline 10% to about $2.2 billion in 2018 from $2.4 billion in 2017, after declining around 8% in 2017. The decline is driven by increased promotional activity and low to mid-teens growth in SG&A related to wage increases and omnichannel investments. Fitch expects gross margin to decline around 100 bps in 2018, due primarily to increased promotional activity to drive store traffic at Victoria's Secret, and remain flattish thereafter. EBTIDA margin is expected to be around 16% in 2018, down about 600 bps from peak margin of 22%. EBITDA is expected to improve to around $2.4 billion by 2021, assuming positive low single digit comps and SG&A growth in line with total revenue growth of 2%-3%. Elevated Leverage: Lease-adjusted leverage increased to 3.8x in 2017 from 3.5x in 2016 and Fitch expects leverage to be elevated at 4.2x to 4.3x in 2018 given EBITDA declines. Leverage is expected to decline modestly thereafter, assuming EBITDA growth and flattish debt levels. Absent any debt reduction, L Brands would need to produce EBITDA of around $2.5 billion to $2.6 billion for leverage to sustain under 4x. Shareholder-Friendly Posture: L Brands is committed to returning cash to shareholders through share repurchases and dividends. The company returned about $5.7 billion in cash to shareholders (via dividends and share buybacks) in the five years ending 2017, utilizing approximately $4.4 billion of FCF before dividends and funding the remainder with debt. Fitch expects L Brands to conduct share buybacks of around $300 million annually in 2018 and thereafter, compared to an average of about $450 million in the prior three years. DERIVATION SUMMARY L Brand's 'BB+' rating reflects the company's dominant position in intimate apparel through its Victoria's Secret brand and a strong position in personal care and home products through the Bath & Body Works Brand. The company does not have any large, direct peers but instead competes with a range of department store and mid-tier apparel/specialty retailers. L Brands' good track record of growth and industry leading margins are offset by an aggressive shareholder return policy that has traditionally dictated leverage. The Negative Outlook reflects Fitch's concern that negative store traffic trends at Victoria's Secret could be indicative of brand challenges that extend beyond recent strategic changes and that these challenges may continue to persist, weakening EBITDA and elevating leverage above 4x. While until recently L Brands' top-line and EBITDA margin trends have been more positive than The Gap Inc. (BB+/Stable), which is a mid-tier, mall-based retailer, leverage is closer to the mid-3x for The Gap. Gap continues to struggle with longer-term operational challenges but has a less shareholder friendly stance than L Brands. Looking at other specialty retailers, the 'BBB-'/Stable ratings of both Tapestry, Inc. and Michael Kors Holdings Limited consider their lower leverage profiles offset by higher fashion risk of the handbag and accessories category. Signet Jewelers Limited (BB/Stable) benefits from expected longer-term stability of the jewelry category, although leverage is expected to trend in the mid-4.0x range on topline weakness. KEY ASSUMPTIONS Fitch's Key Assumptions Within Its Rating Case for the Issuer -- Fitch expects comps to be in the low-single digits annually; -- Top-line growth expected to be close to 5.5% in 2018 due primarily to adoption of new revenue recognition account standards (which have no impact to EBITDA); -- Square footage expansion, if executed successfully, could drive overall top-line growth of around 2%-3% annually beginning 2018; -- EBITDA is expected to decline about 10% to around $2.2 billion in 2018 from $2.4 billion in 2017 but improve to about $2.4 billion by 2021 as top-line returns to growth and SG&A investments moderate; -- Annual FCF after regular dividends of around $100 million to $150 million over the next two to three years; -- Capex is expected to be around $750 million annually following an elevated $1 billion in 2016, reflecting a more normalized level of spending, inclusive of strategic investments, new store constructions and square footage expansion; -- Leverage is expected to be elevated at 4.2x to 4.3x in 2018 and decline modestly thereafter but remain above 4.0x, assuming flattish debt and the above EBITDA assumptions. These assumptions could yield a one-notch downgrade in L Brands' rating. However, Fitch could Stabilize the outlook should L Brands be able to resume mid-single digit comps total comps, with comps stabilization at Victoria Secret, and grow EBITDA to $2.5 billion to $2.6 billion such that leverage returns to under 4.0x. Alternatively, the company would have to pay down almost $1 billion in debt over the next 24-36 months on Fitch's EBITDA assumptions to reduce leverage under 4.0x. RATING SENSITIVITIES Developments That May, Individually or Collectively, Lead to Positive Rating Action -- A positive rating action would require both positive operating trends and a public commitment to maintaining financial leverage around low 3.0x; -- The rating could be stabilized if store traffic trends at Victoria's Secret stabilize and EBITDA rebounds from current levels such that leverage declines to under 4x.This equates to an EBITDA level of $2.5 billion to $2.6 billion, assuming no debt paydown. Developments That May, Individually or Collectively, Lead to Negative Rating Action -- A negative rating action could be driven by reduced confidence in the company's ability to stabilize comp trends and margin compression and leverage sustained above 4.0x. LIQUIDITY Liquidity is strong, supported by a cash balance of $1.5 billion as of Feb. 3, 2018 and the company's $1 billion revolving credit facility. Annual FCF after regular dividends is expected to be around $100 million to $150 million over the next two to three years. Fitch expects the FCF and cash on the balance sheet to be used toward about $300 million in annual share buybacks. FULL LIST OF RATING ACTIONS Fitch has currently rates L Brands as follows: -- Long-term IDR 'BB+'; -- Secured bank credit facility 'BBB-'/'RR1'; -- Senior guaranteed unsecured notes 'BB+'/'RR4'; -- Senior unsecured notes 'BB'/'RR5'. The Rating Outlook is Negative. L BRANDS: Moody's Rates Proposed Sr. Unsec. Guaranteed Note 'Ba1' ----------------------------------------------------------------- Moody's Investors Service assigned a Ba1 rating to L Brands, Inc.'s proposed senior unsecured guaranteed note offering. Moody's ratings for L Brands are unchanged, including its Ba1 Corporate Family Rating (CFR), Ba1-PD Probability of Default Rating (PDR), (P)Ba1 senior unsecured guaranteed shelf rating, (P)Ba3 subordinated shelf rating, (P)Ba3 preferred shelf rating, Ba1 existing senior unsecured guaranteed notes ratings and Ba2 senior unsecured unguaranteed notes ratings. The company's Speculative Grade Liquidity Rating is SGL-1 and the ratings outlook is stable. Net proceeds from the proposed offering of notes due in 2027 in combination with cash will be used to exchange for portions of its 2020, 2021, and 2022 senior notes. The proposed notes will rank pari passu with the existing senior unsecured guaranteed notes. Assignments: Issuer: L Brands, Inc. Senior Unsecured Regular Bond/Debenture, Assigned Ba1 (LGD4) RATINGS RATIONALE L Brands' Ba1 Corporate Family Rating is supported by its popular well recognized brand names which drive its strong profitability. The rating also acknowledges its very good liquidity and moderate leverage and good interest coverage, with debt to EBITDA of 3.4 times and EBIT to interest expense of 3.2 times. The rating considers L Brands' scale with revenues of about $12.8 billion and its concentration on two narrow product niches. The rating also acknowledges its expertise in merchandising and supply chain. L Brands' financial policies continue to favor share repurchases and special dividends which constrains the rating. The company's credit agreement provides it with significant flexibility to make debt financed dividends and share repurchases. The stable outlook reflects Moody's view that L Brands' financial policies will continue to be shareholder friendly with excess cash flow returned to shareholders but that credit metrics will remain appropriate for the Ba1 rating. Moody's expects the company to grow all its major brands with sources of growth including but not limited to international expansion and adjacent product opportunities, such as sport and the PINK assortment. An upgrade would require a more conservative financial policy such that debt to EBITDA was expected to be maintained below 3.0 times and EBIT to interest expense above 4.5 times. Ratings could be downgraded should there be sustained deterioration in profitability at any of its key brands or financial policy becomes more aggressive than currently anticipated. Ratings could also be downgraded should debt increase or operating performance falter such that debt to EBITDA approaches 4.5 times or EBIT to interest expense approaches 2.5 times. The principal methodology used in this rating was Retail Industry published in May 2018. Headquartered in Columbus, Ohio, L Brands, Inc. operates 3,069 company-owned specialty stores in the United States, Canada and the United Kingdom, and its brands are sold in more than 800 additional franchised locations worldwide as well as online as of May 5, 2018. Its brands include Victoria's Secret, Bath & Body Works, PINK, La Senza, and Henri Bendel. For the last twelve months ending May 5, 2018, revenues are approximately $12.8 billion. L BRANDS: S&P Assigns Proposed $700MM Unsecured Notes 'BB+' ----------------------------------------------------------- S&P Global Ratings assigned its 'BB+' issue-level and '3' recovery ratings to L Brands Inc.'s proposed $700 million senior unsecured notes due 2027. The '3' recovery rating indicates our expectation of meaningful (50%-70%; rounded estimate: 65%) recovery in the event of payment default. L Brands intends to use the net proceeds from the proposed notes along with cash on hand to fund a tender offer, redeem existing notes, and pay related transaction fees and expenses. Concurrent with the note issuance, the company began a tender offer for up to $700 million of three outstanding senior unsecured notes due 2020, 2021, and 2022. All of S&P's existing ratings on the company, including the 'BB+' corporate credit rating, are unchanged. The outlook is stable. S&P said, "We expect operating performance to remain under pressure over the next 12 months as management focuses on turning around the Victoria's Secret business. We forecast the adjusted EBITDA margin will contract about 240 basis points in 2018 due to higher labor costs, sales deleveraging, lower merchandise margins, and ongoing investments in China. We forecast credit metrics will be weak but still within ranges consistent for the ratings, with adjusted debt-to-EBITDA of about 3x this year. We expect the company to generate healthy cash flows and maintain a high cash balance of over $1 billion over the next 12 months." RECOVERY ANALYSIS Key Analytical Factors S&P said, "For the company to default, we believe EBITDA would need to decline significantly from recent results, representing ineffective merchandising amid a protracted economic decline and weak consumer spending in conjunction with increased competition and margin compression. Our recovery analysis assumes that, in a hypothetical bankruptcy scenario, the unsecured notes with subsidiary guarantees would benefit from the residual emergence value after the secured revolving credit facility lender claims are satisfied, but that recovery prospects would be limited assuming that additional secured debt would be added to the capital structure on the path to default. For the unsecured notes without subsidiary guarantees, which we view as structurally subordinated, we see negligible value available to the noteholders after the secured and unsecured claims with guarantees are satisfied. We have valued the company on a going-concern basis using a 6x multiple applied to our projected emergence-level EBITDA to arrive at our estimated gross emergence value of about $6.6 billion. The 6x multiple is in line with multiples applied to competitors with comparable size and scale." Simulated default assumptions -- Simulated year of default: 2023 -- EBITDA at emergence: $1.1 billion Implied enterprise value (EV) multiple: 6x -- Estimated gross EV at emergence of $6.6 billion Simplified waterfall -- Net EV after 5% administrative costs: $6.2 billion -- Valuation split % (obligors/non-obligors/unpledged): 90/10/0 Revolver-related claims: $882 million --Recovery expectations: 90%-100% (rounded estimate: 95%) -- Unsecured notes with subsidiary guarantees and other non-debt unsecured claims: $5.6 billion* --Recovery expectations: 50%-70% (rounded estimate: 65%) -- Unsecured notes without subsidiary guarantees-related claims: $674 million --Recovery expectations: 0%-10% (rounded estimate: 0%) *All debts amounts include six months of prepetition interest. Unsecured claims include estimates for rejected operating leases. **The recovery prospects for the unsecured notes with subsidiary guarantees are capped assuming that priority and other secured claims will be added to the capital structure on the path to default. RATINGS LIST L Brands Inc. Corporate Credit Rating BB+/Stable New Rating L Brands Inc. Senior Unsecured $700 mil notes due 2027 BB+ Recovery Rating 3(65%) LADDCO LLC: Full Payment for Unsecured Creditors Over Five Years ---------------------------------------------------------------- LADDCO, LLC, filed with the U.S. Bankruptcy Court for the District of Minnesota its first amended disclosure statement describing its first amended plan dated May 25, 2018. The latest plan adds information on the treatment of Class 4 unsecured claims. The plan now provides that the debtor will pay class 4 claims in full over the course of five years, as follows: -- $2,500 on the first anniversary of the Effective Date of the plan -- $3,500 on the second anniversary of the Effective Date of the plan -- $5,500 on the third anniversary of the Effective Date of the plan -- $7,000 on the fourth anniversary of the Effective Date of the plan -- $7,418.35 on the fifth anniversary of the Effective Date of the plan Payments over the course of the five years will, therefore, total $25,918.35. The aggregate amount of annual distributions under the Plan is approximately $60,120 to Granite Community Bank, plus amounts as stated in the plan to the Class 4 claims annually. The operating expenses of the Debtor are approximately $41,402.50 annually. The Debtor expects rents to increase at least one percent per year instead of the three percent provided in the previous plan. A copy of the First Amended Disclosure Statement is available at: http://bankrupt.com/misc/mnb17-43456-48.pdf About LADDCO LLC LADDCO LLC, based in Eden Valley, Minnesota, filed a Chapter 11 petition (Bankr. D. Minn. Case No. 17-43456) on November 15, 2017. In its petition, the Debtor estimated $1 million to $10 million in assets and $500,000 to $1 million in liabilities. The petition was signed by Douglas A. Ruhland, chief operating officer. The Hon. William J Fisher presides over the case. Sam Calvert, Attorney At Law, serves as bankruptcy counsel to the Debtor. The Debtor hired Daniel Schleper as its accountant. An official committee of unsecured creditors has not yet been appointed in the Chapter 11 case. LC LIQUIDATIONS: BWFS Buying Gantry Crane for $400K --------------------------------------------------- LC Liquidations Corp., formerly known as Lectrus Corp., and its affiliates ask the U.S. Bankruptcy Court for the Eastern District of Tennessee to authorize them to sell Shuttlelift Model SL100 Grantry Crane to BWFS Industries, LLC, for $400,000. A hearing on the Motion is set for June 7, 2018, at 10:30 a.m. In accordance with the Order Establishing Bid and Sale Procedures, the Debtors held an auction of their assets on March 7, 2018, and received bids for both the Chattanooga assets and the Houston assets. The Court approved the sale of substantially all their assets at the sale hearing held on March 8, 2018, and subsequently entered the Original Sale Order on March 20, 2018. The Court subsequently approved the sale of the Debtors' Houston assets at an emergency hearing held on March 29, 2018, and entered on March 29, 2018, the Houston Sale Order. The Asset Purchase Agreement for the Houston Sale Order specifically excluded the sale of the Property, which was subject to an equipment finance agreement between Debtor Lectrus and M2 Lease Funds, LLC. The liens of M2 Lease, believed to be approximately $260,000, will be paid in full from the proceeds of the sale. The Purchaser is of no relation to the Debtors. It has agreed to buy the Property for a purchase price of $400,000 as a result of competitive bidding between various parties and as a result of arms-length and good-faith negotiations. The Debtors believe that the Purchase Price is equal to the fair market value, as established by the competitive bidding for the Property and the Debtors submit that no further marketing is necessary. Pursuant to an agreement between the Debtors, Pre-Petition Lenders and the Committee of Unsecured Creditors, the net sale proceeds will be split evenly in a 33%-33%-33% split between the bankruptcy estate and the Pre-Petition Lenders. The Debtors will also reimburse the Pre-Petition Lenders for the value of certain spreader beams ($15,480), which are being sold along with the Property. The Debtors' decision to sell the Property to the Purchaser in a private sale transaction is a valid and sound exercise of their business judgment. They've considered all options under the circumstances and have determined that a private sale to the Purchaser will result in the greatest recovery. For all of the foregoing reasons, the relief requested in the Motion is a product of sound business judgment and is in the best interests of the Debtors, their creditors, and estates and should be granted. Pursuant to the Sale Motion, the Debtors ask the approval of the Court to sell the Property to the Purchaser for $400,000, free and clear of any liens and claims of any and every kind or nature whatsoever. They believe the sale of the Equipment is in the best interest of the estate and creditors, and the sale will help the Debtors provide a distribution to their general unsecured creditors. Because of the need to close the transactions contemplated herein as promptly as possible, the Debtors ask that the Court orders and directs that the order approving the Motion will not be automatically stayed for 14 days as prescribed under Bankruptcy Rules 6004(h) and 6006(d). About Lectrus Corporation Based in Chattanooga, Tennessee, Lectrus Corporation -- http://www.lectrus.com/-- designs and manufactures custom metal enclosures and electrical and mechanical integration serving the power, oil and gas, renewable energy, industrial, water and wastewater, transportation, military, mining, data centers, institutional, and commercial markets. The company has two manufacturing facilities located in North America. Lectrus Corp. and parent Lectrus Holding Corporation sought protection under Chapter 11 of the Bankruptcy Code (Bankr. E.D. Tex. Lead Case No. 17-15588) on Dec. 7, 2017. James P. Beers, vice-president of finance, signed the petitions. At the time of the filing, Lectrus disclosed assets of $13.34 million and liabilities of $35.26 million. Lectrus Holding disclosed zero assets and liabilities totaling $20.55 million. Judge Nicholas W. Whittenburg presides over the cases. The Debtors tapped Baker, Donelson, Bearman, Caldwell & Berkowitz, PC, as counsel; and Livingstone Partners LLC, as investment banker. The U.S. Trustee for Region 8 appointed an official committee of unsecured creditors' in the Debtors' cases. MAC ACQUISITION: Romano's Macaroni Grill Mulls Deals ---------------------------------------------------- Ron Ruggless, writing for Nation's Restaurant News, reports that Nishant Machado, CEO of Romano's Macaroni Grill, said the company is ready to make another run at acquiring an additional brand, after being turned down in a bid last month for Bravo Brio. The CEO said bankruptcy strengthened the brand. Machado of Mackinac Partners also serves as CRO of Macaroni Grill, according to a prior report by the Troubled Company Reporter. About Romano's Macaroni Grill(R) and Mac Acquisition LLC Romano's Macaroni Grill -- https://www.macaronigrill.com/ -- is an Italian restaurant brand founded in 1988. Inspired by Italian country cuisine, Macaroni Grill restaurants feature an open kitchen that allows guests to see its ingredients and preparation techniques that blend Italian traditions with progressive culinary inspiration, in a polished casual atmosphere. On Oct. 18, 2017, Mac Acquisition LLC and eight affiliates, which operates under the trade name, "Romano's Macaroni Grill", sought Chapter 11 protection (Bankr. D. Del. Lead Case No. 17-12224). Mac Acquisition's estimated assets of $10 million to $50 million and debt at $50 million to $100 million. The Hon. Mary F. Walrath was the case judge. The Debtors tapped Young Conaway Stargatt & Taylor, LLP, as Delaware bankruptcy counsel; Gibson, Dunn & Crutcher LLP, as general bankruptcy counsel; Mackinac Partners, LLC, as financial advisor; and Duff & Phelps Securities, LLC as financial advisor and investment banker. Donlin, Recano & Company, Inc., served as the claims agent. On Oct. 30, 2017, the Office of the U.S. Trustee appointed an official committee of unsecured creditors. The committee hired Kelley Drye & Warren LLP as its lead counsel, and Bayard, P.A., as co-counsel with Kelley Drye. As reported by the Troubled Company Reporter, the Company filed for Chapter 11 protection on Oct. 18, 2017 and emerged from bankruptcy on Feb. 15, 2018. The Company successfully renegotiated lease terms, vendor contracts and secured $13.5 million in new capital to both fund the restructuring efforts and invest directly in the Company in the form of human capital and systems. A revised Plan and Disclosure Statement were filed with the Court on December 14, 2017, a full-text copy of which is available at: http://bankrupt.com/misc/deb17-12224-301.pdf Prior to the Confirmation Hearing, the Debtors amended their Plan several times to, among other things, provide that the Exit Facility in the aggregate amount up to $8,500,000, will have a maturity of 36 months following the Effective Date. MARK HANNA: Selling Nine Mile Falls Commercial Property for $257K ----------------------------------------------------------------- Matk Kenna Hanna and Jennifer Hanna, also known as Jamie Hanna, ask the U.S. Bankruptcy Court for the Eastern District of Washington to authorize the sale of the commercial real property located at 10013 W. Charles Road, Nine Mile Falls, Washington for $257,000. The Debtors and Brandi Graham-Snow jointly own the Real Property. They each own a 50% interest in an entity called "The Tin Cup Cafe and Country Store, LLC." The Tin Cup owns personal property consisting of inventory, fixtures and equipment used in a business conducted by the Tin Cup upon the Real Property. The Tin Cup Property is not property of the Debtors' bankruptcy estate. The Debtors believe the estimated fair market value of the Real Property, without deductions for interests of entities other than the estate, is $226,385; and believe the estimated fair market value of the Tin Cup Property, without deductions for interests of entities other than the Tin Cup, is $30,615, for a total value of $257,000. The basis of this estimated fair market value is that on Nov. 8, 2017, the Real Property was listed for sale at $295,000. There were no offers to purchase the Real Property and on Aug. 4, 2017, the listing price was reduced to $275,000. No offers were received at the reduced price. The listing agreement terminated on Nov. 8, 2017. The Real Property was not re-listed for sale. The Sellers received an offer to purchase the Real Property dated March 3, 2018. This offer was brought to them by the Purchasers' Realtor, Todd Bunger. Neither the Debtors nor Ms. Graham-Snow were acquainted with the purchasers prior to receiving the offer. The purchasers are not related to Debtors. The Sellers will pay to Todd Bunger a Realtor's commission of 3%, or $7,710. The gross sale price is $257,000. Of this, $226,385 is attributed to the Real Property and $30,615 is attributed to the Tin Cup Property. The terms of the sale are $2,500 earnest money with the balance of $254,500 cash at closing. The sale is not contingent upon financing. The closing is scheduled to occur on July 24, 2018. The Closing Agent asks an order approving the sale. There are four known claimed interests in the Real Property: 1) A first position real property tax lien by Spokane County Treasurer for second-half taxes in the amount of $1,044 to be pro-rated at closing in the estimated amount of $660; 2) A second-position deed of trust held by the Class 4 Creditor, Washington Trust Bank in the amount of $93,597; 3) The 50% ownership interest held by Ms. Graham-Snow, who consents to this sale; and 4) A third-position lien in favor of Class 6 Creditors Allan and Gina Margitan arising from a judgment in the amount of $297,934. The Tin Cup Property is not being sold pursuant to provisions of the Bankruptcy Code. Tin Cup's interests in the Tin Cup Property will not be affected by the sale, and will be vested in the Tin Cup Property Sale Proceeds. The only known interest in the Tin Cup Property is held by the Tin Cup, which consents to this sale. Ms. Graham-Snow consents to the sale of the Tin Cup Property. The Debtors estimate costs of closing the sale as follows: Closing Agent's charges to Steve Gustafson: $3,000 Title insurance $ 780 Recording fees $ 75 Realtor's commission to Todd Bunger $7,710 The Debtors estimate an additional cost of closing in the amount of $2,020 comprised of excise taxes and other fees due to Spokane County entities attributable to the sale of Ms. Graham-Snow's 50% ownership interests in the Real Property. The Debtors ask the Court to: (i) approve the sale of the Real Property free and clear of any interest; (ii) authorize the Closing Agent to disburse the amount to Spokane County necessary to discharge the Sellers' pro rata share of the tax lien against the Real Property; (iii) authorize the Closing Agent to disburse the amount to Washington Trust Bank necessary to discharge its mortgage lien against the Real Property; (iv) allocate to Ms. Graham-Snow 50% of the remaining Real Property Proceeds, and allocate to the Debtors' estate 50% of the remaining Real Property Proceeds; (v) direct that the claimed judgment lien asserted by Creditors Margitan shall attach to the Estate Net Real Property Proceeds, direct the Closing Agent to disburse payment equal to the Lien Value to Ian Ledlin, Disbursing Agent for the bankruptcy estate, who will deposit the funds into the DIP Agent Margitan Secured Account; (vi) authorize the Closing Agent to disburse the Joint Costs of Closing; (vii) authorize the Closing Agent to disburse the Separate Cost of Closing to Spokane County the amount of $2,020; (viii) authorize the Closing Agent to disburse to Ms. Graham-Snow an amount calculated as follows: The Graham-Snow Net Real Property Proceeds plus 50% of the Tin Cup Property Sale Proceeds minus 50% of the Joint Costs of Closing minus the Separate Cost of Closing; (ix) authorize the Closing Agent to disburse to Disbursing Agent Ian Ledlin an amount calculated as follows: The Estate Net Real Property Proceeds minus 50% of the Joint Costs of Closing; and (x) authorize the Closing Agent to disburse to Disbursing Agent Ian Ledlin 50% of the Tin Cup Property Sale Proceeds. Counsel for Debtors: Ian Ledlin, Esq. PHILLABAUM LEDLIN MATTHEWS & SHELDON, PLLC 1235 N. Post Street, Suite 100 Spokane, WA 99201 Telephone: (509) 838-6055 Mark Kevin Hanna and Jennifer McWilliams-Hanna sought Chapter 11 protection (Bankr. E.D. Wash. Case No. 16-03437) on Nov. 2, 2016. The Debtors tapped Ian Ledlin, Esq., at Phillabau, Ledline Matthews Sheldon PLLC. MASS PRIVATE: Taps LedgerPlus as Accountant ------------------------------------------- Mass Private Transportation, Inc., seeks approval from the U.S. Bankruptcy Court for the District of Massachusetts to hire LedgerPlus as its accountant. The firm will assist the Debtor in preparing its monthly operating reports and other necessary financial reports. Mark Manganelli, owner of LedgerPlus, charges an hourly fee of $150. His firm received a retainer in the sum of $500 from the Debtor. Mr. Manganelli disclosed in a court filing that he is a "disinterested person" as defined in section 101(14) of the Bankruptcy Code. LedgerPlus can be reached through: Mark M. Manganelli LedgerPlus 29 Cummings Park, Suite 400 Woburn, MA 01801 Phone: (781) 932-1909 About Mass Private Transportation Mass Private Transportation, Inc., is a company based in Reading, Massachusetts, that operates a taxi business. Mass Private Transportation sought protection under Chapter 11 of the Bankruptcy Code (Bankr. D. Mass. Case No. 18-11407) on April 19, 2018. In the petition signed by Marc C. Rod, president, the Debtor estimated assets of less than $50,000 and liabilities of less than $500,000. Judge Joan N. Feeney presides over the case. The Debtor tapped Shapiro & Hender as its legal counsel. MATTY AND PATTY'S: Taps Brian W. Hofmeister as Legal Counsel ------------------------------------------------------------ Matty and Patty's Hot Dogs, LLC, seeks approval from the U.S. Bankruptcy Court for the District of New Jersey to hire the Law Firm of Brian W. Hofmeister, LLC as its legal counsel. The firm will provide all legal services necessary to achieve a successful reorganization or sale of the Debtor's assets. Brian Hofmeister, Esq., the attorney who will be handling the case, charges an hourly fee of $425. Paralegals charge $195 per hour. Mr. Hofmeister disclosed in a court filing that he and his firm are "disinterested" as defined in section 101(14) of the Bankruptcy Code. The firm can be reached through: Brian W. Hofmeister, Esq. Law Firm of Brian W. Hofmeister, LLC 3131 Princeton Pike, Building 5, Suite 110 Lawrenceville, NJ 08648 Phone: (609) 890-1500 Fax: (609) 890-6961 Email: bwh@hofmeisterfirm.com About Matty and Patty's Hot Dogs Matty and Patty's Hot Dogs, LLC sought protection under Chapter 11 of the Bankruptcy Code (Bankr. D.N.J. Case No. 18-19142) on May 3, 2018. At the time of the filing, the Debtor estimated assets of less than $50,000 and liabilities of less than $500,000. Judge Kathryn C. Ferguson presides over the case. MAVERICK ONE: Case Summary & 3 Unsecured Creditors -------------------------------------------------- Debtor: Maverick One Leasing Company LLC PO Box 7007 Bloomfield Hills, MI 48302 Business Description: Maverick One Leasing Company LLC is a privately held company whose principal place of business is located at 100 Main Street, Suite 100, Nashua, NH 03060. Chapter 11 Petition Date: June 6, 2018 Case No.: 18-60785 Court: United States Bankruptcy Court Northern District of New York (Utica) Judge: Hon. Diane Davis Debtor's Counsel: Robert J. Rock, Esq. TULLY RINCKEY PLLC 441 New Karner Road Albany, NY 12205 Tel: 518-218-7100 Email: rrock@1888law4life.com rrock@tullylegal.com Estimated Assets: $0 to $50,000 Estimated Liabilities: $1 million to $10 million The petition was signed by Walter Haskett, manager. A full-text copy of the petition containing, among other items, a list of the Debtor's three unsecured creditors is available for free at: http://bankrupt.com/misc/nynb18-60785.pdf MAY ARTS: July 18 Plan Confirmation Hearing ------------------------------------------- Judge Eric L. Frank of the U.S. Bankruptcy Court for the Eastern District of Pennsylvania issued an order approving the motion for approval disclosure statement and fixing hearing on confirmation of approval of disclosure statement explaining May Arts, LLC's Chapter 11 plan. July 16, 2018, is fixed as the deadline for filing and serving written objections to the confirmation of the Plan, and July 18, 2018 at 11:00 A.M., is fixed as the date and time for hearing on confirmation of the Plan. About May Arts Founded in 1980's in Riverside, Connecticut, May Arts LLC, formerly known as Compass Designs, LLC -- -- https://www.mayarts.com/ -- is a family-owned supplier of ribbons, serving a wide variety of merchants from large retail outlets to home-based business. May Arts carries a wide selection of ribbons to choose from, like sheer, satin, grosgrain, and silk in a variety of prints and patterns. The Company has over 5,000 ribbon variations in stock in its warehouse facility in Stamford, Connecticut. May Arts serves a wide range of industries, including: craft & hobby, scrapbooking, paper crafts, card making, stationery, gift wrapping & packaging, fashion & apparel, jewelry, home decor & interior design, floral, confectionery (chocolates), wedding & party decoration, quilting, craft