/raid1/www/Hosts/bankrupt/TCR

/raid1/www/Hosts/bankrupt/TCR_Public/190405.mbx T R O U B L E D C O M P A N Y R E P O R T E R Friday, April 5, 2019, Vol. 23, No. 94 Headlines 1 GLOBAL CAPITAL: Seeks More Time to File Bankruptcy Plan 1 GLOBAL CAPITAL: Stampler Auction of Office Property Approved ACHAOGEN INC: Reports $186.5 Million Net Loss for 2018 ADETONA LLC: Wells Fargo Objects to Disclosure Statement AIR METHODS: Moody's Lowers CFR to Caa1, Outlook Stable AMERICAN FORKLIFT: Exclusivity Period Extended Until April 19 APEX TOOL: S&P Lowers Issuer Credit Rating to 'B-'; Outlook Stable BARRACUDA NETWORKS: Fitch Affirms 'B' LT IDR, Outlook Stable BLACKBOARD INC: S&P Affirms 'CCC+' ICR on Transact Divestment BLINK CHARGING: Incurs $3.42 Million Net Loss in 2018 BOURDOW CONTRACTING: Case Summary & 20 Largest Unsecured Creditors CABLE ONE: S&P Puts 'BB' Unsecured Debt Rating on Watch Negative CAH ACQUISITION 12: Case Summary & 20 Largest Unsecured Creditors CAMBRIDGE ACADEMY: Fitch Cuts $7.7MM Series 2010 Bonds to 'D' CARTHAGE SPECIALTY: Plan Exclusivity Period Extended to May 24 CD MANAGEMENT: Credit Union Objects to Disclosure Statement CHERRY BROS: U.S. Trustee Forms 3-Member Committee CITIZENS CONSERVATION: Case Summary & 20 Top Unsecured Creditors COUNTRY MORNING FARMS: U.S. Trustee Forms 2-Member Committee DEQUEEN MEDICAL: Case Summary & 20 Largest Unsecured Creditors EASTMAN KODAK: Swings to 2018 Net Loss of $16 Million EP ENERGY: Moody's Lowers CFR to Caa3, Outlook Negative ERA GROUP: Moody's Alters Outlook on B3 CFR to Stable EXPRESSWAY DELIVERIES: Exclusive Filing Period Moved to July 24 FIBRANT LLC: Has Until July 18 to Obtain Plan Acceptances FORESTAR GROUP: Moody's Rates New $300MM Sr. Unsecured Notes 'B2' G-III APPAREL: S&P Ups ICR to BB on Stronger Sales; Outlook Stable GARRETT PROPERTIES: Sale of Three West Virginia Properties Denied GARY FLEMING: $25K Sale of Mineral Rights to Pieria Approved GAUCHO GROUP: Incurs $6.40 Million Net Loss in 2018 GK HOLDINGS: S&P Cuts Issuer Credit Rating to 'CCC'; Outlook Neg. GLYECO INC: Incurs $5.31 Million Net Loss in 2018 GLYECO INC: Posts 2018 Net Revenue of $6.5 Million HEXION INC: Moody's Cuts CFR to 'C' Amid Bankruptcy Filing IOWA FINANCE: Fitch Rates $120MM Series 2019 Refunding Bonds 'B-' JAMES LARRY BAIN: Proposed RE/MAX Auction of Arab Property Approved JOSEPH BRENNICK: $460K Sale of Trust's York Property to Weston OK'd JOSEPH BRENNICK: $65K Sale of Myakka Property to Swatsworth Okayed JOSEPH BRENNICK: $70K Sale of Wauchula Property to Tenerife Okayed LA STEEL SERVICES: Wants Confirmation Deadline Extended to June 21 LA STEEL: June 4 Plan Confirmation Hearing LAKEVIEW VILLAGE: Fitch Affirms BB+ Rating on 2017A & 2018A Bonds LIGHTFOOT FAMILY: U.S. Trustee Unable to Appoint Committee LINDA THE BRA LADY: Simone Perele Objects to Disclosures, Plan LK BENNETT USA: Case Summary & 20 Largest Unsecured Creditors LNB-002-2013: Seeks to Extend Exclusive Filing Period to June 27 LONG BLOCKCHAIN: Subsidiary Secures C$450,000 in Loans LOVEJOY'S FAMILY: Unsecured Creditors to Get $450K in 4 Payments MAURICE SPORTING: Seeks to Extend Exclusivity Period to May 20 MONITRONICS INTERNATIONAL: Widens Net Loss to $678.8-Mil. in 2018 MR TORTILLA: DMFP Objects to Disclosure Statement NATIONAL AUTO: Plan Solicitation Period Extended Until May 31 NATIONAL AUTO: Plan Solicitation Period Extended Until May 31 NGL ENERGY: Fitch Gives B/RR4 Rating to New Unsec. Notes Due 2026 NOWELL TREE: Exclusive Plan Filing Period Extended Until May 7 NSC WHOLESALE: Has Until May 22 to Exclusively File Chapter 11 Plan OKLAHOMA PROCURE: Has Until July 15 to Exclusively File Plan ONE BLUESKY: Case Summary & 9 Unsecured Creditors OPTICAL HOLDINGS: Exclusive Filing Period Extended to May 24 ORGANIC POWER: Voluntary Chapter 11 Case Summary PACKERS HOLDINGS: Fitch Alters Outlook on 'B-' LT IDR to Positive PANAGIOTIS NASSIOS: $380K Sale of Holliston Property to Faria OK'd PARIS MANAGEMENT: First Security Objects to Plan Confirmation PEM FAMILY LIMITED: U.S. Trustee Unable to Appoint Committee PHYLLIS HANEY: $167K Sale of Beaver Properties Denied w/o Prejudice PINEY WOODS: Case Summary & 20 Largest Unsecured Creditors PRAGAT PURSHOTTAM: Substantial Consummation Date Moved to May 2024 PRESCRIPTION ADVISORY: Exclusive Filing Period Extended to July 11 REIGN SAPPHIRE: Incurs $2.6 Million Net Loss in 2018 ROBERT SIMMONS: Case Summary & 14 Unsecured Creditors ROCK SPRINGS: Exclusive Filing Period Extended Until June 27 ROCK SPRINGS: Exclusive Filing Period Extended Until June 27 ROCKIES EXPRESS: Moody's Rates New $550MM Sr. Unsec. Notes 'Ba1' ROSSER RESERVE: Town of Windermere Objects to Plan Confirmation SOUTHCROSS ENERGY: Moody's Cuts PDR to D-PD Amid Bankruptcy Filing SOUTHEASTERN GROCERS: Affiliate Seeks to Extend Exclusivity Period SPANISH BROADCASTING: Posts $16.5 Million Net Income in 2018 SUNCREST STONE: Exclusive Plan Filing Period Extended to May 9 SUNEX INTERNATIONAL: Case Summary & 20 Largest Unsecured Creditors SUNPLAY POOLS: Exclusive Plan Filing Period Extended to June 3 TOWERSTREAM CORP: Incurs $10.2 Million Net Loss in 2018 USA GYMNASTICS: Exclusive Filing Period Extended Until Aug. 5 WEATHERFORD INTERNATIONAL: Adopts New Bonus and Retention Plans WESTERN RESERVE: Case Summary & 20 Largest Unsecured Creditors WILSON MANIFOLDS: Seeks 21-Day Extension of Exclusivity Periods Z GALLERIE: Seeks to Hire A&G Realty as Real Estate Consultant Z GALLERIE: Seeks to Hire Stretto as Administrative Advisor [*] S&P Withdraws Ratings on Four Issuers' Revenue Bonds [^] BOOK REVIEW: GROUNDED: Destruction of Eastern Airlines ********* 1 GLOBAL CAPITAL: Seeks More Time to File Bankruptcy Plan --------------------------------------------------------- 1 Global Capital, LLC asked the U.S. Bankruptcy Court for the Southern District of Florida to extend the period during which the company and its affiliates have the exclusive right to file a Chapter 11 plan through April 24, and to solicit acceptances for the plan through June 26. The companies' current exclusive filing period expired on March 24 while they can solicit acceptances for the plan until May 23. The companies have already prepared a detailed plan term sheet and intends to review it with the unsecured creditors' committee and the Securities and Exchange Commission as soon as certain threshold plan issues are resolved, according to their lawyer, John Dodd, Esq., at Greenberg Traurig, LLP, in Miami, Florida. In November last year, the companies entered into an agreement with the SEC to resolve the claims asserted by the agency in its complaint, which alleges unregistered securities fraud totaling more than $287 million. On Feb. 21, the bankruptcy court approved a stipulation between the companies and the Colorado Division of Securities to address allegations that the companies are engaged in unlawful marketing and sale of interests in loans used to fund cash advances to merchants. About 1 Global Capital 1 Global Capital, LLC -- https://1stglobalcapital.com/ -- is a direct small business funder offering an array of flexible funding solutions, specializing in unsecured business funding and merchant cash advances. 1 Global Capital LLC, based in Hallandale Beach, Florida, and its debtor-affiliates sought Chapter 11 protection (Bankr. S.D. Fla. Lead Case No. 18-19121) on July 27, 2018. In the petition signed by Steven A. Schwartz and Darice Lang, authorized signatories, 1st Global Capital estimated $100 million to $500 million in assets and liabilities as of the bankruptcy filing. The Hon. Raymond B. Ray oversees the cases. Greenberg Traurig LLP, led by Paul J. Keenan Jr., Esq., serves as bankruptcy counsel; and Epiq Corporate Restructuring, LLC, as claims and noticing agent. The U.S. Trustee for Region 21 appointed an official committee of unsecured creditors on Sept. 7, 2018. The committee tapped Stichter, Riedel, Blain & Postler, P.A. as its legal counsel; Conway MacKenzie, Inc., as financial advisor, along with Dundon Advisers, LLC, as co-financial advisor. 1 GLOBAL CAPITAL: Stampler Auction of Office Property Approved -------------------------------------------------------------- Judge Raymond B. Ray of the U.S. Bankruptcy Court for the Southern District of Florida authorized 1 Global Capital, LLC (i) to sell office furniture, business machines and electronics via auction; and (ii) to dispose of any unsold Office Property. As adequate protection of the alleged interest of Collins Asset Group, LLC in the Office Property, such interest will attach to the Collins Reserve. The 14-day stay under Bankruptcy Rule 6004(h) is waived. The Order will be effective immediately upon entry. About 1 Global Capital 1 Global Capital, LLC -- https://1stglobalcapital.com/ -- is a direct small business funder offering an array of flexible funding solutions, specializing in unsecured business funding and merchant cash advances. 1 Global Capital LLC, based in Hallandale Beach, FL, and its debtor-affiliates sought Chapter 11 protection (Bankr. S.D. Fla. Lead Case No. 18-19121) on July 27, 2018. In the petition signed by Steven A. Schwartz and Darice Lang, authorized signatories, 1st Global Capital estimated $100 million to $500 million in assets and liabilities as of the bankruptcy filing. The Hon. Raymond B. Ray oversees the cases. Greenberg Traurig LLP, led by Paul J. Keenan Jr., Esq., serves as bankruptcy counsel; and Epiq Corporate Restructuring, LLC, as claims and noticing agent. The U.S. Trustee for Region 21 on Sept. 7, 2018, appointed seven creditors to serve on an official committee of unsecured creditors. The Committee tapped Stichter, Riedel, Blain & Postler, P.A. as its legal counsel; Conway MacKenzie, Inc., as financial advisor along with Dundon Advisers, LLC, as co-financial advisor. ACHAOGEN INC: Reports $186.5 Million Net Loss for 2018 ------------------------------------------------------ Achaogen, Inc. has filed with the Securities and Exchange Commission its Annual Report on Form 10-K reporting a net loss of $186.51 million on $8.72 million of total revenues for the year ended Dec. 31, 2018, compared to a net loss of $125.61 million on $11.17 million of total revenues for the year ended Dec. 31, 2017. As of Dec. 31, 2018, Achaogen had $82.29 million in total assets, $88.57 million in total liabilities, and a total stockholders' deficit of $6.28 million. Ernst & Young LLP, in Redwood City, California, issued a "going concern" qualification in its report dated April 1, 2019, on the Company's consolidated financial statements for the year ended Dec. 31, 2018, citing that the Company has incurred recurring losses from operations and has stated that substantial doubt exists about the Company's ability to continue as a going concern. Achaogen said "Since our inception, we have financed our operations with the proceeds from the underwritten public offerings of our common stock, proceeds from sales of our common stock through the use of our ATM equity offering programs, private placements of our equity securities and certain debt-related financing arrangements. In addition, we have historically received funding provided under U.S. government contracts and non-profit foundations in connection with the development of ZEMDRI and our product candidates. We have had difficulty raising sufficient funds to advance our commercialization of ZEMDRI in the way we intended and our revenues from sales of ZEMDRI to date have been very limited. For the fiscal year ended December 31, 2018, we recognized $0.8 million in net product revenue from sales of ZEMDRI." At Dec 31, 2018, the Company had unrestricted cash and cash equivalents of $31.0 million and restricted cash of approximately of $25.5 million, for a total cash and cash equivalents of $56.5 million as of Dec. 31, 2018. "Based on our available cash resources, which excludes restricted cash (including the $25.0 million of restricted cash collateralized in connection with the SVB Loan Agreement), we believe we have sufficient cash to support current planned operations into June 2019. This condition results in the assessment that there is substantial doubt about our ability to continue as a going concern," the Company added. The Company's report on Form 10-K is available from the SEC's website at https://is.gd/Ho9htJ. About Achaogen, Inc. South San Francisco, California-based Achaogen, Inc. -- http://www.achaogen.com/-- is a biopharmaceutical company committed to the discovery, development, and commercialization of novel antibacterials to treat multi-drug resistant gram-negative infections. Achaogen's first commercial product is ZEMDRI, for the treatment of adults with complicated urinary tract infections, including pyelonephritis. The Achaogen ZEMDRI program was funded in part with federal funds from the Biomedical Advanced Research and Development Authority (BARDA). The Company is currently developing C-Scape, an orally-administered beta-lactam/beta-lactamase inhibitor combination, which is also supported by BARDA. C-Scape is investigational, has not been determined to be safe or efficacious, and has not been approved for commercialization. ADETONA LLC: Wells Fargo Objects to Disclosure Statement -------------------------------------------------------- Wells Fargo Bank, N.A., objects to the Disclosure Statement explaining Adetona LLC's Chapter 11 Plan. The Creditor complains that the Debtor has failed to provide financial projections that would support its ability to make the proposed Plan payments. The Creditor further complains that the Debtor has proposed making monthly payments to creditors in the approximate amount of $13,400 immediately after confirmation. According to the Creditor, the Plan will be funded from the future operations of the Debtor. The Creditor asserts that the Debtor is only a real estate holding company with no operations, its income is dependent on its tenants, insider medical practices, timely paying rent. The Creditor further asserts that the Debtor improperly classifies the claim of Wells Fargo as "unimpaired." The Creditor points out that prior to the Petition Date, Wells Fargo's Note had been accelerated and was due in full, in rough numbers, the Note, as proposed in the Plan, will be paid off in 2040, which is after the original maturity date of the Note. Creditor asserts that the Debtor's sole source of income is the collection of rent from insider medical practices. Creditor complains that prior to the Petition Date and even after the Petition Date, the tenants have failed to regularly make the contractual $9,000 rental payments to the Debtor. According to the Creditor that the Debtor has failed to provide information about its true ability to fund a plan from any of cash sources. The Creditor points out that the Debtor's monthly post-petition operating reports show an income range from $8,094 to $18,492.93. Creditor further points out that each month is significantly less than the collective $27,000 per month the Debtor's tenants are contractually obligated to pay. The Creditor complains that the Debtor is proposing to assume the unexpired tenant leases and modify them by lowering the monthly rent to $6,500 per month. The Creditor asserts If the Debtor is permitted to do this, its monthly income would be capped at $19,500 (which it has not achieved since the bankruptcy filing anyway). According to the Creditor, the ultimate estimated recovery for unsecured creditors is 35% of the allowed class 9 claims. Creditor points out that unless the Debtor pays all senior classes of claims in full, the equity holders cannot retain their interests and the absolute priority rule has been violated. Counsel to Wells Fargo Bank, N.A.: Allen M. DeBard, Esq. LANGLEY & BANACK, INCORPORATED 745 E. Mulberry, Suite 900 San Antonio, Texas 78212 Tel: (210) 736-6600 Fax: (210) 735-6889 About Adetona, LLC Adetona, LLC filed as a Single Asset Real Estate Debtor (as defined in 11 U.S.C. Section 101(51B)). Based in San Antonio, Texas, Adetona, LLC, filed a petition for relief under Chapter 11 of the Bankruptcy Code (Bankr. W.D. Tex. Case No. 18-52099) on September 3, 2018. The petition was signed by Olutola Adetona, managing member. The case is assigned to Judge Ronald B. King. Martin Warren Seidler, Esq. at the Law Offices of Martin Seidler represents the Debtor as counsel. At the time of filing, the Debtor estimates $2,500,110 in assets and $2,745,813 in liabilities. AIR METHODS: Moody's Lowers CFR to Caa1, Outlook Stable ------------------------------------------------------- Moody's Investors Service downgraded Air Methods Corporation's Corporate Family Rating to Caa1 from B3 and its Probability of Default Rating to Caa1-PD from B3-PD. Moody's also downgraded the first lien secured credit facility ratings to B3 from B2 and the rating on the unsecured notes to Caa3 from Caa2. The outlook is stable. The downgrade reflects a material increase in the company's leverage as a result of ongoing headwinds including declining patient transport volumes, high fleet maintenance costs and deterioration in payor mix leading to pressure on net revenue per transport. Moody's believes reimbursement pressure will continue to negatively impact Air Methods due to unfavorable mix shift from commercial payors to Medicare and increasing scrutiny on surprise medical bills that could lead to regulatory changes unfavorable to the air ambulance industry. Moody's expects that the company's adjusted leverage will remain above 8.0 times over the next 12 months. The following ratings were downgraded: Air Methods Corporation Corporate Family Rating, to Caa1 from B3 Probability of Default Rating, to Caa1-PD from B3-PD $125 million senior secured first lien revolving credit facility expiring 2022, to B3 (LGD3) from B2 (LGD3) $1.25 billion senior secured first lien term loan due 2024, to B3 (LGD3) from B2 (LGD3) $500 million senior unsecured notes due 2025, to Caa3 (LGD5) from Caa2 (LGD5) Outlook action: The rating outlook is stable. RATINGS RATIONALE Air Methods' Caa1 CFR reflects high financial leverage, operating performance volatility caused by adverse weather conditions and significant bad debt expense. Moody's expects the company to operate with financial leverage of 8.0-9.0 times over the next 12-18 months. Moody's estimated leverage (including pro forma run-rate cost savings initiatives, greenfield base contributions and add-backs for non-recurring expenses) was approximately 8.3 times as of December 31, 2018. Excluding Moody's operating lease adjustment, this figure would be 9.1 times. Offsetting the above challenges, Air Methods' Caa1 CFR is supported by a sizeable revenue base, positive cash flow, and the company's position as a leading provider of community-based air ambulance services in the United States. The company's initiatives to capture new demand, manage recent negative press coverage, and reduce its costs are likely to bear positive results. However, the timing and magnitude of the full benefit of these initiatives is uncertain. Despite weakness in operating performance, the company's liquidity remains adequate. The company had $82 million of cash and a largely unutilized $125 million revolver available as of December 31, 2018. This gives the company adequate flexibility to manage its debt service requirements (interest payments as well as mandatory first lien loan amortization) as well as maintenance capital expenditures over the next 12-18 months. Moody's expects limited growth capital expenditures over the next 12-18 months. However, over time the company's capital requirements will likely increase if it pursues growth through expansion of its fleet. The stable ratings outlook reflects Moody's expectation that the company's strategic initiatives are likely to bear positive results, although it will take several quarters for the benefits to be reflected in financial performance. The ratings could be downgraded if the company's operating performance or liquidity weakens. An increased probability of a default event (including a distressed exchange transaction) or weakening credit recovery prospects would also result in a downgrade. The principal methodology used in these ratings was Business and Consumer Service Industry published in October 2016. Air Methods is one of the largest providers of air medical emergency services in the United States. In addition to the core air medical emergency services business, the company also provides aerial tours of the Grand Canyon, the Hawaiian Islands and Las Vegas. The company also has a small presence in design, manufacture, and installation of medical aircraft interiors for domestic and international customers. The company is owned by private equity firm, American Securities. Net revenues are around $1.2 billion. AMERICAN FORKLIFT: Exclusivity Period Extended Until April 19 ------------------------------------------------------------- U.S. Bankruptcy Judge Cynthia Jackson extended through April 19 the period during which only American Forklift Rental & Supply, LLC can file a Chapter 11 plan of reorganization and disclosure statement. The extension would give the company and Bank of Texas more time to resolve various contested matters between them either by settlement or trial. The bank earlier filed a motion to lift the automatic stay and an objection to the company's continued use of cash collateral, which will be tackled at a hearing on April 11. American Forklift is currently working on its proposed plan, which it intends to file with the court after it resolves its issues with Bank of Texas, according to a previous report by the Troubled Company Reporter. About American Forklift American Forklift Rental & Supply, LLC -- https://www.americanforkliftrental.com/ -- specializes in forklift rentals for the Central Florida area including Orlando, Tampa, Lakeland, Orange County, Polk County, Lake County, and surrounding areas. It also offers new and used sales on a wide variety of forklifts. American Forklift sought protection under Chapter 11 of the Bankruptcy Code (Bankr. M.D. Fla. Case No. 18-04155) on July 12, 2018. In the petition signed by Joseph Garcia, Jr., managing member, the Debtor estimated assets of $1 million to $10 million and liabilities of $1 million to $10 million. Judge Cynthia C. Jackson presides over the case. Melissa A. Youngman, Esq., in Altamonte Springs, Florida, is the Debtor's legal counsel. No official committee of unsecured creditors has been appointed. APEX TOOL: S&P Lowers Issuer Credit Rating to 'B-'; Outlook Stable ------------------------------------------------------------------ S&P Global Ratings on April 2 lowered its issuer credit rating on Apex Tool Group LLC to 'B-' from 'B'. The outlook is stable. At the same time, S&P lowered its issue-level rating on the company's senior secured term credit facilities to 'B-' from 'B'. The '3' recovery rating is unchanged. S&P also lowered its issue-level rating on the company's senior unsecured notes to 'CCC+' from 'B-'. The '5' recovery rating is unchanged." The downgrade to 'B-' reflects Sparks, Md.-based Apex Tool Group LLC's inability to deleverage below 8x due to raw material cost inflation, tariffs, and ongoing restructuring charges despite revenue growth spurred by new products. Debt leverage has been in excess of 8x for at least the past seven quarters and was 9x as of Sept. 30, 2018. S&P expects the company's leverage will remain above 8x for at least next 12 to 18 months until recent restructuring expenses run off. The stable rating outlook on Apex Tool Group LLC reflects elevated debt leverage above 8x over the next 12 months, but with sufficient interest coverage and cash flow to meet its obligations. S&P expects to see higher volume growth with price improvement in 2019, which should result in some year-over-year EBITDA growth. However, S&P can continue to expect mild headwinds from cost inflation and the potential of higher tariffs. "We could lower the rating within the next 12 months if U.S. commercial construction declined or input costs increased due to further tariff impositions, resulting in low enough EBITDA that Apex's debt leverage would exceed 10x and EBITDA interest coverage will move closer to 1x. Under our assumptions, this would require a deterioration in its EBITDA margin of over 200 basis points. We could also lower the rating if the company's liquidity deteriorated sufficiently or if it breached its credit agreement covenants, losing access to its credit lines," S&P said. "We could raise the rating within the next 12 months if the company were able to reduce adjusted leverage metrics to well below 8x and maintain interest coverage above 2x on a sustained basis. We would need to see Apex improve margins by 200 bps driven by improved market conditions and successful price increases while relieving pressures driven primarily by inflation, negative manufacturing variances, premium freight, and tariffs," the rating agency said. BARRACUDA NETWORKS: Fitch Affirms 'B' LT IDR, Outlook Stable ------------------------------------------------------------ Fitch Ratings has affirmed Barracuda Networks, Inc.'s Long-Term Issuer Default Rating (IDR) at 'B'. The Rating Outlook is Stable. Fitch has also downgraded the rating for Barracuda's $75 million first-lien secured revolver and upsized $755 million first-lien secured term loan to 'BB-'/'RR2' from 'BB'/'RR1'. In addition, Fitch has withdrawn the rating on Barracuda's second-lien secured term loan. The downgrade of Barracuda's first-lien term loan reflects the lower recovery of the upsized loan. A full list of rating actions follows at the end of this release. On April 3, 2019, Barracuda announced a plan to upsize its 1st lien term loan by $205 million. The proceeds will be used to repay the existing $205 million 2nd lien term loan. The transaction is leverage neutral. However, the recovery prospect for the upsized 1st lien term loan would decrease, resulting in the recovery rating being downgraded to 'RR2' from 'RR1' and the 1st lien rating downgraded to 'BB-' from 'BB'. KEY RATING DRIVERS Product Range Supporting SMB Segment: Barracuda Networks, Inc. offers products addressing a wide range of IT needs for small to midsize business (SMB) customers that generally have limited financial and technical resources dedicated to IT management. The company's products include Next Generation Firewall, Web App Firewall, Email Security Gateway, Web Security Gateway, Security and Archiving for Office 365, and Backup/Data Protection. The availability of these products through both appliance- and cloud-based platforms enables its SMB customers to simplify IT security and data-storage management. Fitch believes the breadth of products available positions Barracuda well in a segment that prefers simplicity to sophisticated solutions. Secular Tailwind Supports Growth: Fitch believes two factors serve as the fundamental demand drivers. The first is Barracuda's cloud-based solutions, which allows the company to benefit from the steady pace of IT workload migrating to the cloud from on-premise infrastructure. The second is the increasing awareness of IT security threats leading companies to allocate more resources to protecting their networks and data. Some of the high-visibility IT security breaches include data breaches and ransomware that could be costly or cause damage to a company's reputation. High Levels of Recurring Revenues and Revenue-Retention Rate: Barracuda has been steadily transitioning toward subscription-based revenue, which provides greater visibility into future revenue streams. The proportion of subscription revenues has reached the mid-80's, up from the 70's during FY2016. Barracuda maintained a high subscription-revenue retention rate of over 100% in recent periods, which demonstrates its ability to retain active subscribers and upsell additional products. Fitch believes the high levels of recurring revenues and retention rates provide a high degree of revenue predictability. Diversified Customer Base: Consistent with the fragmented nature of the SMB segment, Barracuda serves a large set of over 150,000 customers. Fitch believes the diverse customer base could partially mitigate inherent risks in the SMB segment through the economic cycles. Susceptible to Industry Cyclicality: Barracuda is susceptible to IT security industry cycles, as illustrated by its fiscal 2017 and 2018 deceleration in revenue growth; however, the secular growth trend helps moderate exposure to the security industry cycle. Fitch believes the weakness may have been the result of strong growth in previous years coinciding with heightened IT security awareness, which has propelled overall industry growth. Fitch views the current industry environment as normal and a more realistic base for assessing future growth potential. Nevertheless, Barracuda's focus on IT and data security will continue to expose the company to industry cyclicality. Leverage to Remain Elevated: Fitch expects gross leverage to be near 6.3x in fiscal 2019, in line with peers in the 'B' rating category. Fitch expects Barracuda to maintain gross leverage between 5.5x and 6.5x throughout the rating horizon. During the leveraged buyout, Thoma Bravo made an equity contribution of over $500 million. Fitch believes this demonstrates Thoma Bravo's commitment and confidence in the industry and the company. Barracuda has a history of acquiring complementary technologies and products, such as Sookasa and Sonian. Fitch believes the company will remain acquisitive to keep pace with the fast-moving industry, limiting its deleveraging primarily to EBITDA growth. DERIVATION SUMMARY Fitch's ratings are supported by Barracuda's focus on IT and data security for the SMB segment and the secular growth trend for the IT security industry. The downgrade of the upsized 1st lien term loan reflects the lower recovery prospect that results in a lower recovery rating. Barracuda's products are primarily cloud-based, making them easily accessible and manageable by SMB customers who prefer simplicity to sophistication in IT security; having an over 150,000-customer base reflects this. The subscription nature of the products and high revenue retention rates provide a high level of predictability for its revenues. The predictability is marginally tempered by the inherent risks of the SMB segment, which Barracuda is exposed to through the economic cycles. At the IT security industry level, Fitch believes the heightened awareness of IT security risks arising from high profile security breaches in recent years provides support for the secular growth of the industry. Fitch expects Barracuda's leverage to remain in the 5.5x to 6.5x range over the rating horizon. Barracuda's industry expertise, revenue scale, and leverage profile are consistent with the 'B' rating category. KEY ASSUMPTIONS Fitch's Key Assumptions Within Its Rating Case for the Issuer -- Revenue growth near 10%; -- EBITDA margins in the mid-to-high 20% range; -- Capex at approximately 2.2% of revenue, consistent with historical trend; -- Acquisitions averaging $50 million per year for FY2020-2022, enabling the company to expand product lines and technologies. In estimating a distressed EV for Barracuda, Fitch assumes revenue decline of 5% in a distressed scenario that also leads to approximately three percentage points of margin compression on lower scale, resulting in a going concern EBITDA that is approximately 15% lower relative to Fitch's FY19 EBITDA estimates. Fitch applies a 6.5x multiple to arrive at EV of $662 million. The multiple is higher than the median TMT enterprise value multiple, but is in line with other similar software companies that exhibit strong FCF characteristics. In the 21st edition of Fitch's Bankruptcy Enterprise Values and Creditor Recoveries case studies, Fitch notes nine past reorganizations in the Technology sector with recovery multiples ranging from 2.6x to 10.8x. Of these companies, only three were in the Software sector: Allen Systems Group, Inc.; Avaya, Inc.; and Aspect Software Parent, Inc., which received recovery multiples of 8.4x, 8.1x and 5.5x, respectively. Barracuda's operating profile is supportive of a recovery multiple in the middle of this range. Fitch assumes a fully drawn revolver in its recovery analysis. RATING SENSITIVITIES Developments that May, Individually or Collectively, Lead to Positive Rating Action -- Expectation for gross leverage sustaining below 5.5x; -- Pre-dividend FCF margins sustaining above 10%; -- Organic revenue growth sustaining near or above 5%; -- FFO adjusted gross leverage sustained below 6.0x. Developments that May, Individually or Collectively, Lead to Negative Rating Action -- Expectation for gross leverage sustaining above 7x, potentially due to debt-financed acquisitions or dividend payment to owners; -- Pre-dividend FCF margins sustaining below 5%; -- Organic revenue growth sustained near or below 0%; -- FFO adjusted gross leverage sustained above 7.5x. LIQUIDITY Solid Liquidity: Fitch expects the company's liquidity to remain solid over the forecast period. Liquidity will be supported by internal FCF generation, its $75 million RCF, and over $100 million of readily available cash and cash equivalents. Barracuda's FCF is supported by EBITDA margins in the mid- to high-20% range. Fitch estimates FCF to be initially curbed in large part by restricted stock unit payout, and FCF margins to gradually normalize in the low teens and approach $70 million at the end of Fitch's forecast period. FULL LIST OF RATING ACTIONS Fitch has taken the following rating actions: Barracuda Networks, Inc. -- Long-Term IDR affirmed at 'B'; Stable Outlook; -- $75 million first lien secured revolver due 2023 downgraded to 'BB-'/'RR2' from 'BB'/'RR1'; -- Upsized $755 million first lien term loan due 2025 downgraded to 'BB-'/'RR2' from 'BB'/'RR1'; -- Second lien term loan 'CCC+'/'RR6' rating withdrawn. BLACKBOARD INC: S&P Affirms 'CCC+' ICR on Transact Divestment ------------------------------------------------------------- S&P Global Ratings affirmed the 'CCC+' issuer credit rating on U.S education software provider Blackboard Inc. and issue-level ratings of 'B-' and 'CCC-' on the company's first-lien debt and second-lien notes, respectively. Blackboard Inc. has entered into an agreement to sell its Transact business segment to Reverence Capital Partners for over $700 million, to be completed in the second quarter of 2019. S&P expects the company to use substantially all net proceeds to repay first-lien debt. While it expects the transaction to improve near-term liquidity and covenant headroom, the rating agency said that Blackboard's operational performance has been inconsistent over the past few years despite the release of newer products. The ratings affirmation reflects S&P's view of Blackboard's weak projected cash flow prospects, inconsistent operational performance, and a highly competitive landscape. Th rating agency believes these factors and mature market conditions will challenge prospects for sustained business improvement and jeopardize the company's refinancing. S&P said the negative outlook reflects the company's inconsistent operational performance, continued high leverage, and weak FOCF generation. The rating agency expects strong competition in Blackboard's core LMS industry and slower-than-expected traction of newer products to create uncertainty related to a significant and sustained business turnaround. S&P thinks the lack of significant business improvements over the coming year could jeopardize the company's ability to refinance upcoming debt maturities. "We could lower our issuer credit rating on Blackboard if the company does not sustain momentum in its business improvement and revenue stabilization, or if its liquidity position deteriorates, leading us to believe a debt restructuring is likely or its ability to refinance diminishes," S&P said. "We could revise our outlook to stable if the company makes progress toward sustained revenue and business improvement and better FOCF generation, leading us to believe the company's refinancing prospects have improved and the company is able to address upcoming debt maturities," the rating agency said. BLINK CHARGING: Incurs $3.42 Million Net Loss in 2018 ----------------------------------------------------- Blink Charging Co. has filed with the Securities and Exchange Commission its Annual Report on Form 10-K reporting a net loss of $3.42 million on $2.68 million of total revenues for the year ended Dec. 31, 2018, compared to a net loss of $75.36 million on $2.50 million of total revenues for the year ended Dec. 31, 2017. As of Dec. 31, 2018, Blink Charging had $21.65 million in total assets, $5.55 million in total liabilities, and $16.09 million in total stockholders' equity. As of Dec. 31, 2018, the Company had a cash balance, net working capital and an accumulated deficit of $18,417,513, $15,586,510 and $159,856,481, respectively. The Company believes its current cash on hand is sufficient to meet its operating obligations and capital requirements for at least twelve months from the issuance date of these financial statements. Thereafter, the Company may need to raise further capital through the sale of additional equity or debt securities or other debt instruments to support its future operations. The Company's operating needs include the planned costs to operate its business, including amounts required to fund working capital and capital expenditures. The Company's future capital requirements and the adequacy of its available funds will depend on many factors, including the Company's ability to successfully commercialize its products and services, competing technological and market developments, and the need to enter into collaborations with other companies or acquire other companies or technologies to enhance or complement its product and service offerings. 