/raid1/www/Hosts/bankrupt/TCR

/raid1/www/Hosts/bankrupt/TCR_Public/181017.mbx T R O U B L E D C O M P A N Y R E P O R T E R Wednesday, October 17, 2018, Vol. 22, No. 289 Headlines 34 SO. CROSSMAN: Taps Renda and Renda as Accountant 532 MADISON AVENUE: Voluntary Chapter 11 Case Summary ALAMO MECHANICAL: Taps Lentz & Little as Legal Counsel AMERICAN GAMING: Case Summary & 20 Largest Unsecured Creditors AMICIZIA LLC: Case Summary & 17 Unsecured Creditors ARALEZ PHARMACEUTICALS: Panel Opposes Deerfield Bid Protections ARALEZ PHARMACEUTICALS: Seeks Court Approval for KEIP/KERP ASP UNIFRAX: Moody's Assigns 'B3' Corp. Family Rating ATD CORP: Gets Interim Order to Access $990MM of DIP Financing AURORA MEMORY: Court Converts Chapter 11 Case to Chapter 7 AYTU BIOSCIENCE: CVI Investments Has 9.9% Stake as of Oct. 5 BASS PRO: S&P Affirms 'B+' Issuer Credit Rating, Outlook Stable BIRCH WOOD: Northborough to Get $1.9MM from Sale Proceeds BON-TON STORES: Wants to Sell Wilmette Store for $12.5 Million BUNKER HILL: Lease Agreement Terminated Following Default CAFFE ETTORE: Taps Carr Berglund as Accountant CALLAHAN GRADING: Case Summary & 20 Largest Unsecured Creditors CHANNELVIEW TRUCK: Plan Filing Deadline Moved to Jan. 24 COLOR SPOT: Disclosures Okayed; Nov. 14 Plan Hearing Set COLOR SPOT: Wells Fargo to Recoup 5% in New Joint Liquidation Plan CRESTOR GLOBAL: Trustee Taps Fidelity National as Legal Counsel DAN MAZZOLA: Seeks Access to First Commonwealth Cash Collateral DAVID'S PATIO: Case Summary & 20 Largest Unsecured Creditors DL REAL ESTATE: Exclusive Plan File Period Moved to Dec. 10 DPW HOLDINGS: Group Secures $85-M Construction Loan Commitment DR. SHABNAM QASIM: Seeks to Hire James R. Halter as Accountant ENVIVA PARTNERS: Fitch Affirms BB- LT IDR & Alters Outlook to Pos. ETCHER FARMS: Dairy Consulting to be Paid 100% at 4% Per Annum EYEPOINT PHARMACEUTICALS: Receives FDA Approval of YUTIQ F.Y.P.M. HOLDING: Seeks to Hire Cardenas Islam as Counsel FALLS AT FRESNO: Voluntary Chapter 11 Case Summary FILBIN LAND: Taps Bachecki Crom as Tax Advisor GOLDEN OIL: Unsecureds to Get Quarterly Payments for 3 Years GRAND CANYON RANCH: Order Granting Contingency Award to GTG Vacated GREAT PLAINS: Fitch Assigns 'CCC' Issuer Default Rating HELIOS AND MATHESON: Seeks Support for Reverse Stock Split HOSPITALITY INTEGRATED: Taps C&D Consulting as Accountant HUDSON TECH: Enters Into Extension Letter Related to Waiver IEA ENERGY: Moody's Assigns B3 Corp. Family Rating, Outlook Stable JONES ENERGY: In Talks with Debt Holders on Potential Transaction JOSE DIMAS VALADAO: Triple V Must Pay LOLI $$852K in Damages KAPPA DEVELOPMENT: Taps Russell Gill as Special Counsel KENMETAL LLC: Seeks Authorization to Use Cash Collateral LAT REALTY: Taps David J. Harris as Legal Counsel LEGACY RESERVES: Files Amended Prospectus on $500M Securities Sale LINDEN PONDS: Fitch Rates $117.3MM Series 2018 Revenue Bonds 'BB' LITTLE RIVER: Taps H2C Analytics as Investment Banker MEGHA LLC: Gets Interim Approval to Hire Gold Weems as Counsel MEREDITH CORP: S&P Rates New $1.595BB Term Loan Due 2025 'BB' MIDATECH PHARMA: Shareholders OK Sale of Its US Commercial Arm NATIVE SON: Asks Court to Approve Retention of John Blaser NEW ATHENS: Proposed Plan to be Funded from Future Income NGPCP/BRYS CENTRE: Court Vacates Ruling on Mercantile Atty's Fees NINE ENERGY: S&P Assigns 'B' Issuer Credit Rating, Outlook Stable NORDAM GROUP: Wins Court Approval of Key Settlement With GAC, P&W OCEAN SERVICES: Taps Bush Kornfeld as Legal Counsel ONE AVIATION: Unsecureds to Receive Nothing Under Proposed Plan PAC ANCHOR: Dec. 5 Plan Confirmation Hearing PREMIER EXHIBITIONS: Names Project Build as Successful Bidder REX ENERGY: Files Revised Amended Plan of Liquidation RITE-AID CORP: Moody's Lowers CFR to B3, Outlook Positive RMH FRANCHISE: Credit Agreement Claimants Added in Latest Plan ROCKPORT CO: Chubb Companies Object to Liquidation Plan SAINT CATHERINE: Law Firm Can Keep $60K Atty's Fees, Court Affirms SAMSON RESOURCES: Court Upholds Order Disallowing C. Williams Claim SAMUELS JEWELERS: Proposes Sale Bid Procedures for All Assets SCRIBEAMERICA INTERMEDIATE: S&P Affirms 'B' ICR, Outlook Stable SEARS HOLDINGS: Bankruptcy Court Approves First Day Motions SEARS HOLDINGS: Fitch Lowers IDR to 'D' on Bankr. Filing SEARS HOLDINGS: Kimco Realty's Exposure Limited to 14 Leases SEARS HOLDINGS: PREIT Exposure Down to 4 Stores SEARS HOLDINGS: Receives Delisting Notice from Nasdaq SEARS HOLDINGS: S&P Lowers ICR to 'D' on Bankruptcy Filing SEARS HOLDINGS: Seritage Says 70% of Income Now From Other Tenants SEARS HOLDINGS: Tempur Sealy Says Sears Only Less Than 5% of Sales SEARS HOLDINGS: Whirlpool Says Sears Less Than 2% of Net Sales SENIOR NH: Seeks Authorization on Cash Collateral Use SJKWD LLC: Seeks Jan. 10 Exclusive Plan Filing Period Extension SOLBRIGHT GROUP: Needs More Time to File Quarterly Report SUGARLOAF HOLDINGS: Case Summary & 20 Largest Unsecured Creditors SUMMIT FAMILY: Taps Shilliday Law as Legal Counsel SUNPLAY POOLS: Taps Cohne Kinghorn as Local Counsel TANGA.COM INC: Discloses $2MM in Unsecured Claims TONAWANDA COKE: Case Summary & 20 Largest Unsecured Creditors TOYS R US: Taj Noteholders Object to Delaware & Geoffrey Plans TUTOR PERINI: Fitch Affirms 'B+' LongTerm IDR, Outlook Stable UNISON ENVIRONMENTAL: Hires Richardson Law as Special Counsel UNISON ENVIRONMENTAL: To Pay BOC $29K Monthly Plus 4.5% Interest USG CORP: Fitch Keeps 'BB+' IDR on Rating Watch Negative VALLEY LUMBER: Unsecureds Estimated to Recover 63.3% in Latest Plan VEE EXPRESS: Oct. 31 Disclosure Statement Hearing VERITY HEALTH: Seeks Court Approval of Union CBAs VERITY HEALTH: UMB Bank & Wells Fargo Object to Final DIP Order VINE CITY PLAZA: U.S. Trustee Unable to Appoint Committee VRG LIQUIDATING: Files First Amended Joint Plan of Liquidation WANG REAL PROPERTY: Taps Siegel & Siegel as Legal Counsel WESTERN CPE: Firm Reduces Hourly Rate for Atty. Jensen, Paralegal YWFM LLC: U.S. Trustee Unable to Appoint Committee ********* 34 SO. CROSSMAN: Taps Renda and Renda as Accountant --------------------------------------------------- 34 So. Crossman Street Inc. received approval from the U.S. Bankruptcy Court for the Western District of New York to hire Renda and Renda Accountants and Auditors, P.C as its accountant. The services to be provided by the firm primarily will include preparing federal and state tax returns. The firm may also be asked to provide other services, which include reviewing and analyzing financial information; assisting in the preparation of projections and other financial information in connection with the Debtor's anticipated plan of reorganization; preparing the Debtor's monthly operating reports; and bookkeeping and accounting services. The firm will charge these hourly rates: John Renda, CPA Accountant $125 Jane Roland, CPA Accountant $125 Various Bookkeeper/Clerical $75 John Renda, a partner at Renda and Renda, disclosed in a court filing that his firm is "disinterested" as defined in section 101(14) of the Bankruptcy Code. The firm can be reached through: John B. Renda, CPA Renda and Renda Accountants and Auditors, P.C. 525 Aero Drive Cheektowaga, NY 14225 Phone: 716-632-7897 Fax: 716-632-8028 Email: contact@rendaandrenda.com About 34 So. Crossman Street Inc. 34 So. Crossman Street Inc. sought protection under Chapter 11 of the Bankruptcy Code (Bankr. W.D.N.Y. Case No. 18-10908) on May 7, 2018. At the time of the filing, the Debtor estimated assets of less than $500,000 and liabilities of less than $1 million. Judge Michael J. Kaplan presides over the case. The Debtor tapped Andreozzi Bluestein LLP as its legal counsel. 532 MADISON AVENUE: Voluntary Chapter 11 Case Summary ----------------------------------------------------- Debtor: 532 Madison Avenue Gourmet Foods Inc. dba Smiler's Deli 532 Madison Avenue New York, NY 10022 Business Description: 532 Madison Avenue Gourmet Foods Inc. is a privately held company in New York that operates in the restaurants industry. Chapter 11 Petition Date: October 15, 2018 Case No.: 18-13117 Court: United States Bankruptcy Court Southern District of New York (Manhattan) Judge: Hon. Michael E. Wiles Debtor's Counsel: Douglas J. Pick, Esq. PICK & ZABICKI LLP 369 Lexington Avenue, 12th Floor New York, NY 10017 Tel: (212) 695-6000 Fax: (212) 695-6007 E-mail: dpick@picklaw.net Estimated Assets: $100,000 to $500,000 Estimated Liabilities: $1 million to $10 million The petition was signed by Ryung Hee Cho, president. The Debtor did not submit a list of its 20 largest unsecured creditors at the time of the filing. A full-text copy of the petition is available for free at: http://bankrupt.com/misc/nysb18-13117.pdf ALAMO MECHANICAL: Taps Lentz & Little as Legal Counsel ------------------------------------------------------ Alamo Mechanical, LLC received approval from the U.S. Bankruptcy Court for the Southern District of Mississippi to hire Lentz & Little, PA as its legal counsel. The firm will advise the Debtor on issues concerning the administration of its bankruptcy estate and its rights with respect to the estate's assets and claims of creditors, and will provide other legal services in connection with its Chapter 11 case. Lentz & Little will charge these hourly rates: Attorneys $350 Associates $230 Paraprofessionals $75 Prior to the petition date, Lentz & Little received a retainer of $22,052 from the Debtor. W. Jarrett Little, Esq., at Lentz & Little, disclosed in a court filing that his firm does not have any connection with the Debtor or any of its creditors. The firm can be reached through: W. Jarrett Little, Esq. William J. Little, Jr., Esq. Lentz & Little, PA 2505 14th St., Suite 500 Gulfport, MS 39501 Phone: (228) 867-6050 E-mail: jarrett@lentzlittle.com E-mail: bill@lentzlittle.com About Alamo Mechanical Alamo Mechanical, LLC, sought protection under Chapter 11 of the Bankruptcy Code (Bankr. S.D. Miss. Case No. 18-51706) on Aug. 31, 2018. At the time of the filing, the Debtor estimated assets of less than $50,000 and liabilities of less than $50,000. Judge Katharine M. Samson presides over the case. The Debtor tapped Lentz & Little, PA as its legal counsel. AMERICAN GAMING: Case Summary & 20 Largest Unsecured Creditors -------------------------------------------------------------- Two affiliates that have filed voluntary petitions seeking relief under Chapter 11 of the Bankruptcy Code: Debtor Case No. ------ -------- American Gaming & Electronics, Inc. 18-30507 223 Pratt Street Hammonton, NJ 08037 AG&E Holdings Inc. 18-30508 233 Pratt Street Hammonton, NJ 08037 Business Description: Established in 1993, American Gaming & Electronics is a supplier of gaming parts, used machines, and electronic components. AG&E is strategically located in Las Vegas, New Jersey and Florida. Its distribution chain reaches the Caribbean & Puerto Rico, Canada and Europe. AG&E provides repair service for all types of monitors and bill validators and sells a wide array of products including bill validators, monitors and LCDs, coin mechanism coin acceptors as well as replacement parts for these products. AG&E stocks a variety of repair parts and replacement parts including fuses, i.c.'s, transistors, capacitors, connectors, wire, various hardware and more. Replacement parts include button assemblies, power supplies, lamps, various game specific parts, table supplies and much more. AG&E is a wholly owned subsidiary of AG&E Holdings, Inc. (symbol AGNU) with corporate headquarters in Hammonton, NJ. Chapter 11 Petition Date: October 15, 2018 Court: United States Bankruptcy Court District of New Jersey (Camden) Judge: Hon. Andrew B. Altenburg Jr. Debtors' Counsel: Warren J. Martin, Jr., Esq. PORZIO, BROMBERG & NEWMAN, P.C. 100 Southgate Parkway Morristown, NJ 07962-1997 Tel: (973) 889-4006 Fax: (973) 538-5146 Email: wjmartin@pbnlaw.com Debtors' Financial Advisor: PODIUM STRATEGIES, LLC Assets and Liabilities: Total Total Assets Liabilities ------------ ----------- American Gaming & Electronics $945,220 $2,016,152 AG&E Holdings Inc. $0 $2,298,657 The petitions were signed by Anthony R. Tomasello, president/CEO. A full-text copy of American Gaming's petition containing, among other items, a list of the Debtor's 20 largest unsecured creditors is available for free at: http://bankrupt.com/misc/njb18-30507.pdf A full-text copy of AG&E Holdings' petition containing, among other items, a list of the Debtor's two unsecured creditors is available for free at: http://bankrupt.com/misc/njb18-30508.pdf AMICIZIA LLC: Case Summary & 17 Unsecured Creditors --------------------------------------------------- Debtor: Amicizia LLC dba MidiCi of Uptown Dallas 3427 Cedar Springs Rd. #1229 Dallas, TX 75219 Business Description: Amicizia LLC is a privately held company in Dallas, Texas in the restaurant business. Chapter 11 Petition Date: October 15, 2018 Case No.: 18-33380 Court: United States Bankruptcy Court Northern District of Texas (Dallas) Judge: Hon. Barbara J. Houser Debtor's Counsel: Joyce W. Lindauer, Esq. JOYCE W. LINDAUER ATTORNEY, PLLC 12720 Hillcrest Road, Suite 625 Dallas, TX 75230 Tel: (972) 503-4033 Fax: (972) 503-4034 E-mail: joyce@joycelindauer.com Estimated Assets: $0 to $50,000 Estimated Liabilities: $1 million to $10 million The petition was signed by Steven Kuy, managing member. A full-text copy of the petition containing, among other items, a list of the Debtor's 17 unsecured creditors is available for free at: http://bankrupt.com/misc/txnb18-33380.pdf ARALEZ PHARMACEUTICALS: Panel Opposes Deerfield Bid Protections --------------------------------------------------------------- BankruptcyData.com reported that Aralez Pharmaceuticals' Official Committee of Unsecured creditors filed an objection to the Debtors' bid procedures Motion. BankruptcyData related that the Committee asserts, "When the Debtors filed for Chapter 11 and CCAA relief, they explained the purpose and game-plan of their bankruptcies as follows: (i) these would be very quick cases; (ii) the company's U.S. operations had already transitioned to a "virtual" business, with most employees terminated pre-petition; (iii) all estate assets would be rapidly sold outside of a plan; (iv) the Debtors' secured lender, Deerfield, would be the ‘stalking horse"' bidder for the principal assets of the Debtors and provide financing to the purchaser of the other assets; and (v) given the nature of the assets in question and level of "stalking horse" bids, unsecured creditors should not expect any value from the cases. As for the Debtors' Toprol-XL assets, Deerfield would take them directly, via Section 363(k) credit bid. As for the Vimovo and Canadian assets, Deerfield would take them indirectly, rolling its Aralez debt into financing for Nuvo Pharmaceuticals Inc. ('Nuvo'), a micro-cap concern with a market capitalization of approximately $25 million, that would, in turn, 'front' the bid. The Committee says, "This is, to be sure, a controversial way to prosecute a bankruptcy case. Bankruptcy is not intended to be a federal foreclosure device, inuring benefits solely for the secured lender. The 'stalking horse' bid protections are unnecessary, and are tantamount to incremental value grabs. Again, the 'stalking horse' bids are made by or for the benefit of Deerfield, and are intended to substantially repay Deerfield's pre-petition purportedly secured debt. It is commercial absurdity to contend that Deerfield requires ‘stalking horse' protections to encourage a bid that is, essentially, foreclosure on collateral…. the Bid Procedures do not foster and encourage bidding. Given the nature of this proposed bidding process, the Debtors assuredly need to shower the market (as well as the Court) with evidence that: (a) this will be a full and fair auction process; (b) it is worth a potential bidder's time and money to conduct diligence, submit a bid, and participate at the auction; and (c) this is not a 'rigged' or 'inside-track' process unduly favoring Deerfield. We do not have that. The history of Aralez shows an uncomfortably close relationship between management and Deerfield." About Aralez Pharmaceuticals Aralez Pharmaceuticals Inc. -- http://www.aralez.com/-- is a specialty pharmaceutical company focused on delivering products to improve patients' lives by acquiring, developing and commercializing products in various specialty areas. The Company together with its affiliates filed for Chapter 11 protection on Aug. 10, 2018 (Bankr. S.D.N.Y. Lead Case No. 18-12425). The Debtor estimated assets and liabilities between $100 million and $500 million. The Hon. Martin Glenn presides over the Debtors' Chapter 11 cases. The Debtors tapped Willkie Farr & Gallagher LLP, as their counsel; Alvarez & Marsal Healthcare Industry Group, LLC as restructuring and financial advisor; Moelis & Company as investment banker; RSM US LLP as tax advisor; and Prime Clerk LLC as claims, noticing and solicitation agent. ARALEZ PHARMACEUTICALS: Seeks Court Approval for KEIP/KERP ---------------------------------------------------------- BankruptcyData.com reported that Aralez Pharmaceuticals US requested Court approval for (i) a Key Employee Incentive Program (the "KEIP") and (ii) a Key Employee Retention Program (the "KERP"). BankruptcyData related that the KEIP and KERP motion explains, "The Debtors have limited participation in the KEIP to eight individuals: (a) the Chief Executive Officer; (b) the President and Chief Business Officer; (c) the Chief Financial Officer ('CFO'); (d) the Executive Vice President, Human Resources; (e) the General Counsel and Chief Compliance Officer; (f) the Vice President, Business Development; (g) the Treasurer; and (h) [Position redacted] (collectively, the 'KEIP Participants'). Under the proposed KEIP, the KEIP Participants will receive an incentive payment (the 'KEIP Payment') based on their ability to achieve a financial performance target (the 'Net Operating Cash Flow Target') and asset and/or stock sales target (the 'Asset Sale Target,' and collectively with the Net Operating Cash Flow Target, the 'Performance Targets'). The KEIP Participants payout target level consists of, and is equally weighted between, the Net Operating Cash Flow Target and the Asset Sale Target. The sum of both of these at the 'target' payout level equals 50% of the base salary of all participants. If the 'target' performance level is not achieved but the minimum 'threshold' performance level for each Performance Target is achieved, participants will receive 75% of the target bonus resulting in a KEIP Payment equal to 37.5% of each KEIP Participant's salary. This amount can be earned if the Debtors (a) meet 95% through 99.99% of the Net Operating Cash Flow Target and (b) consummate sales of assets prior to termination of employment (without cause or due to death or permanent disability) in an amount no less than $175 million in the aggregate. Any additional KEIP payments are entirely dependent on the Debtors meeting or exceeding the Net Operating Cash Flow Target and/or obtaining combined sale consideration for the sales of their U.S. and/or Canadian assets equal to or greater than $250 million. Above the 'target' performance level, the KEIP is self-funding, as the KEIP Participants will receive payments to the extent they generate (a) incremental operating cash flow and (b) additional sale proceeds for the Debtors' estates. The KEIP Participants will not be permitted to participate in any other retention or incentive plan, including the KERP. BankruptcyData added that the KERP covers 14 employees (the 'KERP Participants'), 5 of whom live and work in Ireland and are employed by the Debtors incorporated in Ireland (the 'Irish Employees'), and 9 of whom who live and work in the U.S. Under the proposed KERP, the proposed aggregate bonus pool is $826,250, which is in line with comparable key employee retention plans. Payments proposed under the KERP range from $20,250 to $123,201, with an average of $59,018 per KERP Participant. The KERP Participants' eligibility for, and proposed compensation under, the KERP is based on each respective KERP Participant's position, responsibilities, compensation package, and other factors. The Court scheduled an October 30, 2018 hearing on the motion, with objections due by October 23, 2018. About Aralez Pharmaceuticals Aralez Pharmaceuticals Inc. -- http://www.aralez.com/-- is a specialty pharmaceutical company focused on delivering products to improve patients' lives by acquiring, developing and commercializing products in various specialty areas. The Company together with its affiliates filed for Chapter 11 protection (Bankr. S.D.N.Y. Lead Case No. 18-12425) on Aug. 10, 2018. The Debtor estimated assets and liabilities between $100 million and $500 million. The Hon. Martin Glenn presides over the Debtors' Chapter 11 cases. The Debtors tapped Willkie Farr & Gallagher LLP, as their counsel; Alvarez & Marsal Healthcare Industry Group, LLC as restructuring and financial advisor; Moelis & Company as investment banker; RSM US LLP as tax advisor; and Prime Clerk LLC as claims, noticing and solicitation agent. ASP UNIFRAX: Moody's Assigns 'B3' Corp. Family Rating ----------------------------------------------------- Moody's Investors Service has assigned a B3 Corporate Family Rating to ASP Unifrax Holding, Inc. and B3 ratings to its proposed $125 million senior secured first lien revolving credit facility, $900 million senior secured first lien term loans, including both US dollar and Euro tranches, as well as a Caa2 rating to its proposed $300 million senior secured second lien term loan. Proceeds from the term loans will be used to repay existing term loans, to fund the acquisition of Unifrax by Clearlake Capital Group from American Securities and for general corporate purposes. The ratings outlook is stable. The assigned ratings are subject to a review of the final terms and conditions of the proposed leveraged buyout transaction. The existing ratings at Unifrax I LLC will be withdrawn once the transaction is closed and the debt is repaid. Ratings assigned: Issuer: ASP Unifrax Holding, Inc. Corporate Family Rating, assigned B3 Probability of Default Rating, assigned B3-PD $550 million Gtd. Senior Secured First Lien Term Loan due 2025, assigned B3 (LGD3) $350 million equivalent Gtd. Senior Secured First Lien Euro denominated Term Loan due 2025, assigned B3 (LGD3) $125 million Gtd. Senior Secured First Lien Revolving Credit Facility due 2023, assigned B3 (LGD3) $300 million Gtd. Senior Secured Second Lien Term Loan, assigned Caa2 (LGD5) Outlook, assigned stable RATINGS RATIONALE "Unifrax's B3 CFR reflects its high debt leverage following the buyout by Clearlake Capital, elevated capital expenditures in the next few years to expand production facilities, as well as high exposure to the cyclical automotive and industrial end markets," said Jiming Zou, a Moody's VP and Senior Analyst. Unifrax's pro-forma debt/EBITDA, including Moody's analytical adjustments, will be close to 7.5x, after the proposed debt issuance of $1.2 billion under its new private equity owner. Such aggressive financial profile, which makes the company more vulnerable in a market downturn, positions the company at the lower end of the single B rating category. Moody's expects a slow progress of debt reduction and its deleveraging below 7.0x is more likely in 2020 and beyond, as Unifrax will incur additional capital expenditure to upgrade and expand its production facilities in the next 12 to 18 months. While such capacity expansions will enhance the company's market share and sales volumes in high temperature insulating fiber and engineered products, the ramp-up time needed and the company's continued exposure to the cyclical automotive, steel and chemical end user industries mean that earnings improvement could be slower than expected. Unifrax has a modest scale indicated by its annual sales of about $540 million and narrow product line of ceramic and glass fiber products. Unifrax has a large exposure to cyclical automotive and industrial end markets, which together account for over 80% of its sales. However, its operational and geographic diversity as well as broad customer base partly mitigate its small business scale and product concentration. Moody's expects Unifrax to continue to benefit from strong EBITDA margins in the mid to high twenties indicative of a specialty materials company given the critical nature of heat insulation materials in industrial applications and its long-standing relations with customers. The ratings reflect expectations that demand in key end markets, including steel, has recovered from the trough, which should support performance along with cost savings programs. The company's Emission Control business, which sells support mats in catalytic converters, will benefit from recently expanded production capacities in polycrystalline wools to meet the increasing demand due to more stringent emissions standards. Moody's considers Unifrax's 29% equity investment in Shandong Luyang Energy-Saving Materials Co. (unrated), a leading ceramic fiber producer in China, as beneficial to its credit profile. Luyang has recently improved its financial performance, paid down its outstanding debt and started dividends distributions. Although Unifrax's proportional share of Luyang's EBITDA was not included in Moody's adjusted EBITDA given its non-controlling interest and potential reinvestment needs, its equity stake in Luyang, which is a listed company, provides an alternative source of liquidity for debt service if management chooses to do so. Unifrax has a good liquidity profile in the next four quarters, supported by its cash on hand, availability under its newly proposed $125 million revolving credit facility due in 2023 and its 29% equity stake in Luyang. The company had about $23 million of cash as of June 30, 2018. Moody's expects the company to maintain sufficient cash and revolver availability to fund its capital spending to build new polycrystalline wool facilities, which will exceed the operating cash flow in the next 12 months. The company has no near-term maturities and annual term loan amortization is 1% of first-lien debt, or about $9 million. The revolver has a springing first-lien leverage ratio covenant of 7.5x, if borrowings exceed 35%, or $43.75 million of the revolving commitments. Moody's expects sufficient headroom under the springing first-lien leverage covenant based on calculation defined by the credit agreement. The company's alternate liquidity includes its non-guarantor international subsidiaries and its 29% equity stake in Shandong Luyang, a listed company in China. The B3 ratings on the senior secured first lien revolving credit facility and term loans, are at the same level as the corporate family rating, as they represent the preponderance of total debt and are secured by a first priority lien on substantially all domestic assets and, in the instance of Euro-denominated borrowings, the assets of certain international subsidiaries in the U.K. and Germany. The $300 million second lien term loan is rated Caa2 given its effective subordination to the first lien credit facilities. The remaining international assets are not encumbered. The stable outlook reflects its expectations that the company will improve earnings and gradually reduce debt leverage, based on its cost savings initiatives and newly expanded capacities, amid improved demand in its key end markets in the next 12 to 18 months. Moody's could upgrade the ratings if Moody's adjusted debt/EBITDA declines below 6.0x and its free cash flow turns positive after completing capacity expansions. An upgrade would require a commitment to more conservative financial policies from the sponsor and management. Moody's could downgrade the ratings if operating performance deteriorates or if the company undertakes a significant debt-financed acquisition or dividend recapitalization, causing debt/EBITDA to rise above 7.5x on a sustained basis. Moody's could also downgrade the ratings if free cash flow remains negative and liquidity deteriorates. The principal methodology used in these ratings was Chemical Industry published in January 2018. Unifrax produces heat-resistant ceramic fiber products and specialty glass microfiber materials for a variety of industrial applications. The company generated revenues of approximately $540 million for the twelve months ending June 30, 2018. ATD CORP: Gets Interim Order to Access $990MM of DIP Financing -------------------------------------------------------------- BankruptcyData.com reported that ATD Corporation, American Tire Distributors and their debtor affiliates requested Court authority to (i) obtain debtor-in-possession ("DIP") postpetition secured financing and (ii) utilize cash collateral. Bank of America, is the administrative agent and collateral agent for the ABL DIP Loan and DIP FILO Loan, for and on behalf of itself and the lenders party thereto from time to time (the "ABL DIP Lenders" or the "DIP FILO Lenders," or "DIP Lenders," as applicable, and together with the DIP Agent,the "DIP CreditParties"). BankruptcyData noted that the financing motion explains, "This Motion requests approval of a DIP Facility that will provide continued access to the Debtors' prepetition asset-based revolver, plus approximately $200 million of incremental liquidity. This financing is critical to facilitate the Debtors' ordinary course operations and ensure a smooth landing into these chapter 11 cases. The approximately $200 million of incremental liquidity will be provided by members of the ad hoc noteholder group as a component of the restructuring support agreement, under which they have agreed to convert over $1 billion of bonds to equity. Additionally, the noteholder group will provide a $250 million DIP FILO Loan, which is subordinate to, but shares the salve lien as, the ABL DIP Loans. The Debtors request that the Court authorize the Debtors to obtain senior secured post-petition financing on a super-priority priming lien basis and for each of the Debtors other than the Borrowers (the 'Guarantors') to guaranty the Borrowers' obligations in connection with the DIP Facility, on a super-priority basis in the aggregate principal amount of up to $1,230,000,000, consisting of (i) a senior secured super-priority revolving credit facility, swing line loans, and letters of credit in the aggregate principal amount of up to $980,000,000 (the 'ABL DIP Loan'), and (ii) a $250,000,000 senior secured super-priority first-in last-out term loan facility (the 'DIP FILO Loan'), which shall be available in full upon entry of the Final Order to repay and discharge the Prepetition U.S. FILO Loans, pursuant to the terms and conditions of the Post-Petition Credit Agreement (the 'DIP Loan Agreement'). Revolving commitments (U.S. Tranche 1 Commitment" and "Canadian Tranche 2 Commitment" are $800,000,000 (not including an additional $180,000,000 of Canadian ABL Revolving Commitments)." The Debtors also filed with the Court a motion to file under seal the fee letters related to the DIP Facility (specifically, (a) the fee letter relating to the ABL DIP Loan and (b) the Put Option Premium Letter relating to the DIP FILO Loan) stating that, "they contain 'commercial information' -- information which would result in an unfair advantage to competitors by providing them information as to the commercial operations of the debtor. A broad publication of the information in the Fee Letters would be inappropriate and materially harmful to the DIP Lenders' businesses. The Fee Letters should be kept confidential so that their competitors may not use the information contained therein to gain a strategic advantage over the DIP Lenders in the marketplace." Interim Order The Court hearing the American Tire Distributors' case issued an order authorizing the Debtors to (i) obtain interim debtor-in-possession ("DIP") postpetition financing and (ii) utilize cash collateral. The interim DIP order will allow the Debtors to access up to $800 million of the ABL DIP Loan and $190 million of the DIP FILO Loan (final amounts for these two DIP facilities are expected to be $980 million and $250 million, respectively). Amounts under the ABL DIP Loan will be used to roll-up prepetition debt. About ATD Corp/American Tire Headquartered in Huntersville, North Carolina, ATD Corporation and its subsidiaries -- https://www.atd-us.com -- are distributors of replacement tires with more than 140 distribution centers and 1,400 delivery vehicles servicing a geographic region covering more than 90 percent of the replacement tire market for passenger vehicles and light trucks in the United States. ATD offers the broadest variety of products and value-added services that range from premium-quality tires and popular custom wheels to business support services and online platforms that cater to tire retailers and their potential customers. ATD has its own proprietary private-label and exclusive tire brands, such as Hercules and Ironman, to supplement its supply of industry-leading brand-name tires, including Continental, Michelin, Pirelli, Cooper, Nexen, Toyo-Nitto, Hankook, Kumho, and Falken among others. The Debtors and their non-Debtor subsidiaries currently employ approximately 5,500 people in the United States and Canada. ATD Corporation and eight of its affiliates filed for bankruptcy on Oct. 4, 2018 (Bankr. D. Del. Lead Case No. 18-12221. The petition was signed by William Williams, chief financial officer. The Hon. Kevin J. Carey presides over the cases. The Debtors estimated assets of $1 billion to $10 billion and liabilities of $1 billion to $10 billion. Kirkland & Ellis LLP serves as general bankruptcy counsel to the Debtors and Pachulski Stang Ziehl & Jones LLP serves as local bankruptcy counsel. The Debtors tapped Moelis & Company as financial advisor; AlixPartners LLP as restructuring advisor; and Kurtzan Carson Consultants, LLC as notice and claims agent. AURORA MEMORY: Court Converts Chapter 11 Case to Chapter 7 ---------------------------------------------------------- Creditor West Suburban Bank filed a motion to convert or dismiss the chapter 11 case of debtor Aurora Memory Care, LLC. Upon deliberation, Bankruptcy Judge A. Benjamin Goldgar granted the motion. Although the Bank prefers dismissal, the case will be converted to chapter 7. The Bank has shown cause to convert or dismiss the case, and AMC has not shown unusual circumstances warranting the case's continuation, let alone any of the other statutory exceptions. Dismissal or conversion is therefore mandatory. The question is whether dismissal or conversion is appropriate. The question is a close one, but on balance conversion appears to be the better course -- even though the Bank urges dismissal. The equity question in this case is less than clear, but what little evidence there is suggests that AMC's facility may have substantial equity. AMC's initial schedules gave a value for the facility of $10 million, and that figure increased in the amended schedules to $16 million. Against the Bank's $8.4 million debt (along with a real estate tax debt scheduled as $120,000), the values from the schedules show equity of either $1,480,000 or $7,480,000 -- easily sufficient to warrant administration in chapter 7. As evidence of value, this is admittedly pretty thin stuff. But at least it is something -- and the Bank offers nothing to call it into question, just the unsupported conclusion that the Bank is "most likely" the only creditor who will be paid. In the absence of better evidence, the schedules are enough to support conversion to chapter 7. It is true, as the Bank observes, that certain aspects of this case arguably favor dismissal over conversion. The AMC facility is the only significant asset in the estate, and that asset is currently in the hands of a receiver. Conversion to chapter 7 would simply substitute a new custodian (a trustee) for the current one. The Bank is also the sole creditor that has participated significantly in the case, and of the three creditors that have participated at all (the other two are the SEC and Meridian) only the Bank has expressed a preference. That preference is dismissal. Because creditors are "the best judges of what is in their own best interests," when creditors agree the court should ordinarily accommodate their wishes. Still, with some indication that the AMC facility could have significant equity to pay unsecured creditors, the prudent course is to convert the case rather than dismiss it. A chapter 7 trustee has greater powers than a receiver and has duties to creditors receivers do not have. Conversion will allow a trustee to investigate whether a sale of the facility would indeed produce a significant dividend for AMC's unsecured creditors. From the Bank's point of view, the resulting delay from a conversion should be minimal. If the trustee concludes a sale is not worthwhile, a "no distribution" report will be filed, the case will close, the property will be deemed abandoned, and the Bank will be free to pursue its remedies in the state court. The bankruptcy case is in re: AURORA MEMORY CARE, LLC, Chapter 11, Debtor, No. 18 B 11289 (Bankr. N.D. Ill.). A copy of the Court's Memorandum Opinion dated Sept. 27, 2018 is available at https://bit.ly/2ErJiXE from Leagle.com. Aurora Memory Care, LLC, Putative Debtor, Debtor 1, represented by David P. Lloyd , David P. Lloyd, Ltd. Meridian Senior Living, LLC, Creditor, Petitioning Creditor, represented by Gregory J. Jordan , Jordan & Zito LLC. Patrick S Layng, U.S. Trustee, represented by Kimberly Bacher, Office of the U. S. Trustee. About Aurora Memory Care Based in Aurora, Illinois, Aurora Memory Care, LLC is a health care services provider that operates assisted living facilities for the elderly. Meridian Senior Living, LLC filed the involuntary chapter 11 petition (Bankr. N.D. Ill. Case No. 18-11289) on April 18, 2018. Judge Benjamin A. Goldgar presides over the case. AYTU BIOSCIENCE: CVI Investments Has 9.9% Stake as of Oct. 5 ------------------------------------------------------------ CVI Investments, Inc., and Heights Capital Management, Inc. disclosed in a Schedule 13G filed with the Securities and Exchange Commission that as of Oct. 5, 2018, they beneficially owned 232,677 shares of common stock of Aytu BioScience, Inc., which represents 9.9 percent of the shares outstanding. The number of Shares reported as beneficially owned consists of (i) Shares, and (ii) Shares issuable upon the conversion of Series C Convertible Preferred Stock. The Preferred Stock is not convertible to the extent that the total number of Shares then beneficially owned by a Reporting Person and its affiliates and any other persons whose beneficial ownership of Shares would be aggregated with such Reporting Person for purposes of Section 13(d) of the Exchange Act, would exceed 9.99%. The Company's Prospectus Supplement to its Form S-1 Registration Statement (Registration Nos. 333-227243 and 333-227706), filed on Oct. 5, 2018 indicates there were 2,258,418 Shares outstanding as of the completion of the offering of units. Heights Capital Management, Inc., which serves as the investment manager to CVI Investments, Inc., may be deemed to be the beneficial owner of all Shares owned by CVI Investments, Inc. Each of the Reporting Persons disclaims any beneficial ownership of any those Shares, except for their pecuniary interest. A full-text copy of the regulatory filing is available at: https://is.gd/Gb8Yhp About Aytu BioScience Englewood, Colorado-based Aytu BioScience, Inc. (OTCMKTS:AYTU) -- http://www.aytubio.com/-- is a commercial-stage specialty healthcare company concentrating on developing and commercializing products with an initial focus on urological diseases and conditions. Aytu is currently focused on addressing significant medical needs in the areas of urological cancers, hypogonadism, urinary tract infections, male infertility, and sexual dysfunction. Aytu Bioscience reported a net loss of $10.18 million for the year ended June 30, 2018, compared to a net loss of $22.50 million for the year ended June 30, 2017. As of June 30, 2018, Aytu Bioscience had $21.06 million in total assets, $7.63 million in total liabilities and $13.42 million in total stockholders' equity. EKS&H LLLP, in Denver, Colorado, the Company's auditor since 2015, issued a "going concern" qualification in its report on the consolidated financial statements for the year ended June 30, 2018, citing that the Company has suffered recurring losses from operations and has an accumulated deficit that raise substantial doubt about its ability to continue as a going concern. Aytu BioScience received on April 9, 2018 a letter from The Nasdaq Stock Market LLC indicating that the Company has failed to comply with the minimum bid price requirement of Nasdaq Listing Rule 5550(a)(2). Nasdaq Listing Rule 5550(a)(2) requires that companies listed on the Nasdaq Capital Market maintain a minimum closing bid price of at least $1.00 per share. BASS PRO: S&P Affirms 'B+' Issuer Credit Rating, Outlook Stable --------------------------------------------------------------- S&P Global Ratings affirmed its 'B+' issuer credit rating on Springfield, Mo.