sewing & doll making and mixed media. May Arts filed for Chapter 11 bankruptcy protection (Bankr. E.D. Pa. Case No. 17-16869) on Oct. 9, 2017, estimating their assets and liabilities at between $1 million and $10 million each. The petition was signed by Joseph S. Duffey, president. Judge Eric L. Frank presides over the case. Albert A. Ciardi, III, Esq., and Jennifer E. Cranston, Esq., at Ciardi Ciardi & Astin, P.C., serve as the Debtor's bankruptcy counsel. MEHRI AKHLAGHPOUR: Trustee Selling Woodland Property for $1.23M --------------------------------------------------------------- Nancy J. Zamora, the Chapter 11 Trustee for the bankruptcy estate of Mehri Akhlaghpour, asks the U.S. Bankruptcy Court for the Central District of California to authorize the bidding procedures in connection with the sale of the real property located at 4450 Winnetka Avenue, Woodland Hills, California to Kamran Taleby for $1,225,000. A hearing on the Motion was held on June 7, 2018 at 2:00 p.m. Subject to Court approval, the Trustee proposes to sell the Property, pursuant to the terms of the Purchase And Sale Agreement And Escrow Instruction and addenda thereto. The essential terms of the proposed sale are: a. Purchaser: Kamran Taleby; b. Purchase Price: $1,225,000, free and clear of liens or interests; c. Condition of Property: Property purchased "as is, where is" without any representations or warranties of any kind; and d. Broker's Commissions: 6% to the Trustee's Broker and the Purchaser's broker. The Trustee asks the Court for an order authorizing these overbid procedures: (1) any person interested in submitting an overbid on the Property must attend the hearing on the Motion or be represented by an individual with authority to participate in the overbid process; (2) an overbid will be defined as an initial overbid of $5,000 above the Purchase Price, with each additional bid in $1,000 increments; (3) overbidders (except for the Purchaser) must deliver a deposit to the Trustee's counsel made payable to "Encore Escrow," in the amount of $127,500 at least 7 calendar days prior to the hearing on the Motion; (4) overbidders must purchase the Property on the same terms and conditions as the Purchaser; (5) the deposit of the successful overbidder will be forfeited if such party is thereafter unable to complete the purchase of the Property within15 calendar days of entry of an order confirming the sale; and (6) in the event the successful overbidder cannot timely complete the purchase of the Property, the Trustee will be authorized to proceed with the sale to the next highest overbidder. A preliminary title report on the Property and supplements thereto has been obtained from First American Title Co. The Title Report indicates that the following liens have been recorded against the Property: a. County Assessor's Office Real property taxes, 2017-2018: The Trustee is informed that real property taxes totaling approximately $7,296 are owed, and the amount owed will be paid from escrow. b. North American Financial Corp., ISAOA/ATIMA: The Deed of Trust recorded in favor of Steward Title of California, Inc. on April 25, 2017 on behalf of Mortgage Electronic Registration Systems, Inc. for North American. The Trustee is informed that an initial obligation of approximately $870,500 was secured by this deed. c. Emymac, Inc.: The disputed Deed of Trust recorded in favor of Emymac on 10/10/17. The Title Report provides that the Deed of Trust was alleged to secure "an original indebtedness of $235,000." The Trustee estimates that the proposed sale will generate approximately $257,744 in net proceeds as follows: Proposed Sales Price: $1,225,000 Real Property Taxes ($7,296) North American Lien ($861,960) Emymac Lien ($0) Estimated Tax Liability from Sale ($0) Closing Costs (estimated at 8% including 6% broker commission) ($98,000) -------- Net Proceeds $257,744 ======== The Trustee further asks an order for turnover of possession of the Property by the Debtor within 15 days of entry of an order approving the sale. In addition, she seeks authorization to obtain a Writ of Possession – Eviction upon ex parte application to the Court should the Debtor fail to timely turn over the Property. Finally, the Trustee asks the Court to waive the 14-day stay of Bankruptcy Rule 6004(h) to permit the Purchaser to proceed with the close of escrow on the sale as soon as possible. A copy of the Agreement attached to the Motion is available for free at: http://bankrupt.com/misc/Mehri_Akhlaghpour_228_Sales.pdf About Mehri Akhlaghpour Mehri Akhlaghpour filed a Chapter 11 Petition (Bankr. C.D. Cal. Case No. 17-12739) on Oct. 11, 2017, and was represented by Giovanni Orantes, Esq. The Debtor asserts an interest in six real properties: * A single family residence located at 4450 Winnetka Ave., Woodland Hills, CA 91364; * A condominium located at 26943 Hillsborough Parkway, #27, Valencia, CA 91354; * A condominium located at 5454 Zelzah Avenue, #302, Encino, CA 91316; * A single family residence located at 16320 Gledhill Street, North Hills, CA 91343; * A single family residence located at 17315 Cagney Street, Granada Hills, CA 91344; and * A condominium located at 8338 Woodley Pl. #28, North Hills, CA 91343. On Dec. 29, 2017, the Office of the United States Trustee filed a motion to appoint a Chapter 11 Trustee. The Motion was granted. On Jan. 25, 2018, Nancy J. Zamora was appointed as the Debtor's Chapter 11 Trustee. The Trustee tapped Levene, Neale, Bender, Yoo & Brill L.L.P. as counsel; and Rodeo Realty, Inc., as real estate broker. MHT 1202: Case Summary & 7 Unsecured Creditors ---------------------------------------------- Debtor: MHT 1202 LLC 15 Knoll Pines Court The Woodlands, TX 77381 Business Description: MHT 1202 LLC is engaged in activities related to real estate. Chapter 11 Petition Date: June 5, 2018 Case No.: 18-33097 Court: United States Bankruptcy Court Southern District of Texas (Houston) Judge: Hon. Eduardo V Rodriguez Debtor's Counsel: Johnie J. Patterson II, Esq. WALKER & PATTERSON, P.C. 4815 Dacoma St. Houston, TX 77092 Tel: 713-956-5577 Estimated Assets: $1 million to $10 million Estimated Liabilities: $1 million to $10 million The petition was signed by Dustin Tucker, manager. A copy of the Debtor's list of seven unsecured creditors is available for free at: http://bankrupt.com/misc/txsb18-33097_creditors.pdf A full-text copy of the petition is available for free at: http://bankrupt.com/misc/txsb18-33097.pdf MILLAR WESTERN: Moody's Rates New C$150MM Secured Notes 'B2' ------------------------------------------------------------ Moody's Investors Service assigned a B2 rating to the proposed C$150 million senior secured notes of Millar Western Forest Products Ltd. Proceeds of the issue will be used to refinance existing debt. At the same time, Millar Western was assigned a B2 corporate family rating (CFR) and a B2-PD probability of default rating. The outlook for the ratings are stable. Assignments: Issuer: Millar Western Forest Products Ltd. Probability of Default Rating, Assigned B2-PD Corporate Family Rating, Assigned B2 Senior Secured Regular Bond/Debenture, Assigned B2 (LGD4) Outlook Actions: Issuer: Millar Western Forest Products Ltd. Outlook, Assigned Stable RATINGS RATIONALE Millar Western's B2 CFR is constrained by the company's relatively small size (proforma revenue of C$533 million), its private equity ownership and the significant pricing volatility of its core products bleached chemi-thermomechanical pulp (BCTMP) and lumber. Millar Western benefits by the company's large presence in the production of BCTMP, the comparatively low cost of its lumber and pulp operations, good liquidity and relatively strong leverage and interest coverage metrics (projected to be about 2x and 7x in 2018). Although credit metrics are currently strong, Millar Western's cash generation can vary widely within relatively short periods of time. A material decline in lumber and pulp prices, which occurred as recently as 2015, could seriously impair the company's financial performance. However, the company's current smaller debt position following the debt for equity exchange in 2017 (which reduced debt by about C$180 million) combined with higher earnings from the recently completed bioenergy effluent project and a recently acquired specialty lumber manufacturer has improved the credit profile of the company. Nevertheless, with one pulp mill generating about half of the company's earnings, coupled with private equity ownership and with all of the company's assets located in Alberta, event risk remains a key factor constraining the rating. The proposed notes are senior secured obligations of Millar Western and are rated B2, in-line with the corporate family rating. The company's B2 senior secured rating incorporates the noteholders' position behind the company's proposed C$50 million asset-backed revolver (unrated). Millar Western has good liquidity, with about C$100 million of sources to cover debt maturities of about C$30 million over the next four quarters. Millar Western had a cash balance of $15 million (March 2018), C$38 million of committed revolver availability and Moody's estimate that company will generate about C$50 million of positive free cash flow in the next 12 months. Debt maturities include C$7 million of amortization and Moody's estimate of C$23 million of mandatory bond payments through a 50% excess cash flow sweep. As part of this transaction, Millar Western is expected to refinance its currently undrawn C$50 million revolver (with about C$12 million in LCs outstanding) with a new C$50 million ABL facility (unrated) that matures in five years. Moody's anticipates that the company will use its cash and possibly draw a portion of its ABL facility to fund the company's log harvesting and hauling, typically building up a log inventory valued at about C$45 million while the ground remains frozen during the first quarter of the year. Covenant issues are not expected over the near term. Alternative sources of liquidity are limited as most of the company's assets are encumbered. The stable outlook reflects Moody's view that Millar Western will be able to maintain good operating performance and liquidity through volatile industry conditions. Moody's expects Millar Western's credit protection measures will remain solid over the next 12 to 18 months as BCTMP pulp and lumber prices remain strong as near term demand exceeds supply growth. This is tempered by the volatility in both BCTMP and lumber prices, which can fluctuate significantly when supply and demand are out of balance. Factors that could lead to an upgrade: - A reduction of event risk. This could be achieved through an increase in scale (current sales are about US$430 million proforma for Spruceland), improved operational flexibility (from just one key pulp mill, plus three sawmills) or increased geographic diversification (currently all of the company's assets are located in Alberta). - Maintaining strong leverage with debt to EBITDA at or below 3.5x and (RCF minus Capex)/debt at or above 8% (1.7x and 34% at March 2018, adjusted per Moody's standard definitions) on a sustainable basis, while maintaining good liquidity. Factors that could lead to a downgrade: - Aggressive financial policies including debt-funded dividends. - The company's liquidity deteriorates. - Sustaining debt to EBITDA above 5x and (RCF minus Capex)/debt below 3% (1.7x and 34% at March 2018, adjusted per Moody's standard definitions). The principal methodology used in these ratings was Paper and Forest Products Industry published in March 2018. Headquartered in Edmonton, Alberta, Canada, Millar Western Forest Products Limited is a producer of bleached chemi-thermomechanical pulp and lumber. The company is privately owned, 80% by Atlas Holdings LLC and 20% by the Millar family. MILLAR WESTERN: S&P Assigns 'B' Corp. Credit Rating, Outlook Stable ------------------------------------------------------------------- S&P Global Ratings said it assigned its 'B' long-term corporate credit rating to Alberta-based Millar Western Forest Products Ltd. The outlook is stable. At the same time, S&P Global Ratings assigned its 'B+' issue-level rating and '2' recovery rating to the company's proposed C$150 million senior secured notes due 2023. The '2' recovery rating reflects our expectation for substantial (70%-90%; rounded estimate 80%) recovery in our simulated default scenario. The ratings on Millar Western primarily reflect our view of its relatively limited scale and breadth of operations, and the sensitivity of the company's margins and credit ratios to historically volatile pulp and lumber prices. The ratings also take into account the company's low debt following Millar Western's distressed exchange transaction in 2017 and expectation for strong credit measures over the next 12 months amid favorable industry conditions. Millar Western is privately owned by Atlas Holdings LLC (80% ownership), with the Millar family owning the remaining 20%. The company was acquired by Atlas in May 2017 following its distressed exchange transaction, which resulted in debt being reduced by about C$185 million (a decline of about 60%). Millar Western is proposing to issue C$150 million of senior secured notes to repay its existing debt. Concurrently, the company will enter into a secured C$50 million asset-based lending (ABL) facility. S&P said, "The stable outlook reflects our expectation that Millar Western will generate adjusted debt-to-EBITDA in the high-1x area in 2018 and 2019. We estimate continuing momentum in U.S. housing starts and that strong BCTMP demand in China will primarily lead to growth in earnings and cash flow over this period. "We could lower the ratings if we expect the company's adjusted debt-to-EBITDA to approach 4x and remain near this level. We believe this could occur from the company's adoption of a more aggressive financial policy, operational disruptions, or declines in lumber and pulp prices by more than 15% relative to our expectations in 2019. We could also lower the ratings if we believed constraints on fiber availability were likely to have a significant impact on operations. "We view an upgrade over the next 12 months as unlikely. However, a higher rating would require a change in our view of Atlas as a financial sponsor. Under this scenario, we would expect the company to generate positive free operating cash flows and maintain and sustain adjusted leverage below 3x, with a low probability of material acquisitions or dividends that could increase leverage above this level. We would also require the company to improve its access to fiber sources." MIRAGE DENTAL: Taps Avison Young Northern California as Broker -------------------------------------------------------------- Mirage Dental Associates, Professional LLC seeks approval from the U.S. Bankruptcy Court for the District of Colorado to hire a real estate broker. The Debtor proposes to employ Avison Young - Northern California, Ltd. to handle the listing, marketing, and eventual lease of the Debtor's property located at 85 Rio Grande Drive, Castle Rock, Colorado. Alec Wynne, a real estate broker employed with Avison Young, disclosed in a court filing that all employees, officers and directors of the firm are "disinterested persons" as defined in section 101(14) of the Bankruptcy Code. The firm can be reached through: Alec Wynne Avison Young - Northern California Ltd. 1801 California Street, Suite 3750 Denver, CO 80202 Main Line: 720.508.8100 Direct Line: 720.508.8112 Mobile: 303.332.4952 Fax: 720.508.8120 Email: alec.wynne@avisonyoung.com 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. No official committee of unsecured creditors has been appointed in the Chapter 11 case. MIRAGE DENTAL: Taps Avison Young NY as Appraiser ------------------------------------------------ Mirage Dental Associates, Professional LLC, seeks approval from the U.S. Bankruptcy Court for the District of Colorado to hire a real estate appraiser. The Debtor proposes to employ Avison Young New York to conduct a valuation of its real property located at 85 Rio Grande Drive, Castle Rock, Colorado. Avison Young's fee for the appraisal is $4,700, with 50% due upon court approval. The firm will charge $350 per hour if required to testify or appear at deposition. Consultation will be charged at $250 per hour. Jaimee Keene, a real estate appraiser employed with Avison Young, disclosed in a court filing that all employees, officers and directors of the firm are "disinterested persons" as defined in section 101(14) of the Bankruptcy Code. The firm can be reached through: Jaimee Keene Avison Young New York 1801 California Street, Suite 3750 Denver, CO 80202 Main Line: 720.508.8100 Direct Line: 303.390.0963 Mobile: 303.588.6222 Email: jaimee.keene@avisonyoung.com 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. No official committee of unsecured creditors has been appointed in the Chapter 11 case. MOHDSAMEER ALJANEDI: Seeks Court OK of Proposed Plan Outline ------------------------------------------------------------ According to a notice, Mohdsameeer Aljandi Dental Corporation filed a motion asking the U.S. Bankruptcy Court for the Central District of California for entry of an order approving its disclosure statement describing a chapter 11 plan of reorganization. The Debtor asserts that the information in the disclosure statement is complete and accurate. The disclosure statement was filed along with a proposed chapter 11 plan of reorganization, setting forth provisions including the intended treatment of various classes of creditors, and the proposed course of action regarding executory contracts and unexpired leases, the means for execution and implementation of the Debtor's plan of reorganization, the federal tax consequences of plan confirmation, and plan voting and confirmation standards. The disclosure statement also sets forth the Debtor's financial problems and history and how they were addressed, distributions contemplated, and cash flow projections for the Debtor's future financial performance. The information in the disclosure statement provides creditors entitled to vote on the Debtor's plan of reorganization adequate information to make an informed judgment regarding whether to vote to accept or reject the Plan. The Debtor also asks the Court to schedule a confirmation hearing and fix related time periods for filing objections and voting to accept or reject the plan so that confirmation can proceed efficiently. Bankruptcy Rule 3017(c) provides that, [o]n or before approval of the disclosure statement, the court must fix a time within which the holders of claims and interests may accept or reject the plan and may fix a date for the hearing on confirmation of the plan. Pursuant to Bankruptcy Rules 2002(b) and 3020(b)(2), at least 28 days notice must be given by mail to all creditors and equity security holders of the time fixed for filing objections to, and the hearing for considering confirmation of a plan of reorganization. Bankruptcy Rule 3020(b) provides that, within a time specified by the Court, objections to plan confirmation must be filed with the Court and served on the Debtors, the official committee of unsecured creditors, if any, and any other entity designated by the Bankruptcy Court. The Debtor proposes that it will file evidence supporting confirmation, together with a memorandum in support of confirmation. About Mohdsameer Aljanedi Dental Beachside Dental Group is a multi-specialty dental company offering a wide range of dental services, including general and cosmetic dentistry, dental sedation, periodontics' gum specialist, orthodontics, endodontics, oral surgery, pedodontics, prosthodontics, and laser dentistry. The Company's gross revenue amounted to $1.65 million in 2016 and $1.50 million during the year prior that. Mohdsameer Aljanedi Dental Corporation, d/b/a Beachside Dental Group, previously sought bankruptcy protection (Bankr. C.D. Cal. Case No. 13-30138) on Aug. 9, 2013. Mohdsameer Aljanedi Dental again filed a Chapter 11 petition (Bankr. C.D. Cal. Case No. 17-14089) on Oct. 15, 2017. The petition was signed by Mohdsameer Aljanedi, president. At the time of filing, the Debtor disclosed $1.50 million in total assets and $3.78 million in liabilities. The case is assigned to Judge Mark S. Wallace. The Debtor is represented by Michael R. Totaro, Esq., at Totaro & Shanahan. On October 20, 2017, the Court approved the appointment of Constance R Doyle as Patient Care Ombudsman for Mohdsameeer Aljandi Dental Corporation, d/b/a Beachside Dental Group. MOOD MEDIA: Moody's Lowers Corp. Family Rating to Caa3, Outlook Neg ------------------------------------------------------------------- Moody's Investor's Service downgraded its ratings for Mood Media Borrower, LLC, including the company's Corporate Family Rating (CFR, to Caa3 from B3) and Probability of Default Rating (PDR, to Caa3-PD from B3-PD), and the rating for its senior secured second lien notes (to Ca from Caa1). The ratings outlook is negative. "The downgrades reflect significant deterioration in liquidity, a deemed untenable capital structure given the company's substantial debt service burden, and ensuing heightened risk of default and potentially material impairment of creditor claims in an event of default scenario," according to Moody's analyst Jonathan Teitel. The following rating actions have been taken for Mood Media Borrower, LLC: Downgrades: Corporate Family Rating, downgraded to Caa3 from B3 Probability of Default Rating, downgraded to Caa3-PD from B3-PD Senior Secured Regular Bond/Debenture, downgraded to Ca (LGD5) from Caa1 (LGD5) Outlook Actions: Outlook, changed to Negative from Stable RATINGS RATIONALE Mood Media's Caa3 CFR reflects the company's heavy debt service burden owing to high cost debt capital in the context of a levered balance sheet, coupled with weak liquidity. Mood Media competes in a fragmented market with a myriad of existing and potential competitors. Moody's thinks that barriers to entry are low and that Internet-based advertising and branding services compete indirectly with Mood Media's point-of-sale digital service offering. Revenue has declined in each of the last four years, and Moody's asserts that competitive threats will likely continue to suppress pricing, and that the company's revenue base will remain broadly pressured. There is a high level of uncertainty around the underlying economics of the business model, and debt service requirements will constrain the company's ability to reinvest in its business and execute on its strategies, according to the rating agency. Moody's expects that the company will have weak liquidity over the next twelve months, compounded in part by a cash absorptive profile and with the first lien debt having a sizable amount of requisite amortization. The company's revolver has very little additional borrowing capacity, and Moody's anticipates that financial covenants will have to be addressed with lenders and modified, in particular ahead of tightening in 2019. The negative ratings outlook reflects Moody's view that the company's liquidity will remain weak, and that ratings may need to be lowered if default risk and loss severity escalate further. Factors that could lead to a downgrade include a default on the company's obligations, including through a prospective distressed exchange of debt, and/or in the event that recovery prospects for lenders weaken further. An upgrade is unlikely in the near-term. However, prospective factors that could lead to an upgrade include a capital structure that Moody's considers tenable while liquidity provisions are significantly improved, along with a supportive pricing environment and market share growth. The principal methodology used in these ratings was Media Industry published in June 2017. Mood Media, headquartered in Austin, Texas, provides subscription branding and advertising services using primarily in-store/premises digital audio and visual media for customers in a variety of industries including quick serve restaurants, retailers, and hotels. The company is majority-owned by affiliates of Apollo Global Management, LLC and GSO / Blackstone Debt Funds Management, LLC. Revenue for the twelve months ended March 31, 2018 were roughly $400 million. NATIONS FIRST: Court Extends Exclusive Periods for 60 Days Only --------------------------------------------------------------- The U.S. Bankruptcy Court for the Eastern District of California has granted Nations First Capital, LLC, an extension of the deadline during which only the Debtor can file a plan of reorganization and solicit acceptances of the plan for 60 days only. The Troubled Company Reporter has previously reported that the Debtor asked the Court to extend the exclusive periods during which only the Debtor can file and solicit acceptances of the plan through and including September 4, 2018, and November 5, 2018, respectively. The Debtor mentioned that a summary of the Plan, including the TopMark business plan was filed with the Court with the Debtor's first status conference statement. A draft Plan has been circulated to the Committee and its counsel, along with the TopMark business plan. However, the Committee has not had a sufficient chance to evaluate the Plan and provide the Debtor with its support before this motion had to be filed. The Debtor believed that, together with the Committee, it is making good faith progress toward reorganization and prospects of a viable plan support granting the requested short extension. In addition, the Debtor represented that the Committee has had a mere four weeks of existence and only approximately two weeks with employed counsel. The relatively short period of time from the time the Committee was appointed favors the requested 90-day extension of the exclusive periods. About Nations First Capital Nations First Capital, LLC, d/b/a Go Capital, headquartered in Roseville, California, specializes exclusively on providing capital on semi-trucks and trailers. The Company provides unique solutions customized to answer the specific needs of the trucking industry. Its services most of the credit spectrum with an expertise in challenged credit and owner operator business. Nations First Capital filed a Chapter 11 petition (Bankr. E.D. Cal. Case No. 18-20668) on Feb. 7, 2018. In the petition signed by James Daniel Summers, managing director, the Debtor estimated $1 million to $10 million in assets and $10 million to $50 million in liabilities. Judge Christopher M. Klein presides over the case. Steven H. Felderstein, Esq., at Felderstein Fitzgerald Willoughby & Pascuzzi LLP, is the Debtor's bankruptcy counsel. NICHOLAS PEZZA: Shaikhs Buying Sadle Brook Property for $375K ------------------------------------------------------------- Nicholas Pezza asks the U.S. Bankruptcy Court for the District of New Jersey to authorize the sale of his residential real estate located at 488 Dewey Avenue, Saddle Brook, New Jersey to Mark and Imran Shaikh for $375,000. The Debtor certifies that his Chapter 11 Plan is based, in part, on the proposed sale of the Property. He has entered into the Real Estate Contract for the sale of the Property to the Buyers. The contract of sale provides for a total sale price of $375,000. The closing on the transfer of title, as required by the Purchasers must be no later than June 15, 2018. He believes that the sale price of $375,000 reflects the highest and best offer for the Property at this time. The contract of sale was obtained after extensive marketing efforts undertaken by the real estate brokers and is an arms'-length transaction. The Property is subject to a first mortgage, held by Deutsche Bank National Trust. The total amount owed to Deutsche Bank Nation Trust is less than the Purchase price offered by the contract. Under the terms of the contract of sale Deutsche Bank National Trust, the first mortgagee will receive the full balance owed on the mortgage. Per the proof of claim filed by the mortgage creditor the balance owed at the time of filing was $336,878. At closing, this mortgage will be paid and satisfied in full. A copy of the Contract attached to the Motion is available for free at: http://bankrupt.com/misc/Nicholas_Pezza_96_Sales.pdf The Purchasers: Mark and Imran Shaikh 42 Iozia Terrace Elmwood Park, NJ 07407 Counsel for the Debtor: Michael J. Cavallaro, Esq. 25 Lafayette Place Kearny, NJ 07032 Telephone: (201) 243-7818 Facsimile: (201) 246-6174 E-mail: attorneyforchrist@gmail.com Nicholas Pezza filed his Chapter 13 case on Dec. 8, 2016 which case was converted to a Chapter 11 bankruptcy (Bankr. D.N.J. Case No. 16-33371 (RG)) on May 10, 2017. NORTH CAROLINA FURNITURE: Taps Martinec Winn as Legal Counsel ------------------------------------------------------------- North Carolina Furniture Direct I Ltd. seeks approval from the U.S. Bankruptcy Court for the Western District of Texas to hire Martinec, Winn & Vickers, P.C. as its legal counsel. The firm will advise the Debtor regarding its duties under the Bankruptcy Code; negotiate with creditors; assist in the preparation of a bankruptcy plan; and provide other legal services related to its Chapter 11 case. The firm will charge these hourly rates: Joseph Martinec $500 Ed Winn $350 Lee Vickers $350 Paralegals $100 Administrative $20 On the petition date, $10,260 for fees and $1,966.26 for expenses incurred in preparation for the filing of the Debtor's petition and schedules were paid, along with a replenishable evergreen retainer of $12,773.74. In addition, $5,000 per month may be added to the retainer, according to court filings. Joseph Martinec, Esq., at Martinec, disclosed in a court filing that he does not represent any interest adverse to the Debtor and its estate. The firm can be reached through: Joseph D. Martinec, Esq. Martinec, Winn & Vickers, P.C. 611 S. Congress Avenue, Suite 450 Austin, TX 78704-1771 Tel: (512) 476-0750 Fax: (512) 476-0753 Email: martinec@mwvmlaw.com About North Carolina Furniture Direct I Ltd. North Carolina Furniture Direct I Ltd. owns a furniture store in San Marcos, Texas, offering a vast selection of living, dining and bedroom furniture, mattresses & decorative accents. North Carolina Furniture sought protection under Chapter 11 of the Bankruptcy Code (Bankr. W.D. Tex. Case No. 18-10595) on May 11, 2018. At the time of the filing, the Debtor estimated assets of $1 million to $10 million and liabilities of $1 million to $10 million. Judge Tony M. Davis presides over the case. NRC US: Moody's Hikes Corp. Family Rating to B2, Outlook Stable --------------------------------------------------------------- Moody's Investors Service upgraded NRC US Holding Company, LLC's Corporate Family Rating (CFR) to B2 from B3 and the Probability of Default Rating to B2-PD from B3-PD. Additionally, Moody's upgraded the company's recently assigned senior secured first-lien revolving credit facility and senior secured first-lien term loan ratings to B2 from B3. The rating outlook is stable. The upgrades reflect the additional earnings and cash flow from the addition of Sprint Energy Services (Sprint), also owned by J.F. Lehman & Company (JFL), to form a more comprehensive environmental, compliance and waste management services provider. Moody's expects the earnings benefit from Sprint to offset a now reduced planned distribution to JFL, resulting in a largely neutral-to-slightly de-leveraging transaction. The larger, more diversified company should be better positioned to capture improving fundamentals within the energy sector, with Sprint's existing and pending landfill operations providing a meaningful boost to margins and cash flow over the next two years. Moody's expects to withdraw the B3 senior secured ratings on NRC's existing revolving credit facility and term loan upon closing of this proposed transaction. RATINGS RATIONALE The B2 CFR encompasses anticipated benefits from the combination of NRC and Sprint, a vertically-integrated provider of environmental and waste management services to the upstream and midstream energy markets. NRC will have greater scale (revenues to $360 million from $235 million) and revenue diversification (adding energy waste disposal revenues) and a broader geographic footprint (expansion into the Southeastern US, Gulf of Mexico and West Texas regions) following the acquisition of SWS Environmental Services, Inc. and the addition of Sprint. The combined company will provide cradle-to-grave environmental and waste management services to a broad range of end markets and customers. Existing and pending landfill capacity in the highly active Eagle Ford (TX) and Permian Basins (TX) should generate stronger earnings and cash flows as energy sector fundamentals continue to strengthen. The B2 CFR also acknowledges the reduction in leverage following NRC's intention to reduce the size of its planned distribution to JFL by lowering the term loan amount by $50 million, to $308 million, from the original proposed amount of $358 million. The proposed refinancing leaves pro forma debt-to-EBITDA near 5x, consistent with mid-B rating levels given the enhanced