2018 and First Quarter 2019 Highlights: * Blink Charging's electric vehicle charging network had approximately 140,146 registered members as of Dec. 31, 2018 as compared to approximately 111,203 members at Dec. 31, 2017 representing a 26% increase year over year in registered network members. * The Company's Dec. 31, 2018 balance sheet reflects $15.6 million in working capital (defined as current assets less current liabilities) versus negative working capital of $34.8 million at Dec. 31, 2017; an improvement of over $50 million in working capital between 2017 and 2018. * Total liabilities were $5.6 million at Dec. 31, 2018 versus $38.8 million at Dec. 31, 2017; reflecting a decrease of $33.2 million or an 86% reduction in total liabilities between 2017 and 2018. Michael D. Farkas, the Company's executive chairman and chief executive officer stated "We ended 2018 with a strong balance sheet and see an increasing world-wide focus on EV adoption and infrastructure build-out. We are ideally positioned to capitalize on the expanding clean transportation opportunities during 2019 and beyond with our Blink charging network and our newly introduced Blink IQ200 Family of next generation Fast AC charging stations. 2018 was a year of rebuilding our business operations. The vision and mission that were established with the founding of Blink in 2008 is now reality as EV technology can now deliver the performance transportation markets require. Our network, expertise and increased footprint of network chargers have us very excited about the coming years opportunities." During the first quarter of 2019, Blink Charging: * Successfully completed its pilot program of the Blink IQ200 family of next-generation, 80Amps, Level 2 Fast AC charging stations with dozens of units and more than six months of testing in every major region of the United States. The Blink IQ200 is now in full production and commercially available to customers. * Entered into a memorandum of understanding with InterEnergy Systems, the technology focused wholly owned subsidiary of InterEnergy Group, to form a joint venture entity to develop EV charging infrastructure throughout the Dominican Republic and Panama, with the objective of expanding the business to other Latin American and Caribbean markets in the near future. Blink will provide the JV with its EV charging stations, the Blink Network and expertise, while InterEnergy will provide operational support, local resources and power sector expertise in the markets where the JV will operate. * Signed an agreement with the EUNICE ENERGY GROUP (EEG) to establish a joint venture, Blink Charging Europe Ltd., to leverage Blink's EV products, network, technology, and experience within the EV charging space alongside EEG's position and financial abilities to expand the charging infrastructure in Greece and other European countries. As previously announced: * The Company teamed up with Google Maps during the third quarter as they brought EV charging stations to its maps to assist EV drivers in locating our charging stations. * Blink Charging and Hubject (a joint venture formed by companies including BMW Group, Bosch, Daimler, EnBW, Innogy, Siemens and Volkswagen Group) announced a strategic relationship. Blink Charging's nationwide network of chargers will be accessible to all EV drivers participating in Hubject's charging platform and Blink Charging's network members will be able to easily access all charging stations on Hubject participating networks while driving in the United States. The Company's report on Form 10-K is available from the SEC's website at https://is.gd/ZKavdA. About Blink Charging Based in Miami Beach, Florida, Blink Charging Co. (OTC: CCGID), formerly known as Car Charging Group, Inc. -- http://www.CarCharging.com/,http://www.BlinkNetwork.com/and http://www.BlinkHQ.com/-- is a provider of public electric vehicle (EV) charging equipment and services. Blink Charging designs, owns, operates and sells EV charging equipment under the Blink brand, as well as a number of other charging station equipment manufacturers such as Chargepoint, General Electric (GE) and SemaConnect. Blink Charging also offers connectivity to the Blink Network, a cloud-based platform that operates, manages and tracks Blink's EV charging stations and all associated data. BOURDOW CONTRACTING: Case Summary & 20 Largest Unsecured Creditors ------------------------------------------------------------------ Debtor: Bourdow Contracting, L.L.C. 7080 Westside Saginaw Road Bay City, MI 48706 Business Description: Bourdow Contracting, L.L.C. is a construction company based in Bay City, Michigan. Chapter 11 Petition Date: April 3, 2019 Court: United States Bankruptcy Court Eastern District of Michigan (Bay City) Case No.: 19-20683 Judge: Hon. Daniel S. Opperman Debtor's Counsel: Susan M. Cook, Esq. WARNER NORCROSS & JUDD, LLP 715 E. Main Street, Suite 110 Midland, MI 48640 Tel: 989-698-3700 989-698-3759 E-mail: smcook@wnj.com Estimated Assets: $100,000 to $500,000 Estimated Liabilities: $1 million to $10 million The petition was signed by Jason A. Bourdow, managing member. A copy of the Debtor's list of 13 unsecured creditors is available for free at: http://bankrupt.com/misc/mieb19-20683_creditors.pdf A full-text copy of the petition is available for free at: http://bankrupt.com/misc/mieb19-20683.pdf CABLE ONE: S&P Puts 'BB' Unsecured Debt Rating on Watch Negative ---------------------------------------------------------------- S&P Global Ratings placed its 'BB' issue-level rating on U.S. cable service provider Cable One Inc.'s senior unsecured debt on CreditWatch with negative implications. The CreditWatch negative placement follows Cable One's recent announcement that it will acquire Sullivan, Mo.-based cable operator Fidelity Communications Co. for $525 million. S&P believes the all-cash transaction, which the company will fund with a combination of cash on hand, revolver borrowings, and the proceeds from new debt, could materially lower the recovery prospects for Cable One's unsecured creditors depending on the type and amount of debt it raises to finance the acquisition. "We intend to resolve the CreditWatch placement in the coming months as more information becomes available. The outcome will depend on the type and amount of debt that the company issues to finance the acquisition. Once more information becomes available about Cable One's funding mix, we will update our recovery analysis to incorporate the new outstanding secured and unsecured claims and our enterprise value to reflect the benefits of the acquisition," S&P said. CAH ACQUISITION 12: Case Summary & 20 Largest Unsecured Creditors ----------------------------------------------------------------- Debtor: CAH Acquisition Company 12, LLC dba Fairfax Community Hospital 40 Hospital Rd. Fairfax, OK 74637 Business Description: CAH Acquisition Company 12 is healthcare services provider in Fairfax, Oklahoma, offering a broad range of services including emergency, radiology, laboratory, inpatient care, rehabilitation services, respiratory therapy, and swing bed. Chapter 11 Petition Date: April 1, 2019 Court: United States Bankruptcy Court Northern District of Oklahoma (Tulsa) Case No.: 19-10641 Judge: Hon. Dana L. Rasure Debtor's Counsel: Sam G. Bratton, II, Esq. DOERNER, SAUNDERS, DANIEL & ANDERSON, L.L.P. Two West Second Street, Suite 700 Tulsa, OK 74103-3117 Tel: 918 582-1211 Fax: 918-925-5215 Email: sbratton@dsda.com Estimated Assets: $50,000 to $100,000 Estimated Liabilities: $1 million to $10 million The petition was signed by Charles E. Cartwright, Trustee for Receiver for Debtor. 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/oknb19-10641.pdf Pending bankruptcy cases filed by affiliates: Debtor Petition Date Case No. ------ ------------- -------- CAH Acquisition Company #1 LLC 2/19/19 19-00730 CAH Acquisition Company #2 LLC 3/17/19 19-01230 CAH Acquisition Company #3 LLC 3/14/19 19-01180 CAH Acquisition Company #4 LLC 3/17/19 19-01128 CAH Acquisition Company #5 LLC 3/13/19 19-10359 CAH Acquisition Company 11, LLC 3/08/19 19-22020 CAH Acquisition Company 12, LLC 3/17/19 19-01229 CAH Acquisition Company 6, LLC 3/21/19 19-01300 CAH Acquisition Company 7, LLC 3/21/19 19-01298 CAH Acquisition Company 7, LLC 3/21/19 19-11040 CAH Acquistion Company 16, LLC 3/17/19 19-12227 CAMBRIDGE ACADEMY: Fitch Cuts $7.7MM Series 2010 Bonds to 'D' ------------------------------------------------------------- Fitch Ratings has downgraded the rating on the following bonds issued on behalf of the charter school, Cambridge Academy East, AZ (CAE), by the Industrial Development Authority of Pima County, AZ to 'D' from 'CCC'. -- $7.7 million education revenue bonds, series 2010. SECURITY The bonds are payable from a first-priority lien on all pledged revenues of CAE, secured by a first mortgage on the financed facilities and a cash-funded debt service reserve sized to transaction maximum annual debt service (TMADS). KEY RATING DRIVERS PAYMENT DEFAULT: The downgrade to 'D' from 'CCC' reflects the principal payment missed on April 1, 2019. The trustee reports that pursuant to a direction from the majority holders of the bonds, only interest payments are being made at this time. Amounts related to principal are being retained in the trust estate and continue to bear interest. RATING SENSITIVITIES Rating sensitivities are no longer required given that the bonds have defaulted. CARTHAGE SPECIALTY: Plan Exclusivity Period Extended to May 24 -------------------------------------------------------------- Judge Margaret Cangilos-Ruiz of the U.S. Bankruptcy Court for the Northern District of New York extended the periods during which Carthage Specialty Paperboard, Inc. and Carthage Acquisition, LLC have the exclusive right to file a Chapter 11 plan through May 24, and to solicit acceptances for the plan through July 23. The extension would give the companies more time to investigate claims and finalize a bankruptcy plan. The companies, which expect to file a plan before May 24, had earlier sent a draft of their plan to KeyBank National Association, the official committee of unsecured creditors and the U.S. trustee, according to an earlier report by The Troubled Company Reporter. About Carthage Specialty Paperboard Carthage Specialty Paperboard, Inc. -- http://www.carthagespbd.com/ -- is a paperboard manufacturer in Carthage, New York, serving a diverse range of markets from pulp-substitute specialty paperboard to industrial grade chipboards. Carthage Specialty Paperboard and its affiliate Carthage Acquisition, LLC sought protection under Chapter 11 of the Bankruptcy Code (Bankr. N.D.N.Y. Lead Case No. 18-30226) on Feb. 28, 2018. In the petitions signed by Donald Schnackel, vice president of finance, Carthage Specialty estimated assets and liabilities of $10 million to $50 million; and Carthage Acquisition estimated assets of $1 million to $10 million and liabilities of $10 million to $50 million. The Debtors tapped Bond, Schoeneck & King, PLLC as their legal counsel, and Bradley Woods & Co. Ltd., as their financial advisor and investment banker. The U.S. Trustee for Region 2 appointed an official committee of unsecured creditors. The committee is represented by Lowenstein Sandler LLP. CD MANAGEMENT: Credit Union Objects to Disclosure Statement ----------------------------------------------------------- The Evansville Teachers Federal Credit Union (the "Credit Union") objects to the approval of the proposed Disclosure Statement explaining the Chapter 11 Plan filed by the debtor CD Management, LLC. The Credit Union complains that the Proposed Disclosure Statement is completely devoid of information regarding the value of the Debtor's real property and any other assets or the current or projected financial status of the Debtor. Credit Union points out that the Plan proposes to pay the Credit Union's claim with low monthly payments and a final balloon payment over an approximately twenty-four (24) month period, but the Disclosure Statement fails to provide financial projections for even a single month. Credit Union asserts that the Disclosure Statement lacks information as to the purported value of the real property. According to Credit Union, this is crucial information, as it determines the status of the Credit Union's claims as being fully secured or under secured. Credit Union further points outs that the Disclosure Statement proposes entering into a new lease with a new tenant, assuming it successfully evicts the current tenant. Credit Union further complains that the Debtor provides a form of this proposed new lease with the Disclosure statement but does not state whether or not this is binding on the proposed lessee. According to the Credit Union, the Debtor expects creditors with allowed unsecured claims to be paid ten percent of their claim in regular monthly payments over twenty-four (24) months, but there are no projections to even hint as to how this could happen. Credit Union asserts that the Proposed Disclosure Statement contains absolutely no information about the current operations of the Debtor or its business. Credit Union complains that the Disclosure Statement does not contain a liquidation analysis. Creditor points out that the Debtor mischaracterizes the Credit Union's claim as unimpaired when it is obvious that the Credit Union's claim is impaired. According to Credit Union that the Debtor has no available income to fund a plan, the Creditor has a properly perfected and valid lien on the Debtor's real property and rents. Creditor points out that the Debtor proposes to use the Credit Union's collateral without proposing any interest rate. Creditor further points out that the Debtor proposes paying the Credit Union in an amount lower than it is currently receiving under its Adequate Protection Order. Credit Union assert that the Plan was not proposed in good faith, violating 11 U.S.C Section 1129(a)(3), as evidenced by the lack of disclosures, factual inaccuracies, and material omissions. Counsel for Evansville Teachers Federal Credit Union: Matthew R. Lindblom, Esq. Sara A. Johnston, Esq. Stoll Keenon Ogden PLLC 500 West Jefferson Street, Suite 2000 Louisville, Kentucky 40202 Telephone: (502) 333-6000 Email: matthew.lindblom@skofirm.com sara.johnston@skofirm.com About CD Management CD Management, LLC, sought protection under Chapter 11 of the Bankruptcy Code (Bankr. W.D. Ky. Case No. 18-32078) on July 5, 2018. At the time of the filing, the Debtor estimated assets of less than $100,000 and liabilities of less than $500,000. Judge Thomas H. Fulton presides over the case. CHERRY BROS: U.S. Trustee Forms 3-Member Committee -------------------------------------------------- Andrew Vara, acting U.S. trustee for Region 3, on April 2 appointed three creditors to serve on the official committee of unsecured creditors in the Chapter 11 cases of Cherry Bros. LLC and its affiliates. The committee members are: (1) Myco International, LLC 6511 West Chester Road West Chester, OH 45609 Attn: Kenneth Winnegrad, President Phone: (513) 644-0442 Fax: (513) 777-4000 Email: kenw@importmyco.com (2) Steven Walnick Associates DBA Garfield Sales 1943 Leslie Lane Mernick, NY 11566 Attn: Steve Walnick, President Phone: (516) 868-2990 Fax: (516) 8686488 Email: garfieldsalesinc@gmail.com (3) Trophy Nut Company 320 North 2nd Street Tipp City, OH 45371 Attn: Robert Wilke, Vice-President Phone: (937) 545-1330 Fax: (937) 667-4656 Email: bwilke@trophynut.com Official creditors' committees serve as fiduciaries to the general population of creditors they represent. They may investigate the debtor's business and financial affairs. Committees have the right to employ legal counsel, accountants and financial advisors at a debtor's expense. About Cherry Bros. Cherry Bros., LLC is a privately held miscellaneous durable goods merchant wholesaler. Cherry Bros., LLC filed for bankruptcy protection (Bankr. E.D. Penn, Lead Case No. 19-11644) on March 18, 2019. The petition was signed by Larry Cherry, authorized representative. Hon. Eric L. Frank presides over the case. The Debtor estimated assets of $1 million to $10 million and estimated debts of $10 million to $50 million. The Debtor tapped Michael Jason Barrie, Esq. of Benesch, Friedlander, Coplan & Aronoff LLP as its counsel. CITIZENS CONSERVATION: Case Summary & 20 Top Unsecured Creditors ---------------------------------------------------------------- Debtor: Citizens Conservation Corps Inc. 198 George Street Beckley, WV 25801 Business Description: Citizens Conservation Corps Inc. is a local nonprofit civic & social organization based in Beckley, West Virginia. Chapter 11 Petition Date: April 3, 2019 Court: United States Bankruptcy Court Southern District of West Virginia (Beckley) Case No.: 19-50058 Judge: Hon. Frank W. Volk Debtor's Counsel: Joseph W. Caldwell, Esq. Matthew M.Johnson, Esq. CALDWELL & RIFFEE 3818 MacCorkle Ave. S.E. Suite 101 Post Office Box 4427 Charleston, WV 25364-4427 Tel: 304-925-2100 Fax: (304) 925-2193 E-mail: joecaldwell@frontier.com chuckriffee@frontier.com Estimated Assets: $1 million to $10 million Estimated Liabilities: $1 million to $10 million The petition was signed by Robert A. Martin, director. 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/wvsb19-50058.pdf COUNTRY MORNING FARMS: U.S. Trustee Forms 2-Member Committee ------------------------------------------------------------ Gregory Garvin, acting U.S. trustee for Region 18, on April 2 appointed two creditors to serve on the official committee of unsecured creditors in the Chapter 11 case of X. The committee members are: (1) Brian Andersen Farm, LLC Denise Andersen, Manager P.O. Box 584 Othello, WA 99344 (509) 750-9709 (2) Christensen, Inc. Jamilyne Fawver, Credit Manager 1060 Jadwin Ave. Richland, WA 99352 Official creditors' committees serve as fiduciaries to the general population of creditors they represent. They may investigate the debtor's business and financial affairs. Committees have the right to employ legal counsel, accountants and financial advisors at a debtor's expense. About Country Morning Farms Country Morning Farms, Inc., is a privately held company in the cattle ranching and farming business. Country Morning Farms grows its own feeds, milk its own cows, and delivers fresh dairy products to its customers. Country Morning Farms filed a Chapter 11 petition (Bankr. E.D. Wash. Case No. 19-00478), on March 1, 2019. The petition was signed by Robert Gilbert, vice president. At the time of filing, the Debtor disclosed $6,421,269 in assets and $10,586,970 in liabilities. The case is assigned to Judge Frederick P. Corbit. The Debtor is represented by William L. Hames, Esq. at Hames, Anderson, Whitlow & O'Leary. DEQUEEN MEDICAL: Case Summary & 20 Largest Unsecured Creditors -------------------------------------------------------------- Debtor: DeQueen Medical Center, Inc. 13595 SW 134th St., Suite 210 Miami, FL 33186 Business Description: DeQueen Medical Center -- http://www.dequeenmedicalcenter.com-- provides general medical and surgical care for inpatient, outpatient, and emergency room patients, and participates in the Medicare and Medicaid programs. Among the services it provides are emergency care, laboratory, nursing, radiology, rehabilitation, and respiratory. Chapter 11 Petition Date: April 3, 2019 Court: United States Bankruptcy Court Southern District of Florida (Miami) Case No.: 19-14362 Judge: Hon. A. Jay Cristol Debtor's Counsel: Paul Decailly, Esq. DECAILLY LAW GROUP, PA PO Box 490 Indian Rocks Beach, FL 33785 Tel: (727) 824-7709 Fax: (866) 906-5977 Email: pdecailly@dlg4me.com Estimated Assets: $1 million to $10 million Estimated Liabilities: $1 million to $10 million The petition was signed by Jorge Perez, president. A full-text copy of the petition containing, among other items, a list of the Debtor's 20 largest unsecured creditors is available for free at: http://bankrupt.com/misc/flsb19-14362.pdf Pending bankruptcy cases filed by affiliates: Debtor: CAH Acquisition Company #3, LLC District: North Carolina Date Filed: 03/14/2019 Case Number: 19-01180 Debtor: CAH Acquisition Company #4, LLC District: North Carolina Date Filed: 03/17/2019 Case Number: 19-01228 Debtor: CAH Acquisition Company #1, LLC District: North Carolina Date Filed: 02/19/2019 Case Number: 19-00730 Debtor: CAH Acquisition Company #5, LLC District: Kansas Date Filed: 03/13/2019 Case Number: 19-10359 Debtor: CAH Acquisition Company #11, LLC District: Tennessee Date Filed: 03/08/2019 Case Number: 19-22020 Debtor: CAH Acquisition Company #12, LLC District: North Carolina Date Filed: 03/17/2019 Case Number: 19-01229 Debtor: CAH Acquisition Company #16, LLC District: North Carolina Date Filed: 03/17/2019 Case Number: 19-01227 Debtor: CAH Acquisition Company #6, LLC District: North Carolina Date Filed: 03/21/2019 Case Number: 19-01300 Debtor: CAH Acquisition Company #7, LLC District: North Carolina Date Filed: 03/21/2019 Case Number: 19-01298 EASTMAN KODAK: Swings to 2018 Net Loss of $16 Million ----------------------------------------------------- Eastman Kodak Company has filed with the Securities and Exchange Commission its Annual Report on Form 10-K reporting a net loss of $16 million on $1.32 billion of total net revenues for the year ended Dec. 31, 2018, compared to net earnings of $94 million on $1.38 billion of total net revenues for the year ended Dec. 31, 2017. As of Dec. 31, 2018, Eastman Kodak had $1.51 billion in total assets, $1.34 billion in total liabilities, $173 million in redeemable, convertible Series A preferred stock, and a total deficit of $3 million. PricewaterhouseCoopers LLP, in Rochester, New York, the Company's auditor since at least 1924, issued a "going concern" qualification in report dated April 1, 2019, on the Company's consolidated financial statements for the year ended Dec. 31, 2018, citing that the Company has debt maturing in 2019, operating losses and negative cash flows that raise substantial doubt about its ability to continue as a going concern. Kodak has debt due in 2019 and is facing liquidity challenges due to negative cash flow. Based on forecasted cash flows, there are uncertainties regarding Kodak's ability to meet commitments in the U.S. as they come due. Kodak's plans to improve cash flow include reducing interest expense by decreasing the debt balance using proceeds from asset sales, including the sale of the Flexographic Packaging segment; further restructuring Kodak's cost structure; and paring investment in new technology by eliminating, slowing, and partnering with investors in product development programs. The divestiture of the Flexographic Packaging segment will negatively impact segment earnings and cash flow. Kodak is also exploring options regarding additional liquidity from other sources. "I look forward to working with my team to help Kodak become cash-flow positive and build long-term value for shareholders," said Jim Continenza, Kodak's newly appointed executive chairman. "Our priorities will be to increase operational efficiency and focus on core competencies to achieve our growth objectives." For the year ended Dec. 31, 2018, revenues decreased by approximately $61 million compared with the same period in 2017. Kodak ended the year with a cash balance of $246 million, down from the Dec. 31, 2017 cash balance of $343 million. "We generated cash in the fourth quarter of 2018 and delivered strong performance in our key growth areas of SONORA Process Free Plates and in PROSPER inkjet annuities," said David Bullwinkle, Kodak's CFO. "We expect to close soon on the sale of our Flexographic Packaging Division and will use the proceeds to significantly reduce our term debt and strengthen our balance sheet. In addition, we plan to secure new financing for our remaining term debt, which will allow us to focus on our operations and return to consistent cash generation." The Company's report on Form 10-K is available from the SEC's website at https://is.gd/0Zg03v. About Eastman Kodak Eastman Kodak Company -- http://www.kodak.com/-- is a technology company focused on imaging. The Company provides -- directly and through partnerships with other innovative companies -- hardware, software, consumables and services to customers in graphic arts, commercial print, publishing, packaging,electronic displays, entertainment and commercial films, and consumer products markets. Kodak is headquartered in Rochester, New York. EP ENERGY: Moody's Lowers CFR to Caa3, Outlook Negative ------------------------------------------------------- Moody's Investors Service downgraded the ratings of EP Energy LLC's (EPE) Corporate Family Rating (CFR) to Caa3 from Caa1 and Probability of Default Rating (PDR) to Caa3-PD/LD from Caa1-PD. The rating on the secured 1-1/8 lien secured notes due 2026 was downgraded to B3 from B1, the rating on the 1-1/4 lien secured notes due November 29, 2024, was downgraded to Caa2 from B3 and the ratings on the 1-1/2 lien secured notes, second lien secured term loan and unsecured notes were downgraded to Ca. The Speculative Grade Liquidity Rating was downgraded to SGL-4 from SGL-3. The ratings outlook is negative. Moody's considers EPE's purchases of notes during the fourth quarter 2018 ($65 million par value) and first quarter 2019 ($50 million par value in January and February) at deep discounts to par as a distressed exchange, which is an event of default under Moody's definition of default. Moody's has appended the PDR with an "/LD" designation indicating a limited default, which will be removed after three business days. "EP Energy's ratings downgrades reflect its worsening liquidity," stated James Wilkins. "The company has not generating positive free cash flow and has $182 million of notes maturing in May 2020." Downgrades: Issuer: EP Energy LLC Probability of Default Rating, Downgraded to Caa3-PD /LD from Caa1-PD Corporate Family Rating, Downgraded to Caa3 from Caa1 Senior Secured Second Lien Term Loan, Downgraded to Ca (LGD5) from Caa2 (LGD5) Senior Secured 1.125 Lien Notes, Downgraded to B3 (LGD2) from B1 (LGD2) Senior Secured 1.25 Lien Notes, Downgraded to Caa2 (LGD3) from B3 (LGD3) Senior Secured 1.5 Lien Notes, Downgraded to Ca (LGD4) from Caa2 (LGD4) Senior Unsecured Notes, Downgraded to Ca (LGD6) from Caa3 (LGD6) Speculative Grade Liquidity Rating, Downgraded to SGL-4 from SGL-3 Outlook Actions: Issuer: EP Energy LLC Outlook, Changed To Negative From Stable RATINGS RATIONALE The downgrade of EP Energy's CFR to Caa3 reflects its weak liquidity, need to repay $182 million of notes maturing in May 2020 and potential for continued negative free cash flow in 2019, if production volumes remain flat. The company has high leverage with $4.4 billion of balance sheet debt as of December 31, 2018, which increased $345 million during 2018, to fund capital expenditures and an acquisition. (Retained cash flow to debt was 10% for 2018 and debt to average daily production was more than $55,000, reflecting the high leverage.) EPE's asset coverage (PV-10 value to debt) is less than 1.0x, which is also indicative of high leverage. The company has guided that production volumes will fall to 72-73 mboe/d in the first quarter 2019, from 79.5 mboe/d in the fourth quarter 2018, making it more difficult to support its high debt load. EPE has not been able to maintain flat production while generating break-even or positive free cash flow, which suggests that it needs higher commodity prices to support its high leverage and cost structure. EPE's production volumes fell after the first quarter 2018, even as it spent $690 million on capital expenditures in 2018 and generated -$279 million of negative free cash flow for the year. Interest expense ($365 million in 2018) adds more than $13 per boe to its cost structure. Any future debt financings will likely command a higher yield than existing debt and refinancing upcoming maturities could add to EPE's interest burden. The SGL-4 Speculative Grade Liquidity Rating, which reflects weak liquidity, is driven by Moody's expectation that EP Energy will not have sufficient funding to repay $182 million of notes maturing in May 2020 as well as fund sufficient capital expenditures to maintain flat production levels in 2019. EP Energy will not generate positive free cash flow in 2019 while holding production volumes flat, assuming a $60 per barrel WTI oil price. The company keeps minimal cash balances ($27 million of unrestricted cash as of December 31, 2018) and had $420 million of availability (as of February 28, 2019) under its first lien revolving credit facility due November 23, 2021. The revolver commitments total $629 million and the borrowing base was set at $1.36 billion following the fall 2018 redetermination. The company's liquidity concerns have led it to calculate its reserves based on a three year plan (instead of the typical five year period). The RBL facility has two financial covenants: (1) a maximum first lien net debt to EBITDAX ratio of 2.25x and (2) minimum current ratio of 1.0x, which Moody's expects EPE will be able to comply with through 2019. EPE's alternative sources of liquidity are limited, as a significant portion of its assets are pledged as collateral for its secured revolver, term loan and notes. It does have the ability to issue up to $371 million of additional secured debt, but the company already has elevated leverage and a substantial interest expense burden. The senior secured 1-1/8 lien notes due 2026 are rated B3 (three notches above the CFR) reflecting their junior priority claim relative to debt obligations under the first lien RBL credit agreement and senior priority claim relative to other secured and unsecured debt obligations in EP Energy's capital structure. The senior secured 1-1/4 lien notes due 2024 are rated Caa2 (one notch above the CFR). The roughly $2.1 billion of 1-1/2 lien notes are rated Ca, one notch below the CFR, and have a higher priority claim on assets relative to the second lien term loans (also rated Ca, $8 million as of December 31, 2018) and unsecured notes (rated Ca). The rating outlook is negative, reflecting Moody's concerns over the company's ability to repay or refinance the notes maturing in May 2020 and fund ongoing operations. The ratings could be downgraded if liquidity deteriorates. An upgrade could be considered if the company's liquidity improves, production volumes remain flat or resume growing, and debt is reduced such that EP Energy has a sustainable capital structure. The principal methodology used in these ratings was Independent Exploration and Production Industry published in May 2017. EP Energy LLC, headquartered Houston, Texas, is an independent exploration & production company with operations in the Permian, Eagle Ford and Altamont basins. ERA GROUP: Moody's Alters Outlook on B3 CFR to Stable ----------------------------------------------------- Moody's Investors Service changed the rating outlook for Era Group Inc. to stable from negative. Moody's also affirmed Era's B3 Corporate Family Rating (CFR), B3-PD Probability of Default Rating and its Caa1 senior unsecured notes rating. Concurrently, Moody's also affirmed Era's SGL-3 Speculative Grade Liquidity (SGL) Rating. "Era's stable outlook reflects improved leverage metrics following