-based Bass Pro Group LLC. The outlook is stable. S&P said, "At the same time, we lowered the issue-level rating on the term loan to 'B+' from 'BB-' and revised the recovery rating to '3' from '2', due to the proposed $800 million term loan add-on. The '3' recovery rating indicates our expectation for meaningful recovery (50%-70%; rounded estimate: 60%) in the event of payment default. "The rating affirmation reflects our view that Bass Pro Group's proposed transaction will leave S&P-adjusted credit metrics relatively unchanged since we currently treat the company's outstanding preferred stock as 100% debt in our analysis. Pro forma for the transaction, total debt will increase by $114 million and cash will decline by $34 million (we net 95% of cash against debt when calculating S&P-adjusted credit metrics), resulting in adjusted leverage weakening less than 0.5x. However, the outlook remains stable because we expect pro forma credit metrics to improve meaningfully over the next 12-24 months driven by debt repayment, better profitability, and lower preferred stock PIK interest. "The stable outlook reflects our forecast for improving operating performance and EBITDA growth on additional synergy realization and better merchandise mix, despite lower revenues reflecting a challenging sporting goods retail industry. We assume the company will continue to use a material portion of its FOCF to repay debt. We believe credit metrics will improve over the next 12-24 months, with debt to EBITDA in the mid-7.0x and fixed-charge coverage in the mid-1.0x at year-end 2018, and strengthening to low-5.0x and low-2.0x at year-end 2019. "We could lower our ratings if top line declines or EBITDA growth is meaningfully below our expectation, driven by increased competition from big-box and online retailers and/or issues realizing planned synergies from the Cabela's merger. Under this scenario, we would view the company's competitive standing and business less favorably even if leverage is modestly lower. We could also lower the rating if soft operating trends or more aggressive financial policy results in weaker-than-expected credit metrics, with debt to EBITDA above 6.5x and fixed-charge coverage below 2.0x on a sustained basis. "Although unlikely over the next year because of the time needed to execute, we could raise the ratings if Bass Pro Group meaningfully expands profits by executing on its planned synergies, and leverages its unique in-store experience to grow market share. At the same time, credit metrics would improve significantly driven by EBITDA growth and meaningful debt repayment, with debt to EBITDA below 5.0x and fixed-charge coverage above 2.2x on a sustained basis. This could happen if the company can consistently grow comparable sales while also realizing EBITDA margin expansion in excess of 500 basis points, with moderate debt repayment." BIRCH WOOD: Northborough to Get $1.9MM from Sale Proceeds --------------------------------------------------------- Birch Wood Inc. filed an amended disclosure statement revising the treatment of general unsecured creditors, classified in Class 4. Class 4 Claims will receive a pro-rata distribution of available funds from sale proceeds (auction or otherwise) for their allowed claims. Upon sale of property, whether by auction or private sale, the Class 2 claimant, Northborough Capital Partners, LLC, will be paid the sum of $1,900,000 of available proceeds following costs of sale; all other proceeds will be escrowed for subordinate lienholders and unsecured claims (Classes 3 & 4) pending resolution of the litigation regarding Northborough's claim. The prior Plan provides that all Classes will be paid 100% of their allowed claims within 10 days of the closing the sale of the Debtor's real estate. A copy of the Amended Disclosure Statement is available from PacerMonitor.com at https://tinyurl.com/y8us4g8t at no charge. About Birch Wood Birch Wood Inc. owns in fee simple a real property located at 327 Fletcher Schoolhouse Road, South Woodstock, Vermont, valued by the company at $2.8 million. Birch Wood sought protection under Chapter 11 of the Bankruptcy Code (Bankr. D. Vt. Case No. 18-10184) on May 1, 2018. In the petition signed by Gary Moore, president, the Debtor disclosed $2.81 million in assets and $1.81 million in liabilities. BON-TON STORES: Wants to Sell Wilmette Store for $12.5 Million -------------------------------------------------------------- BankruptcyData.com reported that Bon-Ton Stores filed with the Court a joint motion of the Debtors, the Bon-Ton Purchaser (comprised of (i) a contractual joint venture comprised of "GA Retail" and "Tiger Capital Group" and (ii) Wilmington Savings Fund Society) and "3200 Lake Avenue" (the "Purchaser") requesting Court approval of the Debtors' sale of a Wilmette, Illinois shopping center to the Purchaser for $12.5 million. BankruptcyData related that the motion explains, "The Property is located in a shopping center called Edens Plaza in Wilmette, Illinois. As of the Petition Date, it was subject to the REA, a reciprocal operating and easement agreement to which Seller, Edens Plaza LLC (the "Developer") and Edens Annex LLC (the "Sublessee") are parties. The Property is further subject to an unexpired lease involving Developer. Since the Petition Date, Developer has attempted to thwart the sale of the Property to prospective purchasers with the apparent goal of securing the Property for itself at a price far below its proven fair market value. Specifically, Developer has sent correspondence to the Bon Ton Purchaser asserting what it claims are its rights under the REA, including what it describes as a 'right to purchase' and a 'right of first offer,' and under the sublease. After Developer made an offer for just $4.65 million -- about one-third of the purchase price under the Sale Agreement -- that was not accepted by the Bon-Ton Purchaser, Developer resorted to threatening the Bon-Ton Purchaser by emailing a fully drafted complaint and draft motion for a temporary restraining order to enjoin the sale of the Property to any third party. The Developer has since been in contact with potential purchasers in an apparent effort to dissuade them from making offers on the Property. Pursuant to its rights under the Sale Order and Agency Agreement, Bon-Ton Purchaser engaged A&G Realty Partners ('A&G') to conduct a marketing and sale process for the Property, which process commenced in May 2018. The Property attracted 55 interested parties, of which five submitted verbal or written offers for the Property in excess of $10 million. Of these parties, Purchaser submitted the highest or otherwise best bid for the Property at a purchase price of $12,500,000 (the 'Purchase Price'). Purchaser made a deposit of $600,000 upon execution of the Sale Agreement (the 'Deposit')." The Court scheduled an October 25, 2018 hearing to consider the sale motion with objections due by October 18, 2018. About The Bon-Ton Stores The Bon-Ton Stores, Inc. (OTCQX: BONT) -- http://www.bonton.com/-- with corporate headquarters in York, Pennsylvania and Milwaukee, Wisconsin, operates 250 stores, which includes nine furniture galleries, in 23 states in the Northeast, Midwest and upper Great Plains under the Bon-Ton, Bergner's, Boston Store, Carson's, Elder-Beerman, Herberger's and Younkers nameplates. The stores offer a broad assortment of national and private brand fashion apparel and accessories for women, men and children, as well as cosmetics and home furnishings. The Bon-Ton Stores, Inc., and nine affiliates sought Chapter 11 protection (Bankr. D. Del. Lead Case No. 18-10248) on Feb. 4, 2018. In the petitions signed by Executive Vice President and CFO MichaelCulhane, Bon-Ton Stores disclosed total assets at $1.58 billion and total debt at $1.74 billion. The Bon-Ton Stores tapped Paul, Weiss, Rifkind, Wharton & Garrison LLP as counsel; Young Conaway Stargatt & Taylor, LLP as co-counsel; Joseph A. Malfitano, PLLC, as special counsel; PJT Partners LP as investment banker; AlixPartners LLP as restructuring advisor and AP Services, LLC as financial advisor; and A&G Realty Partners LLC, as real estate advisor; and Prime Clerk LLC, as administrative advisor. Andrew R. Vara, Acting U.S. Trustee for Region 3, on Feb. 15, 2018, appointed seven creditors to serve on the official committee of unsecured creditors in the Chapter 11 case. Counsel for the creditors' committee are Jeffrey N. Pomerantz, Esq., Robert J. Feinstein, Esq., and Bradford J. Sandler, Esq., at Pachulski Stang Ziehl & Jones LLP. An investor group comprised of DW Partners, LP, Namdar Realty Group and Washington Prime Group, Inc., primarily as secured mortgage lender; and AM Retail Group, Inc., who submitted a going concern bid for the Debtors' assets, are represented by John Lyons, Esq., at DLA Piper LLP (US). Co-Counsel to the Ad Hoc Second Lien Noteholder Group are Norman L. Pernick, Esq., J. Kate Stickles, Esq., and Katherine M. Devanney, Esq., at Cole Schotz, P.C.; and Sidney P. Levinson, Esq., Genna L. Ghaul, Esq., Charles S. Wittmann-Todd, Esq., Bruce Bennett, Esq., and Joshua M. Mester, Esq., at Jones Day. Co-Counsel to the DIP Tranche A-1 Documentation Agent, Crystal Financial LLC, are Mark D. Collins, Esq., and Joseph Charles Barsalona II, Esq., at Richards, Layton & Finger, P.A.; and Matthew P. Ward, Esq., at Womble Bond Dickinson (US) LLP; and Jonathan D. Marwill, Esq., and John Ventola, Esq., at Choate Hall & Stewart LLP. Co-Counsel to the Administrative Agent, Bank of America, N.A., are Julia Frost-Davies, Esq., Robert A.J. Barry, Esq., and Amelia C. Joyner, Esq., at Morgan, Lewis & Bockius LLP. Co-Counsel to the Second Lien Trustee, Wells Fargo Bank, N.A. As indenture trustee and collateral agent for the Debtor's 8.00% Second Lien Senior Secured Notes Due 2021, are Emily Kathryn Devan, Esq., and Luke A. Sizemore, Esq., at Reed Smith LLP. BUNKER HILL: Lease Agreement Terminated Following Default --------------------------------------------------------- Bunker Hill Mining Corp. on Oct. 15, 2018, disclosed that it has defaulted on its payment obligations with respect to its Lease with Option to Purchase Agreement with Placer Mining Corporation, the lessor of the Bunker Hill Mine. As such, the Agreement is terminated. Bunker Hill Mining Corp. (cse:BNKR) -- http://www.bunkerhillmining.com/-- has an option to acquire 100% of the Bunker Hill Mine. The Bunker Hill Mine was the largest producing mine in the Coeur D'Alene zinc, lead and silver mining district in northern Idaho. Historically, the mine produced over 35M tons grading on average 8.76% lead, 3.67% zinc, and 155 g/t (4.52 ounces per ton) silver (Bunker Hill Mines Annual Report 1980). CAFFE ETTORE: Taps Carr Berglund as Accountant ---------------------------------------------- Caffe Ettore, Incorporated, received approval from the U.S. Bankruptcy Court for the Eastern District of California to hire Carr, Berglund, Ringgenberg A.P.A.C. as its accountant. The firm will assist the Debtor in the preparation and filing of federal and state corporate tax returns for the year ending Dec. 31, 2017, and subsequent periods, and will provide other general accounting services to facilitate the filing of those returns. Carr Berglund neither holds nor represents any interest adverse to the Debtor's bankruptcy estate, according to court filings. The firm can be reached through: Julie R. Berglund Carr, Berglund, Ringgenberg A.P.A.C. 2250 Douglas Blvd., Suite 120 Roseville, CA 95661 Phone: (916) 772-4131 Fax: (916) 772-4232 Email: jberglund@cbrapac.com Email: tcarr@cbrapac.com About Caffe Ettore Inc. Caffe Ettore, Incorporated -- https://www.ettores.com/ -- operates the Ettore's Bakery & Cafe sites in Sacramento and Roseville, California. The business offers European breakfast pastries, cookies, cakes, specialty desserts and custom wedding cakes. It also supplies cakes and baked goods to Nugget Markets throughout Northern California. Caffe Ettore sought protection under Chapter 11 of the Bankruptcy Code (Bankr. E.D. Cal. Case No. 18-22152) on April 10, 2018. In the petition signed by Ettore Ravazzolo, president, the Debtor estimated assets of $1 million to $10 million and liabilities of $1 million to $10 million. Judge Christopher D. Jaime presides over the case. The Debtor hired Dahl Law, Attorneys at Law as its legal counsel. The U.S. Trustee for Region 17 appointed an official committee of unsecured creditors on June 22, 2018. The Committee retained Horwood Marcus & Berk as its legal counsel. CALLAHAN GRADING: Case Summary & 20 Largest Unsecured Creditors --------------------------------------------------------------- Affiliates that filed voluntary petitions seeking relief under Chapter 11 of the Bankruptcy Code: Debtor Case No. ------ -------- Callahan Grading LLC 18-05220 1366 Filbert Hwy York, SC 29745 Grinding Specialists of the Carolinas LLC 18-05223 1366 Filbert Hwy York, SC 29745 Grinding Specialists LLC 18-05225 1560 Filbert Hwy York, SC 29745 Business Description: Callahan Grading, LLC, founded in 2006, is engaged in the business of providing excavation work and digging foundations. Grinding Specialist is a mulch supplier in South Carolina. Chapter 11 Petition Date: October 15, 2018 Court: United States Bankruptcy Court District of South Carolina (Spartanburg) Judge: Hon. Helen E. Burris Debtors' Counsel: Robert H. Cooper, Esq. THE COOPER LAW FIRM 150 Milestone Way, Suite B Greenville, SC 29615 Tel: 864-271-9911 Fax: 864-232-5236 Email: thecooperlawfirm@thecooperlawfirm.com Estimated Assets: $1 million to $10 million Estimated Liabilities: $1 million to $10 million The petitions were signed by Jarrett Callahan, managing member. A full-text copy of Callahan Grading's petition containing, among other items, a list of the Debtor's 20 largest unsecured creditors is available for free at: http://bankrupt.com/misc/scb18-05220.pdf Debtor Grinding Specialists of the Carolinas LLC stated it has no unsecured creditrs. A full-text copy of the petition is available for free at: http://bankrupt.com/misc/scb18-05223.pdf A full-text copy of Grinding Specialists' petition containing, among other items, a list of the Debtor's nine unsecured creditors is available for free at: http://bankrupt.com/misc/scb18-05225.pdf CHANNELVIEW TRUCK: Plan Filing Deadline Moved to Jan. 24 -------------------------------------------------------- The Hon. Eduardo V. Rodriguez of the U.S. Bankruptcy Court for the Southern District of Texas, at the behest of Channelview Truck Stop USA, LLC and Alex J. Addy, has extended the exclusivity period to file their chapter 11 plan of reorganization and disclosure statement through and including Jan. 24, 2019. The Troubled Company Reporter has previously reported that the Debtors needed additional time to file their Plan of Reorganization and Disclosure Statement. Managing member, Alex J. Addy, has been incapacitated due to a motor vehicle accident he was involved in recently. Mr. Addy is going through rehabilitation, just had three MRI's and it was determined that he has extensive damage to his lower back, neck and knee and has five herniated discs in his lower back and neck. Although the prognosis is fine, Mr. Addy needed additional time before being able to assist counsel with the proper disclosures and preparation of the plan and disclosure statement. About Channelview Truck Stop USA ChannelView Truck Stop USA LLC is a privately-held company in Channelview, Texas, which provides refuelling, rest (parking), and other services to motorists and truck drivers. It is a small business debtor as defined in 11 U.S.C. Section 101(51D), posting gross revenue of $765,109 in 2017 and gross revenue of $1 million in 2016. Channelview Truck Stop USA sought protection under Chapter 11 of the Bankruptcy Code (Bankr. S.D. Tex. Case No. 18-31775) on April 5, 2018. In the petition signed by Alex J. Addy, managing member, the Debtor disclosed $130,170 in assets and $1.30 million in liabilities. Judge Eduardo V. Rodriguez presides over the case. COLOR SPOT: Disclosures Okayed; Nov. 14 Plan Hearing Set -------------------------------------------------------- Judge Laurie Selber Silverstein, on Oct. 12, 2018, approved the Disclosure Statement explaining the Amended Combined Joint Chapter 11 Plan of Liquidation of CSH Winddown Inc., f/k/a Color Spot Holdings, Inc., et al., on an interim basis for solicitation purposes only. A hearing to consider (a) final approval of the Combined Disclosure Statement and Plan as containing adequate information, and (b) confirmation of the Combined Disclosure Statement and Plan will be held on Nov. 14, 2018, at 10:00 a.m. prevailing Eastern Time. Objections to the Plan should be filed no later than Nov. 8. The Debtors' Amended Combined Plan of Liquidation & Disclosure Statement was filed on Oct. 9, 2018. Under the Amended Plan, a summary of of classes, claims, voting rights and projected recoveries was laid out: Class 1 ("Priority Non-Tax Claims") is unimpaired, deemed to accept and not entitled to vote. The projected amount of claims is less than $750,000 and projected recovery is 100%. Class 2 ("Other Secured Claims") unimpaired, deemed to accept and not entitled to vote. The projected amount of claims is $0 and projected recovery is 100%. Class 3 ("Wells Claims") is impaired and entitled to vote. The projected amount of claims is $13,459,494.40 and projected recovery is 5%. Class 4 ("General Unsecured Claims") is impaired, deemed to reject the Plan and not entitled to vote. The projected amount of claims is $225,370,248 and projected recovery is 0%. Class 5 ("Intercompany Claims") is impaired, deemed to reject the Plan and not entitled to vote. The projected amount of claims is $0 and projected recovery is 0%. Class 6 ("Interests") is impaired, deemed to reject the Plan and not entitled to vote. The projected amount of claims is N/A and projected recovery is 0%. About Color Spot Color Spot Holdings, Inc., through its subsidiaries, owns and operates nurseries. It was incorporated in 2007 and is based in Fallbrook, California. Color Spot Holdings and its affiliates sought Chapter 11 protection (Bankr. D. Del. Case No. 18-11272) on May 29, 2018. In the petitions signed by CEO Paul Russo, the Debtors estimated $50 million to $100 million in assets and $100 million to $500 million in liabilities. Hon. Laurie Selber Silverstein presides over the Debtors' cases. The Debtors tapped Young Conaway Stargatt & Taylor LLP as their counsel; Raymond James & Associates, Inc., as investment banker; and Epiq Bankruptcy Solutions, Inc., as claims and noticing agent and administrative services advisor. In June 2018, an official committee of unsecured creditors was appointed in the Debtors' cases. The Committee tapped Kilpatrick Townsend & Stockton LLP as its lead bankruptcy counsel; Morris, Nichols, Arsht & Tunnell LLP as Delaware co-counsel; and Berkeley Research Group, LLC as their financial advisor. The Debtors filed the Chapter 11 cases in order to pursue a sale of substantially all their assets. The successful bidder for the assets was Wells Fargo Bank, N.A. The Asset Purchase Agreement provided for a credit bid in the amount of $52 million and the satisfaction of certain liabilities. The transactions closed on Aug. 17, 2018. Subsequent to the closing of the Asset Sale, the Debtors sought and obtained authority to change their corporate names: Old Name New Name -------- -------- Color Spot Holdings, Inc. CSH Winddown, Inc. Color Spot Nurseries, Inc. CSN Winddown, Inc. Hines Growers, Inc. HG Winddown, Inc. Lone Star Growers, Inc. LSG Winddown, Inc. COLOR SPOT: Wells Fargo to Recoup 5% in New Joint Liquidation Plan ------------------------------------------------------------------ CSH Winddown, Inc. f/k/a Color Spot Holdings, Inc., and its affiliates filed an amended combined disclosure statement and joint chapter 11 plan of liquidation dated Oct. 9, 2018. Under the latest liquidation plan, Wells Fargo (Class 3) will receive, (1) treatment as a Released Party under the Plan, (2) Distributions of any Excess Cash after satisfaction in full of such Claims to be paid in accordance with the Plan, (3) the right to the return of any proceeds of the Letters of Credit, and (4) to treatment of the Wells Deficiency Claim as an Allowed General Unsecured Claim. Projected recovery for Wells Fargo is 5%. General unsecured creditors in Class 4 have an estimated claims amount of $225,370,248, which was not provided in the previous plan. A full-text copy of the Disclosure Statement is available for free at: http://bankrupt.com/misc/deb18-11272-410.pdf About Color Spot Color Spot Holdings, Inc., through its subsidiaries, owns and operates nurseries. It was incorporated in 2007 and is based in Fallbrook, California. Color Spot Holdings and its affiliates sought Chapter 11 protection (Bankr. D. Del. Case No. 18-11272) on May 29, 2018. In the petitions signed by CEO Paul Russo, the Debtors estimated $50 million to $100 million in assets and $100 million to $500 million in liabilities. Hon. Laurie Selber Silverstein presides over the Debtors' cases. The Debtors tapped Young Conaway Stargatt & Taylor LLP as their counsel; Raymond James & Associates, Inc., as investment banker; and Epiq Bankruptcy Solutions, Inc., as claims and noticing agent and administrative services advisor. The companies had earlier sold substantially all of their assets to Wells Fargo Bank, N.A., which offered a $84 million bid at the auction on July 19. The sale closed on August 17. Following the closing of the sale, the Debtors changed their names to CSH Winddown, Inc. (f/k/a Color Spot Holdings, Inc.), CSN Winddown, Inc. (f/k/a Color Spot Nurseries, Inc.), HG Winddown, Inc. (f/k/a Hines Growers, Inc.) and LSG Winddown, Inc. (f/k/a Lone Star Growers, Inc.). CRESTOR GLOBAL: Trustee Taps Fidelity National as Legal Counsel --------------------------------------------------------------- Christopher Moser, the Chapter 11 trustee for Crestor Global Investments, Funds II, LLC, received approval from the U.S. Bankruptcy Court for the Northern District of Texas to hire Fidelity National Law Group as legal counsel. The firm will provide legal services, which include assisting the trustee in obtaining an amended order of sale to correct a title issue related to the Debtor's property located at 2803 Cary Drive, Mesquite, Texas. Michael Keller, Esq., at Fidelity, disclosed in a court filing that he and his firm do not represent any interest adverse to the Debtor and its estate. The firm can be reached through: Michael Keller, Esq. Fidelity National Law Group 5151 Belt Line Road, Suite 410 Dallas, TX 75254-7026 Phone: (972) 812-6547 About Crestor Global Investments Crestor Global Investments, Funds II, LLC, filed a Chapter 11 bankruptcy petition (Bankr. N.D. Tex. Case No. 17-34797) on Dec. 29, 2017. In the petition signed by authorized representative, Athuman Omar, the Debtor estimated under $1 million in total assets and liabilities. The Debtor tapped Joyce W. Lindauer Attorney, PLLC as its bankruptcy counsel; and Michael Crane as realtor. On March 6, 2018, Christopher J. Moser was appointed as the Chapter 11 trustee for the Debtor. The Trustee tapped Quilling, Selander, Lownds, Winslett & Moser, P.C. as his bankruptcy counsel; and Jeff Wright Consulting Services, LLC, as his accountant. DAN MAZZOLA: Seeks Access to First Commonwealth Cash Collateral --------------------------------------------------------------- Dan Mazzola, Inc., seeks authorization from the U.S. Bankruptcy Court for the Northern District of Ohio to use cash collateral of First Commonwealth Bank. The Debtor asserts that the cash collateral and accounts receivable of Debtor are the only sources of financing available to Debtor, and Debtor was unable to secure other debtor-in-possession financing on better terms. First Commonwealth was Debtor's primary working capital lender prior to the Petition Date and alleges a security interest in all Debtor's assets. Because of that prior relationship, the Debtor is unable to obtain financing from other sources and requires the use of First Commonwealth's collateral to fund the post-petition operations of the Debtor. Specifically, the Debtor must be able to use cash collateral to pay for all necessary postpetition operating expenses including wages, taxes, utilities, and other normal and necessary operating expenses of its business operation. A detailed operating budget was prepared by the Debtor and its professionals. The Budget represents a projection of revenue and ordinary and necessary operating expenses covering the period from September 24, 2018 through December 16, 2018. First Commonwealth alleges and Debtor believes, that First Commonwealth has a perfected security interest in the cash collateral of the Debtor, including the Debtor's cash on deposit and accounts receivable. The Debtor asserts that First Commonwealth claims that the amount due under the Loan Documents for the Stow location as of Sept. 21, 2018, is approximately $126,787. Additionally, the Debtor inherited the debt of a former Rockne's location located in Strongsville, Ohio in the approximate amount of $430,029. The Indebtedness is secured by valid, binding, first-position, perfected, and enforceable prepetition liens against the collateral and the cash collateral. To adequately protect First Commonwealth, the Debtor offers: (i) To grant First Commonwealth a first priority security interest in the Debtor's real and personal postpetition assets, including but not limited to cash and accounts receivable, to constitute adequate protection for any diminution and value of First Commonwealth's prepetition security interest in the collateral to the extent of the fair value of the collateral as of the commencement of the case; (ii) To make adequate protection payments to First Commonwealth in the amount equal to the regularly scheduled payments of interest due pursuant to the Loan Documents. The Debtor has is obligated to First Commonwealth on two notes: Note No. 03137170409 with required monthly payment of $3,500 which is due every 26th day of each month, and Note No. 03137322809 with required monthly payment of $2,896 which is due every 5th day of each month. (iii) Given that there are no prepetition arrearages, the Debtor submits that no additional adequate protection is required; and (iv) To provide financial information to First Commonwealth on a monthly basis during the term of the Proposed Order. A full-text copy of the Debtor's Motion is available at http://bankrupt.com/misc/ohnb18-52271-5.pdf About Dan Mazzola Dan Mazzola, Inc., is an Ohio Corporation located in Stow, Ohio. It operates the last independently owned and op erated Rockne’s restaurant location. Dan Mazzola filed a voluntary Chapter 11 petition (Bankr. N.D. Ohio Case No. 18-52271) on Sept. 21, 2018. In the petition signed by Daniel Mazzola, president, the Debtor estimated under $100,000 in assets and liabilities under $1 million. Peter G. Tsarnas at Goldman & Rosen, Ltd., serves as counsel to the Debtor. DAVID'S PATIO: Case Summary & 20 Largest Unsecured Creditors ------------------------------------------------------------ Debtor: David's Patio, Ltd. dba David's Concrete Innovations 3001 E. Hwy 199 Springtown, TX 76082 Business Description: Founded in 1962, David's Patio, Ltd. is involved in the manufacture and finishing of concrete statuary products. Its customers include nurseries, landscapers, hardware stores, building suppliers, mobile home installers, foundation repair companies, and contractors in Texas and the surrounding states. In addition to the Company's concrete products, it also sells related products such as bagged goods for nurseries and metal shims for foundation repair. Chapter 11 Petition Date: October 15, 2018 Case No.: 18-44081 Court: United States Bankruptcy Court Northern District of Texas (Ft. Worth) Judge: Hon. Russell F. Nelms Debtor's Counsel: Behrooz P. Vida, Esq. THE VIDA LAW FIRM, PLLC 3000 Central Drive Bedford, TX 76021 Tel: (817)358-9977 Fax: 817-358-9988 E-mail: filings@vidalawfirm.com Total Assets: $1,996,173 Total Liabilities: $2,019,727 The petition was signed by Mark J. O'Reilly, general partner, HDG Management, LLC. 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/txnb18-44081.pdf DL REAL ESTATE: Exclusive Plan File Period Moved to Dec. 10 ----------------------------------------------------------- The Hon. Erik P. Kimball of the U.S. Bankruptcy Court for the Southern District of Florida, at the behest of DL Real Estate Holdings LLC, has extended: (a) the Debtor's exclusive period in which to file a plan or commence monthly interest payments to Palm Bay Partners Holdings, LLC, through and including Dec. 10, 2018; (b) the Debtor's exclusive period in which to file a plan and disclosure statement through and including Dec. 10, 2018; (c) the deadline to file a plan, per the Court's Order Shortening Time, through and including Dec. 10, 2018; and (d) the Debtor's exclusive period in which to solicit acceptances through and including Feb. 8, 2019. The Troubled Company Reporter has previously reported that the Debtor needed additional time to file a plan as it is still in the process of marketing its principal asset for sale. The Debtor anticipated filing a plan of liquidation, whereby the real property will be sold and all proceeds will be distributed according to the priority scheme of the Code. About DL Real Estate DL Real Estate Holdings LLC is a real estate lessor that owns in fee simple a real property located at 4700 Dixie Highway NE Palm Bay, FL 32905, having an appraised value of $4.7 million. DL Real Estate Holdings filed a voluntary petition under chapter 11 of the U.S. Bankruptcy Code (Bankr. S.D. Fla. Case No. 18-16992) on June 11, 2018. In the petition signed by Lee Stein, manager, the Debtor disclosed $4.82 million in total assets and $2.88 million in total liabilities. Judge Erik P. Kimball is the case judge. Aaron A. Wernick, Esq., at Furr & Cohen, is the Debtor's counsel. SVN Moecker Realty Auctions and SVN Commercial Realty will serve as the broker and auctioneer. DPW HOLDINGS: Group Secures $85-M Construction Loan Commitment -------------------------------------------------------------- A group which includes DPW Holdings, Inc., as an investor secured an $85 million construction loan commitment from a New York City-based multinational investment bank for the construction of a five-star ultra-luxury hotel in Tribeca. The Group is led by two New York real estate development companies, Mactaggart Family & Partners LP and Caspi Development. DPW Holdings acquired a minority position in the investment. "DPW seeks assets with unique attributes and significant promise," said Milton "Todd" Ault III, DPW's CEO and Chairman. "With strong luxury hospitality fundamentals and specific location advantages the Hotel is positioned to capitalize on the exploding business and residential growth of Lower Manhattan. This loan commitment from a prestigious bank validates our opportunity and keeps the Hotel on track to be completed in the summer of 2020. The anchor of DPW's hospitality portfolio, the Hotel is expected to deliver long-term predictable cash-flow." The Tribeca Hotel The 94,000 square foot hotel, located one block east of the Hudson River in the heart of the Tribeca North Historic District, will feature 96 opulently appointed rooms and suites, a lavish full-service spa and six first-class food and beverage venues, all exclusively designed by renowned designers Martin Brudnizki Design Studio and Stephen B. Jacobs Group. A 106-year, premier hospitality group among the largest operators of 5-star luxury hotels and casinos in Europe will share its flagship hotel's name, sophistication and exclusive service. The group is expected to be revealed as part of a branding effort that will commence in the spring of 2019. A record-number Michelin star restaurateur is also contracted to oversee dining in the Hotel, including the New York manifestation of an iconic European institution in operation since the 1800s. AECOM Tishman Construction Corp. broke ground in December 2017 and expects to open the 96-room hotel during the fall of 2020, with the opening of the restaurants anticipated to be immediately thereafter. For more information regarding the hotel project, please use this link where a live video feed is also featured streaming during the day, https://DPWHoldings.com/456luxhotelnyc/. DPW Investment To maximize long-term predictable cash flow, DPW intends to invest pari passu with top-tier New York City real estate investors. Based on a projected average daily rate (ADR) of $983 upon stabilization in 2021 (as compared to the competitive set's May 2016 ADR of $1,060), the Hotel is expected to produce a stable, unlevered yield on cost of 10%. A refinancing, three years after opening, is projected to return 50% of the invested equity and should generate cash-on-cash returns of 18% thereafter. Partners London-based Mactaggart Family & Partners, LP has been operating in New York City since 1985. Its experience spans over 35 years of high-end office and residential development including 589 Fifth Avenue, 590 Fifth Avenue, 183 Madison Avenue, and 576 Fifth Avenue. Family-run Caspi Development represents decades of real estate pedigree, which along with a comprehensive hands-on approach, has led to an unparalleled reputation for perfection in design, construction and project completion. With a track record of both metropolitan and suburban achievements, Caspi thrives in the competitive Westchester and New York City landscapes. Bringing three generations of experience to the table, Caspi taps into its knowledgeable site selection and financial entrepreneurship to succeed in a variety of markets. About DPW Holdings Headquartered in Fremont, California, DPW Holdings, Inc., formerly known as Digital Power Corp. -- http://www.DPWHoldings.com/-- is a diversified holding company that, through its wholly owned subsidiary, Coolisys Technologies, Inc., is dedicated to providing technology-based solutions where innovation is the main driver for mission-critical applications and lifesaving services. Through its wholly owned subsidiaries and strategic investments, the company provides mission-critical products that support a diverse range of industries, including defense/aerospace, industrial, telecommunications, medical, crypto-mining, and textiles. DPW Holdings incurred a net loss of $10.89 million in 2017 following a net loss of $1.12 million in 2016. As of June 30, 2018, DPW Holdings had $53.44 million in total assets, $21.90 million in total liabilities and $31.53 million in total stockholders' equity. The report from the Company's independent accounting firm Marcum LLP, in New York, on the consolidated financial statements for the year ended Dec. 31, 2017, includes an explanatory paragraph stating that the Company has a significant working capital deficiency, has incurred significant losses and needs to raise additional funds to meet its obligations and sustain its operations. These conditions raise substantial doubt about the Company's ability to continue as a going concern. DR. SHABNAM QASIM: Seeks to Hire James R. Halter as Accountant -------------------------------------------------------------- Dr. Shabnam Qasim MD PA, seeks authority from the U.S. Bankruptcy Court for the Northern District of Texas to employ James R. Halter, CPA, as accountant to the Debtor. Dr. Shabnam Qasim requires James R. Halter to: a. prepare income tax returns; b. prepare F.I.C.A. and withholding tax returns; c. provide adequate control over the revenue from the operation of the professional association; and d. prepare operating reports. James R. Halter will be paid based upon its normal and usual hourly billing rates. The firm will also be reimbursed for reasonable out-of-pocket expenses incurred. James R. Halter assures the Court that the firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code and does not represent any interest adverse to the Debtor and its estates. James R. Halter can be reached at: James R. Halter 17055 Windward Lane Addison, TX 75001 Tel: (972) 713-0989 About Dr. Shabnam Qasim MD PA Dr. Shabnam Qasim MD PA sought Chapter 11 protection (Bankr. N.D. Tex. Case No. 18-43088) on Aug. 7, 2018, estimating less than $1 million in assets and liabilities. Craig Douglas Davis, Esq., at Davis, Ermis & Roberts, P.C., serves as counsel to the Debtor. ENVIVA PARTNERS: Fitch Affirms BB- LT IDR & Alters Outlook to Pos. ------------------------------------------------------------------ Fitch has affirmed the Long-Term Issuer Default Rating of 'BB-' and senior unsecured rating of 'BB-'/'RR4' for Enviva Partners LP. The Outlook is revised to Positive from Stable. The Positive Outlook reflects EVA's strong cash flow profile stemming from the expected dropdown transactions in 2019 and 2020 as well as volume ramp up from the existing contracts. The dropdown transactions will provide EVA with additional production volumes that are underpinned by long-term take-or pay contracts, which will bring in accretive earnings for the company starting in 2019. Fitch expects EVA to also benefit from growing export volumes to major counterparties under the existing contracts. Fitch forecasts EVA's leverage (as defined by Fitch as debt/adjusted EBITDA) to fall below 3.5x by the end of 2020, assuming the dropdown transactions will be funded under a reasonable mix of equity and debt financing. Moreover, the ratings also highlight EVA's existing contract profile, future growth opportunities associated with the currently favorable regulatory environment, and supportive development structure. EVA's contracts are primarily take-or-pay and have a weighted average remaining term of 8.5 years as of second-quarter 2018 (2Q18), which provides earnings stability in the near term. Furthermore, Fitch believes the regulatory environment in the jurisdictions that EVA serves is fundamentally favorable for the company and the biomass industry, where local governments offer economic incentives to encourage renewable energy use. Fitch also views that EVA has a supportive development structure that provides the company a strong path for near-term growth stemming from dropdowns at reasonable multiples. Furthermore, there are also several contracts signed at the sponsor level that would be part of the dropdown assets in future transactions. Fitch believes the structure will allow EVA to fund dropdown transactions from its sponsor using a favorable mix of equity and debt financing. In addition, EVA's recent announcement of the three contracts that it and its sponsors signed in the Japanese market will further add to EVA's cash flow stability and diversify its customer base in the longer term. The ratings also consider Fitch's concerns regarding EVA's limited size and scale, customer concentration risk and re-contracting risk. EVA currently exhibits relatively small scale of operations with limited geographic diversity. Fitch generally believes that master limited partnerships (MLP) operating in niche markets like EVA, with expected annual EBITDA less than $250 million in the near term, could be disadvantaged in accessing capital market debt and equity when needed. Fitch also views EVA as having greater exposure to the financial effect of negative industry trends or events within the relatively limited geographic regions in which its customers operate relative to larger master limited partnerships (MLPs) with a greater breadth of operations. Additional concerns include customer concentration risk, as EVA generated more than 90% of its revenue from three customers year-to-date (YTD) 2Q18, with the largest end-user, Drax Group Holdings, Ltd., currently possessing a high yield credit profile. Fitch recognizes EVA is currently pursuing numerous other potential contracts with a diverse set of counterparties and that the successful execution of these contracts could provide a catalyst for positive credit actions in the future. In the context of 8.5 years of weighted average life of contracts, Fitch views that re-contacting risk poses as a longer term concern for EVA and is dependent upon the availability of government subsidies for biomass energy at the end of those contracts' life. KEY RATING DRIVERS Increased Production Volumes & Cash Flow: Fitch believes that EVA will generate stronger EBITDA and cash flow driven by the dropdown transactions that are expected to take place in 2019 and 2020 and the rising production volumes under existing contracts. Fitch expects the dropdown transaction in 2019 will provide EVA with additional production volumes of more than 500,000 metric tons per year (MTPY) that are underpinned by long term take-or-pay contracts with MGT Power's Teesside Renewable Energy Plant, which is expected to be in-service in 4Q19. Fitch also assumes future dropdown with similar long term take-or-pay contracts to be completed in forecast years. Fitch expects EVA to fund these transactions using a reasonable mix of debt and equity financing that would achieve leverage target of below 3.5x. EVA's 2017 leverage was approximately 3.9x, according to Fitch's calculation. Fitch forecasts EVA's leverage to be 3.6x-3.8x by year-end 2018, but temporarily ticks up to above 4.0x in 2019 given the additional borrowings to fund the dropdown and second phase of the Wilmington dropdown transactions. However, Fitch believes that EVA's leverage will fall below 3.5x starting in 2020, driven by the total production volume ramp up from its existing contracts as well as accretive cash flow from the dropdown contracts. Additionally, Fitch notes that EVA's distribution coverage should remain robust and above 1.0x through 2020. Moreover, Fitch also believes that the Joint Venture (JV) structure that is formed between EVA's sponsor Enviva Holdings, LP and John Hancock Life Insurance provides capital structure benefit to EVA in supporting EVA's growth. Projects are constructed at the JV level and sold to EVA through dropdown transactions. Regulatory Environment Remains Favorable: Fitch views that the regulatory environment in the jurisdictions that EVA serves should remain fundamentally favorable for the company and the biomass industry in the near term. EVA's major customers are European utilities and power generators counterparties that are subjected to the EU and UK environmental laws, which aim to reduce greenhouse gas emissions for the power sector and meet specific carbon-reduction goals by 2020 through mandating an increase in renewable energy usage. To achieve the mandate, the government offers incentives for renewable energy projects, which include subsidizing and funding coal-fired power generation companies such as EVA's top customers to co-fire biomass in their coal plants and/or fully convert their coal plants to biomass plants. Moreover, EVA is also expanding its footprint into the Asian markets, particularly in Japan and Korea, where similar to the EU and UK, there are environmental frameworks in place to incentivize greater use of renewable power generation in the future. Long-Term Contract Profile: EVA has a weighted average remaining term of 8.5 years and contracted revenue backlog of $6.3 billion for its overall contract portfolio as of 2Q18. These contracts are primarily take-or-pay contracts with a fixed price for the entire term of the contract subject to annual inflation-based adjustment and price escalation, which offer some downside protection in raw materials and shipping cost. Moreover, during 2Q18 EVA also announced that the company and its sponsors entered into three new contracts with two Japanese counterparties that will supply more than 700,000 metric tons per year (MTPY) of wood pellets to Japan commencing in 2021 and 2022. Additionally, the company also signed another new contract with one of its major customers, Drax, that will begin in 2021. These long term take-or-pay contracts will further add to EVA's cash flow stability in the longer term. Customer Concentration Risk: Offsetting the stability of its long-term take-or-pay contracts is EVA's customer concentration, as EVA generated more than 90% of its revenue from three customers as of 2Q18. Fitch expects EVA's earnings to remain concentrated among the major counterparties in the next few years: Drax Power Limited (Drax Group Holdings Ltd; BB+/Stable), Orsted A/S (fka Dong Energy; BBB+/Stable), and Lynemouth Power Limited. Fitch believes these European companies, given the economic incentives, will continue to operate their biomass plants using wood pellets until the end of their contracts. Drax currently receives government subsidies to generate power on biomass until 2027 and has converted four coal-fired plants into biomass plants. EVA is one of the several wood pellets suppliers for these three biomass plants. Orsted, the largest power producer in Denmark, has received state aid approval from the European Commission to convert its Asnaes coal power plant to Biomass plant and has a plan to abandon coal-firing plants by 2023. Lynemouth Power Limited is also a coal-fired power plant that was converted into a biomass plant. Limited Size and Scale: EVA exhibits a small scale of operation with expected annual EBITDA less than $250 million in the near term. Given its limited operational and business profile, EVA has a higher exposure to the financial effect of negative industry trends and events relative to larger companies with a greater breadth of operations. Larger companies also have a demonstrated advantage in efficiently accessing debt and equity capital markets to fund growth. Fitch generally believes that MLPs operating in niche markets like EVA, with expected annual EBITDA less than $250 million, could be disadvantaged in accessing capital market debt and equity when needed. Recontracting Risk in the Long Run: EVA does not face any significant recontracting risk for its top customers in the near future, given the weighted average duration of the contracts. However, Fitch recognizes this risk, though not an immediate credit concern will be largely affected by external factors