operating profile. Financial flexibility should improve in the near-term as Sprint's Karnes County landfill, opened in October 2016, is expected to generate sizable earnings and cash flow as operations ramp towards full-run rate performance throughout 2018 and into 2019. In addition, two additional landfills in the Permian Basin are scheduled to open in 2019, expanding capacity for additional high-margin revenues to NRC's operating model. Moody's took the following rating actions on NRC US Holding Company, LLC: - Corporate Family Rating, upgraded to B2 from B3 - Probability of Default Rating, upgraded to B2-PD from B3-PD - Senior Secured Revolving Credit Facility, upgraded to B2 (LGD3) from B3 (LGD3) - Senior Secured Term Loan, upgraded to B2 (LGD3) from B3 (LGD3) - Rating outlook is Stable from Positive Moody's expects to withdraw the following ratings upon closing of the proposed transaction: - Senior Secured Revolving Credit Facility, at B3 (LGD3) - Senior Secured Term Loan, at B3 (LGD3) NRC's B2 CFR reflects still relatively small scale, a history of uneven free cash flow, the inherent cyclicality in energy end markets and the unpredictable nature of emergency response revenues. Leverage also remains high following the recapitalization with Moody's acknowledging that meaningful revenue synergies in the landfill openings should significantly improve earnings. Standby services, approximately 15% of total revenues, are largely predictable and generate higher margins, however revenues related to environmental services (over 75% of revenues) are more volatile and generate substantially lower margins. Waste disposal revenues at less than 10% of revenues are expected to demonstrate accelerated growth which should translate into higher returns as incremental volumes in excess of fixed operating costs flow through to the bottom line. Liquidity is adequate with the proposed, larger $40 million revolving credit facility set to expire in 2023 expected to be undrawn at transaction close. Moody's expects revolver usage to be largely limited to funding acquisitions as free cash flow over the next 12-18 months is anticipated to exceed $15 million. The revolving facility size is modest (approximately 10%) in relation to the company's revenue base, however cash on hand in the $10 million range along with growing free cash flow help offset this concern. The facility is expected to include a springing Total Net Leverage Ratio tested if borrowings, net of a set amount of letters of credit, exceed an agreed upon percentage of the total facility. The term loan will not have any financial maintenance covenants. Because covenant headroom is very tight under the existing facility, the refinancing improves covenant flexibility by shifting to a covenant-lite structure. The stable outlook reflects a high percentage of recurring revenues driven by contractual services - retainers and master service agreements - that are mandated by various federal and state regulations. The addition of waste disposal services in highly productive shale basins, where breakeven production costs have improved dramatically, positions NRC to benefit from an increasingly favorable energy sector backdrop. Additionally, NRC has a business model that is capable of generating solid levels of free cash flow due to modest capital expenditure needs. The stable outlook also includes Moody's expectation for financial policies to be supportive of integrating and growing the combined business, enabling the new entity to capitalize on favorable trends within its key end markets to reduce leverage before considering additional distributions to JFL. With this action, upward rating momentum is limited at this time. However, profitable revenue growth and a reduction in revenue volatility could generate positive rating pressure. Quantitatively, debt-to-EBITDA approaching 4x, EBIT-to-interest coverage trending towards 2x and free cash flow-to-debt in the mid-single digit range could lead to higher ratings. The ratings could be downgraded due to greater volatility in revenues, expectations for sustained weak free cash flow or an erosion in liquidity. Debt-to-EBITDA 5x or higher, the EBIT margin falling to the low-single digits or EBIT-to-interest below 1.5x range could also result in negative rating pressure. Additionally, additional distributions or other aggressive financial policy moves could also result in negative rating actions. NRC US Holding Company, LLC provides recurring environmental and compliance services (remediation, cleaning, decontamination, maintenance and inspection) to the marine and rail transportation, general industrial and energy markets. The addition of Sprint Energy Services expands the company's capabilities to include waste management services to the upstream and midstream energy markets. Pro forma revenues for the latest twelve months ended March 31, 2018 were approximately $360 million. Since early 2012, NRC has been owned by funds affiliated with J.F. Lehman & Company. OFF THE GRID: Centrally Grown Taps Margulies Faith as Counsel ------------------------------------------------------------- Centrally Grown Holdings LLC, an affiliate of Off The Grid LLC, seeks approval from the U.S. Bankruptcy Court for the Central District of California to hire Margulies Faith, LLP as its legal counsel. The firm will advise the Debtor regarding its duties under the Bankruptcy Code; negotiate with creditors; assist in the preparation of a plan of reorganization; and provide other legal services related to its Chapter 11 case. The firm will charge these hourly rates: Partners $585 Associates $395 to $470 Paralegals $225 Margulies Faith received a pre-bankruptcy retainer from the Debtor in the sum of $29,300. Craig Margulies, Esq., at Margulies Faith, disclosed in a court filing that the firm is a "disinterested person" as defined in section 101(14) of the Bankruptcy Code. The firm can be reached through: Craig G. Margulies, Esq. Monsi Morales, Esq. Meghann A. Triplett, Esq. Margulies Faith, LLP 16030 Ventura Blvd., Suite 470 Encino, CA 91436 Telephone: (818) 705-2777 Facsimile: (818) 705-3777 E-mail: Craig@MarguliesFaithLaw.com E-mail: Monsi@MarguliesFaithLaw.com About Off The Grid and Centrally Grown Holdings Founded in 2009, Off The Grid LLC is a privately-held company in San Simeon, California, that leases real estate properties. Centrally Grown Holdings, LLC owns the Centrally Grown restaurant and bar, which serves craft cocktails, local beers and wine. Both companies are affiliates of Red Mountain Farms, LLC, which sought bankruptcy protection (Bankr. C.D. Cal. Case No. 18-10202) on Feb. 14, 2018. Off The Grid sought protection under Chapter 11 of the Bankruptcy Code (Bankr. C.D. Cal. Case No. 18-10399) on March 20, 2018. Centrally Grown Holdings filed for Chapter 11 protection (Bankr. C.D. Cal. Case No. 18-10624) on April 24, 2018. The cases are jointly administered under Case No. 18-10399. In the petitions signed by David Robertson, member, Off The Grid estimated assets of $1 million to $10 million and liabilities of $1 million to $10 million. Centrally Grown Holdings estimated $1 million to $10 million in assets and $1 million to $10 million in liabilities. Judge Deborah J. Saltzman presides over the cases. OREXIGEN THERAPEUTICS: Court OKs Stipulation with Cardinal Health ----------------------------------------------------------------- BankruptcyData.com reported that the U.S. Bankruptcy Court issued an order approving Orexigen Therapeutics' motion for authority to enter into a stipulation with Cardinal Health and Cardinal Health 105. As previously reported, "Cardinal Health owes the Debtor a total of $5,100,696.04 under the WPA (the 'Debtor's Net WPA Claim'). Around December 2017, certain third-party customers made payments to the Debtor totaling $11,082,868.33 for Product sold under the Title Model Addendum (the 'TMA Payment'), which Cardinal Health 105 argues should have been paid to it. In connection with this dispute, the Debtor and Cardinal Health 105 entered into the Letter Agreement, whereby the Debtor agreed to certain modified payment terms with respect to the TMA Payment. In accordance with the Letter Agreement, the Debtor made a payment totaling $5,541,434.17 to Cardinal Health 105. However, the Debtor did not pay the remainder of the TMA Payment before the Petition Date, and a total of $5,541,434.17 remains outstanding ('Cardinal Health 105's TMA Claim')." The stipulation further settles, "The Stipulation accomplishes several goals shared by the Parties. Among other things, approval of the Stipulation will result in the estate's immediate realization of $2.5 million of the Debtor's Net WPA Claim, provides an expeditious process for resolving the dispute between the Parties, and guarantees that the Parties will continue to honor their respective postpetition obligations. More specifically, the Stipulation states that, within three (3) business days of the entry of an Order approving the Stipulation, Cardinal Health shall make a payment of $2.5 million to the Debtor on account of the Debtor's Net WPA Claim." About Orexigen Therapeutics Based in La Jolla, California, Orexigen Therapeutics, Inc. -- http://www.orexigen.com/-- is a biopharmaceutical company focused on the treatment of weight loss and obesity. It is a publicly traded company with its shares listed on The NASDAQ Global Select Market under the ticker symbol "OREX". The company has 111 employees in the U.S. Orexigen Therapeutics sought protection under Chapter 11 of the Bankruptcy Code (Bankr. D. Del. Case No. 18-10518) on March 12, 2018. In its petition signed by Michael A. Narachi, president and CEO, the Debtor disclosed $265.1 million in assets and $226.4 million in liabilities. Judge Kevin Gross presides over the cases. The Debtor tapped Hogan Lovells US LLP as bankruptcy counsel; Morris, Nichols, Arsht & Tunnell LLP as Delaware counsel; Ernst & Young LLP as financial advisor; Perella Weinberg Partners as investment banker; and Kurtzman Carson Consultants LLC as claims and noticing agent. Andrew R. Vara, Acting U.S. Trustee for Region 3, appointed three creditors to serve on the official committee of unsecured creditors. PALMER PARK: U.S. Trustee Unable to Appoint Committee ----------------------------------------------------- The Office of the U.S. Trustee on June 4 disclosed in a court filing that no official committee of unsecured creditors has been appointed in the Chapter 11 case of Palmer Park/Landover Boys & Girls Club, Inc. About Palmer Park/Landover Boys & Girls Club Inc. Palmer Park/Landover Boys & Girls Club, Inc. sought protection under Chapter 11 of the Bankruptcy Code (Bankr. D. Md. Case No. 18-15719) on April 29, 2018. In the petition signed by Rolline Washington, chairman, the Debtor disclosed that it had estimated assets of less than $500,000 and liabilities of less than $100,000. The Debtor tapped the Law Office of Kimberly Taylor Logan as its legal counsel. PARKER BUILDING: Washington Federal to Auction Property on July 17 ------------------------------------------------------------------ The real property of The Parker Building, LLC located at 140 S. Lindon Lane, Tempe, AZ 85281, will be sold at public auction to the highest bidder on July 17, 2018, at 10:00 a.m. at the law offices of Quarles & Brady LLP in Phoenix, Arizona. Proceeds from the sale will be used to pay debt owed to Washington Federal in the original principal balance of $1,200,000. Washington Federal, as the Beneficiary, has perfected its security interests in certain of the collateral by filing a financing statement on May 2, 2008 at Filing No. 2008-153-8571-8 in the office of the Arizona Secretary of State. Washington Federal is located at 425 Pike Street, Seattle, Washington 98101. Every bidder except for Washington Federal will be required to provide a $10,000.00 deposit in form satisfactory to the Trustee as a condition to entering a bid. The Beneficiary reserves the right to transfer the secured indebtedness to, and/or to acquire title to all or part of the collateral in the name of, a title-holding affiliate following the commencement of this sale. This sale will not exhaust the power of sale contained in the Deed of Trust as to any remaining property encumbered by the Deed of Trust, which may, at the Beneficiary's option, be sold in one or more subsequent sale proceedings. The Trustee under the Deed of Trust may be reached at: W. Scott Jenkins, Jr. Quarles & Brady LLP Renaissance One Two North Central Avenue Phoenix, AZ 85004 For information, contact Kelly Webster at kelly.webster@quarles.com or (520) 770-8712. PENTHOUSE GLOBAL: Intellectual Property Rights Sold for $1.075M --------------------------------------------------------------- Rhett Pardon, writing for xbiz.com, reports that the U.S. Bankruptcy Court has approved the sale of Penthouse Global Media's intellectual property rights to its current licensee, Penthouse Clubs Global Leasing LLC, for $1.075 million. Penthouse Global is selling most of its assets to the parent of XVideos.com for $11.2 million. Al Masse, managing principal of Broadway Advisors, Penthouse Global's investment banker, told XBIZ the deal must close by June 15. According to XBIZ, XVideos.com defeated a stalking horse offer by Dream Media, which has said it held $10.3 million in defaulted notes, and sought to acquire the Company for an additional $ million. 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. 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. PREMIER PCS: July 26 Plan Confirmation Hearing ---------------------------------------------- Judge H. Christopher Mott of the U.S. Bankruptcy Court for the Western District of Texas issued an order approving the disclosure statement explaining Premier Pcs of TX, LLC's plan as containing adequate information. July 6, 2018 is fixed as the last day for filing and serving written objections to confirmationof the plan, and July 26, 2018 at 10:00 A.M. is fixed as the time and place of the hearing on confirmation of the plan. As previously reported by The Troubled Company Reporter, the Plan indicates that general unsecured creditors are classified in classes and are being offered distribution ranging from 75% to 100% of their allowed claims respectively, to be distributed in installment payments. Classes of secured claims are to receive other treatments. All property tax creditors are grouped into single, unimpaired class, and they will continue to receive their regular non-bankruptcy amounts of payment, on tome and in full. The Debtor will distribute all Plan payments to creditors from the revenues from regular operations. A full-text copy of the Disclosure Statement filed on March 26, 2018 is available at: http://bankrupt.com/misc/txwb17-32021-92.pdf About Premier PCS of TX Based in El Paso, Texas, Premier PCS of TX, LLC, provides computer maintenance and repair services. Premier PCS of TX, based in El Paso, TX, filed a Chapter 11 petition (Bankr. W.D. Tex. Case No. 17-32021) on Dec. 6, 2017. In the petition signed by Richard Ahn, managing member, the Debtor estimated $500,000 to $1 million in assets and $1 million to $10 million in liabilities. The Hon. Christopher H. Mott presides over the case. E.P. Bud Kirk, a partner at the law firm of E.P. Bud Kirk, serves as bankruptcy counsel. QSL PORTAGE: Proposes an Online Auction of All Tangible Property ---------------------------------------------------------------- QSL Portage, LLC, asks authority from the U.S. Bankruptcy Court for the Northern District of Indiana to authorize the online auction sales of substantially all its tangible property, consisting of equipment and memorabilia, to be conducted by HYPERAMS. The Debtor proposes to sell the Assets free and clear of any liens, claims and encumbrances. Since 2006, the Debtor has operated the Quaker Steak & Lube restaurant at 6245 Ameriplex Dr., Portage, Indiana ("Leased Premises"). Its bankruptcy filing was precipitated by QSL Franchise Systems, LLC ("Franchisor")'s purported termination of the Debtor's franchise agreement shortly before the Petition Date. The Debtor and the Franchisor are parties to related adversary proceeding no. 17-2062. The Franchisor also filed a motion to convert the Case, with respect to which a final hearing was held on April 17, 2018. On May 4, 2018, the Court approved agreed orders between the Debtor and the Franchisor to stay all pending matters and deadlines in the Adversary Proceeding, as well as post-hearing submissions and the deadline for the Court's ruling on the Motion to Convert, through May 31, 2018, based on the parties' tentative resolution of their disputes. The Court also entered the Cash Collateral Order, wherein the Internal Revenue Service consented to the Debtor's continued use of its cash collateral through June 30, 2018 on certain terms and conditions, including the Debtor's representation that it intends to move for dismissal of the bankruptcy case within the next 30 days as part of a tentative resolution with QSL Franchise Systems, LLC to wind down the Debtor's business and liquidate the Debtor's assets in partial satisfaction of IRS' liens. As reflected in its amended proof of claim filed on April 25, 2018, the Internal Revenue Service has a claim in excess of $1 million, a substantial portion of which is secured by federal tax liens. Also on May 4, 2018, the U.S. Trustee filed a motion to dismiss or convert the Case based on the Debtor's failure to pay U.S. Trustee statutory fees, indicating that delinquent fees now total $14,980. The UST Motion is currently scheduled for an initial prehearing conference on May 30, 2018. The Debtor consents to dismissal of the Case, provided that entry of the dismissal order is delayed for approximately 45 days, once the Proposed Sale is completed. Accordingly, the Debtor proposes that the Court continues the UST Motion for final hearing and entry of an agreed dismissal order in early July 2018. A final hearing on the motion of the Debtor's landlord, STORE Master Funding X, LLC, for certain relief pursuant to section 365(d)(3) of the Bankruptcy Code is currently scheduled for final hearing on May 23, 2018 at 1:30 p.m. If the Court were to grant the relief requested, the Debtor will voluntarily surrender the Leased Premises to the Landlord immediately upon completion of the Proposed Sale in approximately 60 days. Alternatively, the Debtor would consent to immediate surrender of the Leased Premises, subject to the express condition that the Debtor has 60 days to remove personal property from the Leased Premises as part of the auction process. The Debtor's secured creditor Internal Revenue Service consents to the Proposed Sale and the Debtor's proposed employment of HYPERAMS to conduct online auction sales of the Debtor's equipment and memorabilia. The contemplated auction and dismissal process will span approximately 60 days, including 15 days of marketing, followed by 15 days of online bidding, 15 days for the collection and removal of property by successful bidders, and 15 days for a final accounting and entry of the dismissal order. The IRS has also agreed to certain carve-outs from its collateral proceeds for payment of outstanding U.S. Trustee statutory fees and the Debtor's professional fees related to the Proposed Sale. Specifically, the IRS has agreed to payment of (i) any outstanding United States Trustee statutory fees ($14,980 as of May 4, plus additional fees that accrue prior to dismissal of the Case); (ii) the 5% commission and expense reimbursement up to $16,000 payable to HYPERAMS as set forth in the HYPER Application; and (iii) a flat fee of $10,000 to the Debtor's counsel, Shaw Fishman Glantz & Towbin, LLC; ("IRS Carve-outs"). The Debtor asks authority to pay the IRS Carve-outs and distribute the net proceeds of the Proposed Sale to the IRS on account of its secured claim. The Debtor will file a Report of the Sale immediately upon the conclusion of the Proposed Sale reflecting the outcome of the sale and the disbursement of sale proceeds to the aforementioned parties. As part of the Proposed Sale and contemplated dismissal of the Case, the Debtor, its principals and its attorneys, have entered into a settlement agreement with the Franchisor. The settlement agreement is expressly conditioned upon the dismissal of the Case and none of the consideration and releases provided thereunder become effective until after the Case is dismissed. In short, the parties have conditionally agreed to a consensual termination of the franchise in conjunction with the orderly wind down of the Debtor's business. The Franchisor has agreed to stay all pending litigation while the Debtor conducts the Proposed Sale for the benefit of creditors. It has further agreed to pay, after dismissal of the Case: (i) $50,000 to each of the Debtor's attorneys, Shaw Fishman and Shumaker Loop & Kendrick, LLP, in partial satisfaction of the fees incurred; (ii) $90,000 to the Debtor's owner, QSL Briski, LLC, in exchange for a covenant not to compete with Franchisor for a period of two years; and (iii) $60,000 payable through monthly installments of $5,000 to the Debtor's managing member, Larry Briski, for future consulting services up to 5 hours per week for the period of one year after dismissal of the Case. The Debtor believes that the Proposed Sale represents the best opportunity under the existing circumstances to maximize the value of its property in connection with the orderly wind down of its business. The Debtor asks an expedited hearing on the Motion to avoid incurring additional operating losses, tax liabilities and administrative expenses, and to promptly move forward with the Proposed Sale and dismissal of the Case. For the same reasons, it asks 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. A copy of the list of tangible property to be sold attached to the Motion is available for free at: http://bankrupt.com/misc/QSL_Portage_214_Sales.pdf The Franchisor: QSL FRANCHISE SYSTEM, LLC 7 St. Paul St., Suite 820 Batimore, MD 21202-1681 About QSL Portage QSL Portage operates the Quaker Steak & Lube restaurant at 6245 Ameriplex Dr., Portage, Indiana, since 2006. QSL Portage filed a Chapter 11 petition (Bankr. N.D. Ind. Case No. 17-21799) on June 26, 2017. Larry J. Briski, managing member, signed the petition. At the time of filing, the Debtor estimated less than $500,000 in assets and $1 million to $10 million in liabilities. Gordon E. Gouveia II, Esq., at Shaw Fishman Glantz & Towbin LLC, serves as the Debtor's legal counsel. The case is assigned to Judge James R. Ahler. No request has been made for the appointment of a trustee or examiner, and no official committee of unsecured creditors has been appointed by the Office of the United States Trustee. RAPHAEL METZGER: Bid to Vacate Stipulation with Ex-Wife Rejected ---------------------------------------------------------------- In the appeals case captioned TAMMY METZGER, Respondent, v. RAPHAEL METZGER, Appellant, No. B277651 (Cal. App.), appellant Raphael Metzger, former husband of Tammy Metzger, appeals from the trial court's denial of his motion under Code of Civil Procedure section 4732 to set aside an order entered on the parties' stipulation that Raphael pay $500,000 in attorney's fees to Tammy's counsel and $75,000 to counsel for the couple's daughter out of his 401(k) and law firm's profit-sharing plans. The California Court of Appeals concludes that the trial court did not abuse its discretion in denying the motion because Raphael failed to demonstrate mistake or that the trial court coerced him into entering into the stipulation. Accordingly, the Court affirms the order. Raphael moved under section 473 to set aside the stipulation and order, entered as an order approximately five months earlier, on the grounds of mistake, extrinsic fraud, and duress. He argued "[t]he essence of [his] claim is that [the trial judge] coerced [him] into settling the case under whatever terms [Tammy] and her attorneys demanded by appointing a receiver to liquidate the assets of [Raphael's] wholly owned law firm . . . over which [the trial court] acknowledged that [it] had no jurisdiction." Tammy countered by moving to lift the stay and appoint a receiver. Raphael's first ground for vacating the stipulation and order was mistake. "A 'mistake' justifying relief may be either a mistake of fact or a mistake of law. 'A mistake of fact exists when a person understands the facts to be other than they are.'" "An honest mistake of law is a valid ground for relief when the legal problem posed '"is complex and debatable."' Raphael contends that he entered into the stipulation and order mistakenly believing that the trial court would then vacate the receiver's appointment because the "settlement mooted any need for attorney fee advances. . . ." Raphael has not articulated a mistake that merits a section 473 set aside. If by "settlement," Raphael refers to the deal memo, there was no mistake. His obligations under the stipulation and order are independent of the deal memo. The deal memo stated: "Payment of fees to [Tammy's attorneys] are set forth in a separate Stipulation and Order." The interpretation of a contract is one of law. There is nothing complex or debatable about this quoted provision. It provided no basis for Raphael to reasonably believe that the deal memo "mooted any need for attorney fee advances. . . ." that were ordered in the separate stipulation and order. If by "settlement," Raphael means the stipulation and order to pay attorney fees, Raphael has identified no valid mistake of fact as nothing has occurred to moot that order. The purpose of the receiver was to ensure that Raphael pay the attorney fees identified in the stipulation and order to Tammy's counsel and Lopez. There is no indication that Raphael has paid those fees. Nowhere in the record did the trial court suggest it would vacate the order for a receiver before this case was closed and Raphael had paid the attorney fees, particularly as the court has watched Raphael make every possible litigation maneuver to avoid his payment obligations. "A judgment will not ordinarily be vacated at the demand of a defendant who . . . changed his mind after the judgment." The denial of Raphael's section 473 motion for asserted mistake was not an abuse of discretion. The essence of Raphael's section 473 motion and contentions on appeal is that the trial court's provisional and stayed appointment of a receiver over the assets of his law firm constituted fraud and coerced him into entering into the stipulation and order for fear that the receiver would ruin his law practice. The order appointing a receiver was lawful. The trial court has discretion to appoint a receiver to prevent dissipation of property during a divorce. That Raphael may have disagreed with the appointment of a receiver, or found it burdensome, did not make the provisional order fraudulent, improper, or void. A full-text copy of the Court's Decision dated May 7, 2018 is available at https://bit.ly/2sMmclz from Leagle.com. Raphael Metzger filed for chapter 11 bankruptcy protection (Bankr. N.D. Cal. Case No. 15-51548) on May 6, 2015. RELATIVITY MEDIA: UltraV Buying All Assets for $4.4 Million ----------------------------------------------------------- Relativity Media, LLC and affiliates ask the U.S. Bankruptcy Court for the Southern District of New York to authorize their Asset Purchase Agreement with UltraV Holdings, LLC in connection with the private sale of substantially all assets for $40 million credit bid plus $350,000 cash, subject to higher and better offers. Earlier this year, UltraV, as assignee of RM Bidder LLC, became the holder of that certain Secured Promissory Note in the aggregate principal amount of $60 million originally issued to RM Bidder under the terms of the plan of reorganization confirmed in the prior chapter 11 case. In February 2018, as the Debtors' business continued to deteriorate, UltraV and the Debtors engaged in discussions concerning a comprehensive restructuring of the Debtors' businesses, operations and assets. The result of those discussions was the execution of a Restructuring Support Agreement ("RSA"), dated as of Feb. 26, 2018, among the Debtors, UltraV and Ryan Kavanaugh pursuant to which the parties agreed to pursue a restructuring of the Debtors' businesses, operations and assets through a chapter 11 plan or section 363 sale process. The RSA also included UltraV's agreement to provide DIP financing to pay the costs and expenses of administering the chapter 11 restructuring contemplated in the RSA. Since the execution of the RSA, the Debtors have continued to hemorrhage cash, requiring UltraV to advance $769,100 (through the factoring of accounts receivable and new loans) to fund the ongoing operating expenses of the Debtors. Immediately upon his appointment on April 9, 2018, Colin Adams, the Debtors' Chief Restructuring Officer, took a fresh look at the Debtors' financial and operating condition and assessed the Debtors' alternatives. Faced with (a) an April 12, 2018 maturity on the Prepetition Secured Note, (b) a primary operating account holding less than a month's projected operating and payroll expenses (let alone debt service), (c) no realistic prospect of immediately generating sufficient cash receipts to cover necessary expenses, and (d) a collection of assets (including the Netflix contract) whose value diminishes over time, Mr. Adams determined that a prompt sale of the Debtors' assets was necessary to maximize and best preserve what value remained. To that end, Mr. Adams began negotiations with UltraV to: (a) secure immediate, near-term liquidity to preserve the Debtors' assets during negotiations – resulting in $769,100 in prepetition funding; (b) obtain a commitment for debtor in possession financing sufficient to file and complete these chapter 11 cases; and (c) construct an asset purchase agreement framework that would not only transfer assets to UltraV, but would also benefit the other creditors of these estates by having UltraV assume millions of dollars of liabilities, and establishing, as part of Ultra V's stated purchase price, a wind-down budget projected to result in proceeds of approximately $350,000 being available for distribution to the Debtors' unsecured creditors. In light of the history of these Debtors, and their recent two year efforts to raise debt or equity capital and/or sell assets, the Debtors are asking approval of the sale without any requirement that the Debtors engage in a formal marketing process. Nevertheless, should any party be interested in potentially presenting a competing transaction to the one presented by UltraV, upon execution of a typical confidentiality agreement such party will have the opportunity to perform due diligence and submit a higher or better bid for the Debtors' assets prior to the hearing on the proposed sale. The Debtors have a full fiduciary out to solicit and accept a higher or better proposal from a third party (however unlikely that may be to materialize) with no break-up fee or similar impediments to such a third party offer. Further, The Debtors will solicit and consider offers for some or all of the Purchased assets at individual and aggregate purchase prices that are less than the $40 million credit bid set forth in the UltraV APA. The Debtors' assets are subject to first lien obligations under the Prepetition Secured Note in the principal amount of $60 million plus all accrued and unpaid interest (including any default interest), fees, costs, expenses (including, without limitation, the reasonable and documented fees and expenses required to be paid under the Prepetition Secured Note Documents), secured by a first lien on substantially all the Debtors' assets. The Prepetition Secured Note matured on April 12, 2018. As of the Petition Date, approximately $73.597 million was due and owing under the Prepetition Secured Note. The Debtors believe that the Prepetition Senior Note is the fulcrum security and that there is no value available for any creditors junior to UltraV (including the holder of the second lien RSL Note which aggregates approximately $44.293 million as of March 31, 2018) from the film and other assets intended to be sold, transferred and assigned to UltraV. The key terms and conditions of the APA are: a. Purchase Price: The aggregate consideration for the Purchased Assets will be (1) the discharge of a portion of the amounts outstanding and obligations under the Promissory Note equal to $40 million ("Credit Bid Consideration"); (2) the assumption of the Assumed Liabilities; and (3) cash in an amount equal to a wind-down budget in respect of the Sellers to be agreed, sufficient to pay, among other things, accrued and unpaid administrative expenses projected to be incurred through the confirmation of a plan of a chapter 11 plan plus $350,000 to be set aside for distributions to unsecured creditors ("Cash Consideration"). b. Assets: Substantially all assets of the Debtors c. Assumed Liabilities: The Purchaser will assume the following liabilities: (i) all Liabilities of Sellers under the Purchased Contracts