additional debt reduction in 2018," said Amol Joshi, Moody's Vice President -- Senior Credit Officer. "While there is continued downside risk as the offshore market remains challenging, the company's earnings look likely to stabilize at low levels in 2019." Outlook Actions: Issuer: Era Group Inc. Outlook, Changed To Stable From Negative Affirmations: Issuer: Era Group Inc. Probability of Default Rating, Affirmed B3-PD Speculative Grade Liquidity Rating, Affirmed SGL-3 Corporate Family Rating, Affirmed B3 Senior Unsecured Notes, Affirmed Caa1 (LGD5) RATINGS RATIONALE Era's B3 CFR is challenged by its small scale and heavy reliance of its operations on activity levels in the Gulf of Mexico associated with exploration and production (E&P) companies. In 2018, 69% of Era's revenues were derived from operations in the Gulf of Mexico and this concentration exposes the company to regional event risk in the volatile offshore oil and gas industry. Era's debt-to-EBITDA improved to below 4.5x in 2018 compared to an elevated level exceeding 8x in 2017 (including Moody's standard adjustments). Moody's expects leverage to be around 4.5x-5.0x through 2019 as earnings remain roughly flat but with continued downside risk as the offshore market remains weak. Era reduced its debt balances while the company experienced only a slight growth in earnings in 2018. Era is supported by the company's sticky customer relationships in the oil and gas industry and its track record of operating profitably through commodity price cycles. While Era's cash flow has deteriorated considerably from peak levels, the company has significantly reduced its outstanding debt since year-end 2014. In addition, Era owns all 108 helicopters in its existing fleet, whose fair market value based on third party appraisals provided good asset coverage for its debt balance at December 31. Era's senior unsecured notes are rated Caa1, one notch below the B3 CFR, reflecting the priority claim of its $125 million revolver to the company's assets. The revolving credit facility is secured by a portion of its US assets only. Era's SGL-3 Speculative Grade Liquidity Rating reflects adequate liquidity. At December 31, 2018, the company had a cash balance of $51 million, and an undrawn $125 million revolver, with revolver availability of $124.1 million net of issued letters of credit of $0.9 million. In March 2019, Era in conjunction with its 50% joint venture partner entered into an agreement to sell its Dart Holding Company Ltd. joint venture for expected cash proceeds to the company of approximately $40 million. The transaction is expected to close in the second quarter of 2019, and should further boost the company's cash position. The credit facility has a maximum senior secured leverage ratio of 3.25x, a minimum interest coverage ratio of 1.75x, and a minimum asset coverage ratio of 2x. Era was in compliance with its debt covenants as of December 31, and Moody's expects Era to remain in compliance into 2020. The credit agreement also allows Era to include up to $20 million of proceeds from asset sales for purposes of the senior secured leverage ratio calculation, which are not included in Moody's EBITDA calculations. In addition to trade-ins, Era periodically sells older aircraft and uses the proceeds to purchase newer models. The periodic sale of equipment provides an additional source of liquidity for the company -- in 2018, Era raised about $30 million from asset sales and disposals. A portion of Era's US-based fleet is pledged as collateral for its revolving credit facility, but there is over-collateralization that provides for backdoor liquidity. The rating could be upgraded if the company sustains Debt-to-EBITDA below 5x, annual EBITDA approaches $75 million in an improving business environment, and the company conducts any newbuild program at a measured pace, funding growth mostly with internal cash flow and asset sales proceeds while maintaining adequate liquidity. The rating could be downgraded if liquidity weakens, Debt-to-EBITDA increases above 6x or Era's financial policy changes, such as using significant amounts of debt to accelerate fleet upgrades or shareholder payouts. The principal methodology used in these ratings was Global Oilfield Services Industry Rating Methodology published in May 2017. Era operates a fleet of 108 helicopters that are used to provide transportation services primarily to the offshore oil and gas industry. EXPRESSWAY DELIVERIES: Exclusive Filing Period Moved to July 24 --------------------------------------------------------------- U.S. Bankruptcy Judge Julia Brand extended the period during which Expressway Deliveries, Inc. has the exclusive right to file a Chapter 11 plan through July 24, and to solicit acceptances for the plan through Nov. 21. Expressway Deliveries is contemplating a sale of substantially all of its assets and needs the extension to finalize the valuation of its assets, get court approval for bid procedures and conduct a sale without the risk of other creditors filing a competing plan. The company is also hopeful it will resolve the class action lawsuits filed by its employees, which constitute the principal dispute in its bankruptcy case, according to a previous report by The Troubled Company Reported. About Expressway Deliveries Expressway Deliveries, Inc., is a privately held company in Carson, California, that operates in the couriers and express delivery services industry. Expressway Deliveries sought protection under Chapter 11 of the Bankruptcy Code (Bankr. C.D. Calif. Case No. 18-23791) on Nov. 26, 2018. At the time of the filing, the Debtor disclosed $325,345 in assets and $1,045,781 in liabilities. The case has been assigned to Judge Julia W. Brand. The Debtor tapped Friedman Law Group, P.C. as its legal counsel. FIBRANT LLC: Has Until July 18 to Obtain Plan Acceptances --------------------------------------------------------- Judge Susan Barrett extended the period during which only Fibrant, LLC and its affiliated debtors must obtain acceptances for their Chapter 11 plan through July 18. About Fibrant, LLC Fibrant, LLC, headquartered in Augusta, Georgia, was previously a producer and global supplier of chemical products and local manufacturing services. At the end of September 2017, the Debtors completed the shutdown and decommissioning of their caprolactam manufacturing facility located at an industrial site at 1408 Columbia Nitrogen Drive, Augusta, Georgia 30901, other than the portion of the Facility that was (until recently) being used to manufacture ammonium sulfate. In late 2017, the Debtors ceased production of ammonium sulfate at the Facility, and the Debtors are now in the process of administering the sale of, and shipping, all of the remaining ammonium sulfate inventory. Once the inventory has been sold and removed from the Site, the Debtors intend to decommission the ammonium sulfate plant and all other operating assets and plant infrastructure that was not previously decommissioned. Fibrant, LLC and affiliates Fibrant South Center, LLC, Evergreen Nylon Recycling, LLC and Georgia Monomers Company, LLC sought Chapter 11 protection (Bankr. S.D. Ga. Case Nos. 18-10274-77) on Feb. 23, 2018. The case is assigned to Judge Susan D. Barrett. The cases are jointly administered. The petitions were signed by David Leach, president and general manager. The Debtors tapped Paul K. Ferdinands, Esq., Jonathan W. Jordan, Esq., Sarah L. Primrose, Esq., at King & Spalding LLP; and James C. Overstreet Jr., Esq., at Klosinski Overstreet, LLP as counsel; and Kurtzman Carson Consultants, LLC as their claims, noticing and balloting agent. The Debtor estimated assets and liabilities in the range of $10 million to $50 million. FORESTAR GROUP: Moody's Rates New $300MM Sr. Unsecured Notes 'B2' ----------------------------------------------------------------- Moody's Investors Service assigned a B2 rating to the proposed $300 million of senior unsecured notes due 2024 of Forestar Group Inc. At the same time, Moody's affirmed Forestar's B2 Corporate Family Rating ("CFR"), B2-PD Probability of Default, B2 rating on its existing $119 million of senior convertible notes, and SGL-3 speculative grade liquidity rating. The outlook is stable. Affirmations: Issuer: Forestar Group Inc. Corporate Family Rating, Affirmed B2 Probability of Default Rating, Affirmed B2-PD Speculative Grade Liquidity Rating, Affirmed SGL-3 Senior Unsecured Conv./Exch. Bond/Debenture, Affirmed B2 (LGD4) Assignments: Issuer: Forestar Group Inc. Gtd Senior Unsecured Regular Bond/Debenture, Assigned B2 (LGD4) Outlook Actions: Issuer: Forestar Group Inc. Outlook, Remains Stable RATINGS RATIONALE The B2 CFR reflects that land developers (Forestar's sole business) frequently produce results that are discrete and transactional in nature rather than recurring, which tend to make operating results lumpy; the dismal financial performance of the overall land development industry during the prior real estate downturn, wherein virtually every land developer that Moody's rated ultimately went bankrupt; the fact that gross margins, usually one of the better metrics that land developers produce, will be constrained by purchases of a major portion of Forestar's lots at a volume discount going forward by 75%-owner, D.R. Horton, Inc. ("Horton"), rated Baa3 stable; and the absence of any guarantees by Horton for Forestar's debt. At the same time, the B2 acknowledges the importance of Forestar to Horton in helping the latter meet its enormous finished lot requirements and the fact that Forestar is well-capitalized for a land developer and will likely operate with a conservative capital structure. Pro forma for the issuance of the $300 million of new notes, Forestar's adjusted debt to capitalization becomes 38.5%. In addition, the B2 rating considers that the Horton relationship will permit Forestar to grow and scale up very rapidly, diversify its own land holdings, tap into Horton's network of land sellers and contractors, and learn and benefit from Horton's experience and success. Also, Horton's demand for land is very strong, and even in a downturn, Horton will still need many finished lots, orders for which it can prioritize and funnel through Forestar so that the latter's revenues do not dry up. The stable outlook incorporates Moody's expectation that Forestar will retain a conservative capital structure, adequate liquidity, and rapid revenue growth once it scales up. The ratings are unlikely to be upgraded in the near term without a Horton parental guarantee. Longer term, an upgrade would be considered if Forestar regains gross margin performance typical of a land developer (35%+), generates interest coverage greater than 3.5x, maintains a sub 40% debt to capitalization, and reaches $1 billion of tangible net worth while maintaining good liquidity. A downgrade could occur if Forestar began generating increasing net losses, debt to capitalization exceeded 50% on a sustained basis, interest coverage fell below 1x, and liquidity became impaired. As of Forestar's trailing twelve months ended December 31, 2018, the company's $154 million of unrestricted cash, an undrawn $380 million unsecured revolver due 2021, and comfortable cushion under its revolver's financial maintenance covenants were balanced by its large projected negative cash flow generation from its very large projected lot purchase and development expenditures. The principal methodology used in these ratings was Homebuilding And Property Development Industry published in January 2018. Headquartered in Austin, Texas, Forestar Group Inc. is a publicly traded land developer that is currently operating in 35 markets in 16 states. On October 5, 2017, it became 75%-owned by D.R. Horton, Inc., the country's largest homebuilder by unit volume. Forestar's revenues for the trailing twelve months ended December 31, 2018 were $116.8 million. G-III APPAREL: S&P Ups ICR to BB on Stronger Sales; Outlook Stable ------------------------------------------------------------------ S&P Global Ratings raised its issuer credit rating on New York-based G-III Apparel Group Ltd. to 'BB' from 'BB-'. At the same time, S&P raised its issue-level ratings on the company's senior secured credit facility to 'BB+' from 'BB'. The recovery rating on this debt remains '2'. The upgrade reflects the company's improving credit metrics, with forecasted leverage improving to the mid-to-high 1x area in the next 12 months from the mid 2x area a year ago. S&P expects the company's growth momentum to continue as its portfolio of brands, anchored by Tommy Hilfiger, Karl Lagerfeld, DKNY, and Donna Karen, continue to take share in the better department store channels. Additionally, the company has integrated the DKI acquisition and produced a successful first year collection. S&P expects the DKI platform to boost profits and generate international opportunities for G-III, as these brands are owned and not licensed. The stable outlook reflects S&P's expectation that G-III will continue to deliver growth in its wholesale segment, especially with its top performing licensed brands, while expanding the scale of its DKI business and executing on further rationalization of its retail segment. As such, the rating agency projects leverage to be less than 2x over the next 12 months, and would expect the company to rapidly deleverage if it were to make any acquisition such that resulting leverage was at or below 3x. "We could lower our ratings on G-III if it undertakes a large debt-funded acquisition such that leverage is sustained at more than 3x. We estimate that debt would increase by more than $400 million for a transformational acquisition depending on the incremental EBITDA from the transaction. We could also lower our ratings if sales and margins are negative impacted by a slowdown in U.S. consumer demand due to a weakening economy, key licensing agreement changes, or a higher than expected tariff on Chinese goods that results in debt leverage exceeding 3x. We estimate that EBITDA would need to decline by 35% from current levels for this to occur," S&P said. "Raising the ratings in the next 12-24 months is unlikely because we believe the company could make additional debt-funded acquisitions to supplement its organic growth. We could upgrade the company, however, if we become comfortable with G-III's financial policy and believe that it will reduce leverage to less than 2x within a year following any debt-financed acquisition. An upgrade would also be predicated on the company continuing to grow in the wholesale channel while expanding the profitability of its DKI business, sustaining leverage at less than 2x, and generating healthy free operating cash flow (FOCF)," S&P said. GARRETT PROPERTIES: Sale of Three West Virginia Properties Denied ----------------------------------------------------------------- Judge Patrick M. Flatley of the U.S. Bankruptcy Court for the Southern District of West Virginia denied Garrett Properties, LLC's sale of the following real properties (i) commonly described as 303A Top of the World Condominium, a condominium unit located within Snowshoe Resort, in the Edray District of Pocahontas County, West Virginia, to Joshua A. McGrath for $25,000; (ii) commonly described as 913 Greendale Drive, Charleston, West Virginia, which consists of a lot and an apartment building, for $55,000; and (ii) commonly described as 1122 Edgewood Drive, Charleston, West Virginia, which consists of a lot and an apartment building, for $55,000; to Joshua A. McGrath, subject to overbid. The Court is of the opinion that the properties proposed to be sold by the Debtor are non-estate property under Section 541. About Garrett Properties Headquartered in Charleston, West Virginia, Garrett Properties, LLC, is a limited liability company. Since Aug. 17, 2004, Garrett Properties has been in the business of owning, holding and renting commercial and residential real estate. Garrett Properties filed for Chapter 11 bankruptcy protection (Bankr. S.D. W.V. Case No. 15-20085) on Feb. 24, 2015, estimating its assets and liabilities at between $1 million and $10 million each. Judge Ronald G. Pearson oversees the case. James M. Pierson, Esq., at Pierson Legal Services, serves as the Debtor's bankruptcy counsel. On Sept. 14, 2015, the Court appointed Judy Boggess as realtor. GARY FLEMING: $25K Sale of Mineral Rights to Pieria Approved ------------------------------------------------------------ Judge Thomas P. Agressi of the U.S. Bankruptcy Court for the Western District of Pennsylvania authorized Gary L. Fleming, Sr.'s sale of mineral and royalty rights related to property in Ritchie County, West Virginia to Pieria Holdings, LLC for $25,000. A hearing on the Motion was held on March 14, 2019. The sale is free and divested of liens and claims, with such liens and claims to be transferred to the proceeds of sale. The following expenses/costs will immediately be paid at the time of closing. Failure of the closing agent to timely make and forward the disbursements required by the Order will subject the closing agent to monetary sanctions, including among other things, a fine or the imposition of damages, after notice and hearing, for failure to comply with the above terms of the Order. Except as to the distribution specifically authorized in the Order, all remaining funds shall, be held by Counsel for Movant pending further Order of the Court after notice and hearing. (1) The 1iens(s)/claim(s) and amounts; No known liens; (2) Any normal and necessary taxes and closing costs related to the sale of mineral rights; (3) The costs of local newspaper advertising 1n the amount of $39.85, payable to Steidl & Steinberg, RC. 707 Grant Street, Gulf Tower-Suite 2830, Pittsburgh, PA 15219, (4) The Court filing fee of $181 payable to Steidl & Steinberg, P.C. 707 Grant Street, Gulf Tower-Suite 2830, Pittsburgh, PA 15219; (5) The Court approved attorney fees in the amount of $750 payable to Steidl & Steinberg; and (6) The balance of the funds realized from the within sale will be held by the Attorney for the Movant until further Order of Court, after notice and hearing. Within seven days ofthe date of the Order, the Movant will serve a copy of the within Order on each Respondent/Defendant (i.e., each party against whom relief is sought) and its attorney of record, if any, upon any attorney or party who answered the motion or appeared at the hearing, the attorney of the Debtor, the Closing Agent, the Purchaser, and the attorney for the Purchaser, if any, and file a certificate of service. The Closing will occur within 90 days of the Order. Within seven days following closing, the Movants/Plaintiffs shal filed a Report of Sale which will include a copy of the HUD—1 or other Settlement Statement. The Sale Confirmation Order survives any dismissal or conversion of the within case. The bankruptcy case is In re Gary L. Fleming, Sr. (Bankr. W.D. Pa. Case No. 19-20486). GAUCHO GROUP: Incurs $6.40 Million Net Loss in 2018 --------------------------------------------------- Gaucho Group Holdings, Inc., formerly Algodon Group, Inc., has filed with the Securities and Exchange Commission its Annual Report on Form 10-K reporting a net loss attributable to common stockholders of $6.40 million on $3.09 million of sales for the year ended Dec. 31, 2018, compared to a net loss attributable to common stockholders of $8.25 million on $1.81 million of sales for the year ended Dec. 31, 2017. As of Dec. 31, 2018, Gaucho Group had $5.64 million in total assets, $6.71 million in total liabilities, $9.02 million in series B convertible redeemable preferred stock, and a total stockholders' deficiency of $10.09 million. Marcum LLP, in New York, NY, the Company's auditor since 2013, issued a "going concern" qualification in its report dated April 1, 2019, on the Company's consolidated financial statements for the year ended Dec. 31, 2018, citing 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. Gaucho Grouip said "Based upon our working capital situation as of December 31, 2018, we require additional equity and/or debt financing in order to sustain operations. "During the years ended December 31, 2018 and 2017, we have relied primarily on debt and equity offerings to third party independent, accredited investors to sustain operations. During the year ended December 31, 2018, we received proceeds of approximately $3,508,000 from the issuance of convertible debt, approximately $580,000 of proceeds from loans payable and approximately $1,324,000 proceeds from the sale of our common stock. "During the year ended December 31, 2017, we issued 775,931 shares of Series B convertible preferred stock at $10.00 per share to accredited investors in a private placement transaction for gross proceeds of approximately $7,759,000, received proceeds of $1,280,000 from the issuance of convertible debt (of which $1,260,000 was subsequently converted to Series B convertible preferred stock), and issued 22,500 shares of common stock at $2.00 per share to accredited investors in a private placement transaction for net proceeds of $40,500. We also received approximately $519,000 of cash proceeds from a bank loan. "The proceeds from these financing activities were used to fund our existing operating deficits, expenditures associated with our real estate development projects, enhanced marketing efforts to increase revenues and the general working capital needs of the business. We will need to raise additional capital in order to meet our future liquidity needs for operating expenses, capital expenditures for the winery expansion and to further invest in our real estate development. If we are unable to obtain adequate funds on reasonable terms, we may be required to significantly curtail or discontinue operations." The Company's report on Form 10-K is available from the SEC's website at https://is.gd/SM4E7f. About Gaucho Group Headquartered in New York, NY, Gaucho Group Holdings, Inc. -- http://www.algodongroup.com/-- was incorporated on April 5, 1999. Effective Oct. 1, 2018, the Company changed its name from Algodon Wines & Luxury Development, Inc. to Algodon Group, Inc., and effective March 11, 2019, the Company changed its name from Algodon Group, Inc. to Gaucho Group Holdings, Inc. Through its wholly-owned subsidiaries, GGH invests in, develops and operates real estate projects in Argentina. GGH operates a hotel, golf and tennis resort, vineyard and producing winery in addition to developing residential lots located near the resort. In 2016, GGH formed a new subsidiary and in 2018, established an e-commerce platform for the manufacture and sale of high-end fashion and accessories. The activities in Argentina are conducted through its operating entities: InvestProperty Group, LLC, Algodon Global Properties, LLC, The Algodon - Recoleta S.R.L, Algodon Properties II S.R.L., and Algodon Wine Estates S.R.L. Algodon distributes its wines in Europe through its United Kingdom entity, Algodon Europe, LTD. GK HOLDINGS: S&P Cuts Issuer Credit Rating to 'CCC'; Outlook Neg. ----------------------------------------------------------------- S&P Global Ratings lowered its issuer credit rating on U.S-based information technology (IT) and business skills learning solutions provider GK Holdings Inc. to 'CCC' from 'CCC+', its issue-level ratings on the company's senior secured first-lien debt to 'CCC' from 'CCC+', and its issue-level rating on the senior secured second-lien term loan to 'CCC-' from 'CCC.' GK Holdings Inc. (doing business as Global Knowledge) is set to receive an equity infusion of EUR15 million from private equity sponsor Rhone Capital LLC. The company will use the proceeds to pay its March 29, 2019, interest payment within the five-day grace period and fund near-term operating needs. The company also amended its credit agreement to extend its revolver maturity to December 2020 and amend its financial covenants to increase covenant headroom. "The downgrade reflects our expectation that weak operating trends will persist over the next 12 months. Despite the equity infusion and amendment to the credit agreement, Global Knowledge could face another liquidity event within the next 6-12 months. We expect the company to use the EUR15 million (about $16.8 million) equity infusion to make its March 29 interest payment within the five-day grace period (on or before April 5), and to fund operating needs," S&P said. "The company's cash balances are limited, and the $20 million revolver is almost fully drawn ($18.7 million outstanding as of Dec. 31, 2018), which underscores the company's need to generate sufficient internal cash or receive additional cash from its sponsor to meet its financial obligations." Global Knowledge extended the maturity on its $20 million revolver by one year to December 2020 and amended its maximum net leverage ratio covenant to increase covenant headroom. The cushion under the current 6.75x covenant was 5% as of Dec. 31, 2018, with covenant stepdowns. This will be the company's third amendment to the credit agreement to increase covenant headroom, and S&P believes it could be difficult for the company to obtain additional amendments if revenue and EBITDA continue to deteriorate. Furthermore, there is increasing refinancing risk as the company's Dec. 30, 2020 revolver maturity and the Jan. 20, 2021 $175 million first-lien term loan maturity dates approach. The company's $50 million second-lien term loan is due on Jan. 20, 2022. Its credit ratios are very weak. S&P forecasts adjusted debt to EBITDA of about 11x and adjusted EBITDA interest coverage of 1x in fiscal 2019 (ended Sept. 30) based on S&P's criteria. S&P expects credit ratios to modestly improve in fiscal 2020 but remain weak. Global Knowledge underperformed over the past several years because of the evolving IT market and management's inability to transform the business. S&P believes there is substantial execution risk for the current management team to turn around North America business well in advance of the company's debt maturities. As its customers' preference shifted from traditional in-person classroom learning to a broadening mix of virtual and online options, Global Knowledge undertook significant restructuring to meet market demand. However, it is unclear whether the company's growth initiatives, especially in digital delivery, will significantly increase EBITDA growth, which S&P believes is necessary to support its capital structure. While lower year-over-year restructuring costs will improve EBITDA growth during fiscal 2019, the rating agency believes that this will be insufficient to support the capital structure. The negative outlook reflects the potential for a lower rating on Global Knowledge in coming quarters if its liquidity position remains weak and S&P believes a payment default or a debt restructuring could occur within the next 12 months. S&P could lower the ratings if the company cannot secure its proposed amendment, if it announces a distressed debt exchange or debt restructuring in which lenders would receive less than par, or in the event of a payment default or covenant breach. While highly unlikely in the near term, S&P could raise the rating if the company successfully generates sustained positive growth and if the rating agency does not view a liquidity event as a significant near-term risk. This could occur if the company's operating trends improve substantially, leading to sizable positive cash flows or debt repayment, according to the rating agency. GLYECO INC: Incurs $5.31 Million Net Loss in 2018 ------------------------------------------------- GlyeCo, Inc. has filed with the Securities and Exchange Commission its Annual Report on Form 10-K reporting a net loss of $5.31 million on $6.45 million of net sales for the year ended Dec. 31, 2018, compared to a net loss of $5.18 million on $5.80 million of net sales for the year ended Dec. 31, 2017. As of Dec. 31, 2018, GlyeCo had $9.85 million in total assets, $10.62 million in total liabilities, and a total stockholders' deficit of $770,553. KMJ Corbin & Company LLP, in Costa Mesa, California, issued a "going concern" qualification in its reported dated April 1, 2019 on the Company's consolidated financial statements for the year ended Dec. 31, 2018, stating that the Company has experienced recurring losses from operations, has negative operating cash flows during the year ended Dec. 31, 2018, has an accumulated deficit of $47,310,534 as of Dec. 31, 2018 and is dependent on its ability to raise capital. These factors raise substantial doubt about the Company's ability to continue as a going concern. For the year ended Dec. 31, 2018 and 2017, net cash used in operating activities from continuing operations was $1,073,960 and $2,068,835, respectively. The decrease in cash used in operating activities is due to the significant period over period changes in accounts receivables, inventories and accounts payable and accrued expenses. For the year ended Dec. 31, 2018, the Company used $128,433 in cash for investing activities from continued operations compared to the $716,787 used in the year ended Dec. 31, 2017. These amounts were comprised primarily of capital expenditures for equipment. For the years ended Dec. 31, 2018 and 2017, the Company received $1,395,786 and $1,121,539, respectively, in cash from financing activities. The amount of cash received in 2018 is primarily comprised of proceeds from the 10% unsecured notes. The amount of cash received in 2017 is primarily comprised of proceeds from the exercise of warrants and proceeds from a sale-leaseback, partially offset by the repayment of debt, including the 5% Notes, as well as proceeds from the Company's August 2017 rights offering. As of Dec. 31, 2018, the Company had $828,946 in current assets, consisting primarily of $237,648 in cash, $215,336 in accounts receivable and $238,895 in inventory. As of Dec. 31, 2018, the Company had total current liabilities of $6,509,831, consisting primarily of accounts payable and accrued expenses of $2,845,856. As of Dec. 31, 2018, the Company had total non-current liabilities of $3,533,736, consisting primarily of the non-current portion of its notes payable and capital lease obligations. The Company's report on Form 10-K is available from the SEC's website at https://is.gd/7aVURi. About GlyEco, Inc. GlyEco, Inc. -- http://www.glyeco.com/-- is a developer, manufacturer and distributor of performance fluids for the automotive, commercial and industrial markets. The Company specializes in coolants, additives and complementary fluids. The Company's network of facilities, develop, manufacture and distribute products including a wide spectrum of ready to use anti-freezes and additive packages for the antifreeze/coolant, gas patch coolants and heat transfer fluid industries, throughout North America. The Company is headquartered Institute, West Virginia. GLYECO INC: Posts 2018 Net Revenue of $6.5 Million -------------------------------------------------- GlyEco, Inc. reported the following financial results for the full year ended Dec. 31, 2018. The Company completed the sale of its assets related to its consumer segment effective Jan. 11, 2019. Full Year 2018 Highlights * Net revenues of $6.5 million were up 11% compared to $5.8 million for full-year 2017. * Total gross profit was $1,285,000, or 20% of revenues, compared to $885,000, or 15% of revenues, for 2017. * Adjusted EBITDA, a non-GAAP measure, was $(1,565,000) compared to $(2,331,000) for 2017. 