including the availability of government subsidies for producers at the end of those contracts' lives, as well as, the competitive landscape of the market. However, Fitch also believes that some of the negative financial impact resulting from the recontracting risk can be partially offset by EVA's plan in expanding to the Japanese and South Korean market. DERIVATION SUMMARY EVA is a master limited partnership (MLP) that supplies utility-grade wood pellets to major power generators across the globe. EVA's cash flow is mainly supported by long-term take-or-pay contracts with utilities and power generators that are currently subsidized by their local government to produce electricity using renewable energy sources such as biomass. There are limited publicly traded comparable companies for EVA given the size of the biomass sector as well as the competitive landscape. EVA exhibits much smaller scale of operations with expected annual EBITDA less than $250 million in the near term, compared with other high-yield MLPs such as NGL Energy Partners (B/Negative) or Nustar Energy LP (BB/Stable). However, EVA has a lower leverage than both MLPs, with a LTM leverage of approximately 4.2x as of 2Q18. Furthermore, Fitch believes that EVA operates in an industry that has a more supportive regulatory environment pushing for greater use of renewable energy, compared with coal producer MLPs such as Foresight Energy LP (B-/Stable). KEY ASSUMPTIONS Fitch's key assumptions within the rating case for the issuer include: - Modest growth in revenue and EBITDA driven by growing wood pellet export volumes as well as annual inflation and price adjustment under existing and new contracts; accretive cash flow from future dropdown transactions; - Second payment for the Port of Wilmington dropdown to be completed in 2019 funded partially by equity; future dropdowns are assumed in forecast periods under a reasonable mix of equity and debt funding to maintain leverage below 3.5x; - Capital Expenditure aligns with management's forecast; - No further expansion projects are assumed in the rating case; - Moderate growth in unit distribution in forecast periods while maintaining distribution coverage of greater than 1.0x. RATING SENSITIVITIES Future Developments That May, Individually or Collectively, Lead to Positive Rating Action - Continued increase in size and scale of operations with increased geographic diversity; Should leverage and distribution coverage sustain at 3.0x-3.5x and above 1.0x, respectively, following the successful execution of the dropdown transactions, Fitch would likely upgrade EVA's long term IDR to 'BB'. Future Developments That May, Individually or Collectively, Lead to Negative Rating Action - Significant credit event with counterparties, including multi-notch downgrade at EVA's major counterparties, which significantly impairs cash flow into EVA; - Unfavorable changes in regulatory environment with regard to treatment and subsidies supporting biomass power generation as renewable generation; - Capex spending or unfavorable dividend policy that significantly reduces liquidity or increases leverage; - Sustained leverage of 3.5x-4.0x can lead to a Stable Outlook; - Leverage above 4.0x and distribution below 1.0x on a sustained basis can result in a negative rating action. LIQUIDITY Near-Term Liquidity Adequate: As of June 30, 2018, EVA had approximately $13.8 million of unrestricted cash and $70 million available under its revolving credit facility for a total liquidity of $83.8 million. The revolving credit facility has a maturity date of April 2020. Fitch expects the company to have adequate liquidity to fund its working capital and dividend distribution in the near term. FULL LIST OF RATING ACTIONS Fitch has affirmed the following ratings with Positive Outlook: Enviva Partners, LP -- Long-term Issuer Default Rating 'BB-'; -- Senior unsecured rating 'BB-'/'RR4'. ETCHER FARMS: Dairy Consulting to be Paid 100% at 4% Per Annum -------------------------------------------------------------- Etcher Farms, Inc., Etcher Family Farms, LLC, and Elmwood Farms, LLC, filed their latest disclosure statement to accompany their proposed chapter 11 plan dated Oct. 9, 2018. The Debtors' Plan is an "operating" Plan and not a "liquidating" Plan. That means the Debtors intend to reorganize their finances and business affairs, continue their business operations, and pay their Creditors from revenue generated by future operations. Class 5 under the latest plan consists of the Allowed Secured Claim of Dairy Consulting Services, LLC in the amount of $72,454.16. The Holder of the Allowed Class 5 Secured Claim will be paid in full with interest at 4% per annum, within five years of the Effective Date. The Reorganized Debtor will make monthly payments of both interest and principal of $1,329.92 beginning on Jan. 1, 2019, through and including Dec. 1, 2023. The Debtors anticipate that after the Effective Date, the Reorganized Debtor will remain engaged in the same business activities as the Debtors' pre-petition business activities. A full-text copy of the Disclosure Statement is available for free at: http://bankrupt.com/misc/iasb18-00554-11-180.pdf About Etcher Farms Etcher Farms, Inc., Etcher Family Farms LLC, and Elmwood Farms, LLC, are privately held companies in Lovilia, Iowa, in the dairy farms business. They own a cropland and dairy complex located in Monroe County. Etcher Farms, Inc., Etcher Family Farms LLC, and Elmwood Farms, LLC, simultaneously filed voluntary petitions for relief under Chapter 11 of the Bankruptcy Code: Etcher Farms, Inc. (Bankr. S.D. Iowa Case No. 18-00554); Etcher Family Farms, LLC (Bankr. S.D. Iowa Case No. 18-00555); and Elmwood Farms, LLC (Bankr. S.D. Iowa Case No. 18-00556) on March 19, 2018. In the petitions signed by Scott Etcher, the Debtors' vice president and CEO, the Debtors disclosed $16,590,000 in assets and $10,000,000 in liabilities for Etcher Farms, Inc.; $7,230,000 in assets and $6,840,000 in liabilities for Etcher Family Farms; and $3,870,000 in assets and $4,670,000 in liabilities for Elmwood Farms, LLC. The Hon. Lee M. Jackwig presides over the Debtors' cases. Jeffrey D. Goetz, Esq., and Krystal R Mikkilineni, Esq., at Bradshaw, Fowler, Proctor & Fairgrave, P.C., serve as the Debtors' counsel. EYEPOINT PHARMACEUTICALS: Receives FDA Approval of YUTIQ -------------------------------------------------------- The U. S. Food and Drug Administration (FDA) has approved YUTIQ (fluocinolone acetonide intravitreal implant) for the treatment of chronic non-infectious uveitis affecting the posterior segment of the eye. YUTIQ utilizes EyePoint Pharmaceuticals, Inc.'s Durasert drug delivery technology and is a non-bioerodible intravitreal micro-insert in a drug delivery system containing 0.18 mg fluocinolone acetonide, designed to release consistently over 36 months. YUTIQ is supplied in a sterile single-dose preloaded applicator that can be administered in the physician's office. In clinical trials, YUTIQ significantly reduced the rate of recurrent uveitis flares versus sham, and the most common adverse reactions reported were cataract development and increase in intraocular pressure (IOP). "The approval of YUTIQ by the FDA is a significant milestone achieved by the Company and marks the second approved ophthalmic product in our pipeline that we plan to commercialize ourselves in the U.S.," said Nancy Lurker, EyePoint's president and chief executive officer. "YUTIQ was developed internally by our research team and this approval further validates our capabilities to successfully design, develop and gain regulatory approval for an ophthalmology product to address a disease with high unmet need. Chronic non-infectious uveitis affecting the posterior segment of the eye is the third leading cause of blindness in the U.S. We anticipate a product launch in the first quarter of calendar 2019 and look forward to bringing this innovative treatment to patients suffering from this disease." "The approval of YUTIQ is an advancement in the treatment of non-infectious posterior segment uveitis, as it delivers consistent dosing without the peaks and valleys of current local corticosteroids, the standard of care. The clinical data have demonstrated that YUTIQ has a meaningful effect to lower recurrence rates at six and twelve-months following treatment. I believe the effect on recurrence rates will be highly beneficial to help to prevent secondary complications that can lead to vision loss. The approval of YUTIQ is an important step forward for patients and caregivers," said Dr. Glenn J. Jaffe, Robert Machemer Professor of Ophthalmology at Duke University School of Medicine. The FDA approved YUTIQ based on clinical data from two randomized, sham injection-controlled, double-masked Phase 3 clinical trials with patient follow-up continuing for three years. After six and 12 months, both clinical trials achieved the primary efficacy endpoint of prevention of recurrent uveitis flares. Although the p-value of less than 0.001 was reported in each clinical trial, the Company will be using a p-value of 0.01 which is reflected in YUTIQ's label. The first Phase 3 clinical trial met its primary efficacy endpoint at six months with statistical significance (p < 0.01, intent-to-treat analysis; recurrence of 18.4% for YUTIQ versus 78.6% for control). This trial yielded similar efficacy through 12 months of follow-up (p < 0.01, intent-to-treat analysis; recurrence of 27.6% for YUTIQ versus 85.7% for control). YUTIQ was generally well tolerated through 12 months of follow-up with a mean IOP elevation of 1.3 mmHg compared to 0.2 mmHg in the sham. Cataract surgeries were performed in 33.3% of patients receiving YUTIQ compared to 4.8% for sham. The second Phase 3 clinical trial also met its primary efficacy endpoint of prevention of recurrence of uveitis flares at six months with statistical significance (p < 0.01, intent-to-treat analysis; recurrence of 21.8% for YUTIQ versus 53.8% for control). 12-month recurrence occurred in 32.7% of patients receiving YUTIQ and 59.6% of those receiving sham injection (p F.Y.P.M. HOLDING: Seeks to Hire Cardenas Islam as Counsel --------------------------------------------------------- F.Y.P.M. Holding Inc., seeks authority from the U.S. Bankruptcy Court for the Southern District of New York to employ Cardenas Islam & Associates, PLLC, as counsel to the Debtor. F.Y.P.M. Holding requires Cardenas Islam to: a. provide legal advice to the Debtor with respect to its powers and duties as Debtor in Possession in the continued management of its property, including to prepare the necessary petition, schedules, statements, proposed orders, operating reports and other legal papers; b. draft all necessary or appropriate motions, applications, answers, orders, reports and other papers in connection with the administration of the Debtor's estate; c. perform all other legal services to the Debtor as a debtor in possession which may be necessary under the circumstance of the bankruptcy case; d. represent the Debtor at the 341 hearing and at all hearings scheduled before the bankruptcy court; e. coordinate and act as a liaison between the Debtor and the Office of the U.S. Trustee, any creditor's committee, and all other parties in interest; f. negotiate with all other creditors, equity holders, and parties in interest including governmental authorities, and prepare a Disclosure Statement and proposed Plan of Reorganization; g. aid the Debtor in its efforts to obtain confirmation of such Plan of Reorganization, should one be sought; and h. take such other and further action with the advice and consent of the Debtor, as may be necessary or appropriate for the benefit of the Debtor, its creditors or its estate. Cardenas Islam will be paid at these hourly rates: Attorneys $350 Paralegals $175 Cardenas Islam will also be reimbursed for reasonable out-of-pocket expenses incurred. Barak P. Cardenas, partner of Cardenas Islam & Associates, PLLC, assured the Court that the firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code and does not represent any interest adverse to the Debtor and its estates. Cardenas Islam can be reached at: Barak P. Cardenas, Esq. CARDENAS ISLAM & ASSOCIATES, PLLC 175-61 Hillside Avenue 11432 Tel: (347) 809-7810 Fax: (914) 861-0099 About F.Y.P.M. Holding Inc. F.Y.P.M. Holding Inc., based in Lincolndale, NY, filed a Chapter 11 petition (Bankr. S.D.N.Y. Case No. 18-12125) on July 13, 2018. The Hon. Sean H. Lane presides over the case. Barak P. Cardenas, Esq., at Cardenas Islam & Associates, PLLC, serves as bankruptcy counsel. In its petition, the Debtor estimated $702,964 in assets and $1,871,996 in liabilities. The petition was signed by Pasqualina Maffucci, vice president. FALLS AT FRESNO: Voluntary Chapter 11 Case Summary -------------------------------------------------- Debtor: The Falls at Fresno, LLC fdba eFalls Properties Fresno CA, LLC 9067 South 1300 West, Suite 301 West Jordan, UT 84088 Business Description: The Falls at Fresno, LLC is part of the Falls consolidated enterprise that operates an event center/venue for hosting conferences, company annual holiday parties, family reunions, high school proms, birthday parties, weddings and more. The Company is an affiliate of The Falls Event Center LLC, which sought bankruptcy protection on July 11, 2018 (Bankr. D. Utah Case No. 18-25116). http://www.thefallseventcenter.com/location/fresno-ca Chapter 11 Petition Date: October 15, 2018 Case No.: 18-27713 Court: United States Bankruptcy Court District of Utah (Salt Lake City) Debtor's Counsel: Elaine A. Monson, Esq. RAY QUINNEY & NEBEKER 36 South State Street, Suite 1400 Salt Lake City, UT 84111 Tel: (801) 532-1500 801-323-3346 Fax: 801-532-7543 E-mail: emonson@rqn.com Estimated Assets: $1 million to $10 million Estimated Liabilities: $1 million to $10 million The petition was signed by Gil A. Miller, chief restructuring officer of The Falls Event Center LLC. The Company stated it has no unsecured creditors. A full-text copy of the petition is available for free at: http://bankrupt.com/misc/utb18-27713.pdf FILBIN LAND: Taps Bachecki Crom as Tax Advisor ---------------------------------------------- Filbin Land & Cattle Co., Inc., received approval from the U.S. Bankruptcy Court for the Eastern District of California to hire Bachecki, Crom & Co., LLP, Certified Public Accountants, as its tax advisor. The firm will provide advice related to the tax consequences of the sales of the Debtor's assets, the tax impacts of its Chapter 11 plan; and the related interplay between tax law and bankruptcy law. The firm will charge these hourly rates: Partners $380 - $525 Senior Accountant $270 - $360 Junior Accountant $165 – $260 Bachecki is "disinterested" as defined in Section 101(14) of the Bankruptcy Code, according to court filings. The firm can be reached through: Jay D. Crom Bachecki, Crom & Co., LLP Certified Public Accountants 400 Oyster Point Blvd., Suite 106 South San Francisco, CA 94080 Phone: (415) 398-3534 Fax: (415) 788-0855 E-mail: jcrom@bachcrom.com E-mail: bachcrom@bachcrom.com About Filbin Land & Cattle Filbin Land & Cattle Co., Inc., is a privately-held company in Patterson, California, engaged in the cattle business. It is a merchant wholesaler of raw farm products. Filbin Land & Cattle Co. sought protection under Chapter 11 of the Bankruptcy Code (Bankr. E.D. Cal. Case No. 18-90030) on Jan. 17, 2018. In the petition signed by Jeffery Edward Arambel, its president and CEO, Filbin Land estimated assets of $1 million to $10 million and liabilities of $50 million to $100 million. Jeffery Edward Arambel also filed a separate Chapter 11 petition (Bankr. E.D. Cal. Case No. 18-90029) on Jan. 17, 2018. The cases are jointly administered with Arambel's case as the lead. Judge Ronald H. Sargis presides over two cases. Filbin Land tapped St. James Law P.C. as its bankruptcy counsel; Arch & Beam Global, LLC, as financial advisor; and Braun International Real Estate, as real estate broker. Mr. Arambel tapped Reno F.R. Fernandez, III, Esq., as his counsel. GOLDEN OIL: Unsecureds to Get Quarterly Payments for 3 Years ------------------------------------------------------------ Golden Oil Holding Corporation filed a plan of reorganization and accompanying disclosure statement that will pay all creditors in full without interest on the Effective Date of the Plan. The source of funds will be the revenue generated once the Debtor is provided a permit as set out in the Settlement Agreement with Jicarilla Apache Nation Oil & Gas Administration and back operating under the leases. The claim of New Mexico Taxation & Revenue is disputed. The Debtor believes the scheduled amount of $30,923.42 is accurate. New Mexico Taxation & Revenue has mistaken the Debtor for another entity regarding payroll accounts. The Debtor has filed and paid its payroll taxes. The unsecured Claims of Ace Services Inc., Gas Analysis Service, Mo-te Inc, Poor Boys Hot Oil Service, Rig Equipment, and Oshino Lamps America are claims under $1,500.00 and will remain in place, due and owing, unless these creditors voluntarily agree to release their claims. The unsecured Claims of 2D Consulting, LLC, Endurance Lift Solutions, fkn John Crane Production, Jade Sales & Services Inc, Mo-te Inc, R&L Chart Services Inc. are claims under $10,000.00 and will remain in place, due and owing, unless these creditors voluntarily agree to release their claims. The unsecured Claims of Hurricane Air & Swab, Ralph McElvenny, Reliable Compression are claims under $40,000 and will remain in place, due and owing, unless these creditors voluntarily agree to release their claims. The priority claim of Jicarilla Apache for $10,785.35 will remain in place, due and owing, unless the creditor voluntarily agrees to release the claim. The Debtor disputes the remaining unsecured claim of Jicarilla Apache Nation Oil & Gas Administration for $123,677. The Jicarilla Apache Nation Oil & Gas Administration did not file a proof of claim. The schedules were served on the Jicarilla Apache Nation Oil & Gas Administration. Since the Jicarilla Apache Nation Oil & Gas Administration did not file a Claim by the bar date set by the Court, its claim will be deemed disallowed. Class 5 - Allowed Claims under $1,500.00 of Unsecured Creditors will be paid in equal installments on a quarterly basis beginning the first quarter after the Effective Date. The payments will continue for 3 years. Class 6 - Allowed Unsecured Claims under $10,000 will be paid in equal installments on a quarterly basis beginning the first quarter after the Effective Date. The payments will continue for 3 years. Class 7 - Allowed Unsecured Claims under $40,000 will be paid in equal installments on a quarterly basis beginning the first quarter after the Effective Date. The payments will continue for 3 years. A copy of the Disclosure Statement is available from PacerMonitor.com at https://tinyurl.com/yb55edsf at no charge. Based in Houston, Texas, Golden Oil Holding Corporation, a privately held company in Houston, Texas, in the oil and gas extraction business, filed a voluntary Chapter 11 petition (Bankr. S.D. Tex. Case No. 18-31594) on March 30, 2018. The case is assigned to Judge Karen K. Brown. The Debtor is represented by Edward L. Rothberg, Esq., at Hoover Slovack, LLP, in Houston, Texas. At the time of filing, the Debtor had estimated assets of $1 million to $10 million and estimated liabilities of $100,000 to $500,000. The petition was signed by Ralph McElvenny, president and director. A full-text copy of the petition containing, among other items, a list of the Debtor's seven unsecured creditors is available for free at http://bankrupt.com/misc/txsb18-31594.pdf GRAND CANYON RANCH: Order Granting Contingency Award to GTG Vacated ------------------------------------------------------------------- In the appeals case captioned FANN CONTRACTING, INC., Appellant, v. GARMAN TURNER GORDON LLP, Appellee, Case No. 2:17-cv-03126-GMN (D. Nev.), Chief District Judge Gloria M. Navarro vacates the order of the U.S. Bankruptcy Court for the District of Nevada granting a contingency award and expense award to Garman Turner Gordon LLP over Appellant's objection. Appellant Fann Contracting, Inc. is an unsecured creditor who performed construction work on certain real property (the "Frontier") that was the subject of a dispute between several parties in state court, as well as the Chapter 11 proceeding giving rise to the instant appeal. Debtor Grand Canyon Ranch, LLC filed a complaint against Appellant on August 14, 2013, asserting contract and tort-based claims arising from Appellant's work on the Frontier. On July 20, 2015, Debtor filed a voluntary petition for relief under Chapter 11 of the Bankruptcy Code. On Jan. 5, 2016, the bankruptcy court appointed Brian Shapiro as the Chapter 11 Trustee for the Debtor's Estate. On Feb. 10, 2016, the Trustee filed an application to employ GTG as attorneys for the Trustee and for approval of a contingency-based fee agreement. GTG agreed to represent the Trustee on a contingency fee basis under their agreement on the grounds that the Estate held "few in any assets, other than recovery actions," and held "no liquid assets." Pursuant to the Retention Agreement, the Trustee and GTG agreed to a contingency fee of 35%, which would increase to 40% if a reorganization plan was reached, or 45% if the action continued until after the filing of a post-trial motion or a notice of appeal. On November 28, 2017, GTG filed an application requesting fees and expenses in the amount of $590,836.93, including a reduction of $50,000. Appellant filed an objection on Dec. 15, 2017, asserting that the Fee Notice and Application is procedurally improper, calculated pursuant to a misguided base computation, and based upon representations that render the fee award improvident. On Dec. 19, 2017, the bankruptcy court held a hearing on the Fee Notice and Application during which it granted the motion in its entirety and overruled Appellant's objection. Appellant raises three issues on appeal concerning the bankruptcy court's approval of the contingency fee award to GTG: (1) whether the bankruptcy court erred as a matter of fact and law in granting a payment of a contingency fees to GTG); (2) whether GTG held a conflict of interest when structuring the settlement that favored GTG over unsecured creditors and whether contingency fees resulting from such conflict of interest should be reduced or eliminated; and (3) whether the Trustee's application to employ GTG negligently represented assets of the bankruptcy estate to the bankruptcy court, the U.S. Trustee, and creditors such that the contingency fees resulting from the application should be reduced. Appellant asserts that the bankruptcy court erred by failing to consider whether GTG's Fee Award should be reduced in light of GTG's conflict of interest in structuring the settlement. At the outset, the Court notes that Appellant does not specify the nature of GTG's alleged conflict of interest other than to point to the contingency fee arrangement, which does not, in and of itself, establish a conflict of interest. Nor does Appellant point the Court to any authority suggesting that a contingency fee arrangement necessarily establishes a conflict. With respect to the authorities Appellant does cite, the cases are readily distinguishable as they involve attorneys who failed to disclose personal financial connections between the attorney and the debtor or trustee. Here, in contrast, Appellant has not made any suggestion that GTG made personal loans to the Trustee, had a prepetition claim against the Debtor, failed to make disclosures concerning connections to the Estate, or otherwise carried any materially adverse interests to the Estate. Stated differently, Appellant has not identified an underlying conflict of interest from which the Court can infer that GTG held materially adverse interests to those of the Estate and its creditors. To the extent Appellant argues that GTG "had a duty to ensure the Settlement resulted in optimal value to the Estate and its creditors." Appellant is not foreclosed from asserting this in connection with the bankruptcy court's section 330 proceedings on remand. At this juncture, however, Appellant has not articulated a conflict of interest and, therefore, the bankruptcy court did not clearly err in finding the same. The Court also finds that the bankruptcy court did not clearly err in declining to find that GTG held a conflict of interest and negligently misrepresented the Estate's assets such that their award of compensation should be reduced or eliminated. The bankruptcy court did, however, err by not considering GTG's compensation award under 11 U.S.C. section 330. On remand, the bankruptcy court must consider GTG's compensation pursuant to section 330 and award any fees and costs it deems reasonable under that standard. A copy of the Court's Memorandum Opinion dated Sept. 27, 2018 is available at https://bit.ly/2OssuEU from Leagle.com. Fann Contracting, Inc., Appellant, represented by Blakeley E. Griffith -- bgriffith@swlaw.com -- Snell & Wilmer L.L.P., D. Kim Lough, pro hac vice, Donald L. Gaffney, pro hac vice & Bob L. Olson -- bolson@swlaw.com -- Snell & Wilmer LLP. Garman Turner Gordon LLP, Appellee, represented by Erick T. Gjerdingen, Garman Turner Gordon, Gregory E. Garman, Garman Turner Gordon & Talitha Gray Kozlowski, Garman Turner Gordon. About Grand Canyon Ranch Headquartered in Las Vegas, Nevada, Grand Canyon Ranch, LLC, filed for Chapter 11 bankruptcy protection (Bankr. D. Nev. Case No. 15-14145) on July 20, 2015. In the petition signed by Nigel Turner, manager, the Debtor estimated assets at between $1 million and $10 million and its liabilities at between $10 million and $50 million. Judge August B. Landis presides over the case. Matthew L. Johnson, Esq., at Johnson & Gubler, P.C., serves as the Debtor's bankruptcy counsel. GREAT PLAINS: Fitch Assigns 'CCC' Issuer Default Rating ------------------------------------------------------- Fitch Ratings has downgraded the following Oklahoma Development Finance Authority bonds issued on behalf of Great Plains Regional Medical Center (GPRMC). -- $31.8 million hospital revenue bonds series 2007 to 'CCC' from 'B+'. Additionally, Fitch assigns GPRMC an Issuer Default Rating (IDR) of 'CCC'. Fitch does not assign Rating Outlooks at the 'CCC' rating category. SECURITY The bonds are secured by a pledge of revenues of the obligated group and a debt service reserve fund. ANALYTICAL CONCLUSION The 'CCC' IDR and downgrade of the series 2007 revenue bond rating to 'CCC' from 'B+' indicates substantial credit risk and the possibility of default. GPRMC's weak financial position and consecutive rate covenant violations below 1.0x have resulted in an event of default under the bond documents. Bondholder remedies include the acceleration of principal for the outstanding bonds. Fitch will monitor the negotiations among the bondholders and GRPMC, taking rating action as information becomes available. The series 2007 revenue bond rating is capped at the IDR. KEY RATING DRIVERS Revenue Defensibility: 'bb'; Stand-Alone Provider in Weak Service Area The 'bb' assessment reflects GPRMC's market position as a stand-alone provider with approximate 50% market share in a weak market subject to competitive uncertainties. The assessment also reflects the potential for a weakening of GPRMC's payor mix (20% combined self-pay and Medicaid) based on weak service area characteristics. Operating Risk: 'b'; Limited Ability to Manage Operating Costs and Very High Lifecycle Needs The 'b' assessment is based on Fitch's view of GPRMC's limited ability to manage operating costs as evidenced by weak fiscal 2016 and 2017 operating EBITDA which has resulted in covenant violations in both years, and still remain uncured. Fitch expects a continuation of weak profitability as evidenced in fiscal 2018 results (unaudited). Fitch views capital requirements as very high based on GPRMC's current age of plant and expected capital spending well below depreciation. Financial Profile: 'b'; Financial Profile Remains Weak Through the Cycle GPRMC's weak financial position results from pressured operating results and diminished liquidity. A weak financial profile through the cycle reflects only a modest margin of safety and a limited capacity to navigate adverse economic conditions. Further erosion of GPRMC's financial profile could transpire during bondholder negotiations and no waiver has been issued. Liquidity is sufficient to support payment of GPRMC's Series 2007 revenue bond debt service scheduled for Dec. 1, 2018. Asymmetric Additional Risk Considerations There are no asymmetric additional risk considerations. RATING SENSITIVITIES FINANCIAL PERFORMANCE; COVENANT VIOLATIONS: Deterioration in financial performance or continued violation of financial bond covenants could pressure the current rating. Conversely, sustained financial improvements could result in positive rating action over time. CREDIT PROFILE GPMRC is a 62-licensed bed community hospital located in Elk City, Oklahoma, approximately 120 miles west of Oklahoma City. Total revenues were $44.7 million in fiscal 2017. The medical center provides acute care, specialized care, outpatient and ancillary services to residents in its primary and secondary service area across 10 counties. Revenue Defensibility Gross patient revenues during fiscal 2017 were derived primarily from Medicare (48%) and commercial and managed care (17%), with combined Medicaid and self-payors approximating 20%. GPRMC has realized a cumulative 19% Medicaid rate reduction since 2011 and remains vulnerable to additional rate cuts associated with ongoing state budget pressures. GPRMC is a stand-alone provider with a 2017 market share of about 50% in its primary service area consisting of Beckham, Dewey, Roger Mills, and Washita counties in western Oklahoma. Its competition includes providers in Oklahoma City, 120 miles from GPRMC and six local providers within distances of 15 miles to 45 miles from GPRMC. The competitors include Sayre Memorial Hospital (SMH), located within GPRMC's primary service area, two competitors within its secondary service area and three critical access hospitals. SMH shut down in August 2018 after just 13 months of reopening under new ownership and management, subsequent to its previous closure in February 2016. SMH's operations adversely influence GPRMC's utilization and its eligibility for a variety of federal support programs. GPRMC's primary service area is highly dependent on the cyclical oil and gas industry. Fitch views the service area's population declines and cyclical employment trends as factors that could weaken GPRMC's payor mix over time. Operating Risk Operating cost flexibility is weak as reflected in an operating EBITDA of about 1.1% during fiscal 2016, 2017 and 2018 (unaudited) reduced from an operating EBITDA averaging 8.6% during fiscal 2014 and 2015. Pressured margins reflect a decline in utilization and physician recruiting costs. As a result of the deterioration in its performance, GPRMC has not been in compliance with its bond covenant requirement for MADs coverage of at least 1.1x. Management reports ongoing discussions with bondholder representatives focused on operating improvements. GPRMC's unaudited fiscal 2018 results reflect its receipt of an estimated $1.36 million of governmental reimbursements in arrears for sole community hospital status dating back to July 2017 and a Medicare low-volume adjustment in arrears back to Oct. 1, 2017, as well as cost savings associated with staff reductions, modifications to physician contracts, supply chain and administrative improvements. Fitch expects fiscal 2019 performance to benefit from GPRMC's participation, effective July 1, 2018, in the CMS funded five-year rural community demonstration project (estimated $1.5 million financial benefit) and anticipated federal program support subsequent to the recent re-closure of SMH. GPRMC's future operating performance will also be influenced by local competition and potential changes to Medicaid reimbursement rates. GPRMC and its physicians maintain professional affiliations including those with The University of Oklahoma, OU Health Sciences and the Oklahoma Heart Hospital to strengthen its clinical service lines. Fitch views GPRMC's capital expenditure requirements as very high based on a 13.4 year average age of plant as of March 31, 2018 and the expectation for capital spending to remain below depreciation based on the hospital's capital spending plans. Financial Profile Cash to adjusted debt of 53% in fiscal 2018 (unaudited) reflects low liquidity in relation to leverage. Total debt outstanding of $31.8 million as of March 31, 2018 consists entirely of GPRMC's series 2007 revenue bonds. The district does not have operating leases or defined benefit pension obligations. Fitch's base case analysis incorporates GPRMC's improved fiscal 2018 (unaudited) performance followed by modest revenue and expense growth. The analysis does not reflect additional debt. Fitch expects to recalibrate its base case analysis upon receipt of the GPRMC fiscal 2018 audit and 2019 results. HELIOS AND MATHESON: Seeks Support for Reverse Stock Split ---------------------------------------------------------- Helios and Matheson Analytics Inc. announced that leading independent proxy advisory firms Institutional Shareholder Services Inc. and Glass, Lewis & Co., LLC have both recommended that Helios's stockholders vote "FOR" the proposed reverse stock split and the other proposal set forth in Helios's proxy statement for the upcoming special meeting of stockholders scheduled for Oct. 18, 2018 at 10:00 a.m. local time. ISS and Glass Lewis are widely recognized as leading independent voting and corporate governance advisory firms. Their analysis and recommendations are relied on by many major institutional investment firms, mutual funds and fiduciaries throughout North America. In its report, ISS stated, among other things, that1: "A vote FOR [the proposal to approve the reverse stock split] is warranted given that the reverse stock split may enable Helios to maintain listing of its common stock on the Nasdaq Capital Market. Furthermore, the effective increase in the number of authorized shares would enable Helios to satisfy reserve requirements under certain convertible notes." Also, in its report, Glass Lewis stated, among other things, that1: "We agree with the board that it is in the best interest of the Company to reduce the number of shares outstanding and thereby attempt to proportionally raise the per share price of the Company's common stock." Helios presented the reverse stock split proposal to regain compliance with the Nasdaq Capital Market $1.00 minimum bid price requirement. If the proposal is not approved, Helios believes that its common stock will be subject to delisting from the Nasdaq Capital Market, which would adversely impact the liquidity and marketability of its common stock. Commenting on the proxy advisors' recommendations, Theodore Farnsworth, chief executive Ooficer of Helios, stated: "The ISS and Glass Lewis recommendations are consistent with our view that maintaining Helios's listing on Nasdaq is in the best interests of Helios and its stockholders." ISS and Glass Lewis are independent proxy advisory firms and do not have any business relationship with Helios. Helios did not engage or compensate either firm for their analysis or recommendations. About Helios and Matheson Helios and Matheson Analytics Inc. -- http://www.hmny.com/-- is a provider of information technology services and solutions, offering a range of technology platforms focusing on big data, business intelligence, and consumer-centric technology. More recently, to provide greater value to stockholders, the Company has sought to expand its business primarily through acquisitions that leverage its capabilities and expertise. The Company is headquartered in New York City, has an office in Miami Florida and has an office in Bangalore India. The Company's common stock is listed on The Nasdaq Capital Market under the symbol "HMNY". Helios and Matheson reported a net loss of $150.8 million for the year ended Dec. 31, 2017, compared to a net loss of $7.38 million for the year ended Dec. 31, 2016. As of June 30, 2018, Helios and Matheson had $175.29 million in total assets, $138.7 million in total liabilities and $36.55 million in total stockholders' equity. The report from the Company's independent accounting firm Rosenberg Rich Baker Berman, P.A., in Somerset, New Jersey, on the consolidated financial statements for the year ended Dec. 31, 2017, includes an explanatory paragraph stating that the Company has suffered recurring losses from operations and negative cash flows from operating activities. This raises substantial doubt about the Company's ability to continue as a going concern. Stock May be Subject to Delisting from Nasdaq On June 21, 2018, Helios and Matheson received a deficiency letter from the Nasdaq Listing Qualifications Department notifying it that, for the prior 30 consecutive business days, the closing bid price for its common stock had closed below the minimum $1.00 per share requirement for continued listing on The Nasdaq Capital Market pursuant to Nasdaq Listing Rule 5550(a)(2). In accordance with Nasdaq Listing Rules, the Company has been given 180 calendar days, or until Dec. 18, 2018 to regain compliance with the Minimum Bid Price Requirement. HOSPITALITY INTEGRATED: Taps C&D Consulting as Accountant --------------------------------------------------------- Hospitality Integrated Services, Inc., received approval from the U.S. Bankruptcy Court for the District of Arizona to hire C&D Consulting, Inc. as its accountant. C&D will provide accounting services to the Debtor for an hourly fee of $135. The hourly rate for clerical time is $80. Additional charges may apply for priority services and extraordinary requests. Deborah Buker, the firm's president and the accountant designated to provide the services, does not hold any interest adverse to the Debtor, according to court filings. C&D can be reached through: Deborah Buker C&D Consulting, Inc. P.O. Box 391 Mesquite, NV 89024 Phone: 480-688-3747 / 480-862-9917 Fax: 877-580-1924 About Hospitality Integrated Services Hospitality Integrated Services, Inc., filed a Chapter 11 petition (Bankr. D. Ariz. Case No. 18-08776) on July 24, 2018. In the petition signed by Daniel Taft, Sr., president and CEO, the Debtor estimated assets and liabilities of at least $50,000. The Debtor is represented by Douglas B. Price, Esq., of the Law Offices of Douglas B. Price, P.C. HUDSON TECH: Enters Into Extension Letter Related to Waiver ----------------------------------------------------------- Hudson Technologies, Inc. on Oct. 15, 2018, disclosed that it has entered into an Extension Letter related to its interim Waiver and Second Amendment to its Term Loan Credit and Security Agreement. The Extension Letter extends to November 14, 2018, the delivery deadline for the Company to provide the Term Loan Lenders with a certificate setting forth the total leverage ratio as of the four fiscal quarter period ending Sept. 30, 2018. Additional details regarding the Extension Letter can be found in the Form 8-K filed with the Securities and Exchange Commission Monday, October 15, 2018. Timing of 10-Q Filing Discussions are continuing with the term loan lenders with respect to an amendment of the Term Loan's existing total leverage ratio financial covenant and certain other terms. As a result of potential balance sheet impact of foregoing discussions, the Company has not been in a position to file its Quarterly Report on Form 10-Q for the quarter ended June 30, 2018. The Company is working diligently to resolve these matters and management believes that the Company will be in a position to file the aforementioned 10-Q by Nov. 14, 2018. Hudson has submitted a Listing Compliance Plan to Nasdaq in response to the August 15, 2018 deficiency letter the Company received from Nasdaq. About Hudson Technologies Hudson Technologies, Inc. -- http://www.hudsontech.com/-- is a provider of innovative and sustainable solutions for optimizing performance and enhancing reliability of commercial and industrial chiller plants and refrigeration systems. Hudson's proprietary RefrigerantSide [(R)] Services increase operating efficiency, provide energy and cost savings, reduce greenhouse gas emissions and the plant's carbon footprint while enhancing system life and reliability of operations at the same time. RefrigerantSide [(R)] Services can be performed at a customer's site as an integral part of an effective scheduled maintenance program or in response to emergencies. Hudson also offers SMARTenergy OPS [(R)], which is a cloud-based Managed Software as a Service for continuous monitoring, Fault Detection and Diagnostics and real-time optimization of chilled water plants. In addition, the Company sells refrigerants and provides traditional reclamation services for commercial and industrial air conditioning and refrigeration uses. IEA ENERGY: Moody's Assigns B3 Corp. Family Rating, Outlook Stable ------------------------------------------------------------------ Moody's Investors Service assigned a B3 Corporate Family Rating and a B3-PD Probability of Default Rating to IEA Energy Services, LLC. At the same time, Moody's assigned B2 ratings to the company's proposed senior secured first lien credit facilities. The outlook for the ratings is stable. Proceeds from the term loan will be used to (1) refinance bridge financing that was used to acquire Consolidated Construction Solutions I, LLC and (2) acquire William Charles Construction. The two acquisitions will have been completely debt funded. "The company's still sizeable concentration in wind farm construction, which faces a steep demand decline in 2021 as tax credits expire, and its acquisitive growth strategy are only partially mitigated by modest financial risk," according Harold Steiner, Moody's lead analyst. The following rating actions were taken by Moody's for IEA Energy Services, LLC: Ratings assigned: Corporate Family Rating, at B3 Probability of Default Rating, at B3-PD $50 million Gtd Senior Secured First Lien Revolver, at B2 (LGD3) $300 million Gtd Senior Secured First Lien Term Loan, at B2 (LGD3) Speculative Grade Liquidity Rating, at SGL-2 Outlook actions: Outlook, assigned at stable RATINGS RATIONALE IEA Energy Services, LLC's B3 Corporate Family Rating broadly reflects the company's inherent revenue volatility due to its dependence on the Renewable Energy Production Tax Credit (PTC) and its resulting aggressive acquisition strategy as it seeks to diversify its operations. Moody's expects the company's growth to be strong over the next two years, but subsequently decline materially as the expiration of the subsidy dents demand. IEA's acquisition of CCS and William Charles will help to diversify revenue, but are nonetheless concentrated in cyclical end markets and still leave its customer base quite concentrated. Moody's anticipates that IEA will continue to pursue acquisitions, likely slowing the pace of deleveraging and creating ongoing integration risk. The rating is supported however by the company's entrenched position in the wind power construction market and its modest debt burden. Moody's-adjusted debt-to-EBITDA of only 4.5x (as of June 30, 2018, pro forma the acquisition of CCS and William Charles) is relatively low compared to similar construction companies in the rating category, and