that arise from and after the Petition Date; (ii) all Liabilities of Sellers under the Assumed Contracts; (iii) any cure amounts that Purchaser is required to pay with respect to Assumed Contracts; (iv) all Transfer Taxes; (v) all Liabilities that the Purchaser has agreed to assume, pay or discharge pursuant to this Agreement; (vi) (A) the Pre-Existing Guild Liens, if any and (B) the applicable Post-Closing Guild Claims, Post-Closing FMSMF Claims, Post-Closing AFM Claims and Post-Closing Equity (UK) Claims concerning those Covered Pictures that are subject to collective bargaining agreements with certain of the Guilds, FMSMF, AFM or Equity (UK), as applicable; (vii) the Accounts Payable; and (viii) those Liabilities of Sellers designated as Assumed Liabilities on Schedule 2.3(h). d. Free and Clear: The Purchaser will be vested with good title to such Purchased Assets, free and clear of all Liens (including any and all prepetition and postpetition adequate protection liens of the Sellers' prepetition lenders) (other than (a) Liens created by the Purchaser (or its designated Affiliate or Affiliates), (b) Permitted Exceptions and (c) Liens expressly assumed by the Purchaser (or its designated Affiliate or Affiliates) as Assumed Liabilities under this Agreement). e. Closing and Other Deadlines: The closing of the purchase and sale of the Purchased Assets and the assumption of the Assumed Liabilities will take place at the offices of Schulte Roth & Zabel LLP located at 919 Third Avenue, New York, New York 10022 on July 2, 2018, or at such other time or place as may be agreed by the parties. While technically it may be a private sale, it is being conducted in a manner akin to a public sale insofar as higher or better offers will be solicited and entertained. A copy of the APA attached to the Motion is available for free at: http://bankrupt.com/misc/Relativity_Media_77_Sales.pdf The Debtors ask the Court to waive the 14-day stay imposed by Bankruptcy Rule 6004(h). The Purchaser: ULTRAV HOLDINGS, LLC 660 Madison Avenue 15th floor New York, New York 10065 Telephone: (212) 432-4650 Attn: David Robbins E-mail: drobbins663@gmail.com The Purchaser is represented by: Joel Simon, Esq. Adam Harris, Esq. SCHULTE ROTH & ZABEL LLP 919 Third Avenue New York, NY 10022 E-mail: joel.simon@srz.com adam.harris@srz.com About Relativity Media Relativity Media, LLC is an American media company headquartered in Beverly Hills, California, founded in 2004 by Lynwood Spinks and Ryan Kavanaugh. Relativity Media and its affiliates sought protection under Chapter 11 of the Bankruptcy Code (Bankr. S.D.N.Y. Lead Case No. 18-11358) on May 3, 2018. This is the company's second trip to Chapter 11. Relativity Media LLC and its affiliates, including Relativity Fashion, LLC, previously sought protection under Chapter 11 of the Bankruptcy Code on July 30, 2015 (Bankr. S.D.N.Y. Case No. 15-11989). In the petitions signed by Colin M. Adams, chief restructuring officer, Relativity Media estimated assets of $100 million to $500 million and liabilities of $500 million to $1 billion. Judge Michael E. Wiles presides over the cases. The Debtors tapped Winston & Strawn LLP as their legal counsel; M-III Partners, LP, as restructuring advisor; and Prime Clerk LLC as noticing and claims consultant. RICHARD SOLBERG: Trustee Selling Farm Equipment at Auction ---------------------------------------------------------- David G. Velde, the Trustee of the bankruptcy estate of the Richard Allen Solberg, asks the U.S. Bankruptcy Court for the District of Minnesota to authorize the auction sale of farm equipment. A hearing on the Motion is set for June 6, 2018 at 9:00 a.m. Any response to the Motion must be filed and served no later than the hearing date. The auction of the Debtor's farm equipment is subject to creditor's secured liens. The Debtor had previously made arrangements with Steffes Group, Inc. to auction the equipment. Steffes has completed the advertising and marketing of the equipment and the auction is set for June 19, 2018, at 11:00 a.m., at 23451 County Road 26, Badger, Minnesota. A delay in the auction will result in additional expenses to the estate. The sale of each item is subject to the secured lien of each creditor. The Trustee will work with the lenders holding perfected security interests to satisfy their liens from the proceeds. The Debtor has not claimed any of the equipment to be sold exempt. The Trustee is obtaining information in order for the estate's accountant to determine the tax consequences to the estate. Given the recent appointment as the Trustee and the prior scheduled auction by the Debtor, it is necessary to obtain Court approval in advance of the auction date of June 19, 2018. Should it be determined that the auction will not be of benefit to the bankruptcy estate, the Trustee may seek abandonment of the estate's interest and allow the auction to proceed by the Debtor individually. In that event, the estate will not be responsible for any of the fees, expenses or taxes owing from the auction. Steffes will be allowed to retain its fees and expenses from the auction proceeds, and remit the net proceeds to the bankruptcy estate. The Trustee will file a report of sale after completion of the auction. A copy of the Auction Sale Agreement attached to the Motion is available for free at: http://bankrupt.com/misc/Richard_Solberg_240_Sales.pdf The Trustee can be reached at: David G. Velde, Trustee 1118 Broadway Alexandria, MN 56308 Telephone: (320) 763-6561 Facsimile: (320) 763-6564 Richard Allen Solberg sought Chapter 11 protection (Bankr. D. Minn. Case No. 17-60495) on Aug. 11, 2017. Kevin T. Duffy, Esq., at Duffy Law Office serves as counsel. The Court later appointed David G. Velde as Trustee. RIVERA FAMILY: Taps Pittman & Pittman as Legal Counsel ------------------------------------------------------ Rivera Family Holdings, LLC, seeks approval from the U.S. Bankruptcy Court for the Western District of Wisconsin to hire Pittman & Pittman Law Offices, LLC as its legal counsel. The firm will assist the Debtor in the preparation of a bankruptcy plan and will provide other legal services related to its Chapter 11 case. The firm will charge these hourly rates: Galen Pittman $300 Greg Pittman $225 Wade Pittman $225 Paralegal $80 Pittman & Pittman and its members neither hold nor represent any interest adverse to the Debtor and its estate, according to court filings. The firm can be reached through: Galen W. Pittman, Esq. Pittman & Pittman Law Offices, LLC 712 Main Street La Crosse, WI 54601 Tel: 608-784-0841 Fax: 608-784-2206 Email: galen@pittmanandpittman.com Email: Info@PittmanandPittman.com About Rivera Family Holdings Rivera Family Holdings, LLC, a privately-held company in Onalaska, Wisconsin, sought protection under Chapter 11 of the Bankruptcy Code (Bankr. W.D. Wis. Case No. 18-11448) on April 30, 2018. In the petition signed by Lynnae Rivera, authorized representative, the Debtor estimated assets of $1 million to $10 million and liabilities of $1 million to $10 million. Judge Brett H. Ludwig presides over the case. RMH FRANCHISE: Noblesville Buying Mishawaka Property for $600K -------------------------------------------------------------- RMH Franchise Holdings, Inc. and its affiliated debtors ask approval from the U.S. Bankruptcy Court for the District of Delaware to sell all of the real estate located at 4515 Lincolnway East, Mishawaka, Indiana, on approximately 2.94 acres of owned real property, together with all improvements located thereon, to Mishiwaka Retail, LLC, as assignee of Noblesville Retail, LLC, for $600,000, subject to certain adjustments. A hearing on the Motion is set for June 6, 2018 at 10:30 a.m. (ET). The objection deadline is May 30, 2018 at 4:00 p.m. (ET). From 2015 to August 2017, the Debtors operated an Applebee's franchise at the Property. In August 2017, however, they closed the location after determining, in their business judgment, to cease operations at the location and sell the Property. Prior to closing their franchise located at the Property, the Debtors engaged Jones Lang Lasalle ("JLL") as their broker for the Property to assist with the marketing and sale of the Property. JLL's marketing process was the second marketing process of the Property in as many years. In 2016, the Debtors marketed the Property with the assistance of another broker, but elected not to proceed with a sale of the Property at that time. JLL began marketing the Property in July 2017, and as a result of these marketing efforts and discussions with multiple parties, received two offers for the Property. Thereafter, the Debtors, with the assistance of JLL, entered into negotiations with Noblesville, the predecessor in interest to the Buyer, for the sale of the Property. These negotiations ultimately resulted in the execution of the Sale Agreement on Sept. 12, 2017. Pursuant to the Sale Agreement, the Buyer will acquire the Property from the Debtors for a purchase price of $600,000, subject to certain adjustments set forth in the Sale Agreement, including for a portion of certain current year assessments and taxes, that are believed to aggregate to less than $30,000. The sale will be free and clear of all liens, claims, encumbrances. The Purchase Price is substantially the same as the assessed value of the Property and its improvements for real property tax purposes, which the Debtors understand was last assessed at $643,400 in the aggregate. The Buyer's offer to purchase the Property is firm. In fact, through an amendment to the Sale Agreement dated April 10, 2018, the Buyer has agreed that all conditions to close, other than the transfer of the Property at closing, have been met. Pursuant to this amendment, the closing was scheduled for May 14, 2018, and would have occurred but for the delay caused by the filing of these Chapter 11 Cases. The deadline to close the sale contemplated by the Sale Agreement has been extended until July 9, 2018, the first business day that is 60 days after the Petition Date. If authorized to consummate the Sale Agreement and close with respect to the sale of the Property, the Debtors will receive the Purchase Price, less certain broker's fees. Thus, they now ask authority to sell the Property to the Buyer pursuant to the Sale Agreement and the Proposed Order. A copy of the Agreement attached to the Motion is available for free at: http://bankrupt.com/misc/RMH_Franchise_94_Sales.pdf Finally, the Debtors ask a waiver of the 14-day stay that would otherwise apply to the sale pursuant to Bankruptcy Rules 6004(h). A prompt closing of the sale will allow the Debtors to avoid the administrative expenses associated with maintaining the Property. The Purchaser: NOBLESVILLE RETAIL, LLC 719 Virginia Ave., Suite 101 Indianapolis, IN 46203 Attn: Drew Warner, Member E-mail: dwarber@warnerretail.com About RMH Franchise RMH Franchise, headquartered in Atlanta, Georgia -- https://www.rmhfranchise.com/ -- is an Applebee's restaurant franchisee with over 163 standardized restaurants located across 15 states. RMH Holdings is the direct or indirect parent of each of the other Debtors. ACON Franchise Holdings, LLC, a non-Debtor, owns 100% of the shares of RMH Holdings. RMH Franchise Holdings, Inc., and certain of its affiliates filed Chapter 11 petitions (Bankr. D. Del. Lead Case No. 18-11092) on May 8, 2018. In the petitions signed by Michael Muldoon, president. At the time of filing, RMH Franchise Holdings estimated assets and liabilities at $100 million to $500 million each. Affiliates that concurrently filed voluntary petitions for relief under Chapter 11 of the Bankruptcy Code are: NuLnk, Inc. (Bankr. D. Del. Case No. 18-11093), RMH Illinois, LLC (Bankr. D. Del. Case No. 18-11094), RMH Franchise Corporation (Bankr. D. Del. Case No. 18-11095), and Contex Restaurants, Inc. (Bankr. D. Del. Case No. 18-11096). The case is assigned to Judge Brendan Linehan Shannon. Young, Conaway, Stargatt & Taylor, LLP, serves as bankruptcy counsel, and Mastodon Ventures, Inc., is the restructuring advisor. ROBLES COMPANIES: BNC Bank to Hold Foreclosure Auction on July 11 ----------------------------------------------------------------- BNC National Bank will sell the property of The Robles Companies, Inc., located at 15150 West Ajo Highway, Tucson, Arizona 85735 at public auction to the highest bidder on July 11, 2018, at 10:00 a.m. at the law offices of Quarles & Brady LLP, One South Church Avenue, Suite 1700, Tucson, Arizona 85701, in Pima County. Proceeds from the sale will be used to pay debt in the original principal balance of $503,000. Every bidder except for BNC as Beneficiary will be required to provide a $10,000.00 deposit in form satisfactory to the Trustee as a condition to entering a bid. BNC reserves the right to transfer the secured indebtedness to, and/or to acquire title to all or part of the collateral in the name of, a title-holding affiliate following the commencement of this sale. This sale will not exhaust the power of sale contained in the Deed of Trust as to any remaining property encumbered by the Deed of Trust, which may, at Beneficiary's option, be sold in one or more subsequent sale proceedings. BNC may be reached at: BNC National Bank SBA Department 20175 North 67th Avenue Glendale, Arizona 85308 The Trustee who will conduct the sale may be reached at: W. Scott Jenkins, Jr., Eq. Quarles & Brady LLP Renaissance One Two North Central Avenue Phoenix, AZ 85004 For information contact Kelly Webster at kelly.webster@quarles.com or (520) 770-8712) ROCKPORT COMPANY: Taps HYPERAMS as Liquidation Consultant --------------------------------------------------------- The Rockport Company, LLC, and certain of its affiliates seek authority from the United States Bankruptcy Court for the District of Delaware to hire HYPERAMS, LLC, as their liquidation consultant nunc pro tunc to May 25, 2018. The Consultant will serve as the independent consultant to the Debtors in connection with the Store Closing Sales at the North American retail locations that are not acquired by the Stalking Horse Bidder or such other successful bidder in accordance with the Court-approved bidding procedures. Consultant's services are: (a) procure, at Merchant's cost and expense, sign packages to be used in the Stores if Merchant so desires; (b) recommend appropriate point-of-sale and external advertising for the Stores; (c) recommend on a weekly basis appropriate discounting and pricing of Merchandise, and, if requested by Merchant, appropriate bonus and incentive programs for the Stores' employees (consistent with the authority granted by the Bankruptcy Court); (d) oversee initial display and signing of a single Store during the first week of the Store Closing Sales, which Merchant will utilize as a guide in setting up its other Stores for the Store Closing Sales; (e) evaluate sales of Merchandise by category and providing liquidation level sales reporting in total on a daily basis; (f) participate in two conference calls per week, or as needed, with Merchant's management to discuss the progress of the Store Closing Sales and the need to implement updated discounts and strategies; (g) maintain the confidentiality of all proprietary or non-public information regarding Merchant of which Consultant or its representatives become aware, except for information that is public or becomes public through no fault of Consultant; and (h) provide other related services deemed necessary or appropriate by Merchant and Consultant. Prior to the commencement of the Store Closing Sales and through and including June 8, 2018, Consultant will provide Services, either on site at Merchant's corporate office or remotely from its own offices, relating to the planning and implementation of the Store Closing Sales. Consultant's fees and expenses are: i. prior to the Court's entry of an order authorizing the commencement of the Store Closing Sales and through and including June 8, 2018, Merchant shall pay Consultant $400 per hour for Planning Services in an amount not to exceed $10,000 in the aggregate during such period, provided that in the event that the Store Closing Sales have not commenced by June 9, 2018, Merchant and Consultant may agree to Consultant’s continued provision of the Planning Services at the Agreed Hourly Rate subject to whatever parameters or limitations are mutually agreeable to both Merchant and Consultant; and ii. provided the Store Closing Sales have commenced and Merchant has not exercised the Termination Option, Merchant will pay Consultant a flat fee of $17,500 for the first week of the Store Closing Sales and a flat fee of $10,000 for every additional week thereafter, with a minimum of 4 such weeks (for a total of 5 weeks). Consultant will also be entitled to reimbursement of all travel and out-of-pocket expenses incurred by its personnel and consultants during the course of the Store Closing Sales, as well as its legal fees. Thomas E. Pabst, president of HYPERAMS, LLC, attests that his firm is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code, as modified by Section 1107(b). The firm can be reached through: Thomas E. Pabst HYPERAMS, LLC 1501 N Michael Drive Wood Dale, IL 60191 Phone: (847) 499-7049 About Rockport Company The Rockport Company, LLC and its subsidiaries are global designers, distributors, and retailers of comfort footwear in more than 50 markets worldwide. The Rockport Company, et al., sought Chapter 11 bankruptcy protection (Bankr. D. Del. Case No. 18-11145) on May 14, 2018, estimating under $100 million to $500 million in assets and liabilities. The Chapter 11 petitions were signed by Paul Kosturos, the Debtors' interim chief financial officer. Debtor Rockport Canada ULC is the operating entity for the Debtors' business in Canada. Rockport Canada is a wholly-owned subsidiary of Rockport, and all material decisions regarding Rockport Canada and its operations are made by Rockport personnel in the United States. Accordingly, the center of main interests for Rockport Canada is located in the United States. On May 16, 2018, the Debtors commenced an ancillary proceeding under Part IV of the Companies' Creditors Arrangement Act (Canada) in Toronto, Ontario, Canada before the Ontario Superior Court of Justice (Commercial List). The Debtor's counsel are Mark D. Collins, Esq., Michael J. Merchant, Esq., Amanda R. Steele, Esq., Brendan J. Schlauch, Esq., and Megan E. Kenney, Esq., at Richards, Layton & Finger, P.A. The Debtors' Canadian bankruptcy counsel is Borden Ladner Gervais LLP; their investment banker is Houlihan Lokey Capital, Inc.; and their restructuring and interim management advisor is Alvarez & Marsal North America LLC. Prime Clerk serves as the Debtors' claims, noticing agent and administrative advisor. On May 23, 2018, the Office of the U.S. Trustee appointed an official committee of unsecured creditors. The Committee is represented by Jay Indyke, Esq., and Robert Winning, Esq., at Cooley LLP; Christopher M. Samis, Esq., and L. Katherine Good, Esq., at Whiteford, Taylor & Preston LLC. Counsel to the Prepetition Noteholders and DIP Note Purchasers are My Chi To, Esq., and Daniel E. Stroik, Esq., at Debevoise & Plimpton LLP; Bradford J. Sandler, Esq., and James E. O'Neill, Esq., at Pachulski Stang Ziehl & Jones LLP. Counsel to the Collateral Agent and DIP Notes Agent are Joshua Spencer, Esq., at Holland & Knight LLP; and Bradford J. Sandler, Esq., and James E. O'Neill, Esq., at Pachulski Stang Ziehl & Jones LLP. Counsel to the ABL Administrative Agent and DIP ABL Agent are Donald E. Rothman, Esq., Lon M. Singer, Esq., Jaime Rachel Koff, Esq., and Jeremy Levesque, Esq., at Riemer Braunstein LLP; and Gregory A. Taylor, Esq., at Ashby & Geddes, P.A. Counsel to CB Marathon Opco, LLC, an affiliate of Charlesbank Equity Fund IX, Limited Partnership, the Stalking Horse Bidder, are Jon Herzog, Esq., Joseph F. Bernardi, Jr., Esq., and William Weintraub, Esq., at Goodwin Procter LLP; and David Fournier, Esq., and Evelyn Meltzer, Esq., at Pepper Hamilton LLP. The U.S. Trustee for Region 3 on May 23, 2018, appointed three creditors to serve on the official committee of unsecured creditors in the Chapter 11 case of The Rockport Company LLC. The Committee proposes to tap Jay R. Indyke, Esq., Robert Winning, Esq., Sarah A. Carnes, Esq., and Lauren A. Reichardt, Esq., at Cooley LLP, in New York; and Christopher M. Samis, Esq., L. Katherine Good, Esq., and Aaron H. Stulman, Esq., at Whiteford, Taylor & Preston LLC, in Wilmington, Delaware. RONNIE WHITEFIELD: Cook Buying 2013 BMW 535 for $22K ---------------------------------------------------- Ronnie C. Whitefield asks the U.S. Bankruptcy Court for the Middle District of Tennessee to authorize the sale of 2013 BMW 535 to Jason Cook for $21,950. A hearing on the Motion is set for June 19, 2018 at 9:00 a.m. The objection deadline is June 6, 2018. The 2013 BMW 535 secures a debt of $22,126 owed to Bank of America. Said sale will be free and clear of any interests of any lien holder, with such liens to attach to proceeds of the sale in accordance with the law of priority liens. All net proceeds of the sale, if any, after payment of the lien and commission, will be put into the DIP Account and used for reorganization. The Title will transfer upon approval of the sale by the Court. A copy of the Car Invoice attached to the Motion is available for free at: http://bankrupt.com/misc/Ronnie_Whitefield_19_Sales.pdf The Creditor: BANK OF AMERICA P.O. Box 15220 Wilmington, DE 19886-522 Ronnie C. Whitefield, Jr., sought Chapter 11 protection (Bankr. M.D. Tenn. Case No. 18-02883) on April 27, 2018. The Debtor tapped Christopher Mark Kerney, Esq., at Kerney Law Office, as counsel. S & S MARKETING: Hires David Merrill of The Associates as Attorney ------------------------------------------------------------------ S & S Marketing Services, Inc., seeks authority from the United States Bankruptcy Court for the Southern District of Florida, West Palm Division, to employ David Lloyd Merrill, Esq. of the law firm The Associates as attorney. Professional services the attorney will render are: a. give advice to the Debtor with respect to its powers and duties as a debtor in possession and the continued management of its business operations; b. advise the Debtor with respect to its responsibilities in complying with the U.S. Trustee's Operating Guidelines and Reporting Requirements and with the rules of the court; c. prepare motions, pleadings, orders, applications, adversary proceedings, and other legal documents necessary in the administration of the case; d. protect the interest of the Debtor in all matters pending before the court; and e. represent the Debtor in negotiation with its creditors in the preparation of a plan. Fees the firm will charge for its services are: Hourly Rate ----------- Attorneys $450 Paralegals $120 to $145 David Lloyd Merrill, Esq., at the law firm The Associates, assures the Court that neither he nor the firm represent any interest adverse to the Debtor, or the estate and they are "disinterested persons" as required by 11 U.S.C. Sec. 327(a). The firm can be reached through: David Lloyd Merrill, Esq. The Associates 105 S Narcissus Ave Suite 802 West Palm Beach, FL 33401 Phone: 561-877-1111 Fax: 772-409-6749 About S & S Marketing Based in West Palm Beach, Florida, S & S Marketing Services, Inc., filed a Chapter 11 petition (Bankr. S.D. Fla. Case No. 18-15703) on May 11, 2018, listing under $1 million in assets and liabilities. David Lloyd Merrill, Esq., at The Associates, is the Debtor's counsel. SALLE FAMILY: Hires Pitts, Hay & Hugenschmidt as Attorney --------------------------------------------------------- Salle Family Land Trust, LLC, seeks authority from the United States Bankruptcy Court for the Western District of North Carolina to hire Benson T. Pitts of Pitts, Hay & Hugenschmidt, P.A., as attorney. Benson T. Pitts will charge the rate of $300 per hour for attorney time in addition to actual out-of-pocket expenses. The professional services which Benson T. Pitts will render are: (a) prepare on behalf of the Debtor-in-Possession the necessary Applications, Orders, reports, and all other legal documents; (b) advise the applicant with respect to the debtor's powers and duties as a Debtor-in-Possession; and (c) perform any other legal services for the Debtor-in-Possession which may become necessary. Benson T. Pitts, member of the law firm of Pitts, Hay & Hugenschmidt, assures the Court that he represents no adverse interest to the Debtor-in-Possession in the matters upon which he is to be engaged. The counsel can be reached through: Benson T. Pitts, Esq. Pitts, Hay & Hugenschmidt, P.A. 14 Clayton St. Suite A Asheville, NC 28801 Phone:828-255-8085 Fax: 828-251-2760 Email: Ben@Phhlawfirm.Com About Salle Family Land Trust Salle Family Land Trust, LLC, is engaged in activities related to real estate. The company is the fee simple owner of three real properties located in Newland and Burnsville, North Carolina, valued by the company at $1.03 million in the aggregate. Salle Family Land Trust filed a voluntary Chapter 11 petition (Bankr. W.D.N.C. Case No. 18-10214) on May 25, 2018. In the petition signed by David Salle, managing member, the Debtor disclosed $1.03 million in total assets and $644,798 in total liabilities. The case is assigned to Judge George R. Hodges. Benson T. Pitts, Esq., at Pitts, Hay & Hugenschmidt, P.A., is the Debtor's counsel. SAM MEYERS: Taps Kaplan Johnson as Legal Counsel ------------------------------------------------ Sam Meyers, Inc., seeks approval from the U.S. Bankruptcy Court for the Western District of Kentucky to hire Kaplan Johnson Abate & Bird, LLP as its legal counsel. The firm will advise the Debtor regarding its duties under the Bankruptcy Code; assist in the preparation and implementation of a bankruptcy plan; and provide other legal services related to its Chapter 11 case. Kaplan received a retainer in the sum of $50,001, which includes payment of the Chapter 11 filing fee. Charity Bird, Esq., at Kaplan, disclosed in a court filing that the firm is a "disinterested person" as defined in section 101(14) of the Bankruptcy Code. The firm can be reached through: Charity S. Bird, Esq. James E. McGhee III, Esq. Kaplan Johnson Abate & Bird, LLP 710 West Main Street, Fourth Floor Louisville, KY 40202 Telephone: 502-540-8285 Facsimile: 502-540-8282 Email: cbird@kaplanjohnsonlaw.com Email: jmcghee@kaplanjohnsonlaw.com About Sam Meyers Inc. Sam Meyers, Inc. -- http://sammeyers.com-- is a wholesale supplier of men's formal wear and accessories. It also owns and operates a dry cleaning business in the Midwest. In addition to its Louisville locations, Sam Meyers owns a store in Nashville, Tennessee, that specializes in costume rentals and sales in addition to formal wear; a tuxedo store in Evansville, Indiana; and a satellite warehouse in Boston, Massachusetts. Sam Meyers' main warehouse is located in Louisville. Sam Meyers sought protection under Chapter 11 of the Bankruptcy Code (Bankr. W.D. Ky. Case No. 18-31559) on May 17, 2018. In the petition signed by James P. Corbett, president, the Debtor disclosed $1.8 million in assets and $2.91 million in liabilities. Judge Alan C. Stout presides over the case. SAMARITAN COMMUNITY: Chicago's Secured Claim Removed in New Plan ---------------------------------------------------------------- New Good Samaritan Community Services filed with the U.S. Bankruptcy Court for the Northern District of Illinois an amended disclosure statement to accompany its modified plan of reorganization. The latest plan removed the Class Two secured claim held by the city of Chicago for water services in the amount of $23,694.82. Unsecured claimants are now classified in Class Two. There are now eight unsecured claims in the amount of $91,368.25. Class Two will receive 20% of the allowed amount of their claims with no interest. The five claims that are less than $5000 will receive the 20%, which is $2334.68, on the First Disbursement Date. The three claims that exceed $5000 will receive a total of $ 15,938.96 in twelve quarterly disbursements of $1328.24. The Plan is based upon the Property generating rental income. For the Plan to be feasible, the Debtor must complete the repairs and establish that the Property complies with the City of Chicago's Building Codes. The Debtor must obtain a court order lifting the injunction, or the agreement of the City to lift the injunction, before the confirmation of the Plan. On May 16, 2018, the Debtor filed a motion in the housing court to lift the injunction. The motion is pending before the state court. The Troubled Company Reporter previously reported that there are seven Unsecured Claims in the amount of $67,673.43. Class Three will receive 20% of the allowed amount of their claims without interest. The five claims that are less than $5,000 will receive the 20%, which is $2,334.68, on the effective date. The two claims that exceed $5,000 will receive a total of $11,200 in 12 quarterly disbursements of $933. A copy of the Amended Disclosure Statement is available at: http://bankrupt.com/misc/ilnb17-18184-64.pdf About New Good Samaritan Community Services New Good Samaritan Community Services filed a Chapter 11 bankruptcy petition (Bankr. N.D. Ill. Case No. 17-18184) on June 15, 2017. Karen J. Porter, Esq., at Porter Law Network, serves as bankruptcy counsel. The Debtor's assets and liabilities are both below $1 million. SAMSONITE INT'L: Moody's Reviews Ba2 CFR for Downgrade ------------------------------------------------------ Moody's Investors Services placed the Ba2 Corporate Family Rating (CFR), Ba2-PD Probability of Default and Ba1 senior secured revolving credit facility rating of Samsonite International S.A. (Samsonite) under review for downgrade. Moody's also placed the B1 unsecured note rating of Samsonite Finco S.a r.l's and the Ba1 term loan ratings of Samsonite IP Holdings S.ar.l's under review for downgrade. These actions are in light of the company's announcement yesterday that it's CEO had unexpectedly resigned. The company's SGL-1 speculative grade liquidity rating was affirmed. Rating placed under review for downgrade: Issuer: Samsonite International S.A. Corporate Family Rating at Ba2 Probability of Default Rating at Ba2-PD Gtd Senior Secured Revolving Credit Facility at Ba1 (LGD 3) Issuer: Samsonite Finco S.ar.l Gtd Senior Unsecured Debt at B1 Issuer: Samsonite IP Holdings S.ar.l Gtd Senior Secured Term Loan A at Ba1 (LGD 3) Gtd Senior Secured Term Loan B at Ba1 (LGD 3) Rating affirmed Issuer: Samsonite International S.A. Speculative Grade Liquidity Rating at SGL-1 RATINGS RATIONALE On May 31, 2018, Samsonite International announced that its Chief Executive Officer, Ramesh Tainwala, had unexpectedly resigned. He was replaced by Chief Financial Officer, Kyle Francis Gendreau. Moody's rating review will focus on the reasons underlying this senior management turnover, and what impact this will have upon Samsonite's strategic direction going forward. It will also assess actions Samsonite management may take in response to recent activist investor activity. The principal methodology used in these ratings was Consumer Durables Industry published in April 2017. Headquartered in Mansfield Massachusetts, Samsonite is a designer, manufacturer, and distributor of travel luggage and bags worldwide. It offers luggage, business, computer, outdoor, and casual bags, as well as travel accessories and slim protective cases. Major brands include Samsonite and Tumi. Samsonite is a publicly-traded on the Hong Kong stock exchange. Revenue approximates $3.5 billion. SANCILIO PHARMACEUTICALS: Files for Chapter 11 to Sell Assets ------------------------------------------------------------- Sancilio Pharmaceuticals Company, Inc., and two affiliates sought Chapter 11 bankruptcy protection with plans to sell substantially all assets. Sancilio is a private pharmaceutical development and manufacturing company that has four business lines: (i) the development of proprietary prescription medicines using a unique and proprietary solubility enhancement technology called Advanced Lipid Technologies ("ALT") including Sancilio's lead product candidate under the ALT platform for the treatment of sickle cell disease in the pediatric population; (ii) over-the-counter and behind-the-counter omega-3 dietary supplements under the brand "Ocean Blue"; (iii) prenatal vitamins and dental health supplements that operate as "generics" dispensed at pharmacies; and (iv) third-party development and manufacturing services for other companies. Geoffrey Glass, president and CEO, explained in court filings that in 2017, Sancilio began experiencing increasingly constrained access to additional capital and liquidity and, by late 2017, endured a liquidity crisis. In early 2018, Sancilio secured an additional $5.5 million in equity capital to serve as bridge financing to pay overdue trade payables pending an expected sale of the company, but that transaction was not consummated. Accordingly, Sancilio began exploring its strategic alternatives including a further recapitalization, refinancing or