2018 Financial Review The Company reported total revenues increased by $650,000 or 11%, from $5,807,000 for full-year 2017 to $6,457,000 for full-year 2018. Sales growth was driven by increasing capacity utilization at the WV ethylene glycol plant which grew net revenues by $401,000 or 11% YoY and by the WEBA division which grew sales of chemical additives by $249,000 or 11% YoY. Total sales of $3,929,000 at the WV facility for 2018 included $59,000 in sales of finished anti-freeze from the newly-operational blending facility. This facility came online in October 2018 and with be a primary engine for sales growth, along with the ethylene-glycol plant and the WEBA operation, going forward. The Company reported total gross profit increased from $885,000, representing a 15% gross margin, in 2017 to $1,285,000, representing a 20% gross margin, in 2018. The increase in gross margin was driven by scaling operations at the WV plant through increased production and sales volumes. The facility remains well below its operational capacity with fixed costs comprising a large portion of overall production costs. The Company expects fixed costs per unit to reduce significantly as it increases production throughout 2019. The Company reported operating expenses decreased from $5,155,000 to $3,946,000, for 2018. The Company expects to significantly reduce operating expenses throughout 2019 to better match the level of corporate overhead with the remaining business operations. The Company reported a net loss from continuing operations of $3,452,000 for 2018, compared to a net loss from continuing operations of $5,078,000 for 2017. The Company reported adjusted EBITDA of $(1,565,000) in 2018, compared to $(2,331,000) for 2017. Both figures reflect only continuing operations entering 2019. Business Update The Company executed the sale of its consumer segment assets effective Jan. 11, 2019. In doing so, the Company exited the business of retail distribution of antifreeze via route delivery trucks. This divestment will allow the company to focus on the remaining business units including the ethylene glycol plant in WV, the finished-fluids blending facility and the WEBA additive operation. The resulting company is designed around true vertical-integration with the ability to meet the full needs of a large-scale, industrial customer. Going forward, the company will report as a single segment with two highly-integrated subdivisions; Commodity Chemicals and Finished Performance Fluids. In addition to external customer sales, the WV glycol plant and WEBA additives subsidiary will supply the blending facility with raw materials to create more-profitable, downstream finished fluids. The new blending facility provides the Company with capacity to blend up to 6 million gallons of finished antifreeze per year to meet the needs of large customers. "The sale of the consumer segment assets marks the completion of a strategic shift for our company that was over a year in the making. Our focus moving forward is on maximizing the value of our production assets, including the West Virginia glycol plant, WEBA additive business and new high-capacity blending facility. The new company structure allows us to offer a full range of glycol-based products on an industrial scale which will facilitate large strategic partnerships in the weeks and months to come," said Mr. Geib, president and chief executive officer. A full-text copy of the press release is available for free at: https://is.gd/D4QidP About GlyEco, Inc. GlyEco, Inc. -- http://www.glyeco.com/-- is a developer, manufacturer and distributor of performance fluids for the automotive, commercial and industrial markets. The Company specializes in coolants, additives and complementary fluids. The Company's network of facilities, develop, manufacture and distribute products including a wide spectrum of ready to use anti-freezes and additive packages for the antifreeze/coolant, gas patch coolants and heat transfer fluid industries, throughout North America. The Company is headquartered Institute, West Virginia. GlyeCo incurred a net loss of $5.31 million for the year ended Dec. 31, 2018, compared to a net loss of $5.18 million for the year ended Dec. 31, 2017. As of Dec. 31, 2018, GlyeCo had $9.85 million in total assets, $10.62 million in total liabilities, and a total stockholders’ deficit of $770,553. KMJ Corbin & Company LLP, in Costa Mesa, California, issued a "going concern" qualification in its reported dated April 1, 2019 on the Company’s consolidated financial statements for the year ended Dec. 31, 2018, stating that the Company has experienced recurring losses from operations, has negative operating cash flows during the year ended Dec. 31, 2018, has an accumulated deficit of $47,310,534 as of Dec. 31, 2018 and is dependent on its ability to raise capital. These factors raise substantial doubt about the Company's ability to continue as a going concern. HEXION INC: Moody's Cuts CFR to 'C' Amid Bankruptcy Filing ---------------------------------------------------------- Moody's Investors Service downgraded the ratings of Hexion Inc., (Corporate Family Rating to C from Caa2 and Probability of Default Rating to D-PD from Caa2-PD). Moody's also downgraded the senior secured first lien notes of Hexion Inc, Hexion US Finance Corp., and Hexion 2 US Finance Corp. to Ca from Caa1, the senior secured (1.5 lien) notes of Hexion Inc, to C from Caa3 and Hexion Inc.'s senior secured second lien notes to C from Ca. Additionally Moody's affirmed the rating of C on the senior unsecured debentures of Borden Chemical, Inc. (Old). The downgrade was prompted by the company's announcement that it voluntarily filed for reorganization under Chapter 11 of the United States Bankruptcy Code on April 1, 2019. The Speculative Grade Liquidity rating was downgraded to SGL-4 from SGL-3. The outlook is stable. Subsequent to its actions, Moody's will withdraw all ratings. Downgrades: Issuer: Hexion Inc. Probability of Default Rating, Downgraded to D-PD from Caa2-PD Corporate Family Rating, Downgraded to C from Caa2 GTD Senior Secured Global Notes, Downgraded to Ca (LGD3) from Caa1 (LGD3) GTD Senior Secured 1.5 Lien Notes, Downgraded to C (LGD5) from Caa3 (LGD5) GTD Senior Secured 2nd Lien Notes, Downgraded to C (LGD5) from Ca (LGD5) Speculative Grade Liquidity Rating, Downgraded to SGL-4 from SGL-3 Issuer: Hexion US Finance Corp. Backed GTD Senior Secured Notes, Downgraded to Ca (LGD3) from Caa1 (LGD3) Issuer: Hexion 2 US Finance Corp. Senior Secured Global Notes, Downgraded to Ca (LGD3) from Caa1 (LGD3) Affirmation: Issuer: Borden Chemical, Inc. (Old) Backed Senior Unsecured Notes, at C (LGD6) Outlook Actions: Issuer: Hexion Inc. Outlook, Remains Stable Issuer: Hexion US Finance Corp. Outlook, Remains Stable Issuer: Hexion 2 US Finance Corp. Outlook, Remains Stable Issuer: Borden Chemical, Inc. (Old) Outlook, Remains Stable RATINGS RATIONALE The downgrade follows the announcement that Hexion Inc. has filed voluntary petitions for reorganization under Chapter 11 of the Bankruptcy Code in the U.S. Bankruptcy Court for the District of Delaware. Hexion's operations outside the U.S. are not included in the Chapter 11 proceedings. Management believes that liquidity from operations combined with the company's planned Debtor-In-Possession financing (unrated) is sufficient to continue operational and restructuring needs on a global basis. The principal methodology used in these ratings was Chemical Industry published in March 2019. Hexion Inc., headquartered in Columbus, Ohio, is a leading producer of thermoset resins (epoxy, phenolic and amino). The company is also a supplier of specialty resins sold to a diverse customer base, as well as a producer of commodities such as formaldehyde, bisphenol A (BPA), epichlorohydrin (ECH), versatic acid and related derivatives. Revenues are approximately $3.75 billion. The majority owner of Hexion is an affiliate of Apollo Management. IOWA FINANCE: Fitch Rates $120MM Series 2019 Refunding Bonds 'B-' ----------------------------------------------------------------- Fitch Ratings has assigned a 'B-' rating to the Iowa Finance Authority's $120 million Midwestern Disaster Area Revenue Series 2019 Refunding Bonds. The Rating Outlook is Positive. The Iowa Finance Authority has issued a total of $1.185 billion ($1.156 billion outstanding) of revenue bonds on behalf of Iowa Fertilizer Company LLC (IFCo). RATING RATIONALE The ratings reflect the limited remaining margin of safety for repayment of the bonds under Fitch's rating case scenario. The project has stabilized its production profile and is generating sufficient operating cash flows with a long-term financial profile consistent with the rating. The facility remains vulnerable to a volatile and potentially weak product pricing environment. Favorably, access to abundant and advantageously priced feedstock partially mitigates margin risk. The project has sufficient liquidity available in the form of various reserve funds and a working capital facility to mitigate short-term liquidity issues. The Positive Outlook reflects that the project has largely resolved ramp-up issues. It is operationally positioned to benefit from an improving pricing environment if it can maintain a stable operating profile and control costs consistent with base case expectations while favorable pricing trends last. KEY RATING DRIVERS Nitrogen Market Price Exposure - Revenue Risk: Weaker IFCo sells its nitrogen products to farmers, distributors, wholesalers, cooperatives, truck stop operators and blenders at market prices. The project's main products have historically exhibited considerable price volatility. The project enjoys some geographical product pricing advantages but remains exposed to long-term market supply and demand risks. Advantageous Access to Natural Gas - Supply Risk: Midrange The project is procuring its natural gas feedstock via an existing pipeline at prices linked to the Henry Hub index, which is an important advantage compared with some international competitors. IFCo has entered into natural gas call swaptions for the first seven years of the project to moderate the risk of a reversal in gas pricing trends. In addition, the project will fund a feedstock reserve and can enter into further call swaptions to help mitigate price risk during the non-hedged period, which would also dispense with the requirement to fund a hedging reserve account. Unproven Operating Profile - Operation Risk: Midrange Non-feedstock O&M and maintenance cost projections have not been tested over an extended period of time, and the project may require several years of operations to establish a stable cost profile. The use of commercially proven technologies and a plant design with oversized capacity could help mitigate operating performance risk. Standard Debt Structure - Debt Structure: Midrange Fixed-rate, fully amortizing debt structure is consistent with other project financings. Relatively high equity distribution triggers and a debt service reserve equivalent to six months of senior bond payments support debt repayment during periods of low operating cash flow. Operating and major maintenance reserves help shield the project from cash flow shortfalls and can be tapped to meet debt service. Improved Long Term Financial Profile: The project is demonstrating largely stable operations. Its ability to meet ongoing mandatory debt payments is vulnerable to product pricing remaining at currently depressed levels on a sustained basis. Fitch's base and rating cases indicate that debt service coverage ratios (DSCR) at current product prices would average 3.1x and 1.5x through debt maturity. A rating case minimum DSCR of 1.0x early in the project life is a potential concern, but the project should have enough liquidity to mitigate any short-term cash flow deficiencies. On a long-term basis, the project's relatively high equity distribution triggers should support debt repayment and replenishment of reserves during potential periods of low operating cash flow. Peer Analysis: IFCo's peer group includes merchant project financings in which product sales are susceptible to the inherent volatility of commodity markets. Merchant projects that have achieved ratings in the 'BB' category have demonstrated some combination of long-term feedstock price certainty, materially lower leverage, structural enhancements, or a proven, quasi-monopolistic competitive advantage. Merchant projects in the 'B' rating category or lower typically face significant technology implementation or construction risks, are exposed to price and volume risk, and operate in a business environment with highly volatile margins. RATING SENSITIVITIES Future Developments That May, Individually or Collectively, Lead to Negative Rating Action: -- Early operational performance below expectations or weakening in near-term product prices; -- A fundamental shift in the supply-demand balance or global producer cost curve that results in materially lower operating margins expected to persist over a long period; -- Inability to effectively manage operating costs or failure to reach and sustain projected capacity and utilization rates; -- Failure to refinance 2023-2025 bond maturities could heighten payment default in those years due to high level of debt service. Future Developments That May, Individually or Collectively, Lead to Positive Rating Action: -- Sustained product prices at least in line with expected 2019 prices with modest escalation; -- Sustained production and margins exceeding expectations. CREDIT UPDATE IFCo is refunding $120 million aggregate principal amounts of the Series 2013 Bonds due Dec. 1, 2022 through an issuance of new Series 2019 bonds with the same terms and sinking fund payments. The refunding allows the project to reduce the interest expense, but given the size of the transaction relative to overall debt outstanding it does not have a material impact on the financial profile. This refunding transaction has been priced and is expected to close on April 3, 2019. The project has been operating for almost a year and a half, and after encountering some ramp-up issues has achieved a relatively stable operating profile. It has gone through winterization and downtimes are becoming less frequent and shorter in duration. Despite above-mentioned teething issues it has achieved higher than nameplate capacity on its production lines, and as supported by Nexant (IE) it is expected that it will operate at higher than original nameplate capacity on a sustained basis, which is reflected in Fitch's cases. In 2018 the project's actual DSCR was 1.5x compared with last year's base and rating case expectation at 2.3x and 1.5x for that year, reflecting early ramp-up issues in 2018. The project realized higher revenues but also incurred higher expenses, both fixed costs and variable production costs that increased because of higher volumes. The project has taken steps to reduce costs by optimizing the steam turbine cogeneration unit, reducing reliance on outside power generation and on outside contractors. Fitch expects that it will take a couple of years to establish a stable and predictable cost profile. The project has created a joint venture (JV) with Dakota Gasification Company for the marketing and distribution of their products. The JV allows the partners improved freight economics, and provides their customers with improved supply security, which in turn ensures access to larger distributors and better contracting options. Through the JV the project has also been leasing storage space and built its own storage for diesel exhaust fuel. These efforts, coupled with the ability to swing the production between various products, provide operational and marketing flexibility and enable the project to improve the realized sales prices compared with average annual product prices as they can adjust for seasonal or other swings in the prices. IFCo's operating margins remain dependent on favorable market pricing for nitrogen products. The pricing of nitrogen products is somewhat correlated to the price of feedstock, which may be oil, coal or natural gas depending on the region and producer. In recent years, the substantial declines in oil and natural gas prices have driven nitrogen prices to levels approaching 10-year lows. These pricing trends have diverged significantly from market consultant forecasts that formed the basis for cash flow projections for the original financing. There has been significant price recovery as December 2018 prices for ammonia, urea and UAN are up to 80% higher than 2017 lows. IFCo management expects continued nitrogen fertilizer supply shutdowns in China and overall global supply additions that are below demand growth from developing countries, which should support prices. It remains to be seen if the positive trends are sustained, which will drive the project's future credit profile now that it has reached full operational phase. Favorably, U.S. natural gas prices trade at a significant discount to global energy prices, and are close to 50% of what was projected in 2013, providing the project with a competitive advantage. Fitch and other market participants believe that U.S. gas prices will remain low into the foreseeable future. The project has access to abundant natural gas feedstock at prices currently below Henry Hub. It has recently put in place hedging to crystalize some of this upside. For 2019, IFCo has locked in the pricing for 74% of its gas needs at $2.42/MMBtu, and specifically for the second quarter of 2019 99% of its gas needs at $2.27. Through the price declines and international nitrogen price weakness, interior U.S. premiums such as in the Cornbelt states have largely remained intact as there remains insufficient regional supply to meet demand, benefitting the project. FITCH CASES Fitch's base and rating cases have been revised to reflect updated product prices, feedstock prices, operating profile, operating costs based on actual operations and assumptions regarding planned future refundings. For the base case Fitch assumed a revision to the project's nameplate capacity in line with the IE's recommendation, sponsor assumptions on costs, flat 10-year average product prices with no escalation that capture a full pricing cycle and gradually rising feedstock prices. Based on discussions with the project management team, Fitch incorporated assumptions regarding several refundings to achieve lower interest payments and to improve the debt amortization profile, most significant of which is a partial refunding of 2023 to 2025 maturities. The coverages under this scenario average 3.1x and reach a minimum of 2.1x. Fitch notes that using forecast 2019 prices with no escalation in the same scenario bring the average and minimum to 1.7x and 1.2x respectively, demonstrating the project's sensitivity to product prices. Relative to Fitch's base case, for the rating case the agency additionally assumes an elevated gas price curve, 10% non-feedstock cost stress, 7.5% production level stress and average 2018 product prices with 2% annual escalation. This scenario would put increased pressure on the financial profile and suggests that IFCo may face periods where debt service would reach breakeven levels. The rating case DSCRs average 1.5x and reach the 1.0x minimum early in project life, with lower average but a higher minimum than the 2018 rating case (2.3x and 0.8x respectively). Fitch does not expect that coverages would fall below 1.0x and anticipates that the project will have sufficient liquidity to mitigate occasional short-term cash flow deficiency. JAMES LARRY BAIN: Proposed RE/MAX Auction of Arab Property Approved ------------------------------------------------------------------- Judge James R. Robinson of the U.S. Bankruptcy Court for the Northern District of Alabama authorized James Larry Bain's employment of Steve Carter and RE/MAX Guntersville as auctioneer, nunc pro tunc Feb. 14, 2019, to conduct the public auction sale of his home and approximately 20 acres located at 750 Mount Oak Drive, Arab, Marshall County, Alabama. A hearing on the Motion was held on March 14, 2019 10:20 a.m. The terms of compensation are not approved at this time and will be subject to review following the filing of an application consistent with the requirements of the Bankruptcy Code, 11 U.S.C. Section 101 et seq. and the Rules of Bankruptcy Procedure. The sale of the real property will not be not free and clear. James Larry Bain sought Chapter 11 protection (Bankr. N.D. Ala. Case No. 16-41436) on Sept. 2, 2016. The Debtor tapped Tameria S. Driskill, Esq., as counsel. On Aug. 30, 2018, the Court appointed Steve Carver and RE/MAX Guntersville as broker. JOSEPH BRENNICK: $460K Sale of Trust's York Property to Weston OK'd ------------------------------------------------------------------- Judge Catherine Peek McEwen of the U.S. Bankruptcy Court for the Middle District of Florida authorized Joseph A. Brennick's sale of The Brennick Irrevocable Family Trust's real property located at 56 Beech Ridge Road, York, Maine to Howard F. Weston, doing business as Stillwater Capital, for $460,000, cash. A hearing on the Motion was held on Feb. 28, 2019, at 1:30 p.m. The U.S. Bank Objection is overruled as moot. The Amended IRS Objection is sustained. The IRS' federal tax liens attach to the Debtor's beneficial interest (as a beneficiary of the Trust) in the net sale proceeds to the same extent, validity, and priority as existed prepetition. The Debtor, as the Trustee of the Trust, is further authorized to cause the Trust to pay the Closing Costs at closing and to deposit the remaining balance of the sale proceeds into Stichter, Riedel, Blain & Postler, P.A.'s trust account. The 14-day stays set forth in Bankruptcy Rules 6004(h) and 6006(d) are waived, for good cause shown, and this Order will be immediately enforceable and the closing may occur immediately following the entry of the Order. Joseph A. Brennick sought Chapter 11 protection (Bankr. M.D. Fla. Case No. 18-07874) on Sept. 18, 2018. The Debtor tapped Edward J. Peterson, III, Esq., at Stichter, Riedel, Blain & Postler, P.A., as counsel. JOSEPH BRENNICK: $65K Sale of Myakka Property to Swatsworth Okayed ------------------------------------------------------------------ Judge Catherine Peek McEwen of the U.S. Bankruptcy Court for the Middle District of Florida authorized Joseph A. Brennick's sale of the vacant real property located at 1050 397th Court E., Myakka City, Florida to Roger Swatsworth for $65,000. A hearing on the Motion was held on Feb. 28, 2019, at 1:30 p.m. The IRS Objection is sustained. The IRS' federal tax liens attach to the Debtor's beneficial interest in the net sale proceeds to the same extent, validity, and priority as existed prepetition. The sale is free and clear of any and all liens, claims, encumbrances and interests. The Purchaser will pay $65,000 in cash at the closing of the purchase and sale transaction as contemplated by the Contract in accordance with the terms of the Contract and the Order. The Seller will be responsible for the Closing Costs as further detailed in the Contract, which will be paid from the proceeds from the sale at the Closing. In addition, the Seller will be authorized to pay any brokers' fees contemplated by the Contract, in a total amount not to exceed 6%, which will be paid directly from the proceeds from the sale at the Closing. The remainder of the proceeds after payment of the Closing Costs and the Broker Fees will be distributed to Wauchula State Bank. The payment received by Wauchula State Bank will be applied to reduce Wauchula State Bank's secured claim. Ordinary and necessary pro-rations will be applied at the Closing pursuant to the terms of the Contract, including pro-rations for 2019 real estate taxes, and for income and expenses from the Real Property. Notwithstanding Bankruptcy Rule 6004(g), and 6006(d) and 7062, the Order is effective and enforceable immediately upon entry and there is no reason for delay in the implementation of the Order. Joseph A. Brennick sought Chapter 11 protection (Bankr. M.D. Fla. Case No. 18-07874) on Sept. 18, 2018. The Debtor tapped Edward J. Peterson, III, Esq., at Stichter, Riedel, Blain & Postler, P.A., as counsel. JOSEPH BRENNICK: $70K Sale of Wauchula Property to Tenerife Okayed ------------------------------------------------------------------ Judge Catherine Peek McEwen of the U.S. Bankruptcy Court for the Middle District of Florida authorized Joseph A. Brennick's sale of a parcel of real property consisting of two vacant lots located at 302 W. Main St., Wauchula, Florida to Tenerife Southwest Investments, Inc., for $70,000. A hearing on the Motion was held on Feb. 28, 2019, at 1:30 p.m. The IRS Objection is sustained. The IRS' federal tax liens attach to the Debtor's beneficial interest in the net sale proceeds to the same extent, validity, and priority as existed prepetition. The sale is free and clear of any and all liens, claims, encumbrances and interests. The Purchaser will pay $70,000 in cash at the closing of the purchase and sale transaction as contemplated by the Contract in accordance with the terms of the Contract and the Order. The Seller will be responsible for the Closing Costs as further detailed in the Contract, which will be paid from the proceeds from the sale at the Closing. In addition, the Seller will be authorized to pay any brokers' fees contemplated by the Contract, in a total amount not to exceed 6%, which will be paid directly from the proceeds from the sale at the Closing. The remainder of the proceeds after payment of the Closing Costs and the Broker Fees will be distributed to Wauchula State Bank. The payment received by Wauchula State Bank will be applied to reduce Wauchula State Bank's secured claim. Ordinary and necessary pro-rations will be applied at the Closing pursuant to the terms of the Contract, including pro-rations for 2019 real estate taxes, and for income and expenses from the Real Property. Notwithstanding Bankruptcy Rule 6004(g), and 6006(d) and 7062, the Order is effective and enforceable immediately upon entry and there is no reason for delay in the implementation of the Order. Joseph A. Brennick sought Chapter 11 protection (Bankr. M.D. Fla. Case No. 18-07874) on Sept. 18, 2018. The Debtor tapped Edward J. Peterson, III, Esq., at Stichter, Riedel, Blain & Postler, P.A., as counsel. LA STEEL SERVICES: Wants Confirmation Deadline Extended to June 21 ------------------------------------------------------------------ LA Steel Services, Inc. asked the U.S. Bankruptcy Court for the Central District of California to modify the 45-day deadline for plan confirmation in its Chapter 11 case. The hearing on confirmation of the company's proposed Chapter 11 reorganization plan is scheduled for June 4. Given that the hearing will be held after the May 8 deadline for plan confirmation under Section 1129(e) of the Bankruptcy Code, LA Steel proposed that the deadline be modified such that it is extended through June 21. Pursuant to the plan, allowed claims of general unsecured creditors will either be paid in full as a cure upon assumption of the subcontract or paid in full over 60 months after the plan takes effect. LA Steel expects only Pacific Steel Group will vote to reject the plan. About LA Steel Services Inc. LA Steel Services, Inc. -- http://www.lasteelservices.com/-- is a construction company in Corona, California, specializing in heavy highway and bridge construction and public or civil works infrastructure. It also offers reinforcing steel design consultations, value engineering, and constructability review. LA Steel Services sought protection under Chapter 11 of the Bankruptcy Code (Bankr. C.D. Cal. Case No. 18-15841) on July 12, 2018. In the petition signed by Pamela Lee Albright, president, the Debtor disclosed $5.15 million in assets and $3.51 million in liabilities. Judge Mark D. Houle oversees the case. The Debtor tapped Shulman Hodges & Bastian LLP as its legal counsel. LA STEEL: June 4 Plan Confirmation Hearing ------------------------------------------ The Disclosure Statement explaining LA Steel Services, Inc.'s Chapter 11 Plan is approved for dissemination. The hearing on the confirmation of the Plan will be held on June 4, 2019, at 3:00 p.m. Ballots accepting or rejecting the Plan must be returned on or before 5:00 p.m. (PST) on April 23, 2019. Any opposition to confirmation of the Plan shall be filed with the Court and served on or before May 14, 2019. Replies to any opposition to confirmation of the Plan shall be filed with the Court and served on or before May 21, 2019. About LA Steel Services Inc. LA Steel Services, Inc. -- http://www.lasteelservices.com/-- is a construction company in Corona, California, specializing in heavy highway and bridge construction and public or civil works infrastructure. It also offers reinforcing steel design consultations, value engineering, and constructability review. LA Steel Services sought protection under Chapter 11 of the Bankruptcy Code (Bankr. C.D. Cal. Case No. 18-15841) on July 12, 2018. In the petition signed by Pamela Lee Albright, president, the Debtor disclosed $5.15 million in assets and $3.51 million in liabilities. Judge Mark D. Houle oversees the case. The Debtor tapped Shulman Hodges & Bastian LLP as its legal counsel. LAKEVIEW VILLAGE: Fitch Affirms BB+ Rating on 2017A & 2018A Bonds ----------------------------------------------------------------- Fitch Ratings has affirmed the 'BB+' rating to the following City of Lenexa, Kansas Health Care Facility Revenue bonds issued on behalf of Lakeview Village, Inc.: -- $16.3 million series 2017A -- $52 million series 2018A. The Rating Outlook is Stable. SECURITY The bonds are secured by a pledge of unrestricted receivables, leasehold interest on the existing facility and a DSRF. KEY RATING DRIVERS STABLE FINANCIAL PROFILE: The affirmation at 'BB+' reflects Lakeview's stable financial profile in fiscal 2018. Weaker investment markets at the end of fiscal 2018 resulted in unrealized losses of over $1.7 million; however, Lakeview was still able to maintain liquidity metrics of 294 days cash on hand (DCOH), 43.8% cash to debt and 5.3x cushion ratio, in line with fiscal 2017 levels. Furthermore, profitability was also adequate in fiscal 2018 as evidenced by its 99.5% operating ratio, 7.7% net operating margin (NOM), and 23% NOM-adjusted (NOMA), favorable to the respective below investment grade (BIG) medians of 101.6%, 5.1% and 18.3%. COMPETITIVE OPERATING ENVIRONMENT: Lakeview operates in a very competitive environment, reflected in its independent living unit (ILU) occupancy, which averaged only 82% in fiscal 2018. Management continues to replace older four-plex cottages with single family and duplex units that are expected to help improve occupancy over time. Although ILU occupancy was soft, assisted living unit (ALU) and skilled nursing facility (SNF) occupancy averaged a strong 95% and 92% in 2018. The community continues to differentiate itself from competitors through the high quality of healthcare services for residents on campus, and benefits from Lakeview run rehabilitation and therapy clinics in the local market, which help draw prospective residents on campus. MANAGEABLE LONG-TERM LIABILITIES: Lakeview's debt burden is manageable as evidenced by maximum annual debt service (MADS) equating to 13.1% of fiscal 2018 (unaudited) revenues. Additionally, Lakeview's debt to net available measured 6x in fiscal 2018, which is favorable to Fitch's BIG category median of 9.8x. ASYMMETRIC RISK FACTORS: No asymmetric risk factors were incorporated into the rating determination. RATING SENSITIVITIES OPERATING STABILITY: Fitch expects Lakeview to maintain consistent operating performance over the medium term. Large improvements in ILU occupancy that positively impact profitability, debt service coverage and balance sheet strength may lead to upward rating movement. Conversely, weaker operations that result in a declining financial profile could place negative pressure on the rating. CREDIT PROFILE Lakeview Village is a predominantly lifecare community currently offering fully amortizing, 75% refundable, and rental contracts, located on an approximately 96-acre campus in Lenexa, Kansas, a suburb of Kansas City. Lakeview's campus consists of 543 ILUs, 26 ALUs, a 120-bed SNF and 38 short-term rehabilitation beds. The corporation currently considers 37 ILUs and three ALUs to be unmarketable, and all occupancy statistics are calculated on a marketable unit basis. Lakeview has three affiliated entities that are not obligated on the outstanding bonds including a foundation and two independent living HUD properties. Fitch uses only Lakeview Village Inc. financials for its analysis and all figures cited in this press release. Lakeview had $44 million in (unaudited) total revenues in 2018. STABLE FINANCIAL PROFILE Lakeview's financial profile was stable in fiscal 2018. Unrestricted cash and investments totaled approximately $31 million at Dec. 31, 2018, up slightly from a year prior even in the midst of over $1.7 in unrealized losses in 2018. Liquidity ratios of 294 DCOH, 43.8% cash to debt and 5.3x cushion ratio are good for the current rating and remain above the BIG category medians of 292 DCOH, 32.1% cash to debt and 4.5x cushion ratio. The overwhelming majority of Lakeview's contracts are non-refundable, which strengthens cash flow and provides balance sheet stability. Profitability was adequate despite weak ILU occupancy of only 82% in 2018. The community's 99.5% operating ratio and 23% NOMA were in line with results from 2017 of 100.1% and 23.1%, respectively. These metrics compare favorably to Fitch's below investment grade operating ratio and NOMA medians 101.6 and 18.3%. Given the improved profitability levels from a few years prior, manageable capital expenditure needs and good net entrance fee receipts ($7.5 million in 2018), Fitch expects liquidity metrics to slowly improve over time. Material strengthening of liquidity metrics to levels consistent with 'BBB' rated peers could lead to positive rating movement. COMPETITIVE OPERATING ENVIRONMENT Lakeview operates within a competitive environment, with three other full service retirement communities within its primary marketing area (PMA), including two newer communities that opened in 2007, as well as other for-profit retirement population care providers. The competitive environment somewhat limits Lakeview's pricing power and flexibility and remains a continual challenge. The community has a high average age of plant and some unmarketable units (53 as of Dec. 31, 2018), which increases the ILU occupancy challenges. Management continually strives to enhance the appeal of ILUs on campus by repositioning older four-plex cottages with more modern single family and duplex buildings and combining smaller apartment units, which is possible due to the concrete and steel construction of the buildings. This combination helps Lakeview meet current market demands and right size the campus by reducing the number of ILUs. Management anticipates continuing these practices over the longer term. Annual capital expenditures were 112.6% of depreciation in 2018 and the average age of plant has continued to rise to 15.9 years in 2018 from 14.6 years in 2017. The community's five-year capital improvements program has budgeted to spend 110% of depreciation over the next five years on refreshes throughout the campus, which should help the campus stay updated and in line with current standards. Consistent execution of campus updates, combined with higher entrance fees and margins for the new ILUs, should be accretive to Lakeview's balance sheet over time. Census in assisted living and skilled nursing was strong in 2018 at 95% and 92%. To stay competitive and improve occupancy, management took 14 short-term rehab beds out of service on July 1, 2018 (down from 52 to 38). In 2019, the rehab beds will all be converted to private units, which should help the community to effectively compete for Medicare business. The total cost to privatize the rehab beds is approximately $400 thousand and the project is expected to be completed by the end of 2019. Management is proactive in its strategies to drive more volume into its rehab center, as demonstrated by the opening of a number of outpatient therapy suites in the broader community, which are expected to act as feeders to the main campus. The newly built private rooms and management's strategies are designed to increase utilization of the rehab facility over the medium to longer term. Furthermore, Lakeview also runs a home health business that showed significant growth in 2018 and helps to diversify the community's revenue streams. MANAGEABLE LONG-TERM LIABILITY PROFILE As of Dec. 31, 2018, Lakeview had approximately $69 million outstanding in long-term debt, which is primarily comprised of $52 million in fixed-rate series 2018A bonds and $16 million in fixed-rate series 2017A bonds. Lakeview's long-term liability profile was manageable in fiscal 2018, with MADS to revenue of 13.1% and debt-to-net available of 6x. The organization has no swap exposure. LIGHTFOOT FAMILY: U.S. Trustee Unable to Appoint Committee ---------------------------------------------------------- No official committee of unsecured creditors has been appointed in the Chapter 11 case of Lightfoot Family Enterprises, LLC as of April 2, according to a court docket. About Lightfoot Family Enterprises Lightfoot Family Enterprises, LLC sought protection under Chapter 11 of the Bankruptcy Code (Bankr. E.D. Mo. Case No. 19-41576) on March 18, 2019. The case has been assigned to Judge Charles E. Rendlen III. Affinity Law Group is the Debtor's bankruptcy counsel. LINDA THE BRA LADY: Simone Perele Objects to Disclosures, Plan -------------------------------------------------------------- Simone Perele USA, Inc., ("SP") submits a limited and conditional objection to the Small Business Combined Plan of Reorganization and Disclosure Statement filed by SP complains that the Plan and Disclosure Statement does not property provide that it is wholly contingent upon and can only become effective in the event that the contemplated sale to Spano, LLC, on terms acceptable to SP, closes and that it is otherwise confirmed without substantial modifications affecting the rights of SP. SP further complains that to the extent that Objection 1 is not resolved so as to protect the rights of SP, SP further objects to the Plan and Disclosure Statement on the grounds that it fails to include SP as a creditor, afford SP plan payments in accordance with its rights under 11 U.S.C. Section 502, is not feasible and is otherwise wholly violative of and cannot as a consequence be confirmed in accordance with 11 U.S.C. Section 1129 (a) or (b). A full-text copy of the Disclosure Statement is available at http://tinyurl.com/y5lgsfj9from PacerMonitor.com at no charge. Co-Counsel for Simone Perele US, Inc.: Anthony A. Boyadjis, Esq. LAW OFFICE OF ANTHONY A. BOYADJIS 103 Washington Street Morristown, NJ 07960 Phone: (973) 538-5512 -- and -- Randolph E. White, Esq. David Y. Wolnerman, Esq. WHITE & WOLNERMAN, PLLC 950 Third Ave, 11th Floor New York, NY 10022 Tel: (212) 308-0607 About Linda The Bra Lady Linda the Bra Lady LLC sought Chapter 11 bankruptcy protection (Bankr. D.N.J. Case No. 18-12469) on Feb. 7, 2018, listing under $500,000 in assets and under $10 million in liabilities. The Hon. Jerrold N. Poslusny Jr. presides over the case. E. Richard Dressel, Esq., at Flaster Greenberg, represents the Debtor. Founder Linda Becker operates two stores, one on Manhattan's East Side and another in southern New Jersey. The Company has been in business for 30 years. LK BENNETT USA: Case Summary & 20 Largest Unsecured Creditors ------------------------------------------------------------- Debtor: L.K. Bennett U.S.A., Inc. 595 Madison Avenue New York, NY 10022 Business Description: L.K. Bennett U.S.A., Inc. is a retailer of the L.K. Bennett luxury fashion brand. Founded in London in 1990 by Linda Bennett, L.K. Bennett offers women's shoes, clothing, handbags, accessories, and jewelries. L.K. Bennett is available in standalone stores across the United States, Europe and the Middle East, lkbennett.com, us.lkbennett.com and in select department stores worldwide. L.K. Bennett Limited owns 100% of the common stock of L.K. Bennett U.S.A, Inc. https://us.lkbennett.com/ Chapter 11 Petition Date: April 3, 2019 Court: United States Bankruptcy Court District of Delaware (Delaware) Case No.: 19-10760 Judge: Hon. Kevin Gross Debtor's General Bankruptcy Counsel: Stuart M. Brown, Esq. DLA PIPER LLP (US) 1201 North Market Street, Suite 2100 Wilmington, DE 19801 Tel: 302-468-5640 Fax: 302-778-7913 Email: stuart.brown@dlapiper.com Debtor's Restructuring Advisor: ERNST & YOUNG LLP Estimated Assets: $1 million to $10 million Estimated Liabilities: $10 million to $50 million The petition was signed by Andrey Komrakov, assistant secretary and financial officer. 