should provide the firm with some flexibility to deal with the projected performance decline in 2021. The stable outlook reflects Moody's expectation that IEA will grow its revenues by approximately 30% through 2019, maintain adjusted EBITDA margins in the 9 to 10% range, and will generate healthy free cash flow after mandatory debt service in the $20 to $40 million dollar range. The outlook also assumes that the company will successfully integrate its recent acquisitions. The ratings could be upgraded if the company is able to successfully diversify its operations such that the expiration of the PTC is expected to have only a modest impact on performance, or if projected annual capacity additions post-PTC are sustained at or above 7.0 GW (2017 actual additions were 7.0 GW). Quantitatively, Moody's believes this would be reflected by post-PTC debt-to-EBITDA sustained at or below 3.0x and FCF-to-debt sustained above 5%. The ratings could be downgraded if the company encounters problems integrating acquisitions, experiences lower than expected revenue and earnings growth, or if liquidity deteriorates. Quantitatively, Moody's believes this would be reflected by debt-to-EBITDA sustained above 5.0x or FCF-to-debt below 2.5%. The principal methodology used in these ratings was Construction Industry published in March 2017. Headquartered in Indianapolis, IN, IEA Energy Services, LLC is an engineering, procurement, and construction company that primarily serves the wind farm construction (42% of pro forma revenue), transportation (26%), and rail end markets (13%). IEA is a subsidiary of Infrastructure & Energy Alternatives, Inc. (NASDAQ: IEA), which is majority owned by Oaktree Capital Management on a fully diluted basis. Pro forma revenue as of June 30, 2018 is approximately $1.077 billion. JONES ENERGY: In Talks with Debt Holders on Potential Transaction ----------------------------------------------------------------- Jones Energy, Inc., and its advisors have been engaged in discussions with certain beneficial holders of the Company's funded debt and equity regarding a potential transaction addressing the Company's debt and equity. Since February 2018, the Holders have been party to that certain cooperation agreement, pursuant to which they have, among other things, pledged to negotiate with the Company collectively through a group of those Holders regarding any transaction involving the Company's 6.75% senior notes due 2022 and 9.25% senior notes due 2023. Following execution of the Cooperation Agreement, the Holders made a proposal to the Company in April 2018 based on publicly available information which, among other things, contemplated a partial equitization of the 2022 Notes and 2023 Notes and potential issuance of additional second lien debt. In August 2018, to facilitate discussions between the Company and the Holders regarding a potential transaction, the Company and various Holders each entered into a confidentiality agreement. Pursuant to the NDAs, the Company agreed to disclose publicly after a specified period if certain conditions were met that the Company and the Holders had engaged in negotiations concerning a potential transaction and information regarding those negotiations. On Oct. 15, 2018, the Company filed with the Securities and Exchange Commission a Current Report on Form 8-K that included an an exhibit containing (a) certain financial and operational information provided to the Holders under the NDAs; (b) the material terms of a proposed transaction provided by the Company to the Holders; and (c) a counterproposal of material terms of a proposed transaction provided by the Holders to the Company. No agreement has been reached with respect to the above discussions. Further, the DrillCo that appeared imminent on the date of the accompanying presentation did not close. The Company has chosen to defer its pursuit of a DrillCo financing. A full-text copy of the discussion materials provided in connection with discussions with Holders is available for free at: https://is.gd/LcOIZ2 About Jones Energy Austin, Texas-based Jones Energy, Inc. -- http://www.jonesenergy.com/-- is an independent oil and natural gas company engaged in the development and acquisition of oil and natural gas properties in the Anadarko basin of Oklahoma and Texas. The Company's Chairman, Jonny Jones, founded its predecessor company in 1988 in continuation of his family's long history in the oil and gas business, which dates back to the 1920s. Jones Energy reported a net loss attributable to common shareholders of $109.41 million in 2017, a net loss attributable to common shareholders of $45.22 million in 2016, and a net loss attributable to common shareholders of $2.38 million in 2015. As of June 30, 2018, Jones Energy had $1.85 billion in total assets, $1.26 billion in total liabilities, $91.53 million in series A preferred stock, and $504.93 million in total stockholders' equity. NYSE Noncompliance On March 23, 2018, the New York Stock Exchange notified the Company that it was noncompliant with certain continued listing standards because the price of the Company's Class A common stock over a period of 30 consecutive trading days had fallen below $1.00 per share, which is the minimum average closing price per share required to maintain a listing on the NYSE. The Company now has a six-month cure period to regain compliance, which expires on Sept. 23, 2018. JOSE DIMAS VALADAO: Triple V Must Pay LOLI $$852K in Damages ------------------------------------------------------------ Magistrate Judge Stanley A. Boone granted Plaintiff Land O'Lakes, Inc.'s motion for summary judgment in the case captioned LAND O'LAKES, INC., Plaintiff, v. TRIPLE V. DAIRY, et al., Defendants, Case No. 1:18-cv-00460-SAB (E.D. Cal.). The action arises out of a March 2011 credit application submitted by Triple V Dairy to Calva Products, LLC, a subsidiary of Plaintiff, to purchase milk replacer products. The credit agreement included the personal guaranty that if Triple V Dairy defaulted, Jose Dimas Valadao, David G. Valadao, and Edward G. Valadao, Jr, would pay upon demand. On April 3, 2018, Plaintiff filed the action alleging that, as of April 1, 2018, Triple V Dairy owed $688,825.57 in unpaid invoices and interest of $103,810.79, plus finance charges accruing at the rate of $342.65 per day. Plaintiff brought the action against Defendant Triple V Dairy for action for the price and breach of contract; against Defendants David G. Valadao and Edward G. Valadao for enforcement of guaranty; and against Defendants David G. Valadao, Terra Valadao, Edward G. Valadao, Jr. and April Valadao for vicarious liability seeking monetary damages. On March 28, 2018, Jose Dimas Valadao and his wife, Mary Jane Valadao, filed a Chapter 11 Bankruptcy Petition in the United States Bankruptcy Court for the Eastern District of California. As a result, Plaintiff's ability to pursue claims against and recovery from Jose Dimas Valadao and Mary Jane Valadao have been stayed. Plaintiff contends that there is no dispute that Defendant Triple V Dairy ordered and accepted the Product, and fed the Product to their calves. Plaintiff argues that the amount due is not disputed nor is the fact that Calva assigned its claims against Triple V Dairy to Plaintiff. Plaintiff asks for judgment to be entered against Defendant Triple V Dairy in the amount of $823,817.58 plus finance charges at the rate of $342.65 per day from July 1, 2018 to the date of entry of judgment. Further, Plaintiff states that Defendants David Valadao and Edward Valadao signed as guarantor and are personally liable for the amount due. Finally, Plaintiff contends that Defendant Triple V Dairy is a general partnership and all partners are jointly and severally liable for the obligations of the partnership. Plaintiff has presented undisputed evidence to prove that Triple V Dairy did not pay for the Products that were ordered and received under the terms of the Credit Agreement. The credit terms state that payment is due thirty days from receipt of invoice. It is undisputed that Triple V Dairy received Products from February 7, 2017 through September 6, 2017, without paying the invoices. Calva has requested that the debt be paid without the debt being satisfied. Triple V Dairy has defaulted on the agreement. Calva has repeated requested that the Valadaos pay Triple V Dairy's account debt for the products, but the Valadaos have not paid the debt. Plaintiff has proved that Defendant David G. Valadao and Edward G. Valadao, Jr. have failed to perform as guaranteed in the Credit Agreement. Plaintiff has met its burden of demonstrating that there are no genuine issues of material fact that David G. Valadao and Edward G. Valadao agreed to guaranty the credit of Triple V Dairy and have failed to perform pursuant to the agreement. Plaintiff's motion for summary judgment against David G. Valadao and Edward G. Valadao on the guaranty claim is granted. Plaintiff has also presented evidence that David G. Valadao, Terra Valadao, Edward G. Valadao, Jr., and April Valadao are general partners of Triple V Dairy. Specifically, the defendants admitted as much in the answer to the complaint, and on the stipulation filed in the State Court for appointment of a receiver. As such they are jointly and severally liable for Triple V Dairy's obligation to pay the invoices for the Products. Plaintiff's request to find David G. Valadao, Terra Valadao, Edward G. Valadao, Jr., and April Valadao jointly and severally liable for Triple V Dairy's debt is granted. Triple V Dairy owes Plaintiff $688,825.57 for Products. Pursuant to the agreement of the parties, Defendants agreed to pay finance charges at the annual percentage rate of 18 percent until payment is received in full. As of July 1, 2018, the balance due under the invoices for the Products had accrued finance charges in the amount of $134,992.01, and have continued to accrue at the rate of $342.65 per day. Interest of $29,125.25 has accrued from July 1, 2018 through the date of this decision. Accordingly, the Court awards damages of $852,942.83 in this matter. A copy of the Court's Order dated Sept. 26, 2018 is available at https://bit.ly/2EfXiDO from Leagle.com. Land O'Lakes, Inc., Plaintiff, represented by Seth D. Hilton -- seth.hilton@stoel.com -- Stoel Rives, LLP & Jonathan Arthur Miles -- jonathan.miles@stoel.com -- Stoel Rives LLP. Triple V. Dairy, David G. Valadao, Terra Valadao, Edward G. Valadao, Jr. & April Valadao, Defendants, represented by Riley C. Walter , Walter Wilhelm Bauer a Professional Corporation. Jose Dimas Valadao and Mary Jane Valadao filed for Chapter 11 bankruptcy protection (Bankr. E.D. Cal. Case No. 18-11166) on March 29, 2018. Riley C. Walter, Esq., serves as the Debtor's bankruptcy counsel. KAPPA DEVELOPMENT: Taps Russell Gill as Special Counsel ------------------------------------------------------- Kappa Development & General Contracting, Inc., received approval from the U.S. Bankruptcy Court for the Southern District of Mississipi to hire Russell Gill, Esq., as special counsel. Mr. Gill will represent the Debtor in a lawsuit it filed against the City of Biloxi and three others (Civil Action No. A2402-14-cv-00176) in the Circuit Court of Harrison County, Mississippi. The attorney will be paid a contingency fee of 30% of the disputed gross amount collected without suit filed; 30% of the disputed gross amount collected once suit is filed through the trial court or board; or 30% of the disputed gross amount on appeal to the appellate court with a blended hourly rate. In a court filing, Mr. Gill disclosed that he has no connection with the Debtor or any of its creditors. Mr. Gill maintains an office at: Russell S. Gill, Esq. 638 Howard Avenue Biloxi, MS 39530-4310 Phone: (228) 447-4105 About Kappa Development Kappa Development & General Contracting, Inc., based in Gulfport, Miss., filed a Chapter 11 petition (Bankr. S.D. Miss. Case No. 17-51155) on June 12, 2017. In the petition signed by Randy Blacklidge, president, the Debtor estimated $1 million to $10 million in both assets and liabilities. The Hon. Katharine M. Samson presides over the case. Nicholas Van Wiser, Esq., at Byrd & Wiser, serves as the Debtor's bankruptcy counsel. KENMETAL LLC: Seeks Authorization to Use Cash Collateral -------------------------------------------------------- Kenmetal, LLC, seeks authorization from the U.S. Bankruptcy Court for the Northern District of Georgia to use cash collateral. The proposed 14-week Budget shows total expenses of approximately $518,741 through December 24, 2018. In the course of operating its business, the Debtor incurs certain operating expenses which are necessary for the continued operation of such businesses. The Debtor also generates accounts receivable and proceeds, which may constitute cash collateral in which Lenders may assert an interest. All the assets of the Debtor are pledged to Metro City Bank to secure a promissory note in the outstanding principal amount of $1,493,635. Metro City Bank holds a first mortgage on the Facility. The Debtor claims that these Lenders also assert interests in its personal property: Gemino Heathcare Finance, LLC; Langsam Health Services, LLC, d/b/a Omnicare, Inc, Omnicare of Oklahoma, Omnicare of Tulsa ("Omnicare"); and First Commercial Bank. However, the Debtor believes that its obligations to Gemino have been satisfied and that First Commercial Bank's security interest has priority over Metro City and Omnicare. Additionally, the Debtor believes that First Commercial Bank's security interests are crosscollateralized among various entities related to the Debtor, to wit, Marsh Pointe Management LLC, Ban NH LLC, Living Center, LLC, Oak Lake LLC, Senior NH, LLC, Harrah Whites Meadows Nursing LLC, Meeker North Dawson Nursing, LLC and MCL Nursing LLC. Metro City Bank, First Commercial Bank and Omnicare assert liens upon and security interests against all assets of the Debtor, including accounts receivable owned by the Debtor, and the proceeds thereof, and against Debtor's inventory, equipment and fixtures. As adequate protection for any interest Lenders may have in cash collateral, the Debtor proposes: A. That Lenders are granted a security interest in and liens upon Debtor's post-petition accounts receivable and proceeds to the same extent and priority as its pre-petition lien and interest in its pre-petition collateral; B. Continuation of the lien and security interest held by Lender in its pre-petition Collateral; and C. Provision of Debtor's monthly operating reports are required by the U.S. Trustee and filed with the Court. A full-text copy of the Debtor's Motion is available at http://bankrupt.com/misc/ganb18-65903-3.pdf About Kenmetal LLC Kenmetal, LLC, operates a 50-bed skilled nursing facility known as the Kenwood Manor located at 502 West Pine Avenue, Enid, Oklahoma. Kenmetal sought protection under Chapter 11 of the Bankruptcy Code (Bankr. N.D. Ga. Case No. 18-65903) on Sept. 21, 2018. In the petition signed by Christopher F. Brogdon, managing member, the Debtor estimated both assets and liabilities of less than $10 million. The Debtor retained Theodore N. Stapleton, Esq., of Theodore N. Stapleton, P.C., as counsel. LAT REALTY: Taps David J. Harris as Legal Counsel ------------------------------------------------- LAT Realty, LLC, seeks approval from the U.S. Bankruptcy Court for the Middle District of Pennsylvania to hire the Law Office of David J. Harris as its legal counsel. The firm will assist the Debtor in the preparation of a plan of reorganization; participate in negotiation with its creditors; represent the Debtor in contested or adversarial matters; and provide other legal services related to its Chapter 11 case. David Harris, Esq., the attorney who will be handling the case, disclosed in a court filing that he and his firm do not hold any interest, which may be affected by their representation of the Debtor. The firm can be reached through: David J. Harris, Esq. Law Office of David J. Harris 69 Public Square, Suite 700 Wilkes-Barre, PA 18701 Tel: 570 823-9400 Fax: 570 208-1400 E-mail: dh@lawofficeofdavidharris.com About LAT Realty LAT Realty, LLC, is a privately-held operator of nonresidential buildings. LAT Realty sought protection under Chapter 11 of the Bankruptcy Code (Bankr. M.D. Pa. Case No. 18-04206) on Oct. 4, 2018. In the petition signed by Linda Teberio, managing member, the Debtor estimated assets of less than $500,000 and liabilities of less than $500,000. Judge John J. Thomas presides over the case. LEGACY RESERVES: Files Amended Prospectus on $500M Securities Sale ------------------------------------------------------------------ Legacy Reserves Inc. has filed a first amendment to its Form S-3 registration statement relating to the sale from time to time of up to $500,000,000 of its common stock, preferred stock, debt securities, depositary shares, warrants, and rights in one or more offerings of one or more classes or series. Legacy Reserves LP, and Legacy Reserves Finance Corporation as co-issuer, may offer and sell debt securities from time to time in one or more offerings, which will be fully and unconditionally guaranteed by Legacy Reserves Inc. and Legacy Reserves GP, LLC. Each time securities are offered, the Company will provide a prospectus supplement that will contain specific information about the terms of the offering and the offered securities. A prospectus supplement may also add, update or change information contained in this prospectus. The Company may sell these securities directly or through agents, underwriters or dealers, or through a combination of these methods. The prospectus supplement will list any agents, underwriters or dealers that may be involved and the compensation they will receive. The Company's common stock is listed on the NASDAQ Global Select Market under the symbol "LGCY." A full-text copy of the Form S-3/A is available for free at: https://is.gd/wXrEII About Legacy Reserves LP Legacy Reserves LP -- http://www.LegacyLP.com/-- is a master limited partnership headquartered in Midland, Texas, focused on the development of oil and natural gas properties primarily located in the Permian Basin, East Texas, Rocky Mountain and Mid-Continent regions of the United States. Legacy Reserves reported a net loss attributable to unitholders of $72.89 million in 2017, a net loss attributable to unitholders of $74.82 million in 2016, and a net loss attributable to unitholders of $720.5 million in 2015. As of June 30, 2018, Legacy Reserves had $1.51 billion in total assets, $1.76 billion in total liabilities and a total partners' deficit of $250.98 million. * * * As reported by the TCR on Oct. 4, 2018, S&P Global Ratings raised its issuer credit rating on Legacy Reserves L.P. to 'CCC' from 'SD' (selective default). The outlook is negative "The upgrade follows the completion of the company's debt exchange, which we viewed as distressed, and our assessment that the company still faces liquidity challenges over the next 12 months." Moody's Investors Service affirmed Legacy Reserves LP's Corporate Family Rating (CFR) at 'Caa2' and its senior unsecured notes rating at 'Caa3'. Legacy's 'Caa2' CFR reflects the company's high leverage, weak liquidity and significant debt refinancing risk, as reported by the TCR on Jan. 26, 2018. LINDEN PONDS: Fitch Rates $117.3MM Series 2018 Revenue Bonds 'BB' ----------------------------------------------------------------- Fitch Ratings has assigned a 'BB' rating to the following bonds issued by Massachusetts Development Finance Agency on behalf of Linden Ponds, Inc. (LP): -- $117.3 million revenue bonds (Linden Ponds, Inc. Facility), series 2018. Bond proceeds are expected to be used to refund a majority of LP's outstanding debt, to fund a debt service reserve fund (DSRF), and to pay costs of issuance. The bonds are scheduled to sell via negotiation the week of Oct. 29. The Rating Outlook is Stable. SECURITY The bonds are secured by a pledge of gross revenues, a first mortgage on the property and a DSRF. Debt service payments on the bonds are senior to any subordinate debt obligations and annual management fees, which enhances senior bondholder security. KEY RATING DRIVERS CONSTRAINED LONG-TERM LIABILITY PROFILE: The 'BB' rating reflects LP's long-term liability profile, which is characterized by a manageable debt burden and hindering subordinate debt structure. Pro forma maximum annual debt service (MADS) equates to 13.9% of fiscal 2017 revenues, which compares favorably to Fitch's below-investment-grade (BIG) median of 16.5%. However, LP will have approximately $28.9 million outstanding in subordinate zero-coupon bonds, which are payable annually from available excess cash flow and will limit LP's ability to improve its liquidity position moving forward. WEAK LIQUIDITY: The 'BB' rating also incorporates LP's weak liquidity position as evidenced by its Fitch-calculated $16.5 million in unrestricted cash and investments at the eight-month interim period (ending Aug. 31, 2018), which translates into 108 days cash on hand (DCOH), 12.1% cash to debt, and 2.1x cushion ratio. However, while weak, Fitch expects LP's overall liquidity to improve over the next two years as a portion of the initial entrance fees from its new independent living units (ILUs) improve its unrestricted cash and investment position. Based upon a third-party forecast, LP's liquidity position is expected to improve to $30 million in fiscal 2019, which would translate into 193 DCOH, 27% cash to debt, and 3.8x cushion ratio. SOLID DEMAND: LP's attractive pricing and favorable reputation has translated into solid demand in recent years. Over the last three fiscal years, LP has averaged occupancy of 95.2% in its ILUs, 98.1% in its memory-care units (MCUs), and 94.2% in its skilled-nursing facility (SNF) beds. Additionally, this strong census has been maintained during the eight-month interim period despite the additional new ILUs and assisted-living units (ALUs) being brought online. STRONG OPERATIONS: LP's solid census and effective expense controls has produced strong historical operations and coverage levels. Over the last three fiscal years, LP has averaged a 95.6% operating ratio, 13.4% net operating margin (NOM), and 23.4% NOM-adjusted (NOMA), which all compare favorably to Fitch's BIG medians. Additionally, LP's solid operations and consistent cash flow levels have produced an average 1.9x pro forma senior MADS coverage and 1x pro forma senior revenue only coverage over the last three fiscal years, which are both better than Fitch's BIG medians. RATING SENSITIVITIES ILU PROJECT FILL-UP: Fitch's rating incorporates the assumption that Linden Pond's will successfully fill its remaining independent living units, enhancing both its operational performance and liquidity position. An inability to do so could pressure the rating. LIQUIDITY/OPERATIONAL DETERIORATION: Any operating pressures that negatively impact coverage levels or Linden Pond's liquidity position may put negative pressure on the rating. CREDIT PROFILE LP is a not-for-profit corporation established in 2002 for the purpose of operating a continuing care retirement community (CCRC). LP operates a Type-C CCRC, which is located on a 108-acre campus in Hingham, MA, approximately 17 miles southeast of Boston, MA. The campus, which opened in 2004, consists of: 1,086 ILUs, 22 ALUs, 44 MCUs, and 66 SNF beds. LP's ILUs includes its recently completed Willard Square building, which was completed in June 2018 and added 104 new ILUs to its campus. Currently, LP only offers 90% refundable fee-for-service (Type-C) contracts to its residents. Additionally, in the spring of 2018, LP repurposed and converted 22 of its short-term rehabilitation units to dedicated ALUs. LP's 44 MCUs are dedicated to support its memory-impaired residents and are licensed as Resident Care Facility Level IV units. In 2007, LP issued approximately $156 million in tax-exempt bonds for initial development of its campus. However, LP struggled to fill and maintain sales and census during 2008-2010 as a result of the challenging real-estate and capital market conditions during that time period. As a result, LP negotiated with its bondholders and other creditors to restructure its debt. However, LP was unable to secure the necessary approval of bondholders, and filed for voluntary chapter 11 bankruptcy in 2011. While in bankruptcy, LP's plan for reorganization and restructuring was accepted by bondholders and LP emerged from bankruptcy in the fall of 2011. As part of that restructuring, Hingham Campus, which currently owns the CCRC facility and leases it to LP, became a wholly owned subsidiary of LP. LP proceeded to amend the 2011 financing agreements following issuance of its series 2016 bonds. LP's sole member is National Senior Campuses, Inc. (NSC), a not-for-profit organization that is committed to providing housing, healthcare, and other related services to seniors. NSC provides governance oversight and strategic planning for 16 CCRCs throughout the U.S., including LP. Additionally, LP contracted Erickson Living Management (ELM) to provide management services. As part of this agreement, LP pays ELM annual base and incentive fees, which totaled $2.3 million in fiscal 2017. ELM's management fees are subordinate to debt service. In fiscal 2017, LP reported total operating revenues of approximately $57 million. LONG-TERM LIABILITY PROFILE Following the issuance of the $117 million series 2018 bonds, LP is expected to refund all its senior debt with bond proceeds, with the exception of its subordinate series 2011B bonds. In conjunction with the closing of its series 2018 bonds, LP is expected to call its temporary debt issued in 2016 with initial entrance fees from its ILU expansion project. Therefore, post issuance, LP will only have the $117 million in series 2018 bonds and $28 million outstanding in series 2011B bonds. The senior 2018 bonds are expected to be fixed-rate and have a pro forma MADS of $7.9 million. The $7.9 pro forma MADS equates to a manageable 13.9% of fiscal 2017 revenues, which compares favorably to Fitch's BIG median of 16.5%. Fitch expects this metric to improve in the coming years as the new revenues from its recent ILU expansion project enhance its revenue base. Additionally, debt to net available was 9.8x in fiscal 2017, which is on par with the 'BIG' median of 9.8x. Debt to net available is also expected to improve following the redemption of a majority of its temporary debt at closing of the series 2018 bond issuance. LP's subordinate series 2011B bonds are zero coupon obligations that mature in 2056. Per LP's audited financial statements, the bonds carry a 6.13% net discount rate, which equates to a discount of approximately $26 million. In fiscal 2017, LP reported approximately $2.7 million in bonds payable related to the series 2011B bonds. Beginning Dec. 31, 2018, the series 2011B bonds will be payable annually from any available excess cash flow, which is defined as net income available for debt service, less routine capital needs and debt service on all senior debt. Depending on its annual DCOH at the time, LP will use anywhere from 30% - 50% of its net cash flow to support debt payments of its subordinate debt. This will hinder its ability to meaningfully improve its liquidity position over the longer term. The presence of the subordinate debt that seizes excess cash flow is a credit negative and is reflected in the 'BB' rating. SOLID DEMAND Despite historical census pressures and the presence of competitors, LP has demonstrated strong demand across all levels of care in recent years. Over the last three fiscal years, LP averaged a strong 95.2% in its ILUs, 98.1% in its MCUs, and 94.2% in its SNF beds. Furthermore, this strong census has been maintained during the eight-month interim period despite the additional new ILUs and ALUs being brought online. Through the interim period, LP has averaged 92.3% in its ILUs, 91.9% in its ALUs, 94.7% in its MCUs, and 94.2% in its SNF beds. Fitch attributes LP's strong census to its solid market reputation, attractive service offerings, and its favorable residency contracts. WEAK LIQUIDITY LP's liquidity position has remained weak in recent years as evidenced by its $14.7 million in unrestricted cash and investments in fiscal 2017, which translates into 100 DCOH, 10.2% cash to debt, and 1.9x cushion ratio. All three metrics remains well below Fitch's BIG medians of 292 DCOH, 32.1% cash to debt, and 4.5x. Despite being weak, LP's liquidity position is expected to improve over the next two years as a portion of the initial entrance fees from its new ILUs are expected to flow into its unrestricted cash and investment position. Current third-party forecasts illustrate unrestricted cash and investments improving 108% to approximately $30 million by the end of fiscal 2019. This $30 million would translate into a healthier 193 DCOH, 26.7% cash to debt, and 3.8x which remains sufficient to support its 'BB' rating level. However, any further improvement is expected to be limited moving forward by the presence of its subordinate debt, but is expected to remain adequate for its 'BB' rating level. STRONG OPERATIONAL PERFORMANCE LP's solid census, strong expense management practices, and consistent cash flow levels have produced strong operations and coverage levels in recent years. In fiscal 2017, LP had a 94.6% operating ratio, 14.7% NOM, and 23.4% NOMA which all compare favorably to Fitch's BIG medians of 101.6%, 5.1%, and 18.3%, respectively. Additionally, in fiscal 2017 LP produced a 1.9x pro forma senior MADS coverage and 1.1x pro forma senior revenue only coverage which are both higher than Fitch's BIG medians of 1.3x and 0.8x, respectively. Over the last four fiscal years, LP's total expenses have increased only 0.8% and its cash flow from turnover units has averaged a solid $7.5 million. Furthermore, LP's recently completed ILU expansion project is expected to be accretive to its financial and operating profiles. The new revenues from the 104 ILUs are expected to enhance its total revenue base and cash flow support. Current third-party forecasts illustrate an average pro forma senior MADS coverage of 2.1x and pro forma senior revenue only coverage of 1.2x over the next five fiscal years. Excluding management fees, senior MADS coverage is expected to average 2.4x over the next five fiscal years. ONGOING CAPITAL PROJECT In fiscal 2016, LP began construction on its most recent ILU expansion project. The project was completely funded by debt proceeds and entailed adding a seven-story building, known as Willard Square, containing 104 units. The project was completed in June 2018, with residents beginning to occupy the new units in April 2018. LP is still in the process of obtaining certificates of occupancy for 14 units, which is expected to occur in October 2018, following completion of certain parking lot improvements. Currently, 77 ILUs, or 74% of the units have been occupied. Additionally, another ten prospective residents have put in a deposit equal to 10% of the initial entrance fee and are expected to begin occupying their units by end of the calendar year. The project is expected to generate approximately $47 million in initial entrance fees, which, together with a portion of the series 2018 bond proceeds, will be used to pay off the series 2016 bonds and to improve LP's overall liquidity position. Overall, the project is viewed favorably and is expected to be accretive to LP's operating and financial profiles. LP's initial campus facilities plan called for an additional 700 ILUs and another continuing care building to house additional ALUs. While LP's long-term plan incorporates these additional units, there are currently no plans to execute on them. Given this, Fitch is not factoring in any additional capital projects or debt plans in its analysis. However, Fitch believes there is limited debt capacity at the current rating level and any additional debt, without a material improvement in liquidity or cash flow, could pressure the rating. LITTLE RIVER: Taps H2C Analytics as Investment Banker ----------------------------------------------------- Little River Healthcare Holdings, LLC, seeks approval from the U.S. Bankruptcy Court for the Western District of Texas to hire H2C Analytics, LLC, as its investment banker. The firm will advise the company and its affiliates as to strategy and tactics in connection with the negotiation of a potential transaction or restructuring, and will provide other financial services related to their Chapter 11 cases. H2C will be compensated according to this fee arrangement: (a) An initial retainer of $100,000 to be paid with the execution of the engagement agreement. (b) A monthly retainer of $25,000 to be credited against any "success fees" up to an amount equal to but not exceeding $50,000. (c) A success fee of $50,000 due and payable upon completion of a transaction or restructuring with Monroe Capital Management Advisors, LLC or any of its affiliates, successors and assigns. (d) A success fee of 2% of consideration subject to (i) a minimum of $300,000 due and payable upon approval of a transaction or restructuring with a party other than Monroe Capital or any of its affiliates, successors and assigns for substantially all of the Debtors' assets; and (ii) a minimum fee of $25,000 if a portion of the Debtors' assets are sold to a party other than Monroe Capital, or any of its affiliates, successors and assigns. (e) In no event shall the aggregate fees due and payable to H2C be less than $150,000. Michael Lane, a managing director of H2C, disclosed in a court filing that his firm is "disinterested" as defined in Section 101(14) of the Bankruptcy Code. H2C can be reached through: Michael R. Lane H2C Analytics, LLC 311 South Wacker Drive, Suite 5425 Chicago, IL 60606 Phone: 312.508.4200 About Little River Little River Healthcare Holdings, LLC and its subsidiaries operate two rural hospitals -- one in Rockdale, Texas, and the other in Cameron, Texas. They also currently operate imaging centers, surgery centers, physical rehabilitation centers, and physician practices, most of which operate in the Central Texas market. Little River and its subsidiaries sought protection under Chapter 11 of the Bankruptcy Code (Bankr. W.D. Tex. Case Nos. 18-60525 to 18-60532) on July 24, 2018. In the petitions signed by CRO Ronald Winters, Little River estimated assets of less than $50,000 and liabilities of $10 million to $50 million. Judge Ronald B. King presides over the case. The Debtor tapped Waller Lansden Dortch & Davis, LLP, as legal counsel; Duane Morris, LLP, as special counsel; Harney Management Partners, LLC, as its healthcare consultant; and Epiq Bankruptcy Solutions, LLC, as claims, noticing and balloting agent. The Office of the U.S. Trustee appointed an official committee of unsecured creditors. The Committee retained Norton Rose Fulbright US LLP as its legal counsel; and CBIZ Accounting, Tax and Advisory of New York, LLC, as its financial advisor. The Office of the U.S. Trustee also appointed Susan N. Goodman as patient care ombudsman in the Debtors' cases. MEGHA LLC: Gets Interim Approval to Hire Gold Weems as Counsel -------------------------------------------------------------- Megha, LLC, obtained interim approval from the U.S. Bankruptcy Court for the Western District of Louisiana to hire Gold, Weems, Bruser, Sues & Rundell, APLC, 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. No Gold Weems attorney holds or represents any interest adverse to the Debtor, according to court filings. The hearing to consider final approval of Gold Weems' employment is scheduled for Oct. 23, 2018. The firm can be reached through: Bradley L. Drell, Esq. Heather M. Mathews, Esq. B. Gene Taylor, III, Esq. P.O. Box 6118 Alexandria, LA 71307-6118 Telephone: (318) 445-6471 Facsimile: (318) 445-6476 E-mail: bdrell@goldweems.com About Megha LLC Megha, LLC, filed as a Single Asset Real Estate as defined in 11 U.S.C. Sec. 101(51B). The company has full ownership of lots 4 and 5 of Spanish Town Center known as the Hampton Inn and Suites New Iberia with an appraisal value of $6.6 million. Megha, LLC, filed a Chapter 11 petition (Bankr. W.D. La. Case No. 18-51147) on Sept. 11, 2018. In the petition signed by Jay Sachania, manager, the Debtor disclosed $8,137,429 in assets and $6,529,035 in liabilities. The case is assigned to Judge John W. Kolwe. Bradley L. Drell, Esq., at Gold, Weems, Bruser, Sues & Rundell, serves as counsel to the Debtor. MEREDITH CORP: S&P Rates New $1.595BB Term Loan Due 2025 'BB' ------------------------------------------------------------- S&P Global Ratings assigned its 'BB' issue-level rating and '1' recovery rating to Des Moines, Iowa-based media company Meredith Corp.'s proposed $1.595 billion senior secured term loan due 2025. The '1' recovery rating indicates S&P's expectation for very high recovery (90%-100%; rounded estimate: 95%) of principal in the event of a payment default. The company will use all of the proceeds from the proposed loan to repay its existing senior secured term loan. S&P said, "In our view, the transaction will modestly improve Meredith's cash flow by reducing its annual interest expense by up to $8 million per year. We expect that the company will continue to make steady progress on achieving the planned cost reductions related to its acquisition of Time Inc. while improving its adjusted EBITDA margins to about 20% by June 30, 2019, its fiscal year end. We also expect Meredith to continue to pay down its outstanding debt balance with the proceeds from asset sales such that its adjusted leverage declines below 5x by the end of fiscal year 2019." RATINGS LIST Meredith Corp. Issuer Credit Rating B+/Stable/-- New Rating Meredith Corp. Senior Secured $1.595 Bil Term B-1 Loan Due 2025 BB Recovery Rating 1(95%) MIDATECH PHARMA: Shareholders OK Sale of Its US Commercial Arm -------------------------------------------------------------- Midatech Pharma announced that the resolution concerning shareholder approval of the sale of Midatech Pharma US Inc. was duly passed at the General Meeting held on Oct. 15, 2018, with 99.7% of votes received in favour of the resolution. A further announcement will be made upon completion of the sale, which is expected on or before Oct. 31, 2018. For more information, please contact: Midatech Pharma PLC Craig Cook, CEO +44 (0)1235 888300 www.midatechpharma.com Panmure Gordon (UK) Limited (Nominated Adviser and Broker) Corporate finance: Freddy Crossley / Emma Earl Corporate broking: James Stearns +44 (0)20 7886 2500 Consilium Strategic Communications (Financial PR) Mary Jane Elliott / Nicholas Brown / Angela Gray +44 (0)20 3709 5700 midatech@consilium-comms.com Westwicke Partners (US Investor Relations) Chris Brinzey +1 339 970 2843 chris.brinzey@westwicke.com About Midatech Pharma Based in Oxfordshire, United Kingdom, Midatech Pharma PLC -- http://www.midatechpharma.com/-- is an international specialty pharmaceutical company focused on the research and development of a pipeline of medicines for oncology and immunotherapy. Midatech's strategy is to internally develop oncology products, and to drive growth both organically and through strategic acquisitions. The Company's R&D activities are focused on three innovative platform technologies to deliver drugs at the "right time, right place": gold nanoparticles ("GNPs") to enable targeted delivery; Q-Sphera polymer microspheres to enable sustained release ("SR") delivery; and Nano Inclusion ("NI") to provide local delivery of therapeutics, initially to the brain. Midatech Pharma US is the Group's US commercial operation, with four cancer supportive care products. The report from the Company's independent accounting firm BDO LLP, in Reading, United Kingdom, the Company's auditor since 2014, on the consolidated financial statements for the year ended Dec. 31, 2017, includes an explanatory paragraph stating that the Company has suffered recurring losses from operations and has an accumulated deficit that raise substantial doubt about its ability to continue as a going concern. Midatech reported a loss before tax of GBP17.32 million in 2017 following a loss before tax of GBP29.32 million in 2016. As of Dec. 31, 2017, Midatech had GBP$49.22 million in total assets, GBP14.54 million in total liabilities and GBP34.67 million in total equity. NATIVE SON: Asks Court to Approve Retention of John Blaser ---------------------------------------------------------- Native Son Landscaping, LLC, seeks approval from the U.S. Bankruptcy Court for the Middle District of Florida to retain John Blaser, principal and member of the company. The services to be provided by Mr. Blaser include the daily administration and operation of the Debtor's business; advertising and marketing; maintaining business records; and the administration of accounts receivable and billing. Mr. Blaser will be paid $2,183 per week for his services. In the event that Native Son cannot afford the weekly payment of $2,183, the company will pay him a reduced amount. In a court filing, Mr. Blaser disclosed that he has no corporate interests that are in conflict with the Debtor. About Native Son Landscaping Native Son Landscaping, LLC sought protection under Chapter 11 of the Bankruptcy Code (Bankr. M.D. Fla. Case No. 18-07968) on Sept. 20, 2018. At the time of the filing, the Debtor estimated assets of less than $500,000 and liabilities of less than $500,000. The Debtor tapped Melody Genson, Esq., as its bankruptcy attorney. NEW ATHENS: Proposed Plan to be Funded from Future Income --------------------------------------------------------- New Athens Home for the Aged filed with the U.S. Bankruptcy Court for the Southern District of Illinois a combined disclosure statement and plan of reorganization dated Oct. 9, 2018. Pursuant to the Plan, Debtor proposes to pay its Creditors, after confirmation and the Effective Date of the Plan, from a combination of monies that Debtor has accumulated during the chapter 11 cases and future income received by Debtor for 10 years following the Effective Date of the Plan unless otherwise provided. Thee holders of Allowed General Unsecured Claims in Excess of $8,000 in Class 4 will receive their Pro Rata share of $2,500 beginning on the first day after Administrative Expense Claims are paid in full, and monthly thereafter for the 10-year term of the Plan or the holders of Allowed General Unsecured Claims are paid in full, whichever is shorter. Thee holders of Allowed General Unsecured Claims Between $4,000 and $8,000 in Class 5 will receive their Pro Rata share of approximately $2,632 beginning on the first day after Administrative Expense Claims are paid in full, and monthly thereafter for 12 months or the holders of Allowed General Unsecured Claims are paid in full, whichever is shorter. Thee holders of Allowed General Unsecured Claims Below $4,000 in Class 6 will receive their Pro Rata share of approximately $3,139.50 beginning on the first day after Administrative Expense Claims are paid in full, and monthly thereafter for six months or the holders of Allowed General Unsecured Claims are paid in full, whichever is shorter. All of Debtor's income from every source will be used to fund the Plan. A full-text copy of the Disclosure Statement is available for free at: http://bankrupt.com/misc/ilsb18-30148-77.pdf About New Athens Home for the Aged New Athens Home for the Aged is a small, non-profit, nursing home with 53 beds based at 203 South Johnson Street in New Athens, Illinois. The provider participates in the medicare & Medicaid programs and provides resident counseling services. New Athens Home for the Aged filed a Chapter 11 petition (Bankr. S.D. Ill. Case No. 18-30148) on Feb. 9, 2018. Robert E. Eggmann, Esq. and Thomas H. Riske, Esq., at Carmody MacDonald, P.C., serve as counsel to the Debtor. NGPCP/BRYS CENTRE: Court Vacates Ruling on Mercantile Atty's Fees ----------------------------------------------------------------- In the case captioned MERCANTILE BANK MORTGAGE COMPANY, LLC, Plaintiff/Counterdefendant-Appellee, v. NGPCP/BRYS CENTRE, LLC and NGP CAPITAL PARTNERS, LLC, Defendants/Counterplaintiffs-Appellants, and FORD A. GRIFO, DANIEL J. NEMES and MARK S. PROVENZANO, Defendants/Counterplaintiffs, Nos. 335600, 335715 (Mich. App.), the Court of Appeals of Michigan affirms in part and vacates in part the circuit court's decision, and remands for further proceedings. The matter began as a suit to collect a debt originating from a $744,000 commercial loan. It has morphed into a battle over attorney fees. After payments made by the debtor and credits allocated under the mortgage, only a little more than $200,000 remains unpaid. But thanks to six years of litigation, an appeal and a trip to bankruptcy court, the legal fees far exceed the outstanding balance. At issue is the circuit court's award to Mercantile Bank of more than $500,000 in attorney fees. Several of defendants' challenges to the fee award are legally unsupportable. But defendants' claim that the circuit court insufficiently justified the amount of the award has merit. The circuit court failed to make any findings regarding the reasonableness of the hourly rate charged by most of the attorneys who worked on the case on Mercantile's behalf. The court's opinion also failed to address defendants' objections to the reasonableness of the time spent by Mercantile's lawyers. These gaps make it impossible for this Court to conduct a meaningful appellate review. Capital Partners contends that Mercantile is not entitled to any attorney fees because the bank's improper pursuit of an inflated judgment caused the post-judgment proceedings, compelling an appeal and forcing Capital Partners into bankruptcy. Had a judgment with the credits been entered in September 2011, Capital Partners argues, defendants would have paid it, avoiding both the bankruptcy and the prolonged post-judgment circuit court proceedings. Capital Partners' assertion that the case would have resolved had the judgment reflected the credits may be correct. But it ignores the elephant in the room during the months the parties wrangled over the judgment language: case-evaluation attorney fees. If a judgment had entered for an amount at least 10% less than the case-evaluation award, the record substantiates that Capital Partners would have sought case-evaluation sanctions, including attorney fees. This fact was not lost on counsel, the two judges who managed the cases before and during the appeal, and it is not lost on this Court. At various times, counsel for both sides admitted that a judgment amount including the credits would trigger a motion for case-evaluation attorney fees. Given this potential consequence, Mercantile's decision to oppose a reduced judgment aligned with its right to protect its interest and enforce its rights. The Court ultimately determined that the parties' fight about the case-evaluation sanctions led to a dead end, as the case-evaluation award did not comply with the rules. The Court further held that Mercantile was wrong about the credits. But these holdings do not alter the fact that in vigorously defending the undiscounted judgment, Mercantile's counsel successfully shielded the bank from a possible award of attorney fees. Mercantile's actions were logical. They were legally supportable for another reason, too. Turning to the most vexing issue in this case: whether the circuit court abused its discretion by awarding the full amount of the fees requested by Mercantile without explaining why the rates charged by most of the lawyers who worked on the case and the hours they spent were reasonable. A court awarding attorney fees is required to "show its work," at least to the extent that an appellate court is capable of reviewing any findings for clear error and the its ultimate conclusions for an abuse of discretion. Consistent with our Supreme Court's directives in Smith and Pirgu v United Servs Auto Ass'n, a trial court must make brief but specific findings as to the rate and the number of hours it determines to be reasonable. While the Court sympathizes with the difficulties trial courts face in unraveling complex attorney fee disputes, we are not permitted to intuit findings that the trial court failed to make. Because the circuit court's opinion lacks such findings other than as to attorney Gates' hourly rate, the Court is unable to undertake even a deferential review, and must remand for further proceedings. In sum, the Court affirms the circuit court's ruling that an award of attorney fees does not exceed the scope of the remand or contravene the law of the case doctrine. The Court further affirms the circuit court's determination that Mercantile is entitled to an award of reasonable attorney fees and expenses for the bankruptcy and other proceedings to the extent that such fees are consistent with the contractual requirements. The Court, however, vacates the circuit court's attorney fee determination and remands for further proceedings. A copy of the Court's Decision dated Sept. 27, 2018 is available at https://bit.ly/2ISM9rr from Leagle.com. JAMES J. WALSH, for MERCANTILE BANK MORTGAGE COMPANY LLC, Plaintiff-Counter Defendant-Appellee. LIISA R. SPEAKER, for NGPCP/BRYS CENTRE LLC, Defendant-Counter Plaintiff-Appellant. NGPCP/BRYS Centre, LLC filed for chapter 11 bankruptcy protection (Bankr. E.D. Mich. Case No. 13-42821) on Feb. 18, 2013, and is represented by Basil T. Simon, Esq. and Stephen P. Stella, Esq., of Simon, Stella & Zingas, P.C. NINE ENERGY: S&P Assigns 'B' Issuer Credit Rating, Outlook Stable ----------------------------------------------------------------- S&P Global Ratings assigned its 'B' issuer credit rating to U.S.