sale. Notwithstanding these efforts, Sancilio received no executable offer for recapitalization or refinancing. Since mid-April the Debtors' liquidity needs have been met from protective overadvances funded by their prepetition lenders. Having no executable path to a recapitalization or refinancing, the Debtors' commenced these cases to preserve themselves as a going concern and to maximize the value of their estates. According to Mr. Glass, the Debtors' objectives in the Chapter 11 cases are to sell all or substantially all their assets pursuant to section 363 of the Bankruptcy Code in a flexible manner allowing for bids on all their assets, one or more of their business lines, or any combination thereof. Prepetition Capital Structure Before the Petition Date, the Debtors and MidCap Financial Trust, as agent for the Lenders thereunder and the financial institutions or other entities from time to time party thereto as Lenders entered into (i) a Credit and Security Agreement, dated as of Feb. 1,2016 (as amended by that certain First Amendment to Credit and Security Agreement and Limited 'Waiver, dated as of April 13, 2017; (ii) Second Amendment to Credit and Security Agreement and Limited Waiver, dated as of Oct. 23, 2017; (iii) a Third Amendment to Credit and Security Agreement, dated as of January 2, 2018; and (iv) an Omnibus Fourth Amendment to Credit and Security Agreement and First Amendment to Third Amendment to Credit and Security Agreement, dated as of January 8, 2018, the "Prepetition Loan Agreement"). After entry into the Prepetition Loan Agreement but before the Petition Date, the Prepetition Agent declared a default pursuant to that certain Notice of Default and Reservation of Rights Letter, dated April 6, 2018, delivered to SCP. Thereafter, the Debtors and the Prepetition Secured Parties entered into a (i) Protective Advance Letter, dated April 12,2018; (ii) Second Protective Advance Letter, dated April 26,2018; (iii) Third Protective Advance letter, dated May 3, 2018;(iv) Fourth Protective Advance Letter, dated May 10, 2018; (v) Fifth Protective Advance Letter, dated May I7,2018, pursuant to which, among other things, the Prepetition Lenders made certain loans and other financial accommodations to the Debtors in aggregate principal amount of not less than $18,114,500. The Prepetition Secured Loans are secured by first-priority, fully-perfected security interests in and liens on all of Debtors' right, title and interest in, to and under the "Collateral" as defined in the Prepetition Loan Documents. In addition, as of the Petition Date, the Debtors have unsecured obligations, not including any deficiency claims, in the approximate amount of $5,008,300, consisting of accounts payable to various trade creditors. DIP Financing The Debtors are seeking approval to incur postpetition indebtedness (the "DIP Facility"), which includes postpetition financing in the aggregate principal amount of not more than $5,300,000, a $265,000 Origination Fee, and a five percent Termination Fee, from MidCap Funding XVIII Trust, as the DIP Agent (in such capacity, the "DIP Agent"), and MidCap Funding XVIII Trust and each of the other lenders from time to time party thereto, and to use cash collateral of the Prepetition Secured Parties. The terms and conditions of the DIP Facility require, among other things, that the Debtors conduct a sale of all or substantially all its assets pursuant to Section 363 of the Bankruptcy Code in accordance with certain milestones. According to the DIP Financing Motion, the Debtors are required to comply with the following milestones in connection with the 363 Sale: (a) As promptly as possible, but in no event later than two Business Days after the Petition Date, the Debtors shall file Bidding Procedures Motion (b) As promptly as possible, but in no event later than 25 days after the Petition Date, the Bankruptcy Court will have entered the Bidding Procedures Order; (c) As promptly as possible, but in no event later than one Business Day after entry of the Bidding Procedures Order, the Debtors shall forward so-called "bid packages" to potential bidders, subject to the terms and conditions contained in the Bidding Procedures Order; (d) As promptly as possible, but in no event later than 21 Business Days after entry of the Bidding Procedures Order (the "Bid Deadline"), binding bids with respect to the 363 Sale will be due and delivered to the Loan Parties in accordance with the Bankruptcy Rule / Local Rule Summary of Material Terms Bidding Procedures Order (and copies of such bids will be provided to the DIP Agent); (e) As promptly as possible, but in no event later than three Business Days after the Bid Deadline, the Auction will have been completed; and (f) As promptly as possible, but in no event later than five Business Days after completion of the Auction, the Bankruptcy Court will have entered an order (the "363 Sale Order") approving the 363 Sale, which order will be in form and substance acceptable to the DIP Agent; and (g) As promptly as possible, but in no event later than 12 Business Days after entry of the 363 Sale Order, the Debtors will have consummated the 363 Sale as requested in the Sale Order Motion. To maximize the value of its estate, and in compliance with the milestones under the proposed DIP Facility, the Debtors are filing a motion to conduct the Section 363 Sale, including a marketing and auction process, by which the Debtors will solicit offers and ultimately seek approval to sell substantially all of its assets to the bidder or bidders with the highest or otherwise best offer. The Debtors have selected two stalking horse bidders for separate portions of the Debtors' assets. The Debtors are also filing an application to retain an investment banker to advise and assist the Debtors in conducting the Section 363 Sale. About Sancilio Pharmaceuticals Headquartered in Riviera Beach, Florida, Sancilio -- https://www.sancilio.com/ -- is a private pharmaceutical development and manufacturing company. Sancilio Pharmaceuticals Company, Inc., along with affiliates Sancilio & Company, Inc., and Blue Palm Advertising Agency, LLC, sought Chapter 11 protection (Bankr. D. Del. Lead Case No. 18-11333) on June 6, 2018. Sancilio Pharmaceuticals estimated $10 million to $50 million in assets and liabilities. The Hon. Christopher S. Sontchi is the case judge. The Debtors tapped Greenberg Traurig, LLP as counsel; MCA Financial Group, LTD., as financial advisor; and JND Corporate Restructuring as claims agent. SHIRAZ HOLDINGS: Wants to Maintain Exclusivity for at Least 30 Days ------------------------------------------------------------------- Shiraz Holdings, LLC, requests the U.S. Bankruptcy Court for the Southern District of Florida to extend Debtor's exclusivity period to solicit acceptances for a period of not less than 30 days. On Dec. 23, 2017, the Debtor filed Chapter 11 Plan of Reorganization and Disclosure Statement. Thereafter, on March 23, 2018, the Debtor filed its Amended Chapter 11 Plan of Reorganization and Amended Disclosure Statement. On April 16, 2018, the Debtor filed its Second Amended Disclosure Statement in Connection together with its Chapter 11 Plan of Reorganization. The disclosure hearing has been set for June 12, 2018 pursuant to the Court's Order. The Debtor is in the process of negotiating with its creditors, it has engaged brokers to help facilitate the sale of leases of its properties, and has reached certain settlements that should prove helpful in its reorganization efforts. Although several, if not all of the factors under Section 1121(d)(1) for consideration support granting Debtor's requested extension of the Exclusivity Period, the Debtor assert that: (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 Debtor requires additional time to negotiate and prepare adequate information. The Debtor continues to negotiate with creditors to advance restructuring of its debt; (3) The Debtor continues 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 Debtor continues to manage and maintain its real estate during this proceeding and is paying its post-petition debts; (5) The Debtor continues to negotiate with creditors in good faith; (6) This case has only been pending a relatively short time for Debtor to navigate the current, difficult real estate and credit markets; (7) The Debtor is not seeking this extension to pressure creditors; and (8) The Debtor's bankruptcy case involves several unresolved contingencies, including negotiations with potential claimants and analysis of the most prudent method of maximizing value of Debtor's assets. About Shiraz Holdings Shiraz Holdings, LLC, based in Delray Beach, Fla., filed a Chapter 11 petition (Bankr. S.D. Fla. Case No. 17-17968) on June 26, 2017. In the petition signed by Jordan A. Satary, managing member, the Debtor estimated $10 million to $50 million in both assets and liabilities. The Hon. Paul G. Hyman, Jr. presides over the case. Thomas M. Messana, Esq., at Messana, P.A., serves as bankruptcy counsel to the Debtor. Fadi Elkhatib and Ten-X, LLC, serve as the Debtor's real estate broker. Ten-X, LLC, is the Debtor's auctioneer. SHIRLEY MCCLURE: Trustee Selling La Mirada Property for $580K ------------------------------------------------------------- John P. Reitman, as chapter 11 trustee of Shirley Foose McClure, asks the United States Bankruptcy Court for the Central District of California to authorize the sale of the single-family residential real property located at 13621 Dalmatian Ave., La Mirada, California to Adan Dadon for $580,000, subject to overbid. On Oct. 25, 2017, the Trustee filed and served his PMB Settlement Motion, by which he sought an order of the Court approving a settlement stipulation entered into between the Trustee, on one hand, and Pacific Mercantile Bank ("PMB") and PMB Asset Resolution, Inc. ("PMAR"), on the other hand. Pacific Mercantile is the largest secured creditor of the Estate, with loans encumbering Estate properties in San Francisco, Southern California and Maui. Pursuant to the Stipulation, the Trustee agreed that Pacific Mercantile would have an allowed secured claim, as specified in the Stipulation, and Pacific Mercantile agreed, inter alia, that if the Trustee (i) turns over to PMAR certain of the proceeds held in escrow and owed to PMAR from the sale by the Debtor of the Estate's Riverside Drive property (prior to the appointment of the Trustee) upon entry of an Order of the Court approving the Stipulation, and (ii) pays the PMAR Allowed Secured Claim in full on or before June 30, 2018, then (i) the allowed amount of default interest on all Loans will be reduced by 2/3, and (ii) the aggregate amount of Pacific Mercantile's attorneys' fees and other expenses will be reduced by $75,000. It was a condition precedent to the effectiveness of the Stipulation that it be approved by the Bankruptcy Court by Order entered by Dec. 21, 2017. The PMB Settlement Motion was opposed by the Debtor. However, following hearings held on Nov. 28, 2017 and Dec. 19, 2017, the Court granted the motion, subject to certain modifications to the Stipulation agreed to by Pacific Mercantile and the Trustee, and a form of order was lodged with the Court on the same day. On Dec. 20, 2017, the Debtor objected to the PMB Settlement Order. On Dec. 22, 2017, the Court overruled the Debtor's objections to the PMB Settlement Order, which was entered on the same day. Although this was one day after the deadline specified in the Stipulation for the Stipulation to become effective, Pacific Mercantile agreed to waive that deadline, and the Stipulation became effective on that date. On Jan. 4, 2018, the Debtor filed her notice of appeal of the PMB Settlement Order. Notwithstanding that appeal, the PMB Settlement Order has not been stayed. The PMB Settlement Order Appeal is presently pending before the Hon. George Wu, United States District Judge, as Case No. 2:18-cv-00698, and has been set for oral argument on May 17, 2018. In the PMB Settlement Motion, the Trustee indicated that it was his intent to sell properties of the Estate to facilitate payment of the PMAR Allowed Secured Claim. To that end, the Trustee assembled a team of real estate brokers and agents to undertake comprehensive and coordinated marketing of the Estate's properties in San Francisco, Southern California and Maui, other than the Debtor's residence at 3401 Gregory Avenue, Fullerton, California. The Dalmatian Property is encumbered by a first deed of trust in favor of Pacific Mercantile Bank in the principal amount of $219,888 plus interest, default interest and attorneys' fees and other expenses. The PMAR Allowed Dalmatian Secured Claim will be paid through escrow from the proceeds of the sale of the Dalmatian Properties if approved by the Court. The Dalmatian Property is also encumbered by a junior deed of trust in favor of the Debtor's former counsel, Weintraub & Selth, APC ("W&S") in the amount of $75,000 pursuant to the Court's Order granting the Debtor's application to employ W&S, entered on Jan. 5, 2016. On April 19, 2016, the Court entered its order approving and allowing, on an interim basis, W&S' fees in the amount of $100,336 and reimbursement of expenses in the amount of $2,715. Pursuant to the W&S Fee Order, the Court authorized the payment to W&S of fees in the amount of $51,525, leaving a balance of $51,525, which is approved and currently unpaid. In the event that the Court approves the sale of the Dalmatian Property pursuant to this Motion, the Trustee asks that the Court authorizes him to pay W&S the W&S Allowed Unpaid Amount from the proceeds of the sale, with the balance of the W&S Lien attaching to the proceeds of the sale to be held by the Trustee in a segregated account. Based on a preliminary title report obtained by the Trustee, unpaid real estate property taxes in the aggregate amount of $6,595 for fiscal year 2017 -2018 are owed on the Dalmatian Property. Upon approval of the sale pursuant to the Motion, such taxes will be paid through escrow from the proceeds of the sale. Of the Brokers employed by the Trustee pursuant to the Coldwell Employment Order, Gregory Bingham of Coldwell Banker was principally responsible for listing, marketing and showing the Dalmatian Property in La Mirada. William Friedman of Coldwell Banker also assisted the Trustee in the marketing and sale of the Dalmatian Property, by advising the Trustee on bids and overbids and by preparing sale documents that are specifically tailored to a trustee's sale in bankruptcy subject to overbid and approval of the Court. The Dalmatian Property has been extensively marketed. On March 13, 2018, an offer was received, and the Trustee's counter-offer to sell the Dalmatian Property for a cash purchase price of $580,000 was accepted on March 18, 2018, and an escrow was opened. However, on April 5, 2018, the buyer informed the Trustee in writing that he was cancelling the agreement because he could not obtain approval for his purchase loan. Between April 4 and April 15, 2018, six more showings of the Dalmatian Property were held. On April 16, 2018, a new offer to purchase the Dalmatian Property for $570,000 was received from the Stalking Horse Purchaser. The Trustee counter-offered in the amount of $580,000, which was accepted by the Stalking Horse Buyer and affirmed by the Trustee on April 18, 2018, subject to overbid and approval of the Court. The Dalmatian Property continues to be listed and actively marketed to attract over bidders. The Stalking Horse Purchasers have paid a deposit of $17,400 and an escrow has been opened with A & A Escrow Services, Inc. as escrow No. 104227-AA. On May 1, 2018, the Stalking Horse Purchaser gave notice to the Trustee that all purchaser contingencies had been satisfied or waived. The Trustee asks approval of these bidding procedures: a. To qualify as an over bidder, a party interested in bidding must, no later than 4:00 p.m. on (TBD), 2018, (a) deliver to the Trustee's counsel a completed and signed copy of the overbid form filed concurrently with the Motion, making a binding offer for the Dalmatian Property of no less than $585,000; (b) deliver to the Trustee a deposit in the amount of at least $17,400, either in the form of a cashier's check payable to the Trustee or by wire transfer to A&A Escrow; and (c) provide to the Trustee's counsel information sufficient to demonstrate to the reasonable satisfaction of the Trustee that the proposed over bidder has the financial ability to complete the sale on the terms specified in the Purchase Agreement and Overbid Form. The Trustee will notify bidders whether they have qualified to bid at the auction within two business days after receipt by the Trustee of the Bid Package. b. All Qualified Bidders must appear, telephonically or in person, at the hearing on the Motion, at (TBD), on (TBD), 2018, in Courtroom 303, United States Bankruptcy Court, 21041 Burbank Boulevard, Woodland Hills, California. c. At the hearing on the Motion, the Court will designate the successful bidder for the Corbett Properties. d. If multiple parties have qualified as Qualified Bidders prior to the hearing on the Motion, an auction will be conducted by the Court or by the Trustee at the hearing, or by the Trustee in a conference room in the courthouse identified in open court at the sale hearing, at which the opening bid will be the Initial Overbid Amount and the opening bidder will be the first party who qualified as a Qualified Bidder, with each subsequent bid being at least $5,000 greater than the prior bid. e. The winning bidder at the auction will be the party that submits the bid that the Trustee determines, in the reasonable exercise of his discretion and with the approval of the Court, to be the highest and best bid for the Corbett Properties. f. At the hearing on the Motion, if the Trustee so requests, the Court may also designate a back-up bidder for the Corbett Properties, which will be (a) if only one overbid is received, the Stalking Horse Purchasers, and (b) if more than one overbid is received, the Qualified Bidder who submits the next highest and best bid, as determined by the Trustee, after the winning bid submitted by the Successful Bidder. g. The closing date of the sale to the Successful Bidder will be a date to which the Trustee and the Successful Bidder agree in writing, but in no event more than 14 days after entry of the order granting the Motion. h. If the sale to the Successful Bidder does not close within 14 days after entry of the order granting the Motion, for any reason other than the fault of the Trustee, the Trustee may retain the entire deposit amount submitted by the Successful Bidder without recourse by such. The Trustee asks that the Court authorizes him to take all steps necessary or that he reasonably deems appropriate to complete the sale of the Corbett Properties to the Successful Bidder or, if the Successful Bidder does not close within 14 days after the order approving such sale is entered by the Court and the Trustee elects to terminate the sale to the Successful Bidder, to the Back-Up Bidder. Other than the PMAR Allowed Dalmatian Secured Claim, the W&S Lien and the Dalmatian Real Property Taxes, all of which will be paid from the proceeds of the sale through escrow, the Trustee is not aware of any liens, claims or interests encumbering the Dalmatian Property. Nonetheless, the Trustee also asks that the Court orders that the sale of the Dalmatian Property will be free and clear of any and all liens, claims and interests, whether or not of record, with all liens, claims and interests (if any) in the Dalmatian Property to attach to the net sale proceeds in the same validity and priority and subject to the same defenses and avoidability, if any, as before the closing of the sale. The Trustee asks authority to pay from escrow a total commission of up to 5% of the final purchase price to Coldwell Banker in accordance with the Coldwell Employment Order. The Trustee also asks authority to pay the seller's customary costs of sale, including title and escrow charges, from escrow. The Trustee requests that the Court waives the 14-day stay on the effectiveness of an order authorizing the sale of estate property imposed by Federal Rule of Bankruptcy Procedure 6004(h). A copy of the Agreement attached to the Motion is available for free at: http://bankrupt.com/misc/Shirley_McClure_1404_Sales.pdf About Shirley McClure Shirley Foose McClure sought Chapter 11 protection (Bankr. C.D. Cal. Case No. 13-10386) on Dec. 21, 2012. The Debtor's estate is comprised of her interest in multiple parcels of income producing real property in Southern California, San Francisco and Maui, cash and claims asserted in two lawsuits against attorneys who formerly represented her. On July 27, 2016, the Court appointed John P. Reitman as Chapter 11 Trustee. On Feb. 26, 2018, the Court appointed Coldwell Banker Real Estate, LLC and Berkshire Hathaway Franciscan Properties was principally responsible for listing, marketing and showing the Corbett Properties in San Francisco. William Friedman of Coldwell as brokers. SPINE ORTHOPEDIC: Wells Fargo to Hold Foreclosure Sale on July 10 ----------------------------------------------------------------- Wells Fargo Bank, N.A., will sell the property of Spine Orthopedic & Sport Physical Therapy, Inc., located at 20715 E. Ocotillo Rd. #103, Queen Creek, Arizona, at a public auction to the highest bidder on July 10, 2018, at 10:00 a.m. at the law offices of Quarles & Brady LLP. Proceeds of the sale will be used to pay debt in the original principal balance of $782,702.45. Every bidder except for Wells Fargo, as Beneficiary, will be required to provide a $10,000.00 deposit in form satisfactory to Trustee as a condition to entering a bid. Wells Fargo reserves the right to transfer the secured indebtedness to, and/or to acquire title to all or part of the collateral in the name of, a title-holding affiliate following the commencement of this sale. Wells Fargo may be reached at: Wells Fargo Bank, National Association 2410 S. Power Rd. Mesa, AZ 85209 The Trustee who will conduct the sale may be reached at: W. Scott Jenkins, Jr., Eq. Quarles & Brady LLP Renaissance One Two North Central Avenue Phoenix, AZ 85004 For information contact Kelly Webster at kelly.webster@quarles.com or (520) 770-8712) ST. PETER UNIVERSITY: Moody's Affirms Ba1 Rating on $144M Bonds --------------------------------------------------------------- Moody's Investors Service has affirmed Saint Peter University Hospital's, NJ (SPUH) Ba1 rating affecting approximately $144 million of outstanding bonds. The outlook is stable. RATINGS RATIONALE The Ba1 reflects maintenance of a good market position in a competitive market and regional draw for a large, well-regarded women and children's program. Despite underperformance in 2017, the rating expects Saint Peter's will continue to grow volume and restore margins to more historic levels with various operational improvement initiatives underway and early evidence of improvement in 2018. While liquidity will remain thin, cash flow will fund capital spending plans and favorable resolution of pension plan litigation will allow for funding flexibility as a church plan (although the hospital still plans to fund the pension). Challenges include ongoing litigation filed against the largest payor in the state, a competitive and consolidating broader market and high reliance on Medicaid due to children's service lines. RATING OUTLOOK The stable outlook reflects Fitch's view that SPUH will achieve more consistent operating cash flow margins around historic levels of 8%. Management has also demonstrated an ability to operate within a narrow corridor of financial flexibility that it expects will continue over the near term. FACTORS THAT COULD LEAD TO AN UPGRADE Sustained financial performance and much improved liquidity and debt service coverage FACTORS THAT COULD LEAD TO A DOWNGRADE Inability to show improvement in fiscal 2018 that is sustainable, resulting in weaker debt service coverage metrics Reduction in liquidity Material increase in debt without commensurate cash flow increase Substantial erosion of market position LEGAL SECURITY The obligated group is comprised of Saint Peters University Hospital (SPUH). The bonds are secured by gross revenue pledge and a mortgage of certain hospital property in New Brunswick. Debt service coverage ratio covenant of at least 1.25 times is measured on a twelve month rolling date; headroom is thin at year end with the weaker operations. PROFILE Saint Peters University Hospital is the largest component of Saint Peters Healthcare System, Inc. a $478 million (total revenues) system located in New Brunswick, New Jersey. Major service lines include women and children's services. STANDARD MEDIA: Fitch Assigns First-Time 'B' IDR, Outlook Stable ---------------------------------------------------------------- Fitch Ratings has assigned first-time 'B' Long-Term Issuer Default Ratings (LT IDRs) to Standard Media Group LLC (Standard Media) and its parent, Standard Media Holdings LLC (Holdings). Fitch has also assigned a 'BB'/'RR1' rating to Standard Media's first lien credit facilities and a 'CCC+'/'RR6' rating to its second lien credit facilities. The Rating Outlook is Stable. The ratings are driven by Standard Media's proposed $335 million issuance of debt including a $15 million revolver, a $245 million first lien term loan and a $90 million second lien term loan. Net proceeds from the issuance along with $130 million in equity provided by the sponsor, Standard General, will be used to purchase nine television stations in seven markets from Sinclair Broadcast Group, Inc. (Sinclair) and Tribune Media Company (Tribune) in an all-cash transaction. Sinclair is required to divest these station assets as part of a larger sale to comply with regulatory restrictions and close its planned merger with Tribune. Standard Media's acquisition of certain Sinclair stations is subject to regulatory approvals and is expected to close in 2018. Standard Media's ratings reflect the company's high leverage, limited geographic diversity and relatively small scale (EBITDA less than $100 million) as compared to TV broadcast peers. The ratings also incorporate Standard Media's concentration towards FOX-affiliated stations (six of the nine stations owned) and FOX's relatively weak historical rating performance relative to other 'Big Four' networks. Fitch notes that investment in content at Twenty-First Century Fox, including the recent addition of Thursday Night Football and focus on comedy and procedural shows, could facilitate an improvement in FOX's primetime ratings over the near to intermediate term. FOX's programming serves as a lead-in for Standard Media's local news content and ratings improvement at FOX could help drive audience and advertising market share for Standard Media's FOX-affiliated stations. Fitch believes the Standard Media management team may improve the operating performance of its acquired station assets (generally 3rd ranked or lower) by investing in local news and increasing news offerings during morning and daytime slots. Generally higher ranked stations with strong local news content are able to garner a larger share of local and political advertising in the markets they serve. The ratings also incorporate the company's growing and more stable retransmission revenues (representing 54% of average 2016/2017A revenues and 76% of average 2016/2017A broadcast station cash flows) and the contracted retransmission revenue per subscriber rate increases presented from Sinclair's existing retransmission contracts. Standard Media's gross unadjusted leverage of 5.3x (6.2x excluding the $9.4 million contracted net retransmission revenues step-up) at acquisition close is high. However, Fitch believes low capital expenditure requirements and strong free cash flow conversion provides the opportunity for meaningful deleveraging capacity. While management is targeting a 4.0x gross unadjusted leverage over the longer term, Fitch expects the company to remain acquisitive, which could cause leverage to periodically remain elevated above target levels. KEY RATING DRIVERS Limited Scale and Market Diversity: Standard Media's ratings reflect its limited scale and market diversity resulting from its small station portfolio in mid-sized markets (DMA size 41-68) covering just 4% of TV U.S. households. Fitch views positively the overlap of these stations with local sports and its presence in key political battleground states, which could work strategically to improve market share of advertising dollars. Heavy FOX Concentration: Standard Media's concentration toward FOX-affiliated stations (six of the nine stations acquired) and FOX's relatively weak historical rating performance relative to other 'Big Four' networks weighs on the ratings. Investment in content at FOX, including the recent addition of Thursday Night Football and focus on comedy and procedural shows, could facilitate an improvement in FOX's primetime ratings over the near to intermediate term. Weak broadcast ratings are concerning given the affiliates' reliance on network programming as lead-ins for their local news programming. Importantly, even with the ratings declines, broadcast television remains one of the very few methods by which advertisers can reach large audiences, which should continue to support advertising demand and CPMs. Weak Performing Station Assets: Standard Media's TV stations rank #3 or lower in their markets. Strong performing stations garner a larger share of local and political advertising in their markets. While Standard Media's stations represent an opportunity to improve performance through investment in local news content, Fitch expects it could take time for investments to funnel through and improve market share for these lower ranked stations. Highly Levered: Standard Media's gross unadjusted leverage will approximate 5.3x based on LTM ended March 31, 2018 (including $9 million in net retransmission revenues from contractual step-up). While Standard Media's strong FCF conversion can support meaningful leverage reduction, Fitch expects the company's leverage will periodically fluctuate above target levels as it consolidates station assets. Strong and Growing Retransmission Revenues: Standard Media benefits from Sinclair's legacy retransmission contracts, which are towards the high-end of the broadcast peer set in regard to retransmission revenue per subscribers. Standard Media will be able to re-rate Tribune's retransmission revenues to Sinclair's higher retransmission revenue per subscriber rates following the acquisition close. Retransmission revenues account for roughly 54% of average revenues and over 76% of average broadcast station cash flow in 2016/2017A. Fitch views positively growing and more stable retransmission revenues which help to offset the company's exposure to cyclical advertising revenues. Strong FCF generation: TV broadcasters typically generate significant amounts of FCF due to high operating leverage and minimal capex requirements. Fitch expects 2018 FCF generation will benefit from political advertising revenues as well as increases in higher-margin retransmission revenues. Standard Media generated $51 million in FCF for the LTM period ended March 31, 2018, as measured as EBITDA less capex. Stable Advertising Environment: Fitch expects the advertising environment to remain stable in 2018. The peer group remains heavily exposed to auto advertising. Despite slowing auto sales, U.S. car sales are expected to remain at solid levels (Fitch forecasts 16.8 million light vehicle unit sales, in-line with pre-recession average). However, Fitch expects television broadcasters will continue to loss advertising share to other mediums. Per Magna Global, total linear television advertising revenues, excluding political and Olympics, are expected to decline by 1.2% in FY 2018. Advertising Revenue Exposure: Advertising revenues comprised 46% of Standard Media's average 2016/2017A revenues. Advertising revenues, especially those associated with TV, are becoming increasingly hypercyclical and represent a significant risk. Local advertising revenues, which tend to be more stable, accounted for 25% of Standard Media's revenues. Viewer Fragmentation: Broadcasters continue to face secular headwinds, including declining audiences amid increasing programming choices and pressures from OTT services. Fitch views positively the increasing inclusion of local broadcast content in OTT offerings. While growth in OTT subscribers could provide incremental revenues and offset declines of traditional MVPD subscribers, Fitch does not believe penetration will be material for Standard Media, particularly give the company's predominance in medium-sized markets. DERIVATION SUMMARY Standard Media's ratings reflect the company's high leverage and relatively small scale (EBITDA less than $100 million) as compared to TV broadcast peers. The ratings also incorporate Standard Media's limited geographic diversity and concentration towards FOX-affiliated