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/deb19-10760.pdf LNB-002-2013: Seeks to Extend Exclusive Filing Period to June 27 ---------------------------------------------------------------- LNB-002-2013, LLC asked the U.S. Bankruptcy Court for the Southern District of Florida to extend the period during which it has the exclusive right to file a Chapter 11 plan through June 27, and to solicit acceptances for the plan through Aug. 27. The extension, if granted by the court, would give the company more time to negotiate with creditors and its lender on a consensual plan, according to court filings. About LNB-002-2013 LLC LNB-002-2013, LLC sought protection under Chapter 11 of the Bankruptcy Code (Bankr. S.D. Fla. Case No. 18-20502) on Aug. 28, 2018. In the petition signed by Laurent Benzaquen, manager LNB Capital LLC, the Debtor estimated assets of less than $50,000 and liabilities of less than $500,000. The Debtor tapped Joel M. Aresty P.A. as its legal counsel. No official committee of unsecured creditors has been appointed in the case. LONG BLOCKCHAIN: Subsidiary Secures C$450,000 in Loans ------------------------------------------------------ Long Island Brand Beverages LLC, a wholly owned subsidiary of Long Blockchain Corp., obtained on March 27, 2019, an advance of C$200,000 (or approximately $150,000) from ECC Ventures 2 Corp. and an advance of C$250,000 (or approximately $187,500) from Long Island Beverages Corp. ECC2 previously had advanced C$50,000 (or approximately $37,5000) to LIBB. The Loans by ECC2 were made pursuant to a loan agreement by and among LIBB, the Company and ECC Ventures 2 Corp. and a general security agreement, by and between LIBB and ECC2, each dated as of Jan. 31, 2019. The Loan by LIBC was made on terms substantially similar to those contained in the Loan Agreement and Security Agreement. As previously disclosed, the Company, ECC2 and LIBC are party to that certain letter of intent, dated Jan. 16, 2019, relating to the sale of LIBB to ECC2 for a combination of cash and shares of ECC2. The Loans incur interest at a rate of 10% per annum and mature on July 31, 2019. Accrued and unpaid interest is payable in cash on July 1, 2019 and on the first day of each calendar month thereafter. The guaranty terminates upon consummation of a sale of all or substantially all of the equity or assets of LIBB to the Lender or its affiliates. The Loans are secured by all of the assets of LIBB and are guaranteed by the Company. The Loan Agreement contains customary representations and warranties and affirmative and negative covenants of LIBB, including without limitation covenants that restrict LIBB from making investments, incurring liens and permitting a change of control to occur, subject to certain exceptions. The Loan Agreement provides that the termination of the LOI or any definitive agreements executed with respect to the Transactions, the breach of the LOI or Definitive Agreements by the Company or LIBB, and certain other customary events constitute events of default. Upon the occurrence of an event of default, at the option of the Lender, all principal and interest under the Lender's Loan will become immediately due and payable. Notwithstanding the foregoing, if the event of default relates to the termination of the LOI or Definitive Agreements by the Lender without the consent of LIBB, or the termination of such agreements by another party based on a breach by the Lender, LIBB will have 30 days after demand to repay the Lender's Loan. The Company used $235,000 of the Loans to satisfy in full its obligations under that certain agreement for the purchase and sale of future receipts, dated Nov. 27, 2017, with Radium2 Capital Inc. Pursuant to the Radium Agreement, Radium was entitled to receive 15% of the proceeds from the Company's future sales, up to a specified maximum amount. Upon payment of the $235,000, the Radium Agreement was terminated and the Company has no further obligation thereunder. Davidson Settlement On April 1, 2019, the Company entered into a settlement agreement with Julian Davidson, the Company's former Chairman of the Board, pursuant to which the Company and Mr. Davidson finally settled certain claims made by Mr. Davidson for severance. Pursuant to the settlement agreement, among other things, the Company agreed to issue 1,000,000 shares of common stock to Mr. Davidson and granted Mr. Davidson certain registration rights with respect to the shares. The shares are being issued to Mr. Davidson in a private placement in reliance on the exemption from registration provided by Section 4(a)(2) of the Securities Act of 1933, as amended. About Long Blockchain Corp. Headquartered in Hicksville, New York, Long Blockchain Corp. -- http://www.longblockchain.com/-- is focused on developing and investing in globally scalable blockchain-based financial technology solutions. It is dedicated to becoming a significant participant in the evolution of blockchain technology that creates long-term value for its shareholders and the global community by investing in and developing businesses that are "on-chain". Blockchain technology is fundamentally changing the way people and businesses transact, and the Company will strive to be at the forefront of this dynamic industry, actively pursuing opportunities. Its wholly-owned subsidiary Long Island Brand Beverages, LLC operates in the non-alcohol ready-to-drink segment of the beverage industry under its flagship brand 'The Original Long Island Brand Iced Tea'. Long Blockchain incurred a net loss of $15.21 million in 2017 and a net loss of $10.44 million in 2016. As of June 30, 2018, Long Blockchain had $11.28 million in total assets, $3.68 million in total liabilities, and $7.59 million in total stockholders' equity. Marcum LLP, the Company's auditor since 2014, issued a "going concern" opinion in its report on the consolidated financial statements for the year ended Dec. 31, 2017, citing that the Company has 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. LOVEJOY'S FAMILY: Unsecured Creditors to Get $450K in 4 Payments ---------------------------------------------------------------- Lovejoy's Family Moving, Inc., dba Republic Moving & Storage, Inc., filed a Chapter 11 Plan and accompanying Disclosure Statement. Class 5 - Allowed General Unsecured Claims. Payment of Pro Rata Distributions of the total amount of $450,000 paid in four annual installments over the course of the Plan. Class 1 - Allowed Secured Claim of BOW. Entitled to receive the Distributions of its Allowed Secured Claim and the BOW Subordinated Claim. Class 2 - Any Allowed Secured Claims of the Creditors Listed in the Plan. Entitled to receive the Distributions of the Plan. The funding for the Distributions to be made by the Reorganized Debtor under the Plan will be derived, in part, from the following: (a) the Debtor's Cash as of the Effective Date; (b) Cash that will be generated from the Reorganized Debtor's operations after the Effective Date; (c) new funding that the Debtor anticipates will be obtained by the Reorganized Debtor after the Effective Date (i.e., the Post-Effective Date Loan); (d) proceeds from the assertion of Causes of Action, including Avoidance Actions; and (e) possible sales of Assets of the Reorganized Debtor. A full-text copy of the Disclosure Statement dated March 28, 2019, is available at http://tinyurl.com/y2nxuv5mfrom PacerMonitor.com at no charge. About Lovejoy's Family Moving Headquartered in Chula Vista, California, Republic Moving & Storage Inc. -- https://www.republicmoving.com/ -- provides moving and storage solutions for residential homes, military personnel, and commercial businesses throughout Southern California and the world. Lovejoy's Family Moving sought protection under Chapter 11 of the Bankruptcy Code (Bankr. C.D. Cal. Case No. 18-16624) on Aug. 6, 2018. In the petition signed by Joseph W. Lovejoy, president, the Debtor estimated assets of $1 million to $10 million and liabilities of $1 million to $10 million. Judge Scott C. Clarkson presides over the case. Lovejoy's originally tapped Illyssa I. Fogel & Associates as its legal counsel. The Debtor later hired Winthrop Couchot Golubow Hollander, LLP as its new general insolvency counsel. MAURICE SPORTING: Seeks to Extend Exclusivity Period to May 20 -------------------------------------------------------------- Maurice Sporting Goods of Delaware, Inc. asked the U.S. Bankruptcy Court for the District of Delaware to extend the period during which the company and its affiliates has the exclusive right to file a Chapter 11 plan through May 20, and to solicit acceptances for the plan through July 22. The companies' current exclusive filing period expired on March 18 while they can solicit acceptances for the plan through May 13. Since their bankruptcy filing, the companies have made significant progress to reorganize their affairs, which included the sale of most of their assets to Middleton Management Company, Inc. Recently, the companies have been focused on analyzing the claims filed by creditors, some of which presented complex issues of international law, and filing objections to certain claims necessary to facilitate a plan of liquidation, according to court filings. About Maurice Sporting Goods Maurice Sporting Goods, Inc., established in 1923, is a family-owned distributor of outdoor sporting goods specializing in fishing; marine; sports licensed products and souvenirs; outdoor gifts and decor; hunting; and camping and outdoor recreation. Collectively, Maurice Sporting Goods services more than 15,000 store fronts across the United States, Canada, South America, and Europe. Maurice Sporting Goods, Inc., and 4 affiliated companies sought Chapter 11 protection (Bankr. D. Del. Lead Case No. 17-12481) on Nov. 20, 2017. Maurice Sporting Goods estimated $10 million to $50 million in total assets and $100 million to $500 million in total liabilities. The Debtors' cases have been assigned to Judge Christopher S. Sontchi. The Debtors tapped Young Conaway Stargatt & Taylor, LLP, as counsel; Patrick J. O'Malley of Development Specialists, Inc., as restructuring advisor; Silverman Consulting as financial advisor; Livingstone Partners LLC as investment banker; and Epiq Bankruptcy Solutions, LLC, as claims, solicitation and balloting agent. MONITRONICS INTERNATIONAL: Widens Net Loss to $678.8-Mil. in 2018 ----------------------------------------------------------------- Monitronics International, Inc. has filed with the Securities and Exchange Commission its Annual Report on Form 10-K reporting a net loss of $678.75 million on $540.35 million of net revenue for the year ended Dec. 31, 2018, compared to a net loss of $111.29 million on $553.45 million of net revenue for the year ended Dec. 31, 2017. The increase in net loss is primarily related to the $563,549,000 goodwill impairment recognized in 2018 and reductions in net revenue offset by the $28,000,000 legal settlement reserve recognized in the second quarter of 2017. As of Dec. 31, 2018, Monitronics had $1.30 billion in total assets, $1.89 billion in total liabilities, and a total stockholders' deficit of $588.97 million. At Dec. 31, 2018, the Company had $2,188,000 of cash and cash equivalents. The Company's primary source of funds is its cash flows from operating activities which are generated from alarm monitoring and related service revenues. During the years ended Dec. 31, 2018 and 2017, the Company's cash flow from operating activities was $104,503,000 and $150,204,000, respectively. During the years ended Dec. 31, 2018 and 2017, the Company used cash of $140,450,000 and $142,909,000, respectively, to fund subscriber account acquisitions, net of holdback and guarantee obligations. In addition, during the years ended Dec. 31, 2018 and 2017, the Company used cash of $14,903,000 and $14,393,000, respectively, to fund its capital expenditures. KPMG LLP, in Dallas, Texas, the Company's auditor since 2011, issued a "going concern" qualification in its report dated April 1, 2019, on the Company's consolidated financial statements for the year ended Dec. 31, 2018, citing that the Company has substantial indebtedness classified within current liabilities that raises substantial doubt about its ability to continue as a going concern. Monitronics said "We have engaged financial and legal advisors to advise us regarding potential alternatives to address the issues described above. There can be no assurance that any such potential alternatives or restructuring transactions will be possible on acceptable terms, if at all. We may not be able to come to an arrangement that is acceptable to all of our stakeholders. Our failure to reach an arrangement on the terms of a restructuring with our stakeholders would have a material adverse effect on our liquidity, financial condition and results of operations, including requiring us to potentially file a voluntary petition for relief under Chapter 11 of the United States Bankruptcy Code in order to implement a restructuring plan." The Company's report on Form 10-K is available from the SEC's website at https://is.gd/iJVLzP. About Monitronics Farmers Branch, Texas-based Monitronics International, Inc. -- http://www.mymoni.com/-- provides residential customers and commercial client accounts with monitored home and business security systems, as well as interactive and home automation services. The Company is supported by a network of independent Authorized Dealers providing products and support to customers in the United States, Canada and Puerto Rico. Its wholly owned subsidiary, LiveWatch is a Do-It-Yourself home security firm, offering professionally monitored security services through a direct-to-consumer sales channel. Monitronics is a wholly-owned subsidiary of Ascent Capital Group, Inc. Monitroics was incorporated in the state of Texas on Aug. 31, 1994. At Dec. 31, 2018, Monitronics had over 1,190 full-time employees and over 40 part-time employees. MR TORTILLA: DMFP Objects to Disclosure Statement ------------------------------------------------- Diana's Mexican Food Products, Inc., objects to the Disclosure Statement explaining the Chapter 11 Plan filed by Mr. Tortilla, Inc. DMFP complains that the Debtor does not disclose the extent of so-called "unsecured claims" held by family members of its insiders. According to DMFP, it appears that not less than $260,000 (30%) of the purported "unsecured creditors" of this Debtor's estate are, in fact, family members of the Alcazars. DMFP points out that the Debtor's only attempt to determine the value of its assets appears to have been limited to the self-serving declaration of its equity owner, Ronald Alcazar, who did "online research" to determine the value of the Debtor's assets. DMFP further points out that the Disclosure Statement also misleads the estate's creditors about DMFP's claims. DMFP asserts that the Debtor states that it is "investigating" whether it will object to DMFP's claims, but the Disclosure Statement fails to disclose to creditors what the basis for such an objection would be, what the administrative costs of such an objection would likely be, or what the impact of the claim objection would be on the estate and its distributions to creditors, either in costs to the estate or what benefit such an objection would be to the estate's creditors. According to DMFP it appears that the primary motive of the Plan (if not the sole motive) is to prevent Creditor from collecting upon its judgment while permitting the owners of the Debtor (Anthony Alcazar and Ronald Alcazar) to retain their ownership stake and, therefore, any "upside" in the Debtor after it reorganizes without having repaid its unsecured creditors. DMFP complains that it appears that the Debtor intends to "recoup" any unclaimed distributions for itself, rather than re-distributing unpaid funds to remaining unsecured creditors. Attorneys for Diana's Mexican Food Products, Inc.: Marsha A. Houston, Esq. Christopher O. Rivas, Esq. REED SMITH LLP 355 South Grand Avenue, Suite 2900 Los Angeles, CA 90071-1514 Tel: 213.457.8000 Fax: 213.457.8080 -- and -- Bernard P. Simons, Esq. REED SMITH LLP 1901 Avenue of the Stars, Suite 700 Los Angeles, CA 90067-6009 Tel: 310.734.5200 Fax: 310.734.5299 About Mr. Tortilla Mr. Tortilla, Inc., is a manufacturer of traditional flour tortilla (fresh or refrigerated) in San Fernando, California. Mr. Tortilla filed a Chapter 11 petition (Bankr. C.D. Cal. Case No. 18-12051) on Aug. 14, 2018. In the petition signed by Anthony Alcazar, president, the Debtor estimated $100,000 to $500,000 in assets and $1 million to $10 million in liabilities. The case is assigned to Judge Victoria S. Kaufman. Jonathan M. Hayes, Esq., at Resnik Hayes Moradi LLP, is the Debtor's counsel. NATIONAL AUTO: Plan Solicitation Period Extended Until May 31 ------------------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of Florida extended the period during which National Auto Lenders, Inc. has the exclusive right to solicit acceptances for its Chapter 11 plan of reorganization through May 31. The company and the unsecured creditors' committee appointed in its bankruptcy case jointly filed a reorganization plan on April 1. About National Auto Lenders National Auto Lenders, Inc. -- http://www.nalenders.com/-- is a non-prime auto finance company that purchases loans from auto dealers. It has been established for more than 20 years and buys loans in multiple states. National Auto Lenders is headquartered in Miami, Florida. National Auto Lenders, Inc., filed a voluntary petition for relief under chapter 11 of title 11 of the United States Code (Bankr. S.D. Fla. Case No. 18-24586) on Nov. 23, 2018. In the petition signed by Dania Ramos-Infante, vice president, CFO, and COO, the Debtor estimated $100 million to $500 million in assets and $50 million to $100 million in liabilities. Judge Laurel M. Isicoff presides over the case. Berger Singerman LLP, led by Paul Steven Singerman, is the Debtor's counsel. The U.S. Trustee for Region 21 on Dec. 4, 2018, appointed nine creditors to serve on the official committee of unsecured creditors in the Chapter 11 case. The committee retained Paul J. Battista, Esq., and the law firm of Genovese Joblove & Battista, P.A., as counsel; and Soneet Kapila, CPA and the firm of KapilaMukamal, LLP, as financial advisors. NATIONAL AUTO: Plan Solicitation Period Extended Until May 31 ------------------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of Florida extended the period during which National Auto Lenders, Inc. has the exclusive right to solicit acceptances for its Chapter 11 plan of reorganization through May 31. The company and the unsecured creditors' committee appointed in its bankruptcy case jointly filed a reorganization plan on April 1. About National Auto Lenders National Auto Lenders, Inc. -- http://www.nalenders.com/-- is a non-prime auto finance company that purchases loans from auto dealers. It has been established for more than 20 years and buys loans in multiple states. National Auto Lenders is headquartered in Miami, Florida. National Auto Lenders, Inc., filed a voluntary petition for relief under chapter 11 of title 11 of the United States Code (Bankr. S.D. Fla. Case No. 18-24586) on Nov. 23, 2018. In the petition signed by Dania Ramos-Infante, vice president, CFO, and COO, the Debtor estimated $100 million to $500 million in assets and $50 million to $100 million in liabilities. Judge Laurel M. Isicoff presides over the case. Berger Singerman LLP, led by Paul Steven Singerman, is the Debtor's counsel. The U.S. Trustee for Region 21 on Dec. 4, 2018, appointed nine creditors to serve on the official committee of unsecured creditors in the Chapter 11 case. The committee retained Paul J. Battista, Esq., and the law firm of Genovese Joblove & Battista, P.A., as counsel; and Soneet Kapila, CPA and the firm of KapilaMukamal, LLP, as financial advisors. NGL ENERGY: Fitch Gives B/RR4 Rating to New Unsec. Notes Due 2026 ----------------------------------------------------------------- Fitch Ratings assigns a 'B'/'RR4' rating to NGL Energy Partner LP's (NGL) proposed offering of senior unsecured notes due 2026. The notes are to be co-issued by NGL Energy Finance Corp. (NGL Energy Finance), which also has a rating of 'B'/'RR4' for the proposed new unsecured notes. The proposed notes are to rank pari passu with all existing and future senior unsecured debt. Proceeds from the bond offering are to be used to reduce borrowings on the secured revolving credit facility. NGL has a 'B' Issuer Default Rating (IDR), which is supported by the partnership's strategy to operate with strong distribution coverage and diverse operations which are located throughout the U.S. Both NGL and NGL Energy Finance have a 'B'/'RR4' rating for the senior unsecured debt. The Recovery Rating of 'RR4' reflects Fitch's expectations of average recovery prospects in the range of 31% to 50% in the event of a default. NGL Energy Finance is the co-issuer of all of the senior unsecured debt. KEY RATING DRIVERS Transactions Modestly Increasing Leverage: In March 2019, NGL sold Class C 9.625% fixed-to-floating perpetual preferreds for net proceeds of $38 million. If the underwriters exercise the right for additional preferreds, net proceeds to NGL will be $44 million. Proceeds from the offering will initially be used to repay the secured revolver. Separately, NGL agreed to spend $100 million to redeem $90 million of its 10.75% Class A convertible preferreds that are owned by Oaktree Capital Management L.P. Once the $90 million of the preferreds are redeemed, there will be $150 million of the Class A preferreds outstanding. Fitch notes that the Class A preferreds received 50% debt credit so by using traditional debt to redeem the preferreds units, NGL is modestly increasing leverage. Previously, Fitch expected leverage for the end of FY20 to be in the low to mid 5x area. Now Fitch expects NGL's leverage to end FY20 in the mid to high 5x range. Asset Sales and Acquisitions: In February 2019, NGL sold water assets for $239 million. Proceeds were used to fund the $90 million acquisition of the wholesale propane business from DCP Midstream, LP. In addition, proceeds from the water assets were used to partially fund $339 million of the senior unsecured notes that were redeemed on March 15, 2019. NGL has a history of being very acquisitive and Fitch would expect the partnership to continue to be an aggressive acquirer of assets. Recently, most of NGL's focus has been on its water solutions segment. Amendment Allows for Share Repurchases: Effective with the 7th Amendment dated Feb. 6, 2019, NGL is permitted to purchase up to $150 million of its common units (through the duration of the bank agreement, which ends in October 2021). No more than $50 million a quarter can be purchased. This is allowed provided that the bank definition of leverage (which excludes working capital borrowings and has numerous other adjustments) is less than 3.25x and that availability on the revolver is $200 million or more. Plans for Growth: With retail propane divested, NGL now intends to focus its capital on water solutions and crude oil logistics. NGL would like crude logistics to account for 35% of EBITDA, water solutions to account for 35%, refined products/renewables 10% to 15%, and liquids 15% to 20%. For water solutions, NGL previously announced it intended to add 300,000 barrels per day (bpd) by the end of FY19. At the end of FY18, the partnership was processing 950,000 bpd and as of Dec. 31, 2018 total volumes averaged 998,524 bpd. Water assets were sold in the Bakken for $91 million in December 2018 and in the Permian in February 2019 for $239 million. It is unclear what volumes were associated with the disposed assets, but volumes look like they will fall short of prior expectations. In crude logistics, NGL targets 10% annual EBITDA growth from its current assets through the end of FY21. Fitch notes that these targets may be overly optimistic and that management has a history of falling short of its goals for growth despite significant spending. DERIVATION SUMMARY NGL Energy Partners is somewhat unique in Fitch's rated midstream universe and it does not have any direct peers. Its focus on water solutions makes it unusual however its focus on crude logistics, liquids and refined products is not. It is diversified in a different way than similarly rated Martin Midstream Partners LP (MMLP; B). MMLP is focused on a mix of natural gas services, sulfur services, terminalling and storage and marine transportation. While NGL is much larger than MMLP, NGL has a history of being an aggressive acquirer of assets whereas MMLP has not been as aggressive. NGL is rated lower than NuStar Energy Partners LP (NuStar; BB), which is focused on crude pipelines and storage. Importantly, NuStar generates more stable operating cash flow and operates in a much more conservative fashion than NGL. NuStar has also been less aggressive with acquisitions than NGL. KEY ASSUMPTIONS Fitch's Key Assumptions Within Its Rating Case for the Issuer - Revenues continue to increase as NGL benefits from higher volumes associated with stronger crude prices; - Revenues and cash flows also increase given NGL's spending for growth and acquisitions; - EBITDA in FY19 is close to management's public guidance of $450 million. For the Recovery Rating, Fitch utilized a going-concern approach with a 6.0x EBITDA multiple, which is in line with recent reorganization multiples for the energy sector. There have been limited bankruptcy and reorganizations within the midstream space but two recent bankruptcies, Azure Midstream and Southcross Holdco, had multiples between 5.0x and 7.0x by Fitch's best estimates. In its recent Bankruptcy Case Study Report "Energy, Power and Commodities Bankruptcies Enterprise Value and Creditor Recoveries" published in March 2018, the median enterprise valuation exit multiple for the 29 energy cases for which this was available was 6.7x, with a wide range. For the going concern EBITDA, Fitch assumed $350 million in FY2020. The $350 million reflects a discount to Fitch's Base Case assumption of EBITDA, which reflects dispositions as well as acquisitions and organic growth. In this scenario, Fitch assumed a default occurred due to lower crude oil and refined product prices that would have a direct impact on NGL's profitability. In Fitch's Stress Case scenario, Fitch assumed NGL had $350 million of EBITDA in FY2020 and projects that would result in bank defined total leverage being above 6.5x which would breach this covenant which does not allow total leverage to exceed 6.0x. Fitch assumed that 75% of the working capital facility was drawn at its maximum capacity of $1.7 billion (reflecting it's a $1.3 billion facility that can have up to $400 million allocated from the acquisition facility) and the acquisition facility was fully utilized at its capacity which would then be $65 million. With these assumptions, the Recovery Rating for the senior unsecured debt was 'RR4' which represents average recovery prospects in the range of 31% to 50%. Fitch also ran recovery scenarios with 75% of the working capital facility drawn at $900 million ($1.3 billion less $400 million reallocated to the acquisition facility) and the acquisition facility fully drawn at $865 billion and the Recovery Rating for the senior unsecured was 'RR5'. Fitch believes that NGL will continue to have the working capital facility capacity allocated toward the high end, particularly if there was an event of default. Therefore the first recovery scenario described remains the Fitch recovery case with an outcome of 'RR4' for the senior unsecured debt. RATING SENSITIVITIES Developments That May, Individually or Collectively, Lead to Positive Rating Action - The rating may be upgraded if NGL can achieve leverage below 6x on a sustained basis; - Evidence of improved capital discipline. Developments That May, Individually or Collectively, Lead to Negative Rating Action - Leverage above 6.0x on a sustained basis, or evidence that management is not prudent with capital; - Inability for NGL to reach its public guidance of EBITDA of $450 million in FY19; - Significant capital spending or acquisition activity financed in a manner that is detrimental to the credit profile (e.g., if not funded with a balance of debt and equity); - Negative regulatory or legislative action which cause volumetric declines and reduces profitability lower and leverage higher on a sustained basis; - Reduced liquidity. LIQUIDITY Liquidity Adequate: As of Dec. 31, 2018, NGL had $23 million of cash on the balance sheet. It also had a $1.765 billion secured bank facility with $1.25 billion of the total directed to the working capital facility (which is restricted by a borrowing base), and $515 million directed to the acquisition facility. NGL can reallocate up to $400 million of either facility to the other facility. As of Dec. 31, 2018, NGL had $889 million drawn on the working capital facility (as well as $158 million of letters of credit on the working capital facility). The bank facility expires in October 2021. The bank agreement was amended in February 2019. Maximum total leverage cannot exceed 6.5x for the quarters ending March 31, 2019 and June 30, 2019. It cannot exceed 6.25x for the quarters ending Sept. 30, 2019 and Dec. 31, 2019. Beyond then, it cannot exceed 6.0x. Previously, total leverage could not be greater than 6.5x indicating that lenders have somewhat tightened this covenant (which was first introduced for the quarter ending March 31, 2019). NGL has indicated that the bank definition of total leverage was 4.9x as of Dec. 31, 2018. It expects it to be under 4.5x at the end of FY19. The bank agreement was modified in May 2018 to provide a temporary relief for the interest coverage ratio for March 31, 2018. The interest coverage ratio must be greater than 2.75x at the end of any quarter. As of Dec. 31, 2019 this was the tightest covenant since NGL's coverage ratio was calculated to be 3.18x. In May 2018, the total leverage covenant was also added (which is different from the "leverage" covenant since it adds the debt from the working capital facility). In addition to the bank agreement having borrowing base restrictions on the working capital revolver, financial covenants do not allow "leverage" (as defined by the bank agreement which excludes any borrowings on the working capital facility) to exceed 4.75x at quarter end through Dec. 31, 2018. Thereafter, it cannot exceed 4.5x. As of Dec. 31, 2018 the bank definition of leverage was 3.0x. The bank agreement has an additional financial covenant that does not allow the senior secured leverage ratio to exceed 3.5x. As of year-end 2018, this was 0.01x and NGL's financial covenant with the most headroom. The bank definition of debt excludes the working capital borrowings and letters of credit for the leverage calculation. Working capital borrowings are significant and were $889 million as of Dec. 31, 2018. On the same date, letters of credit were $158 million. NGL gets pro forma EBITDA credit for acquisitions and material projects. Pro forma EBITDA credit for material projects or acquisitions is typical for master limited partnership (MLP) bank agreements. NGL does not have any significant debt maturities until 2023 when $607 million of senior unsecured notes come due. On May 13, 2019, NGL's $240 million of 10.75% convertible preferreds issued to OakTree Capital Management L.P. can be converted to common units (the third anniversary since the securities were issued). There were nearly 20 million units issued and 4.4 million warrants. Currently, 1.5 million warrants are outstanding and expire in 2024. NGL repurchased $15 million of the warrants in April 2018. FULL LIST OF RATINGS Fitch rates NGL and NGL Energy Finance as follows: NGL Energy Partners LP -- Long-term IDR 'B'; -- Senior unsecured 'B/RR4'. NGL Energy Finance Corp. -- Senior unsecured 'B/RR4'. The Outlook is Stable. NOWELL TREE: Exclusive Plan Filing Period Extended Until May 7 -------------------------------------------------------------- U.S. Bankruptcy Judge Madeleine Wanslee granted Nowell Tree Farm, LLC's third request to extend the period during which the company has the exclusive right to file a Chapter 11 plan through May 7, and to solicit acceptances for the plan through July 8. About Nowell Tree Farm Nowell Tree Farm, LLC, operates a nursery growing, developing and selling trees, shrubs, cactus and palms primarily on a wholesale basis to landscapers, contractors and nurseries. Nowell Tree Farm sought protection under Chapter 11 of the Bankruptcy Code (Bankr. D. Ariz. Case No. 18-08022) on July 9, 2018. At the time of the filing, the Debtor estimated assets of $10 million to $50 million and liabilities of $1 million to $10 million. Judge Madeleine C. Wanslee oversees the case. Burch & Cracchiolo PA, led by Alan A. Meda, serves as the Debtor's counsel; and Steven Stein as its accountant. NSC WHOLESALE: Has Until May 22 to Exclusively File Chapter 11 Plan ------------------------------------------------------------------- Judge Kevin Carey of the U.S. Bankruptcy Court for the District of Delaware extended the period during which NSC Wholesale Holdings, LLC and its affiliates have the exclusive right to file a Chapter 11 plan through May 22, and to solicit acceptances for the plan through July 22. About NSC Wholesale NSC Wholesale Holdings and its subsidiaries -- https://www.nwlshop.com/ -- own and operate a chain of 11 general merchandise close-out stores located in four states: Massachusetts, New Jersey, New York and Pennsylvania. The Stores, which operate under the name "National Wholesale Liquidators," are targeted to lower and lower/middle income customers in densely populated urban and suburban markets. At October 2018, the Company had 695 employees, 629 of whom are employed on a full time basis and 66 of whom are employed part time. On Oct. 24, 2018, NSC Wholesale and six of its subsidiaries filed for Chapter 11 bankruptcy (Bankr. D. Del. Lead Case No. 18-12394). In the petition signed by CEO Scott Rosen, the Debtors estimated assets and liabilities at $10 million to $50 million. Hon. Kevin J. Carey oversees the cases. The Debtors tapped Saul Ewing Arnstein & Lehr LLP as bankruptcy counsel; Getzler Henrich & Associates LLC and SSG Advisors LLC as financial advisor and investment banker; and Omni Management Group Inc. as claims & noticing agent. OKLAHOMA PROCURE: Has Until July 15 to Exclusively File Plan ------------------------------------------------------------ U.S. Bankruptcy Judge Mary F. Walrath extended the period during which Oklahoma ProCure Management, LLC has the exclusive right to file a Chapter 11 plan through July 15, and to solicit acceptances for the plan through Sept. 15. About Oklahoma ProCure Management Oklahoma ProCure Management, LLC -- https://www.procure.com/ -- operates the ProCure Proton Therapy Center in Oklahoma City that utilizes proton therapy for treatment of cancer. Oklahoma ProCure sought bankruptcy protection (Bankr. D. Del. Case No. 18-12622) on Nov. 15, 2018. In the petition signed by James J. Loughlin, Jr., VP/assistant treasurer, the Debtor estimated assets of $10 million to $50 million and liabilities of $100 million to $500 million. Judge Mary F. Walrath presides over the case. The Debtor tapped Gregory W. Werkheiser, Esq., of Morris, Nichols, Arsht & Tunnell LLP, as general counsel; and JND Corporate Restructuring as its claims and noticing agent. Andrew R. Vara, the Acting United States Trustee for Region 3, appointed Deborah Burian as the Patient Care Ombudsman for Oklahoma ProCure Management, LLC. ONE BLUESKY: Case Summary & 9 Unsecured Creditors ------------------------------------------------- Debtor: One BlueSky Investments, LLC P.O. Box 1207 Wake Forest, NC 27588-0506 Business Description: One BlueSky Investments is a privately held company that is engaged in activities related to real estate. Chapter 11 Petition Date: April 1, 2019 Court: United States Bankruptcy Court Eastern District of North Carolina (Raleigh Division) Case No.: 19-01439 Judge: Hon. Stephani W. Humrickhouse Debtor's Counsel: J.M. Cook, Esq. J.M. COOK, P.A. 5886 Faringdon Place, Suite 100 Raleigh, NC 27609 Tel: 919 675-2411 Email: J.M.Cook@jmcookesq.com Estimated Assets: $1 million to $10 million Estimated Liabilities: $500,000 to $1 million The petition was signed by Sainte Deon Robinson, managing member. A full-text copy of the petition containing, among other items, a list of the Debtor's nine unsecured creditors is available for free at: http://bankrupt.com/misc/nceb19-01439.pdf OPTICAL HOLDINGS: Exclusive Filing Period Extended to May 24 ------------------------------------------------------------ U.S. Bankruptcy Judge Stacey Meisel extended the period during which Optical Holdings of Puerto Rico, LLC and OHI of Puerto Rico, LLC have the exclusive right to file a Chapter 11 plan through May 24, and to solicit acceptances for the plan through July 22. About Optical Holdings of Puerto Rico Optical Holdings of Puerto Rico, LLC, owns health and personal care stores. OHI of Puerto Rico, LLC is an eyewear supplier in Springfield, New Jersey. Optical Holdings and OHI sought protection under Chapter 11 of the Bankruptcy Code (Bankr. D.N.J. Case Nos. 18-29070 and 18-29071) on Sept. 25, 2018. At the time of the filing, Optical Holdings estimated assets of less than $50,000 and liabilities of $1 million to $10 million. OHI estimated assets of less than $1 million and liabilities of $1 million to $10 million. Judge Stacey L. Meisel presides over the cases. The Debtors tapped Greenberg Traurig LLP as their legal counsel. ORGANIC POWER: Voluntary Chapter 11 Case Summary ------------------------------------------------ Debtor: Organic Power LLC 267 Sierra Morena Street PM 632 San Juan, PR 00926 Business Description: Organic Power LLC -- https://prrenewables.com -- is a supplier of renewable energy and a provider of environmentally sustainable food waste recycling services based in Puerto Rico. Organic Power offers food processing companies, restaurants, pharmaceuticals and retail outlets an alternative to landfill disposal; a low cost & environmentally friendly recycling option. Chapter 11 Petition Date: April 1, 2019 Court: United States Bankruptcy Court District of Puerto Rico (Old San Juan) Case No.: 19-01789 Debtor's Counsel: Aimee I. Lopez Pabon, Esq. GODREAU & GONZALEZ, LLC PO BOX 9024176 San Juan, PR 00902 Tel: 787-726-0077 Email: al@g-glawpr.com Estimated Assets: $10 million to $50 million Estimated Liabilities: $10 million to $50 million The petition was signed by Miguel E. Perez, president. The Debtor failed to include in the petition a list of its 20 largest unsecured creditors. A full-text copy of the petition is available for free at: http://bankrupt.com/misc/prb19-01789.pdf PACKERS HOLDINGS: Fitch Alters Outlook on 'B-' LT IDR to Positive ----------------------------------------------------------------- Fitch Ratings has affirmed Packers Holdings, LLC's (PKR) Long-Term Issuer Default Rating (IDR) at 'B-'. Fitch has also affirmed the long- term ratings on the company's senior 1st lien secured term loan and revolver at 'B+'/'RR1'. The Rating Outlook has been revised to Positive from Stable. PKR's Long-Term IDR is supported by its strong cash flow generation, leading market position as the largest contract sanitation company serving the food processing industry in North America, and the high degree of regulation within the markets in which it operates. The rating is further supported by the company's consistent and expanding profit margins and long-held, blue-chip customer relationships. These positive factors are offset by PKR's customer concentration, and the company's elevated leverage and aggressive financial policy. KEY RATING DRIVERS The Outlook revision to Positive from Stable reflects PKR's improved credit metrics and margins since year-end 2017, as well as the company's strong execution since that time. These trends, combined with the company's market position, stable cash flow generation, and operating profile, could result in an upgrade if they are sustained. Fitch recognizes the risk that PKR's private equity ownership could potentially drive aggressive shareholder activities over the medium-to-long term; however, this scenario is not part of Fitch's base case for the company. Customer concentration will likely remain a concern over the next few years, although expansion into new end-markets could broaden the company's exposure over time. Strong Market Position: As the largest contract sanitation company for the food-processing industry in North America, PKR has a limited set of competitors that can fully service large plants or quickly relocate resources to address customer needs. The industrial food preparation segment is highly fragmented across the U.S. and Canada with a large concentration of closely held regional players; however, PKR is nearly three times the size (by location) of its closest competitor, The Vincent Group-QSI. Bolt-on Acquisitions Likely: Despite being the largest firm in the industry, PKR believes there is ample greenfield opportunity through further penetration into additional plants of existing customers or through acquisition, as the firm has completed several acquisitions in the past five years, typically with a size of roughly $10 million to $30 million. Fitch expects this will remain part of PKR's overall strategy over the next several years, particularly as the company aims to expand in geographies and end-markets where it is currently less exposed. Strong Profitability, FCF: Fitch considers PKR's stable margins, growing revenue base, and strong FCF to be more commensurate with a higher rating than 'B-'. The company has generated positive FCF over the last several years, and Fitch expects this to continue through 2021. The company has implemented and executed on several cost cutting initiatives over the past two to three years, particularly in regards to training and employee retention. Fitch expects these initiatives will result in EBITDA margins remaining steady over the rating horizon. Necessity of Service: Fitch also believes the company's rating is supported by its clear position within the market. All U.S. protein plants are USDA-inspected daily prior to opening. Protein plants must pass these daily inspections or be subject to fines, citations and production delays with costs running in the tens of thousands of dollars per hour. In addition, non-protein plants are regularly reviewed by the FDA with end-customers such as Walmart, McDonalds and Subway driving higher sanitation standards. Fitch believes such standards and regulations are increasing, further strengthening PKR's position and expanding the available opportunities for the company. Fitch assess PKR's function as mission-critical for its customers such as JBS or Cargill as opposed to other plant production costs that may be delayed such as maintenance or capex for machinery. Sanitation usually represents less than 5% of a customer's plant's cost structure. Positive Industry Trends: PKR's credit risk is somewhat reduced by several current broad markets trends that are likely to continue over the medium-term. Fitch notes that as the grocery segment continues to see pricing pressure from online retailers, both protein and non-protein producers will seek to further streamline production by outsourcing additional functions such as human resources and sanitation. Fitch believes that human resources is a core competency of PKR as the company has over 16,000 full-time employees, no union representation and employee turnover that is below industry average. An additional source of demand is the increased regulatory complexity across various food categories coupled with increasingly unannounced FDA audits. Finally, PKR notes that the growing presence of automation in the food processing arena has in many cases led to increased demand for sanitation services as a growing number of mechanical components need to be disassembled, sanitized and reassembled by its trained staff. Customer Concentration: Fitch considers PKR's customer concentration to be one of its more material concerns. Fitch estimates the company's top five customers comprise approximately half of the company's revenue. The loss of any of these top customers would significantly impact the company's financial performance and subsequently its credit profile. PKR's strong market position offsets some of Fitch's concerns, while the concentration is also somewhat mitigated by the fact that these relationship are spread out across dozens of unique plants that have discrete plant managers, each responsible for plant performance and regulatory compliance, who decide to employ PKR's services. Additionally, contracts are typically negotiated on a plant-by-plant basis, rather than on a corporate level, though corporate relationships can impact broader wins, renewals, and losses. They typically have very high renewal rates, which Fitch expects to be above 95% on average. Elevated Leverage: Fitch considers PKR's leverage (lease-adjusted debt/EBITDAR) to be another significant factor when considering the company's rating. PKR's metrics are generally in line with other companies at a similar 'B-' rating. Fitch expects leverage to remain elevated around or above 6.0x over the next few years; however, the company would exceed Fitch's expectations if there were any material voluntary debt repayments, or if the required repayments from the term loan's excess cash flow sweep were in excess of $50 million in aggregate through 2020. The agency does not forecast the company making any material voluntary debt prepayments. Fitch cites that the company's consistent profitability, long-standing customer relationships and mission-critical nature as mitigants to elevated leverage. DERIVATION SUMMARY PKR compares favorably to its (industry) peers in terms of cash flow generation, strategy and profitability. In particular, Fitch considers the company's FCF margins and stable margins to be exceptional compared to similar-rated companies. Fitch also considers PKR to be differentiated from its other 'B-' rated peers due to its strong market position within its segment. Many other companies in the 'B' category operate in highly fragmented markets with minimal competitive advantage. The company's rating is somewhat limited due to its leverage, which is high, but relatively in line with similarly rated companies. There are no parent subsidiary, country ceiling, or operating environment influences or constraints on this rating. KEY ASSUMPTIONS Fitch's Key Assumptions Within Its Rating Case for the Issuer -- Cash deployment is directed toward re-investment in the company or modest debt reduction over the rating horizon, with no material cash used for leveraging transactions such as a dividend recapitalization; -- Fiscal 2018 results are largely consistent with the company's preliminary 2018 results; -- Low double-digit revenue growth in 2019, partially driven by a small acquisition the company completed around the start of the year, coupled with mid-single digit organic growth; -- Low-to-mid single digit organic growth in 2020 and 2021, coupled with modest bolt-on acquisitions; -- Acquisitions of between $20 million and $30 million per year from 2019 to 2021; -- EBITDA margins stable throughout forecast with increased marketing and corporate expenses offset by effects of improved employee training, employee retention and cost savings initiatives; -- Minimal capex of less than 1% of total revenue; -- Company reinstitutes a small common dividend over the next one to two years; -- Other investing and financing cash costs relating to recapitalization and transaction costs. Recovery Analysis The recovery analysis assumes Packers Holdings would be reorganized rather than liquidated, and would be considered on a going concern (GC). Fitch has assumed a 10% administrative claim in the recovery analysis. In Fitch's recovery analysis, potential default is assumed to come from a combination of one or more of the following: a prolonged economic downturn leads to one or more major customers to close a significant number of facilities; customers shifting to insource a high percentage of currently outsourced contracts; or loss of more than one of the company's major customers. Fitch's recovery assumptions reflects the equivalent of PKR losing one of its top two customers along with at least one of its remaining top five customers, resulting in a revenue and EBITDA decline of approximately 25% compared to Fitch's rating case, while margins also decline modestly. Fitch expects the EV multiple used in Packers' recovery analysis will be approximately 6.5x. Fitch believes the company's business profile and market position are strong, despite the highly leveraged capital structure. PKR has consistently generated positive FCF and stable margins, while growing organically. Fitch's EV multiple also considers the approximately 13x transaction multiple when Leonard Green (sponsor) purchased Packers in 2014. The $50 million senior first lien secured revolving credit facility is assumed to be fully drawn upon default. The revolver and senior first lien secured term loan are senior to the senior unsecured notes in the waterfall. The waterfall results in a recovery between 71% and 90% for the senior first lien revolver and term loan, corresponding to a Recovery Rating of 'RR2'. RATING SENSITIVITIES Developments That May, Individually or Collectively, Lead to Positive Rating Action -- Lease adjusted leverage (adjusted debt/EBITDAR) below 6.5x for a sustained period; -- FFO Adjusted leverage below 6.5x for a sustained period; -- FFO Fixed Charge Coverage above 2.5x for a sustained period; -- Shift to a consistently conservative financial policy. Developments That May, Individually or Collectively, Lead to Negative Rating Action -- Lease adjusted leverage consistently above 7.5x; -- Multiple consecutive periods of negative FCF; -- FFO Fixed Charge Coverage sustained below 1.5x; -- Loss of a major customer. LIQUIDITY Adequate Liquidity: PKR had adequate liquidity at the end of 2018, comprised of cash on the balance sheet coupled with revolver availability. The company has a relatively nimble operating structure and minimal annual maintenance capital expenditures. Its liquidity is also supported by the company's positive FCF generation, which Fitch expects to continue over the rating horizon. Fitch does not consider any of the company's cash to be restricted, and it does not believe the company requires a material cash balance to sustain operations given its nimble operating structure and minimal fixed costs. The company's debt structure as of January 1, 2018 consists of a $50 million revolving credit facility, $600 million senior 1st lien term loan B, and $275 million of senior unsecured notes. The TLB amortizes at 1% per year and matures in 2024, and the notes are due in 2025. Fitch considers the company's capital structure and maturity schedule to be favorable. FULL LIST OF RATING ACTIONS Packers Holdings, LLC - Long-Term Issuer Default Rating (IDR) at 'B-'; - Senior 1st Lien Secured Revolver at 'B+'/'RR2'; - Senior 1st Lien Secured Term Loan at 'B+'/'RR2'; The Rating Outlook is Positive. PANAGIOTIS NASSIOS: $380K Sale of Holliston Property to Faria OK'd ------------------------------------------------------------------ The U.S. Bankruptcy Court for the District of Massachusetts authorized Panagiotis C. Nassios' private sale of the real property located at 208 Prospect Street, Holliston, Massachusetts, to Faria Realty Trust for $380,000, cash, subject to sale leaseback. There have been no objections filed or higher and better offers submitted. The Court cancelled the hearing on the Motion set for March 26, 2019. The sale is free and clear of all liens, claims and encumbrances. Any perfected, enforceable valid liens will attach to the proceeds of the sale. Panagiotis C. Nassios sought Chapter 11 protection (Bankr. D. Mass. Case No. 18-42302) on Dec. 14, 2018. The Debtor tapped Michael Van Dam, Esq., at Van Dam Law LLP, as counsel. PARIS MANAGEMENT: First Security Objects to Plan Confirmation ------------------------------------------------------------- First Security Bank objects to confirmation of the Chapter 11 Plan filed by Paris Management, LLC. The Creditor complains that despite the Debtor's statement that Bank is fully secured, the treatment provided to Bank's claim in Class 2 leaves it impaired inasmuch as the proposed treatment does not (a) address Bank's entitlement to fees, costs or charges provided for in the Note and Deed of Trust which are allowable under Section 506(b) of the Bankruptcy Code; or (b) the retention by Bank of its liens securing the obligations under the Note and Deed of Trust. The Creditor points out that the Plan alters Lender's "legal, equitable, [or] contractual rights" and the Bank is impaired unless the Plan proposes to provide for the Bank's retention of its lien and to pay Bank's fees, costs and charges provided for in the Note and Deed of Trust. The Creditor further points out that the Plan does not provide that Bank will retain its lien on the Property. According to Creditor, the Disclosure Statement provides no analysis or historical operating results for the Debtor's business and Bank cannot determine whether the Projections are realistic or whether the Plan is feasible. The Creditor asserts that the Plan does to specify the length of the payments to be provided raising an ambiguity as to whether the Plan proposes only to make payments for a period of 24 months or whether the payments will continue to be made until the allowed claims are paid in full. The Creditor further complains that the Disclosure Statement provides no analysis or historical operating results for the Debtor's business. The Creditor points out that the Disclosure Statement provides no postpetition operating results from which creditors can determine whether the two (2) years’ worth of Projections provided are realistic. Attorneys for First Security Bank: James E. Bailey III, Esq. 6075 Poplar Avenue, Suite 500 Memphis, TN 38119 Tel: (901) 680-7347 Fax: (901) 680-7201 Email: jeb.bailey@butlersnow.com About Paris Management Paris Management, LLC, is a Mississippi limited liability company doing business in Shelby County, Tennessee. All of its assets are located in Shelby County, Tennessee. Paris Management sought protection under Chapter 11 of the Bankruptcy Code (Bankr. W.D. Tenn. Case No. 19-20957) on Feb. 1, 2019. The case is assigned to Judge Paulette J. Delk. John Dunlap, Esq., from Memphis, Tennessee, is serving as the Debtor's counsel. No official committee of unsecured creditors has been appointed in the Chapter 11 case of Paris Management, LLC as of March 15, according to a court docket. PEM FAMILY LIMITED: U.S. Trustee Unable to Appoint Committee ------------------------------------------------------------ No official committee of unsecured creditors has been appointed in the Chapter 11 cases of The PEM Family Limited Partnership I and its affiliated debtors as of April 2, according to a court docket. About PEM Family Limited Boca Raton, Fla.-based PEM Family Limited Partnership I and its affiliates filed voluntary Chapter 11 petitions (Bankr. S.D. Fla. Lead Case No. 19-12916) on March 5, 2019. In the petitions signed by Philip E. Morgaman, trustee for PEM Family's general partner, PEM LLC, the Debtors each declared $1 million to $10 million in assets and $500,000 to $1 million in liabilities. The case has been assigned to Judge Mindy A. Mora. Craig A. Pugatch, Esq., at Rice Pugatch Robinson Storfer & Cohen, PLLC, is the Debtors' legal counsel. PHYLLIS HANEY: $167K Sale of Beaver Properties Denied w/o Prejudice ------------------------------------------------------------------- Judge Thomas P. Agresti of the U.S. Bankruptcy Court for the Western District of Pennsylvania denied without prejudice Frye Transportation Group, Inc.'s purchase of Debtor Phyllis J. Haney's two real properties: (i) known as 902 Western Avenue, Beaver, Pennsylvania, Tax Parcel No. 55-032-0100.001 for $102,000; and (ii) known as 1405 8th Avenue, Beaver, Pennsylvania, Tax Parcel No. 55-032-0101.000, pursuant to their commercial lease/option agreement, dated June 16, 2017, for $65,000. On March 28, 2019, the Debtor will file a Sale Motion as to the proposed sale of the Properties to Fyre. Phyllis J. Haney sought chapter 11 protection (Bankr. W.D. Pa. Case No. 18-22636) on June 29, 2018. The Debtor tapped Robert O Lampl, Esq. , at Robert O Lampl Law Office, as counsel. PINEY WOODS: 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. ------ -------- Piney Woods Resources, Inc. (Lead Case) 19-01390 1615 Kent Dairy Road Alabaster, AL 35007 Jesse Creek Mining, LLC 19-01394 1615 Kent Dairy Road Alabaster, AL 35007 Business Description: Piney Woods and Jesse Creek are engaged in the production and sale of metallurgical grade coal from a mining complex located in Shelby County, Alabama. Debtor Piney Woods is the parent company of Jesse Creek. The Jesse Creek mining complex consists of a surface and highwall mining operation, a preparation plant, and an underground mine development project. Mining and development operations were idled on March 27, 2019. Chapter 11 Petition Date: April 2, 2019 Court: United States Bankruptcy Court Northern District of Alabama (Birmingham) Judge: Hon. D. Sims Crawford Debtors' Counsel: Lee R. Benton, Esq. Samuel C. Stephens, Esq. BENTON & CENTENO, LLP 2019 Third Avenue North Birmingham, Alabama 35203 Tel: (205) 278-8000 Email: lbenton@bcattys.com sstephens@bcattys.com – and – Mary Elisabeth Naumann, Esq. Chacey R. Malhouitre, Esq. JACKSON KELLY PLLC 175 E. Main Street, Ste. 500 Lexington, KY 40507 Tel: (859) 255-9500 Email: mnaumann@jacksonkelly.com chacey.malhouitre@jacksonkelly. Piney Woods' Estimated Assets: $100 million to $500 million Piney Woods' Estimated Liabilities: $100 million to $500 million Jesse Creek's Estimated Assets: $100 million to $500 million Jesse Creek's Estimated Liabilities: $100 million to $500 million The petitions were signed by B. Scott Spears, CEO. Full-text copies of the petitions are available for free at: http://bankrupt.com/misc/alnb19-01390.pdf http://bankrupt.com/misc/alnb19-01394.pdf A. List of Piney Woods' 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ 1. Calera Industrial Supply $101,628 9300 Hwy 25 S Calera, AL 35040 2. Drummond Coal Sales, Inc. $207,182 P.O. Box 10246 Birmingham, AL 35202 3. Dunn Construction $105,863 P.O. Box 11967 Birmingham, AL 35202 4. Dyno Nobel $150,134 Dept. 2643 P.O. Box 122643 Dallas, TX 75312-2643 5. GMS Mine Repair & Maintenance $720,411 P.O. Box 2446 32 Enterprise Drive Oakland, MD 21550 6. Jamas Technology, Inc. $137,388 1070 Williams Trace Birmingham, AL 35242 7. Jennmar $132,813 860 North Sandcut Rd Earlington, KY 42410 8. Jones Machine & Welding $114,193 P.O. Box 264 Oakman, AL 35579 9. Joy Global Underground Mining, LLC $515,224 P.O. Box 504794 St. Louis, MO 63150-4794 10. Macquarie Corporate and Asset Funding $335,249 125 W 55th Street Level 22 New York, NY 10019 11. McPherson Oil $704,693 5051 Cardinal Street Trussville, AL 35173 12. National Armature & Machine $126,662 P.O. Box 655 Holden, WV 25625 13. Portfolio Advisors VIII, LLC $148,195 2935 Country Drive, Suite 102 Little Canada, MN 55117 14. Refab Co., Inc. $175,220 P.O. Box 437 Stollings, WV 25646 15. Tabor Machinery $96,040 1176 Shelter Road Princeton, WV 24739 16. Thompson Tractor Co., Inc. $586,843 PO Box 934005 Atlanta, GA 31193-4005 17. Tractor & Equipment Company $611,283 5336 Airport Hwy Birmingham, AL 35212 18. Triangle Construction, Inc. $263,248 P.O. Box 5 Cordova, AL 35550 19. USA Ready Mix, LLC $107,022 P.O. Box 730197 Dallas, TX 75373-0197 20. Warrior Tractor & Equipment $352,639 2149 Hwy 31 S Pelham, AL 35124 B. List of Jesse Creek's 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ 1. Calera Industrial Supply $101,628 9300 Hwy 25 S Calera, AL 35040 2. Drummond Coal Sales, Inc. $207,182 P.O. Box 10246 Birmingham, AL 35202 3. Dunn Construction $105,863 P.O. Box 11967 Birmingham, AL 35202 4. Dyno Nobel $150,134 Dept. 2643 P.O. Box 122643 Dallas, TX 75312-2643 5. GMS Mine Repair & Maintenance $720,411 P.O. Box 2446 32 Enterprise Drive Oakland, MD 21550 6. Jamas Technology, Inc. $137,388 1070 Williams Trace Birmingham, AL 35242 7. Jennmar $132,813 860 North Sandcut Rd Earlington, KY 42410 8. Jones Machine & Welding $114,193 P.O. Box 264 Oakman, AL 35579 9. Joy Global Underground Mining, LLC $515,224 P.O. box 504794 St. Louis, MO 63150-4794 10. Macquarie Corporate and Asset Funding $335,249 125 W 55th Street Level 22 New York, NY 10019 11. McPherson Oil $704,693 5051 Cardinal Street Trussville, AL 35173 12. National Armature & Machine $126,662 P.O. Box 655 Holden, WV 25625 13. Portfolio Advisors VIII, LLC $148,195 2935 Country Drive Suite 102 Little Canada, MN 55117 14. Refab Co, Inc. $175,220 P.O. Box 437 Stollings, WV 25646 15. Tabor Machinery $96,040 1176 Shelter Road Princeton, WV 24739 16. Thompson Tractor Co., Inc. $586,843 PO Box 934005 Atlanta, GA 31193-4005 17. Tractor & Equipment Company $611,283 5336 Airport Hwy Birmingham, AL 35212 18. Triangle Construction, Inc. $263,248 P.O. Box 5 Cordova, AL 35550 19. USA Ready Mix, LLC $107,022 P.O. Box 730197 Dallas, TX 75373-0197 20. Warrior Tractor & Equipment $352,639 2149 Hwy 31 S Pelham, AL 35124 PRAGAT PURSHOTTAM: Substantial Consummation Date Moved to May 2024 ------------------------------------------------------------------ Pragat Purshottam, Inc., filed an amended Chapter 11 Plan and accompanying disclosure statement to amend the time by which the Plan is expected to be substantially consummated. The date has been moved to May 2024 instead of March 2024 as indicated in the previously filed plan. Class 4 Claims: General Unsecured Non-Priority Claims (excluding Class 1, 2 and 3 Claims and the claims of holders of assumed Executory Contracts and Unexpired Leases) shall be classified in separate sub-paragraphs as Class 4A and Class 4B. Each sub-class for each of the two holders shall constitute a separate class for the purpose of voting rights and treatment of its respective claims, notwithstanding being aggregated herein for the sake of convenience. Payments to Class 4A and Class 4B shall be made in pari passu with one another and will be paid pro rata with other claims within each sub class derived from the internal cash flow generated by the Reorganized Debtor from the continued operations of its Church. Class 4A and 4B claims shall be paid, pro rata, from the cash flow in four annual payments starting six months following the Effective Date and continuing quarterly until the later of the fifth annual anniversary of the Effective Date. Class 1 Claims: Class 1 Secured Mortgage Claim of Phoenix REO, LLC (Phoenix). Phoenix is the holder of a mortgage on the Debtor’s commercial shopping center real property. Phoenix has not filed a claim. The claim of Phoenix is scheduled by the Debtor on Schedule D of the Petition in the amount of $1,527,814.25. The secured portion shall be fixed at the fair market value as per the appraised value of $350,000.00. This secured claim portion shall be treated as secured and be paid based upon a 20-year amortization, at 5.5% per annum with a balloon payment of then due balance to be made five (5) years after the date of confirmation. The payments of principal and interest would be $2407.61 per month. At the end of 60 months when the balloon payment is due the principal balance due would be $294,658.47. Class 2 Claims: The secured claim of the DuPage County Treasurer. Property taxes owed by the Debtor to the DuPage County Treasurer total $70,000.00 and have been sold to a third party. Debtor shall pay the sum of $1945.00 per month for 36 months to a to be established tax escrow account for the purposes of redeeming the property. Class 5: Claims and Equity Interests. Class 5 claims shall consist of the equity security claims and interests in the Debtor, Pragat Purshottam, Inc. Indu Patel is the 100% owner of equity interests in the Debtor. She is the spouse of the manager, Nikunj Patel. Class 5 claims shall be paid 0%. Class 5 claims and interests are impaired under the Plan and may not participate in balloting. Under the terms herein, the equity holder shall contribute $60,557.55 in new capital at the time of confirmation from funds held in escrow for that purpose. She will also waive any other claims against the Debtor, if any. The Plan will be funded with funds realized from the infusion of capital from the equity security holder, Indu Patel as well as the operating income from rental income. The prorate distribution shall be made by the Debtor in Possession after a review of all claims filed. A full-text copy of the Disclosure Statement dated March 28, 2019, is available at http://tinyurl.com/y4h3wzx7from PacerMonitor.com at no charge. About Pragat Purshottam Pragat Purshottam, Inc., is a real estate company that owns a commercial property located at 270-280 Glen Ellyn Road, Bloomingdale, Illinois. The company valued the property at $500,000. Pragat Purshottam sought protection under Chapter 11 of the Bankruptcy Code (Bankr. N.D. Ill. Case No. 18-20221) on July 19, 2018. In the petition signed by Nikunj Patel, manager, the Debtor disclosed $505,578 in assets and $1,559,150 in liabilities. Judge Carol A. Doyle oversees the case. PRESCRIPTION ADVISORY: Exclusive Filing Period