-based oilfield equipment and services provider Nine Energy Service Inc. The rating outlook is stable. S&P said, "At the same time, we assigned our 'B' issue-level rating to the company's proposed $400 million senior unsecured notes due 2023, with a recovery rating of '4', indicating our expectation of an average (30% to 50%; rounded estimate: 40%) recovery in the event of a default. "Our issuer credit rating on Nine Energy Service reflects the company's smaller size and dearth of international presence relative to larger peers and its limited technological advantage/barriers to entry and earnings variability. Strong customer relationships, low capital intensity, and a diversified revenue mix from products and services in North America somewhat offset these factors. The company has a noticeable presence in the Permian Basin, which will account for approximately 35% of revenues pro forma the Magnum acquisition. Furthermore, the rating incorporates our expectation of FFO/debt percentages in the mid-30% area with debt/EBITDA of just over 2x and adequate liquidity. "The stable outlook on Nine Energy Service reflects our view that the company will maintain at least adequate liquidity and credit measures in line with our expectations such that FFO to debt averages above 30% over the next 12 months and debt to EBITDA averages below 2.25x. We believe Nine's profitability and relatively low capital spending needs will support these expectations. "We could lower the rating if FFO to total debt falls below 30% for an extended period or if liquidity deteriorates. This would most likely occur because of a decline in the U.S. E&P sector due to lower-than-expected hydrocarbon prices, a leveraging transaction, or higher-than-expected capital spending. "We could consider an upgrade if the company increases its scale and further diversifies its operations internationally or meaningfully improves financial leverage with FFO to debt averaging above 45%. This could occur if hydrocarbon prices are above our expectations for a sustained period, leading to a stronger recovery in the U.S. E&P sector." NORDAM GROUP: Wins Court Approval of Key Settlement With GAC, P&W ----------------------------------------------------------------- Tulsa-based NORDAM Group won bankruptcy court approval in late September 2018 of a global settlement with Gulfstream Aerospace Corp. that NORDAM believes will lead to a Chapter 11 reorganization that will provide "substantial (if not complete) recoveries for all creditors." NORDAM sought bankruptcy protection in July following a long contract dispute with Pratt & Whitney Canada Corp. NORDAM in October 2010 entered into a Purchase Agreement for Nacelle Hardware Products ("LTPA"), with P&W to establish a program for designing, manufacturing, and integrating specialized Nacelle Systems with Podding as part of the PW800 Program that would be installed in the G500 and G600 aircraft that Gulfstream Aerospace Corporation had been developing. Unanticipated costs connected with the program led NORDAM to spend more than $200 million on it, a move that challenged overall performance. The Debtors' counsel, Brett M. Haywood, Esq., at RICHARDS, LAYTON & FINGER, P.A., avers that the global resolution is a comprehensive solution to all issues related to the PW800 Program and will not only improve the Debtors' business operations and liquidity profile, but will also facilitate the Debtors' ultimate emergence from chapter 11 by eliminating potentially the largest contingency in the chapter 11 cases -- namely, treatment of claims arising from or related to the LTPA. The Global Resolution itself contemplates a series of steps keyed off the Debtors' requested approval of interim funding, including: (a) upon approval of the interim funding, an immediate restart of the PW800 Program, and a grant from the Debtors to GAC of an interim intellectual property license, (b) a sale of certain program assets from the Debtors to GAC and entry into related agreements including a sublease for certain shared facilities, a shared services agreement, and a permanent intellectual property license agreement, and (c) in connection with consummation of their sale of such program assets to GAC, mutual releases for GAC, Pratt & Whitney, and the Debtors, including with respect to any claims arising under the LTPA. Specifically, the Global Resolution is composed of these interdependent parts: (A) Entry into Asset Purchase Agreement The Debtors have agreed to sell certain property related to the PW800 Program to GAC. As consideration for the sale, GAC will (a) provide a full and irrevocable release of the rejection claim in connection with the rejection of the LTPA and (b) pay trade liabilities related to the PW800 Program, including payment of cure costs up to a cap of $18 million associated with certain purchase orders and executory contracts that are to be assumed. The APA also contemplates that the Debtors will enter into various agreements: -- Mutual Releases: The Debtors will enter into release agreements with GAC and P&W providing for mutual releases with respect to claims relating to or arising from the PW800 Program, the LTPA, and any liability in connection therewith. -- Shared Services Agreement: The Debtors and GAC will enter into a shared services agreement to transition control of the PW800 Program to GAC and provide the services and long-term support required from the Debtors while GAC restarts and operates the PW800 Program at the Debtors' facility. -- Sublease: NORDAM and GAC will enter into a sublease to operate the PW800 Program within one of NORDAM's leased facilities. -- Program IP License Agreement: The Debtors and GAC will enter into an agreement to license and sublicense certain of the Debtors' intellectual property necessary or reasonably desirable for the operation of the PW800 Program or to otherwise exploit products. (B) Rejection of LTPA The Debtors will seek authority to reject the LTPA, thereby giving rise to a rejection damages claim held by GAC, as assignee of P&W under the LTPA. GAC consents to the rejection of the LTPA in furtherance of the Global Resolution. Rejection of the LTPA will be effective upon the consummation of the sale to GAC. King & Spalding LLP, led by Sarah R. Borders and Timothy M. Fesenmyer, is representing GAC. Wachtell, Lipton, Rosen & Katz, led by Philip Mindlin, Douglas K. Mayer, Joshua R. Cammaker, and Victor Goldfeld, is representing Pratt & Whitney. About The Nordam Group Founded in 1969 on family values with multiple, strategically-located operations and customer support facilities around the world, Tulsa-based NORDAM is a leading independently owned aerospace company. The firm designs, certifies and manufactures integrated propulsion systems, nacelles and thrust reversers for business jets; builds composite aircraft structures, interior shells, custom cabinetry and radomes; and manufactures aircraft transparencies, such as cabin windows, wing-tip lens assemblies and flight deck windows. NORDAM also is a major third-party provider of maintenance, repair and overhaul services to the military, commercial airline and air freight markets. Facing outstanding funded debt of about $286 million, The NORDAM Group, Inc., and four affiliates filed for Chapter 11 protection (Bankr. D. Del. Lead Case No. 18-11699) on July 22, 2018. The Debtors tapped Weil Gotshal & Manges LLP and Richards, Layton & Finger, P.A., as counsel; Davis Graham & Stubbs LLP, as special counsel; Huron Consulting, LLC, as financial advisor; Guggenheim Securities, LLC, as investment banker; and Epiq Corporate Restructuring, LLC, as the claims and noticing agent. On Aug. 1, 2018, the Office of the U.S. Trustee appointed an official committee of unsecured creditors. The Committee retained Cole Schotz P.C. and Morrison & Foerster LLP as its legal counsel, Jefferies LLC as investment banker, and Zolfo Cooper, LLC, as bankruptcy consultant and financial advisor. OCEAN SERVICES: Taps Bush Kornfeld as Legal Counsel --------------------------------------------------- Ocean Services, LLC, received approval from the U.S. Bankruptcy Court for the Western District of Washington to hire Bush Kornfeld LLP as its legal counsel. The firm will advise the Debtor regarding its duties under the Bankruptcy Code; assist in reviewing claims and in determining issues concerning the distribution on allowed claims; take necessary actions to avoid any liens subject to the Debtor's avoidance; and provide other legal services related to its Chapter 11 case. Bush Kornfeld neither represents nor holds any interest adverse to the interest of the Debtor's estate, according to court filings. The firm can be reached through: Thomas A. Buford, Esq. Armand J. Kornfeld, Esq. Christine M. Tobin-Presser, Esq. Aimee S. Willig, Esq. Bush Kornfeld LLP 601 Union St., Suite 5000 Seattle, WA 98101 Tel: 206-292-2110 E-mail: tbuford@bskd.com E-mail: jkornfeld@bskd.com E-mail: ctobin@bskd.com E-mail: awillig@bskd.com About Ocean Services Based in Seattle, Washington, Ocean Services, LLC and its subsidiaries -- https://www.stabbertmaritime.com/ -- are a marine operations group with over three decades of experience working with offshore petrochemical companies, the US Government, fisheries, and submarine telecommunications cable survey and installations operators in the waters off the US East Coast, South America, Gulf of Mexico and the Caribbean, the Aleutians, Arctic and Antarctic, the Bering Sea and across the Pacific Ocean. The Stabbert Maritime group of companies offers a comprehensive package of services to the subsea construction and offshore science sector as well as shipyard and mobile vessel repair. Ocean Services provides support vessels to science and survey sectors for clients including NOAA, US Navy, Johns Hopkins University, FUGRO, CP+ and Shell, providing fisheries research, geotechnical/physical, oceanographic, survey and testing services. Stabbert Maritime, through subsidiary Ocean Sub Sea Services (OS/3), provides dive and construction support vessels to oil and gas clients in Gulf of Mexico, Mexico, Brazil, California, and the Arctic. Ocean Services and its affiliates sought protection under Chapter 11 of the Bankruptcy Code (Bankr. W.D. Wash. Lead Case No. 18-13512) on Sept. 7, 2018. In their petitions, the Debtors disclosed their assets and liabilities: Total Total Assets Liabilities ---------- ----------- Ocean Services, LLC $2,037,223 $45,753,398 Ocean Carrier Holding, LLC $1,259 $44,836,444 Ocean Carrier Holding S. de R.L. $16,492,038 $41,790,361 ONE AVIATION: Unsecureds to Receive Nothing Under Proposed Plan --------------------------------------------------------------- ONE Aviation Corporation and its affiliates filed a disclosure statement for its joint prepackaged chapter 11 plan of reorganization dated Oct. 9, 2018. The Debtors' board of directors has approved the Plan and believes the Plan is in the best interests of the Estates. The primary feature of the Plan is Prepetition First Lien Lender (or their designee(s)) receiving 100% of the new common stock and new preferred stock of Reorganized ONE Aviation in full satisfaction of all First Lien Credit Agreement Claims. On the Effective Date, the Debtors will effectuate the transactions contemplated by the Plan. As a result: * the Prepetition First Lien Lender (or their designee(s)) will receive 100% of the new Class A Common Stock and new preferred stock of Reorganized ONE Aviation in full satisfaction of all First Lien Credit Agreement Claims; * if the class of Senior Secured Noteholder Claims votes to accept the Plan, holders of such Claims will receive a pro rata share of (a) shares of New Class B Common Stock representing, in the aggregate, 3% of the total equity interests in Reorganized ONE Aviation as of the Effective Date, and (b) warrants to purchase, upon certain events and in the manner as described in the Plan, New Class B Common Stock representing, in the aggregate, an additional 3 percent of the total equity interests in Reorganized ONE Aviation; * Reorganized ONE Aviation and the reorganized Other ONE Aviation Debtors will enter into a new senior secured asset-based revolving and term-loan facility; * all existing Interests in ONE Aviation Corporation (“ONE Aviation”) and Kestrel Aircraft Company, Inc. (“Kestrel”) will be extinguished; and * all existing Interests in the Other ONE Aviation Debtors and the Other Kestrel Debtors will be reinstated for administrative convenience. The Plan provides for the treatment of Claims and Interests as follows: -- holders of Allowed Other Priority Claims, if any, will be paid in full in Cash, Reinstated, or otherwise rendered Unimpaired; -- holders of Allowed Other Secured Claims, if any, will be paid in full in Cash, Reinstated, receive delivery of the collateral securing their claims, or otherwise rendered Unimpaired; -- holders of Allowed First Lien Credit Agreement Claims will receive New Class A Common Stock (subject to potential dilution by the Employee Incentive Plan) and New Preferred Stock; -- holders of Senior Subordinated Secured Note Claims will receive, if the Class of such Claims votes to accept the Plan, New Class B Common Stock and New Warrants but will receive, if the Class of such Claims does not vote to accept the Plan, no distribution under the Plan on account of such Claims; -- holders of General Unsecured Claims will not receive any distribution under the Plan on account of such Claims; -- holders of Interests in ONE Aviation or in Kestrel will have their Interests canceled, annulled, and extinguished and will not receive or retain any property nor receive any distributions; -- holders of Allowed Administrative Expense Claims other than Priority Tax Claims or Professional Fee Claims will be paid in full in Cash on the later of (a) the Effective Date, (b) the date on which such Claim is Allowed, and (c) the date on which such Claim would otherwise become due and payable. Upon the Effective Date, New ABL/Term Loan Lender will make available, or cause to be made available, to the Reorganized Debtors such amounts as may be necessary to enable the Reorganized Debtors to fund or pay all of their obligations required to be funded or paid under the Plan. A full-text copy of the Disclosure Statement is available for free at: http://bankrupt.com/misc/deb18-12309-14.pdf About ONE Aviation Headquartered in Albuquerque, New Mexico, ONE Aviation Corporation -- http://www.oneaviation.aero-- and its subsidiaries are original equipment manufacturers of twin-engine light jet aircraft. Primarily serving the owner/operator, corporate, and aircraft charter markets, the Debtors are on the forefront of private aviation technology. The Debtors provide maintenance and upgrade services for their existing fleet of aircraft through two Company-owned Platinum Service Centers in Albuquerque, New Mexico and Aurora, Illinois, five licensed, global Gold Service Centers in locations including San Diego, California, Boca Raton, Florida, Friedrichshafen, Germany, Eelde, Netherlands, and Istanbul, Turkey, as well as a research and development center located in Superior, Wisconsin. The Debtors currently employ 64 individuals. ONE Aviation and its affiliates filed for chapter 11 bankruptcy protection (Bankr. D. Del. Case. Nos. 18-12309 - 18-12320) on Oct. 9, 2018, listing its estimated assets at $10 million to $50 million and estimated liabilities at $100 million to $500 million. The petition was signed by Alan Klapmeier, CEO. PAC ANCHOR: Dec. 5 Plan Confirmation Hearing -------------------------------------------- The hearing to consider confirmation of Pac Anchor Transportation, Inc.'s Chapter 11 Plan will be held on December 5, 2018 at 10:00 a.m. About Pac Anchor Transportation Pac Anchor Transportation, Inc., was formed from the merger of Pac Anchor Transportation, Inc., and Green Anchor Lines, Inc. Pac Anchor is a trucking company located in Wilmington, California, that provides trucking services throughout the western United States. Pac Anchor filed for Chapter 11 bankruptcy protection (Bankr. C.D. Cal. Case No. 17-18213) on July 6, 2017. In the petition signed by Alfredo Barajas, its president, the Debtor disclosed $12.08 million in assets and $11.24 million in liabilities. Judge Ernest M. Robles presides over the case. Haberbush & Associates LLP is the Debtor's legal counsel. Trojan and Company Accountancy Corp. is the Debtor's accountant. On Aug. 10, 2017, the Office of the U.S. Trustee appointed an official committee of unsecured creditors. The Committee retained Levene, Neale, Bender, Yoo & Brill LLP as legal counsel, and Armory Consulting Company as financial advisor, and hired Van Horn Auctions & Appraisal Group, LLC, to appraise the rolling stock and related personal property of the Debtor with a fixed fee arrangement. PREMIER EXHIBITIONS: Names Project Build as Successful Bidder ------------------------------------------------------------- BankruptcyData.com reported that Premier Exhibitions notified the U.S. Bankruptcy Court that it had cancelled its "Transferred Assets" auction (supposedly scheduled for Oct. 11, 2018) and had designated Project Build Premier Acquisition Holdings, as the successful bidder. BankruptcyData previously related that the Debtors said, "After considering numerous alternatives and significant arms-length negotiations with various potential buyers, lenders, and investors, the Debtors, in consultation with their professionals and advisers, negotiated the proposed sale of the Transferred Assets to Premier Acquisition Holdings, a Delaware limited liability company (the 'Stalking Horse Purchaser'), an entity formed by affiliates of members of the Ad Hoc Group, the Secured Lenders, and PacBridge Capital Partners (HK) ("PacBridge"). The terms of the Stalking Horse Purchaser's offer to purchase the Transferred Assets are summarized herein: The Purchase Price is $17,500,000 in cash, subject to adjustment for the amount of Current Assets at Closing." About RMS Titanic Premier Exhibitions, Inc. (Nasdaq: PRXI), located in Atlanta, Georgia, is a presenter of museum quality exhibitions throughout the world. Premier -- http://www.PremierExhibitions.com/-- develops and displays unique exhibitions for education and entertainment including Titanic: The Artifact Exhibition, BODIES. The Exhibition, Tutankhamun: The Golden King and the Great Pharaohs, Pompeii The Exhibition, Extreme Dinosaurs and Real Pirates in partnership with National Geographic. The success of Premier Exhibitions lies in its ability to produce, manage, and market exhibitions. RMS Titanic and seven of its subsidiaries filed voluntary petitions for reorganization under Chapter 11 of the Bankruptcy Code (Bankr. M.D. Fla. Lead Case No. 16-02230) on June 14, 2016. In the petitions signed by former CFO and COO Michael J. Little, the Debtors estimated both assets and liabilities of $10 million to $50 million. The Chapter 11 cases are assigned to Judge Paul M. Glenn. Daniel F. Blanks, Esq., and Lee D. Wedekind, III, Esq., at Nelson Mullins Riley & Scarborough LLP, serve as the Debtors' counsel. The Debtors employ Brian A. Wainger, Esq., at Kaleo Legal as special litigation counsel, outside general counsel, securities counsel, and conflicts counsel; Robert W. McFarland, Esq., at McGuireWoods LLP as special litigation counsel; Steven L. Berson, Esq., at Dentons US LLP and Dentons Canada LLP as outside general counsel and securities counsel; Oscar N. Pinkas, Esq., at Dentons LLP as outside general counsel and securities counsel. The Debtors also employed Ronald L. Glass as Chief Restructuring Officer and GlassRatner Advisory & Capital Group, LLC, as financial advisors. Guy Gebhardt, acting U.S. trustee for Region 21, on Aug. 24, 2016, appointed three creditors to serve on an official committee of unsecured creditors. The Committee hired Avery Samet, Esq. and Jeffrey Chubak, Esq., at Storch Amini & Munves PC, and Richard R. Thames, Esq. and Robert A. Heekin, Jr., Esq., at Thames Markey & Heekin, P.A., as counsel. The official committee of equity security holders of Premier Exhibitions Inc. retained Peter J. Gurfein, Esq., at Landau Gottfried & Berger LLP as counsel; Jacob A. Brown, Esq., and Katherine C. Fackler, Esq., at Akerman LLP as Co-Counsel; and Teneo Securities LLC as financial advisor. REX ENERGY: Files Revised Amended Plan of Liquidation ----------------------------------------------------- BankruptcyData.com reported that Rex Energy Corporation filed with the Court a Revised Amended Plan of Liquidation and a related blackline noting changes from the precedent version of the Plan on Oct. 3, 2018. BankruptcyData related that changes to the Plan are minor and principally relate to the wind down of the company, eg the treatment of assets not otherwise sold. The Debtors also filed a Plan Supplement to its Amended Plan of Liquidation. The Supplement attaches the following documents: (i) Exhibit 1: List of Abandoned Assets, (ii) Exhibit 2: Plan Administrator and (iii) Exhibit 3: Wind Down Agreements. A hearing to consider the confirmation of the Revised Plan is scheduled for October 15, 2018. About Rex Energy Corp. Rex Energy Corporation -- http://www.rexenergy.com/-- and its subsidiaries are independent oil and gas companies operating in the Appalachian Basin, engaged in the acquisition, production, exploration and development of oil, natural gas and natural gas liquids. They are focused on drilling and exploration activities in the Marcellus Shale, Utica Shale and Upper Devonian Shale. Rex Energy is headquartered in State College, Pennsylvania and became a public company in 2007. On May 18, 2018, Chapter 11 cases were filed by Rex Energy Corporation (Bankr. W.D. Pa. Case No. 18-22033) and its affiliates R.E. Gas Development, LLC (Bankr. W.D. Pa. Case No. 18-22032), Rex Energy Operating Corp. (Case No. 18-22034), and Rex Energy I, LLC (Case No. 18-22035). R.E. Gas Development is the lead case. In the petitions signed by Thomas C. Stabley, president and CEO, the Debtors listed total assets of $851,000,957 and total debt of $984,529,090 as of April 30, 2018. Judge Jeffery A. Deller presides over the cases. James D. Newell, Esq., Timothy P. Palmer, Esq., and Tyler S. Dischinger, Esq., at Buchanan Ingersoll & Rooney PC and Scott J. Greenberg, Esq., Michael J. Cohen, Esq., Anna Kordas, Esq., Thomas A. Howley, Esq., and Rachel Biblo Block, Esq., at Jones Day, serve as the Debtors' bankruptcy counsel. The Debtors tapped Perella Weinberg Partners as their investment banker; FTI Consulting, Inc., as financial advisor; and Prime Clerk LLC as claims and noticing agent. The Office of the U.S. Trustee for Region 3 appointed an official committee of unsecured creditors on May 29, 2018. The Committee tapped Brown Rudnick LLP as its lead counsel; and Leech Tishman Fuscaldo & Lampl, LLC, as its local counsel. RITE-AID CORP: Moody's Lowers CFR to B3, Outlook Positive --------------------------------------------------------- Moody's Investors Service downgraded Rite Aid Corporation's Corporate Family Rating and probability of default rating to B3 and B3-PD from B2 and B2-PD respectively. Moody's also downgraded the rating of the company's senior secured revolving credit facility to B1 from Ba2, the rating of its senior unsecured guaranteed notes to Caa1 from B3 and the rating of its senior unsecured notes to Caa2 from Caa1. The company's speculative grade liquidity rating was affirmed at SGL-2. The ratings outlook is negative. This concludes a review which was initiated on August 9, 2018 prompted by the termination of the merger agreement with Albertsons Inc. "Despite the debt reduction through the proceeds of the asset sales to Walgreens, the company's leverage remains high due to EBITDA erosion and free cash flow remains weak", Moody's Vice President Mickey Chadha stated. "Rite-Aid's operating performance has been weak in the last 18-24 months and it has a much weaker competitive position vis-à-vis its much larger and well capitalized competitors in an industry where scale is becoming increasingly important, hence the downgrade", Chadha further stated. Downgrades: Issuer: Rite Aid Corporation Probability of Default Rating, Downgraded to B3-PD from B2-PD Corporate Family Rating, Downgraded to B3 from B2 Senior Secured Revolving Credit Facility, Downgraded to B1 (LGD2) from Ba2 (LGD2) Guaranteed Senior Unsecured Regular Bond/Debenture, Downgraded to Caa1 (LGD4) from B3 (LGD5) Senior Unsecured Regular Bond/Debenture, Downgraded to Caa2 (LGD5) from Caa1 (LGD6) Outlook Actions: Issuer: Rite Aid Corporation Outlook, Changed To Negative From Rating Under Review Affirmations: Issuer: Rite Aid Corporation Speculative Grade Liquidity Rating, Affirmed SGL-2 RATINGS RATIONALE Rite-Aid's B3 rating incorporates it's weak market position as it lacks the scale or the balance sheet to compete effectively with much larger and well capitalized competitors like CVS Health and Walgreens Boots Alliance, Inc. in the changing pharmacy landscape as scale has become increasingly more important in the competitive environment within the pharmacy sector. The termination of the Albertsons merger also negates the opportunity for Rite-Aid to gain scale and reduce its reliance on purely drug sales. The combination of Albertsons and Rite-Aid would also have resulted in an enhanced pharmacy network for Rite-Aid on the west coast and northeast which could have helped Rite-Aid owned PBM, Envision Rx in contract negotiations. For the last 3 years Rite-Aid's focus has been on its sale, first to Walgreens which was scuttled by the FTC and then to Albertsons which was terminated as majority of its shareholders were expected to reject the deal. Rite-Aid did however sell about half its stores and a couple of distribution centers to Walgreens for about $5.175 billion and used the proceeds to repay debt. However, in the midst of all this deal making the operating performance of the company has faltered as customers had no incentive to sign new contracts with Envision and the number of prescriptions filled at Rite-Aid declined. The company was also unable to offset reimbursement rate declines with generic purchasing effeciencies. Therefore EBITDA and free cash flow has declined significantly resulting in deteriorating credit metrics. Moody's expects Rite Aid's lease adjusted debt/EBITDA to be about 6.8x at the end of this fiscal year ending February 2019. Although Moody's expects modest improvement, leverage is expected to remain above 6.0x in the next 12-18 months. The rating also reflects the company's modest free cash flow EBIT/interest at about 1.0 times in the next 12-18 months. Positive ratings consideration is given to Moody's expectation that as the uncertainty of the last few years is eliminated management will now focus on cost reduction, store rationalization and increase the level of script growth through file buys and strategically target participation in limited and preferred networks to boost the top line. Rite Aid also has the opportunity to improve purchasing efficiencies by shifting its drug purchases to Walgreens Boots Alliance's group purchasing organization. Rite Aid's good liquidity, and the relative stability and positive longer term trends of the prescription drug industry are other positive rating considerations. The negative outlook reflects the uncertainty in management's ability to improve operating performance and credit metrics in the next 12-18 months given the current competitive business environment in the pharmacy sector and much larger and well capitalized peers in this space. An upgrade would require Rite Aid's, operating performance to improve or absolute debt levels to fall such that the company demonstrates that it can maintain debt/EBITDA below 5.5 times and EBIT to interest expense above 1.5 times. In addition, a higher rating would require Rite Aid to continue to maintain at least an adequate liquidity profile. Ratings could be downgraded if Rite Aid experiences decline in revenues or earnings or increases debt such that debt/EBITDA is likely to remain above 6.5 times and EBIT to interest expense is likely to remain below 1.0 times. Ratings could also be downgraded should free cash flow become persistently negative or the company does not get any traction on new PBM contracts or prescription volumes decline. Rite Aid Corporation operates 2,526 drug stores in 19 states. It also operates a full-service pharmacy benefit management company (Envision Rx). Revenues are about $22 billion. The principal methodology used in these ratings was Retail Industry published in May 2018. RMH FRANCHISE: Credit Agreement Claimants Added in Latest Plan -------------------------------------------------------------- Bank of America, N.A., acting in its capacity as Administrative Agent, Collateral Agent and L/C Issuer filed a limited objection to RMH Franchise Holdings, Inc. and affiliates' original disclosure statement with respect to their chapter 11 plan dated Sept. 4, 2018. The Agent asserts that the Term Sheet, which will contain certain terms regarding the treatment of the Senior Lenders' claims and collateral, is not attached to the Plan or Disclosure Statement. While the Agent hopes that the parties will finalize the Term Sheet in advance of the hearing to consider approval of the Disclosure Statement, the Term Sheet remains under negotiation between Debtors, the Agent and Senior Lenders. The treatment of the Senior Lenders' claims needs to be accurately described in the Disclosure Statement and Plan. The Plan and Disclosure Statement separately classify the Sub-Debt Claim in Class 4, and provide that the Sub-Debt Claim is unimpaired. Because the Agent controls the Sub-Debt Claim and has the right to vote the claim until the Senior Lenders are paid in full, the Disclosure Statement and Plan should classify and treat the Sub-Debt Claim the same as claims of other General Unsecured Claims and should provide that Agent is entitled to vote with respect to the Sub-Debt Claim. In response, the Debtors filed a disclosure statement to accompany their first amended plan of reorganization, dated Oct. 9, 2018, which added the Credit Agreement Claimants in Class 3. Class 3 consists of all claims for unpaid principal, interest, fees, costs charges, premiums and other amounts arising under or in connection with the Credit Agreement, and which Credit Agreement Claims are held by the Senior Lenders as follows: Applicable Senior Lender Percentage ------------- ---------- Bank of America, N.A. 53.92% Citizens Bank, National Association 31.50% Wells Fargo Bank, National Association 14.58% Total 100.00% The Credit Agreement Claims will be Allowed in a principal amount not less than $61,237,665.32 as of Oct. 3, 2018 (excluding amounts owed with respect to any letter of credit issued by the Administrative Agent and/or any of the Senior Lenders), and will not be subject to any avoidance, reductions, setoff, offset, recharacterization, subordination (whether equitable, contractual or otherwise), counterclaims, cross-claims, defenses, disallowance, impairment, or any other challenges under any applicable law or regulation by any person or entity. On the Effective Date, each holder of an Allowed Credit Agreement Claim will receive the Credit Agreement Claims Payment and the Amended Credit Agreement, including all related documents provided for or contemplated thereby, will be executed by the Reorganized Debtors, the Senior Lenders and the Administrative Agent. The latest plan also discloses that ACON Equity Partners has an unsecured claim against the estates of Debtors RMH Franchise Holdings, Inc. and RMH Franchise Corporation in an amount not less than $33,445,057.04, on account of the Sub-Debt Claims, which will be treated as Class 5 General Unsecured Claims. However, pursuant to the Subordination Agreements, (a) the Administrative Agent has the right to vote and otherwise act with respect to the Sub-Debt Claims (including the right to vote to accept or reject the Plan), and (b) any payment or distribution of any kind or character, whether in cash, property or securities, by set-off or otherwise, to which ACON Equity Partners would be entitled but for the provisions of the Subordination Agreements are assigned and directed to the Administrative Agent until the Credit Agreement Claims are paid in full; therefore, the Sub-Debt Claims are currently held by the Administrative Agent, and not by an insider of the Debtors. A copy of the Agent's Objection to the Original Disclosures is available at: http://bankrupt.com/misc/deb18-11092-613.pdf A full-text copy of the Latest Disclosure Statement is available for free at: http://bankrupt.com/misc/deb18-11092-620.pdf Counsel for Bank of America, N.A., as Administrative Agent, Collateral Agent and Letter of Credit Issuer: Geoffrey G. Grivner, Esq. Mary F. Caloway, Esq. BUCHANAN INGERSOLL & ROONEY PC 919 North Market Street, Suite 1500 Wilmington, Delaware 19801 Telephone: (302) 552-4200 Facsimile: (302) 552-4295 Email: geoffrey.grivner@bipc.com mary.caloway@bipc.com -and- Frank W. DeBorde, Esq. Lisa Wolgast, Esq. MORRIS, MANNING & MARTIN, LLP 1600 Atlanta Financial Center 3343 Peachtree Road, NE Atlanta, Georgia 30326 Telephone: (404) 233-7000 Facsimile: (404) 365-9532 Email: fwd@mmmlaw.com lwolgast@mmmlaw.com About RMH Franchise Holdings 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 were signed Michael Muldoon, president, RMH Franchise Holdings estimated assets and liabilities of $100 million to $500 million. 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 (Case No. 18-11094), RMH Franchise Corporation (Case No. 18-11095), and Contex Restaurants, Inc. (Case No. 18-11096). The case is assigned to Judge Brendan Linehan Shannon. Young, Conaway, Stargatt & Taylor, LLP, serves as bankruptcy counsel to the Debtors; Mastodon Ventures, Inc., is the restructuring advisor; Hilco Real Estate LLC serves as real estate broker; and Prime Clerk LLC acts as claims and noticing agent. On May 24, 2018, the U.S. Trustee appointed an official committee of unsecured creditors in the Debtors' cases. Kelley Drye & Warren LLP serves as lead counsel to the Committee while Zolfo Cooper LLC acts as bankruptcy consultant and financial advisor. ROCKPORT CO: Chubb Companies Object to Liquidation Plan ------------------------------------------------------- BankruptcyData.com reported that the Chubb Companies filed with the Court an objection to The Relay Company's Disclosure Statement and Chapter 11 Plan of Liquidation. BankruptcyData related that the objection asserts, "The Chubb Companies object to the Plan on the grounds, that: (i) while the Plan purports to provide that nothing alters the terms of the Debtors' Insurance Policies (Plan Art. IX.O), elsewhere the Plan provides that one of the sources of funding for the Liquidating Trust shall be the proceeds of the Debtors’ Insurance Policies (Plan Art. VIII.F), and such an apparent wholesale transfer of the proceeds of Insurance Policies (which proceeds may be owned to third-party claimants, or others, or not yet or ever owed to anyone) is not appropriate, and likely was not the intent of the Plan; (ii) while it appears that the Debtors seek to obtain the benefits of the Insurance Program (Plan Article X.O), the Plan should make clear that in order to do so, the Debtors (and/or the Liquidating Trust) must remain liable for the Obligations under the Insurance Program; and (iii) the Plan must provide that workers. Compensation claims and direct action claims must continue in the ordinary course of business." About The 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. Deloitte Tax LLP, as tax service provider. 