stations and FOX's relatively weak historical rating performance relative to other 'Big Four' networks. The ratings also incorporate the company's growing and more stable retransmission revenues and Fitch's expectations for strong EBITDA margins (in low 30% range over the rating case) and FCF conversion. KEY ASSUMPTIONS Fitch's Key Assumptions Within Its Rating Case for the Issuer: - Revenue from growing retransmission revenue fees; - Fitch assumes core advertising revenue growth between -2% to +1% reflecting odd/even year fluctuations; - 2018 and 2020 revenues and EBITDA reflects the impact of political revenues. Fitch expects Standard Media to benefit from presence in battleground states including Michigan, Pennsylvania, Virginia, North Carolina and Iowa. - Fitch expects retransmission revenues to grow by roughly 21% in 2018, with growth decelerating to the high single digits by 2022. Growth in retransmission revenues reflects the contractual step-ups in existing retransmission contracts and expectations that new retransmission contracts will be conducted at higher rates. - Due to increasing reverse retransmission fees, Fitch expects EBITDA margins compress to the low 30% range; - Average FCF generation of roughly $40 million 2019/2018E; - Standard Media pays $2.5 million in mandatory term loan amortization and applies the remaining excess cash flow (ECF) towards debt reduction; - Tuck-in acquisition of broadcast stations of roughly $100 million at a 7x purchase price multiple. - Average gross unadjusted leverage of 5.6x at acquisition close (August 2018) and approaches 4.0x by 2021. - Standard Media's Recovery Ratings reflect Fitch's expectation that the enterprise value of the company, and thus, recovery rates for its creditors, will be maximized in a restructuring scenario (going concern), rather than a liquidation. - Fitch estimates the adjusted distressed enterprise valuation to be approximately $288 million. Fitch employs a 6x distressed enterprise value multiple reflecting the value present in the company's FCC licenses in medium-sized U.S. markets. Fitch also assumes a going-concern EBITDA of $48 million which reflects the impact of a cyclical downturn which pressures advertising revenues and EBITDA. - Fitch also incorporates the following into its recovery analysis: (1) public TV broadcast peers trade at an average EV/EBITDA multiple of 7.1x; (2) Recent acquisition multiples for TV stations have been in a range of 7-8x average two-year cash flow. Notably, Sinclair Broadcast Group's planned acquisition of Tribune Media Company for $6.6 billion represented a purchase price multiple of roughly 7.0x average 2017/2018 pro forma EBITDA. - The recovery analysis results in a 'BB/RR1'rating for the first lien secured debt reflecting expectations for 91-100% recovery under a bankruptcy scenario. The recovery analysis results in a 'CCC+/RR6' rating on the second lien debt reflecting Fitch's expectations for limited recovery prospects in a restructuring scenario. RATING SENSITIVITIES Developments That May, Individually or Collectively, Lead to Positive Rating Action - Fitch would consider an upgrade if management maintains two-year average leverage below 4.5x Developments That May, Individually or Collectively, Lead to Negative Rating Action - If Standard Media is unable to reduce two-year average leverage below 5.5x as a result of weaker than anticipated operational performance or increasing secular pressures, Fitch would consider a downgrade. LIQUIDITY Fitch believes Standard Media has adequate liquidity supported by an anticipated $5 million in balance sheet cash following the transaction close and the $15 million in revolver availability. Standard Media generated EBITDA of $51 million for the LTM period and $53.7 million for the last eight quarters annualized ending March 31, 2018. The company generated $51 million in FCF (as measured as EBITDA less capital expenditures) for the last eight quarters annualized. Liquidity will continue to benefit by the low capital expenditure needs of the business model which will support strong FCF conversion. Fitch expects capital expenditures of roughly $3 million per year representing roughly 2% of revenues over the rating case. Standard Media will benefit from the return of political revenues in 2018 with what is expected to be a contentious mid-term election and the next presidential election in 2020. The company has modest amortization under the first lien term loan of $2.45 million annually until 2025. FULL LIST OF RATING ACTIONS Fitch has assigned the following ratings: Standard Media Holdings LLC (Holdings) - Long-Term IDR 'B'. Standard Media Group LLC - Long-Term IDR 'B'; - Senior Secured First Lien Revolver 'BB''/RR1'; - Senior Secured First Lien Term Loan 'BB'/'RR1'; - Senior Secured Second Lien Term Loan 'CCC+'/'RR6'. STAR PERFORMANCE: Taps Hamilton & Phillips as Accountant -------------------------------------------------------- Star Performance Realty, Inc., seeks approval from the U.S. Bankruptcy Court for the Middle District of Florida to hire Hamilton & Phillips LLC as its accountant. The firm will assist the Debtor in the preparation of its annual tax returns; conduct tax research; prepare court-ordered reports and documents necessary for the Debtor's bankruptcy plan; and provide other accounting services related to its Chapter 11 case. Hamilton will charge a monthly fee of $375 and will be provided with a $1,500 initial retainer. The firm neither represents nor holds any interest adverse to the Debtor and its estate and creditors, according to court filings. Hamilton can be reached through: Rachel Santana Hamilton & Phillips LLC 3447 Brook Crossing Dr. Brandon, FL 33511 Telephone: (813) 689-7480 Fax: (813) 685-0075 Email: rachels@hamiltonandphillips.com About Star Performance Realty Star Performance Realty, Inc., which conducts business under the name ReMax South Shore Realty, filed a Chapter 11 bankruptcy petition (Bankr. M.D. Fla. Case No. 18-01791) on March 9, 2018. In the petition signed by Janelle M. Duncan, president, the Debtor estimated assets and liabilities at $500,000 to $1 million. The Debtor hired Buddy D. Ford, Esq., at Buddy D. Ford, P.A., as counsel. STERLING ENTERTAINMENT: Aristotle Objects to Disclosure Statement ----------------------------------------------------------------- Aristotle Holding Limited Partnership objects to the approval of the second amended disclosure statement explaining the Chapter 11 plan of Sterling Entertainment Group LV, LLC. Aristotle complains that the disclosure statement cannot be approved because the plan is not confirmable on its face. Among others, Aristotle reasserts its objection with regard to the Debtor's attempt to remove Aristotle's first priority deed of trust from the portion of the Real Property with the Club (and the parking lot) and pay Aristotle a portion of what it is owed on its first priority deed of trust. This proposal makes the Plan patently unconfirmable, Aristotle tells the Court. Aristotle Holding Limited Partnership is represented by: Jeanette E. McPherson, Esq. Schwartzer & McPherson Law Firm 2850 S. Jones Blvd., Suite 1 Las Vegas, NV 89146 Phone: 702-228-7590 Fax: 702-892-0122 Email: bkfilings@s-mlaw.com -- and -- Dennis L. Kennedy, Esq. Kelly B. Stout, Esq. Bailey Kennedy, LLP 8984 Spanish Ridge Avenue Las Vegas, NV 89148-1302 Phone: 702.562.8820 Fax: 702.562.8821 Email: DKennedy@BaileyKennedy.com About Sterling Entertainment Group Sterling Entertainment Group LV, LLC owns Olympic Garden Gentlemen's Club located at 1531 Las Vegas Boulevard, Las Vegas, Nevada 89104 as well as the real property associated with it. The Club is currently not operational and does not generate any cash flow for the Company. Sterling Entertainment also owns a commercial space located at 1507 Las Vegas Boulevard South, Las Vegas, Nevada 89104 and rents it to a commercial tenant. The Company previously sought bankruptcy protection on July 6, 2017 (Bankr. D. Nev. Case No. 17-13662). Sterling Entertainment Group LV, LLC, based in Los Angeles, CA, filed a Chapter 11 petition (Bankr. D. Nev. Case No. 18-11484) on March 20, 2018. In the petition signed by Amadouba Tall, trustee of the Salahadin Family Trust, the Debtor estimated $10 million to $50 million in assets and $1 million to $10 million in liabilities. The Hon. Laurel E. Davis presides over the case. Samuel A. Schwartz, Esq., at Schwartz Flansburg PLLC, serves as bankruptcy counsel. SWD LLC: Seeks to Hire Kutner Brinen PC as Attorney --------------------------------------------------- SWD, LLC, seeks authority from the U.S. Bankruptcy Court for the District of Colorado to hire Kutner Brinen, P.C., as attorneys. The professional services that Kutner Brinen is to render are: a. provide the Debtor with legal advice with respect to its powers and duties; b. aid the Debtor in the development of a plan of reorganization under Chapter 11; c. file the necessary petitions, pleadings, reports, and actions that may be required in the continued administration of the Debtor’s property under Chapter 11; d. take necessary actions to enjoin and stay until a final decree herein the continuation of pending proceedings and to enjoin and stay until a final decree the commencement of lien foreclosure proceedings and all matters as may be provided under 11 U.S.C. Sec. 362; and e. perform all other legal services for the Debtor that may be necessary. Kutner Brinen's hourly rates are: Lee M. Kurtner $500 Jeffrey S. Brinen $430 Jenny M. Fujii $340 Keri L. Riley $280 Law Clerk $175 Paralegal $75 Lee M. Kurtner, Esq., a shareholder of Kutner Brinen, attests that his firm is a "disinterested person" as defined by 11 U.S.C. Section 101(14) and does not have or represent an interest materially adverse to the interest of the estate or of any class of creditors. The counsel can be reached through: Lee M. Kutner, Esq. Keri L. Riley, Esq. KUTNER BRINEN, P.C. 1660 Lincoln Street, Suite 1850 Denver, CO 80264 Tel: (303) 832-2400 Fax: (303) 832-1510 E-mail: lmk@kutnerlaw.com About SWD, LLC SWD, LLC, is a Wyoming limited liability company with its principal place of business located in Golden, Colorado. It is engaged in business as the holder of a working interest in the Cheapside Salt Water Disposal Well located in Gonzales, Texas. SWD, LLC, filed its Voluntary Petition pursuant to Chapter 11 of the Bankruptcy Code (Bankr. D. Colo. Case No. 18-14537) on May 24, 2018, estimating $1,000,001 to $10 million in assets and liabilities. The case is assigned to Judge Michael E. Romero. Lee M. Kutner, at Kutner Brinen, P.C., serves as the Debtor's counsel. TENNECO INC: Moody's Cuts CFR to Ba3 & Unsec. Notes Rating to B2 ---------------------------------------------------------------- Moody's Investors Service downgraded the ratings of Tenneco Inc., including the Corporate Family Rating to Ba3 from Ba1 and the existing senior unsecured notes to B2 from Ba2. Moody's also assigned a Ba2 rating to $4.9 billion of new senior secured bank credit facilities (revolver and term loans), and affirmed the Speculative Grade Liquidity Rating at SGL-2. The rating outlook is stable. This action concludes the review for downgrade initiated on April 10, 2018. The following ratings were downgraded: Tenneco, Inc. Corporate Family Rating, to Ba3 from Ba1; Probability of Default Rating, to Ba3-PD from Ba1-PD; Senior unsecured notes due 2026; to B2 (LGD5) from Ba2 (LGD5); Senior unsecured notes due 2024, to B2 (LGD5) from Ba2 (LGD5); The following ratings were assigned: Tenneco, Inc. New $1.5 billion senior secured revolving credit facility due 2023, Ba2 (LGD2); New $1.6 billion senior secured Term Loan A due 2023, Ba2 (LGD2); New $1.8 billion senior secured Term Loan B due 2025, Ba2 (LGD2); The following rating was affirmed: Speculative Grade Liquidity Rating: SGL-2 Rating Outlook: Stable RATINGS RATIONALE The rating actions, including the downgrades, incorporate Tenneco's proposed capital structure related to the financing its planned acquisition of Federal-Mogul LLC (Federal-Mogul), a leading global supplier to automotive original equipment manufacturers and the aftermarket. On a pro forma basis for 2017, the transaction will increase Tenneco's Debt/EBITDA (inclusive of Moody's standard adjustments for both companies) to over 4x inclusive of estimated synergies, from 2.4x. This is transformational for Tenneco, both the acquisition of Federal Mogul as well as the plan to separate into two separate businesses with one focused on Aftermarket & Ride Performance and the other on Powertrain Technology. Moody's anticipates the ratings on Federal Mogul's senior secured debt will be withdrawn as that debt will be repaid with new funding. Tenneco is expected to acquire Federal-Mogul from affiliates of Icahn Enterprises L.P. for $5.4 billion through a combination of $800 million in cash, 5.7 million shares of Tenneco Class A common stock (representing a 9.9% voting interest), 23.8 million shares of Non-Voting Class B common stock, and the assumption of debt. This is about a 7.2x multiple of Tenneco's calculation of Federal-Mogul's 2017 adjusted EBITDA (pre synergies). The acquisition is expected to close in the second half of 2018, subject to regulatory and shareholder approvals and other customary closing conditions. The new senior secured term loans totaling $3.4 billion, along with newly issued $1.6 billion issued common stock, is anticipated to be used to fund the purchase price of the transaction, refinance Federal-Mogul's and Tenneco's existing bank credit facilities, fund balance sheet cash, and pay related transaction fees. Federal-Mogul's senior secured notes will be assumed by Tenneco. The ratings reflect the significant increase in leverage, with the expectation that improvement is unlikely over the near term, as approximately 75% of the synergies will not be realized until late 2019. Pro Forma debt/EBITDA (inclusive of Moody's standard adjustments) is estimated at 4.8x, and about 4.2x adjusting for Tenneco's projected synergies. The ratings also reflect a number of near-term execution risks including: operating the ongoing businesses while both integrating certain operations related to the planned separation; and implementing programs to achieve the planned synergies and working capital improvements. Tenneco's SGL-2 Speculative Grade Liquidity rating incorporates Moody's expectation of a good liquidity profile over the next 12-15 months supported by expected free cash flow generation and availability under the new $1.5 billion revolving credit facility. Pro forma cash balances as of December 31, 2017 are estimated at $778 million. However, mid-year 2018 amounts (just prior to the planned acquisition closing) are likely to be lower due to seasonal working capital trends. Pro forma for the acquisition, the revolving credit facility is anticipated to be unfunded. The credit facility is expect to have two financial covenants, a maximum net leverage ratio and a minimum interest coverage ratio. Moody's expects the company to maintain a good cushion to these covenants over the next 12-15 months. In addition to the revolving credit, both Federal-Mogul and Tenneco rely on a significant amounts of accounts receivable factoring/securitization as a source of financing (included in Moody's adjusted debt calculations). While not expected, if the company is unable to maintain and extend these securitizations, additional borrowings under the revolving credit facility would be required to meet liquidity needs. SUBSEQUENT BUSINESS SEPARATION PLANNED Following the completion of the acquisition, Tenneco plans to separate the combined businesses into two independent, publicly traded companies through a tax-free spin-off to shareholders that will establish a clean air & powertrain technology company (the PT business) and an aftermarket & ride performance company (the AM business). The PT business is expected be more closely aligned with trends in automotive powertrain technology toward increased fuel efficiency and more stringent emission controls. The AM business is expected to be focused on the manufacture and distribution of aftermarket products, and in addition, will retain Tenneco's existing OEM ride performance business. The separation is anticipated to occur in the second half of 2019. The stable rating outlook reflects the expectation that the PT business should have stronger growth trends related to increased penetration of clean air technologies. The stable rating outlook also anticipates that the capital structure of the PT business will reflect a much improved leverage profile over time compared to the above synergy adjusted pro forma Debt/EBITDA of 4.2x. The AM business is likely to follow slower growth automotive aftermarket trends, and slower growth forecasts of the global automotive industry The ratings could be upgraded with stronger than anticipated profit and cash flow growth from ongoing stability in global automotive demand combined with increasing penetration of the combined company's products and faster than expected realized synergies. Consideration for a higher rating could result from Debt/EBITDA approaching 2x, and EBITA/Interest coverage, inclusive of restructuring, sustained above 5.0x, while maintaining a good liquidity profile. The ratings could be downgraded if there is weakness in global automotive demand that is not offset by successful restructuring actions, operating weakness related the integration and subsequent business separation, or a delay in the business separation beyond year-end 2019, resulting in Debt/EBITDA leverage sustained over 4x, or EBITA/Interest coverage of 2x. A weakening liquidity profile could also drive a lower rating. The principal methodology used in these ratings was Global Automotive Supplier Industry published in June 2016. Federal-Mogul LLC, headquartered in Southfield, MI is a leading global supplier of products and services to the world's manufacturers and servicers of vehicles and equipment in the automotive, light, medium and heavy-duty commercial, marine, rail, aerospace, power generation and industrial markets. The company's products and services enable improved fuel economy, reduced emissions and enhanced vehicle safety. Federal-Mogul is controlled by affiliates of Icahn Enterprises L.P. Revenues in 2017 were $7.9 billion. Tenneco Inc., headquartered in Lake Forest, Illinois, is a leading manufacturer of automotive emissions control (approximately 70% of 2016 revenues) and ride performance (approximately 30%) products and systems for both the worldwide original equipment market and aftermarket. Leading brands include Monroe, Rancho, Clevite, and Fric Rot ride control products and Walker, Fonos, and Gillet emission control products. Revenues for 2017 were $9.3 billion. TERNAL JEWELERS: Taps Gregory K. Stern as Legal Counsel ------------------------------------------------------- Eternal Jewelers, Inc., seeks approval from the U.S. Bankruptcy Court for the Northern District of Illinois to hire Gregory K. Stern, P.C. as its legal counsel. The firm will advise the Debtor regarding its duties under the Bankruptcy Code; negotiate with creditors; review proofs of claim; prepare a bankruptcy plan and assist in the solicitation of votes on the plan; and provide other legal services related to its Chapter 11 case. The attorneys who will be handling the case and their hourly rates are: Gregory Stern $475 Dennis Quaid $475 Monica O'Brien $450 Rachel Sandler $350 The Debtor has paid the attorneys a pre-bankruptcy minimum fee in the sum of $15,000. Gregory Stern, Esq., and the other attorneys disclosed in court filings that they do not represent any interest adverse to the Debtor or its estate. The firm can be reached through: Gregory K. Stern, Esq. Monica C. O'Brien, Esq. Dennis E. Quaid, Esq. Rachel S. Sandler, Esq. Gregory K. Stern, P.C. 53 West Jackson Boulevard, Suite 1442 Chicago, IL 60604 Phone: (312) 427-1558 Email: greg@gregstern.com Email: monica@gregstern.com Email: dquaid3@gmail.com About Eternal Jewelers Inc. Eternal Jewelers, Inc. sought protection under Chapter 11 of the Bankruptcy Code (Bankr. N.D. Ill. Case No. 18-13761) on May 10, 2018. In the petition signed by Fayed Yasin, president, the Debtor disclosed that it had estimated assets of less than $50,000 and liabilities of less than $500,000. Judge Janet S. Baer presides over the case. TINSELTOWN PARTNERS: July 19 Plan Confirmation Hearing ------------------------------------------------------ Judge Paul M. Glenn of the U.S. Bankruptcy Court for the Middle District of Florida, Jacksonville Division, has issued an order approving the disclosure statement explaining Tinseltown Partners LLC's plan. July 5, 2018, is fixed as the last day for filing acceptances or rejections of the Plan, and July 19, 2018 at 10:00 A.M., is fixed as the date of hearing of confirmation of the Plan. About Tinseltown Partners, LLC Tinseltown Partners, LLC, based in Jacksonville, Florida, filed a Chapter 11 petition (Bankr. M.D. Fla. Case No. 17-04251) on December 14, 201. The Hon. Paul M. Glenn presides over the case. Eric N. McKay, Esq., at the Law Offices of Eric N. McKay, serves as bankruptcy counsel. In its petition, the Debtor estimated $10 million to $50 million in both assets and liabilities. The petition was signed by Andre El-Bahri, its partner. TJ ACQUIRERS: Involuntary Chapter 11 Case Summary ------------------------------------------------- Alleged Debtor: TJ Acquirers LLC 4611 Northaven Rd Dallas, TX 75229-4226 Business Description: TJ Acquirers LLC is a privately held company in Dallas, Texas. Case Number: 18-31934 Involuntary Chapter 11 Petition Date: June 5, 2018 Court: United States Bankruptcy Court Northern District of Texas (Dallas) Judge: Hon. Barbara J. Houser Petitioners' Counsel: Larry K. Hercules, Esq. LARRY K. HERCULES, ATTORNEY AT LAW 1400 Preston Road, Suite 400 Plano, TX 75093 Tel: (972) 964-9757 Fax: (972) 964-0120 E-mail: lkhercules@yahoo.com Alleged creditors who signed the involuntary petition: Petitioners Nature of Claim Claim Amount ----------- --------------- ------------ Robert Besearra Contract for Sale $____ 6111 Northaven Road Dallas, TX 75230 Tel: 214-893-2197 Sophia Besearra Contract for Sale $____ 6111 Northaven Road Dallas, TX 75230 ---------- Total Petitioners' Claim: $1,000,000 A full-text copy of the Involuntary Petition is available at: http://bankrupt.com/misc/txnb18-31934.pdf TOYS R US: Propco I Debtors Tap Goldin as Financial Advisor ----------------------------------------------------------- Toys "R" Us Property Company I, LLC, and its debtor-affiliates seek authority from the United States Bankruptcy Court for the Eastern District of Virginia to hire Goldin Associates, LLC as financial advisor to the Propco I Debtors with respect to all conflict matters. Financial advisory services Goldin will provide are: -- familiarize itself with the business, operations, properties, financial condition and prospects of the Company; -- evaluate each of the Company’s debt capacity and alternative capital structures; -- analyze various Transaction scenarios and the potential impact of these scenarios on the value of the Company and the recoveries of those stakeholders impacted by the Transaction; -- assist the disinterested directors and/or participate in negotiations with entities or groups affected by the Transaction; -- if requested by the Disinterested Directors, participate in hearings before the bankruptcy court with respect to the matters upon which Goldin has provided advice, including, as relevant, coordinating with the Company's counsel with respect to testimony in connection therewith; -- assist the Disinterested Directors in determining the adequacy and relevance of valuation information provided in connection with real estate holdings; and -- perform such other financial advisory services as may be specifically agreed upon by the Disinterested Directors and Goldin. Goldin's customary hourly rates are: Sr. Managing Directors/Sr. Advisors $1,000 to $1,050 Managing Directors $800 to $1,000 Sr. Directors/Sr. Consultants $700 to $800 Directors $600 to $700 Vice Presidents/Consultants $500 to $600 Associates $400 to $500 Analysts $250 to $400 David W. Prager, managing director of Goldin Associates, attests that his firm is a "disinterested person" within the meaning of Section 101(14) of the Bankruptcy Code, as required by Section 327(a), and does not hold or represent an interest adverse to the Wayne Debtor's estate. The advisor can be reached through: David W. Prager Goldin Associates, LLC 350 Fifth Avenue New York, NY 10118 Tel: 212-593-2255 Fax: 212-888-2841 Email: dprager@goldinassociates.com About Toys R Us, Inc. Toys "R" Us, Inc., was an American toy and juvenile-products retailer founded in 1948 and headquartered in Wayne, New Jersey, in the New York City metropolitan area. Merchandise was sold in 880 Toys "R" Us and Babies "R" Us stores in the United States, Puerto Rico and Guam, and in more than 780 international stores and more than 245 licensed stores in 37 countries and jurisdictions. Merchandise was also sold at e-commerce sites including Toysrus.com and Babiesrus.com. On July 21, 2005, a consortium of Bain Capital Partners LLC, Kohlberg Kravis Roberts, and Vornado Realty Trust invested $1.3 billion to complete a $6.6 billion leveraged buyout of the company. Toys "R" Us is a privately owned entity but still files with the Securities and Exchange Commission as required by its debt agreements. The Company's consolidated balance sheet showed $6.572 billion in assets, $7.891 billion in liabilities, and a stockholders' deficit of $1.319 billion as of April 29, 2017. Toys "R" Us, Inc., and certain of its U.S. subsidiaries and its Canadian subsidiary voluntarily filed for relief under Chapter 11 of the Bankruptcy Code (Bankr. E.D. Va. Lead Case No. Case No. 17-34665) on Sept. 19, 2017. In addition, the Company's Canadian subsidiary voluntarily commenced parallel proceedings under the Companies' Creditors Arrangement Act ("CCAA") in Canada in the Ontario Superior Court of Justice. The Company's operations outside of the U.S. and Canada, including its 255 licensed stores and joint venture partnership in Asia, which are separate entities, were not part of the Chapter 11 filing and CCAA proceedings. Grant Thornton is the monitor appointed in the CCAA case. Judge Keith L. Phillips presides over the Chapter 11 cases. In the Chapter 11 cases, Kirkland & Ellis LLP and Kirkland & Ellis International LLP serve as the Debtors' legal counsel. Kutak Rock LLP serves as co-counsel. Toys "R" Us employed Alvarez & Marsal North America, LLC as its restructuring advisor; and Lazard Freres & Co. LLC as its investment banker. It hired Prime Clerk LLC as claims and noticing agent. Consensus Advisory Services LLC and Consensus Securities LLC, serve as as sale process investment banker. A&G Realty Partners, LLC, serves as the Debtors' real estate advisor. On Sept. 26, 2017, the U.S. Trustee for Region 4 appointed an official committee of unsecured creditors. The Committee retained Kramer Levin Naftalis & Frankel LLP as its legal counsel; Wolcott Rivers, P.C. as local counsel; FTI Consulting, Inc. as financial advisor; and Moelis & Company LLC as investment banker. Toys "R" Us UK Toys "R" Us Limited, Toys "R" Us, Inc.'s UK arm with 105 stores and 3,000 employees, was sent into administration in the United Kingdom in February 2018. Arron Kendall and Simon Thomas of Moorfields Advisory Limited, 88 Wood Street, London, EC2V 7QF were appointed Joint Administrators on Feb. 28, 2018. The Administrators now manage the affairs, business and property of the Company. The Administrators act as agents only and without personal liability. The Administrators said they will make every effort to secure a buyer for all or part of the business. Liquidation of U.S. Stores Toys "R" Us, Inc., on March 15, 2018, filed with the U.S. Bankruptcy Court a motion seeking Bankruptcy Court approval to start the process of conducting an orderly wind-down of its U.S. business and liquidation of inventory in all 735 of the Company's U.S. stores, including stores in Puerto Rico. Propco I Debtors Toys "R" Us Property Company I, LLC and its subsidiaries own fee and leasehold interests in more than 300 properties in the United States. The Debtors lease the properties on a triple-net basis under a master lease to Toys-Delaware, the operating entity for all of TRU's North American businesses, which operates the majority of the properties as Toys "R" Us stores, Babies "R" Us stores or side-by-side stores, or subleases them to alternative retailers. Toys "R" Us Property was founded in 2005 and is headquartered in Wayne, New Jersey. Toys 'R' Us Property operates as a subsidiary of Toys "R" Us Inc. Company LLC, MAP Real Estate LLC, TRU 2005 RE I LLC, TRU 2005 RE II Trust, and Wayne Real Estate Company LLC (collectively, "Propco I Debtors") sought protection under Chapter 11 of the Bankruptcy Code (Bankr. E.D. Va. Lead Case No. 18-31429) on March 20, 2018. The Propco I Debtors sought and obtained procedural consolidation and joint administration of their Chapter 11 cases, separate from the Toys "R" Us Debtors' Chapter 11 cases. The Propco I Debtors estimated assets of $500 million to $1 billion and liabilities of $500 million to $1 billion. Judge Keith L. Phillips presides over the Propco I Debtors' cases. The Propco I Debtors hired Klehr Harrison Harvey Branzburg, LLP; and Crowley, Liberatore, Ryan & Brogan, P.C., as co-counsel. The Debtors also tapped Kutak Rock LLP. They hired Goldin Associates, LLC, as financial advisors. TOYS R US: Supplemental Order Issued on Transition Services ----------------------------------------------------------- BankruptcyData.com reported that the U.S. Bankruptcy Court issued a supplemental order "(a) authorizing Toys 'R' Us - Delaware ('Toys Delaware') to provide certain transition services to the Debtors' international operations (including to purchasers of such operations, if any); (b) authorizing Toys Delaware to enter into certain transition services agreements; (c) authorizing the Debtors to enter into that certain corporate services agreement with TRU Taj LLC ('TRU Taj') and (d) granting related relief." The supplemental order amends an earlier order authorizing transition services, dated as of May 17, 2018 (the "Original TSA Order"). Paragraph 2 of the supplemental order states, "The Canadian Transition Services Agreement substantially in the form attached hereto as Exhibit 1 is hereby approved, and the Debtors are authorized to take any and all actions necessary or appropriate to perform thereunder, including, without limitation, entry into an escrow agreement that will be entered into in connection with the Canadian Transition Services Agreement." The order continues, "except for paragraph 3 of the Original TSA Order, which is supplanted by paragraph 2 of this Order, the Original TSA Order remains in full force and effect, and no provisions thereof shall be modified by this Order." About Toys R Us, Inc. Toys "R" Us, Inc., was an American toy and juvenile-products retailer founded in 1948 and headquartered in Wayne, New Jersey, in the New York City metropolitan area. Merchandise was sold in 880 Toys "R" Us and Babies "R" Us stores in the United States, Puerto Rico and Guam, and in more than 780 international stores and more than 245 licensed stores in 37 countries and jurisdictions. Merchandise was also sold at e-commerce sites including Toysrus.com and Babiesrus.com. On July 21, 2005, a consortium of Bain Capital Partners LLC, Kohlberg Kravis Roberts, and Vornado Realty Trust invested $1.3 billion to complete a $6.6 billion leveraged buyout of the company. Toys "R" Us is a privately owned entity but still files with the Securities and Exchange Commission as required by its debt agreements. The Company's consolidated balance sheet showed $6.572 billion in assets, $7.891 billion in liabilities, and a stockholders' deficit of $1.319 billion as of April 29, 2017. Toys "R" Us, Inc., and certain of its U.S. subsidiaries and its Canadian subsidiary voluntarily filed for relief under Chapter 11 of the Bankruptcy Code (Bankr. E.D. Va. Lead Case No. Case No. 17-34665) on Sept. 19, 2017. In addition, the Company's Canadian subsidiary voluntarily commenced parallel proceedings under the Companies' Creditors Arrangement Act ("CCAA") in Canada in the Ontario Superior Court of Justice. The Company's operations outside of the U.S. and Canada, including its 255 licensed stores and joint venture partnership in Asia, which are separate entities, were not part of the Chapter 11 filing and CCAA proceedings. Grant Thornton is the monitor appointed in the CCAA case. Judge Keith L. Phillips presides over the Chapter 11 cases. In the Chapter 11 cases, Kirkland & Ellis LLP and Kirkland & Ellis International LLP serve as the Debtors' legal counsel. Kutak Rock LLP serves as co-counsel. Toys "R" Us employed Alvarez & Marsal North America, LLC as its restructuring advisor; and Lazard Freres & Co. LLC as its investment banker. It hired Prime Clerk LLC as claims and noticing agent. Consensus Advisory