Extended to July 11 ------------------------------------------------------------------ Judge Brendan Shannon of the U.S. Bankruptcy Court for the District of Delaware extended the period during which Prescription Advisory Systems & Technology, Inc. has the exclusive right to file a Chapter 11 plan through July 11, and to solicit acceptances for the plan through Sept. 9. About Prescription Advisory Prescription Advisory Systems & Technology, Inc. -- https://pastrx.com/ -- is a privately held company that developed a prescription software to deal with prescription overdose epidemic. The Company's product PASTRx is a software that helps doctors treat patients with chronic pain and reduce the abuse of controlled substances. Benefits of PastRx include valuable medical information at a glance, ability to drill down for more detail, automatic checks for many patient risks, reduction in clerical work, and records of compliance. The company was incorporated in 2013 and is based in Jenkintown, Pennsylvania. Prescription Advisory Systems & Technology, Inc. sought bankruptcy protection on November 13, 2018 (Bankr. D. Del. Lead Case No. Case No. 18-12601). In the petition signed by Richard G. Bunker, Jr., CEO, the Debtor estimated assets of $0 to $50,000 and liabilities of $1 million to $10 million. The Debtor tapped Bielli & Klauder, LLC as general counsel. REIGN SAPPHIRE: Incurs $2.6 Million Net Loss in 2018 ---------------------------------------------------- Reign Sapphire Corporation has filed with the Securities and Exchange Commission its Annual Report on Form 10-K reporting a net loss of $2.62 million on $28,348 of net revenues for the year ended Dec. 31, 2018, compared to a net loss of $4.25 million on $38,434 of net revenues for the year ended Dec. 31, 2017. As of Dec. 31, 2018, Reign Sapphire had $862,049 in total assets, $4.57 million in total liabilities, and a total shareholders' deficit of $3.71 million. Overall, the Company had a decrease in cash flows for the year ended Dec. 31, 2018 of $2,095 resulting from cash used in operating activities of $286,112, and cash used in investing activities of $8,452, offset partially by cash provided by financing activities of $292,469. For the year ended Dec. 31, 2018, net cash used in operations was $286,112 compared to net cash used in operations of $400,003 for the year ended Dec. 31, 2017. Net cash used in operations was primarily due to a net loss of $2,620,274 for year ended Dec. 31, 2018, and the change in derivative liabilities of $530,838, offset primarily by stock based compensation - related party of $2,390, stock based compensation issued to employees of $7,742, the estimated fair market value of stock issued for services of $230,521, depreciation expense of $12,698, amortization expense of $234,688, accretion of debt discount of $340,216, the loss on extinguishment of debt of $535,039, the amortization of stock issued for future services of $13,750, the impairment of long-term assets of $942,736, and the changes in operating assets and liabilities of $545,220, primarily due to the increase in accrued compensation - related party of $203,750, due to related party of $525,371, prepaid expenses of $1,336, accounts receivable of $7,634, inventory of $2,545, and other current liabilities of $11,799, offset partially by the estimated fair value of contingent payments, net of $8,932, accounts payable of $138,805, and deferred revenue of $59,478. For the year ended Dec. 31, 2018, net cash used in investing was $8,452 compared to net cash used in investing of $79,068 for the year ended Dec. 31, 2017. Net cash used in investing activities was mainly due to purchases of equipment and the acquisition of intangible assets. For the year ended Dec. 31, 2018, net cash provided by financing was $292,469 compared to net cash provided by financing of $339,056 for the year ended Dec. 31, 2017. The net cash provided by financing activities in 2018 was primarily due to proceeds from short-term convertible notes of $250,000, proceeds from short-term notes of $155,020, and repayments of short-term notes of $112,551. The net cash provided by financing activities in 2017 was primarily due to proceeds from short-term convertible notes of $250,005, proceeds from short-term notes of $149,504, and repayments of short-term notes of $60,453. Reign Sapphire said "We expect that our current working capital position, together with our expected future cash flows from operations will be insufficient to fund our operations in the ordinary course of business, anticipated capital expenditures, debt payment requirements and other contractual obligations for at least the next twelve months. However, this belief is based upon many assumptions and is subject to numerous risks, and there can be no assurance that we will not require additional funding in the future. "We have no present agreements or commitments with respect to any material acquisitions of other businesses, products, product rights or technologies or any other material capital expenditures. However, we will continue to evaluate acquisitions of and/or investments in products, technologies, capital equipment or improvements or companies that complement our business and may make such acquisitions and/or investments in the future. Accordingly, we may need to obtain additional sources of capital in the future to finance any such acquisitions and/or investments. We may not be able to obtain such financing on commercially reasonable terms, if at all. Due to the ongoing global economic crisis, we believe it may be difficult to obtain additional financing if needed. Even if we are able to obtain additional financing, it may contain undue restrictions on our operations, in the case of debt financing, or cause substantial dilution for our shareholders, in the case of equity financing." Benjamin & Young, LLP, in Anaheim, California, issued a "going concern" qualification in its report dated April 1, 2019, on the Company's consolidated financial statements for the year ended Dec. 31, 2018, citing that the Company has suffered losses from operations and cash outflows from operating activities that raise substantial doubt about its ability to continue as a going concern. The Company's report on Form 10-K is available from the SEC's website at https://is.gd/XLsEDw. About Reign Sapphire Reign Sapphire Corporation is a Beverly Hills-based, direct-to-consumer, branded and custom jewelry company with four niche brands: Reign Sapphires: ethically produced, millennial targeted sapphire jewelry, Coordinates Collection: custom jewelry, inscribed with location coordinates commemorating life's special moments, Le Bloc: classic customized jewelry and ION Collection by Jen Selter an athleisure jewelry brand. ROBERT SIMMONS: Case Summary & 14 Unsecured Creditors ----------------------------------------------------- Debtor: Robert Simmons, Jr., DDS, PC dba Hinesville Smiles P.O. Box 726 Hinesville, GA 31310 Business Description: Robert Simmons, Jr., DDS, PC owns and operates a dental clinic in Hinesville, Georgia. It offers an array of dental services, including preventive dentistry, children's dentistry, cosmetic dentistry, and restorative dentistry. Chapter 11 Petition Date: April 1, 2019 Court: United States Bankruptcy Court Southern District of Georgia (Savannah) Case No.: 19-40478 Judge: Hon. Edward J. Coleman III Debtor's Counsel: J. Michael Hall, Esq. HALL & NAVARRO, LLC 5 Oak Street Statesboro, GA 30458 Tel: (912) 764-6757 Fax: (912) 764-6756 Email: mhall@hlg-pc.com mhall@hallnavarro.com Total Assets: $547,343 Total Liabilities: $2,201,109 The petition was signed by Robert Simmons, Jr., CEO. A full-text copy of the petition containing, among other items, a list of the Debtor's 14 unsecured creditors is available for free at: http://bankrupt.com/misc/gasb19-40478.pdf ROCK SPRINGS: Exclusive Filing Period Extended Until June 27 ------------------------------------------------------------ The U.S. Bankruptcy Court for the Western District of Texas extended the period during which Rock Springs Energy Group, LLC has the exclusive right to file a Chapter 11 plan of reorganization. In its order, the bankruptcy court extended the exclusive filing period to June 27 on the condition that such period may be shortened or terminated upon motion by any party for good cause. The company needs additional time within which to file a plan until the exact amount of claim asserted by its secured creditor BH, Inc. is determined, according to court filings. About Rock Springs Energy Group Rock Springs Energy Group, LLC, operates a crude oil distillation and storage tank facility in Rock Springs, Wyoming. The Company was formed for the purpose of constructing modular technology systems at key locations to convert readily available feeds into high quality and highly marketable products. Its Wyoming Facility project is designed to process up to 5,000 barrels per day of sweet crude oil, condensate and related feeds available in Utah, Wyoming and Colorado. The feeds are to be processed primarily into paint solvents, marine diesel, and paraffinic oils. Rock Springs Energy Group filed a Chapter 11 petition (Bankr. W.D. Tex. Case No. 18-52772) on Nov. 28, 2018. In the petition signed by Alberto Schroeder, manager, the Debtor estimated $10 million to $50 million in assets and liabilities. The Hon. Ronald B. King oversees the case. The Vasquez Law Firm is counsel to the Debtor. ROCK SPRINGS: Exclusive Filing Period Extended Until June 27 ------------------------------------------------------------ The U.S. Bankruptcy Court for the Western District of Texas extended the period during which Rock Springs Energy Group, LLC has the exclusive right to file a Chapter 11 plan of reorganization. In its order, the bankruptcy court extended the exclusive filing period to June 27 on the condition that such period may be shortened or terminated upon motion by any party for good cause. The company needs additional time within which to file a plan until the exact amount of claim asserted by its secured creditor BH, Inc. is determined, according to court filings. About Rock Springs Energy Group Rock Springs Energy Group, LLC, operates a crude oil distillation and storage tank facility in Rock Springs, Wyoming. The Company was formed for the purpose of constructing modular technology systems at key locations to convert readily available feeds into high quality and highly marketable products. Its Wyoming Facility project is designed to process up to 5,000 barrels per day of sweet crude oil, condensate and related feeds available in Utah, Wyoming and Colorado. The feeds are to be processed primarily into paint solvents, marine diesel, and paraffinic oils. Rock Springs Energy Group filed a Chapter 11 petition (Bankr. W.D. Tex. Case No. 18-52772) on Nov. 28, 2018. In the petition signed by Alberto Schroeder, manager, the Debtor estimated $10 million to $50 million in assets and liabilities. The Hon. Ronald B. King oversees the case. The Vasquez Law Firm is counsel to the Debtor. ROCKIES EXPRESS: Moody's Rates New $550MM Sr. Unsec. Notes 'Ba1' ---------------------------------------------------------------- Moody's Investors Service assigned a Ba1 rating to Rockies Express Pipeline LLC's (REX) proposed $550 million senior unsecured notes due 2029. REX's other ratings, including its Ba1 Corporate Family Rating (CFR), Ba1-PD Probability of Default Rating (PDR), and stable outlook are unchanged. The Ba1 rating on the existing $1.5 billion senior unsecured notes is also unchanged. The notes are being offered to repay the company's 364-day Term Loan that was issued to refinance its January 2019 notes. Assignments: Issuer: Rockies Express Pipeline LLC Senior Unsecured Notes, Assigned Ba1 (LGD4) RATINGS RATIONALE The proposed unsecured notes, along with REX's existing unsecured notes, are rated Ba1, the same as the company's CFR. The senior unsecured notes are rated at the same level as the CFR because the company's long-term debt, which includes a $150 million revolving credit facility, is all unsecured. REX's Ba1 CFR benefits from its fully contracted east-to-west capacity, and partially contracted post-2019 west-to-east capacity, which will enable REX to maintain its cash flow coverage of its debt burden. Moody's projects REX's debt/EBITDA to fall below 3x by the end of 2019, aided by modestly enhanced cash flows. REX's debt/EBITDA is projected to rise post-2019, due to potentially reduced cash flows from its west-to-east capacity contract expirations, however, this ratio is not likely to rise above 4x. REX's rating is constrained by its customer base and their credit quality. The pipeline's customers are almost entirely comprised of E&P companies, or 'supply-push' customers, that are directly exposed to commodity prices. The credit quality of this customer base-- specifically, the east-to-west customers -- is predominantly speculative-grade rated. REX's stable outlook reflects Moody's expectation that REX will recontract at least a portion of its uncontracted post-2019 west-to-east capacity and its customer credit quality will not weaken materially. REX's ratings could be considered for an upgrade if the company's customer credit quality improves and a significant portion of its west-to-east capacity is re-contracted such that the company's Debt/EBITDA can be sustained below 3.5x. An increase in financial leverage or a meaningful decrease in interest coverage could lead to a ratings downgrade. If Debt/EBITDA approaches 4.5x or significant deterioration in customer credit quality could also result in downgrade. The principal methodology used in this rating was Natural Gas Pipelines published in July 2018. REX owns a 1,712 mile interstate natural gas pipeline system that reaches from the Rocky Mountains area of Wyoming and Colorado to Ohio. It is a key northern bi-directional pipeline with west-to-east natural gas transportation capacity of 2.0 billion cubic feet per day (bcf/d) from Meeker, CO to Cheyenne Hub (Zone 1), 1.8 bcf/d capacity from Cheyenne Hub to Clarington, OH (Zone 2 and Zone 3), and 2.6 bcf/d capacity east-to-west from Clarington, OH to eastern Missouri (Zone 3). ROSSER RESERVE: Town of Windermere Objects to Plan Confirmation --------------------------------------------------------------- The Town of Windermere, Florida, a municipal corporation, objects to confirmation of the Chapter 11 Plan and final approval of the Disclosure Statement filed by Regal Marine Industries, Inc., for Rosser Reserve, LLC. On or about August 13, 2015, Rosser Reserve, LLC, and the Town entered into the Rosser Reserve Development Agreement. The Town points out that Regal Marine's Plan and Disclosure Statement contemplate an auction of each individual lot within the Property. The Town further points out that the Town's preference is for a rebuttable and experienced developer with a proven track record to purchase and complete the entire Project. The Town complains that the Regal Marine's Plan and Disclosure Statement fail to provide for any of the outstanding obligations to the Town under the Agreement and First Amendment to the Agreement. About Rosser Reserve Rosser Reserve is the fee simple owner of nine real properties in Windermere, Florida, valued by the company at $9.83 million. Rosser Reserve, based in Oakland, Florida, filed a Chapter 11 petition (Bankr. M.D. Fla. Case No. 17-07730) on Dec. 12, 2017. In the petition signed by Sue R. Prosser, its managing member, the Debtor disclosed $9.83 million in assets and $8.20 million in liabilities. The Law Offices of L. William Porter III, P.A., serves as bankruptcy counsel to the Debtor. S. Avery Smith, Esq., is the Debtor's special real estate counsel. No official committee of unsecured creditors has been appointed in the Chapter 11 case. SOUTHCROSS ENERGY: Moody's Cuts PDR to D-PD Amid Bankruptcy Filing ------------------------------------------------------------------ Moody's Investors Service downgraded Southcross Energy Partners, L.P.'s Probability of Default Rating (PDR) to D-PD from Ca-PD following the announcement that the company filed a petition for relief under Chapter 11 of the U.S. Bankruptcy Code in the state of Delaware. The company's other ratings were affirmed, including the Caa3 Corporate Family Rating (CFR), Caa3 senior secured term loan rating and SGL-4 Speculative Grade Liquidity (SGL) rating. The rating outlook remains negative. Shortly after the actions, Moody's will withdraw all of Southcross' ratings. Ratings downgraded: Issuer: Southcross Energy Partners, L.P. Probability of Default Rating, Downgraded to D-PD from Ca-PD Ratings Affirmed: Corporate Family Rating, Affirmed Caa3 Senior Secured Term Loan, Affirmed Caa3 (Changed to LGD2 from LGD3) Speculative Grade Liquidity Rating, Affirmed SGL-4 Outlook Actions: Maintain Negative Outlook RATINGS RATIONALE The downgrade of the PDR reflects Southcross' bankruptcy filing on April 1, 2019. The Caa3 CFR and the Caa3 senior secured ratings reflect Moody's view on expected recovery. Southcross is currently in discussions with its lenders and other stakeholders regarding the terms of its anticipated restructuring plan, and is exploring various options which may include a sale of the company, sales of certain assets, or a standalone restructuring plan. Southcross' current lenders have committed to providing $255 million in debtor-in-possession financing (DIP) to support the company's operations during the reorganization. Southcross Energy Partners, LP is a midstream MLP headquartered in Dallas, Texas. SOUTHEASTERN GROCERS: Affiliate Seeks to Extend Exclusivity Period ------------------------------------------------------------------ An affiliate of Southeastern Grocers, LLC filed a motion with the U.S. Bankruptcy Court for the District of Delaware to extend by six months the period during which it has the exclusive right to file a Chapter 11 plan and solicit acceptances for the plan. In the court filing, Winn-Dixie Warehouse Leasing, LLC proposed to extend the exclusive filing period to Sept. 27 and the exclusive solicitation period to Nov. 27. The extension, if granted by the court, would allow the company to seek approval for a deal that would resolve its dispute with CenterPoint Properties Trust concerning their lease contract. CenterPoint is the landlord for Winn-Dixie's distribution center in Miami, Florida. Winn-Dixie said its dispute with the landlord is the only remaining issue in its bankruptcy case. Following approval of the settlement agreement, the company will proceed towards confirmation of its prepackaged Chapter 11 plan. About Southeastern Grocers Southeastern Grocers, LLC, (SEG), the parent company and home of BI-LO, Fresco y Mas, Harveys Supermarket and Winn-Dixie grocery stores, is one of the largest conventional supermarket companies in the U.S. SEG grocery stores, liquor stores and in-store pharmacies serve communities throughout the seven southeastern states of Alabama, Florida, Georgia, Louisiana, Mississippi, North Carolina and South Carolina. BI-LO, Fresco y Mas, Harveys Supermarket and Winn-Dixie are well known and well-respected regional brands with deep heritages, strong neighborhood ties, proud histories of giving back, talented and caring associates and strong commitments to providing the best possible quality and value to customers. Their Web sites are http://www.bi-lo.com/,http://www.frescoymas.com/, http://www.harveyssupermarkets.com/and http://www.winndixie.com/ BI-LO and its affiliates filed for Chapter 11 bankruptcy protection on March 23, 2009 (Bankr. D. S.C. Case No. 09-02140). BI-LO emerged from bankruptcy in May 2010 with Lone Star Funds remaining as majority owner. Winn-Dixie Stores, Inc., sought Chapter 11 protection (Bankr. S.D.N.Y. Case No. 05-11063, transferred April 14, 2005, to Bankr. M.D. Fla. Case Nos. 05-03817 through 05-03840) on Feb. 21, 2005. In December 2011, BI-LO Holdings signed a deal to acquire all of the outstanding shares of Winn-Dixie Stores stock in a merger. Holdings was later renamed Southeastern Grocers. On March 27, 2018, Southeastern Grocers, LLC, and 26 affiliated debtors sought Chapter 11 protection (Bankr. D. Del. Lead Case No. 18-10700). SEG commenced Chapter 11 cases to seek confirmation of a prepackaged chapter 11 plan that will cancel their unsecured notes in exchange for 100% of the equity of the reorganized company. The Debtors have requested joint administration of the cases. The Honorable Mary F. Walrath oversees the cases. Weil, Gotshal & Manges LLP is serving as legal counsel to the Debtors, Evercore is serving as their investment banker, and FTI Consulting Inc. as restructuring advisor. Prime Clerk LLC is the claims and noticing agent and administrative advisor. Morrison & Foerster LLP is serving as legal counsel and Moelis & Company LLC is serving as financial advisor to an ad hoc group of holders of Unsecured Notes and 9.25% Senior Secured Notes due 2019. SPANISH BROADCASTING: Posts $16.5 Million Net Income in 2018 ------------------------------------------------------------ Spanish Broadcasting System, Inc. has filed with the Securities and Exchange Commission its Annual Report on Form 10-K reporting net income of $16.49 million on $142.36 million of net revenue for the year ended Dec. 31, 2018, compared to net income of $19.62 million on $134.70 million of net revenue for the year ended Dec. 31, 2017. The decrease in net income of $3.1 million was primarily due to the reduction of income tax benefit offset by the increase in operating income and the decrease in interest expense, net. Consolidated Adjusted OIBDA, a non-GAAP measure, totaled $50.1 million compared to $36.5 million for the same prior year period, resulting in an increase of $13.6 million or 37%. The Company's radio segment Adjusted OIBDA increased $12.3 million or 29%, primarily due to the increase in net revenue of $6.9 million and a decrease in operating expense of $5.4 million. Radio station operating expenses decreased primarily due to decreases in legal settlements, production and talent costs, and special event expenses offset by increases in commissions and advertising expenses. The Company's television segment Adjusted OIBDA increased $2.3 million, due to the decrease in station operating expenses of $1.5 million and the increase in net revenue of $0.8 million. Television station operating expenses decreased primarily due to decreases in production costs, compensation and benefits, professional fees and facilities expense offset by a decrease in production tax credits and an increase in special events expense. The Company's corporate expenses, excluding non-cash stock-based compensation, increased $1.0 million or 11% primarily due to increases in compensation and benefits and professional fees. Operating income totaled $51.6 million compared to $40.5 million for the same prior year period, representing an increase of $11.1 million or 27%. This increase in operating income was mainly due to the increase in net revenue and decreases in operating expenses and recapitalization costs offset by increases in corporate expenses, an impairment of an FCC broadcasting license and having recognized less gains on the sale of the New York property than were recognized in the prior year for the sale of the Los Angeles facility and spectrum assets. As of Dec. 31, 2018, Spanish Broadcasting had $444.31 million in total assets, $523.69 million in total liabilities, and a total stockholders' deficit of $79.37 million. Crowe LLP, in Fort Lauderdale, Florida, the Company's auditor since 2013, issued a "going concern" opinion in its report dated April 1, 2019, on the Company's consolidated financial statements for the year ended Dec. 31, 2018, citing that the 12.5% Senior Secured Notes had a maturity date of April 15, 2017. Cash from operations or the sale of assets was not sufficient to repay the notes when they became due. In addition, at Dec. 31, 2018 the Company had a working capital deficiency. These factors raise substantial doubt about its ability to continue as a going concern. Quarter End Results For the quarter-ended Dec. 31, 2018, consolidated net revenue totaled $39.6 million compared to $36.4 million for the same prior year period, resulting in an increase of $3.2 million or 9%. The Company's radio segment net revenue increased $4.9 million or 16%, due to increases in local, national, network, barter and digital sales, partially offset by a decrease in special events revenue. The Company's television segment net revenue decreased $1.7 million or 29%, primarily from a reduction in subscriber based revenue, partially offset by increases in local and national sales. Consolidated Adjusted OIBDA, a non-GAAP measure, totaled $17.4 million compared to $13.9 million for the same prior year period, representing an increase of $3.5 million or 25%. The Company's radio segment Adjusted OIBDA increased $5.0 million or 38%, primarily due to the increase in net revenue of $4.9 million and a decrease in operating expenses of $0.1 million. Radio station operating expenses decreased mainly due to decreases in legal settlements, production costs, professional fees and special event expenses offset by increases in taxes and licenses, sales commissions, and barter expenses. The Company's television segment Adjusted OIBDA decreased $1.4 million, due to the decrease in net revenue of $1.7 million, partially offset by a decrease in operating expenses of $0.3 million. Television station operating expenses decreased primarily due to decreases in production costs and taxes and licenses offset by a decrease in production tax credits. The Company's corporate expenses, excluding non-cash stock-based compensation, increased $0.2 million or 9%, mostly due to an increase in compensation and benefits. Operating income totaled $14.3 million compared to $14.4 million for the same prior year period, representing a decrease of $0.1 million or less than 1%. This decrease in operating income was primarily due to having recognized the gain on the sale of spectrum assets in the prior year and current year increases in recapitalization costs and corporate expenses offset by an increase in net revenue and decreases in operating expenses. Discussion and Results "Our fourth quarter and full year 2018 performance represent one of the best operating results in our 35-year history and the true power of our multi-media strategy and leading radio, television, digital and experiential assets," commented Raul Alarcon, chairman and CEO. "Our multi-year effort to transform our company from a traditional broadcaster into an integrated multi-media company is clearly evident in our financial results. "This past year we generated solid top-line growth while also prudently managing our costs, which resulted in consolidated Adjusted OIBDA growth of 37%. We believe this operating margin performance significantly outperformed both our Spanish- and English-language peers. In addition to this industry-leading performance, our audio rankings, as well as our TV, digital and mobile engagement metrics, also grew significantly." Mr. Alarcon continued, "We entered 2019 with significant momentum in our business, a strong management team, a clear and unambiguous operating strategy, and a 100% commitment to taking the next critical steps in furthering our business transformation. "Looking ahead, we are focused on building on our successes to date and driving further strong performance in 2019 and beyond. Our key priorities include further integration of our assets, prudently managing our costs and delivering sustainable growth across all our businesses." Continued Recapitalization and Restructuring Efforts "We have not repaid our outstanding 12.5% Senior Secured Notes due 2017 (the "Notes") since they became due on April 17, 2017, and continue to evaluate all options available to refinance the Notes. While we assess how to best achieve a successful refinancing of the Notes, we have continued to pay monthly interest on the Notes, payments that a group of investors purporting to own our 10 3/4% Series B Cumulative Exchangeable Redeemable Preferred Stock (the "Series B preferred stock") have challenged through the institution of litigation in the Delaware Court of Chancery. The complaint filed by these investors revealed a purported foreign ownership of our Series B preferred stock, which we are actively addressing, including before the Federal Communications Commission (the "FCC") in order to protect our broadcast licenses. Our refinancing efforts have been made more difficult and complex by the Series B preferred stock litigation and foreign ownership issue. We provide more information about each of these items in our Annual Report on Form 10-K for the year ended December 31, 2018. "We have worked and continue to work with our advisors regarding a consensual recapitalization or restructuring of our balance sheet, including through the issuance of new debt or equity to raise the necessary funds to repay the Notes. We believe that the delay in refinancing the Notes has adversely affected us, in that we have been paying substantially more in interest expense on our outstanding Notes than would be the case if we refinanced them in the current market based on the feedback we have received from several financial institutions and potential sources of capital; there is a cloud on title regarding who validly owns our Series B preferred stock, which has created uncertainty as to who owns these shares, and the parties with whom the Company could potentially negotiate a consensual restructuring; we are incurring higher legal costs than otherwise would be the case due to our efforts to resolve the situation in general, to defend ourselves against the Series B preferred stock litigation and to address the foreign ownership issue before the FCC; the trading price of our common stock and preferred stock has been materially adversely affected; our ability to attract interest from investment banks and third party capital suppliers has been materially adversely affected; our reputation has been similarly negatively affected as a general matter despite our diligent efforts to resolve the situation; and the negativity and complexity surrounding our situation has been an unfortunate distraction from our otherwise successful and healthy operating business. The resolution of the recapitalization or restructuring of our balance sheet, the litigation with the purported holders of our Series B preferred stock and the foreign ownership issue are subject to several factors currently beyond our control. Our efforts to effect a consensual refinancing of the Notes, the Series B preferred stock litigation and the foreign ownership issue will likely continue to have a material adverse effect on us if they are not successfully resolved. We face various risks regarding these matters which are summarized in our Annual Report on Form 10-K for the year ended December 31, 2018," the Company stated in a press release. The Company's report on Form 10-K is available from the SEC's website at https://is.gd/TZESnU. About Spanish Broadcasting Based in Miami, Florida, Spanish Broadcasting System, Inc. (OTCMKTS:SBSAA) -- http://www.spanishbroadcasting.com/-- owns and operates radio stations located in the top U.S. Hispanic markets of New York, Los Angeles, Miami, Chicago, San Francisco and Puerto Rico, airing the Tropical, Regional Mexican, Spanish Adult Contemporary, Top 40 and Urbano format genres SBS also operates AIRE Radio Networks, a national radio platform of over 250 affiliated stations reaching 94% of the U.S. Hispanic audience. SBS also owns MegaTV, a network television operation with over-the-air, cable and satellite distribution and affiliates throughout the U.S. and Puerto Rico, produces a nationwide roster of live concerts and events, and owns a stable of digital properties, including La Musica, a mobile app providing Latino-focused audio and video streaming content and HitzMaker, a new-talent destination for aspiring artists. SUNCREST STONE: Exclusive Plan Filing Period Extended to May 9 -------------------------------------------------------------- Judge Austin Carter of the U.S. Bankruptcy Court for the Middle District of Georgia extended the period during which Suncrest Stone Products, LLC and its affiliated debtors have the exclusive right to file a Chapter 11 plan through May 9, and to solicit acceptances for the plan through July 8. About Suncrest Stone Products Suncrest Stone Products, LLC -- https://www.suncreststone.com/ -- is a stone supplier in Ashburn, Georgia. Its products include Ashlar, Country Ledge, Ledge, River Rock, Olde-Castle, Splitface, Stock, and Rubble. Suncrest Stone Products and 341 Stone Properties, LLC, sought protection under Chapter 11 of the Bankruptcy Code (Bankr. M.D. Ga. Lead Case No. 18-10850) on July 13, 2018. In the petition signed by Max Suter, authorized officer, Suncrest estimated assets of less than $1 million and liabilities of $1 million to $10 million. 341 Stone estimated $1 million to $10 million in assets and liabilities. Judge Austin E. Carter presides over the cases. Stone & Baxter, LLP, is the Debtors' counsel. McMurry Smith & Company is the accountant. Crumley and Associates Inc. d/b/a South Georgia Appraisal Company is appraiser to the Debtor. SUNEX INTERNATIONAL: Case Summary & 20 Largest Unsecured Creditors ------------------------------------------------------------------ Debtor: Sunex International, Inc. 1401 Green Road, Suite I Pompano Beach, FL 33064 Business Description: Founded in 1985, Sunex International -- http://www.sunexintl.com-- is a supplier of architectural products and complete turn-key building materials for builders, architects, and designers throughout the Caribbean and South Florida. The Company specializes in windows, doors, lumber, framing, roofing, lighting, flooring, tools, fasteners, underground pipes, pumps, and more. Chapter 11 Petition Date: April 3, 2019 Court: United States Bankruptcy Court Southern District of Florida (Fort Lauderdale) Case No.: 19-14372 Judge: Hon. Raymond B. Ray Debtor's Counsel: Michael D. Seese, Esq. SEESE, P.A. 101 NE 3rd Avenue, Suite 410 Fort Lauderdale, FL 33301 Tel: 954-745-5897 Email: mseese@seeselaw.com Estimated Assets: $1 million to $10 million Estimated Liabilities: $1 million to $10 million The petition was signed by Jerry Rand, president. A full-text copy of the petition containing, among other items, a list of the Debtor's 20 largest unsecured creditors is available for free at: http://bankrupt.com/misc/flsb19-14372.pdf SUNPLAY POOLS: Exclusive Plan Filing Period Extended to June 3 -------------------------------------------------------------- U.S. Bankruptcy Judge Joel Marker extended the period during which SunPlay Pools and Spas Superstore, Inc. has the exclusive right to file a Chapter 11 plan of reorganization through June 3. The extension would give the company more time to finalize its plan and negotiate with creditors after it is filed. SunPlay is about to enter its busiest time of the year, which should provide the company with additional monies to fund its plan. Moreover, SunPlay's principal John Olson has intended to inject capital into the company in order to retain his equity interests. As of Jan. 31, SunPlay had $8,372 in monies in the bank, inventory valued at $430,454, and vehicles valued at $379,913, according to a previous report by the Troubled Company Reporter. 