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 taps 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. SAINT CATHERINE: Law Firm Can Keep $60K Atty's Fees, Court Affirms ------------------------------------------------------------------ The appeals case captioned UNITED STATES OF AMERICA, Appellant, v. SEILLER WATERMAN LLC, Appellee, Case No. 4:17-cv-00182-TWP-DML (S.D. Ind.) is an appeal by the United States of America from a decision of the Bankruptcy Court of the Southern District of Indiana issued on Sept. 13, 2017, denying its request for an order requiring Seiller Waterman LLC to disgorge attorneys' fees. Upon careful review, District Judge Tanya Walton Pratt affirms the Bankruptcy Court's decision. Appellee Seiller Waterman LLC, a law firm, represented Saint Catherine Hospital of Indiana, LLC and filed a Chapter 11 bankruptcy petition on behalf of the Hospital on June 19, 2012. Seiller's employment was approved by the Bankruptcy Court, and the firm represented the Hospital throughout the time it operated as a debtor-in-possession. Approximately two years later, in June 2014, the United States (on behalf of the Internal Revenue Service) and the United States Trustee moved the Bankruptcy Court to dismiss the proceedings or to convert the case to a liquidation; the Bankruptcy Court took no immediate action on the motions. In November 2014, after a mediation, Seiller moved the Bankruptcy Court to appoint a Chapter 11 trustee to liquidate the Hospital's assets, settle claims, and distribute the proceeds under the court's supervision. The Bankruptcy Court appointed a trustee, who retained counsel, and Seiller's legal work on behalf of the Hospital ended. While Seiller represented the Hospital as DIP, it received a total of $135,572.22 in attorneys' fees and expenses for legal work between 2012 and March 31, 2014, pursuant to two interim fee applications approved by the Bankruptcy Court. After Seiller's work for the Hospital had ceased because a Trustee had been appointed to manage the bankruptcy estate, Seiller filed a third interim fee application on Jan. 12, 2015, seeking approval of a fee of $114,474.65 and expenses of $10,000.08 for the remainder of all of the work it had performed, between April 1, 2014 through Dec. 31, 2014. The Trustee filed a "Limited Objection" to the fee application on Feb. 3, 2015, to reserve his rights because he had not been able to discuss his questions and concerns with Seiller "due to more pressing demands in the case." On July 10, 2015, the Trustee and Seiller filed with the Bankruptcy Court an Agreed Entry resolving the Trustee's limited objection to Seiller's third application. Thus, for the totality of its legal work as counsel to the Hospital as DIP, performed from 2012 through Dec. 31, 2014, Seiller was awarded and paid a total of $135,572.22 (consisting of $132,557.00 in fees and $3,015.22 for expenses). The principal argument by the United States presents a question of law: whether the Bankruptcy Court was required as a matter of law to order disgorgement of fees from Seiller to the extent necessary to result in a pro rata distribution among all of the Chapter 11 administrative claimants, including the IRS. The disgorgement amount at issue is approximately $60,000. The Bankruptcy Court determined that it was not required to order disgorgement under the circumstances of this case, and the Court agrees. The issue then becomes whether the Bankruptcy Court's decision not to order disgorgement was otherwise an appropriate exercise of its authority and discretion based on the facts. The Court finds that the Bankruptcy Court appropriately exercised its authority and that its factual findings are not clearly erroneous. Therefore, the Bankruptcy Court's order is affirmed. The United States argues that the Supreme Court's recent decision in Czyzewski v. Jevic Holding Corp., as a matter of law does not permit the Bankruptcy Court to depart from a pro rata distribution in a "structured dismissal" of a Chapter 11 proceeding. Therefore, it asserts, the Bankruptcy Court was required to order Seiller to disgorge fees that it had been paid to the extent necessary for it and the IRS (and other administrative claimants) to receive a pro rata distribution based on their respective allowed administrative claims. In the Court's view, Czyzewski does not mandate disgorgement of Seiller's fees to achieve ultimate pro rata distribution among administrative claimants in this chapter 11 structured dismissal case. Czyzewski addressed the Code's basic priority system; it did not address pro rata distributions within classes of creditors. Nor did it concern whether a bankruptcy court can decline to order disgorgement where it has made, or makes, a final award of attorneys' fees. In deciding that it would not order Seiller to disgorge fees, the Bankruptcy Court canvassed the relatively sparse case law in this area and found that disgorgement was not appropriate. In reaching this decision, Judge Lorch relied on two basic points: (1) that when he had approved and entered the Agreed Entry, he had in essence made a final award of fees under Section 330 of the Code, and (2) even if he had the authority to disgorge fees paid under a final award, disgorgement was not appropriate here because of the value of Seiller's work to the estate and the absence of evidence that Seiller had "acted inappropriately or unreasonably amassed fees." The Court finds that Judge Lorch's account of the evidence is plausible, and his decisions in this regard should be upheld. A copy of the Court's Sept. 26, 2018 Ruling is available at https://bit.ly/2EfXiDO from Leagle.com. UNITED STATES OF AMERICA, Appellant, represented by Arie M. Rubenstein , DEPARTMENT OF JUSTICE, TAX DIVISION & Peter Sklarew , TRIAL ATTORNEY, TAX DIVISION U. S. Department of Justice. SEILLER WATERMAN, LLC, Appellee, represented by David Marcus Cantor -- cantor@derbycitylaw.com -- SEILLER WALTERMAN LLC, Keith James Larson , SEILLER WATERMAN LLC,Neil C. Bordy , SEILLER WALTERMAN LLC & William P. Harbison , SELLER WATERMAN LLC. About Saint Catherine Hospitals Saint Catherine Hospital of Indiana LLC -- http://www.saintcatherinehospital.com/-- an acute-care hospital in Charlestown, Indiana, filed for Chapter 11 protection June 19 in New Albany, Indiana (Bankr. S.D. Ind. Case No. 12-91316). Saint Catherine Hospital of Indiana is a regional facility that performs weight-loss surgery and other procedures. The Debtor estimated assets worth less than $10 million and debt exceeding $10 million. A buyer has been located to purchase the operation while in Chapter 11, according to a report by Bill Rochelle, the bankruptcy columnist for Bloomberg News. Mr. Rochelle also reports that, in addition to losses from operations, bankruptcy was the result of a lawsuit begun by the trustee for Saint Catherine Hospital of Pennsylvania, which filed for bankruptcy reorganization in April in Wilkes-Barre, Pennsylvania. The Chapter 11 trustee in the Pennsylvania hospital's case filed a lawsuit to recover $300,000 allegedly transferred to the Indiana institution. Saint Catherine Hospital of Pennsylvania, LLC, dba Saint Catherine Medical Center of Fountain Springs, filed a Chapter 11 petition (Bankr. M.D. Pa. Case No. 12-02073) on April 9, 2012, estimating under $50,000 in assets and debts. It is a non-operating 107-bed hospital in Ashland, Pennsylvania. John H. Doran, Esq., at Doran & Doran, P.C., in Wilkes-Barre, Pennsylvania, served as counsel. Nine days after the bankruptcy filing, U.S. Bankruptcy Judge John J. Thomas granted the request of the Chapter 11 trustee to convert the Chapter 11 case of Saint Catherine Hospital of Pennsylvania to a liquidation in Chapter 7. SAMSON RESOURCES: Court Upholds Order Disallowing C. Williams Claim ------------------------------------------------------------------- Calvin Williams in the case captioned CALVIN WILLIAMS, Appellant, v. SAMSON RESOURCES CORPORATION, et al., Appellees, Civ. No. 18-84-RGA (D. Del.) appeals from a Dec. 13, 2017 Order ("Claim Objection Order") entered by the U.S. Bankruptcy Court for the District of Delaware, which sustained Debtor Samson Resources Corporation's objection to Appellant's proof of claim. Upon review of the facts presented, District Judge Richard G. Andrews affirms the Claim Objection Order. As part of their reorganization, Debtors pursued various asset sales, and, on Jan. 29, 2016, filed a motion seeking authority to sell certain assets, including the Debtors' working interests in certain oil and gas leases. Appellant filed various pleadings objecting to the Sale Motion. Appellant argued that because the Lease was invalid, the Debtors could not sell their interest in the Lease. Appellant's overall argument is that his Claim should be allowed because the Lease was obtained by fraud or that it otherwise is unconscionable, but Appellant adduced no evidence to support these assertions. Debtors, on the other hand, put on testimony to establish that the royalty rate set under the Lease was standard for such leases and that its terms were otherwise ordinary. None of the documents that Appellant cites and relies upon altered the mineral royalty granted under the Lease or the calculation of Appellant's inherited percentage of that mineral royalty. Debtors submitted unrebutted testimonial and documentary evidence that Appellant had been paid in full for his proportional interest under the Lease. Appellant failed to adduce evidence sufficient to establish his Claim. Accordingly, the Bankruptcy Court did not clearly err in holding that Appellant had been paid in full for his interests and did not have a claim against the Debtors. A copy of the Court's Memorandum dated Sept. 27, 2018 is available at https://bit.ly/2A9VmJg from Leagle.com. Calvin D. Williams, Appellant, pro se. Samson Resources Corporation, Appellee, represented by Joseph Charles Barsalona, II -- jbarsalona@mnat.com -- Morris, Nichols, Arsht & Tunnell LLP. Settlement Trust, Intervenor, represented by Michael J. Farnan -- mfarnan@farnanlaw.com -- Farnan LLP. About Samson Resources Corporation Samson Resources Corporation, et al., filed Chapter 11 bankruptcy petitions (Bankr. D. Del. Lead Case No. 15-11934) on Sept. 16, 2015. Philip W. Cook, the executive vice president and CFO, signed the petition. The Debtors estimated assets and liabilities of more than $1 billion. Samson is an onshore oil and gas exploration and production company with interests in various oil and gas leases primarily located in Colorado, Louisiana, North Dakota, Oklahoma, Texas, and Wyoming. The Operating Companies operate, or have royalty or working interests in, approximately 8,700 oil and gas production sites. Samson was acquired by KKR and Crestview from Charles Schusterman in December 2011 for approximately $7.2 billion. The investor group provided approximately $4.1 billion in equity investments as part of the purchase price. Kirkland & Ellis LLP represents the Debtors as general counsel. Klehr Harrison Harvey Branzburg LLP is the Debtors' local counsel. Alvarez & Marsal LLC acts as the Debtors' financial advisor. Blackstone Advisory Partners L.P. serves as the Debtors' Investment banker. Garden City Group, LLC, serves as claims and noticing agent to the Debtors. Andrew Vara, acting U.S. trustee for Region 3, appointed three creditors of Samson Resources Corp. and its affiliated debtors to serve on the official committee of unsecured creditors. The Committee has tapped White & Case LLP as counsel and Farnan LLP as local counsel. * * * The Debtors have filed a plan of reorganization. The Creditors' Committee has filed a competing plan of liquidation. The Hon. Christopher S. Sontchi of the U.S. Bankruptcy Court for the District of Delaware entered on Feb. 13, 2017, an order confirming Samson Resources Corporation, et al.'s plan of reorganization. SAMUELS JEWELERS: Proposes Sale Bid Procedures for All Assets ------------------------------------------------------------- BankruptcyData.com reported that Samuels Jewelers filed with the Court a motion for (i) an order establishing bid procedures and (ii) an order approving the sale of the Debtor's assets. BankruptcyData related that the motion explains, "By this motion, the Debtor seeks authority to commence a sale process to sell substantially all or any portion of the Assets. The Debtor will provide a form asset purchase agreement (the 'Asset Purchase Agreement') to Potential Bidders. Potential Bidders will be required to submit a revised Asset Purchase Agreement to the Debtor prior to the Bid Deadline. The Debtor, with the consent of each of the DIP Agents, will also entertain the possibility of entering into an agreement (the 'Stalking Horse Agreement') with a stalking horse purchaser (the 'Stalking Horse Purchaser') prior to the Bid Deadline. If the Debtor, with the consent of each of the DIP Agents selects a Stalking Horse Purchaser, the Debtor will file and serve notice of the proposed Stalking Horse Agreement no later than two days after execution of the agreement." BankruptcyData added that the motion proposes the following general timeline: (i) a December 5, 2018 deadline to submit qualified competing bids, (ii) an auction date, if necessary, of December 11, 2018 and (iii) a December 18, 2018 sale hearing. The Court scheduled an October 22, 2018 hearing on the motion. About Samuels Jewelers Samuels Jewelers, Inc. -- http://www.samuelsjewelers.com/-- operates a chain of jewelry stores with more than 120 stores in 23 states across the United States. These stores are located primarily in strip-mall centers, major shopping malls and as stand-alone stores. Samuels Jewelers filed for Chapter 11 protection (Bankr. D. Del. Lead Case No. 18-11818) on Aug. 7, 2018. In the petition signed by CEO Farhad K. Wadia, Samuels Jewelers estimated assets of $100 million to $500 million and liabilities of $100 million to $500 million. Jones Day and Richards, Layton & Finger, P.A., serve as counsel to the Debtor. Berkeley Research Group, LLC, acts as financial advisor, SSG Advisors, LLC, is the investment banker, and Prime Clerk LLC serves as claims and noticing agent to the Debtor. On Aug. 16, 2018, the U.S. Trustee appointed a seven-member panel to serve as the Official Committee of Unsecured Creditors in the Debtors' cases. The Committee tapped Foley & Lardner LLP as its counsel; Whiteford, Taylor & Preston LLC as its co-counsel; and Province, Inc. as financial advisor. SCRIBEAMERICA INTERMEDIATE: S&P Affirms 'B' ICR, Outlook Stable --------------------------------------------------------------- S&P Global Ratings affirmed its 'B' long-term issuer credit rating on U.S.-based scribe staffing company ScribeAmerica Intermediate Holdco LLC. The outlook remains stable. S&P said, "At the same time, we affirmed our 'B' issue-level rating on the company's first-lien secured debt, which comprises a $15 million revolving credit facility, a $250 million term loan, and the new $135 million term loan add-on. The '3' recovery rating remains unchanged, indicating our expectation for meaningful (50%-70%; rounded estimate: 50%) recovery in the event of a payment default. "While we expect ScribeAmerica's leverage to spike to 7.5x in 2018 following its unusually large acquisition of PhysAssist Scribes, we anticipate that its leverage will remain below 5x in 2019 due to the lack of suitably large acquisition targets in its market. Our overall assessments of the company's business and financial risk remain little changed despite the business benefits of the merger. PhysAssist is the largest acquisition the company has undertaken in recent history (larger than the four acquisitions it has completed since 2015). We expect the addition of PhysAssist to increase ScribeAmerica's scale, geographic presence, and market share. Nonetheless, the very narrow niche market that the company operates in continues to predominate our view of its business. "The stable outlook on ScribeAmerica reflects our expectation that the company will continue to grow, primarily through organic means, while expanding its margins and realizing acquisition synergies. We anticipate that it will use its resources to fund future acquisitions while maintaing leverage of between 4x and 5x over the next two years." SEARS HOLDINGS: Bankruptcy Court Approves First Day Motions ----------------------------------------------------------- Sears Holdings Corporation on Oct. 15, 2018, disclosed that the U.S. Bankruptcy Court for the Southern District of New York granted interim approval of all the Company's first day motions related to its voluntary Chapter 11 restructuring. Collectively, the approvals by the Court immediately improve the Company's liquidity position and allow Holdings to continue its business operations throughout the financial restructuring process. The Court entered an order granting the Company authorization to access its $300 million in senior priming debtor-in-possession ("DIP") financing from its senior secured asset-based revolving lenders. The Company also received authorization to continue paying employee wages and benefits, and to honor member programs including warranties and promotions. "The Court's approval of our First Day motions is an important step forward in our financial restructuring process that will allow the Company to continue operating in the normal course and providing our customers and members with trusted service," said Robert A. Riecker, Chief Financial Officer, and member of the Office of the Chief Executive. "Our stores, online and mobile platforms, and related businesses are open and we continue to offer our customers and members the brands and products they want. We look forward to continuing to engage in productive discussions with our creditors and other stakeholders to pursue a plan of reorganization as expeditiously as possible." About Sears Holdings Sears Holdings Corporation (NASDAQ: SHLD) -- http://www.searsholdings.com/-- began as a mail ordering catalog company in 1887 and became the world's largest retailer in the 1960s. At its peak, Sears was present in almost every big mall across the U.S., and sold everything from toys and auto parts to mail-order homes. Sears claims to be is a market leader in the appliance, tool, lawn and garden, fitness equipment, and automotive repair and maintenance retail sectors. Sears and Kmart merged to form Sears Holdings in 2005 when they had 3,500 US stores between them. Kmart emerged in 2005 from its own bankruptcy. Unable to keep up with online stores and other brick-and-mortar retailers, a long series of store closings has left it with 687 retail stores in 49 states, Guam, Puerto Rico, and the U.S. Virgin Islands as of mid-October 2018. The Company employs 68,000 individuals, of whom 32,000 are full-time employees. As of Aug. 4, 2018, Sears Holdings had $6.93 billion in total assets, $11.33 billion in total liabilities and a total deficit of $4.40 billion. Unable to cover a $134 million debt payment due Oct. 15, 2018, Sears Holdings Corporation and 49 subsidiaries sought Chapter 11 protection (Bankr. S.D.N.Y. Lead Case No. 18-23538) on Oct. 15, 2018. The Hon. Robert D. Drain is the case judge. Weil, Gotshal & Manges LLP is serving as legal counsel, M-III Partners is serving as restructuring advisor, and Lazard Freres & Co. LLC is serving as investment banker to Holdings. DLA Piper LLP is the real estate advisor. Prime Clerk is the claims and noticing agent. SEARS HOLDINGS: Fitch Lowers IDR to 'D' on Bankr. Filing -------------------------------------------------------- Fitch Ratings has downgraded the Long-Term Issuer Default Ratings on Sears Holdings Corporation, Sears Roebuck Acceptance Corp. and Kmart Corporation to 'D' from 'CC' following the company's announcement that the company has filed for Chapter 11 bankruptcy protection on Oct. 15, 2018. There was $5.7 billion in total debt outstanding on the petition date (including $836 million borrowings on its $1.5 billion ABL, but excluding $3.2 billion of intercompany notes). The company's prepetition senior secured ABL lenders are providing up to $1.83 billion senior secured superpriority priming DIP ABL Facility, with $300 million of new incremental commitments. In addition to the DIP ABL Facility, the company is negotiating a $300 million junior DIP financing with ESL Investments, Inc. (ESL). ESL is the company's largest stockholder (currently beneficially owns approximately 49.7% of Sears Holdings' outstanding stock) and creditor, and Edward S. Lampert is ESL's Chairman and Chief Executive Officer. ESL and affiliates own approximately 41% of Sears' $5.7 billion debt, including $1.5 billion in debt secured by real estate and intellectual properly and $845 million of debt secured by a second lien on the ABL collateral. Fitch expects to withdraw its ratings 30 days after default. KEY RATING DRIVERS The bankruptcy comes on the heels of Sears underperforming its largest retail peers within the department store, discount and big-box specialty retail segments since Kmart and Sears, Roebuck and Co. merged under the entity Sears Holdings Corporation in March 2005. The multi-year top line market share and EBITDA declines have resulted in high cash burn since 2013, which has necessitated significant liquidity infusion via asset sales and secured debt. This has led to long-held concerns regarding the company's competitive viability. The combined domestic entity lost $30 billion, or close to 65% of its 2006 domestic revenue base of $47 billion, excluding Orchard Hardware, through 2017, with Fitch projecting 2018 revenue (prior to bankruptcy) of $12.5 billion to $13 billion. The top-line weakness reflects years of underinvestment in stores, competitive pressures, inconsistent merchandising execution and the lack of a long-term retail strategy. The company has significantly reduced its store base with accelerated store closings beginning 2012. Sears full line stores stood at 482 units at Aug. 4, 2018 (down approximately 45% versus 860 units in 2006) while Kmart stood at 360 units (down approximately 75% versus approximately 1,400 stores in 2006). Sears noted that it will close 142 stores that operate at significant losses at the outset of bankruptcy and is seeking lease rejections of 217 store locations. The company stated that approximately 400 of its stores are four-wall EBITDA positive (before any lease concessions) - and intends to sell these and other viable stores, or a substantial portion thereof, as a going concern. Sears is in discussions with ESL regarding a stalking-horse bid for the purchase of the company's store base. Sears also noted that it is currently burning $125 million of cash per month, in line with Fitch's expectation. Sears cash burn distinguishes it from recent retail bankruptcies such as Toys 'R' Us, Claire's and Gymboree, which could impact its ability to emerge as a going concern. Impact on Direct Competitors and U.S. Mall Traffic Fitch expects the U.S. mall landscape to significantly evolve over the next few years. Large-scale closures over the last couple of years, including Macy's of 100+ stores, J.C. Penney Company, Inc. of 138 stores and Bon-Ton's liquidation (approximately 260 stores), are likely to accelerate tenant type evolution, given minimal department store expansion within the industry. As has been the case, much of the vacated square footage at mall locations with strong local traffic (supported by stable or positive demographic shifts in that market) can be re-tenanted with big-box retailers, not traditionally associated with indoor malls, such as grocery stores, dining and entertainment complexes, fitness centers, or converted into medical or office space. For weaker malls, anchor closures without re-tenanting activity could yield significant productivity declines or even mall closures. While closures would be negative for retailers in the affected centers, reduced mall capacity could improve the overall health of the industry over the long run. Fitch continues to believe the mall category is a viable shopping destination for the long term, despite these significant changes and the need for operators to adjust business models and footprints. Fitch expects financially and operationally stronger companies such as Macy's, Nordstrom and Kohl's to at least maintain their market share as they evolve into omnichannel models, with over 20% of their revenue already coming from online and benefit from their position as retail ambassadors for vendors who cannot risk brand commoditization from the online and discount channels. In the near term, Sears' liquidation sales during the holiday season at the 144 locations it has already identified for closure and potentially more could have a modest negative impact on other large retailers. Longer term, Fitch expects much of its revenue ($14.3 billion on an LTM basis) to be captured by several retailers. Hardlines is the largest category accounting for $6 billion or approximately 43% of consolidated revenue. Of this, almost $5 billion is generated within the Sears stores. Hardlines includes categories such as consumer electronics, appliances and home improvement, in addition to sporting goods and housewares. Major competitors in these categories include Home Depot, Lowe's, Best Buy and Dick's Sporting Goods. Fitch believes sales trends at many of these retailers in recent years have been supported by loss of market share at Sears. Apparel and soft home represent $3.7 billion or approximately 25% of consolidated revenue. This compares to between $10 billion and $25 billion each in annual revenue at Macy's, Kohl's, J.C. Penney and Nordstrom. Even the regionally-focused Dillard's generates $6 billion in overall revenue. As a result of modest share held by Sears in the category, the opportunities for direct department store competitors to pick up apparel share are limited. The remaining revenue mix is split between food and drug ($1.5 billion at Kmart) and services such as repair, installation and warranty (primarily at Sears). Kmart represents approximately 30% of consolidated revenue, with sales pretty evenly split between apparel/soft home, food and drug, and hardlines. Given the off-mall real estate positioning, continued comps declines and store closures at Kmart branded stores are most likely to benefit discount peers, such as Walmart and Target and food/drug retailers, in addition to the hardlines players referenced. DERIVATION SUMMARY Sears' bankruptcy reflects the multi-year top line market share and EBITDA declines have resulted in high cash burn since 2013, which has necessitated significant liquidity infusion via asset sales and secured debt. This has led to long-held concerns regarding the company's competitive viability. The combined domestic entity lost $30 billion, or close to 65% of its 2006 domestic revenue base of $47 billion, excluding Orchard Hardware, through 2017, with projected 2018 revenue of $12.5 billion to $13 billion. The top-line weakness reflects years of underinvestment in stores, competitive pressures, inconsistent merchandising execution and the lack of a long-term retail strategy. While the hardlines and discount channel has been relatively resilient with growth in retailers such as Walmart, Target, Home Depot, Lowe's and Best Buy, department store industry sales have declined almost 30% over the last 10 years. The decline in Sears' sales have been more pronounced compared to investment grade-rated retailers such as Macy's, Kohl's and Nordstrom, where sales have been flat to up during this time frame. J. C. Penney's 'B' rating reflects Fitch's expectations that comparable store sales should remain flattish over the next 24-36 months as weakness in women's apparel (22% of sales) is largely offset with growth in areas such as home and appliances (15% of sales), beauty/Sephora, private brands, baby gear/toys. EBITDA is expected to decline to around $700 million to $750 million, relative to approximately $890 million in 2017, given execution issues around merchandising and inventory levels. Leverage is expected to tick up to around 6x but overall liquidity remains strong with manageable near term debt maturities. KEY ASSUMPTIONS Recovery Considerations for Issue-Specific Ratings Fitch's recovery analysis assumes a liquidation value under a distressed scenario of approximately $3.7 billion on inventory; receivables; and property, plant and equipment. Fitch applied an 80% advance rate on receivables and a 70% advance rate against second-quarter inventory as a proxy for a net orderly liquidation value of the assets. Fitch also assumes owned stores as discussed, would be valued at $1.5 billion. A going-concern approach does not maximize total enterprise value, even acknowledging Sears' comments that 400 stores or approximately half its stores is 4-wall EBITDA positive. The ratings on the existing $1.5 billion domestic senior secured credit facility (SRAC and Kmart Holding Corp. are the borrowers) is 'CCC'/'RR1', indicating outstanding (90%-100%) recovery prospects. The current facility is secured primarily by inventory, and pharmacy and credit card receivables. Fitch will withdraw the ratings once the DIP financing is ordered by the judge and the proceeds are used to repay pre-petition ABL borrowings in full. The new expected DIP financing of up to $1.83 billion would have a first lien on inventory, and pharmacy and credit card receivables and substantially all other unencumbered assets. The $571 million first-lien secured term loan due July 2020 is rated 'CCC'/'RR1', as it is secured by a first lien on the same collateral and guaranteed by the same subsidiaries of the company that guarantee the revolving facility. The $300 million second-lien term loan facility due July 2020, the $525 million second-lien uncommitted line of credit loans provided by ESL and affiliates and the $170 million extended second-lien notes due 2019 have a second lien on the ABL collateral. Fitch rates the extended and the non-extended portion of the second-lien secured notes at 'C/RR6', though notes that the extended portion of the second-lien secured notes ranks pari passu to the second lien credit agreement while the non-extended second-lien secured notes is subordinated. Fitch notes that while the proposed $300 million junior ABL DIP facility that could be provided by ESL would rank lower in priority to all the second lien debt on the original ABL collateral (inventory, and pharmacy and credit card receivables), it would benefit from liens on other assets such as real estate. The $284 million senior unsecured notes at SRAC and the 8% $625 million unsecured notes due 2019 at Holdings are rated 'C'/'RR6', given poor recovery prospects (0%-10%). The company owned 48 Kmart stores, 243 Sears stores and 10 DCs as of Feb. 3, 2018. This excludes the 138 ring-fenced properties that were subject to a ring fence arrangement with the PBGC. Fitch has valued the 153 total owned stores and 10 DCs at approximately $1.5 billion based on the valuation Sears has received in various real estate transactions. Fitch notes there is approximately $1.1 billion of debt outstanding held by ESL and affiliates ($955 million) and Cascade Investment LLC ($108 million) that is secured by some (Fitch estimates close to 50%-60%) of these properties. RATING SENSITIVITIES N/A LIQUIDITY Sears had total liquidity of $291 million as of the last reported quarter ended Aug. 4, 2018, consisting of $193 million cash and $96 million available under its credit facility. The $96 million available on the $1.5 billion domestic credit facility reflected $660 million of borrowings and $120 million of letters of credit outstanding, the effect of the springing fixed-charge coverage ratio covenant of $150 million, and another about $620 million that was not available due to the borrowing base limitation. FULL LIST OF RATING ACTIONS Fitch has downgraded the following ratings: Sears Holdings Corporation -- Long-Term IDR to 'D' from 'CC'; -- Extended second-lien secured notes due 2019 to 'C/RR6' from 'CCC'/'RR2'; Sears, Roebuck and Co. -- Long-Term IDR to 'D' from 'CC'; Sears Roebuck Acceptance Corp. -- Long-Term IDR to 'D' from 'CC'; -- $1.5 billion secured bank facility to 'CCC/RR1' from 'CCC+'/'RR1' (as co-borrower); -- First-lien term loans to 'CCC/RR1' from 'CCC+'/'RR1' (as co-borrower). Kmart Holding Corporation -- Long-Term IDR to 'D' from 'CC'; Kmart Corporation -- Long-Term IDR to 'D' from 'CC'; -- $1.5 billion secured bank facility to 'CCC/RR1' from 'CCC+'/'RR1' (as co-borrower); -- First-lien term loans to 'CCC/RR1' from 'CCC+'/'RR1' (as co-borrower). Fitch has affirmed the following ratings: Sears Holdings Corporation -- Non-extended second-lien secured notes due 2018 at 'C/RR6'; -- Unsecured notes at 'C'/'RR6'. Sears Roebuck Acceptance Corp. -- Senior unsecured notes at 'C'/'RR6'. Fitch has withdrawn the following ratings: Sears Roebuck Acceptance Corp. -- Short-Term IDR 'C'; -- Commercial paper 'C'; SEARS HOLDINGS: Kimco Realty's Exposure Limited to 14 Leases ------------------------------------------------------------ Kimco Realty Corp. on Oct. 15, 2018, disclosed that it expects to benefit from considerable mark-to-market and long-term redevelopment opportunities in the wake of the recently announced Sears Holdings ("Sears/Kmart") bankruptcy filing. Overall, Kimco's exposure is limited to 14 leases (three Sears and eleven Kmart, one of which is subleased to At Home), representing just 0.6% of annualized base rent and 1.9% of the company's total gross leasable area. "[Mon]day's announcement may afford us the long-awaited opportunity to recapture boxes with significant mark-to-market potential in our core markets, and sparks several new redevelopment opportunities within our portfolio," said Conor Flynn, Kimco's Chief Executive Officer. "Given the highly favorable demographics of these locations, along with the continued demand for well-located, high-quality real estate, we expect to build on our past success in creating value by re-tenanting and redeveloping these below-market anchor spaces and activating underutilized parking fields." Sears/Kmart pays among the lowest rents of any tenant in Kimco's portfolio. The 14 Sears/Kmart leases have an average base rent of $5.25 per square foot, which is significantly below the company's portfolio average of $15.95. Demographics across the 14 locations are desirable, with a population of 129,000 within a three-mile radius with an average household income of $88,000. Select opportunities include: * Whittwood Town Center, an infill site in the densely populated Los Angeles suburb of Whittier, California, serving a population of approximately 175,000 within a three-mile radius with an average household income of over $93,000. * Bridgehampton Commons in Bridgehampton, New York, serving the affluent Hamptons community, with an average household income of over $193,000 in a three-mile radius. * Kendale Lakes Plaza in Miami, Florida, with a population of 215,000 within a three-mile radius in this strong South Florida market. Since 2015, Kimco has proactively reduced its overall exposure to Sears/Kmart and has recognized the benefits of recapturing eight Sears/Kmart locations, achieving an average rent spread of 211%. The recaptures triggered the redevelopment of four of those centers, including: * Hylan Plaza in Staten Island, New York, where a former Kmart has been demolished to make way for The Boulevard, Kimco's $186 million Signature Series redevelopment scheduled to open in 2020, featuring tenants such as Alamo Drafthouse, Marshalls, Ulta, LA Fitness and ShopRite, which replaced Kmart at a rent spread of 727%. * Vermont-Slauson Shopping Center in Los Angeles, California, where a former Kmart was re-leased to Ross Dress for Less and dd's Discounts for a total rent spread of 748%. * Bayhill Plaza in Orlando, Florida, where a Kmart box was re-tenanted with a PGA Superstore and Ross Dress for Less for a total rent spread of 127%. * Fullerton Plaza in Baltimore, Maryland, where Kmart was replaced by Weis Markets for a rent spread of 191%. About Kimco Kimco Realty Corp. -- http://www.kimcorealty.com/-- is a real estate investment trust (REIT) headquartered in New Hyde Park, N.Y., that is one of North America's largest publicly traded owners and operators of open-air shopping centers. As of September 30, 2018, the company owned interests in 450 U.S. shopping centers comprising 78 million square feet of leasable space primarily concentrated in the top major metropolitan markets. Publicly traded on the NYSE since 1991, and included in the S&P 500 Index, the company has specialized in shopping center acquisitions, development and management for 60 years. About Sears Holdings Sears Holdings Corporation (NASDAQ: SHLD) -- http://www.searsholdings.com/-- began as a mail ordering catalog company in 1887 and became the world's largest retailer in the 1960s. At its peak, Sears was present in almost every big mall across the U.S., and sold everything from toys and auto parts to mail-order homes. Sears claims to be is a market leader in the appliance, tool, lawn and garden, fitness equipment, and automotive repair and maintenance retail sectors. Sears and Kmart merged to form Sears Holdings in 2005 when they had 3,500 US stores between them. Kmart emerged in 2005 from its own bankruptcy. Unable to keep up with online stores and other brick-and-mortar retailers, a long series of store closings has left it with 687 retail stores in 49 states, Guam, Puerto Rico, and the U.S. Virgin Islands as of mid-October 2018. The Company employs 68,000 individuals, of whom 32,000 are full-time employees. As of Aug. 4, 2018, Sears Holdings had $6.93 billion in total assets, $11.33 billion in total liabilities and a total deficit of $4.40 billion. Unable to cover a $134 million debt payment due Oct. 15, 2018, Sears Holdings Corporation and 49 subsidiaries sought Chapter 11 protection (Bankr. S.D.N.Y. Lead Case No. 18-23538) on Oct. 15, 2018. The Hon. Robert D. Drain is the case judge. Weil, Gotshal & Manges LLP is serving as legal counsel, M-III Partners is serving as restructuring advisor and Lazard FrÃ¨res & Co. LLC is serving as investment banker to Holdings. DLA Piper LLP is the real estate advisor. Prime Clerk is the claims and noticing agent. SEARS HOLDINGS: PREIT Exposure Down to 4 Stores ----------------------------------------------- PREIT outlined its proactive Sears replacement strategy, resulting in minimal exposure to the troubled department store, down from 27 stores in 2012 to just four active stores on Oct. 10, 2018, when factoring in locations at lease with replacement tenants, those with non-recourse mortgage loans and one location with a significant portion of the space sub-leased by Sears to others. PREIT's four stores compares to a Mall REIT peer average of over thirty stores. Since 2017, PREIT has proactively replaced five Sears locations and has reached agreement to recapture a sixth store. As part of its overall anchor repositioning and remerchandising strategy, PREIT has diversified the tenant roster with unique and experiential concepts to reflect the new mall model and drive traffic and sales while improving the underlying tenant credit within the portfolio. "Just as we were proactive in disposing of lower-productivity malls, we have positioned ourselves well with minimal exposure to Sears in the event of potential material store closing event. As we look to redefine the mall experience, we are finding great success in replacing department stores with a variety of uses and experiences in line with the interests of today's consumer," said Joseph F. Coradino, CEO of PREIT. "Our tireless effort to improve our portfolio continues and has laid the foundation for continued growth in traffic, sales and value for our shareholders." A snapshot of new anchor tenants throughout the portfolio, either signed or opened, across several in-demand retail segments, includes: Segment Brand Property Off-Price Burlington Magnolia Mall Plymouth Meeting Mall HomeGoods Viewmont Mall Magnolia Mall Five Below Magnolia Mall HomeSense Moorestown Mall Sierra Trading Moorestown Mall Entertainment Tilt Valley Mall Studio Movie Grille Willow Grove Park Fitness Edge Fitness Plymouth Meeting Mall One Life Fitness Valley Mall Sporting Goods/Recreation DICK's Sporting Goods Viewmont Mall Field & Stream Capital City Mall Plymouth Meeting Mall Department Store Belk Valley Mall Von Maur Woodland Mall Food and Dining Primanti Bros Capital City Mall Fine Wine & Good Spirits Capital City Mall Whole Foods Exton Square Mall About PREIT PREIT (NYSE: PEI) -- http://www.preit.com/-- is a publicly traded real estate investment trust that owns and manages quality properties in compelling markets. PREIT's robust portfolio of carefully curated retail and lifestyle offerings mixed with destination dining and entertainment experiences are located primarily in the densely populated eastern U.S. with concentrations in the mid-Atlantic's top MSAs. Since 2012, the Company has driven a transformation guided by an emphasis on portfolio quality and balance sheet strength driven by disciplined capital expenditures. About Sears Holdings Sears Holdings Corporation (NASDAQ: SHLD) -- http://www.searsholdings.com/-- began as a mail ordering catalog company in 1887 and became the world's largest retailer in the 1960s. At its peak, Sears was present in almost every big mall across the U.S., and sold everything from toys and auto parts to mail-order homes. Sears claims to be is a market leader in the appliance, tool, lawn and garden, fitness equipment, and automotive repair and maintenance retail sectors. Sears and Kmart merged to form Sears Holdings in 2005 when they had 3,500 US stores between them. Kmart emerged in 2005 from its own bankruptcy. Unable to keep up with online stores and other brick-and-mortar retailers, a long series of store closings has left it with 687 retail stores in 49 states, Guam, Puerto Rico, and the U.S. Virgin Islands as of mid-October 2018. The Company employs 68,000 individuals, of whom 32,000 are full-time employees. As of Aug. 4, 2018, Sears Holdings had $6.93 billion in total assets, $11.33 billion in total liabilities and a total deficit of $4.40 billion. Unable to cover a $134 million debt payment due Oct. 15, 2018, Sears Holdings Corporation and 49 subsidiaries sought Chapter 11 protection (Bankr. S.D.N.Y. Lead Case No. 18-23538) on Oct. 15, 2018. The Hon. Robert D. Drain is the case judge. Weil, Gotshal & Manges LLP is serving as legal counsel, M-III Partners is serving as restructuring advisor, and Lazard Freres & Co. LLC is serving as investment banker to Holdings. DLA Piper LLP is the real estate advisor. Prime Clerk is the claims and noticing agent. SEARS HOLDINGS: Receives Delisting Notice from Nasdaq ----------------------------------------------------- Sears Holdings Corporation received on Oct. 15, 2018, a letter from the listing qualifications department staff of the Nasdaq Stock Market notifying the Company that, as a result of the Chapter 11 cases and in accordance with Nasdaq Listing Rules 5101, 5110(b) and IM-5101-1, Nasdaq has determined that the Company's common stock and warrants to purchase common stock will be delisted from Nasdaq. Accordingly, unless the Company requests an appeal of this determination, trading of the securities will be suspended at the opening of business on Oct. 24, 2018 and a Form 25-NSE will be filed with the Securities and Exchange Commission, which will remove the Company's securities from listing and registration on Nasdaq. The Company does not intend to appeal the determination and, therefore, it is expected that the securities will be delisted. The Company expects that the trading of its securities on the OTC Pink market will commence on Oct. 24, 2018 under the symbol "SHLDQ". The transition does not affect the Company's operations and does not change reporting requirements under SEC rules. About Sears Holdings Sears Holdings Corporation (NASDAQ: SHLD) -- http://www.searsholdings.com/-- began as a mail ordering catalog company in 1887 and became the world's largest retailer in the 1960s. At its peak, Sears was present in almost every big mall across the U.S., and sold everything from toys and auto parts to mail-order homes. Sears claims to be is a market leader in the appliance, tool, lawn and garden, fitness equipment, and automotive repair and maintenance retail sectors. Sears and Kmart merged to form Sears Holdings in 2005 when they had 3,500 US stores between them. Kmart emerged in 2005 from its own bankruptcy. Unable to keep up with online stores and other brick-and-mortar retailers, a long series of store closings has left it with 687 retail stores in 49 states, Guam, Puerto Rico, and the U.S. Virgin Islands as of mid-October 2018. The Company employs 68,000 individuals, of whom 32,000 are full-time employees. As of Aug. 4, 2018, Sears Holdings had $6.93 billion in total assets, $11.33 billion in total liabilities and a total deficit of $4.40 billion. Unable to cover a $134 million debt payment due Oct. 15, 2018, Sears Holdings Corporation and 49 subsidiaries sought Chapter 11 protection (Bankr. S.D.N.Y. Lead Case No. 18-23538) on Oct. 15, 2018. The Hon. Robert D. Drain is the case judge. Weil, Gotshal & Manges LLP is serving as legal counsel, M-III Partners is serving as restructuring advisor, and Lazard Freres & Co. LLC is serving as investment banker to Holdings. DLA Piper LLP is the real estate advisor. Prime Clerk is the claims