Services LLC and Consensus Securities LLC, serve as as sale process investment banker. A&G Realty Partners, LLC, serves as the Debtors' real estate advisor. On Sept. 26, 2017, the U.S. Trustee for Region 4 appointed an official committee of unsecured creditors. The Committee retained Kramer Levin Naftalis & Frankel LLP as its legal counsel; Wolcott Rivers, P.C. as local counsel; FTI Consulting, Inc. as financial advisor; and Moelis & Company LLC as investment banker. Toys "R" Us UK Toys "R" Us Limited, Toys "R" Us, Inc.'s UK arm with 105 stores and 3,000 employees, was sent into administration in the United Kingdom in February 2018. Arron Kendall and Simon Thomas of Moorfields Advisory Limited, 88 Wood Street, London, EC2V 7QF were appointed Joint Administrators on Feb. 28, 2018. The Administrators now manage the affairs, business and property of the Company. The Administrators act as agents only and without personal liability. The Administrators said they will make every effort to secure a buyer for all or part of the business. Liquidation of U.S. Stores Toys "R" Us, Inc., on March 15, 2018, filed with the U.S. Bankruptcy Court a motion seeking Bankruptcy Court approval to start the process of conducting an orderly wind-down of its U.S. business and liquidation of inventory in all 735 of the Company's U.S. stores, including stores in Puerto Rico. Propco I Debtors Toys "R" Us Property Company I, LLC and its subsidiaries own fee and leasehold interests in more than 300 properties in the United States. The Debtors lease the properties on a triple-net basis under a master lease to Toys-Delaware, the operating entity for all of TRU's North American businesses, which operates the majority of the properties as Toys "R" Us stores, Babies "R" Us stores or side-by-side stores, or subleases them to alternative retailers. Toys "R" Us Property was founded in 2005 and is headquartered in Wayne, New Jersey. Toys 'R' Us Property operates as a subsidiary of Toys "R" Us Inc. Company LLC, MAP Real Estate LLC, TRU 2005 RE I LLC, TRU 2005 RE II Trust, and Wayne Real Estate Company LLC (collectively, "Propco I Debtors") sought protection under Chapter 11 of the Bankruptcy Code (Bankr. E.D. Va. Lead Case No. 18-31429) on March 20, 2018. The Propco I Debtors sought and obtained procedural consolidation and joint administration of their Chapter 11 cases, separate from the Toys "R" Us Debtors' Chapter 11 cases. The Propco I Debtors estimated assets of $500 million to $1 billion and liabilities of $500 million to $1 billion. Judge Keith L. Phillips presides over the Propco I Debtors' cases. The Propco I Debtors hired Klehr Harrison Harvey Branzburg, LLP; and Crowley, Liberatore, Ryan & Brogan, P.C., as co-counsel. The Debtors also tapped Kutak Rock LLP. They hired Goldin Associates, LLC, as financial advisors. TOYS R US: Wayne Debtor Taps Goldin as Financial Advisor -------------------------------------------------------- Wayne Real Estate Parent Company, LLC ("Wayne Debtor"), seeks authority from the United States Bankruptcy Court for the Eastern District of Virginia to hire Goldin Associates, LLC, as its financial advisor with respect to all Conflict Matters effective nunc pro tunc to Feb. 9, 2018. Financial advisory services Goldin will provide are: -- familiarize itself with the business, operations, properties, financial condition and prospects of the Company; -- evaluate each of the Company’s debt capacity and alternative capital structures; -- analyze various Transaction scenarios and the potential impact of these scenarios on the value of the Company and the recoveries of those stakeholders impacted by the Transaction; -- assist the Disinterested Directors and/or participate in negotiations with entities or groups affected by the Transaction; -- if requested by the Disinterested Directors, participate in hearings before the bankruptcy court with respect to the matters upon which Goldin has provided advice, including, as relevant, coordinating with the Company's counsel with respect to testimony in connection therewith; -- assist the Disinterested Directors in determining the adequacy and relevance of valuation information provided in connection with real estate holdings; and -- perform such other financial advisory services as may be specifically agreed upon by the Disinterested Directors and Goldin. Goldin's customary hourly rates are: Sr. Managing Directors/Sr. Advisors $1,000 - $1,050 Managing Directors $800 - $1,000 Sr. Directors/Sr. Consultants $700 - $800 Directors $600 - $700 Vice Presidents/Consultants $500 - $600 Associates $400 - $500 Analysts $250 - $400 David W. Prager, managing director of Goldin Associates, attests that his firm is a "disinterested person" within the meaning of Section 101(14) of the Bankruptcy Code, as required by Section 327(a), and does not hold or represent an interest adverse to the Wayne Debtor's estate. The advisor can be reached through: David W. Prager Goldin Associates, LLC 350 Fifth Avenue New York, NY 10118 Tel: 212-593-2255 Fax: 212-888-2841 Email: dprager@goldinassociates.com About Toys R Us, Inc. Toys "R" Us, Inc., was an American toy and juvenile-products retailer founded in 1948 and headquartered in Wayne, New Jersey, in the New York City metropolitan area. Merchandise was sold in 880 Toys "R" Us and Babies "R" Us stores in the United States, Puerto Rico and Guam, and in more than 780 international stores and more than 245 licensed stores in 37 countries and jurisdictions. Merchandise was also sold at e-commerce sites including Toysrus.com and Babiesrus.com. On July 21, 2005, a consortium of Bain Capital Partners LLC, Kohlberg Kravis Roberts, and Vornado Realty Trust invested $1.3 billion to complete a $6.6 billion leveraged buyout of the company. Toys "R" Us is a privately owned entity but still files with the Securities and Exchange Commission as required by its debt agreements. The Company's consolidated balance sheet showed $6.572 billion in assets, $7.891 billion in liabilities, and a stockholders' deficit of $1.319 billion as of April 29, 2017. Toys "R" Us, Inc., and certain of its U.S. subsidiaries and its Canadian subsidiary voluntarily filed for relief under Chapter 11 of the Bankruptcy Code (Bankr. E.D. Va. Lead Case No. Case No. 17-34665) on Sept. 19, 2017. In addition, the Company's Canadian subsidiary voluntarily commenced parallel proceedings under the Companies' Creditors Arrangement Act ("CCAA") in Canada in the Ontario Superior Court of Justice. The Company's operations outside of the U.S. and Canada, including its 255 licensed stores and joint venture partnership in Asia, which are separate entities, were not part of the Chapter 11 filing and CCAA proceedings. Grant Thornton is the monitor appointed in the CCAA case. Judge Keith L. Phillips presides over the Chapter 11 cases. In the Chapter 11 cases, Kirkland & Ellis LLP and Kirkland & Ellis International LLP serve as the Debtors' legal counsel. Kutak Rock LLP serves as co-counsel. Toys "R" Us employed Alvarez & Marsal North America, LLC as its restructuring advisor; and Lazard Freres & Co. LLC as its investment banker. It hired Prime Clerk LLC as claims and noticing agent. Consensus Advisory Services LLC and Consensus Securities LLC, serve as sale process investment banker. A&G Realty Partners, LLC, serves as its real estate advisor. On Sept. 26, 2017, the U.S. Trustee for Region 4 appointed an official committee of unsecured creditors. The Committee retained Kramer Levin Naftalis & Frankel LLP as its legal counsel; Wolcott Rivers, P.C. as local counsel; FTI Consulting, Inc. as financial advisor; and Moelis & Company LLC as investment banker. Toys "R" Us UK Toys "R" Us Limited, Toys "R" Us, Inc.'s UK arm with 105 stores and 3,000 employees, was sent into administration in the United Kingdom in February 2018. Arron Kendall and Simon Thomas of Moorfields Advisory Limited, 88 Wood Street, London, EC2V 7QF were appointed Joint Administrators on Feb. 28, 2018. The Administrators now manage the affairs, business and property of the Company. The Administrators act as agents only and without personal liability. The Administrators said they will make every effort to secure a buyer for all or part of the business. Liquidation of U.S. Stores Toys "R" Us, Inc., on March 15, 2018, filed with the U.S. Bankruptcy Court a motion seeking Bankruptcy Court approval to start the process of conducting an orderly wind-down of its U.S. business and liquidation of inventory in all 735 of the Company's U.S. stores, including stores in Puerto Rico. About Toys R Us, Inc. Toys "R" Us, Inc., was an American toy and juvenile-products retailer founded in 1948 and headquartered in Wayne, New Jersey, in the New York City metropolitan area. Merchandise was sold in 880 Toys "R" Us and Babies "R" Us stores in the United States, Puerto Rico and Guam, and in more than 780 international stores and more than 245 licensed stores in 37 countries and jurisdictions. Merchandise was also sold at e-commerce sites including Toysrus.com and Babiesrus.com. On July 21, 2005, a consortium of Bain Capital Partners LLC, Kohlberg Kravis Roberts, and Vornado Realty Trust invested $1.3 billion to complete a $6.6 billion leveraged buyout of the company. Toys "R" Us is a privately owned entity but still files with the Securities and Exchange Commission as required by its debt agreements. The Company's consolidated balance sheet showed $6.572 billion in assets, $7.891 billion in liabilities, and a stockholders' deficit of $1.319 billion as of April 29, 2017. Toys "R" Us, Inc., and certain of its U.S. subsidiaries and its Canadian subsidiary voluntarily filed for relief under Chapter 11 of the Bankruptcy Code (Bankr. E.D. Va. Lead Case No. Case No. 17-34665) on Sept. 19, 2017. In addition, the Company's Canadian subsidiary voluntarily commenced parallel proceedings under the Companies' Creditors Arrangement Act ("CCAA") in Canada in the Ontario Superior Court of Justice. The Company's operations outside of the U.S. and Canada, including its 255 licensed stores and joint venture partnership in Asia, which are separate entities, were not part of the Chapter 11 filing and CCAA proceedings. Grant Thornton is the monitor appointed in the CCAA case. Judge Keith L. Phillips presides over the Chapter 11 cases. In the Chapter 11 cases, Kirkland & Ellis LLP and Kirkland & Ellis International LLP serve as the Debtors' legal counsel. Kutak Rock LLP serves as co-counsel. Toys "R" Us employed Alvarez & Marsal North America, LLC as its restructuring advisor; and Lazard Freres & Co. LLC as its investment banker. It hired Prime Clerk LLC as claims and noticing agent. Consensus Advisory Services LLC and Consensus Securities LLC, serve as as sale process investment banker. A&G Realty Partners, LLC, serves as the Debtors' real estate advisor. On Sept. 26, 2017, the U.S. Trustee for Region 4 appointed an official committee of unsecured creditors. The Committee retained Kramer Levin Naftalis & Frankel LLP as its legal counsel; Wolcott Rivers, P.C. as local counsel; FTI Consulting, Inc. as financial advisor; and Moelis & Company LLC as investment banker. Toys "R" Us UK Toys "R" Us Limited, Toys "R" Us, Inc.'s UK arm with 105 stores and 3,000 employees, was sent into administration in the United Kingdom in February 2018. Arron Kendall and Simon Thomas of Moorfields Advisory Limited, 88 Wood Street, London, EC2V 7QF were appointed Joint Administrators on Feb. 28, 2018. The Administrators now manage the affairs, business and property of the Company. The Administrators act as agents only and without personal liability. The Administrators said they will make every effort to secure a buyer for all or part of the business. Liquidation of U.S. Stores Toys "R" Us, Inc., on March 15, 2018, filed with the U.S. Bankruptcy Court a motion seeking Bankruptcy Court approval to start the process of conducting an orderly wind-down of its U.S. business and liquidation of inventory in all 735 of the Company's U.S. stores, including stores in Puerto Rico. Propco I Debtors Toys "R" Us Property Company I, LLC and its subsidiaries own fee and leasehold interests in more than 300 properties in the United States. The Debtors lease the properties on a triple-net basis under a master lease to Toys-Delaware, the operating entity for all of TRU's North American businesses, which operates the majority of the properties as Toys "R" Us stores, Babies "R" Us stores or side-by-side stores, or subleases them to alternative retailers. Toys "R" Us Property was founded in 2005 and is headquartered in Wayne, New Jersey. Toys 'R' Us Property operates as a subsidiary of Toys "R" Us Inc. Company LLC, MAP Real Estate LLC, TRU 2005 RE I LLC, TRU 2005 RE II Trust, and Wayne Real Estate Company LLC (collectively, "Propco I Debtors") sought protection under Chapter 11 of the Bankruptcy Code (Bankr. E.D. Va. Lead Case No. 18-31429) on March 20, 2018. The Propco I Debtors sought and obtained procedural consolidation and joint administration of their Chapter 11 cases, separate from the Toys "R" Us Debtors' Chapter 11 cases. The Propco I Debtors estimated assets of $500 million to $1 billion and liabilities of $500 million to $1 billion. Judge Keith L. Phillips presides over the Propco I Debtors' cases. The Propco I Debtors hired Klehr Harrison Harvey Branzburg, LLP; and Crowley, Liberatore, Ryan & Brogan, P.C., as co-counsel. The Debtors also tapped Kutak Rock LLP. They hired Goldin Associates, LLC, as financial advisors. TRANSALTA CORP: Moody's Alters Outlook to Pos. & Affirms Ba1 CFR ---------------------------------------------------------------- Moody's Investors Service affirmed TransAlta Corporation's Corporate Family Rating, senior unsecured rating of Ba1, Probability of Default rating of Ba1-PD, and revised its rating outlook to positive from stable. TransAlta's Speculative Grade Liquidity (SGL) rating is unchanged at SGL-2. "TransAlta's deleveraging plan is transformative," said Toby Shea VP -- Senior Credit Officer. "We see over $1 billion of additional deleveraging, a more simplified capital structure, a material reduction in carbon risk exposure and stable contracted cash flows positioning the company with a strong credit profile as the Alberta market goes through a major redesign." Outlook Actions: Issuer: TransAlta Corporation Outlook, Changed To Positive From Stable Affirmations: Issuer: TransAlta Corporation Probability of Default Rating, Affirmed Ba1-PD Corporate Family Rating, Affirmed Ba1 Senior Unsecured Regular Bonds/Debentures, Affirmed Ba1 (LGD4) RATINGS RATIONALE Due to a combination of economic and regulatory changes, the Alberta market is undergoing a major transformation where coal capacity will experience a steep decline in the next few years, while new contracted renewables, a carbon credit regime and a capacity market are being introduced. The company is implementing a debt reduction plan to operate in this new environment and the net result should be credit positive. The company's business outside of Alberta is comprised mainly of contracted generation and owned by its yieldco subsidiary TransAlta Renewables Inc. (not rated). TransAlta's ratio of CFO Pre-WC to debt has improved to 18.7% by the end of 2017 on a consolidated basis, and 17.8% on a proportionally consolidated basis, taking into consideration the 64% ownership interest with TransAlta Renewable. The proportional consolidation resulted in about $100 million less CFO and $350 million less debt for TransAlta. Fitch expects TransAlta's recourse debt to decline $1.2 billion by the end of 2020, from $2.2 billion currently. However, cash flows could decline 2018 and 2019, resulting in CFO Pre-WC to debt closer to 16% to 17% range on a proportionally consolidated basis. Liquidity Analysis TransAlta's SGL-2 short-term liquidity rating indicates Fitch's expectation that the company will sustain good liquidity through the next 12 to 18 months. Fitch expects TransAlta to generate about $250 million of after-dividend free cash flows in both 2018 and 2019. TransAlta has access to about $2 billion of revolving credit facilities, about $1.5 billion at TransAlta and $0.5 billion at TransAlta Renewable. As of March 31, TransAlta had $329 million of cash holding and the net drawing on the credit facilities was $325 million. The credit facilities contain a material adverse change clause and are pari passu with the senior unsecured bonds. The next major debt maturity is a $400 million bond issuance due November 2019 and another $400 million in November 2020. The credit facilities have 2019, 2020 and 2021 expirations but most of it ($1.5 billion out of $2 billion) expires in 2021. Rating Outlook The positive outlook reflects TransAlta's stable cash flows from its contracted generation; that the company is transitioning away from its Alberta coal-fired generation and its debt reduction program offsets the increased exposure to wholesale market prices in Alberta. The positive outlook incorporates a view that TransAlta will continue with its plan to achieve its stated goal of a FFO to debt ratio of 25% to 30% by the end of 2020. Factors that Could Lead to an Upgrade An improvement in the company's business risk profile through increasing contractedness could lead to an upgrade, and a sustained proportionately consolidated ratio of CFO pre-W/C to debt above 17% could lead to an upgrade. Factors that Could Lead to a Downgrade Proportionately consolidated CFO pre-W/C to debt below 13% on a sustained basis could lead to a downgrade. Factors that could lead to a downgrade include a lower proportion of long-term contracts leading to less predictable cash flow or if the gross margin under Alberta's market redesign falls well below expectation. Company Profile TransAlta is a publicly traded independent power producer headquartered in Calgary, Alberta. TransAlta has a net interest ownership in 8,266 MW of generating capacity, including coal, gas, wind and hydro plants. About 60% of TransAlta's generating capacity is located within its incumbent territory of Alberta, Canada. The remaining 40% is spread among eastern and western Canada, US and Australia. The principal methodology used in these ratings was Unregulated Utilities and Unregulated Power Companies published in May 2017. TRANSWORLD SYSTEMS: Moody's Cuts CFR & 2nd Lien Notes Rating to C ----------------------------------------------------------------- Moody's Investors Service downgraded Transworld Systems, Inc.'s ("TSI") Corporate Family Rating ("CFR") and senior secured second-lien notes to C, from Caa2, and its Probability of Default rating ("PDR") to C-PD/LD, from Caa2-PD, in the light of a recently completed debt-for-equity exchange that Moody's views as a Distressed Exchange ("DE"). The "/LD" designation on the PDR reflects the fact that there was a limited default in TSI's capital structure -- that is, with regard to the DE of the second-lien notes only. While the ratings outlook has been changed to stable, from negative, substantially all of TSI's rated debt has been eliminated through the debt-for-equity exchange, and as a result Moody's expects to withdraw TSI's ratings in the near term. Downgrades: Issuer: Transworld Systems, Inc. Corporate Family Rating, Downgraded to C, from Caa2 Probability of Default Rating, Downgraded to C-PD/LD, from Caa2-PD Senior secured, second-lien notes maturing 2021, Downgraded to C (LGD5), from Caa2 (LGD4) Outlook change: Outlook, stable, changed from negative RATINGS RATIONALE The CFR downgrade to C, from Caa2, reflects Moody's estimation that holders of TSI's $440 million, 9.5% second-lien notes will recover, as a result of a recently completed, privately negotiated debt-for-equity exchange transaction, substantially less than their original principal investment. As a result of the out-of-court restructuring, announced on May 23rd, TSI's debt will be reduced by 91%, to roughly $44 million, through an exchange of the second-lien notes for new debt and common equity, a partial repayment and extension of the revolving credit facility, and a $39 million equity capital injection. In consideration for agreeing to tender their notes, the noteholders will receive a small amount of new debt plus a 57% ownership interest in TSI, all of whose equity has been valued via the restructuring at approximately $100 million. With Moody's-expected 2018 net revenues of roughly $200 million (a 10% decline from 2017), Transworld Systems, Inc. ("TSI") provides accounts receivable management services and debt collection services to the government, healthcare, education, and commercial sectors. TSI was acquired by an affiliate of Platinum Equity Advisors ("Platinum") in October 2014 for about $510 million. TREATMENT CENTER: Hires GlassRatner as Restructuring Advisor ------------------------------------------------------------ The Treatment Center of the Palm Beaches, LLC, seeks authority from the United States Bankruptcy Court for the Southern District of Florida, West Palm Division, to employ GlassRatner Advisory & Capital Group, LLC, as Restructuring Advisors to the Debtor and appoint Michael Thatcher as Chief Restructuring Officer, nunc pro tunc to May 24, 2018. Services to be rendered by GlassRatner are: a. assist in all aspects of the Debtor's business activities and operations, including budgeting, cash management and financial management; b. negotiate with respect to the relationship with the Debtor's lenders; c. negotiate with vendors and other creditors; d. review the Debtor's daily operating activities; e. evaluate the Debtor's liquidity options, including, restructuring, refinancing and reorganizing; f. maximize the value of the Debtor's assets via the advancing of a competitive, open sale of the Property; g. review purchases and expenses; and h. act as the Debtor's representative in court hearings, as appropriate. The terms of engagement are: -- GlassRatner will be paid hourly by the Debtor for its services: Michael Thatcher (CRO) $395 Alan Barbee $450 Teresa Licamara $350 Jonathan Eargle $250 Other Staff $195 to $450 -- GlassRatner requires a $40,000 retainer and further requires that the Debtor and DIP Lender agree that $50,000 for the first month and $40,000 thereafter will be included as an approved expense in all budgets submitted to the Court for DIP financing. -- Such compensation shall be subject to a monthly maximum on fees billed to GlassRatner each month. Any fees incurred by GlassRatner during a specific month that exceed the applicable Monthly Cap shall be treated: (i) 50% of the Unbilled Fees shall be carried over and billed in the month immediately following, and (ii) 50% of the Unbilled Fees shall be permanently written off by GlassRatner. -- The applicable Monthly Cap for each month shall be: (i) Month 1 - $50,000; and (ii) Months Following Month 1 - $40,000. In addition, GlassRatner will be reimbursed by the Debtor for the reasonable out-of-pocket expenses of the Co-CROs. Michael Thatcher, senior managing director of GlassRatner, attests that neither he nor GlassRatner hold or represent an interest adverse to the Debtor's estate and is a "disinterested person," as that term is defined in Bankruptcy Code Secs. 101(14) and 1107(b) with respect to the matters for which they are to be retained. The firm can be reached through: Michael Thatcher GlassRatner Advisory & Capital Group, LLC 3500 Maple Avenue, Suite 350 Dallas, TX 75219 Main: (469) 453-1800 Mobile: (347) 678-2575 Email: mthatcher@glassratner.com About The Treatment Center of The Palm Beaches, LLC The Treatment Center of the Palm Beaches, LLC, located in West Palm Beach, Florida -- https://www.thetreatmentcenter.com/ -- is an addiction treatment center whose mission is to transform the lives of every individual and family member that walks through its doors. Since 2009, the Treatment Center has offered custom treatment programs for drugs, alcohol, trauma, mental health, and other addictions. The Treatment Center of the Palm Beaches filed a Chapter 11 petition (Bankr. S.D. Fla. Case No. 18-14622) on April 19, 2018. In the petition signed by Judi Gargiulo, manager, the Debtor disclosed $11.07 million in total assets and $6.12 million in total liabilities. The case is assigned to Judge Erik P. Kimball. Robert C. Furr, Esq. at Furr & Cohen, is the Debtor's counsel. UNIFIED GRAPHICS: Lonestar Buying 2000 Hyster S50Ft for $5K ----------------------------------------------------------- Unified Graphics & Signs, LLC, asks authority from the U.S. Bankruptcy Court for the Northern District of Texas to sell outside the ordinary course of business its 2000 Hyster S50Ft forklift to Lonestar Forklift for $5,000. The objection deadline is June 6, 2018. Starting in 2015, the Debtor started falling behind on its payment to vendors and suppliers, due to changing demands in the industry and a loss of customers. In 2017, its gross revenues decreased by approximately $200,000 from the prior year. Its revenues are expected to decrease even further in 2018. Post-petition, the Debtor was approached by a third-party, the Purchaser, about purchasing its forklift, which is 2000 Hyster S50Ft. The Debtor valued this forklift at $8,000 in its Bankruptcy Schedule A/B, but this valuation was generous. The Debtor purchased the forklift prepetition and previously utilized this forklift to assist with the substantial needs of one of its significant customer. However, prepetition the Debtor lost this customer, so now rarely uses the forklift. The Purchaser is not related to the Debtor or its principal. It has offered the Debtor $5,000 to purchase the forklift, free and clear of any liens and encumbrances. The Debtor believes that this is the highest offer it can receive for the forklift. The Debtor possesses ample and sound business reasons for selling the forklift at this time. There is no cost-efficient market for the sale of an individual forklift. The sale is likely to result in the best offer for this equipment, with minimal expense. Considering that the Debtor no longer uses the forklift, the proposed sale also represents the highest and best use of the Debtor's assets. Under these circumstances, sound business reasons exist that justify the sale of the forklift outside of the ordinary course of business. The Debtor asks that the proposed sale be effective immediately upon their entry by providing that the 14-day stay under Bankruptcy Rules 6004(h) and 6006(d) is waived. About Unified Graphics Founded in 2013, Unified Graphics & Signs, LLC, is a screen printer, digital printer and trade shop. The Company is owned solely by Anthony Vallejo, the managing member. It is headquartered in Fort Worth, Texas, and currently employs two full-time and one part-time employee. Unified Graphics & Signs filed a Chapter 11 bankruptcy petition (Bankr. N.D. Tex. Case No. 18-40196) on Jan. 17, 2018. The Debtor hired FisherBroyles, LLP, as counsel. VIRTUAL COMMUNICATIONS: Taps Kolesar & Leatham as Legal Counsel --------------------------------------------------------------- Virtual Communications Corporation seeks approval from the U.S. Bankruptcy Court for the District of Nevada to hire Kolesar & Leatham as its legal counsel. The firm will advise the Debtor regarding its duties under the Bankruptcy Code; assist in the preparation of a plan of reorganization; and provide other legal services related to its Chapter 11 case. The current rates charged by Kolesar do not exceed $450 per hour for attorneys or $175 per hour for paraprofessionals, including law clerks and paralegals. Kolesar and its attorneys are "disinterested" as defined in section 101(14) of the Bankruptcy Code, according to court filings. The firm can be reached through: Bart K. Larsen, Esq. Kolesar & Leatham 400 South Rampart Boulevard, Suite 400 Las Vegas, NV 89145 Telephone: (702) 362-7800 Facsimile: (702) 362-9472 Email: blarsen@klnevada.com About Virtual Communications Corporation Virtual Communications Corporation, headquartered in Las Vegas, Nevada, is a privately-held technology company that develops technology solutions that enable businesses to improve their customer interaction experience. The company's primary product is the ALICE ("A Live Interactive Communication Experience") Receptionist software. The ALICE system, provided as a software subscription model, permits businesses to control many aspects f handling visitors to their physical premises without the need for a designated member of staff to be located in the entity's reception area. A single staff member may remotely interact with visitors to a number of physical locations. The company currently sells its product to businesses and government entities in the United States, Australia, Azerbaijan, Belgium, Bermuda, Brazil, Canada, China and New Zealand. Virtual Communications Corporation sought protection under Chapter 11 of the Bankruptcy Code (Bankr. D. Nev. Case No. 18-12951) on May 22, 2018. In the petition signed by Michael Yoder, president and director, the Debtor disclosed that it had estimated assets of less than $50,000 and liabilities of $1 million to $10 million. Judge Laurel E. Babero presides over the case. VISUAL COMFORT: Moody's Affirms B2 CFR Amid Postponed Transaction ----------------------------------------------------------------- Moody's Investors Service affirmed Visual Comfort Group, Inc.'s B2 Corporate Family Rating ("CFR"), B2-PD Probability of Default Rating ("PDR"), and Caa1 rating on the company's second lien term loan due 2025. At the same time, Moody's downgraded the rating on Visual Comfort's existing $505 million first lien senior secured term loan due 2024 to B2 from B1, and withdrew the B2 rating on the postponed first lien term loan offering due 2025. The rating outlook is stable. Visual Comfort postponed its transaction, where the planned first lien term loan agreement was expected to include the maturity extension to 2025 from 2024 and a $90 million term loan add-on, the proceeds of which would be used to repay $140 million of the company's second lien term loan due 2025. Instead, the company will use $20 million of balance sheet cash to repay the same amount of second lien term loan. Visual Comfort also plans to utilize the funds from the contemplated sale leaseback transaction to further reduce outstanding second lien term loan. As a result of the $20 million of second lien debt repayment, Visual Comfort's pro forma debt to EBITDA (inclusive of Moody's adjustments) declines to approximately 5.8x from 6.0x at March 31, 2018 and EBITA to interest coverage increases to 2.6x from 2.5x. The CFR rating affirmation reflects Moody's view that the company is well positioned within the B2 rating category given its pro forma credit metrics, its operating profile and the cyclicality of end markets. The B2 rating on the company's existing first lien term loan due 2024 reflects the reduction in second lien debt, which provides loss absorption cushion in the capital structure. The following rating actions were taken: Issuer: Visual Comfort Group, Inc.: Corporate Family Rating, affirmed at B2; Probability of Default Rating, affirmed at B2-PD; $140 million second lien senior secured term loan due 2025, affirmed at Caa1 (LGD6); $505 million first lien senior secured term loan due 2024, downgraded to B2 (LGD3) from B1 (LGD3); B2 (LGD4) rating on postponed $595 million first lien term loan offering due 2025, withdrawn; The rating outlook is stable. RATINGS RATIONALE Visual Comfort B2 Corporate Family Rating reflects: 1) the company's high debt leverage; 2) highly competitive nature of the lighting industry; 3) the cyclicality of the residential and commercial end markets served; 4) the company's aggressive financial policies in its willingness to increase leverage in the past, risks related to potential future changes in philosophy and product strategy, as well as potential risks of shareholder-friendly activities given the private equity ownership. Notwithstanding these concerns, the credit profile is supported by: 1) Visual Comfort's positive operating trends and Moody's expectations that favorable residential and repair & remodel market conditions and new product introductions will continue to drive modest revenue and earnings growth; 2) the anticipated strengthening of EBITDA margins following the February 2017 acquisition, as well as the resulting nearly doubling in revenue scale, although it remains modest compared to rated consumer durable peers; 3) improved end market diversification towards a higher percentage of more stable repair & remodeling segment; 4) solid position in the niche and fragmented lighting market; and 5) a good liquidity profile, supported by positive free cash flow generation and ample availability under the ABL revolving credit facility. The stable rating outlook reflects Moody's expectations that over the next 12 to 18 months the company will demonstrate revenue and earnings growth and will de-lever towards 5.0x debt to EBITDA, while maintaining good liquidity and successfully integrating the transformative acquisition. Visual Comfort has a good liquidity profile, supported by Moody's expectations that the company will generate solid levels of free cash