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 oversees the case. The Debtor tapped The Fox Law Corporation as its lead bankruptcy counsel; and Cohne Kinghorn, PC, as its local bankruptcy counsel. TOWERSTREAM CORP: Incurs $10.2 Million Net Loss in 2018 ------------------------------------------------------- Towerstream Corporation has filed with the Securities and Exchange Commission its Annual Report on Form 10-K reporting a net loss attributable to common stockholders of $10.21 million on $24.60 million of revenues for the year ended Dec. 31, 2018, compared to a net loss attributable to common stockholders of $14.37 million on $26.21 million of revenues for the year ended Dec. 31, 2017. As of Dec. 31, 2018, Towerstream had $18.41 million in total assets, $42.85 million in total liabilities, and a total stockholders' deficit of $24.44 million. Marcum LLP, in New York, NY, the Company's auditor since 2007, issued a "going concern" qualification in its report dated April 1, 2019, on the Company's consolidated financial statements for the year ended Dec. 31, 2018, noting 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. As of Dec. 31, 2018, the Company had cash and cash equivalents of approximately $4.2 million and a working capital deficiency of approximately $36.9 million and is subject to forbearance agreements under its loan agreement. The Company incurred significant operating losses since inception and continues to generate losses from operations, and as of Dec. 31, 2018, the Company has an accumulated deficit of $199.3 million. Towerstream stated "The Company has monitored and reduced certain of its operating costs over the course of 2017 and 2018. Historically, the Company has financed its operations through private and public placement of equity securities, as well as debt financing and capital leases. The Company's ability to fund its longer term cash requirements is subject to multiple risks, many of which are beyond its control. The Company intends to raise additional capital, either through debt or equity financings or through the potential sale of the Company's assets in order to achieve its business plan objectives. Management believes that it can be successful in obtaining additional capital; however, no assurance can be provided that the Company will be able to do so. There is no assurance that any funds raised will be sufficient to enable the Company to attain profitable operations or continue as a going concern. To the extent that the Company is unsuccessful, the Company may need to curtail or cease its operations and implement a plan to extend payables or reduce overhead until sufficient additional capital is raised to support further operations. Our ability to make payments on our indebtedness and to fund planned capital expenditures will depend on our ability to generate cash in the future. Our ability to generate cash in the future will be dependent upon, among other things, the financial performance of the Company, and general economic, financial, competitive, legislative, regulatory and other factors that are beyond our control. There can be no assurance that such a plan will be successful." The Company's report on Form 10-K is available from the SEC's website at https://is.gd/jStjV5. About Towerstream Headquartered in Middletown, Rhode Island, Towerstream Corporation (OTCQB:TWER) -- http://www.towerstream.com/-- is a fixed-wireless fiber alternative company delivering Internet access to businesses. The Company provides services to business customers in New York City, Boston, Chicago, Los Angeles, San Francisco, Seattle, Miami, Dallas-Fort Worth, Houston, Philadelphia, Las Vegas-Reno and Providence-Newport. USA GYMNASTICS: Exclusive Filing Period Extended Until Aug. 5 ------------------------------------------------------------- Judge Robyn Moberly of the U.S. Bankruptcy Court for the Southern District of Indiana extended the period during which USA Gymnastics has the exclusive right to file a Chapter 11 plan through Aug. 5 and to solicit acceptances for the plan through Oct. 3. USA Gymnastics' attorney, Catherine Steege, Esq., at Jenner & Block LLP, said the company will have to wait until the deadline for filing claims expires to better assess claims of its creditors. The company will also have to wait until the case (Adv. Pro. No. 19-50012), which was filed to determine its rights under various insurance policies, is resolved, according to the attorney. USA Gymnastics has more than 500 creditors, most of whom are sex abuse victims who are represented by a court-appointed committee. These creditors have until April 29 to file their claims. About USA Gymnastics USA Gymnastics -- https://www.usagym.org/ -- is a not-for-profit organization incorporated in Texas. Based in Indianapolis, Indiana, USAG's organization encompasses six disciplines: women's gymnastics, men's gymnastics, trampoline and tumbling, rhythmic gymnastics, acrobatic gymnastics, and group gymnastics. USAG provides educational opportunities for coaches and judges, as well as gymnastics club owners and administrators, and sanctions approximately 4,000 competitions and events throughout the United States annually. More than 200,000 athletes, professionals, and clubs are members of USAG. USAG sets the rules and policies that govern the sport of gymnastics in the United States, including selecting and training the United States gymnastics teams for the Olympics and World Championships. As of the Petition Date, USAG employs 53 individuals, nearly all of whom work for USAG full-time. USA Gymnastics sought Chapter 11 protection (Bankr. S.D. Ind. Case No. 18-09108) on Dec. 5, 2018. The Debtor estimated $50 million to $100 million in assets and liabilities as of the bankruptcy filing. The Hon. Robyn L. Moberly is the case judge. The Debtor tapped Jenner & Block LLP as counsel; Alfers GC Consulting, LLC, and Scramble Systems, LLC, as business consulting services providers; and Omni Management Group, Inc., as claims agent. WEATHERFORD INTERNATIONAL: Adopts New Bonus and Retention Plans --------------------------------------------------------------- Weatherford International plc and its compensation advisors have reviewed the Company's incentive plans to determine whether they continue to fulfill their purpose of retaining key employees and incentivizing key employees to perform at a high level. Currently, the Company's incentive plans consist primarily of an annual cash bonus program and long-term equity incentive awards. After reviewing the Company's current incentive plans, the Company and the Compensation Committee of the Board of Directors have determined that the current plans are not optimally effective in achieving their goals. Most significantly, because the ordinary shares of the Company have been trading at extremely low prices, the Company does not have a large enough share reserve to continue to rely on the Company's 2010 Omnibus Incentive Plan as a material retention and incentive tool in the near future. As a result, the Board, on the recommendation of the Compensation Committee, determined to (i) suspend the Company's Executive Non-Equity Incentive Compensation Plan with respect to 2019 and (ii) adopt (a) a new Executive Bonus Plan and (b) new retention award letters, in each case for certain key employees, including the named executive officers. Executive Bonus Plan The EBP provides a means of rewarding key employees based on the overall performance of the Company and the achievement of certain quarterly and cumulative performance goals in 2019 to be established by the Compensation Committee and communicated to participants. Each individual participant is provided a cash target bonus opportunity set by the Compensation Committee. Each participant is eligible to receive up to 200% of his or her target bonus, if stretch performance is achieved. Payments are made in cash quarterly. Participants must generally remain employed until the date of payment to receive payments under the EBP. The target bonus opportunities for the named executive officers are set forth in the table below: Named Executive Officer Target Bonus Opportunity ----------------------- ------------------------ Mark McCollum $7,000,000 Christoph Bausch $1,650,000 Christina Ibrahim $1,175,000 Karl Blanchard $2,300,000 Stuart Fraser $231,250 Retention Award Letters The Company entered into Retention Award Letters with the same key employees who participate in the EBP. Each such individual will be eligible to receive a cash retention award in an amount equal to a percentage of the recipient's annual base salary (200% for the named executive officers other than Stuart Fraser, and 150% for Stuart Fraser). The Retention Award amounts for the named executive officers are set forth in the table below: Named Executive Officer Retention Award Amount ----------------------- ---------------------- Mark McCollum $2,000,000 Christoph Bausch $1,300,000 Christina Ibrahim $1,250,000 Karl Blanchard $1,400,000 Stuart Fraser $637,500 The Retention Awards are payable in advance within 30 days after participants accept the terms. Under the Retention Award Letters, in the event a recipient of a Retention Award voluntarily terminates his or her employment, or the Company terminates such recipient's employment for Cause, in either case, before the first anniversary of the date on which the recipient received the Retention Award, then such recipient will be required to promptly repay to the Company, the amount of the Retention Award. A recipient will not be required to repay a Retention Award in the event of termination of employment due to death or disability or by the Company without Cause subject to the recipient's (or in the case of the recipient’s death, the recipient's legal representative's) execution of a release of claims against the Company. The Retention Award Letters also include certain restrictive covenants (including agreements not to solicit Company clients or employees for one year following termination and not to compete with the Company for six months following termination). About Weatherford Weatherford (NYSE: WFT), an Irish public limited company and Swiss tax resident -- http://www.weatherford.com/-- is a multinational oilfield service company providing innovative solutions, technology and services to the oil and gas industry. The Company operates in over 80 countries and has a network of approximately 700 locations, including manufacturing, service, research and development, and training facilities and employs approximately 26,500 people. Weatherford reported a net loss attributable to the company of $2.81 billion for the year ended Dec. 31, 2018, compared to a net loss attributable to the company of $2.81 billion for the year ended Dec. 31, 2017. As of Dec. 31, 2018, Weatherford had $6.60 billion in total assets, $10.26 billion in total liabilities, and a total shareholders' deficiency of $3.66 billion. Weatherford's credit ratings have been downgraded by multiple credit rating agencies and these agencies could further downgrade the Company's credit ratings. On Dec. 24, 2018, S&P Global Ratings downgraded the Company's senior unsecured notes to CCC- from CCC+, with a negative outlook. Weatherford's issuer credit rating was lowered to CCC from B-. On Dec. 20, 2018, Moody's Investors Services downgraded the Company's credit rating on its senior unsecured notes to Caa3 from Caa1 and its speculative grade liquidity rating to SGL-4 from SGL-3, both with a negative outlook. The Company said its non-investment grade status may limit its ability to refinance its existing debt, could cause it to refinance or issue debt with less favorable and more restrictive terms and conditions, and could increase certain fees and interest rates of its borrowings. Suppliers and financial institutions may lower or eliminate the level of credit provided through payment terms or intraday funding when dealing with the Company thereby increasing the need for higher levels of cash on hand, which would decrease the Company's ability to repay debt balances, negatively affect its cash flow and impact its access to the inventory and services needed to operate its business. WESTERN RESERVE: Case Summary & 20 Largest Unsecured Creditors -------------------------------------------------------------- Debtor: Western Reserve Water Systems, Inc. 4133 East 49th Street Cleveland, OH 44105 Business Description: Western Reserve Water Systems, Inc. -- http://www.westernreservewater.com-- is an industrial water service company offering a wide range of equipment, services, parts, and consulting services for the industrial process water and high purity water user. Western Reserve Water Systems services are supplied to various industries, such as power generation, chemical processing, auto, steel, food & beverage, pharmaceutical, hospital, medical, laboratory and light industrial and commercial markets. The Company's service center and regeneration facility is currently located in Cleveland, Ohio, with satellite service locations in Cincinnati, Ohio, and Terre Haute, Indiana. Chapter 11 Petition Date: April 1, 2019 Court: United States Bankruptcy Court Northern District of Ohio (Cleveland) Case No.: 19-11864 Judge: Hon. Jessica E. Price Smith Debtor's Counsel: Glenn E. Forbes, Esq. FORBES LAW LLC 166 Main Street Painesville, OH 44077-3403 Tel: (440) 357-6211 Email: bankruptcy@geflaw.net Total Assets: $10,285,282 Total Liabilities: $4,306,486 The petition was signed by Michael Eiermann, president. A full-text copy of the petition is available for free at: http://bankrupt.com/misc/ohnb19-11864.pdf List of Debtor's 20 Largest Unsecured Creditors: Entity Nature of Claim Claim Amount ------ --------------- ------------ 1. Aetna Plastics Corp. $16,579 P.O. Box 931780 Cleveland, OH 44193 2. Benovation $29,557 2035 Reading Rd. Cincinnati, OH 45202 3. Bonded Chemicals $64,083 1125 Solutions Center Chicago, IL 60677 4. Chemtreat, Inc. $23,179 15045 Collections Center Chicago, IL 60693 5. Enpress, LLC $17,535 34899 Curtis Blvd Eastlake, OH 44095 6. Enviroserve $59,851 PO Box 413070 Salt Lake City, UT 84141 7. Filmtec Corporation $204,596 4118 Collection Center Dr Chicago, IL 60693 8. GCS Water Purification, LLC $130,471 PO Box 703 Rosharon, TX 77583 9. Kelly Services, Inc. $41,855 PO Box 820405 Philadelphia, PA 19182 10. Key Bank Loan and Leases $2,895,451 127 Public Square Cleveland, OH 44114 11.Mettler-Toledo Ingold $31,967 23669 Network Place Chicago, IL 60673 12. NEORSD $21,016 PO Box 94550 Cleveland, OH 44101-4550 13. OTP Industrial Solutions $24,464 PO Box 73278 Cleveland, OH 44193 14. Purolite Company $19,237 PO Box 824075 Philadelphia, PA 19182-4075 15. Resintech $47,958 1 Resintech Plaza 160 Cooper Road West Berlin, NJ 08091 16. Rexel of America, LLC $18,517 PO Box 742833 Atlanta, GA 30374-2833 17. Suez WTS USA, Inc. $105,702 12822 Collection Center Drive Chicago, IL 60693 18. Talent Transportation, Inc. $15,600 PO Box 361159 Strongville, OH 44136 19. Water Surplus/Surplus Mgmt. $123,073 PO Box 2668 Loves Park, IL 61132 20. WSM $25,860 580 Golden Oak Parkway Oakwood Village OH 44146 WILSON MANIFOLDS: Seeks 21-Day Extension of Exclusivity Periods --------------------------------------------------------------- Wilson Manifolds, Inc. and its president Keith Wilson asked the U.S. Bankruptcy Court for the Southern District of Florida to extend by 21 days the period during which the company has the exclusive right to file a Chapter 11 plan and solicit acceptances for the plan. Pursuant to prior court ruling and the Bankruptcy Code, another "party in interest" may file a plan of reorganization if Wilson Manifolds has not filed a plan accepted by each class of impaired claims or interests by May 22. The company's current exclusive filing period expired on March 22. Wilson Manifolds, a manufacturer of auto racing parts, suffered a significant slowdown in its operations recently duue to a failed joint venture and two protracted lawsuits. This slowdown resulted in the company's delinquency in tax and other obligations and in the financial decline of the company's owner. Since the commencement of its bankruptcy case, Wilson Manifolds has made progress towards reorganizing its business affairs. The company has reached agreements with its two largest creditors -- secured creditor BB&T Bank and equipment lessor TCF Equipment Finance. These agreements have provided financial relief to Wilson Manifolds and have helped increased cashflow. Wilson Manifolds has also had its assets appraised and is considering options to either joint venture with an investor or sell its assets. The company expects to have a Chapter 11 plan on file within a few days. About Wilson Manifolds Inc. Wilson Manifolds, Inc. manufactures products for the automotive and racing industries. It specializes in custom-built and installed parts for high-performance vehicles. Wilson Manifolds sought protection under Chapter 11 of the Bankruptcy Code (Bankr. S.D. Fla. Case No. 18-21658) on Sept. 21, 2018. The case is jointly administered with the Chapter 11 case of Keith D. Wilson, the company's president (Bankr. S.D. Fla. Case No.18-21662). In the petition signed by Mr. Wilson, Wilson Manifolds estimated assets of less than $50,000 and liabilities of $1 million to $10 million. Wilson Manifolds tapped Hoffman, Larin & Agnetti, P.A. as legal counsel; Siegelaub, Rosenberg, Golding & Feller, P.A. as accountant; and Moecker Auctions, Inc. as appraiser. No official committee of unsecured creditors has been appointed. Z GALLERIE: Seeks to Hire A&G Realty as Real Estate Consultant -------------------------------------------------------------- Z Gallerie, LLC, and its debtor-affiliates seek authority from the U.S. Bankruptcy Court for the District of Delaware to employ A&G Realty Partners, LLC, as real estate consultant to the Debtors. Z Gallerie requires A&G Realty to: a) consult with the Debtors to discuss the Debtors' goals, objectives and financial parameters in relation to the Leases and Properties; b) provide ongoing advice and guidance based upon the Debtors' goals and objectives; c) negotiate with the landlords of the Properties on behalf of the Debtors in order to assist the Debtors in obtaining Lease Modifications; d) negotiate with the landlords of the Properties and other third parties on behalf of the Debtors in order to assist the Debtors in obtaining Early Termination Rights; and e) provide status update reports to the Debtors on the Services. A&G Realty will be paid as follows: a. Retainer. The Debtors shall pay A&G Realty a retainer fee in the amount of fifty thousand dollars ($50,000). The retainer shall be nonrefundable and shall be applied to the fees and expenses due under the terms of the Agreement. b. Early Termination Rights – For each Early Termination Right obtained by A&G Realty on behalf of the Debtors, A&G Realty shall earn and be paid a fee in the amount of a quarter of one (1) month's Gross Occupancy Cost. c. Monetary Lease Modifications (i.e. Rent Reductions) – For each Monetary Lease Modification obtained by A&G Realty on behalf of the Debtors, A&G Realty shall earn and be paid a fee in the amount of three percent (3%) of the Occupancy Cost Savings per Lease. d. Non-Monetary Lease Modifications – For Non-Monetary Lease Modifications obtained by A&G Realty on behalf of the Debtors, A&G Realty shall earn and be paid a fee in the amount of seven hundred and fifty dollars ($750) per Lease. Andrew Graiser, co-president of A&G Realty Partners, LLC, 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 Debtors and their/its estates. A&G Realty can be reached at: Andrew Graiser A&G REALTY PARTNERS, LLC 445 Broadhollow Road, Suite 410 Melville, NY 11747 Tel: (631) 465-9506 About Z Gallerie Z Gallerie, LLC -- https://www.zgallerie.com/ -- is a retailer of home decor products. It operates 76 retail stores in 28 states as of the petition date. Z Gallerie and its affiliate Z Gallerie Holding Company, LLC, sought protection under Chapter 11 of the Bankruptcy Code (Bankr. D. Del. Lead Case No. 19-10488) on March 11, 2019. At the time of the filing, the Debtors estimated assets of $100 million to $500 million and liabilities of $100 million to $500 million. The Debtors tapped Klehr Harrison Harvey Branzburg LLP and Kirkland & Ellis as legal counsel; Lazard Middle Market LLC as investment banker; Berkeley Research Group, LLC as restructuring advisor; and Stretto as claims and noticing agent. Z GALLERIE: Seeks to Hire Stretto as Administrative Advisor ----------------------------------------------------------- Z Gallerie, LLC, and its debtor-affiliates, seek authority from the U.S. Bankruptcy Court for the District of Delaware to employ Stretto, as administrative advisor to the Debtors. Z Gallerie requires Stretto to: (a) assist with, among other things, legal noticing, claims management and reconciliation, plan solicitation, balloting, disbursements, and tabulation of votes, and prepare any related reports, as required in support of confirmation of a chapter 11 plan, and in connection with such services, process requests for documents from parties in interest, including, if applicable, brokerage firms, bank back-offices and institutional holders; (b) prepare an official ballot certification and, if necessary, testify in support of the ballot tabulation results; (c) assist with the preparation of the Debtors' schedules of assets and liabilities and statements of financial affairs and gather data in conjunction therewith; (d) provide a confidential data room, if requested; (e) manage and coordinate any distributions pursuant to a chapter 11 plan; and (f) provide such other processing, solicitation, balloting and other administrative services described in the Engagement Agreement, but not included in the Section 156(c) Application, as may be requested from time to time by the Debtors, the Court or the Office of the Clerk of the United States Bankruptcy Court for the District of Delaware. Stretto will be paid based upon its normal and usual hourly billing rates. Stretto will be paid a retainer in the amount of $10,000. It will also be reimbursed for reasonable out-of-pocket expenses incurred. James Le, chief operating officer of Stretto, 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 Debtors and their estates. Stretto can be reached at: Travis Vandell STRETTO 410 Exchange, Suite 100 Irvine, CA 92606 Tel: (800) 634-7734 About Z Gallerie Z Gallerie, LLC -- https://www.zgallerie.com/ -- is a retailer of home decor products. It operates 76 retail stores in 28 states as of the petition date. Z Gallerie and its affiliate Z Gallerie Holding Company, LLC, sought protection under Chapter 11 of the Bankruptcy Code (Bankr. D. Del. Lead Case No. 19-10488) on March 11, 2019. At the time of the filing, the Debtors estimated assets of $100 million to $500 million and liabilities of $100 million to $500 million. The Debtors tapped Klehr Harrison Harvey Branzburg LLP and Kirkland & Ellis as legal counsel; Lazard Middle Market LLC as investment banker; Berkeley Research Group, LLC as restructuring advisor; and Stretto as claims and noticing agent. [*] S&P Withdraws Ratings on Four Issuers' Revenue Bonds -------------------------------------------------------- S&P Global Ratings has withdrawn its ratings on four issuers' revenue bonds that are secured by project revenues from federal contracts. At the same time, S&P Global Ratings has removed the ratings from CreditWatch, where they were placed with negative implications Dec. 21, 2018. The issuers and ratings affected are: -- Fannin County Public Facility Corp., Texas (BB/Watch Neg); -- Willacy County Public Facility Corp., Texas (BB+/Watch Neg); -- Hudspeth County, Texas/ West Texas Detention Facilities Corp., Texas (BB/Watch Neg); -- Garza County Public Facilities Corp., Texas (B/Watch Neg). "We base these rating actions on our inability to communicate with the federal agency that appropriates the funding, or the operator who manages a specific facility. As stated in our Dec. 21, 2018 publication, we have increasingly come to view ongoing direct access to the major parties engaged in the federal contracts and operating agreements, including the federal agency under contract (Immigration and Customs Enforcement [ICE], the Bureau of Prisons [BOP], or U.S. Marshals Service[USMS]), the operator, and an issuer representative as key components in our assessment of this sector's credit quality," S&P said. "And, to maintain a rating in this sector, we will need to speak with the federal agency that appropriates the funding at least annually, the operator who runs the facility at least quarterly, and the issuer that supports the transactions at least annually. Failure to receive the requested information will likely result in our withdrawal of the affected rating, preceded in accordance with our policies." S&P has made repeated attempts to have direct, regular communication with these federal entities and operators. The rating agency has been able to speak with ICE and the operators but it has been unable to communicate with BOP and USMS, which have contracts with these local entities. Furthermore, given its unsuccessful outreach attempts, S&P believes it is unlikely that any sort of meaningful dialogue will be forthcoming or be maintained on a regular basis. "Limited or incomplete access to the federal entities limits our ability to reflect federal policy changes in our ratings and report on programmatic or appropriations-related risks within the sector. While the federal budget is accessible via publicly available sources, we have very little insight into important aspects of federal policies that have been key drivers of rating changes in the past two-year period, such as lack of contract renewal or bipartisan funding deals brokered on reduction of funding for detention beds," S&P said. "Furthermore, without access to the prison operators we cannot analyze operational issues that might influence the facilities or their compliance with state and federal regulations. As a result, we do not have sufficient information to maintain these ratings and are withdrawing the ratings in accordance with our policies." [^] BOOK REVIEW: GROUNDED: Destruction of Eastern Airlines ---------------------------------------------------------- Grounded: Frank Lorenzo and the Destruction of Eastern Airlines Author: Aaron Bernstein Publisher: Beard Books Softcover: 272 Pages List Price: $34.95 Order a copy today at http://www.beardbooks.com/beardbooks/grounded.html Barbara Walters once referred to Frank Lorenzo as "the most hated man in America." Since 1990, when this work was first published and Eastern Airlines' troubles were front-page news, there have been many worthy contenders for the title. Nonetheless, readers sensitive to labor-management concerns, particularly in the context of corporate restructurings, will find in this book much to support Barbara Walters' characterization. To recap: For a few brief and discordant years, Frank Lorenzo was boss of the biggest airline conglomerate in the free world (Aeroflot was larger), combining Eastern, Continental, Frontier, and People Express into Texas Air Corporation, financing his empire with junk bonds. TAC ultimately comprised a fleet of 451 planes and 50,000 employees, with revenues of $7 billion. But Lorenzo was lousy on people issues, famously saying, "I'm not paid to be a candy ass." The mid-1980s were a bad time to take that approach. Those were the years when the so-called Japanese model of management, which emphasized cooperation between management and labor, was creating a stir. The Lorenzo model was old school: If the unions give you any trouble, break 'em. That strategy had worked for him at Continental, where he'd filed Chapter 11 despite the airline's $60 million in cash reserves, in order to exploit a provision in Bankruptcy Code allowing him to abrogate his contracts with the unions. But Congress plugged that loophole by the time Lorenzo went to the mat with Charles Bryan, I AM chapter president. Lorenzo might have succeeded in breaking the machinists alone, but when flight attendants and pilots honored the picket lines, he should have known it was time to deal. He didn't. Instead he tried again for a strategic advantage through the bankruptcy courts, by filing Chapter 11 in the Southern District of New York where bankruptcy judges were believed to be more favorably disposed toward management than in Miami where Eastern was headquartered. Eastern had to hide behind the skirts of its subsidiary, Ionosphere Clubs, Inc., a New York corporation, in order to get into SDNY. Six minutes later, Eastern itself filed in the same court as a related proceeding. The case was assigned to Judge Burton Lifland, whom Eastern's bankruptcy lawyer, Harvey Miller, knew well, but Lorenzo was mistaken if he believed that serendipitous lottery assignment would be his salvation. Judge Lifland a year later declared Lorenzo unfit to run the airline and appointed Martin Shugrue as trustee. Most hated man or not, one wonders whether the debacle was all Lorenzo's fault. Eastern's unions, in particular the notoriously militant machinists, were perpetual malcontents, and Charlie Bryan was an anti-management zealot, to the point of exasperating even other IAM officers. The book provides a detailed account of the three-and-a-half-year period between Lorenzo's acquisition of Eastern in the autumn of 1986 and Judge Lifland's appointment of the trustee in April 1990. It includes the history of Eastern's pre-Lorenzo management, from World War I flying ace Eddie Rickenbacker to astronaut Frank Borman. Aaron Bernstein won numerous awards during his 20-year career as a professional journalist. He is an associated editor for Business Week. Aaron Bernstein is the editor of Global Proxy Watch, a corporate governance newsletter for institutional investors. He is also a non-resident Senior Research Fellow at the Pensions and Capital Stewardship Project at Harvard Law School. He left BusinessWeek magazine in 2006 after a 23-year career as an editor and senior writer covering workplace and social issues. ********* Monday's edition of the TCR delivers a list of indicative prices for bond issues that reportedly trade well below par. Prices are obtained by TCR editors from a variety of outside sources during the prior week we think are reliable. Those sources may not, however, be complete or accurate. The Monday Bond Pricing table is compiled on the Friday prior to publication. Prices reported are not intended to reflect actual trades. Prices for actual trades are probably different. Our objective is to share information, not make markets in publicly traded securities. Nothing in the TCR constitutes an offer or solicitation to buy or sell any security of any kind. It is likely that some entity affiliated with a TCR editor holds some position in the issuers public debt and equity securities about which we report. Each Tuesday edition of the TCR contains a list of companies with insolvent balance sheets whose shares trade higher than $3 per share in public markets. At first glance, this list may look like the definitive compilation of stocks that are ideal to sell short. Don't be fooled. Assets, for example, reported at historical cost net of depreciation may understate the true value of a firm's assets. A company may establish reserves on its balance sheet for liabilities that may never materialize. The prices at which equity securities trade in public market are determined by more than a balance sheet solvency test. On Thursdays, the TCR delivers a list of recently filed Chapter 11 cases involving less than $1,000,000 in assets and liabilities delivered to nation's bankruptcy courts. The list includes links to freely downloadable images of these small-dollar petitions in Acrobat PDF format. Each Friday's edition of the TCR includes a review about a book of interest to troubled company professionals. All titles are available at your local bookstore or through Amazon.com. Go to http://www.bankrupt.com/books/to order any title today. Monthly Operating Reports are summarized in every Saturday edition of the TCR. The Sunday TCR delivers securitization rating news from the week then-ending. TCR subscribers have free access to our on-line news archive. Point your Web browser to http://TCRresources.bankrupt.com/and use the e-mail address to which your TCR is delivered to login. ********* S U B S C R I P T I O N I N F O R M A T I O N Troubled Company Reporter is a daily newsletter co-published by Bankruptcy Creditors Service, Inc., Fairless Hills, Pennsylvania, USA, and Beard Group, Inc., Washington, D.C., USA. Jhonas Dampog, Marites Claro, Joy Agravante, Rousel Elaine Tumanda, Valerie Udtuhan, Howard C. Tolentino, Carmel Paderog, Meriam Fernandez, Joel Anthony G. Lopez, Cecil R. Villacampa, Sheryl Joy P. Olano, Psyche A. Castillon, Ivy B. Magdadaro, Carlo Fernandez, Christopher G. Patalinghug, and Peter A. Chapman, Editors. Copyright 2019. All rights reserved. ISSN: 1520-9474. This material is copyrighted and any commercial use, resale or publication in any form (including e-mail forwarding, electronic re-mailing and photocopying) is strictly prohibited without prior written permission of the publishers. Information contained herein is obtained from sources believed to be reliable, but is not guaranteed. The TCR subscription rate is $975 for 6 months delivered via e-mail. Additional e-mail subscriptions for members of the same firm for the term of the initial subscription or balance thereof are $25 each. For subscription information, contact Peter A. Chapman at 215-945-7000. *** End of Transmission ***