and noticing agent. SEARS HOLDINGS: S&P Lowers ICR to 'D' on Bankruptcy Filing ---------------------------------------------------------- S&P Global Ratings said it lowered its issuer credit rating on Sears Holdings Corp. and all rated subsidiaries to 'D'. At the same time, S&P lowered all issue-level ratings to 'D'. The downgrade follows Sears' Chapter 11 bankruptcy filing in the U.S. Bankruptcy Court for the Southern District of New York to address its debt-heavy capital structure and money losing retail operations. S&P said, "In the months before the bankruptcy, Sears' largest shareholder proposed a wide-ranging out of court debt restructuring (via 13-D filings), which we viewed as an alternative to a Chapter 11 filing. No such agreement was reached, so we view the October 15 maturity of about $134 million of principal (relatively modest in the context of its $4.9 billion reported short- and long-term debt and capital leases as of August 4) as the trigger for Sears' filing. "We have viewed the company's capital structure as unsustainable for several years due to cash use in the retail operation, pension funding requirements, and a heavy cash interest burden. But, until now, Sears' extensive legacy asset base supported efforts to fund cash losses with asset sales and additional financings, including from entities related to large shareholder and Chairman Edward S. Lampert." Sears plans to seek a superpriority priming debtor-in-possession asset-based credit facility in an aggregate principal amount of approximately $1.830 billion. The company is moving immediately to rapidly reduce its footprint. Its initial plans are to reject leases at about 220 locations, almost all of which Sears said they had already stopped operating, and commence going out of business sales at another 142 unprofitable stores that are expected to be closed by the end of 2018. S&P expects to withdraw its 'D' ratings once they have been outstanding for 30 days. SEARS HOLDINGS: Seritage Says 70% of Income Now From Other Tenants ------------------------------------------------------------------ Seritage Growth Properties on Oct. 15, 2018, provided a business update related to the recent announcement by Sears Holdings Corporation that Sears Holdings has filed for Chapter 11 bankruptcy protection. "All of our capital investment, leasing and development activity over the last three years is unlocking substantial value, and has significantly diversified our income stream with approximately 70% of our signed leased income now coming from diversified, non-Sears tenants," said Benjamin Schall, President and Chief Executive Officer. "We have $1 billion of cash and committed capital under our Term Loan facility, which provides us the funds to complete all of our on-going redevelopment projects and cover reductions in cash flow that may result from the potential disruption in Sears income. The completion of our redevelopment projects brings our signed leased income on-line and will replace any potential lost income from Sears Holdings." "Our go-forward strategy remains as it has been -- to unlock substantial value through investment of capital and the intensive redevelopment of our well-located buildings and land," continued Mr. Schall. "All of our active projects will continue uninterrupted, and we are excited to further build our pipeline of redevelopment activity by partnering with growing retailers and users, mixed-use developers and institutional capital allocators." Additional comments from Mr. Schall can be found in our "Letter from our Chief Executive Officer" dated October 15, 2018 and filed on Form 8-K with the Securities and Exchange Commission. Development Activities * Announced Projects: as of September 30, 2018, the Company had completed or commenced 94 redevelopment projects, representing over $1.4 billion of total investment, and will proceed uninterrupted with all active and underway projects. The Company's share of remaining spending at these projects is approximately $880 million which is expected to be funded with cash on hand and committed borrowing facilities. This capital is being invested at targeted incremental returns of approximately 11% and is creating significant value for our shareholders. * Development Pipeline: the Company will continue to build its pipeline of redevelopment opportunities through the activation of the remainder of its portfolio for higher and better uses much in the same way it has since its inception in July 2015. The scale and quality of the Company's portfolio, combined with its unique redevelopment platform and control over its real estate, provide Seritage with competitive advantages that will allow it to continue as an industry leader in transforming retail real estate around the country. Leasing Activities * Signed Not Opened Leases: the Company has sufficient liquidity to complete all underway projects and, as such, the Company is positioned to fulfill all of its commitments to tenants under signed but not opened ("SNO") leases. As of September 30, 2018, the Company had 156 SNO leases representing $75.0 million of annual base rent, including the Company's proportional share of its unconsolidated joint ventures, the majority of which is expected to steadily come on line throughout the next 24 months. * Lease Up at Underway Projects: completing all underway projects includes the lease-up of remaining unleased space at these projects. The Company projects an additional $80 million of rental income, including the Company's proportional share of its unconsolidated joint ventures, can be generated as these projects are stabilized without allocating additional capital beyond the $880 million referenced above [1] . Seritage Liquidity * Cash on Hand: as of September 30, 2018, the Company had approximately $580 million of cash on hand. This capital is available to fund on-going development activities, as well as adverse impacts to operating cash flow that may result from potential reductions of rental income under the Master Lease with Sears Holdings. * Incremental Funding Facility: the Company's $2.0 billion term loan facility (the "Term Loan Facility") includes a committed $400 million incremental funding facility. This capital would also be available, subject to certain conditions, to fund announced and future redevelopment activities. * Asset Monetization: the Company will continue to opportunistically pursue select asset monetization and new joint ventures that support the Company's value creation activities. * Common Stock Dividends: the Company expects to maintain its current common stock dividend policy of making distributions that approximate taxable income so as to retain as much free cash flow as possible for reinvestment back into the portfolio. To the extent estimated taxable income falls meaningfully below current distribution levels (approximately $55 million annually), as a result of reduced income under the Master Lease or reduced capital gains from asset monetization activities, the Board of Trustees may consider adjustments to common stock dividend amounts. Any reduction of the common dividend would be made to allow the Company to reinvest the capital retained into future redevelopment projects at accretive returns. * Preferred Stock Dividends: the Company expects to continue paying dividends ($4.9 million annually) on its preferred shares. Master Leases with Sears Holdings * Remaining Exposure: as of September 30, 2018, including the effect of all previously exercised recapture and termination activity, Sears Holdings was a tenant in 82 properties under the Master Lease and 20 properties under the JV Master Leases representing an aggregate of 12.4 million square feet and $61.2 million of annual base rent, or 31.4% of all base rent under signed leases. * Impact of Re-Leasing Spreads: the 3.5x to 4.5x rental uplift that Company has historically achieved upon re-leasing space formerly occupied by Sears Holdings allows it to recover all the rental income generated from Sears Holdings by re-leasing only 25-35% of the formerly occupied space and deploying the capital required to bring the rental income online. Term Loan Facility with Berkshire Hathaway * Loan Status: there is no direct impact of Sears Holdings' bankruptcy filing, or a potential rejection of the Master Lease, on the Company's Term Loan Facility. Specifically, such occurrences will not result in an event of default, mandatory amortization, cash flow sweep or any similar provision. * Financial Metrics: the Term Loan Facility includes certain financial metrics, including fixed charge coverage ratios, leverage ratios and a minimum net worth, that could be negatively impacted by a loss of revenue from Sears Holdings. A failure to satisfy any of these financial metrics will require the Company to seek lender approval to monetize assets via sale or joint venture and also provide the lender the right to request mortgages on its real estate collateral, but will not result in an event of default, mandatory amortization, cash flow sweep or any similar provision. The Company is monitoring, and will continue to monitor, Sears Holdings' bankruptcy proceedings and the impact on its business. By their nature, bankruptcy proceedings and their outcomes are subject to uncertainty. For more information regarding the same, refer to the risk factors relating to Sears Holdings in our periodic filings with the Securities and Exchange Commission. About Sears Holdings Sears Holdings Corporation (NASDAQ: SHLD) -- http://www.searsholdings.com/-- began as a mail ordering catalog company in 1887 and became the world's largest retailer in the 1960s. At its peak, Sears was present in almost every big mall across the U.S., and sold everything from toys and auto parts to mail-order homes. Sears claims to be is a market leader in the appliance, tool, lawn and garden, fitness equipment, and automotive repair and maintenance retail sectors. Sears and Kmart merged to form Sears Holdings in 2005 when they had 3,500 US stores between them. Kmart emerged in 2005 from its own bankruptcy. Unable to keep up with online stores and other brick-and-mortar retailers, a long series of store closings has left it with 687 retail stores in 49 states, Guam, Puerto Rico, and the U.S. Virgin Islands as of mid-October 2018. The Company employs 68,000 individuals, of whom 32,000 are full-time employees. As of Aug. 4, 2018, Sears Holdings had $6.93 billion in total assets, $11.33 billion in total liabilities and a total deficit of $4.40 billion. Unable to cover a $134 million debt payment due Oct. 15, 2018, Sears Holdings Corporation and 49 subsidiaries sought Chapter 11 protection (Bankr. S.D.N.Y. Lead Case No. 18-23538) on Oct. 15, 2018. The Hon. Robert D. Drain is the case judge. Weil, Gotshal & Manges LLP is serving as legal counsel, M-III Partners is serving as restructuring advisor and Lazard FrÃ¨res & Co. LLC is serving as investment banker to Holdings. DLA Piper LLP is the real estate advisor. Prime Clerk is the claims and noticing agent. SEARS HOLDINGS: Tempur Sealy Says Sears Only Less Than 5% of Sales ------------------------------------------------------------------ In connection with the Oct. 15 announcement that Sears Holdings Corporation and certain of its subsidiaries ("Sears") have filed for bankruptcy protection, Tempur Sealy International, Inc. is disclosing its credit exposure and sales volume related to Sears. Sears represented less than 5% of the Company's global net sales and less than $5 million of its accounts receivable exposure as of September 30, 2018. Tempur Sealy International, Inc. Chairman and CEO Scott Thompson commented, "Our products are broadly distributed across many channels so consumers can choose where and how they wish to shop. We continue to work closely with Sears during their restructuring process while managing our related financial and operational risks." About the Company Tempur Sealy International, Inc. -- http://www.tempursealy.com/-- develops, manufactures, and markets mattresses, foundations, pillows and other products. The Company's products are sold worldwide through third party retailers, its own stores, and online. The Company's brand portfolio includes many highly recognized brands in the industry, including Tempur(R), Tempur-Pedic(R), Sealy(R) featuring Posturepedic(R) Technology, and Stearns & Foster(R). World headquarters for Tempur Sealy International is in Lexington, KY. About Sears Holdings Sears Holdings Corporation (NASDAQ: SHLD) -- http://www.searsholdings.com/-- began as a mail ordering catalog company in 1887 and became the world's largest retailer in the 1960s. At its peak, Sears was present in almost every big mall across the U.S., and sold everything from toys and auto parts to mail-order homes. Sears claims to be is a market leader in the appliance, tool, lawn and garden, fitness equipment, and automotive repair and maintenance retail sectors. Sears and Kmart merged to form Sears Holdings in 2005 when they had 3,500 US stores between them. Kmart emerged in 2005 from its own bankruptcy. Unable to keep up with online stores and other brick-and-mortar retailers, a long series of store closings has left it with 687 retail stores in 49 states, Guam, Puerto Rico, and the U.S. Virgin Islands as of mid-October 2018. The Company employs 68,000 individuals, of whom 32,000 are full-time employees. As of Aug. 4, 2018, Sears Holdings had $6.93 billion in total assets, $11.33 billion in total liabilities and a total deficit of $4.40 billion. Unable to cover a $134 million debt payment due Oct. 15, 2018, Sears Holdings Corporation and 49 subsidiaries sought Chapter 11 protection (Bankr. S.D.N.Y. Lead Case No. 18-23538) on Oct. 15, 2018. The Hon. Robert D. Drain is the case judge. Weil, Gotshal & Manges LLP is serving as legal counsel, M-III Partners is serving as restructuring advisor and Lazard Freres & Co. LLC is serving as investment banker to Holdings. DLA Piper LLP is the real estate advisor. Prime Clerk is the claims and noticing agent. SEARS HOLDINGS: Whirlpool Says Sears Less Than 2% of Net Sales -------------------------------------------------------------- Whirlpool Corporation on Oct. 15, 2018, confirmed the recently announced Sears Holdings Corporation ("Sears") bankruptcy will have a very limited impact on Whirlpool's results of operations. As of Sept. 30, 2018, approximately $30 million or 1% of Whirlpool's aggregate accounts receivable exposure was related to Sears, and Whirlpool had an immaterial amount of Sears-related inventory. In addition, net sales to Sears represented less than 2% of Whirlpool's global net sales. In the past, when faced with a potential volume reduction from any one particular segment of the trade distribution network, Whirlpool has been able to offset such declines with increased sales through a broad distribution network. "Our products are sold where consumers want to shop with distribution across all big-box retailers, the homebuilding channel and independent retailers," said Joe Liotine, President, Whirlpool Corporation North America. "We will continue to provide a great array of product offerings and services that meet consumer needs, offering strong brands that deliver innovation to consumers every day." Whirlpool does not anticipate this bankruptcy will have any impact on our full-year 2018 EPS guidance or financial results over the long term. Further updates will be provided on Whirlpool's conference call to discuss third-quarter financial results. About Whirlpool Corporation Whirlpool Corporation is the world's leading major home appliance company, with approximately $21 billion in annual sales, 92,000 employees and 70 manufacturing and technology research centers in 2017. The company markets Whirlpool, KitchenAid, Maytag, Consul, Brastemp, Amana, Bauknecht, Jenn-Air, Indesit and other major brand names in nearly every country throughout the world. About Sears Holdings Sears Holdings Corporation (NASDAQ: SHLD) -- http://www.searsholdings.com/-- began as a mail ordering catalog company in 1887 and became the world's largest retailer in the 1960s. At its peak, Sears was present in almost every big mall across the U.S., and sold everything from toys and auto parts to mail-order homes. Sears claims to be is a market leader in the appliance, tool, lawn and garden, fitness equipment, and automotive repair and maintenance retail sectors. Sears and Kmart merged to form Sears Holdings in 2005 when they had 3,500 US stores between them. Kmart emerged in 2005 from its own bankruptcy. Unable to keep up with online stores and other brick-and-mortar retailers, a long series of store closings has left it with 687 retail stores in 49 states, Guam, Puerto Rico, and the U.S. Virgin Islands as of mid-October 2018. The Company employs 68,000 individuals, of whom 32,000 are full-time employees. As of Aug. 4, 2018, Sears Holdings had $6.93 billion in total assets, $11.33 billion in total liabilities and a total deficit of $4.40 billion. Unable to cover a $134 million debt payment due Oct. 15, 2018, Sears Holdings Corporation and 49 subsidiaries sought Chapter 11 protection (Bankr. S.D.N.Y. Lead Case No. 18-23538) on Oct. 15, 2018. The Hon. Robert D. Drain is the case judge. Weil, Gotshal & Manges LLP is serving as legal counsel, M-III Partners is serving as restructuring advisor and Lazard FrÃ¨res & Co. LLC is serving as investment banker to Holdings. DLA Piper LLP is the real estate advisor. Prime Clerk is the claims and noticing agent. SENIOR NH: Seeks Authorization on Cash Collateral Use ----------------------------------------------------- Senior NH, LLC, seeks authorization from the U.S. Bankruptcy Court for the Northern District of Georgia to use cash collateral. The proposed 14-week Budget shows total expenses of approximately $904,358 through December 24, 2018. In the course of operating its business, the Debtor incurs certain operating expenses which are necessary for the continued operation of such businesses. The Debtor also generates accounts receivable and proceeds, which may constitute cash collateral in which Lenders may assert an interest. All the assets of the Debtor are pledged to First Commercial Bank to secure a promissory note in the outstanding principal amount of $2,787,841. First Commercial Bank holds a first mortgage on the Facility. The Debtor believes that First Commercial Bank's security interests are cross-collateralized among various entities related to the Debtor, to wit: Marsh Pointe Management LLC; Ban NH LLC; Living Center, LLC; Oak Lake LLC; Kenmetal LLC; Harrah Whites Meadows Nursing LLC; Meeker North Dawson Nursing, LLC; and MCL Nursing LLC. The Debtor claims that these Lenders also assert interests in its personal property: Gemino Heathcare Finance, LLC, Langsam Health Services, LLC, d/b/a Omnicare, Inc, Omnicare of Oklahoma, Omnicare of Tulsa, Metro City Bank, Summit Funding Group, Inc. and MB Financial, NA. The Debtor believes that its obligations to Metro City Bank, Summit Funding Group, and Gemino Heathcare have been satisfied leaving Omnicare's note in the outstanding amount of approximately $120,788 in second position behind First Commercial Bank. Thus, First Commercial Bank and Omnicare assert liens upon and security interests against all assets of the Debtor, including accounts receivable owned by the Debtor, and the proceeds thereof, and against Debtor's inventory, equipment and fixtures. As adequate protection for any interest Lenders may have in cash collateral, the Debtor proposes: A. That Lenders are granted a security interest in and liens upon Debtor's post-petition accounts receivable and proceeds to the same extent and priority as its pre-petition lien and interest in its pre-petition collateral; B. Continuation of the lien and security interest held by Lenders in its pre-petition Collateral; and C. Provision of Debtor's monthly operating reports are required by the U.S. Trustee and filed with the Court. A full-text copy of the Debtor's Motion is available at http://bankrupt.com/misc/ganb18-65904-3.pdf About Senior NH, LLC Senior NH, LLC, operates a one hundred bed skilled nursing facility known as the Enid Senior Care located at 410 N. 30th Street, Enid, Oklahoma. Senior NH sought protection under Chapter 11 of the Bankruptcy Code (Bankr. N.D. Ga. Case No. 18-65904) on Sept. 21, 2018. In the petition signed by Christopher F. Brogdon, managing member, the Debtor estimated assets of less than $10 million and debt under $50 million. The Debtor retained Theodore N. Stapleton, Esq., of Theodore N. Stapleton, P.C., as counsel. SJKWD LLC: Seeks Jan. 10 Exclusive Plan Filing Period Extension --------------------------------------------------------------- SJKWD, LLC, and Du-Rite Company request the U.S. Bankruptcy Court for the Southern District of Florida to extend exclusive period within which only the Debtors may propose a Plan and within which only the Debtors may solicit acceptances to its Plan for a ninety day period through and including Jan. 10, 2019 and March 11, 2019, respectively. Unless extended, the Debtors have the exclusive right to file a plan of reorganization and to solicit acceptances thereof through Oct. 12, 2018 and Dec. 11, 2018, respectively. This is the Debtors' first request for an extension of exclusivity. The Debtors contend that they currently require additional time to establish a clearer track record of income and expenses in order to formulate a feasible plan. In addition, the Debtors are currently seeking resolutions with several creditors, which will also have a material effect on the plan. About SJKWD LLC SJKWD, LLC, operates its business under the name Denny's Restaurant located at 2710 N. Roosevelt Boulevard, Key West Florida. SJKWD sought protection under Chapter 11 of the Bankruptcy Code (Bankr. S.D. Fla. Case No. 18-17154) on June 14, 2018. In the petition signed by Stan Jackowski, managing member, the Debtor disclosed $199,323 in assets and $1,036,677 in liabilities. Judge Robert A. Mark presides over the case. SOLBRIGHT GROUP: Needs More Time to File Quarterly Report --------------------------------------------------------- Solbright Group, Inc. filed a Form 12b-25 with the Securities and Exchange Commission notifying the delay in the filing of its Quarterly Report on Form 10-Q for the period ended Aug. 31, 2018. Solbright was unable to file the Quarterly Report by the prescribed date of Oct. 15, 2018, without unreasonable effort or expense, because the Company needs additional time to complete certain disclosures and analyses to be included in the Report. In accordance with Rule 12b-25 promulgated under the Securities Exchange Act of 1934, as amended, the Company intends to file the Report on or prior to the fifth calendar day following the prescribed due date. About Solbright Group Newark, New Jersey-based Solbright Group, Inc., formerly Arkados Group, Inc. -- https://www.solbrightgroup.com/ -- is an industrial AI, machine learning and energy management company providing Internet of Things (IoT) solutions for commercial and industrial facilities. Solbright reported a net loss of $15.80 million on $12.06 million of net sales for the year ended May 31, 2018, compared to a net loss of $3.34 million on $2.34 million of net sales for the year ended May 31, 2017. As of May 31, 2018, Solbright had $15.67 million in total assets, $11.25 million in total liabilities and $4.41 million in total stockholders' equity. The audit opinion included in the company's Annual Report on Form 10-K for the year ended May 31, 2018 contains a going concern explanatory paragraph. RBSM LLP, in New York, NY, the Company's auditor since 2016, stated that the Company has suffered recurring losses from operations, will require additional capital to fund its current operating plan, and has stated that substantial doubt exists about the Company's ability to continue as a going concern. SUGARLOAF HOLDINGS: Case Summary & 20 Largest Unsecured Creditors ----------------------------------------------------------------- Debtor: Sugarloaf Holdings, LLC 1471 North 900 West Lehi, UT 84043 Business Description: Sugarloaf Holdings, LLC -- http://sugarloafholdings.com-- is a privately held company in Lehi, Utah, whose business consists of farming and ranching operations. Court: United States Bankruptcy Court District of Utah (Salt Lake City) Case No.: 18-27705 Judge: Hon. Kevin R. Anderson Debtor's Counsel: Michael Ronald Brown, Esq. PARSONS BEHLE & LATIMER 201 S. Main Street, Suite 1800 Salt Lake City, UT 84111 Tel: 801-536-6790 Fax: 801-536-6111 E-mail: mbrown@parsonsbehle.com - and - Grace S. Pusavat, Esq. PARSONS BEHLE & LATIMER 201 S. Main Street Suite 1800 Salt Lake City, UT 84111 Tel: 801-536-6985 Fax: 801-536-6111 E-mail: gpusavat@parsonsbehle.com - and - Brian M. Rothschild, Esq. PARSONS BEHLE & LATIMER 201 S. Main St. Suite 1800 Salt Lake City, UT 84111 Tel: 801-532-1234 Fax: 801-536-6111 E-mail: brothschild@parsonsbehle.com Total Assets: $21,067,619 Total Liabilities: $15,666,618 The petition was signed by David J. Gray, manager. A full-text copy of the petition is available for free at: http://bankrupt.com/misc/utb18-27705.pdf List of Debtor's 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Gray Holdings Corp. $1,075,200 1471 North 900 West Lehi, UT 84043 TEl: (801) 691-3370 Gardner Brothers Drilling $385,140 P.O. Box 965 Enterprise, UT 84725 Tel: (435) 878-5602 Kirton McKonkie $257,000 50 East South Temple Salt Lake City, UT 84111 Tel: (801) 328-3600 TNT General Contractors, LLC $132,745 Moyle Irrigation $86,885 Fulmers $23,174 Hansen Allen Luce $23,174 Agco Finance, LLC $17,042 Flowell Electric Association $12,254 Moss Industrial Inc. $59,809 Hermansen's Mill $8,669 Farm Bureau $7,862 Clay Palfreman Trucking $6,100 Scales NW $5,025 Cardwell Distributers $3,332 Overson Farm Center $1,014 Lake PhilGas $925 Rocky Mountain Power $286 Hoffman Al Breeders $254 Wells Fargo SBL $15,267 SUMMIT FAMILY: Taps Shilliday Law as Legal Counsel -------------------------------------------------- Summit Family Fun LLC received approval from the U.S. Bankruptcy Court for the District of Colorado to hire Shilliday Law, P.C., as its legal counsel. The firm will advise the Debtor regarding its duties under the Bankruptcy Code; assist the Debtor in the preparation of a plan of reorganization; and provide other legal services related to its Chapter 11 case. Robert Shilliday, III, Esq., the attorney who will be handling the case, charges an hourly fee of $300. Paralegals charge $100 per hour. The firm received from the Debtor a pre-bankruptcy retainer in the sum of $10,000. Mr. Shilliday disclosed in a court filing that he is "disinterested" as defined in Section 101(14) of the Bankruptcy Code. The firm can be reached through: Robert J. Shilliday, III, Esq. Shilliday Law, P.C. 1512 Larimer St., Suite 600 Denver, CO 80202 Phone: 720-439-2500 E-mail: rjs@shillidaylaw.com About Summit Family Fun Summit Family Fun LLC operates a bowling alley and restaurant in Dillon, Colorado. Summit Family Fun sought protection under Chapter 11 of the Bankruptcy Code (Bankr. D. Colo. Case No. 18-18054) on Sept. 13, 2018. At the time of the filing, the Debtor estimated assets of less than $50,000 and liabilities of less than $500,000. Judge Kimberley H. Tyson presides over the case. The Debtor tapped Shilliday Law, P.C., as its legal counsel. SUNPLAY POOLS: Taps Cohne Kinghorn as Local Counsel --------------------------------------------------- SunPlay Pools and Spas Superstore, Inc., seeks approval from the U.S. Bankruptcy Court for the District of Utah to hire Cohne Kinghorn, PC, as its local bankruptcy counsel. The firm will advise the Debtor regarding its duties under the Bankruptcy Code; negotiate with creditors regarding the resolution and payment of claims; assist the Debtor in any proposed disposition of its assets; review claims to be pursued on behalf of its estate; assist in the preparation of a bankruptcy plan; and provide other legal services related to its Chapter 11 case. Cohne Kinghorn will charge these hourly rates: Shareholders $200 to $450 Associates $180 to $195 Paralegals $100 to $125 The firm received an initial pre-bankruptcy retainer of $10,000, plus $1,717 for the filing fee. Jeffrey Trousdale, Esq., an associate attorney at Cohne Kinghorn, disclosed in a court filing that his firm is "disinterested" as defined in Section 101(14) of the Bankruptcy Code. The firm can be reached through: Jeffrey Trousdale, Esq. Cohne Kinghorn, PC 111 E. Broadway Eleventh Floor Salt Lake City, UT 84111 Phone: (801) 363-4300 Fax: (801) 363-4378 Email: jtrousdale@cohnekinghorn.com About SunPlay Pools and Spas Superstore Inc. Founded in 1967, SunPlay Pools and Spas Superstore, Inc. -- https://www.sunplay.com/ -- operates a retail store offering pool and spa supplies, equipment, chemicals, parts and services. It has been transitioning to serve customers everywhere via its online sales department at Sunplay.com and HotTubWarehouse.com. SunPlay Pools and Spas Superstore sought protection under Chapter 11 of the Bankruptcy Code (Bankr. D. Utah Case No. 18-27417) on Oct. 4, 2018. In the petition signed by John A. Olson, president, the Debtor disclosed $692,093 in assets and $2,571,463 in liabilities. Judge Joel T. Marker presides over the case. TANGA.COM INC: Discloses $2MM in Unsecured Claims ------------------------------------------------- Tanga.com, LLC, filed a Chapter 11 plan and accompanying disclosure statement that proposes to create a liquidation trust. The Debtor has sought approval to sell substantially all of its assets. An auction of the Debtor's assets is scheduled for October 25, 2018. The Debtor has substantial unsecured claims asserted against it. These claims in large part fall into one of two categories -- vendors or customers. Tanga's claim register shows approximately $2,006,775.32 in unsecured claims. Class 3 consists of all General Unsecured Claims not classified in Class 2 arising before the Petition Date. Any Claimants holding General Unsecured Claims not otherwise classified shall be deemed to be classified in Class 3. All Claimants holding Allowed Class 3 Claims shall become Beneficiaries in the Liquidating Trust to the extent of their Allowed Claim and shall receive Distributions as set forth in the Plan. Tanga expects that, at the time of confirmation it will have $150,000 in administrative claims for all Chapter 11 Professionals arising from unpaid professional fees and costs in excess of retainers provided. Further, Tanga expects to have approximately $120,000 in Priority Tax Claims. No other Priority Claims are expected. A copy of the Disclosure Statement is available from PacerMonitor.com at https://tinyurl.com/y9adsdwz at no charge. About Tanga.com Tanga.com is a Chandler, Arizona-based e-retailer that sells various products including men and women apparel, electronics, home appliances and health & beauty products. Tanga was founded by Jeremy Young in 2006. Tanga.com filed a voluntary petition for relief under Chapter 11 of the Bankruptcy Code (Bankr. D. Ariz. Case No. 18-06314) on June 1, 2018. The petition was signed by Jeremy Young, manager. At the time of filing, the Debtor estimated $500,000 to $1 million in assets and $1 million to $10 million in liabilities. Judge Brenda Moody Whinery presides over the case. Anthony W. Austin, Esq., at Fennemore Craig, P.C., is the Debtor's counsel. The Office of the U.S. Trustee on June 25 appointed two creditors to serve on the official committee of unsecured creditors in the Chapter 11 case of Tanga.com, LLC. TONAWANDA COKE: Case Summary & 20 Largest Unsecured Creditors ------------------------------------------------------------- Debtor: Tonawanda Coke Corporation P.O. Box 5007 Tonawanda, NY 14151 Business Description: Tonawanda Coke Corporation -- http://www.tonawandacoke.com-- is an ISO 9001 Registered merchant producer of high- performance foundry coke to the U.S. and Canadian foundry, and insulation and sugar beet industries. The company was founded in 1917 and is headquartered in Tonawanda, New York. Chapter 11 Petition Date: October 15, 2018 Case No.: 18-12156 Court: United States Bankruptcy Court Western District of New York (Buffalo) Judge: Hon. Michael J. Kaplan Debtor's Counsel: Garry M. Graber, Esq. HODGSON RUSS LLP The Guaranty Building, Suite 100 140 Pearl Street Buffalo, NY 14202-4040 Tel: (716) 856-4000 E-mail: ggraber@hodgsonruss.com Estimated Assets: $10 million to $50 million Estimated Liabilities: $10 million to $50 million The petition was signed by Michael K. Durkin, president. A full-text copy of the petition is available for free at: http://bankrupt.com/misc/nywb18-12156.pdf List of Debtor's 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ Dival Safety Equipment, Inc. Trade Debt $1,037,467 1721 Niagara Street Buffalo, NY 14207 Advanced Manufacturing & Trade Debt $21,360 Mechanical Inc. 3043 Lakeshore Blvd, Unit 9 Blasdell, NY 14219 American Express Credit Cards $16,404 P.O. Box 360001 Ft. Lauderdale, FL 33336-0001 Southern Minerals, Inc. Trade Debt $207,000 Rhino Energy LLC Trade Debt $293,885 424 Lewis Hargett Circle Lexington, KY 40503 Scott Morris Tel: 859-519-3622 Email: smorris@rhinolp.com Doritex Corporation Trade Debt $21,554 Global Environmental Trade Debt $18,951 Guardian Environmental Trade Debt $14,773 Associates Inc. Brights Systems, Inc. Trade Debt $73,523 Email: brightsinc.@aol.com Metso Minerals Industries, Inc. Trade Debt $61,978 Chiampou Travis Besaw & Kerschner LLP Professional $39,178 Email: btravis@chiampou.com Services Constellation New Energy, Inc. Utility Services $37,510 Schagrin Associates Professional $37,500 Email: rschagrin@ Services schagrinassociates.com Coopers Creek Chemical Corp. Trade Debt $21,000 Email: smorris@cooperscreekchemical.com Corfu Machine Co INc. Trade Debt $22,745 Klein Steel Service, Inc. Trade Debt $31,533 National Maintenance Trade Debt $28,778 Contracting Corp. Kubota Materials Trade Debt $26,550 Canada Corporation ACCCI Trade Association, $25,772 Email: dailor@accci.org dues and fees Aptim Environmental Trade Debt $25,684 & Infastructure TOYS R US: Taj Noteholders Object to Delaware & Geoffrey Plans -------------------------------------------------------------- BankruptcyData.com reported that the Ad Hoc Group of Taj Noteholders filed an objection to the confirmation of the Second Amended Chapter 11 Plans of Toys Delaware and Geoffrey. BankruptcyData related that the Noteholders assert, "The DE/Geoffrey Plan cannot be confirmed for at least three reasons. First and foremost, as the Court is well aware, these cases have spawned enormous professional fees with estimated fees for the legal and restructuring advisors for the Debtors and the Creditors’ Committee exceeding $130 million through September 30, 2018. Yet the DE/Geoffrey Plan fails to establish an adequately funded reserve to satisfy all Professionals' Claims . . . that could be allocated to the Toys Delaware Debtors and the Geoffrey Debtors, as required under section 1129(a)(9)(A) of the Bankruptcy Code. Second, the DE/Geoffrey Plan impermissibly exempts Professionals from complying with sections 327 through 330 of the Bankruptcy Code and the Interim Compensation Order for the period between the Confirmation Date and the Effective Date. And third, the Debtors have failed to establish that the DE/Geoffrey Plan is feasible with respect to the Successor Entities, as required by section 1129(a)(11) of the Bankruptcy Code." About Toys "R" Us 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 U.S. 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. 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 -- 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. TUTOR PERINI: Fitch Affirms 'B+' LongTerm IDR, Outlook Stable ------------------------------------------------------------- Fitch Ratings has affirmed Tutor Perini Corporation's Long-Term Issuer Default Rating at 'B+', senior first lien secured revolver at 'BB+'/'RR1', and senior unsecured notes and senior unsecured convertible notes at 'BB-'/'RR3'. The Rating Outlook is Stable. The ratings cover approximately $800 million of outstanding debt. Tutor Perini's 'B+' Long-Term IDR is supported by the company's strong backlog growth since the end of 2016 and Fitch's expectation that the company will generate positive cash flow over the next few years. The ratings are further supported by the company's improving operating and EBITDA margins, especially within the specialty contractors segment, strong market position within the U.S. and meaningful customer and project diversification. Rating concerns include the company's limited liquidity given the amount of the seasonality and cyclicality in the engineering and construction (E&C) industry; potential for contract cancellations in the event of a cyclical or secular downturn; and potential for project delays or cost overruns, particularly given the various large, fixed-price contracts on which the company operates. Fitch also believes there is a meaningful degree of "key man" risk regarding the company's current CEO and Chairman of the Board, Ronald Tutor. Fitch considers the company's leverage and risk profile to be adequate for the rating level. However, Fitch also believes that seasonality or cyclicality could magnify many of the associated risks of an E&C company maintaining a meaningful debt balance for the company's size. KEY RATING DRIVERS Strong Backlog Growth: Fitch considers the company's rapidly increasing backlog to be one of the leading positive drivers for the company. Fitch believes that if the company is able to execute on its planned projects over the next 12 to 18 months, revenue could approach or exceed double digit growth in 2019. Backlog was at approximately $8.7 billion as of June 30, 2018, up from around $7.3 billion and $6.2 billion as of year-end 2017 and 2016, respectively. The business with the largest degree of growth since 2016 has been the company's civil segment due to a number of mass transit awards, though each of the segments' backlogs grew by at least 15% in the first half of 2018. Fitch expects additional bidding opportunities through the end of 2018 will continue to support backlog growth in the near term. Progress towards a federal infrastructure spending bill could also bolster prospects over the next few years. However, Fitch also believes a cyclical downturn or regulatory influence present significant risks and could lead to project delays, cancellations, or costly change orders. Furthermore, the company has publicly expressed concern that backlog greater than $10 billion could strain management's ability to continue bidding on large (+$1 billion-sized) projects while executing on its major projects already in backlog. Fitch also considers this execution risk to be a significant concern. Adequate and Improving Leverage for Rating: Fitch considers the company's leverage (lease adjusted debt to EBITDAR) to be adequate for the company's 'B+' rating. However, Fitch views the company's willingness to maintain significant long-term debt balances, as well as consistent revolver utilization, as credit negatives in the highly cyclical Engineering and Construction (E&C) sector. TUT's leverage was approximately 4.1x as of June 30, 2018, slightly weaker than the 3.8x calculated as of year-end 2017 due to the company drawing on its revolver during 1H 2018. Fitch projects the company will repay its revolver in the second half of 2018 driving leverage to improve to 3.2x by year-end, though payment or project delays remain risks to its forecasts. Over the intermediate to long term, Fitch expects TUT to maintain adjusted Debt/EBITDAR within the 2.5x to 3.5x range through 2020. The agency's expectation for improvement is somewhat supported by operating margin growth in the specialty contractors segment to mid-single digits, as lower margin contracts in the segment roll off, and the company executing on higher margin civil contracts in the second half of the year. Further improvement would result from the company allocating any excess cash flow to debt repayment, although Fitch would also view liquidity improvement as favorable. "Key Man" Risk: The current CEO and Chairman of the Board, Ronald Tutor, is 78 years-old. In Fitch's view, Ronald Tutor's role within the company cannot be easily replaced and there is currently no one single person within the organization that could match his current level of contribution within a reasonable time frame. In Fitch's discussion with company management, it was made clear that Mr. Tutor is currently deeply engaged in many facets of the enterprise, much more so than one would expect of a typical CEO and or Chairman. The Engineering & Construction landscape is one in which long-standing relationships heavily impact a firm's ability to win new awards. In addition, contract disputes are not unusual, those relationships are often the underpinning of arbitration settlements and change-order compromises. These negotiations help firms avoid costly litigation and are often critical to a firm's ability to remain profitable. Fitch assesses this as a concern in the inevitable absence of Mr. Tutor due to the potential reputational impact. However, Fitch expects the company will continue to address this concern over the intermediate term. Limited Liquidity Given Cyclicality and Seasonality: Rating concerns include TUT's limited available liquidity given the inherent seasonal capital intensity and cyclicality of the sector. Collections in the first half of the year is typically weaker than the latter half, and often leads to the company drawing on its revolver early in the year before paying it down during the second half of the year. Fitch believes the limited liquidity could be strained further during a downturn or as a result of one or more major project delays or cancellations. The company has stated an intention to grow cash balances in part by working capital management. Fitch believes is possible over the intermediate term given the significant number of new awards and substantial backlog around $8.7 billion as of June 2018. Fitch calculated the company's total available liquidity at $343 million as of June 30, 2018, comprised of approximately $85 million of readily available cash and $258 million of revolver availability. The company also had approximately $3.0 million of restricted cash and $54 million of cash related to VIE's, which Fitch considers to be restricted. The company has exhibited free cash flow (FCF) margins greater than 2% for full year 2016 and 2017, which Fitch considers to be adequate for a 'B+ rating. Although Fitch projects increased capex and working capital outflows will likely lead to FCF margins declining somewhat over the next 12 to 24 months, Fitch believes positive FCF generation over the next few years will continue to support the company's liquidity. Fitch's projection is principally supported by the company's rapidly growing backlog and the strong current bidding environment. Risks to cash flow generation include increased capex, significant working capital fluctuations, project delays, project cancellations, and potential litigation payments. Reasonable Project Risk Profile: Fitch believes the company's overall project risk profile is reasonable for the rating level and within sector expectations. Fitch views the firm's profit margins as consistent with similar projects performed by its peers. The company's working capital management is adequate, as the firm has produced moderately positive aggregate FCF over the previous four years. The company's working capital flows feature moderate volatility, but less than some of its