flow and maintain ample availability under its $85 million ABL credit facility expiring in 2022, as well as by the flexibility provided by the springing financial covenant in the credit agreement, and an extended debt maturity profile. However, liquidity is constrained by potential volatility of cash flows due to working capital needs and new product introductions. The ratings could be considered for an upgrade if the company reduces its leverage sustainably below 3.5x, increases interest coverage above 3.0x, and further improves its size and scale. Maintenance of conservative financial policies and a good liquidity profile would also be required for a higher rating. The ratings could be downgraded if operating performance were to weaken through revenue or earnings declines, if leverage does not decline towards 5.0x over the next 12 to 18 months, or if interest coverage weakens below 2.0x. A liquidity deterioration, including negative free cash flow generation or acquisition integration challenges, could also result in a negative rating pressure. The principal methodology used in these ratings was Consumer Durables Industry published in April 2017. Visual Comfort Group, Inc., headquartered in Skokie, IL and Houston, TX, is a collection of brands including Visual Comfort & Co.'s premium decorative lighting collections, Tech Lighting which manufacturers decorative and functional lighting, and Generation Lighting's lighting and fans including Show House Collection by Feiss, Home Solutions Collection by Sea Gull Lighting and the Monte Carlo Fan Collection. Its customer base includes lighting showrooms, which serve primarily the home remodeling market, and electrical distributors, which sell to the homebuilding and commercial markets, as well as interior designers. In the LTM period ending March 31, 2018, the company generated approximately $544 million in pro forma revenues. WALL STREET LANGUAGES: Taps DelBello Donnellan as Legal Counsel --------------------------------------------------------------- Wall Street Languages, Ltd., seeks approval from the U.S. Bankruptcy Court for the Eastern District of New York to hire DelBello Donnellan Weingarten Wise & Wiederkehr, LLP as its legal counsel. The firm will advise the Debtor regarding its duties under the Bankruptcy Code; negotiate with creditors; represent the Debtor in any potential sale of its business or post-petition financing; assist in the preparation of a plan of reorganization; and provide other legal services related to its Chapter 11 case. The firm will charge these hourly rates: Attorneys $375 - $620 Law Clerks $200 Legal Assistants/Paralegals $150 DelBello received from the Debtor a pre-bankruptcy retainer of $21,717, inclusive of the filing fee in the sum of $1,717. Dawn Kirby, Esq., a partner at DelBello, disclosed in a court filing that the firm is "disinterested" as defined in section 101(14) of the Bankruptcy Code. The firm can be reached through: Dawn Kirby, Esq. DelBello Donnellan Weingarten Wise & Wiederkehr, LLP One North Lexington Avenue White Plains, NY 10601 Phone: (914) 681-0200 About Wall Street Languages Ltd. Wall Street Languages Ltd. sought protection under Chapter 11 of the Bankruptcy Code (Bankr. E.D. N.Y. Case No. 18-11581) on May 24, 2018. At the time of the filing, the Debtor disclosed that it had estimated assets of less than $50,000 and liabilities of less than $500,000. WALL STREET THEATER: Taps Hinckley Allen as Special Counsel ----------------------------------------------------------- Wall Street Theater Company, Inc., Wall Street Master Landlord, LLC, and Wall Street Managing Member, LLC, seek authority from the United States Bankruptcy Court for the District of Colorado, Bridgeport Division, to hire Hinckley, Allen & Snyder, LLP as special counsel for Debtors to assist Debtors general counsel, Green & Sklarz LLC with monitoring and evaluating pending construction litigation and providing guidance concerning said matters, including the arbitration proceeding filed by The Morganti Group, Inc. nunc pro tunc to April 16, 2018. Peter J. Martin, a partner at the law firm of Hinckley, Allen & Snyder, attests that HAS does not hold an adverse interest with respect to Debtors, their estates or any creditors, and are disinterested within the meaning of 11 U.S.C. Secs. 101(14) and 327(e). Hourly rates for HAS attorneys and staff are: Peter J. Martin $460 Antonino M. Leone $460 Allen M. Even $275 The counsel can be reached through: Peter J. Martin, Esq. Hinckley, Allen & Snyder, LLP 20 Church Street Hartford, CT 06103 Phone: (860) 725-6200 Fax: (860) 278-3802 Email: pmartin@hinckleyallen.com About The Wall Street Theater The Wall Street Theater, listed in the National Register of Historic Places, has re-emerged as a 501c3 non-profit organization, whose mission is to provide diverse programming and promote arts education, thereby enriching the cultural life of the greater Norwalk community. The Wall Street Theater -- https://www.wallstreettheater.com/ -- adopts its moniker from its location and its mission from its history, combining live shows, interactive entertainment, cinema, digital production, art space and a community arena in which to play. Wall Street Theater Company, Inc., and affiliates Wall Street Master Landlord, LLC and Wall Street Managing Member, LLC, filed Chapter 11 petitions (Bankr. D. Conn. Lead Case No. 18-50132) on Feb. 4, 2018. In the petitions signed by Suzanne Cahill, president, the WS Theater Company and WS Master Landlord had $1 million to $10 million in assets and $10 million to $50 million in liabilities while WS Managing Member estimated less than $50,000 in assets and $10 million to $50 million in liabilities. Judge Julie A. Manning is the case judge. The Debtor tapped Green & Sklarz, LLC, as its legal counsel; R.J. Reuter, LLC as financial advisor; and Wellspeak, Dugas & Kane, LLC as real estate appraiser and consultant. WELLNESS ANALYSIS: Taps Eric A. Liepins as Counsel -------------------------------------------------- Wellness Analysis, LLC, seeks authority from the United States Bankruptcy Court for the Eastern District of Texas, Sherman Division, to hire Eric A. Liepins and the law firm of Eric A. Liepins, P.C., as counsel for the Debtor. The Firm has received a retainer of $6,770. The Firm's hourly rates are: Eric A. Liepins $275 Paralegals and Legal Assistants $30 to $50 Eric A. Liepins, Esq., sole shareholder with the law firm of Eric A. Liepins, P.C., attests that the Firm does not presently or hold or represent any interest adverse to the interest of the Debtor or this Estate and is disinterested within the meaning of 11 U.S.C. Sec. 101(14). The firm can be reached through: Eric Liepins. Esq. ERIC A. LIEPINS, P.C. 12770 Coit Road, Suite 1100 Dallas, TX 75251 Tel: (972) 991-5591 Fax: (972) 991-5788 About Wellness Analysis Wellness Analysis LLC operates a clinical medical laboratory in Farmer Branch, Texas. The laboratory conducts tests on clinical specimens to get specific information about the health of a patient to help in diagnosing, treating and preventing diseases. Wellness Analysis filed its voluntary petition for relief under Chapter 11 of the U.S. Bankruptcy Code (Bankr. E.D. Tex. Case No. 18-41066) on May 24, 2018. In the petition signed by Mustopha Oulad Chikh, sole member, the Debtor estimated $1 million to $10 million in both assets and liabilities. Eric A. Liepins and the law firm of Eric A. Liepins, P.C., serve as the Debtor's counsel. WEST POINT MARKET: Taps Zurn Law as Legal Counsel ------------------------------------------------- West Point Market of Akron, LLC, seeks approval from the U.S. Bankruptcy Court for the Northern District of Ohio to hire Zurn Law, LLC as its legal counsel. The firm will advise the Debtor regarding its duties under the Bankruptcy Code; assist the Debtor in negotiation and documentation of transactions; assist in the preparation and implementation of a plan of reorganization; and provide other legal services related to its Chapter 11 case. Zurn Law will charge an hourly fee of $185. The firm received a $10,000 retainer, plus $1,771 for the filing fee. Julie Zurn, Esq., owner of Zurn Law, disclosed in a court filing that she is a "disinterested person" as defined in section 101(14) of the Bankruptcy Code. Zurn Law can be reached through: Julie K. Zurn, Esq. Zurn Law, LLC P.O. Box 411 Bath, OH 44210 Tel: 216-626-5854 Email: jkz@zurnlaw.com About West Point Market of Akron West Point Market of Akron, LLC is a specialty family-owned supermarket in Akron, Ohio. It was founded in 1936 and is owned by Richard Vernon. West Point Market of Akron sought protection under Chapter 11 of the Bankruptcy Code (Bankr. N.D. Ohio Case No. 18-51253) on May 24, 2018. In the petition signed by Richard Vernon, member, the Debtor estimated assets of $1 million to $10 million and liabilities of $1 million to $10 million. Judge Alan M. Koschik presides over the case. WET SEAL: ASK Needs To Recover Proceeds; EY To Pursue Tax Refunds ----------------------------------------------------------------- The Wet Seal, LLC and its affiliated debtors ask the U.S. Bankruptcy Court for the District of Delaware to further extend, on a final basis, the Debtors' exclusive periods for the filing of a Chapter 11 plan and soliciting acceptances thereof through and including Aug. 2, 2018, and October 2, 2018, respectively. A hearing on the Debtors' request is set for July 12, 2018, at 10:00 a.m. Objections to the request must be filed by June 12, 2018, at 4:00 p.m. (ET). As reported by the Troubled Company Reporter on March 15, 2018, the Court extended the Debtors' exclusive plan filing period through May 29, 2018, as well as the Debtors' solicitation period through July 30, 2018. The Debtors now seek an additional extension of the Exclusive Periods so that, among other things, ASK LLP may be afforded sufficient time to further pursue the Avoidance Actions and recover maximum proceeds generated thereby, and EY LLP may similarly be afforded sufficient time to pursue tax refunds from applicable taxing authorities. The results of these respective efforts will largely allow the Debtors to determine the scope of future distributions and, in connection therewith, the prospect for a viable Chapter 11 plan (or plans). Once the Avoidance Actions have run their course and the Debtors have otherwise explored all viable ways to realize value from the estates' remaining assets, including the pursuit of tax refunds by EY LLP, the Debtors will evaluate their administrative liabilities (if any) and determine the feasibility of a Chapter 11 plan. The Debtors believe that it is appropriate to maintain the Exclusive Periods as long as possible so as to reduce any administrative expenses that may be incurred in connection with any competing Chapter 11 plan(s) that are filed before it can be accurately determined whether any chapter 11 plan can be confirmed and, if so, which Debtors have the ability to do so. Since the Petition Date, the Debtors have focused their efforts and resources on, among other things, ensuring a smooth transition into Chapter 11, complying with the myriad reporting requirements imposed on a Chapter 11 debtor, and working to liquidate their remaining inventory and monetize their intellectual property in an efficient and value-maximizing manner. In the early months of these Chapter 11 cases, the Debtors and their professionals devoted significant time and resources to, among other things, (i) coordinating tasks associated with implementing the store closing sales and vacating their retail properties in a timely manner, thereby avoiding the incurrence of additional administrative expenses; (ii) resolving the Official Committee of Unsecured Creditors' objection to the proposed terms of the Debtors' cash collateral use, and implementing the negotiated resolution reached in connection therewith; (iii) preparing and filing their respective schedules of assets and liabilities and statements of financial affairs; (iv) negotiating (and amending) independent contractor agreements with a limited number of pivotal personnel; (v) designing, negotiating and obtaining court approval for their key employee incentive plan and related key employee retention plan for non-insiders; (vi) retaining ASK to pursue the Avoidance Actions and conducting due diligence in pursuit thereof; (vii) retaining EY LLP to pursue employment tax refunds from various taxing authorities and conducting due diligence in pursuit thereof; and (viii) ensuring that the estates continue to be competently and efficiently managed during the pendency of these Chapter 11 cases. Since the Fourth Exclusivity Extension Order was entered, the Debtors have continued to, among other things, meet their reporting obligations and pursue potential estate assets as appropriate, notwithstanding that the Debtors no longer have any full-time employees and are administering these cases with a very lean staff. Moreover, the Debtors have obtained authority to use cash collateral on a consensual basis through the end of June 2018, which the Debtors believe will allow, among other things, (i) ASK to pursue Avoidance Actions and (ii) EY LLP to pursue tax refunds on a more realistic timeline. At the same time, the Debtors and their advisors have been dealing with administrative issues attendant to these Chapter 11 cases, including, but not limited to, (i) responding to routine and numerous creditor inquiries; (ii) retaining various professionals; and (iii) preparing monthly operating reports. These demands on the Debtors during the sixteen months of the Chapter 11 cases have occupied significant time and resources, and required substantial attention from the Debtors' respective retained professionals and limited remaining staff. Under these circumstances, the Debtors submit that the requested extensions are both appropriate and necessary to afford the Debtors with sufficient time to pursue the Avoidance Actions and tax refunds and, ultimately, adequately prepare a viable chapter 11 plan and related disclosure statement in the event that the proceeds generated thereby position the Debtors to do so. Since the Petition Date, the Debtors have directed substantially all of their energy and resources towards liquidating their physical inventory, pursuing value-maximizing sale initiatives, and limiting their administrative expense exposure, all while operating with an extremely limited staff. At this stage of the Chapter 11 cases, the Debtors and their professionals, and most notably ASK and EY LLP, are focused on (i) pursuing settlements with potential Avoidance Action defendants or, as warranted, prosecuting litigation against the parties, and (ii) pursuing unemployment tax refunds, as applicable. As previewed at the March Hearing, the prosecution of the Avoidance Actions will take time to unfold, and the available asset pool will remain uncertain until ASK has had a full opportunity to explore -- and pursue -- all available recourse against the defendants in the Avoidance Actions. Given this timeline, the Debtors believe that it is in the best interests of all parties to allow the Debtors sufficient additional time to determine the scope of the proceeds that will arise from the Avoidance Actions and to formulate a practical and effective chapter 11 plan after their litigation strategies have run their course. This need is further heightened given EY LLP's current work on behalf of the Debtors' estates and the potential upside its efforts will generate. A copy of the Debtors' request is available at: http://bankrupt.com/misc/deb17-10229-795.pdf About The Wet Seal The Wet Seal, LLC, and its affiliates are a national multi-channel specialty retailer selling fashion apparel and accessory items designed for female customers aged 18 to 24 years old. They are currently comprised of two primary units: the retail store business and an e-commerce business. Through their retail store business, they operate approximately 142 retail locations in 37 states, principally in lease-based mall locations. They also have historically sold gift cards, which business has been primarily operated through The Wet Seal Gift Card, LLC. The Wet Seal, LLC, also known as The Wet Seal (2015), LLC, sought Chapter 11 protection (Bankr. D. Del. Case No. 17-10229) on Feb. 2, 2017. The petitions were signed by Judd P. Tirnauer, executive vice president and chief financial officer. The cases are assigned to Judge Christopher S. Sontchi. The Debtors estimated assets in the range of $10 million to $50 million and $50 million to $100 million in debt. The Debtors tapped Robert S. Brady, Esq., Michael R. Nestor, Esq., Jaime Luton Chapman, Esq., Andrew L. Magaziner, Esq., of the Young Conaway Stargatt & Taylor, LLP, as counsel. They also tapped Berkeley Research Group, LLC, as financial advisors; Hilco IP Services, LLC dba Hilco Streambank as intellectual property disposition consultant; and Donlin, Recano & Company as claims and noticing agent. The Debtors employ Ernst & Young LLP, as tax advisor to the Debtors. The Official Committee of Unsecured Creditors tapped Cooley LLP and Saul Ewing LLP as its attorneys. WYNDHAM DESTINATIONS: Moody's Assigns 'Ba2' Corp. Family Rating --------------------------------------------------------------- Moody's Investors Service assigned Wyndham Destinations a Ba2 Corporate Family Rating ("CFR"), a Ba2-PD Probability of Default Rating ("PDR") and SGL-1 Speculative Grade Liquidity Rating following the completed spin-off of its hotel group, Wyndham Hotels & Resorts (Ba1 stable). At the same time, Moody's downgraded the company's senior notes to Ba2 from Baa3 (these notes share the same collateral package as the bank facility post-spin). The rating outlook is stable. The rating action concludes the review for downgrade that was initiated on August 4, 2017. "The downgrade to Ba2 reflects Wyndham Destinations' credit profile as a standalone timeshare and timeshare exchange company, which Moody's views as a higher risk segment of the hospitality industry," stated Pete Trombetta, Moody's lodging analyst. "Despite this focus, Wyndham benefits from being the largest timeshare company with good brands and geographic diversification," added Trombetta. Downgrades: Issuer: Wyndham Destinations Senior Secured Regular Bond/Debenture, Downgraded to Ba2(LGD3) from Baa3 Assignments: Issuer: Wyndham Destinations Speculative Grade Liquidity Rating, Assigned SGL-1 Probability of Default Rating, Assigned to Ba2-PD Corporate Family Rating, Assigned to Ba2 Outlook Actions: Issuer: Wyndham Destinations Outlook, Changed To Stable From Rating Under Review Issuer: Wyndham Global Finance PLC Outlook, Changed To Rating Withdrawn From No Outlook Affirmations: Issuer: Wyndham Destinations Senior Secured Bank Credit Facility, Affirmed Ba2(LGD3) Withdrawals: Issuer: Wyndham Destinations Senior Unsecured Commercial Paper, Withdrawn , previously rated P-3 Issuer: Wyndham Global Finance PLC Senior Unsecured Commercial Paper, Withdrawn , previously rated P-3 RATINGS RATIONALE Wyndham Destinations' credit profile benefits 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 its 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 (its metrics include Moody's standard adjustments and 100% of securitized debt). The stable rating outlook reflects Moody's view that Wyndham Destinations will maintain leverage (including Moody's standard adjustments and 100% of securitized debt) of between 4.5x and 5.0x. Wyndham Destinations' Speculative Grade Liquidity rating of SGL-1 reflects very good liquidity. The company's cash flow and cash balances will be more than sufficient to cover its inventory investment, accounts receivable originations, debt service requirements and capital expenditures over the next 12 months. The company has a $1.0 billion committed revolver in place, which Moody's expects will have about 70% availability at the end of 2018. The revolver is subject to financial maintenance covenants that are to be tested quarterly, including a maximum first lien net leverage ratio (as defined) of 4.25x and a minimum interest coverage ratio of 2.5x (as defined). In Moody's view, the company has modest access to alternative liquidity in a distressed scenario including the sale of receivables. The ratings could be upgraded if Wyndham Destinations is able to improve leverage to about 3.5x and EBITA/interest coverage above 5.0x. An upgrade would also require the company maintain its very good liquidity profile and a conservative financial policy regarding share repurchases and dividends. Ratings could be downgraded if debt/EBITDA remained above 5.0x for an extended period or EBITA/interest remained below 4.0x. Wyndham Destinations is the largest vacation ownership company in the industry and operates 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 approximately $4 billion. WYNDHAM WORLDWIDE: S&P Lowers CCR to 'BB-', Off Watch Negative -------------------------------------------------------------- S&P Global Ratings lowered its corporate credit rating on Wyndham Worldwide Corp. to 'BB-' from 'BBB-' and removed all ratings from CreditWatch, where they were placed with negative implications on Aug. 3, 2017. S&P said, "In addition, we are lowering the issue-level rating on the company's $2.4 billion in notes to 'BB-', in line with the corporate credit rating, and assigning a '3' recovery rating. Wyndham's senior notes have become secured and pari passu with the company's secured revolver and term loan. The '3' recovery rating indicates our view that lenders can expect meaningful (50%-70%; rounded estimate: 50%) recovery of principal in the event of a payment default. "Our 'BB-' issue-level rating and '3' recovery rating on Wyndham's $1 billion senior secured revolving credit facility due in 2023 and $300 million senior secured term loan due in 2025 are also affirmed. "The 'BB-' corporate credit rating on Wyndham Destinations reflects heightened business risks following the completion of the separation transactions and our base-case forecast for lease- and captive-finance adjusted leverage in the low-4x area in 2018. The rating also reflects our view that potential consolidation in the rapidly evolving timeshare industry will likely be a key driver of Wyndham Destinations' leverage policy and risk appetite over the next few years. We believe Wyndham Destinations may take on incremental leverage for an opportunistic acquisition and this would drive financial risk over the next few years, particularly if the company leverages up and acquires a target at the top of the economic cycle. We adjust our leverage measure to remove captive-finance debt, assets, and EBITDA from consolidated measures. As a result, the pro forma leverage at Wyndham Destinations is based on the amount of corporate debt that the company carries on its balance sheet. "The positive outlook reflects our base-case forecast for adjusted leverage in the low-4x area in 2018 and to decline by another 0.5x over the subsequent two years primarily through EBITDA growth. This deleveraging trend would result in greater cushion compared to our 4.5x upgrade threshold even with anticipated industry volatility and the potential leveraging impact of future opportunistic acquisitions. The positive outlook also incorporates our expectation for mid- to high–single-digit percentage revenue and EBITDA growth through 2019. "We could raise the rating even if Wyndham Destinations pursues an opportunistic acquisition that strengthens its competitive position and leverage temporarily spikes to 5x if we believe the company would reduce our measure of adjusted leverage to below 4.5x over a two-year period. "We could lower the rating if we believe Wyndham Destinations would pursue opportunistic acquisitions and it increases and sustains leverage above 5.5x." [*] Beard Group 25th Annual Distressed Investing Conference Nov. 26 ------------------------------------------------------------------- Law firm Foley & Lardner LLP, DSI (Development Specialist Inc.), and Longford Capital will sponsor Beard Group's 2018 Distressed Investing (DI) Conference on Nov. 26, 2018. Foley, DSI, provider of management consulting and financial advisory services, and Longford Capital, a private investment company, who have been past sponsors, will again be partnering with Beard Group as it marks the conference's Silver Anniversary this year. This milestone denotes the event as the oldest, influential DI conference in U.S. The day-long program will be held at The Harmonie Club in New York City. For a quarter of a century, the DI Conference's focus has been on "Maximizing Profits in the Distressed Debt Market." The event also serves as a forum for leaders in corporate restructuring, lending and debt and equity investments to gather and discuss the latest topics and trends in the distressed investing industry, as well as exchange ideas about high-profile chapter 11 bankruptcy proceedings and out-of-court restructurings. These are distinguished professionals who place their resources and reputations at risk to produce stellar results by preserving jobs, rebuilding broken businesses, and efficiently redeploying underutilized assets in the marketplace. The conference will also feature: * a luncheon presentation of the Harvey K Miller Award to Edward I. Altman, Professor of Finance, Emeritus, New York University's Stern School of Business. The award will be presented by last year's winner billionaire Marc Lasry, Altman's former student. * an evening awards dinner recognizing the 2018 Turnarounds & Workouts Outstanding Young Restructuring Lawyers. To register for the one-day conference visit: https://www.distressedinvestingconference.com/ Discounted early registration tickets are now available. To learn how you can be a sponsor and participate in shaping the day-long program, contact: Bernard Tolliver at bernard@beardgroup.com or Tel: (240) 629-3300 x-149 To learn about media sponsorship opportunities to bring your outlet into the view of leaders in corporate restructuring, lending and debt and equity investments, and to expand your network of news sources, contact: Jeff Baxt at jeff@beardgroup.com or (240) 629-3300, ext 150 [] BOOK REVIEW: The First Junk Bond A Story of Corporate Boom ------------------------------------------------------------- Author: Harlan D. Platt Publisher: Beard Books Softcover: 236 pages List Price: $34.95 Review by Gail Owens Hoelscher Order your personal copy today and one for a colleague at http://www.beardbooks.com/beardbooks/the_first_junk_bond.html Only one in ten failed businesses is equal to the task of reorganizing itself and satisfying its prior debts in some fashion. This engrossing book follows the extraordinary journey of Texas International, Inc (known by its New York Stock Exchange stock symbol, TEI), through its corporate growth and decline, debt exchange offers, and corporate renaissance as Phoenix Resource Companies, Inc. As Harlan Platt puts it, TEI "flourished for a brief luminous moment but then crashed to earth and was consumed." TEI's story features attention-grabbing characters, petroleum exploration innovations, financial innovations, and lots of risk taking. The First Junk Bond was originally published in 1994 and received solidly favorable reviews. The then-managing director of High Yield Securities Research and Economics for Merrill Lynch said that the book "is a richly detailed case study. Platt integrates corporate history, industry fundamentals, financial analysis and bankruptcy law on a scale that has rarely, if ever, been attempted." A retired U.S. Bankruptcy Court judge noted, "(i)t should appeal as supplementary reading to students in both business schools and law schools. Even those who practice.in the areas of business law, accounting and investments can obtain a greater understanding and perspective of their professional expertise." "TEI's saga is noteworthy because of the company's resilience and ingenuity in coping with the changing environment of the 1980s, its execution of innovative corporate strategies that were widely imitated and its extraordinary trading history," says the author. TEI issued the first junk bond. In 1986 it achieved the largest percentage gain on the NYSE, and in 1987 suffered the largest percentage loss. It issued one of the first bonds secured by a physical commodity and then later issued one of the first PIK (payment in kind) bonds. It was one of the first vulture investors, to be targeted by vulture investors later on. Its president was involved in an insider trading scandal. It innovated strip financing. It engaged in several workouts to sell off operations and raise cash to reduce debt. It completed three exchange offers that converted debt in to equity. In 1977, TEI, primarily an oil production outfit, had had a reprieve from bankruptcy through Michael Milken's first ever junk bond. The fresh capital had allowed TEI to acquire a controlling interest of Phoenix Resources Company, a part of King Resources Company. TEI purchased creditors' claims against King that were subsequently converted into stock under the terms of King's reorganization plan. Only two years later, cash deficiencies forced Phoenix to sell off its nonenergy businesses. Vulture investors tried to buy up outstanding TEI stock. TEI sold off its own nonenergy businesses, and focused on oil and gas exploration. An enormous oil discovery in Egypt made the future look grand. The value of TEI stock soared. Somehow, however, less than two years later, TEI was in bankruptcy. What a ride! All told, the book has 63 tables and 32 figures on all aspects of TEI's rise, fall, and renaissance. Businesspeople will find especially absorbing the details of how the company's bankruptcy filing affected various stakeholders, the bankruptcy negotiation process, and the alternative post-bankruptcy financial structures that were considered. Those interested in the oil and gas industry will find the book a primer on the subject, with an appendix devoted to exploration and drilling, and another on oil and gas accounting. Harlan Platt is a professor of Finance and Insurance at Northeastern University. He is president of 911RISK, Inc., which specializes in developing analytical models to predict corporate distress. He received a Ph.D. from the University of Michigan, and holds a B.A. degree from Northwestern University. ********* Monday's edition of the TCR delivers a list of indicative prices for bond issues that reportedly trade well below par. Prices are obtained by TCR editors from a variety of outside sources during the prior week we think are reliable. Those sources may not, however, be complete or accurate. The Monday Bond Pricing table is compiled on the Friday prior to publication. Prices reported are not intended to reflect actual trades. Prices for actual trades are probably different. Our objective is to share information, not make markets in publicly traded securities. Nothing in the TCR constitutes an offer or solicitation to buy or sell any security of any kind. It is likely that some entity affiliated with a TCR editor holds some position in the issuers public debt and equity securities about which we report. Each Tuesday edition of the TCR contains a list of companies with insolvent balance sheets whose shares trade higher than $3 per share in public markets. At first glance, this list may look like the definitive compilation of stocks that are ideal to sell short. Don't be fooled. Assets, for example, reported at historical cost net of depreciation may understate the true value of a firm's assets. A company may establish reserves on its balance sheet for liabilities that may never materialize. The prices at which equity securities trade in public market are determined by more than a balance sheet solvency test. On Thursdays, the TCR delivers a list of recently filed Chapter 11 cases involving less than $1,000,000 in assets and liabilities delivered to nation's bankruptcy courts. The list includes links to freely downloadable images of these small-dollar petitions in Acrobat PDF format. Each Friday's edition of the TCR includes a review about a book of interest to troubled company professionals. All titles are available at your local bookstore or through Amazon.com. Go to http://www.bankrupt.com/books/to order any title today. Monthly Operating Reports are summarized in every Saturday edition of the TCR. The Sunday TCR delivers securitization rating news from the week then-ending. TCR subscribers have free access to our on-line news archive. Point your Web browser to http://TCRresources.bankrupt.com/and use the e-mail address to which your TCR is delivered to login. ********* S U B S C R I P T I O N I N F O R M A T I O N Troubled Company Reporter is a daily newsletter co-published by Bankruptcy Creditors Service, Inc., Fairless Hills, Pennsylvania, USA, and Beard Group, Inc., Washington, D.C., USA. Jhonas Dampog, Marites Claro, Joy Agravante, Rousel Elaine Tumanda, Valerie Udtuhan, Howard C. Tolentino, Carmel Paderog, Meriam Fernandez, Joel Anthony G. Lopez, Cecil R. 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 ***