peers, largely driven by the firm's proven ability to accurately forecast projects costs, which allows client advances to satisfy most funding needs. Fitch believes management has a strong reputation in the market and exhibits prudent risk management tactics when bidding on projects. This is supported by its history of just one major project loss in more than the past 20 years. Scale and Market Position: TUT's rating is supported by the firm's scale and domestic market position. The company maintains operations across the U.S., in addition to a diverse set of customers across a wide range of end markets. This geographic and end-market diversity, along with its extensive long-standing customer relationships, allow its segments to be highly competitive on projects of all sizes while maintaining limited exposure to a single region, industry or customer. The company's end markets include bridges, tunnels, highways, industrial buildings, mass-transit systems, condominiums, hospitality & gaming, aviation, education, sports facilities and health care. Diversified Projects and Customers: The company features a balanced split between private and public customers with approximately 54% of its 2017 revenue generated from federal, state and local government agencies while the remaining 46% came from private project owners. The company's June 2018 backlog of approximately $8.7 billion is composed of 55% higher margin civil projects, 24% building projects and the remaining 21% consisting of specialty contractor projects. Individual customer concentration is limited, particularly following the significant backlog growth since 2016. DERIVATION SUMMARY TUT's 'B+' rating is primarily derived by the company's product and end market diversification compared to peers, strong reputation, and meaningful growth prospects. Fitch considers the company's profitability to be adequate when compared to other companies within the engineering and construction industry, as the company has returned positive FCF over each of the past two fiscal years, with margins in the mid-single digits. Fitch considers the main constraints on the rating to be the financial structure and limited liquidity. Many of the company's E&C peers do not carry debt on the balance sheet. Fitch believes the company's limited liquidity, when coupled with debt on the balance sheet, could exacerbate risks to the company's credit profile and operations due to the inherent seasonality and cyclicality across the sector. No Parent/Subsidiary Linkage, Country Ceiling constraints, or Operating Environment influence was in effect for these ratings. KEY ASSUMPTIONS Fitch's Key Assumptions Within Its Rating Case for the Issuer - Revenue growth in the low single digit range in 2018 as the company executes on planned contracts during the second half of 2018; - Double digit top line growth in 2019, supported by recent awards and the past two years of backlog growth; mid-single digit growth in 2020 and 2021 as the company executes on projects, but slows bidding on new contracts; - EBITDA margins remain in the high 5% range throughout the forecasted period; Fitch assumes low double digit operating margins in the civil segment, mid-single digit operating margins in the specialty contractors segment, and approximately 2% operating margins in the building segment; - Annual cash flow remains mostly positive throughout the forecast; - Company effectively manages liquidity and working capital; - No material acquisitions, dividends, or share repurchases; - Capex increases to around $50 million in 2018 and slightly above that in 2019, but trends towards historical levels in 2020 and 2021; - Working capital swings reflect historical performance during growth periods; - Approximately $50 million of cash interest paid; - Convertible notes convert to equity in 2021 (equity issuance in 2021 is how this is exhibited in COMFORT); - No material litigation charges or benefits; - Cash tax around 30%; - Recurring associate dividends between $12 million and $15 million annually. Recovery Rationale The recovery analysis assumes that TUT would be considered a going concern in bankruptcy and that the company would be reorganized rather than liquidated. A 10% administrative claim is assumed in the recovery analysis. Fitch's recovery assumptions are based on the company's exposure to cyclical end markets, project litigation, reputational risk, and sensitivity of cash flow related to working capital swings and seasonality. Fitch also considered TUT's significant backlog, strong reputation, and recent margin improvement across segments. Fitch assumes TUT will receive a going-concern recovery EV multiple of 5.0x EBITDA under this scenario. Fitch believes this multiple was appropriate given the low trading multiple in the sector (TUT currently trades at less than 8x EV/EBITDA) and the median recovery multiple for all industrial companies in Fitch's most recent U.S. Engineering and Construction Bankruptcy Case Study was 5.3x. Fitch assumes a proforma $162 million as the going concern EBITDA in its analysis. Fitch believes this figure captures significant contract cancellations and potential impact of legal charges, which would lead to a bankruptcy scenario. Fitch notes that in an alternate liquidation scenario, the agency assumed a 25% recovery rate would be used for accounts receivable due to the high likelihood that much of the company's current project receivables would not be available to pre-petition creditors as a result of project disputes or litigation. It is customary within the industry for major disputes with project owners to drag on for years, even post-bankruptcy and in any case would likely be settled for a significant discount. In Fitch's recovery analysis, potential default is assumed to come from a combination of one or more of the following: major project delays or losses leading to increased costs and lower cash generation; material negative legal claims causing a significant strain on liquidity; or the inability to refinance or repay outstanding debt obligations when they become due. Fitch generally assumes a fully drawn revolver in its recovery analyses since credit revolvers are tapped as companies are under distress. As a result, Fitch has assumed full draw of TUT's $350 million revolver in its analysis. The 'BB+' rating and Recovery Rating of 'RR1' on the first lien term loan are based on Fitch's recovery analysis under a going concern scenario, which indicates recovery prospects for the term loan in the range of 91% to 100%. The 'BB-' rating and 'RR3' on the senior unsecured notes and senior unsecured convertible notes indicate recovery prospects for the term loan in the range of 51% to 70%. RATING SENSITIVITIES Developments That May, Individually or Collectively, Lead to Positive Rating Action - An increase in available liquidity to above $750 million, including at least $500 million in cash and equivalents (excluding cash held in joint ventures [JVs]), for a prolonged period; - Decreased adjusted debt/EBITDAR to below 2.5x for a sustained period; - FCF margin above 3% for a prolonged period; - A material improvement in EBITDA margins to above 8% for a sustained period. Developments That May, Individually or Collectively, Lead to Negative Rating Action - A deterioration in adjusted debt/EBITDAR to above 4.5x for a prolonged period; - A material decline in EBITDA margins to below 3%; - Failure to maintain at least $350 million in seasonally adjusted available liquidity (excluding cash held in JVs) for a prolonged period; - Consistently negative FCF; - Any indication of meaningful impending project losses, or legal or contingent liabilities which could lead to a severe liquidity strain or reputational damage to the company; - Debt-funded share repurchases or dividends. LIQUIDITY Fitch considers TUT's liquidity to be adequate for the rating level, but limited overall. Fitch calculated the company's total available liquidity at $343 million as of June 30, 2018, comprised of approximately $85 million of readily available cash and $258 million of revolver availability. The company also had approximately $3 million of restricted cash and $54 million of cash related to JV's and VIE's, which Fitch considers to be restricted. The company's debt structure is comprised of a $350 million first lien secured revolving credit facility maturing in 2020, $200 million of 2.875% senior unsecured convertible notes due 2021, and $500 million of 6.875% senior unsecured notes due 2025. Fitch views the company's willingness to maintain significant long-term debt balances, as well as consistent revolver utilization, as credit negatives in the highly cyclical Engineering and Construction (E&C) sector and is reflected by the 'B+' IDR. FULL LIST OF RATING ACTIONS Fitch has affirmed the following ratings: Tutor Perini Corporation - Long-term IDR at 'B+'; - Senior first-lien secured revolving credit facility at 'BB+'/'RR1'; - Senior unsecured notes at 'BB-'/'RR3'; - Senior unsecured convertible notes at 'BB-'/'RR3'; The Rating Outlook is Stable. UNISON ENVIRONMENTAL: Hires Richardson Law as Special Counsel ------------------------------------------------------------- Unison Environmental Services, LLC, seeks authority from the U.S. Bankruptcy Court for the Eastern District of Tennessee to employ The Richardson Law Firm, as special counsel to the Debtor. Unison Environmental requires Richardson Law to assist and provide legal services to the Debtor in connection with the resolution of a dispute with the Bank of Cleveland. Richardson Law will be paid a contingency fee of 20% of the amount collected plus expenses related to the litigation. Richardson Law will be paid a retainer in the amount of $50,000. Michael E. Richardson, partner of The Richardson Law Firm, assured the Court that the firm is a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code and does not represent any interest adverse to the Debtor and its estates. Richardson Law can be reached at: Michael E. Richardson THE RICHARDSON LAW FIRM 633 Chestnut Street, Suite 1110 Chattanooga, TN 37450 Tel: (423) 602-9623 About Unison Environmental Services Unison Environmental Services, LLC, provides waste treatment and disposal services. The company's principal assets are located at 6315 12th Ave East Tuscaloosa, AL 35405. Unison Environmental Services filed a Chapter 11 (Bankr. E.D. Tenn. Case No. 18-10113) on Jan. 11, 2018. In the petition signed by Jefferson Knox Horner, chief manager, the Debtor estimated $1 million to $10 million in total assets and liabilities. Judge Shelley D. Rucker presides over the case. David J. Fulton, Esq., at Scarborough & Fulton, is the Debtor's counsel. The Richardson Law Firm, is the special counsel. UNISON ENVIRONMENTAL: To Pay BOC $29K Monthly Plus 4.5% Interest ---------------------------------------------------------------- Unison Environmental Services, LLC, submits a first amended disclosure statement in support of its chapter 11 plan of reorganization dated Oct. 9, 2018. This latest filing provides answers to the questions raised by secured creditor Bank of Cleveland and a response to the objection filed by the U.S. Trustee. General unsecured creditors not otherwise classified are classified in Class 4, and will receive a distribution of 100% of their allowed claim, to be distributed in quarterly payments, over 60 months from the Effective Date. Bank of Cleveland's Allowed Secured Claims in Class 1-A in the amount of $4,700,000, more or less, will be paid in monthly payments in the amount of $29,102. The Allowed Secured Claims of Bank of Cleveland will be paid interest at the rate 4.5% APR. The monthly payment is based on a 20 year amortization. There will be a balloon payment due on the 60th month after the Effective Date at which time the remaining balance owed to Bank of Cleveland will be due and payable. All payments under the Plan which are due on the Effective Date will be funded from the Cash on hand generated by operations. The funds necessary to ensure continuing performance under the Plan after the Effective Date will be (or may be) obtained from: (a) any and all remaining Cash retained by the Reorganized Debtor after the Effective Date; (b) Cash generated from the post-Effective Date operations of the reorganized Debtor; (c) any other contributions or financing (if any) which the Reorganized Debtor may obtain on or after the Effective Date. A copy of the First Amended Disclosure Statement is available for free at: http://bankrupt.com/misc/tneb1-18-10113-147.pdf About Unison Environmental Service Unison Environmental Services, LLC, provides waste treatment and disposal services. The company's principal assets are located at 6315 12th Ave East Tuscaloosa, AL 35405. Unison Environmental Services filed a Chapter 11 (Bankr. E.D. Tenn. Case No. 18-10113) on Jan. 11, 2018. In the petition signed by Jefferson Knox Horner, chief manager, the Debtor estimated $1 million to $10 million in total assets and liabilities. Judge Shelley D. Rucker presides over the case. David J. Fulton, Esq., at Scarborough & Fulton, is the Debtor's counsel. USG CORP: Fitch Keeps 'BB+' IDR on Rating Watch Negative -------------------------------------------------------- Fitch has maintained USG Corporation's (NYSE: USG) ratings on Rating Watch Negative, including the company's Long-Term Issuer Default Rating (IDR) of 'BB+'. Fitch placed USG's ratings on Watch Negative on June 15, 2018 following the company's announcement that it had entered into an agreement to be acquired by Gebr Knauf KG (Knauf), a private Germany-based building products company. The Rating Watch Negative reflects Fitch expectation that USG's leverage will increase to about 3.9x on a pro forma basis, which is above Fitch's negative rating sensitivity of 3.0x. Fitch does not have adequate information to determine Knauf's financial strength or the parent-subsidiary relationship between USG and Knauf following the merger. KEY RATING DRIVERS Merger with Knauf: On June 11, 2018, USG announced that it had entered into a definitive agreement under which Knauf will acquire all of the outstanding shares of USG in a transaction valued at approximately $7.0 billion. Under the terms of the agreement, USG shareholders will receive $44 per share, which consists of $43.50 per share payable in cash upon closing of the transaction and a $0.50 per share special dividend that was paid following shareholder approval of the transaction. The price represents a premium of 31% to USG's unaffected closing price as of March 23, 2018. On Sept. 26, 2018, USG's shareholders approved the agreement for USG to merge with Knauf, with about 99% of the votes cast in favor of the merger. Upon the completion of the transaction, which the company expects to occur in early 2019, USG will operate as a wholly-owned subsidiary of Knauf. Capital Structure: Knauf and USG have received financing commitments to finance the transaction. Knauf will obtain a EUR2.25 billion term loan facility and a EUR500 million revolving credit facility (the European facilities). The merger sub (to be merged with USG upon the completion of the transaction) will receive an $800 million term loan facility and an $858.5 million backstop facility (the US facilities) that may be used to repay the holders of USG's outstanding senior notes pursuant to a change of control redemption election following the acquisition by Knauf. The European facilities will be guaranteed by Knauf International GmbH and Knauf Gips KG and the US facilities will be guaranteed by USG Corporation and its subsidiaries. Fitch estimates that USG's gross leverage will increase to 3.9x based on Q2 LTM EBITDA at the completion of the transaction, up from about 2.2x currently. Resolution of Rating Watch: The outcome of the rating watch will be dependent upon several factors. Pro forma for the transaction, USG's gross leverage will increase to about 3.9x, which is above Fitch's negative sensitivity threshold of 3.0x. Absent a strong parent-subsidiary linkage between the two entities in addition to equal or stronger credit profile at Knauf, the increased leverage will likely result in at least a one notch downgrade of USG's Long-Term Issuer Default Rating (IDR) following the completion of the transaction. Fitch does not have adequate information on the acquiring entity to determine that legal, operational, and strategic ties will be strong between Knauf and USG, nor does Fitch have adequate information on Knauf's credit profile to determine that up-notching would be likely in the event that the parent-subsidiary linkage is strong. USG has stated that the entity will likely operate as a separate entity upon the completion of the transaction. Should Fitch receive sufficient information to determine that Knauf's credit profile is stronger than USG's, and USG's legal, operational, and strategic linkage to the entity is strong, the eventual rating outcome may be positive. If Knauf and USG have strong strategic ties and similar credit profiles, the watch may be resolved with no rating action on USG. Fitch views these scenarios as unlikely to occur. Strong Market Position: USG maintains a strong market position in all of its core businesses. According to the company, it has the #1 market position in the wallboard industry in North America. USG's Ceilings business has the #2 market position worldwide and USG's UBBP international joint venture also has the #1 or #2 position in most of its markets in Asia, Australasia and the Middle East. Credit Metrics: USG's operating margins, which had been improving during the modest housing recovery, began to weaken in 2017 and so far in 2018. Fitch-calculated EBITDA margins had increased from below 2% in 2010 to 14.1% in 2015 and 18.3% in 2016, but fell to 16.1% in 2017 and 14.8% for the LTM period ending June 30, 2018 amid higher input and transportation costs, coupled with a lag in passing along these cost increases on to customers. Leverage has increased slightly since the end of 2016, but is still strong for the ratings. Debt to EBITDA was 2.1x for the LTM ending June 30, 2018, up from 1.9x at the end of 2017 and 1.8x at the conclusion of 2016. Free Cash Flow: USG's free cash flow (FCF) was strong in 2016 and 2017, but has also recently started to weaken. The company reported FCF of $68 million (2.1% of revenues) for the LTM ended June 30, 2018, compared with $214 million (6.7% of revenues) during 2017 and $290 million (9.6% of revenues) during 2016. The weaker FCF for the LTM period is due in part to higher capital expenditures. Capital Allocation: In 2018, the company expects to spend about $250 million on capital expenditures, which includes about $90 million allocated for advanced manufacturing projects, $95 million for growth investments, and about $65 million for maintenance capex. By comparison, USG spent about $168 million on capex in 2017 and $83 million during 2016. In February 2018, the company's board approved an expanded share repurchase program to buy back up to $500 million of its common stock. USG repurchased $184 million of common stock in 2017 and $76 million in the first half of 2018, leaving $240 million of authorization remaining. The company has not repurchased stock since April 2018 pending the Knauf merger. . Cyclicality of End-Markets: USG's businesses are sensitive to general economic conditions as well as the cyclicality of the construction markets. During the last housing cycle, USG's revenues peaked at $5.8 billion during 2006 and troughed at $2.9 billion in 2010, a 49.4% decline. Operating profit margins (excluding impairment charges) declined from roughly 16.4% in 2006 to operating losses during 2008-2011. Operating profits have since steadily recovered, with USG reporting 2017 operating profit margins of roughly 11.5% on $3.2 billion of revenues. Management estimates that about 47% of the company's revenues were from repair and remodel end-markets, 37% were from residential new construction, 13% were from non-residential construction, and 3% from other end-markets. DERIVATION SUMMARY The rating for USG reflects the company's leading market position in all of its core businesses, strong brand recognition, its large manufacturing network and sizeable gypsum reserves. Risks include the cyclicality of the company's end markets, excess capacity currently in place in the U.S. wallboard industry and volatility of wallboard shipments and pricing. The Negative Watch reflects USG's weaker credit metrics pro forma for the transaction with Knauf, which may warrant a downgrade upon completion of the transaction. Fitch does not have adequate information to determine Knauf's financial strength or the parent-subsidiary relationship between USG and Knauf following the merger. KEY ASSUMPTIONS Fitch's Key Assumptions Within the Rating Case for the Issuer - Acquisition by Knauf is completed in 1Q19 and USG assumes $800 million in incremental debt via a term loan upon the completion of the transaction, bringing pro forma gross leverage to around 4.0x; - Total revenues grow 7.0% in 2018 and 3% in 2019, while margins continue to contract; - Total U.S. housing starts improve 6.4% in 2018 and 1.7% in 2019, U.S. home improvement spending advances 4.0% in 2018 and 2019, and commercial construction spending grows 1.5% in 2018 and 1.0% in 2019. RATING SENSITIVITIES Developments That May, Individually or Collectively, Lead to Positive Rating Action - Positive rating actions may be considered if the company commits to strong credit metrics, including debt to EBITDA consistently at or below 2.0x, FFO adjusted leverage below 3.0x, and interest coverage sustained above 7.0x, and the expectation that the company can maintain metrics close to these levels through the cycle. Fitch will also consider USG's liquidity position in assessing positive rating actions. - Although unlikely, positive rating action may be considered upon the completion of the acquisition of USG by Knauf if Fitch determines that Knauf has a stronger credit profile than USG and legal, operational, or strategic ties are strong. Developments That May, Individually or Collectively, Lead to Negative Rating Action - A negative rating action may be considered if there is a sustained erosion of profits and cash flows due either to weak residential and commercial construction activity, meaningful and continued loss of market share, and/or continued materials and energy cost pressures resulting in margin contraction, including EBITDA margins of less than 12%, debt to EBITDA approaching 3.0x, FFO adjusted leverage sustained above 4x and interest coverage below 5x. - Additionally, negative rating action may be considered upon the completion of transaction financing associated with Knauf's acquisition of USG, resulting of debt to EBITDA above 3.0x if legal, operational, or strategic ties are determined to be weak, or if linkages are determined to be strong but Knauf's credit profile is unknown, similar to, or weaker than USG's. LIQUIDITY AND DEBT STRUCTURE Liquidity: USG has ample liquidity with $246 million of cash, $58 million of short-term marketable securities, and $198 million of availability under its $220 million secured revolving credit facility that matures in 2022. The company has no debt maturities until 2025 when $350 million of sr. unsecured notes become due. SUMMARY OF FINANCIAL STATEMENT ADJUSTMENTS -- Historical and projected EBITDA is adjusted to add back non-cash stock-based compensation, restructuring charges, and cash distributions from USG's UBBP joint venture. The equity in earnings from joint ventures is excluded in the calculation of EBITDA. VALLEY LUMBER: Unsecureds Estimated to Recover 63.3% in Latest Plan ------------------------------------------------------------------- Valley Lumber Company, Inc., submits a second amended disclosure statement for its chapter 11 plan of reorganization dated Oct. 9, 2018. Under the latest plan, the Allowed Unsecured Claims of the unsecured creditors will be paid from 50% of the Net Plan Profits of Debtor for five years or until paid in full. This payment will be calculated on an annual basis by March 15 of each Plan year, and paid by May 15 of each Plan year. The current total unsecured claim is $1,517,962.72. With a predicted five-year payout of $960,862.00, the estimated unsecured payout will be 63.3%. The remaining 50% of Net Plan Profits is reserved for taxes and capital needs during the Plan. A copy of the Second Amended Disclosure Statement is available for free at: http://bankrupt.com/misc/alnb17-72121-11-210.pdf About Valley Lumber Company Valley Lumber Company, Inc., based in Hackleburg, Alabama -- http://www.valleylumbercompany.com/-- manufactures, sells, and delivers lumber, timbers, and glulams. The company has added several products over the 25 plus years in business including plywood, post, poles, boards and siding. Valley Lumber Company filed a Chapter 11 petition (Bankr. N.D. Ala. Case No. 17-72121) on Dec. 8, 2017. Steven D. Hammack, president, signed the petition. The case is assigned to Judge Jennifer H. Henderson. The Debtor is represented by Stuart M Maples, Esq., at Maples Law Firm, PC. At the time of filing, the Debtor estimated $0 to $50,000 in assets and $1 million to $10 million in liabilities. VEE EXPRESS: Oct. 31 Disclosure Statement Hearing ------------------------------------------------- The hearing on the conditional approval of the Disclosure Statement explaining Vee Express LLC's Plan is scheduled for October 31, 2018 at 11:30 a.m. Existing business cash flow and cash flow from newly acquired future business clients will fund the Plan. The treatment of general unsecured creditors is revised to 100% paid $1,250 monthly beginning on November 15, 2018, at an interest of 5%. A copy of the Disclosure Statement dated September 26 is available from PacerMonitor.com at https://tinyurl.com/y7q8pwj6 at no charge. A copy of the Disclosure Statement dated October 10 is available from PacerMonitor.com at https://tinyurl.com/ydbz7ooq at no charge. Vee Express LLC filed a voluntary Chapter 11 (Bankr. S.D. Tex. Case No. 18-31332) on March 16, 2018, and is represented by Otha Tyrone Carpenter, Esq. VERITY HEALTH: Seeks Court Approval of Union CBAs ------------------------------------------------- BankruptcyData.com reported that Verity Health System of California requested Court approval of a compromise reached with the International Union of Operating Engineers, Stationary Engineers, Local 39, which includes entry into new collective bargaining agreements (the "Successor CBAs"). BankruptcyData related that the compromise notes, "Since October 2016, each of O'Connor, Seton and St. Louise has been party to an Existing CBA with Local 39, which represents stationary engineers employed at those hospitals. Because the Existing CBAs were expiring, the Debtors entered into negotiations with Local 39 to enter into new collective bargaining agreements to extend and modify the arrangements under the Existing CBAs. The Debtors submit that continuing the Parties' arrangements by entering into the Successor CBAs is in the best interest of the Debtors' estates. Although entering into such an agreement is arguably an ordinary course transaction, in an abundance of caution, because the Parties have agreed to modified terms from the previous agreements and because the Tentative Agreements expressly require it, the Debtors seek Court approval of the Successor CBAs, on notice to parties in interest. "An analysis of those factors in this case demonstrates that the Successor CBAs are equitable and fair and, accordingly, should be approved. First, the new contractual relationship embodied in the Successor CBAs provides stability and will enable the Debtors to implement a labor agreement that achieves the savings targets and work rule flexibility necessary for the Hospitals' long-term viability and profitability. Without provisions restricting assumption by successor parties, the Successor CBAs give the Debtors significant flexibility to make appropriate decisions in the course of these Cases, including to sell the Hospitals and provide potential buyers the opportunity to take over a good deal if they wish to continue the arrangement. "Moreover, entry into the Successor CBAs avoids the potential labor unrest and disruption that might be occasioned by a prolonged period of operation without a labor agreement, and the obvious loss of value arising therefrom. Failure to reach an agreement with Local 39 would result in Local 39 providing a 10-day notice of intent to strike. If agreement is not reached in those ten days, the engineers would go out on strike or engage in a work stoppage. If this had occurred, the Hospitals would have had to hire replacement engineers that possess the specific training to maintain the life safety programs in the hospital. Replacement engineers are difficult to hire due to the required qualifications and are very expensive. Specifically, in addition to wages for the replacement workers, employing hospitals must pay for housing, transportation and invest unbudgeted labor hours to ensure that the replacement engineers meet all required competencies. Strikes can also create disruption of normal hospital operations and may result in reduction of patient volume (e.g., if patients refuse to cross a picket line to enter). As store placement workers, not only is their cost prohibitive on a long-term basis, their availability is limited as it is generally understood that Local 39's collective bargaining agreements with different hospitals expire at the same time." The Court scheduled a November 6, 2018 hearing to consider the compromise motion. About Verity Health System Verity Health System -- https://www.verity.org/ -- operates as a non-profit health care system in the state of California, with approximately 1,680 inpatient beds, six active emergency rooms, a trauma center, and a host of medical specialties, including tertiary and quaternary care. Verity's two Southern California hospitals are St. Francis Medical Center in Lynwood and St. Vincent Medical Center in Los Angeles. In Northern California, O'Connor Hospital in San Jose, St. Louise Regional Hospital in Gilroy, Seton Medical Center in Daly City and Seton Coastside in Moss Beach are part of Verity Health. Verity Health also includes Verity Medical Foundation. With more than 100 primary care and specialty physicians, VMF offers medical, surgical and related healthcare services for people of all ages at community-based, multi-specialty clinics conveniently located in areas served by the Verity hospitals. Verity Health System was created in a transaction approved by California Attorney General Kamala Harris and completed in December 2015. Verity Health System of California, Inc. and its affiliates sought protection under Chapter 11 of the Bankruptcy Code (Bankr. C.D. Cal. Lead Case No. 18-20151) on Aug. 31, 2018. In the petition signed by Richard Adcock, chief executive officer, Verity Health estimated assets of $500 million to $1 billion and liabilities of $500 million to $1 billion. Judge Ernest M. Robles presides over the cases. The Debtors tapped Dentons US LLP as their bankruptcy counsel; Berkeley Research Group, LLC, as financial advisor; Cain Brothers as investment banker; and Kurtzman Carson Consultants as claims agent. The Office of the U.S. Trustee appointed an official committee of unsecured creditors on Sept. 17, 2018. VERITY HEALTH: UMB Bank & Wells Fargo Object to Final DIP Order --------------------------------------------------------------- BankruptcyData.com reported that Verity Health System of California's creditors UMB Bank, as master indenture trustee, and Wells Fargo Bank, as indenture trustee, filed with the Court an objection to a proposed final order issued in respect of the Debtors' debtor-in-posession ("DIP") financing [Docket No. 31]. BankruptcyData related that the creditors asserted, "The Secured Parties' objection is based upon the fact that the Proposed Final Order does not reflect the proceedings held in Court [] on the Financing Motion, or the Court's ruling on the Intercreditor Agreement at that hearing. The Secured Parties have attempted to resolve, but were unable to resolve, the problems with the Proposed Final Order that form the basis for this objection. At [the] hearing on the Financing Motion, the Court ruled that the final order on the Financing Motion should provide that any priority of replacement liens between the Secured Parties and Note Trustee should be governed by the Intercreditor Agreement, subject to further order of the Court. The Proposed Final Order provides only the following statement, which appears in Section 5(a): ‘Unless otherwise ordered by the Court, the Intercreditor Agreement shall not be deemed altered or modified by the terms of this Final Order or the DIP Financing Agreements.' This is not what was stated at the hearing. The Court's ruling was that the final order on the Financing Motion should provide that any priority of replacement liens between the Secured Parties and Note Trustee should be governed by the Intercreditor Agreement, subject to further order of the Court." About Verity Health System Verity Health System -- https://www.verity.org/ -- operates as a non-profit health care system in the state of California, with approximately 1,680 inpatient beds, six active emergency rooms, a trauma center, and a host of medical specialties, including tertiary and quaternary care. Verity's two Southern California hospitals are St. Francis Medical Center in Lynwood and St. Vincent Medical Center in Los Angeles. In Northern California, O'Connor Hospital in San Jose, St. Louise Regional Hospital in Gilroy, Seton Medical Center in Daly City and Seton Coastside in Moss Beach are part of Verity Health. Verity Health also includes Verity Medical Foundation. With more than 100 primary care and specialty physicians, VMF offers medical, surgical and related healthcare services for people of all ages at community-based, multi-specialty clinics conveniently located in areas served by the Verity hospitals. Verity Health System was created in a transaction approved by California Attorney General Kamala Harris and completed in December 2015. Verity Health System of California, Inc. and its affiliates sought protection under Chapter 11 of the Bankruptcy Code (Bankr. C.D. Cal. Lead Case No. 18-20151) on Aug. 31, 2018. In the petition signed by Richard Adcock, chief executive officer, the Verity Health estimated assets of $500 million to $1 billion and liabilities of $500 million to $1 billion. Judge Ernest M. Robles presides over the cases. The Debtors tapped Dentons US LLP as their bankruptcy counsel; Berkeley Research Group, LLC, as financial advisor; Cain Brothers as investment banker; and Kurtzman Carson Consultants as claims agent. The Office of the U.S. Trustee appointed an official committee of unsecured creditors on Sept. 17, 2018. VINE CITY PLAZA: U.S. Trustee Unable to Appoint Committee --------------------------------------------------------- No official committee of unsecured creditors has been appointed in the Chapter 11 case of Vine City Plaza I, LLC as of Oct. 12, according to a court docket. About Vine City Plaza I Vine City Plaza I, LLC, sought protection under Chapter 11 of the Bankruptcy Code (Bankr. N.D. Ga. Case No. 18-64635) on Aug. 31, 2018. At the time of the filing, the Debtor disclosed less than $1 million in assets and less than $500,000 in liabilities. The Debtor hires George Geeslin, Esq., as its bankruptcy attorney. VRG LIQUIDATING: Files First Amended Joint Plan of Liquidation -------------------------------------------------------------- VRG Liquidating, LLC, together with its affiliates and the Official Committee of Unsecured Creditors submit a disclosure statement in connection with their first amended joint plan of liquidation dated Oct. 9, 2018. The Plan provides for the liquidation of the Debtors' Assets. The Debtors' Assets are largely limited to Cash, Retained Causes of Action, and certain other Excluded Assets. Substantially all of the Debtors' assets were sold to Vestis BSI Funding II, LLC, an affiliate of Versa Capital Management, LLC, pursuant to the terms and conditions of that certain Amended and Restated Asset Purchase Agreement, dated as of May 31, 2016, by and among the Debtors and Buyer. If the Plan is confirmed and the Effective Date occurs, the Debtors will be substantively consolidated, meaning that all of the Assets and liabilities of the Debtors will be deemed to be the Assets and liabilities of a single entity. The Plan provides for the creation of a Liquidating Trust that will administer and liquidate all Liquidating Trust Assets in accordance with the Plan, including the remaining proceeds of the Sale. The Plan also provides for Distributions to Holders of Allowed Secured Claims, Allowed Administrative Claims, Allowed Professional Fee Claims, Allowed Priority Claims, and Allowed Priority Tax Claims, and for the funding of the Liquidating Trust. Finally, the Plan provides for the cancellation of all Equity Interests in the Debtors, the dissolution and wind-up of the affairs of the Debtors, and the transfer of any remaining Assets of the Debtors' Estates to the Liquidating Trust. All Allowed Administrative Claims, Allowed Professional Fee Claims, Allowed Priority Tax Claims, Allowed Secured Claims, and Allowed Priority Claims will be paid or otherwise satisfied in full, unless otherwise agreed to by the Holders of such Claims and the Liquidating Trustee. Holders of Allowed General Unsecured Claims will receive their Pro Rata share of the Liquidating Trust Interests, unless otherwise agreed to by the Liquidating Trustee and the Holders of such Claims. Projected recovery for general unsecured creditors under the plan is 0.60-0.90%. A full-text copy of the Disclosure Statement is available for free at: http://bankrupt.com/misc/deb16-10971-2028.pdf About VRG Liquidating Headquartered in Meriden, Connecticut, Vestis Retail Group, LLC, et al., operate 144 retail stores, which are located in 15 states. Bob's Stores operates 36 stores throughout New England, New York, and New Jersey. Eastern Mountain Sports operates 61 stores, located primarily in the Northeastern states. Sport Chalet operates 47 stores throughout California, Arizona, and Nevada. Bob's Stores and EMS primarily operate stores located in the Northeastern states, while Sport Chalet's stores, which are currently being liquidated, are located in the Western states. Vestis and its affiliates operated e-commerce sites at http://www.bobstores.com/http://www.sportchalet.com/and http://www.ems.com/ Vestis Retail Group LLC and eight of its affiliates filed Chapter 11 bankruptcy petitions (Bankr. D. Del. Lead Case No. 16-10971) on April 18, 2016. The Debtors estimated assets of up to $50,000 and debt of $100 million to $500 million. The petitions were signed by Thomas A. Kennedy, their secretary. Judge Laurie Selber Silverstein is assigned to the cases. The Debtors have hired Young, Conaway, Stargatt & Taylor, LLP, as their counsel, FTI Consulting, Inc. and Lincoln Partners Advisors LLC as their financial advisor and Kurtzman Carson Consultants, LLC, as their claims and noticing agent, KPMG LLP as tax compliance and consulting service provider. An official committee of unsecured creditors has been appointed in the cases. The Committee has tapped Cooley LLP as its lead counsel and Polsinelli as conflicts counsel. Zolfo Cooper, LLC, serves as its bankruptcy consultant and financial advisor. * * * In April 2016, Vestis Retail Group LLC successfully restructured and recapitalized Eastern Mountain Sports and Bob's Stores through a Section 363 sale to an affiliate of Versa Capital Management LLC, the Debtors' lender, in exchange for the satisfaction of some debt, a $3 million cash contribution to the estate and the assumption of some liabilities. The Company's remaining retailer, Sport Chalet, was concurrently divested through an organized wind down. WANG REAL PROPERTY: Taps Siegel & Siegel as Legal Counsel --------------------------------------------------------- Wang Real Property LLC seeks approval from the U.S. Bankruptcy Court for the Eastern District of New York to hire Siegel & Siegel, P.C. as its legal counsel. The firm will advise the Debtor regarding its duties under the Bankruptcy Code and will provide other legal services related to its Chapter 11 case. Michael Siegel, Esq., the attorney who will be handling the case, charges an hourly fee of $300. Paraprofessionals charge $75 per hour. The firm received $10,000 as an initial payment to file the Debtor's case. Mr. Siegel disclosed in a court filing that his firm is "disinterested" as defined in section 101(14) of the Bankruptcy Code. The firm can be reached through: Michael D. Siegel, Esq. Siegel & Siegel, P.C. One Penn Plaza, Suite 2414 New York, NY 10119 Tel: (212) 721-5300 Fax: 212-947-9967 Email: sieglaw@optonline.net About Wang Real Property Wang Real Property LLC is a privately-held company engaged in activities related to real estate. It is the fee simple owner of a vacant land in Flushing, New York, with an expert valuation of $900,000. Wang Real Property sought protection under Chapter 11 of the Bankruptcy Code (Bankr. E.D.N.Y. Case No. 18-45185) on Sept. 11, 2018. In the petition signed by Li Xi, managing member, the Debtor disclosed $900,000 in assets and $1,224,506 in liabilities. Judge Carla E. Craig presides over the case. WESTERN CPE: Firm Reduces Hourly Rate for Atty. Jensen, Paralegal ----------------------------------------------------------------- The U.S. Bankruptcy Court for the District of Montana approved the amended application of Western CPE LLC to hire Browning, Kaleczyc, Berry & Hoven, PC, as its special counsel. Browning will represent the Debtor in corporate matters at the hourly rate of $225 for Troy Bentson, Esq., $175 for Judd Jensen, Esq., and $80 for paralegal L. Erin Much. The Debtor had initially proposed to pay an hourly fee of $200 for Mr. Jensen and an hourly fee of $100 for the services of the paralegal. The firm can be reached through: Troy L. Bentson, Esq. Judd Jensen, Esq. Browning, Kaleczyc, Berry & Hoven, PC 801 West Main, Suite 2A Bozeman, MT 59715 Phone: (406) 585-0888 Fax: (406) 587-0165 E-mail: troy@bkbh.com E-mail: judd@bkbh.com About Western CPE LLC Western CPE, LLC, provides continuing education to CPAs, accounting, and finance professionals. Since 1991, its instructors have been offering live conferences, live webcasts, and self-study materials. Western CPE sought protection under Chapter 11 of the Bankruptcy Code (Bankr. D. Mont. Case No. 18-60291) on April 6, 2018. In the petition signed by CEO Vernon B. Hoven, the Debtor disclosed $2.38 million in assets and $3.26 million in liabilities. The Debtor tapped Patten, Peterman, Bekkedahl & Green PLLC as its bankruptcy counsel; and Browning, Kaleczyc, Berry & Hoven, PC as its special counsel. YWFM LLC: U.S. Trustee Unable to Appoint Committee -------------------------------------------------- The Office of the U.S. Trustee on Oct. 2, 2018, disclosed in a court filing that no official committee of unsecured creditors has been appointed in the Chapter 11 case of YWFM, LLC. About YWFM, LLC d/b/a Brian's Tire and Service YWFM LLC, d/b/a Brian's Tire and Service, filed a Chapter 11 bankruptcy petition (Bankr. N.D. Fla. Case No. 18-40469) on Aug. 31, 2018, estimating under $1 million in assets and liabilities. The Debtor is represented by Byron Wright III, Esq., at Bruner Wright, P.A. ********* 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. 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